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
September 15, 2000
Date of Report
(Date of earliest event reported)
LIBERTY GROUP HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-9201 59-3453151
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
11 52nd Street, Brooklyn, New York, 11232
(Address of registrant's principal executive offices)
(718) 492-1200
(Registrant's telephone number, including area code)
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Item 5. Other Events
On September 15, 2000 Liberty Processing & Distribution, Inc. ("LP&D"),
a wholly-owned subsidiary of Liberty Group Holdings, Inc. ("LGHI"), entered into
a Stock Purchase Agreement ("Agreement") with Philadelphia Foods, Inc.
("Philadelphia") and Marvin Raab, Philadelphia's sole stockholder ("Seller"),
pursuant to which LP&D agreed to purchase all of the stock of Philadelphia from
the Seller. The consideration for the stock is $8,150,000, as adjusted pursuant
to the terms of the Agreement, plus the balance of cash in Philadelphia on the
closing date. The purchase price payable on closing is to be paid $2,000,000 in
cash, plus the cash in Philadelphia, and the balance of the purchase price by
delivery to Seller of two promissory notes. Said promissory notes will be
secured by all of the assets of Philadelphia, the stock of Philadelphia and its
subsidiaries and guarantees by Philadelphia, LGHI, and Liberty Food Group, LLC
("LFG"). The closing is scheduled to occur on November 15, 2000.
The Agreement provides that LP&D will pay a break-up fee to Seller in
the amount of $500,000 if it fails to pay him the $2,000,000 due upon the
closing. As part of the agreement among the parties, LGHI and LFG agreed to
secure the payment of said break-up fee by delivering a letter of credit to
Seller or, in the alternative, by granting him a security interest in their
accounts receivable and their inventory. Since LP&D did not deliver the letter
of credit to Seller by September 22nd, LGHI and LFG have secured payment of the
$500,000 break-up fee by granting to Seller a security interest in their
accounts receivable and inventory.
For the terms and conditions of the Agreement, the notes evidencing the
cash payment due upon closing and the agreements securing the $500,000 break-up
fee, reference is made to such documents attached hereto as Exhibits 10.18-10.22
and the terms of such Exhibits are incorporated herein by reference in their
entirety. All statements made herein concerning the foregoing agreements are
qualified in their entirety by reference to such Exhibits.
Item 7. Financial Statements and Exhibits.
10.18 Stock Purchase Agreement dated as of September 15, 2000, by and
among LP&D, Philadelphia Foods, Inc. and Marvin Raab.
10.19 Promissory note executed by LP&D, dated as of September 15, 2000,
in the original principal amount of $500,000.
10.20 Promissory note executed by LP&D, dated as of September 15, 2000
in the original principal amount of $1,500,000.
10.21 Security Agreement dated as of September 22, 2000 by Marvin Raab
and Liberty Food Group, LLC.
10.22 Security Agreement dated as of September 22, 2000 by and between
Marvin Raab and Liberty Group Holdings, Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LIBERTY GROUP HOLDINGS, INC.
By: /s/ Dennis Lane
Dennis Lane
Chairman and Chief Executive Officer
Date: September 27, 2000
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EXHIBIT INDEX
10.18 Stock Purchase Agreement dated as of September 15, 2000, by and
among Liberty Processing & Distributing, Inc., Philadelphia Foods,
Inc. and Marvin Raab
10.19 Promissory note executed by Liberty Processing & Distributing,
Inc, dated as of September 15, 2000, in the original principal
amount of $500,000
10.20 Promissory note executed by Liberty Processing & Distributing,
Inc., dated as of September 15, 2000 in the original principal
amount of $1,500,000
10.21 Security Agreement dated as of September 22, 2000 by Marvin Raab
and Liberty Food Group, LLC
10.22 Security Agreement dated as of September 22, 2000 by and between
Marvin Raab and Liberty Group Holdings, Inc.
