<PAGE>
Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 14, 1997
SCRIPTEL HOLDING, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-20938 31-1069865
(State or other jurisdiction ( Commission ( IRS Employer
of incorporation) file number) Identification No.)
4153 Arlingate Plaza Columbus, OH 43228
( Address of principal executive offices)
(614) 276-8402
(Registrant's telephone number,
including area code)
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Item 1. Changes In Control Of Registrant
(a) On May 14, 1997, Scriptel Holding, Inc. ("the Company") entered into an
agreement with Futronics Omega Systems, Inc. ("Futronics"), a company
controlled by John Wampler (" Mr. Wampler"), an individual living in Texas,
under which the Company issued to Futronics 40,000,000 shares of Common Stock
at $0.10 per share in return for a non-recourse note receivable for
$4,000,000. (The note is attached to this Form 8-K as an exhibit.) In a
written consent action dated May 20, 1997, Futronics and several other
stockholders of Scriptel, including its senior management, voted their shares
in favor of three corporate actions. These stockholders held a total of
60,972,460 shares of 97,293,254 shares then outstanding, or 62.7%. Coupled
with the issuance of convertible notes to another affiliate of Mr. Wampler
(see below), these corporate actions gave Mr. Wampler effective control of the
Company. The three corporate actions included approving a 1-for-20 reverse
stock split of the Company's outstanding shares effected in the form of a 1-
for-20 stock redemption on the Common Stock; reducing the par value of the
Company's 125,000,000 authorized shares of Common Stock from $0.10 per share
to a new par value of $0.001 per share; and authorizing a new series of
25,000,000 shares of undesignated Preferred Stock. The Company will prepare
and forward an Information Statement to its stockholders outlining these
actions, in compliance with SEC rules.
The Company issued additional shares of Common Stock subsequent to May 20,
1997. See the further descriptions in Item 5 below.
(b) On May 14, 1997, the Company issued $4,250,000 of convertible notes in
denominations of $250,000. A copy of the convertible note is attached to this
Form 8-K as an exhibit. Of these notes, $4,000,000 were issued to T Bar W
Ranch Investments, Inc. ("T Bar W"), a company controlled by Mr. Wampler; and
$250,000 of such notes were issued to Gerald S. Jacobs ("Mr. Jacobs"), a large
creditor of the Company. The Company received in payment for these notes a
$4,000,000 non-recourse note from T Bar W (a copy of the note is attached to
this Form 8-K as an exhibit), and a reduction of $250,000 in the amounts owed
to Mr. Jacobs by the Company. Through May 24, 1997, T Bar W has made a
$200,000 principal payment on the note. In addition, Mr. Jacobs agreed to
defer demand on any of the Company's notes payable to him until at least
December 31, 1998. Mr. Jacobs also agreed to surrender for cancellation all
of his currently owned options and warrants to purchase a total of 7,746,000
shares of Common Stock of the Company.
The notes are convertible into Common Stock of the Company at the initial
conversion price of $0.10 per share. The notes retain their conversion
privileges after the 1-for-20 reverse stock split approved by stockholders
(see above), except that in no case will the conversion price be greater than
$0.20 per share after the reverse stock split. The notes are secured by a
pledge of the Company's patents and all rights related thereto.
Assuming full conversion of the notes after the reverse stock split, the
Company would have the following approximate pro forma outstanding shares:
Currently outstanding shares (including
2,000,000 held by Futronics) 5,320,000
Shares issued upon conversion of the notes:
To T Bar W 20,000,000
To Mr. Jacobs 1,250,000
------------
Pro forma total outstanding shares 26,570,000
============
Of the pro forma total outstanding shares, Mr. Wampler would control a total
of 22,000,000 shares, or 82.8%, and would then have sole controlling interest
in the Company.
Item 5. Other Events
A. The Company issued a press release on the refinancing outlined in Item 1
above. A copy of the press release is attached to this Form 8-K as an
exhibit.
B. The Company currently meets the definition of a "Small Business Issuer" as
that term is defined in Regulation S-B of the Securities and Exchange
Commission, as it did not pass the public float market valuation test at the
end of calendar 1995 or 1996. Consequently, the Company is reporting under
the provisions of Regulation S-B for 1997.
