Securities and Exchange Commission
Washington D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _______)
(Name of Issuer)
UStel, Inc.
(Title of Class Securities)
Common Stock
(CUSIP Number)
917325102
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
Mr. Shaul Elovitch
c/o
Moshe H. Ne'eman Ben Artzi & Co., Advocates
Top Tower, 50 Dizengof St.
Tel-Aviv 64332, Israel
Tel-972-3-5254141 Fax-972-3-5253818
(Date of Event which Requires Filling of this Statement)
October 4, 1998
<PAGE>
CUSIP Number - 917325102
1)Name of Reporting Persons (entities only) Eurocom Global Communication
(1996) LTD I.R.S. Identification No. 000000000.
2)Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b) X
3)SEC Use only
4)Source of Funds (See Instructions) - OO parent company
5)Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e)
6)Citizenship or Place of Organization - Israel
7)Sole Voting Power - 8,000,000 common stock shares representing 41%
8)Shared Voting Power -
9)Sole Dispositive Power - 8,000,000 common stock shares representing 41%
10)Shared Dispositive Power -
11)Aggregate Amount Beneficially Owned by Each Reporting Person - 8,000,000
common stock shares
12)Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
13)Percent of Class Represented by Amount in Row (11) - 41%
14)Type of Reporting Person (See Instructions) - OO (Israeli company limited
by shares)
<PAGE>
Item 1 - Security and Issuer
Title of Class - Common Stock
Name of Issuer - UStel, Inc.
Principal Executive Offices - 6167 Bristol Parkway #100, Culver City, CA 90230
Item 2 - Identity and Background
Eurocom Global Communication (1996) LTD (the "Reporting Person")
Place of Organization - Israel
Principal business - Investment in companies in the field of communication
products and services.
Address of Principal Business - 2 Dov Friedman St., Ramat Gan, 52503, Israel
Executive Officers -
(a) Name - Mr. Shaul Elovitch
(b) Residence - 2 Dov Friedman St., Ramat Gan, 52503, Israel
(c) Occupation - CEO and Chairman of the Board of Eurocom Communication LTD
(d) Criminal proceedings - None
(e) Civil proceedings - None
(f) Citizenship - Israeli
(a) Name - Mr. Joseph Elovitch
(b) Residence - 2 Dov Friedman St., Ramat Gan, 52503, Israel
(c) Occupation - Director in Eurocom Communication LTD
(d) Criminal proceedings - None
(e) Civil proceedings - None
(f) Citizenship - Israeli
<PAGE>
Eurocom Communication LTD (the Reporting Person's parent company)
Place of Organization - Israel
Principal business - Investment in companies in the field of communication
products and services.
Address of Principal Business - 2 Dov Friedman St., Ramat Gan, 52503, Israel
Executive Officers -
(a) Name - Mr. Shaul Elovitch
(b) Residence - 2 Dov Friedman St., Ramat Gan, 52503, Israel
(c) Occupation - CEO and Chairman of the Board
(d) Criminal proceedings - None
(e) Civil proceedings - None
(f) Citizenship - Israeli
(a) Name - Mr. Joseph Elovitch
(b) Residence - 2 Dov Friedman St., Ramat Gan, 52503, Israel
(c) Occupation - Director
(d) Criminal proceedings - None
(e) Civil proceedings - None
(f) Citizenship - Israeli
(a) Name - Mr. Shlomo Nehama
(b) Residence - 23 Shaul Hamelech Blvd., 64367, Israel
(c) Occupation - Director, Arison Investments Ltd.
(d) Criminal proceedings - None
(e) Civil proceedings - None
(f) Citizenship - Israeli
(a) Name - Mr. Erez Gisin
(b) Residence - 2 Dov Friedman St., Ramat Gan, 52503, Israel
(c) Occupation - Vice President
(d) Criminal proceedings - None
(e) Civil proceedings - None
(f) Citizenship - Israeli
<PAGE>
Item 3 - Source and Amount of funds or Other Consideration
The funds for the purchase of the securities of the Issuer shall be provided
to the Reporting Person by way of a loan from Eurocom Communication Ltd., the
Reporting Person's parent company.
