FORM 8-K
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) 12/9/96
Affinity Entertainment, Inc.
Formerly Affinity Teleproductions, Inc.
(Exact Name of Registrant as specified in its Charter)
Delaware 0-12193 22-2473403
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(State or other (Commission File (IRS Employer
Jurisdiction of Number) Identification
Incorporation) Number)
15310 Amberly Drive, Suite 370, Tampa, FL 33647
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: 813-975-8180
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Acquisition of Tradewinds Television, Inc.
On September 13, 1996, the Registrant and Tradewinds Television, LLC, a
California limited liability company ("Tradewinds"), entered into an Interim
Financing and Security Agreement (the "Security Agreement") pursuant to which
Tradewinds granted the Registrant, as security for the repayment by Tradewinds
of certain loans to be made by the Registrant, a first priority lien on
substantially all of Tradewinds' assets (the "Assets"). The Assets include
accounts receivable, the name and mark "Tradewinds Television," the rights to
the syndicated television series "Bounty Hunters" and distribution rights to
certain other television products. Between September 13, 1996 and November 19,
1996, the Registrant loaned Tradewinds an aggregate of approximately $823,000
(the "Loans") pursuant to the Security Agreement.
Concurrently with the execution of the Security Agreement, the
Registrant and Tradewinds engaged in negotiations pursuant to which the
Registrant would purchase substantially all of the Assets. The parties entered
into an Asset Purchase Agreement dated as of October 3, 1996, as amended, to
provide for such acquisition. The sale of the assets was contingent upon the
resolution to the satisfaction of the Registrant of various bankruptcy issues
concerning other companies affiliated with Royeric Pack, the sole owner of
Tradewinds.
On November 14, 1996, the Registrant filed a complaint in Los Angeles
Superior Court asserting that Tradewinds had defaulted under the Loans and the
Security Agreement, and seeking judicial foreclosure of the Assets, among other
claims. On December 6, 1996, Tradewinds, in lieu of foreclosure on the Assets by
the Registrant, agreed to transfer and assign to the Registrant the Assets,
subject to certain payables associated therewith, in consideration of the
Registrant forgiving the indebtedness evidenced by the Loans. Such indebtedness,
including accrued interest and related costs and expenses, was approximately
$1,000,000. Also on December 6, 1996, the Registrant entered into an Executive
Producer Agreement with Mr. Pack, with respect to Mr. Pack providing executive
producing services in connection with the Bounty Hunters series. Pursuant to
such agreement, Mr. Pack received a $75,000 payment on December 6, 1996 for the
first production season, and is entitled in the second production season to a
fee of $3,000 per episode, payable upon airing of each such episode.
On December 17, 1996, the Registrant agreed with the Trustee of Action
Media Group, Inc., a company affiliated with Mr. Pack
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and which is the subject of a bankruptcy court proceeding ("AMG"), to pay
$275,000 to the Trustee of AMG, and to secure in exchange a release of certain
claims by the Trustee and AMG against Tradewinds and the Registrant with regard
to indebtedness owed by Tradewinds to AMG and the assignment of Assets by
Tradewinds to the Registrant in lieu of foreclosure, as described above. On
December 18, 1996, the Court having jurisdiction over the AMG bankruptcy
proceeding approved the $275,000 payment and release among AMG, Tradewinds and
the Registrant. The Registrant anticipates that an order to this effect will be
entered shortly.
The loans made to Tradewinds by the Registrant and the $275,000 to be
paid to the Trustee of AMG are from internally generated funds of the
Registrant.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a) Financial Statements
(1) Audited Financial Statements of Tradewinds
Televison, LLC*
* To be filed by amendment.
b) Exhibits
10.01 Interim Financing and Security Agreement, dated as of
September 13, 1996;
10.02 Asset Purchase Agreement, dated as of October 3, 1996;
10.03 Amendment No. 1 to the Asset Purchase Agreement, dated
as of November 19, 1996;
10.04 $600,000 Secured Promissory Note;
10.05 Acknowledgment regarding $600,000 Note:
10.06 $122,997.18 Secured Promissory Note;
10.07 Acknowledgment regarding $122,997.18 Note;
10.08 $100,000 Secured Promissory Note;
10.09 Acknowledgment regarding $100,000 Note;
10.10 Assignment of Callateral in Lieu of Foreclosure, dated
December 6, 1996.
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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.
Date: December 23, 1996 AFFINITY ENTERTAINMENT, INC.
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By: /s/ William J. Bosso
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William J. Bosso
President
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