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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) April 27, 2000
INTELLICALL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-10588 75-19993841
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2155 CHENAULT, SUITE 410 CARROLLTON, TEXAS 75006
(Address of principal executive offices) (Zip Code)
Registrant=s telephone number, including area code (972) 416-0022
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 27, 2000, Intellicall, Inc. (the "Company") completed a transaction
in which it sold 11,836 shares of common stock and 58,772 shares of Series A
Preferred stock of ILD Telecommunications, Inc. (together, the "Shares") to
Gotthardfin Limited, Nassau, Bahamas, a wholly-owned subsidiary of Banca del
Gottardo ("Purchaser") in exchange for $15,533,760 pursuant to a Stock
Purchase Agreement (the "Agreement") dated as of March 10, 2000. As part of
the Agreement, the Company and Purchaser agreed that the Company would use
approximately $2.6 million of the proceeds from the sale of the Shares to
payoff the promissory note dated December 22, 1995 made by the Company and
payable to the Purchaser. Additionally, the Company and Purchaser agreed
that the Company would offer additional holders of promissory notes made by
the Company totaling approximately $7 million the opportunity to have those
notes repaid. As part of the Agreement, the Purchaser also granted the
Company a one year option to repurchase the Shares at a price of $250 per
share.
The consideration for the transaction was determined by negotiations between
the parties to the Stock Purchase Agreement. Other than the relationship of
Purchaser as a lender to the Company, to the best knowledge of the Company,
there is no material relationship between Purchaser and the Company or any of
its affiliates, any director or officer of the Company, or any associate of
such director or officer.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
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99.1 Stock Purchase Agreement dated as of March 10, 2000
by and between Intellicall, Inc. and Gotthardfin
Limited, a wholly-owned subsidiary of Banca del
Gottardo.
99.2 Press Release dated May 1, 2000.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
INTELLICALL, INC.
DATE: May 15, 2000 By: /s/ R. Phillip Boyd
----------------------------------
Title: Chief Financial Officer
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of March 10, 2000, is by and
between Intellicall, Inc., a Delaware corporation ("Seller") and Gotthardfin
Limited, Nassau, Bahamas, a wholly-owned subsidiary of Banca del Gottardo
("Purchaser").
W I T N E S S E T H
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires
to purchase from Seller, 11,836 shares of common stock and 58,772 shares of
Series A Preferred stock, par value $0.01 per share of ILD
Telecommunications, Inc. (the "Shares"), a Delaware corporation (the
"Company");
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants herein contained, and on the terms and subject to
the conditions herein set forth, the parties hereto hereby agree as follows:
1. PURCHASE AND SALE. Subject to the remainder of this Section 1, at
the Closing (as hereinafter defined), Seller agrees to sell to Purchaser, and
Purchaser agrees to purchase from Seller, the Shares. The closing of the
purchase and sale of the Shares (the "Closing") shall occur on the first
business day following the satisfaction of the condition precedent set forth
in Section 2 below (the "Closing Date"), at the offices of Seller. At the
Closing, Seller shall deliver to Purchaser original certificates representing
the Shares, together with executed stock powers relating thereto. At the
Closing, Purchaser shall deliver to Seller: (i) by wire transfer of
immediately available funds, of the sum of U.S. $15,533,760.00; and (ii) an
Instrument of Accession, in the form of Exhibit A attached hereto (the
"Instrument of Accession).
2. CONDITION PRECEDENT. The parties acknowledge and agree that the
transfer of the Shares from Seller to Purchaser is subject to the terms and
provisions of that certain Fourth Amended and Restated Shareholders'
Agreement, dated as of December 22, 1999, by and among the Company and
certain of its Shareholders (the "Shareholders Agreement"). The obligations
of the parties hereto shall be subject to the waiver of the parties to the
Shareholders Agreement of Sections 2.02 and 2.03 of the Shareholders
Agreement, or the failures of such parties to exercise any of their rights
under such Sections within the time periods prescribed in such Sections.
