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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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):
DECEMBER 8, 1999
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UNITEL VIDEO, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-8654 23-1713238
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
555 WEST 57TH STREET, NEW YORK, NEW YORK 10019
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(Address of principal executive offices) (Zip Code)
212-265-3600
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address,
if changed since last report)
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FORM 8-K UNITEL VIDEO, INC.
(File no. 1-8654) Page 2 of 4
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On or about May 21, 1999 Unitel Video, Inc. (the "Company") closed its
Editel Los Angeles post-production division located in Los Angeles, California.
Subsequent to that date, the Company disposed of certain assets used in
connection with that business. Specifically, as of July 21, 1999, the Company
subleased to At The Post, Inc., a Santa Monica, California, based
post-production facility, one Quantel Henry machine (the "Henry Equipment") for
a monthly rental of $16,261.88 (the "Monthly Rental Payment") for the balance of
the term of the Company's lease for such equipment. Upon receipt of the Monthly
Rental Payment, the Company pays the entire amount to the lessor under the
Company's lease for the Henry Equipment. On July 22, 1999 the Company sold,
pursuant to a publicly advertised auction, various items of post-production
equipment owned by the Company that had been used in the Editel Los Angeles
post-production business and received $756,759.65 in proceeds from such auction
net of auctioneer fees and expenses. The auction was conducted by Joseph Finn
Co., Inc., an independent auction company, pursuant to a letter agreement dated
June 18, 1999 (the "Joseph Finn Letter Agreement"). The proceeds from the
auction were used by the Company to repay outstanding indebtedness of the
Company. Finally, on December 17, 1999, the Company transferred to SSI Advanced
Post Services two complete URSA Gold telecine rooms and received net sale
proceeds of $933,000. The proceeds from the sale of the two telecine rooms were
used by the Company to pay amounts owed to the lessor of certain of the
equipment sold, to repay outstanding indebtedness and for working capital
purposes.
On September 2, 1999, the Company closed its Unitel Post 38
post-production division located in New York City. Subsequent to that date, the
Company disposed of certain assets used in connection with that business.
Specifically, on December 8, 1999, the Company sold pursuant to a publicly
advertised auction, together with pre-sales related to the auction, various
items of post-production equipment and office equipment owned by the Company and
by lessors of equipment leased to the Company that had been used in the Unitel
Post 38 business. The auction was conducted by Michael Fox International, Inc.
and Rabin Brothers, independent auction companies, pursuant to a Guaranteed Sale
Agreement dated as of October 13, 1999 (the "Michael Fox/Rabin Agreement")
between the Company and Michael Fox International, Inc. and Rabin Brothers, as
amended, and generated $1,560,500 in gross sale proceeds. Upon receipt of the
sale proceeds from the auction the Company will use such proceeds, after payment
of fees and expenses of the auction, to repay outstanding indebtedness of the
Company or to pay lessors of the leased equipment sold at the auction, as
applicable. All of the assets sold by the Company and described in this Item 2
are hereinafter referred to, collectively, as the "Assets".
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FORM 8-K UNITEL VIDEO, INC.
(File no. 1-8654) Page 3 of 4
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The consideration received by the Company in connection with the
private sale transactions described above was determined by arms-length
negotiations between the Company and the purchasers. The consideration received
by the Company in connection with the auction sales described above was
determined by an open bidding process conducted by independent auction firms.
The foregoing summary is qualified in its entirety by reference to the
Joseph Finn Letter Agreement and the Michael Fox/Rabin Agreement, a copy of each
of which is filed as an exhibit to this Report.
To the Company's knowledge, there are no material relationships between
the purchasers of the Assets and the Company or any of their affiliates,
officers or directors, or any associates of any of their officers or directors.
ITEM 5. OTHER EVENTS
On September 28, 1999, the Company issued a press release announcing
that the Company has engaged Houlihan Lokey Howard & Zukin Capital, L.P.
("Houlihan Lokey"), subject to the approval of the Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court") which is presiding over the
chapter 11 cases of the Company and its three domestic affiliates (collectively,
the "Debtors"). Under the proposed engagement, Houlihan Lokey will explore the
Debtors' strategic alternatives, including a sale of the Debtors in whole or in
part. The Bankruptcy Court has approved the engagement of Houlihan Lokey by the
Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired:
Not applicable
(b) Pro forma financial information:
It is impractical for the Company to provide the required pro forma
financial information at this time; the Company expects to file such
information on or before February 21, 2000.
(c) Exhibits:
2.1(A) Letter agreement dated June 18, 1999 between Joseph Finn Co.,
Inc. and Unitel Video, Inc.
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FORM 8-K UNITEL VIDEO, INC.
(File no. 1-8654) Page 4 of 4
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2.1(B) Guaranteed Sale Agreement dated as of October 13, 1999 between
Unitel Video, Inc. and Michael Fox International, Inc. and Rabin
Brothers, as amended by letter agreement dated October 15, 1999
between Michael Fox International, Inc. and Unitel Video, Inc.
99.1: Unitel Video, Inc. Press Release dated September 28, 1999.
Upon the request of the Securities and Exchange Commission, the Company
agrees to furnish to the Commission a copy of any schedule or exhibit
to the Joseph Finn Letter Agreement or the Michael Fox/Rabin Agreement
omitted from the copy of such agreement filed herewith as Exhibit Nos.
