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EXHIBIT 10.7
FIRST AMENDMENT TO TRANSITIONAL SERVICES AGREEMENT
THIS FIRST AMENDMENT TO TRANSITIONAL SERVICES AGREEMENT is
entered into as of April 24, 1998 by and among STC BROADCASTING OF VERMONT
SUBSIDIARY, INC., a Delaware corporation ("STC"), TUSCALOOSA BROADCASTING,
INC., a Maryland corporation ("Tuscaloosa"), Xxxxxxx X. Xxxxx, as trustee for
the Heritage Stations Disposition Trust ("Trustee"), XXXXXXX TELECASTING, INC.,
a Delaware corporation ("Xxxxxxx"), WNNE-TV, Inc., a Vermont corporation ("WNNE
Subsidiary"; WNNE Subsidiary and Xxxxxxx are collectively referred to herein as
the "Heritage Sellers").
WHEREAS, Xxxxxxx and WNNE have transferred their rights with
respect to television broadcast stations WPTZ-TV, Channel 5, North Pole, New
York ("WPTZ"), WFFF-TV, Channel 44, Burlington, Vermont ("WFFF") and WNNE-TV,
Channel 00, Xxxxxxxx, Xxxxxxx ("XXXX" and collectively, the "Stations") to
Tuscaloosa pursuant to the terms of that certain Asset Purchase Agreement dated
as of July 16, 1997 (the "Multi-Stations Purchase Agreement") by and among
Xxxxxxxx Broadcast Group, Inc. ("Xxxxxxxx") and the Heritage Sellers;
WHEREAS, Tuscaloosa, Trustee and the Heritage Sellers are
parties to that certain Transitional Services Agreement (the "Transitional
Services Agreement") dated as of March 6, 1998, pursuant to which, in order to
accommodate an orderly transition of the Burlington Stations, inter alia, the
Trustee has continued certain administrative services for Tuscaloosa and the
Heritage Sellers have continued to employ the employees of the Burlington
Stations;
WHEREAS, Tuscaloosa and certain other subsidiaries of Xxxxxxxx
and STC are parties to that certain Asset Purchase Agreement dated as of
February 3, 1998 (the "Xxxxxxxx/STC Agreement") pursuant to which, inter alia,
Tuscaloosa is to assign, transfer and convey to STC all of Tuscaloosa's right,
title and interest in the Stations;
WHEREAS, following the execution of the Xxxxxxxx/STC
Agreement, STC, STC Broadcasting, Inc. ("STC Broadcasting"), STC Broadcasting
of Vermont, Inc. ("STCBV"), STC License Company ("STC License Company and
collectively, "STC") and Hearst-Argyle Stations, Inc. ("HAT") entered into that
certain Asset Exchange Agreement dated as of February 18, 1998 pursuant to
which, inter alia,, STC is to assign, transfer and convey to HAT all of STC's
right, title and interest in the assets of WPTZ and WNNE (the "HAT Exchange
Agreement");
WHEREAS, as of the date hereof, (a) pursuant to the
Xxxxxxxx/STC Agreement, Tuscaloosa has transferred the Non-License Assets (as
defined therein) of the Stations to STC,
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and (b) thereafter, STC has transferred (or will transfer) to Xxxxx
Broadcasting of Vermont, LLC ("Xxxxx") the rights of Tuscaloosa with respect to
WFFF;
WHEREAS, in order to accommodate an orderly transition of WPTZ
and WNNE and the rights with respect to WFFF from STC to HAT and Xxxxx,
respectively, and to minimize any disruption to the employees of the Stations
which may be associated with such transfers, the parties desire to (a) assign
the Transitional Services Agreement from Tuscaloosa to STC effective as of the
date hereof, and (b) amend certain provisions of the Transitional Services
Agreement as provided for herein; and
WHEREAS, all capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the
Transitional Services Agreement.
NOW, THEREFORE, the parties set forth above, intending to be
legally bound by this Agreement, agree as follows:
1. Assignment and Assumption. Tuscaloosa hereby
expressly assigns to STC the Transitional Services Agreement and all of
Tuscaloosa's rights and obligations thereunder. STC hereby expressly assumes
the Transitional Services Agreement and all of the rights and obligations of
Tuscaloosa thereunder, confirms and agrees to perform and observe each and
every one of Tuscaloosa's obligations under the Transitional Services Agreement
and acknowledges that STC is now "Tuscaloosa" thereunder. The parties
acknowledge and agree that the effective time of the assignment and assumption
is 12:00 a.m. (New York time) as of the date hereof and all Liabilities of
Tuscaloosa arising and to be performed under the Transitional Services
Agreement prior to such time (including, but not limited to, indemnification
with respect to any act, omission or Liability if such act, omission or
Liability occurs or arises prior to such time) shall be the responsibility and
obligation of Tuscaloosa and all Liabilities of STC, as the assignee of
Tuscaloosa under the Transitional Services Agreement, arising and to be
performed after such time (including, but not limited to, indemnification with
respect to any act, omission or Liability if such act, omission or Liability
occurs or arises after such time) shall be the responsibility and obligation of
STC.
