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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) March 12, 1996
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CALL NOW, INC.
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(Exact name of registrant as specified in its charter)
Florida 0-27160 65-0337175
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
P.O. Box 531399, Miami Shores, FL 33153
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Registrant's telephone number, including area code (305) 751-5115
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Item 2. Acquisition or Disposition of Assets.
The Company declared a dividend to its shareholders of record on March
12, 1996 of 1 share of Cable-Sat Systems, Inc. common stock for each 10 shares
of the Company's common stock held as of the close of business on such date.
Such dividend amounts to approximately 723,438 shares.
On October 1, 1996 Cable-Sat Systems, Inc. redeemed its 150,000 shares
of Preferred Stock held by the Company for $450,000 plus 150,000 of Cable-Sat
common stock.
In August 1996 the Company executed an agreement to sell all of the
assets and liabilities of its long distance services company, ARN Communications
Corp. (ARN). Under the terms of the agreement, the former President of ARN
exchanged one hundred thousand shares of Call Now, Inc. common Stock for all of
the assets and liabilities of ARN.
On September 20, 1996 the Company acquired $52,274,000 of the
$54,040,000, 8.75% term bonds of the Retama Development Corporation Special
Facilities Revenue Bonds, Series 1993 for a purchase price of $10,300,000. The
bonds are secured by a first mortgage on the Retama Park Racetrack in Selma,
Texas.
The Bonds were purchased for $10,300,000 in association with Hall,
Solomon & Howe Financial, Inc. Pursuant to this agreement with Hall, Solomon &
Howe Financial, Inc. the Company owns $27,020,000 of the Bonds and Hall, Solomon
& Howe Financial, Inc. owns $27,020,000 of the Bonds. The purchase price of the
Bonds was $10,300,000, of which the Company paid $8,600,000 and HSH paid
$1,740,000 at the time of acquisition. HSH has agreed to make additional
payments to the Company of $1,950,000 as its purchase price for the Bonds. The
Company also issued a stock purchase warrant to HSH to purchase 760,000 shares
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of the Company's common stock at $2.60 per share. The Company and HSH have
entered into an agreement concerning the various aspects of their holding of the
Bonds, including sharing of potential defeasance payments, expenses and debt
service, a copy of which agreement is filed herewith as an exhibit.
In November 1996, the Company purchased from Retama Partners Ltd. the
principal amount of $39,275,000 of a Retama Development Corporation Series 1993A
Note and $500,000 of a Retama Development Corporation Series 1993B Note, as well
as certain goodwill, enhancements as specified in the Agreement of Purchase and
Sale, a copy of which is filed herewith as an exhibit. The Company issued
385,700 shares of its common stock for such Notes. These Notes are secured by a
lien on the Retama Park Racetrack facilities, including real and personal
property.
On July 15, 1996, Andice Development Co. (a wholly owned subsidiary of
Call Now, Inc.) acquired 118 acres of development property in Williamson County,
Texas for a purchase price of $2,359,310. Under the terms of the purchase, the
Company paid $589,310 and executed a seven year, 9% note in the amount of
$1,770,000. The note requires the Company to make semi-annual principal and
interest payments of $85,721.39 commencing on January 15, 1997 and ending July
15, 2003, at which time, the entire remaining balance is due and payable.
The following is a summary of annual principal payments due under this
agreement:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1997 $ 12,416
1998 13,558
1999 14,806
2000 16,169
2001 17,657
Thereafter 1,695,394
----------
Total $1,770,000
==========
</TABLE>
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibits. Agreement between Registrant and Hall, Solomon & Howe
Financial, Inc. dated October 17, 1996 covering purchase of certain Retama
Development Corporation bonds is annexed hereto as Exhibit A.
Agreement of Purchase and Sale between Registrant and Retama Park
Association, Inc., Retama Partners, Ltd. and Retama Park Management Company,
L.C., relating to purchase of certain Development Corporation Notes is annexed
hereto as Exhibit B.
Agreement to purchase certain real estate in Texas is annexed hereto as
Exhibit C.
Agreement with Alan Niederhoffer relating to sale of assets of ARN
Communications Corp. is annexed hereto as Exhibit C.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALL NOW, INC.
By: s/ William M. Allen
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November 12, 1996 William M. Allen
President
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EXHIBIT A
AGREEMENT
THIS AGREEMENT, entered into as of the 17th day of October, 1996 by and between
CALL NOW, INC., a Florida Corporation (CNI), and HALL, SOLOMON & HOWE FINANCIAL,
INC., a Florida corporation (HSH).
WHEREAS, the parties have acquired certain tax exempt Bonds issued by the
Retama Development Corporation ("RDC"), as Retama Development Corp.
Special Facilities Revenue Bonds, Series 1993 (hereafter the "Senior Bonds");
and
WHEREAS, the parties hereto desire to declare their respective interest in
the Bonds and their further agreements as follows:
NOW, THEREFORE, the parties hereto mutually agree:
1. HSH has purchased 50% of the Senior Bonds for $3,690,000. HSH paid
$1,740,000 September 20, 1996. HSH agrees to pay to CNI $1,100,000 on October
30, 1996. HSH agrees to pay $850,000 to CNI on or before December 15, 1996.
2. CNI agrees to own 50% of the Senior Bonds. CNI and HSH have paid an
aggregate of $10,300,000 for the Senior Bonds. CNI agrees to accept $1,950,000
contemplated in #1 as final payment for the HSH 50% of the Senior Bonds.
3. CNI and HSH agree to work in concert to defease the Senior Bonds. The two
parties agree that any net profits paid in cash on the defeasance of the
Senior Bonds shall be paid 50% to CNI and 50% to HSH. However if CNI completes
the acquisition contemplated in #~4, then the proportionate payout will be
altered in accordance with #5.
4. CNI intends to acquire $39,275,000 Retama Development Corporation Special
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Facilities Subordinated Revenue Notes, Series 1993A (hereafter "1993A Notes")
and $500,000 Retama Development Corporation Special Facilities Taxable
Subordinated Revenue Notes Series 1993B (hereafter "1993B Notes"). CNI agrees
to convey 50% of their 1993A Notes and 50% of the 1993B Notes to HSH.
5. When and if CNI acquires the 1993A Notes contemplated in #4, the net profits
of the defeasance from the Senior Bonds and the 1993A Notes will be distributed
64% to CNI and 36% to HSH for the first $10,300,000 of net profits on
defeasance. After $10,300,000 has been distributed, HSH and CNI shall receive
50% and 50%, respectively, of each additional dollar.
6. Any bonds that are issued to replace the Senior Bonds, 1993A Notes or the
1993B Notes shall be distributed 50% to CNI and 50% to HSH.
7. The parties shall cooperate with each other in all matters arising out of
their ownership of the Senior Bonds, 1993A Notes and 1993B Notes, including
selection of counsel to represent their interests as bondholders, recommending a
plan of reorganization to the ~, t, recommending a management company and such
other actions as may be advisable.
8. All counsel fees, disbursements and expenses approved by CNI and HSH to
third parties shall be borne by CNI until CNI acquires the 1993A Notes and the
1993B Notes. When CNI acquires the 1993A Notes, the 1993B Notes and completes
its obligation to convey 50% of the foregoing to HSH, then such costs will be
borne equally.
9. If CNI and HSH agree to fund any operating deficits defined as excesses of
expenses except for debt service payments, that exceed all revenuel4en CNI
acquires the 1993A Notes, the 1993B Notes and completes its obligation to
convey 50% of the foregoing to HSH, all such operating deficits will be borne
equally.
10. CNI agrees to guaranty Bond debt service for the Senior Bonds held by the
parties
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of $100,000 in fiscal 1997, $100,000 in fiscal 1998. When CNI acquires the 1993A
Notes, the 1993B Notes and completes its obligation to convey 50% of the
foregoing to HSH, all such bond debt service for the Senior Bonds will be borne
equally.
11. CNI and HSH shall originally fund any cash outlays as described in #8, 9 and
10. HSH's share of these funds shall be paid back as outlined herein from HSH's
defeasance profits or as otherwise mutually agreed.
12. In consideration of HSH paying $7600 to CNI, CNI shall deliver 760,000
warrants which allow HSH to purchase 760,000 shares of Cal Now, Inc. common
stock with the symbol CNOW, at $2.60 per share on or before October 16, 1999.
13. Should a dispute arise between the parties concerning the terms of
defeasance, plan to reorganization, management or any other matter requiring
decision as bondholders, the parties shall be free to act in their individual
capacities as holders of the bonds.