2.1(A) and 2.1(B), respectively.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNITEL VIDEO, INC.
Date: December 22, 1999 By: /s/ Ira Glazer
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Ira Glazer
Getzler & Co., Inc., consultant
for Unitel Video, Inc.
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
2.1(A) Letter Agreement dated June 18, 1999 between Joseph
Finn Co., Inc. and Unitel Video, Inc.
2.1(B) Guaranteed Sale Agreement dated as of October 13,
1999 (the "Michael Fox/Rabin Agreement") between
Unitel Video, Inc. and Michael Fox International,
Inc. and Rabin Brothers, as amended by letter
agreement dated October 15, 1999 between Michael Fox
International, Inc. and Unitel Video, Inc.
99.1 Unitel Video, Inc. Press Release dated September 28,
1999
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JOSEPH FINN CO., INC.
Auctioneers & Appraisers
188 Needham Street
Newton MA 02464
June 18, 1999
Tom Eyring
Chief Technology Officer
Unitel Video
555 West 57th Street Room 1240
New York, NY 10019
RE: Editel/LA, 729 Highland Avenue, Los Angeles, California
Dear Mr. Eyring:
We are pleased to offer Unitel Video, Inc. the following proposal for the
liquidation at auction of certain equipment located at your captioned facility
in Los Angeles, California.
We will conduct a one-day public auction sale by catalog from a nearby hotel
function room. We have scheduled Thursday, July 22, 1999 as an auction date,
with inspection at the facility on Tuesday, July 20th and Wednesday, July 21st
from 9:00 a.m. to 5:00 p.m.
We will visit the facility on June 7th and 8th to get complete descriptions and
photographs of all of the equipment for sale, which equipment list will be
subject to your approval. We will prepare a pictorial brochure for mailing to
approximately 20,000 audio video production facilities, television stations, and
broadcast facilities in North America. We will also prepare and place
promotional advertisements to appear in trade journals and newspapers.
You will provide us with two engineers during the entire auction process of
setup, sale, and removal.
We will provide security acceptable to Unitel on the premises beginning July
20th inspection through July 27th, including the inspection and removal period.
We will work along with Unitel personnel to arrange, tag, and catalog all of the
equipment for sale. We plan to be on the premises on June 21st to begin our
work.
We will work along with the two Unitel engineers to supervise two days of public
inspection prior to the auction sale.
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We will provide sale day labor to include auctioneers, deposit men, floor
personnel, and computerized billing and bookkeeping.
We will work along with Unitel personnel to supervise the removal of equipment.
Buyers will be responsible for their own packing and shipping.
No non-Unitel-owned equipment will be placed in the sale without Unitel's prior
consent.
We will collect all funds and applicable taxes associated with the sale.
You hereby warrant that all of the machinery and equipment will be free and
clear of all liens and encumbrances when sold by us and you will hold us
harmless and defend us from any claims arising over the machinery and equipment
which do not involve acts of Joseph Finn Co., Inc. personnel.
We are to have free use and occupancy of the premises during the auction process
of set up, sale, and removal and understand that a Unitel employee will be
present at all times during this process.
Subject to your prior approval of specific language, we have the right to use
the name Editel/LA in our advertising for this auction.
All items will be sold as is and where is and the purchasers will be responsible
for removing the equipment and shall bear all risks of loss while in transit and
Joseph Finn Co., Inc. shall notify all purchasers of these terms. Unitel shall
have no liability for loss in transit.
Joseph Finn Co., Inc. will leave in place any machinery and equipment not sold
at the auction and will not in any way be responsible for cleaning the premises
after the auction.
Joseph Finn co., Inc. shall have not rights to any equipment not sold at auction
except their right to make private sales as provided in the seventh paragraph of
Page 3.
You will have all machinery and equipment free from any and all hazardous
wastes, chemicals, or regulated substances prior to the auction.
We will not be responsible in any way for any hazardous wastes or regulated
substances associated with any of the machinery and equipment.
We have and will maintain public liability insurance in the amount of two
million dollars naming Unitel as an additional insured and covering anyone on
the premises for the auction and provide you with a certificate of insurance. We
will also require riggers removing equipment from the premises to post insurance
certificates with us.
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The proceeds from the auction will be distributed as follows: Joseph Finn co.,
Inc is to receive the full 10% Buyer's Premium on the first $750,000.00 in
sales. We are to split the Buyer's Premium 5% to Unitel and 5% to Joseph Finn
Co., Inc. on all proceeds over $750,000.00. All other sales proceeds are Unitel
property.
Unitel has the right until June 30, 1999 to sell any and all equipment without
any commission to Joseph Finn Co., Inc. Joseph Finn Co., Inc. is to receive a 5%
commission on any pre or post auction sales from July 1, 1999 through August 8,
1999. Joseph Finn Co., Inc. will also receive up to $40,000.00 in out-of-pocket
expenses incurred by them in connection with the auction regardless of whether
sales are made pursuant to the third and/or fourth paragraphs of this Page
You will receive a full accounting of all sales immediately following the
auction sale and receive the net funds due to you within ten days followg the
auction sale. Joseph Finn Co., Inc. will hold all funds received by them in
connection with the sale of the equipment pursuant to this agreement in trust
for Unitel in a separate trust account at Wells Fargo Bank in Los Angeles,
California and deliver such funds to Unitel as provided in this paragraph.
