Time Brokerage Agreement - Sinclair Communications Inc., River City Broadcasting LP, River City License Partnership and Sinclair Broadcast Group Inc.
TIME BROKERAGE AGREEMENT
This TIME BROKERAGE AGREEMENT (the "Agreement") is entered into on this
31st day of May, 1996, by and among Sinclair Communications, Inc., a Maryland
corporation ("Programmer"), River City Broadcasting, L.P., a Delaware limited
partnership, River City License Partnership, a Missouri general partnership
(collectively, "Owner"), and, for the limited purposes stated herein, Sinclair
Broadcast Group, Inc., a Maryland corporation ("SBG").
RECITALS:
WHEREAS, River City License Partnership is the licensee, pursuant to
authorizations issued by the Federal Communications Commission ("FCC"), of the
television and radio stations listed on Attachment A hereto (collectively, the
"Stations" and each individually, the "Station");
WHEREAS, River City Broadcasting, L.P. owns certain assets used in
connection with the business and operations of the Stations and is a general
partner of River City License Partnership;
WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement
dated as of April 10, 1996, as Amended and Restated as of May 31, 1996 (the
"Asset Purchase Agreement"), Programmer purchased certain assets of River City
Broadcasting, L.P.;
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WHEREAS, on this date, Programmer and Owner have entered into the Group
I Option Agreement pursuant to which Owner has granted to Programmer an option
to acquire certain of the assets and the FCC licenses held by Owner in
connection with its ownership and operation of the Stations;
WHEREAS, Programmer is experienced in broadcast ownership and
operation;
WHEREAS, during the term of this Agreement, Owner wishes to retain
Programmer to provide programming and related services for the Stations, all in
conformity with Station policies and procedures, FCC rules and policies for time
brokerage arrangements, and the provisions hereof;
WHEREAS, Programmer agrees to use the Stations to broadcast such
programming of its selection that is in conformity with all rules, regulations
and policies of the FCC, subject to Owner's full authority to manage and control
the operation of the Stations; and
WHEREAS, Programmer and Owner agree to cooperate to make this
Agreement work to the benefit of the public and both parties and as contemplated
by the terms set forth herein.
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 USE OF STATION AIR TIME.
1.1 Scope. During the term of this Agreement, Owner shall make
available to Programmer broadcast time on the Station as set forth in this
Agreement. Programmer shall deliver such programming, at its expense, to the
Station's transmitter or other authorized remote control point designated by
Owner. Subject to the provisions of Section 4.8 hereof, Programmer
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shall provide such programming of Programmer's selection complete with
commercial matter, news, public service announcements and other suitable
programming to the Station for at least one hundred and sixty-six (166) hours
per week. Except as otherwise provided in this Agreement, Owner agrees to
broadcast such programming in its entirety, including commercials at the times
specified, on the facilities of the Station without interruption, deletion, or
addition of any kind. Owner may use such time as it may require up to two (2)
hours per week, for the broadcast of its own regularly-scheduled news, public
affairs, and other non-entertainment programming on the Station. Owner may elect
to set aside additional air time (up to two (2) hours per week) (the "Additional
Time") to be scheduled at a mutually agreeable time, for the broadcast of
specific non-entertainment programming on issues of importance to the local
community. Owner shall provide Programmer with as much notice as possible, but
in no event less than three (3) weeks' notice, of its intention to set aside
such Additional Time. All program time not reserved by or designated for Owner
shall be available for use by Programmer. Owner agrees that Programmer may sell,
or engage a third party to sell, commercial time during the programming provided
by Programmer to the Station for Programmer's account.
1.2 Consideration. As consideration for the air time made available
hereunder and the other agreements of the parties made hereunder, Programmer
agrees to pay Owner the payments set forth in Attachment 1.2 hereto.
Notwithstanding any provision of this Agreement to the contrary, in the event of
a preemption by Owner of Programmer's programming under Sections 1.1, with
respect to the Additional Time only, 3.2, 4.1 or 4.2 of this Agreement, the
Monthly Payment as defined in Attachment 1.2 shall be reduced by an amount equal
to (a) the amount of the Monthly Payment multiplied by (b) a fraction the
numerator of which is the
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number of minutes of Programmer's programming preempted by Owner during such
month and the denominator of which is the total number of minutes of programming
provided by Programmer for the Station for such month.
1.3 Term. This Agreement shall commence for all Stations on May 31,
1996 (the "Effective Date"), and end with respect to any one Station on the date
of consummation of the purchase of the License Assets of such Station, as
defined by and contemplated under the Group I Option Agreement (the "Term"),
unless terminated earlier pursuant to any of the provisions of Section 5 hereof.
SECTION 2 STATION OPERATIONS.
2.1 Owner Control Over Station Operations.
(a) Owner shall retain full authority, power and control over
the management and operations of the Stations during the Term of this Agreement,
including specifically control over its personnel, programming and finances.
(b) Subject to Owner's full authority, power and control over
the management and operations of the Stations, Programmer agrees to provide
programming and related services to the Stations. Such related services shall
include: (i) the sale of advertising time on the Stations; (ii) coordination of
traffic and billing functions; (iii) maintenance, repair and replacement of the
Station's transmitting or studio equipment and the other License Assets,
provided, however, that Programmer shall not make any modifications to or
replace any material items of the License Assets without Owner's prior written
authorization; and (iv) other administrative or operational functions as Owner
may from time to time assign to Programmer consistent with FCC rules and
regulations relating to time brokerage agreements. Programmer
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shall provide and perform its obligations hereunder, including all related
services, diligently and in a manner consistent with broadcast industry
practices.
