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EXHIBIT 10.69
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EXHIBIT 10.69
LOAN AND OPTION AGREEMENT
DATED AS OF DECEMBER 17, 1993
BY AND BETWEEN
THE CHRISTIAN NETWORK, INC.
AND
BRADENTON BROADCAST TELEVISION COMPANY, LTD.
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LOAN AND OPTION AGREEMENT
This LOAN AND OPTION AGREEMENT is made as of December 17, 1993, by and
between Bradenton Broadcast Television Company, Ltd., a Florida limited
partnership ("BBTC"), and The Christian Network, Inc., a Florida non-profit
corporation ("CNI").
RECITALS
A. BBTC is currently constructing commercial television station
WTBG-TV, Channel 66, in Bradenton, Florida (the "Station"), pursuant to a
construction permit (File No. BALCT-930624KG) issued by the Federal
Communications Commission (the "Permit").
B. BBTC has requested that CNI make, and CNI has agreed to make,
a line of credit in an amount not to exceed Three Million One Hundred Thousand
Dollars ($3,100,000) available to BBTC, on the terms and conditions set forth
herein.
C. To induce CNI to extend the line of credit, BBTC has agreed to
grant to CNI an option, exercisable beginning on the Option Commencement Date
(as defined in this Agreement), to purchase all the assets that are then owned
by BBTC and used or useful in the construction or operation of the Station,
including all licenses, leases, and other intangible assets of the Station, for
the price and on the terms and conditions set forth in this Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained herein, CNI and BBTC, intending to be bound legally,
agree as follows:
SECTION 1 DEFINITIONS.
1.1 Terms Defined in this Section. The following terms, as used in
this Agreement, shall have the meanings set forth in this Section:.
"Assets" means the assets that are the subject of the Option, as
specified in Section 3.1.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to the Option in accordance with the provisions of Section 9.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 9.
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"Completion Date" means the date on which the Station first commences
program tests after the completion of construction of the Station in accordance
with the Permit and standard industry requirements for normal commercial
operations.
"Contracts Schedule" means the schedule to be delivered by BBTC to CNI
in accordance with Section 4.7.
"Covenanting Parties" means the individuals who have executed this
Agreement as Covenanting Parties.
"Effective Time" means 12:01 a.m., Bradenton, Florida, time, on the
Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to CNI as contemplated by this Agreement.
"FCC Licenses" means all licenses, permits, and other authorizations
now or hereafter issued by the FCC to BBTC in connection with the construction
and operation of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles Schedule" means the schedule to be delivered by BBTC to
CNI in accordance with Section 4.9.
"License Schedule" means the schedule to be delivered by BBTC to CNI
in accordance with Section 4.4.
"MFR Noncompetition Agreement" means a Noncompetition Agreement in the
form of Exhibit H, to be entered into among CNI, MFR, Inc., and the sole
stockholder of MFR, Inc. prior to, or concurrently with, the making of the
first Loan under this Agreement.
"Noncompetition Agreement" means the Noncompetition Agreement to be
entered into at the Closing among CNI, BBTC, and the Covenanting Parties, in
the form of Exhibit A.
"Option" means the option granted by BBTC to CNI by this Agreement.
"Personal Property Schedule" means the schedule to be delivered by
BBTC to CNI in accordance with Section 4.5.
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"Personnel Schedule" means the schedule to be delivered by BBTC to CNI
in accordance with Section 4.8.
"Real Property" means all real property, and all buildings and other
improvements thereon, used or useful in the business or operations of the
Station.
"Real Property Schedule" means the schedule to be delivered by BBTC to
CNI in accordance with Section 4.6.
"Time Brokerage Agreement" means the Time Brokerage Agreement relating
to the Station, substantially in the form of Exhibit B to this Agreement, to be
entered into between BBTC and CNI prior to the Completion Date.
1.2 Terms Defined Elsewhere in this Agreement. For purposes of
this Agreement, the following terms have the meanings set forth in the sections
indicated:
Term Section
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Estimated Purchase Price Section 3.4(b)(1)
Event of Default Section 2.8(a)
Line of Credit Note Section 2.1
Loans Section 2.1
Maturity Date Section 2.5
Mortgage Section 2.6
Option Commencement Date Section 3.3
Permit Recitals
Purchase Price Section 3.4(a)
Security Agreement Section 2.6
Station Recitals
SECTION 2 LOAN.
2.1 Line of Credit. From time to time prior to the earlier of the
Maturity Date or the Completion Date, BBTC may obtain loans from CNI (the
"Loans"), up to a maximum amount outstanding of Three Million One Hundred
Thousand Dollars ($3,100,000). All Loans shall be evidenced by a single
promissory note of BBTC (such promissory note, as it may be amended, restated,
or extended from time to time is called the "Line of Credit Note") in the
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form of Exhibit C hereto. The Line of Credit Note shall be executed by BBTC and
delivered to CNI prior to the initial Loan under this Agreement. CNI may, and
is hereby authorized by BBTC to, set forth on the grid attached to the Line of
Credit Note, or in other comparable records maintained by CNI, the amount of
each Loan, the current outstanding principal balance, and other appropriate
information. The aggregate unpaid amount of any Loan set forth in any records
maintained by CNI with respect to the Line of Credit Note shall be presumptive
evidence of the principal amount owing and unpaid on the Line of Credit Note
absent manifest error. Failure of CNI to record the principal amount of any
Loan on the grid attached to the Line of Credit Note shall not limit or
otherwise affect the obligation of BBTC under this Agreement or under the Line
of Credit Note to repay the principal amount of such Loan and all interest
accruing thereon.
2.2 Interest.
(a) The Loans shall bear interest at the rate of nine
percent per annum, except that any amount of principal or, to the extent
permitted by law, interest outstanding under the Line of Credit Note which is
not paid when due, whether at maturity, upon acceleration, or otherwise, shall
bear interest until paid in full at the rate of fifteen percent per annum. The
provisions of this paragraph specifying the rate of interest for periods after
the Maturity Date shall not be construed to postpone the Maturity Date beyond
the applicable date specified in Section 2.5. Subject to Section 3.4(b)(1)(A),
interest shall be payable on the Maturity Date and, prior to the Maturity Date,
shall accrue and, to the extent permitted by law, compound monthly.
(b) All interest payable on the Line of Credit Note shall
be computed for the actual number of days elapsed using a daily rate determined
by dividing the annual rate by 365. Any interest that is not paid when due
shall, to the extent permitted by law, compound monthly. Whenever any payment
to be made under this Agreement or under the Line of Credit Note shall be
stated to be due on a Saturday, Sunday, or a public holiday under the laws of
the State of Florida, such payment may be made on the next succeeding business
day, and such extension of time shall be included in the computation of
interest under the Line of Credit Note.
(c) The rate of interest payable on the Line of Credit
Note from time to time shall in no event exceed the maximum rate, if any,
permissible under applicable law. If the rate of interest payable on the Line
of Credit Note is ever reduced as a result of the preceding sentence and any
time thereafter the maximum rate permitted by applicable law shall exceed the
rate of interest provided for in this Agreement and the Line
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of Credit Note, then the rate provided for in this Agreement and the Line of
Credit Note shall be increased to the maximum rate permitted by applicable law
for such period as is required so that the total amount of interest received by
CNI is that which would have been received by CNI but for the operation of the
preceding sentence.
2.3 Use of Proceeds. BBTC agrees that:
(a) The proceeds of the Loans made under this Agreement
will be used solely:
(1) to redeem in full, but not in part, the
partnership interest of MFR, Inc. in BBTC, and to reimburse the general partner
of BBTC for certain expenses incurred in constructing the Station; provided that
the maximum amount of the proceeds of the Loans that may be used for the purpose
described in this Section 2.3(a)(1) shall not exceed One Million One Hundred
Thousand Dollars ($1,100,000).
(2) to purchase and install equipment and related
tangible personal property required to construct the Station in accordance with
the construction plans previously furnished by BBTC to CNI and approved by CNI,
and
(3) to pay any other expenses authorized by and
agreed to by CNI in writing.
(b) Without limiting any of the other terms of this
Agreement, no part of the proceeds of any Loan made under this Agreement will
be used to "purchase" or "carry" any "margin stock" or to extend credit to
others for the purpose of "purchasing" or "carrying" any "margin stock" (as
such terms are defined in the Regulation U of the Board of Governors of the
Federal Reserve System), and the assets of BBTC do not include, and BBTC has no
present intention of acquiring, any such security.