All communications between the parties hereto are in strict confidence and the
parties hereto agree that no discussion or communication to a third party
concerning this Agreement or the underlying basis is to be made by any one party
without written approval of the other.
Joseph Finn Co., Inc. has exclusive sales rights to this equipment from July 1,
1999 through August 8, 1999 and the equipment may not be sold by any other
parties during this period. Any sales of equipment by Joseph Finn Co., Inc.
during the period July 1, 1999 through August 8, 1999 which are not auction
sales may only be made at a price which shall have been pre-approved by Unitel.
Notwithstanding anything to the contrary in this agreement, neither party shall
be liable or responsible to the other in the event that such party's performance
is prevented by a reason customarily referred to a "force majure" except that if
Joseph Finn Co., Inc.'s performance is prevented, it will reschedule in the near
future and advertise the auction without additional expense to Unitel.
No equipment will be released by Joseph Finn Co., Inc. to a purchaser prior to
Joseph Finn Co., Inc. receiving payment in full in cash or by certified check or
other appropriate means.
If our proposal is acceptable to you, please sign where indicated below and
return one copy to us and this proposal shall be a binding agreement between us.
The parties shall indemnify each other for any breach of the termsof this
agreement.
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If the auction does not occur on or before July 22, 1999 for any reason, this
agreement will terminate and its terms will be of no further force or effect.
Very truly yours,
JOSEPH FINN CO., INC.
/s/ PAUL J. FINN
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Paul J. Finn
PJF/hf
Enclosure
/s/ BARRY KNEPPER 6/23/99
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ACCEPTED BY DATE
CEO
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TITLE
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GUARANTEED SALE AGREEMENT
THIS GUARANTEED SALE AGREEMENT ("AGREEMENT") is made as of October 13,
1999, by and between UNITEL VIDEO, INC., a Delaware corporation ("SELLER"),
debtor and debtor-in-possession in a certain chapter 11 bankruptcy proceedings
pending in the Bankruptcy Court for the District of Delaware (the "BANKRUPTCY
COURT"), Case No. 99-2979 (PJW), Jointly Administered, and MICHAEL FOX
INTERNATIONAL, INC., a Maryland corporation and RABIN BROTHERS, a California
general partnership (together, the "AUCTIONEER").
RECITALS:
The SELLER has engaged the services of the AUCTIONEER to conduct a
public auction and/or private sales of certain property of the SELLER
(collectively, "SALE") pursuant to the terms of this AGREEMENT. As a condition
of the SELLER'S engagement of the AUCTIONEER, the AUCTIONEER has agreed to
guarantee the SELLER a minimum return on the SALE ("GUARANTEE"). The PARTIES
have agreed to execute this AGREEMENT so as to document the terms of -- (i) the
SELLER'S engagement of the AUCTIONEER in connection with the SALE, and (ii) the
GUARANTEE.
NOW, THEREFORE, in consideration of these premises, the terms and
conditions set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the SELLER and the
AUCTIONEER (collectively "PARTIES") agree as follows:
Section 1. PURPOSE OF AGREEMENT. The SELLER hereby hires the
AUCTIONEER, for the purpose of this transaction, as the SELLER'S exclusive agent
to conduct the SALE of the personal property of the SELLER that is listed and
described on Exhibit "A" attached hereto and made a part hereof (collectively,
"ASSETS"), upon the terms and conditions set forth herein.
Section 2. MANNER OF SALE. The SELLER hereby authorizes the AUCTIONEER,
for the purpose of this transaction, to sell the ASSETS, in whole or in part, at
public auction(s) and/or private sale(s) to the highest bidder thereof. Although
the AUCTIONEER shall endeavor to consult with the SELLER regarding the manner
and method of the SALE, the AUCTIONEER shall have the authority to conduct the
SALE in the manner, and utilizing the methods, that the AUCTIONEER deems, in its
professional judgment, to be appropriate.
Section 3. TERMS OF THE GUARANTEE. The AUCTIONEER hereby guarantees
that the aggregate amount of the gross proceeds of the SALE (collectively, "SALE
PROCEEDS") shall be an amount at least equal to One
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Million Eight Hundred Thousand Dollars ($1,800,000) ("GUARANTEED AMOUNT"). The
AUCTIONEER will take the next Two Hundred Thousand Dollars ($200,000) of SALE
PROCEEDS for its expenses and risk. Any SALE PROCEEDS in excess of Two Million
Dollars ($2,000,000) will be divided Eighty Percent (80%) to SELLER and Twenty
Percent (20%) to AUCTIONEER. In the event SALE PROCEEDS equal at least Two
Million Five Hundred Thousand Dollars ($2,500,000), AUCTIONEER will be entitled
to a bonus commission equal to Five Percent (5%) of the total SALE PROCEEDS.
AUCTIONEER may charge buyers and retain up to a Ten Percent (10%) "Buyer's
Premium". The Buyer's Premium belongs exclusively to the AUCTIONEER and is not
part of the SALE PROCEEDS. In connection with the GUARANTEED AMOUNT, the
AUCTIONEER shall provide SELLER with an item-by-item valuation of the ASSETS of
the LESSORS (as defined hereinafter) in order for SELLER to allocate the
GUARANTEED AMOUNT by and among SELLER'S secured creditors and equipment lessors
("LESSORS"). If any LESSOR does not consent to include certain of its ASSETS in
the SALE (the "EXCLUDED ASSETS"), or decides not to participate in the
GUARANTEE, then the GUARANTEED AMOUNT shall be reduced by the total amount of
such EXCLUDED ASSETS, and the ASSETS shall not include any of the EXCLUDED
ASSETS.