(c) Owner shall employ at the Station's main studio location,
at Owner's expense, at least two full-time employees, including a Station
Manager and a staff level employee, who will direct the day-to-day operations of
the Station, and who will report to and be accountable to Owner.
(d) When on the Owner's premises, all employees of Programmer
used to provide Programmer's programming or other services to the Stations shall
be subject to the overall supervision of Owner's management personnel.
2.2 Station Expenses.
(a) During the Term of this Agreement, and subject to timely
receipt of the Monthly Payment specified in Attachment 1.2, Owner shall be
responsible for and pay in a timely manner all operating, capital and other
expenses of the Stations, including but not limited to those expenses set forth
in Attachment 2.2(a).
(b) During the Term of this Agreement, Programmer shall be
responsible for and pay in a timely manner all costs incurred by Programmer in
the performance of its obligations hereunder, including but not limited to those
expenses set forth in Attachment 2.2(b).
SECTION 3 STATION PUBLIC INTEREST OBLIGATIONS.
3.1 Owner Authority. Owner shall be responsible 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. Programmer shall cooperate with Owner, at Programmer's
expense, in taking such actions as Owner may reasonably request
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to assist Owner in maintaining the Station's compliance with the Act, rules,
regulations and policies of the FCC and all other applicable laws.
Notwithstanding any other provision of this Agreement, Programmer recognizes
that Owner has certain obligations to operate the Stations in the public
interest, and to broadcast programming to meet the needs and interests of the
Station's community of license, the Station's service area and with respect to
Owner's television Stations, the educational and informational needs of
children. From time to time Owner shall air, or if Owner requests, Programmer
shall air, programming on issues of importance to the local community and, with
respect to Owner's television Stations, educational and informational
programming for children aged 16 years and younger. Nothing in this Agreement
shall abrogate or limit the unrestricted authority of Owner to discharge its
obligations to the public and to comply with the Act and the rules, regulations
and policies of the FCC and Owner shall have no liability or obligation to
Programmer, except as set forth in Section 1.2, for taking any action that it
deems necessary or appropriate to discharge such obligations or comply with such
laws, rules, regulations or policies.
3.2 Additional Owner Obligations. Although both Owner and Programmer
shall cooperate in the broadcast of emergency information over the Station,
Owner shall retain the right, without any liability or obligation to Programmer,
to interrupt Programmer's programming in case of an emergency or for programming
which, in the good faith judgment of Owner, is of greater local or national
public importance. Owner shall coordinate with Programmer the Station's hourly
station identification and any other announcements required to be aired by FCC
rules or regulations. Owner shall (i) continue to maintain and staff a main
studio, as that term is defined by the FCC, for the Station within the Station's
principal community contour, (ii)
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maintain the Station's local public inspection file within the Station's
community of license, and (iii) prepare and place in such inspection file in a
timely manner all material required by Section 73.3526 of the FCC's Rules,
including without limitation the Station's quarterly issues and program lists,
and with respect to Owner's television Stations, 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 Owner,
promptly provide Owner with such information concerning Programmer's programs
and advertising as is necessary to assist Owner in the preparation of such
information or to enable Owner to verify independently each television Station's
compliance with the Children's Television Act and the Station's compliance with
any other laws, rules, regulations or policies applicable to the Station's
operation. Owner shall also maintain the station logs, receive and respond to
telephone inquiries, and control and oversee any remote control point for the
Station.
SECTION 4 STATION PROGRAMMING POLICIES.
4.1 Broadcast Station Programming Policy Statement. Owner has adopted a
Broadcast Station Programming Policy Statement (the "Policy Statement"), a copy
of which appears as Attachment 4.1 hereto and which may be amended from time to
time by Owner upon notice to Programmer. Programmer agrees and covenants to
comply in all material respects with the Policy Statement, with all rules and
regulations of the FCC, and with all changes subsequently made by Owner 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
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and with the Policy Statement. All advertising spots and promotional material or
announcements shall comply with all applicable federal, state and local
regulations and policies and the Policy Statement, and shall be produced in
accordance with quality standards established by Programmer. If Owner determines
that a program, commercial announcement or promotional material supplied by
Programmer is for any reason, in Owner's sole discretion, unsatisfactory or
unsuitable or contrary to the public interest, or does not comply with the
Policy Statement it may, upon written notice to Programmer (to the extent time
permits such notice), and without any liability or obligation to Programmer,
except as set forth in Section 1.2, suspend or cancel such program, commercial
announcement or promotional material and substitute its own programming or, if
Owner requests, Programmer shall provide promptly suitable programming,
commercial announcement or other announcement or promotional material.
4.2 Owner Control of Station Programming. Notwithstanding any contrary
provision contained in this Agreement, and consistent with Owner's obligations
pursuant to the Act and the rules and regulations of the FCC, Owner shall have
the right, without any liability or obligation to Programmer, except as set
forth in Section 1.2, to delete any material contained in any programming or
commercial matter furnished by Programmer for broadcast over the Station that
Owner determines is unsuitable for broadcast or the broadcast of which Owner
believes would be contrary to the public interest. Owner shall have the right,
without any liability or obligation to Programmer, except as set forth in
Section 1.2 to broadcast Owner's own programming in place of such deleted
material.