Upon satisfaction of the above condition precedent, Seller shall give written
notice to Purchaser thereof.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to Seller as follows: (a) this Agreement is a legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms; and (b) Purchaser has the right, power and authority to
execute and deliver this Agreement and to consummate the transactions set
forth herein. In addition, Purchaser acknowledges and agrees that, due to an
officer of Seller being on the Board of Directors of the Company, Seller may
have knowledge of certain material information concerning the Company which
Purchaser does not have knowledge of, and that the purchase price for the
Shares may not bear any relevance to the actual value of the Shares or the
Company. Purchaser further represents and warrants that Purchaser has done
its own due
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diligence on the Company and is not relying upon Seller to furnish Purchaser
with any information.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Purchaser as follows: (a) this Agreement is a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with
its terms; (b) Seller is the legal and beneficial owner of the Shares, and,
subject to compliance with the terms and provisions of the Shareholders
Agreement, Seller has no obligation to any person or entity to sell or vote
the Shares; (c) Seller has the right, power and authority to execute and
deliver this Agreement and to consummate the transactions set forth herein;
(d) subject to compliance with the terms and provisions of the Shareholders
Agreement, the delivery of the Shares to the Company pursuant to this
Agreement will convey to the Company legal, valid and marketable title to the
Shares, free and clear of all liens, security interests, or other
encumbrances of any character whatsoever (other than those imposed by federal
or state securities laws or by the Shareholders Agreement).
5. FURTHER AGREEMENTS.
(a) Purchaser agrees that Seller shall use (i) approximately $2.6
million of the proceeds from the sale of Shares to pay-off the
promissory note, dated December 22, 1995, with Seller as "maker" and
Purchaser as "payee"; and (ii) the remaining proceeds from such sale
for general corporate purposes (including the repayment of a $500,000
bridge loan made by Bank of America, N. A. to Seller). Seller
acknowledges that Seller owes an additional approximately $2 million
to a group of lenders pursuant to a series of promissory notes, dated
on or about June 10, 1999, and that Seller shall offer to such
lenders the opportunity to have such indebtedness repaid, without
premium or penalty. Seller further acknowledges that Seller owes an
additional approximately $5 million to a group of lenders pursuant to
a series of promissory notes, dated on or about November 22, 1996
(including Purchaser), and that Seller shall offer to such lenders
the opportunity to have such indebtedness repaid, without premium or
penalty.
(b) The parties hereto agree that the Deposit Agreement, dated
June 8, 1999, by and between the parties, is hereby terminated in its
entirety and of no further force or effect, and Purchaser hereby
agrees to promptly deliver to Seller the certificate representing the
shares of Series A Preferred Stock of the Company which is being held
by Purchaser under the Deposit Agreement.
(c) During the period commencing on the Closing Date and ending
on the one-year anniversary of the Closing Date (the "Option
Period"), Purchaser hereby grants to Seller an option (the "Option")
to repurchase all or any part of the Shares for a purchase price of
U.S. $250 per share (subject to appropriate adjustment for any stock
split, stock dividends or the like). The Option may be exercised by
Seller by delivery of written notice to Purchaser indicating the
number of Shares to be repurchased and the date to be repurchased
(which date may be no later than thirty (30) days following the date
of such written notice). The repurchase price shall be paid in
immediately available funds, unless otherwise agreed to by Purchaser.
Purchaser agrees not to take any action which would impede or hinder
the ability of Seller to exercise the Option (including,
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without limitation, selling, transferring or encumbering the Shares).
The Option shall be assignable by Seller upon written notice to
Purchaser.
6. MISCELLANEOUS.
(a) This Agreement may be amended, modified or supplemented
only by an instrument in writing executed by the party against which
enforcement of the amendment, modification or supplement is sought.
(b) Except as provided in Section 5(b) above, neither this
Agreement nor any right created hereby shall be assignable by any
party hereto.
(c) This Agreement and the rights and obligations of the
parties hereto shall be governed, construed and enforced in
accordance with the laws of the State of Delaware.
(d) This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which together shall
constitute one and the same instrument.
EXECUTED as of the date first set forth above.
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GOTTHARDFIN LIMITED
By: /s/ Fabio Testori /s/ Gabriele Zanetti
------------------- --------------------
Title: Authorized Officer Authorized Officer
------------------- --------------------
INTELLICALL, INC.
By: /s/ John J. McDonald, Jr.
------------------------------------
Title: President & Chief Executive Officer
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STOCK POWER
FOR VALUE RECEIVED, Intellicall, Inc. hereby sells, assigns and
transfers unto Gotthardfin Limited, Eleven Thousand Eight Hundred and Thirty
Six (11,836) shares of the common stock and Fifty Eight Thousand Seven Hundred
and Seventy Two (58,772) shares of the Series A Preferred stock, par value
$0.01 per share, of ILD Telecommunications, Inc., a Delaware corporation (the
"Company"), standing in our name on the books of said corporation and
represented by Certificate No. herewith, and do hereby irrevocably
appoint ____________________________________, attorney to transfer the said
stock on the books of the Company with full power of substitution in the
premises.