Section 4. PAYMENTS TO SELLER.
(a) Upon the date that is One (1) business day after the date
that the order of the BANKRUPTCY COURT approving this
AGREEMENT becomes final and nonappealable ("APPROVAL DATE"),
the AUCTIONEER will deliver to the SELLER an irrevocable
letter of credit (the "LETTER OF CREDIT") from a financial
institution acceptable to SELLER and in a form acceptable to
Seller in an amount equal to the GUARANTEED AMOUNT;
(b) If SALE PROCEEDS do not equal at least the GUARANTEED
AMOUNT, and AUCTIONEER has not remitted to SELLER the
GUARANTEED AMOUNT in good funds within Two (2) business days
from the SALE date, then SELLER will be entitled to draw on
the LETTER OF CREDIT to satisfy the GUARANTEED AMOUNT. The
report of sale and accounting statements will be delivered to
SELLER within ten (10) business days after the SALE; and
(c) If total SALE PROCEEDS equal or exceed the GUARANTEED
AMOUNT, then AUCTIONEER will deliver the GUARANTEED AMOUNT
plus any other monies due and owing to SELLER pursuant to
section 3 above, along with the Report of Sale and
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Accounting Statements, within ten (10) business days after the
SALE.
Section 5. LOCATION OF ASSETS. The ASSETS are located on the
parcel(s) of real property located at 8 West 38th Street in New York, New York
Section 6. USE OF THE PREMISES. The SELLER: a) authorizes the
AUCTIONEER, upon the APPROVAL DATE, to enter and use the PREMISES for the
purposes of -- (i) storing the ASSETS thereupon, (ii) preparing for and
conducting the SALE thereupon, and (iii) otherwise exhibiting the ASSETS; b)
shall not charge the AUCTIONEER any fees associated with the AUCTIONEER'S use of
the PREMISES in accordance with the terms of this Section (specifically, and
without limitation, AUCTIONEER will not be responsible for security (so long as
AUCTIONEER occupies the PREMISES, SELLER shall continue to provide a guard
during normal business hours at its sole cost and expense), waste removal or
taxes); c) shall provide adequate utilities to the PREMISES, at the SELLER'S
sole expense, to allow the AUCTIONEER -- (i) to demonstrate and exhibit the
ASSETS to any prospective purchaser of the ASSETS ("PURCHASER"), and (ii) to
conduct the SALE; and d) shall provide the AUCTIONEER, at AUCTIONEER'S request,
for the duration of the SALE program, with the services of a studio engineer
employed by SELLER, at no cost or expense to the AUCTIONEER. Notwithstanding
anything contained herein to the contrary, the SALE and removal of sold ASSETS
of the PREMISES shall be completed no later than December 31, 1999.
Upon the date this AGREEMENT is mutually executed and delivered by the
parties, AUCTIONEER will conduct a final physical inspection (the "INSPECTION")
of the ASSETS at the PREMISES. Upon AUCTIONEER'S approval, AUCTIONEER, at
AUCTIONEER'S expense, will change the locks at the PREMISES and remit the keys
to SELLER'S counsel. SELLER'S counsel shall not give said keys to any other
individual under any circumstances without the prior written consent of the
PARTIES (unless this AGREEMENT is terminated or not approved by the Bankruptcy
Court), and shall return the keys to AUCTIONEER on the APPROVAL DATE. On-site
security and the alarm company for the PREMISES shall be instructed by SELLER in
writing (with a copy to AUCTIONEER) to report directly to the AUCTIONEER. Within
five (5) business days prior to the APPROVAL DATE, SELLER's facilities manager
and crisis manager will each file an affidavit with the BANKRUPTCY COURT (i)
verifying that no ASSETS have been removed from the PREMISES or otherwise
altered since the INSPECTION and (ii) identifying all EXCLUDED ASSETS.
Section 7. TERM OF AGREEMENT. AUCTIONEER shall have the exclusive right
to sell the ASSETS until the earliest to occur of (i) the completion of the SALE
of all of the ASSETS by the AUCTIONEER and the removal of the ASSETS following
the SALE, (ii) AUCTIONEER's decision to terminate its right
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to sell the ASSETS, and (iii) AUCTIONEER's or SELLER's termination of this
AGREEMENT pursuant to Section 10 hereof ("TERMINATION DATE"); provided, that
after December 31, 1999, AUCTIONEER may continue to exclusively sell the ASSETS
only if such ASSETS are removed by AUCTIONEER, at AUCTIONEER'S EXPENSE, from the
PREMISES on or before December 31, 1999, and AUCTIONEER may not sell any ASSETS
remaining in the PREMISES after December 31, 1999. Notwithstanding the
foregoing, following the TERMINATION DATE, the AUCTIONEER shall have no
obligation to remove unsold ASSETS from the PREMISES. The AUCTIONEER shall be
responsible to repair any damages to the PREMISES during the term hereof caused
by the AUCTIONEER; provided, however, AUCTIONEER shall not be responsible for
any damages caused by the ordinary removal of the ASSETS from the PREMISES.