2.4 Prepayments. BBTC shall have the right at any time and from
time to time, upon five business days prior written notice to CNI, to prepay
all or any part of the Line of Credit Note, plus interest accrued on the amount
prepaid, without premium or penalty. Such notice shall state the date and
amount of the proposed prepayment and shall be irrevocable. All prepayments on
the Line of Credit Note shall be accompanied by interest accrued pursuant to
Section 2.2(a) on the amount prepaid through the date of prepayment.
2.5 Maturity. Subject to Section 3.4(b)(1)(A), the entire
principal balance of the Loans, together with accrued interest, shall be paid
in full on the Maturity Date, which shall be the earliest of:
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(a) the Closing Date; or
(b) the date on which the Time Brokerage Agreement
expires or is terminated in accordance with its terms; or
(c) the date on which the Option is terminated pursuant
to Section 10; or
(d) the date on which the Option expires pursuant to
Section 3.3.
2.6 Security Agreement. BBTC shall execute and deliver to CNI a
Security Agreement granting a first priority security interest to CNI in all of
BBTC's personal property, whether tangible or intangible, whether now owned or
hereafter acquired, in the form of Exhibit D hereto (the "Security Agreement").
The Security Agreement shall be accompanied by appropriate financing statements
to be filed in all appropriate jurisdictions. Prior to acquiring any interest
in Real Property, BBTC shall execute and deliver to CNI a mortgage, deed of
trust, collateral assignment, or other appropriate agreement (each, a
"Mortgage"), in form and substance satisfactory to CNI, granting a first
priority security interest to CNI in all of BBTC's interest in such Real
Property.
2.7 Conditions of Borrowing. Without limiting any of the other
terms of this Agreement, CNI shall not be required to make any Loan to BBTC
unless:.
(a) the representations and warranties contained in this
Agreement continue to be true and complete on the date of such Loan;
(b) no Event of Default under this Agreement shall have
occurred and be continuing, and no condition or event shall exist or have
occurred that with the passage of time, or the giving of notice, or both, would
constitute an Event of Default under this Agreement;
(c) BBTC shall have delivered to CNI a certificate, dated
as of the date of such Loan and signed by its general partner, certifying that
(i) all representations and warranties of CNI in Section 4 of this Agreement
were true and complete when made and are true and complete as of the date of
such Loan; (ii) no Event of Default exists under this Agreement and no
condition or event exists or has occurred that with the passage of time, or the
giving of notice, or both, would constitute an Event of Default; and (iii) BBTC
has performed all obligations and taken all actions to be performed or taken by
it at or prior to the date of such Loan;
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(d) BBTC shall have delivered to CNI an opinion of
counsel substantially in the form of Exhibit E;
(e) at least three business days prior to the date of
such Loan CNI shall have received a written request therefor;
(f) all proceedings taken in connection with the
transactions contemplated by this Agreement, and all instruments,
authorizations, and other documents applicable thereto, shall be reasonably
satisfactory in form and substance to CNI and its counsel;
(g) BBTC shall have delivered to CNI invoices and other
documentation satisfactory to CNI to evidence that the proceeds of the Loan
will be used solely for the purposes specified in Section 2.3(a);
(h) BBTC shall have executed and delivered to CNI the
Line of Credit Note, and the Security Agreement, financing statements, and
Mortgages described in Section 2.6;
(i) prior to, or concurrently with, the making of such
Loan, BBTC shall have redeemed all of the partnership interest of MFR, Inc. in
BBTC and shall have delivered to CNI documentation satisfactory to CNI to
evidence that MFR, Inc. waives and disclaims any further rights to the profits,
revenues, or other assets of BBTC; and
(j) prior to, or concurrently with, the making of such
Loan, MFR, Inc. and its sole stockholder shall have executed and delivered to
CNI the MFR Noncompetition Agreement in the form of Exhibit H.
2.8 Defaults and Remedies.
(a) Event of Default Defined. The occurrence of any one or
more of the following events shall constitute an "Event of Default":.
(1) BBTC shall fail to pay any amount due on the
Line of Credit Note when due; or
(2) BBTC shall default in any material respect in
the performance or observance of any of the other agreements, covenants,
conditions, provisions, or terms of this Agreement, the Line of Credit Note,
the Security Agreement, any Mortgage, or the Time Brokerage Agreement, and the
default shall have continued for a period of fifteen days after written notice
thereof has been given to BBTC by CNI; or
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(3) Any representation or warranty made by BBTC
herein or in any document, agreement, or certificate delivered pursuant hereto
shall prove to have been false in any material respect as of the time when
made; or
(4) A final judgment that, together with other
outstanding final judgments against BBTC, exceeds an aggregate or $10,000 shall
be entered against BBTC and shall remain outstanding and unsatisfied, unbonded,
unstayed, or uninsured thirty days from the date of entry thereof; or
(5) BBTC shall: (A) become insolvent; or (B) be
unable or admit in writing its inability to pay its debts as they mature; or
(C) make a general assignment for the benefit of creditors or to an agent
authorized to liquidate any substantial amount of its property; or (D) commence
a voluntary case or have an "order for relief" entered with respect to its
pursuant to or within the meaning of the United States Bankruptcy Code; or (E)
apply for, seek, consent to, or acquiesce in the appointment of a receiver,
trustee, liquidator, or custodian for any of its assets; or (F) otherwise
become the subject of any voluntary insolvency, bankruptcy, or reorganization
proceeding or propose to enter into any formal or informal composition or
arrangement with its creditors; or
(6) BBTC shall (A) have an involuntary case
commenced against it pursuant to the United States Bankruptcy Code or other
bankruptcy or insolvency law or (B) become the subject of a creditor's petition
any plan or other arrangement with creditors, or (C) have a receiver or
custodian appointed for any of its assets without its consent, and such
appointment shall continue undischarged, or such case, petition, or proceeding
shall continue undismissed, for a period of thirty days; or
(7) This Agreement, the Line of Credit Note, the
Security Agreement, any Mortgage, or the Time Brokerage Agreement shall, at any
time after their respective execution and delivery, and for any reason, cease
to be in full force and effect or be declared null and void, or be revoked or
terminated; or
(8) BBTC shall contest the validity or
enforceability of, or deny that it has any or further liability or obligation
under, this Agreement, the Line of Credit Note, the Security Agreement, any
Mortgage, or the Time Brokerage Agreement; or
(9) The Permit, any other FCC license, or any
other material license or permit in respect to the Station shall be revoked,
cancelled, nullified, or otherwise terminated for any reason and not
immediately replaced; or
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(10) BBTC shall default in any payment due on any
liability or obligation in an amount in excess of $10,000 and such default
shall continue for more than the period of grace, if any, applicable thereto,
or in the performance of or compliance with any term of any evidence of such
liability or obligation or of any agreement relating thereto, and any such
default shall continue for more than the period of grace, if any, specified
therein and shall not have been waived pursuant thereto; or
(11) NI shall cease to have a valid lien or
security interest in any substantial part of the collateral for the Loans, as
reasonably determined by CNI.
(b) Acceleration of Obligations.
(1) Upon the occurrence of any Event of Default
(other than an Event of Default under Sections 2.8(a)(5) or 2.8(a)(6)) and at
any time thereafter during the continuation of the Event of Default without
waiver or cure, CNI may, by written notice to BBTC, immediately declare the
unpaid principal balance of the Line of Credit Note, together with all interest
accrued thereon, to be immediately due and payable, and the unpaid principal
balance of and accrued interest on the Line of Credit Note shall thereupon be
due and payable all without presentment, demand, protest, or further notice of
any kind, all of which are hereby waived, and notwithstanding anything to the
contrary contained in this Agreement or in the Line of Credit Note.
(2) Upon the occurrence of any Event of Default
under Sections 2.8(a)(5) or 2.8(a)(6), the unpaid principal balance of the Line
of Credit Note then outstanding, together with all interest accrued thereon,
shall immediately and forthwith be due and payable, all without presentment,
demand, protest, or notice of any kind, all of which are hereby waived, and
notwithstanding anything to the contrary contained in this Agreement or in the
Line of Credit Note.
