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): November 17, 1998
GROUP LONG DISTANCE, INC.
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(Exact name of Registrant as Specified in Charter)
Florida 0-21913 65-0213198
(State or other jurisdiction (Commission (IRS Employer
of organization) File Number) Identification No.)
1451 West Cypress Creek Road, Suite 200, Fort Lauderdale, Florida 33309
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (954) 771-9696
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Item 5. Other Events
On November 12, 1998, the Company and STAR
Telecommunications ("STAR") executed a Letter of
Intent, which provides, among other things, for
the acquisition by STAR of all or substantially
all of the outstanding securities of the Company
(the "Acquisition") at a purchase price of
$3,700,000, plus an additional amount to be
determined based on the Company's accounts
receivables less certain liabilities as of a
specified date.
The transaction is contingent upon, among other
things, approval by both the Company's and STAR's
board of directors and the Company's stockholders
and other customary conditions, and is expected to
close by year end.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
1. Letter Agreement between STAR and the
Company dated November 12, 1998.
2. Press Release issued by the Company dated
November 16, 1998.
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SIGNATURE
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 thereunto duly authorized.
GROUP LONG DISTANCE, INC.
(Registrant)
By:/s/Gerald M. Dunne, Jr.
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Gerald M. Dunne, Jr.
President
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EXHIBIT INDEX
Exhibit
99.1 Letter Agreement between STAR and the Company dated
November 12, 1998.
99.2 Press Release issued by the Company dated November
16, 1998.
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Exhibit 99.1
THE REBENSDORF GROUP, INC.
November 10, 1998
Mr. Gerry Dunne
Chief Executive Officer
Group Long Distance, Inc.
1451 West Cypress Road
Suite 200
Fort Lauderdale, Florida 33309
Re: Letter of Intent
Gentlemen:
This firm represents the interests of STAR Telecommunications, Inc.
("STAR") with respect to the possible acquisition of Group Long Distance, Inc.
("Group"). This letter may serve as the expression of intent of STAR to acquire
all or substantially all of the securities of Group as set forth below:
1. STAR, acting directly or through an affiliate or subsidiary, is willing
to acquire all or substantially all of the securities of Group.
2. The purchase price ("Purchase Price") shall be Three Million Seven
Hundred Thousand Dollars ($3,700,000), plus an amount equal to Eighty Five
Percent (85%) of the Accounts Receivables, net of billing costs, of Group aged
less than sixty (60) days, less any non-Tel-Save liabilities and/or payables
(approximately $1.2 million).
3. The Representations and Warranties shall include but shall not be
limited to:
a. A Representation of the Gross Monthly Revenue (defined as
one-plus inter and intra-state usage, international usage, and monthly
recurring charges) generated by the Customer Base in the month
immediately prior to Closing. All taxes, governmental and ancillary
charges are not to be included for the purposes of this calculation.
b. A Representation that Group is not aware of any material
liabilities outstanding other than those disclosed in Group's public
filings and/or notices and/or those made available to STAR during the
course of its due diligence.
c. Group is a defendant in certain civil actions, Case No.
CV-96-025165 S and Case No. CV-94-0472 CA 5. A Representation that
Group will settle these cases prior to the closing of this transaction
and that defendant is not a defendant in any other pending civil
actions.
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d. A Representation that Group is not aware of any cease and
desist orders from the FCC. A Representation that all FCC inquiries
are customary and ordinary and do not represent material amounts.
e. A Representation that Group is not aware of any cease and
desist orders from any Public Utility (PUCs). A Representation that
all Public Utility inquiries are customary and ordinary and do not
represent material amounts.
f. A Representation that Group's local certifications are valid
in 39 states and the 2 CIC codes are valid nationwide. The parties
hereto agree to use all commercially feasible efforts to execute
definitive agreements containing customary representations warranties,
and covenants within 15 days after execution of this Letter of Intent,
or as soon thereafter as possible, but in no event later than December
1, 1998 after which date this Letter of Intent shall expire.