Section 8. LIABILITY AND WORKERS' COMPENSATION INSURANCE. The
AUCTIONEER shall provide the SELLER with evidence that the AUCTIONEER has: a)
public liability and property damage insurance policies insuring the SELLER and
the AUCTIONEER, as the case may be, against loss as a result of personal injury
or property damage in connection with the ASSETS, the PREMISES and any SALE,
with limits of not less than Five Million Dollars ($5,000,000.00) in the
aggregate as to personal injury; and b) workers' compensation insurance with
limits of coverage that comply with applicable laws and regulations. The
AUCTIONEER shall maintain the insurance described in this Section until the
TERMINATION DATE.
Section 9. CASUALTY INSURANCE. Until such time as title to and
possession of the ASSETS is delivered to the PURCHASER, the SELLER shall obtain
and thereafter maintain a policy or policies of all-risk or fire and extended
coverage casualty insurance, and vandalism and malicious mischief, for the
ASSETS: (a) in an amount not less than the full insurable value of the ASSETS;
and (b) that names the AUCTIONEER as an additional insured. In the event that
prior to the SALE of all of the ASSETS, all or any portion of the ASSETS shall
be lost or damaged by fire or other casualty, or by theft or vandalism, the
AUCTIONEER is under no obligation to pay the GUARANTEED AMOUNT to the SELLER and
the GUARANTEE shall be void and of no further force or effect. Notwithstanding
the terms of the immediately preceding sentence hereof to the contrary, if the
AUCTIONEER has previously paid to the SELLER all or a portion of the GUARANTEED
AMOUNT, or the amount of the insurance proceeds that are paid to the SELLER in
connection with any fire or other casualty, or theft or vandalism, is greater
than the GUARANTEED AMOUNT, the AUCTIONEER shall be entitled to receive a
portion of such insurance proceeds in an amount equal to the sum of the
previously paid portion of the GUARANTEED AMOUNT plus such sums that the
AUCTIONEER is entitled to receive under Section 3 hereof (as if the SALE had
been consummated), provided that the insurance proceeds are adequate to satisfy
such sums.
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Section 10. DEFAULT; TERMINATION OF AGREEMENT. In the event that the
SELLER violates the terms of, or fails to perform its obligations under, this
AGREEMENT, the AUCTIONEER may terminate this AGREEMENT, upon the delivery of
written notice thereof to the SELLER, and the SELLER shall promptly pay to the
AUCTIONEER the sum of any previously paid portion of the GUARANTEED AMOUNT plus
the amount that the AUCTIONEER was to receive pursuant to Section 3 hereof (to
be based on the appraised fair market value of the ASSETS). In the event that
the AUCTIONEER violates the terms of, or fails to perform its obligations under,
this AGREEMENT, the SELLER may terminate this AGREEMENT, upon the delivery of
written notice thereof to the AUCTIONEER, and the AUCTIONEER shall promptly pay
to the SELLER an amount equal to the greater of: (i) the unpaid portion of the
GUARANTEED AMOUNT; or (ii) the aggregate amount of SALE PROCEEDS that the
AUCTIONEER has received prior to the date of such termination (less the amount
that the AUCTIONEER was entitled to receive pursuant to Section 3 hereof).
Notwithstanding any of the terms of this Section to the contrary, if the
AUCTIONEER has paid the GUARANTEED AMOUNT to the SELLER, the SELLER may not
terminate this AGREEMENT without the AUCTIONEER's consent.
Section 11. SELLER'S AUTHORIZATIONS REGARDING BILLS OF SALE. The SELLER
hereby authorizes the AUCTIONEER to execute, on the SELLER'S behalf, all bills
of sale, receipts and other documents necessary to transfer title to the ASSETS
to the PURCHASER upon payment of the SALE PROCEEDS.
Section 12. SATISFACTION OF LIENS. Notwithstanding the SELLER'S
representations that are more fully described below, in the event any claim is
made by any alleged creditor for the payment of sums due in connection with any
security interests or liens associated with any of the ASSETS owned by the
LESSORS (collectively, "CLAIM"), the SELLER shall require each LESSOR to: (a)
expeditiously pay the amount of the CLAIM so as to discharge all liens
associated with the ASSETS owned by such Lessor and to obtain a full and
complete release thereof; or (b) provide sufficient surety bond or other
security to protect the AUCTIONEER and the PURCHASER while any CLAIM is being
defended or challenged, in good faith, by the SELLER or LESSOR. In the event a
LESSOR does not consent to the foregoing with respect to all or some of such
LESSOR's ASSETS, then such ASSETS shall constitute EXCLUDED ASSETS and shall not
be included in the SALE.
Section 13. REPRESENTATIONS OF THE SELLER. The SELLER represents and
warrants to the AUCTIONEER that, subject to the approval and authorization of
the BANKRUPTCY COURT:
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(a) at the time of the SALE, the SELLER shall be authorized by
the BANKRUPTCY COURT to sell the ASSETS (other than ASSETS
owned by the LESSORS) pursuant to sections 363(b) and 363(f)
of title 11 of the United States Code, free and clear of all
liens, encumbrances, security interests, adverse claims,
mortgages, pledges, liabilities, conditional sale agreements,
restrictions, and charges of any kind (collectively, "LIENS");
(b) no brokerage fees are due and owing in connection with the
SALE;
(c) the person executing this AGREEMENT on behalf of the
SELLER is duly authorized to do so;
(d) the terms of this AGREEMENT are binding upon and
enforceable against the SELLER;
(e) to the best of the SELLER'S knowledge, information or
belief, the ASSETS have never been and are not being used to
make, store, handle, treat, dispose, generate, or transport
"HAZARDOUS SUBSTANCES" (as that term is defined below) in
violation of any applicable laws; and
(f) the AUCTIONEER has no obligation to handle, sell, remove
or store any HAZARDOUS SUBSTANCES that may be located at the
PREMISES or otherwise associated with the ASSETS.