4.3 Political Advertising. Owner shall oversee and shall take ultimate
responsibility for the Station's compliance with the political broadcasting
rules of the FCC and Sections 312
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and 315 of the Act, including but not limited to, the provision of equal
opportunities, compliance with lowest unit charge requirements, and the
provision of reasonable access to federal political candidates. Programmer shall
cooperate with Owner, at Programmer's expense, to assist Owner in complying with
the political broadcasting rules of the FCC. Programmer shall supply such
information promptly to Owner as may be necessary to comply with the lowest unit
charge and other applicable political broadcast requirements of federal law. To
the extent that Owner deems necessary or appropriate, Programmer shall release
advertising availabilities to Owner to permit Owner to comply with the political
broadcasting rules of the FCC and Sections 312 and 315 of the Act. Programmer
shall be entitled to all revenues received by Owner for such advertising.
4.4 Advertising of Credit Terms. To the extent prohibited by the rules
of the Federal Trade Commission, no advertising of credit terms shall be made
over broadcast material supplied hereunder by Programmer beyond mention of the
fact that credit terms are available.
4.5 Payola/Plugola. In order to enable Owner to fulfill its obligations
under Section 317 of the Act, Programmer, in compliance with Section 507 of the
Act, will, in advance of any scheduled broadcast by a Station, disclose to Owner
any information of which Programmer has knowledge or which has been disclosed to
Programmer as to any money, service, or other valuable consideration that any
person has paid or accepted, or has agreed to pay or to accept, for the
inclusion of any matter as a part of the programming or commercial matter to be
supplied to Owner pursuant to this Agreement. Programmer will cooperate with
Owner, at Programmer's expense, as necessary to ensure compliance with this
provision. Commercial matter with obvious sponsorship identifications shall not
require disclosure in addition to that contained in the commercial copy.
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4.6 Children's Television Advertising. Programmer agrees that it will
not broadcast on any television Station advertising in programs originally
designed for children aged 12 years and under in excess of the amounts permitted
under applicable FCC rules.
4.7 Programmer Compliance with Copyright Act. Programmer represents and
warrants that Programmer will have full authority to broadcast the programming
on the Stations, and that Programmer shall not broadcast any material in
violation of the Copyright Act. The performing rights to all music contained in
broadcast material supplied hereunder by Programmer are licensed by BMI, ASCAP,
or SESAC, are in the public domain, are controlled by Programmer, or are cleared
at the source by Programmer.
4.8 Owner Programming Agreements. Notwithstanding any provision of this
Agreement to the contrary, Programmer agrees to broadcast on the Station, at the
times required, the programs that Owner is required to air on the Station
pursuant to its obligations under the agreements listed on Attachment 4.8
hereto. The broadcast of such programs by Programmer shall not reduce in any
manner (a) any of the broadcast time on the Station reserved by Owner, pursuant
to Section 1.1 hereof for the broadcast of Owner's non-entertainment programming
or (b) the Monthly Payment owed to Owner under the provisions of Attachment 1.2.
SECTION 5 TERMINATION.
5.1 Termination by Programmer. Unless terminated pursuant to the
provisions of Section 1.3, this Agreement may be terminated by Programmer with
respect to any Station or all Stations, by written notice to Owner, if
Programmer is not then in material default or breach hereof, upon the occurrence
of any of the following:
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(a) upon termination by Programmer of the Option for such
Station under the Group I Option Agreement, provided that in such event, the
termination of this Agreement shall be effective as of the date that is three
(3) months following termination of said Option;
(b) Owner is in material breach of its material obligations
hereunder or under the Group I Option Agreement and has failed to cure such
breach within thirty (30) days of notice from Programmer; or
(c) the mutual consent of both parties.
5.2 Termination by Owner. Unless terminated pursuant to the provisions
of Section 1.3, this Agreement may be terminated by Owner with respect to any
Station or all Stations, by written notice to Programmer, if Owner is not then
in material default or breach hereof, upon the occurrence of any of the
following:
(a) upon the date of termination by Owner of the Option for
such Station under the Group I Option Agreement;
(b) Programmer is in material breach of its material
obligations hereunder or under the Group I Option Agreement and has failed to
cure such breach within thirty (30) days of notice from Owner;
(c) Programmer is in material breach of its obligations under
the Group I Option Agreement and its then existing senior credit facility and
has failed to cure such breach within ninety (90) days of notice from Owner; or
(d) the mutual consent of both parties.
5.3 Termination for All Stations. This Agreement will terminate with
respect to all Stations, upon the occurrence of any of the following:
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(a) 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; or
(b) there has been a material change in FCC rules or policies
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,
provided that in such event the parties shall first negotiate in good faith and
attempt to agree on an amendment to this Agreement that will provide the parties
with a valid, binding and enforceable agreement that conforms to the new FCC
rules, policies or precedent.
5.4 Expiration of Option. Notwithstanding the provisions of Sections
5.1 and 5.2 hereof, this Agreement shall terminate with respect to a Station
immediately upon the expiration of the Exercise Period, as defined in the Group
I Option Agreement, if the Option relating to such Station has not been
exercised within the Exercise Period.
5.5 Continuation of Agreement. Notwithstanding any termination of this
Agreement with respect to a Station under Sections 5.1, 5.2, or 5.4, this
Agreement shall continue in full force and effect for all Stations for which
such termination is not effective.
5.6 Severability. It is the intent of the parties hereto that the
transactions contemplated hereunder comply in all respects with the Act and all
applicable rules, regulations, and policies of the FCC. If any provision of this
Agreement shall be declared void, illegal, or invalid by any governmental
authority with jurisdiction thereof, the remainder of this Agreement shall
remain in full force and effect without such offending provision so long as such
remainder substantially reflects the original agreement of the parties
hereunder. Furthermore, in such
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event, the parties shall use their commercially reasonable efforts to reach
agreement promptly on lawful substitute provisions in place of said offending
provision so as to effectuate more closely their intent as expressed hereunder.
