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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
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PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): DECEMBER 23, 1996
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THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
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(Exact name of Registrant as specified in its charter)
DELAWARE 0-11656 22-1807533
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(State or other jurisdiction (Commission File Number) (I.R.S. EIN)
of incorporation)
TWO NATIONWIDE PLAZA, SUITE 760, COLUMBUS, OHIO 43215
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (614) 221-6000
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NO CHANGE
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(Former name or former address, if changed since last report)
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ITEM 9. RECENT SALES OF UNREGISTERED SECURITIES.
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(a) Date: December 23, 1996
Title: Subordinated Convertible Bond
Amount: One (1) bond of One Million and no/100 Dollars
($1,000,000.00)
(b) No underwriter. The security was sold to a European investor.
(c) A total offering price of One Million and no/100
Dollars ($1,000,000.00) with no underwriting
discounts or commissions.
(d) The exemption relied upon is Regulation S. The security was
sold in an offshore transaction to a European investor and was
issued in the name of a Swiss bank. Therefore, the transaction
complied with the requirement that the offer not be made to a
U.S. person and that the buy order be originated when the
purchaser is outside of the United States. Additionally, no
directed selling efforts were engaged in, since no activities
with the potential to condition the United States' market for
the sale of the securities were conducted. Furthermore, the
sale qualifies for Regulation S's second safe harbor, as the
issuer is a reporting issuer and has met all the offering
restrictions imposed by the safe harbor. Namely, the
certificate is properly legended as required by Regulation S
(see Section 1.4 of Exhibit 1 hereto), the appropriate
certification is required to exercise the conversion rights,
and the issuer has adopted procedures to ensure compliance with
Regulation S.
(e) Terms of conversion. From and after February 2, 1997, the
Bondholder may, from time to time, convert all or any portion
(but not less than $100,000.00) of the principal amount of the
Bond into fully paid nonassessable shares of the Company's
common stock at a conversion ratio of two dollars (U.S. $2.00)
of principal for one share of common stock.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE WENDT-BRISTOL HEALTH
SERVICES CORPORATION
Dated: January 3, 1997 By:/s/ Sheldon A. Gold
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Sheldon A. Gold, President
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
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THE WENDT-BRISTOL HEALTH
SERVICES CORPORATION
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EXHIBITS
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EXHIBIT INDEX
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EXHIBIT PAGE NO.
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1 Convertible subordinated bond, dated December 6
23, 1996, by and between The Wendt-Bristol
Health Services Corporation and Societe
Generale Bank & Trust, or registered assigns.
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EXHIBIT 1
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
5.5% CONVERTIBLE SUBORDINATED BOND DUE DECEMBER 30, 2001
ARTICLE I
PROMISE TO PAY; INTEREST; PAYMENT TERMS
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1.1 FOR VALUE RECEIVED, The Wendt-Bristol Health Services Corporation
(the "Company"), a Delaware corporation, promises to pay to Societe Generale
Bank & Trust (the "Holder") or registered assigns, the sum of One Million
Dollars (US$1,000,000), and promises to pay interest on the principal amount of
this Bond at the rate of 5.5% per annum from the issuance date hereof until
paid. The Company will pay interest quarterly on March 31, June 30, September 30
and December 31 of each year, commencing on March 31, 1997, and at maturity.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. If not sooner paid or converted in accordance with the terms hereof, the
principal of this Bond shall be due and payable on December 30, 2001. The
Company will pay principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of public and private
debts at The Wendt-Bristol Health Services Corporation, Two Nationwide Plaza,
280 North High Street, Suite 760, Columbus, Ohio, 43215, U.S.A. The Company,
however, may pay principal and interest by its check payable in such money.
1.2 In no event shall the interest rate exceed the maximum rate allowed
by law; any interest payment which would for any reason be deemed unlawful under
applicable law shall be applied to principal.
1.3 The Company may at any time prepay this Note, in whole or in part,
without premium or penalty.