The term "HAZARDOUS SUBSTANCES" means, collectively, any chemical, solid,
liquid, gas, or other substance having the characteristics identified in, listed
under, or designated pursuant to any law, statute, or regulation of a government
or political subdivision or agency thereof, as presenting an imminent and
substantial danger to the public health or welfare or to the environment, or as
otherwise requiring special handling, collection, storage, treatment, disposal,
or transportation.
Section 14. REPRESENTATIONS OF THE AUCTIONEER. The AUCTIONEER
represents and warrants to the SELLER that:
(a) all necessary authority to conduct the SALE has been
obtained by the AUCTIONEER;
(b) the person executing this AGREEMENT on behalf of the
AUCTIONEER is duly authorized to do so;
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(c) the terms of this AGREEMENT are binding upon and
enforceable against the AUCTIONEER; and
(d) the LETTER OF CREDIT shall be delivered in accordance with
Section 4 hereof and shall be in full force and effect in
accordance with its terms.
Section 15. ASSIGNMENT OF SERVICE AGREEMENTS, MANUALS, ETC.. The SELLER
agrees to assign to the PURCHASER, without additional consideration from the
AUCTIONEER or the PURCHASER, any and all service agreements, warranties,
operating agreements, maintenance agreements, manuals, plans, and all similar
and other documents relating to the ASSETS or the SALE which are in the
possession or under the control of the SELLER (collectively, "SERVICE
AGREEMENTS"). The SERVICE AGREEMENTS shall be delivered to the PURCHASER at the
time of the consummation of the SALE, unless otherwise agreed to by the PARTIES
and the PURCHASER in writing.
Section 16. ADVERTISING. The SELLER hereby authorizes the AUCTIONEER to
use the SELLER's name, without additional consideration from the AUCTIONEER, in
promotional materials pertaining to any SALE.
Section 17. INDEMNIFICATIONS BY THE SELLER. The SELLER hereby
indemnifies, defends and agrees to hold harmless the AUCTIONEER and the
AUCTIONEER'S officers, agents and employees from and against any and all claims,
demands, liabilities, judgments, damages, settlements, costs and expenses
(including but not limited to court costs and reasonable attorneys' fees) that
may be sustained or incurred by the AUCTIONEER as a result of:
(a) any acts or omissions of the SELLER that result in -- (i)
personal or property injury incurred at the PREMISES, (ii) a
violation of any governmental statute, ordinance or code
related to the ASSETS or the PREMISES, or (iii) a violation of
any security interest, license agreement, patent or other
encumbrance restricting the SALE or the use of the ASSETS;
(b) any claim made by a third party for commissions allegedly
due and owing in connection with the SALE, unless such
commissions arose pursuant to an agreement between the third
party and the AUCTIONEER;
(c) any environmental action being brought -- (i) because the
ASSETS allegedly were involved in, or are somehow related to,
the storage, handling, treatment, disposition, generation, or
transportation of HAZARDOUS SUBSTANCES, or (ii) against the
<PAGE>
AUCTIONEER in connection with any remedial actions associated
with the ASSETS or the PREMISES; or
(d) any material misrepresentation of the warranties more
fully described in Section 13 hereof.
Section 18. INDEMNIFICATIONS BY THE AUCTIONEER. The AUCTIONEER hereby
indemnifies, defends and agrees to hold harmless the SELLER and the SELLER'S
officers, agents and employees from and against any and all claims, demands,
liabilities, judgments, damages, settlements, costs and expenses (including but
not limited to court costs and reasonable attorneys' fees) that may be sustained
or incurred by the SELLER as a result of:
(a) any acts or omissions of the AUCTIONEER that result in
personal or property injury incurred at the PREMISES;
(b) any claim made by a third party for commissions allegedly
due and owing in connection with the SALE, which arose
pursuant to an agreement between the third party and the
AUCTIONEER; or
(c) any material misrepresentation of the warranties more
fully described in Section 14 hereof.
Section 19. BINDING OBLIGATION; ASSIGNMENT. This AGREEMENT shall be
binding upon the PARTIES and their respective successors and assigns. Neither
PARTY may assign its interest in this AGREEMENT without the prior written
consent of the other PARTY.
