Time Brokerage Agreement

Exhibit 10.9


TIME BROKERAGE AGREEMENT


By and Between


Atlantic Media Group, Inc.


and


Vision Communications, Inc.


April 28, 1994


TABLE OF CONTENTS


Page


TABLE OF DEFINITIONS


iv


1.


Overall Purpose and Term; Renewal Option


3


2.


Construction and Lease of Facilities


3


3.


Facilities


4


4.


Payment


4


5.


Responsibilities


6


A.


Broker' s Responsibilities


6


B.


Atlantic' s Responsibilities


7


C.


Additional Responsibilities


7


D.


Renewal, Modification and Cancellation of Contracts


8


6.


Revenues and Deposits


8


A.


Revenues from Post-Commencement Date Broadcast Time Sales and Uses of Station' s Studio/Production Facilities


8


B.


Bank Accounts for Revenues from Broker' s Activities/ Payments By Broker from Such Revenues


9


7.


Station Facilities


9


A.


Operation of Station


9


B.


Interruption of Normal Operations


10


C.


Studio Location


10


8.


Handling of Station Communications


11


9.


Atlantic' s Compliance With FCC Rules and Policies


11


10.


Programming and the Public Interest


11


11.


Special Programs


14


12.


Station Identification


14


13.


Political Advertising


15


14.


Children' s Programming


15


15.


Atlantic' s Responsibility For Compliance with FCC Technical Rules


17


16.


Force Majeure


17


17.


Trade Secrets and Proprietary Information


18


18.


Payola and Conflicts of Interest


19


19.


Broker' s Compliance with Law


19


20.


No Sub-Brokering


20


21.


Indemnification


20


A.


Broker' s Indemnification of Atlantic


20


B.


Atlantic' s Indemnification of Broker


21


C.


Procedure for Indemnification


21


D.


Insurance


24


22.


Atlantic' s Events of Default


24


23.


Broker' s Events of Default


27


24.


Termination Upon Order of Governmental Authority


31


25.


Additional Representations, Warranties and Covenants


32


A.


Mutual Additional Representations, Warranties and Covenants


32


B.


Finders


32


C.


Atlantic' s Additional Representations, Warranties and Covenants


33


D.


Broker' s Additional Representations, Warranties and Covenants


33


26.


Sale of Station To Broker


33


27.


Procedure for Termination


34


A.


Upon Broker' s Events of Default


34


B.


Upon Broker' s Failure to Enter Into or Maintain Fox Affiliation Agreement


34


C.


Upon Certain Atlantic' s Events of Default


35


D.


Upon Government Termination


35


E.


Upon Force Majeure


36


28.


Notices


36


29.


Modification and Waiver


37


30.


Construction


37


31.


Headings


37


32.


Assignment


37


33.


Counterparts


38


34.


Entire Agreement


38


35.


No Partnership or Joint Venture Created


38


36.


Severability


38


ii


37.


Legal Effect


39


38.


No Party Deemed Drafter


39


39.


Arbitration


39


A.

Generally


39


B.

Notice of Arbitration


39


C.

Selection of Arbitrator


40


D.

Conduct of Arbitration


40


E.

Enforcement


41


F.

Expenses


41


iii


TABLE OF DEFINITIONS


Term


Page Defined


AAA Rules


39

Additional Local Programming


13

Additional Syndicated Programming


12

Arbitration Notice


40

Atlantic


1

Atlantic' s Event of Default


24

Atlantic' s Termination Notice


34

ATV


33

Broker


1

Broker' s Event of Default


27

Broker' s Termination Notice


36

Claimant


21

Commencement Date


3

Communications Act


1

Consideration


19

Disputes


39

Disputing Person


39

FCC


1

Final Determination


40

Governmental Termination Event


31

HDTV


33

Indemnifying Party


21

Losses


20

Mandatory Cessation Date


35

Option Agreement


2


iv


Term


Page Defined


Station


1

Station Bank Account(s)


9


v


TIME BROKERAGE AGREEMENT


THIS TIME BROKERAGE AGREEMENT is made this 28th of April, 1994, by and between Atlantic Media Group, Inc., a South Carolina corporation (" Atlantic" ), and Vision Communications, Inc., a Delaware corporation (" Broker" ).


