Time Brokerage Agreement

Exhibit 10.(i)


TIME BROKERAGE AGREEMENT
------------------------


Dated as of March 18, 1994


Among


Outlet Broadcasting, Inc.


and


Fant Broadcasting Company of Ohio, Inc.


and


Outlet Communications, Inc.
(for limited purposes)


TABLE OF CONTENTS


Page Recitals........................................................ 1


ARTICLE I PROGRAMMING AGREEMENT ---------------------
1.1 Brokered Programming................................ 1
1.2 Licensee Programming................................ 2
1.3 Preemption.......................................... 2


ARTICLE II OPERATIONS ----------
2.1 Compliance with FCC Regulations..................... 2
2.2 Provision of Programming............................ 3
2.3 Station Staffing.................................... 3
2.4 Station Maintenance................................. 3
2.5 New Technology...................................... 3


ARTICLE III CONSIDERATION -------------
3.1 Fee................................................. 4
3.2 Adjustments......................................... 4


ARTICLE IV TERM AND SECURITY FOR PERFORMANCE ---------------------------------
4.1 Initial Term........................................ 5
4.2 Renewal Term........................................ 5
4.3 Cancellation........................................ 5
4.4 Termination for Refusal To Transmit Programs........ 5
4.5 Termination for Default and Nonperformance.......... 5
4.6 Liquidated Damages.................................. 6
4.7 Security for Performance............................ 8
4.8 Specific Performance................................ 9
4.9 Survival of Option and Right of First Refusal....... 9


ARTICLE V ASSIGNABILITY, OPTION TO PURCHASE, ---------------------------------- RIGHT OF FIRST REFUSAL, LPTV OPTION -----------------------------------
5.1 Assignability....................................... 9
5.2 Option To Purchase.................................. 9
5.3 Right of First Refusal.............................. 12
5.4 Licensee's Option to Purchase Translator............. 12


ARTICLE VI REGULATORY MATTERS ------------------
6.1 Renegotiation Upon FCC Action or Other
Regulatory Changes.................................. 13
6.2 FCC Matters......................................... 13
6.3 Mandatory Signal Carriage........................... 14


i


ARTICLE VII BROADCAST EQUIPMENT AND RELATED ASSETS -------------------------------------
7.1 Equipment and Assets ................................. 14
7.2 Insurance ............................................ 14
7.3 Lease of Tower Space and Equipment Building .......... 15


ARTICLE VIII REPRESENTATIONS, WARRANTIES, AND COVENANTS ------------------------------------------
8.1 Licensee's Representations and Warranties ............ 16
8.2 Broker's Representations and Warranties .............. 17
8.3 Licensee's Affirmative Covenant ...................... 18
8.4 Broker's Affirmative Covenant ........................ 18
8.5 Licensee's Negative Covenants ........................ 18


ARTICLE IX MISCELLANEOUS -------------
9.1 Force Majeure ........................................ 20
9.2 Trademarks ........................................... 20
9.3 Notice ............................................... 20
9.4 Duty to Consult ...................................... 21
9.5 Press Releases ....................................... 21
9.6 Severability ......................................... 21
9.7 Entire Agreement ..................................... 21
9.8 Survival ............................................. 21
9.9 Payment of Expenses .................................. 22
9.10 Further Assurances ................................... 22
9.11 Counterparts ......................................... 22
9.12 Headings ............................................. 22
9.13 Dealings with Third Parties .......................... 22
9.14 Indemnification ...................................... 22
9.15 Governing Law ........................................ 23


ii


TIME BROKERAGE AGREEMENT
------------------------


This TIME BROKERAGE AGREEMENT (the "Agreement") is made as of March 18, 1994, among Outlet Broadcasting, Inc., a Rhode Island ("Broker"), and Fant Broadcasting Company of Ohio, Inc., an Alabama corporation ("Licensee"), and with respect to paragraph 5.2, Outlet Communications, Inc. ("OCI"), a Delaware corporation.