If any governmental authority grants to any other entity or individual rights
which are not contained in this Agreement, then the parties shall use their
commercially reasonable efforts to amend this Agreement to provide the parties
hereto such lawful provisions which comport with any rules, regulations and
policies adopted after the date of this Agreement.
5.7 Force Majeure. Any failure or impairment of the License Assets 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 or any other cause not reasonably within the control of
Owner, shall not constitute a breach of this Agreement and Owner will not be
liable to Programmer for any liability or obligation with respect thereto,
including without limitation, any reimbursement obligation.
5.8 Insurance; Risk of Loss.
(a) During the Term of this Agreement, Owner shall maintain
insurance with respect to the License Assets as provided in Section 5.1 of the
Group I Option Agreement and shall cause Programmer to be named as an additional
insured on Owner's policies as required in Section 5.1 of the Group I Option
Agreement. The risk of any loss, damage, impairment, confiscation, or
condemnation of any equipment or other personal property owned and used by Owner
in the business and operations of the Station shall be borne by Owner at all
times during the Term of this Agreement, to the extent of, but solely to
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the extent of, Owner's receipt of insurance proceeds in respect thereof and in
no event shall Owner have any liability or obligation to Programmer in respect
of any such loss, damage, impairment, confiscation or condemnation. Owner shall
use such proceeds of insurance to repair or replace any such equipment or such
other personal property of Owner to the extent of such proceeds. At Owner's
request and subject to Owner's supervision and direction, Programmer shall
effect in a timely fashion any repairs to or replacement of any of Owner's
damaged equipment or property.
(b) During the Term of this Agreement, Programmer shall
maintain with reputable insurance companies reasonably acceptable to Owner,
insurance in such amounts and with respect to such risks, as reasonably
requested by Owner, and Programmer shall comply with the provisions of Section
6.5 of the Group I Option Agreement. The risk of any loss, damage, impairment,
confiscation, or condemnation of any equipment or other personal property owned
or leased and used by Programmer in the performance of its obligations hereunder
shall be borne by Programmer at all times during the Term of this Agreement.
SECTION 6 INDEMNIFICATION.
6.1 Indemnification by Programmer. Programmer shall indemnify and hold
harmless Owner from and against any and all claims, losses, costs, liabilities,
damages, expenses, including any FCC fines or forfeitures (including reasonable
legal fees and other expenses incidental thereto), of every kind, nature and
description (collectively "Damages") arising or resulting from or relating to
(a) Programmer's breach of any covenant, agreement or other obligation of
Programmer contained in this Agreement, (b) any action taken by Programmer or
its employees and agents with respect to the Stations, or any failure by
Programmer or its
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employees and agents to take any action with respect to the Stations, including,
without limitation, 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 or Programmer's broadcast and sale of
advertising time on the Stations, or (c) the business or operations of the
Stations (except where the Damages are caused by Owner's gross negligence,
willful misconduct, or a breach of its obligations under this Agreement) from
and after the date of this Agreement.
6.2 Indemnification by Owner. Owner shall indemnify and hold harmless
Programmer from and against any and all claims, losses, costs, liabilities,
damages, expenses, including any FCC fines or forfeitures (including reasonable
legal fees and other expenses incidental thereto), of every kind, nature and
description, arising out of Owner's breach of its obligations under this
Agreement or its ownership of the Station.
6.3 Indemnification Procedure. Neither Owner 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, together
with a statement as to the factual basis for the claim and the amount of the
claim. The party making the claim (the "Claimant") shall make available to the
other party (the "Indemnitor") the information relied upon by the Claimant to
substantiate the claim. The Indemnitor under this Section 6.3 shall have the
right to conduct and control through counsel of its own choosing the defense of
any third party claim, action or suit (and the Claimant shall cooperate fully
with the Indemnitor), but the Claimant may, at its election, participate in the
defense of any such claim, action or suit at its sole cost and expense provided
that, if the Indemnitor shall fail to defend any such claim, action or suit,
then the
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Claimant may defend through counsel of its own choosing such claim, action or
suit, and (so long as it gives the Indemnitor at least fifteen (15) days' notice
of the terms of the proposed settlement thereof and permits the Indemnitor to
then undertake the defense thereof) settle such claim, action or suit, and to
recover from the Indemnitor the amount of such settlement or of any judgment and
the costs and expenses of such defense. The Indemnitor shall not compromise or
settle any third party claim, action or suit without the prior written consent
of the Claimant, which consent will not be unreasonably withheld or delayed.
6.4 Arbitration. To the fullest extent not prohibited by law, any
controversy, claim or dispute arising out of or relating to Section 6 of this
Agreement, including the determination of the scope or applicability of this
Agreement to arbitrate, shall be settled by final and binding arbitration in
accordance with the rules then in effect of the American Arbitration Association
("AAA"), as modified or supplemented under this section, and subject to the
Federal Arbitration Act, 9 U.S.C. ss.ss. 1-16. The decision of the arbitrators
shall be final and binding provided that, where a remedy for breach is
prescribed hereunder or limitations on remedies are prescribed, the arbitrators
shall be bound by such restrictions, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
If any series of claims arising out of the same or related transactions
shall involve claims which are arbitrable under the preceding paragraph and
claims which are not, the arbitrable claims shall first be finally determined
before suit may be instituted upon the others and the parties will take such
action as may be necessary to toll any statutes of limitations, or
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defenses based upon the passage of time, that are applicable to such
non-arbitrable claims during the period in which the arbitrable claims are being
determined.