14. No party or its officers, agents or attorneys are authorized or empowered to
perform acts, give consents, or take actions unless both parties have agreed in
writing.
15. This agreement embodies the entire understanding between the parties and
supersedes all prior agreements, understandings and communications relating to
the subject matter hereof and shall be construed in accordance with and governed
by the laws of the State of Florida.
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EXHIBIT B
AGREEMENT OF PURCHASE AND SALE
This AGREEMENT OF PURCHASE AND SALE ("Agreement") is made as of this ____
day of November, 1996, by and between CALL NOW, INC. ("Call Now") and RETAMA
PARK ASSOCIATION, INC. ("Association"), RETAMA PARTNERS, LTD. ("Partners"), and
RETAMA PARK MANAGEMENT COMPANY, L.C. ("RPMC") (herein Association, Partners and
RPMC may be individually and/or jointly and severally referred to as the
"Seller").
WITNESSETH:
WHEREAS, in connection with the construction of a Class I racetrack in
Selma, Texas (the "Track"), the Retama Development Corporation, a Texas
non-profit local government corporation ("RDC") issued the following two series
of subordinated notes (the "Notes"):
1. Retama Development Corporation Special Facilities Subordinated
Revenue Note (Retama Park Racetrack Project) Series 1993A in the original
principal amount of $39,275,000.00 maturing December 15, 2020 ("Series 1993A
Note").
2. Retama Development Corporation Special Facilities Taxable
Subordinated Revenue Note (Retama Park Racetrack Project) Series 1993B in the
original principal amount of $500,000.00 maturing December 15, 2001 ("Series
1993B Note").
WHEREAS, the Series 1993A Note is owned and held by Partners, and the
Series 1993B Note is held by Joe Straus, Jr. ("Straus") as trustee, but owned in
undivided interests (the "Series 1993B Note Interests") by the partners of
Partners.
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WHEREAS, RPMC is a party with the RDC to that certain Management
Agreement dated December 1, 1993 (the "Management Contract") pertaining to the
management of the Track.
WHEREAS, Association is the general partner of Partners.
WHEREAS, Seller desires to assign and transfer or cause to be assigned
and transferred the Notes, the Series 1993B Note Interests and the RPMC
Interests (below defined) and the Other Assets (below defined) [collectively,
the "Assets"] to Call Now, and Call Now desires to obtain the Assets (such
transaction may be referred to as the "Acquisition").
WHEREAS, the Acquisition is of material benefit to each Seller.
WHEREAS, the RDC commenced a proceeding under Chapter 9, Title 11,
United States Code, styled In re: Retama Development Corporation, Case No.
96-51115-LC, United States Bankruptcy Court, Western District of Texas, San
Antonio Division (the "Bankruptcy Case") on or about March 20, 1996.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, the parties hereby agree as follows:
ARTICLE I
PURCHASE OF ASSETS
1.1 Notes to be Purchased.
(a) Series 1993A Note. Subject to and upon the terms and
conditions hereof, Partners shall sell, transfer, assign, convey and deliver to
Call Now and Call Now shall purchase and acquire from Partners, at the Closing
(as hereinafter defined), the Series 1993A Note and all entitlements thereunder
free and clear of all claims or encumbrances. Partners waives any right or
claim to accrued interest on the Series
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1993A Note, and agrees that any entitlement to accrued interest on the Series
1993A Note passes to Call Now as part of the Series 1993A Note. The Series
1993A Note will be endorsed by Partners without recourse.
(b) Series 1993B Note. Subject to and upon the terms and
conditions hereof, Partners will use its reasonable efforts to cause its
partners to sell, transfer, assign, convey and deliver to Call Now, the Series
1993B Note Interests, so that at Closing, Call Now owns at least 60% in number
and 75% in amount of all Series 1993B Note Interests and 75% in outstanding
principal and accrued interest of the Series 1993B Note. Partners shall use
its reasonable efforts to cause Straus to deliver physical possession of the
Series 1993B Note into Escrow (as defined below). By the transfer of the
Series 1993B Note Interests to Call Now, Partners and each transferor shall be
deemed to waive any right to claim to accrued interest or other entitlements on
the Series 1993B Note and to agree that any entitlement to accrued interest or
otherwise on the Series 1993B Note Interests so transferred will pass to Call
Now in the Acquisition. The form of transfer of the Series 1993B Note
Interests will be satisfactory to Call Now and will include such waivers and
agreements, and such warranties and representations made in favor of Partners
and Call Now (as set forth in Article IV), and will provide for an endorsement
of such interest without recourse.
1.2 Other Assets. The Seller will also act in accordance with the
Addenda attached to confer on Call Now or its designee the interests, rights or
benefits of the following (the "Other Assets"):
(a) Matters relating to the Management Contract and, at Call
Now's option, all membership interests in RPMC (the "RPMC Interests") as
described in Addendum A.
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(b) Certain enhancements under the license for the operation of
the Track as described in Addendum B.
(c) Goodwill of Seller and its partners, members and
shareholders as described in Addendum C.
These Addenda are attached hereto and incorporated herein.
1.3 Escrow Prior to Closing. Upon execution of this Agreement by
Seller, Partners shall deliver into an escrow hereby established with the
below-named Escrow Agent (the "Escrow") the Series 1993A Note properly endorsed
in blank and without recourse. Partners will also use its reasonable efforts in
accordance with Section 1.1 (b) above to have the Series 1993B Note delivered
into Escrow. Such deliveries will be held by Escrow Agent in accordance with
this Article I. Upon execution hereof, Call Now shall deliver to the Escrow
Agent certificate number 2934, representing 385,700 shares of Call Now common
stock (the "Stock"), issued to Partners, to be held by Escrow Agent in
accordance with Article I.
As received by Seller, Seller shall deliver to Escrow Agent the following
to be held by Escrow Agent in accordance with this Section 1.3:
(a) Investment letters in the form attached as Addendum D from
each partner of Partners designed on the Transfer List (below described) to
receive Stock upon distribution of the Stock by Partners according to Section
2.2 below, ("Investment Letters").
(b) Appropriate minutes, resolutions and/or written consents of
Seller evidencing authority of each Seller to close this Agreement and complete
the Acquisition ("Authorizations").
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Prior to Closing, Seller shall deliver to Call Now and Escrow Agent a
written list (the "Transfer List") setting forth the name of each partner of
Partners and each owner of a Series 1993B Note Interest or a RPMC Interest, and
listing the percentage ownership of Partners and the percentage Series 1993B
Note Interest or RPMC Interest. The Transfer List will also state the number of
shares of Call Now common stock such partner or owner will acquire out of the
335,700 shares of Call Now to be delivered to Partners at Closing (exclusive of
the additional 50,000 shares to be delivered to Partners but sold by Call Now in
accordance with Section 2.2, below). Call Now, prior to Closing, may exchange
with Escrow Agent certificate number 2934 for certificates necessary to effect
distribution in accordance with such Transfer List. Such certificates
evidencing the Stock may be referred to as the "Stock Certificates".
Strause will retain until Closing and then deliver to the Escrow Agent
the following as and to the extent received by Straus:
(a) Series 1993B Note Interests, together with transfer forms,
endorsed in blank without recourse as required.
(b) RPMC Interests, together with transfer forms.
1.4 Disbursement from Escrow.
(a) If this Agreement closes, Escrow Agent shall deliver to
Call Now the Series 1993A Note, the Authorizations, and to the extent received,
(subject to Section 1.5, below) the Series 1993B Note, all Series 1993B Note
Interests tendered, and related transfer forms and Investment Letters, and if
requested by Call Now, the RPMC Interests and the related transfer forms; and
Escrow Agent shall deliver the Stock to Partners. Escrow Agent may deliver any
items due to be delivered to Seller or any person (other than Call Now) to
Straus as Seller's designated representative.
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(b) If this Agreement does not close, Escrow Agent shall
redeliver the Stock to Call Now, and redeliver the Series 1993A Note, the
Authorizations, and if and to the extent received, the Series 1993B Note and
each Series 1993B Note Interest, RPMC Interest, Investment Letters, and
transfer form to Straus as Seller's designated representative.
