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EXHIBIT 10.167.1
TIME BROKERAGE AGREEMENT
BY AND BETWEEN
ITT-DOW ▇▇▇▇▇ TELEVISION
AND
▇▇▇▇▇▇ COMMUNICATIONS OF NEW YORK-31, INC.
FOR
TELEVISION STATION WBIS(TV)
NEW YORK, NEW YORK
* * *
May, 1997
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TABLE OF CONTENTS
Page
SECTION 1. LEASE OF STATION AIR TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Date; Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Option to Renew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Licensee Operation of the Station. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Licensee Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Programmer Representations, Warranties
and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2. STATION OBLIGATION TO ITS COMMUNITY OF LICENSE . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Licensee Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Additional Licensee Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Additional Programmer Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Responsibility for Employees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. STATION PROGRAMMING POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Broadcast Station Programming Policy Statement . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Licensee Control of Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Programmer Compliance with Copyright Act. . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Payola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.7 Staffing Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 Children's Television Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 4. INDEMNIFICATION AND EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Programmer's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Licensee's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3 Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5 Time Brokerage Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.6 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.7 Cure Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE . . . . . . . . . . . . . . . . . . . . . 10
5.1 Confidential Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Political Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.2 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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SECTION 7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.1 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.2 Call Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.6 Headings; Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.10 No Joint Venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.11 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.12 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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TIME BROKERAGE AGREEMENT
TIME BROKERAGE AGREEMENT, made this 12th day of May, 1997, by and
between ITT-DOW ▇▇▇▇▇ TELEVISION, a Delaware partnership (the "Licensee") and
▇▇▇▇▇▇ COMMUNICATIONS OF NEW YORK-31, INC., a Florida corporation (the
"Programmer").
WHEREAS, Licensee is the owner and operator of Television Station
WBIS(TV), New York, New York (the "Station") pursuant to authorizations issued
by the Federal Communications Commission (the "FCC").
WHEREAS, Programmer is involved in television station ownership and
operation and has entered into an Asset Purchase Agreement dated the date of
this Agreement among Licensee, Programmer and certain of their respective
affiliates relating to the Station (the "Asset Purchase Agreement"), pursuant
to which Licensee has agreed to sell certain assets associated with the Station
to Programmer upon receipt of FCC approval;
WHEREAS, the Licensee wishes to retain Programmer to provide
programming for the Station that is in conformity with the Station's policies
and procedures, FCC policies for time brokerage arrangements, and the
provisions hereof.
WHEREAS, Programmer agrees to use the Station to broadcast such
programming of its selection that is in conformity with all rules, regulations
and policies of the FCC, subject to Licensee's full authority to manage and
control the operation of the Station.
WHEREAS, Programmer and Licensee agree to cooperate to make this
Time Brokerage Agreement work to the benefit of the public and both parties and
as contemplated in this Agreement.
NOW, THEREFORE, in consideration of the above recitals and mutual
promises and covenants contained herein, the parties, intending to be legally
bound, agree as follows:
SECTION 1. LEASE OF STATION AIR TIME
1.1 Representations. Both Licensee and Programmer represent
that they are legally qualified, empowered and able to enter into this
Agreement.
1.2 Effective Date; Term. The effective date of this Agreement
shall be June 30, 1997, or such later date as the parties may agree in the
event that the waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976 shall not have expired or been terminated by such date
(the "Effective Date") and it shall continue in force from that date until the
earlier of (a) the Closing of the Asset Purchase Agreement; (b) the
termination of the Asset Purchase Agreement pursuant to Article VIII of the
Asset Purchase Agreement; or (c) the termination of this Agreement pursuant to
Section 6 hereof.
1.3 Scope. Subject to the terms of this Agreement, during the
term of this Agreement and any renewal thereof, Licensee shall make available
to Programmer broadcast
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time upon the Station as set forth in this Agreement twenty-four (24) hours a
day, seven (7) days a week. Programmer shall deliver programming, at its
expense, to the Station's transmitter facilities or other authorized remote
control points as reasonably designated by Licensee. Programmer shall
broadcast such programming as is required pursuant to Section 1.9 and shall
have the right to broadcast its programming from the Licensee's existing
studio, provided that payment is made by Programmer as provided in Schedule I .
Subject to Licensee's reasonable approval, as set forth in this Agreement,
Programmer shall provide programming of Programmer's selection consisting of
programming that responds to ascertained community issues, needs and interests,
commercial matter, news, public affairs and other non- entertainment programs,
children's educational and informational programs, public service announcements
and other programming suitable to the Licensee and consistent with FCC
requirements.