C. On May 15, 1997, Charles W. Clark was appointed as a Director of the
Company. His term of office nominally extends until the stockholders meeting
held in the year 2000. Mr. Clark is a member in DeWitt Wolf Consultants, LLC
("DeWitt"), the consulting firm used by the Company in the refinancing
outlined above. The Company has agreed to give a 10% cash commission to
DeWitt for their services in the refinancing. The Company also issued 200,000
shares of Common Stock to DeWitt in late April 1997 in payment for travel and
related expenses.
D. On May 21, 1997, the Company issued 3,400,000 shares of Common Stock to
Charles W. Clark, a Director of the Company. Of these shares, 2,300,000 were
for consulting services in the refinancing; 500,000 shares were for future
consulting services relating to the reorganization of the Company; and 600,000
shares were in lieu of expenses and retainer. In addition, the Company issued
1,700,000 shares of Common Stock to Allyn Van Alstyne, the managing member of
DeWitt, for consulting services in the refinancing. The Company paid $20,000
cash to designated personnel of DeWitt as commission on $200,000 of funds
received in May on the non-recourse note from T Bar W.
E. The Company entered into a forbearance agreement with Mr. Jacobs on April
30, 1997 under which Mr. Jacobs agreed not to demand payment of the Company's
loans payable to him until at least December 31, 1998, provided that certain
conditions were maintained. A copy of the agreement is filed as an exhibit to
this Form 8-K. One of the conditions of the forbearance agreement precludes
Scriptel from offering debt-to-equity conversion rights on terms more
favorable than those held by either or both of Mr. Jacobs or Standard Energy
Company (a company he controls). In May 1997, the Company provided conversion
rights to holders of existing debt and debt previously without conversion
rights on more favorable terms than those held by Mr. Jacobs or Standard
Energy Company on certain of their existing debt. The new conversion rights
were at prices ranging from $0.10 to $0.15 per share on a pre-split basis.
The Company has provided Mr. Jacobs notice of the reduction of his conversion
rights on his existing convertible debt to $0.10 per share on a pre-split
basis, from the former conversion price of $1.69 per share.
F. As part of the refinancing, in late May 1997 the Company converted
approximately $360,000 of debt to approximately 3,600,000 shares of Common
Stock at a conversion price of $0.10 per share. The Company also granted
approximately 900,000 new warrants to debt holders and modified the terms of
approximately 600,000 outstanding warrants and options held by debt holders so
that they would have a new exercise price of $0.10 to $0.15 per share (instead
of exercise prices ranging up to $2.50 per share), and/or new expiration
dates, generally to the year 2001 (from 1997 to 1999).
Item 7. Financial Statements, Pro Forma Financial Information And Exhibits
(c) Exhibits:
4(v) Non-recourse Note receivable from Futronics Omega Systems, Inc., 5 year,
12.5%, dated May 14, 1997.
4(w) Non-recourse Note receivable from T Bar W Ranch Investments, Inc., 5
year, 12.5%, dated May 14, 1997.
4(x) Scriptel Holding, Inc. 5 year, convertible 12.5% note, in the amount of
$250,000 and dated May 14, 1997.
4(y) Scriptel Holding, Inc. and Gerald S. Jacobs and Standard Energy Company
Agreement to Forbear Collection.
99 Press release issued by Scriptel Holding, Inc. on May 16, 1997.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
May 27, 1997
Scriptel Holding, Inc.
(Registrant)
By: /s/ Bernard H. Eckstein
Bernard H. Eckstein
Chairman and Chief Executive Officer
May , 1997 $4,000,000
5 Year, 12.5%, Non-Recourse Note
Futronics Omega Systems, Inc. (the "Payor"), for value received, hereby
promises to pay to Scriptel Holding, Inc., a Delaware corporation, (the
"Payee"), the sum of $4,000,000 on May 14, 2002 (the "Maturity Date") and to
pay interest on the principal amount from time to time remaining unpaid
hereon, from the date hereof, at the rate of 12.5% per annum, payable at the
Maturity Date. The principal hereof and the interest hereon shall be payable
at the principal office of the Payee at 4153 Arlingate Plaza, Columbus, Ohio
43228, or at such place as Payee may designate.
1. No Recourse - No recourse shall be had for payment of any part of the
principal or interest of this Note against the Payor, all such liability
being, by the acceptance hereof, expressly released, and it being expressly
understood that this Note is payable only out of the proceeds of the sale of
common shares of the Payee owned by the Payor.
