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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):
May 30, 1996
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COMMODORE MEDIA, INC.
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(Exact name of Registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
33-92732 13-3034720
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(Commission File No.) (I.R.S. Employer
Identification No.)
500 Fifth Avenue, Suite 3000, New York, New York 10110
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(Address of Principal Executive Offices) (Zip Code)
(212) 302-2727
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(Registrant's telephone number, including area code)
not applicable
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(Former Name of Former Address, if Changed Since Last Report)
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<TABLE>
<CAPTION>
TABLE OF ADDITIONAL REGISTRANTS
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NAME STATE OR OTHER Primary IRS Employer
JURISDICTION OF Standard Identification
INCORPORATION Industrial Number
Classification
Number
<S> <C> <C> <C>
Commodore Media of Delaware 4832 51-0286804
Delaware, Inc.
Commodore Media of Delaware 4832 61-0997863
Kentucky, Inc.
Commodore Media of Delaware 4832 23-2207457
Pennsylvania, Inc.
Commodore Media of Delaware 4832 06-1277523
Norwalk, Inc.
Commodore Media of Delaware 4832 59-2813110
Florida, Inc.
Commodore Media of Delaware 4832 13-3356485
Westchester, Inc.
Commodore Holdings, Inc. Delaware 4832 13-3858506
Danbury Broadcasting, Inc. Connecticut 4832 13-3653113
</TABLE>
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) On May 30, 1996, Commodore Media, Inc. (the "Registrant"), through
its subsidiary Commodore Media of Norwalk, Inc. ("CMN"), acquired from Odyssey
Communications, Inc., a Delaware corporation and the successor corporation to Q
Broadcasting, Inc. ("Odyssey"), substantially all the assets used or useful in
the operation of radio stations WSTC-AM and WKHL-FM in Stamford, Connecticut
(collectively, the "Stamford Stations"). In connection therewith, Odyssey and
CMN entered into an Unwind Agreement, a copy of which is attached as Exhibit
10.72 hereto, which provides that the sale of the Stamford Stations to CMN may
be unwound if certain specified events do not occur.
On May 31, 1996, the Registrant, through its subsidiary Commodore Media
of Florida, Inc. ("CMF"), acquired from Media VI, a Florida general partnership,
substantially all the assets used or useful in the operation of radio stations
WKQS-FM, WAVW-FM and WAXE-AM in the Ft. Pierce-Stuart-Vero Beach, Florida market
(collectively, the "Florida Stations").
The assets acquired from Odyssey and the assets acquired from Media VI
consisted of, among other things, FCC licenses, transmitting antennae,
transmitters and other broadcasting and technical equipment, technical
information and data, and, with respect to Media VI only, certain real property.
The purchase price for the assets acquired from Odyssey was
approximately $9,500,000 and the purchase price for the assets acquired from
Media VI was approximately $8,000,000. The purchase price for each of the
acquisitions was calculated upon arms length negotiations considering (i) the
estimated potential annual broadcast cash flow of the stations acquired, (ii)
the existing quality and potential quality of the stations' broadcast signals
and transmission facilities and (iii) the markets in which the stations are
located.
The principal sources of funds used to acquire the assets described
above were (i) borrowings under the $35 million senior secured credit facility
made available by AT&T Commercial Finance Corporation to Commodore Holdings,
Inc., the owner of all the issued and outstanding stock of each of CMN and CMF
and a wholly-owned subsidiary of the Registrant, (ii) proceeds from the sale of
Senior Exchangeable Redeemable Series A Preferred Stock of the Company (the
"Series A Preferred Stock") to CIBC WG Argosy Merchant Fund 2, L.L.C. (the "CIBC
Merchant Fund") pursuant to a certain Securities Purchase Agreement in which the
CIBC Merchant Fund agreed to purchase from the Company up to an aggregate
liquidation value of $12,500,000 of the Series A Preferred Stock
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at such time and in such amounts as requested by the Company, subject to certain
limitations and (iii) available funds of the Registrant.
(b) The assets acquired by CMN from Odyssey and the assets acquired by
CMF from Media VI were used in the radio broadcast businesses of the Stamford
Stations and the Florida Stations, respectively. CMN and CMF intend to continue
such uses of the acquired assets.
ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
It is impracticable to provide the financial information required under
Item 7(a) as of the required filing date of this Form 8-K. Such required
financial information will be filed under cover of Form 8-K/A as soon as
available and in no event later than August 13, 1996.
(b) Pro Forma Financial Information.
It is impracticable to provide the pro forma financial information
required under Item 7(b) as of the required filing date of this Form 8-K. Such
required pro forma financial information will be filed under cover of Form 8-K/A
as soon as available and in no event later than August 13, 1996.
(c) Exhibits.
Exhibit
Number Exhibit Title
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10.48* Asset Purchase Agreement dated as of February 16, 1996 between
Media VI and Commodore Media of Florida, Inc. Incorporated by
reference to the Company's 10-K.
10.52* Asset Purchase Agreement dated as of March 15, 1996 between
Odyssey Communications, Inc., the successor corporation to Q
Broadcasting, Inc., and Commodore Media of Norwalk, Inc.
Incorporated by reference to the Company's 10-K.
Exhibit
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Number Exhibit Title
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10.72 Unwind Agreement dated as of May 30, 1996, between Odyssey
Communications, Inc., the successor corporation to Q Broadcasting,
Inc., and Commodore Media of Norwalk, Inc.
99.1 Press Release issued by the Registrant on June 3, 1996.
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*Previously filed with the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 and incorporated herein by reference.
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SIGNATURES
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.
Dated: June 7, 1996
COMMODORE MEDIA, INC.
(Registrant)
By: /s/ Bruce A. Friedman
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Bruce A. Friedman
President and
Chief Executive Officer
By: /s/ James J. Sullivan
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James J. Sullivan
Chief Financial Officer
(principal financial
and accounting officer)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Additional Registrants have duly caused this report to be signed on their
behalf by the undersigned hereunto duly authorized.
Dated: June 7, 1996
Commodore Media of Delaware, Inc.,
a Delaware corporation
Commodore Media of Kentucky, Inc.,
a Delaware corporation
Commodore Media of Pennsylvania, Inc.,
a Delaware corporation
Commodore Media of Norwalk, Inc.,
a Delaware corporation
Commodore Media of Florida, Inc.,
a Delaware corporation
Commodore Media of Westchester, Inc.,
a Delaware corporation
Commodore Holdings, Inc.,
a Delaware corporation
Danbury Broadcasting, Inc.,
a Connecticut corporation
By: /s/ Bruce A. Friedman
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Bruce A. Friedman
President and
Chief Executive Officer
By: /s/ James J. Sullivan
--------------------------------
James J. Sullivan
Chief Financial Officer
(principal financial and
accounting officer)
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<TABLE>
<CAPTION>
Exhibit Index
Sequentially
Exhibit Numbered
Number Exhibit Title Page
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<C> <C> <C>
10.48 Asset Purchase Agreement dated as of February 16, 1996 between *
Media VI and Commodore Media of Florida, Inc. Incorporated by
reference to the Company's 10-K.
10.52 Asset Purchase Agreement dated as of March 15, 1996 between *
Odyssey Communications, Inc., the successor corporation to Q
Broadcasting, Inc. Incorporated by reference to the Company's
10-K.
10.72 Unwind Agreement dated as of May 30, 1996, between Odyssey 9
Communications, Inc., the successor corporation to Q Broadcasting,
Inc., and Commodore Media of Norwalk, Inc.
99.1 Press Release issued by the Registrant on June 3, 1996. 14
</TABLE>
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*Previously filed with the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 and incorporated herein by reference.
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EXHIBIT 10.72
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UNWIND AGREEMENT
THIS UNWIND AGREEMENT, dated as of the 30th day of May, 1996 by and between
Odyssey Communications, Inc., a Delaware corporation ("Seller"), and Commodore
Media of Norwalk, Inc., a Delaware corporation ("Buyer"). All capitalized terms
used herein without definition have the meanings assigned to them in the Asset
Purchase Agreement described below.