1.5. Escrow After Closing. Seller and Call Now recognize that some
of the Series 1993B Note Interests and RPMC Interests may not be delivered
prior to Closing. Therefore, should this Agreement close, then after Closing,
Escrow Agent shall continue to hold the Series 1993B Note and any Series 1993B
Note Interests, RPMC Interests and transfer forms actually received by Escrow
Agent. On December 15, 1996, or such earlier time as Call Now may designate,
Partners and the Escrow Agent shall request the Indenture Trustee to issue two
replacement notes for the Series 1993B Note, as follows: one replacement note
will represent the Series 1993B Note Interests delivered to the Escrow Agent
and now owned by Call Now, and a second replacement note will represent the
Series 1993B Note Interests not delivered to the Escrow Agent. Partners will
use its reasonable efforts to have Straus join in such request to the Indenture
Trustee. If issued, the first replacement note will be delivered to Call Now
and the second replacement note will be delivered to Straus on behalf of the
owners of the Series 1993B Note Interests not acquired by Call Now. For this
purpose, the Escrow Agent may deliver the Series 1993B Note to the Indenture
Trustee. If the Indenture Trustee does not issue replacement notes, then the
Escrow Agent shall deliver the Series 1993B Note and all Series 1993B Note
Interests, which were delivered to the Escrow Agent, to Call Now, at Call
Now's request.
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1.6 Escrow Agent. The Escrow Agent is Steven R. Brook. The
Seller and Call Now recognize Steven R. Brook is a lawyer representing Call Now
in the Acquisition and does not represent Seller. Seller is represented by one
or more independent lawyers. Steven R. Brook is used as Escrow Agent, without
compensation by Seller therefor, as a convenience to the parties. Escrow Agent
may take any action set forth herein in reliance on any document Escrow Agent
in good faith believes to be regular on its face; Escrow Agent has no duty to
confirm or authenticate instructions or signatures. Steven R. Brook owes
Seller only a duty of reasonable care to physically hold the things delivered
to him in Escrow in accordance with this Article I. The Escrow Agent may
resign at any time by notice to the parties hereto; the parties by a mutual
written directive may remove or replace Escrow Agent at any time by notice to
Escrow Agent. Call Now indemnifies and holds harmless Steven R. Brook from any
loss, costs, claims or liability arising from Steven R. Brook's function as
Escrow Agent, except for his negligence or wilful misconduct. Any successor
Escrow Agent is indemnified jointly and severally by the parties hereto to the
same extent. Escrow Agent is not a party to this Agreement, but joins this
Agreement solely to consent to his appointment as Escrow Agent and to the terms
regarding the Escrow and the Escrow Agent.
1.7 Further Cooperation. At and subsequent to Closing, Seller,
and each of them, shall execute and deliver, or cause to be executed and
delivered, to Call Now or its designee, all other documents, instruments and
agreements, and all endorsements and signatures, and take or cause to be taken
all actions, reasonably necessary or useful in Call Now's reasonable opinion to
effect the Acquisition; provided however, other than the Seller's costs of
negotiating this Agreement, obtaining Authorizations and transfer forms,
preparing the Transfer List, closing and effecting deliveries, Seller is not
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obligated to incur any out-of-pocket expense under this section. At Closing,
Seller will withdraw or cause to be withdrawn each claim filed by or on behalf
of Seller in the Bankruptcy Case and Seller will not file or cause to be filed
additional claims in the Bankruptcy Case; provided however, the claim filed in
the Bankruptcy Case regarding the Notes will not be withdrawn.
ARTICLE II
PAYMENT AND DISTRIBUTION
2.1 Purchase Price. As full and adequate consideration for the
Acquisition, Call Now shall cause the Stock to be delivered by the Escrow Agent
out of Escrow in accordance with this Agreement.
2.2 Distribution. The Stock will be distributed in accordance
with the directive of the Seller, subject to Article I, above, to this
paragraph, and to Article III, below, and, subject to applicable laws. At
Closing, 50,000 shares of the Stock shall be distributed directly to Partners
in accordance with Section 1.4, and, at Partner's request, registered and sold
on Seller's behalf as part of Call Now's next (following Closing) public
offering of Call Now's common stock, in accordance with Article III. An
additional 335,700 shares of the Stock shall be delivered to Partners upon
Closing; simultaneously therewith, and as a material covenant hereunder,
Partners shall re-certify the Transfer List to Call Now, and direct Call Now to
re-issue the Stock Certificate for the 335,700 shares to the partners of
Partners ("Initial Transferees") in accordance with the Transfer List, provided
only that each such Initial Transferee shall have delivered such person's
Investment Letter duly executed. If the Investment Letter has been received by
Call Now, Call Now will re-issue a Stock Certificate to such Initial
Transferee; if the Investment Letter has not been delivered, the Stock
Certificates representing the shares of the Stock
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of the Initial Transferees not delivering their Investment Letters will be held
by Partners, pending only the receipt of the Investment Letters, but if the
Investment Letters have not been delivered prior to December 15, 1996, then
Partners will re-deliver such Stock Certificates to Call Now, and Call Now will
have the Stock Certificates reissued in the name of and redelivered to
Partners. The 335,700 shares of the Stock will be registered at the next
(following Closing) public offering of Call Now's common stock, in accordance
with Article III. All Stock distributed under this Agreement shall bear a
legend that restricts the sale of such shares for a period of six (6) months
following their registration date(s), in addition to any legend required in
Article III, provided that the 50,000 shares may be sold in accordance with the
foregoing.
2.3 Dilution.
(a) Call Now represents that 385,700 shares of its common
stock represents 4.44% of all of Call Now's outstanding common stock on a
fully diluted basis, including any now existing rights, warrants or options in
any person to acquire shares of the common stock of Call Now (the "Base
Percentage"), and will represent the Base Percentage at the Closing.
(b) If prior to Closing there are any splits, dividends
in kind or reorganizations of Call Now's common stock, the number of shares of
Stock to be delivered under this Agreement will be adjusted accordingly so that
the Base Percentage remains constant.
(c) For the period (the "Restriction Period") that is the
longer of (i) two years following Closing or (ii) thirty (30) days subsequent
to the lapse of restrictions on transferability under this Agreement or
applicable securities laws, the direct transferees of the Stock from Call Now
out of Escrow under this Agreement will be protected from
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involuntary dilution below the Base Percentage (determined on the aggregate of
all shares of Stock delivered by Call Now into Escrow as above, or otherwise
distributed under this Agreement) according to this Section 2.3. In the event
of involuntary dilution of the Stock below the Base Percentage during the
Restriction Period, Call Now will issue to Partners or the Initial Transferees,
as the case may be, sufficient shares of Call Now's common stock at no
additional cost to Partners or the Initial Transferees sufficient to cause the
Stock including such additional shares to represent at least the Base
Percentage of all outstanding common stock of Call Now (including any now
existing rights, warrants or options for Call Now common stock). This
protection is extended only to the Partners and the Initial Transferees, and no
one else. Call Now will not be responsible for distribution of such additional
shares to Initial Transferees, but will provide reasonable cooperation (at no
expense to Call Now) to Partners in such distribution. This subsection (c)
does not apply to, and there shall be excluded from the definition of
involuntary dissolution under this subsection (c), any of the following:
(i) shares of Call Now common stock issued
pursuant to the public offering in which the
Stock is sold or registered under Section
2.2, above, or any underwritten public
offering.
(ii) any sale by Call Now of its common stock at
or above the lower of book or market value.
2.4 Registration Costs. Call Now will pay the costs of
registration of the Stock under Section 2.2, above.
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ARTICLE III
SECURITIES ACT
3.1 Investment Representation. Partners acknowledges that the
Stock issuable pursuant this Agreement will not have been registered under the
Securities Act of 1933 (the "Securities Act") and that the Stock must be held
indefinitely unless subsequently registered thereunder or an exemption from
registration is available. Except for the distribution pursuant to the
Transfer List, Partners represents and warrants to Call Now that (i) it will
acquire such Stock for investment, and not with a view to the distribution
thereof within the meaning of the Securities Act, (ii) it will acquire such
Stock for its own account and has not offered, and as of the Closing Date, as
that term is hereinafter defined, will not have offered and does not intend to
offer any participation or interest of any kind in such Stock to any other
person and (iii) the purchase of the Stock constitutes an investment decision
of an amount and type consistent with investment practices and objectives of
those on the Transfer List. Partners acknowledges that Call Now has offered
Partners and all Initial Transferees access to all information, financial and
otherwise, regarding Call Now deemed relevant by Partners to its investment
decision and an opportunity to discuss such information with officers and
employees of Call Now and to examine its books and records. Seller shall use
its reasonable efforts to cause each Initial Transferee to deliver his
Investment Letter. Except as provided in Section 3.3, Partners shall not
distribute any Stock to an Initial Transferee (or any one else) without an
Investment Letter being received and delivered to Call Now.
3.2 Legending of Securities. Other than Stock sold in an
underwritten public offering, the Stock issuable hereunder shall not be
transferable except upon the conditions specified in this Agreement, which
conditions are intended to insure
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compliance with the provisions of the Securities Act in respect of the transfer
of any such Stock.