1.4 BOTH THE SECURITIES UNDERLYING THIS BOND AND THE BOND ITSELF HAVE
NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). THE HOLDER OF THIS BOND PRIOR TO
FEBRUARY 2, 1997 CAN RESELL THIS BOND ONLY IF REGISTERED UNDER THE ACT, PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, OR IN TRANSACTIONS EFFECTED IN
ACCORDANCE WITH THE PROVISIONS OF RULE 904 OF REGULATION S ADOPTED UNDER THE
ACT. THE WARRANT MAY NOT BE EXERCISED AND CONVERTED INTO THE UNDERLYING
SECURITIES UNLESS THE PERSON EXERCISING THE WARRANT PROVIDES WRITTEN
CERTIFICATION THAT HE, SHE OR IT IS NOT A "U.S. PERSON" OR EXERCISING THE
WARRANT ON BEHALF OF A "U.S. PERSON" AS THAT TERM IS DEFINED UNDER RULE 902 OF
REGULATION S ADOPTED UNDER THE ACT OR
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PROVIDES WRITTEN OPINION OF COUNSEL TO THE EFFECT THAT THE WARRANT AND THE
SECURITIES DELIVERED UPON EXERCISE HAVE BEEN REGISTERED UNDER THE ACT OR ARE
EXEMPT FROM REGISTRATION UNDER THE ACT.
Additional provisions of this Bond are set forth on the reverse side of
this Bond.
THE WENDT-BRISTOL HEALTH SERVICES
CORPORATION , a Delaware corporation
By: /s/ Marvin D. Kantor
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Name: Marvin D. Kantor
Title: Chairman
Issue Date: December 23, 1996
1.5 The Company shall keep at its office a register in which the
Company shall provide for the registration of the Bond and for the registration
of transfer and exchange of this Bond. The holder of this Bond may, either in
person or by duly authorized attorney, surrender the same for registration of
transfer or exchange at the office of the Company and, without expense to the
Holder (except for taxes or governmental charges imposed in connection
therewith), receive in exchange therefor, a Bond in such denomination or
denominations as the Holder may request, dated as of the date to which interest
has been paid on the Bond so surrendered for transfer or exchange, for the same
aggregate principal amount as the then unpaid principal amount of the Bond so
surrendered for transfer or exchange, and registered in the name of such person
or persons as may be designed by the Holder. Each Bond presented or surrendered
for registration of transfer or exchange shall be duly endorsed, or shall be
accompanied by a written instrument of transfer, satisfactory in form to the
Company, duly executed by the Holder of this Bond so made and delivered in
exchange for this Bond shall in all other respects be in the same form and have
the same terms as this Bond. No transfer or exchange of this Bond shall be valid
unless made in the foregoing manner at such office in compliance with the
requirements of Regulation S adopted under the Act.
ARTICLE II
SUBORDINATION
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2.1 As used in this Bond, the term "Senior Indebtedness" shall mean, at
any date, without duplication, (i) all obligations of the Company for borrowed
money, (ii) all obligations of the Company evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of the Company to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of the Company
as lessee which are capitalized in accordance with generally accepted accounted
principles as followed in the United States of America, (v) all non-contingent
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obligations and contingent obligations of the Company to reimburse any bank or
other entity or institution in respect of amounts paid under a letter of credit
or similar instrument, (vi) all indebtedness secured by a lien on any asset of
the Company, whether or not such indebtedness is otherwise an obligation of the
Company, (vii) all indebtedness of others guaranteed by the Company, and (viii)
any and all renewals or extensions of any indebtedness described in the
foregoing clauses.
2.2 The Company covenants and agrees and the Holder, by acceptance
hereof, covenants and agrees, expressly for the benefit of the present and
future holders of Senior Indebtedness, that the payment of the principal of and
interest on this Bond is expressly subordinated in right of payment to the
payment in full of principal of and interest on all Senior Indebtedness of the
Company in the circumstances described below in accordance with the provisions
of this Article II:
(a) Upon the maturity of any Senior Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof and interest thereon
shall first be paid in full, or such payment duly provided for in cash or in a
manner satisfactory to the holders of such Senior Indebtedness, before any
payment is made on account of the principal of or interest on this Bond;
(b) Upon the happening of any default in payment of the
principal of or interest on any Senior Indebtedness, then, unless and until such
default shall have been cured or waived or shall have ceased to exist, no
payment shall be made by the Company with respect to this Bond; or
(c) Upon any terminating liquidation of assets of the Company,
upon the occurrence of any dissolution, winding up, liquidation, whether or not
in bankruptcy, insolvency, or receivership proceedings of the Company, the
Company shall not pay thereafter, and the Holder of this Bond shall not be
entitled to receive thereafter, any amount in respect of the principal of and
interest on this Bond unless and until all of the Senior Indebtedness shall have
been paid or otherwise discharged in full. Upon any such dissolution, winding
up, liquidation or proceedings, any payment or distribution of assets of the
Company, whether in cash, property or securities, to which the Holder of this
Bond would be entitled, except for the provisions hereof, shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Indebtedness, or their
representative or representatives, ratable according to the aggregate amounts
remaining unpaid on Senior Indebtedness held or represented by each, to the
extent necessary to pay said Senior Indebtedness after giving effect to any
concurrent payment or distribution by the Company to or for the holders of the
Senior Indebtedness.