2. Pre-Payment - The Payor may pre-pay the principal amount of this Note, in
whole or it part, at any time and from time to time, prior to the Maturity
Date without penalty. All pre-payments shall be applied against the
outstanding principal amount of the Note.
3. Title - This Note is issued subject to the condition, and every holder of
this Note by accepting the same agrees with every subsequent holder of this
Note and with the Payee, that title to this Note and all rights hereunder
shall be transferable only in accordance with the terms hereof, and by
delivery of this Note, duly endorsed, and that the Payee and all persons
dealing with this Note may treat the registered owner hereof or, when
presented duly endorsed in blank to a specified person, the bearer of this
Note, or such persons respectively, as the absolute owner hereof for all
purposes, any notice to the contrary notwithstanding. The Payor may transfer
this Note, subject to the terms and conditions hereof, by delivering the Note
to the Payee, duly endorsed, with instructions to re-issue the Note as one or
more notes (the one or more notes to have a total face amount equal to the
Note) to those person(s) designated by the Payor. This Note may not be
transferred by the Payee.
4. Loss, Theft, Destruction, or Mutilation - Upon receipt by the Payee of
evidence satisfactory to it (in the exercise of its reasonable discretion) of
the ownership of and the loss, theft, destruction, or mutilation of this Note
and (in the case of loss, theft, or destruction) of indemnity satisfactory to
it (in the exercise of its reasonable discretion), and (in the case of
mutilation) upon surrender and cancellation thereof, the Payee will execute
and deliver, in lieu thereof, a new Note for like tenor.
5. Taxes - The Payee will pay all taxes, if any, in respect of the issue of
this Note.
6. Governing Law - This Note shall be enforced, governed and construed in all
respects in accordance with the laws of the State of Texas.
7. Notices - All notices, approvals and other communications authorized or
required to be given between the parties hereto shall be validly given or made
in writing and hand-delivered, sent by United States mail or by telegram,
postage or other charges prepaid, and addressed to the party to whom the
notice is given at the address set forth below, or such other address as may
be specified in writing to the other party hereto, and shall be deemed to have
been received when sent if sent in accordance with the provisions hereof:
If to the Payee:
Scriptel Holding, Inc.
4153 Arlingate Plaza
Columbus, Ohio 43228
Attn: Bernard H. Eckstein, Chairman
If to the Payor:
Futronics Omega Systems, Inc.
1285 Ave. of Americas
3rd Floor
New York, New York 10019
Attn Mark Gasarch
IN WITNESS WHEREOF, the Payor has signed and sealed this Note on May 14, 1997.
/s/ John H. Wampler
May 14, 1997 $4,000,000
5 Year, 12.5%, Non-Recourse Note
T Bar W Ranch Investments, Inc. (the "Payor"), for value received, hereby
promises to pay to Scriptel Holding, Inc., a Delaware corporation, (the
"Payee"), the sum of $4,000,000 on May 14, 2002 (the "Maturity Date") and to
pay interest on the principal amount from time to time remaining unpaid
hereon, from the date hereof, at the rate of 12.5% per annum, payable at the
Maturity Date. The principal hereof and the interest hereon shall be payable
at the principal office of the Payee at 4153 Arlingate Plaza, Columbus, Ohio
43228, or at such place as Payee may designate.
1. No Recourse - No recourse shall be had for payment of any part of the
principal or interest of this Note against the Payor, all such liability
being, by the acceptance hereof, expressly released, and it being expressly
understood that this Note is payable only out of the proceeds of the sale of 5
year, convertible 12.5% Notes numbered 1-16 in amounts of $250,000 each of the
Payee owned by the Payor.
2. Pre-Payment - The Payor may pre-pay the principal amount of this Note, in
whole or it part, at any time and from time to time, prior to the Maturity
Date without penalty. All pre-payments shall be applied against the
outstanding principal amount of the Note.