2. Amendments.
Section 1 of the Transitional Services Agreement shall be
amended to read in its entirety as follows:
"1. Term. The term of this Agreement shall commence
as of March 6, 1998 and shall remain in effect until the earlier to occur of (a)
the closing of the transfer of WPTZ and WNNE to HAT, or (b) the close of
business on May 31, 1998. This Agreement shall automatically terminate and be
of no further force or effect on June 1, 1998. Notwithstanding the termination
of this Agreement, all obligations of the parties hereto to be performed after
the term hereof shall survive, including, without limitation, any obligations to
pay any amounts owing hereunder for Operating Cash Flow (as defined below),
indemnification or otherwise."
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Section 4 of the Transitional Services Agreement shall be amended
to read in its entirety as follows:
"4. Operating Cash Flow. The Operating Cash Flow (as
defined below) shall be for the account of Tuscaloosa during the term of
this Agreement and the Trustee shall pay (a) the Operating Cash Flow for
March 1998 on April 30, 1998, at: Tuscaloosa Broadcasting, Inc., c/x
Xxxxxxxx Broadcast Group, Inc., 0000 Xxxx 00xx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, or at such other address as requested in writing by
Xxxxxxxx; provided, however, that in the event of a negative Operating
Cash Flow for March 1998, Xxxxxxxx shall pay to Trustee such negative
amount on April 30, 1998, at the address specified in Section 2 above;
and (b) any unremitted Operating Cash Flow (and remaining cash balance)
to Tuscaloosa on the date of termination of this Agreement at the
following address: STC Broadcasting of Vermont Subsidiary, Inc., c/o STC
Broadcasting, Inc., 0000 0xx Xxxxxx Xxxxx, Xxxxx 000, Xx. Xxxxxxxxxx,
Xxxxxxx 00000; provided, however, that in the event of a negative
Operating Cash Flow as of the date of termination of this Agreement,
Tuscaloosa shall pay to Trustee such negative amount on such date at the
address specified in Section 2 above; provided, further, that the Trustee
shall promptly pay to Tuscaloosa at the address specified above any cash
receipts received by the Trustee after the date of termination of this
Agreement. For purposes of this Agreement, the Operating Cash Flow shall
mean the revenues of the Stations less the operating expenses of the
Stations and the Trustee on and after the Closing Date, excluding
depreciation, film amortization and intangible asset amortization, but
including film payment, as customarily reported on the monthly financial
reports of the Stations."
Section 8(b) of the Transitional Services Agreement shall be
amended to substitute the last sentence of Section 8(b) with the following
sentence:
"The Trustee, the Heritage Sellers and Tuscaloosa
acknowledge and agree that upon the date of termination of this
Agreement, the Station Employees shall become employees of Tuscaloosa in
accordance with the terms and conditions set forth in the
Xxxxxxxx/STC Agreement and all obligations of the Heritage Sellers under
this Section 8 shall terminate."
Section 12 of the Transitional Services Agreement shall be amended
to substitute "STC Broadcasting, Inc." for "Xxxxxxxx Broadcast Group, Inc." as
the Guarantor under the Transitional Services Agreement.
Section 13 of the Transitional Services Agreement shall be amended
to provide that all notices to STC Broadcasting of Vermont Subsidiary, Inc."
shall be delivered to the following:
"c/o STC Broadcasting, Inc.
0000 0xx Xxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
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Attn: Xxxxx Xxxx
Fax: (000) 000-0000"
3. Prorations Between STC and Tuscaloosa. STC and
Tuscaloosa agree that the Service Fee for the month of April 1998 and the
Operating Cash Flow of the Stations shall be prorated between STC and
Tuscaloosa to reflect the principle that Tuscaloosa shall receive the benefit
of the operations of the Stations (and be responsible for all expenses in
connection therewith) for the period prior to the date hereof, and STC shall
receive the benefit of the operations of the Stations (and be responsible for
all expenses in connection therewith) for the period thereafter. The proration
described in the preceding sentence shall be determined in conjunction with the
determination of the Final Proration Amount (as defined in the Xxxxxxxx/STC
Agreement) and in accordance with the procedures for prorations set forth in
Section 2.6.2 of the Xxxxxxxx/STC Agreement.
4. Miscellaneous. Except as expressly modified
hereby, all other terms and conditions of the Transitional Services Agreement
shall remain in full force and effect in accordance with their terms.
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IN WITNESS WHEREOF, each of the parties hereto has executed
this First Amendment to Transitional Services Agreement, or has caused this
First Amendment to Transitional Services Agreement to be duly executed and
delivered in its name on its behalf, all as of the day and year first above
written.
STC BROADCASTING OF VERMONT
SUBSIDIARY, INC.
By: /s/ Xxxxx X. Xxx
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Name: Xxxxx X. Xxx
Title: Secretary
TUSCALOOSA BROADCASTING, INC.
By: /s/ Xxxxx X. Xxx
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Name: Xxxxx X. Xxx
Title: Secretary
XXXXXXX TELECASTING, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Trustee/Vice President
WNNE-TV, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Trustee/Vice President
TRUSTEE:
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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For purposes of Section 12 of
this Transitional Services Agreement
XXXXXXXX BROADCAST GROUP, INC.
By: /s/ Xxxxx X. Xxx
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Name: Xxxxx X. Xxx
Title: Chief Financial Officer
STC BROADCASTING, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
Acknowledged and Consented:
THE NEWS CORPORATION LIMITED
By: /s/ Xxxxxxxx Xxxxxx
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Name: Xxxxxxxx Xxxxxx
Title: Vice President
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