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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM S-1/A Registration Statement under
The Securities Act of 1933
MEDIA ENTERTAINMENT, INC.
(Exact name of Registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
4841
(Primary Standard Industrial Classification Code Number)
72-1346591
(IRS Employer Identification No.)
8748 Quarters Lake Road, Baton Rouge, Louisiana 70809; (504) 922-7744
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive office)
David M. Loflin, President
Media Entertainment, Inc.
8748 Quarters Lake Road, Baton Rouge, Louisiana 70809
(504) 922-7744
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
Eric Newlan, Esq.
NEWLAN & NEWLAN
5525 North MacArthur Boulevard
Suite 670
Irving, Texas 75038
Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement becomes effective.
If any securities being registered on this Form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box: /X/
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------
- -------------------------
Title of Proposed Proposed
each class maximum maximum
of securities Amount offering aggregate
Amount of
to be to be price per offering
registration
registered registered unit price
fee
- -------------------------------------------------------------
- -----------------------------
Common 360,000 (1) (1)
(1)
Stock, shares
$.0001 par
value
per share
Total 360,000 shares
$100.00(2)
- ---------------------------------------------------------------------
- ----------------------
(1) The shares are being distributed to shareholders as a dividend.
The shares are valued at their book value, $.031 per share, or $187,949 in
the aggregate.
(2) Minimum Fee.
The Registrant hereby amends this Registration Statement on such date as
may be necessary to delay its effective date until Registrant shall file a
further
amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933, or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to Section 8(a), may determine.
MEDIA ENTERTAINMENT, INC.
Cross Reference Sheet
(Pursuant to Rule 404 and
Item 501(b) of Regulation S-K)
Item in Form S-1 Caption or Heading in
Prospectus
- -------------------------------------- ----------------------------
- ------------
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Inside Front Cover Page; Outside
Cover Pages of Prospectus Back Cover Page; Table of Contents
3. Summary Information, Risk
Factors and Ratio of Earnings
to Fixed Charges Prospectus Summary; The
Company; Risk
Factors
4. Use of Proceeds Use of Proceeds
5. Determination of
Offering Price Distribution of
Securities
of the Company
6. Dilution Dilution
7. Selling Securityholders Not Applicable
8. Plan of Distribution Distribution of Securities
of the
Company
9. Description of Securities
to be Registered Description of
Securities
10. Interest of Named Experts Not Applicable
11. Information with Respect
to the Registrant Prospectus Summary; The
Company;
Risk Factors;
Dilution; Use
of Proceeds;
Distribution of
Securities of the
Company;
Dividends;
Capitalization; Selected
Financial Data;
Management's
Discussion and
Analysis of
Financial
Condition and
Results of
Operations; Regulation;
Business;
Management; Certain
Transactions;
Principal Shareholders;
Litigation;
Description of
Securities;
Legal Matters; Experts;
Financial
Statements
12. Disclosure of Commission Management - Indemnification
Position on Indemnification of Directors and Officers
for Securities Act Liabilities
SUBJECT TO COMPLETION, DATED APRIL 21, 1997
PROSPECTUS
360,000 Shares
Media Entertainment, Inc.
Common Stock
$.0001 par value
This Prospectus relates to the distribution by Entertainment Corporation of
America, a Delaware corporation ("ECA"), of 360,000 shares of the $.0001
par value common stock (the "Common Stock") of Media Entertainment,
Inc., a Nevada corporation (the "Company"), as a dividend to the holders of
record of ECA common stock on March 15, 1997. (See "Information
Concerning ECA").
Certificates evidencing 360,000 shares of the Common Stock of the
Company will be distributed by mail within a reasonable time after the date
of this Prospectus on the basis of .0732824 of a share of the Company's
Common Stock for each share of the outstanding common stock of ECA.
Holders of ECA Common Stock will not be charged or assessed for the
Common Stock of the Company distributed to them as a dividend and the
shareholders will be taxed on receipt of such dividend to the extent of the
value of the shares received. Under the laws of the State of Delaware, the
state of incorporation of ECA, the distribution of the 360,000 shares of the
Common Stock of the Company will be a dividend out of capital surplus.
(See "Federal Income Taxes").
The Company was incorporated on November 1, 1996, and, on November 15,
1996, issued to ECA 360,000 shares of its $.0001 par value Common Stock
for a cash consideration of $360.00. There exist no affiliations between ECA
and the Company. The Company was organized with a view toward
operating as a holding company in the wireless cable television and
community (low power) television industries, as well as other segments of
the communications industry. The Company intends to operate its business
through subsidiary corporations. (See "Business").
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus does not cover resales of Common Stock of the Company by
persons who are deemed to be "affiliates" of the Company under the Rules
and Regulations of the Securities and Exchange Commission. Any and all
shares of Common Stock of the Company received by an affiliate of the
Company as a dividend must either be registered under the Securities Act of
1933, as amended (the "Act"), prior to resale, or sold in compliance with
Rule 144 under the Act or pursuant to another exemption from registration.
The Company is bearing the expenses of the registration and distribution of
the Company's Common Stock. Neither the Company nor ECA will receive
any cash or other proceeds in connection with the distribution of the
Company's Common Stock to the shareholders of ECA. (See "Use of
Proceeds"). There are no underwriting arrangements made with respect to
the proposed distribution transaction to the knowledge of the Company.
Certain information concerning the federal income tax consequences of the
dividend distribution is set forth herein under "Federal Income Taxes".
As of the date of this Prospectus, there has been no trading market for the
Company's Common Stock. There can be no assurance that a trading market
will develop or, if such should develop, that such market will be maintained.
(See "Risk Factors").
OWNERSHIP OF COMMON STOCK OF THE COMPANY INVOLVES
A DEGREE OF RISK. SEE "RISK FACTORS" FOR A DISCUSSION
OF PARTICULAR INVESTMENT RISKS.
The date of this Prospectus is -------------, 1997
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY SECURITIES IN ANY JURISDICTION TO ANY
PERSON TO WHOM SUCH OFFER OR SOLICITATION IS
UNLAWFUL.
This Prospectus contains information concerning the Company as of the date
of this Prospectus, unless otherwise indicated. The delivery of this
Prospectus at any time does not constitute a representation that the
information contained herein is correct as of any date other than the date of
this Prospectus, unless otherwise indicated, and the delivery of this
Prospectus shall not create any implication that there has been no change in
the business or affairs of the Company since such date.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Form S-1 Registration Statement (herein, together with all
amendments thereto, called the "Registration Statement") of which this
Prospectus constitutes a part, under the Securities Act of 1933, as amended,
and the Rules and Regulations promulgated thereunder (the "Act"), with
respect to the Common Stock to be distributed hereunder. This Prospectus
omits certain information contained in the Registration Statement, and
reference is made to the Registration Statement, including the exhibits
thereto, for further information with respect to the Company and the
securities offered hereunder. Statements contained in this Prospectus as to
the contents of any contract or other document are summaries that are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement herein being qualified and amplified in all
respects by such reference. Items of information omitted from this
Prospectus but contained in the Registration Statement may be obtained from
the Securities and Exchange Commission, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, upon the payment of the fee prescribed by
the Rules and Regulations of the Commission or may be examined without
cost. Also, the Registration Statement, with exhibits, may be examined on,
and/or downloaded from, the Internet at: http://www.sec.gov/cgi-bin/srch-edgar
PROSPECTUS SUMMARY
The Company
The Company was incorporated in the State of Nevada on November 1, 1996,
to operate as a holding company in the wireless cable television and
community (low power) television industries, as well as other segments of
the communications industry. Effective December 20, 1996, the Company
acquired from certain of its officers and directors and others licenses and
leases of licenses to wireless cable television channels and community (low
power) television channels. As of December 31, 1996, the Company
acquired all of the outstanding capital stock of (1) Winter Entertainment,
Inc.,
a Delaware corporation incorporated on December 28, 1995 ("WEI"), and (2)
Missouri Cable TV Corp., a Louisiana corporation incorporated on October
9, 1996 ("MCTV"). WEI operates a community television station in Baton
Rouge, Louisiana; MCTV owns wireless
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cable television channels in Poplar
Bluff, Missouri, which system has been constructed and is ready for
operation, and Lebanon, Missouri, which market's system has yet to be
constructed. In January 1997, the Company entered into a joint venture
(known as "Web One Wireless I.S.P. - Baton Rouge, J.V.") (the "Joint
Venture") which is to operate as a Wireless Internet Service Provider (ISP)
in Baton Rouge, Louisiana, and acquired the right to utilize, on an exclusive
basis, a licensed Wireless Internet Access System in operating as a Wireless
ISP in several U.S. cities. The Company carries on its business through its
subsidiaries. References to the "Company" include WEI, MCTV and the
Joint Venture, unless the context indicates otherwise. (See "The Company",
"Business" and "Certain Transactions").
Distribution of Securities of the Company
The Company presently has outstanding 6,170,000 shares of Common Stock,
$.0001 par value per share, of which 360,000 shares are held by
Entertainment Corporation of America, a Delaware corporation (ECA).
Pursuant to this Prospectus, ECA will distribute 360,000 shares of the
Company's Common Stock as a dividend to the shareholders of record of
ECA as of March 15, 1997. (See "Information Concerning ECA"). After
such dividend distribution, the Company will be owned by the persons and
entities who were shareholders of record of ECA on March 15, 1997, as to
360,000 shares and by those persons and entities owning shares of Common
Stock as of the date of this Prospectus as to 5,810,000 shares. On March 15,
1997, there were approximately 900 shareholders of ECA; therefore, the
Company will have approximately 925 shareholders after the distribution of
Company Common Stock by ECA to its shareholders.
Certificates evidencing 360,000 shares of the Common Stock of the
Company will be distributed to holders of ECA Common Stock of record as
of March 15, 1997, by mail within a reasonable time after the date of this
Prospectus on the basis of .0732824 of a share of Company Common Stock
for each share of ECA Common Stock. (See "Distribution of Securities of
the Company").
For information regarding the federal income tax consequences of the
proposed dividend distribution, see "Federal Income Taxes" herein.
Use of Proceeds
Neither the Company nor ECA will receive any proceeds from the dividend
distribution described herein. (See "Use of Proceeds").
Management
The directors of the Company are David M. Loflin, Waddell D. Loflin,
Richard N. Gill, Ross S. Bravata and Michael Cohn. David M. Loflin is
President of the Company and Waddell D. Loflin is Vice President and
Secretary of the Company. (See "Management").
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THE COMPANY
Media Entertainment, Inc. (the Company) was incorporated under the laws
of the State of Nevada on November 1, 1996, primarily for the purpose of
acquiring the rights to various wireless cable television channels and various
community (low power) television channels, and, thereafter, to operate as a
holding company in the wireless cable television and community (low power)
television industries, as well as other segments of the communications
industry. Effective December 31, 1996, Winter Entertainment, Inc. (WEI)
and Missouri Cable TV Corp. (MCTV) became wholly-owned subsidiaries
of the Company pursuant to separate stock-for-stock reorganizations. WEI
is a predecessor of the Company. (See "History" under "Business").
The Company has begun to engage in the development of wireless cable
television systems and the construction of community (low power) television
stations. The Company's activities are, or will, in the near future, be,
carried
on in certain cities in Georgia, Idaho, Louisiana, Missouri, Oregon and
Washington. The Company also is seeking to acquire broadcast channels in
other, as yet unidentified, cities throughout the United States. In January
1997, the Company entered into a joint venture (known as "Web One
Wireless I.S.P. - Baton Rouge, J.V.") (the Joint Venture) which is to operate
as Wireless Internet Service Provider (ISP) in Baton Rouge, Louisiana, and
the Company has acquired the rights to utilize, on an exclusive basis, a
licensed Wireless Internet Access System in operating as a Wireless ISP in
several U.S. cities, including, among others, Seattle, Washington, Portland,
Oregon, New Orleans, Louisiana, and Dallas and Houston, Texas. The
Company anticipates that it will enter other segments of the communications
industry as opportunities become available. (See "Business"). References
to the "Company" include WEI, MCTV and the Joint Venture, unless the
context indicates otherwise.
The Company's headquarters is located at 8748 Quarters Lake Road, Baton
Rouge, Louisiana 70809. Its telephone number is (504) 922-7744; its
facsimile number is (504) 922-9123.
RISK FACTORS
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Prospectus contains statements that are forward-looking, such as statements
relating to plans for future expansion, as well as other capital spending,
financing sources and the effects of regulation. Such forward-looking
information involves important risks and uncertainties that could
significantly
affect anticipated results in the future and, accordingly, such results may
differ from those expressed in any forward-looking statements made herein.
These risks and uncertainties include, but are not limited to, those relating
to
projected expenses, consumer acceptance, the availability of financing, the
ability to obtain and maintain required licenses, development and
construction and dependence on existing management. The Company
cautions readers of this Prospectus not to place undo reliance on any such
forward-looking statements and to be mindful that such statements speak
only as of the date made.
The Common Stock of the Company should be considered an investment
involving a degree of risk. Factors which holders and prospective purchasers
of Common Stock should weigh carefully include the following:
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Risks Concerning the Company
Limited Operating History. The Company has only recently begun to engage
in business activities. The Company's operations, and proposed operations,
are subject to all of the risks inherent in the establishment of a new
business,
particularly one in the highly competitive communications industry. The
likelihood of the success of the Company must be considered in light of the
problems, expense, difficulties, complications and delays frequently
encountered in connection with establishing a new business, including,
without limitation, market acceptance of the Company's services, regulatory
problems, unanticipated expenses and competition. There is no assurance
that the proposed business activities of the Company will be successful or
that the Company will ever earn a profit from such proposed activities. (See
"History" under "Business").
Going Concern Opinion. The Company's independent auditor, Weaver and
Tidwell, L.L.P., expressed, in its opinion on the Company's audited financial
statements, substantial doubt about the Company's ability to continue as a
going concern. Reference is made to the financial statements of the
Company included elsewhere herein, and, specifically, to the Independent
Auditor's Report and Note 1 to the financial statements of the Company.
Dependence on Management. The Company is dependent on its current
management for its success. In particular, the Company is dependent on the
efforts of its President, David M. Loflin, for its success. Mr. Loflin
expects
to devote not less than 75% of his time to the business of the Company
during the initial stages of development, which amount of time is expected
to be adequate. Should the Company be successful in obtaining at least
$500,000 under its currently ongoing private placement of Common Stock,
of which there is no assurance, Mr. Loflin will then begin to devote his full-
time efforts to the Company's business. The Company and Mr. Loflin have
not entered into an employment agreement, nor has any key-man life
insurance been purchased with respect to Mr. Loflin or any other members
of the Company's management. However, it is anticipated that the Company
and Mr. Loflin will execute a written employment agreement in the near
future, although no assurance in this regard can be given. The Company's
success is also dependent upon its ability to attract and retain qualified
employees to meet the Company's needs during its growth. (See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" and "Management").
Control of the Company. After giving effect to the distribution of the
Company's Common Stock by ECA, the Company's directors and executive
officers will own approximately 81.13% of the Company's outstanding shares
of Common Stock. Accordingly, these shareholders will continue to be able
to elect the Company's directors and thereby control the management policies
of the Company, as well as determine the outcome of corporate actions
requiring shareholder approval by majority, or so-called "super majority",
action, regardless of how other shareholders of the Company may vote. Such
ownership of Common Stock may have the effect of delaying, deferring or
preventing a change in control of the Company and may adversely affect the
voting rights of other holders of Common Stock. (See "Management" and
"Principal Shareholders").
Conflicts of Interest. It is possible that conflicts of interest could
arise in the
negotiation of the terms of any transaction between the Company and its
shareholders, officers, directors or affiliates. The Company has no plans or
arrangements, such as the hiring of independent consultants or arbiters, for
the resolution of disputes between the Company and such persons if they
arise. The Company and its public shareholders could be adversely affected,
should such individuals choose to place their own interests before those of
the Company. No assurance can be given that conflicts of interest will not
cause the Company to lose potential opportunities, profits or management
attention. The
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Company could acquire channel licenses or other assets from
management, principal shareholders or their affiliates or from entities in
which management, principal shareholders or their affiliates may hold an
interest. Such persons or entities could derive monetary or other benefits
from such transactions. Such benefits could include, without limitation, the
assumption of, or release from, liabilities incurred by such persons or result
in increased control of the Company by such persons.
The Company's President, David M. Loflin, owns a television station,
WTVK Channel 11, in Baton Rouge, Louisiana, which operates in
competition with the Company's Baton Rouge community television station,
K13VE Channel 13. It is possible that Mr. Loflin's ownership of a
competing television station will result in a conflict of interest for
Mr. Loflin,
particularly with respect to obtaining advertisers. Mr. Loflin intends to
resolve any such conflict that may arise in accordance with his fiduciary duty
and duty of loyalty to the Company. There is no assurance that Mr. Loflin
will be able to resolve any such conflict of interest to the Company's
benefit.
Need for Future Financing. The Company is in need of additional financing
to complete construction and exploitation of its proposed wireless cable
systems, community (low power) television channels and Wireless ISP
markets. The Company is currently conducting a private placement of its
Common Stock. There is no assurance that the Company will derive any
proceeds from such private offering. The Company does not have a bank
line-of-credit and there can be no assurance that any required or desired
financing will be available, through bank borrowings, debt or equity, or
otherwise, on acceptable terms. To the extent that future financing
requirements are satisfied through the issuance of equity securities,
investors
may experience significant dilution in the net book value per share of
Common Stock. Any future debt incurred by the Company could result in a
substantial portion of the Company's cash flow from operations being
dedicated to the payment of principal and interest on such indebtedness and
may render the Company more vulnerable to competitive pressures and
economic downturns. The Company's future capital requirements will
depend upon a number of factors, many of which are not within the
Company's control, including programming costs, capital costs, marketing
expenses, staffing levels, subscriber growth and competitive factors. A
failure by the Company to secure such additional financing would render the
Company unable to exploit its channel licenses and leases of channel
licenses. In addition, the Company is in need of additional financing to
exploit its Wireless ISP business opportunities. There is no assurance that
the
Company will be able to secure such additional financing or, if found, that
such financing would be on terms favorable to the Company. (See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" and "Business").
Uncertainty of Significant Assumptions. The Company's plans for
implementing its proposed business operations and achieving profitability
from its intended operations are based on the experience, judgment and
certain assumptions of its management, and upon certain available
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information concerning the communications industry, in general, and the
Company's proposed plan of operation, in particular. No independent market
studies have been conducted concerning the extent to which customers will
utilize the services and products to be offered by the Company, nor are any
such studies planned. There can be no assurance that the Company's plans
will materialize, or that the Company's assumptions will prove correct. (See
"Business").
Lack of Patent Protection. The Company has no material proprietary
technology or software. As a result, there are no technological or patent
barriers to entry by other companies into the Company's areas of endeavor.
Risks Concerning Wireless Cable
Competition. The pay television industry is highly competitive. Wireless
cable systems face competition from several sources, including, among
others, hard-wire cable companies, Satellite Master Antenna Television
systems, Direct Broadcast Satellite and other alternative methods of
distributing and receiving television transmissions. Further, premium movie
services offered by cable television systems have encountered significant
competition from the home VCR industry. In areas where several local off-
air VHF/UHF broadcast signals can be received without the benefit of cable
television, cable television systems (hard-wire and wireless) also have
experienced competition from the availability of broadcast signals generally
and have found market penetration to be difficult. In addition, within each
market, the Company initially must compete with others to acquire, from the
limited number of channel licenses issued, rights to a minimum number of
channels needed to establish a viable system. Legislative, regulatory and
technological developments may result in additional and significant
competition, including competition from local telephone companies and from
a proposed new wireless service known as local multi-point distribution
service. However, new digital compression technologies may have the effect
of allowing the Company to compete in a particular market having acquired
only two or three channel licenses. Because the Company intends to target
its initial marketing effort in each of its markets to households that are
unpassed by hard-wire cable and that have limited access to local off-air
VHF/UHF broadcast channels, the Company does not anticipate, during
start-up, significant direct competition from local hard-wire cable
companies.
No assurance can be given, however, that the Company will not face direct
competition from hard-wire cable companies in the future. It can be expected
that potential competitors of the Company will have greater resources,
financial and otherwise, than the Company. Also, legislative, regulatory and
technological developments may result in additional and significant new
competition, including competition from local telephone companies. No
assurances can be given that the Company will compete successfully in its
wireless cable markets. (See "Business - Wireless Cable - Competition"
under "Business").
Dependence upon Frequencies; No Automatic Renewal of Licenses. The use
of frequencies is subject to regulation by the FCC, and, therefore, the
ability
of the Company's wireless cable systems to utilize such channels is
dependent upon continuing compliance by the Company (or third-party
lessors) with such applicable regulations as the FCC may adopt from time to
time. FCC licenses for wireless cable frequencies must be renewed
periodically and there is no automatic renewal of such licenses. If the
underlying FCC licenses are cancelled or not renewed, or if leases are
terminated or not renewed, the Company's wireless cable systems would be
unable to deliver programming on such frequencies, which could have a
materially adverse effect on the Company. (See "Regulation").
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Dependence Upon Programming Availability. The Company's wireless
cable systems must obtain contracts with various program suppliers for non-
broadcast programming services (such as ESPN, HBO, CNN and MTV). The
likelihood that program material will be unavailable to the Company is
significantly mitigated by the Cable Act and various FCC regulations issued
thereunder, which, among other things, impose limits on exclusive
programming contracts and generally prohibit cable programmers in which
a cable operator has an attributable interest from discriminating against
cable
competitors with respect to the price, terms and conditions of sale of
programming. There is, nevertheless, no assurance that any programming
source will be available to the Company's wireless cable systems or, if
available, that it will be available at reasonable prices or will be
acceptable
to subscribers. (See "Business - Wireless Cable - Programming" under
"Business").
Impediments to Proposed Expansion. The Company has adopted a business
strategy which includes, in part, growth through the development of
additional wireless cable systems. The Company's proposed expansion will
be dependent on, among other things: the availability of channel license
rights on terms and conditions acceptable to the Company, if at all;
successful
development and construction of operating systems; the availability of
suitable management and other personnel; the Company's general ability to
manage growth; and the availability of adequate financing. The Company's
management will be responsible for the selection of expansion opportunities
in its sole discretion and shareholders will not be presented with advance
information regarding expansion opportunities or the ability to approve or
disapprove system expansion opportunities. There can be no assurance that
the Company will be successful in its proposed business strategy.
Uncertainties Associated with Wireless Cable. The Company has only
recently entered the wireless cable industry and has not yet launched its
initial
commercial broadcast. Due to this lack of operating history, the Company's
growth can be expected to face unanticipated impediments, costs and
competitive factors in connection with the expansion of the business,
including changes in laws or regulations, technological advances, the
availability of funding for future subscriber growth and the impact of new
competitors for subscribers. There is no assurance that the Company will be
able to compete successfully in its wireless cable markets. (See "Business -
Wireless Cable - Competition" under "Business").
Physical Limitations of Wireless Cable Transmission. The vast majority of
wireless cable programming is transmitted through the air via microwave
frequencies (2500 to 2700 MHZ) from a transmission facility to a small
receiving antenna at each subscriber's location, which generally requires a
direct "line-of-sight" from the transmission facility to the subscriber's
receiving antenna. Therefore, in communities with tall trees, hilly terrain,
tall
buildings or other obstructions in the transmission path, wireless cable
transmission can be difficult or impossible to receive at certain locations
without the use of signal repeaters known as "beambenders". The terrain in
the Company's markets is generally conducive to wireless cable transmission
and the Company does not presently anticipate any material use of
beambenders. Nevertheless, because hard-wire cable systems deliver the
signal to a subscriber's location through a network of coaxial cable and
amplifiers and do not require a direct line-of-site, it is possible that a
particular hard-wire cable system may have a competitive advantage over the
Company in those areas where the reception of wireless cable transmission
is difficult. In addition, extremely adverse weather can damage transmission
and receiving antennas, as well as transmit-site equipment. However, the
Company does not believe such potential damage represents a material risk.
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A small number of wireless cable systems utilize several low power
television stations, built-out for wireless cable operations, within a
particular
market to broadcast programming to a small receiving antenna at each
subscriber's location. Because the programming of such a wireless cable
system is broadcast by low power television stations rather than via
microwave frequencies, most "line-of-sight" limitations usually associated
with wireless cable are eliminated. Two of the Company's markets, Poplar
Bluff and Lebanon, Missouri, are designed in such a manner. The
Company's management intends to develop as many markets as possible in
this manner, because of management's belief that this style of wireless cable
system is superior to the "traditional" wireless cable system structure.
However, no assurance can be made in this regard. (See "Business - Wireless
Cable - Company Markets" under "Business").
Government Regulation. The wireless cable industry is highly regulated.
The right to transmit on wireless cable channels is regulated by the FCC and
the retransmission of local off-air VHF/UHF broadcasts is regulated by the
U.S. Copyright Office, pursuant to the Copyright Act.
Pursuant to the Cable Act, the FCC adopted rate regulations relating
exclusively to hard-wire cable systems, which regulations provide for, among
other things, reductions in the basic service and equipment rates charged by
most hard-wire cable operators and FCC oversight of rates for all other
services and equipment. The Cable Act also provides for rate deregulation
of a hard-wire cable operator in a particular market, once there is "effective
competition" in that market. Effective competition is deemed to exist when,
among other circumstances, another cable operator exceeds a 15%
penetration in that market. The Company cannot predict precisely what
effect these regulations or further governmental regulations may have on
hard-wire cable operators as to price and service. While current FCC
regulations are intended to promote the development of a competitive pay
television industry, the rules and regulations affecting the wireless cable
industry may change, and any future changes in FCC rules, regulations,
policies and procedures could have an adverse effect on the wireless cable
industry, as a whole, and on the Company, in particular.
Secondary transmission of a broadcast signal is permissible only if approved
by the copyright holder or if subject to compulsory licensing under the
Copyright Act. The U.S. Copyright Office has taken the position that,
effective January 1, 1995, wireless cable operators, unlike hard-wire cable
operators, will not be "cable systems" entitled to a compulsory license under
the Copyright Act. Pursuant to the Cable Act, local broadcasters may now
require that wireless cable operators obtain their consent before
retransmitting local off-air VHF/UHF broadcasts. The Wireless Cable
Association International does not believe that retransmission consents are
applicable to wireless cable system operators. However, the Company
intends, nonetheless, to seek to obtain such consents in each of its markets
where the Company may retransmit on a wireless cable channel. There can
be no assurance that the Company will be able to obtain such consents on
terms satisfactory to the Company, if required.
Wireless cable operators are also subject to regulation by the FAA with
respect to the construction of transmission towers and to certain local zoning
regulations affecting construction of towers and other facilities. There may
also be restrictions imposed by local authorities. There can be no assurance
that the Company will not be required to incur substantial additional costs in
complying with such regulations and restrictions. (See "Wireless Cable"
under "Regulation").
9
<PAGE>
Difficulties and Uncertainties of a New Industry. Wireless cable television
is a relatively new industry with a short operating history. Potential
investors
should be aware of the difficulties and uncertainties that are normally
associated with new industries, such as lack of consumer acceptance,
difficulty in obtaining financing, increasing competition, advances in
technology and changes in laws and regulations. There is no assurance that
the wireless cable industry will, in general, and the Company, in particular,
develop and survive over the long term. (See "Business").
Risks Concerning Community (Low Power) Television
Competition. Community (low power) television stations compete for
advertising revenue in their respective markets, primarily with other
broadcast television stations and cable television channels, and compete with
other advertising media, as well. Such competition is intense. In addition,
competition for programming, management personnel and network
affiliations is severe. There is no assurance that the Company's community
television channels, once built, of which there is no assurance, will be able
to compete effectively in their respective markets. (See "Business -
Community (Low Power) Television - Competition" under "Business").
Government Regulation. Television broadcasting operations are subject to
the jurisdiction of the FCC under the Communications Act. The
Communications Act empowers the FCC to issue, revoke or modify
broadcast licenses, to assign frequencies, to determine the locations of
stations, to regulate the broadcasting equipment used by stations, to
establish
areas to be served, to adopt such regulations as may be necessary to carry out
the provisions of the Communications Act and to impose certain penalties for
violation of its regulations. The Company's currently operating television
station is, and the Company's future television stations will be, subject to a
wide range of technical, reporting and operational requirements. There is no
assurance that the Company will be able to comply with such requirements
in the future. Similarly, the Federal Trade Commission, among other
regulatory agencies, imposes a variety of requirements that affect the
business and operations of broadcast stations. Proposals for additional or
revised requirements are considered from to time by the FCC, other
regulatory agencies and Congress. The Company is unable to predict what
new or revised Federal requirements may result from such consideration or
what impact, if any, such requirements might have upon the operation of a
television station operated by the Company. (See "Community (Low Power)
Television" under "Regulation").
Risks Concerning Wireless Internet
Competition. The Company intends to operate as a Wireless Internet Service
Provider (ISP) in numerous U.S. cities. Competition among traditional
(telephone-line dependent) ISP businesses is intense, with price and ease of
Internet access being primary points of competition. Because many of the
Company's potential competitors may possess greater resources, financial
and otherwise, than does the Company, there is no assurance that the
Company will be able to attract customers for its Wireless ISP services.
Thus, it is possible that the Company will be unsuccessful in establishing its
Wireless ISP business in one or more of its proposed Wireless ISP markets.
(See "Business - Wireless Internet - Competition" under "Business")
10
<PAGE>
New Product; Possible Lack of Consumer Acceptance. The Company
intends to be the first Wireless ISP in each of its proposed markets. While
the Company expects that its Wireless ISP service will be readily accepted
by consumers, as with any new product or service, there can be no assurance
that the Company's Wireless ISP service will be accepted by consumers in
commercially viable numbers.
Risks Concerning the Common Stock
Dividend Policy. The Company does not anticipate the payment of cash
dividends in the foreseeable future, but intends to re-invest any profits
which
may be earned by the Company's business. (See "Dividends").
Absence of Trading Market for the Common Stock. No market for trading
the Common Stock of the Company currently exists and there is no assurance
that a market ever will develop or, should such ever be established, that it
will be maintained.
Possible Volatility of Market for Common Stock. The market prices for
securities of newly public companies have, historically, been highly
volatile.
Future announcements concerning the Company or its competitors, including
operating results, technological innovations and government regulations,
could have a significant impact on the market price of the Common Stock of
the Company, increasing possible volatility.
Market Overhang; Restricted Securities. 5,810,000 shares, or 94.16%, of the
outstanding shares of Common Stock of the Company, after the dividend
distribution of Common Stock to the shareholders of ECA, will be owned by
the current shareholders of the Company. Such shares of Common Stock will
be eligible for resale to the public beginning in November 1997, pursuant to
the provisions of Rule 144 of the Rules and Regulations of the Commission.
Such amount of Common Stock may represent a significant overhang on the
market for the Common Stock, if any develops. Such overhang on the
market for the Common Stock could, if a substantial number of shares
comprising such overhang were sold in a short period of time, depress the
then-current market price for the Common Stock of the Company. However,
no prediction as to the effect of such overhang on the market for the Common
Stock of the Company can be made.
In general, under Rule 144, as currently in effect, a person (or persons whose
shares are aggregated) who has beneficially owned his or her restricted stock
for at least one year, including persons who may be deemed "affiliates" of the
Company, as that term is defined under the Act, would be entitled to sell
within any three-month period a number of shares that does not exceed the
greater of 1% of the then-outstanding shares of the Company's Common
Stock (approximately 61,700 shares based on the current number of
outstanding shares) or the average weekly trading volume of trading on all
national securities exchanges and/or reported through the automated
quotation system of a registered securities association of the Company's
Common Stock during the four calendar weeks preceding the filing of the
Form 144 with respect to such sale. Sales under Rule 144 are also subject to
certain manner of sale provisions and notice requirements, and to the
availability of current public information about the Company. However, a
person who is not deemed to have been an affiliate of the Company at any
time during the 90 days preceding a sale, and who has beneficially owned his
or her restricted shares for at least two years, would be entitled to sell
such
shares under Rule 144 without regard to the requirements described above.
11
<PAGE>
Market Overhang; Registration Rights. The Company has granted
registration rights with respect to 150,000 shares of its currently
outstanding
Common Stock. As to such shares, the holder can demand the registration
of its shares any time following the effective date of the Registration
Statement of which this Prospectus forms a part. (See "Legal Matters").
Such amount of Common Stock may represent a significant overhang on the
market for the Common Stock, if any develops. Such overhang on the
market for the Common Stock could, if a substantial number of shares
comprising such overhang were sold in a short period of time, depress the
then-current market price for the Common Stock of the Company. However,
no prediction as to the effect of such overhang on the market for the Common
Stock of the Company can be made.
Tax Risks
Valuation of Distribution. The Internal Revenue Service (the "Service") is
not bound by the determination of fair market value of the Common Stock
being distributed by ECA as a dividend to its shareholders. In the event the
Service determines the Common Stock to have a higher value, the recipients
may have to pay income tax on a greater amount of gain than that arising
from the value attributed to the Common Stock by ECA. (See "Federal
Income Taxes").
No Internal Revenue Service Ruling. The Company has not obtained, nor
does it intend to obtain, an advance ruling from the Service as to the
valuation of the dividend distribution Common Stock to be distributed under
this Prospectus. The absence of an advance ruling increases the chance that
the Service will challenge the valuation attributed to the Common Stock
received by a taxpayer. (See "Federal Income Taxes").
USE OF PROCEEDS
Neither the Company nor ECA will receive any proceeds from the dividend
distribution to the shareholders of ECA of 360,000 shares of the Company's
Common Stock.
INFORMATION CONCERNING ECA
General
Entertainment Corporation of America (ECA) was formed in 1987 under the
laws of the State of Delaware under the name "Mulka, Inc." In February
1988, all of the shares of Mulka, Inc. were distributed to the shareholders of
Forme Capital, Inc. In September 1989, Mulka, Inc. changed its name to
"Entertainment Corporation of America" in connection with the current
management's acquiring control. Until 1994, ECA's primary business was
the operation of adult entertainment facilities. The facilities, known as The
Gold Club , are located in Atlanta, Georgia, and Baton Rouge, Louisiana.
In 1994, ECA sold its interest in both such facilities. Since 1994, ECA has
searched for a going business to acquire.
Management
John D. Kirkendoll, Alan G. Kirkendoll and Karen M. Rhea are the directors
of ECA as of the date of this Prospectus. Mr. John Kirkendoll serves as
President, Mr. Alan Kirkendoll serves as Vice President and Ms. Rhea serves
as Secretary/Treasurer.
12
<PAGE>
Outstanding Securities
On March 15, 1997, the record date for the distribution of Common Stock of
the Company, ECA had outstanding 4,912,500 shares of its $.001 par value
common stock. The common stock of ECA is not currently traded in any
public market.
Prior Dividend Distribution
In August 1993, ECA distributed 300,000 shares of common stock of K.L.S.
Enviro Resources, Inc. (formerly K.L.S. Gold Mining Company), a Nevada
corporation ("KLS"), to its shareholders as a property dividend. The
common stock of KLS currently trades on the OTC Electronic Bulletin Board
under the symbol "KLSE". The closing bid price for the common stock of
KLS on April 16, 1997, as reported by the OTC Electronic Bulletin Board,
was $4.00 per share. There is no assurance that a market for the Common
Stock of the Company will ever be established.
DISTRIBUTION OF SECURITIES OF THE COMPANY
Background and Reasons for Distribution
The principals of the Company envisioned, as part of their overall plan for
the
Company, having the Company become publicly owned soon after its
inception. To that end, the Company's directors investigated various
methods of becoming publicly owned. After their investigation, the directors
determined that the dividend distribution, or "spin-off", method contemplated
by this Prospectus would be the least expensive, least ownership-dilutive
means of becoming publicly owned. Following an introduction facilitated by
counsel to the Company, the Company and ECA agreed to the transaction to
which this Prospectus relates.
The Board of Directors of ECA perceived a potential for added value to the
ownership of ECA common stock through the dividend distribution of
Company Common Stock. ECA's management anticipates that its
shareholders will benefit from the dividend distribution, though there is no
assurance that such will be the case. (See "Risks Concerning the Common
Stock - Absence of Trading Market for the Common Stock" under "Risk
Factors").
Method of Distribution and Subsequent Trading
Certificates representing 360,000 shares of the Company's Common Stock
will be distributed by mail within a reasonable time after the date of this
Prospectus on the basis of .0732824 of a share of Company Common Stock
for each share of ECA common stock (approximately one share of the
Company's Common Stock for each 14 shares of ECA held) to holders of
ECA common stock of record on March 15, 1997. (See "Information
Concerning ECA"). On March 15, 1997, there were approximately 900
shareholders of ECA; therefore, the Company will have approximately 925
shareholders after the distribution. No exchange of shares, payment or other
action by holders of ECA common stock will be required. Common Stock
of the Company will be distributed to the nearest number of whole shares; no
fractional shares will be issued. Any such fractional interests will not be
compensated by ECA.
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<PAGE>
A copy of this Prospectus will be mailed to each ECA shareholder of record
as of March 15, 1997, within a reasonable time after the date of this
Prospectus. Copies will also be mailed to brokers and dealers who make a
market in the common stock of ECA, if any, and to other brokers and dealers
who may reasonably be expected to trade or make a market in the Common
Stock of the Company. There can be no assurance, however, that any market
will develop in the Common Stock. The likelihood of the Common Stock of
the Company being regularly traded in any market or at any particular price
cannot be predicted.
DIVIDENDS
The Company anticipates that it will retain any profits from its operation for
re-investment in the Company's business and does not anticipate paying any
such dividends in the foreseeable future. (See "Risks Concerning the
Common Stock - Dividend Policy" under "Risk Factors").
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
December 31, 1996. This table should be read in conjunction with the
financial statements of the Company included herein.
As at
12/31/96
Long-Term Debt
$ ---
Shareholders' Equity:
Common Stock - $.0001 par value; 100,000,000
shares authorized, 6,000,000 shares issued as
at December 31, 1996
600
Additional Paid-in Capital
189,528
Deficit Accumulated During the
Development Stage
(19)
Shareholders' Equity
187,949
Total Capitalization
187,949
SELECTED FINANCIAL DATA
The following selected financial data have been derived from the financial
statements of the Company, Missouri Cable TV Corp. (MCTV) and Winter
Entertainment, Inc. (WEI), which financial statements are included elsewhere
herein. The selected financial data set forth below should be read in
conjunction with such financial statements, related notes and other financial
information included elsewhere in this Prospectus and "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
14
<PAGE>
STATEMENT OF OPERATIONS DATA:
The MCTV
Company for the
Pro
for the period
Forma
Inception from Incep- WEI for
for the
(11/1/96) tion (10/9/96) the year
year
thru thru ended
ended
12/31/96 12/31/96 12/31/96
12/31/96
----------- ---------------- ------------
-------------
Revenue $ --- $ --- $3,337
$ 3,337
Expenses 19 7,763 4,554
12,336
Net loss (19) (7,763) (1,217)
(8,999)
Loss per share (0.00) (0.00) (0.81)
(0.00)
BALANCE SHEET DATA:
The Company
as at
12/31/96
-----------------
Working Capital (Deficit) $ (30,839)
Total Assets 248,838
Total Current Liabilities 60,889
Shareholders' Equity 187,949
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Background
The Company, incorporated on November 1, 1996, has not engaged in active
business operations. One of the Company's subsidiaries, WEI, has been
engaged in television broadcast operations since January 1996, while the
Company's other subsidiary, MCTV, has only recently begun to attempt to
attract subscribers for its wireless cable system located in Poplar Bluff,
Missouri. Since its inception, the Company has acquired wireless cable
channels and community (low power) television channels from its founders
and others, has entered into a joint venture (known as "Web One Wireless
I.S.P. - Baton Rouge, J.V.") (the Joint Venture) which is to operate as a
Wireless Internet Service Provider (ISP) and has begun to seek the capital
necessary to carry out its plan of business. (See "Business"). The
Company's fiscal year ends December 31st. References to the "Company"
include WEI, MCTV and the Joint Venture, unless the context indicates
otherwise.
Results of Operations
Wireless Cable Segment. The Company has only recently begun to attempt
to attract subscribers in one of its wireless cable markets, Poplar Bluff,
Missouri. The Company expects that revenues will not exceed expenditures
in its Wireless Cable Segment for the remainder of the year ending December
31, 1997 ("Fiscal 97").
The Wireless Cable Segment's revenues will primarily be generated by
subscription fees, pay-per-view fees and installation charges. The Company
15
<PAGE>
anticipates that installation fees will average $49.95 per subscriber and will
begin at $5.00 for promotional specials. The Company anticipates that
subscription fees will average $18.95 per month for basic programming, plus
approximately $9.00 per month each for additional premium and movie
channels. The Company believes these programming fees are approximately
20% less than comparable hard wire cable prices.
Expenses will consist primarily of service costs, selling, general and
administrative expenses and depreciation and amortization. Service costs
include programming costs, channel lease payments, if any, transmitter site
rentals, cost of program guides and repair and maintenance expenditures. Of
these, programming costs, channel lease payments and costs of program
guides will be variable expenses that increase as the number of subscribers
increases. Also, it is possible that the addition of subscribers will
increase
depreciation expense as the Company will expend approximately $300 for an
analog system or $625 for a digital system to purchase and install the
wireless
cable receiving antenna and related equipment necessary at each subscriber's
location.
The Wireless Cable Segment's profitability will be determined by its ability
to maximize revenue from subscribers while maintaining variable expenses.
Significant increases in revenues will generally come from subscriber growth.
Currently, the Wireless Cable Segment has no employees, but expects to have
retained three employees by the end of Fiscal 97, assuming adequate funding
for planned development is obtained, of which there is no assurance. The
Company does not intend to incur expenses relating to research and
development during the next 12 months, except for general market research
in the ordinary course of business.
The Wireless Cable Segment's success will be dependent upon the extent to
which its assumptions as to future revenues and expenses prove to be correct.
These assumptions are based strictly on management's experience and
judgment and certain available information concerning the wireless cable
industry, in general. Because of the substantial number of variables
applicable to the Wireless Cable Segment's proposed operations and the
Wireless Cable Segment's lack of operating history, there can be no
assurance that the Wireless Cable Segment's assumptions will prove accurate
or that its plan of business will lead to future profitability. (See "Risk
Factors
Concerning Wireless Cable" under "Risk Factors").
Community Television Segment. To date, the Company's only revenues
have been derived from the operations of its community television station in
Baton Rouge, Louisiana, call sign K13VE, Channel 13, which station has
been engaged in broadcast operations since January 1996. For the year ended
December 31, 1996 ("Fiscal 96"), the Community Television Segment had
revenues of $3,337 and a net loss of $1,217. K13VE is, and since the start
of its broadcast operations has been, an affiliate of the Video Catalog
Channel, a video merchandise sales firm. The Community Television
Segment derives revenues from commissions on sales made by the Video
Catalog Channel originating from zip codes within K13VE's principal
broadcast coverage area. The Community Television Segment earns a
commission equal to 10% of such sales (less returns) as are attributable to
its
broadcast area. The Company expects that K13VE will continue to operate
in a similar manner through the remainder of Fiscal 97. However, should
K13VE have an opportunity to become an affiliate of a national broadcast
network, such as FOX, UPN or WB, it can be expected that it would take
advantage of such opportunity. To date, no such opportunity has been
presented to K13VE, and there is no assurance that any such opportunity will
arise. (See "Business - Community (Low Power) Television - Business
Strategy" under "Business").
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<PAGE>
The Company is currently investigating the possibility of establishing a
network of independent community television stations around the U.S. There
is no assurance that the Company will be successful in establishing such a
television network.
Wireless Internet Segment. The Wireless Internet Segment has yet to
generate any revenues. In January 1997, the Company entered into a joint
venture known as "Web One Wireless I.S.P. - Baton Rouge, J.V." (the Joint
Venture) with Web One, Inc. ("Web One"), whereby the Joint Venture will
attempt to operate as a Wireless ISP in Baton Rouge, Louisiana. The Joint
Venture expects to begin to solicit customers for its Wireless ISP service
during May 1997. With respect to the business of the Joint Venture, the
Company is dependent upon the efforts of Web One, which is the Managing
Venturer of the Joint Venture. The Company has an option to acquire all of
the outstanding capital stock of Web One at any time on or before August 1,
1998. If the option to acquire Web One is exercised by the Company, the
Company, at its sole option, may elect to utilize cash or shares of its
Common Stock in payment for the stock of Web One. The value of the stock
of Web One is to be established by an independent appraiser. Should the
Company elect to utilize shares of its Common Stock with which to acquire
the stock of Web One, the per share value of the Company's Common Stock
shall be equal to the average closing bid price of the Common Stock for the
ten trading days immediately prior to the closing of such acquisition, or,
should no public market for the Common Stock exist, the per share value of
the Common Stock shall be established by an independent appraiser. There
is no assurance that the Joint Venture will be successful.