(c) Other Remedies. In addition to the remedies provided
in Sections 2.8(b)(1) and 2.8(b)(2), CNI shall have all of the remedies for
default provided by applicable law. Without limiting any of the other terms of
this Agreement, upon the occurrence of any Event of Default, the rights,
powers, and privileges provided in this Agreement or at law or in equity may be
exercised by CNI at any time and from time to time, whether or not the
indebtedness evidenced by the Line of Credit Note shall be due and payable, and
whether or not CNI shall have instituted any foreclosure proceedings or other
action for the enforcement of its rights under the Line of Credit Note or any
of the documents securing it.
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(d) FCC Consent Required. Notwithstanding anything to the
contrary contained in this Agreement, CNI will not, without the prior consent
of the FCC, take control of or manage the operation of the Station or take any
action pursuant to this Agreement that would constitute or result in an
assignment of any FCC licenses, in each case to the extent that such action
requires the prior consent of the FCC under the Communications Act of 1934, as
amended, or the rules and regulations of the FCC.
2.9 Taxes. All sums payable by BBTC under this Agreement or under
the Line of Credit Note, whether of principal, interest, expenses, or
otherwise, shall be paid in full, free of any deductions or withholdings for
any and all present and future taxes, levies, imposts, stamps, duties, fees,
deductions, charges, withholdings, and all other similar types of liabilities
with respect to such sums payable under this Agreement or under the Line of
Credit Note, other than income, franchise, or ad valorem taxes imposed by any
jurisdiction as a direct consequence of CNI being organized and existing,
qualified to do business, or maintaining a permanent establishment, in such
jurisdiction.
SECTION 3 OPTION TO PURCHASE.
3.1 Grant of Option. BBTC hereby grants to CNI an irrevocable,
exclusive option to purchase from BBTC on the Closing Date, all tangible and
intangible assets, real, personal, and mixed, that are owned or held by BBTC on
the Option Commencement Date or are subsequently acquired by BBTC and which are
used or useful in the construction or operation of the Station. The Assets
shall be free and clear of any liabilities, liens, security interests, pledges,
conditions, or encumbrances, including liabilities under financing and capital
leases (except for liens for current taxes not yet due and payable and liens
securing the Loans). BBTC agrees that the Assets shall include the following:.
(a) all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local governmental authority to BBTC in connection with the
construction and operation of the Station;
(b) all right, title, and interest of BBTC in the Assets
to be listed on the License Schedule, the Personal Property Schedule, the Real
Property Schedule, the Contracts Schedule, and the Intangibles Schedule;
(c) all intangible assets of BBTC relating to the Station
that are not listed on the Intangibles Schedule, including the goodwill of the
Station, if any, and any goodwill associated with the assets listed on the
Intangibles Schedule;
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(d) all of BBTC's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station;
(e) all choses in action of BBTC relating to the Station;
(f) all books and records relating to the construction,
business, or operations of the Station, including executed copies of all
contracts, leases, non-governmental licenses and other agreements to be
assigned to CNI, and all records required by the FCC to be kept by the Station;
(g) all contracts, leases, non-governmental licenses, and
other agreements of BBTC relating to the Station; and
(h) all accounts receivable of BBTC from the sale of
advertising time on the Station or for services performed by BBTC prior to the
Closing Date.
3.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) BBTC's cash on hand as of the Closing and all other
cash in any of BBTC's bank accounts;
(b) any insurance policies, bonds, letters of credit, or
other similar items, and any cash surrender value in regard thereto;
(c) all books and records that BBTC is required by law to
retain and all books and records relating to BBTC's internal partnership
organization; and
(d) any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements.
3.3 Term and Manner of Exercise. Subject to Section 10, CNI may
exercise the Option at any time during the period beginning one day after the
first anniversary of the Completion Date (the "Option Commencement Date") and
ending on the tenth anniversary of the Option Commencement Date by delivering a
written notice of exercise to BBTC. If not previously exercised by CNI or
terminated pursuant to Section 10, the Option shall expire at 5:00 p.m.,
Eastern Time, on the tenth anniversary of the Option Commencement Date.
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3.4. Purchase Price and Manner of Payment.
(a) Purchase Price. Subject to adjustment as provided in
Section 3.4(c), the purchase price for the Assets to be purchased pursuant to
the Option and for the covenants of the Covenanting Parties in the
Noncompetition Agreement (collectively, the "Purchase Price") shall be the sum
of One Hundred Thousand Dollars ($100,000), plus the outstanding principal
amount of the Loans and all interest accrued thereon as of the Closing Date,
and plus the amount of any payments of principal or interest made by BBTC with
respect to the Loans prior to the Closing Date.
(b) Payment of Purchase Price. The Purchase Price shall be
paid by CNI to BBTC as follows: .
(1) At the Closing, CNI shall pay or cause to be
paid to or for the account of BBTC the Purchase Price as adjusted by the
estimated adjustments set forth in BBTC's preliminary settlement statement (the
"Estimated Purchase Price") as follows:
(A) As of the Closing, BBTC's
obligations to CNI with respect to the outstanding principal amount of the
Loans, plus interest accrued thereon, shall be canceled;
(B) At the Closing, CNI shall pay or
cause to be paid to BBTC the amount of any payments of principal or interest
made by BBTC with respect to the Loans prior to the Closing Date, in
immediately available funds by federal wire transfer or by other means
acceptable to the parties; and
(C) At the Closing, CNI shall pay or
cause to be paid to BBTC the balance of the Estimated Purchase Price, in
immediately available funds by federal wire transfer or by other means
acceptable to the parties.
(2) If the Purchase Price as finally determined
pursuant to Section 3.4(d) exceeds the Estimated Purchase Price, CNI shall pay
to BBTC, in immediately available funds within five days after the date on
which the Purchase Price is determined pursuant to Section 3.4(d), the
difference between the Purchase Price and the Estimated Purchase Price.
(3) If the Purchase Price as finally determined
pursuant to Section 3.4(d) is less than the Estimated Purchase Price, BBTC
shall pay to CNI, in immediately available funds within five days after the
date on which the Purchase Price is determined pursuant to Section 3.4(d), the
difference between the Purchase Price and the Estimated Purchase Price.
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(c) Prorations.
(1) The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Assets under this Agreement), prepaid deposits (to the extent
such prepaid deposits are assigned to CNI at Closing), commissions, wages,
payroll taxes, vacation pay, sick leave, severance benefits, and other fringe
benefits of employees of BBTC who become employees of CNI, and similar prepaid
and deferred items, shall be prorated between CNI and BBTC in accordance with
the principle that BBTC shall be responsible for all expenses, costs, and
liabilities allocable to the period prior to the Closing Date (subject to
reimbursement by CNI to the extent provided in the Time Brokerage Agreement),
and CNI shall be responsible for all expenses, costs, and obligations allocable
to the period on and after the Closing Date. Notwithstanding the preceding
sentence, there shall be no adjustment for, and BBTC shall remain solely liable
with respect to, any obligation or liability not being assumed by CNI in
accordance with Section 3.5(a).
(2) The Purchase Price shall be decreased by the
amount of any revenues received by BBTC under any contract, lease,
non-governmental license, or other agreement included in the Assets to the
extent such revenues relate to the performance of obligations on or after the
Closing Date.
(d) Manner of Determining Adjustments. The Purchase Price,
taking into account the adjustments pursuant to Section 3.4(c), will be
determined finally in accordance with the following procedures:.
(1) BBTC shall prepare and deliver to CNI not
later than five days before the Closing Date a preliminary settlement statement
which shall set forth BBTC's good faith estimate of the adjustments to the
Purchase Price under Section 3.4(c). The preliminary settlement statement (A)
shall contain all information reasonably necessary to determine the adjustments
to the Purchase Price under Section 3.4(c), to the extent such adjustments can
be determined or estimated as of the date of the preliminary settlement
statement, and such other information as may be reasonably requested by CNI,
and (B) shall be certified by BBTC to be true and complete to BBTC's knowledge
as of the date thereof.
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(2) No later than 30 days after the Closing Date,
CNI will deliver to BBTC a statement setting forth CNI's determination of the
Purchase Price and the calculation thereof pursuant to Section 3.4(c). If BBTC
disputes the amount of the Purchase Price determined by CNI, it shall deliver
to CNI within 30 days after its receipt of CNI's statement a statement setting
forth its determination of the amount of the Purchase Price. If BBTC notifies
CNI of its acceptance of CNI's statement, or if BBTC fails to deliver its
statement within the 30-day period specified in the preceding sentence, CNI's
determination of the Purchase Price shall be conclusive and binding on the
parties as of the last day of the 30-day period.