WHEREAS, Atlantic is authorized to construct and operate a new television broadcast station on Channel 21 at Florence, South Carolina, with the call sign WFIL (the " Station" ), pursuant to authorization issued by the Federal Communications Commission (" FCC" ); and


WHEREAS, Broker has entered into an agreement to purchase the assets of broadcast station WPDE-TV, Florence, South Carolina; and


WHEREAS, the parties hereto have carefully considered the Communications Act of 1934, as amended (the " Communications Act" ) and the FCC' s time brokerage policies adopted pursuant thereto, and intend that this Agreement in all respects comply with such Communications Act and policies; and


WHEREAS, the Florence, South Carolina television and advertising markets are highly competitive and will remain so, unaffected by the transactions contemplated hereunder; and


WHEREAS, Atlantic desires to enter into this Agreement to facilitate the construction of the Station and to provide a regular source of diverse programming and income to sustain the operations of the Station; and


WHEREAS, Broker desires to provide an over-the-air program service to the Florence, South Carolina area using the facilities of the Station; and


WHEREAS, Atlantic agrees to provide time exclusively to Broker on terms and conditions that conform to policies of the Station and the FCC for time brokerage arrangements and that are as set forth herein; and


WHEREAS, Broker agrees to utilize the Station' s transmitting facilities solely to broadcast programming of Broker' s selection that conforms with the policies of Atlantic and with all rules, regulations and policies of the FCC, and as set forth herein; and


WHEREAS, Atlantic maintains, and shall continue to maintain during the term of this Agreement, ultimate control over the Station' s facilities including control over the Station' s finances, personnel and programming; and


WHEREAS, contemporaneously herewith, the parties hereto have entered into: (1) an Option Agreement (the " Option Agreement" ) granting to Broker or Broker' s assignee an option to purchase substantially all of the assets used in connection with the operation of the Station, and to obtain the assignment of the Station' s FCC licenses to Broker or Broker' s assignee (and capitalized terms herein which are not otherwise defined herein shall have the same meanings as stated in the Option Agreement) and (2) a Transmission Facilities and Studio Construction and Lease Agreement;


NOW, THEREFORE, in consideration of the foregoing, and of the mutual promises set forth herein, and for other good and valuable consideration, the sufficiency of which Atlantic and Broker hereby acknowledge, Atlantic and Broker, intending to be bound legally, hereby agree as follows:


2


1. Overall Purpose and Term; Renewal Option . In accordance with the terms and limitations set forth herein: (a) Broker shall construct at its own expense transmission, including microwave, and studio facilities for the Station and shall program the Station, promote the Station and its programming, sell commercial and other time on the Station and bill for and collect the payments for time sales on the Station; and (b) Atlantic will lease such transmission and studio facilities from Broker, maintain the Station' s transmitting and microwave relay facilities, and make said facilities available to Broker. Subject to the terms of this Agreement, each party hereby warrants and covenants that it will fulfill said obligations, and its other obligations specified herein, to the fullest extent permitted by law (including the FCC' s rules and policies) in a diligent, reasonable manner.


Broker shall begin its time brokerage activities with regard to the Station pursuant to this Agreement upon the commencement of Station program tests, and said date shall be referred to herein as the " Commencement Date." The term of this Agreement shall be a period of five (5) years from the date on which Broker acquires the assets of broadcast station WPDE-TV, Florence, South Carolina, or from April 8, 1994, whichever occurs first. Broker also shall have the option to extend this agreement for one successive five (5) year term, on the same terms and conditions as this Agreement, by giving notice of its intent to exercise such option not less than six months prior to the expiration of the initial term.


2. Construction and Lease of Facilities . Broker shall construct at its own expense transmission facilities for the Station (including antenna transmission line, transmitter, and


3


studio-transmitter microwave link equipment) pursuant to agreed on specifications and in accordance with the terms of the FCC construction permit for the Station. Broker also will provide studio facilities for the Station, including studio-transmitter microwave link equipment in full compliance with the FCC' s main studio rules, regulations and policies. Atlantic shall lease such facilities from Broker in accordance with the Transmission Facilities and Studio Construction and Lease Agreement of even date herewith.