1.4 Option to Renew. Subject to the termination provisions of
Section 6 hereof, this Agreement may be renewed for an additional term as
mutually agreed upon by the Licensee and the Programmer and consistent with FCC
requirements.
1.5 Consideration. As consideration for the air time made
available hereunder Programmer shall make payments to Licensee as set forth in
Schedule I.
1.6 Licensee Operation of the Station. Licensee will have full
authority, power and control over the management and operations of the Station
during the term of this Agreement and during any renewal of such term.
Licensee will bear all responsibility for the Station's compliance with all
applicable provisions of the Communications Act of 1934, as amended, (the
"Act") the rules, regulations and policies of the FCC and all other applicable
laws. Licensee shall be solely responsible for and pay in a timely manner all
customary operating costs of the Station, including but not limited to
maintenance of the studio and transmitting facilities and costs of
electricity, provided, that Licensee shall be entitled to reimbursement
pursuant to Schedule I hereof and Programmer shall be responsible for the costs
of its programming and its personnel as provided in Sections 1.8 and 2.4
hereof. Licensee shall employ at its expense management level and other
employees consisting of an Operations Manager who will direct the day-to-day
operations of the Station and such other personnel as required by the FCC, and
who will report to and be accountable to the Licensee. Licensee shall be
responsible for the salaries, taxes, insurance and related costs for all
personnel employed by the Station and shall maintain insurance reasonably
satisfactory to Programmer covering the Station's transmission facilities (it
being agreed that the insurance currently maintained by Licensee is reasonably
satisfactory to Programmer). During the term of the Agreement and any renewal
hereof, Programmer shall perform, without charge and under the supervision of
Licensee, routine monitoring and maintenance of the Station's studio and
transmission facilities.
1.7 Licensee Representations and Warranties. Licensee
represents and warrants as follows:
(a) Licensee owns and holds or will hold all licenses
and other permits and authorizations necessary for the current operation of the
Station ("Licenses"), and such Licenses are and will be in full force and
effect throughout the term of this Agreement. Licensee is not in material
violation of any statute, ordinance, rule, regulation, policy, order or decree
of
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any federal, state or local entity, court or authority having jurisdiction over
it or the Station, which would have a material adverse effect upon Licensee,
the Station or Licensee's ability to perform its obligations under this
Agreement. Licensee shall not take any action or omit to take any action which
would have a material adverse effect upon Licensee, the Station or Licensee's
ability to perform its obligations under this Agreement. All reports and
applications required to be filed with the FCC or any other governmental body
have been, and during the course of the term of this Agreement or any renewal
thereof, will be filed in a timely and complete manner. During the term of
this Agreement and any renewal thereof, Licensee shall not dispose of,
transfer, assign or pledge any of Licensee's assets and properties which are,
individually or in the aggregate, necessary for the operation of the Station
without the prior written consent of the Programmer, which consent shall not be
unreasonably withheld.
(b) Licensee shall pay, in a timely fashion, all of
the expenses incurred in operating the Station, including salaries and benefits
of its two (2) employees, lease payments, utilities, taxes, etc., as set forth
in Schedule I (except those for which a good faith dispute has been raised with
the vendor or taxing authority), and shall provide Programmer with a schedule
of such timely payments (including invoices) within thirty (30) days following
the end of each month. Programmer shall reimburse Licensee for such payments
within five (5) days of Programmer's receipt of Licensee's schedule.
1.8 Programmer Representations, Warranties and Covenants.
Programmer represents, warrants and covenants as follows:
(a) Programmer is not in violation of any statute,
ordinance, rule, regulation, policy, order or decree of any federal, state or
local entity, court, or authority having jurisdiction over it (collectively,
"Applicable Laws"), which would have a material adverse effect upon Programmer,
the Station, or Programmer's ability to perform this Agreement. Programmer
shall not take any action or omit to take any action which would have a
material adverse impact upon Programmer, the Station or Programmer's ability to
perform this Agreement. Programmer shall comply in all material respects with
all Applicable Laws during the term of this Agreement.
(b) Programmer shall be solely responsible for any
expenses incurred in the origination and/or delivery of programming from any
remote location and for any publicity or promotional expenses incurred by
Programmer, including ASCAP and BMI music license fees for all programming
provided by Programmer and shall employ and be responsible for the salaries,
commission, taxes, insurance (including without limitation workmen's
compensation) and all other related expenses for all personnel involved in the
production and broadcast of its Programs (including air personalities,
engineering personnel, sales personnel, traffic personnel, board operators and
other programmers and production staff members). Such payments by Programmer
shall be in addition to any other payments to be made by Programmer under this
Agreement.