(3) CNI and BBTC shall use good faith efforts to
resolve any dispute involving the determination of the Purchase Price. If the
parties are unable to resolve the dispute within fifteen days following the
delivery of BBTC's statement, CNI and BBTC shall jointly designate an
independent certified public accountant, who shall be knowledgeable and
experienced in the operation of television broadcasting stations, to resolve
the dispute. The accountant's resolution of the dispute shall be final and
binding on the parties, and a judgment may be entered thereon in any court of
competent jurisdiction. Any fees of this accountant shall be split equally
between the parties.
(e) Allocation of Purchase Price. CNI and BBTC agree that
Sixty-Four Thousand Dollars ($64,000) of the Purchase Price shall be allocated
to the covenants of BBTC and the Covenanting Parties in the Noncompetition
Agreement and the balance of the Purchase Price shall be allocated to the
Assets. CNI and BBTC shall allocate the balance of the Purchase Price for tax
and recording purposes in accordance with an appraisal to be conducted after
Closing by an appraisal firm selected and retained by CNI, at CNI's expense,
with experience in the valuation and appraisal of television station assets.
3.5 Assumption of Liabilities and Obligations.
(a) Except as provided in Section 3.5(b), as of the
Effective Time, CNI shall assume and undertake to pay, discharge, and perform
(1) insofar as they relate to the period after the Effective Time and arise out
of events occurring after the Effective Time, all the obligations and
liabilities of BBTC under the contracts, leases, non-governmental licenses, and
other agreements entered into in accordance with Section 6.11 prior to the
Option Commencement Date and listed on the Contracts Schedule as delivered to
CNI pursuant to Section 4.7, the contracts, leases, non-governmental licenses,
and other agreements entered into in accordance with Section 6.11 after the
Option Commencement Date, and all other contracts, leases, non-governmental
licenses, and other agreements that CNI expressly agrees to
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assume, and (2) all obligations and liabilities arising out of events occurring
after the Effective Time related to CNI's ownership of the Assets or its
operation of the Station after the Effective Time.
(b) Notwithstanding its purchase of the Assets pursuant
to the Option, CNI shall not assume any obligations or liabilities of BBTC not
specified in Section 3.5(a) or (1) any obligations or liabilities under any
contract, lease, non-governmental license, or other agreement not included in
the Assets or entered into in violation of Section 6.11, (b) any obligations or
liabilities under any contract, lease, non-governmental license, or other
agreement relating to the period prior to the Closing Date (except to the
extent that the Purchase Price was reduced pursuant to Section 3.4(c) as a
result of any such obligation or liability), (c) any claims or pending
litigation or proceedings relating to the operation of the Station prior to the
Closing, (d) any obligations or liabilities arising under capitalized leases or
other financing agreements, (e) any obligations or liabilities arising under
agreements entered into other than in the ordinary course of business, (f) any
obligations or liabilities of BBTC under any employee pension, retirement, or
other benefit plans or collective bargaining agreements, (g) any obligation to
any employee of the Station for severance benefits, vacation time, or sick
leave accrued prior to the Closing Date (except to the extent that the Purchase
Price was reduced pursuant to Section 3.4(c) as a result of any such
obligation), or (h) any obligations or liabilities caused by, arising out of,
or resulting from any action or omission of BBTC prior to the Closing, and all
such obligations and liabilities shall remain and be the obligations and
liabilities solely of BBTC.
SECTION 4 REPRESENTATIONS, WARRANTIES, AND COVENANTS OF BBTC.
BBTC represents, warrants, and covenants to CNI as follows:
4.1 Organization, Standing, and Authority. BBTC is a limited
partnership duly organized, validly existing, and in good standing under the
laws of the State of Florida. BBTC has all requisite power and authority (a) to
own, lease, and use the Assets as now owned, leased, and used or proposed to be
owned, leased, or used by it, (b) to construct the Station and to conduct the
business and operations of the Station as now conducted or as proposed to be
conducted, and (c) to execute and deliver this Agreement and the documents
contemplated hereby, and to perform and comply with all of the terms,
covenants, and conditions to be performed and complied with by BBTC hereunder
and thereunder. BBTC is not a participant in any joint venture or partnership
with any other person or entity with respect to
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any part of the operations of the Station or any of the Assets. BBTC has
delivered to CNI a true and complete copy of the Certificate and Limited
Partnership Agreement of BBTC.
4.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by BBTC have been duly authorized by all
necessary actions on the part of BBTC and its partners. This Agreement has been
duly executed and delivered by BBTC and constitutes the legal, valid, and
binding obligation of BBTC, enforceable against it in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally, and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. The execution, delivery,
and performance of this Agreement and the documents contemplated hereby (with
or without the giving of notice, the lapse of time, or both): (a) do not
require the consent of any third party; (b) will not conflict with any
provision of the Certificate and Limited Partnership Agreement of BBTC; (c)
will not conflict with, result in a breach of, or constitute a default under,
any law, judgment, order, ordinance, injunction, decree, rule, regulation, or
ruling of any court or governmental instrumentality; (d) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute
a default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which BBTC is a party or by which BBTC may be bound; and (e) will not create
any claim, liability, mortgage, lien, pledge, condition, charge, or encumbrance
of any nature whatsoever upon any of the Assets, other than the liens securing
the Loans.
4.4 Governmental Licenses. On or prior to the Option Commencement
Date, BBTC shall deliver the License Schedule, which shall be a true and
complete list as of the Option Commencement Date of all licenses, permits, and
other authorizations required from governmental and regulatory authorities for
the lawful construction of the Station and the lawful conduct of the business
of the Station in the manner and to the full extent it is and will be
conducted. From and after the Option Commencement Date, BBTC shall be the
authorized legal holder of all those licenses, permits, and other
authorizations, and none of the licenses, permits, and other authorizations
shall be subject to any restriction or condition that would limit the
operations of the Station as they are or will be conducted. BBTC is the
authorized legal holder of the Permit. All required licenses, permits, and
other authorizations, once obtained, shall remain in full force and effect, and
the operations of the Station shall at all times be in accordance therewith.
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4.5 Tangible Personal Property.
(a) On or prior to the Option Commencement Date, BBTC
shall deliver the Personal Property Schedule, which shall be a true and
complete list as of the Option Commencement Date of all material items of
tangible property used or useful in the operation of the Station, including any
machinery, equipment, tools, vehicles, furniture, leasehold improvements,
office equipment, plant, and inventory.
(b) From and after the Option Commencement Date,
(1) BBTC shall own and have good title to each
item listed on the Personal Property Schedule (other than items designated as
being leased by BBTC pursuant to lease agreements entered into with the prior
written consent of CNI).
(2) All tangible property owned or held by BBTC
shall be in good operating condition and repair (ordinary wear and tear
excepted) and shall be available for immediate use in the construction and
operation of the Station.
(3) All items of transmitting and studio
equipment owned or held by BBTC shall (A) be maintained in a manner consistent
with generally accepted standards of good engineering practice, and (B) permit
the Station and any unit auxiliaries thereto to operate in accordance with the
terms of the FCC Licenses and the rules and regulations of the FCC, and with
all other applicable federal, state, and local statutes, ordinances, rules, and
regulations.
4.6 Real Property.
(a) On or prior to the Option Commencement Date, BBTC
shall deliver the Real Property Schedule, which shall be a true and complete
description as of the Option Commencement Date of all interests of BBTC in any
Real Property, including fee estates, leaseholds and subleaseholds, purchase
options, licenses, easements, rights to access, and rights of way. The Real
Property Schedule shall specify the street address, legal description, owner,
and use and the location of all improvements on the Real Property.
(b) From and after the Option Commencement Date:
(1) BBTC shall have full legal and practical
access to all of the Real Property.
(2) All buildings or improvements located on the
Real Property (A) shall be in good condition and repair consis-
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tent with their present use, and (B) shall comply with all applicable building
or zoning codes and the regulations of any governmental authority having
jurisdiction.
(3) With respect to each leasehold or
subleasehold interest included in the Assets, so long as BBTC fulfills its
obligations under the lease therefor, BBTC shall have enforceable rights to
nondisturbance and quiet enjoyment, and no third party shall hold any interest
in the leased premises with the right to foreclose upon BBTC's leasehold or
subleasehold interest.