3. Facilities . Atlantic shall make the Station' s television broadcasting transmission facilities available to Broker for broadcast on the Station of programs selected by Broker, and advertising/commercial announcements sold by Broker, which may originate from Station' s studios, Broker' s studios or from other sources contracted for by Broker. In addition, Atlantic will make available to Broker, at no cost, during the term of this Agreement, exclusive use (other than Atlantic' s own use for the Station pursuant to this Agreement) of all of Atlantic' s studio and production facilities, for Broker' s use in its activities with regard to the Station pursuant to this Agreement and for use by Station WPDE-TV. Atlantic may use the Station' s studio and production facilities, during the term of this Agreement, for Station public affairs programs and public service announcements, consistent with paragraphs 9 and 10 below.


4. Payment . As consideration for Atlantic' s permitting Broker to air its programming on the Station pursuant to this Agreement, Broker shall pay Atlantic as follows:


4


A. Five thousand dollars ($5,000) per month for the period beginning April 1, 1994 through and including the month during which Broker begins providing programming to the Station pursuant to this Agreement.


B. Beginning on the earlier of September 1, 1994 or the Commencement Date, Broker shall pay Atlantic the sum of ten thousand dollars ($10,000) on the first day of each month. Payments shall continue at this amount for twelve consecutive months.


C. Beginning on the Commencement Date, in addition to the ten thousand dollars ($10,000) monthly payments referred to in paragraph 4.B. above, an amount equal to Atlantic's operating expenses (including Atlantic's rent pursuant to the Transmission Facilities and Studio Construction and Lease Agreement), as determined in advance by Atlantic and Broker.


D. Beginning with the first anniversary of Broker' s monthly payment obligations pursuant to Paragraph 4.B, and on every anniversary thereafter, the parties shall recalculate Broker' s payment obligation for the forthcoming twelve-month period. The new monthly payment amount shall be equal to the sum of the following:


1. Base Amount . $10,000 per month increased five (5)% percent on the first anniversary, and an additional five (5)% percent on each subsequent anniversary.


2. Expenses . Atlantic' s estimated monthly cost of operating the Station for the forthcoming year, including utilities associated with the Station' s transmitting facilities (pursuant to the Transmission Facilities and Studio Lease Agreement), rent to


5


Broker for the Station' s transmitting and studio facilities, and salaries for the Station' s General Manager and Chief Operator, all based on an operating budget jointly agreed to by Atlantic and Broker.


5. Responsibilities .


A. Broker' s Responsibilities .


i. Broker shall employ and be responsible for paying the salaries, commissions, payroll taxes, insurance and all other related costs for all personnel (other than Atlantic' s employees) involved in the acquisition, compilation, production, broadcast and sale of the Station' s programming and commercial messages, including but not limited to administrative, internal and external sales, traffic, billing, collections, promotion, production, outside talent and master control personnel (but excluding such expenses as incurred by Atlantic for Station programming originated by Atlantic).


ii. Broker also shall be responsible for paying all promotional expenses in connection with the Station' s programming (but excluding such expenses as incurred by Atlantic for Station programming originated by Atlantic).


iii. Broker' s personnel shall operate and maintain Atlantic' s studio, production and master control facilities, including maintaining the Station' s program and operations logs, under the supervision


6


of the Station' s General Manager and Chief Operator.


iv. Broker shall be responsible for its own telephone systems and local and long-distance telephone service and fax costs.


B. Atlantic' s Responsibilities .


Atlantic shall be responsible for and shall pay all of Atlantic own expenses of operating and maintaining the Station, including, but not limited to:


i. All lease obligations in connection with property leased to Atlantic;


ii. Utility bills for utility services at both the Station' s main studio/office location and its tower/transmitter site;


iii. Telephone system maintenance costs and local exchange and long distance telephone service costs for Atlantic' s telephone system and usage at the Station' s main studio/office location(s) and at the Station' s tower/transmitter site;


iv. Salaries, payroll taxes, insurance and other related costs of all personnel employed by Atlantic for the Station;


v. Costs of engineering and technical personnel necessary to assure compliance with the FCC' s rules and policies and maintenance and repair of the Station' s transmitting and microwave relay facilities; and


7


C. Additional Responsibilities .


i. Broker shall be fully responsible for the supervision and direction of its employees, and Atlantic shall be fully responsible for the supervision and direction of its employees.


ii. Broker and Atlantic shall pay their respective expenses with regard to the Station and in no event will any such payable remain unpaid for more than ninety (90) days unless such payable is being disputed in good faith.


iii. Except as otherwise mutually agreed, as between Atlantic and Broker, Atlantic is and will continue to be responsible for all obligations of Atlantic pursuant to any contracts of employment of Station employees and any contracts with labor unions to which Atlantic is a party.