Pursuant to an agreement with Open Net, Inc. ("Open Net"), Sacramento,
California, the Company owns an exclusive right of first refusal to utilize
Open Net's Wireless Internet Access System in several U.S. cities, including,
among others, Seattle, Washington, Portland, Oregon, New Orleans,
Louisiana, and Dallas and Houston, Texas. The Company must pay the sum
of $50,000 (for equipment and set-up services) to Open Net for each of Open
Net's Wireless Internet Access Systems purchased by the Company. In
addition, the Company is required to pay to Open Net a monthly customer
maintenance fee of $5.00 per customer utilizing the Company's Wireless ISP
services. The Company believes that it will require between $60,000 and
$200,000 ($50,000 to Open Net and the balance for marketing and other
general expenses), depending on the size of a particular city, to commence
Wireless ISP operations in a particular city. These estimates are not based
on
a specific study or market research conducted by the Company, but are based,
instead, on the business experience of the Company's management, as well
as general market surveys conducted by the Company and others. There is
no assurance that such estimates will be accurate. Should funds be available,
the Company intends to commence its Wireless ISP operations in Dallas,
Texas, during the second quarter of Fiscal 97. After Dallas, the Company
intends to commence its Wireless ISP operations, in order, in Houston, New
Orleans, Seattle and Portland. There is no assurance that the Company will
possess sufficient capital with which to develop any of such markets.
Liquidity and Capital Resources
During Fiscal 96, the Company required little capital with which to operate.
Since inception of the Company, one of the Company's officers, David M.
Loflin, has loaned to the Company a total of $68,000, which funds were used
primarily for operating expenses of MCTV and for attorneys' fees and
auditor's fees associated with the Registration Statement of which this
Prospectus forms a part. Such loans are evidenced by promissory notes and
bear interest at 8% per annum and are payable on demand. The Company
does not currently possess funds necessary to repay such loans.
17
<PAGE>
Mr. Loflin
has advised the Company that he does not intend to make demand for
repayment of such loans for the foreseeable future. Nevertheless, should Mr.
Loflin make such demand for repayment, the Company could be unable to
satisfy such demand, which would have a materially adverse affect on the
Company. In addition, none of the officers of the Company will be paid a
salary, and such persons have agreed to work without pay, until such time as
payment of such officers' salaries would have no materially adverse affect on
the Company's financial condition. Should the Company be successful in
obtaining at least $500,000 under its currently ongoing private placement of
Common Stock, of which there is no assurance, Mr. Loflin intends to begin
to devote his full-time efforts to the Company's business and to draw a
salary. (See "Executive Compensation" under "Management")
During Fiscal 96, the Company utilized shares of its Common Stock to
acquire all of its currently-held assets. Specifically, the Company acquired
assets as follows:
Number of
Appraised Value
Wireless Cable Market Shares Issued of Assets(1)
- ---------------------------- ---------------- ---
- ------------------
Poplar Bluff, Missouri 867,990 $1,004,560
Lebanon, Missouri 1,061,913 1,228,995
Port Angeles, Washington 374,602 433,541
Astoria, Oregon 336,418
389,350
Sandpoint, Idaho 220,988
255,759
The Dalles, Oregon 284,074
328,770
Fallon, Nevada 242,738
280,930
------------
--------------
Total 3,388,723
$3,921,905
Community Number of Appraised
Value
Television Market Shares Issued of Assets(1)
- ---------------------------- ---------------- ---
- ------------------
Baton Rouge, Louisiana 227,336 $263,106
Monroe/Rayville, Louisiana 80,271 92,900
Natchitoches, Louisiana 39,421 45,623
Bainbridge, Georgia 104,249 120,652
---------
-----------
Total 451,277
$522,281
- -----------------
(1) The assets acquired were appraised by Broadcast Services International,
Inc. ("BSI"), a Sacramento, California-based communications appraisal firm.
The report of BSI was based on 1990 Census Data. Valuation formulas for
the wireless cable markets of the Company were based on initial public
offerings within the wireless cable industry during the past three years. The
formulas used in evaluation of the Company's broadcast channels were based
on recent sales and market evaluation techniques employed by the
Community Broadcasters Association, among others. (See "Certain
Transactions - Appraisal").
Since the end of Fiscal 96, the Company has issued shares of its Common
Stock on two occasions. First, the Company entered into a Consulting and
Legal Services Agreement (the "Newlan Agreement") with its legal counsel,
Newlan & Newlan, Attorneys at Law. (See "Legal Matters"). Under the
Newlan Agreement, Newlan & Newlan agreed to provide legal services to the
18
<PAGE>
Company for a period of one year in consideration of the Company's
undertaking to pay $3,500 in cash per month and the issuance to Newlan &
Newlan of 150,000 shares of Company Common Stock in pre-payment of
$60,000 of legal services. The Company believes it will be able to meet its
obligations under the Newlan Agreement. (See "Legal Matters").
Also, in March 1997, the Company sold 20,000 shares of its Common Stock
to a single investor for $50,000 in cash. Such funds have been allocated to
the Company's working capital account. Such investor, now a director of the
Company, has committed to invest an additional $100,000 on the same terms
within thirty days of the date of this Prospectus. There is no assurance that
such investment will be made. (See "Stock Purchase" under "Certain
Transactions").
The Company may, when and if the opportunity arises, acquire other
businesses which are related to one of the Company's current businesses. If
such an opportunity arises, the Company may use a portion of its available
funds, if any, shares of its Common Stock or a combination of Common
Stock and cash, for that purpose. The Company has no specific arrangements
with respect to any such acquisition at the present time, and is not presently
involved in any negotiations with respect to any such acquisition. There can
be no assurance that any such acquisitions will be made.
Private Placement Offering. The Company, through the efforts of its officers
and directors, is currently conducting a private placement offering of up to
330,000 shares of its Common Stock at an offering price of $3.00 per share.
The private placement offering is being made on a minimum-maximum basis,
with $45,000 being the minimum and $990,000 being the maximum. The
Company intends to utilize the proceeds of such private placement offering
(assuming a maximum offering thereunder, of which there is no assurance),
as follows: development of the Company's Poplar Bluff, Missouri, wireless
cable system; build-out and start-up of the Company's proposed Dallas,
Texas, Wireless ISP; development of the Company's Baton Rouge,
Louisiana, Wireless ISP; start-up of the Company's Lebanon, Missouri,
wireless cable system; construction of the Company's three unbuilt
community television stations; upgrade of the Company's Baton Rouge,
Louisiana, community television station; installment payment for certain
wireless cable channel rights; payroll expense; and development of the
Company's television network concept. Such use of proceeds is subject to
change, depending on market conditions and other factors beyond the
Company's control. The Company will be substantially unable to pursue its
proposed operations, without the successful completion of such private
offering. There is no assurance that such private placement offering will be
successful.
Wireless Cable Systems. The Company continues to seek sources of capital
with which to develop its wireless cable systems, including the private
offering described above. The Company may enter into joint ventures or
form general and/or limited partnerships in its efforts to construct and
develop its wireless cable systems, although no agreement with any potential
partner has been discussed. The development of wireless cable systems
entails substantial capital investment and will require additional funding.
The
future availability of funding and terms of equity and debt financing cannot
be predicted. The unavailability or inadequacy of financing to meet future
capital needs could force the Company to modify, curtail, delay or suspend
some or all of its planned wireless cable operations. The failure to obtain
additional funds on a timely basis could materially adversely affect the
Company and its business. The Company believes it will be able to
undertake limited development of one or more of such markets (that is, with
less rapid construction and less extensive marketing) without such additional
financing or partners. (See "Risks Concerning the Company -
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<PAGE>
Need for
Future Financing" under "Risk Factors").
Poplar Bluff, Missouri. Since the end of Fiscal 96, the Company has taken
steps toward the commencement of marketing and customer installation
activities for its Poplar Bluff system. Should the Company be successful in
securing additional capital, of which there is no assurance, the Company
intends to commit not less than $30,000 to further the development of its
Poplar Bluff system. The Company expects that it will be able to obtain
approximately 300 subscribers with such amount of funding. The Company
anticipates that its Poplar Bluff system will generate positive cash flow
shortly after it reaches 300 subscribers, although there is no assurance that
such will be the case. There is no assurance that such additional funding
will
be available to the Company. A failure to secure additional funding would
severely impede the development of the Poplar Bluff system. (See "Risks
Concerning the Company - Need for Further Financing" under "Risk
Factors").
Other Systems. The Company owns rights to certain wireless cable channels
in Lebanon, Missouri, Port Angeles, Washington, The Dalles, Oregon, Sand
Point, Idaho, Fallon, Nevada, and Astoria, Oregon, which systems are
expected to be developed in the order listed, assuming adequate funding is
available, of which there is no assurance. The Company believes it will
require approximately $200,000 for construction, should it determine to
construct an analog-based system, or approximately $750,000 for
construction, should it determine to construct a digital-based system, as well
as approximately an additional $40,000 to commence marketing and
customer installation activities for each system. There is no assurance that
funding will be available to the Company at such times as it attempts to
construct and market any one of its systems. Without adequate funding, the
Company will likely be unable to develop any of its wireless cable systems.
Also, in June 1997, it is the Company's intention, should funds be available,
to make a $60,000 payment under a contract pursuant to which it acquired
certain wireless cable channel rights in The Dalles, Oregon, Fallon, Nevada,
and Sandpoint, Idaho, and to renegotiate such contract at such time in
accordance with an oral agreement reached with the person who sold such
channel rights to the Company. Should the Company be unsuccessful in
renegotiating such contract, the Company will be required, under such
contract, to make a $100,000 payment in September 1997. The Company
does not currently possess sufficient capital with which to make such
payment and there is no assurance that it will ever possess sufficient capital
to make such payment.
Community Television Stations. The Company continues to seek sources of
capital, including the private offering described above, with which to
construct and operate its community television stations. The Company does
not expect that it will seek joint venture partners or form general and/or
limited partnerships in its efforts to construct and operate its community
television stations. Rather, the Company intends to construct and operate its
community television stations with funds derived from operations, if any, or
from debt or other equity offerings. The availability or inadequacy of
financing to meet future capital needs could force the Company to modify,
curtail, delay or suspend some or all of its planned community television
station development. The failure to obtain additional funds on a timely basis
could materially adversely affect the Company and its business. The
Company believes it will be able to undertake construction and limited
operations of one or more of its community television stations without such
additional financing, although the speed of such construction would be
severely inhibited.
Baton Rouge, Louisiana. K13VE Channel 13, the Company's Baton Rouge,
Louisiana, community television station, has been broadcasting since January
1996, as an affiliate of the Video Catalog Channel. The Company's current
broadcast signal reaches approximately 30,000 households. The Company
is in need of approximately $20,000 in order to boost the power of such
station to its maximum legal limit, which would permit the Company's
broadcast signal to reach approximately 150,000 households. It is expected
that the commissions earned by K13VE from
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Video Catalog Channel sales
originating from its broadcast area will increase proportionately to its
increased number of households reached. There is no assurance that such
will be the case. Should the Company be successful in securing additional
capital, of which there is no assurance, the Company intends to commit
$20,000 to the upgrade of such television station.
Other Stations. The Company owns the licenses to community television
stations located in Monroe/Rayville, Louisiana, Natchitoches, Louisiana, and
Bainbridge, Georgia, which television stations are expected to be constructed
in the order listed, assuming adequate funding is available, of which there is
no assurance. The Company believes it will require approximately $50,000
to construct each station so that it will be able to operate as an affiliate
of the
Video Catalog Channel. Should the Company desire any such station to
become a fully operational television station, an additional $100,000 would
be required to expand the facility. Because the Company intends to have
each of its stations become an affiliate of the Video Catalog Channel
immediately after construction has been completed, the Company does not
expect to require additional funds for marketing. There is no assurance that
funding will be available to the Company at such times as it attempts to
construct any one of its community television stations. Should the Company
be successful in attaining a maximum offering under the private offering
described above, the Company would possess funds necessary to construct
each of its community television stations. However, absent such funding, the
Company will likely be unable to construct any of its community television
stations.
Wireless ISP Markets. The Company owns the exclusive right of first refusal
to operate, utilizing Open Net's Wireless Internet Access System, as a
Wireless ISP in the following markets: Dallas and Houston, Texas, New
Orleans, Louisiana, Seattle, Washington, and Portland, Oregon. The
Company intends to develop its Wireless ISP capabilities in such markets
utilizing its own funds, however derived. In addition, the Company intends
to seek joint venture partners or form general and/or limited partnerships to
develop its Wireless ISP capabilities in the following markets: Alexandria,
Louisiana, Astoria, Oregon, Bainbridge, Georgia, Lebanon, Missouri,
Macon/Milledgeville, Georgia, Poplar Bluff, Missouri, Port Angeles,
Washington, Sand Point, Idaho, and The Dalles, Oregon. It is possible that
the Company will develop one or more of such Wireless ISP markets
utilizing its own funds. However, no prediction can be made with respect to
the order of development of such markets, nor can assurances be given that
any of such markets will, in fact, be developed.
For the development of any of its proposed Wireless ISP markets, the
Company will be required to purchase $50,000 of equipment from Open Net.
Thereafter, the amount of marketing funds needed will vary from market to
market, depending on the size of a particular market. It can be expected,
however, that the initial marketing budget will range approximately from
$10,000 to $150,000. There is no assurance that funding will be available to
the Company at such times as it attempts to develop any one of its Wireless
ISP markets. Should the Company be successful in attaining a maximum
offering under the private offering described above, the Company would
possess funds necessary to construct and develop its Wireless ISP in Dallas,
Texas. However, absent such funding, the Company will likely be unable to
exploit any of its Wireless ISP markets.
Dallas, Texas. Should the Company be successful in securing additional
capital, of which there is no assurance, the Company intends to commit not
less than $100,000 to the establishment of its Wireless ISP in Dallas, Texas.
The Company expects that it will be able to begin to market
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its Wireless ISP
service in Dallas during the second quarter of 1997. The Company believes,
after conducting an informal market study, that Dallas, among its other
proposed Wireless ISP markets, offers the greatest opportunity for success,
although there is no assurance in this regard.
Capital Expenditures
During the remainder of Fiscal 97, the Company expects to apply
substantially all of its available capital to the construction of one or more
of
its wireless cable systems (approximately $200,000 per system), one or more
of its community television stations (approximately $50,000 per station) and
one or more of its Wireless ISP markets (an average of approximately
$100,000 per market). There is no assurance that any of the necessary capital
for such proposed activities will be available.
REGULATION
Wireless Cable
General. The wireless cable industry is subject to regulation by the FCC
pursuant to the Communications Act. The Communications Act empowers
the FCC to issue revoke, modify and renew licenses within the spectrum
available to wireless cable; to approve the assignment and/or transfer of
control of such licenses; to approve the location of wireless cable systems;
to regulate the kind, configuration and operation of equipment used by
wireless cable systems; and to impose certain equal employment opportunity
and other reporting requirements on wireless cable operators.
In the 50 largest U.S. markets, 33 channels are available for wireless
cable (in
addition to local off-air VHF/UHF broadcast channels that are not
retransmitted over the microwave channels). In the Company's markets, 32
channels are available for wireless cable (in addition to local off-air
VHF/UHF broadcast channels that are not retransmitted over the microwave
channels), 12 of which can be owned by for-profit entities for full-time usage
without programming restrictions (multi-point distribution service [MDS]
channels). Except in limited circumstances, the other 20 wireless cable
channels can only be owned by qualified non-profit educational
organizations, and, in general, each must be used a minimum of 20 hours per
week for educational programming (instructional television fixed service
[ITFS] channels). The remaining excess air time on an ITFS channel may be
leased to wireless cable operators for commercial use, without further
restrictions (other than the right of the ITFS license holder, at its option,
to
recapture up to an additional 20 hours of air time per week per channel for
educational programming). Certain programming (including, among others,
The Discovery Channel and Arts & Entertainment) qualifies as educational
and thereby facilitates full-time usage of an ITFS channel by commercial
wireless cable operators. Additionally, a technique known as "channel
mapping" permits ITFS licensees to meet their minimum educational
programming requirements by transmitting educational programming over
several ITFS channels at different times, which the viewer sees as just one
channel. In addition, lessees of ITFS excess air time generally have the
right
to transmit to their subscribers the educational programming provided by the
lessor at no incremental cost. The FCC now permits "channel loading".
Channel loading permits ITFS license holders to consolidate their educational
programming on one or more of their
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ITFS channels, thereby providing
wireless cable operators leasing such channels with greater flexibility in
their
use of ITFS channels. The FCC's allocation of frequencies to wireless cable
is subject to change and, in the future, the FCC might propose to alter the
present wireless cable allocation to provide a portion of the spectrum for
other emerging technologies. The FCC has formally inquired as to whether
certain wireless cable frequencies should be reallocated for new computer-
based communications services. It is uncertain whether any definitive action
will be taken with respect to this inquiry. The Company believes that if any
such action were taken to reallocate these channels, the FCC would allocate
substitute frequency rights to the wireless cable industry or provide other
concessions.
As the Company expands, it may be dependent on leases with unaffiliated
third parties for most of its wireless cable channel rights. Most wireless
cable
systems' channel leases typically cover four ITFS and/or one to four MDS
wireless cable channels each. Generally, ITFS channels may only be owned
by qualified non-profit educational organizations and, in general, must use
a minimum of 20 hours per week per channel for educational programming.
The remaining excess ITFS channel time may be leased to wireless cable
operators for commercial use without further restriction. MDS channels may
be owned by commercial entities and allow full-time usage without
programming restrictions. The use of such channels by the license holders
is subject to regulation by the FCC and a wireless cable operator's ability to
continue to enjoy the benefits of its leases with channel license holders is
dependent upon the continuing compliance by the channel license holders
with applicable regulations, including the requirement that ITFS license
holders must meet certain educational use requirements in order to lease
transmission capacity to wireless cable operators. Additionally, the FCC
licenses also specify construction deadlines, which, if not met, could result
in the loss of the license. Requests for additional time to construct may be
filed and are subject to review pursuant to FCC rules.
Applications for wireless cable licenses are subject to approval by the FCC.
There is no limit on the time that may elapse between filing the application
with the FCC for a modification or new license and action thereon by the
FCC. Once the FCC staff determines that the applications meet certain basic
technical and legal qualifications, the staff then determines whether each
application is proximate to transmit and receive-site locations of other
applications. Those applications that would result in signal interference to
other pending applications must then undergo a comparative selection
process. The FCC's ITFS application selection process is based on a set of
objective criteria that include whether an applicant is located in the
community to be served and the number of students that will receive the
applicant's educational programming. Thus, the outcome of the selection
process when two or more qualified applicants are competing for the same
channels lends itself to a degree of predictability that varies according to
the
circumstances.
In 1985, the FCC established a lottery procedure for awarding MDS licenses.
In 1990, the FCC established a filing "window" system for new multichannel
MDS (MMDS) applications. The FCC's selection among more than one
acceptable MMDS applications filed during the same filing window was
determined by a lottery. Generally, once an MMDS application is selected
by the FCC and the applicant resolves any deficiencies identified by the FCC,
a conditional license is issued, allowing construction of the station to
commence. Construction generally must be completed within one year of the
date of grant of the conditional license, in the case of MMDS channels, or 19
months, in the case of ITFS channels. ITFS and MMDS licenses generally
have terms of 10 years. Licenses must be renewed and may be revoked for
cause in a manner similar to other FCC licenses. FCC
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rules prohibit the sale
for profit of an MMDS conditional license or of a controlling interest in the
conditional license holder prior to construction of the station or, in certain
instances, prior to the completion of one year of operation. The FCC,
however, does permit the leasing of 100% of an MMDS license holder's
spectrum capacity to a third party and the granting of options to purchase a
controlling interest in a license, once the required license holding period
has
lapsed and certain other conditions are met.
Application for renewal of MDS and ITFS licenses must be filed within a
certain period prior to expiration of the license term, and petitions to deny
applications for renewal may be filed during certain periods following the
filing of such applications. Licenses are subject to revocation or
cancellation
for violations of the Communications Act or the FCC's rules and policies.
Conviction of certain criminal offenses may also render a licensee or
applicant unqualified to hold a license.
Wireless cable transmissions are governed by FCC regulations governing
interference and reception quality. These regulations specify important
signal
characteristics such as modulation (e.g., AM/FM) or encoding formats (e.g.,
analog or digital).
The FCC also regulates transmitter locations and signal strength. The
operation of a wireless cable system requires the collection of a commercially
viable number of channels operating with common technical characteristics.
In order to commence operations in a particular market, the Company may
be required to file applications with the FCC to modify licenses for unbuilt
stations. In applying for these modifications, the Company must demonstrate
that its proposed signal does not violate interference standards in the FCC-
protected area of another wireless cable channel license holder. A wireless
cable license holder generally is protected from interference within 35 miles
of the transmission site. An ITFS license holder has protection to all of its
receive sites, but only a 35 mile protected service area during excess
capacity
use by a wireless cable operator.
The Cable Act. On October 5, 1992, Congress passed the Cable Act, which
imposes greater regulation on hard-wire cable operators and permits
regulation of prices in areas in which there is no "effective competition".
The
Cable Act directs the FCC to adopt comprehensive new federal standards for
local regulation of certain rates charged by hard-wire cable operators. The
legislation also provides for deregulation of hard-wire cable in a given
market
once other multi-channel video providers serve, in the aggregate, at least 15%
of the cable franchise area. Rates charged by wireless cable operators,
typically already lower than hard-wire cable rates, are not subject to
regulation under the Cable Act.
Under the retransmission consent provisions of the Cable Act and the FCC's
implementing regulations, all multi-channel video providers (including both
hard-wire and wireless cable) seeking to re-transmit certain commercial
broadcast signals must first obtain the permission of the broadcast station.
Hard-wire cable systems, but not wireless cable systems, are required under
the Cable Act and the FCC's "must carry" rules to re-transmit a specified
number of local commercial television or qualified community (low power)
television signals.
In May 1993, the FCC issued new regulations implementing the rate
regulation provisions in the Cable Act. Hard-wire cable operators with rates
above a price benchmark average for basic services were directed to reduce
their rates by approximately 10%. In February 1994, the FCC announced that
it would require hard-wire cable operators to implement a further reduction
in rates
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of another 7%. On November 18, 1994, the FCC adopted some
exceptions to its cable rate regulations. The FCC has also adopted
regulations implementing the Cable Act that require hard-wire cable
operators to establish standardized levels of customer service. The Company
cannot predict what effect these regulations may have on the Company's
price and service competitiveness in its proposed wireless cable markets.
In February 1996, the Telecommunications Act was enacted. Pursuant to the
Telecommunications Act, all cable rate regulation will be eliminated after
three years, and for "small systems", as defined in the Telecommunications
Act, and under certain other circumstances, rate regulation will be eliminated
immediately. Until these sunset provisions go into effect, hard-wire cable
operators will continue to be subject to rate regulations.
While current FCC regulations are intended to promote the development of
a competitive pay television industry, the rules and regulations affecting the
wireless cable industry may change, and any future changes in FCC rules,
regulations, policies and procedures could have a material adverse effect on
the industry, as a whole, and on the Company, in particular. In addition, a
number of legal challenges to the Cable Act and the regulations promulgated
thereunder have been filed, both in the courts and before the FCC. These
challenges, if successful, could substantially increase the Company's
operating costs, make some programming unavailable to the Company and
otherwise have a material adverse effect on the wireless cable industry, as a
whole, and the Company, in particular. Specifically, those sections of the
Cable Act which prohibit discriminatory or unfair practices in the sale of
satellite cable and satellite broadcast programming to competing multi-
channel video programming distributors have been challenged. The
Company's costs to acquire satellite cable and broadcast programming may
be affected by the outcome of those challenges. Other aspects of the Cable
Act that have been challenged are the Cable Act's provisions governing rate
regulation and customer service standards to be met by hard-wire cable
companies. The Cable Act empowered the FCC to regulate the subscription
rates charged by hard-wire cable operators. As described above, the FCC
recently issued rules requiring such cable operators, under certain
circumstances, to reduce the rates charged for basic services. The Cable Act
also empowered the FCC to establish certain minimum customer service
standards to be maintained by hard-wire cable operators. These standards
include prompt responses to customer telephone inquiries, reliable and timely
installations and repairs and readily understandable billing practices. Should
these provisions withstand court and regulatory challenges, the extent to
which wireless cable operators may continue to maintain an advantage over
hard-wire cable operators in price and customer service practices could be
diminished.
Other Regulations. Because the use of coaxial cable by hard-wire cable
operators requires a "right of way" to cross municipal streets, such operators
must acquire a municipal franchise and pay municipal franchise fees. Since
wireless cable uses FCC approved frequencies, no municipal right of way is
required. Accordingly, wireless cable operators are not subject to municipal
franchise fees. Hard-wire cable operators are also required to set aside
public
access channels for municipal and local resident use. Wireless cable
operators are not subject to such requirements.
Wireless cable license holders are subject to regulation by the FAA with
respect to the construction of transmission towers and to certain local zoning
regulations affecting construction of towers and other facilities. There may
also be restrictions imposed by local authorities. There can
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<PAGE>
be no assurance
that the Company will not be required to incur additional costs in complying
with such regulations and restrictions.
Community (Low Power) Television
General. Television broadcasting operations are subject to the jurisdiction
of
the FCC under the Communications Act. The Communications Act
empowers the FCC, among other things, to issue, revoke or modify broadcast
licenses, to assign frequencies, to determine the locations of stations, to
regulate the broadcasting equipment used by stations, to establish areas to be
served, to adopt such regulations as may be necessary to carry out the
provisions of the Communications Act and to impose certain penalties for
violation of its regulations. The Company's currently operating community
television station, as well as any future stations, is subject to a wide
range of
technical, reporting and operational requirements imposed by the
Communications Act and by FCC rules and policies.
The Communications Act provides that a license may be granted to any
applicant if the public interest, convenience and necessity will be served
thereby, subject to certain limitations, including the requirement that the
FCC
allocate licenses, frequencies, hours of operation and power in a manner that
will provide a fair, efficient and equitable distribution of service
throughout
the United States. Television licenses generally are issued for five-year
terms. Upon application, and in the absence of a conflicting application that
would require the FCC to hold a hearing, or questions as to the licensee's
qualifications, television licenses have usually been renewed for additional
terms without a hearing by the FCC. An existing license automatically
continues in effect once a timely renewal application has been filed until a
final FCC decision is issued.
Under existing FCC regulations governing multiple ownership of broadcast
stations, a license to operate a television or radio station generally will
not be
granted to any party (or parties under common control) if such party directly
or indirectly owns, operates, controls or has an attributable interest in
another
television or radio station serving the same market or area. The FCC,
however, is favorably disposed to grant waivers of this rule for certain radio
station-television station combinations in the top 25 television markets, in
which there will be at least 30 separately owned, operated and controlled
broadcast licenses, and in certain other circumstances.
FCC regulations further provide that a broadcast license will not be granted
if that grant would result in a concentration of control of radio and
television
broadcasting in a manner inconsistent with the public interest, convenience
or necessity. FCC rules generally deem such concentration of control to exist
if any party, or any of its officers, directors or shareholders, directly or
indirectly, owns, operates, controls or has an attributable interest in more
than
12 television stations, or in television stations capable of reaching, in the
aggregate, a maximum of 25% of the national audience. This percentage is
determined by the DMA market ranking of the percentage of the nation's
television households considered within each market. Because of certain
limitations of the UHF signal, however, the FCC will attribute only 50% of
a market's DMA reach to owners of UHF stations for the purpose of
calculating the audience reach limits. The Company will not
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<PAGE>
approach such
limits for the foreseeable future. To facilitate minority group participation
in radio and television broadcasting, the FCC will allow entities with
attributable ownership interests in stations controlled by minority group
members to exceed the ownership limits.
The FCC's multiple ownership rules require the attribution of the licenses
held by a broadcasting company to its officers, directors and certain of its
shareholders, so there would ordinarily be a violation of FCC regulations
where an officer, director or such a shareholder and a television broadcasting
company together hold interests in more than the permitted number of
stations or more than one station that serves the same area. In the case of a
corporation controlling or operating television stations, such as the Company,
there is attribution only to shareholders who own 5% or more of the voting
stock, except for institutional investors, including mutual funds, insurance
companies and banks acting in a fiduciary capacity, which may own up to
10% of the voting stock without being subject to such attribution, provided
that such entities exercise no control over the management or policies of the
broadcasting company.
The FCC has recently begun a proceeding to consider liberalization of the
various TV ownership restrictions described above, as well as changes (not
all of which would be liberalizing in effect) in the rules for attributing the
licenses held by an enterprise to various parties. The Company is unable to
predict the outcome of these proceedings.
The Communications Act and FCC regulations prohibit the holder of an
attributable interest in a television station from having an attributable
interest
in a cable television system located within the coverage area of that
station.
FCC regulations also prohibit the holder of an attributable interest in a
television station from having an attributable interest in a daily newspaper
located within the predicted coverage area of that station.
The Communications Act limits the amount of capital stock that aliens may
own in a television station licensee or any corporation directly or indirectly
controlling such licensee. No more than 20% of a licensee's capital stock
and, if the FCC so determines, no more than 25% of the capital stock of a
company controlling a licensee, may be owned or voted by aliens or their
representatives. Should alien ownership exceed this limit, the FCC may
revoke or refuse to grant or renew a television station license or approve the
assignment or transfer of such license.
The Communications Act prohibits the assignment of a broadcast license or
the transfer of control of a licensee without the prior approval of the FCC.
Legislation was introduced in the past that would impose a transfer fee on
sales of broadcast properties. Although that legislation was not adopted,
similar proposals, or a general spectrum licensing fee, may be advanced and
adopted in the future. Recent legislation has imposed annual regulatory fees
applicable to the Company.
The foregoing does not purport to be a complete summary of all of the
provisions of the Communications Act or regulations and policies of the FCC
thereunder. Reference is made to the Communications Act, such regulations
and the public notices promulgated by the FCC.
Other Regulations. The Federal Trade Commission, among other regulatory
agencies, imposes a variety of requirements that affect the business and
operations of broadcast stations. From time to time, proposals for additional
or revised requirements are considered by the FCC, numerous other Federal
agencies and Congress. The Company is unable to predict future Federal
requirements
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or what impact, if any, any such requirements may have on
Company television stations.
BUSINESS
History
The Company was organized in November 1996 to act as a holding company
primarily in the wireless cable and community (low power) television
industries. To this end, the Company has acquired Winter Entertainment,
Inc. (WEI), which owns and operates a community (low power) television
station in Baton Rouge, Louisiana, and Missouri Cable TV Corp. (MCTV),
which owns the licenses necessary to operate wireless cable systems in
Poplar Bluff and Lebanon, Missouri, has acquired licenses and leases of
licenses necessary to operate wireless cable systems in Port Angeles,
Washington, Astoria, Oregon, Sand Point, Idaho, The Dalles, Oregon, and
Fallon, Nevada, and has acquired licenses necessary to operate community
(low power) television stations in Monroe/Rayville, Louisiana, Bainbridge,
Georgia, and Natchitoches, Louisiana. In January 1997, the Company
entered into a joint venture (known as "Web One Wireless I.S.P. - Baton
Rouge, J.V.") (the Joint Venture) which is to operate as a Wireless Internet
Service Provider (ISP) in Baton Rouge, Louisiana, and acquired the rights to
utilize, on an exclusive basis, a licensed Wireless Internet Access System in
several U.S. cities, including, among others, Seattle, Washington, Portland,
Oregon, New Orleans, Louisiana, and Dallas and Houston, Texas. In
addition, the Company intends, assuming funding is available to the
Company, to become involved in the following related areas: (1) Local
Multi-Point Distribution Service (LMDS), a new spectrum anticipated to be
put up for auction by the FCC during 1997; (2) the acquisition of small, hard-
wire cable television systems as a means of entering the telephony-based
cable market, that is, to be able to provide telephone service and ISP
services
in each such system's market; and (3) the establishment of a broadcast
television network. References to the "Company" herein include WEI,
MCTV and the Joint Venture, unless the context requires otherwise.
Business - Wireless Cable
General
Industry History - Cable Television. The cable television industry began in
the late 1940's and 1950's to serve the needs of residents in predominantly
rural areas with limited access to local off-air VHF/UHF broadcasts. The
cable television industry expanded to metropolitan areas by offering better
reception and more programming than available with off-air broadcasts.
Today, cable television systems offer various types of programming, which
generally include basic service, premium service and, in many instances,
pay-per-view services.
Wireless Cable Technology. Initially, most cable systems were hard-wire
systems, using coaxial cable and amplifiers to transmit television signals.
In
1983, the FCC allocated a portion of the radio spectrum from 2500 to 2700
MHz, which had previously been allocated entirely for educational use, to
commercial wireless cable operation. Simultaneously, the FCC also modified
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its rules on the usage of the remaining portion of such spectrum allocated for
educational use. Nevertheless, regulatory and other obstacles impeded the
growth of the wireless cable industry through the remainder of the 1980's.
The FCC maintained burdensome restrictions on the commercial use of
educational channel capacity. In addition, before enactment of the Cable Act
(October 5, 1992), many program suppliers were unwilling to provide
programming to wireless cable operators on terms comparable to those
offered to hard-wire cable operators, if at all. During the 1990's, several
factors have contributed to the growth of the wireless cable industry,
including (I) Congressional scrutiny of the rates and practices of the hard-
wire cable industry, (ii) improved technology, particularly signal encryption
and signal compression, (iii) regulatory reforms by the FCC to facilitate the
growth and competitive impact of the wireless cable industry, including
permitting channel aggregation, (iv) increased availability of programming
for wireless cable systems, (v) strong consumer demand for alternatives to
hard-wire cable service and (vi) increased availability of capital to wireless
cable operators in the public and private markets.
Wireless cable systems, like hard-wire cable systems, operate from a head-
end, consisting of satellite reception and other equipment necessary to
receive
the desired programming. Programming is then transmitted by microwave
transmitters from an antenna located on a tower to a small receiving antenna
located on a subscriber's rooftop. At the subscriber's location, the
microwave signals are converted to frequencies that can pass through
conventional coaxial cable into an addressable descrambling converter
located on top of a television set. Because the microwave frequencies used
by wireless cable will not pass through large trees, hills, tall buildings or
other obstructions, wireless cable requires a clear line-of-sight from tower
to
receiving antenna. However, most signal blockages can be overcome with
the use of signal boosters which retransmit an otherwise blocked signal over
a limited area. Because wireless cable systems do not require an extensive
network of coaxial cable and amplifiers, wireless cable operators are able to
provide subscribers with a high quality picture and a reliable signal at a
significantly lower per-subscriber system cost, when compared to hard-wire
cable systems.
Hard-Wire Cable Technology. Hard-wire cable operators transmit signals
from a head-end, delivering local and satellite-delivered programming
through a network consisting primarily of coaxial cable and amplifiers to
subscribers. As a direct result of the use of coaxial cable to deliver
signals
throughout a service area, hard-wire cable systems are susceptible to signal
problems. Because signals can only be transmitted through coaxial cable a
fixed distance without additional amplification, some degree of noise is
added each time a television signal is so amplified. A series of amplifiers
between the head-end and the viewer leads to progressively greater noise and,
accordingly, for some viewers, a grainier picture. Also, an amplifier must be
properly balanced or the signal may be improperly amplified. Failure of any
one amplifier in the chain will black out an area. Substantial regular system
maintenance is required due to water ingress, temperature changes and other
equipment problems, all of which may affect the quality of signals delivered
to subscribers. Some hard-wire cable companies have begun installing fiber
optic cable networks. While this technology will substantially improve the
transmission and reception problems currently experienced by most hard-wire
cable systems, the high costs associated with such technology may slow the
conversion to all fiber optic systems and further enhance the typical cost
advantages of wireless cable.
Programming
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General. Once a wireless cable operator has obtained the right to transmit
programming over specified frequencies, the operator must then obtain the
right to use the programming to be transmitted. With the exception of the
retransmission of local off-air VHF/UHF broadcast signals, programming is
made available in accordance with contracts with program suppliers under
which the system operator pays a royalty based on the number of subscribers
receiving service each month. Individual program pricing varies from
supplier to supplier; however, more favorable pricing for programming is
generally afforded to operators with larger subscriber bases. The likelihood
that program material will be unavailable to the Company has been
significantly mitigated by the Cable Act and various FCC regulations issued
thereunder, which, among other things, impose limits on exclusive
programming contracts and prohibit cable programmers, in which a cable
operator has an attributable interest, from discriminating against cable
competitors with respect to the price, terms and conditions of programming.
Because only a few of the industry's programming services are not currently
directly owned by vertically integrated multiple cable system operators, the
Company expects little difficulty in arranging satisfactory programming
contracts. The basic programming package expected to be offered in each of
the Company's markets can be expected to be comparable to that offered by
the local hard-wire cable operators.
Copyright. Under the Federal copyright laws, permission from the copyright
holder generally must be secured before a video program may be
retransmitted. Under Section 111 of the Copyright Act, certain "cable
systems" are entitled to engage in the secondary transmission of
programming without the prior permission of the holders of copyrights in the
programming. In order to do so, a cable system must secure a compulsory
copyright license. Such a license may be obtained upon the filing of certain
reports and the payment of certain fees set by the Copyright Royalty
Tribunal.
Wireless cable operators may rely on Section 111 of the Copyright Act. The
United States Congress recently enacted legislation that confirmed the ability
of wireless cable operators to obtain the benefit of the compulsory copyright
license. Periodically, Congress has considered proposals to phase out the
compulsory license.
Local broadcasters may require that cable operators obtain their consent
before re-transmitting local off-air VHF/UHF broadcasts. The FCC has
exempted wireless cable operators from the re-transmission consent rules if
the receive-site antenna is either owned by the subscriber or within the
subscriber's control and available for purchase by the subscriber upon the
termination of service. In all other cases, wireless cable operators must
obtain consent to re-transmit local broadcast signals. The Company will
attempt to obtain such consents in each of its markets where it will be
re-transmitting on a wireless cable channel. There can be no assurance that
the Company will be able to obtain such consents on terms satisfactory to the
Company, if at all.
Contract Programming. In each of its wireless cable systems, the Company
will be required to enter into agreements with program suppliers, such as
ESPN, CNN, HBO and MTV. The Company has not yet determined the mix
of programming that will be offered in any of its wireless cable systems.
Thus, no agreements with program suppliers have been made. It can be
expected that such program agreements will have three-year terms, with
provisions for automatic renewals, and be subject to termination for breach
of the agreement, including non-payment. As a rule, the programming
agreements can be expected to provide for royalty payments based upon the
number of Company subscribers receiving the programming each month.
Individual program prices vary
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from supplier-to-supplier, and more favorable
pricing sometimes is afforded to operators with larger subscriber bases;
however, the Cable Act requires cable programming to be made available for
purchase by all system operators at competitive pricing.
Pay-Per-View Services. The Company intends to offer "pay-per-view"
services that will enable customers to order, and pay for, one program at a
time. Pay-per-view services have, in the past, been successful for specialty
events, such as wrestling and heavyweight prize fights, concerts and early-
release motion pictures. It is possible that the Company will promote the
purchase of movies on a pay-per-view basis in competition with video rental
stores. Pay-per-view requires the subscriber to have an "addressable
converter". An addressable converter allows the cable company to control
what the subscriber watches without having to visit the subscriber location
to change equipment. The Company intends to utilize addressable converters
in all of its systems. However, for customers to order pay-per-view events
conveniently, an impulse pay-per-view converter is required. An impulse
pay-per-view converter, which has a return frequency (in a wireless system)
to the operator's computer system, enables a subscriber to make a telephone
call to order an event. The Company intends to have impulse capability in
all of its systems, but it does not intend to offer impulse pay-per-view in
the
foreseeable future.
Pay Television Industry Trends
The Company's business will be affected by pay television industry trends
and, in order to maintain and increase its subscriber base in the years ahead,
the Company will need to adapt rapidly to industry trends and modify its
practices to remain competitive. Due to the limited number of physical
components of the wireless transmission system, the Company believes it
will be less expensive for it to adapt to coming industry trends than for
hard-
wire cable operators. The cost of such adaptation by the Company could,
nonetheless, be substantial.
Signal Compression. Several decoder manufacturing companies are
developing digital compression technology, which would allow several
programs to be carried in the amount of bandwidth where only one program
is carried now. Manufacturers have projected varying compression ratios for
future equipment, with more conservative estimates ranging from 3-to-1 to
10-to-1. The Company believes second-generation 6-to-1 signal compression
technology will be available within three months. It is generally expected
that such digital compression technology would have at least two major
effects: (1) such technology will permit wireless cable systems to be launched
in a particular market with far fewer channels having been licensed or leased,
thereby reducing start-up and operating costs; and (2) such technology will
permit dramatic expansion of pay-per-view video services, thereby increasing
the potential of greater revenues for a particular system's operator. The
Company believes hard-wire cable companies will be required to expend
significant funds on upgrading current systems in order to utilize digitally-
compressed signals, the costs of which may be prohibitive.
Addressability and Pay-Per-View. "Addressability" means the ability to
implement specific orders from, or send other communications to, each
subscriber, without having to modify a subscriber's equipment. "Impulse
addressability" allows a subscriber to select specialized programming, such
as pay-per-view, on an immediate basis, simply through the remote control.
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While the Company, like many wireless cable operators, expects that it will
use impulse-addressable set-top converters, only approximately 35% of hard-
wire cable operators use addressability and only approximately 5% use
impulse-addressability. Without addressability, a hard-wire customer not
subscribing to a premium channel must make two trips to the hard-wire cable
operator's offices, once to obtain the descrambling device and once to return
it. A customer subscribing to a premium channel must telephone the hard-
wire cable operator in advance. The Company believes this lack of
convenience has substantially hindered pay-per-view sales. Pay-per-view is
expected to become more popular as additional events become available for
distribution exclusively on pay-per-view. Compression technology will
greatly expand the channel capacity available for such programming. The
Company believes that the use of digital compression technology will
provide an additional advantage over most hard-wire cable operators, because
impulse-addressable set-top converters provide greater convenience for
subscribers. Hard-wire cable operators will incur significant expenditures to
upgrade their systems to be able to offer impulse addressability.
Advertising. Until recently, most advertising on cable has been sold by
program suppliers, who sell national advertising time as part of the signal
they deliver to cable operators. Recently, however, advertisers have begun
placing advertisements on channels dedicated exclusively to advertising, as
well as in local available time (typically, two minutes each hour) set aside
by
program suppliers for local insertions in their programming of advertisements
sold by cable operators. The Company expects that digital compression
technology will allow substantial flexibility in the expansion of advertising
sales, due to the increased number of programming channels available. (See
"Business Strategy" hereunder).
Interactivity. Certain hard-wire cable operators have announced their
intentions to develop interactive features for use by their subscribers.
Interactivity would allow subscribers to utilize their televisions for two-way
communications, such as video games and home shopping, among others.
Wireless cable operators will be able to utilize a frequency which the FCC
has made available for interactive communications. At this time, the
Company believes the commercial viability of interactivity in the Company's
markets is at least several years away.
Business Strategy
The Company's primary business objective in the wireless cable industry is
to develop, own and operate wireless cable television systems in markets in
which the Company believes it can achieve positive cash flow and operating
income rapidly after system launch. This period of development would be
followed by consolidation of its subscriber base and expansion of
programming.
Rural Market Focus. The Company intends to aggregate wireless cable
channel rights and to locate operations in small to mid-size markets that have
a substantial number of households not currently passed by hard-wire cable
and lack off-air VHF/UHF broadcast channels. The Company believes that
this size market typically has a stable economic base, less competition from
alternative forms of entertainment and other conditions conducive to wireless
cable transmissions.
Market Penetration. Because the Company's officers will be involved in
each system launch in a hands-on manner, the Company believes it will be
able to achieve positive monthly operating cash flow upon obtaining between
350 and 400 subscribers within a particular system. Initially, the
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Company
will direct its marketing at unpassed households. Accordingly, the Company
believes it will be able to launch service successfully in most of its markets
with approximately 12 channels of programming, allowing it to contain
system launch costs and achieve positive cash flow with a lower number of
subscribers. The Company expects that it will be able to achieve this level
of programming in each of its markets. It is the Company's plan that, once
a system achieves positive cash flow, the Company would expand the
channel offering and add subscribers. There is no assurance that any of the
Company's proposed systems will ever generate positive cash flow or earn
a profit. (See "Risk Factors").
Low Cost Infra-Structure. Wireless cable systems typically cost significantly
less to build and operate than hard-wire cable systems, for many reasons.