4.7 Contracts.
(a) On or prior to the Option Commencement Date, BBTC
shall deliver the Contracts Schedule, which shall be a true and complete list
as of the Option Commencement Date of all contracts, leases, non-governmental
licenses, and other agreements, written or oral, that relate to the Assets or
the construction or operation of the Station, and shall deliver to CNI true and
complete copies of all written contracts, leases, non-governmental licenses,
and other agreements and true and complete memoranda of all oral contracts,
leases, non-governmental licenses, and other agreements listed on the Contracts
Schedule.
(b) As of the date of this Agreement, except as disclosed
on Schedule 4.7, BBTC is not a party to or bound by any contract, lease,
non-governmental license, or other agreement relating to the Assets or the
construction or operation of the Station, other than this Agreement and the
other agreements to be entered into pursuant to this Agreement. With respect to
the agreements listed on Schedule 4.7, (1) BBTC has delivered to CNI true and
complete copies of all written agreements and true and complete memoranda of
all oral agreements, (2) all of such agreements are in full force and effect
and are valid, binding, and enforceable in accordance with their terms, and (3)
there is not under any such agreement any default by any party thereto or any
event that, after notice or lapse of time or both, could constitute a default.
(c) From and after the Option Commencement Date, (1) all
the agreements listed on the Contracts Schedule shall be in full force and
effect and shall be valid, binding, and enforceable in accordance with their
terms, (2) there shall not be under any such agreement any default by any party
thereto or any event that, after notice or lapse of time or both, would
constitute a default, (3) BBTC shall have full legal power and authority to
assign its rights under all agreements listed on the Contracts Schedule to CNI,
and (4) the assignment of those agreements to CNI will not affect the validity,
enforceability, or continuation of any of those agreements.
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4.8 Personnel.
(a) On or prior to the Option Commencement Date, BBTC
shall deliver the Personnel Schedule, which shall be a true and complete list
as of the Option Commencement Date of all persons employed or retained as
independent contractors by the Station and a description of their compensation.
(b) On the Closing Date, no controversies, disputes, or
proceedings shall be pending or threatened between BBTC and any employees
(singly or collectively) of the Station, no labor union or other collective
bargaining unit shall represent or claim to represent any of the employees of
the Station, and there shall be no union campaign being conducted to solicit
cards from employees to authorize a union to request a National Labor Relations
Board certification election with respect to any employees of the Station.
4.9. Intangibles. On or prior to the Option Commencement Date, BBTC
shall deliver the Intangibles Schedule, which shall be a true and complete list
as of the Option Commencement Date of all copyrights, trademarks, trade names,
service marks, service names, licenses, patents, permits, and other similar
intangible property rights and interests applied for, issued to, or owned by
BBTC or under which BBTC is licensed or franchised and which are used or useful
in the business and operations of the Station (exclusive of those listed on the
Licenses Schedule), together with copies of all existing documents that
establish or evidence any of such intangible property rights. From and after
the Option Commencement Date, all of the intangible property rights listed on
the Intangibles Schedule shall be valid and in good standing and uncontested.
BBTC shall not infringe upon or otherwise act adversely to any trademarks,
trade names, service marks, service names, copyrights, patents, patent
applications, know-how, methods, or processes owned by any other person or
persons.
4.10. Claims and Legal Actions. Except for rulemaking proceedings
affecting the television broadcasting industry generally, there is no claim,
legal action, counterclaim, suit, arbitration, governmental investigation, or
other legal, administrative, or tax proceeding, nor any order, decree, or
judgment, in progress or pending, or, to the knowledge of BBTC, threatened,
against or relating to BBTC, its properties, the Assets, or the business of the
Station, nor does BBTC know or have reason to be aware of any basis for the
same.
4.11. Compliance with Laws. BBTC has complied and will comply fully
with the terms of all licenses, permits, and other authorizations from
governmental authorities and with all laws,
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rules, regulations, and ordinances. Neither the ownership nor use of BBTC's
properties nor the conduct of its business conflicts or will conflict with the
rights of any person or entity.
4.12 FCC Actions. BBTC is not aware of any facts that could prevent
the FCC from issuing the FCC Consent.
4.13 Brokers. Neither BBTC nor any person or entity acting on its
behalf has agreed to pay a commission, finder's fee, or similar payment in
connection with this Agreement or any matter related hereto to any person or
entity, nor has it or any person or entity acting on its behalf taken any
action on which a claim for any such payment could be based.
4.14 Environmental Matters .
(a) BBTC has complied and shall comply with all laws,
rules, and regulations of all federal, state, and local governments (and all
agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against BBTC in connection with its ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
(b) BBTC has no liability relating to its construction,
ownership, and operation of the Station under the Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and
Recovery Act, the Federal Water Pollution Control Act, the Clean Air Act, the
Safe Drinking Water Act, the Toxic Substances Control Act, the Refuse Act, the
Emergency Planning and Community Right-to-Know Act, or the Occupational Safety
and Health Act (each as amended) or any other law, rule, or regulation of any
federal, state, or local government (or agency thereof) concerning release or
threatened release of hazardous substances, public or employee health and
safety, or pollution or protection of the environment.
(c) BBTC has not handled or disposed of any substance,
arranged for the disposal of any substance, or owned or operated any property
or facility in any manner that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand, under the common law or pursuant to any statute, against BBTC giving
rise to any such liability) for damage to any site, location, or body of water
(surface of subsurface) or for illness or personal injury.
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(d) BBTC has obtained and been in compliance with all of
the terms and conditions of all permits, licenses, and other authorizations
which are required under, and has complied with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules, and timetables which are contained in, all federal, state, and local
laws, rules, and regulations (including all codes, plans, judgments, orders,
decrees, stipulations, injunctions, and charges thereunder) relating to public
health and safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
4.15 Balance Sheet. BBTC has delivered to CNI a true and complete
copy of its balance sheet as of October 31, 1993. Such balance sheet has been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis and fairly, accurately, and completely presents BBTC's
financial condition as of the date of this Agreement.
4.16 Full Disclosure. No representation or warranty made by BBTC in
this Agreement or in any certificate, document, or other instrument furnished
or to be furnished by BBTC pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
required to make any statement contained herein or therein not misleading.
SECTION 5 REPRESENTATIONS AND WARRANTIES OF CNI.
CNI represents and warrants to BBTC as follows:
5.1 Organization, Standing, and Authority. CNI is a non-profit
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida. CNI has all requisite power and authority to
execute and deliver this Agreement and the documents contemplated hereby and to
perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by CNI hereunder and thereunder.
5.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by CNI have been duly authorized by all
necessary action on the part of CNI. This Agreement has been duly executed and
delivered by CNI and constitutes a legal, valid, and binding obligation of CNI,
enforceable against CNI in accordance with its terms except as the
enforceability hereof may be affected by bankruptcy, insolvency, or
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similar laws affecting creditors' rights generally and by judicial discretion
in the enforcement of equitable remedies.
5.3 Absence of Conflicting Agreements and Required Consents.
Except that the FCC Consent will be required prior to the purchase and sale of
the Assets following exercise of the Option, the execution, delivery, and
performance of this Agreement and the documents contemplated hereby by CNI
(with or without the giving of notice, the lapse of time, or both): (a) do not
require the consent of any governmental or regulatory authority or any other
third party; (b) will not conflict with the Articles of Incorporation or
By-Laws of CNI; (c) will not conflict with, result in a breach of, or
constitute a default under, any law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality; and (d) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license or permit to which CNI is a party or by
which CNI may be bound.
5.4 Brokers. Neither CNI nor any person or entity acting on its
behalf has agreed to pay a commission, finder's fee, or similar payment in
connection with this Agreement or any matter related hereto to any person or
entity, nor has it or any person or entity acting on its behalf taken any
action on which a claim for any such payment could be based.
5.5 Full Disclosure. No representation or warranty made by CNI in
this Agreement or in any certificate, document, or other instrument furnished
or to be furnished by CNI pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
required to make any statement contained herein or therein not misleading.
SECTION 6 ADDITIONAL COVENANTS REGARDING CONSTRUCTION AND OPERATION OF
THE STATION.