Item 4 - Purpose of Transaction
The purpose of acquisition of securities of the issuer is in order to acquire
control of the issuer. The Reporting Person may acquire additional securities
of the issuer or dispose of any securities it has acquired. The Reporting
Person has not yet finalized its plans but the Reporting Person may cause a
merger or acquisition to take place between the issuer and affiliated entity
of the Reporting Person or may undertake joint projects with the issuer. If
the Reporting Person exercises its Option it may cause a change in the
composition of the Board of Directors or Management of the issuer, it may
cause nominees of the Reporting Person to be placed on the Board of
Directors. The Reporting Person has no present plans to change the
capitalization or dividend policy of the issuer although it may do so after
taking control if business purposes dictate that it do so. At this time the
Reporting Person has no plans to change the issuer's charter or by-laws but it
reserves the right to do so if it deems it desirable upon exercise of its
Option and assuming control of the issuer. At the present time the reporting
person has no plans to cause the issuers securities to be delisted from a
National Securities Exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system. At the present time the Reporting Person has
no plans to cause termination of registration of the issuer pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934.
Item 5 - Interest in Securities of the Issuer
(a)The Reporting Person has an option to subscribe for and purchase from the
Company of 8,000,000 shares of the Company's common stock, $0.01 par value
per share, at a price per share of common stock of $0.75, which, after the
exercise of the option, shall represent 41% of the common stock.
(b)Following the exercise of the option by the Reporting Person, it shall have
the sole power to vote or direct the vote and sole power to dispose or direct
the disposition of 8,000,000 shares.
Item 6 - Contracts, Arrangements, Understanding or Relationship With Respect
to Securities of the Issuer
The Reporting Person is entering in an Option Agreement, a copy of which is
attached as an Exhibit, pursuant to which, if exercised, it will acquire
8,000,000 new issued shares of common stock of the issuer for a price of $0.75
per share. Based on the information provided by the issuer there are
currently 11,496,111 shares of common stock of the issuer outstanding. After
exercise of the Option shares will represent 41% of the total then
outstanding.
Item 7 - Material to be Filed as Exhibits
Exhibit 1 - Option Agreement
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
October 21, 1998
Date
/S/ Shaul Elovitch
Signature
Shaul Elovitch
Name / Title
<PAGE>
THIS OPTION AND ANY SHARES ISSUABLE UPON THE EXERCISE OF THIS OPTION HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), NOR UNDER ANY STATE SECURITIES LAW AND SUCH SECURITIES MAY NOT BE
PLEDGED, SOLD, ASSIGNED, HYPOTHECATED, OR OTHERWISE TRANSFERRED UNTIL (1) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAW OR (2) THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE COMPANY OR COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH
COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED, OR TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS.
THE TRANSFER OF THIS OPTION AND THE SHARES ISSUABLE UPON THE EXERCISE HEREOF
IS RESTRICTED AS DESCRIBED HEREIN.
OPTION AGREEMENT
This Option Agreement is entered into between UStel, Inc., a Minnesota
corporation (the "Company") and Eurocom Communications, Ltd., (the "Holder").
1.Whereas, Holder is desirous of obtaining an option to purchase shares of
Common Stock of UStel;
2. Whereas, UStel is desirous of granting such an option;
NOW THEREFORE, the parties agree as follows:
1. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Holder is entitled to subscribe for and
purchase from the Company upon the terms and conditions set forth herein, at
any time in a single transaction, during the period commencing on September
18, 1998, and expiring at 5:00 p.m. on November 17, 1998, (the "Exercise
Period"), 8,000,000 shares of the Company's common stock, $0.01 par value per
share (the "Common Stock"), at a price (the "Exercise Price") per share of
Common Stock of $0.75.
2. This Option may be exercised during the Exercise Period, as to all of
the shares of Common Stock, but not less than all, which are the subject of
this Option, by transmission by telecopy of an election to exercise, to the
Company, Attention: Robert L.B. Diener, Chairman, at its office at 6167
Bristol Parkway, Suite 100, Culver City, CA 90230, Telecopy No.: (310)
645-5546, or at such other place as is designated in writing by the Company,
together with a certified or bank cashier's check payable to the order of the
Company or by wire transfer in an amount equal to the product of the Exercise
Price and 8,000,000 (the "Aggregate Exercise Price"). This Option is
conditioned upon (i) the Holder notifying the Company within thirty (30) days
of the date hereof that it has satisfactorily completed its due diligence with
respect to the transaction contemplated hereby and (ii) presents the Company
with a proposed definitive Purchase Agreement within such thirty (30) day
period calling for a closing by November 17, 1998.
3. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of the rights to purchase the shares which are the subject of
this Option. The Company covenants that all shares of Common Stock issuable
upon exercise of this Option, upon receipt by the Company of the full Exercise
Price therefor, shall be validly issued, fully paid, nonassessable, and free
of preemptive rights.
4. The Exercise Price in effect at any time and the number and kind of
securities purchasable upon the exercise of this Option shall be subject to
adjustment from time to time upon the happening of certain events as detailed
below:
(a) In case the Company shall (I) subdivide or reclassify its
outstanding shares of Common Stock into a greater number of shares, or (ii)
combine or reclassify its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect at the time of the effective
date of such subdivision, combination or reclassification shall be adjusted so
that it shall equal the price determined by multiplying the Exercise Price by
a fraction, the denominator of which shall be the number of shares of Common
Stock outstanding after giving effect to such action, and the numerator of
which
shall be the number of shares of Common Stock outstanding immediately prior
to such action. Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) Upon each adjustment of the Exercise Price pursuant to the
provisions of this Section, the number of shares issuable upon the exercise at
the adjusted Exercise Price shall be adjusted to the nearest number of whole
shares of Common Stock by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of shares issuable
upon exercise of this Option immediately prior to such adjustment and dividing
the product so obtained by the adjusted Exercise Price.
(c) For the purpose of this Option, the term "Common Stock" shall
mean (I) the class of stock designated as Common Stock in the Articles of
Incorporation of the Company as amended as of the date hereof, or (ii) any
other class of stock resulting from successive changes or reclassifications of
such Common Stock consisting solely of changes in par value, or from par value
to no par value, or from no par value to par value.
(d) In case of any consolidation of the Company with, or merger of
the Company into, another corporation (other than a consolidation or merger
which does not result in any reclassification or change of the outstanding
Common Stock), the corporation formed by such consolidation or merger shall
execute and deliver to the Holder a supplemental agreement providing that the
Holder shall have the right thereafter (until the expiration of this Option)
to receive, upon exercise of this Option, the kind and amount of shares of
stock and other securities and property receivable upon such consolidation or
merger by a holder of the number of shares of Common Stock for which this
Option might have been exercised immediately prior to such consolidation,
merger, sale or transfer. Such supplemental agreement shall provide for
adjustments which shall be identical to the adjustments provided in this
Section. The above provision of this subsection shall similarly apply to
successive consolidations or mergers.
(e) No adjustment in the number of shares shall be required if such
adjustment is less than one share; provided, however, that any adjustments
which by reason of this Section are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
5. The issuance of any shares or other securities upon the exercise of
this Option, and the delivery of certificates or other instruments
representing such shares or other securities, shall be made without charge to
the Holder for any tax or other charge in respect of such issuance, other than
applicable transfer taxes. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of any certificate in a name other than that of the Holder and
the Company shall not be required to issue or deliver any such certificate
unless and until the person or persons requesting the issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
6. The shares issued upon exercise of this Option shall be subject to a
stop transfer order and the certificate or certificates evidencing shares
shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN NOT REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT, OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT. SUCH SHARES ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER CONTAINED IN AN OPTION AGREEMENT, DATED
SEPTEMBER 18, 1998, A COPY OF WHICH ARE ON FILE WITH THE SECRETARY OF THE
COMPANY."
7. The Holder of this Option shall not have, solely on account of such
status, any rights of a stockholder of the Company, either at law or in
equity, or to any notice of meetings of stockholders or of any other
proceedings of the Company, unless and until this Option is exercised in
accordance with this Agreement.
8. This Option shall be construed in accordance with the laws of the State
of California applicable to contracts made and performed within such State,
without regard to principles of conflicts of law.
9. The Holder agrees to promptly file a Form 13D or similar form with
respect hereof with the Securities and Exchange Commission, if required, and
to otherwise comply in all respects with United States securities laws.
Dated: September 18, 1998
HOLDER
EUROCOM COMMUNICATIONS, LTD.:
BY: /S/ Shaul Elovitch October 4, 1998
Name: Shaul Elovitch
Title: President
USTEL, INC.
BY: /S/ Robert L.B.Diener
Name: Robert L.B. Diener
Title: Chairman