Each certificate for Stock issued to Partners or an Initial
Transferee, shall (unless otherwise permitted by this Article III) be stamped
or otherwise imprinted in substantially the following form:
"The transfer of the shares represented by this
certificate is subject to compliance with the conditions
specified in an Agreement dated ____________, between Call
Now, Inc. and Retama Partners, Ltd., et al, a copy of which
is on file at the office of the Corporation, and no transfer
of such shares shall be valid or effective until such conditions
have been fulfilled."
3.3 Restrictions on Transferability. Partners, the Initial
Transferees, and any subsequent holder of a certificate of Stock bearing the
restrictive legend set forth in Section 3.2 (hereinafter in this Section 3.3
called the "Holder") by acceptance thereof agree, prior to any transfer or
attempted transfer of such Stock other than after registration, to give written
notice to the Call Now of such Holder's intention to effect such transfer (the
"notice of transfer"). Each such notice of transfer shall describe the manner
and circumstances of the proposed transfer in reasonable detail and shall
contain an undertaking by the person giving such notice to furnish such further
information as may reasonably be required by Call Now or counsel referred to
below. Promptly upon receiving any such notice of transfer, the following
provisions shall apply:
(i) If such notice of transfer does not include an
opinion of counsel for the Holder reasonably acceptable to Call Now
concerning the transferability of the Stock without registration under
the Securities Act, Call Now shall promptly submit copies of the
notice of transfer to its counsel. If in the opinion of such counsel,
the proposed transfer of such Stock may be effected without
registration under the
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Securities Act, Call Now shall as promptly as is practicable so notify the
Holder and the transfer agent of such Stock and such Holder shall thereupon be
entitled to transfer such Stock in accordance with the terms of the notice
delivered by such Holder to Call Now. Each certificate representing Stock
issued upon the transfer of any such Stock shall bear the restrictive legend
set forth above if in the opinion of such counsel such legend is required in
order to insure compliance with the applicable provisions of the Securities
Act;
(ii) If, in the opinion of such Call Now counsel, the
proposed transfer of such Stock may not be effected without
registration under the Securities Act, Call Now shall as promptly as
is practicable to so notify the Holder. The Holder thereof, agrees,
as to such Stock, by acceptance thereof, that if the proposed transfer
cannot, in the reasonable opinion of such counsel, be effected without
registration under the Securities Act, such Holder will not transfer
such Stock unless it has been registered under the Securities Act, or
unless the staff of the Securities and Exchange Commission has stated
in writing that it would raise no objection with respect to the
proposed transfer. The restrictions imposed by this Section 3.3 upon
the transferability of any particular Stock shall cease and terminate
concurrently with the sale or other disposition thereof pursuant to
and in the manner contemplated by an effective registration statement
under the Securities Act, or pursuant to and in accordance with Rule
144 promulgated under the Securities Act (or any similar rule or
regulation hereafter promulgated), or such later date as provided in
Paragraph 2.2, above. Whenever the restrictions imposed by this
Section 3.3 shall terminate, as hereinabove provided, the Holder of
any Stock as to which such restrictions shall have terminated shall be
entitled
13
<PAGE> 21
to receive from Call Now one or more new certificates of such
Stock not bearing the restrictive legend set forth above and not
containing any other reference to the restrictions imposed by this
Section 3.3.
(iii) If the Holder delivers with the notice of transfer an
opinion of Holder's counsel to which Call Now has no reasonable
objection confirming the transferability of the Stock without
registration under the Securities Act, Call Now shall as promptly as
is practicable so notify the transfer agent, if any, of such Stock and
such Holder shall thereupon be entitled to immediately receive from
Call Now one or more new certificates of such Stock not bearing the
restrictive legend set forth above and not containing any other
reference to the restrictions imposed by this Section 3.3.
3.4 Registration Rights. If at any time while the Stock contain
any restrictive legend imposed by Section 3.2 or Section 2.2, Call Now proposes
to register any of its securities under the Securities Act on any form other
than Form S-8 (or its equivalent), Call Now will each such time promptly give
written notice to Partners of its intention to do so together with the name of
the proposed underwriter, if any, and, upon the written request of Partners
given within twenty (20) days after receipt of any such notice (which request
shall state the intended method of disposition of such Call Now common stock),
Call Now will use all reasonable efforts to cause any or all of the Stock to
be registered under the Securities Act, all to the extent requisite to permit
the sale or other disposition (in accordance with the intended methods thereof,
as aforesaid), provided however, that Call Now may, at any time, withdraw or
cease proceeding with any such registration if it shall at the same time
withdraw or cease proceeding with the registration of such other securities
originally proposed to be registered, and provided further that Call Now shall
14
<PAGE> 22
not be obligated to file and cause to become effective more than one
registration statement in which the Stock is effectively registered.
Notwithstanding Articles II or III, Call Now shall not be required to register
any of the shares if such shares could then be sold without registration by the
Holders pursuant to the provisions of Rule 144 under the Securities Act.
Nothing in this Section 3.4 is intended to reduce Call Now's undertakings
regarding the 50,000 shares as provided in Section 2.2, above. Except as to the
sale of 50,000 shares of Stock as described in Section 2.2, above, if the
underwriter requests, the Partners and the Initial Transferees will delay their
sale of remaining Stock pursuant to the registration statement for such time as
Call Now requests, but for no longer than any other stockholder whose shares
are being registered for sale pursuant to such registration statement can sell
shares; provided that no delay will be beyond the waiting period after which
the Partners or Initial Transferees could sell under certain circumstances
without registration.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Seller. Each Seller for
itself represents and warrants to Call Now as follows:
(a) Such Seller is duly organized, validly existing and
in good standing in and under the laws of the state of its organization. Such
Seller has full power and authority to enter into this Agreement and to sell,
transfer, assign and convey the Assets to Call Now.
(b) When duly executed by all parties, this Agreement
will be valid and legally binding upon such Seller and neither the execution of
this Agreement by such Seller nor the performance by such Seller of the various
terms and provisions hereof will
15
<PAGE> 23
violate such Seller's Articles of Incorporation or By-laws or any
organizational documents or any indenture, loan agreement, contract or other
instrument to which any such Seller is a party or is bound.
(c) Partners has good and marketable title to the Series
1993A Note, free and clear of all liens, charges, security interests, equities
and other encumbrances and upon endorsement (without recourse) and delivery of
the Series 1993A Note to Call Now, Call Now will own the Series 1993A Note and
have good and marketable title thereto, free and clear from all liens, charges
security interests, equities and/or other encumbrances, subject to ratification
by the partners of Partners.
(d) To the best of such Seller's knowledge, the persons
so designated on the Transfer List have good and marketable title to the Series
1993B Note Interests and the RPMC Interests, as the case may be, free and clear
of all liens, charges, security interests, equities, claims, restrictions and
other encumbrances (other than, as to the RPMC Interests, restrictions in
RPMC's Regulations, a true and correct copy of which has been provided to Call
Now), and upon delivery to Call Now of such interests and transfer forms
described in Article I, Call Now will own all Series 1993B Note Interests and
RPMC Interests so delivered, free and clear of all liens, charges, security
interests, equities, claims, restrictions and encumbrances (other than, as to
the RPMC Interests, the Regulations). Partners will include in each transfer
form and require of the person signing such form a like warranty and
representation (unqualified as to knowledge) with regard to such person's
interests.
(e) There are no agreements or restrictions written or
oral pertaining to the ownership or transfer of the Series 1993A, or to such
Seller's knowledge, of the Series 1993B Notes or Series 1993B Note Interests,
other than the Indenture (below
16
<PAGE> 24
described), Partners' partnership agreement and, as to the Series 1993B Note
Interests, the assignment of promissory note dated January 1, 1994 ( a true and
correct copy of which has been delivered to Call Now). Such agreements do not
impair the transactions contemplated hereby. Partners will include in each
transfer form and require of the person signing such form a like warranty and
representation (unqualified as to knowledge) with regard to such person's
interests.
(f) To such Seller's knowledge, there are no agreements
or restrictions, written or oral, pertaining to the ownership or transfer of
the RPMC Interests other than the Regulations (above described), except as will
be effectively canceled prior to Closing. Partners will include in each
transfer form and require of the person signing such form a like warranty and
representation (unqualified as to knowledge) with regard to such person's
interests. There are 12,499.999 RPMC Interests issued and outstanding.
(g) The Transfer List is correct when delivered and shall
be correct at Closing and sets forth correctly each owner of a Series 1993B
Note Interest or a RPMC Interest, according to such Seller's records and best
knowledge.