Section 20. FINAL AGREEMENT; COURT APPROVAL. This AGREEMENT -- and any
and all (i) exhibits that are attached hereto and made a part hereof, and (ii)
side agreements, letter agreements, and amendments (if any) that are executed by
the SELLER and the AUCTIONEER in furtherance of this AGREEMENT -- contains the
final and entire agreement and understanding of the PARTIES, and any terms and
conditions not set forth in this AGREEMENT (or in such exhibits, side letters,
letter agreements, and amendments) are not a part of this AGREEMENT and the
understanding of the PARTIES. This AGREEMENT may be amended or altered only in
writing signed by the PARTY to be bound by the change or alteration. The parties
agree that this AGREEMENT is subject to the approval of the Bankruptcy Court and
the submission of higher and better bids for the ASSETS. SELLER agrees to
promptly file a motion with the Bankruptcy Court seeking approval of the
AGREEMENT. SELLER agrees that initial overbids of the GUARANTEED AMOUNT shall be
at least Five Percent (5%) of the GUARANTEED AMOUNT and that SELLER shall
require potential overbidders to post a good faith deposit in an amount no less
than $250,000. AUCTIONEER acknowledges that SELLER is not required to seek
separate
<PAGE>
approval of the overbid protections set forth in the immediately preceding
sentence in advance of the BANKRUPTCY COURT's approval of this AGREEMENT in
total.
Section 21. TIME. Time is strictly of the essence of this AGREEMENT.
Section 22. NUMBER, GENDER, AND CAPTIONS. As used herein, the singular
shall include the plural and the plural may refer to only the singular. The use
of any gender shall be applicable to all genders. The captions contained herein
are for purposes of convenience only and are not a part of this AGREEMENT.
Section 23. PARTIAL INVALIDITY. If any term, covenant or condition of
this AGREEMENT or its application to any person or circumstances shall be
invalid or unenforceable, the remainder of this AGREEMENT, or the application of
such term or provision to persons or circumstances other than those to which it
is held invalid or unenforceable shall not be affected, and each term shall be
valid and enforceable to the fullest extent permitted by law.
Section 24. NOTICES. Any notice required or permitted by or in
connection with this AGREEMENT, without implying the obligation to provide any
such notice, shall be in writing and shall be made by facsimile (confirmed on
the date the facsimile is sent by one of the other methods of giving notice
provided for in this Section) or by hand delivery, by Federal Express, or other
similar overnight delivery service, or by certified mail, unrestricted delivery,
return receipt requested, postage prepaid, addressed to the respective PARTIES
at the appropriate address set forth below or to such other address as may be
hereafter specified by written notice by the respective PARTIES. If notice is
tendered pursuant to the provisions of this Section and is refused by the
intended recipient thereof, the notice, nevertheless, shall be considered to
have been given.
If to the SELLER:
C/o Getzler & Company
295 Madison Avenue
New York, NY 10017
Attention: Joel Getzler
Fax. No.: (212) 617-4812
with a copy to:
Kaye, Scholer, Fierman, Hayes & Handler, LLP
425 Park Avenue
New York, NY 10022
Attention: Marc D. Rosenberg, Esq. and Benjamin Mintz, Esq.
Fax No.: (212) 836-7157
<PAGE>
If to the AUCTIONEER:
MICHAEL FOX INTERNATIONAL, INC.
3835 Naylors Lane
Baltimore, MD 21208
Attention: David Fox
Fax. No.: (410) 653-4069
Section 25. FORCE MAJEURE. Notwithstanding any of the terms of this
AGREEMENT to the contrary, neither the SELLER nor the AUCTIONEER shall be deemed
in default with respect to their respective obligations hereunder if the SELLER
or the AUCTIONEER, as the case may be, is unable to fulfill its obligations
hereunder due to any strike, lockout, civil commotion, war-like operation,
invasion, rebellion, governmental regulations or controls, inability to provide
services through acts of God, or other cause by or beyond the control of the
SELLER or the AUCTIONEER, as the case may be (collectively, "FORCE MAJEURE
EVENT"). Upon the occurrence of a FORCE MAJEURE EVENT, the AUCTIONEER may
terminate this AGREEMENT. Upon such termination, any sums that previously were
delivered to the SELLER shall be returned to the AUCTIONEER and all SALE
PROCEEDS received by AUCTIONEER shall be immediately paid to SELLER (unless the
aggregate amount of such SALE PROCEEDS is greater than the GUARANTEED AMOUNT, in
which case the AUCTIONEER may retain such sums as it is entitled to receive
under Section 3 hereof).
<PAGE>
IN WITNESS WHEREOF, the SELLER and the AUCTIONEER execute this
AGREEMENT as of the date first above written (notwithstanding the actual date of
execution and delivery hereof), with the specific intention that this AGREEMENT
constitutes a document under seal. This AGREEMENT may be executed in
counterparts and may be delivered via facsimile transmission.
THE SELLER:
UNITEL VIDEO, INC.,
A DelawareCorporation
By: /s/ Joel Getzler
-----------------------------------
Name: Joel Getzler
Title: President, Getzler & Co.,
Inc., Management Consultant for the
Debtors
THE AUCTIONEER:
MICHAEL FOX INTERNATIONAL, INC.,
A Maryland Corporation
By: /s/ Jonathan S. Reich
-----------------------------------
Name: Jonathan S. Reich
Title: Principal
RABIN BROTHERS
A California general partnership
By: /s/ Richard Reese
-----------------------------------
Name: Richard Reese
Title: Principal
EXHIBIT A - DESCRIPTION OF ASSETS
<PAGE>
MICHAEL FOX INTERNATIONAL
Worldwide Asset Services Since 1946
October 15, 1999
Mr. Joel Getzler
Getzler & Company
295 Madison Ave.
New York, NY 10017
Re: Amending & clarifying GUARANTEED SALE AGREEMENT Dated October 13, 1999
Dear Joel:
Further to our meeting and agreement yesterday, the following serves to both
amend and clarify the executed GUARANTEED SALE AGREEMENT dated October 13, 1999
(the "Agreement"). All terms not defined herein, shall having the meaning
ascribed in the Agreement.