Dated as of 4-11-00
---------
INTELLICALL, INC.
By: /s/ John J. McDonald, Jr.
-----------------------------------
John J. McDonald, President
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EXHIBIT A
INSTRUMENT OF ACCESSION
The undersigned, Gotthardfin Limited, as a condition precedent to
becoming the owner or holder of record of Eleven Thousand Eight Hundred and
Thirty Six (11,836) shares of the common stock and Fifty Eight Thousand Seven
Hundred and Seventy Two (58,772) shares of the Series A Preferred stock, par
value $0.01 per share, of ILD Telecommunications, Inc., a Delaware
corporation (the "Company"), hereby agrees to become party to, and to be
bound by, that certain Fourth Amended and Restated Shareholders' Agreement,
dated as of December 22, 1999, by and among the Company and certain other
shareholders of the Company. This Instrument of Accession shall take effect
and shall become an integral part of the said Shareholders' Agreement
immediately upon execution and delivery to the Company of this instrument.
IN WITNESS WHEREOF, the INSTRUMENT OF ACCESSION has been duly
executed by or on behalf of the undersigned, as a sealed instrument under the
laws of the State of Texas, as of the date below written.
GOTTHARDFIN LIMITED
Signature:
----------------------------
Name:
---------------------------------
Title:
---------------------------------
Address:
---------------------------------
--------------------------------------
Date:
---------------------------------
Accepted:
ILD TELECOMMUNICATIONS, INC.
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Date:
---------------------------------
A-1
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INTELLICALL TO LEVERAGE $15.6 MM STOCK
SALE IN CORPORATE REPOSITIONING STRATEGY
CASH WILL BE USED TO RETIRE DEBT AND CATALYZE GROWTH IN PROFITABLE NEW MARKETS
DALLAS - MAY 1, 2000 - Intellicall-Registered Trademark- (AMEX:ICL)
received $15.6 million dollars in a strategic stock sale announced today that
provides the company a solid financial foundation as it shifts its focus
toward new, fast-growing markets. The sale of a substantial portion of its
interest in ILD Telecommunications allows Intellicall to eliminate the
majority of its outstanding debt. The sale also provides considerable cash to
accelerate growth as the company moves into its planned merger with Heads Up
Technologies Inc. of Dallas, a leading provider of technology solutions to
the aviation, transportation and entertainment industries.
Approximately 71,000 shares, a combination of ILD Series A Convertible
Preferred and common stock, were sold to Banca del Gottardo. Terms of the
agreement, which was consummated on April 11, also give Intellicall a
12-month option to repurchase the stock. Intellicall retains some 6,200
shares of Series A Preferred Convertible stock as required by its
organization agreement with ILD.
"The broad range of applications-oriented, technology solutions that
will be realized in core and new markets by the combined forces of
Intellicall and Heads Up Technologies will spur growth, financial stability
and shareholder value," said John J. McDonald, Jr., Intellicall's president
and chief executive officer. "The sale of the ILD stock is just one part of
our overall plan to reinvent Intellicall. The cash from the sale will enable
us to capitalize on the successes of Heads Up and propel us toward a new
dimension."
The stock sale is another in a series of strategic moves undertaken by
Intellicall in recent months to reduce the company's reliance on a single
market. As the company turns its focus toward lucrative new markets, it will
continue to support its existing product lines and customers where its
advanced public access technologies can compete profitably.
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ADD
Intellicall/Stock Sale
Page 2
In January, Intellicall announced it had signed a definitive letter of
agreement to acquire the Dallas-based, privately held Heads Up Technologies.
The transaction is subject to customary conditions of closing, including each
party obtaining requisite stockholder approval.
"The sale of ILD stock provides the financial strength to capitalize on
the lucrative new market opportunities the union between Intellicall and
Heads Up will bring," said Bill Hunt, Intellicall's chairman. "Intellicall
will have a substantially improved balance sheet going into the merger and a
business plan that concentrates resources on profitable core operations that
maximize shareholder value."
Intellicall is a leading manufacturer of advanced public access
telecommunications systems including intelligent payphones, prepaid and call
processing systems, and network control and business management systems.
Intellicall's common stock is traded on the American Stock Exchange under the
symbol "ICL."
The statements contained in this release that are not historical facts
contain forward-looking information with respect to plans, projections, or
future performance of the company, the occurrence of which involves certain
risks and uncertainties that could cause the company's actual results to
differ materially from expected results. Such risks include the timing of
implementation and the scope and success of the program described here.
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