D. Renewal, Modification and Cancellation of Contracts .


Atlantic will comply with all reasonable requests of Broker with respect to the renewal and cancellation of contracts (in accordance with their terms) or the entry into or the modification of contracts which affect Broker' s time brokerage activities with regard to the Station pursuant to this Agreement.


6. Revenues and Deposits .


A. Revenues from Post-Commencement Date Broadcast Time Sales and Uses of Station' s Studio/Production Facilities . Broker shall have the exclusive right to sell, either directly or indirectly through sales representatives, and shall be solely responsible for billing and collecting payments for, all programs


8


and commercials aired on the Station, and production fees for uses of the Station' s studio/production facilities, on or after the Commencement Date until the termination of this Agreement. Broker may contract; and bill in its own name for the sale of broadcast time on the Station and uses of the Station' s studio/production facilities on and after Commencement Date until the termination of this Agreement. Broker also shall have the right to negotiate for, subject to Atlantic' s approval, and to receive, for deposit pursuant to sub-paragraph 6.B. below, all compensation due to the Station from cable television systems pursuant to the " retransmission consent" provisions of the Cable Television Consumer Protection and Competition Act of 1992.


B. Bank Accounts for Revenues from Broker' s Activities/Payments By Broker from Such Revenues . Broker shall deposit all sums it receives pursuant to sub-paragraph 6.A. above into a bank account (or accounts) established by Broker, in Broker' s name, exclusively for this purpose (the " Station Bank Account(s)" ), and the funds in such Station Bank Account(s) shall be the property of Broker. Broker shall be authorized to endorse payments received in names other than Broker' s (e.g., " WFIL" or " WFIL-TV" ) in order to deposit such payments into the Station Bank Account(s).


7. Station Facilities .


A. Operation of Station . Atlantic represents that, upon completion of Station construction, the Station will be operated by Atlantic throughout the term of this Agreement, in all material respects in accordance with the authorizations issued to it by the FCC and all applicable FCC rules, regulations and policies. As of the Commencement Date, Atlantic shall make the


9


Station available to Broker for program transmissions, at least at ninety five percent (95%) of the Station' s currently authorized effective radiated power, for one hundred sixty-eight (168) hours per week, Sunday through Saturday, except for downtime occasioned by required maintenance and other interruptions contemplated by sub-paragraph 7.B. below and paragraph 16 of this Agreement. Any routine or non-emergency maintenance work affecting operation of the Station at full power shall be scheduled with at least forty-eight (48) hours prior notice to Broker, and shall not take place during a rating period, and to the extent possible Atlantic shall cause such maintenance work to be performed between the hours of 1:00 AM and 6:00 AM Florence local time.


B. Interruption of Normal Operations . If the Station suffers any loss or damage of any nature to its transmission or studio facilities which results in the interruption of service or the inability of the Station to operate with its maximum authorized facilities, Atlantic shall immediately notify Broker of such loss or damage and Atlantic shall undertake, subject to Broker' s prior consent, such consent not to be unreasonably withheld, such repairs as are necessary to restore full-time operation of the Station with its maximum authorized facilities as expeditiously as possible following the occurrence of any such loss or damage. If Atlantic is unable to or does not commence such repairs as soon as possible, Broker may do so on Atlantic' s behalf, and may pay for such repairs in accordance with the procedures specified in sub-paragraph 5.D. above.


C. Studio Location . Atlantic shall maintain a main studio facility, within the Station' s principal community contour,


10


and shall staff the Station consistent with the FCC' s rules and policies.