2.3 In the event that, notwithstanding the provisions of Section 2.2,
the Company shall make any payment to the Holder on account of the principal of
or interest on this Bond which should not have been paid to the Holder of this
Bond, such payment shall be held by the Holder for the benefit of the holders of
the Senior Indebtedness and such payment
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shall be repaid and redelivered to the Company in order to pay such amounts to
the holders of the Senior Indebtedness to the extent necessary to pay all Senior
Indebtedness in full in accordance with its terms, after giving effect to any
concurrent payment or distribution by the Company to or for the holders of the
Senior Indebtedness.
2.4 It is understood that the provisions of this Article II captioned
"Subordination" are, and are intended to be, solely for the purpose of defining
the relative rights of the Holder of this Bond on the one hand and the holders
of the Senior Indebtedness of the Company on the other hand. Nothing contained
in this Article II or elsewhere in this Bond shall or is intended to impair, as
between the Company, its creditors, other than the holders of Senior
Indebtedness, and the Holder of this Bond, the unconditional and absolute
obligation of the Company to pay the Holder of this Bond the principal of and
interest on this Bond as and when the same shall become due and payable in
accordance with its terms or affect the relative rights of the Holder of this
Bond and the creditors of the Company, other than the holders of such Senior
Indebtedness; nor shall anything herein prevent the Holder of this Bond from
exercising all remedies otherwise permitted by applicable law upon default under
this Bond, subject to the rights, if any, of the holders of Senior Indebtedness
in respect to cash, property or securities of the Company received upon the
exercise of any such remedy. The subordination herein provided applies to
payments or distributions by the Company only and shall not affect the right of
the Holder to collect and retain payment from any co-obligor, guarantor or
surety. Upon any payment or distribution of assets of the Company referred to in
this Article II, the Holder of this Bond shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or proceedings are pending, or upon a
certificate of the liquidating trustee or agent or other person making any
distribution to the Holder of this Bond, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amounts thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article II.
2.5 No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holders,
or by any noncompliance by the Company with the terms of this Bond, regardless
of any knowledge thereof which any such holders may have or be otherwise charged
with.
ARTICLE III
CONVERSION AND PURCHASE RIGHTS
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3.1 The Holder of this Bond shall have the right (the "Conversion
Right") from and after February 2, 1997 and then at any time or times on or
prior to December 30, 2001, to convert any portion of the principal amount of
this Bond into fully paid and nonassessable shares of common stock (the "Common
Stock") of the Company at the
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conversion ratio of two dollars (U.S. $2.00) of principal of this Bond for one
share of the Common Stock (the "Conversion Price"), provided, however, that each
exercise of the Conversion Right shall be with respect to no less than One
Hundred Thousand Dollars ($100,000.00) of principal.
3.2 The Conversion Price and number of shares to be issued upon
exercise of the Conversion Right determined pursuant to Section 3.1 shall be
subject to adjustment from time to time upon the happening of the following
events while the Conversion Right remains outstanding:
(a) If, at any time after the issuance date of this Bond and
while the Conversion Right remains outstanding, there shall be a merger or
consolidation of the Company with or into another corporation, or the
liquidation of the Company, then, as part of such merger, consolidation or
liquidation, lawful provision shall be made so that the Holder shall thereafter
be entitled to receive on the exercise of the Conversion Right the number of
shares of stock, other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation, to which the
Holder would have been entitled on such merger, consolidation or liquidation as
if the Conversion Right had been exercised immediately before such merger,
consolidation or liquidation. In any such case, appropriate adjustment (as
determined in good faith by the Company's Board of Directors) shall be made in
the application of the provisions of the Conversion Right with respect to the
rights and interest of the Holder after the merger, consolidation or liquidation
so that the provisions of the Conversion Right shall be applicable after such
event, as near as reasonably may be, in relation to any shares, other securities
or property deliverable after such event on the exercise of the Conversion
Right.
