SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 4, 1999
CHRONICLE COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Georgia 333-34283 58-2235301
(State or other jurisdiction Commission (IRSEmployer
Of Incorporation) File Number) Identification No.)
2601 2nd Ave., Tampa, Florida 33605
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (813) 248-0100
140 First Avenue NE, Cairo, Georgia 31728
(Former name or former address, if changed since last report.)
Item 1. Changes in Control of Registrant
Upon the closing of the proposed acquisition of Seminole Scrap Corp. and
Florida Machine & Welding, Inc. (See Item 2), two parties are expected to
become holders of ten percent or more of the Registrant's voting stock.
M.L. McDonough, Trustee, will control 18.7 percent of the Registrant's
outstanding shares upon completion of these transactions. Robert L. Lewis,
Trustee, will control 17.2 percent of the Registrant's outstanding shares
upon completion of these transactions. Both Trustees have notified the
Registrant that no beneficiary will be the beneficial owner of 10% or more
of the Registrant's outstanding shares upon completion of these
transactions. The Trustees are expected to have both voting and
investments authority over the Registrant's common stock.
John and Marsha Whitman, and family members will no longer be considered
control parties by virtue of stock ownership (See Item 5), upon completion
of these transactions. Mr. Whitman will remain Chairman of the Board.
Item 2. Acquisition or Disposition of Assets.
The following contains forward looking statements. There are a number of
important factors which could cause actual events to materially differ from
those indicated by such forward looking statements, including the
availability of funding, results of marketing efforts, general economic
conditions, audits, closing of three transactions and performance of
pending contracts, among others.
On January 12, 1999, the Registrant acquired Bartow Communications, Inc.
Bartow Communications is engaged in the business of publishing proprietary
residential real estate guides directed to the residential real estate
development, construction and sales industry in the metropolitan
Washington, D.C. area, and distribution of its own publications and the
advertising and promotion materials of industry participants by direct mail
to the company's proprietary mailing list. Bartow Communications generated
approximately $400,000 (unaudited) annual revenues for the last year ended
December 31, 1998
The Registrant has signed three binding letters of intent, whose dates and
terms are represented individually below:
On March 9, 1999, the Registrant agreed to acquire all of the issued and
outstanding common stock of Seminole Scrap Corp., a privately owned holding
corporation headquartered in New York City, New York. The Registrant has
agreed to issue 7,000,000 five dollar stated value preferred shares with
voting rights in the acquisition. The value was agreed based upon
demolition contracts and asset values. Seminole Scrap Corp. has two wholly
owned subsidiaries, Iroquois Wrecking, Corp. and Indigo Industries, Inc.,
that currently operate at several commercial demolition sites in the New
York City metropolitan area. These companies were both formed in 1998. The
subsidiaries have signed contracts for approximately $6 million with an
additional $20.8 million in awarded commitments, which are in final
contract form and await signatures. Seminole Scrap Corp. projects an
additional $34 million in new project revenue from bids made and privately
directed contracts. No shareholder in Seminole Scrap Corp. had a
relationship with the Registrant or any of its affiliates prior to signing
the letter of intent.
Seminole Scrap Corp. intends to operate as a dealer/broker for scrap metals
derived from demolition operations and spot purchases to build inventory
for bulk sales to Mexico, Central America, South America and Asia. No
projections are being made at this time for the scrap operation. The
subsidiaries will continue to operate independently with Iroquois Wrecking
Corp. providing contract demolition and Indigo Industries, Inc. providing
asbestos abatement for all contracts. The majority of operations are in the
Northeastern U.S. from Pennsylvania to Connecticut. These companies intend
to expand into the Great Lakes region in 1999.
Seminole Scrap Corp. and subsidiaries represent an asset value of
$2,992,801 in heavy equipment, office equipment, and vehicles (unaudited).
Seminole also owns two warehousing structures in Hamtramck, MI valued at
$1,400,000. These facilities will be used as a staging area for the
expansion of demolition operations into Michigan, Ohio and Indiana.