3. Title - This Note is issued subject to the condition, and every holder of
this Note by accepting the same agrees with every subsequent holder of this
Note and with the Payee, that title to this Note and all rights hereunder
shall be transferable only in accordance with the terms hereof, and by
delivery of this Note, duly endorsed, and that the Payee and all persons
dealing with this Note may treat the registered owner hereof or, when
presented duly endorsed in blank to a specified person, the bearer of this
Note, or such persons respectively, as the absolute owner hereof for all
purposes, any notice to the contrary notwithstanding. The Payor may transfer
this Note, subject to the terms and conditions hereof, by delivering the Note
to the Payee, duly endorsed, with instructions to re-issue the Note as one or
more notes (the one or more notes to have a total face amount equal to the
Note) to those person(s) designated by the Payor. This Note may not be
transferred by the Payee.
4. Loss, Theft, Destruction, or Mutilation - Upon receipt by the Payee of
evidence satisfactory to it (in the exercise of its reasonable discretion) of
the ownership of and the loss, theft, destruction, or mutilation of this Note
and (in the case of loss, theft, or destruction) of indemnity satisfactory to
it (in the exercise of its reasonable discretion), and (in the case of
mutilation) upon surrender and cancellation thereof, the Payee will execute
and deliver, in lieu thereof, a new Note for like tenor.
5. Taxes - The Payee will pay all taxes, if any, in respect of the issue of
this Note.
6. Governing Law - This Note shall be enforced, governed and construed in all
respects in accordance with the laws of the State of Texas.
7. Notices - All notices, approvals and other communications authorized or
required to be given between the parties hereto shall be validly given or made
in writing and hand-delivered, sent by United States mail or by telegram,
postage or other charges prepaid, and addressed to the party to whom the
notice is given at the address set forth below, or such other address as may
be specified in writing to the other party hereto, and shall be deemed to have
been received when sent if sent in accordance with the provisions hereof:
If to the Payee:
Scriptel Holding, Inc.
4153 Arlingate Plaza
Columbus, Ohio 43228
Attn: Bernard H. Eckstein, Chairman
If to the Payor:
T Bar W Ranch Investments, Inc.
16885 Dallas Parkway, 3rd Fl.
Dallas, Texas 75248
IN WITNESS WHEREOF, the Payor has signed and sealed this Note on May 14, 1997.
/s/ T BAR W RANCH INVESTMENTS, INC. by John H. Wampler
May , 1997 $250,000
Scriptel Holding, Inc.
5 Year, Convertible 12.5% Note
Scriptel Holding, Inc., a Delaware corporation, (the "Corporation"), for value
received, hereby promises to pay to , (the "Payee"), or order the
sum of $250,000 on May , 2002 (the "Maturity Date") and to pay interest on
the principal amount from time to time remaining unpaid hereon, from the date
hereof, at the rate of 12.5% per annum, payable on the quarterly on the last
day of March, June, September and December of each year. The principal hereof
and the interest hereon shall be payable at the principal office of the
Corporation at 4153 Arlingate Plaza, Columbus, Ohio 43228, or at such place
as Payee may designate. This Note shall be secured by a lien on the patents
and patent rights owned by the Company including all royalties and other
payments received thereon.
1. Conversion - The holder of this Note has the right, at his option, at any
time and from time to time, to convert the principal amount hereof and any
accrued but unpaid interest, or any lesser amount, but no less than Fifty
Thousand ($50,000) Dollars, into Common Shares of the Corporation (the
"Shares") at the original conversion price of Ten Cents ($0.10) principal
amount of this Note for one Share. Conversion is effected by delivery and
surrender of this Note at the office of the Corporation, accompanied by
written notice of conversion. The original conversion price is subject to
adjustment as set forth below. No fractional shares or scrip representing
fractional shares will be issued upon any conversion, but an adjustment in
cash will be made in respect of any fraction of a Share which would otherwise
be issuable upon the surrender of this Note for conversion.