BBTC covenants and agrees that between the date of this Agreement and
the expiration of the Option or the Closing Date, or, if later, until the
repayment in full of the Loans and all interest accrued thereon, BBTC will act
in accordance with the following:
6.1 General. BBTC will construct the Station and conduct its
business diligently, in the ordinary course (except where such conduct would
conflict with the following covenants, with BBTC's other obligations under this
Agreement, or with the Time Brokerage Agreement), and in such a manner so that
the representations and warranties contained in this Section 4 shall continue
to be
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true on the Closing Date as if made on and as of the Closing Date.
6.2 Completion Certificate. BBTC will deliver to CNI within five
days after the Completion Date a certificate, executed by BBTC and a qualified
independent engineer approved by CNI, specifying the Completion Date and
certifying that construction of the Station has been completed in accordance
with the Permit and standard industry requirements for normal commercial
operations and that the Station has commenced program tests.
6.3 Liens. BBTC will not create, assume, or permit to exist any
mortgage, pledge, lien, or other charge or encumbrance affecting any of the
Assets, except for liens for current taxes not yet due and payable and liens
securing the Loans.
6.4 Disposition of Assets. BBTC will not sell, assign, lease, or
otherwise transfer or dispose of any assets used or useful in the construction
or operation of the Station.
6.5 Licenses. BBTC will not cause or permit, by any act or failure
to act, any governmental license, permit, or other authorization to expire or
to be surrendered or modified, or take any action that would cause the FCC or
any other governmental authority to institute proceedings for the suspension,
revocation, or adverse modification of any governmental license, permit, or
other authorization, or fail to prosecute with due diligence any applications
to any governmental authority in connection with the construction or operation
of the Station.
6.6 Partnership Existence. BBTC will comply in all respects with
its Certificate and Limited Partnership Agreement and will preserve, renew, and
keep in full force and effect its existence as a limited partnership. BBTC will
not amend its Certificate and Limited Partnership Agreement except as required
to redeem in full the partnership interest of MFR, Inc. and, if necessary, to
admit a substitute limited partner, which shall be controlled by the general
partner of BBTC, so as to preserve BBTC's partnership existence. Except as
provided in the preceding sentence, BBTC shall not admit any person or entity
as a partner of BBTC.
6.7 Access. BBTC will give to CNI and its counsel, accountants,
engineers, and other authorized representatives reasonable access to the Assets
and all books and records relating thereto, and will furnish or cause to be
furnished to CNI and its authorized representatives all information relating to
the Assets that they reasonably request.
6.8 Notice of Events. BBTC will give CNI prompt written notice of
any material change in any of the information contained in its representations
and warranties in this Agreement or in the
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Schedules and of any occurrence involving the Station and not arising in the
ordinary course of the Station's business.
6.9 Maintenance of Assets. BBTC will maintain all of the Station's
property and assets or replacements thereof in good condition. If any loss,
damage, impairment, confiscation, or condemnation to any of the Assets occurs,
BBTC shall repair, replace, or restore the Assets to their prior condition as
represented herein as soon thereafter as possible, and BBTC will use the
proceeds of any claim under any insurance policy solely to repair, replace, or
restore any of the Assets that are lost, damaged, impaired, or destroyed.
6.10 Insurance. BBTC shall maintain in effect policies of insurance
that (1) are adequate in amount with respect to, and for the full value
(subject to customary deductibles) of, the Assets, and (2) insure the Assets
and the business of the Station against all foreseeable risk.
6.11 Contracts. BBTC will not enter into any contract, lease, or
other agreement other than contracts, leases, and other agreements entered into
in the ordinary course of business that will not impose on CNI after the
Closing any material non-monetary obligations or any monetary obligations in
excess of $5,000 in the aggregate. BBTC shall not become a party to or become
subject to any collective bargaining agreements with respect to the Station and
shall not enter into any written or oral contracts of employment with any
employee of the Station.
6.12 ERISA Liabilities. BBTC will not create, become a party to,
incur any liability to or in respect of, or agree or incur any obligation to
contribute to any employee benefit plan, as defined under Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations thereunder.
6.13 Indebtedness. BBTC will not incur, create, assume, or permit
to exist any indebtedness, except:.
(a) indebtedness owed to CNI;
(b) unsecured trade payables incurred and paid in the
ordinary course of business; and
(c) liabilities for taxes, assessments, and similar
governmental charges, none of which shall be past due.
6.14 Taxes. BBTC will file or cause to be filed all federal, state,
county, local, or city tax returns that are required to be filed, and will pay
or cause to be paid all taxes shown on those returns or on any tax assessment
received by it.
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6.15 Inconsistent Actions. BBTC will not take any action that is
inconsistent with its obligations under this Agreement or that could hinder or
delay the consummation of the transactions contemplated by this Agreement.
SECTION 7 SPECIAL COVENANTS AND AGREEMENTS.
7.1 FCC Consent. The assignment of the FCC Licenses in connection
with the purchase and sale of the Assets pursuant to the Option shall be
subject to the prior consent and approval of the FCC. Promptly upon the
exercise of the Option, CNI and BBTC shall prepare for filing with the FCC an
appropriate application for FCC Consent. The parties shall file and prosecute
the application with all reasonable diligence and otherwise use their best
efforts to obtain a grant of the application as expeditiously as practicable.
Each party agrees to comply with any condition imposed on it by the FCC
Consent, except that no party shall be required to comply with a condition if
(a) the condition was imposed on it as the result of a circumstance the
existence of which does not constitute a breach by the party of any of its
representations, warranties, or covenants under this Agreement, and (b)
compliance with the condition would have a material adverse effect upon it. CNI
and BBTC shall oppose any requests for reconsideration or judicial review of
the FCC Consent and shall jointly request an extension of the effective period
of the FCC Consent if the Closing shall not have occurred prior to the
expiration of the original effective period of the FCC Consent. No extension of
the FCC Consent shall limit the exercise by either party of its right to
terminate the Option under Section 10.
7.2 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by BBTC at all times prior to the Closing.
7.3 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including CNI's obtaining of
financing related hereto, and except as and to the extent required by law, each
party will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If the Option
is terminated, each party will return to the other party all information
obtained by the such party from the other party in connection with the
transactions contemplated by this Agreement.
7.4 Public Announcements. CNI and BBTC jointly shall prepare and
determine the timing of any press release or other public announcement relating
to the execution of this Agreement. Neither CNI nor BBTC will issue any press
release or make any
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other public announcement relating to the transactions contemplated by this
Agreement without the prior consent of the other party, except that either
party may, with prior notice to the other party, make any disclosure that it
determines in good faith is required to be made by it under applicable law
(including the federal securities laws).
7.5 Cooperation. CNI and BBTC shall cooperate fully with each
other and their respective counsel, engineers, and accountants in connection
with any actions required to be taken as part of their obligations under this
Agreement, and CNI and BBTC will use their best efforts to consummate the
transactions contemplated hereby and to fulfill their obligations under this
Agreement.
7.6 Noncompetition Agreement. At Closing, CNI, BBTC, and the
Covenanting Parties shall enter into the Noncompetition Agreement.
7.7 Access. BBTC shall provide CNI access and the right to copy
for a period of five years from the Closing Date any books and records that
relate to the Assets but are not included in the Assets.
7.8 Control of the Station. Prior to Closing, except to the extent
that certain functions relating to the Station have been lawfully delegated or
assigned by BBTC to CNI pursuant to the Time Brokerage Agreement, CNI shall
not, directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of BBTC until the Closing.
SECTION 8 CONDITIONS TO OBLIGATIONS OF CNI AND BBTC AT CLOSING.
8.1 Conditions to Obligations of CNI. All obligations of CNI at
the Closing under this Agreement are subject at CNI's option to the fulfillment
prior to or at the Closing Date of each of the following conditions: .
(a) Representations and Warranties. All representations
and warranties of BBTC contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. BBTC shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date, no Event of Default shall have occurred and be
continuing, and no
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condition or event shall exist or have occurred which with the passage of time,
or the giving of notice, or both, would constitute an Event of Default.
(c) Consents. All consents, permits, or approvals of
third parties, including governmental authorities, necessary to transfer any of
the Assets to CNI or otherwise to consummate the transactions contemplated
hereby shall have been obtained, without any adverse change in the terms or
conditions of any agreement or any governmental license, permit, or other
authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on CNI of any conditions that need not be complied with
by CNI under Section 7.1, BBTC shall have complied with any conditions imposed
on it by the FCC Consent, and the FCC Consent shall have become a Final Order.