Contracts are currently being bid in this region.
On March 2, 1999, the Registrant agreed to acquire all of the outstanding
stock of Frontline Consulting Services, Inc., a privately held corporation
headquartered in Charlotte, North Carolina. The Registrant has agreed to
issue 500,000 restricted common shares with the value based on the stock
having a projected value of $5 with the purchase price predicated on
projected revenues and profits. Frontline Consulting Services, Inc.
specializes in network integration services, Y2K compliance software, and
contract programming serving the manufacturing, healthcare and banking
industries. The Frontline projection shows approximate revenue of
$8,500,000 with approximate net income of $2,600,000 for 1999. Acquired
assets will be minimal with the majority of equipment being subject to
short-term leases. No shareholders in Frontline Consulting Services, Inc.
had a relationship with the Registrant or any of its affiliates prior to
signing the letter of intent.
Frontline Consulting Services, Inc. has operated nationally with the
majority of software programming performed in North Carolina by qualified
individuals entering the workplace on the expanded H1 visa program that
requires the individual to remain in the employ of the sponsoring entity
for at least two years..
The acquired company intends to expand to foreign markets in the second
quarter of 1999 with the first expansion planned for Venezuela. Further
market share is expected to be forthcoming from agreements to provide
services on a business partner and sub contractor basis with a nationally
recognized computer hardware and software manufacturer.
On March 2, 1999 the Registrant agreed to acquire the outstanding shares of
Florida Machine & Welding, Inc., a privately owned corporation
headquartered in Bartow Florida. The terms call for the Registrant to issue
1,600,000 five dollar stated value Preferred Shares with voting rights. The
share price is based on the asset value and projected revenue for the 12
month period following closing of the transaction. Florida Machine &
Welding, Inc. has provided its service in Florida and the Southeastern U.S.
since 1978. The sole shareholder had no previous relationship with the
Registrant or any of its affiliates prior to signing the letter of intent.
Florida Machine & Welding, Inc. is one the largest machine shops in the
Southeastern U.S. The assets of the company include a 35,000-square foot.
production shop housing approximately $2,250,000 of machine tools. The site
also includes 3,000-sq. ft. of engineering and office space situated on
five acres of industrial land. The total value of the land and buildings is
estimated at $1,300,000. The business has a particular emphasis on
repairing large, complex shaped, heavy machinery components from the
phosphate industry which surround the facility. Additionally, the business
re-manufactures pumps, valves, material transfer lines, large gears,
bearings, and many other components for heavy equipment and industry. The
welding operations produce specialty products manufactured from aluminum,
steel, and other metals that require specific tolerance and specifications.
Other assets include $2,550,000 of pedestal cranes normally used for
loading large cargoes. These cranes are immediately available for resale
and is a recent expansion of the core business as the majority of these
cranes must be dismantled, refurbished, shipped, and reassembled at the
purchaser's site. Total liabilities are approximately $1,500,000.
The acquired company projects current year revenue to be approximately
$5,000,000 and pre tax net income of approximately $1,900,000.
The acquisitions of Seminole, Frontline and Florida Machine are each
subject to final due diligence and audits of their financial statements.
Upon closing of the three pending acquisitions, the Registrant will
transfer all of its operating assets to its Bright Now, Inc. subsidiary and
will function solely as a holding company.
Item 5. Other Events.
Effective February 26, 1999, the Registrant has relocated its principal
executive offices to the executive offices of its primary subsidiary,
Bright Now, Inc., d/b/a United Printing and Publishing, which are located
at 2601 Second Avenue, Tampa, Florida 33605. In connection with such
relocation, the Registrant has terminated the publication of The South
Georgia Shopper, the Registrant's only remaining shopper product in the
South Georgia market which served primarily Thomasville and several
surrounding counties, and closed its operations in Cairo, Georgia. The
Registrant's decision to relocate its headquarters and to terminate shopper
publication and Georgia operations reflects the change in geographic
location of the Registrant's primary business operations and a shift from
the Registrant's intent away from starting new shopper publications of its
own and toward the acquisition of existing, operating publications from
others.