(c) In the event that the application of the Station
currently pending before the FCC relating to the upgrade of the Station's
broadcast power (the "Upgrade Application") is granted during the term of this
Agreement, Programmer may, at Programmer's
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sole expense and risk, and under the control and supervision of Licensee,
purchase and install on the Station's premises additional transmission
equipment necessary in order to increase the broadcast power of the Station to
the extent permitted by, and in accordance with, such FCC approval, and to the
extent such equipment has previously been ordered by Seller, Programmer shall
assume all of Licensee's obligations under all contracts relating thereto,
including the obligation to pay for such equipment. Programmer acknowledges
and agrees that the failure by Licensee to obtain, or take any action in order
to obtain, FCC approval of the Upgrade Application shall not constitute a
breach of any representation, warranty or covenant of Licensee hereunder.
1.9 Contracts. Programmer will perform all of Licensee's
non-monetary obligations pursuant to (a) the lease dated as of August 24, 1984,
by and between the Port Authority of New York and New Jersey (the "Port
Authority"), as lessor, and The City of New York (the "City"), as lessee, as
assigned to the Seller pursuant to the Assignment of Lease with Assumption and
Consent dated as of June 28, 1996, among Licensee, the Port Authority and the
City; (b) the Capacity Agreement dated February 7, 1997, between Licensee and
Time Warner Communications; and (c) Licensee's use and occupancy arrangements
with respect to space located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, to the
extent such space is utilized by Programmer pursuant to this Agreement.
Programmer will perform all of Licensee's obligations pursuant to the
Programming Agreement dated September 18, 1996, by and between Licensee and
Liberty/Fox U.S. Sports L.L.C. ("LFS"), as amended on January 23, 1997 (the
"LFS Agreement"), including with respect to the provision of airtime and the
sale of advertising. Programmer's use of the assets of the Station and its use
and occupancy of Licensee's premises shall comply with the terms of any
contract, lease or agreement listed above. Programmer will enter into no
third-party contracts, leases or agreements which will bind Licensee in any way
except with Licensee's prior approval.
SECTION 2. STATION OBLIGATION TO ITS COMMUNITY OF LICENSE
2.1 Licensee Authority. Notwithstanding any other provision of
this Agreement, Programmer recognizes that Licensee has certain obligations to
broadcast programming to meet the needs and interests of viewers in New York,
New York, the Station's community of license. From time to time the Licensee
may air specific programming on issues of importance to the local community.
Nothing in this Agreement shall abrogate the unrestricted authority of
theLicensee to discharge its obligations to the public and to comply with the
Act and the rules and policies of the FCC.
2.2 Additional Licensee Obligations. Although both parties
shall cooperate in the broadcast of emergency information over the Station,
Licensee shall also retain the right to interrupt Programmer's programming in
case of an emergency or for programming which, in the good faith judgment of
Licensee, is of greater local or national public importance. Licensee shall
also coordinate with Programmer the Station's hourly Station identification and
any other announcements required to be aired by FCC rules. Licensee shall
continue to maintain a main studio, as that term is defined by the FCC, within
the Station's principal community contour, shall maintain its local public
inspection file in accordance with FCC rules, regulations and policies, and
shall prepare and place in such inspection file or files in a timely manner all
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material required by Section 73.3526 of the FCC's Rules, including the
Station's quarterly issues and program lists; information concerning the
broadcast of children's educational and informational programming; and
documentation of compliance with commercial limits applicable to certain
children's television programming. Programmer shall, upon request by Licensee,
provide Licensee with such information concerning Programmer's programs and
advertising as is necessary to assist Licensee in the preparation of such
information. Programmer shall provide Licensee such information as Licensee
may request concerning Programmer's recruitment, hiring or employment practices
in connection with Programmer's provision of programming and the station.
Licensee shall also maintain the Station's logs and control and oversee any
remote control point which may be established for the Station.
2.3 Additional Programmer Obligations. Programmer shall
broadcast on the Station sufficient programming to comply with the minimum
operating requirements specified in Section 73.1740 of the FCC's rules and
regulations.
2.4 Responsibility for Employees and Expenses. Programmer shall
employ and be solely responsible for the salaries, commission, taxes, insurance
and related costs for all personnel used in the production of its programming
(including salespeople, technical staff, traffic personnel, board operators,
programming staff and air personalities). Licensee will provide and be
responsible for the salaries, taxes, benefits, insurance (including without
limitation workmen's compensation) and related costs for all the Licensee's
employees necessary to the Station operation. Whenever on the Station's
premises, all personnel shall be subject to the overall supervision of
Licensee's Operations Manager.