W I T N E S S E T H:
- - - - - - - - - -


WHEREAS, Broker is in the business of producing and transmitting news, sports, informational, public service and entertainment programming and associated advertising on Television Station WCMH (TV), Columbus, Ohio; and


WHEREAS, Licensee, as of the date of this Agreement noted above, is the licensee of the Television Station presently operating with the call letters WWAT (TV) in Chillicothe, Ohio (the "Station") and as of that date owns certain of the Station's assets; and


WHEREAS, Broker desires to utilize its currently held assets as well as assets it will acquire to provide programming to be transmitted on the Station at such time as Licensee becomes the Station's licensee, pursuant to the provisions hereof and pursuant to applicable regulations and policies of the Federal Communications Commission ("FCC"); and


WHEREAS; Licensee desires to accept and transmit programming supplied by Broker on the Station while maintaining control over the Station and continuing to broadcast Licensee's own public interest programming;


NOW, THEREFORE, in consideration of these premises and the mutual promises, undertakings, covenants and agreements of the parties contained in this Agreement, the parties hereto do hereby agree as follows:


ARTICLE I
PROGRAMMING AGREEMENT
---------------------


1.1 Brokered Programming. Broker hereby agrees to provide for transmission
-------------------- by the Station of news, sports, informational and entertainment programming and associated advertising, promotional, and public service programming and announcement matter sufficient to program the Station on a daily basis throughout the year ("Brokered Programming"), subject to paragraphs 1.2 and 1.3 herein. All Brokered Programming and its


transmission by the Station shall be subject to the supervision and control of Licensee.


1.2 Licensee Programming. Licensee will retain sole responsibility for
-------------------- ascertainment of the needs of its community of license and service area, including specifically the children therein. The parties agree that the Brokered Programming will include programming which responds to these ascertained needs and concerns, including children's programming; provided, however, Licensee shall have the right and obligation to broadcast such additional noncommercial programming, either produced or purchased by Licensee, as it determines appropriate to respond to the ascertained issues of community concern ("Licensee Programming"); provided, further, however, beginning on the Commencement Date, as defined below in paragraph 4.1 and continuing through 11:59 p.m. on April 17, 1994, (the "Transition Period"), Licensee shall have the right to transmit commercial programming ("Transition Programming"). Such Licensee Programming and Transition Programming shall be broadcast at times agreed to by Broker and Licensee, provided, however, that in the absence of such agreement, Licensee may delete or preempt in its sole discretion any Brokered Programming for the purpose of transmitting such Licensee Programming and Transition Programming. For purposes of this Agreement, "noncommercial" shall mean any programming for which no consideration of any kind is received by Licensee.


1.3 Preemption. Licensee may preempt or delete any Brokered Programming
---------- which Licensee believes to be unsatisfactory, unsuitable or contrary to the public interest, and to substitute programming which, in Licensee's opinion, is of greater local or national importance.


ARTICLE II
OPERATIONS
----------


2.1 Compliance with FCC Regulations. Licensee will retain responsibility
------------------------------- for the employ of such personnel as is necessary to assure compliance with all FCC regulations, including all technical regulations governing the operation of the Station and all programming content requirements, including maintenance of a main studio and providing a meaningful managerial and staff presence at the main studio, ascertainment of and programming in response to community needs and concerns and the needs and concerns of children, satisfaction of the limits on commercial matter in children's programming, political programming laws and regulations, sponsorship identification rules, lottery and contest regulations, maintenance of the Station's public and political files, compiling appropriate quarterly issues programs lists, children's programming lists, employment records and all other FCC requirements and duties.


2


2.2 Provision of Programming. Subject to Licensee's control and supervision,
------------------------- Broker shall provide the programming specified in paragraph 1.1 hereof and shall be responsible for implementing its transmission by the Station, utilizing assets owned by Broker to the extent necessary. To the extent Broker reasonably requests the use of tangible station assets owned by Licensee to enable Broker to fulfill its obligations under this Agreement, Licensee shall make the use of such assets reasonably available to Broker at no cost. To the extent Licensee requests the use of assets owned by Broker to produce or broadcast the programming specified in paragraphs 1.2 and 1.3 hereof, or to fulfill Licensee's obligations pursuant to paragraph 2.1 hereof, Broker shall make the use of such assets available to Licensee pursuant to an Equipment Lease to be executed in the form set out in Exhibit A.