The Registrant has added two directors to its board. These directors are
as follows:
Randall D. Bartow, age 47, is the founder and has been the president and
sole stockholder of Bartow Communications, Inc., a Maryland corporation,
since 1992. Mr. Bartow earned a B.S. degree in journalism (1973) from Ohio
University in Athens, Ohio.
Richard K. Nicholson, age 51, is the founder and has been the president and
sole stockholder of RKN Enterprises, Inc., a Florida corporation, since
1992. RKN Enterprises is engaged in business as an independent contract
publisher of magazines and newsletters owned by other businesses, trade
associations and other types of organizations. Mr. Nicholson earned a B.S.
degree in marketing (1971) from Central Connecticut State College in New
Britan, Connecticut.
Upon closing of the pending acquisitions (See Item 2) a majority of the
Registrant's existing directors will resign and be replaced by designees of
the acquired companies. Mr. Whitman will remain Chairman of the Board.
Item 7. Financial Statements and Exhibits.
(a) Financial statements
The audited financial statements for Bartow Communications, Inc., Seminole
Scrap Corp., Frontline Communications Service, Inc., and Florida Machine &
Welding, Inc. required to be filed as part of this report will be filed
upon completion, by amendment to this current report within sixty days from
the date this initial report was filed with the Commission.
(b) Pro forma financial information.
The pro forma financial information required to be filed as part of this
report will be filed, subject to the completion of the audit of Seminole
Scrap Corp., Frontline Communication Service, Inc., and Florida Machine &
Welding, Inc., by amendment to this current report within sixty days from
the date this initial report is filed with the Commission.
(c) Exhibits
2.1 Letter agreement for acquisition of Bartow Communications, Inc.
2.2 Binding Letter of Intent Seminole Scrap Corp. dated March 8, 1999
2.3 Binding Letter of Intent Frontline Consulting Services, Inc. March 2,
1999
2.4 Binding Letter of Intent Florida Machine & Welding, Inc. March 2, 1999
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Chronicle Communications, Inc.
By: /s/ John V. Whitman Jr.
John V. Whitman Jr., Chief Executive Officer
<PAGE>
Exhibit 2.1
CHRONICLE COMMUNICATIONS, INC.
P.O. BOX 756 l 140 First Avenue NE
CAIRO, GEORGIA 31728
Phone (912) 377-2111 Fax (912) 377-7748
www.chronicleinc.com
By telephone facsimile (301) 468-7005
January 4, 1999
Randy Bartow
c/o Bartow Communications, Inc.
12156 Parklawn Drive
Rockville, Maryland 20852
Dear Randy:
This letter sets forth the terms upon which Chronicle Communications, Inc., a
Georgia corporation ("Chronicle") whose common stock is publicly traded, will
acquire all of the issued and outstanding capital stock of Bartow
Communications, Inc., a Maryland corporation, ("BCI").
1. Mr. Bartow is the majority stockholder of BCI and will deliver all of the
issued and outstanding common stock at closing. The purchase price to be paid
by Chronicle to Mr. Bartow for all of the issued and outstanding capital stock
of BCI is (i) $2,000 in cash payable at the closing of the acquisition and (ii)
Chronicle common stock purchase options covering 410,000 shares of stock
exercisable at $.25 per share and good for five years from the date of closing,
subject to approval of board for each exercise thereof. The options will have
other normal and customary provisions, including adjustments for stock splits
and recapitalizations.
2. The acquisition agreement will provide that BCI will be operated as a
separate, wholly owned subsidiary of Chronicle for not less than one year and
thereafter can be combined with Chronicle or with another Chronicle subsidiary.