First, while both hard-wire cable operators and wireless cable operators must
construct a head-end, hard-wire cable operators must also install an extensive
network of coaxial cable and amplifiers in order to transmit signals from the
head-end to subscribers. In a wireless cable system, once the head-end is
constructed, the Company estimates that each additional wireless cable
subscriber will require an incremental capital expenditure by the Company
of approximately $200. Such incremental capital expenditures are variable
costs and will be partially offset by installation fees to be paid by
subscribers.
Second, without an extensive co-axial cable network to maintain, wireless
cable operators typically incur lower system maintenance costs and
depreciation expense. Third, programming is generally available to hard-
wire and wireless cable operators on comparable terms, although operators
that have a smaller number of subscribers often are required to pay higher
per-subscriber fees. Finally, the Company expects that it will, based on
industry averages, experience a lower rate of subscriber turnover, as
compared to the "churn" rate of approximately 3% per month typically
experienced by hard-wire cable operators, although no assurances can be
made in this regard. Reduced subscriber turnover can be expected to reduce
installation and marketing expenses.
Development Priority. The Company currently intends to exploit its wireless
cable markets in the following order: (1) Poplar Bluff, Missouri, which is
built out and will become operational at such time as needed marketing funds
are obtained, of which there is no assurance; (2) Lebanon, Missouri; (3) Port
Angeles, Washington; (4) The Dalles, Oregon; (5) Sandpoint, Idaho; (6)
Fallon, Nevada; and (7) Astoria, Oregon. There is no assurance that the
Company will be able to launch any of its proposed wireless cable systems.
(See "Company Markets" hereunder).
Marketing and Customer Support. The Company intends primarily to utilize
door-to-door marketing, as well as media advertising, telemarketing and
direct mail, to gain a subscriber base in each of its wireless cable markets.
The Company also intends to run promotional pricing campaigns and take
advantage of public relations opportunities. In this regard, the Company
expects that substantial consumer education regarding wireless cable will be
necessary in each of its markets, which could slow the growth of its
subscriber base.
The Company believes that it will offer its subscribers competitively priced
installation and subscription fees. Several points will be emphasized in the
Company's advertising, as discussed below. The Company anticipates that
installation fees will average $49.95 per subscriber and begin at $5.00 for
promotional specials, while monthly subscription fees are expected to start
at $18.95 for basic programming. Pay-per-view stations may be made
available in the future at no additional charge. It can be expected that the
Company will offer specially-priced packages during promotional periods.
Hard-wire cable customer charges are subject to local franchise taxes,
whereas wireless
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<PAGE>
cable customers do not pay any franchise taxes. A focus on
the value received for the price paid, together with an emphasis on increased
programming availability, are expected to provide a competitive choice to
potential customers. There is, however, no assurance that the Company will
be successful in attracting subscribers.
The Company intends to provide 24-hour-per-day service, with rapid
response time on subscriber telephone calls, uniformed field personnel and
flexible installation scheduling. The Company will emphasize its picture
quality and reliability of its wireless transmission. The Company believes
that, within its signal pattern, its picture quality will be as good or
better than
that received by hard-wire cable subscribers because, absent any line-of-sight
obstruction, there is less opportunity for signal degradation between
transmitter and the subscriber. Also, wireless cable service has proven very
reliable, primarily due to the absence of certain distribution system
components that can fail and thereby cause outages. The Company intends
to position itself as a reliable, cost-effective alternative to hard-wire
cable
operations by delivering a high-quality signal throughout its signal area and
personal service to its subscribers.
Equipment Reliability and Picture Quality. Several manufacturers produce
the equipment used in the wireless cable systems, from transmitters to the
set-
top converters which feed the signal to the television set. Because the
signal
is broadcast over the air directly to a receiving antenna, wireless cable does
not experience the problems caused by amplifying signals over long distances
experienced by some hard-wire cable subscribers. Amplification of signals
can lead to greater signal noise and, accordingly, a grainier picture for some
subscribers. Also, the transmission of wireless signals is not subject to the
problems caused by deteriorating underground cables used in hard-wire cable
systems. As a result, wireless cable is sometimes more reliable than hard-
wire cable, and picture quality is generally equal to or better than hard-wire
cable. In addition, extreme weather conditions typically do not affect
wireless cable transmitters, so customers seldom experience outages
sometimes common with hard-wire cable systems.
Signal security is provided by encoding each wireless cable channel and
equipping the converter with a unique decoding device that responds to a
pilot signal carrying a data stream, with authorizations instructions. Thus,
the
system is fully "addressable". The converter boxes will not be usable until
they are authorized for service by each system's central computer. All
channels, both basic and premium, are scrambled. Because the wireless cable
system is addressable, it can also accommodate pay-per-view service.
Advertising. The Company will attempt to generate advertising sales revenue
in each of its proposed wireless cable markets, through the use of surplus
channels, that is, channels on which the Company is not broadcasting regular
programming. It is expected that the Company would sell space on such
surplus channels to distributors of so-called "infomercials", which can be
expected to generate additional revenues for the Company. In addition, it is
possible that the Company will establish a program production unit, which
would produce, among other types of programming, infomercials for its own
use, as well as for sale to other systems in need of additional programming.
There is no assurance that the Company will be successful in this regard.
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Company Markets
General. The Company currently holds the rights to wireless cable channels
in the following cities:
Estimated Estimated
Total Total
Line-of-Sight Current
City(SMSA) Population(1) Households(1) Households(1) Channels
- --------------- ---------------- ----------------- -----------------
-----------
Poplar
Bluff, MO 120,710 54,590 51,136
26, 28, 31
35, 56, 59
61, 68*
Lebanon, MO 135,474 75,979 74,092
18, 29, 31
40, 51, 53
55, 59*
Port
Angeles, WA 64,553 30,085 25,141
H1-2-3
The Dalles, OR 59,945 27,328 20,232
B1-2-3;
C1-2-3
Sandpoint, ID 46,750 25,510 15,739
B1-2-3;
C1-2-3
Fallon, NV 27,943 11,506 9,288
E1-2-3-4;
H3
Astoria, OR 57,213 31,663 23,960
H2-3
--------- --------- ----
- -----
Totals 512,588 256,661 219,588
- -------------------------
(1) Source: 1990 Census Data.
* Each of these channels is a low power television channel, not a channel in
the FCC-allocated wireless cable frequencies (2500-2700 MHZ).
The Company currently intends to exploit its wireless cable markets in the
order of the above presentation. Such order of development was determined
after an assessment of the business potential of each of the markets based
upon the number of homes within the radius of the proposed transmit site, the
number of homes passed by hard-wire cable and other demographic factors.
Except where noted below, the Company will seek additional financing,
either equity or debt, or form partnerships for the development of its
markets.
The Company does not currently have such financing or partners in place.
The Company believes such financing will be available on a market-by-
market basis, especially for the incremental capital needed as a particular
wireless cable system adds revenue-producing subscribers; however, there
can be no assurance that it will be able to obtain such financing or partners
on a timely basis and on satisfactory terms and conditions, if at all. The
failure to obtain additional funds or partners on a timely basis could
materially adversely affect the Company and its business. Nevertheless, the
Company believes it will be able to undertake limited development of one or
more of its markets (that is, with less rapid construction and less extensive
marketing) without such additional financing or partners.
Poplar Bluff, Missouri. The Company's wireless cable system in Poplar
Bluff is based on low power television channels rather than on the 2500-2700
MHZ channels specifically allocated by the FCC to wireless cable. That is,
the low power television channels have been built-out for
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<PAGE>
wireless cable
operations, with full encryption and signal compression capability. The
Company believes this style of wireless cable system to be superior to a
"traditional" wireless cable system, inasmuch as the low power television
broadcast signal is not limited by "line-of-sight" concerns associated with
microwave (2500-2700 MHZ) transmissions. Thus, terrain, large trees and
buildings cause far less signal interference.
Pursuant to separate Assignment and Assumption Agreements, the Company
holds the rights to leases of eight low power television channels in the
Poplar
Bluff area. Specifically, the Company holds the rights to channels 26, 28,
31,
35, 56, 59, 61, 68. The Company is obligated to pay monthly fees of $.14 per
subscriber for channels 26 and 31, and $.10 per subscriber for the remainder
of the channels. The term of each of such agreements is 10 years,
commencing October 17, 1996, which term shall renew automatically for an
additional 10 years, at the Company's option.
Should funds be available, of which there is no assurance, the Company
intends to commit $100,000 to the initial marketing and development efforts
in Poplar Bluff. The Company expects that it will be able to secure
approximately 300 subscribers with the expenditure of such funds. There is
no assurance that such will be the case. (See "Management's Discussion and
Analysis of Financial Condition and Results of Operations").
The hard-wire cable system in Poplar Bluff carries approximately 25
channels. The Company will offer 12 channels (including available off-air
VHF/UHF channels), and will charge approximately 20% less per month for
programming services than does the local hard-wire operator. In addition,
there are a large number of unpassed (by hard-wire cable) residences in the
Poplar Bluff area, which is the market segment on which the Company will
concentrate initially. The Company expects to achieve market penetration in
the unpassed residences in the Poplar Bluff area at a rate that meets or
exceeds the national average. However, no assurances can be given in this
regard.
The Company will utilize door-to-door marketing, newspaper and radio
advertising to advertise its wireless cable services. Other forms of
advertising may be used, should cost factors be acceptable. The Company's
officers expect to oversee installation and sales efforts. Once the Poplar
Bluff system is established, the Company expects to employ one full-time
and one part-time employee there.
Lebanon, Missouri. The Company's Lebanon, Missouri, wireless cable
system will contain the same feature as its Poplar Bluff, Missouri, wireless
cable system, that is, transmission of programming will emanate from low
power television stations rather than a microwave transmitter. Pursuant to
separate Assignment and Assumption Agreements, the Company holds the
rights to leases of eight low power television channels in the Lebanon area.
Specifically, the Company holds the rights to channels 18, 29, 31, 40, 51, 53,
55 and 59. The Company is obligated to pay monthly fees of $.10 per
subscriber. The term of each of such agreements is 10 years, commencing
October 17, 1996, which term shall renew automatically for an additional 10
years, at the Company's option. The Company is currently unable to predict
when it will begin to construct its Lebanon system, although the Company
does not anticipate that it will commence construction prior to 1998, at the
earliest, unless it is successful in obtaining funds through its currently
ongoing private offering. The Company does
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<PAGE>
not currently possess capital
sufficient to commence construction of such wireless cable system. There is
no assurance that the Company will ever possess capital with which it would
be able to construct its Lebanon system.
Port Angeles, Washington. The Company holds the rights to leases of three
wireless cable channels in Port Angeles, Washington, channels H1, H2 and
H3. The Company is currently unable to predict when it will begin to
construct such wireless cable system. Nevertheless, should funding of
approximately $200,000 be available, the Company anticipates that it will
begin construction of such wireless cable system during the first quarter of
Fiscal 98. There is no assurance that such level of funding for construction
of such wireless cable system will be available. In addition, the Company
will be required to acquire more channel rights and/or utilize available
signal
compression technologies, in order to be in position to offer a viable
wireless
cable alternative. There is no assurance that the Company will be able to
acquire any additional channel rights or acquire the rights to utilize any
signal
compression technologies.
The Dalles, Oregon. The Company holds the rights to leases of six wireless
cable channels in The Dalles, Oregon, channels B1-2-3 and C1-2-3. The
Company is currently unable to predict when it will begin to construct such
wireless cable system, inasmuch as the Company does not currently possess
capital with which to commence construction. There is no assurance that
funding for construction of such wireless cable system will be available.
Sandpoint, Idaho. The Company holds the rights to leases of six wireless
cable channels in Sandpoint, Idaho, channels B1-2-3 and C1-2-3. The
Company is currently unable to predict when it will begin to construct such
wireless cable system, inasmuch as the Company does not currently possess
capital with which to commence construction. There is no assurance that
funding for construction of such wireless cable system will be available.
Fallon, Nevada. The Company holds the rights to leases of five wireless
cable channels in Fallon, Nevada, channels E1-2-3-4 and H3. The Company
is currently unable to predict when it will begin to construct such wireless
cable system, inasmuch as the Company does not currently possess capital
with which to commence construction. There is no assurance that funding for
construction of such wireless cable system will be available.
Astoria, Oregon. The Company holds the rights to leases of two wireless
cable channels in Astoria, Oregon, channels H2 and H3. The Company is
currently unable to predict when it will begin to construct such wireless
cable
system, inasmuch as the Company does not currently possess capital with
which to commence construction. There is no assurance that funding for
construction of such wireless cable system will be available. In addition,
the
Company will be required to acquire more channel rights and/or utilize
available signal compression technologies, in order to be in position to offer
a viable wireless cable alternative. There is no assurance that the Company
will be able to acquire any additional channel rights or acquire the rights to
utilize any signal compression technologies.
Competition
In addition to competition from established hard-wire cable television
systems, wireless cable television operators face competition from numerous
other sources, including potential competition from emerging technologies
in the pay-television industry, certain of which are described below.
Satellite Receivers. Satellite receivers are generally seven to 12 foot
dishes
mounted in the yards of homes to receive television signals from orbiting
satellites. Until the implementation of encryption, these dishes enabled
reception of any and all signals without payment of fees. Having to purchase
decoders and pay for programming has reduced their popularity, although the
Company will, to some degree, compete with these systems in marketing its
wireless cable services.
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<PAGE>
Direct Broadcast Satellite (DBS). DBS involves the transmission of an
encoded signal direct from a satellite to a customer's home. Because the
signal is at a higher power level and frequency than most satellite
transmitted
signals, its reception can be accomplished with a relatively small (18-inch)
dish. DBS cannot, for technical and legal reasons, provide local VHF/UHF
broadcast channels as part of its service, although many DBS subscribers
receive such channels through the use of standard over-air receive antennas.
Moreover, DBS may provide subscribers with access to broadcast network
distant signals only when a subscriber resides in areas unserved by any
broadcast station. The cost to a DBS subscriber for equipment and service
is generally substantially higher than similar costs to wireless cable
subscribers. Several DBS services currently are available nationwide. DBS
currently has approximately four million subscribers nationwide. At present,
the Company does not believe that, in the near-term, DBS will constitute
significant competition in the markets in which the Company operates, due
primarily to its cost and failure to provide access to local VHF/UHF
broadcast channels.
Satellite Master Antenna Television (SMATV). SMATV is a multi-channel
television service offered through a wired plant quite similar to a hard-wire
cable system, except that it operates without a franchise from a local
authority. SMATV operates under an agreement with a private landowner to
service a specific multiple-dwelling unit (e.g., apartment complex). The FCC
has recently amended its rules to provide point-to-point delivery of video
programming by SMATV operators and other video delivery systems in the
18 gigahertz band.
Telephone Companies. Under the Communications Act, local exchange
carriers (LECs) are currently prohibited from providing video programming
directly to subscribers in their respective telephone service areas. The FCC
has recently ruled, however, that LECs may acquire wireless cable
operations. Moreover, certain U.S. District Courts and Courts of Appeal
have held that the "telco-cable cross-ownership ban" abridges the First
Amendment rights of LECs to free expression under the U.S. Constitution.
Such rulings are currently under appeal or are expected to be appealed. The
Telecommunications Act lifts barriers to the provision of cable television
service by telephone companies. The FCC already permits LECs to provide
"video dial-tone" service, thereby allowing such carriers to make available
to multiple service providers, on a nondiscriminatory common carrier basis,
a basic platform that will permit end users to access video program services
provided by others.
While the competitive effect of the entry of telephone companies into the
video programming business is still uncertain, the Company believes that
wireless cable systems will continue to maintain a cost advantage over video
dial-tone service and fiber optic distribution technologies. However, due to
rapid technological advancements and the capital resources of LECs, no
assurances can be made in this regard.
Video Stores. Retail stores rent VCRs and/or video tapes, and are a major
participant in the television program delivery industry. According to Paul
Kagan Associates, Inc., there are over 75.5 million households with VCRs
now in use in the United States. This segment of the television program
delivery industry represents significant competition for pay-per-view sales
and premium programming channels.
Local Off-Air VHF/UHF Broadcasts. Local off-air VHF/UHF broadcasts
(such as ABC, NBC, CBS, FOX, UPN and WB) provide a free programming
alternative to the public. Prior to
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<PAGE>
October 1993, wireless cable systems
could
re-transmit these broadcast signals without permission. However, with the
enactment of the Cable Act, local broadcasters may require that cable
operators obtain their consent before re-transmitting local off-air VHF/UHF
broadcasts. The Company will attempt to obtain such consents in each of its
markets where the Company is re-transmitting on a wireless cable channel.
Local Multi-Point Distribution Service. In 1993, the FCC proposed to re-
designate the 28 gigahertz band to create a new video programming delivery
service referred to as local multipoint distribution service (LMDS). Final
rules for LMDS have not been established. Auctions for the LMDS-related
channels are not expected to begin until the middle of 1997, and the
Company does not expect to possess sufficient capital to participate in such
auction.
Community (Low Power) Television. Community Television utilizes a
limited portion of the spectrum allocated by the FCC for local off-air
VHF/UHF broadcasts, but Community Television utilizes lower power
transmission equipment than local off-air VHF/UHF broadcasts and its signal
may be encrypted. Community Television requires a separate transmitter for
each channel and a standard antenna at the receiving site.
Business - Community (Low Power) Television
General
Industry History. Community, or low power, television is a relatively new
broadcasting category created by the FCC in the early 1980's. Community
television stations, with their narrow geographic coverage, usual unaffiliated
status and local programming focus, are becoming a more important part of
the current broadcasting mix. While able to cover, on average, only between
five and 20 miles radius (15-62 square miles) with their signals, community
television stations have been able to expand greatly their coverage by having
their signals included in local and regional cable systems. Entry into the
community television industry requires substantially less capital than entry
into the high-power television industry. There are currently approximately
1,700 community television stations licensed by the FCC, with
approximately the same number of applications for new licenses now pending
with the FCC.
Community television stations may be either affiliated with one of the
national networks (ABC, NBC, CBS, FOX, UPN or WB) or may be
independent. The Company does not anticipate that its community television
stations will become network affiliates in the near term. However, it is
expected that, once operational, each of the Company's stations will become
an affiliate of the Video Catalog Channel, a merchandise sales operation.
The Company's only operational station, Call sign K13VE, Channel 13, in
Baton Rouge, Louisiana, has been an affiliate of the Video Catalog Channel
since going on the air in January 1996. (See "Business Strategy" hereunder).
Programming
Lacking a national network affiliation, independent community (low power)
television stations, in general, depend heavily on independent third parties
for
programming. Programs obtained from independent sources consist
primarily of syndicated television shows, many of which have been shown
previously on a network, and syndicated feature films, which were either
made for
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network television or have been exhibited previously in motion
picture theaters (most of which films have been shown previously on network
and cable television). Syndicated programs are sold to individual stations to
be broadcast one or more times. Independent television stations generally
have large numbers of syndication contracts; each contract is a license for a
particular series or program that usually prohibits licensing the same
programming to other television stations in the same market. A single
syndication source may provide a number of different series or programs.
Licenses for syndicated programs are often offered for cash sale or on a
barter
or cash-plus-barter basis to stations. In the case of a cash sale, the
station
purchases the right to broadcast the program, or a series of programs, and
sells advertising time during the broadcast. The cash price of such
programming varies, depending on the perceived desirability of the program
and whether it comes with commercials that must be broadcast (a cash-plus-
barter basis). Bartered programming is offered to stations without charge,
but
comes with a greater number of commercials that must be broadcast, and,
therefore, with less time available for sale by the station. Recently, the
amount of bartered and cash-plus-barter programming broadcast industry-
wide has increased substantially.
For the foreseeable future, however, the Company anticipates that each of its
community television stations will be an affiliate of the Video Catalog
Channel, deriving all of its programming therefrom. (See "Business
Strategy" hereunder, as well as "Management's Discussion and Analysis of
Financial Condition and Results of Operations").
Community Television Industry Trends
The Company believes that community television is in the right position at
a very dynamic time in the television broadcasting market place. With the
ever-growing number of cable (hard-wire and wireless) channels in most
markets, coupled with the lack of programming available for channel slots
past the 70-channel mark, there appears to be room available on such cable
systems for additional stations. This availability of channel room on cable
systems has the effect of giving community television far greater area
coverage than could be achieved solely by broadcasting a signal. The
potential for community television stations to achieve historically high
revenues exists, if a particular market and/or region can be exploited
effectively. There is no assurance that the Company will be able to exploit
each of its community television markets.
Business Strategy
It is the Company's current intention for each of its community television
stations, as soon as it becomes operational, to become an affiliate of the
Video Catalog Channel, a merchandise sales operation. It is the Company's
experience, from the operations of its Baton Rouge, Louisiana, community
television station, that this strategy generates positive cash flow, from
inception of broadcasting. From such financial position, a station's
advertising sales efforts will be increased in an effort to exploit such
station's
coverage area. Also, the Company will attempt to secure a channel on each
of the cable systems within a particular market. There is no assurance that
the Company will be able to exploit effectively any of its community
television markets. It is possible that one or more of the Company's
community television stations could, in the future, become an affiliate of one
of the national networks, such as FOX, UPN or WB. However, no prediction
in this regard can be made.
40
<PAGE>
Company Markets
General. The Company currently operates a community television station in
Baton Rouge, Louisiana, and holds the rights to community television
stations in other cities, as follows:
Estimated
Total Total
City(SMSA) Population(1) Households(1) Channel
- ---------------- ----------------- ------------------
----------
Baton Rouge, LA 637,555 252,106
Channel 13
Monroe/Rayville, LA 235,394 92,900
Channel 26
Bainbridge, GA 298,215 120,688
Channel 36
Natchitoches, LA 97,764 45,730
Channel 38
---------- -----------
Totals 1,268,928 511,424
- -------------------------
(1) Source: 1990 Census Data.
The Company currently intends to establish its Community Television
stations in the order of the above presentation. Such order of development
was determined after an assessment of the business potential of each of the
markets based upon the number of homes within the radius of the proposed
transmit site, as well as other demographic factors. Except where noted
below, the Company will seek additional financing, either equity or debt, or
form partnerships for the development of its markets. The Company does not
currently have such financing or partners in place. The Company believes
such financing will be available on a station-by-station basis; however, there
can be no assurance that it will be able to obtain such financing or partners
on a timely basis and on satisfactory terms and conditions, if at all. The
failure to obtain additional funds or partners on a timely basis could
materially adversely affect the Company and its business.
Baton Rouge, Louisiana. K13VE, Channel 13, the Company's Baton Rouge,
Louisiana, community television station, has been broadcasting since January
1996, as an affiliate of the Video Catalog Channel. The Company's current
broadcast signal reaches approximately 30,000 households. Should the
Company obtain necessary funds, of which there is no assurance, the
Company intends to commit $20,000 to increase the power of such station to
its maximum legal limit, which would permit the Company's broadcast
signal to reach approximately 150,000 households. It is expected that the
commissions earned by K13VE from Video Catalog Channel sales
originating from its broadcast area will increase proportionately to its
increased number of households reached. There is no assurance that such
will be the case.
Other Stations. The Company owns the licenses to community television
stations located in Monroe/Rayville, Louisiana, Natchitoches, Louisiana, and
Bainbridge, Georgia, which television stations are expected to be constructed
in the order listed, assuming adequate funding is available, of which there is
no assurance. The Company believes it will require approximately $50,000
to construct each station. Because the Company intends to have each of its
stations become an affiliate of the Video Catalog Channel immediately after
construction has been completed, the Company does not expect to require
additional funds for marketing. There is no assurance that funding will be
41
<PAGE>
available to the Company at such times as it attempts to construct any one of
its community television stations. Should the Company be successful in
attaining a maximum offering ($990,000) under its currently ongoing private
offering, the Company would possess funds necessary to construct each of its
community television stations. However, absent such funding, the Company
would likely be unable to construct any of its community television stations.
Competition
Community television stations compete for advertising revenue in their
respective markets, primarily with other broadcast television stations and
cable television channels, and compete with other advertising media, as well.
Such competition is intense. In addition, competition for programming,
management personnel and network affiliations is severe. There is no
assurance that the Company's community television channels, once built, of
which there is no assurance, will be able to compete effectively in their
respective markets. (See "Risk Concerning Community (Low Power)
Television - Competition" under "Risk Factors").
Business - Wireless Internet
General
Wireless Internet is a new type of communications spectrum recently
designated by the FCC. The FCC has designated the 900 MHZ band for
wireless internet use. Wireless Internet requires a transmission facility
maintained by the Wireless ISP and the user's modem equipped with an
antenna. Wireless Internet capability allows users to access the Internet
from
a stationary computer or from a mobile, lap-top computer located within the
Wireless ISP's transmission area; that is, a user can travel in a car, bus,
train,
etc., within the Wireless ISP's transmission area and maintain constant
Internet access. The Company believes that businesses, particularly service
businesses, once made aware of the Wireless Internet technology, will readily
subscribe to the Company's Wireless ISP service, although no assurance can
be made in this regard.
During the second quarter of 1997, the Wireless Internet technology to be
employed by the Company will have been developed so as to allow the user's
connection to be the equivalent of a traditional ISDN telephone line. This
type of connection permits much more efficient access to the Internet than
does a traditional (non-ISDN) telephone line. The Company believes its
Wireless ISP service will be extremely competitive in its markets. However,
there is no assurance that such will be the case, inasmuch as the Wireless ISP
is a new technology and the Company has conducted no formal market
research in any of its proposed Wireless ISP markets. (See "Business
Strategy" hereunder).
Business Strategy
General. It is the Company's intention to develop its Dallas Wireless ISP as
quickly as possible. Assuming funding is available, of which there is no
assurance, the Company intends to commit $200,000 to this end. Should the
Company's currently ongoing private offering be successful, the Company
intends to begin to develop its Dallas Wireless ISP as quickly as possible,
42
<PAGE>
a
goal of commencement of customer solicitation during the second quarter of
1997. Assuming funding is available, of which there is no assurance, the
Company intends to begin to develop its Houston Wireless ISP as soon as its
Dallas Wireless ISP's monthly revenues exceed its monthly expenditures.
No prediction can be made with respect to when the Company's Dallas
Wireless ISP will begin to generate positive cash flow. There is no assurance
that the Company will successfully exploit any of its Wireless ISP markets.
(See "Competition" hereunder). The Company's Baton Rouge, Louisiana,
Wireless ISP has not yet begun to solicit customers; thus, no determination
of consumer acceptance can yet be made. However, another Wireless ISP in
Monroe, Louisiana, utilizing the same Wireless Internet Access System as the
Company, reports that consumer acceptance appears to be excellent. There
is no assurance that the Company will experience similar results.
Marketing. In marketing its Wireless ISP services, the Company will
emphasize the superior connection to the Internet offered by its equipment,
the low price relative to the quality of the Internet connection, the mobility
of the Internet connection and the ability to gain access to the Internet
without dealing with the local telephone company. There is no assurance that
this method of marketing will be successful.
Competition
Traditional (telephone-line dependent) Internet Service Providers are
currently engaged in severe competition for market share, particularly in the
larger markets of the U.S. It can be expected that many competitors will
possess far greater resources, financial and otherwise, than does the
Company. There is no assurance that the Company will be able to compete
successfully in any of its Wireless ISP markets. (See "Risk Factors
Concerning Wireless Internet - Competition" under "Risk Factors").
Company Employees
The Company currently has no salaried employees. However, the
Company's officers are performing all required business and administrative
functions without pay. Should the Company be successful in securing
funding, it is expected that the Company would employ approximately 25
persons by the close of 1997. The industries in which the Company operates
require a high level of expertise in many positions. The Company does not
anticipate any difficulty in retaining necessary personnel.
Company Properties
The Company leases approximately 1,200 square feet for its executive offices
in Baton Rouge, Louisiana, for a monthly rental of $1,600. The Company
expects to lease additional office space, as well as necessary transmitter
space, as it launches each wireless cable system, each community television
station and Wireless ISP.
MANAGEMENT
The following table sets forth the officers and directors of the Company as
of the date of this Prospectus.
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<PAGE>
Name Age
Position
- -------- ------
-----------
David M. Loflin (1) 39 President
and Director
Waddell D. Loflin (1) 47 Vice President,
Secretary
and Director
Richard N. Gill 39 Director
Ross S. Bravata 38 Director
Michael Cohn 39 Director
- ---------------------------
(1) David M. Loflin and Waddell D. Loflin are brothers.
The current officers and directors of the Company serve until the next annual
meeting or until their respective successors are elected and qualified. All
officers serve at the discretion of the Board of Directors. The family
relationships between the Company's officers and directors are noted in the
table above. Certain information regarding the backgrounds of each of the
officers and directors of the Company is set forth below.
David M. Loflin, President and Director of the Company, has, for more than
the past five years, owned and operated Gulf Atlantic Communications, Inc.
("Gulf-Atlantic"), a Baton Rouge, Louisiana-based wireless technology firm
specializing in development of wireless cable systems and broadcast
television stations. Gulf Atlantic has designed, constructed and operated two
wireless cable systems: (1) Baton Rouge, Louisiana, and (2) Selma, Alabama.
Mr. Loflin developed and currently operates one television station, WTVK-
TV11, Inc. (a Warner Brothers Network affiliate), Channel 11 in Baton
Rouge, Louisiana. For over ten years, Mr. Loflin has served as a consultant
for Wireless One, one of the largest wireless communications firms in the
United States. Mr. Loflin is a member of the Wireless Cable Association
International and the Community Broadcasters Association.
Waddell D. Loflin, Vice President, Secretary and Director of the Company,
has, for more than the past five years, served as Vice President of Operations
and Treasurer of Gulf Atlantic Communications, Inc. and WTVK-TV11, Inc.,
both in Baton Rouge, Louisiana. In addition, Mr. Loflin serves as Production
Manager and Film Director for WTVK-TV11, Inc. Mr. Loflin served as
General Manager for Baton Rouge Television Company, Baton Rouge,
Louisiana, a wireless cable system, where he directed the development and
launch of such wireless cable system. Also, Mr. Loflin has devoted over five
years to demographic research relating to the wireless cable industry. Mr.
Loflin is a member of the Wireless Cable Association International and the
Community Broadcasters Association. Mr. Loflin holds a B.A. degree in
Social Sciences from Oglethorpe University, Atlanta, Georgia.
Richard N. Gill, Director of the Company, has, for more than the past five
years, served as Chairman of the Board, President and General Manager of
Campti-Pleasant Hill Telephone Company, Inc., a Pleasant Hill, Louisiana-
based independent telecommunications company involved in the cellular
telephone service industry, the wireless cable industry and the Internet
service provider industry. Mr. Gill currently serves on the Board of
Directors
of Artcrete, Inc., and is on the Advisory Board of Peoples State Bank,
Pleasant Hill, Louisiana. Mr. Gill received a degree from the University of
Southwestern Louisiana, Lafayette, Louisiana, where he currently serves as
a member of the Industry Telecommunication Advisory Committee for the
Electrical Engineering
44
<PAGE>
Department. Mr. Gill is a past-Chairman and current
member of the Louisiana Telephone Association. Mr. Gill is also a member
of the United States Telephone Association and the National Telephone
Cooperative Association.
Ross S. Bravata, Director of the Company, has, since 1981, worked for
Novartis (formerly Ciba Corporation), in various positions, and currently
serves as a Senior Control Systems Technician. In such capacity, Mr.
Bravata supervises the service and maintenance of electronic instrumentation.
Since 1988, Mr. Bravata has served as a director and principal financial
officer of CG Federal Credit Union, Baton Rouge, Louisiana. Also, Mr.
Bravata has, since its inception in 1994, served as a director of Trinity's
Restaurant, Inc. in Baton Rouge, Louisiana.
Michael Cohn, Director of the Company, has, for 20 years, owned and
operated Arrow Pest Control, Inc., Baton Rouge, Louisiana. In addition, Mr.
Cohn owns Arrow Pest Control of New Orleans, Wilson and Sons
Exterminating in Mobile, Alabama, and Premier Termite and Pest Control in
Florida.
Executive Compensation
None of the Company's officers is expected to receive any cash, or other,
compensation during Fiscal 97. Further, no Company officer will begin to
receive cash compensation until such time as the payment of such
compensation would not adversely affect the Company's operations and
proposed development and expansion. No prediction can be made as to when
cash compensation will begin to be paid to the Company's officers.
However, should the Company obtain at least $500,000 under its currently
ongoing private offering, of which there is no assurance, the Company's
President, David M. Loflin, will begin to be paid an annual salary of
$120,000. Any other cash compensation paid to Company officers will be
determined by the Board of Directors.
Indemnification of Directors and Officers
The Company currently is seeking officer and director liability insurance,
though none has been obtained as of the date of this Prospectus.
As permitted by Nevada law, the Company's Bylaws provide that the
Company will indemnify its directors and officers against expense and
liabilities they incur to defend, settle or satisfy any civil, including any
action
alleging negligence, or criminal action brought against them on account of
their being or having been Company directors or officers unless, in any such
action, they are judged to have acted with gross negligence or willful
misconduct. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers
or persons controlling the Company pursuant to the foregoing provisions, the
Company has been informed that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
CERTAIN TRANSACTIONS
Founders
45
<PAGE>
In November 1996, the Company's officers purchased a total of 1,800,000
shares of Company Common Stock for cash at $.10 per share, a total
consideration of $1,800. Specifically, David M. Loflin, President and a
director of the Company, purchased 1,600,000 shares and Waddell D. Loflin,
Vice President, Secretary and a director of the Company, purchased 200,000
shares of Company Common Stock.
Joint Venture
In January 1997, the Company entered into a joint venture, known as "Web
One Wireless I.S.P. - Baton Rouge, J.V." (the Joint Venture), with Web One,
Inc. (Web One), a Louisiana corporation owned by David M. Loflin (50%)
and Ross S. Bravata (50%), whereby the Joint Venture will operate as a
Wireless Internet Service Provider (ISP) in Baton Rouge, Louisiana.
Pursuant to the Joint Venture Agreement by which the Joint Venture was
formed, the Company and Web One each contributed $5,000 to the capital of
the Joint Venture. Since the formation of the Joint Venture, each of Messrs.
Loflin and Bravata has loaned a total of $7,500 to the Joint Venture, which
loans bear interest at 8% per annum and are due on demand. Messrs. Loflin
and Bravata have advised the Joint Venture that they have no intention of
demanding payment of such loans for the foreseeable future. It is expected
that each of Messrs. Loflin and Bravata will make similar loans to the Joint
Venture during the next six months, up to an additional $7,500. However,
there is no guaranty that Messrs. Loflin and Bravata will make any such
additional loans. Should such additional loans not be made, it can be
expected that the Joint Venture's ability to achieve successful operations
would be severely impaired. In addition, the Company has an option to
acquire all of the outstanding capital stock of Web One at any time on or
before August 1, 1998. If the option to acquire Web One is exercised by the
Company, the Company, at its sole option, may elect to utilize cash or shares
of its Common Stock in payment for the stock of Web One. The value of the
stock of Web One is to be established by an independent appraiser. Should
the Company elect to utilize shares of its Common Stock with which to
acquire the stock of Web One, the per share value of the Company's
Common Stock shall be equal to the average closing bid price of the
Common Stock for the ten trading days immediately prior to the closing of
such acquisition, or, should no public market for the Common Stock exist,
the per share value of the Common Stock shall be established by an
independent appraiser.
Loans by Officers
In October 1996, David M. Loflin loaned, on two separate occassions, a total
of $40,000 to MCTV, which loan is evidenced by a promissory note, bears
interest at eight percent per annum and is payable on demand. In November
1996, Mr. Loflin loaned the sum of $20,000 to MCTV, which loan is
evidenced by a promissory note, bears interest at eight percent per annum and
is payable on demand
In January 1997, Mr. Loflin loaned the sum of $8,000 to the Company, which
loan is evidenced by a promissory note, bears interest at eight percent per
annum and is payable on demand.
Mr. Loflin has advised the Company that he does not intend to demand
payment of such loans until such time as repayment would not adversely
affect the financial position of the Company.
46
<PAGE>
Subscription Agreements
Effective December 20, 1996, the Company entered into a Subscription
Agreement with its President, David M. Loflin, whereby the Company issued
1,578,512 shares of Common Stock to Mr. Loflin in exchange for
assignments of licenses and leases of licenses of television channels and
wireless cable television channels and options to acquire such assets, as
follows:
Community TV Market
Channel
----------------------------
----------
Monroe/Rayville, LA
Channel 26
Natchitoches, LA
Channel 38
Wireless Cable Market
Channels
----------------------------
-----------
Port Angeles, WA
H1-2-3
Astoria, OR
H2-3
Sandpoint, UT
B1-2-3; C1-2-3
The Dalles, OR
B1-2-3; C1-2-3
Fallon, NV
E1-2-3-4; H3
The shares issued to Mr. Loflin under such Subscription Agreement were
valued at $1.157 per share, or $1,826,873, in the aggregate, which value was
determined pursuant to a market report and appraisal as of December 20,
1996 (the "Appraisal"), delivered to the Company by Broadcast Services
International, Inc., Sacramento, California. (See "Appraisal" hereunder for
a full discussion of the Appraisal).
Effective December 20, 1996, the Company entered into a Subscription
Agreement with its Vice President, Waddell D. Loflin, whereby the Company
issued 104,249 shares of Common Stock to Mr. Loflin in exchange for an
assignment of the license of television channel 36 in Bainbridge, Georgia.
The shares issued to Mr. Loflin under such Subscription Agreement were
valued at $1.157 per share, or $120,652, in the aggregate, which value was
determined pursuant to the Appraisal.
Reorganizations
Effective December 31, 1996, the Company entered into an Agreement and
Plan of Reorganization (the "WEI Reorganization") among the Company,
Winter Entertainment, Inc., a Delaware corporation (WEI), and David M.
Loflin, as WEI's sole shareholder, pursuant to which transaction WEI became
a wholly-owned subsidiary of the Company. WEI owns and operates K13VE
Channel 13 in Baton Rouge, Louisiana. Under the WEI Reorganization, Mr.
Loflin received 227,336 shares of Company Common Stock in exchange for
his shares of WEI common stock. The shares of Company Common Stock
issued to Mr. Loflin in the WEI Reorganization were valued at $1.157 per
share, or $263,106, in the aggregate, which value was determined pursuant
to the Appraisal.
Effective December 31, 1996, the Company entered into an Agreement and
Plan of
47
<PAGE>
Reorganization (the "MCTV Reorganization") among the Company,
Missouri Cable TV Corp., a Louisiana corporation (MCTV), and the
shareholders of MCTV, pursuant to which transaction WEI became a wholly-
owned subsidiary of the Company. MCTV owns licenses and leases of
licenses of wireless cable television channels in Poplar Bluff, Missouri,
which system is ready for broadcast operations, and Lebanon, Missouri,
which system has yet to be developed. Under the MCTV Reorganization,
David M. Loflin, as a shareholder of MCTV, received 1,179,389 shares of
Company Common Stock in exchange for his shares of MCTV common
stock. The shares of Company Common Stock issued to Mr. Loflin in the
MCTV Reorganization were valued at $1.157 per share, or $1,364,553, in the
aggregate. Also under the MCTV Reorganization, Ross S. Bravata, a director
of the Company, received, as a shareholder of MCTV, 42,887 shares of
Company Common Stock valued at $1.157 per share, or $49,620, in the
aggregate, and Michael Cohn, a director of the Company, received, as a
shareholder of MCTV, 53,608 shares of Company Common Stock valued at
$1.157 per share, or $62,024, in the aggregate. The value of the shares of
Company Common Stock received by Messrs. Loflin, Bravata and Cohn
under the MCTV Reorganization was determined pursuant to the Appraisal.
Stock Purchase
In March 1997, one of the Company's directors, Michael Cohn, purchased
20,000 shares of Company Common Stock for cash in the amount of
$50,000. Mr. Cohn has advised the Company that he intends to purchase,
within 30 days from the date of this Prospectus, an additional 40,000 shares
for cash in the amount of $100,000. However, there is no assurance that such
investment will be made.
Appraisal
The Appraisal was delivered to the Company by Broadcast Services
International, Inc., a Sacramento, California-based communications appraisal
firm. The report of BSI was based on 1990 Census Data. With respect to the
wireless cable markets, the engineering studies relied upon by BSI indicate
the number of households within the broadcast radius using the 1200 MHZ
frequency. The 1200 MHZ frequency was assumed, due to BSI's experience
that, given all of the variables that may be present in a market-by-market
system build-out, the actual benchmark performance is more truly reflected
by using the higher (1200 MHZ) frequency, such that the signal attenuation
is not over-stated. Valuation formulas for the wireless cable markets of the
Company were based on initial public offerings within the wireless cable
industry during the past three years. The formulas used in evaluation of the
Company's broadcast channels are based on recent sales and market
evaluation techniques employed by the Community Broadcasters
Association, among others.
PRINCIPAL SHAREHOLDERS
On the date of this Prospectus, there were 6,170,000 shares of Company
Common Stock issued and outstanding. The following table sets forth certain
information regarding the beneficial ownership of Company Common Stock
as of the date of this Prospectus, and after giving effect to the dividend
distribution of Company Common Stock to the shareholders of ECA, by (i)
persons known to the Company to be beneficial owners of more than 5% of
the Common Stock of the Company, (ii) each of the Company's officers and
directors and (iii) the officers and directors of the Company as a group.
48
<PAGE>
Name and
Address of Shares Shares
Beneficial Owned % Owned
%
Owner Beneficially Owned Beneficially
Owned
- ------------- --------------- ---------- -----
- ---------- --------
David M. Loflin 4,585,237 74.31% 4,585,237
74.31%
8478 Quarters Lake Rd.
Baton Rouge, LA 70809
Waddell D. Loflin 304,249 4.93% 304,249
4.93%
8478 Quarters Lake Rd.
Baton Rouge, LA 70809
Entertainment Corpor- 360,000 5.83% ---
---
ation of America
727 Iberville
New Orleans, LA 70130
Ross S. Bravata 42,887 *
42,887 *
8478 Quarters Lake Road
Baton Rouge, LA 70809
Michael Cohn 73,608 1.19% 73,608
1.19%
8748 Quarters Lake Road
Baton Rouge, LA 70809
All officers and directors
as a group (5 persons) 5,005,981 81.13% 5,005,981 81.13%
- -----------------------------
* Less than 1%.
(1) Based on 6,170,000 shares outstanding and prior to the dividend
distribution described herein.
(2) Based on 6,170,000 shares outstanding and after giving effect to the
dividend distribution described herein.
FEDERAL INCOME TAXES
The summary discussion below is based on the Internal Revenue Code of
1986, as amended (the "Code"), various regulations promulgated pursuant to
the Code, interpretations published by the Internal Revenue Service (the
"Service") and court decisions.
This section was prepared by the law firm of Newlan & Newlan ("Counsel")
and reflects the opinions of such firm regarding the material federal income
tax consequences arising from the distribution of the Company's Common
Stock as described in this Prospectus. All opinions of Counsel rely upon the
accuracy of the information submitted and the representations made by ECA.
Such opinion is not binding on the Service or on the courts. Accordingly, no
assurance can be given that the Service will agree with the opinions
expressed hereinbelow.
ECA will report the distribution of the Company's Common Stock as a
distribution subject to the provisions of Section 301 of the Internal Revenue
Code of 1986, as amended (the "Code"). ECA will recognize gain as a result
of the distribution to the extent the fair market value of the Common Stock
exceeds the adjusted basis of such Common Stock in the hands of ECA.
ECA can recognize no loss as a result of the distribution. The fiscal year of
ECA ends July 31 and the Company's fiscal year ends December 31.
Holders of ECA common stock will be taxed on the dividend distribution as
ordinary income
49
<PAGE>
to the extent of ECA's current and accumulated earnings
and profits, computed as of the close of the tax year during which the
distribution occurs. A portion of the distribution, if any, which exceeds
ECA's current and accumulated earnings and profits will reduce a
shareholder's adjusted basis in his ECA common stock, but not below zero.
To the extent of any such reduction in basis, the distribution will not be
currently taxable. If the amount of the distribution would have the effect of
reducing a shareholder's adjusted basis in his ECA common stock below
zero, the excess will be treated as a gain from the sale or exchange of
property. If the ECA common stock is a capital asset in the hands of the
shareholder, the gain will be a capital gain, either long-term or short-term,
depending on whether the shareholder has held his ECA common stock for
more than one year.