2.3 Station Staffing. Licensee shall have sole discretion to make and
---------------- effectuate all staffing and personnel decisions for the Station, including the sole responsibility to determine appropriate levels of staffing to fulfill Licensee's duties under paragraph 2.1 herein. Broker shall have no control or right of review whatsoever over any decision by Licensee to hire or dismiss any Licensee employee. Whenever any individuals, whether employed by Licensee or Broker, are on the Station's premises, they shall be subject to the supervision and direction of Licensee's General Manager or other supervisory personnel.


2.4 Station Maintenance. Licensee shall retain ultimate operational control
------------------- over the Station and shall retain full responsibility for ensuring compliance with all FCC technical rules. Licensee hereby delegates to Broker, under the supervision and ultimate control of Licensee's Chief Operator, the duty to maintain in good working order the Station's equipment used in connection with the broadcast of the Station's program material. Broker shall bear full and exclusive responsibility for all capital expenditures that may be necessary to maintain the Station's equipment in good working order; provided, however, that
-------- ------- Broker's obligation to bear exclusive responsibility for all necessary capital expenditures for the maintenance and improvement of the transmission facilities licensed to the Station shall be limited to the Initial Term and first Renewal Term and shall also be limited in amount to Three Million Dollars ($3,000,000.00), exclusive of any recovery of proceeds from policies insuring the Station's equipment, received by Broker for the account of Licensee or directly by Licensee.


2.5 New Technology. The parties agree that any future FCC frequency
-------------- allocations associated with the operation of the Station are included under the provisions of this Agreement. Specifically, if an HDTV simulcast channel is allocated to the Station, Broker will have the exclusive right to build the transmission facility and the parties agree to bargain in good


3


faith to enter into an appropriate agreement with Licensee for the provision of programming by Broker for that facility on terms consistent with this Agreement.


ARTICLE III
CONSIDERATION
-------------


3.1 Fee. Starting on the Commencement Date, as defined below, Broker
--- shall pay to Licensee a monthly fee calculated according to the provisions set forth in Section 3 of Exhibit B. In further consideration of the programming transaction contemplated under this Agreement as well as the right to renew the Agreement as provided in paragraph 4.2, Broker shall pay to Licensee the sum of Five Hundred Twenty Five Thousand Dollars ($525,000.00) ("Initial Payment") in cash. Of this amount, Fifty Thousand Dollars ($50,000.00) has already been delivered to Licensee by letter of Broker dated February 28, 1994. The remaining Four Hundred Seventy Five Thousand Dollars ($475,000.00) shall be delivered on the Commencement Date. The Net Operating Income, as defined in Exhibit B, shall be shared in accordance with the provisions of Exhibit B.


3.2 Adjustments.
-----------
(a) Effective at the end of the Transition Period, Licensee may broadcast up to two hours of Licensee Programming per week pursuant to paragraph 1.2 without any adjustment to the fee set out in paragraph 3.1. If at any time following the Transition Period and continuing during the term of the Agreement, the Station shall fail to carry Brokered Programming for all but the two hours per week specified in this paragraph 3.2, the fee payable to Licensee by Broker shall be reduced by the then-current market rate of the advertising time scheduled during any deleted or preempted Brokered Programming. During the Transition Period, there shall be no reduction in the fee payable to Licensee by Broker for the then-current market rate of the advertising time scheduled during any deleted or preempted Brokered programming.


(b) Notwithstanding the provisions of subparagraph 3.2(a), the fee payable to Licensee by Broker shall not be reduced if Licensee determines, in its good faith judgment, that noncommercial Licensee Programming, as defined in paragraph 1.2, of more than two hours per week is necessary to meet FCC requirements or to meet Licensee's obligations as an FCC licensee.


ARTICLE IV
TERM AND SECURITY FOR PERFORMANCE
---------------------------------


4


4.1 Initial Term. The Initial Term of this Agreement shall commence on the
------------ date noted above by the parties (the "Commencement Date") and shall expire on the final day of the ten-year period following the Commencement Date, unless otherwise renewed.


4.2 Renewal Term. This Agreement shall automatically renew for two
------------ additional periods of five years each ("Renewal Terms"), unless Broker provides written notice of nonrenewal within 180 days prior to the expiration of the Initial Term.