The acquisition agreement will provide that Chronicle will supply funding to
BCI in the amount of $200,000 delivered in two equal installments on January
31 and March 3, 1999, which funding will be used by BCI exclusively for the
payoff of BCI's creditors identified by the parties in an exhibit to the
acquisition agreement.
3. Mr. Bartow will enter into a one-year employment agreement with Chronicle
and/or BCI which will provide a salary of $50,000 per year, bonuses determined
by the board based upon performance and, among other customary provisions, a
three year non compete provision. Chronicle or BCI will also provide, at its
expense consistent with the current practice of BCI, the same level of health
and/or dental insurance now provided by BCI to Mr. Bartow and his family. Mr.
Bartow will be employed as President of BCI and serve on its board of
directors. Mr. Bartow will also be nominated as a director of Chronicle and
Chronicle's affiliated stockholders will agree to vote in favor of Mr. Bartow's
election.
4. From the date of acceptance of this letter to the closing, BCI will provide
Chronicle, its agents and representatives, with full access to their
facilities, books, records, employees, customers, creditors and all other
information necessary to perform a due diligence examination of BCI. Mr.
Bartow and BCI will provide all material information regarding the business,
operations and prospects (financial and otherwise) about BCI and will not omit
any material information or information which is needed to make the information
provided not misleading. The results of the due diligence examination will be
to Chronicle's satisfaction.
5. Until after Chronicle's public announcement of the proposed merger, Mr.
Bartow and BCI will maintain the existence of this letter of intent and the
acquisition agreement in strictest confidence and will not disclose it to or
discuss it with any person other than their personal professional advisors who
will likewise be required to maintain such information in strict confidence.
With Chronicle's prior approval, Mr. Bartow will be permitted to discuss this
matter for purposes which benefit Chronicle. Any such disclosure not permitted
hereby or by specific prior approval would constitute the unauthorized
disclosure of insider information.
6. Between the date of this letter and the closing date, the business of BCI
will be operated consistently with its practices immediately prior to the date
of this letter.
7. The acquisition agreement will contain other ordinary and customary
provisions, representations and warranties for a contract of this nature. The
parties will proceed promptly in good faith to proceed and complete due
diligence and to prepare, execute and deliver a definitive acquisition
agreement. From the date of this letter until the date of closing, or earlier
in the event the parties determine in writing not to proceed with the
transaction, neither Mr. Bartow nor BCI will make or receive offers
for the sale of BCI's capital stock, business or assets. This letter
of intent is intended to be a binding agreement, subject to Chronicle's
satisfaction with the points identified above.
If the foregoing provisions are acceptable to you, please approve in the space
provided below and return the enclosed copy of this letter to me.
Sincerely,
/s/ John V. Whitman, Jr.
John V. Whitman, Jr.
Chairman
Accepted and approved
/s/ Randy Bartow
Randy Bartow, sole stockholder
Date: December 31, 1998
<PAGE>
Exhibit 2.2
CHRONICLE COMMUNICATIONS INC.,
2601 2nd Avenue
Tampa, Florida 33605
813-248-0100 Fax 813-247-2133
March 9, 1999
Seminole Scrap Corporation
322 North Federal Highway
Boynton Beach, Fl 33435
This binding letter of intent sets forth the terms and conditions pursuant to
which Chronicle Communications, Inc., a Georgia corporation, ("Chronicle") will
purchase all of the common stock of Seminole Scrap Corporation, a Florida
corporation, ("SSC").
1) SSC will include in the purchase, for additional value, all business
combinations currently in negotiations. Chronicle Communications will be
included in the said negotiations with a first right of refusal if a binding
letter of intent is consummated.
2) The officers of the operating corporation will enter into a two year
employment and non-competition and confidentiality agreement with Chronicle and
the president of SSC will agree to serve on Chronicle's board of directors or
elect a qualified replacement for a period of two years.
3) Purchase price will be paid as follows:
$35,000,000 in $5 stated value voting convertible preferred shares of Chronicle
Communications. All preferences to be defined in the definitive agreement with
registration rights.