2. Adjustment of Conversion - In the event that the Corporation shall, at any
time prior to the Maturity Date of this Note and prior to the conversion into
Shares thereof: (i) declare or pay to the holders of the Shares a dividend
payable in cash or in any kind of shares of stock of the Corporation; or (ii)
change or divide or otherwise reclassify its Common Stock into the same or a
different number of shares with or without par value, or into shares of any
class or classes; or (iii) consolidate or merge with, or transfer its property
as an entirety or substantially as an entirety to, any other corporation; or
(iv) make any distribution of its assets to holders of its Common Stock as a
liquidation or partial liquidation dividend or by way of return of capital;
then, upon the subsequent conversion of this Note into Shares, the holder
thereof shall receive for the conversion price, in addition to or in
substitution for the Shares to which he would otherwise be entitled upon such
conversion, such cash, or such additional shares, or such reclassified shares
of stock of the Corporation, or such shares of the securities or property of
the Corporation resulting from such consolidation or merger or transfer, or
such assets of the Corporation, which he would have been entitled to receive
had he converted this Note prior to the happening of any of the foregoing
events. Notwithstanding the foregoing, and regardless of the happening of any
one or more of the events set forth herein, at no time shall the conversion
price per share be greater than Twenty Cents ($0.20) per Share.
3. Pre-Payment - The Company may not pre-pay the principal amount of this Note
at any time prior to the Maturity Date without the prior written consent of
the Payee.
4. Title - This Note is issued subject to the condition, and every holder of
this Note by accepting the same agrees with every subsequent holder of this
Note and with the Corporation, that title to this Note and all rights
hereunder shall be transferable only in accordance with the terms hereof, and
by delivery of this Note, duly endorsed, and that the Corporation and all
persons dealing with this Note may treat the registered owner hereof or, when
presented duly endorsed in blank to a specific person, the bearer of this
Note, or such persons respectively, as the absolute owner hereof for all
purposes, any notice to the contrary notwithstanding. The Payee may transfer
this Note, subject to the terms and conditions hereof, by delivering the Note
to the Corporation, duly endorsed, with instructions to re-issue the Note as
one or more notes (the one or more notes to have a total face amount equal to
the Note) to those person(s) designated by the Payee.
5. Note Not Registered - This Note, and the Shares to be received upon the
conversion of this Note, have not been registered under the Securities Act of
1933, as amended (the "1933 Act"), and are issued in reliance upon an
exemption from the registration provisions of the 1933 Act. The Payee, and
any subsequent holder(s) of this Note, agrees to comply with, and not in any
manner violate, all applicable securities laws, rules and regulations and the
terms and conditions herein contained with respect to the sale, transfer or
other disposition of this Note, including any conditions or other restrictions
as may be imposed by any regulatory authorities having jurisdiction as a
condition of their granting approval of the issuance of this Note. This Note,
and any Shares issued upon the conversion of this Note, shall bear a legend to
that effect. Notwithstanding the foregoing, if, in the case of any offering
of equity securities by the Company (or securities convertible into equity
securities), within ten days after Payee has been made aware by the Company of
its intention to effect a registration of any of its securities (otherwise
than pursuant to Form S-8 or for an employee benefit plan), the Payee may
request and the Company shall honor Payee's request that, solely at the
Company's expense, all equity securities in the Company acquired by Payee
pursuant to the conversion rights set forth in this Note be included in the
registration statement. In addition, in the event that the Company shall
receive from the Payee a written request that the Company effect any
registration, qualification or compliance with respect to all or any portion
of the Shares then held by the Payee, or which the Payee may be entitled upon
conversion of this Note, the Company will, as soon as practicable, at its sole
cost and expense, effect all such registrations, qualifications and
compliances (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualifications under the
applicable blue-sky or other state securities laws and appropriate compliance
with exemptive regulations issued under the 1933 Act and any other
governmental requirements or regulations) as may be so requested and as would
permit or facilitate the sale of all or such portion of the Shares as are
specified in such request. The Company shall file the registration statement
including the Payee's Shares as soon as practical, but in any event no later
than 60 days after the receipt of said request. The Payee is limited to one
such demand registration in every 365 day period. The registration statement
filed pursuant to Payee's request shall be limited to registering for sale the
Shares of Payee and of other payees who hold similar demand rights, but shall
not be available to others who hold solely "piggyback" registration rights.
6. Reservation of Shares Issuable on Conversion of Note - The Corporation will
at all times keep available out of its authorized shares, solely for issuance
upon the conversion of this Note, such number of Shares as from time to time
shall be issuable upon the conversion of this Note.