(h) The Notes were issued pursuant to the Trust Indenture
and Security Agreement by and between RDC and The Frost National Bank dated
December 1, 1993, as supplemented by First Supplemental Indenture of Trust and
Security Agreement dated March 15, 1996 (the "Indenture"). Except for such
March 15, 1996 First Supplemental, the Indenture has not been amended or
supplemented. Partners has not altered or modified, or consented to the
alteration or modification of, the Notes and are aware of no such modifications
or alterations. There have been no payments of principal or interest made on
the Notes, except interest has accrued in accordance with the terms of the
Notes and Indenture. Partners is the sole legal, record and beneficial owner
of
17
<PAGE> 25
the Series 1993A Note and is the sole record owner of the Series 1993B Note.
The Series 1993B Note is held by Straus as the trustee for the partners of
Partners. The Notes exist in physical (not book entry) form. Partners has not
sold, disposed of or encumbered the Series 1993A Note, except for the sale
under this Agreement; Partners has transferred interests in the Series 1993B
Note only in accordance with the Transfer List, the assignment of promissory
note (above described), and this Agreement.
(i) Such Seller has taken no action that would impair the
intended benefits to be conferred under the attached Addenda. Such Seller has
all necessary authority and power to confer the intended benefits under the
attached Addenda.
4.2 Representations and Warranties of Call Now. Call Now
represents and warrants to Seller as follows:
(a) Call Now is a corporation duly organized, validly
existing and in good standing under the laws of Florida. Call Now has full
power and authority to carry on its business as now conducted, to own, hold
and operate its properties and assets, and to enter into this Agreement.
(b) Its authorized securities consist of 50,000,000
shares of Common Stock, 7,233,700 of which has been issued and is fully paid
and nonassessable and 800,000 of Preferred Stock of which none are outstanding.
The Stock to be delivered to Partners (and Initial Transferees) pursuant to
this Agreement, when issued in accordance with the provisions of this
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable.
(c) The execution, delivery and performance of this
Agreement have been duly authorized by the Board of Directors of Call Now. The
performance and observance of and compliance with the terms and provisions
hereof do not conflict with
18
<PAGE> 26
or result in any breach of any of the terms, conditions or provisions of, or
constitute a default under the Articles of Incorporation or By-laws of Call
Now, or any agreement, indenture, deed of trust, instrument, judgment,
obligation, order or decree to which Call Now is a party.
ARTICLE V
PRE-CLOSING OBLIGATIONS
5.1 Supply of Information by Seller. During the period from the
date of this Agreement to the Closing Date, Seller shall supply to Call Now
such information in such Seller's control concerning the Track and the Assets
as Call Now shall reasonably request and allow Call Now and its auditors and
representatives access to the books and records and employees and
representatives of Seller.
5.2 Conduct of Business. During the period from the date of this
Agreement to the Closing Date, RPMC shall operate the Track and Assets, as the
case may be, in the ordinary and usual course consistent with its prior
practices and shall not engage in any activity or enter into any transaction
outside the ordinary and usual course of business.
ARTICLE VI
CONDITIONS TO CLOSE
6.1 Conditions to Obligation of Call Now. The obligation of Call
Now to consummate the Acquisition shall be subject to the fulfillment at or
before the Closing of the following conditions, any one or more of which may be
waived in writing, in whole or in part, by Call Now:
(a) Representations, Warranties and Covenants. The
representations and warranties of Seller in Section 4.1 of this Agreement shall
be true in all material
19
<PAGE> 27
respects on and as of the Closing with the same effect as though made on and as
of such date and all agreements to be performed by Seller on or before the
Closing shall have been duly performed in all respects. At Closing, Call Now
shall have received a certificate to such effect from Seller.
(b) Bills of Sale, Assignments, etc. Seller shall have
delivered to Call Now, as applicable, such instruments of transfer conveying
and transferring, and/or effecting the benefits of the Assets, as Call Now may
reasonably request, including any documents or instruments under Section 1.7.
(c) Title. Except as specifically set forth in this
Agreement, Call Now shall receive at the Closing legal title to the Series
1993A Note and the Series 1993B Note Interests and the RPMC Interests
delivered at Closing free and clear of all liens, pledges and encumbrances of
any kind, nature or description, and the Other Assets will be transferred or
conferred free of claim or encumbrance.
(d) Bankruptcy Case. The Bankruptcy Case shall not have
been dismissed, and no orders shall have been entered in the Bankruptcy Case
that have a material and adverse effect in the Acquisition or the benefits Call
Now may reasonably anticipate therefrom.
(e) At Closing, Call Now shall have received no less
than:
(i) 60% in number and 75% in amount of all Series
1993B Note Interests and 75% of all
outstanding principal and accrued interest on
the Series 1993B Note.
(ii) the right to acquire 100% less only one
membership interest of all RPMC Interests.
6.2 Conditions to Obligation of Seller. The obligation of Seller
to consummate the Acquisition shall be subject to the delivery out of Escrow
by Call Now at the Closing of the Stock as provided in Articles I and II, and
approval (by meeting or consent) of the partners of Partners to the sale of the
Series 1993A Note, and a certificate from Call Now that the representations and
warranties of Call Now in Section 4.2 of this Agreement shall be true in all
material respects on and as of the Closing with the same effect as though made
on and as of such date and all agreements to be performed by Call Now on or
before the Closing shall have been duly performed in all respects.
20
<PAGE> 28
ARTICLE VII
CLOSING
The Acquisition shall be consummated at a closing (the
"Closing") in the offices of Call Now located at 9701 Biscayne Boulevard, Miami
Shores, Florida, at 11:00 a.m., five (5) days after the date hereof, or such
other date and place as is mutually agreed upon by the parties hereto (the
"Closing Date"). At the Closing, Seller and Call Now shall cause the Escrow
Agent to make the delivers out of Escrow in accordance with Section 1.4.
Seller shall deliver such other documents as are necessary to convey or effect
the benefit of the Other Assets, and Call Now shall deliver the Stock in
accordance with Article II. Call Now may, at its sole election, to comply with
applicable laws or regulations regarding the tax-exempt nature of the
indebtedness secured by the Indenture or otherwise, waive or choose not to
accept any portion of the Assets, or to defer the acceptance thereof.
ARTICLE VIII
POST CLOSING RIGHTS AND OBLIGATIONS
21
<PAGE> 29
8.1 Record Inspection Rights. Call Now agrees that all books and
records delivered to Call Now by Seller pursuant to the provisions hereof shall
be open for inspection and audit by representatives of Seller at any time
during regular business hours for a period of five (5) years following the
Closing and that Seller may at its expense make such excerpts therefrom as it
may deem desirable. Seller agrees that all books and records as shall be
retained hereunder by Seller relating to the Track and its operation or the
Other Assets shall remain in the premises of the Track and shall be open for
inspection and audit by representatives of Call Now at any time during regular
business hours upon reasonable notice for a period of five (5) years following
the Closing and that Call Now may at its expense make such excerpts therefrom
as it may deem desirable.
8.2 Cooperation. After the Closing, Seller shall execute and
deliver to Call Now such applications, requests and other documents as may be
reasonably requested by Call Now in order to vest in Call Now the full benefit
of the Assets.
ARTICLE IX
NOTICES
9.1 Notices. All notices, requests, demands, or other
communications hereunder shall be in writing and shall be deemed to have been
duly given when sent by certified mail, return receipt requested:
(i) If to Call Now, addressed to: William M. Allen
P.O. Box 531399
Miami Shores, FL 33153
With a copy to: Joel Bernstein, Esq.
P.O. Box 330072
Miami, FL 33233
(ii) If to Association, addressed to:
---------------------
22
<PAGE> 30
--------------------------
--------------------------
(iii) If to RPMC, addressed to:
--------------------------
--------------------------
(iv) If to Partners, addressed to:
--------------------------
--------------------------
--------------------------
or such other address as Call Now or any Seller shall designate by notice given
as provided herein.
ARTICLE X
MISCELLANEOUS
10.1 Expenses. Except as otherwise expressly provided herein, each
of the parties hereto shall pay its own fees and expenses incident to the
negotiation, preparation, execution and consummation of this Agreement,
including all fees and expenses of their respective counsel and accountants
incurred in connection with this Agreement and all other agreements, documents,
certificates, applications and other instruments prepared in connection
herewith.
10.2 Successors. This Agreement shall inure to the benefit of and
be binding upon the Seller and its legal representatives and successors and
assigns, and Call Now and its respective successors and assigns. Call Now may
assign all or part of the Assets to its designees, and Seller, if requested by
Call Now, will convey such assigned Assets directly to Call Now's designee.