In the event additional combinations are included all relative rights and
privileges will be accorded on an equivalent basis.
4) An audit of SSC's financial statements for 1997 and 1998 must be completed
before signing the definitive Acquisition Agreement with the result that the
audited assets, liabilities and revenues and profits must be of a non-material
difference from the un-audited financial statements. If the variance is
considered material by Chronicle, Chronicle has the right to terminate this
letter of intent.
5) All litigation pending or threatened which encumbers or may encumber SSC
must be fully disclosed and agreed to be continued or resolved prior to closing
to the satisfaction of Chronicle Communications.
6) All agreements, leases and other contracts must be undisturbed by the sale
of stock.
7) Any compensation change of greater than 3% from acceptance hereof to
closing must be approved by Chronicle.
8) Between the date of this letter and the closing date, SSC business will be
operated consistent with its practice immediately prior to the date of this
letter.
9) All representations and warranties made by SSC in the Acquisition
Agreement will be true and correct when made and on the closing date.
10) Following the execution of the this letter, SSC and Chronicle will make
its books, records, operations and employees available for inspection and
interview by representatives and agents of Chronicle, subject to
confidentiality, for purposes of due diligence, the results of which must be to
mutual satisfaction.
11) Following the execution of this letter, SSC will disclose all material
information regarding its business, operations, condition and prospects
(financial and otherwise) and will not omit any information which is required
to make any information disclosed not misleading, subject to confidentiality,
such business, operations condition, and prospects must be to mutual
satisfaction. No additional common shares may be issued.
12) The Acquisition agreement will contain other ordinary and customary
provisions, representations and warranties for a contract of this nature.
13) The day of the signing of this letter of intent, Chronicle Communications,
Inc., will generate a mutually agreeable press release on the purchase for
release to the general public, and filing a report on Form 8-K to allow
Chronicle to meet SEC guidelines.
14) Each party will bear it's own costs incurred in connection with the
transaction.
The parties will proceed promptly in good faith to prepare, execute and deliver
a definitive Acquisition agreement. From the date of this letter until
the date of closing, or earlier in the event the parties determine in writing
not to proceed with the Acquisition, SSC will not make or receive offers for
the sale of SSC capital stock, business or assets. This letter of intent is
intended to be a binding agreement above and as provided in this paragraph.
Neither party will issue any public statement regarding the transaction
contemplated by this letter of intent without the prior written approval of the
other party.
If the foregoing provisions are acceptable to you, please approve in the space
provided below and return the enclosed copy of this letter to me.
Sincerely,
/s/ John V. Whitman, Jr.
John V. Whitman, Jr.
Chairman/CEO
Accepted and approved
Seminole Scrap Corporation
/s/ Norman J. Birmingham
By: Norman J. Birmingham
Sr. Vice President
Date: March 9, 1999
<PAGE>
Exhibit 2.3
CHRONICLE COMMUNICATIONS INC.,
2601 2nd Avenue
Tampa, Florida 33605
813-248-0100 Fax 813-247-2133
March 1, 1999
Bruce Moses
Frontline Consulting Services Inc.
8701 Mallard Creek Rd.
Charlotte, NC 28262
This binding letter of intent sets forth the terms and conditions pursuant to
which Chronicle Communications, Inc., a Georgia corporation, ("Chronicle") will
purchase all of the stock of Frontline Consulting Services Inc., a North
Carolina corporation, ("FCS").
1) FCS will include in the purchase, for additional value, all business
combinations currently in negotiations. Chronicle Communications will be
included in the said negotiations with a first right of refusal if a binding
letter of intent is consummated.
2) All employees, officers, directors and employees, will enter into a two
year non-competition and confidentiality agreement with Chronicle. FCS's
president will serve on Chronicle's board of directors for a period of two
years. In the event a non - employee is selected as the board member the
members rights will be as stated in the company by-laws as amended. Certain
officers and employees of FCS will enter into a separate employment contract
with Chronicle.