(e) Governmental Authorizations. BBTC shall be the holder
of all required governmental licenses, permits, and other authorizations, and
there shall not have been any modification of any governmental license, permit,
or other authorization that could have an adverse effect on the Station or the
conduct of its business and operations. No proceeding shall be pending the
effect of which would be to revoke, cancel, fail to renew, suspend, or modify
adversely any governmental license, permit, or other authorization.
(f) Deliveries. BBTC shall have made or stand willing to
make all the deliveries to CNI set forth in Section 9.2.
(g) Adverse Change. Between the Option Commencement Date
and the Closing Date, except as a result of actions taken by CNI under the Time
Brokerage Agreement, there shall have been no material adverse change in the
business, assets, properties, or business prospects of the Station, including
any damage, destruction, or loss affecting any assets used or useful in the
conduct of the business of the Station that has not been repaired, restored, or
remedied, excepting normal wear and tear to the Assets.
8.2 Conditions to Obligations of BBTC. All obligations of BBTC at
the Closing under this Agreement are subject at BBTC's option to the
fulfillment prior to or at the Closing Date of each of the following
conditions:.
(a) Representations and Warranties. All representations
and warranties of CNI contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
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(b) Covenants and Conditions. CNI shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. CNI shall have made or stand willing to
make all the deliveries set forth in Section 9.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on BBTC of any conditions that need not be complied with
by BBTC under Section 7.1 hereof and CNI shall have complied with any
conditions imposed on it by the FCC Consent.
SECTION 9 CLOSING AND CLOSING DELIVERIES.
9.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date not earlier than the first business day after the FCC Consent is
granted and not later than thirty days following the date upon which the FCC
Consent has become a Final Order, to be set by CNI on at least five days'
written notice to BBTC.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Xxxxxx & Xxxxxxxxx, 0000 Xxxxxx-Xxxxx Xxxxxx, X.X., Xxxxx 000,
Xxxxxxxxxx, X.X. 00000, or any other place that is agreed upon by CNI and BBTC.
9.2 Deliveries by BBTC. Prior to or on the Closing Date, BBTC
shall deliver to CNI the following, in form and substance reasonably
satisfactory to CNI and its counsel:.
(a) Transfer Documents. Duly executed bills of sale and
other transfer documents which shall be sufficient to vest good title to the
Assets in the name of CNI, free and clear of all mortgages, liens,
restrictions, encumbrances, claims, and obligations except for liens for
current taxes not yet due and payable and liens securing the Loans.
(b) Consents. A manually executed copy of any instrument
evidencing receipt of the consent or approval of any governmental or regulatory
authority or any other third party necessary to transfer any of the Assets to
CNI or otherwise to consummate the transactions contemplated hereby.
(c) Certificate. A certificate, dated as of the Closing
Date, executed on behalf of BBTC by its general partner, certifying: (1) that
the representations and warranties of BBTC contained in this Agreement are true
and complete in all material respects as of the Closing Date as though made on
and as of that date; and (2) that BBTC has in all material respects performed
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and complied with all of its obligations, covenants, and agreements set forth
in this Agreement to be performed and complied with on or prior to the Closing
Date.
(d) Licenses, Leases, Etc. Copies of all governmental
licenses, permits, and other authorizations, and all related files and records
used by BBTC in the operations of the Station.
(e) Noncompetition Agreement. The Noncompetition
Agreement, duly executed by BBTC and the Covenanting Parties.
(f) Opinion of Counsel. Opinion of BBTC's counsel dated
as of the Closing Date, substantially in the form of Exhibit F.
9.3 Deliveries by CNI. Prior to or on the Closing Date, CNI shall
deliver to BBTC the following, in form and substance reasonably satisfactory to
BBTC and its counsel:.
(a) Estimated Purchase Price. The Estimated Purchase
Price as provided in Section 3.4(b)(1).
(b) Canceled Line of Credit Note. The Line of Credit
Note, duly marked to indicate that all obligations of BBTC for principal and
interest thereunder have been canceled, together with any instruments
reasonably requested by BBTC to evidence the termination of any security
interests granted by BBTC to secure the Line of Credit Note.
(c) Certificate. A certificate, dated as of the Closing
Date, executed on behalf of CNI by an officer of CNI, certifying (1) that the
representations and warranties of CNI contained in this Agreement are true and
complete in all material respects as of the Closing Date as though made on and
as of that date, and (2) that CNI has in all material respects performed and
complied with all of its obligations, covenants, and agreements set forth in
this Agreement to be performed and complied with on or prior to the Closing
Date.
(d) Noncompetition Agreement. The Noncompetition
Agreement, duly executed by CNI.
(e) Opinion of Counsel. An opinion of CNI's counsel dated
as of the Closing Date, substantially in the form of Exhibit G.
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SECTION 10 TERMINATION.
10.1 Termination by BBTC.
(a) Before Exercise of the Option. Before the exercise of
the Option, the Option may be terminated by BBTC, if BBTC is not then in
material default, upon written notice to CNI, if the Time Brokerage Agreement
shall have expired or shall have been terminated in accordance with its terms,
other than as a result of BBTC's breach thereof.
(b) Following Exercise of the Option. Following the
exercise of the Option but before the Closing, the Option may be terminated by
BBTC and the purchase and sale of the Station abandoned, if BBTC is not then in
material default, upon written notice to CNI, upon the occurrence of any of the
following:.
(1) If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of BBTC set
forth in this Agreement have not been satisfied or waived in writing by BBTC.
(2) If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(3) If the Time Brokerage Agreement shall have
expired or shall have been terminated in accordance with its terms, other than
as a result of BBTC's breach thereof.
10.2 Termination by CNI.
(a) Following Exercise of the Option. Following the
exercise of the Option but before the Closing, the Option may be terminated by
CNI and the purchase and sale of the Station abandoned, if CNI is not then in
material default, upon written notice to BBTC, upon the occurrence of any of
the following:.
(1) If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of CNI set
forth in this Agreement have not been satisfied or waived in writing by CNI.
(2) If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(3) If the Time Brokerage Agreement shall have
expired or shall have been terminated in accordance with its terms, other than
as a result of BBTC's breach thereof.
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(b) Interruption of Service. Following the Completion
Date, the Option may be terminated by CNI and (if the Option has been
exercised) the purchase and sale of the Station abandoned, upon written notice
to BBTC, if any event shall have occurred that prevented signal transmission by
the Station in the normal and usual manner for more than 120 hours in any
continuous period of thirty days.
10.3 Automatic Termination. The Option shall terminate
automatically if the Option shall at any time and for any reason cease to be in
full force and effect, shall be revoked or terminated, or shall be declared
null and void by a final order of a court of competent jurisdiction.
10.4 Rights on Termination. If the Option is terminated pursuant to
Section 10.1, Section 10.2, or Section 10.3 and neither party is in material
breach of any provision of this Agreement, the parties hereto shall not have
any further liability to each other with respect to the purchase and sale of
the Assets. If the Option is terminated by either party due to the other
party's material breach of any provision of this Agreement, the terminating
party shall have all rights and remedies available at law or equity. The
termination of the Option pursuant to Section 10.1, Section 10.2, or Section
10.3 shall not impair or otherwise affect the obligations of BBTC under the
Line of Credit Note or diminish the obligations of BBTC to comply with the
covenants set forth in this Agreement until the repayment in full of the Loans
and all interest accrued thereon as provided in Section 2.5.
SECTION 11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES.
11.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
eighteen months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant contained herein. No notice or information delivered by BBTC shall
affect CNI's right to rely on any representation or warranty made by BBTC or
relieve BBTC of any obligations under this Agreement as the result of a breach
of any of its representations and warranties.
11.2 Indemnification by BBTC. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of CNI or any
information CNI may have, BBTC hereby agrees to indemnify and hold CNI harmless
against and with respect to, and shall reimburse CNI for:.
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(a) Breach. Any and all losses, liabilities, or damages
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant by BBTC contained herein or in any certificate, document, or
instrument delivered to CNI under this Agreement.
(b) Obligations. Any and all obligations of BBTC not
assumed by CNI pursuant to this Agreement.
(c) Ownership. Any and all losses, liabilities, or
damages resulting from the operation or ownership of the Station prior to the
Closing.
