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EXHIBIT 99.1
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EXHIBIT 99.1
TAX EXEMPTION SAVINGS AGREEMENT
THIS TAX EXEMPTION SAVINGS AGREEMENT is among Xxxxxx X. Xxxxxx
("Xxxxxx"), Xxxxxx Communications Corp. ("PCC"), and The Christian Network,
Inc., ("CNI") and is dated this 15th day of May, 1994. Xxxxxx, PCC, and CNI
are referred to individually as a "Party" and, collectively, as the "Parties."
References in this Agreement to affiliates of PCC include all persons over
which PCC has either voting control or owns a majority of the person's equity
interests.
BACKGROUND
CNI is a Florida not-for-profit corporation which has received a
favorable determination from the Internal Revenue Service that it is an
organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended (the "Code"), and is also classified as an organization,
consisting of a church or an association of churches, described in Section
509(a)(1) and Section 170(b)(1)(A)(i) of the Code. One effect of these
determinations is that CNI is not a private foundation.
Xxxxxx has been a major motivational and financial force behind the
creation of CNI and his contributions have enabled CNI to carry on its exempt
purposes. CNI has not had the financial wherewithal nor the expertise
necessary, without the assistance of Xxxxxx and the entities affiliated with
PCC, to deliver its message to the public. Without the support of Xxxxxx,
CNI's activities would have been substantially curtailed and CNI may not have
been able to continue to exist. As a result, CNI, PCC and its affiliates, and
Xxxxxx have engaged in, and will engage in, various transactions involving
transfers of property, services, or cash between or among the Parties (the
"Transactions"), and the Parties wish to enter into this Agreement to ensure
that inadvertent and unintentional effects or consequences of the Transactions
involving CNI will not jeopardize CNI's tax-exempt status.
UNDERTAKINGS
The Parties hereby agree as follows:
1. Purpose. Xxxxxx and PCC, on behalf of itself and each of its
affiliates, acknowledge that the maintenance by CNI of its federal income tax
exemption is fundamental to the purposes of the Parties to this Agreement and
to the purpose of each Transaction involving CNI.
2. Corrective Action. If the Internal Revenue Service, a court,
or other body having regulatory control over CNI determines that any prior or
subsequent Transaction between or among Xxxxxx, PCC and its affiliates, and CNI
(such Transaction is referred to herein as the "Identified Problem") results
(or would result unless corrected) in the imposition of a penalty on CNI or any
of its trustees, officers, directors or employees, or jeopardizes CNI's federal
income tax exemption, then the Parties agree to take whatever action (the
"Corrective Action")
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as is appropriate to avoid the imposition of any such penalty or loss of
federal tax exemption. Corrective Action may include, but is not limited to, a
rescinding of any contract, restructuring of any agreement, or the transfer of
any property, money, or services if the effect of the action would cure the
Identified Problem. To this end, the Parties agree that the Corrective Action
shall be that minimum action necessary to avoid the incurrence of the penalty
or loss of tax-exempt status, as the case may be, and which would still provide
the Transaction with substantial substantive effect if possible.
3. CNI's Liability. CNI shall not be liable to Xxxxxx, PCC, or
any of PCC's affiliates because of any act, or failure to act, by CNI if CNI
determines the act or omission might jeopardize its federal income tax
exemption, nor shall CNI be liable for any loss, damages, or expenses incurred
by Xxxxxx, PCC, or PCC's affiliates in complying with the terms of this
Agreement, or otherwise.
4. Termination or Amendment. Any provision included in any
contract or agreement pertaining to any Transaction shall be void and
unenforceable if it is subsequently determined that compliance with such
provision is reasonably certain to jeopardize CNI's federal income tax
exemption. In the event Xxxxxx or PCC determines that a provision rendered
void by the preceding sentence was material to his or its purposes for entering
into the Transaction, then Xxxxxx or PCC may either (i) immediately terminate
the contract or agreement governing the Transaction, or (ii) obtain the
approval of the other Parties to amend the contract or agreement governing the
Transaction if the amendment is not likely to jeopardize CNI's federal income
tax exemption. CNI's determination that a particular act or omission (or the
inclusion of a particular provision in the contract or agreement pertaining to
a Transaction) may reasonably jeopardize its federal income tax exemption shall
be conclusive and binding upon Xxxxxx and PCC.
5. Costs. Any costs incurred by CNI in connection with this
Agreement, including, but not limited to, costs of obtaining legal opinion,
appraisals or evidence necessary to support the position that a Transaction
does not give rise to an Identified Problem, and attorneys' fees in any action
arising out of, or matters contemplated by, this Agreement shall be paid by
Xxxxxx.
6. Governing Law. This Agreement shall be governed by the laws
of the state of Florida as to all matters, including but not limited to,
matters of validity, construction, effect, performance, and remedies.
7. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance is determined to be invalid
or unenforceable to any extent, the remainder of this Agreement, and the
application of any such provision to the other persons or circumstances, shall
not be affected thereby and shall be enforced to the greatest extent permitted
by law.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
Parties hereto as of the date first above written.
WITNESSES: XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
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XXXXXX COMMUNICATIONS CORP.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Chairman
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THE CHRISTIAN NETWORK, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
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Title: Chairman
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