WITNESSETH
WHEREAS, Q Broadcasting, Inc., which was subsequently merged with and
into Seller, and Buyer are parties to that certain Asset Purchase Agreement
(the "Asset Purchase Agreement") dated as of March 15, 1996 providing for the
sale and assignment to Buyer (the "Assignment"), subject to approval by the
FCC, the Consent to Assignment of the City Lease as provided in Section 8.1(m)
of the Asset Purchase Agreement Agreement ("City Lease Consent") and other
conditions contained in the Asset Purchase Agreement, substantially all of the
assets of radio stations WSTC(AM) and WKHL(FM), Stamford, Connecticut including
the FCC Licenses; and
WHEREAS, Seller and Buyer believe it is desirable and in the public
interest that the transactions contemplated in the Asset Purchase Agreement be
consummated within the period of time set forth in the Asset Purchase Agreement
after FCC Consent by the Mass Media Bureau of the FCC pursuant to delegated
authority even though Buyer is entitled pursuant to the Asset Purchase
Agreement to await finality of the Assignment of Licenses; and
WHEREAS, Seller and Buyer believe it is desirable and in the public
interest that Seller and Buyer enter into the License Agreement for use by the
Buyer of the facilities located at the site of the City Lease attached hereto
as Attachment A (the "License Agreement") and that the transactions
contemplated in the Asset Purchase Agreement be consummated prior to completion
of all of the requirements for the City Lease Consent, even though Buyer is
entitled pursuant to the Asset Purchase Agreement to await the City Lease
Consent; and
WHEREAS, in the event that after the Closing that any "Unwind Event" as
defined herein shall occur, Seller and Buyer desire to make appropriate
provisions for (a) the retransfer to Seller of the FCC Licenses and other
Assets to be transferred pursuant to the Asset Purchase Agreement; and (b) the
repayment to Buyer of the Purchase Price paid by Buyer to Seller pursuant to
the Asset Purchase Agreement with adjustments as provided herein; and
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WHEREAS, this Unwind Agreement is a material inducement for Seller to
transfer to Buyer the Assets to be conveyed pursuant to the Asset Purchase
Agreement and for the Buyer to pay to Seller the Purchase Price as provided in
the Asset Purchase Agreement, all prior to the date upon which the Assignment
of FCC Licenses would be a Final Order and the City Lease Consent obtained;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Buyer and Seller agree as follows:
1. Buyer and Seller agree that notwithstanding anything to the contrary
contained in the Asset Purchase Agreement the Closing Date shall occur before
the FCC Consent becomes a Final Order and the City Lease Consent is obtained.
The parties agree that the transactions undertaken in consummation of the Asset
Purchase Agreement will be unwound and reversed in the event of any of the
following (an "Unwind Event"):
(a) The FCC or court of competent jurisdiction orders the unwinding
and reversal of the consummation of the Asset Purchase Agreement;
(b) The City Lease Consent is not obtained by August 31, 1996; or
(c) Prior to the City Lease Consent the City of Stamford or any other
person other than AT&T (as defined below) evicts Buyer or
otherwise terminates Buyer's right to use the facilities located
at the site of the City Lease pursuant to the License Agreement.
2. Subject to Section 3 below which shall take precedence, upon an
Unwind Event, the Time Brokerage Agreement attached hereto as Attachment B (the
"Time Brokerage Agreement") shall at the sole option of Buyer thereupon become
effective on the third business day after written notice by Buyer to Seller of
such election and Seller and Buyer shall fully cooperate so as to restore to
each other their respective rights, titles and interests enjoyed by each of
them immediately prior to closing of the Asset Purchase Agreement with respect
to all Assets, transferred, moneys paid, documents executed, rights assigned
and obligations assumed (including contracts entered into between the date
hereof and Unwind Closing (as defined below)). The parties shall hold a closing
(the "Unwind Closing") as quickly as possible following the Unwind Event, but
in no event later than the date ordered by the FCC or court, at which time (a)
Buyer shall (i) reassign, retransfer and redeliver to Seller the Assets, in good
operating condition (ordinary wear and tear excepted) by instruments of
transfer comparable to those delivered to Buyer at the Closing pursuant to the
Asset Purchase Agreement and (ii) provide such information as Seller shall
reasonably request comparable to the Schedules, documents and information
Seller has delivered to Buyer pursuant to the Asset Purchase Agreement, and (b)
Seller shall deliver to Buyer documents comparable to those delivered to Seller
at the Closing pursuant to the Purchase Agreement and shall pay to
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Buyer and its designees the Purchase Price and other consideration as required
under paragraph 3 hereof.