SECTION 3. STATION PROGRAMMING POLICIES
3.1 Broadcast Station Programming Policy Statement. Licensee
has adopted and will enforce a Broadcast Station Programming Policy Statement
(the "Policy Statement"), a copy of which appears as Schedule II hereto and
which may be amended in a reasonable manner from time to time by Licensee upon
notice to Programmer. Programmer agrees and covenants to comply in all
material respects with the Policy Statement, all rules and regulations of the
FCC,and all changes subsequently made by Licensee or the FCC. Programmer shall
furnish or cause to be furnished the artistic personnel and material for the
programs as provided by this Agreement and all programs shall be prepared and
presented in conformity with the rules, regulations and policies of the FCC and
with the Policy Statement set forth in Schedule II hereto. All advertising
spots and promotional material or announcements shall comply with applicable
federal, state and local regulations and policies, the Policy Statement and FCC
requirements, and shall be produced in accordance with quality standards
established by Licensee. If Licensee determines that a program supplied by
Programmer is for any reason, within Licensee's sole discretion, unsatisfactory
or unsuitable or contrary to the public interest, or does not comply with the
Policy Statement, it may, upon prior written notice to Programmer (to the
extent time permits such notice), suspend or cancel such program without
incurring liability to Programmer. Licensee will use reasonable efforts to
provide such written notice to Programmer prior to the suspension or
cancellation of such program.
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3.2 Licensee Control of Programming. Programmer recognizes that
the Licensee has full authority to control the operation of the Station. The
parties agree that Licensee's authority includes the right to reject or refuse
such portions of the Programmer's programming which Licensee believes to be
unsatisfactory, unsuitable or contrary to the public interest. Programmer
shall have the right to change the programming supplied to Licensee and shall
give Licensee at least twenty-four (24) hours notice of substantial and
material changes in such programming, provided that such programming is
consistent with the Policy Statement and FCC regulations.
3.3 Programmer Compliance with Copyright Act. Programmer
represents and warrants to Licensee that Programmer has full authority to
broadcast its programming on the Station, and that Programmer shall not
broadcast any material in violation of the Copyright Act or any other
applicable law, rule or regulation. All music supplied by Programmer shall be:
(i) licensed by ASCAP, SESAC or BMI; (ii) in the public domain; or (iii)
cleared at the source by Programmer. Licensee will maintain music licenses as
necessary. The right to use the programming and to authorize its use in any
manner shall be and remain vested in Programmer.
3.4 Sales. Programmer shall retain all revenues from the sale
of advertising time within the programming it broadcasts on the Station.
Programmer shall be responsible for payment of all expenses attributable
thereto, including the commissions due to any sales representative engaged by
it for the purpose of selling advertising which is carried during the
programming it broadcasts on the Station. Licensee and Programmer each shall
have the right, at their own expense, to seek copyright royalty payments for
their own programming. Licensee shall remit to Programmer amounts, if any,
received following the Effective Date by Licensee with respect to LFS
programming aired after the Effective Date pursuant to the LFS Agreement,
provided that Programmer performs Licensee's obligations thereunder as required
pursuant to Section 1.9. Programmer shall remit to Licensee amounts received,
if any, following the Effective Date by Programmer with respect to LFS
programming aired prior to the Effective Date pursuant to the LFS Agreement.
3.5 Payola. Programmer agrees that it and its employees will
not accept any consideration, compensation, gift or gratuity of any kind
whatsoever, regardless of its value or form, including, but not limited to, a
commission, discount, bonus, material, supplies or other merchandise, services
or labor (collectively, "Consideration"), whether or not pursuant to written
contracts or agreements between Programmer and merchants or advertisers, unless
the payer is identified in the program for which Consideration was provided as
having paid for or furnished such Consideration, in accordance with the Act and
FCC requirements. Programmer agrees to annually, or more frequently at the
request of the Licensee, execute and provide Licensee with a Payola Affidavit
from each of its employees involved with the Station substantially in the form
attached hereto as Schedule III.