In the event of any controversy, claim or dispute that is subject to
arbitration under this Section 6.4, any party thereto may commence arbitration
hereunder by delivering notice to the other party or parties thereto. The
arbitration panel shall consist of three (3) arbitrators, appointed in
accordance with the procedures set forth in this paragraph. Within ten (10)
business days of delivery of the notice of commencement of arbitration referred
to above, Owner, on the one hand, and Programmer, on the other hand, shall each
appoint one arbitrator, and the two arbitrators so appointed shall within ten
(10) business days of their appointment mutually agree upon and appoint one
additional arbitrator (or, if such arbitrators cannot agree on an additional
arbitrator, the additional arbitrator shall be appointed by the AAA as provided
under its rules); provided, that persons eligible to be selected as arbitrators
shall be limited to attorneys at law who (i) are on the AAA's Large, Complex
Case Panel, (ii) have practiced law for at least fifteen (15) years as an
attorney specializing in either general commercial litigation or general
corporate and commercial matters, and (iii) are experienced in matters involving
the broadcasting industry.
The arbitration hearing shall commence no later than thirty (30)
business days after the completion of the selection of the arbitrators.
Consistent with the intent of the parties hereto that the arbitration be
conducted as expeditiously as possible, the parties agree that (i) discovery
shall be limited to the production of such documents and the taking of such
depositions as the arbitrators determine are reasonably necessary to the
resolution of the controversy, claim or dispute and (ii) the arbitrators shall
limit the presentation of evidence by
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each side in such arbitration to not more than ten (10) full days' (or the
equivalent thereof) or such shorter period as the arbitrators shall determine to
be necessary in order to resolve the controversy, claim or dispute. The
arbitrators shall be instructed to render a decision within ten (10) business
days of the close of the arbitration hearing. If arbitration has not been
completed within ninety (90) days of the commencement of such arbitration, any
party to the arbitration may initiate litigation upon ten (10) days' written
notice to the other party(ies); provided, however, that if one party has
requested the other to participate in an arbitration and the other has failed to
participate, the requesting party may initiate litigation before the expiration
of such ninety-day period; and provided further, that if any party to the
arbitration fails to meet any of the time limits set forth in this Section 6.4
or set by the arbitrators in the arbitration, any other party may provide ten
(10) days' written notice of its intent to institute litigation with respect to
the controversy, claim or dispute without the need to continue or complete the
arbitration and without awaiting the expiration of such ninety-day period. The
parties hereto further agree that if any of the rules of the AAA are contrary to
or conflict with any of the time periods provided for hereunder, or with any
other aspect of the matters set forth in this Section 6.4, that such rules shall
be modified in all respects necessary to accord with the provisions of this
Section 6.4 (and the arbitrators shall be so instructed by the parties).
The arbitrators shall base their decision on the terms of this
Agreement and applicable law and judicial precedent which a United States
District Court sitting in the District of Maryland (Southern Division) would
apply in the event the dispute were litigated in such court, and shall render
their decision in writing and include in such decision a statement of
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the findings of fact and conclusions of law upon which the decision is based.
Each party agrees to cooperate fully with the arbitrator(s) to resolve any
controversy, claim or dispute. The arbitrators shall not be empowered to award
punitive damages or damages in excess of actual damages. The venue for all
arbitration proceedings shall be Rockville, Maryland.
6.5 Damages; Specific Performance. In the event of a material breach by
either party of its obligations hereunder, the non-breaching party shall be
entitled to seek monetary damages against the party in breach. The parties
recognize that given the unique nature of the Station and this Agreement,
monetary damages alone will not be adequate to compensate Programmer for any
injury resulting from Owner's breach. Programmer shall therefore be entitled, in
addition to a right to seek and collect monetary damages, to obtain specific
performance of the terms of this Agreement. If any action is brought by
Programmer to enforce this Agreement, Owner shall waive the defense that there
is an adequate remedy at law.
SECTION 7 MISCELLANEOUS.
7.1 Assignment. This Agreement shall not be assigned by any party
hereto without the prior written consent of the other party, which consent shall
not be unreasonably withheld, except that Programmer may assign its rights and
interests hereunder (a) to any party that is qualified to be an owner of the
License Assets and the Stations under the Act and the existing rules,
regulations and policies of the FCC or (b) a direct or indirect wholly-owned
subsidiary of Programmer provided that (1) Programmer gives Owner written notice
of any such assignment; (2) such assignment shall not relieve Programmer of any
of its obligations or liabilities hereunder; and (3) such assignment would not
violate any applicable laws, rules, regulations or policies of any applicable
governmental authority. It is understood and agreed that nothing
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herein shall be deemed to expand the rights granted hereunder to any permitted
assignee, which rights shall be in combination with, and not in addition to, the
rights of Programmer. This Agreement shall be binding on the parties' respective
heirs and assigns.
