Item 1.01 Entry into a Material Definitive Agreement.
On March 10, 2020, Emmis QOZ Business, LLC ("EQOZB"), an Indiana limited
liability company and wholly-owned subsidiary of Emmis Communications
Corporation, an Indiana corporation ("Emmis"), Emmis Operating Company ("EOC"),
an Indiana corporation and wholly-owned subsidiary of Emmis, Lencore Acoustics
Corporation, a New York corporation ("Lencore"), and the stockholders listed
therein (the "Stockholders") entered into a certain Asset Purchase Agreement
(the "APA") pursuant to which EQOZB contemporaneously acquired substantially all
of the assets of Lencore used and useful in Lencore's sound masking business
(the "Sound Masking Business"). The purchase price for the Sound Masking
Business was $75.1 million (subject to customary working capital adjustments),
and the APA contains customary representations, warranties and covenants. The
foregoing description does not purport to be a complete statement of the terms
and conditions of the transaction or the rights of the parties to the APA, and
is qualified in its entirety by reference to the text of the APA, a copy of
which is attached hereto as Exhibit 10.1 and is incorporate herein by reference.
In connection with the closing of the transaction, EQOZB entered into certain
additional agreements with Lencore and its affiliates, including:
Restricted Covenant and Technology Cross License Agreement. On March 10, 2020,
EQOZB, Lencore, Mercury Notifications, LLC (an affiliate of Lencore, "Mercury")
and Jonathan S. Leonard (the principal shareholder of Lencore, "Leonard")
entered into a certain Restrictive Covenant and Technology Cross License
Agreement (the "RCA") pursuant to which (i) Lencore, Mercury and Leonard agreed
not to compete with the Sound Masking Business for a period of five (5) years,
and (ii) EQOZB and Lencore each agreed to cross license certain technology to
each other on a going forward basis. The foregoing description is qualified in
its entirety by reference to the complete terms and conditions of the RCA, which
is filed as Exhibit 10.2 hereto and is incorporated by reference herein.
Transition Services Agreement. On March 10, 2020, EQOZB and Lencore entered
into a certain Transition Services Agreement (the "TSA") pursuant to which EQOZB
and Lencore agreed to provide certain services to each other to facilitate the
orderly separation of the Sound Masking Business from Lencore's retained mass
notification business. The foregoing description is qualified in its entirety by
reference to the complete terms and conditions of the TSA, which is filed as
Exhibit 10.3 hereto and is incorporated by reference herein.
Manufacturing Services Agreement. On March 10, 2020, EQOZB and Norfolk Main
Mfg. LLC (an affiliate of Lencore, "Norfolk Main") entered into a certain
Manufacturing Services Agreement (the "MSA") pursuant to which Norfolk Main will
provide certain product manufacturing services to EQOZB. The foregoing
description is qualified in its entirety by reference to the complete terms and
conditions of the MSA, which is filed as Exhibit 10.4 hereto and is incorporated
by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information provided in Item 1.01 of this Report is incorporated by
reference into this Item 2.01.
Item 7.01 Regulation FD Disclosure.
On March 11, 2020, Emmis issued a press release announcing the transaction
described above. A copy of the press release is furnished herewith as Exhibit
99.1.
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Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The Company intends to file financial statements in accordance with Item 9.01(a)
as part of an amendment to this Report no later than 71 calendar days after the
required filing date for this Report.
(b) Pro forma financial information.
The Company intends to file pro forma financial statements in accordance with
Item 9.01(b) as part of an amendment to this Report no later than 71 calendar
days after the required filing date for this Report.
(d) Exhibits.
Exhibit No. Description
10.1 Asset Purchase Agreement among Emmis QOZ Business, LLC, Emmis
Operating Company, Lencore Acoustics Corporation and the stockholders
listed therein, dated March 10, 2020. *#
10.2 Restrictive Covenant and Technology Cross License Agreement between
Lencore Acoustics Corporation, Jonathan S. Leonard, Mercury
Notifications LLC, and Emmis QOZ Business, LLC, dated March 10, 2020.
10.3 Transition Services Agreement between Emmis QOZ Business, LLC and
Lencore Acoustics Corporation, dated March 10, 2020.
10.4 Manufacturing Services Agreement between Emmis QOZ Business, LLC and
Norfolk Main Mfg. LLC, dated March 10, 2020.
99.1 Press Release dated March 11, 2020.
* Schedules and exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K.
The registrant will furnish a copy of any omitted schedule or exhibit as a
supplement to the Commission or its staff upon request.
# Portions of this exhibit, marked by brackets, have been omitted pursuant to
Item 601(b)(10) of Regulation S-K because they are both (i) not material and
(ii) would likely cause competitive harm to the registrant if publicly
disclosed. The registrant undertakes to promptly provide an unredacted copy of
the exhibit on a supplemental basis, if requested by the Commission or its
staff.
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