7. Representations and Warranties of the Company - The Company represents and
warrants that it is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, and that it has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now conducted. The Company further represents and
warrants that it has the corporate power and authority to execute and deliver
this Note and to perform its obligations hereunder and to consummate the
transactions contemplated herein. The Company has taken all necessary
corporate action to authorize the execution, deliver and performance of this
Note and the transactions contemplated herein. The Company represents and
warrants that this Note has been duly executed and delivered by it and
constitutes a valid, legal and binding obligation of the Company, enforceable
against the Company in accordance with its terms. The Company represents and
warrants that the execution and deliver of this Note by the Company will not
(i) result in a breach of or constitute a material default under or give rise
to any right of termination, cancellation or acceleration under, or create
obligations to pay money or otherwise perform a material act pursuant to, any
of the terms, conditions, or provisions of any contract, agreement, note or
other instrument to which the Company is a party or by which the Company or a
material portion of its assets may be bound, (ii) conflict with, or result in
any breach of any provision of, the Certificate of Incorporation or By Laws or
other governing instruments of the Company, (iii) violate any domestic or
foreign, federal, state or local law, rule regulation, statute or ordinance
applicable to or binding upon the Company or its properties, or any
determination, ruling, decree or judgment of any arbitrator or a court or any
other governmental or quasi-governmental entity, official or authority having
jurisdiction over the Company or any material portion of its assets or
properties; or (iv) result in the imposition of any lien or encumbrance upon
any of its capital stock, properties or assets of the Company. The Company
represents and warrants that no consent, approval, waiver or other action by
any person or entity who is not a party to this Note or under any domestic or
foreign, federal, state or local law, rule regulation, statute or ordinance
applicable to or binding upon the Company or its properties is required or
necessary for the execution or delivery by the Company of this Note or for the
consummation of the transactions contemplated herein, or the performance by
the Company of its obligations hereunder.
8. Loss, Theft, Destruction, or Mutilation - Upon receipt by the Corporation
of evidence satisfactory to it (in the exercise of its reasonable discretion)
of the ownership of and the loss, theft, destruction, or mutilation of this
Note and (in the case of loss, theft, or destruction) of indemnity
satisfactory to it (in the exercise of its reasonable discretion), and (in the
case of mutilation) upon surrender and cancellation thereof, the Corporation
will execute and deliver, in lieu thereof, a new Note for like tenor.
9. Taxes - The Corporation will pay all taxes, if any, in respect of the issue
of this Note and the Shares issuable upon the conversion thereof.
10. Governing Law - This Note shall be enforced, governed and construed in all
respects in accordance with the laws of the State of Texas.
11. Notices - All notices, approvals and other communications authorized or
required to be given between the parties hereto shall be validly given or made
in writing and hand-delivered, sent by United States mail or by telegram,
postage or other charges prepaid, and addressed to the party to whom the
notice is given at the address set forth below, or such other address as may
be specified in writing to the other party hereto, and shall be deemed to have
been received when sent if sent in accordance with the provisions hereof:
If to the Corporation:
Scriptel Holding, Inc.
4153 Arlingate Plaza
Columbus, Ohio 43228
Attn: Bernard H. Eckstein, Chairman
If to the Payee:
IN WITNESS WHEREOF, the Corporation has signed and sealed this Note on May ,
1997.
Scriptel Holding, Inc.
By:
Bernard H. Eckstein, Chairman
SCRIPTEL HOLDING, INC.
AND GERALD S. JACOBS AND STANDARD ENERGY COMPANY
AGREEMENT TO FORBEAR COLLECTION
This agreement made this 30th day of April 1997, is between Gerald S. Jacobs
(hereinafter referred to as Jacobs), Standard Energy Company, an Ohio
corporation (hereinafter referred to as Standard), and Scriptel Holding, Inc.,
a Delaware corporation (hereinafter referred to as Scriptel), with respect to
the debts owed by Scriptel to either or both of Jacobs and Standard as
evidenced by the promissory notes from Scriptel and others as maker(s) to
Jacobs and/or Standard as payee(s) as listed on Attachment "A" hereof (the
"Notes"). This agreement is contingent upon, and shall become binding upon,
completion of an initial funding of at least $275,000 by sources provided by
DeWitt & Wolf Consultants, LLC.