1. Attached hereto, is a list entitled "Excluded Assets" (the "List"), which
the PARTIES believe contains a description of the LESSOR'S ASSETS. The
PARTIES agree that certain ASSETS may ultimately be removed from or added
to the List. The PARTIES further agree that the values appointed to the
ASSETS on the List shall determine the GUARANTEED AMOUNT. Unless additional
ASSETS are added to the List, the GUARANTEED AMOUNT shall be no less than
Eight Hundred Thousand Dollars ($800,000).
2. If the GUARANTEED AMOUNT is reduced, then the amount of SALE PROCEEDS
AUCTIONEER needs to obtain in order to qualify for the Five Percent (5%)
bonus commission shall also be reduced by the same percentage. By way of
example, if the GUARANTEED AMOUNT is reduced to Eight Hundred Thousand
Dollars ($800,000), which is approximately Fifty Five Percent (55%) of the
initial One Million Eight Hundred Thousand Dollar ($1,800,000) GUARANTEE,
then the initial SALES PROCEEDS target of Two Million Five Hundred Thousand
Dollars ($2,500,000) shall be reduced accordingly to approximately One
Million One hundred and Eighty Nine Thousand Dollars ($1,189,000) (the
$700,000 of SALE PROCEEDS between the $1,800,000 GUARANTEE and the
$2,500,000 sales target is reduced 55% to approximately $389,000, which
amount is then added to the $800,000 GUARANTEED AMOUNT).
3. SELLER shall provide AUCTIONEER with the keys to the PREMISES immediately
after AUCTIONEER'S retention is approved by the BANKRUPTCY COURT and shall
provide AUCTIONEER with access to the PREMISES prior to the APPROVAL DATE,
for the preparation of the SALE.
4. In the event SELLER is authorized by the BANKRUPTCY COURT to retain an
entity other than AUCTIONEER to conduct the SALE, the SELLER shall
reimburse AUCTIONEER for all SALE related expenses expended up to and
including such date, said amount not to exceed Twenty Five Thousand Dollars
($25,000).
<PAGE>
Very truly yours,
/s/ Jonathan Reich
Jonathan Reich
UNITEL VIDEO, INC.
/s/ Joel Getzler
- -------------------
By: Joel Getzler
ATTACHMENT - DESCRIPTION OF EXCLUDED ASSETS
<PAGE>
NEWS ANNOUNCEMENT
Contact: Joel Getzler, Getzler & Co., Inc. (212) 697-2400
FOR IMMEDIATE RELEASE
UNITEL VIDEO, INC. PROPOSES TO ENGAGE
HOULIHAN LOKEY HOWARD & ZUKIN
CAPITAL, L.P. TO PROVIDE INVESTMENT
BANKING SERVICES
New York, New York - September 28, 1999 - Unitel Video, Inc. (AMEX:UNV)
(the "Company") announced today that it has engaged Houlihan Lokey Howard &
Zukin Capital, L.P. ("Houlihan Lokey"), subject to the approval of the
Bankruptcy Court for the District of Delaware which is presiding over the
chapter 11 cases of the Company and its three domestic affiliates (collectively,
the "Debtors"). Under the proposed engagement, Houlihan Lokey will explore the
Debtors' strategic alternatives, including a sale of the Debtors in whole or in
part.
Commenting on the announcement, Joel Getzler, Chairman of Getzler &
Co., Inc., the Company's management consultant which is overseeing the
day-to-day operations of the Company, said, "The proposed engagement of
Houlihan Lokey Howard & Zukin Capital, L.P. is an important step in the
Debtors' effort to maximize the value of their assets and business for the
benefit of the Debtors' creditors and estates."
In addition, the Company announced that, in view of the Company's
current disposition program, Barry Knepper has decided to step down as President
and Chief Executive Officer of the Company but has agreed to continue in the
employment of the Company in order to assist in maximizing the value of the
Debtors' estates. Mr. Knepper will continue to serve as a member of the Board of
Directors. The Company also announced that Philip S. Birsh and Richard L.
Clouser have resigned from the Board of Directors, and that Mr. Clouser has
resigned as President of the Company's Mobile Division and Senior Vice
President-Corporate of the Company.
As of May 31, 1999, the Company had consolidated assets (unaudited) of
approximately $56.8 million and consolidated liabilities (unaudited) of
approximately $52.4 million.
Unitel is a leading provider of studio and mobile production facilities
to virtually every major entertainment company in the United States. Unitel's
New York City studios are home to King World Production's "Inside Edition",
Paramount Picture's "The Montel Williams Show", and Eyemark Entertainment's the
"Dr. Joy Browne Show". Unitel Mobile Video, based in Pittsburgh and Burbank, is
the pre-eminent supplier of mobile facilities to the entertainment industry.
<PAGE>
This news announcement contains certain forward-looking statements
under federal securities laws which are based upon current expectations and
involve certain risks and uncertainties. Under the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, readers should note that these
statements may be impacted by several factors, and, accordingly, Unitel's actual
performance and results may vary from those stated herein.