4.3 Cancellation. Licensee shall have the unlimited right to cancel this
------------ Agreement at any time upon provision of twelve months' written notice to Broker, such advance notice being necessary in view of the substantial financial commitments Broker will be required to incur in order to provide high quality programming for transmission on the Station; provided, however, that upon
-------- ------- cancellation of this Agreement by Licensee under this paragraph, there shall be a final accounting of monies due but unpaid under this Agreement; and provided
-------- further that Broker shall be entitled to Liquidate Damages under paragraph 4.6 ------- herein.


4.4 Termination for Refusal To Transmit Programs. Effective at the end of
-------------------------------------------- the Transition Period, in the event that Licensee refuses to transmit programming under this agreement (except as a result of Broker's default under any of its obligations herein or except as provided in paragraph 9.1) for either twenty-four (24) consecutive hours or one-half hour in each day in any period of thirty (30) consecutive days, Broker shall have the right, exercisable at any time within sixty (60) days after the end of such period, to terminate this Agreement as of any date within 120 days of the date Broker notifies Licensee of its election to terminate this Agreement. If such termination shall occur pursuant to this paragraph, such termination shall extinguish and cancel this Agreement without further liability of Broker to Licensee; provided, however,
-------- ------- that, upon termination of this Agreement by Broker under this paragraph, there shall be a final accounting of monies due but unpaid under this Agreement; and provided further that Broker shall be entitled to Liquidated Damages, as defined -------- ------- in paragraph 4.6 herein.


4.5 Termination for Default and Nonperformance. Except as is provided in
------------------------------------------ paragraph 4.4, should either party be in breach of this Agreement for the nonperformance of a material obligation, this Agreement may be terminated by the non-defaulting party if such breach shall continue with respect to monetary defaults for a period of five (5) days and, with respect to non-monetary defaults, for a period of fifteen (15) days following the receipt of written notice from the non-defaulting party ("Cure Period"), which notice shall indicate the nature of such default; provided, however, that there shall be a
-------- ------- final accounting of monies due but


5


unpaid under this Agreement and provided further that if such termination is due
-------- ------- to the default of Licensee, Broker shall be entitled to Liquidated Damages, as defined in paragraph 4.6 herein. The Cure Period shall be extended as necessary for those non-monetary defaults which cannot be cured within fifteen (15) days, provided that the defaulting party is diligently working with all reasonable haste to remedy such default.


4.6 Liquidated Damages.
------------------
(a) Licensee acknowledges that Broker has made a substantial advance payment in order to enter into this Agreement; that Broker will acquire certain assets associated uniquely with the Station's operation and will enter into various long-term agreements with program suppliers and other third parties to produce programming for the Station at substantial expense and risk; that Broker will recruit, hire and maintain a staff of employees dedicated to acquiring and producing quality programming to be broadcast on the Station; and that Broker will make substantial investments in additional hard assets to produce quality programming for the Station. Licensee also acknowledges that Broker will make substantial investments, both in tangible and intangible terms, to promote the Station under this Agreement, to create a unique image for the Station, and to develop a competitive position in the market for the Station and that such efforts on the part of Broker will add substantial value to the Station. Licensee and Broker hereby acknowledge and agree that any measure of actual damages cannot compensate Broker for the loss of Licensee's performance under this Agreement and that the true measure of damages to Broker for a cancellation, termination, or material breach of this Agreement by Licensee or by Broker pursuant to paragraphs 4.3, 4.4, or 4.5 is incapable of accurate estimation with reasonable certainty. Licensee and Broker therefore agree that it is a fair and reasonable forecast of just compensation for the harm caused to be measured by liquidated damages, as defined in subparagraph (b) of this paragraph, to be paid to Broker upon the cancellation, termination or breach of this Agreement by Licensee.