3.6 Cooperation. Programmer and Licensee mutually acknowledge
their interest in ensuring that the Station serve the needs and interests of
viewers in New York and the surrounding service area and agree to cooperate to
provide such service. Licensee shall, on a regular basis, assess the issues of
concern to residents of New York and the surrounding area and address those
issues in its public service programming. Programmer, in cooperation with
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Licensee, will endeavor to ensure that programming responsive to the needs and
interests of the community of license and surrounding area is broadcast, in
compliance with applicable FCC requirements and will assist Licensee, if
requested, in the production of Licensee-provided programming. Licensee will
describe those issues and the programming that is broadcast in response to
those issues and place issues/programs lists in the Station's public inspection
file as required by FCC rules. Further, Licensee may request, and Programmer
shall provide, information concerning such of Programmer's programs as are
responsive to community issues so as to assist Licensee in the satisfaction of
its public service programming obligations. Programmer shall also provide
Licensee upon request such other information necessary to enable Licensee to
prepare records and reports required by the Commission or other local, state or
federal government entities. Without limiting the generality of the foregoing,
Programmer and Licensee shall cooperate with one another to ensure compliance
with FCC rules and the Communications Act of 1934 and to otherwise fulfill the
purposes of this Agreement. Whenever on the Station's premises, all of
Programmer's personnel shall be subject to the supervision and direction of
Licensee's General Manager.
3.7 Staffing Requirements. Licensee will be in full compliance
with the main studio staff requirements as specified by the FCC.
3.8 Children's Television Advertising. Programmer agrees that
it will not broadcast advertising within programs originally designed for
children aged 12 years and under in excess of the amounts permitted under
applicable FCC rules, and will take all steps necessary to pre-screen
children's programming broadcast during the hours it is providing such
programming, to establish that advertising is not being broadcast in excess of
the applicable FCC rules.
SECTION 4. INDEMNIFICATION AND EVENTS OF DEFAULT
4.1 Programmer's Indemnification. Programmer shall indemnify
and hold harmless Licensee and Licensee's employees, officers, directors,
affiliates and representatives from and against any and all claims, losses,
costs, liabilities, damages, forfeitures and expenses (including reasonable
legal fees and other expenses incidental thereto) of every kind, nature and
description, including damage to the Station's facilities caused by the
negligence or willful misconduct of Programmer (collectively, "Damages"), as
incurred, resulting from (i) Programmer's breach of any representation,
warranty, covenant or agreement contained in this Agreement, (ii) the
provisions of Section 1.6 notwithstanding, any action taken by Programmer or
its employees and agents with respect to the Station or any License relating
thereto, or any failure by Programmer or its employees and agents to take any
action with respect to the Station or any License relating thereto, including,
damages relating to violations of the Act or any rule, regulation or policy of
the FCC, slander, defamation or other claims relating to programming provided
by Programmer and Programmer's broadcast and sale of advertising time on the
Station, or (iii) any breach or alleged breach of the LFS Agreement, whether
arising in connection with the execution and delivery of this Agreement or the
Asset Purchase Agreement or Programmer's failure or alleged failure to perform
Licensee's obligations thereunder.
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4.2 Licensee's Indemnification. Licensee shall indemnify and
hold harmless Programmer and Programmer's employees, officers, directors,
affiliates and representatives from and against any and all claims, losses,
consents, liabilities, damages, FCC forfeitures and expenses (including
reasonable legal fees and other expenses incidental thereto) of every kind,
nature and description, as incurred, arising out of Licensee's operation of the
Station and the broadcast by Licensee of Licensee's programming (which excludes
any programming broadcast pursuant to the LFS Agreement), if any, to the extent
permitted by law, including damages to the Station's facilities caused by the
negligence or willful misconduct of Licensee, and any action taken by the
Licensee or its employees and agents with respect to the Station, or any
failure by Licensee or its employees and agents to take any action with respect
to the Station.
4.3 Limitation. Neither Licensee nor Programmer shall be
entitled to indemnification pursuant to this section unless such claim for
indemnification is asserted in writing delivered to the other party.
4.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give written notice to the party from which indemnification is
claimed (the "Indemnifying Party") of any claim, whether between the parties or
brought by a third party, specifying in reasonable detail the factual basis for
the claim. If the claim relates to an action, suit, or proceeding filed by a
third party against Claimant, such notice shall be given by Claimant no later
than ten (10) business days after written notice of such action, suit, or
proceeding was given to Claimant provided that the failure to timely give
notice shall not extinguish the Claimant's right to indemnification except to
the extent the Indemnifying Party shall have been actually prejudiced by such
failure, except that the Indemnifying Party shall not be liable for any
expenses incurred during the period in which the indemnified Party failed to
give such notice.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty (30) days to make such investigation of the claim as
the Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
or its authorized representatives the information relied upon by the Claimant
to substantiate the claim. If the Claimant and the Indemnifying Party agree in
writing at or prior to the expiration of the thirty (30) day period (or any
mutually agreed upon extension thereof) to the validity and amount of such
claim, the Indemnifying Party shall immediately pay to the Claimant the full
amount of the claim or such amount as agreed to by the parties. If the
Claimant and the Indemnifying Party do not agree within the thirty (30) day
period (or any mutually agreed upon extension thereof), such dispute shall be
resolved by litigation in an appropriate court of competent jurisdiction.