3) Purchase price will be paid as follows:
$2,500,000 in restricted common stock in (CRNC) Chronicle, valued at $5.00 per
share.
4) An audit of FCS's financial statements for 1997 and 1998 must be completed
before signing the definitive Acquisition Agreement with the result that the
audited assets, liabilities and revenues and profits must be of a non-material
difference from the un-audited financial statements. If the variance is
considered material (10%+-) by Chronicle, Chronicle has the right to terminate
this letter of intent.
5) All litigation pending or threatened which encumbers or may encumber FCS
must be fully disclosed and agreed to be continued or resolved prior to closing
to the satisfaction of Chronicle Communications.
6) All agreements, leases and other contracts must be undisturbed by the sale
of stock.
7) Any compensation change of greater than 3% from acceptance hereof to
closing must be approved by Chronicle.
8) Between the date of this letter and the closing date, FCS business will be
operated consistent with its practice immediately prior to the date of this
letter.
9) All representations and warranties made by FCS in the Acquisition
Agreement will be true and correct when made and on the closing date.
10) Following the execution of the this letter, FCS will make its books,
records, operations and employees available for inspection and interview by
representatives and agents of Chronicle, subject to confidentiality, for
purposes of due diligence, the results of which must be to Chronicle's
satisfaction.
11) Following the execution of this letter, FCS will disclose all material
information regarding its business, operations, condition and prospects
(financial and otherwise) and will not omit any information which is required to
make any information disclosed not misleading, subject to confidentiality, such
business, operations condition, and prospects must be to Chronicle's
satisfaction.
12) Following the execution of this letter, Chronicle will disclose all
material information regarding its business, operations, condition and
prospects (financial and otherwise) and will not omit any information which
is required to make any information disclosed not misleading, subject to
confidentiality, such business, operations condition, and prospects must be
to Chronicle's satisfaction.
13) The Acquisition agreement will contain other ordinary and customary
provisions, representations and warranties for a contract of this nature.
14) Chronicle Communications, Inc., agrees to provide financing in an amount
no less than $800,000 through internal cash flows, capital raises, or lines of
credit specifically created for FCS. Further, Chronicle Communications agrees
to close this transaction on or before April 30, 1999, subject to completion
of the audit.
15) The day of the signing of this letter of intent, Chronicle Communications,
Inc., will generate a mutually agreeable press release on the purchase for
release to the general public, and filing a report on Form 8-K to allow
Chronicle to meet SEC guidelines.
16) Each party will bear it's own costs incurred in connection with this
transaction.
The parties will proceed promptly in good faith to prepare, execute and deliver
a definitive Acquisition agreement. From the date of this letter until the
date of closing, or earlier in the event the parties determine in writing
not to proceed with the Acquisition, FCS will not make or receive offers
for the sale of FCS capital stock, business or assets. This letter of intent
is intended to be a binding agreement for the terms above and as provided in
this paragraph. Neither party will issue any public statement regarding the
transaction contemplated by this letter of intent without the prior written
approval of the other party.
If the foregoing provisions are acceptable to you, please approve in the space
provided below and return the enclosed copy of this letter to me.
Sincerely,
/s/ John V. Whitman, Jr.
John V. Whitman, Jr.
Chairman/CEO
Accepted and approved
Frontline Consulting Services Inc.,
/s/ Bruce Moses
Bruce Moses, President
Date: March 2, 1999
<PAGE>
Exhibit 2.4
CHRONICLE COMMUNICATIONS INC.,
2601 2nd Avenue
Tampa, Florida 33605
813-248-0100 Fax 813-247-2133
February 26, 1999
Robert L. Lewis, Trustee
Florida Machine & Welding Inc.
1500 Chamber Dr.
Bartow, Florida 33830
This binding letter of intent sets forth the terms and conditions pursuant to
which Chronicle Communications, Inc., a Georgia corporation, ("Chronicle") will
purchase all of the stock of Florida Machine & Welding Inc., a Florida
corporation, ("FMW").