8. Handling of Station Communications . Atlantic shall receive and handle mail, faxes, telegraph messages and telephone calls in connection with the Atlantic' s operation of the Station.


9. Atlantic' s Compliance With FCC Rules and Policies . Atlantic shall comply in all material respects with all FCC rules and policies applicable to its operation of the Station. Without limiting the foregoing sentence, Atlantic' s obligations shall include ascertaining the needs and interests of the Station' s service area, maintaining the Station' s political broadcasting and public inspection files and the Station' s maintenance logs, meeting equal employment opportunity requirements with regard to Atlantic' s employees, preparing the Station' s quarterly issues/programs lists and making all required FCC filings.


10. Programming and the Public Interest . Throughout the term of this Agreement, unless otherwise agreed to by the parties hereto, Broker shall program the Station so as to maintain a general, advertiser-supported, entertainment/sports format, with some mix permitted of home shopping, religious, foreign language and infomercial programming. The Station shall not become predominantly a home shopping, religious, foreign language and/or infomercial station. The programming selected by Broker shall consist of such materials as are determined by Broker to be appropriate and/or in the public interest including, without limitation, public affairs programming, public service announcements, entertainment, news, weather reports, sports, promotional material, commercial material and advertising. Without


11


limiting the foregoing sentence, Broker will program at least a total of one and one-half hours per week of news, public affairs, or other non-sports, non-entertainment programming, between the hours of 6:00 AM and 12:00 Midnight. Generally, Broker will air over the Station an amount of informational programming (which may be news, public affairs or other informational programming, including PSAs) at least equal to the total amount of such programming aired over Station WPDE-TV.


Following the commencement of Broker programming on the Station, Broker' s management personnel as designated by Broker will meet at least twice per month with Atlantic' s Station Manager in order to help formalize Atlantic' s oversight over Broker' s activities at the Station. At such meetings, Atlantic will provide Broker with the results of Atlantic' s ongoing efforts to ascertain the problems, needs and interests of the Station' s service area, so that the programming and public service announcements selected and/or scheduled by Broker will be responsive thereto. In the event Atlantic determines that additional attention should be directed to particular community needs, Broker will cooperate to assure that Station' s locally-produced programming serves those needs. In the event Atlantic decides that additional local programming must be aired over the Station in order to better serve viewers' problems, needs and interests, Broker will cooperate with Atlantic in producing up to one hour weekly of such programming using the appropriate facilities of Station and staff of Broker. If Atlantic acquires syndicated programming (" Additional Syndicated Programming" ) or if Atlantic uses the Station' s staff for the production of local programs in addition to the informational and


12


public affairs programming described above in this paragraph 10 (" Additional Local Programming" ) and in addition to the one hour per week specified in the immediately preceding sentence, then all expenses for such additional programming (including fees to Broker for use of Broker' s facilities, in accordance with a schedule adopted by Broker) will be paid by Atlantic and will not be included in the calculation of Broker payments due Atlantic under this Agreement. Such programs will be aired at a mutually agreeable time between 6:00 AM and midnight.


Broker shall provide Atlantic with all documents it receives which are required to be placed in the Station' s political or public inspection files. Broker shall, upon reasonable request by Atlantic, provide Atlantic with information with respect to programs and public service announcements broadcast on the Station which are responsive to the problems, needs and issues facing the residents of the Station' s service area, and Broker' s programming for children, so as to assist Atlantic in the preparation of required programming reports, and will assist Atlantic upon request in compiling such other information which is reasonably necessary to enable Atlantic to prepare other records and reports required by the FCC or other government agencies.


Atlantic shall have the full and unrestricted right to reject, delete and not broadcast any material contained in any part of the programming selected and/or scheduled by Broker which Atlantic in good faith determines is unsuitable for broadcast or the broadcast of which Atlantic in good faith concludes would be contrary to law or the public interest. Atlantic shall retain ultimate control over the Station' s policies and standards, and, in that regard,


13


shall adopt written standards, generally in accordance with industry standards for commercial television broadcast stations, in substantially the same form and substance as Exhibit C attached hereto, for the acceptance of programming material and commercial announcements. Atlantic retains the right to modify such standards to conform to general industry standards or to meet specific FCC rules and policies and to take any other actions necessary for compl ...