(c) With respect to any claim by a third party as to which
the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party. If the Indemnifying Party elects
to assume control of the defense of any third-party claim, the Claimant shall
have the right to participate in the defense of such claim at its own expense.
If the Indemnifying Party does not elect to
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assume control or otherwise participate in the defense of any third party
claim, it shall be bound by the results obtained by the Claimant with respect
to such claim. Whether or not the Indemnifying Party shall have assumed the
defense of a claim by a third party, the Claimant shall not admit any liability
with respect to, or settle, compromise or discharge, such claim without the
Indemnifying Party's prior written consent (which consent shall not be
unreasonably withheld). If the Indemnifying Party shall have assumed the
defense of a third party claim, the Claimant shall agree to any settlement,
compromise or discharge of a third party claim which the Indemnifying Party may
recommend and which by its terms obligates the Indemnifying Party to pay the
full amount of the liability in connection with such third party claim, which
releases the Indemnifying Party completely in connection with such third party
claim and imposes no nonmonetary obligation on the indemnified party.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every reasonable effort
to reach a decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided herein shall extend
to the shareholders, directors, officers, employees, representatives and
successors and assigns of any Claimant although for the purpose of the
procedures set forth in this Section 4.4, any indemnification claims by such
parties shall be made by and through the Claimant.
4.5 Time Brokerage Challenge. If this Agreement is challenged
at the FCC, whether or not in connection with the Station's license renewal
application, counsel for the Licensee and counsel for the Programmer shall
jointly defend the Agreement and the parties' performance thereunder throughout
all FCC proceedings at the sole expense of the Programmer. If portions of this
Agreement do not receive the approval of the Mass Media Bureau of the FCC (the
"FCC Staff"), then the parties shall reform the Agreement in a mutually
acceptable manner as necessary to satisfy the FCC Staff's concerns or, at
Programmer's option and expense, seek reversal of the Staff's decision and
approval from the full Commission or a court of law.
4.6 Events of Default. The following shall, after the
expiration or the applicable cure periods, constitute Events of Default under
this Agreement:
(i) Non-Payment. Programmer's failure to timely pay
the consideration provided for in Section 1.5 hereof;
(ii) Default in Covenants or Adverse Legal Action. The
default by either party hereto in the material observance or performance of any
covenant, condition or agreement contained herein, or if either party shall (a)
make a general assignment for the benefit of creditors, (b) file or have filed
against it a petition for bankruptcy, for reorganization or any arrangement, or
for the appointment of a receiver, trustee or similar creditors' representative
for the property or assets of such party under any federal or state insolvency
law, which, if filed against such party, has not been dismissed or discharged
within sixty (60) days thereof; or
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(iii) Breach of Representation. If any representation
or warranty herein made by either party hereto, or in any certificate or
document furnished be either party to the other pursuant to the provisions
hereof, shall prove to have been false or misleading in any material respect as
of the time made or furnished.
4.7 Cure Periods. An Event of Default shall not be deemed to
have occurred until ten (10) business days after the non-defaulting party has
provided the defaulting party with written notice specifying the event or
events that if not cured would constitute an Event of Default and specifying
the actions necessary to cure within such period. This period may be extended
for a reasonable period of time if the defaulting party is acting in good faith
to cure and such delay is not materially adverse to the other party.
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE
5.1 Confidential Review. Prior to the commencement of any
programming by Programmer under this Agreement, Programmer shall acquaint the
Licensee with the nature and type of the programming to be provided. Licensee
shall be entitled to review at its discretion from time to time on a
confidential basis any of Programmer's programming material it may reasonably
request. Programmer shall promptly provide Licensee with copies of all
correspondence and complaints received from the public (including any telephone
logs of complaints called in), and copies of all program logs and promotional
materials. However, nothing in this section shall entitle Licensee to review
the internal corporate or financial records of the Programmer.
5.2 Political Advertising. Programmer shall cooperate with
Licensee to assist Licensee in complying with all rules of the FCC regarding
political broadcasting. Licensee shall promptly supply to Programmer, and
Programmer shall promptly supply to Licensee, such information, including all
inquiries concerning the broadcast of political advertising, as may be
necessary to comply with FCC rules and policies, including the lowest unit
rate, equal opportunities, reasonable access, political file and related
requirements of federal law. Licensee, in consultation with Programmer, shall
develop a statement which discloses its political broadcasting policies to
political candidates, and Programmer shall follow those policies and rates in
the sale of political programming and advertising. In the event that
Programmer fails to satisfy the political broadcasting requirements under the
Act and the rules and regulations of the FCC and such failure inhibits Licensee
in its compliance with the political broadcasting requirements of the FCC, then
to the extent reasonably necessary to assure such compliance, Programmer shall
either provide rebates to political advertisers or release broadcast time
and/or advertising availabilities to Licensee at no cost to Licensee.