7.2 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and, except for the Asset Purchase Agreement, the Group I Option Agreement and
to the extent applicable, the Modification Agreement dated May 10, 1996 between
River City Broadcasting, L.P. and SBG, and the letter dated May 10, 1996 from
the parties' counsel to the Department of Justice in connection therewith, and
documents delivered pursuant thereto, supersedes any and all prior agreements,
broadcasting commitments, or any other understandings between Programmer and
Owner with respect to such subject matter. No provision of this Agreement shall
be changed or modified, nor shall this Agreement be discharged in whole or in
part, except by an agreement in writing signed by the party against whom the
change, modification, or discharge is claimed or sought to be enforced, nor
shall any waiver of any of the conditions or provisions of this Agreement be
effective and binding unless such waiver shall be in writing and signed by the
party against whom the waiver is asserted, and no waiver of any provision of
this Agreement shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision.
7.3 Further Assurances. Owner and Programmer shall use commercially
reasonable best efforts in the performance and fulfillment of the terms and
conditions of this Agreement in effectuating the intent of such parties as
expressed under this Agreement. From time to time, without further
consideration, Owner and Programmer shall execute and deliver such other
<PAGE>
-21-
documents and take such other actions as either party hereto reasonably may
request to effectuate such intent.
7.4 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each such counterpart
were upon the same instrument.
7.5 Notices. All notices, demands and other communications which may or
are required to be given hereunder or with respect hereto shall be in writing,
shall be delivered personally or sent by nationally recognized overnight
delivery service, charges prepaid, or by registered or certified mail,
return-receipt requested, or by facsimile transmission, and shall be deemed to
have been given or made when personally delivered, the next business day after
delivery to such overnight delivery service, when dispatched by facsimile
transmission, five (5) days after deposited in the mail, first class postage
prepaid, addressed as follows:
(a) If to Owner:
River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106-3897
Attn.: Mr. Barry Baker and Mr. Larry D. Marcus
Telecopier: (314) 259-5709
with a copy to:
Dow, Lohnes & Albertson A Professional
Limited Liability Company 1200 New Hampshire
Ave., N.W.
Suite 800
Washington, D.C. 20036-6802
Attn.: Kevin F. Reed, Esq.
Telecopier: (202) 776-2222
and
<PAGE>
-22-
Baker & Botts
800 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201-2916
Attn.: Andrew M. Baker, Esq.
Telecopier: (214) 953-6503
or to such other address as Owner may from time to time designate.
(b) If to Programmer or SBG:
Sinclair Broadcast Group, Inc.
Sinclair Communications, Inc.
2000 W. 41st Street
Baltimore, Maryland 21211
Attn.: Mr. David D. Smith
Telecopier: (410) 467-5043
with a copy to:
Thomas & Libowitz, P.A.
The USF&G Tower
100 Light Street
Suite 1100
Baltimore, Maryland 21202-1053
Attn.: Steven A. Thomas, Esq.
Telecopier: (410) 752-2046
and
Fisher Wayland Cooper Leader & Zaragoza, LLP
2001 Pennsylvania Avenue, N.W.
Suite 400
Washington, D.C. 20006-1851
Attn.: Martin R. Leader, Esq.
Telecopier: (202) 296-6518
or to such other address as Programmer may from time to time designate.
7.6 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Maryland, without regard to its choice
of law rules.
<PAGE>
-23-
7.7 Taxes. Owner and Programmer shall each pay its own ad valorem
taxes, if any, which may be assessed on such party's 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 1.2 herein is subject,
provided that Owner shall be responsible for payment of its own income taxes.
7.8 No Joint Venture or Partnership. Programmer shall act as an
independent contractor in rendering its services hereunder. Programmer shall
have no power or authority to act for or on behalf of Owner or to bind Owner in
any manner whatsoever, except as and to the extent expressly provided for in
this Agreement. The parties hereto agree that nothing herein shall constitute a
joint venture or partnership between them.
7.9 Headings. The headings in this Agreement are for convenience only
and will not affect or control the meaning or construction of the provisions of
this Agreement.
7.10 Guaranty.
(a) By its signature below, for value received and in
consideration of Owner entering into this Agreement, SBG (referred to in this
Section 7.10 as the "Guarantor") hereby unconditionally guarantees to Owner the
full amount and prompt performance by Programmer of all of Programmer's
obligations under this Agreement. This guaranty is a guaranty of payment and/or
performance, as the case may be. The Guarantor hereby waives demand,
presentment, protest and notice of acceptance of this guaranty. Upon any default
by Programmer in the performance of any of its obligations under this Agreement,
the liability of Guarantor shall be effective immediately and payment or
performance shall be made by Guarantor on demand without suit or action against
Programmer. No delay or omission by Owner in exercising any
<PAGE>
-24-
right under this guaranty shall operate as a waiver of such right or any other
right. All costs incurred by Owner in connection with enforcing this guaranty
(including reasonable attorneys' fees) shall be payable by Guarantor.
(b) Guarantor represents and warrants to Owner that: (i)
Guarantor and the party executing this Agreement on behalf of the Guarantor have
the requisite corporate power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement; (ii) all
requisite corporate actions and proceedings necessary to be taken on the part of
Guarantor in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby and necessary to make
the same effective have been duly and validly taken; and (iii) this Agreement
has been duly and validly authorized, executed and delivered by Guarantor and
constitutes its valid and binding agreement, enforceable in accordance with its
terms, except as limited by laws affecting the enforcement of creditors' rights
or contractual obligations generally and by application of general principles of
equity.
<PAGE>
-25-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
OWNER:
RIVER CITY LICENSE PARTNERSHIP
By: River City Broadcasting, L.P., its General Partner
By: Better Communications, Inc., its General Partner
By: /s/ Larry D Marcus
--------------------------------------------------
Name: Larry D. Marcus
Title: Vice President
RIVER CITY BROADCASTING, L.P.
