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): NOVEMBER 27, 1996
EMERSON RADIO CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 0-25226 22-3285224
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
NINE ENTIN ROAD, PARSIPPANY, NEW JERSEY 07054
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 884-5800
NONE
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On November 27, 1996 Emerson Radio Corp. ("Emerson") and Sport
Supply Group, Inc. ("SSG") entered into a Securities Purchase Agreement
(the "Agreement"), pursuant to which Emerson will purchase from SSG
1,600,000 shares of the common stock, $.01 par value per share (the "Common
Stock"), of SSG for aggregate consideration of $11.5 million, or
approximately $7.19 per share. In addition, Emerson will purchase, for an
aggregate consideration of $500,000, 5-year warrants (the "Warrants") to
acquire an additional 1,000,000 shares of Common Stock at an exercise price
of $7.50 per share, subject to standard anti-dilution adjustments, pursuant
to a Warrant Agreement (the "Warrant Agreement"). After the closing of the
transactions contemplated under the Agreement, but prior to the exercise of
any of the Warrants, Emerson will own approximately 27% of the outstanding
shares of the Common Stock, and assuming exercise of all such warrants,
will beneficially own approximately 34.9% of the Common Stock. The
$12,000,000 purchase price contemplated by the Agreement will be obtained
by Emerson from its United States senior secured lender under the terms of
its existing credit facility and in accordance with the terms of the
consent obtained from such lender. Pursuant to a Registration Rights
Agreement (the "Registration Rights Agreement"), Emerson will also be
granted certain demand and incidental registration rights on the resale of
the shares of Common Stock it will own, as well as on the exercise and
resale of the shares it may acquire under the Warrant Agreement. In
addition, Emerson will arrange for foreign trade credit financing of $2
million for the benefit of SSG to supplement SSG's existing credit
facilities.
Pursuant to the Agreement, SSG will cause a majority of the
members of its Board of Directors to consist of Emerson's designees until
SSG's next stockholders meeting. Emerson has designated Geoffrey P.
Jurick, its Chairman and Chief Executive Officer, Eugene I. Davis, its
President, John P. Walker, its Executive Vice President and Chief Financial
Officer, and Johnson C. Ko, an independent Hong Kong businessman, as its
designees to the SSG Board. SSG has indicated that Peter S. Blumenfeld and
William H. Watkins, Jr., currently Directors of SSG, will continue as
Directors, while Michael J. Blumenfeld and Robert W. Philip will resign as
Directors. In addition, for a period of at least 2 years after the
closing, neither SSG nor any of its subsidiaries shall be permitted to
enter into or be a party to any agreement or transaction with any Affiliate
(as such term is defined in the Securities Exchange Act of 1934, as
amended) of SSG or Emerson, except (i) in the ordinary course of SSG's or
its subsidiaries' business and on terms no less favorable to SSG or its
subsidiaries than would be obtained in a comparable arms' length
transaction with a person not an Affiliate of SSG or Emerson or (ii) unless
approved by a majority of SSG's directors who do not have a direct or
indirect material financial interest in the agreement or transaction and
which includes a majority of directors who are not officers or employees of
SSG or Emerson or directors of Emerson.
The parties expect that a closing of the transactions
contemplated by the Agreement will occur on or before December 12, 1996
(the "Closing Date"), subject to adjournments or postponements as agreed
upon by the parties, but in no event later than December 16, 1996. If the
transactions are not consummated due to (i) SSG's acceptance of an
Acquisition Proposal (as such term is defined in the Agreement) other than
with Emerson or (ii) the willful failure to close by SSG, and Emerson has
not in any way contributed to the failure to so close, the Company will pay
Emerson a termination fee of $750,000. If the transactions are not
consummated due solely to the financial inability or willful failure to
close by Emerson, and SSG has not in any way contributed to the failure to
so close, Emerson will pay SSG a termination fee of $3,000,000, which fee
is secured by an irrevocable standby letter of credit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired
Not applicable
(b) Pro forma financial information
Not applicable
(c) Exhibits
2(a). Securities Purchase Agreement dated as of November 27,
1996, by and between Sport Supply Group, Inc. and Emerson Radio Corp.
4(a). Form of Warrant Agreement by and between Sport Supply
Group, Inc. and Emerson Radio Corp.
4(b). Form of Registration Rights Agreement by and between
Sport Supply Group, Inc. and Emerson Radio Corp.
10(b). Consent No. 1 to Financing Agreements among Emerson
Radio Corp., certain of its subsidiaries, and Congress Financial
Corporation.
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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.
EMERSON RADIO CORP.
Dated: December 2, 1996 By: /S/ EUGENE I. DAVIS
Eugene I. Davis,
President
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INDEX TO EXHIBITS
EXHIBIT PAGE
NO. EXHIBIT NUMBER
2. Securities Purchase Agreement dated November 27, 1996
by and between Sport Supply Group, Inc. and
Emerson Radio
Corp...................................................................
6
4(a) Form of Warrant Agreement by and between Sport Supply
Group, Inc. and Emerson Radio
Corp........................................ 39
4(b) Form of Registration Rights Agreement by and between Sport
Supply Group, Inc. and Emerson Radio
Corp............................. 51
10(b) Consent No. 1 to Financing Agreements among Emerson Radio
Corp., certain of its subsidiaries, and Congress Financial
Corporation...............................................................69
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