For the consideration, and on the terms and conditions, herein stated, Jacobs
and Standard hereby agree that, prior to December 31, 1998, they shall neither
demand any payment from Scriptel on any of the Notes nor attempt any
collection of the Notes against Scriptel or any of its assets unless:
a) Scriptel ceases operation
b) Scriptel is moved against by the holder of the convertible debenture
described in the Attachment "B" hereof (the "Debenture")
c) Legal action has been taken by a third party which seeks to attach or
otherwise sell or liquidate assets of Scriptel in which event the secured
parties may take appropriate action to protect their priority.
d) Scriptel makes a filing or legal declaration of bankruptcy or insolvency.
e) Scriptel violates any State or Federal laws which Standard, Jacobs and the
Debenture holders agree jeopardizes the value or priority of the collateral
securing the Notes.
f) Standard and Jacobs agree with the Debenture holder that the collateral
securing the Debenture is at risk.
g) The full amount of the Debenture is not timely funded on the timetable and
terms agreed upon by the purchasers and Scriptel or final documents for the
Debenture are not executed by June 30, 1997..
h) Any shareholder or creditor of Scriptel receives from Scriptel prior to
the full-funding of the Debenture a debt conversion or equity-conversion right
on more favorable terms than any right then held by either or both of Jacobs
and Standard.
Further, the parties hereby agree that:
1) Scriptel will not pay any dividends or make any distributions to its
shareholders while any balance of the Notes remains unpaid.
2) Standard and Jacobs will surrender all of their presently held warrants
and options in consideration for being allowed to convert $250,000. of the
amount due on the Notes into the Debenture, which will provide Standard and
Jacobs a maximum of five percent (5%) of the outstanding shares of Scriptel
immediately after a proposed 1 to 20 reverse stick split.
3) This Agreement shall not restrict Standard and/or Jacobs from taking any
action whatsoever to collect the amounts due under the Notes from any of the
Notes' co-obligors other than Scriptel and Scriptel Corporation.
AGREED:
/s/ B. H. Eckstein
B. H. Eckstein, CEO
Scriptel Holding, Inc.
AGREED:
/s/ Gerald S. Jacobs, Pres.
Gerald S. Jacobs, President
Standard Energy Company
AGREED:
/s/ Gerald S. Jacobs
Gerald S. Jacobs
ATTACHMENT A
STANDARD ENERGY NOTES
NOTE no. NOTE DATE DUE PRINCIPLE
3 10/31/94 110,000.00
4 12/29/94 258,500.00
5 05/31/94 242,011.26
6 05/17/94 125,000.00
7 06/23/93 50,000.00
8 05/21/93 50,000.00
12 05/10/95 125,000.00
15 06/07/95 225,000.00
16 06/15/95 80,000.00
18 09/01/95 330,000.00
19 09/21/95 175,000.00
22 01/17/96 180,000.00
23 02/15/96 17,000.00
24 02/29/96 350,000.00
25 03/26/96 100,000.00
GERALD JACOBS NOTES
NOTE no. NOTE DATE PRINCIPLE DUE
3 02/01/93 75,000.00
4 04/29/93 100,000.00
5 10/20/95 200,000.00
ATTACHMENT B
SCRIPTEL HOLDING, INC.
FOUR MILLION TWO HUNDRED FIFTY THOUSAND DOLLAR 12 1/2%
NON-DILUTIVE CONVERTIBLE DEBENTURE TERMS
A) The Convertible Debenture shall be issued by Scriptel (the "Debenture")
for not more than $4,250,000 in the aggregate, shall bear interest at the rate
of 12 1/2% per annum, shall be payable no later than April 30, 1999, and shall
be secured by a lien on the Patents and Patent rights owned by Scriptel
including all royalties and other payments received thereon.
B) The Debenture will be convertible at $.10 per share on a non-dilutive
basis. Scriptel will secure shareholder approval for a maximum of 1 for 20
reverse stock split. After the shareholder approved reverse stock split, the
Debenture will be convertible at a price of $.20 per share. If any portion of
the Debenture is converted prior to the shareholder approved reverse stock
split, then after the reverse stock split the Debenture holders will be issued
additional shares so that the price per share shall equal $.20 and the then
outstanding shares represented by the Debenture shall be at least eighty-five
percent of the outstanding shares.
Scriptel's major secured creditors, Gerald s. Jacobs ("Jacobs") and Standard
Energy Company ("Standard"), have agreed to share the lien position with the
Debenture holders on the following basis:
1) Subject to the terms and conditions of a separate agreement, Jacobs and
Standard will forbear collection of their notes until December 31, 1998.