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT
6.1 Termination.
A. In addition to other remedies available at law or
equity, this Agreement may be terminated as set forth below by either Licensee
or Programmer, as
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applicable, by written notice to the other if the party seeking to terminate is
not then in material default or material breach hereof, upon the occurrence of
any of the following:
(a) subject to the provisions of Section 7.9,
this Agreement is declared invalid or illegal in whole or substantial part by
an order or decree of an administrative agency or court of competent
jurisdiction and such order or decree has become final and no longer subject to
further administrative or judicial review;
(b) any Event of Default set forth in Section
4.6 has occurred with respect to the other party and such other party has
failed to cure such breach in accordance with the provisions of Section 4.7;
(c) the mutual consent of both parties; or
(d) there has been a material change in FCC
rules, policies or precedent that would cause this Agreement to be in violation
thereof and such change is in effect and not the subject of an appeal or
further administrative review and this Agreement cannot be reformed, in a
manner acceptable to Programmer and Licensee, to remove and/or eliminate the
violation.
B. Notwithstanding any contrary provision hereof,
this Agreement shall terminate upon the Closing, as defined in the Asset
Purchase Agreement or any termination of the Asset Purchase Agreement pursuant
to Article VIII thereof.
C. During any period prior to the effective date of
any termination of this Agreement, Programmer and Licensee agree to cooperate
in good faith to ensure that Station's operations will continue, to the extent
possible, in accordance with the terms of this Agreement and that the
termination of this Agreement is effected in a manner that will minimize, to
the extent possible, the resulting disruption of the Station's ongoing
operations.
6.2 Force Majeure. Any failure or impairment of the Station's
facilities or any delay or interruption in the broadcast of programs, or
failure at any time to furnish facilities, in whole or in part, for broadcast,
due to Acts of God, strikes, lockouts, material or labor restrictions by any
governmental authority, civil riot, floods and any other cause not reasonably
within the control of Licensee, or for power reductions necessitated for
maintenance of the Station or for maintenance of another station located on the
tower from which the Station will be broadcasting, shall not constitute a
breach of this Agreement and Licensee will not be liable to Programmer for
reimbursement or reduction of the consideration owed to Licensee.
6.3 Other Agreements. During the term of this Agreement or any
renewal hereof, Licensee will not enter into any other agreement with any third
party that would conflict with or result in a material breach of this Agreement
by Licensee.
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SECTION 7. MISCELLANEOUS
7.1 Assignment.
(a) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
(b) Neither this Agreement nor any of the rights,
interests or obligations of either party hereunder shall be assigned,
encumbered, hypothecated or otherwise transferred without the prior written
consent of the other party. Any attempted assignment by either party in
violation of the preceding sentence shall be null and void and of no force and
effect.
7.2 Call Letters. Upon request of Programmer, subject to the
consent of the Licensee, Licensee shall apply to the FCC for authority to
change the call letters of the Station (to be made effective on the Effective
Date of this Agreement with the consent of the FCC) to such call letters that
Programmer shall reasonably designate. Licensee must coordinate with
Programmer any such proposed changes to the call letters of the Station before
taking any action to change such letters.
7.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument.
7.4 Entire Agreement. This Agreement (including the Schedules
hereto) and the Asset Purchase Agreement embody the entire agreement and
understanding of the parties relating to the operation of the Station. No
amendment, waiver of compliance with any provision or condition hereof, or
consent pursuant to this Agreement will be effective unless evidenced by an
instrument in writing signed by the parties.
7.5 Taxes. Licensee and Programmer shall each pay its own ad
valorem taxes, if any, which may be assessed on such party's respective
personal property for the periods that such items are owned by such party.
Programmer shall pay all taxes, if any, to which the consideration specified in
Section 1.5 herein is subject, provided that Licensee is responsible for
payment of its own income taxes.
7.6 Headings; Schedules. The headings are for convenience only
and will not control or affect the meaning or construction of the provisions of
this Agreement. All Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein.
7.7 Governing Law. The obligations of Licensee and Programmer
are subject to applicable federal, state and local law, rules and regulations,
including, but not limited to, the Act and the rules and regulations of the
FCC. The construction and performance of the Agreement will be governed by the
laws of the State of New York with the exception of its conflicts of law
provision. Both parties hereby waive their right to a trial by jury. The
parties
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agree to the exclusive jurisdiction and venue of the state or federal district
court for the district including New York, New York.