By: Better Communications, Inc., its General Partner
By: /s/ Larry D Marcus
--------------------------------------------------
Name: Larry D. Marcus
Title: Vice President
PROGRAMMER:
SINCLAIR COMMUNICATIONS, INC.
By: /s/ David B. Amy
--------------------------------------------------
Name: David B. Amy
Title: Chief Financial Officer
SINCLAIR BROADCAST GROUP, INC.
By: /s/ David B. Amy
--------------------------------------------------
Name: David B. Amy
Title: Chief Financial Officer
<PAGE>
Attachment A
------------
Stations
--------
Station City of License Service
------- --------------- -------
KDNL-TV St. Louis, Missouri TV
KOVR(TV) Stockton, California TV
KABB(TV) San Antonio, Texas TV
KDSM-TV Des Moines, Iowa TV
WLOS(TV) Asheville, North Carolina TV
WTTV(TV) Bloomington, Indiana TV
WTTK(TV) Kokomo, Indiana TV
WFBC(TV) Anderson, South Carolina TV
WVRV-FM East St. Louis, Illinois FM
KPNT(FM) Ste. Genevieve, Missouri FM
KBLA(AM) Santa Monica, California AM
WJCE-FM Russellville, Kentucky FM
WSMB(AM) New Orleans, Louisiana AM
WWL(AM) New Orleans, Louisiana AM
WLMG(FM) New Orleans, Louisiana FM
KMEZ(FM) Belle Chasse, Louisiana FM
WBEN(AM) Buffalo, New York AM
WMJQ(FM) Buffalo, New York FM
WWKB(AM) Buffalo, New York FM
WKSE(FM) Niagara Falls, New York FM
WGBI(AM) Scranton, Pennsylvania AM
WGGY(FM) Scranton, Pennsylvania FM
WILK(AM) Wilkes-Barre, Pennsylvania AM
WKRZ(FM) Wilkes-Barre, Pennsylvania FM
WJCE(AM) Memphis, Tennessee AM
WRVR-FM Memphis, Tennessee FM
WLAC(AM) Nashville, Tennessee AM
WLAC-FM Nashville, Tennessee FM
WOGY-FM Germantown, Tennessee FM
<PAGE>
Attachment 1.2
--------------
Consideration
-------------
During the Term of this Agreement, Programmer shall pay to
Owner by the first day of each month the payments set forth in Schedule I hereto
(collectively, the "Monthly Payment"). The Monthly Payment shall include those
amounts necessary to reimburse Owner for Owner's expenses set forth on
Attachment 2.2(a). The Monthly Payment shall be adjusted from time to time upon
written notice from Owner to Programmer, which notice shall specify in
reasonable detail the changes in Station expenses, to reflect any changes in
Station operating expenses that are the responsibility of Owner under this
Agreement. Notwithstanding any provision to the contrary herein, it is expressly
agreed by Owner and Programmer that any network compensation paid to or received
by Owner directly or indirectly shall be immediately paid to Programmer, or at
Owner's option, credited against the Monthly Payment to Owner.
<PAGE>
The information below marked by * and [ ], has been omitted pursuant to a
request for confidential treatment. The omitted portions have been separately
filed with the Commission.
Schedule I
River City Broadcasting
Monthly Estimated Owner Expenses
Employee Repair & Property Public Svce
Station Costs Maintenance Utility Insurance Tax Prod. Costs Other Total
KDNL [*******] [*******] [******] [******] [******] [******] [******]
KABB [*******] [*******] [******] [******] [******] [******] [******]
KDSM [*******] [*******] [******] [******] [******] [******] [******]
WTTV/ [*******] [*******] [******] [******] [******] [******] [******]
WTTK
KOVR [*******] [*******] [******] [******] [******] [******] [******]
WLOS [*******] [*******] [******] [******] [******] [******] [******]
WFBC [*******] [*******] [******] [******] [******] [******] [******]
Keymarket [*******] [*******] [******] [******] [******] [******] [******]
Total [*******] [*******] [******] [******] [******] [******] 304,999
<PAGE>
Attachment 2.2(a)
Owner Expenses
1. Expenses incurred by Owner, to the extent not paid directly by
Programmer pursuant to its obligations under Section 2.1(b),
including any capital expenditures, relating to the maintenance,
repair and replacement of the Station's transmitting and studio
equipment and other License Assets.
2. Tower, transmitter building, studio and office lease payments.
3. Utility costs.
4. Insurance as provided in Section 5.8(a) of this Agreement.
5. Salaries, benefits and taxes for all Station personnel employed by
Owner at the Station.
6. Expenditures incurred by Owner in maintaining its corporate offices
and personnel.
7. Costs incurred by Owner in airing its own non-entertainment
programming on the Station.
8. Payments made by Owner to third parties under the programming
agreements listed on Attachment 4.8 less any compensation received
by Owner under such agreements.
9. Miscellaneous Station expenses.
<PAGE>
Attachment 2.2(b)
Programmer Expenses
1. All costs associated with Programmer's provision of programming to
the Station, maintenance, repair and replacement of Programmer's
assets related to the operation of the Station, the sale of
commercial advertising time on the Station, Programmer's
coordination of traffic and billing functions and the performance
of any other administrative or operational duties assigned by Owner
to Programmer.
2. Salaries, benefits and taxes for all personnel employed by
Programmer and used by Programmer in the performance of its
obligations hereunder.