2) Two hundred fifty thousand dollars of the Debenture will be subscribed to
by Standard and Jacobs, to be purchased at the same times and in proportion
to the purchase of the $4,000,000 balance of the Debenture.
3) Standard and Jacobs agree that shares issued under the Debenture will be
an investment under Rule 144 and the investment date will be the date of
signing this agreement.
4) Any cash receipts or distributions pledged or received to liquidate either
the secured debt or the Debenture will be distributed as follows:
a. The first two million dollars will be distributed to Standard and/or
Jacobs as reduction of the non-Debenture secured debt.
b. All moneys after two million dollars will be shared prorata based on the
outstanding debt amounts due under the Debenture and the secured debt to
Standard Energy and Jacobs.
C) Scriptel will secure an extension from other Scriptel note holders of
those note holders' date of maturity to December 31, 1998.
D) Investor will fund $4,000,000 to Scriptel under the Debenture as follows:
1) Within two banking days of this agreement, the Investor will fund $150,000
to meet immediate needs and $125,000 for one month's operating expenses, for a
total of $275,000.
2) Within ten banking days of this agreement, Investor will escrow an
additional $125,000 for the performance of this agreement. These funds will
be released to Scriptel at the completion of final documents by attorneys for
Scriptel and Investor and any required approval by the S.E.C.
3) The balance of the funding by the Investor of $3,600,000 will be received
in the form of a note payable from the Investor to Scriptel, with payment
schedule to be determined no later than the completion of the final documents.
a. Minimum monthly payment shall be the operating overhead cost.
b. A proforma cash flow will be presented showing cash requirements, tooling
and inventory build up needs.
E) The Debenture holders other than Standard and/or Jacobs shall have the
right to appoint up to three directors to the Scriptel Holding, Inc. Board of
Directors.
Date: 4/30, 1997
AGREED:
/s/ B. H. Eckstein
B. H. Eckstein, CEO
AGREED:
/s/ Gerald S. Jacobs, Pres.
Gerald S. Jacobs, President
Standard Energy Company
AGREED:
Investor
AGREED:
/s/ Gerald S. Jacobs
Gerald S. Jacobs
Contact: Edward Palmer
Executive Vice President
Scriptel Holding, Inc.
Tel:(614) 276.8402
FOR IMMEDIATE RELEASE
SCRIPTEL ANNOUNCES RESTRUCTURE
COLUMBUS, OH - May 16 - Scriptel Holding, Inc. headquartered in Columbus, OH
(OTC:SCRH), announced today it has just completed a financial restructuring
agreement which will allow the company to more aggressively pursue the
manufacturing ramp up and marketing of its WriteTouch (TM) system to OEMs.
the system began shipping in February.
The Company has restructured its liabilities, issued stock to key employees,
signed new management agreements and reorganized its capital structure.
Scriptel's financial advisor, DeWitt Wolf Consultants LLC of San Francisco,
has brought in a $4 million capital commitment in a staged financing.
Scriptel intends to undertake a reverse stock split, and has authorized DeWitt
Wolf to seek compatible acquisition candidates that will create new revenue
opportunities for Scriptel to broaden its product lines, customer base and
distribution channels.
Mr. Bernard Eckstein, Chairman and CEO says, "This restructure will provide
the Company a sound base to move the Scriptel technology forward, and offers
some interesting opportunities for the future. We now have a management team
and investor support of motivated, results driven people."
"This restructuring is the step needed to allow Scriptel shareholders and
business partners to realize the fruits of their investment in our
technology," says Vance Holloway, President and COO.
Scriptel Holding, Inc. develops, manufactures and markets high-performance
digital pen subsystems that are customized by OEMs into end-user products,
including the WriteTouch (TM) cordless pen. WriteTouch (TM) was designed for
a variety of vertical and horizontal markets including the retail,
telemedicine, utility and insurance industries as well as a variety of other
mobile data collection industries and service companies. The Company is
located at 4153 Arlingate Plaza, Columbus, Ohio 43228; phone 614.276.8402.
For more information about Scriptel please visit the Web site at
www.scriptel.com and the WriteTouch (TM) Web site at www.writetouch.com. For
further information regarding the restructure, contact DeWitt Wolf Consultant
LLC at 415.955.0561.