Non-corporate shareholders will be treated as having received a distribution
equal in value to the fair market value, at the date of the distribution, of
the
Common Stock they receive. Corporate shareholders will generally be
treated as having received a distribution in an amount equal to the lesser of
(I) ECA's adjusted basis in the Common Stock immediately prior to the
distribution, increased by the amount of any gain recognized by ECA on the
distribution, or (ii) the fair market value of the Common Stock on the date of
the distribution. However, corporate shareholders may be entitled to the
dividends-received deduction, which would generally allow them a
deduction, subject to certain limitations, from their gross income of 80% of
the amount of the dividend.
A non-corporate shareholder's tax basis in the Common Stock will equal the
fair market value of the Common Stock on the date of the distribution and a
corporate shareholder's tax basis in the Common Stock will generally equal
the lesser of the fair market value of the Common Stock on the date of the
distribution or the adjusted basis of the Common Stock in the hands of ECA
immediately prior to the distribution, increased in the amount of any gain
recognized to ECA on the distribution.
The holding period of a corporate shareholder of ECA attributable to the
Common Stock of the Company will commence on the date of the
distribution. If gain is recognized on the distribution by ECA, as will be
the
case if the fair market value of the Common Stock distributed exceeds its
adjusted basis, a corporate shareholder's holding period will begin on the
date
of the distribution.
If gain is not recognized by ECA on the distribution and the basis of the
Common Stock in the hands of the corporate shareholder is determined under
Code Section 301(d)(2)(B), then (except for gain from certain sales or
exchanges of stock in foreign corporations) such corporate shareholder will
not be treated as holding the Common Stock distributed during any period
before the date on which such corporate shareholder's holding period in its
Common Stock began.
In the absence of a trading market for the Common Stock, "fair market value"
is to be calculated in accordance with Internal Revenue Service Revenue
Ruling 59-60, 1959-1C.B.237, which sets forth certain factors for such a
determination (for example, the nature of the business, its history, the
general
economic outlook, book value of the Company, earnings capacity, dividend
paying capacity, existence of good will and recent sales of Company shares).
Neither ECA nor the Company will advise the shareholders what the "fair
market value" of the Common Stock will be on the distribution date. Each
shareholder must make his own determination. ECA intends to send to
shareholders and the Service, however, IRS Form 1099 DIV which will
indicate a value of the dividend distribution equal to the fair market value
of
the Common Stock on the date of the dividend distribution, in the opinion of
ECA. Any portion of the distribution which has the effect of reducing
50
<PAGE>
a
shareholder's adjusted basis below zero will be treated as a gain from the
sale
or exchange of property.
The preceding discussion is a general summary of current federal income tax
consequences of the dividend distribution as presently interpreted, and a
shareholder's particular tax consequences may vary depending on his
individual circumstances. Shareholders are encouraged to consult their own
tax counsel concerning the treatment of the distribution on their income tax
returns.
LITIGATION
The Company is not currently involved in any legal proceeding.
DESCRIPTION OF SECURITIES
Authorized Capital Stock
The authorized capital stock of the Company consists of One Hundred
Million (100,000,000) shares of Common Stock, $.0001 par value per share.
As of the date of this Prospectus, there were 6,170,000 shares of Company
Common Stock outstanding.
Description of Common Stock
Each share of Common Stock is entitled to one (1) vote at all meetings of
shareholders. All shares of Common Stock are equal to each other with
respect to liquidation rights and dividend rights. There are no preemptive
rights to purchase any additional shares of Common Stock. The Articles of
Incorporation of the Company prohibit cumulative voting in the election of
directors. The absence of cumulative voting means that holders of more than
50% of the shares voting for the election of directors can elect all directors
if they choose to do so. In such event, the holders of the remaining shares
of
Common Stock will not be entitled to elect any director. A majority of the
shares entitled to vote, represented in person or by proxy, constitutes a
quorum at a meeting of shareholders. In the event of liquidation, dissolution
or winding up of the Company, holders of shares of Common Stock will be
entitled to receive, on a pro rata basis, all assets of the Company remaining
after satisfaction of all liabilities.
Transfer Agent and Registrar
The Company has retained Securities Transfer Corporation, Dallas, Texas,
as transfer agent and registrar for the Common Stock of the Company.
LEGAL MATTERS
The law firm of Newlan & Newlan, Irving, Texas, has acted as legal counsel
for the Company in connection with the Registration Statement of which this
Prospectus forms a part and related matters. As of the date of this
Prospectus,
Newlan & Newlan owned 150,000 shares of Company Common Stock.
51
<PAGE>
EXPERTS
The financial statements of the Company included in this Prospectus and
Registration Statement have been audited by Weaver and Tidwell, L.L.P.,
independent auditor, for the period indicated in its report thereon which
appear elsewhere herein and in the Registration Statement. The financial
statements audited by Weaver and Tidwell, L.L.P., have been included in
reliance on its reports given as its authority as an expert in accounting and
auditing.
52
<PAGE>
MEDIA ENTERTAINMENT, INC. AND SUBSIDIARIES
(a dedvelopment stage company)
INDEX TO FINANCIAL STATEMENTS
Page No.
Consolidated Financial Statements
Independent Auditor's Report F-2
Consolidated Balance Sheet - December 31, 1996 F-3
Consolidated Statement of Operations - Period
from Inception (November 1, 1996) to
December 31, 1996 F-4
Consolidated Statement of Changes in
Stockholders' Equity - Period from Inception
(November 1, 1996) to December 31, 1996 F-5
Consolidated Statement of Cash Flows - Period
from Inception (November 1, 1996) to
December 31, 1996 F-6
Notes to Consolidated Financial Statements F-7
Missouri Cable TV Corporation
(a development stage company)
Independent Auditor's Report F-12
Balance Sheet F-13
Statement of Operations - Period from Inception
(October 9, 1996) to December 31, 1996 F-14
Statement of Changes in Stockholder's Equity -
Period from Inception (October 9, 1996)
to December 31, 1996 F-15
Statement of Cash Flows - Period from Inception
(October 9, 1996) to December 31, 1996 F-16
Notes to the Financial Statements F-17
Winter Entertainment, Inc.
(a development stage company)
Independent Auditor's Report F-20
Balance Sheets F-21
Statements of Operations - Year Ended December 31,
1996 and Period from Inception (December 28, 1995)
to December 31, 1995 F-22
Statements of Cash Flows - Year Ended December 31,
1996 and Period from Inception (December 28, 1995)
to December 31, 1995 F-23
Notes to Financial Statements F-24
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Director's and Stockholders
Media Entertainment, Inc.
We have audited the accompanying consolidated balance sheet of
Media Entertainment Inc., and subsidiaries (a development stage
company) as of December 31, 1996 and the related consolidated
statements of operations, changes in stockholders' equity and
cash flows for the period from inception (November 1, 1996) to
December 31, 1996. These consolidated financial statements are
the responsibility of the company's management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Media Entertainment, Inc. and subsidiaries
as of December 31, 1996, and the consolidated results of their
operations and their cash flows for the period from inception
(November 1, 1996) through December 31, 1996 in conformity with
generally accepted accounting principles.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the financial statements, the
Company is in its development stage and has no operating revenue.
In addition, the Company has limited capital resources and a loss
from operations since inception, all of which raise substantial
doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also discussed
in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
WEAVER AND TIDWELL, L.L.P.
Fort Worth, Texas
April 3, 1997
2875
F-2
(PAGE)
MEDIA ENTERTAINMENT, INC. AND SUBSIDIARIES
(a development stage company)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
ASSETS
CURRENT ASSETS
Cash $ 14,502
Accounts receivable 310
Deferred offering costs 15,238
Total current assets 30,050
PROPERTY AND EQUIPMENT 196,214
INTANGIBLES
Organization costs, net of
accumulated amortization of $19 550
Licenses and rights to leases of licenses 22,024
22,574
TOTAL ASSETS $248,838
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable to stockholder $ 50,000
Accounts payable 10,069
Accrued interest 820
Total current liabilities 60,889
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value,
100,000,000 shares authorized
6,000,000 shares issued and outstanding 600
Additional paid-in capital 189,528
Deficit accumualted during the development stage ( 19)
Subscriptions receivable ( 2,160)
187,949
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $248,838
F-3
(PAGE)
MEDIA ENTERTAINMENT, INC. AND SUBSIDIARIES
(a development stage company)
CONSOLIDATED STATEMENT OF OPERATIONS
PERIOD FROM INCEPTION (NOVEMBER 1, 1996)
TO DECEMBER 31, 1996
Revenue $ -
General and administrative expenses 19
Net loss ($ 19)
Loss per common share ($ 0.00)
F-4
(PAGE)
MEDIA ENTERTAINMENT, INC. AND SUBSIDIARIES
(a development stage company)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM INCEPTION (NOVEMBER 1, 1996)
TO DECEMBER 31, 1996
Deficit
Accumulated
Additional During the Stock
Common Stock Paid-in Development Subscriptions
Shares Amount Capital Stage Receivable
Balance at inception
(November 1, 1996 - $ - $ - $ - $ -
Issuance of common
stock for $1,800
subscription
receivable upon
incorporation of the
Company on
November 1, 1996 1,800,000 180 1,620 - ( 1,800)
Sale of common
stock for $360
subscription
receivable on
November 15, 1996 360,000 36 324 - 360)
Issuance of common
stock for assign-
ment of licenses
and leases on
December 20, 1996 1,578,512 158 ( 158) - -
Issuance of common
stock for assign-
ment of licenses
and leases on
December 20, 1996 104,249 10 ( 10) - -
Issuance of common
stock for the acqui-
sition of Winter
Entertainment,
Inc., effective
December 31, 1996 227,336 23 16,097 - -
Issuance of common
stock for the acqui-
sition of Missouri
Cable TV Corp.,
effective
December 31, 1996 1,929,903 193 171,655
Net loss - - - ( 19) -
Balance,
December 31, 1996 6,000,000 $ 600 $189,528 ($ 19) ($ 2,160)
F-5
(PAGE)
MEDIA ENTERTAINMENT, INC. AND SUBSIDIARIES
(a development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
PERIOD FROM INCEPTION (NOVEMBER 1, 1996)
TO DECEMBER 31, 1996
CASH FLOWS FROM OPERTING ACTIVITIES
Net loss ($ 19)
Adjustment to reconcile net loss to net
cash provided by operating activities
Amortization 19
Net cash provided by operating activities -
CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired in acquisition 14,502
Net cash provided by investing activities 14,502
Net increase in cash 14,502
Cash, beginning of period -
Cash, end of period $ 14,502
NONCASH INVESTING AND FINANCING ACTIVITIES
Acquisition of Missouri Cable TV Corp.
and Winter Entertainment, Inc.
Cash $ 14,502
Accounts receivable 310
Deferred offering costs 15,238
Property and equipment 196,214
Intangibles 22,593
Notes payable to stockholder ( 50,000)
Accounts payable ( 10,069)
Accrued interest ( 820)
Common stock issued $187,968
F-6
(PAGE)
NOTE 1. NATURE OF BUSINESS, ORGANIZATION
AND BASIS OF PRESENTATION
Media Entertainment, Inc., (MEI) was incorporated in the State
of Nevada on November 1, 1996, to operate as a holding company
in the wireless cable television and community (low power)
television industries, as well as other segments of the
communications industry.
Effective December 31, 1996, MEI acquired all of the
outstanding common stock of Winter Entertainment, Inc., a
Delaware corporation incorporated on December 28, 1995 (WEI),
and Missouri Cable TV Corp., a Louisiana corporation
incorporated on October 9, 1996 (MCTV). WEI operates a
community television station in Baton Rouge, Louisiana; MCTV
owns wireless cable television channels in Poplar Bluff,
Missouri, which system has been constructed and is ready for
operation, and Lebanon, Missouri, which has yet to be
constructed. The acquisition of WEI and MCTV by Media was
accounted for as a reorganization of companies under common
control at historical cost.
The financial statements have been prepared on a going concern
basis, which contemplates realization of assets and
liquidation of liabilities in the ordinary course of business.
Since the Company is in the development stage, it has limited
capital resources, insignificant revenue and a loss from
operations since its inception. The appropriateness of using
the going concern basis is dependent upon the Company's
ability to obtain additional financing or equity capital and,
ultimately, to achieve profitable operations. The uncertainty
of these conditions raises substantial doubt about its ability
to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome
of this uncertainty.
The Company plans to raise up to $990,000 in a private
placement of up to 330,000 shares of its common stock. The
Company intends to use the proceeds of the private placement
to increase the broadcast signal of WEI's community television
station, to start operation of MCTV's wireless cable channels
in Poplar Bluff, Missouri and to provide working capital. The
Company believes that these actions will enable the Company to
carry out its business plan and ultimately to achieve
profitable operations.
F-7
(PAGE)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include
all the accounts of MEI and its wholly owned subsidiaries,
WEI and MCTV, since the date of acquisition. All
intercompany transactions and balances have been eliminated
in consolidation. The consolidated group is referred to as
the "Company".
Broadcast Equipment
Equipment is recorded at cost. Depreciation will be
calculated using a straight-line method over the estimated
useful lives of the assets, ranging from 3 to 15 years.
Cash Equivalents
The Company considers all highly liquid investments with
original maturities of ninety days or less from the date of
purchase to be cash equivalents.
Income Taxes
The Company provides deferred taxes for the tax consequences
of temporary differences between the tax basis of assets and
liabilities and their reported amounts in the financial
statements. As of December 31, 1996, there are no
significant differences between financial statement and tax
basis of assets and liabilities that will result in taxable
or deductible amounts in the future.
Deferred Offering Costs
Costs related to the Company's proposed public or private
offering of $15,238 are capitalized as deferred offering
costs. These costs will be offset against the proceeds of
the proposed offering upon its completion, as a charge to
paid-in capital, or expensed in the event the offering is
unsuccessful.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
F-8
(PAGE)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Use of Estimates
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
Loss Per Common Share
Loss per common share is computed based on the loss for the
period divided by the weighted average number of common
shares outstanding during the period.
Amortization
Organization costs are being amortized on a straight-line
basis over 60 months. Licenses and rights to leases of
licenses will be amortized on a straight-line basis over the
license and lease rights periods expected to be 5 to 15
years.
NOTE 3. ACQUISITIONS
Effective December 31, 1996, the Company acquired WEI and MCTV
by issuing common stock in exchange for all the common stock
of each company. The majority stockholder of the Company was
also the sole stockholder of WEI and the majority stockholder
of MCTV. Therefore, the acquisitions have been accounted for
at historical cost. The consolidated statement of operations
includes only the Company, since the effective date of the
acquisition was the last day of the year. Proforma financial
information, as if the acquisition had occurred as of the
beginning of the year ended December 31, 1996, is as follows:
Revenue $ 3,337
Operating expense 4,787
Operating loss ($ 1,450)
General and administrative expenses 7,549
Net loss ($8,999)
Loss per common share ($ 0.00)
F-9
(PAGE)
NOTE 4. LICENSES AND RIGHTS TO LEASES OF LICENSES
The Company owns licenses or rights to leases of licenses in the following
wireless cable and community television markets:
Wireless Cable Market Expiration Date
Poplar Bluff, Missouri October 16, 2006
Lebanon, Missouri October 16, 2006
Port Angeles, Washington December 21, 2003
Astoria, Oregon December 21, 2003
Sand Point, Idaho August 09, 2006
The Dalles, Oregon August 09, 2006
Fallon, Nevada August 09, 2006
Community Television Market
Baton Rouge, Louisiana July 01, 2007
Monroe/Rayville, Louisiana July 01, 2007
Natchitoches, Louisiana July 01, 2007
Bainbridge, Georgia July 01, 2007
Application for renewal of licenses must be filed within a certain period
prior to expiration.
NOTE 5. NOTES PAYABLE STOCKHOLDER
Notes payable to majority stockholder, interest accrues at 8%, due on demand
and unsecured $50,000
NOTE 6. SUBSEQUENT EVENTS
In January 1997, the Company entered into an agreement with Web One, Inc.
forming Web One Wireless I.S.P. - Baton Rouge, J.V. (the "Joint Venture").
The Joint Venture was created to operate as a Wireless Internet Service
Provider in Baton Rouge, Louisiana. The agreement gives the Company
the option to buy all the outstanding capital stock of Web One, Inc. at any
time on or before August 1, 1998. The option price is to be based on an
appraisal of Web One, Inc.
F-10
(PAGE)
NOTE 6. SUBSEQUENT EVENTS - continued
In addition, the Company entered into an agreement with Open Net, Inc.
whereby the Company has an exclusive right of first refusal to utilize
Open Net's wireless internet access system in several U.S. cities. The
Company must pay to Open Net $50,000 for each such system purchased by the
Company.
Since December 31,1996, the Company has issued 150,000 shares of common
stock to prepay legal services valued at $60,000. The Company has also sold
20,000 shares of common stock for $50,000, and has issued options to purchase
another 40,000 shares for $100,000.
NOTE 7. FINANCIAL INSTRUMENTS
Financial instruments of the Company consist principally of cash, accounts
payable, and notes payable. Recorded values approximate fair values due to
the short maturities of these instruments.
F-11
(PAGE)
INDEPENDENT AUDITOR'S REPORT
To the Board of Director's and Stockholder
Missouri Cable TV Corporation
We have audited the accompanying balance sheet of Missouri Cable
TV Corporation, (a development stage company) as of December 31,
1996 and the related statements of operations, changes in
stockholder's equity and cash flows for the period from
inception (October 9, 1996) to December 31, 1996. These
financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Missouri Cable TV Corporation as of December 31, 1996, and the
results of its operations and its cash flows for the period from
inception (October 9, 1996) to December 31, 1996 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 1 to the financial statements, the Company is in its
development stage and has no operating revenue. In addition, the
Company has limited capital resources and a loss from operations
since inception, all of which raise substantial doubt about its
ability to continue as a going concern. Management's plans in
regard to these matters are also discussed in Note 1. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
WEAVER AND TIDWELL, L.L.P.
Fort Worth, Texas
April 3, 1997
2880
F-12
(PAGE)
MISSOURI CABLE TV CORPORATION
(a development stage company)
BALANCE SHEET
DECEMBER 31, 1996
ASSETS
CURRENT ASSETS
Cash $13,742
Due from affiliate 15,000
Total current assets 28,742
PROPERTY AND EQUIPMENT 186,333
LICENSES AND RIGHTS TO LEASES OF LICENSES,
net of accumulated amortization of $225 15,774
TOTAL ASSETS $230,849
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Note payable to stockholder $ 50,000
Accounts payable 8,181
Accrued interest 820
Total current liabilities 59,001
STOCKHOLDER'S EQUITY
1,800,000 shares authorized
1,800,000 issued and outstanding 179,611
Deficit accumulated during the development stage ( 7,763)
171,848
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $230,849
F-13
(PAGE)
MISSOURI CABLE TV CORPORATION
(a development stage company)
STATEMENT OF OPERATIONS
PERIOD FROM INCEPTION (OCTOBER 9, 1996)
TO DECEMBER 31, 1996
Revenue $ -
Operating expenses 225
Operating loss ( 225)
General and administrative expenses 6,718
Interest expense 820
Net loss ($ 7,763)
Loss per common share ($ 0.00)
F-14
(PAGE)
MISSOURI CABLE TV CORPORATION
(a development stage company)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
PERIOD FROM INCEPTION (OCTOBER 9, 1996)
TO DECEMBER 31, 1996
Deficit
Accumualted
During the
Common Stock Development
Shares Amount Stage
Balance at inception
(October 9, 1996) - $ - $ -
Contribution of equipment
for common stock 1,800,000 179,611 -
Net loss - - ( 7,763)
Balance, December 31, 1996 1,800,000 179,611 ($ 7,763)
F-15
(PAGE)
MISSOURI CABLE TV CORPORATION
(a development stage company)
STATEMENT OF CASH FLOWS
PERIOD FROM INCEPTION (OCTOBER 9, 1996)
TO DECEMBER 31, 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($ 7,763)
Adjustments to reconcile net loss to net
cash used in operating activities
Amortization 225
Increase in due from affiliate ( 15,000)
Increase in accounts payable and accruals 9,001
Net cash used in operating activities ( 13,537)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment ( 6,721)
Purchase of licenses and
rights to leases of licenses ( 16,000)
Net cash used in investing activities ( 22,721)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 50,000
Net cash provided by financing activities 50,000
Net increase in cash 13,742
Cash at beginning of period -
Cash at end of period $ 13,742
NONCASH INVESTING ACTIVITIES
Contribution of equipment for common stock ($179,611)
F-16
(PAGE)
NOTE 1. NATURE OF BUSINESS, ORGANIZATION
AND BASIS OF PRESENTATION
Missouri Cable TV Corporation (MCTV), was incorporated in the
state of Louisiana on October 9, 1996 to operate in the
wireless cable television industry. The original stockholders
contributed equipment to MCTV upon incorporation on October 9,
1996 in exchange for all of the common shares of MCTV. MCTV
owns licenses or rights to leases of licenses to wireless
cable television channels in Poplar Bluff, Missouri, which
system has been constructed and is ready for operation, and
Lebanon, Missouri, which has yet to be constructed.
Effective December 31, 1996, the Company was acquired by Media
Entertainment, Inc. (Media). The stockholders of MCTV
exchanged their shares of MCTV for stock in Media. The
majority stockholder of MCTV at the time of the exchange is
also the majority stockholder of Media. MCTV will operate as
a wholly owned subsidiary of Media pursuant to the
acquisition.
The financial statements have been prepared on a going concern
basis, which contemplates realization of assets and
liquidation of liabilities in the ordinary course of business.
Since the Company is in the development stage, it has limited
capital resources, insignificant revenue and a loss from
operations since its inception. The appropriateness of using
the going concern basis is dependent upon the Company's
ability to obtain additional financing or equity capital and,
ultimately, to achieve profitable operations. The uncertainty
of these conditions raises substantial doubt about its ability
to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome
of this uncertainty.
Media plans to raise up to $990,000 in a private placement of
330,000 shares of its common stock. The parent company
intends to use a portion of the proceeds of the private
placement to begin marketing and installation activities and
to provide working capital. Management believes that these
actions will enable the Company to carry out its business plan
and ultimately to achieve profitable operations.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Broadcast Equipment
Equipment is recorded at cost. Depreciation will be
calculated using a straight-line method over the estimated
useful lives of the assets, ranging from 3 to 15 years.
F-17
(PAGE)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Cash Equivalents
The Company considers all highly liquid investments with
original maturities of ninety days or less from the date of
purchase to be cash equivalents.
Income Taxes
The Company provides deferred taxes for the tax consequences
of temporary differences between the tax basis of assets and
liabilities and their reported amounts in the financial
statements. As of December 31, 1996, there are no
significant differences between financial statement and tax
basis of assets and liabilities that will result in taxable
or deductible amounts in the future.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
Loss Per Common Share
Loss per common share is computed based on the loss for the
period divided by the weighted average number of common
shares outstanding during the period.
Amortization
Licenses and rights to leases of licenses are being
amortized on a straight-line basis over the licenses and
lease rights periods of 5 to 15 years.
NOTE 3. FINANCIAL INSTRUMENTS
Financial instruments of the Company consist principally of
cash, due from affiliate, accounts payable and note payable to
stockholder. Recorded values approximate fair values due to
the short maturities of these instruments.
F-18
(PAGE)
NOTE 4. LICENSES AND RIGHTS TO LEASES OF LICENSES
The Company owns licenses or rights to leases of licenses in
the following wireless cable markets:
Wireless Cable Market Expiration Date
Poplar Bluff, Missouri October 16, 2006
Lebanon, Missouri October 16, 2006
Application for renewal of the license must be filed within a
certain period prior to expiration.
NOTE 5. NOTES PAYABLE STOCKHOLDER
Notes payable to majority stockholder,
interest accrues at 8%, due on demand and
unsecured $50,000
NOTE 6. RELATED PARTY TRANSACTIONS
Due from affiliate consists of $15,000 advance to Winter
Entertainment, Inc., a company related through common
ownership.
F-19
(PAGE)
INDEPENDENT AUDITOR'S REPORT
To the Board of Director's and Stockholder
Winter Entertainment, Inc.
We have audited the accompanying balance sheets of Winter
Entertainment Inc., (a development stage company) as of
December 31, 1996 and 1995 and the related statements of
operations, changes in stockholder's equity and cash flows for
the year ended December 31, 1996 and the period from inception
(December 28, 1995) to December 31, 1995. These financial
statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Winter Entertainment, Inc. as of December 31, 1996 and 1995,
and the results of its operations and its cash flows for the year
ended December 31, 1996 and the period from inception
December 28, 1995) to December 31, 1995 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 1 to the financial statements, the Company is in its
development stage and has insignificant operating revenue. In
addition, the Company has limited capital resources and a loss
from operations since inception, all of which raise substantial
doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also discussed
in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
WEAVER AND TIDWELL, L.L.P.
Fort Worth, Texas
April 3, 1997
2882
F-20
(PAGE)
WINTER ENTERTAINMENT, INC.
(a development stage company)
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
1996 1995
ASSETS
CURRENT ASSETS
Cash $ 760 $ -
Due from parent 15,997 -
Total current assets 16,757 -
PROPERTY AND EQUIPMENT
Broadcast equipment, net of accumulated
depreciation of $706 in 1996 9,881 10,587
LICENSE, net of accumulated
amortization of $500 in 1996 6,250 6,750
TOTAL ASSETS $32,888 $17,337
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable 1,768 -
Due to affiliate 15,000 -
Total current liabilities 16,768 -
STOCKHOLDER'S EQUITY
Common stock, no par value
1,500 shares authorized
1,500 shares issued and outstanding 17,337 17,337
Deficit accumulated during
the development stage ( 1,217) -
16,120 17,337
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $32,888 $17,337
F-21
(PAGE)
WINTER ENTERTAINMENT, INC.
(a development stage company)
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996 AND PERIOD FROM
INCEPTION (DECEMBER 28, 1995) TO DECEMBER 31, 1995
1996 1995
Revenue $3,337 $ -
Operating expenses 4,543 -
Operating loss ( 1,206) -
General and administrative expenses 11 -
Net loss $1,217 $ -
Loss per common share ($ 0.81) $ -
F-22
(PAGE)
WINTER ENTERTAINMENT, INC.
(a development stage company)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
YEAR ENDED DECEMBER 31, 1996 AND PERIOD FROM
INCEPTION (DECEMBER 28, 1995) TO DECEMBER 31, 1995
Deficit
Accumulated
Common Stock Development
Shares Amount Stage
Balance at inception,
(December 28, 1995) - $ - $ -
Contribution of equipment
for commons tock 1,500 17,337 -
Net loss - - -
Balance, December 31, 1995 1,500 17,337 -
Net loss - - ( 1,217)
Balance, December 31, 1996 $1,500 $17,337 ($ 1,217)
F-23
(PAGE)
WINTER ENTERTAINMENT, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996 AND PERIOD FROM
INCEPTION (DECEMBER 28, 1995) TO DECEMBER 31, 1995
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($ 1,217) $ -
Adjustments to reconcile net
loss to net cash provided
by operating activities
Depreciation and amortization 1,206 -
Increase in accounts receivable ( 15,997) -
Increase in accounts payable 1,768 -
Increase in due to affiliates 15,000 -
Net cash provided
by operating activities 760 -
Net increase in cash 760 -
Cash at beginning of period - -
Cash at end of period $ 760 $ -
NONCASH INVESTING ACTIVITIES
Contribution of equipment
and license agreement
for common stock $ - $17,337
F-24
(PAGE)
NOTE 1. NATURE OF BUSINESS, ORGANIZATION
AND BASIS OF PRESENTATION
Winter Entertainment, Inc. (WEI), was incorporated in the
State of Delaware on December 28, 1995, to operate as a
community television station in Baton Rouge, Louisiana. The
original stockholder contributed equipment and a license
agreement to WEI upon incorporation on December 28, 1995 in
exchange for all of the common shares of WEI. Operations did
not commence until February of 1996, therefore, no operations
were shown prior to that date.
Effective December 31, 1996, the Company was acquired by Media
Entertainment, Inc. (Media). The sole stockholder of WEI
exchanged his shares of WEI for stock in Media. The sole
stockholder of WEI at the time of the exchange is also the
majority stockholder of Media. WEI will operate as a wholly
owned subsidiary of MEDIA pursuant to the acquisition.
The financial statements have been prepared on a going concern
basis, which contemplates realization of assets and
liquidation of liabilities in the ordinary course of business.
Since the Company is in the development stage, it has limited
capital resources, insignificant revenue and a loss from
operations since its inception. The appropriateness of using
the going concern basis is dependent upon the Company's
ability to obtain additional financing or equity capital and,
ultimately, to achieve profitable operations. The uncertainty
of these conditions raises substantial doubt about its ability
to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome
of this uncertainty.
Media plans to raise up to $990,000 in a private placement of
330,000 shares of its common stock. The parent company
intends to use a portion of the proceeds of the private
placement to increase the broadcast signal of the Company's
community television station and to provide it with working
capital. Management believes that these actions will enable
the Company to carry out its business plan and ultimately to
achieve profitable operations.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Broadcast Equipment
Equipment is recorded at cost. Depreciation will be
calculated using a straight-line method over the estimated
useful lives of the assets, ranging from 3 to 15 years.
F-25
(PAGE)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Cash Equivalents
The Company considers all highly liquid investments with
original maturities of ninety days or less from the date of
purchase to be cash equivalents.
Income Taxes
The Company provides deferred taxes for the tax consequences
of temporary differences between the tax basis of assets and
liabilities and their reported amounts in the financial
statements. As of December 31, 1996, there are no
significant differences between financial statement and tax
basis of assets and liabilities that will result in taxable
or deductible amounts in the future.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
Loss Per Common Share
Loss per common share is computed based on the loss for the
period divided by the weighted average number of common
shares outstanding during the period.
Amortization
Licenses are being amortized on a straight-line basis over
the license period of 5 years.
NOTE 3. FINANCIAL INSTRUMENTS
Financial instruments of the Company consist principally of
cash, accounts receivable and accounts payable. Recorded
values approximate fair values due to the short maturities of
these instruments.
F-26
<PAGE>
NOTE 4. LICENSES
The Company owns a license to community television channels in
Baton Rouge, Louisiana which expires on July 1, 2007.
Application for renewal of the license must be filed within a
certain period prior to expiration.
NOTE 5. RELATED PARTY TRANSACTIONS
Due from parent of $15,997 consists primarily of legal fees
paid on behalf of Media, the Company's parent. Due to
affiliate of $15,000 consists of an advance to the Company
from Missouri Cable TV Corporation, a company related through
common ownership.
F-27
<PAGE>
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offering described herein, and, if given or
made, such information or representations must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any securities offered
hereby
in any jurisdiction in which such offer or solicitation is not authorized or
in
which the person making such offer of solicitation is not qualified to do so
or to anyone to whom it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create an implication that the information herein is
correct as of any time subsequent to its date.
TABLE OF CONTENTS
Page
Additional Information 2
Prospectus Summary 2
The Company 4
Risk Factors 4
Use of Proceeds 12
Information Concerning ECA 12
Distribution of Securities of the Company 13
Dividends 14
Capitalization 14
Selected Financial Data 14
Management's Discussion and Analysis of
Financial Condition and Results of Operations 15
Regulation 22
Business 28
Management 43
Certain Transactions 45
Principal Shareholders 48
Federal Income Taxes 49
Litigation 51
Description of Securities 51
Legal Matters 51
Experts 52
Index to Financial Statements F-1
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
Estimated expenses payable by the Company in connection with the
registration of Common Stock covered hereby are as follows:
Registration fee
$100.00
Underwriter's unaccountable expense allowance 0.00
Printing and engraving expenses 3,000.00 *
Legal fees and expenses
27,500.00
Accounting fees and expenses 7,500.00
Blue Sky fees and expenses (including legal fees) 0.00
Transfer agent and registrar fees and expenses 5,000.00
Miscellaneous
750.00 *
(* estimate) Total
$43,850.00 *
Item 14. Indemnification of Directors and Officers.
Registrant is a Nevada corporation. Section 78.751 of Nevada Revised
Statutes (the "Nevada Act") empowers a corporation to indemnify its
directors and officers and to purchase insurance with respect to liability
arising out of their capacity as directors and officers. The Nevada Act
further
provides that the indemnification permitted thereunder shall not be deemed
exclusive of any other rights to which the directors and officers may be
entitled under the corporation's bylaws, any agreement, vote of the
shareholders or otherwise.
Section VIII of Registrant's Bylaws, included as Exhibit 3.2 filed herewith,
which provides for the indemnification of directors and officers, is
incorporated herein by reference.
Registrant has purchased no insurance for indemnification of its officers and
directors, agents, etc., nor has there been any specific agreement for
indemnification made between Registrant and any of its officers and
directors, or others, with respect to indemnification for them arising out of
their duties to Registrant.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, the Securities Exchange Act of 1934 or the Rules and
Regulations of the Securities and Exchange Commission thereunder may be
permitted under said indemnification provisions of the law, or otherwise,
Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, any such indemnification is against public policy and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
II-1
<PAGE>
Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such
director, officer or controlling person in connection with the securities
being
registered, the Registrant will, unless in the opinion of its counsel the
matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Nevada Act and will be governed by the final
adjudication of such issue.
Item 15. Recent Sales of Unregistered Securities.
1.(a) Securities Sold. On November 1, 1996, a total of 1,800,000 shares of
Company Common Stock were sold.
(b) Underwriter or Other Purchasers. Such shares of Common Stock were
sold to David M. Loflin (1,600,000 shares) and Waddell D. Loflin (200,000
shares).
(c) Consideration. Such shares of Common Stock were sold for cash at a
price of $.10 per share, or $1,800.00 in the aggregate.
(d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof, as a transaction not involving a public
offering.
2.(a) Securities Sold. On November 15, 1996, a total of 360,000 shares of
Company Common Stock were sold.
(b) Underwriter or Other Purchasers. Such shares of Common Stock were
sold to Entertainment Corporation of America, a Delaware corporation.
(c) Consideration. Such shares of Common Stock were sold for cash at a
price of $.10 per share, or $360.00 in the aggregate.
(d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof, as a transaction not involving a public
offering.
II-2
<PAGE>
3.(a) Securities Sold. On December 20, 1996, 1,578,512 shares of Company
Common Stock were issued.
(b) Underwriter or Other Purchasers. Such shares of Common Stock were
issued to David M. Loflin.
(c) Consideration. Such shares of Common Stock were issued in exchange
for assignments of licenses and leases of licenses of wireless cable channels
and low power television stations, pursuant to a Subscription Agreement, at
a value of $1.157 per share, or $1,826,873, in the aggregate.
(d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof, as a transaction not involving a public
offering.
4.(a) Securities Sold. On December 20, 1996, 104,249 shares of Company
Common Stock were issued.
(b) Underwriter or Other Purchasers. Such shares of Common Stock were
isssued to Waddell D. Loflin.
(c) Consideration. Such shares of Common Stock were issued in exchange
for an assignment of a license to operate a television station, pursuant to a
Subscription Agreement, at a value of $1.157 per share, or $120,652, in the
aggregate.
(d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof, as a transaction not involving a public
offering.
5.(a) Securities Sold. On December 31, 1996, 227,336 shares of Company
Common Stock were issued.
(b) Underwriter or Other Purchasers. Such shares of Common Stock were
issued to David M. Loflin.
(c) Consideration. Such shares of Common Stock were issued in exchange
for all of the capital stock of Winter Entertainment, Inc., a Delaware
corporation, pursuant to an Agreement and Plan of Reorgainzation, at a value
of $1.157 per share, or $263,106, in the aggregate.
(d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof, as a transaction not involving a public
offering.
6.(a) Securities Sold. On December 20, 1996, 1,929,903 shares of Company
Common Stock were issued.
(b) Underwriter or Other Purchasers. Such shares of Common Stock were
issued to David M. Loflin (1,179,389 shares), Alvin J. Bernard (21,443
shares), Clyde and Linda Bunker (32,165 shares), Ross and Becky Bravata
(42,887 shares), Curtis Bunyett (10,722 shares), Mike and Lori Cohn
(53,608), Denis Mantei (21,443 shares), Sareth Morm and Saoeth Im (32,165
shares), Nancy McRae L.T. dtd-12/4/86 (16,082 shares), Harold Miller
(21,443 shares) Arthur Rodriguez (21,443 shares), Don Reid (214,434
shares), Linda Simmons (10,722 shares), David and Lynne Stenske (21,443
shares), Michael Stecher (26,804 shares), Glen and Maria Thomas (21,443
shares), Gilbert and Eliza Tobon (16,082 shares), Carlton P. Weise (32,165
shares), Dunn Revocable Trust (42,887 shares), Evangelical Center (26,804
shares), Ted L. Flory Revocable Trust (21,443 shares), Ross Carey Trust
(21,443 shares) and 1993 Robbins Revocable Trust (21,443 shares)
(c) Consideration. Such shares of Common Stock were issued in exchange
for all of the capital stock of Missouri Cable TV Corp., a Louisiana
corporation, pursuant to an Agreement and Plan of Reorgainzation, at a value
of $1.157 per share, or $2,233,555, in the aggregate.
II-3
<PAGE>
(d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof, as a transaction not involving a public
offering.
7.(a) Securities Sold. On February 1, 1997, 150,000 shares of Company
Common Stock were issued.
(b) Underwriter or Other Purchasers. Such shares of Common Stock were
issued to Newlan & Newlan, Attorneys at Law.
(c) Consideration. Such shares of Common Stock were issued pursuant to
a Consulting and Legal Services Agreement, at a value of $.40 per share, or
$60,000, in the aggregate.
(d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof, as a transaction not involving a public
offering.
8.(a) Securities Sold. On March 7, 1997, 20,000 shares of Company
Common Stock were sold.
(b) Underwriter or Other Purchasers. Such shares of Common Stock were
issued to Michael Cohn.
(c) Consideration. Such shares of Common Stock were sold for cash
pursuant to a Stock Purchase Agreement, at a price of $2.50 per share, or
$50,000, in the aggregate.
(d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof, as a transaction not involving a public
offering.
Item 16. Exhibits and Financial Statements Schedules.
1. Exhibits.
Exhibit No. Description
# 2.1 Agreement and Plan of Reorganization, dated as of December
31, 1996, among Registrant, Winter Entertainment, Inc., a
Delaware
corporation, and its Shareholder.
# 2.2 Agreement and Plan of Reorganization, dated as of December
31, 1996, among Registrant, Missouri Cable TV Corp., a
Louisiana
corporation, and its Shareholders.
# 3.1 Articles of Incorporation of Registrant.
# 3.2 Bylaws of Registrant.
* 4.1 Specimen Common Stock Certificate.
# 5.1 Opinion of Newlan & Newlan, Attorneys at Law, re: Legality.
II-4
<PAGE>
# 8.1 Opinion of Newlan & Newlan, Attorneys at Law, re: Taxes.
# 10.1 Letter Agreement, dated November 15, 1996, between Registrant
and Entertainment Corporation of America.
# 10.2 Subscription Agreement, dated as of December 20, 1996, between
Registrant and David M. Loflin.
# 10.3 Subscription Agreement, dated as of December 20, 1996, between
Registrant and Waddell D. Loflin.
# 10.4 Office Lease, dated as of December 2, 1996, between Registrant
and 8674 Corporation.
# 10.5 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable TV
Corp., relating to Channel K26EC, Poplar Bluff, Missouri.
# 10.6 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable TV
Corp., relating to Channel K31EB, Poplar Bluff, Missouri.
# 10.7 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable TV
Corp., relating to Channel K56FP, Poplar Bluff, Missouri.
# 10.8 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable TV
Corp., relating to Channel K61FY, Poplar Bluff, Missouri.
# 10.9 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable TV
Corp., relating to Channel K59FE, Poplar Bluff, Missouri.
# 10.10 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable TV
Corp., relating to Channel K35EP, Poplar Bluff, Missouri.
# 10.11 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable TV
Corp., relating to Channel K28ED, Poplar Bluff, Missouri.
# 10.12 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable TV
Corp., relating to Channel K68FL, Poplar Bluff, Missouri.
# 10.13 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable
TV
Corp., relating to Channel K18EK, Lebanon, Missouri.
# 10.14 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable
TV
Corp., relating to Channel K29DA, Lebanon, Missouri.
# 10.15 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable
II-5
<PAGE>
TV
Corp., relating to Channel K31EC, Lebanon, Missouri.
# 10.16 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable
TV
Corp., relating to Channel K40EP, Lebanon, Missouri.
# 10.17 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable
TV
Corp., relating to Channel K51ES, Lebanon, Missouri.
# 10.18 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable
TV
Corp., relating to Channel K53FK, Lebanon, Missouri.
# 10.19 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable
TV
Corp., relating to Channel K55HD, Lebanon, Missouri.
# 10.20 Assignment and Assumption Agreement, dated as of October 17,
1996, between Northeast Telecom, Inc. and Missouri Cable
TV
Corp., relating to Channel K59FD, Lebanon, Missouri.
# 10.21 Assignment of Contract for Programming, dated as of December
1, 1995, between Gulf Atlantic Communications, Inc. And
Winter Entertainment, Inc., relating to television station
K13VE, Baton Rouge, Louisiana.
# 10.22 Letter of Understanding, dated as of January 6, 1997, between
Registrant and Open Net, Inc., relating to wireless
internet
territory rights.
# 10.23 Joint Venture Agreement, dated as of January 24, 1997, between
Registrant and Web One, Inc., relating to a joint venture
to operate as a wireless internet service provider.
# 10.24 License Agreement, dated as of February 1, 1996, between
Registrant and Web One, Inc., relating to the licensing of
a trademark.
# 10.25 Consulting and Legal Services Agreement, dated as of February
1, 1997, between Registrant and Newlan & Newlan, Attorneys
at
Law, relating to the performance of consulting and legal
services.
# 10.26 Stock Purchase Agreement, dated as of March 10, 1997, between
Registrant and Michael Cohn, relating to the sale of
Common Stock.
# 10.27 Promissory Note, face amount $25,000, dated October 14, 1996,
with Missouri Cable TV Corp. as maker and David M. Loflin
as payee.
# 10.28 Promissory Note, face amount $15,000, dated October 22, 1996,
with Winter Entertainment, Inc. as maker and David M. Loflin
as payee.
# 10.29 Promissory Note, face amount $20,000, dated November 15,
1996, with Missouri Cable TV Corp. as maker and David M.
Loflin as payee.
# 10.30 Promissory Note, face amount $8,000, dated January 31, 1996,
with Registrant as maker and David M. Loflin as payee.
II-6
<PAGE>
# 10.31 Agreement Appointing Securities Transfer Corporation as
Transfer Agent and Registrar, dated February 6, 1997, between
Registrant and Securities Transfer Corporation.
# 22.1 Subsidiaries of Registrant.
# 24.1 Consent of Weaver and Tidwell, L.L.P., independent auditor.
# 24.2 Consent of Newlan & Newlan, Attorneys at Law.
________________
# Filed herewith.
* To be filed by amendment.
2. Financial Statement Schedules.
All schedules are omitted since they are furnished elsewhere in the
Prospectus.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
1.(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(I) To included any prospectus required by Section 10(a)(3) of the Securities
Act of 1933, as amended (the "Act);
(II) To reflect in the prospectus any facts or events arising after the
effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
and
(III) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(b) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
II-7
<PAGE>
2. Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against
such liabilities (other than the payment by the registrant of expenses
incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being
registered, the registrant will, unless in the opinion of its counsel the
matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City
of Baton Rouge, State of Louisiana, on April 21, 1997.
MEDIA ENTERTAINMENT, INC.
By: /s/ David M. Loflin
David M. Loflin
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement on Form S-1 has been signed by the following persons in the
capacities and on the dates indicated:
Signatures Title
Date
/s/ David M. Loflin President (Principal
April 21, 1997
David M. Loflin Executive Officer and
Principal Accounting
Officer) and Director
/s/ Waddell D. Loflin Vice President, Secretary
April 21, 1997
Waddell D. Loflin and Director
/s/ Richard N. Gill Director
April 21, 1997
Richard N. Gill
/s/ Ross S. Bravata Director
April 21, 1997
Ross S. Bravata
/s/ Michael Cohn Director
April 21, 1997
Michael Cohn
360,000 Shares
Common Stock
$.0001 par value
MEDIA ENTERTAINMENT, INC.
- ---------------------
PROSPECTUS
- ---------------------
________ , 1997
EXHIBIT 2.1
_______________________
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement"), dated as of
the 31st day of December, 1996, by and among Media Entertainment, Inc.,
a Nevada corporation ("MEI"), Winter Entertainment, Inc., a Delaware
corporation ("WEI"), and David M. Loflin, the sole shareholder of WEI (the
"Shareholder"), is made with reference to the following:.
A. MEI is a Nevada corporation organized on November 1, 1996. MEI has
authorized 50,000,000 shares of Common Stock, $.0001 par value per share,
of which 2,160,000 shares are outstanding.