5. During the period between the date hereof and closing, Group will permit
STAR to conduct all necessary and reasonable due diligence. Group will continue
its operations on a basis consistent with past practices.
6. Consummation of the transaction will be subject to certain conditions,
and receipt of appropriate Board resolutions and consents of third parties
without limiting the generality of the foregoing, as conditions to closing:
a. The parties shall execute a mutually acceptable definitive
purchase agreement, together with the fulfillment or waiver of the
terms and conditions thereof,
b. Directors Dunne and Russo of Group will enter into
Non-Solicitation Agreements, in consideration of the payments of
$270,000 for Dunne and $230,000 for Russo.
c. STAR shall be satisfied in their discretion with the results
of its due diligence review of all aspects of Group.
d. There shall not have occurred after the date hereof any
material change in the business and operations of Group.
7. In consideration of the substantial investment of time and money to be
undertaken by STAR in connection with the foregoing, Group agrees not to
solicit, consider or negotiate any other offer to be acquired during the term of
this Letter of Intent. Further, in the event Group should accept an offer for
purchase of the company at a value in excess of the Purchase Price during the
term of this Letter of Intent, or within 180 days after expiration hereof, Group
agrees to pay STAR a break up fee in the amount of $200,000 at the closing of
the subsequent purchase and sale to the third party.
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8. The parties shall keep the subject matter of this Letter of Intent and
the identity of the purchaser strictly confidential, subject to legal and
regulatory disclosure requirements. Each party shall bear all of its own costs
and expenses incurred in connection with the transactions contemplated hereby,
including the negotiation and finalization of all agreements.
Sections 8 and 9 above, are the binding agreements of the parties, and the
remainder of this Letter of Intent is non-binding and intended as a guide to
completion of negotiations. The purchase and sale of Group will be effected only
pursuant to a definitive written agreement between the parties. This Letter of
Intent may be signed by fax and in counterpart, each of which will be considered
to be an original, and all of which together will be considered to be one
document.
If the foregoing meets with your approval, please so indicate where
indicated below, and returning it no later than November 17, 1998.
STAR TELECOMMUNICATIONS, INC.
By: The Rebensdorf Group, Inc.
(authorized representative)
By: ______________________________
George Rebensdorf
President
GROUP LONG DISTANCE, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
<PAGE>
Exhibit 99.2
FOR IMMEDIATE RELEASE CONTACT: PETER J. RUSSO
CHIEF FINANCIAL OFFICER
(954) 771-9696
GROUP LONG DISTANCE, INC. ANNOUNCES ACQUISITION BY STAR
TELECOMMUNICATIONS, INC.
November 16, 1998, New York, New York- Group Long Distance, Inc. ("Group Long
Distance" or the "Company") (NASDAQ symbol: GLDI, GLDIW), today announced that
on November 12, 1998, the Company and STAR Telecommunications, Inc. ("STAR")
executed a Letter of Intent, which provides, among other things, for the
acquisition by STAR of all or substantially all of the outstanding securities of
the Company (the "Acquisition") at a purchase price of $3,700,000, plus an
additional amount to be determined based on the Company's accounts receivables
less certain liabilities as of a specified date.
The transaction is contingent upon, among other things, approval by both the
Company's and Star's board of directors and the Company's stockholders and other
customary conditions, and is expected to close by year end.
Group Long Distance is a long distance telecommunications provider. The Company
utilizes special network service contracts to provide customers with products
and services through major telecommunications carriers.
Certain of the statements contained in this press release may be deemed
forward-looking statements. Such statements, and other matters addressed in this
press release involve a number of risks and uncertainties. Among the factors
that could cause actual results to differ materially from these statements and
other matters, are the risks and other factors, detailed from time to time in
the Company's reports filed with the United States Securities and Exchange
Commission.