(b) "Liquidated Damages" shall mean an amount equal to funds expended and/or committed to be expended by Broker (except (i) with respect to items (2) through (8) below, such expenditures and/or commitments as are consistent with industry practices and (ii) to the extent not theretofore recovered by Broker from Gross Revenues as defined by Exhibit B prior to the cancellation, termination, or breach) in each of the following categories:


(1) the Initial Payment;


(2) the full value of all service contracts and programming agreements
assumed and entered into by Broker


6


for purposes of providing programming and advertising to be broadcast on
the Station, which Broker owns at the time of cancellation, termination or
breach, less any consideration received by Broker as a consequence of its
good faith efforts to sell or assign such agreements;


(3) the full value of all severance and employee benefit packages
that Broker, in its discretion, shall provide to employees whose services
would not be required in the absence of this Agreement;


(4) the full value of any contracts with third parties, which could
not be performed owing to cancellation or termination, for services to be
rendered in connection with programming provided to the Station including,
without limitation, producers, advertising salespeople, technicians,
engineers, and any other independent contractors whose services would not
be required in the absence of this Agreement;


(5) the full value of all expenses incurred to promote the Station
and position the Station in the marketplace;


(6) the full value of all assets acquired by Broker for the purpose
of initially implementing this Agreement and of all Capital Expenditures
incurred subsequently in connection with this Agreement, less any
consideration received by Broker as a consequence of its good faith efforts
to sell any such assets;


(7) all corporate, legal, administrative, professional and brokerage
expenses relating in any way to this Agreement; and


(8) the good will and intangible value associated with Broker's
efforts under this Agreement to create a unique image and competitive
market position for the Station, giving due consideration to the fact that
the option and right of first refusal contained in paragraphs 5.2 and 5.3
shall survive cancellation or termination of this Agreement.


(c) Should Licensee cancel, terminate or materially breach this Agreement, Broker shall submit its computation of Liquidated Damages under the categories set forth above to a "Big Six" accounting firm mutually acceptable to the parties for independent auditing and verification. Within thirty (30) days of verification, Licensee agrees to tender payment of all verified amounts to Broker; provided, however, that if Licensee objects to any particular enumerated component of the Liquidated Damages, as verified, it shall notify Broker of such objection within fifteen (15) days of verification. If thereafter Broker


7


and Licensee cannot agree as to the amount of the objectionable component, either party shall have the right to elect to arbitrate such dispute provided it gives written notice of its election to arbitrate by the thirtieth (30th) day following the date of Licensee's objection to Broker's verification. All arbitration proceedings shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association and shall be in Columbus, Ohio. In any proceeding, the arbitrators shall be bound by the provisions of this Agreement. The prevailing party in any arbitration proceeding shall be entitled to enforce such award in any court of competent jurisdiction. Notwithstanding that Licensee may question a particular component of the Liquidated Damages and either party may elect arbitration of the dispute, the remainder of the items comprising the Liquidated Damages shall be paid by Licensee to Broker within thirty (30) days of accounting verification, as specified above. No payment shall be required as to any contested component until the earlier of (i) Broker and Licensee reaching an agreement on the amount or (ii) entering of the arbitration award.


(d) If any category of Liquidated Damages is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of the categories of Liquidated Damages shall not be affected thereby, and the parties agree to use their best efforts to negotiate a replacement category that is neither invalid, illegal nor unenforceable.


4.7 Security for Performance. Licensee's performance under this Agreement
------------------------ shall be secured by a security interest in all of Licensee's and Station's assets, junior only to that certain mortgage and security agreement of even date herewith between Licensee and Triplett & Associates, Inc., an Ohio corporation, to secure the obligation of Licensee under that certain promissory note in original face amount of One Million Four Hundred Seventy Five Thousand Dollars ($1,475,000.000) also of even date herewith ("Triplett Obligation"). The form of the Security Agreement is attached as Exhibit C. In addition, Licensee's performance under this Agreement shall be secured by the personal guarantee of Anthony J. Fant as a pledgor of the Licensee stock that he holds. If additional individuals or entities shall acquire stock of Licensee, Licensee's performance under this Agreement shall be further secured by personal guarantees of such shareholders as pledgors of the Licensee stock that they hold. The pledge agreement(s) shall provide that the Broker shall not take any action which would constitute or result in an assignment of license or change of control of Licensee without first obtaining FCC approval if such assignment or change of control would require that approval. In addition, the pledge agreement(s) shall provide that (i) voting rights will remain with the Licensee, even in the event of its default; (ii) in the event of default, there will be either a private or public sale of the


...