B. WEI is a Delaware corporation organized under the laws of the State of
Delware on December 28, 1995.
C. The respective Boards of Directors of MEI and WEI have deemed it
advisable and in the best interests of MEI and WEI for WEI to be acquired
by MEI pursuant to the terms and conditions set forth in this Agreement.
D. MEI, WEI and the Shareholder propose to enter into this Agreement
which provides, among other things, that all of the outstanding shares of
WEI be acquired by MEI, in exchange for shares of MEI, and additional
items, all as more fully described in this Agreement.
E. The parties desire the transaction to qualify as a tax-free
reorganization
under Section 368 (a)(1)(B) of the Internal Revenue Code of 1986 and the
shares of MEI to be issued to the Shareholder be exempt from registration
under the Securities Act of 1933, as amended (the "Act"), by virtue of the
provisions of Section 4(2) of the Act.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
THE ACQUISITION
1.01 At the Closing, a total of 1,500 shares of common stock of WEI, which
represents all of the outstanding shares of capital stock of WEI, shall be
acquired by MEI in exchange for 227,336 shares of MEI, which shall be
issued to the Shareholder, and shall represent approximately 3.79% of the
issued and outstanding shares of MEI following this reorganization, with
effect having been given to the reorganization transaction referred to in
paragraph 3.13 of this Agreement.
1.02 At the Closing, the Shareholder will deliver a certificate or
certificates
for the outstanding shares of WEI, duly endorsed so as to make MEI the sole
holder thereof, free and clear of all claims and encumbrances and MEI shall
issue its shares to the Shareholder.
ARTICLE 2
THE CLOSING
2.01 The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place in the offices of MEI, 8748 Quarters Lake
Road, Baton Rouge, Louisiana 70809 at 4:00 p.m., on January 24, 1997, or
at such other place or date and time as may be agreed to in writing by the
parties hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MEI
MEI hereby represents and warrants to WEI and Shareholder as follows:
3.01 MEI shall deliver to WEI and Shareholder within three (3) days before
Closing, each of the following:
(a) Financial Statement. The unaudited balance sheet of MEI as of
December 31, 1996. (Schedule A)
(b) Leases and Contracts. A complete and accurate list describing all
material terms of each lease (whether of real or personal property) and each
contract, promissory note, mortgage, license, franchise or other written
agreement to which MEI is a party. (Schedule B)
(c) Charter and Bylaws. Complete and accurate copies of the Articles of
Incorporation and Bylaws of MEI, together with all amendments thereto to
the date hereof. (Schedule C)
(d) Shareholders. A complete list of all persons or entities holding capital
stock of MEI or any rights to subscribe for, acquire or receive shares of the
capital stock of MEI (whether warrants, calls, options or conversion rights),
including copies of all stock option plans whether qualified or non-qualified,
and other similar agreements. (Schedule D)
(e) Officers and Directors. A list of officers and directors of MEI.
(Schedule
E)
(f) Litigation. A complete and accurate list (in all material respects) of
all
material civil, criminal, administrative, arbitration or other such
proceedings
or investigations (including, without limitation, unfair labor practice
matters,
labor organization activities, environmental matters and civil rights
violations) pending or, to the knowledge of MEI, threatened, which may
materially and adversely affect MEI. (Schedule F)
(g) Jurisdictions Where Qualified. A list of all jurisdictions wherein MEI
is
qualified to do business and is in good standing. (Schedule G)
(h) Subsidiaries. A complete list of all subsidiaries of MEI. (Schedule H)
The term "Subsidiary" or "Subsidiaries" shall include corporations,
unincorporated associations, partnerships, joint ventures or similar entities
in
which MEI has an interest, direct or indirect.
(i) Employee Benefit Plans. Complete and accurate copies of all salary,
stock option, bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance, disability, death benefit or
other benefit plans, trust agreements or arrangements of MEI in effect on the
date hereof or to become effective after the date thereof, together with
copies
of any determination letters issued by the Internal Revenue Service with
respect thereto. (Schedule I)
3.02 Organization, Standing and Power. MEI is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada with all requisite corporate power to own or lease its properties
and carry on its business as is now being conducted.
3.03 Qualification. MEI is duly qualified and is licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
its business operations. Such jurisdictions, which are the only jurisdictions
in which MEI is duly qualified and licensed as a foreign corporation, are
shown in Schedule J.
3.04 Capitalization of MEI. The authorized capital stock of MEI consists of
50,000,000 shares of Common Stock, $.0001 par value per share, of which
the only shares issued and outstanding are 2,160,000, which shares were duly
authorized, validly issued and fully paid and non-assessable. There are no
preemptive rights with respect to the MEI Common Stock.
3.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action, including, but not limited to,
duly and validly authorized action and approval by the Board of Directors,
on the part of MEI. This Agreement constitutes the valid and binding
obligation of MEI enforceable against it in accordance with its terms, subject
to the principles of equity applicable to the availability of the remedy of
specific performance. This Agreement has been duly executed by MEI and
the execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement shall not result in the breach of
any provisions of the Articles of Incorporation or of the Bylaws or of any
other agreement, court order or instrument to which MEI is a party or by
which it is bound.
3.06 Absence of Undisclosed Liabilities. MEI has no material liabilities of
any nature, whether fixed, absolute, contingent or accrued, which are not
reflected in the financial statements set forth in Schedule A nor otherwise
disclosed in this Agreement or any of the Schedules or Exhibits attached
hereto.
3.07 Absence of Changes. Since December 31, 1996, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of MEI.
3.08 Options, Warrants, etc. Except as otherwise described in Schedule C,
there are no outstanding options, warrants, calls, commitments or agreements
of any character to which MEI or its shareholder is a party or by which MEI
or its shareholder are bound, or is a party, calling for the issuance of
shares
of capital stock of MEI or any securities representing the right to purchase
or
otherwise receive any such capital stock of MEI.
3.09 Agreements in Force and Effect. All material contracts, agreements,
plans, promissory notes, mortgages, leases, policies, licenses, franchises or
similar instruments to which MEI is a party are valid and in full force and
effect on the date hereof, and MEI has not breached any material provision
of, and is not in default in any material respect under the terms of, any such
contract, agreement, plan, promissory note, mortgage, lease, policy, license,
franchise or similar instrument which breach or default would have a material
adverse effect upon the business, operations or financial condition of MEI.
3.10 Legal Proceedings, etc. There are no civil, criminal, administrative,
arbitration or other such proceedings or investigations pending or, to the
knowledge of either MEI or the shareholder thereof, threatened, in which,
individually or in the aggregate, an adverse determination would materially
and adversely affect the assets, properties, business or income of MEI. MEI
has substantially complied with, and is not in default in any material respect
under, any laws, ordinances, requirements, regulations or orders applicable
to its businesses.
3.11 Governmental Regulation. To the knowledge of MEI, MEI is not in
violation of or in default with respect to any applicable law or any
applicable
rule, regulation, order, writ or decree of any court or any governmental
commission, board, bureau, agency or instrumentality, or delinquent with
respect to any report required to be filed with any governmental commission,
board, bureau, agency or instrumentality which violation or default could
have a material adverse effect upon the business, operations or financial
conditions of MEI.
3.12 Accuracy of Information. No representation or warranty by MEI
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to WEI pursuant hereto or in
connection with the transactions contemplated hereby (including, without
limitation, all Schedules and Exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
3.13 Subsidiaries. Contemporaneous with the consummation of this
Agreement, MEI is to acquire all of the outstanding capital stock of Missouri
Cable TV Corp., a Louisiana corporation, pursuant to an Agreement and Plan
of Reorganization. After the consummation of such reorganization and the
reorganization contemplated herein, the Company will have two subsidiaries.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF WEI
WEI hereby represents and warrants to MEI as follows:
4.01 WEI shall deliver to MEI within three (3) days before Closing, each of
the following for WEI:
(a) Financial Statements. Unudited financial statements of WEI, including
balance sheets and profit and loss statements, for the year ended December
31, 1996. (Schedule AA)
(b) Property. An accurate list and description of all property, real or
personal, owned by WEI of a value equal to or greater than $500. (Schedule
BB)
(c) Liens and Liabilities. A complete and accurate list of all material
liens,
encumbrances, easements, security interests or similar interests in or on any
of the assets listed on Schedule BB. (Schedule CC)
(d) Leases and Contracts. A complete and accurate list describing all
material terms of material leases (whether of real or personal property) and
any material contract, promissory note, mortgage, license, franchise or other
written agreement to which WEI is a party. (Schedule DD)
(e) Loan Agreements. Complete and accurate copies of all loan agreements
and other documents with respect to obligations of WEI for the repayment of
borrowed money. (Schedule EE)
(f) Consents Required. A complete list of all agreements wherein consent
to the transaction herein contemplated is required to avoid a default
thereunder; or where notice of such transaction is required at or subsequent
to Closing, or where consent to an acquisition, consolidation or sale of all
or
substantially all of the assets is required to avoid a default thereunder.
(Schedule FF)
(g) Charter and Bylaws. Complete and accurate copies of the Certificate and
Articles of Incorporation and Bylaws of WEI, together with all amendments
thereto to the date hereof. (Schedule GG)
(h) Shareholders. A confirmation of the person or persons or entities
holding
capital stock of WEI or any rights to subscribe for, acquire, or receive
shares
of the capital stock of WEI (whether warrants, calls, options or conversion
rights), including copies of all stock option plans whether qualified or
nonqualified, and other similar agreements. (Schedule HH)
(i) Officers and Directors. A list of officers and directors of WEI.
(Schedule
II)
(j) Salary Schedule. A complete and accurate list (in all material respects)
of the names and the current salary rate of each employee of WEI. (Schedule
JJ)
(k) Litigation. A complete and accurate list (in all material respects) of
all
material civil, criminal, administrative, arbitration or other such
proceedings
or investigations (including, without limitation, unfair labor practice
matters,
labor organization activities, environmental matters and civil rights matters)
pending or, to the knowledge of WEI, threatened, which may materially and
adversely affect WEI. (Schedule KK)
(l) Tax Returns. Accurate copies of all tax returns for WEI since inception.
(Schedule LL)
(m) Banks. A true and complete list (in all material respects), as of the
date
of this Agreement, showing (1) the name of each bank in which WEI has an
account or safe deposit box, and (2) the names and addresses of all
signatories, other than officers and directors. (Schedule MM)
(n) Jurisdictions Where Qualified. A list of all jurisdictions wherein WEI
is
qualified to do business and is in good standing. (Schedule NN)
(o) Subsidiaries. A complete list of all subsidiaries of WEI. (Schedule OO)
The term "Subsidiary" or "Subsidiaries" shall include corporations,
unincorporated associations, partnerships, joint ventures or similar entities
in
which WEI has an interest, direct or indirect.
(p) Union Matters. An accurate list and description of all union contracts
and collective bargaining agreements of WEI, if any. (Schedule PP)
(q) Employee and Consultant Contracts. A complete and accurate list of all
employee and consultant contracts which WEI may have, other than those
listed in the schedule on Union Matters. (Schedule QQ)
(r) Employee Benefit Plans. Complete and accurate copies of all salary,
stock option, bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance, disability, death benefit or
other benefit plans, trust agreements or arrangements of WEI in effect on the
date hereof or to become effective after the date thereof. (Schedule RR)
(s) Insurance Policies. A complete and accurate list (in all material
respects)
and description of all material insurance policies naming WEI as an insured
or beneficiary or as a loss payable payee or for which WEI has paid all or
part
of the premium in force on the date hereof, specifying any notice or other
information possessed by WEI regarding possible claims thereunder,
cancellation thereof or premium increases thereon, including any policies
now in effect naming WEI as beneficiary covering the business activities of
WEI. (Schedule SS)
(t) Customers. A complete and accurate list (in all material respects) of
the
customers of WEI. (Schedule TT)
(u) Licenses and Permits. A complete list of all license, permits and other
authorizations of WEI. (Schedule UU)
4.02 Organization, Standing and Power. WEI is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware with all requisite corporate power to own or lease its properties
and carry on its business as is now being conducted.
4.03 Qualification. WEI is duly qualified and licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
business operations. Such jurisdictions, which are the only jurisdictions in
which WEI is duly qualified and licensed as a foreign corporation, is shown
in Schedule NN.
4.04 Capitalization of WEI. The authorized capital stock of WEI consists of
1,500 shares of Common Stock, no par value, all of which shares are issued
and outstanding and are issued to the Shareholder as set forth on Schedule
HH, which shares were duly authorized, validly issued and fully paid and
non-assessable. There are no preemptive rights with respect to the WEI
stock.
4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action, including, but not limited to,
duly and validly authorized action and approval by the Board of Directors,
on the part of WEI. This Agreement constitutes the valid and binding
obligation of WEI and its Shareholder, enforceable against it and him,
respectively, in accordance with its terms, subject to the principles of
equity
applicable to the availability of the remedy of specific performance. This
Agreement has been duly executed by WEI and the execution and delivery
of this Agreement and the consummation of the transactions contemplated by
this Agreement shall not result in any breach of any terms or provisions of
WEI's Articles of Incorporation or Bylaws or of any other agreement, court
order or instrument to which WEI is a party or by which it is bound.
4.06 Absence of Undisclosed Liabilities. WEI has no material liabilities of
any nature, whether fixed, absolute, contingent or accrued, which were not
reflected on the financial statements set forth in Schedule AA nor otherwise
disclosed in this Agreement or any of the Schedules or Exhibits attached
hereto.
4.07 Absence of Changes. Since December 31, 1996, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business or WEI.
4.08 Tax Matters. All taxes and other assessments and levies which WEI is
required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by WEI for such payment or are represented by depository receipts, and
all such withholdings and collections and all other payments due in
connection therewith as of December 31, 1996, are duly reflected in the
financial statement as of December 31, 1996, and, since such dates and as of
the date of this Agreement, all such taxes (including, without limitation,
employment taxes, both the employee's and employer's share) have been
provided for. There are no known deficiencies in income taxes for any
periods prior to December 31, 1996, and further, the representations and
warranties as to absence of undisclosed liabilities contained in Section 4.06
include any and all tax liabilities of whatsoever kind or nature (including,
without limitation, all Federal, Provincial, local and foreign income, profit,
franchise, sales, use and property taxes) due or to become due, incurred in
respect of or measured by WEI's income or business prior to the Closing
Date.
4.09 Title to Assets. Except for liens set forth in Schedule WEI and
interests
of third parties as set forth in Schedule DD, WEI is the sole and
unconditional owner of, with good and marketable title to, all the assets
listed
in Schedule BB, free and clear of all mortgages, liens, pledges, charges or
encumbrances of any nature whatsoever.
4.10 Agreements in Force and Effect. Except as set forth in Schedules DD
and EE, all material contracts, agreements, plans, promissory notes,
mortgages, leases, policies, licenses, franchises or similar instruments to
which WEI is a party are valid and in full force and effect on the date
hereof,
and WEI has not breached any material provision of, and is not in default in
any material respect under the terms of, any such contract, agreement, plan,
promissory note, mortgage, lease, policy, license, franchise or similar
instrument which breach or default would have a material adverse effect upon
the business, operations or financial condition of WEI.
4.11 Legal Proceedings, etc. Except as set forth in Schedule KK, there are
no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of WEI or the Shareholder
thereof, threatened, in which, individually or in the aggregate, an adverse
determination would materially and adversely affect the assets, properties,
business or income of WEI. WEI has substantially complied with, and is not
in default in any material respect under, any laws, ordinances, requirements,
regulations or orders applicable to its business.
4.12 Governmental Regulation. To the knowledge of WEI and except as set
forth in Schedule KK, WEI is not in violation of or in default with respect to
any applicable law or any applicable rule, regulation, order, writ or decree
of
any court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality
which violation or default could have a material adverse effect upon the
business, operations or financial conditions of WEI.
4.13 Broker and Finders. WEI shall be solely responsible for payment to any
broker or finder retained by WEI for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated herein.
4.14 Accuracy of Information. No representation or warranty by WEI
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to MEI pursuant hereto or in
connection with the transactions contemplated hereby (including, without
limitation, all Schedules and Exhibits hereto) contains or will contain any
untrue statement of a material fact or omits or will omit to state any
material
fact necessary in order to make the statements contained herein or therein not
misleading.
4.15 Subsidiaries. WEI currently has no subsidiaries.
4.16 Consents. Except as listed in Schedule FF, no consent or approval of,
or registration, qualification or filing with, any governmental authority or
other person is required to be obtained or accomplished by WEI or the
Shareholder thereof in connection with consummation of the transactions
contemplated hereby.
4.17 Improper Payments. No person acting on behalf of WEI has made any
payment or otherwise transmitted anything of value, directly or indirectly, to
(a) any official or any government or agency or political subdivision thereof
for the purpose of influencing any decision affecting the business of WEI, (b)
any customer, supplier or competitor of WEI, or employee of such customer,
supplier or competitor, for the purposes of obtaining, retaining or directing
business for WEI, or (c) any political party or any candidate for elective
political office, nor has any fund or other asset of WEI been maintained that
has not fully and accurately recorded on the books of account of WEI.
4.18 Copies of Documents. WEI has made available for inspection and
copying by MEI and its duly authorized representatives, and will continue to
do so at all times, true and correct copies of all documents filed with
governmental agencies which are material to the terms and conditions
contained in this Agreement. Furthermore, all filings by WEI with
governmental agencies have contained information which is true and correct
in all material respects and did not contain any untrue statement of a
material
fact or omit to state any material fact necessary to make the statements made
therein not misleading or which could have any material adverse effect upon
the financial condition or operations of WEI or adversely affect the
objectives
of this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDER
The Shareholder of WEI hereby represents and warrants to MEI as follows:
5.01 Title to Shares of WEI. The Shareholder owns the full right, title and
interest in and to his respective shares of WEI, free and clear of adverse
claims, liens or encumbrances.
5.02 Legal Capacity of Shareholder. The Shareholder is under no legal
disability with respect to the execution and performance of this Agreement
and Plan of Reorganization.
5.03 Investment Intent of Shareholder. The Shareholder represents and
warrants to MEI that the shares of MEI being acquired pursuant to this
Agreement are being acquired for his own account and for investment and not
with a view to the public resale or distribution of such shares and further
acknowledges that the shares being issued have not been registered under the
Securities Act or any state securities law and are "restricted securities"
as that
term is defined in Rule 144 promulgated by the Securities and Exchange
Commission and must be held indefinitely unless they are subsequently
registered or an exemption from such registration is available.
5.04 Restrictive Legend. The Shareholder acknowledges that the share
certificate or certificates of MEI issued to him in exchange for his or her
WEI
stock will bear a legend restricting future transfer in the following, or
similar,
form:
"THE STOCK REPRESENTED BY THIS CERTIFICATE HAS BEEN
ISSUED IN RELIANCE UPON THE EXEMPTION FROM
REGISTRATION AFFORDED BY SECTION 4(2) OF THE SECURITIES
ACT OF 1933, AS AMENDED. THE STOCK MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION, EXCEPT IN A
TRANSACTION EXEMPT FROM SUCH REGISTRATION."
ARTICLE 6
CONDUCT AND TRANSACTIONS PRIOR TO THE
EFFECTIVE TIME OF THE REORGANIZATION
6.01 Conduct and Transactions of MEI. During the period from the date
hereof to the date of Closing, MEI shall:
(a) Conduct its operations in the ordinary course of business, including but
not limited to, paying all obligations as they mature, complying with all
applicable tax laws, filing all tax returns required to be filed and paying
all
taxes due; and
(b) Maintain its records and books of account in a manner that fairly and
correctly reflect its income, expenses, assets and liabilities.
MEI shall not during such period, except in the ordinary course of business,
without the prior written consent of WEI:
(c) Sell, dispose of or encumber any of its properties or assets;
(d) Declare or pay any dividends on shares of its capital stock or make any
other distribution of assets to the holders thereof;
(e) Issue, reissue or sell, or issue options or rights to subscribe to, or
enter
into any contract or commitment to issue, reissue or sell, any shares of its
capital stock or acquire or agree to acquire any shares of its capital stock,
except for shares to be issued under that certain Agreement and Plan of
Reorganization among MEI, Missouri Cable TV Corp. and its Shareholders,
which reorganization is to be consummated contemporaneously with the
reorganization contemplated herein;
(f) Except as otherwise contemplated and required by this Agreement, amend
its Articles of Incorporation or merge or consolidate with or into any other
corporation or sell all or substantially all of its assets or change in any
manner the rights of its capital stock or other securities;
(g) Pay or incur any obligation or liability, direct or contingent, of an
amount
in excess of $1,000;
(h) Incur any indebtedness for borrowed money, assume, guarantee, endorse
or otherwise become responsible for obligations of any other party, or make
loans or advances to any of the party;
(i) Make any material change in its insurance coverage;
(j) Increase in any manner the compensation, direct or indirect, of any of
its
officers, except in accordance with existing employment contracts;
(k) Enter into any agreement or make any commitment to any labor union
or organization; or
(l) Make any capital expenditures.
6.02 Conduct and Transactions of WEI. During the period from the date
hereof to the date of Closing, WEI shall:
(a) Conduct the operations of WEI in the ordinary course of business.
WEI shall not during such period, except in the ordinary course of business,
without the prior written consent of MEI:
(b) Sell, dispose of or encumber any of the properties or assets of WEI;
(c) Declare or pay any dividends on shares of its capital stock or make any
other distribution of assets to the holders thereof;
(d) Issue, reissue or sell, or issue options or rights to subscribe to, or
enter
into any contract or commitment to issue, reissue or sell, any shares of its
capital stock or acquire or agree to acquire any share of its capital stock;
(e) Except as otherwise contemplated and required by this Agreement,
amend its Articles of Incorporation or merge or consolidate with or into any
other corporation or sell all or substantially all of its assets or change
in any
manner the rights of its capital stock or other securities;
(f) Pay or incur any obligation or liability, direct or contingent;
(g) Incur any indebtedness for borrowed money, assume, guarantee, endorse
or otherwise become responsible for obligations of any other party, or make
loans or advances to any other party;
(h) Make any material change in its insurance coverage;
(i) Increase in any manner the compensation, direct or indirect, of any
of its
officers or executive employees, except in accordance with existing
employment contracts;
(j) Enter into any agreement or make any commitment to any labor union or
organization; or
(k) Make any material capital expenditures.
ARTICLE 7
RIGHTS OF INSPECTION
7.01 During the period from the date of this Agreement to the date of
Closing, MEI and WEI each agree to use its best efforts to give the other
party, including its representatives and agents, full access to the premises,
books and records of each of the entities, and to furnish the other with such
financial and operating data and other information including, but not limited
to, copies of all legal documents and instruments referred to on any Schedule
or Exhibit hereto, with respect to the business and properties of MEI or WEI,
as the case may be, as the other shall from time to time request; provided,
however, if there are any such investigations: (a) they shall be conducted in
such manner as not to unreasonably interfere with the operation of the
business of the other party and (b) such right of inspection shall not
affect in
any way whatsoever any of the representations or warranties made by the
parties hereunder. In the event of termination of this Agreement, MEI and
WEI will each return to the other all documents, work papers and other
materials obtained from the other party in connection with the transactions
contemplated hereby, and will take such other steps necessary to protect the
confidentiality of such material.
ARTICLE 8
CONDITIONS TO CLOSING
8.01 Conditions to Obligation of WEI. The obligation of WEI to perform
this Agreement is subject to the satisfaction of the following conditions on
or before the Closing, unless waived in writing by WEI:
(a) Representations and Warranties. There shall be no information disclosed
in the Schedules delivered by MEI which. in the opinion of WEI, would
materially adversely affect the proposed transaction and intent of the parties
as set forth herein. The representations and warranties of MEI set forth in
Article 3 hereof shall be true and correct in all material respects as of
the date
of this Agreement and as of the Closing as though made on and as of the
Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. MEI shall have in all material respects
performed all agreements required to be performed by it under this
Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing and MEI shall
have complied in all material respects with the course of conduct required by
this Agreement.
(c) Corporate Action. Minutes, certified copies of corporate resolutions
and/or other documentary evidence satisfactory to counsel for WEI that MEI
has submitted this Agreement and any other documents required hereby to
such parties for approval as provided by applicable law.
(d) Financial Statements. WEI shall have been furnished with an unaudited
balance sheet of MEI as of December 31, 1996. Such balance sheet shall
have been prepared in conformity with generally accepted accounting
principles and fairly present the financial position of MEI as of December 31,
1996.
(e) Opinion of MEI Counsel. MEI shall deliver to WEI an opinion of MEI's
counsel, dated as of the date of Closing, in form and substance satisfactory
to counsel for WEI stating:
(i) MEI is a corporation duly organized and validly existing and in good
standing under the laws of the State of Nevada;
(ii) Counsel is not aware of any failure by MEI to be qualified and licensed
as a foreign corporation in each such jurisdiction where such corporation
may be required to be licensed as a foreign corporation;
(iii) MEI has the corporate power to carry on its business as now being
conducted;
(iv) The authorized capital stock of MEI consists of 50,000,000 shares of
common stock, $.0001 par value per share, the number of shares of
authorized common stock of MEI which have been issued is 2,160,000 and
all such issued shares have been duly authorized, validly issued and
outstanding, and are fully paid and non-assessable;
(v) The shares of MEI common stock to be issued to the Shareholder of WEI
pursuant to this Agreement when so issued, will be duly and validly
authorized and issued and fully-paid and non-assessable;
(vi) This Agreement, and any other agreements required hereby, has been
duly executed and delivered by MEI and all corporate action required by MEI
to authorize the reorganization has been taken, and MEI has the corporate
power to effect the reorganization as provided for in this Agreement;
(vii) To the best of Counsel's knowledge, neither the execution or
delivery
by MEI of this Agreement, nor compliance with the terms and provisions
thereof, will conflict with or result in a breach of any of the terms,
conditions
or provisions of any agreement, contract or commitment listed on any
Schedule delivered by MEI to WEI pursuant to this Agreement or constitute
a material default thereunder;
(viii) Except as set forth on any Schedule delivered by MEI to WEI,
pursuant to this Agreement, to the best of Counsel's knowledge, MEI is not
engaged in or threatened with any suit, action or legal, administrative,
arbitration or other proceeding or governmental investigation;
(ix) All authorizations, consents, approvals, permits and orders of all
Federal
and State governmental agencies required to be obtained by MEI for
consummation of the transactions contemplated by this Agreement have
been obtained;
(x) The Board of Directors and shareholders of MEI have taken all action
required by law, or under the charter documents, including, but not limited
to, the Articles of Incorporation and Bylaws, including all amendments
thereto, of MEI, to the best of Counsel's knowledge, and all other action
required to authorize the execution, delivery and performance of the
Agreement by MEI has been taken; and
(xi) In connection with the exchange of any of its shares and receipt of
shares
of MEI contemplated by the provisions of this Agreement, MEI and WEI are
exempt from registration of such shares.
(f) Statutory Requirements. All statutory requirements for the valid
consummation by MEI of the transactions contemplated by this Agreement
shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents, approvals, permits
and orders of all Federal and State governmental agencies required to be
obtained by MEI for consummation of the transactions contemplated by this
Agreement shall have been obtained.
(h) Employment Agreements. Existing MEI employment agreements, if any,
will have been delivered to Counsel for WEI.
(i) Changes in Financial Condition of MEI. There shall not have occurred
any material adverse change in the financial condition or in the operations of
the business of MEI, except expenditures in furtherance of this Agreement.
(j) Absence of Pending Litigation. MEI is not engaged in or threatened with
any suit, action, or legal, administrative or other proceedings or
governmental
investigations pertaining to this Agreement or the consummation of the
transactions contemplated hereunder.
8.02 Conditions to Obligation of MEI. The obligation of MEI to perform this
Agreement is subject to the satisfaction of the following conditions on or
before the Closing, unless waived in writing by MEI:
(a) Representations and Warranties. There shall be no information disclosed
in the Schedules delivered by WEI which in the opinion of MEI would
materially adversely affect the proposed transaction and intent of the parties
as set forth in this Agreement. The representations and warranties of WEI set
forth in Article 4 hereof shall be true and correct in all material respects
as of
the date of this Agreement and as of the Closing as though made on and as
of the Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. WEI shall have in all material respects
performed all agreements required to be performed by it under this
Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing and WEI shall
have complied in all respects with the course of conduct required by this
Agreement.
(c) Corporate Action. Minutes, certified copies of corporate resolutions
and/or other documentary evidence satisfactory to Counsel for MEI that WEI
has submitted this agreement and any other documents required hereby to
such parties for approval as provided by applicable law.
(d) Consents. Any consents necessary for or approval of any party listed on
any Schedule delivered by WEI whose consent or approval is required
pursuant thereto shall have been obtained.
(e) Financial Statements. MEI shall have been furnished with the unaudited
financial statements of WEI as of December 31, 1996. Such financial
statements shall have been prepared in conformity with generally accepted
accounting principles and fairly present the financial position of WEI as of
December 31, 1996.
(f) Opinion of WEI Counsel. WEI shall deliver to MEI an opinion of WEI's
counsel, dated on the date of Closing, in form and substance satisfactory to
counsel for WEI stating:
(i) WEI is a corporation duly organized and validly existing and in good
standing under the laws of the State of Delaware;
(ii) Counsel is not aware of any failure by WEI to be qualified and licensed
as a foreign corporation in each such jurisdiction where such corporation may
be required to be licensed as a foreign corporation;
(iii) WEI has the corporate power to carry on its business as now being
conducted;
(iv) The authorized capital stock of WEI consists of 1,500 shares of common
stock, no par value; the number of shares of authorized common stock of
WEI which have been issued is 1,500 and all such issued shares have been
duly authorized, validly issued and outstanding, and are fully paid and
non-assessable;
(v) This Agreement has been duly executed and delivered by WEI and is the
valid obligation of WEI and all corporate action required by WEI to authorize
the acquisition which has been taken, and WEI has the corporate power to
effect the acquisition as provided for in this Agreement;
(vi) To the best of Counsel's knowledge, neither the execution or delivery by
WEI of this Agreement, nor compliance with the terms and provisions
thereof, will conflict with or result in a breach of any of the terms,
conditions
or provisions of any agreement, contract or commitment listed on any
Schedule delivered by WEI to MEI pursuant to this Agreement or to the best
of Counsel's knowledge of any judgment, order, injunction, decree, regulation
or ruling of any court of governmental authority, to which WEI is subject, or
constitute a material default thereunder;
(vii) Except as set forth on any Schedule delivered by WEI to MEI, pursuant
to this Agreement, to the best of Counsel's knowledge, WEI is not engaged
in or threatened with any suit, action or legal, administrative, arbitration
or
other proceeding or governmental investigation which might materially and
adversely affect or impair the business or condition, financial or otherwise
of
WEI; and
(viii) All authorizations, consents, approvals, permits and orders of all
Federal and State governmental agencies required to be obtained by WEI for
consummation of the transactions contemplated by this Agreement have been
obtained.
(g) Statutory Requirements. All statutory requirements for the valid
consummation by WEI of the transactions contemplated by this Agreement
shall have been fulfilled.
(h) Change in Financial Condition of WEI. There shall not have occurred
any material adverse change in the financial condition or in the operations of
the business of WEI.
ARTICLE 9
MATTERS SUBSEQUENT TO CLOSING
9.01 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such
further or other actions as the other party or parties to this Agreement may
reasonably deem necessary in order to carry out the purposes and intent of
this Agreement.
ARTICLE 10
NATURE AND SURVIVAL OF REPRESENTATIONS
10.01 All statements contained in any written certificate, schedule,
exhibit
or other written instrument delivered by MEI or WEI pursuant hereto, or
otherwise adopted by MEI, by its written approval, or by WEI by its written
approval, or in connection with the transactions contemplated hereby, shall
be deemed representations and warranties by MEI or WEI as the case may be.
All representations, warranties and agreements made by either party shall
survive for the period of the applicable statute of limitations and until the
discovery of any claim, loss, liability or other matter based on fraud, if
longer.
ARTICLE 11
TERMINATION OF AGREEMENT AND
ABANDONMENT OF REORGANIZATION
11.01 Termination. Anything herein to the contrary notwithstanding, this
Agreement and any agreement executed as required hereunder and the
acquisition contemplated hereby may be terminated at any time before the
Closing Date as follows:
(a) By mutual written consent of the Boards of Directors of MEI and WEI.
(b) By the Board of Directors of MEI if any of the conditions set forth in
Section 8.02 shall not have been satisfied.
(c) By the Board of Directors of WEI if any of the conditions set forth in
Section 8.01 shall not have been satisfied.
11.02 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the reorganization are terminated
and abandoned pursuant to this Article 11, this Agreement shall become void
and of no force and effect and there shall be no liability on the part of
any of
the parties hereto, or their respective directors, officers, shareholders or
controlling persons to each other. Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and
any of the documents evidencing the transactions contemplated hereby,
including fees, expenses and disbursements of counsel.
ARTICLE 12
EXCHANGE OF SHARES; FRACTIONAL SHARES
12.01 Exchange of Shares. At the Closing, MEI shall issue to the
Shareholder a total of 227,336 shares of MEI Common Stock.
12.02 Fractional Shares. It is intended that no fractional shares or
script
certificates will be issued in connection with the reorganization. In lieu
thereof, if the Shareholder of WEI would be entitled to receive a fractional
share of MEI Common Stock, he will receive cash equal to the fair value of
the fractional share as determined by the Board of Directors of WEI.
ARTICLE 13
MISCELLANEOUS
13.01 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nevada, excluding any conflicts of
laws.
13.02 Notices. All notices necessary or appropriate under this Agreement
shall be effective when personally delivered or deposited in the U. S. mail
system, as the case may be, postage prepaid, certified or registered, return
receipt requested, and addressed to the party's last known address which
addresses are currently as follows:
If to "MEI": Media Entertainment, Inc.
Attn: Mr. Waddell D. Loflin
8478 Quarters Lake Road
Baton Rouge, Louisiana 70809
If to "WEI": Winter Entertainment, Inc.
Attn: Mr. David M. Loflin
8478 Quarters Lake Road
Baton Rouge, Louisiana 70809
If to "Shareholder": Mr. David M. Loflin
8478 Quarters Lake Road
Baton Rouge, Louisiana 70809
13.03 Amendment and Waiver. The parties hereby may, by mutual
agreement in writing signed by each party, amend this Agreement in any
respect. Any term or provision of this Agreement may be waived in writing
at any time by the party which is entitled to the benefits thereof, such
waiver
right shall include, but not be limited to, the right of either party to:
(a) Extend the time for the performance of any of the obligations of the
other;
(b) Waive any inaccuracies in representations by the other contained in this
Agreement or in any document delivered pursuant hereto;
(c) Waive compliance by the other with any of the covenants contained in
this Agreement, and performance of any obligations by the other; and
(d) Waive the fulfillment of any condition that is precedent to the
performance by the party so waiving of any of its obligations under this
Agreement. Any writing on the part of a party relating to such amendment,
extension or waiver as provided in this Section 13.03 shall be valid if
authorized or ratified by the Board of Directors of such party.
13.04 Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise. The election of any one or
more remedies by MEI or WEI shall not constitute a waiver of the right to
pursue other available remedies.
13.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of MEI, WEI and the
Shareholder.
13.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto represent the entire agreement of the undersigned regarding
the subject matter hereof, and supersedes all prior written or oral
understandings or agreements between the parties.
13.08 Each Party to Bear its Own Expense. MEI and WEI shall each bear
their own respective expenses incurred in connection with the negotiation,
execution, closing and performance of this Agreement, including counsel fees
and accountant fees.
13.09 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning
or construction of any provision of this Agreement.
Executed as of the date first written above.
MEI:
MEDIA ENTERTAINMENT, INC.
(a Nevada corporation)
By: /s/ Waddell D. Loflin
Waddell D. Loflin
Vice President
WEI:
WINTER ENTERTAINMENT, INC.
(a Delaware corporation)
By: /s/ David M. Loflin
David M. Loflin
President
SHAREHOLDER:
/s/ David M. Loflin
David M. Loflin, individually
EXHIBIT 2.2
_____________________________________________________
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement"), dated as of
the 31st day of December, 1996, by and among Media Entertainment, Inc.,
a Nevada corporation ("MEI"), Missouri Cable TV Corp., a Louisiana
corporation ("MCTV"), and the shareholders of MCTV executing this
Agreement (collectively, the "Shareholders"), is made with reference to the
following:
A. MEI is a Nevada corporation organized on November 1, 1996. MEI has
authorized 50,000,000 shares of Common Stock, $.0001 par value per share,
of which 2,160,000 shares are outstanding.
B. MCTV is a privately-held corporation organized under the laws of the
State of Louisiana on October 9, 1996.
C. The respective Boards of Directors of MEI and MCTV have deemed it
advisable and in the best interests of MEI and MCTV for MCTV to be
acquired by MEI pursuant to the terms and conditions set forth in this
Agreement.
D. MEI, MCTV and the Shareholders propose to enter into this Agreement
which provides, among other things, that all of the outstanding shares of
MCTV be acquired by MEI, in exchange for shares of MEI, all as more fully
described in the Agreement.
E. The parties desire the transaction to qualify as a tax-free
reorganization
under Section 368(a)(1)(B) of the Internal Revenue Code of 1986 and the
shares of MEI to be issued to the Shareholders be exempt from registration
under the Securities Act of 1933, as amended (the "Act"), by virtue of the
provisions of Section 4(2) of the Act.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
THE ACQUISITION
1.01 At the Closing, a total of 1,800,000 shares of common stock of MCTV,
which represents all of the outstanding shares of capital stock of MCTV, shall
be acquired by MEI in exchange for a total of 1,929,903 shares of MEI,
which shall be issued to the Shareholders, and shall represent approximately
32.16% of the issued and outstanding shares of MEI following this
reorganization, with effect having been given to the reorganization referred
to in paragraph 3.13 of this Agreement. Each share of common stock of
MCTV shall be exchanged for approximately 1.072 shares of MEI Common
Stock.
1.02 At the Closing, the Shareholders will deliver a certificate or
certificates
for the outstanding shares of MCTV, duly endorsed so as to make MEI the
sole holder thereof, free and clear of all claims and encumbrances and MEI
shall issue its shares to Shareholders.
ARTICLE 2
THE CLOSING
2.01 The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place in the offices of MEI, 8478 Quarters Lake
Road, Baton Rouge, Louisiana 70809, at 4:00 p.m., on January 24, 1997, or
at such other place or date and time as may be agreed to in writing by the
parties hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MEI
MEI hereby represents and warrants to MCTV and Shareholeder as follows:
3.01 MEI shall deliver to MCTV and Shareholders within three (3) days
before Closing, each of the following:
(a) Financial Statement. The unaudited balance sheet of MEI as of
December 31,1996. (Schedule A)
(b) Leases and Contracts. A complete and accurate list describing all
material terms of each lease (whether of real or personal property) and each
contract, promissory note, mortgage, license, franchise or other written
agreement to which MEI is a party. (Schedule B)
(c) Charter and Bylaws. Complete and accurate copies of the Articles of
Incorporation and Bylaws of MEI, together with all amendments thereto to
the date hereof. (Schedule C)
(d) Shareholders. A complete list of all persons or entities holding capital
stock of MEI or any rights to subscribe for, acquire or receive shares of the
capital stock of MEI (whether warrants, calls, options or conversion rights),
including copies of all stock option plans whether qualified or non-qualified,
and other similar agreements. (Schedule D)
(e) Officers; Directors. A list of officers and directors of MEI.
(Schedule E)
(f) Litigation. A complete and accurate list (in all material respects)
of all
material civil, criminal, administrative, arbitration or other such
proceedings
or investigations (including without limitation, unfair labor practice
matters,
labor organization activities, environmental matters and civil rights
violations) pending or, to the knowledge of MEI, threatened, which may
materially and adversely affect MEI. (Schedule F)
(g) Jurisdictions Where Qualified. A list of all jurisdictions wherein
MEI is
qualified to do business and is in good standing. (Schedule G)
(h) Subsidiaries. A complete list of all subsidiaries of MEI. (Schedule H)
The term "Subsidiary" or "Subsidiaries" shall include corporations,
unincorporated associations, partnerships, joint ventures or similar entities
in which MEI has an interest, direct or indirect.
(i) Employee Benefit Plans. Complete and accurate copies of all salary,
stock option, bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance, disability, death benefit or
other benefit plans, trust agreements or arrangements of MEI in effect on the
date hereof or to become effective after the date thereof, together with
copies
of any determination letters issued by the Internal Revenue Service with
respect thereto. (Schedule I)
3.02 Organization, Standing and Power. MEI is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada with all requisite corporate power to own or lease its properties
and carry on its business as is now being conducted.
3.03 Qualification. MEI is duly qualified and is licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
its business operations. Such jurisdictions, which are the only jurisdictions
in which MEI is duly qualified and licensed as a foreign corporation, are
shown in Schedule J.
3.04 Capitalization of MEI. The authorized capital stock of MEI consists of
50,000,000 shares of Common Stock, $.0001 par value per share, of which
the only shares issued and outstanding are 2,160,000, which shares were duly
authorized, validly issued and fully paid and non-assessable. There are no
preemptive rights with respect to the MEI Common Stock.
3.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action, including, but not limited to,
duly and validly authorized action and approval by the Board of Directors,
on the part of MEI. This Agreement constitutes the valid and binding
obligation of MEI enforceable against it in accordance with its terms, subject
to the principles of equity applicable to the availability of the remedy of
specific performance. This Agreement has been duly executed by MEI and
the execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement shall not result in the breach of
any provisions of the Articles of Incorporation or of the Bylaws or of any
other agreement, court order or instrument to which MEI is a party or by
which it is bound.
3.06 Absence of Undisclosed Liabilities. MEI has no material liabilities of
any nature, whether fixed, absolute, contingent or accrued, which are not
reflected in the financial statements set forth in Schedule A nor otherwise
disclosed in this Agreement or any of the Schedules or Exhibits attached
hereto.
3.07 Absence of Changes. Since December 31, 1996, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of MEI.
3.08 Options, Warrants, etc. Except as otherwise described in Schedule C,
there are no outstanding options, warrants, calls, commitments or agreements
of any character to which MEI or its Shareholders are a party or by which
MEI or its Shareholders are bound, or are a party, calling for the issuance of
shares of capital stock of MEI or any securities representing the right to
purchase or otherwise receive any such capital stock of MEI.
3.09 Agreements in Force and Effect. All material contracts, agreements,
plans, promissory notes, mortgages, leases, policies, licenses, franchises or
similar instruments to which MEI is a party are valid and in full force and
effect on the date hereof, and MEI has not breached any material provision
of, and is not in default in any material respect under the terms of, any such
contract, agreement, plan, promissory note, mortgage, lease, policy, license,
franchise or similar instrument which breach or default would have a material
adverse effect upon the business, operations or financial condition of MEI.
3.10 Legal Proceedings, etc. There are no civil, criminal, administrative,
arbitration or other such proceedings or investigations pending or, to the
knowledge of either MEI or the Shareholders thereof, threatened, in which,
individually or in the aggregate, an adverse determination would materially
and adversely affect the assets, properties, business or income of MEI. MEI
has substantially complied with, and is not in default in any material respect
under, any laws, ordinances, requirements, regulations or orders applicable
to its business.
3.11 Governmental Regulation. To the knowledge of MEI, MEI is not in
violation of or in default with respect to any applicable law or any
applicable
rule, regulation, order, writ or decree of any court or any governmental
commission, board, bureau, agency or instrumentality, or delinquent with
respect to any report required to be filed with any governmental commission,
board, bureau, agency or instrumentality which violation or default could
have a material adverse effect upon the business, operations or financial
conditions of MEI.
3.12 Accuracy of Information. No representation or warranty by MEI
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to MCTV pursuant hereto or in
connection with the transactions contemplated hereby (including, without
limitation, all Schedules and Exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
3.13 Subsidiaries. Contemporaneous with the consummation of this
Agreement, MEI is to acquire all of the outstanding capital stock of Winter
Entertainment, Inc., a Delaware corporation, pursuant to an Agreement and
Plan of Reorganization. After the consummation of such reorganization and
the reorganization contemplated herein, the Company will have two
subsidiaries.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MCTV
MCTV hereby represents and warrants to MEI as follows:
4.01 MCTV shall deliver to MEI within three (3) days before Closing, each
of the following for MCTV:
(a) Financial Statement. Unaudited financial statements of MCTV,
including balance sheets and profit and loss statements, for the ten months
ended December 31, 1996. (Schedule AA)
(b) Property. An accurate list and description of all property, real or
personal, owned by MCTV of a value equal to or greater than $500.