10.3 LAW TO APPLY. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA, AND THE
23
<PAGE> 31
PARTIES HEREBY AGREE THAT SUBJECT TO SECTION 10.8, ANY ACTION, SUIT OR OTHER
LEGAL PROCEEDING BY ANY PARTY CONCERNING THIS AGREEMENT OR THE CONSTRUCTION OR
ENFORCEMENT THEREOF SHALL BE BROUGHT ONLY IN A COURT OF APPROPRIATE
JURISDICTION IN THE STATE OF FLORIDA.
10.4 Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any and all prior arrangements, proposals or understandings,
written or oral, (including but not limited to Drake Leddy's letter of
September 27, 1996 to Call Now), by or among any of the parties hereto with
respect to such purchase and sale or other transactions, which arrangements,
proposals and understandings shall be of no further force and effect. No
amendment or modification of this Agreement shall be effective for any purpose
unless the same shall be in writing signed by all of the parties hereto or
their successors in interest.
10.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10.6 Section Headings. The section headings herein are for
convenience only and shall not affect the construction hereof.
10.7 Survival. The representations, warranties and covenants of
the parties survive Closing. It is specifically contemplated that this
Agreement imposes obligations on the parties that will be fulfilled after
Closing.
10.8 Arbitration. The parties hereto agree that any controversy or
claim between Call Now and any Seller arising out of or relating to this
Agreement or the performance
24
<PAGE> 32
hereunder, or any dispute arising out of the interpretation or application of
this Agreement, shall be submitted for and settled by arbitration in San
Antonio, Texas, pursuant to the American Arbitration Association's commercial
arbitration rules then in effect (or any successor rules thereto). Call Now
and such Seller will each select an arbitrator within ten (10) days, the two
(2) arbitrators so selected will select a third. If more than one Seller
participates as a party to the arbitration, all participating Sellers will be
aggregated and entitled to only one selected arbitrator. The arbitrators
selected will have a back-ground in commercial or corporate law or in the
racing industry. Call Now and Seller will use their reasonable efforts to
reach a hearing within 180 days of commencement of the case. Call Now and
Seller may depose the other and appropriate witnesses and have reasonable,
relevant document production. Up to two (2) depositions for each side will be
held in San Antonio (or such other location as the parties mutually agree).
Any deposition beyond two (2) for each side, and any extensive document
production, shall be held at the location of the witness or records. Call Now
and Seller shall require the award be in writing and accompanied by written
findings and conclusions. The reasonable cost and expenses of arbitration may
be included as part of the award to be allocated by the arbitration. Call Now
and Seller agree that judgment upon the award rendered by the arbitrators
pursuant to such rules may be entered by any court having jurisdiction thereof.
Call Now and Seller agree that the arbitrators' decision shall be final,
binding and non-appealable. The arbitrators shall be authorized to order
specific performance by a party hereto as, or as a part of, their award. Any
party may be served with notice of commencement of an arbitration proceeding
hereunder given in a manner permitted by this Section. For the purpose of this
Section, if more than one Seller participates as a party to the arbitration,
the Seller will be
25
<PAGE> 33
considered a single entity, and any award against such participating Sellers
will be joint and several.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first above written.
CALL NOW, INC., a Florida corporation
By:________________________________
William M. Allen, President
RETAMA PARK ASSOCIATION, INC., a
Texas corporation
By:________________________________
Name:________________________
Title:_______________________
RETAMA PARTNERS, LTD., a Texas
limited partnership
By: RETAMA PARK ASSOCIATION, INC.,
a Texas corporation, its General Partner
By:_____________________________
Name:_____________________
Title:____________________
RETAMA PARK MANAGEMENT
COMPANY, L.C., a Texas limited liability
company
By:________________________________
Name:________________________
Title:_______________________
ESCROW AGENT:
26
<PAGE> 34
Escrow Agent accepts his duties
hereunder, not as a party but strictly as
an escrow agent, under and according
to Article I, above.
______________________________
STEVEN R. BROOK
27
<PAGE> 35
ADDENDUM A
MANAGEMENT CONTRACT AND MANAGEMENT COMPANY
1. Management Contract. Retama Park Management Co., L.C.
("RPMC") entered into that certain Management Agreement dated December 1, 1993,
with RDC pertaining to the Track (the "Management Contract"). Seller will take
all necessary actions to approve the renegotiation of such Management Contract,
or at Call Now's option, its rejection, in the Bankruptcy Case, on terms
reasonably acceptable to Call Now and RDC including a waiver of any accrued and
unpaid fees.
2. RPMC. Seller will use its reasonable efforts to cause the
members of RPMC to offer up to all membership units in RPMC ("RPMC Interests")
to Robert Buffkin and Bryan Brown at one cent (1c.) per unit, to be acquired,
at Call Now's option and as Call Now determines (subject to any necessary TRC
approvals). Call Now will give notice as Robert Buffkin and Bryan Brown acquire
such interests. To effect this provision, all RPMC Interests tendered will be
delivered into Escrow (at or after Closing, as provided in Article I, above)
and will be held by Escrow Agent and, after Closing and if and when Call Now
elects, distributed to Robert Buffkin or Bryan Brown as they may direct Escrow
Agent. In any event, RPMC will assist in taking the actions described in
paragraph 1, above, when requested by Call Now, and if requested by Call Now
after confirmation of the RDC's Plan of Adjustment, RPMC will negotiate and
permit such other modifications to or cancellation of the Management Contract
as may be requested by Call Now and approved by the RDC. Seller shall use its
reasonable efforts to obtain the tendered, written resignations of such
officers and managers of RPMC as Robert Buffkin and Bryan Brown may designate,
to be accepted or rejected by Robert Buffkin and Bryan Brown after they have
acquired control in accordance with the foregoing.
The form of transfer of the RPMC Interests will be satisfactory to
Call Now and will include such waivers and agreements, and such warranties and
representations made in favor of RPMC and Call Now (as set forth in Article
IV).
<PAGE> 36
ADDENDUM B
Retama Partners, Ltd. ("Partners") and RDC entered into that certain
License and Agency Contract ("Contract") dated December 1, 1993, under which
certain beneficial interests in the License (as therein identified and defined)
were assigned to RDC. The interests not assigned to RDC under the Contract may
be referred to as the "Enhancements." Partners, at Closing, or as soon
thereafter as any requisite TRC approval is obtained (and Partners shall use
its reasonable efforts to obtain such approval), shall irrevocably assign and
transfer an undivided 50% of the Enhancements by license agreements in form
reasonably acceptable to Call Now, to Call Now's designee.
The term "Enhancements" is to be interpreted broadly to include any
right, benefit or entitlement now existing or hereafter arising under the
License (except interest assigned to RDC under the Contract, but including any
reversion of such interest to Partners), or in or under any related license
hereafter issued to Partners or its designee, all to the extent as follows:
a. As to any activities located on the grounds now or
hereafter owned by or leased to RDC (or its successors as owners of the Track)
or otherwise on the Track or within a five (5) mile radius of the center point
of the main race-track at the Track, any activities or matters whatsoever.
b. As to any activities at any other location, any
activities or matters dealing with or related to horse racing or betting on
horse racing (whether pertaining to racing at the Track or otherwise).
Call Now may designate one or more persons to hold the undivided
interests in the Enhancements allocated to it as provided under this Addendum.
The Enhancement acquired by Call Now's designee will be subject
(equally with the Enhancement retained by Partners) to Section 4.02 of the
Master Acquisition Agreement dated as of December 1, 1993, between Partners and
RDC, concerning the future allocation of Enhancements between the RDC and
Partners, provided that Call Now or its designee will have the right to
participate equally with Partners in such negotiations and allocations with the
RDC.
<PAGE> 37
ADDENDUM C
The Seller, and their respective partners, members, directors,
officers and shareholders, are involved to varying degrees in the Texas horse
racing industry. Seller will, or will cause their respective members,
partners, directors, officers and shareholders to, provide (at no out-of-pocket
expense to such persons) reasonable assistance to RDC and the current (or any
future) management company in the operation of the Track, in the following
areas:
a. Maintaining contacts with the TRC and being available for
meetings and hearings with the TRC and its staff, and
supporting reasonable goals of RDC or the current (or any
future) management company as to the Track and its operations.
b. Attending Track events, including media functions, promoting
the Track.
c. Generally maintaining, enhancing and promoting the goodwill
and reputation of RDC and the Track in the local, state and
regional communities and the horse racing industry generally.