7.8 Notices. All notices, demands and other communications
required or permitted to be given under the provisions of this Agreement shall
be in writing and shall be (i) hand delivered and a written receipt obtained,
(ii) sent by nationally recognized overnight courier, (iii) transmitted by
facsimile (with hard copy confirmation by hand delivery, certified mail, return
receipt requested, or nationally recognized overnight courier) or (iv) sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
To Programmer: ▇▇▇▇▇▇ Communications of
New York-31, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
To Licensee: ITT-Dow ▇▇▇▇▇ Television
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
and
ITT Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
7.9 Severability. The provisions of this Agreement are
severable, and, if any provision or part hereof or the application thereof to
any person or circumstance shall be held by the FCC or any court of competent
jurisdiction to be invalid, unconstitutional or unenforceable for any reason,
the remainder of this Agreement and the application of such provision or part
hereof to the persons or circumstances shall not be affected thereby. In the
event that the FCC alters or modifies its rules or policies in a fashion which
would raise a substantial and material question as to the validity of any
provision of this Agreement, the parties hereto shall negotiate in good faith
to revise any such provision of this Agreement with a view toward assuring
compliance with all then existing FCC rules and policies which may be
applicable, while attempting to preserve, as closely as possible, the intent of
the parties as embodied in the provision of this Agreement which is to be so
modified.
7.10 No Joint Venture. Nothing in this Agreement shall be deemed
to create a joint venture between the Licensee and the Programmer.
7.11 Press Release. Neither party shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other party; provided, however, that
nothing contained herein shall prevent either party from promptly making all
filings with governmental authorities as may, in its judgment, be required or
advisable in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby.
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7.12 Interpretation. For all purposes of this Agreement,
"including" shall mean "including without limitation".
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Time Brokerage
Agreement the day and year first above written.
LICENSEE: ITT-DOW ▇▇▇▇▇ TELEVISION
By: DOW ▇▇▇▇▇ BROADCASTING (U.S.A.), INC.,
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
By: ITT BROADCASTING CORP.,
General Partner
By: /s/
----------------------------------------
Name:
Title:
PROGRAMMER: ▇▇▇▇▇▇ COMMUNICATIONS OF
NEW YORK-31, INC.
By: /s/
----------------------------------------
Name:
Title:
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Schedule 1
----------
Monthly Fee
-----------
In exchange for the air time supplied to Programmer pursuant to this
Agreement, Programmer shall pay Licensee One Million Two Hundred Fifty Thousand
Dollars ($1,250,000.00) per month by wire transfer. The first monthly payment
to Licensee is due and payable on the Effective Date of this Agreement, and each
successive payment is due on the first (1st) day of each month thereafter. The
monthly fee shall be reduced pro rata for any partial month at the beginning or
end of the term of this Agreement.
In addition, Programmer shall receive pro rata credit (and the monthly
fee shall be reduced accordingly) for any part of the weekly one hundred
sixty-eight (168) hours of programming that Licensee uses to broadcast its own
programming or for which Licensee suspends or cancels Programmer's programming.
In no event shall there be a reduction in the monthly amount as a consequence
of the broadcast of programming pursuant to the LFS Agreement.
Notwithstanding any provision of the Agreement, Programmer shall not be
obligated to pay Licensee the pro rata portion of the monthly fee or the pro
rata portion of the reimbursable expenses for any period of time where the
Station is off-the-air.
Station's Expenses
------------------
Programmer shall reimburse Licensee for Licensee's payment of the
Station expenses included in Reimbursable Expenses as defined below.
The reimbursement payments shall be made by delivery of checks to
Licensee at the address specified in Section 7.8 hereof, covering the expenses
included in the following categories and as generally set forth in the budget
provided to Programmer by Licensee.
(1) Payments for the Use and Occupancy of Premises
of Station at World Trade Center and the
Portion of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
Utilized by Programmer*
(2) Utility Payments
(3) Employee Salaries and Benefits (2) employees
(4) Real Estate and Personal Property Insurance and
Taxes.
(5) Business, Professional and Regulatory Fees and
Licenses
20
(6) Fiber Connection and Transmission Facility
Expenses
(7) Music License Fees
(9) Miscellaneous Station Expense
* Programmer will provide notice to Licensee, prior to the
Effective Date of the Agreement, if Programmer wishes to
utilize the ground floor studios of WBIS at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
If Programmer chooses not to use that space, then there will be
no reimbursement for the rent. If Programmer chooses to use
that space, then the rent on that studio will be a reimbursable
item.