(d) Legal Matters. Any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs, and expenses,
including reasonable legal fees and expenses, incident to any of the foregoing
or incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing this indemnity.
11.3 Indemnification by CNI. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of BBTC or any
information BBTC may have, CNI hereby agrees to indemnify and hold BBTC
harmless against and with respect to, and shall reimburse BBTC for: .
(a) Breach. Any and all losses, liabilities, or damages
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant by CNI contained herein or in any certificate, document, or
instrument delivered to BBTC under this Agreement.
(b) Obligations. Any and all obligations of BBTC assumed
by CNI pursuant to this Agreement.
(c) Ownership. Any and all losses, liabilities, or
damages resulting from the operation or ownership of the Station on and after
the Closing.
(d) Legal Matters. Any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs and expenses,
including reasonable legal fees and expenses, incident to any of the foregoing
or incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing this indemnity.
11.4 Specific Performance. The parties recognize that if BBTC
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate CNI for
its injury. CNI shall therefore be entitled, in addition to any other remedies
that may be
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available, including money damages, to obtain specific performance of the terms
of this Agreement. If any action is brought by CNI to enforce this Agreement,
BBTC shall waive the defense that there is an adequate remedy at law.
11.5 Attorneys' Fees. In the event of the filing by either party of
a lawsuit for any remedy available under this Agreement, the prevailing party
shall be entitled to reimbursement from the other party of its reasonable legal
fees and expenses.
SECTION 12 MISCELLANEOUS.
12.1 Fees and Expenses. BBTC shall pay any filing fees, transfer
taxes, sales taxes, document stamps, or other charges levied by any
governmental entity, including any subsequently instituted tax on the
assignment of FCC licenses, on account of the transfer of the Assets from BBTC
to CNI. Except as otherwise provided in this Agreement, each party shall pay
its own expenses incurred in connection with the authorization, preparation,
execution, and performance of this Agreement, including all fees and expenses
of counsel, accountants, agents, and representatives.
12.2 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be in
writing and shall be addressed as follows:.
If to BBTC: Bradenton Broadcast Television Company, Ltd.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxx Xxxxxx
With a copy to: Baynard, Harrell, Ostow & Xxxxxx, P.A.
000 Xxxxxx Xxxxxx South
Twelfth Floor
St. Petersburg, Florida 33701
Attention: Xx. Xxxxxx X. Xxxxxx
If to CNI: The Christian Network, Inc.
00000 00xx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
With a copy to: Dow, Xxxxxx & Xxxxxxxxx
0000 Xxxxxx-Xxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxx, Xx.
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or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
12.2. A notice mailed by registered or certified mail, postage prepaid and
return receipt requested, shall be deemed to have been duly delivered and
received on the date of receipt shown on the return receipt.
12.3 Benefit and Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
12.4 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
BBTC, any additional bills of sale, deeds, or other transfer documents that, in
the reasonable opinion of CNI, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to CNI pursuant to this
Agreement.
12.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
12.6 ENFORCEMENT. BBTC (A) HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE STATE COURTS OF THE STATE OF FLORIDA AND TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE __________ DISTRICT OF
FLORIDA, FOR THE PURPOSE OF ANY SUIT, ACTION, OR OTHER PROCEEDING ARISING OUT
OF OR BASED UPON THIS AGREEMENT, THE LINE OF CREDIT NOTE, THE SECURITY
AGREEMENT, ANY MORTGAGE, OR THE SUBJECT MATTER HEREOF OR THEREOF BROUGHT BY CNI
OR ITS SUCCESSORS OR ASSIGNS AND (B) HEREBY WAIVES, AND AGREES NOT TO ASSERT,
BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION, OR
PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF
THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT
OR EXECUTION, THAT THE SUIT, ACTION, OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION, OR PROCEEDING IS
IMPROPER OR THAT THIS AGREEMENT, THE LINE OF CREDIT NOTE, THE SECURITY
AGREEMENT, ANY MORTGAGE, OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE
ENFORCED IN OR BY SUCH COURT, AND (C) HEREBY WAIVES AND AGREES NOT TO SEEK ANY
REVIEW BY ANY COURT OF ANY JURISDICTION OTHER THAN FLORIDA OR THE UNITED STATES
WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF THE JUDGMENT OF ANY SUCH
FLORIDA STATE OR FEDERAL COURT. BBTC HEREBY CONSENTS TO SERVICE OF PROCESS BY
CERTIFIED OR REGISTERED MAIL AT THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN.
BBTC AGREES THAT ITS SUBMISSION TO JURISDICTION AND ITS CONSENT TO SERVICE OF
PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF CNI. FINAL JUDGMENT
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AGAINST BBTC IN ANY SUCH ACTION, SUIT, OR PROCEEDING MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT, ACTION, OR PROCEEDING ON THE JUDGMENT, OR IN ANY OTHER
MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF SUCH OTHER JURISDICTION;
PROVIDED, HOWEVER, THAT CNI MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER
JUDICIAL PROCEEDINGS, AGAINST BBTC OR ANY OF ITS ASSETS IN ANY XXXXX XX XXXXXXX
XXXXX XX XXX XXXXXX XXXXXX OR OF ANY COUNTRY OR PLACE WHERE BBTC, OR SUCH
ASSETS, MAY BE FOUND.
12.7 Headings. The headings herein are included for ease of
reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
12.8 Gender and Number. Words used herein, regardless of the gender
and number specifically used, shall be deemed and construed to include any
other gender, masculine, feminine, or neuter, and any other number, singular or
plural, as the context requires.
12.9 Entire Agreement. This Agreement, the Schedules, and the
exhibits hereto, and all documents, certificates, and other documents to be
delivered by the parties pursuant hereto, collectively represent the entire
understanding and agreement between CNI and BBTC with respect to the subject
matter hereof. This Agreement supersedes all prior negotiations between the
parties and cannot be amended, supplemented, or changed except by an agreement
in writing that makes specific reference to this Agreement and which is signed
by the party against which enforcement of any such amendment, supplement, or
modification is sought.
12.10 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
12.11 Agreements by Covenanting Parties.
(a) In consideration of the execution and delivery of
this Agreement by CNI, each of the Covenanting Parties agrees, at the Closing,
to enter into the Noncompetition Agreement.
(b) Each of the Covenanting Parties represents and
warrants to CNI as follows:
(1) This Agreement has been duly and validly
executed and delivered by him or her and constitutes his or her legal, valid,
and binding agreement, enforceable in accordance with its terms, except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally, and by judicial discretion
in the enforcement of equitable remedies.
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(2) The Noncompetition Agreement, when executed
and delivered by him or her at Closing, will constitute his or her legal,
valid, and binding agreement, enforceable in accordance with its terms, except
as the enforceability of the Noncompetition Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
and by judicial discretion in the enforcement of equitable remedies.
(3) Neither the execution and delivery by him or
her of this Agreement, the Noncompetition Agreement, or any other document or
instrument to be delivered by him or her pursuant hereto nor the consummation
of the transactions contemplated hereby and thereby will (A) result in a
default (or give rise to any right of termination, cancellation, or
acceleration), with or without notice or the passage of time, or both, under
any of the terms, conditions, or provisions of any note, bond, mortgage,
indenture, agreement, lease, or other instrument or obligation to which he is a
party or by which any of his assets may be bound, or (B) violate any law, rule,
regulation, order, writ, injunction, or decree applicable to him or her.
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IN WITNESS WHEREOF, this Agreement has been executed by BBTC and CNI
as of the date first written above.
Bradenton Broadcast Television Company, Ltd.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------------
Title: President
--------------------------------
The Christian Network, Inc.
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
---------------------------------
Title: Chairman
--------------------------------
COVENANTING PARTIES:
------------------------
------------------------
------------------------
------------------------
------------------------
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LIST OF EXHIBITS
EXHIBIT A -- Form of Noncompetition Agreement
EXHIBIT B -- Form of Time Brokerage Agreement
EXHIBIT C -- Form of Line of Credit Note
EXHIBIT D -- Form of Security Agreement
EXHIBIT E -- Form of Loan Opinion
EXHIBIT F -- Form of Opinion of BBTC's Counsel
EXHIBIT G -- Form of Opinion of CNI's Counsel
EXHIBIT H -- Form of MFR Noncompetition Agreement
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