<PAGE> 38
FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
This FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE ("Amendment")
is made as of this 6th day of November, 1996, by and between CALL NOW, INC.
("Call Now") and RETAMA PARK ASSOCIATION, INC. ("Association"), RETAMA
PARTNERS, LTD. ("Partners"), and RETAMA PARK MANAGEMENT COMPANY, L.C. ("RPMC")
(herein Association, Partners and RPMC may be jointly and severally referred to
as the "Seller").
W I T N E S S E T H:
WHEREAS, Call Now and Seller have executed and entered into that
certain AGREEMENT OF PURCHASE AND SALE ("Agreement") of even date herewith,
pertaining in part to the purchase by Call Now and the sale by Partners of the
Series 1993A Note (such term, together with all other terms used herein and
defined in the Agreement, have the meanings assigned in the Agreement);
WHEREAS, Call Now and the Seller desire to close the purchase of the
Series 1993A Note immediately, and close the purchase of the remainder of the
Assets on or before December 7, 1996;
WHEREAS, this Amendment is intended to operate consistently with the
Agreement, but will prevail over and control any conflicting terms of the
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, the parties hereby agree as follows:
1. Subject to and upon the terms and conditions of the Agreement
not directly inconsistent with this Amendment, but intending to effect a
closing of the purchase of the Series 1993A Note today, Partners hereby sell,
transfer, assign, convey and deliver to Call Now and Call Now hereby purchases
and acquires from Partners the Series 1993A Note and all entitlements
thereunder free and clear of all claims or encumbrances. In accepting
conveyance of the Series
<PAGE> 39
1993A Note, Call Now acknowledges and understands that such conveyance is
subject to ratification by the Partners' limited partners. Seller pledges to
use its best efforts to secure (1) on or before November 8, 1996, written
proxies from the requisite majority of the partners of Partners voting to
approve this purchase and the Acquisition generally, and (2) ratification at a
meeting or by written consent (at which such proxies are voted) on or before
November 23, 1996, but no assurance of ratification can be given. Partners
waives any right or claim to accrued interest on the Series 1993A Note, and
agrees that any entitlement to accrued interest on the Series 1993A Note
passes to Call Now as part of the Series 1993A Note. The Series 1993A Note is
endorsed by Partners without recourse to Call Now and is hereby delivered to
Call Now. Seller reaffirms all warranties and representation pertaining to the
Series 1993A Note and to the Seller generally. The outstanding balance of the
Series 1993A Note, including accrued interest, is no less than $50,745,213.00.
2. To effect the closing of the purchase of the Series 1993A Note
prior to the closing on the purchase of the other Assets, Call Now hereby
delivers to the Escrow Agent certificate number 2934, representing 385,700
shares of Call Now common stock, being the Stock.
3. The Escrow Agent may act in accordance with the Agreement
regarding the Stock, except, upon ratification of the purchase of the Series
1993A Note, Partners is entitled to receive the Stock out of Escrow in
accordance with the Agreement upon the Closing of the remainder of the Assets,
or if such does not close, then upon demand by Seller at any time after
December 15, 1996, and Call Now shall retain any remedies for Seller's default.
<PAGE> 40
4. The parties agree that the Closing as to the purchase of the
Series 1993A Note occurred the date of this Amendment. The parties agree to
effect Closing on or before November 23, 1996.
5. As hereby amended, the Agreement shall continue in full force
and effect according to its terms.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the date first above written.
CALL NOW, INC., a Florida corporation
By:________________________________
William M. Allen, President
RETAMA PARK ASSOCIATION, INC., a
Texas corporation
By:________________________________
Name:________________________
Title:_______________________
RETAMA PARTNERS, LTD., a Texas
limited partnership
By: RETAMA PARK ASSOCIATION, INC.,
a Texas corporation, its General
Partner
By:_____________________________
Name:_____________________
Title:____________________
RETAMA PARK MANAGEMENT
COMPANY, L.C., a Texas limited
liability company
By:________________________________
Name:________________________
Title:_______________________
<PAGE> 41
EXHIBIT C
AGREEMENT OF PURCHASE AND SALE
This AGREEMENT OF PURCHASE AND SALE ("Agreement") is made as of this
____ day of June, 1996 by and between ALAN NIEDERHOFFER ("Buyer") and ARN
COMMUNICATIONS CORP., a Florida corporation ("Seller").
WITNESSETH:
WHEREAS, Seller is engaged in the marketing and providing of long
distance telephone services (the "Business"); and
WHEREAS, Seller desires to sell and transfer to Buyer, and Buyer
desires to acquire from Seller the Business and the tangible and intangible
assets utilized in the conduct of the Business and assume certain of the
liabilities of the Business on the terms and conditions herein set forth (such
transaction being hereinafter referred to as the "Acquisition");
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, the parties hereto agree as follows:
ARTICLE I
PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
1.1 Assets to be purchased. Subject to and upon the terms and
conditions hereof and upon the basis of the representations and warranties
contained herein, Seller shall sell, transfer, assign, convey and deliver to
Buyer and Buyer shall purchase and acquire from Seller, at the Closing , the
following assets of Seller (the "Acquisition Assets"):
(a) All equipment, furniture, consumable supplies, telephone
numbers and other tangible personal property used in the conduct of the
Business.
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(b) All trademarks, tradenames, copyrights and registrations
thereof used in the conduct of the Business, together with the good will of the
Business symbolized thereby and the right to sue for past infringement thereof.
(c) All of Seller's know-how, processes, trade secrets and
other proprietary information and technology used in the Business, including,
without limitation, all business plans, publications, customer and prospect
lists, instructions, manuals, advertising and marketing programs, data, records,
information, prospects, knowledge, procedures and other material relating to the
Business or any service or product sold by the Business.
(d) All the rights and incidents of interest of Seller in the
executory contracts, agreements and understandings relating to the Business.
(e) All records of Seller relating to the conduct of the
Business, including, without limitation, customer lists, and contract files and
letters of agency.
(f) All rights and incidents of interest held by Seller in
software, computer programs, source codes and documentation used in the conduct
of the Business to the extent that such rights may be legally transferred to
Buyer.
(g) All payroll and personnel records of those employees of
Seller who accept Buyer's offer of employment pursuant to Section 7.1 hereof.
(h) All accounts receivable and customer orders relating
to the Business, except those specified in Section 1.2(e).
(i) FCC and PSC licenses, tariffs and permits and tax
certificates related to the Business to the extent they may be legally
transferred.
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(j) Except as specifically stated in Section 1.2 below, all
other assets of Seller used in the conduct of the Business and not specifically
identified above.
1.2 Assets to be Retained. Seller shall retain and shall not
sell, transfer, assign, convey or deliver to Buyer the following assets of
Seller:
(a) All workers' compensation and unemployment compensation
accounts of the Seller relating to the Business.
(b) Any assets not transferred in above.
(c) All federal, state and local income, sales, franchise,
property and other tax refunds related to periods ending on or prior to the
Closing.
(d) All rights with respect to corporate and other services
provided to or on behalf of Seller before the Closing.
(e) All rights to real estate facilities utilized in the
operation of the Business.
(f) All books, minute books, documents and records of whatever
kind and nature and in whatever form, relating to the Assets to be Retained.
(g) Claims against Telnex, its principals and Mid-Com.
1.3 Obligations to be Assumed. In connection with the purchase
of the Acquisition Assets, Buyer shall assume all obligations and liabilities
of Seller under the executory contracts, agreements, understandings and
payables of the Business, other than amounts payable to Seller's parent
corporation.
1.4 Obligations to be Retained. Except as otherwise expressly
provided in this Agreement, Buyer shall not assume or otherwise be obligated to
pay, perform or discharge any existing obligations or liabilities, fixed or
contingent, of Seller to Mid-Com.
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1.5 Consents to Assignment. To the extent that the assignment to
Buyer of any contract, agreement, understanding or order to be assumed by Buyer
under this Agreement shall require the consent of the other party thereto, the
same shall not be assigned to Buyer hereunder until such consent is obtained.
Seller shall use its best efforts to procure consent to the assignment of any
contract, agreement, commitment, undertaking or order that requires such
consent. If such consent is not obtained, Seller shall cooperate with Buyer in
a reasonable arrangement designed to provide for Buyer the benefit under any
such contract, agreement, commitment, undertaking or order, including
enforcement, at Buyer's expense, of any and all rights of Seller against the
other party thereto arising out of breach or cancellation thereof by such other
party or otherwise.
ARTICLE II
PAYMENT
2.1 Purchase Price. In consideration of the Acquisition, Buyer
shall pay Seller as follows:
(a) 100,000 shares of Call Now, Inc. Common Stock, excluding
all dividends accrued and undistributed thereon as of the Closing.
