Item 1.01 Entry into a Material Definitive Agreement.
On April 22, 2020, Emmis Operating Company ("Emmis"), an Indiana corporation and
wholly-owned subsidiary of Emmis Communications Corporation, and MediaCo Holding
Inc., an Indiana corporation ("MediaCo"), entered into a certain Loan Proceeds
Participation Agreement (the "LPPA") pursuant to which (i) Emmis agreed to use
certain of the proceeds of the loan Emmis received pursuant to the Paycheck
Protection Program under Division A, Title I of the CARES Act (the "PPP Loan")
to pay certain wages of employees leased to MediaCo pursuant to that certain
Employee Leasing Agreement, dated as of November 25, 2019, between Emmis and
MediaCo (the "Leasing Agreement"), (ii) Emmis agreed to waive up to $1.5 million
in reimbursement obligations of MediaCo to Emmis under the Leasing Agreement to
the extent that the PPP Loan is forgiven, and (iii) MediaCo agreed to promptly
pay Emmis an amount equal to 31.56% of the amount of the PPP Loan, if any, that
Emmis is required to repay, up to the amount of the reimbursement obligations
forgiven under (ii) above. Standard General L.P., on behalf of all of the funds
for which it serves as an investment advisor, agreed to guaranty MediaCo's
obligations under the LPPA. 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 LPPA, and is qualified in its entirety by reference to the
text of the LPPA, a copy of which is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On April 21, 2020, the Board of Directors (the "Board") of Emmis Communications
Corporation ("Emmis" or the "Company") determined to voluntarily delist the
Company's Class A Common Stock from The Nasdaq Stock Market LLC ("Nasdaq"). The
Company notified Nasdaq of the Board's determination on April 24, 2020.
The Company intends to file with the SEC, on or about May 4, 2020, a
Form 25 requesting the delisting of its Class A Common Stock from Nasdaq and the
deregistration of its common stock under Section 12(b) of the Exchange Act.
After the effectiveness of the Form 25, the Company intends to file with the
SEC, on or about May 14, 2020, a Form 15 requesting the deregistration of its
Class A Common Stock under Section 12(g) of the Exchange Act and the suspension
of the Company's reporting obligations under Sections 13 and 15(d) of the
Exchange Act. After delisting, the Company's Class A Common Stock may be
eligible for quotation on the OTC Markets Group if market makers commit to
making a market in the Company's shares. The Company can provide no assurance
that trading in its Class A Common Stock will continue on the OTC Markets Group
or otherwise.
On April 24, 2020, the Company issued a press release announcing its intention
to delist from Nasdaq and providing additional information about the reasons for
the Board's decision, which is attached hereto as Exhibit 99.1, and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Loan Proceeds Participation Agreement, dated April 22, 2020, between
Emmis Operating Company and MediaCo Holding, Inc.
99.1 Press Release of Emmis Communications Corporation, dated April 24,
2020.
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