(Schedule BB)
(c) Liens and Liabilities. A complete and accurate list of all material
liens,
encumbrances, easements, security interests or similar interests in or on any
of the assets listed on Schedule BB. (Schedule CC)
(d) Leases and Contracts. A complete and accurate list describing all
material terms of material leases (whether of real or personal property) and
any material contract, promissory note, mortgage, license, franchise or other
written agreement to which MCTV is a party. (Schedule DD)
(e) Loan Agreements. Complete and accurate copies of all loan agreements
and other documents with respect to obligations of MCTV for the repayment
of borrowed money. (Schedule EE)
(f) Consents Required. A complete list of all agreements wherein consent
to the transaction herein contemplated is required to avoid a default
thereunder; or where notice of such transaction is required at or subsequent
to Closing, or where consent to an acquisition, consolidation or sale of
all or
substantially all of the assets is required to avoid a default thereunder.
(Schedule FF)
(g) Charter and Bylaws. Complete and accurate copies of the Certificate and
Articles of Incorporation and Bylaws of MCTV, together with all
amendments thereto to the date hereof. (Schedule GG)
(h) Shareholders. A confirmation of the person or persons or entities
holding
capital stock of MCTV or any rights to subscribe for, acquire, or receive
shares of the capital stock of MCTV (whether warrants, calls, options or
conversion rights), including copies of all stock option plans, whether
qualified or non-qualified, and other similar agreements. (Schedule HH)
(i) Officers and Directors. A complete and current list of all officers and
directors of MCTV. (Schedule II)
(j) Salary Schedule. A complete and accurate list (in all material respects)
of the names and the current salary rate of each present employee of MCTV.
(Schedule JJ)
(k) Litigation. A complete and accurate list (in all material respects)
of all
material civil, criminal, administrative, arbitration or other such
proceedings
or investigations (including, without limitation, unfair labor practice
matters,
labor organization activities, environmental matters and civil rights
matters)
pending or, to the knowledge of MCTV, threatened, which may materially
and adversely affect MCTV. (Schedule KK)
(l) Tax Returns. Accurate copies of all tax returns for MCTV since
inception. (Schedule LL)
(m) Banks. A true and complete list (in all material respects), as of the
date
of this Agreement, showing (1) the name of each bank in which MCTV has
an account or safe deposit box, and (2) the names and addresses of all
signatories, other than officers and directors. (Schedule MM)
(n) Jurisdictions Where Qualified. A list of all jurisdictions wherein MCTV
is qualified to do business and is in good standing. (Schedule NN)
(o) Subsidiaries. A complete list of all subsidiaries of MCTV. (Schedule
OO) The term "Subsidiary" or "Subsidiaries" shall include corporations,
unincorporated associations, partnerships, joint ventures or similar
entities in
which MCTV has an interest, direct or indirect.
(p) Union Matters. An accurate list and description (in all material
respects)
of all union contracts and collective bargaining agreements of MCTV, if any.
(Schedule PP)
(q) Employee and Consultant Contracts. A complete and accurate list of all
employee and consultant contracts which MCTV may have, other than those
listed in the schedule on Union Matters. (Schedule QQ)
(r) Employee Benefit Plans. Complete and accurate copies of all salary,
stock option, bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance, disability, death benefit or
other benefit plans, trust agreements or arrangements of MCTV in effect on
the date hereof or to become effective after the date thereof. (Schedule RR)
(s) Insurance Policies. A complete and accurate list (in all material
respects)
and description of all material insurance policies naming MCTV as an
insured or beneficiary or as a loss payable payee or for which MCTV has
paid all or part of the premium in force on the date hereof, specifying any
notice or other nformation possessed by MCTV regarding possible claims
thereunder, cancellation thereof or premium increases thereon, including any
policies now in effect naming MCTV as beneficiary covering the business
activities of MCTV. (Schedule SS)
(t) Customers. A complete and accurate list (in all material respects)
of the
customers of MCTV. (Schedule TT)
(u) Licenses and Permits. A complete list of all licenses, permits and other
authorizations of MCTV. (Schedule UU)
4.02 Organization, Standing and Power. MCTV is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Louisiana with all requisite corporate power to own or lease its properties
and carry on its business as is now being conducted.
4.03 Qualification. MCTV is duly qualified and licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
business operations. Such jurisdictions, which are the only jurisdictions in
which MCTV is duly qualified and licensed as a foreign corporation, are
shown in Schedule NN.
4.04 Capitalization of MCTV. The authorized capital stock of MCTV
consists of 1,800,000 shares of Common Stock, no par value, all of which
shares have been issued and are outstanding and issued to the Shareholders
as set forth on Schedule HH, which shares were duly authorized, validly
issued and fully paid and non-assessable. There are no preemptive rights
with respect to the MCTV stock.
4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action, including, but not limited to,
duly and validly authorized action and approval by the Board of Directors,
on the part of MCTV. This Agreement constitutes the valid and binding
obligation of MCTV and its Shareholders, enforceable against it and him,
respectively, in accordance with its terms, subject to the principles of
equity
applicable to the availability of the remedy of specific performance. This
Agreement has been duly executed by MCTV and the execution and delivery
of this Agreement and the consummation of the transactions contemplated by
this Agreement shall not result in any breach of any terms or provisions of
MCTV's Articles of Incorporation or Bylaws or of any other agreement, court
order or instrument to which MCTV is a party or by which it is bound.
4.06 Absence of Undisclosed Liabilities. MCTV has no material liabilities
of any nature, whether fixed, absolute, contingent or accrued, which were not
reflected on the financial statements set forth in Schedule AA nor otherwise
disclosed in this Agreement or any of the Schedules or Exhibits attached
hereto.
4.07 Absence of Changes. Since December 31, 1996, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business or MCTV.
4.08 Tax Matters. All taxes and other assessments and levies which MCTV
is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by MCTV for such payment or are represented by depository receipts,
and all such withholdings and collections and all other payments due in
connection therewith as of December 31, 1996, are duly reflected in the
financial statement as of December 31, 1996, and, since such date and as of
the date of this Agreement, all such taxes (including, without limitation,
employment taxes, both the employee's and employer's share) have been
provided for. There are no known deficiencies in income taxes for any
periods prior to December 31, 1996, and further, the representations and
warranties as to absence of undisclosed liabilities contained in Section 4.06
includes any and all tax liabilities of whatsoever kind or nature (including,
without limitation, all Federal, Provincial, local and foreign income, profit,
franchise, sales, use and property taxes) due or to become due, incurred in
respect of or measured by MCTV's income or business prior to the Closing
Date.
4.09 Title to Assets. Except for liens set forth in Schedule MCTV and
interests of third parties as set forth in Schedule DD, MCTV is the sole and
unconditional owner of, with good and marketable title to, all the assets
listed
in Schedule BB, free and clear of all mortgages, liens, pledges, charges or
encumbrances of any nature whatsoever.
4.10 Agreements in Force and Effect. Except as set forth in Schedules DD
and EE, all material contracts, agreements, plans, promissory notes,
mortgages, leases, policies, licenses, franchises or similar instruments to
which MCTV is a party are valid and in full force and effect on the date
hereof, and MCTV has not breached any material provision of, and is not in
default in any material respect under the terms of, any such contract,
agreement, plan, promissory note, mortgage, lease, policy, license, franchise
or similar instrument which breach or default would have a material adverse
effect upon the business, operations or financial condition of MCTV.
4.11 Legal Proceedings, etc. Except as set forth in Schedule KK, there are
no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of MCTV or the Shareholders
thereof, threatened, in which, individually or in the aggregate, an adverse
determination would materially and adversely affect the assets, properties,
business or income of MCTV. MCTV has substantially complied with, and
is not in default in any material respect under, any laws, ordinances,
requirements, regulations or orders applicable to its business.
4.12 Governmental Regulation. To the knowledge of MCTV and except as
set forth in Schedule KK, MCTV is not in violation of or in default with
respect too any applicable law or any applicable rule, regulation, order, writ
or decree of any court or any governmental commission, board, bureau,
agency or instrumentality, or delinquent with respect to any report required
to be filed with any governmental commission, board, bureau, agency or
instrumentality which violation or default could have a material adverse
effect upon the business, operations or financial conditions of MCTV.
4.13 Broker and Finders. MCTV shall be solely responsible for payment to
any broker or finder retained by MCTV for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated herein.
4.14 Accuracy of Information. No representation or warranty by MCTV
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to MEI pursuant hereto or in
connection with the transactions contemplated hereby (including, without
limitation, all Schedules and Exhibits hereto) contains or will contain any
untrue statement of a material fact or omits or will omit to state any
material
fact necessary in order to make the statements contained herein or therein not
misleading.
4.15 Subsidiaries. MCTV has no subsidiaries.
4.16 Consents. Except as listed in Schedule FF, no consent or approval of,
or registration, qualification or filing with, any governmental authority or
other person is required to be obtained or accomplished by MCTV or any
Shareholders thereof in connection with consummation of the transactions
contemplated hereby.
4.17 Improper Payments. No person acting on behalf of MCTV has made
any payment or otherwise transmitted anything of value, directly or
indirectly, to (a) any official or any government or agency or political
subdivision thereof for the purpose of influencing any decision affecting the
business of MCTV (b) any customer, supplier or competitor of MCTV, or
employee of such customer, supplier or competitor, for the purposes of
obtaining, retaining or directing business for MCTV, or (c) any political
party
or any candidate for elective political office, nor has any fund or other
asset
of MCTV been maintained that has not fully and accurately recorded on the
books of account of MCTV.
4.18 Copies of Documents. MCTV has made available for inspection and
copying by MEI and its duly authorized representatives, and will continue to
do so at all times, true and correct copies of all documents filed with
governmental agencies which are material to the terms and conditions
contained in this Agreement. Furthermore, all filings by MCTV with
governmental agencies have contained information which is true and correct
in all material respects and did not contain any untrue statement of a
material
fact or omit to state any material fact necessary to make the statements made
therein not misleading or which could have any material adverse affect upon
the financial condition or operations of MCTV or adversely effect the
objectives of this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDERS
The Shareholders, and each of them, hereby represent and warrant to MEI as
follows:
5.01 Title to Shares of MCTV. Each Shareholder owns the full right, title
and interest in and to his shares of MCTV, free and clear of adverse claims,
liens or encumbrances.
5.02 Legal Capacity of Shareholders. No Shareholder is under no legal
disability with respect to the execution and performance of this Agreement
and Plan of Reorganization.
5.03 Investment Intent of Shareholders. Each Shareholder represents and
warrants to MEI that the shares of MEI being acquired pursuant to this
Agreement are being acquired for his own account and for investment and not
with a view to the public resale or distribution of such shares and further
acknowledges that the shares being issued have not been registered under the
Securities Act or any state securities law and are "restricted securities", as
that term is defined in Rule 144 promulgated by the Securities and Exchange
Commission, and must be held indefinitely unless they are subsequently
registered or an exemption from such registration is available.
5.04 Restrictive Legend. Each Shareholder acknowledges that the share
certificate or certificates of MEI issued to him in exchange for his MCTV
stock will bear a legend restricting future transfer in the following, or
similar,
form:
"THE STOCK REPRESENTED BY THIS CERTIFICATE HAS BEEN
ISSUED IN RELIANCE UPON THE EXEMPTION FROM
REGISTRATION AFFORDED BY SECTION 4(2) OF THE SECURITIES
ACT OF 1933, AS AMENDED. THE STOCK MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION EXCEPT IN A
TRANSACTION EXEMPT FROM SUCH REGISTRATION."
ARTICLE 6
CONDUCT AND TRANSACTIONS PRIOR TO THE
EFFECTIVE TIME OF THE REORGANIZATION
6.01 Conduct and Transactions of MEI. During the period from the date
hereof to the date of Closing, MEI shall:
(a) Conduct its operations in the ordinary course of business, including, but
not limited to, paying all obligations as they mature, complying with all
applicable tax laws, filing all tax returns required to be filed and paying
all
taxes due; and
(b) Maintain its records and books of account in a manner that fairly and
correctly reflect its income, expenses, assets and liabilities.
MEI shall not during such period, except in the ordinary course of business,
without the prior written consent of MCTV:
(c) Sell, dispose of or encumber any of its properties or assets;
(d) Declare or pay any dividends on shares of its capital stock or make any
other distribution of assets to the holders thereof;
(e) Issue, reissue or sell, or issue options or rights to subscribe to, or
enter
into any contract or commitment to issue, reissue or sell, any shares of its
capital stock or acquire or agree to acquire any shares of its capital stock,
except for shares to be issued under that certain Agreement and Plan of
Reorganization among MEI, Winter Entertainment, Inc. and its Shareholder,
which reorganization is to be consummated contemporaneously with the
reorganization contemplated herein;
(f) Except as otherwise contemplated and required by this Agreement, amend
its Articles of Incorporation or merge or consolidate with or into any other
corporation or sell all or substantially all of its assets or change in any
manner the rights of its capital stock or other securities;
(g) Pay or incur any obligation or liability, direct or contingent, of an
amount
in excess of $1,000;
(h) Incur any indebtedness for borrowed money, assume, guarantee, endorse
or otherwise become responsible for obligations of any other party, or make
loans or advances to any of the party;
(i) Make any material change in its insurance coverage;
(j) Increase in any manner the compensation, direct or indirect, of any of
its
officers, except in accordance with existing employment contracts;
(k) Enter into any agreement or make any commitment to any labor union
or organization; or
(l) Make any capital expenditures.
6.02 Conduct and Transactions of MCTV. During the period from the date
hereof to the date of Closing, MCTV shall:
(a) Conduct the operations of MCTV in the ordinary course of business.
MCTV shall not during such period, except in the ordinary course of
business, without the prior written consent of MEI:
(b) Sell, dispose of or encumber any of the properties or assets of MCTV;
(c) Declare or pay any dividends on shares of its capital stock or make any
other distribution of assets to the holders thereof;
(d) Issue, reissue or sell, or issue options or rights to subscribe to, or
enter
into any contract or commitment to issue, reissue or sell, any shares of its
capital stock or acquire or agree to acquire any share of its capital stock;
(e) Except as otherwise contemplated and required by this Agreement,
amend its Articles of Incorporation or merge or consolidate with or into any
other corporation or sell all or substantially all of its assets or change
in any
manner the rights of its capital stock or other securities;
(f) Pay or incur any obligation or liability, direct or contingent;
(g) Incur any indebtedness for borrowed money, assume, guarantee, endorse
or otherwise become responsible for obligations of any other party, or make
loans or advances to any other party;
(h) Make any material change in its insurance coverage;
(i) Increase in any manner the compensation, direct or indirect, of any
of its
officers or executive employees; except in accordance with existing
employment contracts;
(j) Enter into any agreement or make any commitment to any labor union or
organization; or
(k) Make any material capital expenditures.
ARTICLE 7
RIGHTS OF INSPECTION
7.01 During the period from the date of this Agreement to the date of
Closing, MEI and MCTV each agree to use its best efforts to give the other
party, including its representatives and agents, full access to the premises,
books and records of each of the entities, and to furnish the other with such
financial and operating data and other information including, but not limited
to, copies of all legal documents and instruments referred to on any Schedule
or Exhibit hereto, with respect to the business and properties of MEI or
MCTV, as the case may be, as the other shall from time to time request;
provided, however, if there are any such investigations: (a) they shall be
conducted in such manner as not to interfere unreasonably with the operation
of the business of the other party and (b) such right of inspection shall not
affect in any way whatsoever any of the representations or warranties made
by the parties hereunder. In the event of termination of this Agreement, MEI
and MCTV will each return to the other all documents, work papers and other
materials obtained from the other party in connection with the transactions
contemplated hereby, and will take such other steps necessary to protect the
confidentiality of such material.
ARTICLE 8
CONDITIONS TO CLOSING
8.01 Conditions to Obligation of MCTV. The obligation of MCTV to
perform this Agreement is subject to the satisfaction of the following
conditions on or before the Closing, unless waived in writing by MCTV:
(a) Representations and Warranties. There shall be no information disclosed
in the Schedules delivered by MEI which, in the opinion of MCTV, would
materially adversely affect the proposed transaction and intent of the parties
as set forth herein. The representations and warranties of MEI set forth in
Article 3 hereof shall be true and correct in all material respects as
of the date
of this Agreement and as of the Closing as though made on and as of the
Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. MEI shall have in all material respects
performed all agreements required to be performed by it hereunder and shall
have performed in all material respects any actions contemplated by this
Agreement prior to or on the Closing and MEI shall have complied in all
material respects with the course of conduct required by this Agreement.
(c) Corporate Action. Minutes, certified copies of corporate resolutions
and/or other documentary evidence satisfactory to counsel for MCTV that
MEI has submitted this Agreement and any other documents required hereby
to such parties for approval as provided by applicable law.
(d) Financial Statements. MCTV shall have been furnished with an
unaudited balance sheet of MEI as of December 31, 1996. Such balance
sheet shall have been prepared in conformity with generally accepted
accounting principles and fairly present the financial position of MEI as of
December 31, 1996.
(e) Opinion of MEI Counsel. MEI shall deliver to MCTV an opinion of
MEI's counsel, dated as of the date of Closing, in form and substance
satisfactory to counsel for MCTV stating:
(i) MEI is a corporation duly organized and validly existing and in good
standing under the laws of the State of Nevada;
(ii) Counsel is not aware of any failure by MEI to be qualified and licensed
as a foreign corporation in each such jurisdiction where such corporation may
be required to be licensed as a foreign corporation;
(iii) MEI has the corporate power to carry on its business as now being
conducted;
(iv) The authorized capital stock of MEI consists of 50,000,000 shares of
common stock, $.0001 par value per share, the number of shares of
authorized common stock of MEI which have been issued is 2,160,000 and
all such issued shares have been duly authorized, validly issued and
outstanding, and are fully paid and non-assessable;
(v) The shares of MEI common stock to be issued to the Shareholders of
MCTV pursuant to this Agreement when so issued, will be duly and validly
authorized and issued and fully-paid and non-assessable;
(vi) This Agreement, and any other agreements required hereby, has been
duly executed and delivered by MEI and all corporate action required by MEI
to authorize the acquisition has been taken, and MEI has the corporate power
to effect the acquisition as provided for in this Agreement;
(vii) To the best of Counsel's knowledge, neither the execution or
delivery
by MEI of this Agreement, nor compliance with the terms and provisions
thereof, will conflict with or result in a breach of any of the terms,
conditions
or provisions of any agreement, contract or commitment listed on any
Schedule delivered by MEI to MCTV pursuant to this Agreement or
constitute a material default thereunder;
(viii) Except as set forth on any Schedule delivered by MEI to MCTV
pursuant to this Agreement, to the best of Counsel's knowledge, MEI is not
engaged in or threatened with any suit, action or legal, administrative,
arbitration or other proceeding or governmental investigation;
(ix) All authorizations, consents, approvals, permits and orders of all
Federal
and State governmental agencies required to be obtained by MEI for
consummation of the transactions contemplated by this Agreement have been
obtained;
(x) The Board of Directors and shareholders of MEI have taken all action
required by law, or under the charter documents, including, but not limited
to, the Articles of Incorporation and Bylaws, including all amendments
thereto, of MEI, to the best of Counsel's knowledge, and all other action
required to authorize the execution, delivery and performance of the
Agreement by MEI has been taken; and
(xi) In connection with the exchange of any of its shares and receipt of
shares
of MEI contemplated by the provisions of this Agreement, MEI and MCTV
are exempt from registration of such shares.
(f) Statutory Requirements. All statutory requirements for the valid
consummation by MEI of the transactions contemplated by this Agreement
shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents, approvals, permits
and orders of all Federal and State governmental agencies required to be
obtained by MEI for consummation of the transactions contemplated by this
Agreement shall have been obtained.
(h) Employment Agreements. Existing MEI employment agreements, if any,
will have been delivered to Counsel for MCTV.
(i) Changes in Financial Condition of MEI. There shall not have occurred
any material adverse change in the financial condition or in the operations
of the business of MEI, except expenditures in furtherance of this Agreement.
(j) Absence of Pending Litigation. MEI is not engaged in or threatened with
any suit, action, or legal, administrative or other proceedings or
governmental
investigations pertaining to this Agreement or the consummation of the
transactions contemplated hereunder.
8.02 Conditions to Obligation of MEI. The obligation of MEI to perform this
Agreement are subject to the satisfaction of the following conditions on or
before the Closing, unless waived in writing by MEI:
(a) Representations and Warranties. There shall be no information disclosed
in the Schedules delivered by MCTV which in the opinion of MEI would
materially adversely affect the proposed transaction and intent of the parties
as set forth in this Agreement. The representations and warranties of MCTV
set forth in Article 4 hereof shall be true and correct in all material
respects
as of the date of this Agreement and as of the Closing as though made on and
as of the Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. MCTV shall have in all material respects
performed all agreements required to be performed by it under this
Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing and MCTV shall
have complied in all respects with the course of conduct required by this
Agreement.
(c) Corporate Action. Minutes, certified copies of corporate resolutions
and/or other documentary evidence satisfactory to Counsel for MEI that
MCTV has submitted this agreement and any other documents required
hereby to such parties for approval as provided by applicable law.
(d) Consents. Any consents necessary for or approval of any party listed on
any Schedule delivered by MCTV whose consent or approval is required
pursuant thereto shall have been obtained.
(e) Opinion of MCTV Counsel. MCTV shall deliver to MEI an opinion of
MCTV's counsel, dated on the date of Closing, in form and substance
satisfactory to counsel for MCTV stating:
(i) MCTV is a corporation duly organized and validly existing and in good
standing under the laws of the State of Louisiana;
(ii) Counsel is not aware of any failure by MCTV to be qualified and licensed
as a foreign corporation in each such jurisdiction where such corporation may
be required to be licensed as a foreign corporation;
(iii) MCTV has the corporate power to carry on its business as now being
conducted;
(iv) The authorized capital stock of MCTV consists of 1,800,000 shares of
common stock, no par value; and the number of shares of authorized common
stock of MCTV which have been issued is 1,800,000; and all such issued
shares have been duly authorized, validly issued and outstanding, and are
fully paid and non-assessable;
(v) This Agreement has been duly executed and delivered by MCTV and is
the valid obligation of MCTV and all corporate action required by MCTV to
authorize the acquisition which has been taken, and MCTV has the corporate
power to effect the acquisition as provided for in this Agreement;
(vi) To the best of Counsel's knowledge, neither the execution or delivery by
MCTV of this Agreement, nor compliance with the terms and provisions
thereof, will conflict with or result in a breach of any of the terms,
conditions
or provisions of any agreement, contract or commitment listed on any
Schedule delivered by MCTV to MEI pursuant to this Agreement or to the
best of Counsel's knowledge of any judgment, order, injunction, decree,
regulation or ruling of any court of governmental authority, to which MCTV
is subject, or constitute a material default thereunder;
(vii) Except as set forth on any Schedule delivered by MCTV to MEI
pursuant to this Agreement, to the best of Counsel's knowledge, MCTV is not
engaged in or threatened with any suit, action or legal, administrative,
arbitration or other proceeding or governmental investigation which might
materially and adversely affect or impair the business or condition, financial
or otherwise of MCTV; and
(viii) All authorizations, consents, approvals, permits and orders of all
Federal and State governmental agencies required to be obtained by MCTV
for consummation of the transactions contemplated by this Agreement have
been obtained.
(f) Statutory Requirements. All statutory requirements for the valid
consummation by MCTV of the transactions contemplated by this Agreement
shall have been fulfilled.
(g) Change in Financial Condition of MCTV. There shall not have occurred
any material adverse change in the financial condition or in the operations of
the business of MCTV.
ARTICLE 9
MATTERS SUBSEQUENT TO CLOSING
9.01 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such
further or other actions as the other party or parties to this Agreement may
reasonably deem necessary in order to carry out the purposes and intent of
this Agreement.
ARTICLE 10
NATURE AND SURVIVAL OF REPRESENTATIONS
10.01 All statements contained in any written certificate, schedule,
exhibit
or other written instrument delivered by MEI or MCTV pursuant hereto, or
otherwise adopted by MEI, by its written approval, or by MCTV by its
written approval, or in connection with the transactions contemplated hereby,
shall be deemed representations and warranties by MEI or MCTV, as the case
may be. All representations, warranties and agreements made by either party
shall survive for the period of the applicable statute of limitations and
until
the discovery of any claim, loss, liability or other matter based on fraud, if
longer.
ARTICLE 11
TERMINATION OF AGREEMENT AND
ABANDONMENT OF REORGANIZATION
11.01 Termination. Anything herein to the contrary notwithstanding, this
Agreement and any agreement executed as required hereunder and the
reorganization contemplated hereby may be terminated at any time before the
Closing Date as follows:
(a) By mutual written consent of the Boards of Directors of MEI and MCTV.
(b) By the Board of Directors of MEI if any of the conditions set forth in
Section 8.02 shall not have been satisfied.
(c) By the Board of Directors of MCTV if any of the conditions set forth in
Section 8.01 shall not have been satisfied.
11.02 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the reorganization are terminated
and abandoned pursuant to this Article 11, this Agreement shall become void
and of no force and effect and there shall be no liability on the part of
any of
the parties hereto, or their respective directors, officers, Shareholders or
controlling persons to each other. Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and
any of the documents evidencing the transactions contemplated hereby,
including fees, expenses and disbursements of counsel.
ARTICLE 12
EXCHANGE OF SHARES; FRACTIONAL SHARES
12.01 Exchange of Shares. At the Closing, MEI shall issue to the
Shareholders of MCTV a total of 1,929,903 shares of MEI Common Stock.
Each share of common stock of MCTV shall be exchanged for 1.072 shares
of MEI Common Stock.
12.02 Fractional Shares. It is intended that no fractional shares or
script
certificates will be issued in connection with the reorganization. In lieu
thereof, if any Shareholder of MCTV would be entitled to receive a fractional
share of MEI Common Stock he will receive cash equal to the fair value of
the fractional share as determined by the Board of Directors of MCTV.
ARTICLE 13
MISCELLANEOUS
13.01 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nevada, excluding any conflicts of
laws.
13.02 Notices. All notices necessary or appropriate under this Agreement
shall be effective when personally delivered or deposited in the U. S. mail
system, as the case may be, postage prepaid, certified or registered, return
receipt requested, and addressed to the parties last known address, which
addresses are currently as follows:
If to "MEI": Media Entertainment, Inc.
Attn: Mr. Waddell D. Loflin
8478 Quarters Lake Road
Baton Rouge, Louisiana 70809
If to "MCTV": Missouri Cable TV Corp.
Attn: Mr. David M. Loflin
8478 Quarters Lake Road
Baton Rouge, Louisiana 70809
If to "Shareholders":
Alvin J. Benard Sareth Morm and
Saoeth Im
8113 South Harper Avenue 1060 East 19th Street
Los Angeles, CA 90001 Long Beach, CA 90806
Clyde and Linda Bunker Nancy McRae L.T. dtd-
12/4/86
19233 Abdale Street 1414 Coolidge Avenue
Newhall, CA 91321 Pasadena, CA 91104
Ross and Becky Bravata Ross Carey Trust
41022 Galvaz Seminario ESEPA,
Box 025216-184
Prairieville, LA 70707 Miami, FL 33102
Curtis Bunyett Arthur Rodriguez
8748 Quarters Lake Road 23817 Minnequa Drive
Baton Rouge, LA 70809 Diamond Bar, CA 91765
Mike and Lori Cohn 1993 Robbins Revocable
Trust
12424 Park Trail 6904 Winnetka Avenue
Baton Rouge, LA 70816 Winnetka, CA 91306
Dunn Revocable Trust Don Reid
2711 East 1st Street 1115 West Olympic
Boulevard
Long Beach, CA 90803 Los Angeles, CA 90064
Evangelical Center Linda Simmons
2067 Hobart 7305 Kester Avenue,
#2
Los Angeles, CA 90018 Van Nuys, CA 91405
Ted L. Flory Revocable Trust David and Lynn Stenske
6412 Heil Avenue 5531 Adele Avenue
Huntington Beach, CA 92647 Whittier, CA 90601
David M. Loflin Michael Stecher
644 Frances Harriet 703 Main Street, #3
Baton Rouge, LA 70815 El Segundo, CA 90245
Denis Mantei Glen and Maria
Thomas
13821 Ridgecrest Circle 12023 Peoria Street
Tustin, CA 92680 Sun Valley, CA 91352
Harold Miller Gilbert and
Eliza Tobon
4071 Grandview Boulevard, #2 22138 Barbacoa Drive
Los Angeles, CA 90066 Saugus, CA 91350
Carlton P. Weise
P.O. Box 251
Sierra Madre, CA 91024
13.03 Amendment and Waiver. The parties hereby may, by mutual
agreement in writing signed by each party, amend this Agreement in any
respect. Any term or provision of this Agreement may be waived in writing
at any time by the party which is entitled to the benefits thereof, such
waiver
right shall include, but not be limited to, the right of either party to:
(a) Extend the time for the performance of any of the obligations of the
other;
(b) Waive any inaccuracies in representations by the other contained in this
Agreement or in any document delivered pursuant hereto;
(c) Waive compliance by the other with any of the covenants contained in
this Agreement, and performance of any obligations by the other; and
(d) Waive the fulfillment of any condition that is precedent to the
performance by the party so waiving of any of its obligations under this
Agreement. Any writing on the part of a party relating to such amendment,
extension or waiver as providedin this Section 13.03 shall be valid if
authorized or ratified by the Board of Directors of such party.
13.04 Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise. The election of any one or
more remedies by MEI or MCTV shall not constitute a waiver of the right to
pursue other available remedies.
13.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of MEI, MCTV and the
Shareholders.
13.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto represent the entire agreement of the undersigned regarding
the subject matter hereof, and supersedes all prior written or oral
understandings or agreements between the parties.
13.08 Each Party to Bear its Own Expense. MEI and MCTV shall each
bear their own respective expenses incurred in connection with the
negotiation, execution, closing and performance of this Agreement, including
counsel fees and accountant fees.
13.09 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning
or construction of any provision of this Agreement.
Executed as of the date first written above.
MEI: MCTV:
MEDIA ENTERTAINMENT, INC. MISSOURI CABLE TV CORP.
(a Nevada corporation) (a Louisiana corporation)
By: /s/ Waddell D. Loflin By: /s/ David M. Loflin
Waddell D. Loflin David M. Loflin
Vice President President
SHAREHOLDERS:
/s/ David M. Loflin /s/ Alvin J. Benard
David M. Loflin, individually Alvin J. Benard
(1,100,000MCTVshares for (20,000 MCTV shares
1,179,389MEIshares) for 21,443 MEI shares)
/s/ Clyde Bunker /s/ Linda Bunker
Clyde Bunker Linda Bunker
(30,000 MCTV shares for (30,000 MCTV shares
32,165 MEI shares) for 32,165 MEI shares)
/s/ Ross Bravata /s/ Becky Bravata
Ross Bravata Becky Bravata
(40,000 MCTV shares (40,000 MCTV shares
for42,887 MEI shares) for 42,887 MEI shares)
/s/ Curtis Bunyett /s/ Mike Cohn
Curtis Bunyett Mike Cohn
(10,000 MCTV shares for (50,000 MCTV shares
10,722 MEI shares) for 53,608 MEI
shares)
/s/ Lori Cohn /s/ Denis Mantei
Lori Cohn Denis Mantei
(50,000 MCTV shares (20,000 MCTV shares
for 53,608 MEI shares) for 21,443 MEI shares)
/s/ Sareth Morm /s/ Harold Miller
Sareth Morm Harold Miller
(30,000 MCTV shares) (20,000 MCTV shares
for 32,165 MEI shares for 21,443 MEI
shares)
/s/ Arthur Rodriguez /s/ Don Reid
Arthur Rodriguez Don Reid
(20,000 MCTV shares (200,000 MCTV shares
for 21,443 MEI shares) for 214,434 MEI
shares)
/s/ Linda Simmons /s/ David
Stenske
Linda Simmons David Stenske
(10,000 MCTV shares (20,000 MCTV shares
for 10,722 MEI shares) for 21,443 MEI
shares)
/s/ Lynn Stenske /s/ Michael
Stecher
Lynn Stenske Michael
Stecher
(20,000 MCTV shares (25,000 MCTV
shares
for 21,443 MEI shares) for 26,804 MEI
shares)
/s/ Glen Thomas /s/ Maria
Thomas
Glen Thomas Maria
Thomas
(20,000 MCTV shares (20,000 MCTV
shares
for 21,443 MEI shares) for 21,443 MEI
shares)
/s/ Gilbert Tobon /s/ Eliza
Tobon
Gilbert Tobon Eliza
Tobon
(15,000 MCTV shares (15,000 MCTV
shares
for 16,082 MEI shares) for 16,082 MEI
shares)
/s/ Carlton P. Weise /s/ Saoeth
Im
Carlton P. Weise Saoeth Im
(30,000 MCTV shares (30,000 MCTV
shares
for 32,165 MEI shares) for 32,165 MEI
shares)
DUNN REVOCABLE TRUST EVANGELICAL CENTER
By: /s/ Fred B. Dunn By: /s/
By: /s/ Marjorie L. Dunn Its authorized agent
Trustee
(40,000 MCTV shares (25,000 MCTV shares
for 42,887 MEI shares) for 26,804 MEI
shares)
TED L. FLORY REVOCABLE TRUST ROSS CAREY TRUST
By: /s/ Ted L. Flory By: /s/ Ross
Carey
Ted L. Flory, Trustee Ross Carey,
Trustee
(20,000 MCTV shares (20,000 MCTV shares
for 21,443 MEI shares) for 21,443 MEI
shares)
1993 ROBBINS REVOCABLE TRUST
By: /s/ Craig Robbins
Craig Robbins, Trustee
By: /s/ Karen Robbins
Karen Robbins, Trustee
(20,000 MCTV shares
for 21,443 MEI shares)
NANCY McRAE L.T. dtd-12/4/86
By: /s/ Nancy McRae
Nancy McReae, Trustee
(15,000 MCTV shares
for 16,082 MEI shares)
EXHIBIT 3.1
_____________________________________________________
ARTICLES OF INCORPORATION
OF
MEDIA ENTERTAINMENT, INC.
That I, the undersigned, for the purpose of forming a corporation under and
by virtue of the laws of the State of Nevada, hereby adopts the following
Articles of Incorporation:
ARTICLE I NAME
The name of this Corporation is Media Entertainment, Inc.
ARTICLE II DURATION
The duration of this Corporation is perpetual.
ARTICLE III PURPOSES
The Corporation is organized and authorized to pursue any lawful purpose or
purposes which may be undertaken or carried on by a corporation under the
laws of the State of Nevada and to engage in any active, lawful business or
pursuit.
The Corporation shall further have all powers specified in Sections 78.060,
78.065 and 78.070 of the Nevada Revised Statutes, and any amendments
thereto.
ARTICLE IV STOCK
The Corporation shall have the authority to issue One Hundred Million
(100,000,000) shares of common stock, with a par value of $.0001 per share.
The common stock of the Corporation shall be of the same class and shall
have the same rights and preferences. All fully paid shares of stock of this
Corporation shall not be liable to any further call or assessment.
ARTICLE V AMENDMENT
These Articles of Incorporation may be amended by the affirmative vote of
a majority of the shares entitled to vote on each such amendment.
ARTICLE VI SHAREHOLDER RIGHTS
The authorized stock of this Corporation may be issued at such time, upon
such terms and conditions and for such consideration as the Board of
Directors shall determine. Shareholders shall not have preemptive rights to
acquire unissued shares of the stock of this Corporation and cumulative
voting is denied.
ARTICLE VII INITIAL OFFICE AND AGENT
The address of the initial registered office of the Corporation is CSC
Services
of Nevada, Inc., 502 East John, Carson City, Nevada 89706, and the name of
the Corporation's initial registered agent at such address is CSC Services of
Nevada, Inc., 502 East John, Carson City, Nevada 89706.
ARTICLE VIII DIRECTORS
The number of Directors constituting the initial Board of Directors of this
Corporation shall be two (2) in number, provided, however, that the number
of directors may be changed from time to time by a provision of the Bylaws,
but in no event shall the number of directors be less than two (2) or more
than ten (10).
The names and addresses of the initial board of directors who shall hold
office until the first annual meeting of shareholders, or until their
successors
are elected and qualified are:
David M. Loflin 8748 Quarters Lake Road
Baton Rouge, Louisiana 70809
Waddell D. Loflin 8748 Quarters Lake Road
Baton Rouge, Louisiana 70809
ARTICLE IX INCORPORATOR
The name and address of the incorporator is: L. A. Newlan, Jr., Esquire,
Newlan & Newlan, Attorneys at Law, 5525 North MacArthur Boulevard,
Suite 670, Irving, Texas 75038.
ARTICLE X LIMITATION OF LIABILITY:
DIRECTORS AND OFFICERS
No director or officer of the Corporation shall be personally liable to the
Corporation or its stockholders for damages for breach of fiduciary duty as
a director or officer; provided, however, that this ARTICLE X shall not
eliminate or limit the liability of a director or officer for:
(a) acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law; or
(b) the payment of dividends in violation of law.
Any repeal or modification of this ARTICLE X shall be prospective only and
shall not adversely affect any right or protection of a director or officer
of the
Corporation existing at the time of such repeal or modification for any breach
covered by this ARTICLE X which occurred prior to such repeal or
modification.
ARTICLE XI RELIANCE BY OFFICERS
AND DIRECTORS
Each director, officer or member of any committee designated by the Board
of Directors shall, in the performance of his or her duties, be fully
protected
and absolved from liability in relying in good faith upon the books of account
or reports made to the Corporation by any of its officials, an independent
public accountant or by an appraiser or an investment banker selected with
reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation. This ARTICLE
XI is in addition to and shall not in any manner limit the scope of the
director
and officer liability limitation in ARTICLE X.
ARTICLE XII INDEMNIFICATION OF
DIRECTORS AND OFFICERS
The Corporation shall indemnify any and all persons who may serve at any
time as directors or officers or who at the request of the Board of Directors
of the Corporation may serve or at any time have served as directors or
officers of another corporation in which the Corporation at such time owned
or may own shares of stock or of which it was or may be a creditor, and their
respective heirs, administrators, successors and assignees, against any and
all
expenses, including amounts paid upon judgments, counsel fees and amounts
paid in settlement (before or after suit is commenced), actually and
necessarily incurred by such persons in connection with the defense or
settlement of any claim, action, suit or proceeding in which they, or any of
them are made parties, or a party, or which may be asserted against them or
any of them, by reason of being or having been directors or officers or a
director or officer of the Corporation, or such other corporation, except in
relation to matters as to which any such director or officer or former
director
or officer or person shall be adjudged in any action, suit or proceeding to be
liable for his own gross negligence or wilful misconduct in the performance
of his duty. Such indemnification shall be in addition to any other rights to
which those indemnified may be entitled under any law, bylaw, agreement,
vote of shareholders or otherwise.
ARTICLE XIII COMMON DIRECTORS:
TRANSACTIONS BETWEEN CORPORATIONS
No contract or other transaction between this Corporation and one or more
of its directors or any other corporation, firm, association or entity in
which
one or more of its directors or officers are financially interested, shall be
either void or voidable because of such relation or interest, or because such
director or directors are present at the meeting of the Board of Directors, or
a committee thereof which authorizes, approves or ratifies such contract or
transaction, or because his or their votes are counted for such purpose if:
(a)
the fact of such relationship or interest is disclosed or known to the Board
of
Directors or committee which authorizes, approves, or ratifies such contract
or transaction by vote or consent sufficient for the purpose without counting
the votes or consents of such interested directors; or (b) the fact of such
relationship or interest is disclosed or known to the shareholders entitled to
vote and they authorize, approve, or ratify such contract or transaction by
vote or written consent; (c) the contract or transaction is fair and
reasonable
to the Corporation.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or committee thereof
which authorizes, approves or ratifies such contract or transaction.
DATED this 31st day of October, 1996.
/s/ L.A. Newlan, Jr.
L. A. Newlan, Jr.
Incorporator
STATE OF TEXAS )
ss
COUNTY OF DALLAS )
I, the undersigned, being first duly sworn on oath, deposes and says: That I
am the incorporator hereinbefore named; that I have read the foregoing
Articles of Incorporation and know the contents thereof and that the same are
true of my knowledge, except as to matters therein stated upon information
and belief, and as to those, I believe them to be true.
/s/ L.A. Newlan, Jr.
L. A. Newlan, Jr.
On the 31st day of October, 1996, personally appeared before me, L. A.
Newlan, Jr., signer of the above Articles of Incorporation, who duly
acknowledged to me that he executed the same.
/s/
Notary Public
EXHIBIT 3.2
_______________________________
BYLAWS
OF
MEDIA ENTERTAINMENT, INC.
ARTICLE I - OFFICE AND REGISTERED AGENT
The principal office of the Corporation in the State of Nevada shall be
located
at 502 East John, Carson City, Nevada 89706. The Corporation may
maintain such other offices, within or without the State of Nevada, as the
Board of Directors may from time to time designate. The location of the
principal office may be changed by the Board of Directors. The name of the
registered agent of the Corporation in the State of Nevada at its principal
office is CSC Services of Nevada, Inc.
ARTICLE II - SHAREHOLDERS' MEETINGS
Section 2.1 Annual Meetings. The annual meeting of the shareholders of
the Corporation shall be held at such place within or without the State of
Nevada as shall be set forth in compliance with these Bylaws. The meeting
shall be held on the first Tuesday of May of each year beginning with the
year 1998 at 10:00 a.m. If such day is a legal holiday, the meeting shall be
on the next business day. This meeting shall be for the election of directors
and for the transaction of such other business as may properly come before
it.
In the event that such annual meeting is omitted by oversight or otherwise on
the date herein provided for, the directors shall cause a meeting in lieu
thereof
to be held as soon thereafter as conveniently may be, and any business
transacted or elections held at such meeting shall be as valid as if
transacted
or held at the annual meeting. If the election of directors shall not be
held on
the date designated herein for any annual meeting of shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be
held at a special meeting of shareholders as soon thereafter as may
conveniently be called. Such subsequent meeting shall be called in the same
manner as is provided for the annual meeting of shareholders.
Section 2.2 Special Meetings. Special meetings of shareholders, other than
those regulated by statute, may be called at any time by the President, or by
a majority of the directors, and must be called by the President upon written
request of the holders of not less than 10% of the issued and outstanding
shares entitled to vote at such special meeting.
Section 2.3 Notice of Shareholders' Meetings. The President, Vice
President or Secretary shall give written notice stating the place, day and
hour
of the meeting, and in the case of a special meeting the purpose or purposes
for which the meeting is called, which shall be delivered not less than ten
nor
more than fifty days before the day of the meeting, either personally or by
mail to each shareholder of record entitled to vote at such meeting. If
mailed,
such notice shall be deemed to be delivered when deposited in the United
States mail addressed to the shareholder at his address as it appears on the
books of the Corporation, with postage thereon prepaid.
Any meeting of which all shareholders shall at any time waive or have
waived notice in writing shall be a legal meeting for the transaction of
business notwithstanding that notice has not been given as hereinbefore
provided.
Section 2.4 Waiver of Notice. Whenever any notice whatever is required
to be given by these Bylaws, or the Articles of Incorporation, or by any of
the
Corporation Laws of the State of Nevada, a shareholder may waive the notice
of meeting by attendance, either in person or by proxy, at the meeting, or by
so stating in writing, either before or after such meeting. Attendance at a
meeting for the express purpose of objecting that the meeting was not
lawfully called or convened shall not, however, constitute a waiver of notice.
Section 2.5 Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Nevada, as the place of meeting
for any annual meeting or for any special meeting called by the Board of
Directors. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the registered office of the
Corporation.
Section 2.6 Closing of Transfer Books or Fixing Record Date. For the
purpose of determining shareholders entitled to notice or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled
to receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be closed for a
period not to exceed in any case 50 days. If the stock transfer books
shall be
closed for the purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed for at least 10
days immediately preceding the date determined to be the date of record. In
lieu of closing the stock transfer books, the Board of Directors may fix in
advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than 50 days and in case of a meeting of
shareholders not less than 10 days prior to the date on which the particular
action requiring such determination of shareholders is to be taken. If the
stock transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice or to vote at a meeting of
shareholders or shareholders to receive payment of a dividend, the date on
which notice of the meeting is mailed or the date on which the resolution of
the Board of Directors declaring such dividend is adopted, as the case may
be, shall be deemed the date of record for such determination of
shareholders.
When a determination of persons entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof.
Section 2.7 Quorum of Shareholders. Except as herein provided and as
otherwise provided by law, at any meeting of shareholders a majority in
interest of all the shares issued and outstanding represented by shareholders
of record in person or by proxy shall constitute a quorum, but a less interest
may adjourn any meeting and the meeting may be held as adjourned without
further notice; provided; however, that directors shall not be elected at the
meeting so adjourned. When a quorum is present at any meeting, a majority
in interest of the shares represented is one upon which the express provision
of law or of the Articles of Incorporation or of these Bylaws a larger or
different vote is required, in which case such express provision shall govern
and control the decision of such question.