(b) Seller's parent has provided Seller with a $100,000
certificate of deposit from Intercontinental Bank which is collateral security
for payment of long distance telephone services from Cable and Wireless. Buyer
shall return such certificate of deposit on or before its current maturity date
of June 30, 1997 with the entire principal and interest undiminished. As
collateral security for such obligation, Buyer will deliver to Seller 50,000
shares of Call
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Now, Inc. In the event Buyer wishes to sell any such shares prior to return of
such certificate of deposit, the first $100,000 of the proceeds of such sale
shall be paid to Seller in lieu of such sold stock. Seller will take such
actions as may be necessary to allow such shares to be sold pursuant to Rule
144.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Seller. Seller represents
and warrants to Buyer as follows:
(a) Seller is duly organized, validly existing and in good
standing in and under the laws of the State of Florida. Seller has full power
and authority to enter into this Agreement and to sell, transfer, assign and
convey the Acquisition Assets to Buyer.
(b) When duly executed by all parties, this Agreement will be
valid and legally binding upon Seller and neither the execution of this
Agreement by Seller nor the performance by Seller of the various terms and
provisions hereof will violate Seller's Articles of Incorporation or By-laws or
any indenture, loan agreement, contract or other instrument to which Buyer is a
party or is bound.
(c) Seller has good and marketable title to all of the
Acquisition Assets, free and clear of all liens, charges, security interests,
equities and other encumbrances and upon delivery by Seller to Buyer of the
bills of sale, assignments and other instruments referred to in Section 5.l(d),
Buyer will own the Acquisition Assets owned by the Business and have good and
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marketable title thereto, free and clear from all liens, charges, security
interests, equities and/or other encumbrances.
3.2 Representations and Warranties of Buyer. Buyer represents
and warrants to Seller as follows:
When duly executed by all parties, this Agreement will be
valid and legally binding upon Buyer and neither the execution of this Agreement
by Buyer nor the performance by it of the various terms and provisions hereof
will violate any indenture, loan agreement, contract or other instrument to
which it is a party or by which it is bound.
ARTICLE IV
PRE-CLOSING OBLIGATIONS
4.1 Supply of Information by Seller. During the period from the
date of this Agreement to the Closing Date, Seller shall supply to Buyer such
information concerning the Business and the Acquisition Assets as Buyer shall
reasonably request and allow Buyer and its auditors and representatives access
to the books and records and employees and representatives of Seller.
4.2 Conduct of Business. During the period from the date of this
Agreement to the Closing Date, Seller shall operate the Business in the ordinary
and usual course consistent with its prior practices, and shall not engage in
any activity or enter into any transaction outside the ordinary and usual course
of business.
ARTICLE V
CONDITIONS TO CLOSE
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5.1 Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the Acquisition shall be subject to the fulfillment at or before the
Closing of the following conditions, any one or more of which may be waived in
writing, in whole or in part, by Buyer:
(a) Representations, Warranties and Covenants. The
representations and warranties of Seller in Section 3.1 of this Agreement shall
be true in all material respects on and as of the Closing with the same effect
as though made on and as of such date and all agreements to be performed by
Seller on or before the Closing shall have been duly performed in all respects.
(b) Loss of Property. None of the Acquisition Assets, the
loss, material damage or destruction of which would interfere with the ability
of Buyer to continue the Business, shall have been lost, materially damaged or
destroyed, whether or not such loss, damage or destruction is covered by
insurance and there has been no materially adverse change in the business,
operations or customer base of the Business.
(c) Bills of Sale, Assignments, etc. Seller shall have
delivered to Buyer a duly executed Assignment and Bill of Sale in the form
attached hereto as Exhibit C and such other instruments of transfer conveying
and transferring the Acquisition Assets to Buyer as Buyer may reasonably
request.
(d) Title. Except as specifically set forth in this Agreement,
Buyer shall receive at the Closing legal title to the Acquisition Assets free
and clear of all liens, pledges and encumbrances of any kind, nature or
description.
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5.2 Conditions to Obligation of Seller. The obligation of Seller
to consummate the Acquisition shall be subject to the payment by Buyer at the
Closing of the price and security stated in Section 2.1 hereof.
ARTICLE VI
CLOSING
The Acquisition shall be consummated at a closing (the
"Closing") in the offices of Buyer located at 9701 Biscayne Boulevard, Miami
Shores, Florida, at 11:00 a.m., five (5) days after the date hereof, or such
other date and place as is mutually agreed upon by the parties hereto.
ARTICLE VII
POST CLOSING RIGHTS AND OBLIGATIONS
7.1 Buyer Employment. At the Closing, Buyer may offer employment
to some or all employees of the Seller on terms equivalent to employment by
Seller. Seller will give Buyer reasonable assistance, without charge, in
effecting the employment of such employees, but acknowledges that it has no
authority to speak for or make commitments on behalf of Buyer and warrants that
it has not made any representations to Seller's employees that it has any such
authority with respect to employment with Buyer.
7.2 Record Inspection Rights. Buyer agrees that all books and
records delivered to Buyer by Seller pursuant to the provisions hereof shall be
open for inspection and audit by representatives of Seller at any time during
regular business hours for a period of five (5) years
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following the Closing and that Seller may at its expense make such excerpts
therefrom as it may deem desirable. Seller agrees that all books and records as
shall be retained hereunder by Seller relating to the Business shall remain in
the premises of the Business and shall be open for inspection and audit by
representatives of Buyer at any time during regular business hours upon
reasonable notice for a period of five (5) years following the Closing and that
Buyer may at its expense make such excerpts therefrom as it may deem desirable.
7.3 Cooperation. Seller shall execute and deliver to Buyer such
applications, requests and other documents as may be reasonably requested by
Buyer in order to vest in Buyer the full benefit of the Acquisition Assets.
7.4 Conduct of Business. Buyer shall have the right to use the
name ARN COMMUNICATIONS, or a variation thereof in the conduct of the Business
after the Closing.
7.5 Facilities. Buyer shall receive the right to operate the
Business at the facility now utilized by Seller for up to 90 days after the
Closing for no rent.
7.6 Buyer hereby acknowledges his employment agreement with Call
Now, Inc. (f/k/a Phone One International, Inc.) is terminated and Call Now,
Inc. is hereby released from any liability to Buyer under or pursuant to said
agreement.
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ARTICLE VIII
NOTICES
8.01 Notices. All notices, requests, demands, or other
communications hereunder shall be in writing and shall be deemed to have been
duly given when sent by certified mail, return receipt requested:
(i) If to Seller, addressed to:
William M. Allen.
P.O. Box 531399
Miami Shores, FL 33153
With a copy to:
Joel Bernstein, Esq.
P. O. Box 330072
Miami, FL 33233
(ii) If to Buyer, addressed to:
or such other address as Buyer or Seller shall designate by notice given as
provided herein
ARTICLE IX
MISCELLANEOUS
9.01 Public Announcements. No public announcement of the
transactions provided for herein shall be made by the Buyer unless the same
shall be approved in advance in writing by Seller.
9.02 Expenses. Except as otherwise expressly provided herein,
each of the parties hereto shall pay its own fees and expenses incident to the
negotiation, preparation, execution and
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consummation of this Agreement, including all fees and expenses of their
respective counsel and accountants incurred in connection with this Agreement
and all other agreements, documents, certificates, applications and other
instruments prepared in connection herewith.
9.03. Successors. This Agreement shall inure to the benefit of and
be binding upon the Seller and its legal representatives and successors and
assigns, and Buyer and its respective successors and assigns.
9.04 Law to Apply. This Agreement shall be construed and enforced
in accordance with the laws of the State of Florida, and the parties hereby
agree that any action, suit or other legal proceeding by any party concerning
this Agreement or the construction or enforcement thereof shall be brought
only in a court of appropriate jurisdiction in the State of Florida.
9.05 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes any and all prior arrangements, proposals or understandings, written
or oral, by or among any of the parties hereto with respect to such purchase and
sale or other transactions, which arrangements, proposals and understandings
shall be of no further force and effect. No amendment or modification of this
Agreement shall be effective for any purpose unless the same shall be in writing
signed by all of the parties hereto or their successors in interest.
9.06 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
9.07 Section Headings. The section headings herein are for
convenience only and shall not affect the construction hereof.
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9.08 Name Change. Upon Closing, Seller will change its corporate
name to eliminate "ARN" or similar names from its corporate name or trade name.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
ARN COMMUNICATIONS CORP.
By:
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President
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ALAN NIEDERHOFFER
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