UNITED
STATES
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): April 3, 2008
EQUITY
MEDIA HOLDINGS CORPORATION
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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000-51418
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20-2763411
|
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(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File Number)
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(IRS
Employer
Identification
No.)
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One
Shackleford Drive, Suite 400
Little
Rock, Arkansas
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72211
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (501) 219-2400
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
¨
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive Agreement
.
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On
April
3, 2008, EBC Southwest Florida, Inc. (“Seller”), a subsidiary of Equity Media
Holdings Corporation (“Equity Media”), entered into an asset purchase agreement
(“Purchase Agreement”) with Luken Communications, LLC (“Buyer”) and Henry G.
Luken III, individually (“Luken”), for the sale of all of the assets used in the
business and operations of five low power and Class A television stations in
Naples and Fort Myers, Florida (“Stations”), including licenses, construction
permits and other instruments of authorization (“Licenses”) issued by the
Federal Communications Commission (“FCC”) and certain other assets (together
with the Licenses, the “Assets”). The Buyer is owned by Luken, the Chairman of
the Board, Chief Executive Officer and President of Equity Media, and Thomas
M.
Arnost, the President and Chief Executive Officer of Equity Media’s Broadcasting
Station Group.
Seller
entered into the Purchase Agreement in order for Equity Media to satisfy its
obligations under the terms of an amendment, dated as of March 19, 2008, to
its
third amended and restated credit agreement (“Credit Agreement”) with Silver
Point Finance, LLC and Wells Fargo Foothill, Inc., pursuant to which the lender
group agreed to forbear from exercising certain of their rights and remedies
with respect to designated defaults under the Credit Agreement through the
earlier of (a) April 18, 2008 and (b) the date of occurrence of certain events
or by which certain events have failed to occur, including Equity Media’s
failure to enter into agreements with respect to the sale of certain of its
assets and Equity Media’s failure to secure approvals for, and meet other
criteria with respect to, financing alternatives necessary to meet its immediate
capital requirements.
Buyer
has
agreed to pay an aggregate of $8,000,000 for the Assets (“Purchase Price”) in
immediately available funds at the closing (“Closing”). Luken has agreed to
personally guarantee the Buyer’s obligation to pay the Purchase Price. In
addition to the Purchase Price, if within the 12-month period following the
Closing, Buyer enters into an agreement to sell the Stations, collectively
or
individually, to an unaffiliated third party, then 50% of the purchase price
from that transaction that are of an amount greater than the Purchase Price
will
be paid to Seller. If, within the second 12-month period following the Closing,
Buyer enters into an agreement to sell the Stations, collectively or
individually, to an unaffiliated third party, then 25% of the purchase price
from that transaction that are of an amount greater than the Purchase Price
will
be paid to Seller.
The
Closing is subject to certain conditions, including FCC consent to the
assignment of the Licenses (“FCC Consent”). Seller and Buyer have agreed to
promptly prepare an application for assignment of the Licenses and to fully
prosecute the application. Each party will bear its own costs, and the filing
fees will be split evenly. The Closing will occur within ten business days
after
the grant of FCC Consent becomes a final order or, upon waiver of such condition
by Buyer, within ten business days following the publication of the grant of
FCC
Consent.
The
Purchase Agreement may be terminated under the following
circumstances:
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·
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by
Seller for any reason prior to the Closing with ten days’ written notice
to Buyer if Seller is not otherwise in breach of its obligations
under the
Purchase Agreement, provided that the Seller will reimburse Buyer
for
expenses incurred in entering into the Purchase Agreement. Seller
has
agreed to exercise this termination right if it refinances its debt
with
its current lender.
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·
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by
Buyer if the Closing has not occurred within 12 months from the date
the
application for FCC Consent is accepted for filing by the FCC; upon
Seller’s failure to perform environmental remediation on issues set forth
in an environmental audit to be performed that exceed $25,000; or
if
regular broadcast transmission is interrupted for a continuous period
of
72 hours or more prior to the Closing solely as a result of the actions
of
Seller.
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·
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by
either party if the conditions of the other party have not been met
as of
the Closing; the other party becomes or is declared insolvent; or
the
other party is in breach.
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The
full
text of the press release issued on April 4, 2008, in connection with the
Purchase Agreement is attached as Exhibit 99.1 hereto this Current Report on
Form 8-K.
On
April
2, 2008, Equity Media issued a press release, which is attached hereto as
Exhibit 99.2, stating that its independent registered public accounting firm,
Moore Stephens Frost, has included an explanatory paragraph in their audit
opinion for the year ended December 31, 2007, which opinion was included in
Equity Media’s Form 10-K/A filed on April 1, 2008 expressing doubt about Equity
Media’s ability to continue as a going concern based on its current financial
resources. The press release was issued in compliance with Nasdaq Marketplace
Rule 4350(b)(1)(B), which requires separate disclosure of receipt of an audit
opinion that contains a going concern opinion.
On
April
8, 2008, Equity Media issued a press release, which is attached hereto as
Exhibit 99.3, stating that it has hired Thomas Weisel Partners to review and
evaluate Equity Media’s strategic options. Thomas Weisel Partners, based in San
Francisco, is an investment bank specializing in the growth sectors of the
economy including the media, technology, healthcare and consumer
sectors.
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Item
9.01.
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Financial
Statements, Pro Forma Financial Information and
Exhibits
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10.1
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Asset
Purchase Agreement, dated as of April 3, 2008, by and between EBC
Southwest Florida, Inc., Luken Communications, LLC and Henry Luken,
individually, for the limited purpose set forth under Section 4.8
therein.*
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99.1
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Press
release, dated April 4, 2008, announcing the execution of the Asset
Purchase Agreement with Luken Communications,
LLC.*
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99.2
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Press
release, dated April 2, 2008, announcing the receipt of an audit
opinion
that contains a going concern
opinion.*
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99.3
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Press
release, dated April 8, 2008, announcing the engagement of Thomas
Weisel
Partners.*
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__________________________
*
Filed
herewith.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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April
8, 2008
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EQUITY
MEDIA HOLDINGS CORPORATION
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By:
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/s/
Henry G. Luken III
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Henry G. Luken III
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Chairman of the Board, Chief Executive Officer
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and President
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