3. Insurance as provided in Section 5.8(b) of this Agreement..
<PAGE>
Attachment 4.1
Broadcast Station Programming Policy Statement
Programmer agrees to cooperate with Owner in the broadcasting
of programs of the highest possible standard of excellence and for this purpose
to observe the following regulations in the preparation, writing and
broadcasting of its programs.
I. No Plugola or Payola. Except for commercial messages aired in
compliance with 47 C.F.R.ss.73.1212, Programmer shall not receive
any consideration in money, goods, services, or otherwise, directly
or indirectly (including to relatives) from any persons or company
for the presentation of any programming over the Station without
reporting the same to Licensee's general manager. The commercial
mention of any business activity or "plug" for any commercial,
professional, or other related endeavor, except where contained in
an actual commercial message of a sponsor, is prohibited.
II. No Lotteries. Announcements giving any information about lotteries
or games prohibited by federal or state law or regulation are
prohibited.
III. Election Procedures. At least fifteen (15) days before the start of
any primary or election campaign, Programmer will clear with
Owner's Station Manager the rates Programmer will charge for the
time to be sold to candidates for the public office and/or their
supporters to make certain that the rates charged are in
conformance with applicable law and Station policy.
IV. Required Announcements. Programmer shall broadcast (i) an
announcement in a form satisfactory to Owner at the beginning of
each hour
<PAGE>
to identify the Station and (ii) any other announcements that may
be required by law, regulation, or Owner policy.
V. No Illegal Announcements. No announcements or promotion prohibited
by federal or state law or regulation shall be made over the
Station. Any game, contest, or promotion relating to or to be
presented over the Station must be fully stated and explained in
advance to Owner, which reserves the right in its sole discretion
to reject any game, contest, or promotion.
VI. Owner Discretion Paramount. In accordance with the Owner's
responsibility under the Communications Act of 1934, as amended,
and the Rules and Regulations of the Federal Communications
Commission, Owner reserves the right to reject or terminate any
advertising proposed to be presented or being presented over the
Station which is in conflict with Station policy or which in
Owner's or its Station Manager's sole judgment would not serve the
public interest.
Owner may waive any of the foregoing regulations in specific
instances, if, in its opinion, the Station will remain in compliance with all
applicable laws, rules, regulations and policies and broadcasting in the public
interest is served. In any case where questions of policy or interpretation
arise, Programmer should submit the same to Owner for decision before making any
commitments in connection therewith.
<PAGE>
Attachment 4.8
Programming Agreements
1. KDSM-TV - Fox: Station Affiliation Agreement, dated as of June 11,
1992, as amended as of June 11, 1992 and December 2, 1992, by and
between River City Broadcasting, L.P. ("RCB") and Fox Broadcasting
Company.
2. KDSM-TV - Paramount: Paramount License Agreement, dated as of November
16, 1993, by and between Paramount Pictures Corporation and RCB on
behalf of River City License Partnership.
3. KABB-TV - Fox: Station Affiliation Agreement, dated as November 18,
1994, by and between RCB and Fox Broadcasting Company.
4. KOVR-TV - CBS: Affiliation Agreement, dated as of December 9, 1994, by
and between RCB and CBS Television Network.
5. WLOS-TV - ABC: Primary Television Affiliation Agreement, dated as of
April 13, 1990, between WLOS-TV, Inc. and American Broadcasting
Companies, Inc. ("ABC"), as assumed by RCB as of September 8, 1994.
6. WLOS-TV: RCB has negotiated a new agreement with ABC which is currently
not executed. 1/
7. WFBC-TV - ABC: Satellite Television Affiliation Agreement, dated as of
September 8, 1994, by and between RCB and American Broadcasting
Companies, Inc. 2/
----------
1/ Note that this agreement is not executed. No representation or warranty is
made by RCB regarding the effectiveness or noneffectiveness of this agreement.
To the extent RCB has any post-Effective Date rights and obligations under any
affiliation agreement on this schedule, RCB transfers such rights and
obligations to Programmer, but without any admission by RCB that RCB has any
rights or obligations thereunder. In addition to requiring consent to transfer
this agreement to a third party, the current draft of this agreement presently
requires that the consent of ABC be obtained by RCB prior to entering into any
local marketing or time brokerage agreement whereby another television station
provides programming to RCB's station.
2/ During the term of this agreement, WFBC-TV became an independent station
and no longer rebroadcasts ABC programming. As a result, this agreement may no
longer be in force and effect however, to the extent RCB has any rights or
obligations thereunder, they are incorporated into this schedule by this
reference.
<PAGE>
8. WTTV-TV/WTTK-TV - Paramount: Station Affiliation Agreement, dated as of
November 16, 1993, by and between Parmount Pictures Corporation and RCB
on behalf of River City License Partnership.
9. KDNL-TV - Paramount: Paramount License Agreement, dated as of November
16, 1993, by and between Paramount Pictures Corporations and RCB on
behalf of River City License Partnership.
10. KDNL-TV: RCB is negotiating an affiliation agreement with ABC. 3/
--------
3/ Note that this agreement is not executed. No representation or warranty is
made by RCB regarding the effectiveness or noneffectiveness of this agreement.
To the extent RCB has any post-Effective Date rights and obligations under any
affiliation agreement on this schedule, RCB transfers such rights and
obligations to Programmer, but without any admission by RCB that RCB has any
rights or obligations thereunder. In addition to requiring consent to transfer
this agreement to a third party, the current draft of this agreement presently
requires that the consent of ABC be obtained by RCB prior to entering into any
local marketing or time brokerage agreement whereby another television station
provides programming to RCB's station.