Section 2.8 Voting Lists. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make a complete list of the
shareholders entitled to vote at such meeting or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of shares
held by each, which list shall be produced and kept open at the time and place
of the meeting and shall be subject to the inspection of any shareholder, for
any purpose germane to the meeting, during the whole time of the meeting.
The original stock transfer books shall be prima facie evidence as to who are
the shareholders entitled to examine such list or transfer books or to vote at
any meeting of shareholders.
Section 2.9 Voting. A holder of an outstanding share entitled to vote
at a
meeting may vote at such meeting in person or by proxy. Except as may
otherwise be provided in the Articles of Incorporation, every shareholder
shall be entitled to one vote for each share standing in his name on the
record
of shareholders. Except as herein or in the Articles of Incorporation
otherwise provided, all corporate action shall be determined by a majority of
the votes cast at a meeting of shareholders by the holders of shares entitled
to vote thereon.
Section 2.10 Proxies. At all meetings of shareholders, a shareholder may
vote in person or by proxy executed in writing by the shareholder or by his
duly authorized attorney in fact. Such proxy shall be filed with the
secretary
of the Corporation before or at the time of the meeting. No proxy shall be
valid after eleven months from the date of its execution, unless otherwise
provided in the proxy.
Section 2.11 Informal Action by Shareholders. Any action required to be
taken at a meeting of the shareholders, or any action which may be taken at
a meeting of the shareholders, may be taken without a meeting if a consent
in writing, setting forth the action so taken, shall be signed by a majority
of
the shareholders entitled to vote with respect to the subject matter thereof,
provided that if any greater proportion and voting power is required for such
action, then such greater proportion of written consents shall be required.
ARTICLE III - BOARD OF DIRECTORS
Section 3.1 General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors. The Board of Directors may
adopt such rules and regulations for the conduct of their meetings and the
management of the Corporation as they deem proper.
Section 3.2 Number, Tenure and Qualifications. The number of directors
for the Board of Directors of the Corporation shall be not less than two nor
more than ten. Each director shall hold office until the next annual meeting
of shareholders and until his successor shall have been elected and
qualified.
Directors need not be residents of the State of Nevada or shareholders of the
Corporation.
Section 3.3 Election of Board of Directors. The Board of Directors shall
be chosen by ballot at the annual meeting of shareholders or at any meeting
held in place thereof as provided by law.
Section 3.4 Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than by this Bylaw, immediately following
and at the same place as the annual meeting of the shareholders. The Board
of Directors may provide by resolution the time and place for the holding of
additional regular meetings without other notice than this resolution.
Members of the Board of Directors may participate in a meeting of the Board
by means of conference telephone or similar communications equipment by
which all persons participating in the meeting can hear each other and
participation in a meeting under this subsection shall constitute presence in
person at the meeting, pursuant to Nevada Revised Statute, Section 78.315.
Section 3.5 Special Meetings. Special meetings of the Board of Directors
may be called by order of the Chairman of the Board, the President or by
one-third of the directors. The Secretary shall give notice of the time,
place
and purpose or purposes of each special meeting by mailing the same at least
two days before the meeting or by telephoning or telecopying or wiring the
same at least one day before the meeting to each director.
Section 3.6 Waiver of Notice. Whenever any notice whatever is required
to be given by these Bylaws, or the Articles of Incorporation of the
Corporation, or by any of the Corporation Laws of the State of Nevada, a
director may waive the notice of meeting by attendance in person at the
meeting, or by so stating in writing, either before or after such meeting.
Attendance at a meeting for the express purpose of objecting that the meeting
was not lawfully called or convened shall not, however, constitute a waiver
of notice.
Section 3.7 Quorum. A majority of the members of the Board of Directors
shall constitute a quorum for the transaction of business, but less than a
quorum may adjourn any meeting from time to time until a quorum shall be
present, whereupon the meeting may be held, as adjourned, without further
notice. At any meeting at which every director shall be present, even though
without any notice, any business may be transacted.
Section 3.8 Manner of Acting. At all meetings of the Board of Directors,
each director shall have one vote. The act of a majority present at a meeting
shall be the act of the board of Directors, provided a quorum is present. Any
action required to be taken or which may be taken at a meeting of the
directors may be taken without a meeting if a consent in writing setting forth
the action so taken shall be signed by all the directors. The directors may
conduct a meeting by means of a conference telephone or any similar
communication equipment by which all persons participating in the meeting
can hear each other.
Section 3.9 Powers of Directors. The Board of Directors shall have the
responsibility for the entire management of the business of the Corporation.
In the management and control of the property, business and affairs of the
Corporation the Board of Directors is hereby vested with all of the powers
possessed by the Corporation itself so far as this delegation of authority
is not
inconsistent with the laws of the State of Nevada and with the Articles of
Incorporation or with these Bylaws. The Board of Directors shall have the
power to determine what constitutes net earnings, profits and surplus,
respectively, and what amounts shall be reserved for working capital and for
any other purpose and what amounts shall be declared as dividends, and such
determination by the Board of Directors shall be final and conclusive.
Section 3.10 Vacancies. A vacancy in the Board of Directors shall be
deemed to exist in case of death, resignation or removal of any director,
or if
the authorized number of directors be increased, or if the shareholders
fail at
any meeting of shareholders at which any director is to be elected, to elect
the
full authorized number to be elected at that meeting.
Any vacancy occurring in the Board of Directors, whether arising from death,
resignation, removal (with or without cause), any increase in the number of
directors or any other reason, may be filled by an affirmative vote of the
majority of the remaining directors, though less than a quorum of the Board
of Directors, or by the shareholders at the next annual meeting thereof or at
a special meeting thereof, and each director so elected to fill a vacancy
shall
be elected for the unexpired term of his predecessor in office.
Section 3.11 Removals. Directors may be removed at any time at a meeting
called expressly for that purpose by a vote of the shareholders holding a
majority of the shares issued and outstanding and entitled to vote. Such
vacancy shall be filled by the directors then in office, though less than a
quorum, to hold office until the next annual meeting or until his successor is
duly elected and qualified, except that any directorship to be filled by
reason
of removal by the shareholders may be filled by election, by the shareholders,
at the meeting at which the director is removed. No reduction of the
authorized number of directors shall have the effect of removing any director
prior to the expiration of his term of office.
Section 3.12 Resignations. A director may resign at any time by delivering
written notification thereof to the President or Secretary of the
Corporation.
Such resignation shall become effective upon its acceptance by the Board of
Directors; provided, however, that if the Board of Directors has not acted
thereon within ten days from the date of its delivery, the resignation shall
upon the tenth day be deemed accepted.
Section 3.13 Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the Secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the Secretary of the Corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.
Section 3.14 Compensation. By resolution of the Board of Directors, the
directors shall be paid their expenses, if any, of attendance at each meeting
of the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor.
Section 3.15 Emergency Power. When, due to a national disaster or death,
a majority of the directors are incapacitated or otherwise unable to attend
the
meetings and function as directors, the remaining members of the Board of
Directors shall have all powers necessary to function as a complete Board
and, for the purpose of doing business and filling vacancies, shall constitute
a quorum until such time as all directors can attend or vacancies can be
filled
pursuant to these Bylaws.
Section 3.16 Chairman. The Board of Directors may elect from its own
number a Chairman of the Board, who shall preside at all meetings of the
Board of Directors, and shall perform such other duties as may be prescribed
from time to time by the Board of Directors.
ARTICLE IV - OFFICERS
Section 4.1 Number. The officers of the Corporation shall be a President,
one or more Vice Presidents, a Secretary and a Treasurer, each of whom shall
be elected by a majority of the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or appointed
by the Board of Directors. In its discretion, the Board of Directors may
leave
unfilled for any such period as it may determine any office except those of
President and Secretary. Any two or more offices may be held by the same
person. Officers may or may not be directors or shareholders of the
Corporation.
Section 4.2 Election and Term of Office. The officers of the Corporation
are to be elected by the Board of Directors at the first meeting of the Board
of Directors held after each annual meeting of the shareholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as convenient. Each officer shall hold office until
his
successor shall have been duly elected and shall have qualified or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided.
Section 4.3 Resignation. Any officer may resign at any time by delivering
a written resignation either to the President or to the Secretary. Unless
otherwise specified therein, such resignation shall take effect upon delivery.
Section 4.4 Removal. Any officer or agent may be removed by the Board
of Directors whenever in its judgment the best interests of the Corporation
will be served thereby but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of
an officer or agent shall not of itself create contract rights. Any such
removal
shall require a majority vote of the Board of Directors, exclusive of the
officer in question if he is also a director.
Section 4.5 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, or if a new office
shall be
created, may be filled by the Board of Directors for the unexpired portion of
the term.
Section 4.6 President. The President shall be the chief executive and
administrative officer of the Corporation. He shall preside at all meetings
of
the shareholders and, in the absence of the Chairman of the Board, at
meetings of the Board of Directors. He shall exercise such duties as
customarily pertain to the office of President and shall have general and
active supervision over the property, business and affairs of the Corporation
and over its several officers. He may appoint officers, agents or employees
other than those appointed by the Board of Directors. He may sign, execute
and deliver in the name of the Corporation, powers of attorney, certificates
of stock, contracts, bonds, deeds, mortgages and other obligations and shall
perform such other duties as may be prescribed from time to time by the
Board of Directors or by the Bylaws.
Section 4.7 Vice President. The Vice President shall have such powers and
perform such duties as may be assigned to him by the Board of Directors or
the President. In the absence or disability of the President, the Vice
President
designated by the board or the President shall perform the Duties and exercise
the powers of the President. In the event there is more than one Vice
President and the Board of Directors has not designated which Vice President
is to act as President, then the Vice President who was elected first shall
act
as President. A Vice President may sign and execute contracts and other
obligations pertaining to the regular course of his duties.
Section 4.8 Secretary. The Secretary shall keep the minutes of all
meetings
of the shareholders and of the Board of Directors and to the extent ordered by
the Board of Directors or the President, the minutes of meetings of all
committees. He shall cause notice to be given of the meetings of
shareholders, of the Board of Directors and of any committee appointed by
the board. He shall have custody of the corporate seal and general charge of
the records, documents and papers of the Corporation not pertaining to the
performance of the duties vested in other officers, which shall at all
reasonable times be open to the examination of any director. He may sign or
execute contracts with the President or Vice President thereunto authorized
in the name of the Corporation and affix the seal of the Corporation thereto.
He shall perform such other duties as may be prescribed from time to time by
the board of Directors or by the Bylaws. He shall be sworn to the faithful
discharge of his duties. Assistant Secretaries shall assist the Secretary and
shall keep and record such minutes of meetings as shall be directed by the
Board of Directors.
Section 4.9 Treasurer. The Treasurer shall have general custody of the
collection and disbursement of funds of the Corporation for collection of
checks, notes, and other obligations, and shall deposit the same to the credit
of the Corporation in such bank or banks or depositories as the Board of
Directors may designate. He may sign, with the President, or such other
persons as may be designated for the purpose by the Board of Directors, all
bills of exchange or promissory notes of the Corporation. He shall enter or
cause to be entered regularly in the books of the Corporation full and
accurate
accounts of all monies received and paid by him on account of the
Corporation; shall at all reasonable times exhibit his books and accounts to
any director of the Corporation upon application at the office of the
Corporation during business hours; and, whenever required by the Board of
Directors or the President, shall render a statement of his accounts. He
shall
perform such other duties as may be prescribed from time to time by the
Board of Directors or by the Bylaws.
Section 4.10 General Manager. The Board of Directors may employ and
appoint a General Manager who may, or may not, be one of the officers or
directors of the Corporation. If employed by the Board of Directors he shall
be the chief operating officer of the Corporation and, subject to the
directions
of the Board of Directors, shall have general charge of the business
operations of the Corporation and general supervision over its employees and
agents. He shall have the exclusive management of the business of the
Corporation and of all of its dealings, but at all times subject to the
control
of the Board of Directors. Subject to the approval of the Board of Directors
or the executive committee, he shall employ all employees of the
Corporation, or delegate such employment to subordinate officers, or such
division officers, or such division chiefs, and shall haings, but at all
times subject to the control
of the Board of Directors. Subject to the approval of the Board of Directors
or the executive committee, he shall employ all employees of the
Corporation, or delegate such employment to subordinate officers, or such
division officers, or such division chiefs, and shall have authority to
discharge any person so employed. He shall make a quarterly report to the
President and directors, or more often if required to do so, setting forth the
result of the operations under his charge, together with suggestions looking
to the improvement and betterment of the condition of the Corporation, and
to perform such other duties as the Board of Directors shall require.
Section 4.11 Officers. Other officers shall perform such duties and have
such powers as may be assigned to them by the Board of Directors.
Section 4.12 Salaries. The salaries or other compensation of the officers
of
the Corporation shall be fixed from time to time by the Board of Directors
except that the Board of Directors may delegate to any person or group of
persons the power to fix the salaries or other compensation of any
subordinate officers or agents. No officer shall be prevented from receiving
any such salary or compensation by reason of the fact that he is also a
director of the corporation.
Section 4.13 Surety Bonds. In case the Board of Directors shall so
require,
any officer or agent of the corporation shall execute to the Corporation a
bond in such sums and with sureties as the Board of Directors may direct,
conditioned upon the faithful performance of his duties to the Corporation,
including responsibility for negligence and for the accounting for all
property, monies or securities of the Corporation which may come into his
hands.
ARTICLE V - COMMITTEES
Section 5.1 Executive Committee. The Board of Directors may appoint
from among its members an Executive Committee of not less than two nor
more than seven members, one of whom shall be the President, and shall
designate one or more of its members as alternates to serve as a member or
members of the Executive Committee in the absence of a regular member or
members. The Board of Directors reserves to itself alone the power to
declare dividends, issue stock, recommend to shareholders any action
requiring their approval, change the membership of any committee at any
time, fill vacancies therein, and discharge any committee either with or
without cause at any time. Subject to the foregoing limitations, the
Executive
Committee shall possess and exercise all other powers of the Board of
Directors during the intervals between meetings.
Section 5.2 Other Committees. The Board of Directors may also appoint
from among its own members such other committees as the Board may
determine, which shall in each case consist of not less than two directors,
and
which shall have such powers and duties as shall from time to time be
prescribed by the Board. The President shall be a member ex officio of each
committee appointed by the Board of Directors. A majority of the members
of any committee may fix its rules of procedure.
ARTICLE VI - CONTRACTS, LOANS, DEPOSITS AND CHECKS
Section 6.1 Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and
deliver
any instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
Section 6.2 Loans. No loan or advances shall be contracted on behalf of
the
Corporation, no negotiable paper or other evidence of its obligation under any
loan or advance shall be issued in its name, and no property of the
Corporation shall be mortgaged, pledged, hypothecated or transferred as
security for the payment of any loan, advance, indebtedness or liability of
the
corporation unless and except as authorized by the Board of Directors. Any
such authorization may be general or confined to specific instances.
Section 6.3 Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board of Directors may
select, or as may be selected by any officer or agent authorized to do so by
the Board of Directors.
Section 6.4 Checks and Drafts. All notes, drafts, acceptances, checks,
endorsements and evidences of indebtedness of the Corporation shall be
signed by such officer or officers or such agent or agents of the Corporation
and in such manner as the Board of Directors from time to time may
determine. Endorsements for deposit to the credit of the Corporation in any
of its duly authorized depositories shall be made in such manner as the Board
of Directors from time to time may determine.
Section 6.5 Bonds and Debentures. Every bond or debenture issued by the
Corporation shall be evidenced by an appropriate instrument which shall be
signed by the President or a Vice President and by the Treasurer or by the
Secretary, and sealed with the seal of the Corporation. The seal may be
facsimile, engraved or printed. Where such bond or debenture is
authenticated with the manual signature of an authorized officer of the
Corporation or other trustee designated by the indenture of trust or other
agreement under which such security is issued, the signature of any of the
Corporation's officers named thereon may be facsimile. In case any officer
who signed, or whose facsimile signature has been used on any such bond or
debenture, shall cease to be an officer of the Corporation for any reason
before the same has been delivered by the Corporation, such bond or
debenture may nevertheless be adopted by the Corporation and issued and
delivered as though the person who signed it or whose facsimile signature has
been used thereon had not ceased to be such officer.
ARTICLE VII - CAPITAL STOCK
Section 7.1 Certificates of Shares. The shares of the Corporation shall be
represented by certificates prepared by the Board of Directors and signed by
the President or aVice President, and by the Secretary, or an Assistant
Secretary, and sealed with the seal of the Corporation or a facsimile. The
signatures of such officers upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent or registered by a registrar
other than the Corporation itself or one of its employees. All certificates
for
shares shall be consecutively numbered or otherwise identified. The name
and address of the person to whom the shares represented thereby are issued,
with the number of shares and date of issue, shall be entered on the stock
transfer books of the Corporation. All certificates surrendered to the
Corporation for transfer shall be cancelled and no new certificate shall be
issued until the former certificate for a like number of shares shall have
been
surrendered and cancelled, except that in case of a lost, destroyed or
mutilated certificate a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board may prescribe.
Section 7.2 Transfer of Shares. Transfer of shares of the Corporation
shall
be made only on the stock transfer books of the Corporation by the holder of
record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the
Corporation, and on surrender for cancellation of the certificate for such
shares. The person in whose name shares stand on the books of the
Corporation shall be deemed by the Corporation to be the owner thereof for
all purposes.
Section 7.3 Transfer Agent and Registrar. The Board of Directors shall
have power to appoint one or more transfer agents and registrars for the
transfer and registration of certificates of stock of any class, and may
require
that stock certificates shall be countersigned and registered by one or more
of such transfer agents and registrars.
Section 7.4 Lost or Destroyed Certificates. The Corporation may issue a
new certificate to replace any certificate theretofore issued by it alleged to
have been lost or destroyed. The Board of Directors may require the owner
of such a certificate or his legal representatives to give the Corporation a
bond in such sum and with such sureties as the Board of Directors may direct
to indemnify the Corporation and its transfer agents and registrars, if any,
against claims that may be made on account of the issuance of such new
certificates. A new certificate may be issued without requiring any bond.
Section 7.5 Consideration for Shares. The capital stock of the Corporation
shall be issued for such consideration, but not less than the par value
thereof,
as shall be fixed from time to time by the Board of Directors. In the absence
of fraud, the determination of the Board of Directors as to the value of any
property or services received in full or partial payment of shares shall be
conclusive.
Section 7.6 Registered Shareholders. The Corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder
thereof
in fact, and shall not be bound to recognize any equitable or other claim to
or
on behalf of the Corporation, any and all of the rights and powers incident to
the ownership of such stock at any such meeting, and shall have power and
authority to execute and deliver proxies and consents on behalf of the
Corporation in connection with the exercise by the Corporation of the rights
and powers incident to the ownership of such stock. The Board of Directors,
from time to time may confer like powers upon any other person or persons.
ARTICLE VIII - INDEMNIFICATION
Section 8.1 Indemnification. No officer or director shall be personally
liable for any obligations arising out of any acts or conduct of said officer
or
director performed for or on behalf of the Corporation. The Corporation shall
and does hereby indemnify and hold harmless each person and his heirs and
administrators who shall serve at any time hereafter as a director or officer
of
the Corporation from and against any and all claims, judgments and liabilities
to which such persons shall become subject by reason of any action alleged
to have been heretofore or hereafter taken or omitted to have been taken by
him as such director or officer, and shall reimburse each such person for all
legal and other expenses reasonably incurred by him in connection with any
such claim of liability; including power to defend such person from all suits
as provided for under the provisions of the Nevada Corporation Laws;
provided, however that no such person shall be indemnified against, or be
reimbursed for, any expense incurred in connection with any claim or liability
arising out of his own gross negligence or willful misconduct. The rights
accruing to any person under the foregoing provisions of this section shall
not
exclude any other right to which he may lawfully be entitled, nor shall
anything herein contained restrict the right of the Corporation to indemnify
or reimburse such person in any proper case, even though not specifically
herein provided for. The Corporation, its directors, officers, employees and
agents shall be fully protected in taking any action or making any payment
or in refusing so to do in reliance upon the advice of counsel.
Section 8.2 Other Indemnification. The indemnification herein provided
shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in
his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer or employee and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 8.3 Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer or
employee of the Corporation, or is or was serving at the request of the
Corporation in such capacity for another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against him
and incurred by him in any capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him
against liability under the provisions of this Article VIII or the laws of the
State of Nevada.
Section 8.4 Settlement by Corporation. The right of any person to be
indemnified shall be subject always to the right of the Corporation by its
Board of Directors, in lieu of such indemnity, to settle any such claim,
action,
suit or proceeding at the expense of the Corporation by the payment of the
amount of such settlement and the costs and expenses incurred in connection
therewith.
ARTICLE IX - AMENDMENTS
These Bylaws may be altered, amended, repealed, or added to by the
affirmative vote of the holders of a majority of the shares entitled to vote
in
the election of any director at an annual meeting or at a special meeting
called
for that purpose, provided that a written notice shall have been sent to each
shareholder of record entitled to vote at such meetings at least ten days
before
the date of such annual or special meetings, which notice shall state the
alterations, amendments, additions, or changes which are proposed to be
made in such Bylaws. Only such changes shall be made as have been
specified in the notice. The Bylaws may also be altered, amended, repealed,
or new Bylaws adopted by a majority of the entire Board of Directors at any
regular or special meeting. Any Bylaws adopted by the Board may be
altered, amended, or repealed by a majority of the shareholders entitled to
vote.
ARTICLE X - FISCAL YEAR
The fiscal year of the Corporation shall be December 31, and may be varied
by resolution of the Board of Directors.
ARTICLE XI - DIVIDENDS
The Board of Directors may at any regular or special meeting, as they deem
advisable, declare dividends payable out of the unreserved and unrestricted
earned surplus of the Corporation except the directors may declare dividends
in accordance with the laws of the State of Nevada.
ARTICLE XII - CORPORATE SEAL
The seal of the Corporation shall be in the form of a circle and shall bear
the
name of the Corporation and the year of incorporation.
Adopted by resolution of the Board of Directors the 1st day of November,
1996.
/s/ Waddell D. Loflin
Waddell D. Loflin, Secretary
MEDIA ENTERTAINMENT, INC.
(a Nevada corporation)
EXHIBIT 5.1
_________________________
April 21, 1997
The Board of Directors
Media Entertainment, Inc.
8478 Quarters Lake Road
Baton Rouge, Louisiana 70809
Gentlemen:
We have acted as counsel to Media Entertainment, Inc., a Nevada
corporation (the "Company"), in connection with the preparation and filing
of a Registration Statement on Form S-1 (the "Registration Statement") with
the Securities and Exchange Commission under the Securities Act of 1933,
as amended. The Registration Statement covers 360,000 shares of the $.0001
par value Common Stock (the "Common Stock") of the Company.
As counsel for the Company, we have examined the originals or copies
certified, or otherwise authenticated to our satisfaction, of the corporate
records of the Company and such other documents or certificates of public
officials as we have deemed necessary for the opinions expressed herein.
In rendering the opinions set forth herein, we have assumed (i) the legal
capacity of all natural persons, (ii) the authenticity of all documents
submitted to us as originals and (iii) the conformity to original documents of
all documents submitted to us as copies.
Based upon our examination of such documents, materials, certificates and
information as we have deemed appropriate or relevant for the purpose of
delivering this opinion, but subject to the qualifications set forth herein,
we
are of the following opinion:
1. The Company is duly incorporated and validly existing and in good
standing under the laws of the State of Nevada.
2. The 360,000 shares of the Common Stock owned by Entertainment
Corporation of America, a Delaware corporation, are validly issued and were
duly authorized for issuance by the Board of Directors of the Company at a
valid meeting thereof, after due consideration by the Board of the facts and
circumstances surrounding such issuance, legally issued in accordance with
the laws of the State of Nevada, and an appropriate stock certificate
representing such shares of Common Stock has been issued. Also, such
360,000 shares of Common Stock are fully paid and non-assessable.
The foregoing is based solely on the facts stated herein. No opinion
contained herein shall be construed to infer an opinion relating to any other
situation, unless such opinion is stated expressly herein.
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement and to the use of our name in the Prospectus forming
part of the Registration Statement.
Sincerely,
/s/
NEWLAN & NEWLAN
EXHIBIT 8.1
____________________________
April 21, 1997
The Board of Directors
Media Entertainment, Inc.
8478 Quarters Lake Road
Baton Rouge, Louisiana 70809
Gentlemen:
We have acted as tax counsel to Media Entertainment, Inc., a Nevada
corporation (the "Company"), in connection with the preparation of the
"Federal Income Taxes" caption of the Prospectus forming part of a
Registration Statement on Form S-1 (the "Registration Statement") filed by
the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended.
The Registration Statement covers 360,000 shares of the $.0001 par value
Common Stock (the "Common Stock") of the Company to be distributed as
a dividend to the shareholders of Entertainment Corporation of America, a
Delaware corporation ("ECA").
The 360,000 shares of the Common Stock have been issued by the
Company to ECA and will be distributed (the "Distribution") to all holders
of record on March 15, 1997 (the "Record Date"), of Common Stock of ECA
on the effective date of the Registration Statement.
Holders of ECA Common Stock will not be charged or assessed for the
dividend stock. Neither ECA nor the Company will receive any proceeds
from the Offering. ECA will report the Distribution of the Common Stock
of the Company as a distribution subject to the provisions of Section 301 of
the Internal Revenue Code of 1986, as amended (the "Code").
For purposes of rendering the opinions hereinafter set forth, we have
examined (a) the Registration Statement and the Prospectus included as a part
thereof (the "Prospectus") and (b) such other documents and instruments as
we have deemed necessary or relevant. Based solely upon such examination
and our interpretation of existing Federal Income Tax Laws, Court decisions,
Treasury Department Regulations, and Internal Revenue Service Rulings, we
are of the opinion that the Federal Income Tax consequences to the
distributees of the Common Stock will be as follows:
1. Under Section 311(b) of the Code, ECA will recognize gain as a
result
of the Distribution to the extent that the fair market value of the Common
Stock distributed exceeds its adjusted basis in the hands of ECA. For this
purpose, ECA will be treated as though it had sold the Common Stock to its
shareholders at its fair market value. On the other hand, if the fair market
value of the Common Stock is less than its adjusted basis in the hands of
ECA, ECA will recognize no loss as a result of the Distribution.
2. The Distribution will be taxable to ECA's shareholders pursuant to
Section 301 of the Code.
3. With respect to a non-corporate distributee, the amount of the
Distribution will be the fair market of the Distribution to such distributee
determined as of the date of the Distribution. Under Sections 301(c) and
316(a) of the Code, the amount of the Distribution will be a dividend to the
extent the Distribution is made out of ECA'S current or accumulated
earnings and profits computed as of the close of the tax year in which the
Distribution occurs.
The portion, if any, of the Distribution which is not a dividend
will
reduce the adjusted basis of the ECA Common Stock in the hands of the
non-corporate distributees. That portion (if any) of the Distribution which
is
not a dividend, to the extent that such portion exceeds the adjusted basis of
such ECA Common Stock, will be treated as gain from the sale or exchange
of property. Such gain will be capital gain if such ECA Common Stock is
a capital asset in the hands of such distributee and will be either long-term
or
short-term depending on whether he has held such stock for more than twelve
months. The holding period of the Common Stock to be distributed will
commence on the day following the date of the Distribution.
4. The tax basis to the non-corporate distributee of the Common Stock
to be distributed will be the fair market value of such Common Stock on the
date of the Distribution.
5. With respect to a corporate distributee, the amount of the
Distribution
will be the lesser of: (i) the fair market value of the Distribution,
determined
as of the date of the Distribution, or (ii) the adjusted basis (in the hands
of
ECA immediately prior to the Distribution) of the Common Stock to be
distributed increased by the amount of gain recognized to ECA on the
Distribution. However, under Section 301(b) of the Code, if the distributee
is a foreign corporation, and if the amount received by such foreign
corporation is not effectively connected with the conduct by it of a trade or
business within the United States, the amount of the Distribution to such
foreign corporation will be the fair market value of the Distribution
determined as of the date of the Distribution. Under Sections 301(c) and
316(a) of the Code, the amount of the Distribution will be a dividend to the
extent the Distribution is made out of ECA's current or accumulated earnings
and profits computed as of the close of the tax year in which the Distribution
occurs. A corporate distributee may be entitled to the dividends received
deduction, which generally would allow it a deduction, subject to certain
limitations from its gross income, of 80% of the amount of the dividend (if
any).
The portion, if any, of the Distribution which is not a dividend
will
reduce the adjusted basis of the ECA Common Stock in the hands of the
corporate distributee. That portion (if any) of the Distribution which is not
a dividend, to the extent that such portion exceeds the adjusted basis of such
ECA Common Stock will be treated as gain from the sale or exchange of
property. Such gain will be capital gain if such ECA Common Stock is a
capital asset in the hands of such distributee and will be either long-term or
short-term depending on whether it has held such stock for more than twelve
months.
6. The tax basis to the corporate distributee of the Common Stock to be
distributed will be the lesser of: (i) the fair market value of such Common
Stock on the date of the Distribution, or (ii) the adjusted basis (in the
hands
of ECA immediately before the Distribution) of the Common Stock to be
distributed, increased in the amount of gain recognized to ECA on the
Distribution. However, under Section 301(d)(3) of the Code, if such
distributee is a foreign corporation, and if the amount received by such
foreign corporation is not effectively connected with the conduct by it of a
trade or business within the United States, the tax basis of the Common Stock
to be distributed will be the fair market value of the Distribution determined
as of the date of the Distribution.
7. The determination of the holding period with respect to a corporate
distributee of the Common Stock to be distributed does not appear settled.
A corporate distributee (which is not a foreign corporation of the type
described in paragraph 6 above) could contend that such holding period
includes the period for which the Common Stock to be distributed was held
by ECA. Such position would be predicated on the theory that since the tax
basis (as described above) of the Common Stock to such corporate distributee
might be the adjusted basis of the Common Stock in the hands of ECA
pursuant to Section 1223(2) of the Code, which provides that the holding
period of the property, however acquired, shall include the period for which
such property was held by any other person where such property has, for
determining gain or loss from a sale or exchange, the same basis (in whole
or in part) in his hands as it would have in the hands of such other person.
However, the Internal Revenue Service might take the position that Section
1223(2) of the Code is not applicable to the Distribution and, consequently,
that the holding period of the Common Stock to be distributed will
commence on the day following the date of the Distribution. Based on a
reasonable interpretation of the applicable statutes, regulations, ruling and
judicial decisions, the holding period of the Common Stock to be distributed
to corporate distributees will commence on the day following the
Distribution.
8. In the absence of a trading market for the Common Stock, "fair
market
value" should be calculated in accordance with Revenue Ruling 59-60
1959(1) C.B. 237, which sets forth certain factors to be considered in making
such determination.
We hereby consent to the inclusion of this opinion as an Exhibit to the
Registration Statement and to the reference in the Prospectus to our firm
under the heading of "Federal Income Taxes".
Persons reviewing this opinion should be aware that:
1. Statutes, regulations and rulings with respect to all of the
foregoing tax
matters are subject to change by Congress or by the Department of the
Treasury, and the interpretation of such statutes, regulations and rulings
may
be modified or affected by judicial decision or by the Department of the
Treasury. Because of continual changes by Congress, the Treasury
Department and the Courts with respect to the administration and
interpretation of the tax laws, no assurance can be given that the foregoing
opinions and interpretations will not be challenged by the Internal Revenue
Service, or, if challenged, that such opinions and interpretations will be
sustained.
2. Each individual taxpayer's situation will be different from that of
each
other taxpayer. Accordingly, we recommend that the respective distributees
be advised to seek their own personal tax counsel with respect to the tax
considerations discussed above.
3. No opinion in any matter not expressly stated should be inferred
from
the opinions set forth herein.
Sincerely,
/s/
NEWLAN & NEWLAN
EXHIBIT 10.1
________________________________________
November 15, 1996
Mr. John D. Kirkendoll, President
Entertainment Corporation of America
Re: Purchase of Stock and Agreement
for Dividend Distribution
Dear Mr. Kirkendoll:
As you know, we have determined to become a publicly-held company and
have decided to employ the distributive registration technique by which to
accomplish this goal. You indicated that your company has approximatley
900 shareholders and that it is your desire to add value to the ownership of
your company's stock through dividend distributions of other companies'
stock.
Let this letter, then, serve to memorialize our oral agreement relating to the
purchase by Entertainment Corporation of America, a Delaware corporation
("ECA"), of shares of common stock, $.0001 par value per share (the
"Common Stock") of Media Entertainment, Inc., a Nevada corporation
("MEI"), and the distribution of such Common Stock to the shareholders of
ECA, pursuant to an effective Registration Statement on file with the
Securities and Exchange Commission ("SEC"). Our agreement is as follows:
1. In consideration of a cash payment of $360.00 by ECA, MEI agrees to
issue to ECA a total of 360,000 shares of MEI's Common Stock, which
amount of Common Stock shall represent 6% of the outstanding Common
Stock of MEI as of December 31, 1996, on which date MEI will have
completed its first step of capitalization.
2. ECA agrees to declare a dividend with respect to all of the shares of MEI
Common Stock purchased by ECA, whereby ECA would distribute, as a
property dividend, the shares of MEI Common Stock pro rata to its
shareholders.
3. MEI agrees to file with the Securities and Exchange Commission, and
bring to effectiveness, a Registration Statement on Form S-1 with respect to
the dividenddistribution of the MEI Common Stock to the shareholders of
ECA. MEI further agrees and undertakes to pay all of the expenses relating
to the preparation, filing and bringing to effectiveness of such Registration
Statement, including, without limitation, legal fees, accounting fees, SEC
filing fees, Blue Sky filing fees, transfer agent fees, courier fees and
copying
fees. In addition, MEI agrees and undertakes to pay all of the expenses
relating specifically to the dividend distribution, including, without
limitation, prospectus printing fees and postage.
4. MEI agrees to indemnify ECA, its directors and officers against expenses
and liabilities they incur to defend, settle or satisfy any civil, including
any
action alleging negligence, or criminal action brought against them as a
result
of ECA's entering into the agreement memorialized herein, unless, in any
such action, they are judged to have acted with gross negligence or willful
misconduct. In the opinion of the SEC, such indemnification is against
public policy as expressed in the Securities Act of 1933, as amended, and is,
therefore, unenforceable.
5. ECA agrees to cooperate fully with MEI, its counsel and accountants as
may be necessary to effectuate the preparation, filing and bringing to
effectiveness of the Registration Statement relating to the dividend
distribution.
Should the foregoing accurately reflect your understanding of our agreement,
please sign below in the appropriate place and return to the undersigned.
Thank you for your attention.
Sincerely,
/s/ David M. Loflin
David M. Loflin
President
AGREED AND ACCEPTED:
ENTERTAINMENT CORPORATION OF AMERICA
By: /s/ John D. Kirkendoll
John D. Kirkendoll
President
tate of Louisiana ("Loflin"),
in light of the following facts:
1. MEI is a development-stage communications company operating
primarily within the wireless cable and community television
industries; and
2. Loflin is the owner of certain assets useful in the wireless cable
and community television industries; and
3. Loflin desires to sell such assets in exchange for Common Stock
of MEI.
WITNESSETH:
THEREFORE, the agreement of the parties, the promises of each being
consideration for the promises of the other:
I. DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Agreement" shall mean this Subscription Agreement and all exhibits
hereto or amendments hereof.
(b) "Loflin" shall mean David M. Loflin, an individual resident of the State
of Louisiana.
(c) "MEI" shall mean Media Entertainment, Inc., a Nevada corporation with
offices in Baton Rouge, Louisiana.
(d) "Knowledge of MEI" or matters "known to MEI" shall mean matters
actually known to the Board of Directors or officers of MEI, or which
reasonably should be or should have been known by them upon reasonable
investigation.
(e) "Securities Act" shall mean the Securities Act of 1933, as amended, and
includes the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, as such shall then be in effect.
(f) "Louisiana Act" shall mean the Securities Act of Louisiana, and includes
the rules and regulations of the Louisiana Securities Commission
promulgated thereunder, as such shall then be in effect.
Any term used herein to which a special meaning has not been ascribed shall
be construed in accordance with either (i) the context in which such term is
used, or (ii) the definition provided for such term in the place in this
Agreement at which such term is first used.
II. DISCLOSURES
MEI is a development stage company with no history of operations and
which has not yet begun to do business in its chosen field of endeavor. It
intends to operate as a holding company in the wireless cable and community
television industries, among other endeavors.
III. PURCHASE AND SALE
Loflin hereby sells to MEI and MEI hereby buys from Loflin all of the assets
set forth in Exhibit "A" attached hereto and incorporated herein by this
reference in consideration of 1,578,512 shares of the $.0001 par value
Common Stock of MEI, at the price set forth below, subject to all of the
terms and conditions set forth herein.
IV. PURCHASE PRICE - PAYMENT
Loflin shall deliver to MEI assignments conveying each of the assets listed
in Exhibit "A" hereto, for a price of $1,826,873, payable by issuance and
delivery by MEI to Loflin of 1,578,512 shares of the $.0001 par value
Common Stock of MEI, a consideration of $1.157 per share.
V. THE EXCHANGE
Loflin agrees to deliver to MEI assignments conveying each of the assets
listed in Exhibit "A" hereto, wherein title in and to all of the assets is
transferred to MEI. Upon delivery of such assignments by Loflin, MEI shall
deliver to Loflin a certificate representing 1,578,512 shares of the $.0001
par
value Common Stock of MEI, properly executed and issued.
VI. REPRESENTATIONS AND WARRANTIES OF MEI
MEI represents and warrants to Loflin:
(a) Organization and Corporate Authority. MEI is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada. MEI has all requisite corporate power and authority,
governmental permits, consents, authorizations, registrations, licenses and
memberships necessary to own its property and to carry on its business in the
places where such properties are now owned and operated or such business
is being conducted.
(b) Issuance of the Common Stock. The shares of $.0001 par value
Common Stock of MEI to be issued hereunder, when issued and delivered in
accordance with this Agreement, will be duly and validly issued, fully paid
and non-assessable, and will be free and clear of any liens or encumbrances
and, to the knowledge of MEI, will be issued in compliance with applicable
state and federal laws.
(c) Compliance with Agreements. The execution and performance of this
Agreementwill not result in any violation or be in conflict with any
agreement to which MEI is a party.
(d) Authorization. All corporate action on the part of MEI and its officers,
directors and shareholders necessary for the authorization, execution and
delivery of this Agreement, for the performance of MEI's obligations
hereunder and for the issuance and delivery of the $.0001 par value Common
Stock of MEI. This Agreement, when executed and delivered, shall
constitute a legal, valid and binding obligation of MEI.
(e) Legality of Share Issuance. MEI warrants that the Common Stock to be
issued hereto will be legally issued without registration under the Securities
Act or the Louisiana Act pursuant to applicable exemptions from registration
thereunder.
VII. REPRESENTATIONS AND WARRANTIES OF LOFLIN
(a) Title to Assets. Loflin owns each of the assets listed in Exhibit "A"
hereto, free and clear of adverse claims, liens or encumbrances.
(b) Legal Capacity. Loflin is under no legal disability with respect to the
execution and performance of this Subscription Agreement.
(c) Investment Intent of Shareholder. Loflin represents and warrants that
the
shares of MEI Common Stock acquired hereunder by Loflin are being
purchased by him solely for his own account for investment purposes only
and not for the account of any other person and not for distribution,
assignment or resale to others.
(d) Restrictive Legend. Loflin further consents to the placement of the
following legend, or a legend similar thereto, on the certificate or
certificates
representing shares of MEI Common Stock deliverable hereunder:
THESE SECURITIES HAVE BEEN ISSUED IN RELIANCE UPON THE
EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 4(2)
OF THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE TRANSFERRED WITHOUT AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT
ANY SUCH PROPOSED TRANSFER IS IN ACCORDANCE WITH ALL
APPLICABLE LAWS, RULES AND REGULATIONS.
VIII. MISCELLANEOUS
Survival of Covenants. Unless otherwise waived as provided herein, all
covenants agreements, representations and warranties of the parties made in
this Agreement and in the financial statements or other written information
delivered or furnished in connection therewith and herewith shall survive the
Exchange hereunder, and shall be binding upon, and inure to the benefit of,
the parties and their respective successors and assigns.
Governing Law. This Agreement shall be deemed to be a contract made
under, governed by and construed in accordance with the substantive laws of
the State of Louisiana.
Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which when so executed and delivered shall be taken to
be an original; but such counterparts shall together constitute but one and
the
same documents.
Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors or assigns of the parties hereto.
Entire Agreement. This Agreement, the other agreements and the other
documents delivered pursuant hereto and thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
day and year first above written.
MEDIA ENTERTAINMENT, INC.
(a Nevada corporation)
By: /s/ Waddell D. Loflin
Waddell D. Loflin
Vice President
/s/ David M. Loflin
David M. Loflin, individually
EXHIBIT 10.3
________________________________________
SUBSCRIPTION AGREEMENT
This Subscription Agreement is entered into as of December 20, 1996, by and
between Media Entertainment, Inc., a Nevada corporation, ("MEI"), and
Waddell D. Loflin, an individual resident of the State of Louisiana
("Loflin"),
in light of the following facts:
1. MEI is a development-stage communications company operating
primarily within the wireless cable and community television
industries; and
2. Loflin is the owner of certain assets useful in the community
television industry; and
3. Loflin desires to sell such assets in exchange for Common Stock
of MEI.
WITNESSETH:
THEREFORE, the agreement of the parties, the promises of each being
consideration for the promises of the other:
I. DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Agreement" shall mean this Subscription Agreement and all exhibits
hereto or amendments hereof.
(b) "Loflin" shall mean Waddell D. Loflin, an individual resident of the
State
of Louisiana.
(c) "MEI" shall mean Media Entertainment, Inc., a Nevada corporation with
offices in Baton Rouge, Louisiana.
(d) "Knowledge of MEI" or matters "known to MEI" shall mean matters
actually known to the Board of Directors or officers of MEI, or which
reasonably should be or should have been known by them upon reasonable
investigation.
(e) "Securities Act" shall mean the Securities Act of 1933, as amended, and
includes the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, as such shall then be in effect.
(f) "Louisiana Act" shall mean the Securities Act of Louisiana, and includes
the rules and regulations of the Louisiana Securities Commission
promulgated thereunder, as such shall then be in effect.
Any term used herein to which a special meaning has not been ascribed shall
be construed in accordance with either (i) the context in which such term is
used, or (ii) the definition provided for such term in the place in this
Agreement at which such term is first used.
II. DISCLOSURES
MEI is a development stage company with no history of operations and
which has not yet begun to do business in its chosen field of endeavor. It
intends to operate as a holding company in the wireless cable and community
television industries, among other endeavors.
III. PURCHASE AND SALE
Loflin hereby sells to MEI and MEI hereby buys from Loflin all of the assets
set forth in Exhibit "A" attached hereto and incorporated herein by this
reference in consideration of 104,249 shares of the $.0001 par value Common
Stock of MEI, at the price set forth below, subject to all of the terms and
conditions set forth herein.
IV. PURCHASE PRICE - PAYMENT
Loflin shall deliver to MEI assignments conveying each of the assets listed
in Exhibit "A" hereto, for a price of $120,652, payable by issuance and
delivery by MEI to Loflin of 104,249 shares of the $.0001 par value Common
Stock of MEI, a consideration of $1.157 per share.
V. THE EXCHANGE
Loflin agrees to deliver to MEI assignments conveying each of the assets
listed in Exhibit "A" hereto, wherein title in and to all of the assets is
transferred to MEI. Upon delivery of such assignments by Loflin, MEI shall
deliver to Loflin a certificate representing 104,249 shares of the $.0001 par
value Common Stock of MEI, properly executed and issued.
VI. REPRESENTATIONS AND WARRANTIES OF MEI
MEI represents and warrants to Loflin:
(a) Organization and Corporate Authority. MEI is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada. MEI has all requisite corporate power and authority,
governmental permits, consents, authorizations, registrations, licenses and
memberships necessary to own its property and to carry on its business in the
places where such properties are now owned and operated or such business
is being conducted.
(b) Issuance of the Common Stock. The shares of $.0001 par value
Common Stock of MEI to be issued hereunder, when issued and delivered in
accordance with this Agreement, will be duly and validly issued, fully paid
and non-assessable, and will be free and clear of any liens or encumbrances
and, to the knowledge of MEI, will be issued in compliance with applicable
state and federal laws.