1) FMW will include in the purchase, for additional value, all business
combinations currently in negotiations. Chronicle Communications will be
included in the said negotiations with a first right of refusal if a binding
letter of intent is consummated.
2) Mr. Maxwell, will enter into a five year non-competition and
confidentiality agreement with Chronicle and FMW and serve on Chronicle's board
of directors or elect a qualified replacement for a period of two years. In the
event a non - employee is selected as the board member the members rights will
be as stated in the company by-laws as amended.
3) Purchase price will be paid as follows:
$8,000,000 in $5 stated value voting convertible preferred shares of Chronicle
Communications. All preferences to be defined in the definitive agreement with
registration rights.
In the event additional combinations are included all relative rights and
privileges will be accorded on an equivalent basis.
NOTE: Chronicle agrees to pay Dan Hefner 40,000 registered shares at the time
of the signing of this binding letter of intent.
4) An audit of FMW's financial statements for 1997 and 1998 must be completed
before signing the definitive Acquisition Agreement with the result that the
audited assets, liabilities and revenues and profits must be of a non-material
difference from the un-audited financial statements. If the variance is
considered material by Chronicle, Chronicle has the right to terminate this
letter of intent.
5) All litigation pending or threatened which encumbers or may encumber FMW
must be fully disclosed and agreed to be continued or resolved prior to closing
to the satisfaction of Chronicle Communications.
6) All agreements, leases and other contracts must be undisturbed by the sale
of stock.
7) Any compensation change of greater than 3% from acceptance hereof to
closing must be approved by Chronicle.
8) Between the date of this letter and the closing date, FMW business will be
operated consistent with its practice immediately prior to the date of this
letter.
9) All representations and warranties made by FMW in the Acquisition
Agreement will be true and correct when made and on the closing date.
10) Following the execution of the this letter, FMW will make its books,
records, operations and employees available for inspection and interview by
representatives and agents of Chronicle, subject to confidentiality, for
purposes of due diligence, the results of which must be to Chronicle's
satisfaction.
11) Following the execution of this letter, FMW will disclose all material
information regarding its business, operations, condition and prospects
(financial and otherwise) and will not omit any information which is required
to make any information disclosed not misleading, subject to confidentiality,
such business, operations condition, and prospects must be to Chronicle's
satisfaction.
12) The Acquisition agreement will contain other ordinary and customary
provisions, representations and warranties for a contract of this nature.
13) Chronicle Communications, Inc., agrees to provide financing in an amount
no less than $350,000 and no greater than $500,000 within 5 days of signing
this letter of intent. Further, Chronicle Communications agrees to close this
transaction on or before April 30, 1999, subject to completion of the audit.
14) The day of the signing of this letter of intent, Chronicle Communications,
Inc., will generate a mutually agreeable press release on the purchase for
release to the general public, and filing a report on Form 8-K to allow
Chronicle to meet SEC guidelines.
15) Each party will bear it's own costs incurred in connection with the
transaction.
The parties will proceed promptly in good faith to prepare, execute and deliver
a definitive Acquisition agreement. From the date of this letter until the
date of closing, or earlier in the event the parties determine in writing not
to proceed with the Acquisition, FMW will not make or receive offers for the
sale of FMW capital stock, business or assets. This letter of intent is
intended to be a binding agreement above and as provided in this paragraph.
Neither party will issue any public statement regarding the transaction
contemplated by this letter of intent without the prior written approval of
the other party.
If the foregoing provisions are acceptable to you, please approve in the space
provided below and return the enclosed copy of this letter to me.
Sincerely,
/s/ John V.Whitman, Jr.
John V. Whitman, Jr.
Chairman/CEO
Accepted and approved
FMW, Inc.
/s/ Robert L. Lewis, Trustee
Robert L. Lewis, Trustee
Sole stockholder of FMW, Inc.
Date: March 2, 1999