3. Seller has simultaneously with the execution and delivery of
this Unwind Agreement caused to be delivered to Buyer the Irrevocable Letter
of Credit of Chemical Bank for the benefit of AT&T Commercial Finance
Corporation ("AT&T") in the amount of $3,300,000 attached hereto as Attachment
C and the Irrevocable Letter of Credit of Chemical Bank for the benefit of
Buyer attached hereto as Attachment D. Upon the occurrence of any of the events
set forth in paragraph 6 hereof, (i) AT&T shall be entitled and is hereby
authorized to draw as a beneficiary under the Letter of Credit attached hereto
as Attachment C, an amount equal to $3,300,000 which represents the portion of
the Purchase Price received directly from AT&T on behalf of the Buyer on the
Closing Date; (ii) Buyer shall be entitled and is hereby authorized to draw as a
beneficiary under the Letter of Credit attached hereto as Attachment D, an
amount equal to $5,700,000; (iii) Seller shall pay to Buyer interest at the
annual rate of nine (9%) percent on $9,500,000 (less interest received by Buyer
from MVP (as defined below) pursuant to subsection (iv) of this paragraph 3),
minus the amount of all net income of Buyer with respect to the Stations or plus
any net loss of Buyer with respect to the Stations for the period from the
Closing Date to the date of the Unwind Closing, before any deductions for income
tax expense and depreciation and amortization expense; and (iv) Buyer shall
deliver the Escrow Instructions attached as Attachment E hereto, which Seller
authorizes Buyer to date and deliver upon the occurrence of an event set forth
in paragraph 6 hereof, to Media Venture Partners ("MVP") and Buyer shall be
entitled to receive the $500,000 amount plus interest held by MVP to date
pursuant to the Indemnification Escrow Agreement. In addition to the foregoing,
if Buyer has purchased or leased any item of personal property or fixtures
("Property") used or useful in the operation of the Stations, then Seller at its
sole election may purchase such item(s) by payment to Buyer at the Unwind
Closing the cost thereof or acquire the lease(s) for such items by assuming from
Buyer all remaining obligations under such leases. If Seller does not acquire
the Property from Buyer at the Unwind Closing or acquire the leases for such
Property, Buyer shall retain the ownership or leasehold rights to such Property.
4. Between the Closing Date and the date the Time Brokerage
Agreement becomes effective on the Unwind Closing (the "Interim Period"), the
Stations shall be deemed to have been operated for the benefit of Buyer, so
that Buyer, subject to paragraph 3 above, shall be entitled to retain all
income and receivables from operation of the Stations received during the
Interim Period and shall be responsible for all liabilities, costs and
expenditures arising from Buyer's operation of the Stations during the Interim
Period.
5. In order to effect the transactions contemplated herein to
occur at the Unwind Closing, Buyer and Seller shall promptly and diligently
join in and file an appropriate FCC application for such consent to the
assignment of the licenses to operate the Stations from Buyer to Seller (the
"FCC Re-Transfer Consent") no later than five (5) business days after the
occurrence of an Unwind Event (provided, however, if the
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Unwind Event is under paragraph 1(a) Buyer may defer the filing of such
application at its discretion and will notify Seller of Buyer's desire to file
an application at least seven (7) business days prior to the intended date of
filing). Buyer and Seller will use their best efforts to insure the re-transfer
of the FCC Licenses to Seller from Buyer. The Unwind Closing contemplated by
this Unwind Agreement shall be scheduled for two (2) business days after
receipt of the FCC Re-Transfer Consent. Any FCC fees with respect to an
application for such FCC Re-Transfer Consent shall be borne solely by Seller,
and all other expenses with respect to the preparation, filing and prosecution
of such application shall be borne solely by Seller.
6. AT&T and Buyer shall be entitled, and are hereby authorized, to draw
as beneficiaries under the Irrevocable Letters of Credit referred to in
paragraph 3 above, in full, if any one or more of the following occur:
(a) Seller fails to file an appropriate application with the FCC as
required under paragraph 5 hereof; or
(b) On the Unwind Closing date scheduled under paragraph 5 hereof,
regardless of whether such closing occurs; or
(c) The appropriate FCC Consent required for re-transfer of the FCC
Licenses from Buyer and Seller are not obtained within 180 days
after they are filed as required under paragraph 5 hereof; or
(d) AT&T and Buyer are not provided with replacement Letters of Credit
substantially in the form of Attachments C and D hereto (except for
the expiration dates which shall be extended for a period of not
less than six months) from Chemical Bank or its successor, at least
five (5) business days prior to the expiration date of such Letters
of Credit
7. Except to the extent amended by the provisions of this Unwind
Agreement, the Asset Purchase Agreement shall remain in full force and effect
according to its terms; provided that in the event an ambiguity exists
regarding terms of this Unwind Agreement and the Asset Purchase Agreement the
terms of this Unwind Agreement shall control.