(b) In case at any time after the issuance date of this Bond
and while the Conversion Right remains outstanding, the shareholders of the
Company shall have received or shall have become entitled to receive, without
payment therefor:
(i) additional stock, other securities or property (other
than cash) by way of dividend,
(ii) any cash (excluding cash dividends payable solely out of
earnings or surplus of the Company), or
(iii) additional stock, other securities or property
(including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of
shares or similar corporate rearrangement;
other than as provided for in Section 3.2(a) or other than additional shares of
Common Stock issued as a stock dividend or in a stock-split as provided for in
Section 3.2(c), then, and in each such case, the Conversion Price shall be
reduced by the fair market value (as determined in good faith by the Company's
Board of Directors) of the portion of such stock, securities and property
(including cash) applicable to one share of Common Stock on the
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record date fixed for determination of shareholders eligible to receive such
items or, in the absence of a record date, the date of distribution of such
items.
(c) In case the Company shall at any time after the issuance
date of this Bond and while the Conversion Right remains outstanding (i) declare
or pay any dividend on outstanding shares of Common Stock payable in Common
Stock, (ii) effect a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend of its Common Stock)
or (iii) combine or consolidate the outstanding shares of Common Stock into a
lesser number of shares of Common Stock, by reclassification or otherwise, then,
and in each such case, the Conversion Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision, combination
or reclassification, and the number of such shares of Common Stock subject to
the Conversion Right on such date, shall be proportionately adjusted so that the
Holder shall be entitled to receive the aggregate number of shares of Common
Stock which, if the Conversion Right had been exercised immediately prior to
such date at the Conversion Price then in effect, the Holder would have owned
upon the exercise and been entitled to receive upon such dividend, subdivision,
combination or reclassification.
3.3 No fractional shares of Common Stock will be issued in connection
with any exercise of the Conversion Right hereunder but in lieu of such
fractional shares, the Company shall make a cash payment therefor upon the basis
of the Conversion Price then in effect.
3.4 The Company covenants that during the period the Conversion Right
exists, the Company will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Common Stock upon the
exercise of the Conversion Right of the Holder under this Bond. The Company
agrees that its issuance of this Bond shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock upon the
exercise of the Conversion Right of the Holder under this Bond.
3.5 This Bond may be converted by the Holder in whole or in part,
subject to the minimum requirements set forth in Section 3.1 above, by the
surrender of this Bond at the principal office of the Company at its address and
in the manner set forth above in Section 4.5. In order to exercise the
Conversion Right, the Holder must communicate the intent to exercise the
Conversion Right to the President of the Company. The Holder must certify that
he/she/it is not a "U.S. person" as defined in Section 203.902(o) of Regulation
S nor purchasing the Common Stock on behalf of a "U.S. person" or must present
the written opinion of counsel to the effect that the Bond and the Common Stock
have been registered under the Securities Act of 1933 or are exempt from
registration thereunder. Upon partial exercise of the Conversion Right, a new
Bond containing the same issuance date and provisions of this Bond shall be
issued by the Company to the Holder for the remaining principal balance and the
number of shares of Common Stock with respect to which this Bond shall not have
been converted.
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3.6 Prior to the exercise of the Conversion Right, the Holder shall not
be entitled to any rights of a stockholder of the Company, including without
limitation the right to vote, to receive dividends or other distributions or to
exercise any pre-emptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
ARTICLE IV
DEFAULT; REMEDIES; MISCELLANEOUS
--------------------------------
4.1 If the Company fails to pay any amount payable under this Bond
within 30 days after the Company receives written notice thereof from the Holder
setting forth such failure and demanding payment, the Lender may immediately
exercise any right, power or remedy permitted to the Lender by law or agreement.
4.2 A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company under
this Bond or for any claim based on, or in respect or by reason of, such
obligations or their creation. The Holder by accepting this Bond waives and
releases all such liability. The waiver and release are part of the
consideration of the issuance of this Bond.
4.3 This Bond is a general unsecured obligation of the Company limited
to the principal amount and accrued interest thereon.
4.4 This Bond shall be governed by the laws of the State of Ohio
(U.S.A). This Bond embodies the entire agreement between the Company and the
Holder regarding the terms of the loan evidenced by this Bond, and supersedes
all oral statements and prior writings relating to that loan.
4.5 All notices, certificates, requests or other communications
hereunder shall be in writing and shall be deemed to be sufficiently given when
mailed by registered or certified mail, postage prepaid, and addressed to the
appropriate party at its address set forth below. The Company or the Holder may,
by notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates, requests or other communications shall be
sent.
If to the Company The Wendt-Bristol Health Services Corporation
Two Nationwide Plaza
280 North High Street, Suite 760
Columbus, Ohio, 43215
U.S.A.
Attn: President
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