8. This Unwind Agreement shall be terminated, and shall thereupon
become null and void and of no further force or effect whatsoever, upon the
later of (i) the date upon which the FCC Re-Transfer Consent becomes a Final
Order or (ii) the date the City Lease Consent is obtained. Immediately upon
such termination, AT&T and Buyer shall cancel and return to Seller the Letters
of Credit.
9. This Unwind Agreement, contains all of the terms agreed upon with
respect to the subject matter hereof. This Unwind Agreement may not be altered
or
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amended except by an instrument in writing signed by the party against whom
enforcement of any such change is sought.
10. The Unwind Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their representatives, successors and assigns,
as permitted hereunder. The parties acknowledge that AT&T is a third party
beneficiary of this Unwind Agreement and such Unwind Agreement may not be
amended or modified without the consent of AT&T.
11. This Unwind Agreement is to be construed and enforced in accordance
with the laws of the State of New York but not including the choice of law
rules thereof. In the event any action is brought by either party against the
other with respect to this Unwind Agreement, the parties hereby consent to the
jurisdiction of the federal or state courts located in New York County, New
York.
12. This Unwind Agreement may be signed in any number of counterparts
with the same effect as if the signature on each such counterpart were on the
same instrument.
13. Neither party hereto shall assign this Unwind Agreement, in whole
or in part, whether by operation of law or otherwise, without the prior written
consent of Seller (if the assignor is Buyer) or Buyer (if the assignor is
Seller), and any purported assignment contrary to the terms hereof shall be
null, void and of no force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
ODYSSEY COMMUNICATIONS, INC. COMMODORE MEDIA OF
NORWALK, INC.
By: /s/ Michael Kakoyiannis By: /s/ Bruce A. Friedman
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Name: Michael Kakoyiannis Name: Bruce A. Friedman
Title: Pres./CEO Title: President and Chief
Executive Officer
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EXHIBIT 99.1
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PRESS RELEASE
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Commodore Media, Inc.
500 Fifth Avenue - Suite 3000, New York, NY 10110
Contact: Sandra Nacinovich
Phone: 212-302-5580
FAX: 212-302-6457
FOR IMMEDIATE RELEASE
COMMODORE MEDIA CLOSES ON FAIRFIELD COUNTY, CT AND
TREASURE COAST, FL ACQUISITIONS.
Monday, June 3, 1996 - New York, New York
Commodore Media, Inc.'s, Bruce Friedman, President and CEO announces the closing
of the purchase of WKHL-FM and WSTC-AM in Fairfield County, CT from
Q-Broadcasting and WKQS-FM, WAVW-FM and WAXE-AM, Ft. Pierce-Stuart-Vero Beach,
Florida from Media VI. The acquisitions were handled by Randall E. Jeffery of
Media Venture Partners.
Commodore Media owns and operates or provides sales and marketing services for
33 radio broadcasting stations (19 FM's 14 AM's): WEFX-FM, WRKI-FM, WNLK-AM,
WINE-AM, WKHL-FM and WSTC-AM in Fairfield County, Connecticut; WAEB-FM,
WZZO-FM, WAEB-AM and WKAP-AM in Allentown, Pennsylvania; WJBR-AM/FM in
Wilmington, Delaware; WZZR-FM, WQOL-FM, WPAW-FM, WAVW-FM, WAXE-AM, and WKQS-FM
in the Treasure Coast of Florida; WFAS-AM/FM, WAXB-FM, WZZN-FM and WPUT-AM in
Westchester/Putnam Counties, New York; WTCR AM/FM, WKEE-AM/FM, WHRD-AM
in Huntington, West Virginia; WZZW-AM, WFXN-FM, Milton, WV; WBVB-FM Coal Grove,
OH; and WIRO-AM, WMLV-FM Ironton, OH.
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