(c) Compliance with Agreements. The execution and performance of this
Agreementwill not result in any violation or be in conflict with any
agreement to which MEI is a party.
(d) Authorization. All corporate action on the part of MEI and its officers,
directors and shareholders necessary for the authorization, execution and
delivery of this Agreement, for the performance of MEI's obligations
hereunder and for the issuance and delivery of the $.0001 par value Common
Stock of MEI. This Agreement, when executed and delivered, shall
constitute a legal, valid and binding obligation of MEI.
(e) Legality of Share Issuance. MEI warrants that the Common Stock to be
issued hereto will be legally issued without registration under the
Securities
Act or the Louisiana Act pursuant to applicable exemptions from registration
thereunder.
VII. REPRESENTATIONS AND WARRANTIES OF LOFLIN
(a) Title to Assets. Loflin owns each of the assets listed in Exhibit "A"
hereto, free and clear of adverse claims, liens or encumbrances.
(b) Legal Capacity. Loflin is under no legal disability with respect to the
execution and performance of this Subscription Agreement.
(c) Investment Intent of Shareholder. Loflin represents and warrants that
the
shares of MEI Common Stock acquired hereunder by Loflin are being
purchased by him solely for his own account for investment purposes only
and not for the account of any other person and not for distribution,
assignment or resale to others.
(d) Restrictive Legend. Loflin further consents to the placement of the
following legend, or a legend similar thereto, on the certificate or
certificates
representing shares of MEI Common Stock deliverable hereunder:
THESE SECURITIES HAVE BEEN ISSUED IN RELIANCE UPON THE
EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 4(2)
OF THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE tRANSFERRED WITHOUT AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT
ANY SUCH PROPOSED TRANSFER IS IN ACCORDANCE WITH ALL
APPLICABLE LAWS, RULES AND REGULATIONS.
VIII. MISCELLANEOUS
Survival of Covenants. Unless otherwise waived as provided herein, all
covenants agreements, representations and warranties of the parties made in
this Agreement and in the financial statements or other written information
delivered or furnished in connection therewith and herewith shall survive the
Exchange hereunder, and shall be binding upon, and inure to the benefit of,
the parties and their respective successors and assigns.
Governing Law. This Agreement shall be deemed to be a contract made
under, governed by and construed in accordance with the substantive laws of
the State of Louisiana.
Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which when so executed and delivered shall be taken to
be an original; but such counterparts shall together constitute but one and
the
same documents.
Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors or assigns of the parties hereto.
Entire Agreement. This Agreement, the other agreements and the other
documents delivered pursuant hereto and thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
day and year first above written.
MEDIA ENTERTAINMENT, INC.
(a Nevada corporation)
By: /s/ David M. Loflin
David M. Loflin
President
/s/ Waddell D. Loflin
Waddell D.Loflin, individually
EXHIBIT 10.4
_______________________________
LEASE
THIS LEASE made and entered this 2nd day of December, 1996, by and
between 8674 Corporation, a Louisiana corporation, hereinafter called
"Lessor", and Media Entertainment, Inc. hereinafter called "Lessee".
1. Lessor does hereby lease unto Lessee and Lessee does hereby lease and
take from Lessor for the term and on the conditions set forth in this Lease
that
certain property of approximately 425 square feet located at 8748 Quarters
Lake Road, Suite 1 and 2, Baton Rouge, Louisiana 70809.
2. The term of this Lease shall be month to month, beginning on the 15th day
of December, 1996. Lessor covenants to deliver actual possession of the
demised premises as soon as possible and rent shall be pro-rated from that
date.
3. As consideration for this Lease and the covenants of Lessor herein
contained, Lessee shall pay to Lessor, based on an annual cash rental of six
thousand five hundred eighty three and 20/100 dollars ($6,583.20), herein
referred to as the "base rent", payable in monthly installments of $five
hundred forty eight and 60/100 dollars ($548.60) on the first day of each
month in advance.
4. Lessee intends to use the demised premises for the conduct of its
business,
and it is agreed that such use is a lawful use of the demised premises.
Lessee
shall at all times use the demised premises in accordance with all applicable
laws, ordinances and regulations of any governmental body governing use of
the demised premises and shall at all times keep the demised premises free and
clear from any nuisance of filth thereon. Lessee and all employees of Lessee
shall not dispose of refuse in the parking area, walkways or surrounding
grounds. Further, Lessee covenants Lessee and all employees of Lessee shall
maintain proper decorum and not act in a loud and/or boisterous manner and
further allow other Lessee's quite enjoyment of the demised premises.
5. Lessor shall at Lessor's cost be responsible for structural maintenance
and
repairs, and for all the maintenance and repair of the exterior of the
building
including the paved parking area, sidewalks, and all windows and window
glass. Lessor shall also maintain, at his sole cost, the heating, air
conditioning,
lighting, electrical, plumbing and other utility systems in good condition and
repair and shall effect such repairs and maintenance thereto that shall be
required to maintain the demised premises in good condition and repair.
Lessor will, at Lessor's cost, be responsible for routine interior maintenance
of the building, including, painting, light bulb tubes and air conditioning
filters.
6. Lessor will provide at Lessor's cost, janitorial services required within
the
demised premises and Lessor will pay for utility services consumed within the
demised premises. However, Lessee shall take all steps a prudent business
person would take to reduce said utility costs. Lessor shall provide adequate
garbage and water service at Lessor's sole cost. Lessor shall further provide
Lessee free use of a reception area and free scheduled use of a conference
room and shall collect and deposit Lessee's mail in the United States Mail
each afternoon.
7. Lessee shall have the right to make alterations or improvements to the
demised premises, subject to Lessor's written consent, which consent would
not be reasonably withheld, and at Lessee's cost. Any improvements,
alterations or additions made by Lessee shall be made in accordance with
applicable laws, ordinances and regulations of any governmental body
jurisdiction thereof. Any attached improvements (exclusive of those used in
Lessee's business) shall remain in the building at the end of the Lease
period.
8. Lessor shall carry, at its own cost, free and extended coverage insurance,
and vandalism and malicious mischief insurance and outside liability insurance
on the demised premises and the property of which the demised premises are
a part to the extent Lessor shall deem appropriate. Lessee shall carry at its
own cost, fire and extended coverage, insurance and vandalism insurance and
malicious mischief insurance on the property of the Lessee placed in or upon
the demised premises to the extent that Lessee shall deem appropriate.
9. If the demised premises are damaged or destroyed and if they can be
restored so that they will not be untenantable for a period in excess of sixty
(60) days, the premises shall be restored promptly by Lessor at Lessor's cost
and there shall be an equitable abatement of rent for actual impairment of use
by Lessee during the period prior to restoration. If the demised premises are
damaged or destroyed so that they cannot be restored within sixty (60) days,
then either party shall have the option of terminating this Lease by giving
written notice of termination to the other within thirty (30) days of such
damage or destruction; if neither party elects to terminate the Lease, the
premises shall be restored promptly at Lessor's cost and there shall be an
equitable abatement of rent for actual impairment of use by Lessee during the
period prior to restoration.
10. If the entire demised premises or such of the demised premises that the
conduct of Lessee's business thereon shall be substantially impaired or shall
be taken by exercise of a right of eminent domain or shall be conveyed under
threat of condemnation, this Lease shall terminate on the date of passage of
title to the authority exercising the right of eminent domain and the rent
shall
be adjusted to that date. If part of the demised premises shall be taken by
exercise of a right of eminent domain or conveyed under threat of
condemnation and if the conduct of Lessee's business on the demised
premises shall not be substantially impaired thereby, then this Lease shall
continue in full force and effect except that there shall be, from the date of
passage of title for the part taken or conveyed to the condemning authority,
an abatement of rent sufficient to compensate Lessee for the loss of use of
the
part so taken or conveyed. If part of the building shall be so taken or
conveyed and this Lease shall continue, Lessor shall promptly, at its cost,
repair and restore the building to a complete architectural unit, and there
shall
be an equitable abatement of rent for actual impairment of use by Lessee
during the period prior to restoration.
11. Lessor covenants that Lessee, upon paying the rent herein reserved and
performing the covenant and agreements herein contained to be performed by
Lessee, shall peacefully and quietly have, hold and enjoy the demised premises
during the term and any extended term of this Lease, and Lessor shall protect
Lessee's right to use the parking area adjacent to the demised premises.
12. All personal property including partitions and equipment placed on or in
the demised premises by Lessee, shall remain the property of Lessee, whether
or not physically attached to the demised premises, and the Lessee may
remove such property at any time during the term of this Lease, but Lessee
shall, at its cost, repair any damage to the demised premises covered by the
removal of such property to the satisfaction of Lessor.
13. Lessee shall have the right to assign this Lease or sublet the demised
premises with Lessor's written consent, such consent not to be unreasonably
withheld.
14. It is agreed as a further condition of this Lease, at the filing of any
petition in bankruptcy or insolvency, by or against the Lessee, shall be
deemed
to constitute a breach of the Lease and shall ipso facto and without notice of
default or any other action by Lessor, terminate this Lease with Lessee being
liable for damages in the amount equal to the balance of the rent and any
other
monetary covenants of the Lease.
It shall be a default when Lessee fails to pay any rent when due or fails to
pay
any other money covenant contained herein, the noncompliance with any
other terms and conditions of this Lease, which default shall, at the option
of
Lessor, accelerate the entire balance of Lease payments due for the remainder
of the term of this Lease, together with an additional twenty percent (20%)
of the amount due for attorneys fees; alternatively, Lessor shall have the
option in the event of a default to cause the Lessee to be evicted from
possession of the premises and Lessor restored to such possession. Lessor
shall be required to proved Lessee with written notice only of any non-
monetary default and in such notice Lessor shall state the nature of the
default
and provide Lessee five (5) days from the receipt of such notice by Lessee to
cure the default before taking any action against Lessee as proved for
herein.
This notice shall not be required when the default is the nonpayment of rent
or any other monetary covenant.
15. In the event Lessor shall fail to perform any covenant of Lessor or
comply with any other condition imposed on Lessor under this Lease, Lessee
may give notice in writing to Lessor specifying the nature of such default.
If
Lessor shall fail to cure such default within thirty (30) days after the date
of
such notice or if such default is such that it cannot reasonably be cured
within
thirty (30) days from the date of such notice, then if Lessor shall fail to
use
reasonable diligence in curing such default, Lessee may take such reasonalbe
steps as it may deem necessary to cure such default, and if any expense shall
be incurred thereby, Lessee may reimburse itself therefor from the amount due
Lessor under the Lease, but only after Lessee has provided Lessor with an
itemized statement of such expense and allowed Lessor ten (10) days to
directly reimburse Lessee for such expense.
16. The base rent set forth in Clause 3 of this Lease has been fixed in part
to
cover present and future real estate and property taxes levied on the land and
building which comprise the deemised premises. In the event Lessee is in
possession of the demised premises during the period hereinafter covered, and
in the event such taxes for the tax year subsequent to the period covered by
the 994 tax bill are increased, then Lessee will pay its pro-rata portion of
such
increase or increases, not to exceed five percent (5%) of the base rent per
year, as additional rent with the amount of the increase divided by twelve
with
1/12 of such increase added to each of the succeeding twelve months' rental
payments. A receipted tax bill shall be sufficient evidence of the amount of
taxes so imposed. This provision shall apply to the renewal terms as provided
below for years subsequent to 1994 and any further extended terms of this
Lease.
17. Lessor, upon notification from Lessee of Lessee's desire to Lease
additional office space, shall allow Lessee the first right to Lease or refuse
said space prior to leasing said space to any other person(s) or business
organizations.
18. The base rent provided for in clause 3, in the event the Lessee retains
possession of the demised property for one year or longer, shall be increased
three percent (3%) of the base rent on each annual anniversary date of the
Lease for as long as the Lease shall remain in effect.
19. Immediately upon termination of this Lease, by expiration of the Lease
term, or any extended Lease term, or otherwise, Lessee and any assignee or
sublessee of Lessee, will quit and immediatley deliver possession of the
demised premises to Lessor without notice or process of law, and no holdover
of possession, with or without consent of Lessor, shall effect an extension of
renewal of this Lease.
20. No waiver of any forfeiture by acceptance of rent or otherwise shall
constitute a waiver of any subsequent cause of forfeiture or breadch of any
term or condition of thsi Lease.
21. Any notice to be given under this Lease by Lessor or Lessee shall be
given in writing and shall be mailed by registered mail to Lessee or Lessor as
appropriate and addressed as follows:
Lessor: Lessee:
8674 Corporation Media Entertainment, Inc.
8674 Quarters Lake Rd. 8748 Quarters Lake Rd.
Baton Rouge, LA 70809 Baton Rouge, LA 70809
or to such address as Lessor or Lessee may direct in writing from time to
tiem. Any notice so given shall be deemed given when mailed.
22. We hereby acknowledge receipt of the keys to suites #1 & 2, the upper
and lower locks. Lessee agrees that the above described key(s) shall be
returned to Lessor upon termination of this Lease, at which time said deposit
shall be refunded. Lessee further agrees, if for any reason, the above-
described key(s) are lost, stolen or otherwise not returned to Lessor and it
is
determined by Lessor the security of the Leased building is jeopardized,
Lessee agrees to re-key, at Lessee's cost, all locks affected by the
unreturned
key(s).
23. This Lease attached hereto, which is incorporated herein by reference,
constitute the entire agreement between the parties.
IN WITNESS WHEREOF, the parties have exectuve this Agreement on the
date below written.
LESSOR:
8674 Corporation /s/
By: /s/ Date: 12/2/96 Witness
LESSEE:
Media Entertainment, Inc. /s/
By: /s/ David M. Loflin Date: 12/2/96 Witness
EXHIBIT 10.5
________________________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Vincie Pritchard (the "Lease")
for the operation of one (1) Low Power Television station in Poplar Bluff,
MO, having the Call sign K26EC and operating on channel 26 (the
"Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution of
this
agreement.
3. Assignor herein further represents and warrants that he has full power
and
authority to execute and deliver this agreement and to conclude the
transaction contemplated herein. Assignor also represents and warrants that
the has all the rights, title, and interest to the Lease and the Channel and
that
there are no existing or anticipated liabilities or legal action associated
with
the Lease or the Channel, to the best of his knowledge and Assignor has not
transferred (or agreed to transfer), nor will it transfer prior to the
completion
of the transaction contemplated herein, any portion of his interest in the
Lease
or the Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of the
Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid, to the
Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction. It is expressly
understood, however, that the Parties hereto intend each and every provision
of this Agreement to be valid and enforceable and hereby knowingly waive
all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws of the
state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24 day
of June, 1995 by and between Northeast Telecom Inc. (NTI), and Vincie
Pritchard ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of Low Power Television ("LPTV") stations as defined
in Section 74.701(F) of the Commission's Rules, to provide subscription
television ("STV") service on their authorized channels, subject to FCC rules
and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 26 at Poplar Bluff, Mo. (Call Sign K26EC), and has determined that
it desires to provide STV service on such Channel on a twenty-four (24) hour
per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
1. Definitions. As used in this Agreement, the following terms shall have
the meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and data
programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign K26EC) which
issued by the FCC to Permittee to construct the Channel and provide service
on the Channel on a seven (7) day per week, twenty (24) hours per day basis,
and shall specifically include any regular, modified or renewal authorizations
to operate the Channel.
1.3 License Date means the date on which a License Application is filed with
the FCC certifying the completion of construction of the transmission
facilities, but not later than the date specified on the Construction Permit,
unless extended.
1.4 Transmission Facilities means the equipment and facilities to be owned
by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement, including
without limitation restaurants, bars, offices and businesses that receive LPTV
Service under contract with NTI or under rights granted by NTI.
2. Term. The term of this Agreement shall begin on the date hereof and
shall continue for a period of ten (10) years following the License Date,
provided that Permittee's authorization to operate the Channel has been
renewed as necessary by the FCC. Permittee shall use its reasonable best
efforts to obtain such renewals. This Agreement shall be authormatically
renewed for an additional ten (10) years, unless NTI shall have submitted to
Permittee at least six (6) months' advance written notice of its intent to
terminate this Agreement upon the expiration of the initial term.
3. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel for STV
services seven (7) days per week, twenty-four (24) hours per day, subject to
FCC Rules and Regulations and all of the terms and conditions set forth in
this Agreement. For purposes of this Agreement, such transmission on the
Channel shall include all rights to transmit both video programming and data
over the entire frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions of service
to Subscribers uniformly; provided, however, that: (a) Subscribers may be
divided into reasonable classifications approved by the FCC, and the
imposition of different sets of conditions may be applied to Subscribers in
different classifications; and (b) for good cause, within such
classifications,
deposits may be required of some Subscribers and not of others.
4. Control of Facilities. Notwithstanding anything in this Agreement to the
contrary, Permittee, as the FCC permittee for the Channel, shall be
responsible for compliance with all applicable FCC rules and regulations.
Permittee shall have control, in operation, management and maintenance of
the station to the extent necessary to comply with such rules and regulations,
of the construction, operation, management and maintenance of the station
to the extent necessary to comply with such rules and regulations. Nothing
in this Agreement shall be construed to: (a) prevent or hinder Permittee
from
rejecting or refusing any STV broadcast program that it reasonably believes
to be unsatisfactory, unsuitable or contrary to the public interest, or from
substituting a program that in its opinion is of greater local or national
importance; (b) deprive Permittee of the right of ultimate decision concerning
the maximum amount of any STV program charge or fee; or (c) delegate to
any other individual or entity ultimate authority over the scheduling of STV
programs.
5. Payments. In consideration of Permittee's agreement to permit NTI to
transmit on the Channel, NTI agrees to pay Permittee a monthly transmission
fee of Fourteen Cents ($.14) per Subscriber ("Transmission Fee"), beginning
with and including the first calendar month immediately following the license
date. Payment will be due no later than the twentieth (20th) day of the
following month.
5.2 The number of Subscribers shall be determined by adding the number of
Subscribers as of the last day of the prior month to the number of Subscribers
as of the then-current month, and then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency of the
United States of America by negotiable bank check drawn upon a United
States bank insured by the FDIC made payable to the order of Vincie
Prichard and mailed to or to such other address as Permittee shall
designate in writing to NTI. Payments shall be made by the twentieth (20th)
day of the following month.
6. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
7. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated with
the
construction of the Transmission Facilities and any subsequent modifications
thereto. NTI shall also bear the costs of any licenses, permits,
authorizations,
or of such sites. NTI shall, at its sole cost and expense, complete
construction of the Transmission Facilities as authorized by the FCC. Upon
completion of construction of the Transmission Application on the
then-prescribed FCC form for submission to the FCC. Permittee agrees to
timely file the License Application with the FCC after its receipt from NTI.
NTI shall not be liable to make any payments under Section 5 hereof during
any delay caused by Permittee's failure to promptly file such License
Application. All lease, construction, legal, licensing and engineering costs
or any other costs associated therewith shall be the sole responsibility of
and
be paid by NTI, and NTI shall reimburse Permittee within fifteen (15) days
after receipt of invoice for reasonable payments made by Permittee and first
approved in writing by NTI, which approval will not be unreasonably
withheld or delayed.
7.1 Lease of Transmission Facilities to Permittee. In consideration of
the
sum of ONE DOLLAR ($1.00), the receipt and sufficiency of which is
hereby acknowledged, NTI shall lease the Transmission Facilities to
Permittee for a term equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of Section 4, NTI
shall, at its sole cost and expense, operate and maintain the Transmission
Facilities in good operating condition and repair with Permittee being
notified of all such repairs. All persons performing maintenance, repairs or
any other duties shall work under ANTI's direct and continuing supervision
and in accordance with good engineering practices consistent with industry
standards. In the event transmission service is interrupted for any reason,
NTI shall notify Permittee immediately. NTI shall be solely responsible for
the origination of all programming to be transmitted over the Channel,
subject to the provisions of Section 4 hereof and applicable FCC rules and
regulations. All personnel required to install, operate and maintain any
program origination and delivery facilities shall be provided by NTI, at its
sole cost and expense, and such personnel shall be under NTI's exclusive
control, and shall not be considered to be employees or agents of Permittee
for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties agree to take
no action that would jeopardize or otherwise impair the Construction Permit
or any other FCC approval or authorization necessary for the LPTV Service.
Permittee shall use its reasonable best efforts, and NTI shall cooperate with
Permittee, to obtain any and all FCC or other governmental licenses, permits,
authorizations or approvals required to carry out the transactions
contemplated by this Agreement; provided, however, that Permittee shall not
be required to pay for the relocation, reconstruction or similar costs
associated with the Channel, which costs shall be the sole responsibility of
NTI. Permittee also shall use its reasonable best efforts to cause the
authorization for the Channel to be renewed.
7.4 Access. Throughout the term of this Agreement, including any renewals
hereof, NTI shall provide, and/or cause others to provide, Permittee with
reasonable access to all Transmission Facilities for emergency repairs and
routine inspection, provided that Permittee shall not utilize such access in a
manner which unreasonably interferes with NTI's use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to lease or
lease for the transmission site and shall be responsible for bearing all
expenses in connection with such site, including the payment of rent and all
other costs and expenses of every nature. The site lease, if any, shall be
maintained and renewed by NTI throughout the term of this Agreement,
including any renewals hereof.
8. Representations and Warranties of NTI. NTI represents and warrants as
follows:
8.1 Organization. NTI is a corporation duly organized, validly existing, and
in good standing under the laws of the State of . NTI is
qualified
or otherwise entitled to do business in all jurisdictions in which such
qualifications or entitlement is required by reason of its business,
activities,
ownership or property. NTI has all requisite power and authority to own its
properties and to carry on its business. NTI has all requisite power to
execute, deliver, and, subject to the regulatory authority of the FCC, perform
this Agreement. The person executing this Agreement on behalf of NTI is
authorized to do so execute and to bind NTI to the term hereof.
8.2 Authorization. All necessary actions on the part of NTI to authorize the
execution and delivery of this Agreement and the performance of the
obligations of NTI herein have been taken. This Agreement is valid and
legally binding upon NTI and enforceable in accordance with its terms except
to the extent that enforceability thereof may be limited by bankruptcy,
insolvency, or the laws relating to the enforcement of creditor's rights or by
the application of equitable principles. The person executing this Agreement
on behalf of NTI is authorized to so execute and bind NTI to the terms
hereof.
8.3 No Violations. The exectution, delivery, and performance of this
Agreement and all actions and transactions contemplated hereby: (a) will not
violate any provision of law or the Articles of Incorporation or By-Laws of
NTI, any order of any court or other agency of government to which NTI is
a party or by which it or any of its properties is bound, and (b) will not
violate, be in conflict with, result in a breach of, or constitute (with
notice or
lapse of time or both) a default under any applicable law, order, or
regulation,
indenture, agreement, or other instrument to which NTI is a party of, by
which it or any of its properties is bound and which has not been waived or
consented to, or result in the creation or imposition of any lien, charge, or
encumbrance of any nature whatsoever upon any of its property or assets.
9. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and payable
under this Agreement within twenty (20) days after the date upon which a
payment is due hereunder, and NTI does not cure such default within thirty
(30) days after notice of default is provided by Permittee to NTI; (b) any of
the material "Representations or Warranties" of either party materially
breaches any covenant or agreement herein or fails to comply with any
material provision of this Agreement, and any such breach, failure or default
continues for thirty (30) days after written notice thereof, as contemplated
herein, shall have been sent by the non-defaulting Party to the defaulting
Party.
10. Termination. Upon an Event of Default, the non-defaulting Party may
cancel this Agreement and may pursue such legal and equitable remedies as
may be available.
11. Indemnification. Each Party shall indemnify, defend, and hold the other
Party harmless from and against any and all claims, damages, causes of
action, penalties,statutory damages, interest and costs and expenses,
including attorneys' fees, arising directly or indirectly out of the acts,
omissions, negligence or willful misconduct of said party, its employees or
agents in connection with the performance of this Agreement.
12. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited partnership, is
duly organized, validly existing and in good standing in the state of its
formation. Permittee is qualified or otherwise entitled to do business in all
jurisdictions in which such qualification or entitlement is required by reason
of its business, activities, ownership or property. Permittee has all
requisite
power and authority to own its own properties and to carry on its business.
Permittee has all requisite power to execute, deliver, and, subject to the
regulatory authority of the FCC, perform this Agreement. The person signing
this Agreement on behalf of Permittee is authorized to so execute and to bind
Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee to
authorize the execution and delivery of this Agreement and the performance
of the obligations of Permittee herein have been taken. This Agreement is
valid and legally binding upon Permittee and enforceable in accordance with
its terms except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of creditor's
rights or by the application of equitable principles. The person executing
this
Agreement on behalf of Permittee is authorized to so execute and bind
Permittee to the terms thereof.
12.3 Valid Construction Permit. The Construction Permit is in full force and
effect.
12.4 No Violation. The execution and delivery of this Agreement by
Permittee and the performance of Permittee's obligations hereunder are not
in violation or breach of, do not conflict with or constitute a default under,
and will not accelerate or permit the acceleration of the performance required
by any of the terms or provisions of any note, debt instrument, security
agreement, or mortgage or any other contract or agreement, written oral, to
which Permittee is a party or by which its Construction Permit is bound and
will not be an event which, after notice or lapse or time or both, will
result in
any such violation, notice or lapse of time or both, will result in any such
violation, breach, conflict, default, or acceleration, or under any law,
judgment, decree, order, rule or regulation of any governmental authority or
authority applicable to Permittee and will not result in the creation or
imposition of any lien (whether or not perfected), encumbrance, equity or
restriction in favor of any third person upon the Construction Permit;
provided, however, that the Permittee shall not be in default of this
provision
if the FCC determines that any provision of this Agreement, or the
Agreement as a whole, violates FCC rules or policies or the Communications
Act of 1934 as amended. In such event, the Parties shall negotiate in good
faith such changes to the Agreement so as to effectuate compliance with FCC
requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the aggregate
amount actually paid by NTI to Permittee pursuant to Section 5 of this
Agreement. Permittee shall not be liable for any consequential or similar
damages. This Section provides only for a limitation of damages otherwise
awardable, and shall not be construed to create an entitlement or legal right
to the amounts of damages specified herein upon an Event of Default. No
liability for damages shall be assessed under this Section except as a result
of a final judgment on a complaint for damages awarded by a court of
competent jurisdiction, or as otherwise agreed by the Parties to this
Agreement.
14. Permittee's Access to Records. From time to time and upon reasonable
notice to NTI, Permittee or its accountants shall have the right to request
information or be permitted at al reasonable times to inspect and copy all
records of NTI which Permittee or its accountants or attorneys reasonably
consider necessary to verify NTI's compliance with the terms and provisions
of this Agreement. It is understood by Permittee that such information is to
be held in confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably withheld or
delayed.
15. Specific Performance. The Parties acknowledge and agree that all of the
rights reserved thereunder are necessarily of a special, unique, unusual and
extraordinary character, which gives them a peculiar value, the loss of which
cannot be adequately or reasonably compensated for in damages in an action
at law, and that the breach by either Party of any of the provisions of this
Agreement will cause the other Party irreparable injury and damage.
Therefore, upon the occurrence of an event of Default, the non-defaulting
Party shall be entitled as a matter of right to seek specific performance of
the
defaulting Party's obligations and warranties hereunder, and/or declaratory,
injunctive or other equitable relief in court to correct the Event of
Default.
No exercise of this right to specific performance shall constitute a waiver of
such Party's other rights or remedies otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall be
effective upon receipt; provided, however, that the refusal to accept receipt
will constitute receipt for this purpose, in each case addressed:
If to Permittee, to:
If to NTI, to: Howard B. Winkler, President
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Stephen E. Coran, Esq.
Rini & Coran, P.C.
1350 Connecticut Avenue, N.W., Suite
900
Washington, D.C. 20036
provided, however, that if any party shall have designated a different address
by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to comply
with any provision of this Agreement by the other Party shall not be
construed as or constitute a continuing waiver of such provision or a waiver
of any other provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior agreements,
covenants, arrangements, communications, representations, or warranties,
whether oral or written, by any Party (or any officer, employee, or
representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed and
enforced in accordance with and governed by the internal substantive law of
the State of and of the United States of America. The
headings
of the Sections of this Agreement are inserted for convenience of reference
only and shall not be deemed to constitute a part hereof. Unless otherwise
stated, references in this Agreement to sections refer to the Sections of this
Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the Parties,
except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable in
whole or in part to carry out its obligations hereunder, the Party shall not
be
deemed in violation or default during the period of such inability. The term
"force majeure" as used herein shall mean the following: acts of God; acts of
public enemies; orders of any kind of the government of the United States of
America or of any state or state departments, agencies, political
subdivisions,
or officials, or any civil or military authority; insurrections; riots;
epidemic;
landslides; lightning; earthquakes; fires; hurricanes; volcanic activity;
storms
of extraordinary force; floods; washouts; drought; civil disturbances;
explosions; or any other cause or event not reasonably within the control of
the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart shall be
deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold
itself out to be, vested with any power or right to contractually bind, act on
behalf of the other as its contracting broker, agent or otherwise for
committing, selling, conveying or transferring any of the other Party's assets
or property, contracting for or in the name of the other Party, or making any
agreement contractually binding upon such Party.
24. Severability. If any provision of this Agreement is declared void by any
court of competent jurisdiction, the validity of any other provision of this
Agreement shall not be affected.
25. Time of the Essence. Time shall be of the essence in the performance of
this Agreement.
26. Survival. This Agreement shall be binding upon and inure to the benefit
of the Parties hereto and their respective assigns, heirs, successors and
legal
representatives.
27. Assignment. This Agreement may be assigned by NTI without the prior
consent of the permittee.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI to
employ an attorney to enforce its rights pursuant to this Agreement because
of the default of the other Party, the defaulting Party shall reimburse the
prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or
NTI that there by any third party beneficiary to this Agreement, and this
Agreement is exclusively for the benefit of Permittee and NTI and their
respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be construed
as creating an employer-employee relationship, partnership or joint venture
by and between Permittee and NTI, and Permittee shall not be held
responsible for the acts or omissions of NTI and vice versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in the
drafting and preparation of this Agreement. Hence, in any construction to be
made of this Agreement, the same shall not, as a matter of law, be construed
against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third party to
purchase its Construction Permit or License, and Permittee desires to accept
such offer, Permittee, within five (5) days of receiving such offer, shall
notify
NTI in writing and provide NTI with a copy of the same, and NTI shall have
the right to acquire Permittee's Construction Permit or License on the same
terms and conditions as offered by the third party, such right to be exercised
by NTI within thirty (30) days of written notice by Permittee.
(b) In the event NTI does not exercise its right of first refusal hereunder,
then
Permittee shall be free to assign or transfer its Construction Permit or
License
to the third party, subject to the condition that the assignee or transferee,
as
the case may be, agrees to be bound by all of the terms and conditions of this
Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ Vincie Prichard
Its:
NORTHEAST TELECOM, INC.
By: /s/ Michael Taylor
Michael Taylor, Vice President
EXHIBIT 10.6
________________________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Jeffery Narod (the "Lease") for
the operation of one (1) Low Power Television station in Poplar Bluff, MO,
having the Call sign K35EP and operating on channel 35 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution of
this
agreement.
3. Assignor herein further represents and warrants that he has full power
and
authority to execute and deliver this agreement and to conclude the
transaction contemplated herein. Assignor also represents and warrants that
the has all the rights, title, and interest to the Lease and the Channel and
that
there are no existing or anticipated liabilities or legal action associated
with
the Lease or the Channel, to the best of his knowledge and Assignor has not
transferred (or agreed to transfer), nor will it transfer prior to the
completion
of the transaction contemplated herein, any portion of his interest in the
Lease
or the Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of the
Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid, to the
Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction. It is expressly
understood, however, that the Parties hereto intend each and every provision
of this Agreement to be valid and enforceable and hereby knowingly waive
all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws of the
state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Jeffery Narod
1879 Jeffery Court
Wantagh, New York 11793
Re: Notice of Lease Assignment: Poplar Bluff, MO
LPTV Ch.K35EP
Dear Jeffery
This letter will serve to notify you of Northeast Telecom's intentions to
assign
your management and lease agreements, to another company. It will be
necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Jeffery Narod
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24th day
of June, 1994 by and between Northeast Telecom Inc. (NTI), and Jeffery
Narod ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of Low Power Television ("LPTV") stations as defined
in Section 74.701(F) of the Commission's Rules, to provide subscription
television ("STV") service on their authorized channels, subject to FCC rules
and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 35 at Poplar Bluff, Mo. (Call Sign K35EP) ("Channel"), and has
determined that it desires to provide STV service on such Channel on a
twenty-four (24) hour per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
1. Definitions. As used in this Agreement, the following terms shall have
the meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and data
programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign K35) which
issued by the FCC to Permittee to construct the Channel and provide service
on the Channel on a seven (7) day per week, twenty (24) hours per day basis,
and shall specifically include any regular, modified or renewal authorizations
to operate the Channel.
1.3 License Date means the date on which a License Application is filed with
the FCC certifying the completion of construction of the transmission
Facilities, but not later than the date specified on the Construction Permit,
unless extended.
1.4 Transmission Facilities means the equipment and facilities to be owned
By NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement, including
without limitation restaurants, bars, offices and businesses that receive LPTV
Service under contract with NTI or under rights granted by NTI.
2. Term. The term of this Agreement shall begin on the date hereof and
shall continue for a period of ten (10) years following the License Date,
provided that Permittee's authorization to operate the Channel has been
renewed as necessary by the FCC. Permittee shall use its reasonable best
efforts to obtain such renewals. This Agreement shall be authormatically
renewed for an additional ten (10) years, unless NTI shall have submitted to
Permittee at least six (6) months' advance written notice of its intent to
terminate this Agreement upon the expiration of the initial term.
3. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel for STV
services seven (7) days per week, twenty-four (24) hours per day, subject to
FCC Rules and Regulations and all of the terms and conditions set forth in
this Agreement. For purposes of this Agreement, such transmission on the
Channel shall include all rights to transmit both video programming and data
over the entire frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions of service
to Subscribers uniformly; provided, however, that: (a) Subscribers may be
divided into reasonable classifications approved by the FCC, and the
imposition of different sets of conditions may be applied to Subscribers in
different classifications; and (b) for good cause, within such
classifications,
deposits may be required of some Subscribers and not of others.
4. Control of Facilities. Notwithstanding anything in this Agreement to the
contrary, Permittee, as the FCC permittee for the Channel, shall be
responsible for compliance with all applicable FCC rules and regulations.
Permittee shall have control, in operation, management and maintenance of
the station to the extent necessary to comply with such rules and regulations,
of the construction, operation, management and maintenance of the station
to the extent necessary to comply with such rules and regulations. Nothing
in this Agreement shall be construed to: (a) prevent or hinder Permittee from
rejecting or refusing any STV broadcast program that it reasonably believes
to be unsatisfactory, unsuitable or contrary to the public interest, or from
substituting a program that in its opinion is of greater local or national
importance; (b) deprive Permittee of the right of ultimate decision concerning
the maximum amount of any STV program charge or fee; or (c) delegate to
any other individual or entity ultimate authority over the scheduling of STV
programs.
5. Payments. In consideration of Permittee's agreement to permit NTI to
transmit on the Channel, NTI agrees to pay Permittee a monthly transmission
fee of Fourteen Cents ($.14) per Subscriber ("Transmission Fee"), beginning
with and including the first calendar month immediately following the license
date. Payment will be due no later than the twentieth (20th) day of the
following month.
5.2 The number of Subscribers shall be determined by adding the number of
Subscribers as of the last day of the prior month to the number of Subscribers
as of the then-current month, and then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency of the
United States of America by negotiable bank check drawn upon a United
States bank insured by the FDIC made payable to the order of **********
and mailed to SEE SECTION 16 or to such other address as Permittee shall
designate in writing to NTI. Payments shall be made by the twentieth (20th)
day of the following month.
6. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
7. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated with
the
construction of the Transmission Facilities and any subsequent modifications
thereto. NTI shall also bear the costs of any licenses, permits,
authorizations,
or of such sites. NTI shall, at its sole cost and expense, complete
construction of the Transmission Facilities as authorized by the FCC. Upon
completion of construction of the Transmission Application on the
then-prescribed FCC form for submission to the FCC. Permittee agrees to
timely file the License Application with the FCC after its receipt from NTI.
NTI shall not be liable to make any payments under Section 5 hereof during
any delay caused by Permittee's failure to promptly file such License
Application. All lease, construction, legal, licensing and engineering costs
or any other costs associated therewith shall be the sole responsibility of
and
be paid by NTI, and NTI shall reimburse Permittee within fifteen (15) days
after receipt of invoice for reasonable payments made by Permittee and first
approved in writing by NTI, which approval will not be unreasonably
withheld or delayed.
7.1 Lease of Transmission Facilities to Permittee. In consideration of the
sum of ONE DOLLAR ($1.00), the receipt and sufficiency of which is
hereby acknowledged, NTI shall lease the Transmission Facilities to
Permittee for a term equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of Section 4, NTI
shall, at its sole cost and expense, operate and maintain the Transmission
Facilities in good operating condition and repair with Permittee being
notified of all such repairs. All persons performing maintenance, repairs or
any other duties shall work under ANTI's direct and continuing supervision
and in accordance with good engineering practices consistent with industry
standards. In the event transmission service is interrupted for any reason,
NTI shall notify Permittee immediately. NTI shall be solely responsible for
the origination of all programming to be transmitted over the Channel,
subject to the provisions of Section 4 hereof and applicable FCC rules and
regulations. All personnel required to install, operate and maintain any
program origination and delivery facilities shall be provided by NTI, at its
sole cost and expense, and such personnel shall be under NTI's exclusive
control, and shall not be considered to be employees or agents of Permittee
for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties agree to take
no action that would jeopardize or otherwise impair the Construction Permit
or any other FCC approval or authorization necessary for the LPTV Service.
Permittee shall use its reasonable best efforts, and NTI shall cooperate with
Permittee, to obtain any and all FCC or other governmental licenses, permits,
authorizations or approvals required to carry out the transactions
contemplated by this Agreement; provided, however, that Permittee shall not
be required to pay for the relocation, reconstruction or similar costs
associated with the Channel, which costs shall be the sole responsibility of
NTI. Permittee also shall use its reasonable best efforts to cause the
authorization for the Channel to be renewed.
7.4 Access. Throughout the term of this Agreement, including any renewals
hereof, NTI shall provide, and/or cause others to provide, Permittee with
reasonable access to all Transmission Facilities for emergency repairs and
routine inspection, provided that Permittee shall not utilize such access in a
manner which unreasonably interferes with NTI's use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to lease or
lease for the transmission site and shall be responsible for bearing all
expenses in connection with such site, including the payment of rent and all
other costs and expenses of every nature. The site lease, if any, shall be
maintained and renewed by NTI throughout the term of this Agreement,
including any renewals hereof.
8. Representations and Warranties of NTI. NTI represents and warrants as
follows:
8.1 Organization. NTI is a corporation duly organized, validly existing, and
in good standing under the laws of the State of New Jersey. NTI is qualified
or otherwise entitled to do business in all jurisdictions in which such
qualifications or entitlement is required by reason of its business,
activities,
ownership or property. NTI has all requisite power and authority to own its
properties and to carry on its business. NTI has all requisite power to
execute, deliver, and, subject to the regulatory authority of the FCC, perform
this Agreement. The person executing this Agreement on behalf of NTI is
authorized to do so execute and to bind NTI to the term hereof.
8.2 Authorization. All necessary actions on the part of NTI to authorize the
execution and delivery of this Agreement and the performance of the
obligations of NTI herein have been taken. This Agreement is valid and
legally binding upon NTI and enforceable in accordance with its terms except
to the extent that enforceability thereof may be limited by bankruptcy,
insolvency, or the laws relating to the enforcement of creditor's rights or by
the application of equitable principles. The person executing this Agreement
on behalf of NTI is authorized to so execute and bind NTI to the terms
hereof.
8.3 No Violations. The exectution, delivery, and performance of this
Agreement and all actions and transactions contemplated hereby: (a) will not
violate any provision of law or the Articles of Incorporation or By-Laws of
NTI, any order of any court or other agency of government to which NTI is
a party or by which it or any of its properties is bound, and (b) will not
violate, be in conflict with, result in a breach of, or constitute (with
notice or
lapse of time or both) a default under any applicable law, order, or
regulation,
indenture, agreement, or other instrument to which NTI is a party of, by
which it or any of its properties is bound and which has not been waived or
consented to, or result in the creation or imposition of any lien, charge, or
encumbrance of any nature whatsoever upon any of its property or assets.
9. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and payable
under this Agreement within twenty (20) days after the date upon which a
payment is due hereunder, and NTI does not cure such default within thirty
(30) days after notice of default is provided by Permittee to NTI; (b) any of
the material "Representations or Warranties" of either party materially
breaches any covenant or agreement herein or fails to comply with any
material provision of this Agreement, and any such breach, failure or default
continues for thirty (30) days after written notice thereof, as contemplated
herein, shall have been sent by the non-defaulting Party to the defaulting
Party.
10. Termination. Upon an Event of Default, the non-defaulting Party may
cancel this Agreement and may pursue such legal and equitable remedies as
may be available.
11. Indemnification. Each Party shall indemnify, defend, and hold the other
Party harmless from and against any and all claims, damages, causes of
action, penalties, statutory damages, interest and costs and expenses,
including attorneys' fees, arising directly or indirectly out of the acts,
omissions, negligence or willful misconduct of said party, its employees or
agents in connection with the performance of this Agreement.
12. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited partnership, is
duly organized, validly existing and in good standing in the state of its
formation. Permittee is qualified or otherwise entitled to do business in all
jurisdictions in which such qualification or entitlement is required by
reason
of its business, activities, ownership or property. Permittee has all
requisite
power and authority to own its own properties and to carry on its business.
Permittee has all requisite power to execute, deliver, and, subject to the
regulatory authority of the FCC, perform this Agreement. The person signing
this Agreement on behalf of Permittee is authorized to so execute and to bind
Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee to
authorize the execution and delivery of this Agreement and the performance
of the obligations of Permittee herein have been taken. This Agreement is
valid and legally binding upon Permittee and enforceable in accordance with
its terms except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of creditor's
rights or by the application of equitable principles. The person executing
this
Agreement on behalf of Permittee is authorized to so execute and bind
Permittee to the terms thereof.
12.3 Valid Construction Permit. The Construction Permit is in full force and
effect.
12.4 No Violation. The execution and delivery of this Agreement by
Permittee and the performance of Permittee's obligations hereunder are not
in violation or breach of, do not conflict with or constitute a default under,
and will not accelerate or permit the acceleration of the performance required
by any of the terms or provisions of any note, debt instrument, security
agreement, or mortgage or any other contract or agreement, written oral, to
which Permittee is a party or by which its Construction Permit is bound and
will not be an event which, after notice or lapse or time or both, will
result in
any such violation, notice or lapse of time or both, will result in any such
violation, breach, conflict, default, or acceleration, or under any law,
judgment, decree, order, rule or regulation of any governmental authority or
authority applicable to Permittee and will not result in the creation or
imposition of any lien (whether or not perfected), encumbrance, equity or
restriction in favor of any third person upon the Construction Permit;
provided, however, that the Permittee shall not be in default of this
provision
if the FCC determines that any provision of this Agreement, or the
Agreement as a whole, violates FCC rules or policies or the Communications
Act of 1934 as amended. In such event, the Parties shall negotiate in good
faith such changes to the Agreement so as to effectuate compliance with FCC
requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the aggregate
amount actually paid by NTI to Permittee pursuant to Section 5 of this
Agreement. Permittee shall not be liable for any consequential or similar
damages. This Section provides only for a limitation of damages otherwise
awardable, and shall not be construed to create an entitlement or legal right
to the amounts of damages specified herein upon an Event of Default. No
liability for damages shall be assessed under this Section except as a result
of a final judgment on a complaint for damages awarded by a court of
competent jurisdiction, or as otherwise agreed by the Parties to this
Agreement.
14. Permittee's Access to Records. From time to time and upon reasonable
notice to NTI, Permittee or its accountants shall have the right to request
information or be permitted at al reasonable times to inspect and copy all
records of NTI which Permittee or its accountants or attorneys reasonably
consider necessary to verify NTI's compliance with the terms and provisions
of this Agreement. It is understood by Permittee that such information is to
be held in confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably withheld or
delayed.
15. Specific Performance. The Parties acknowledge and agree that all of the
rights reserved thereunder are necessarily of a special, unique, unusual and
extraordinary character, which gives them a peculiar value, the loss of which
cannot be adequately or reasonably compensated for in damages in an action
at law, and that the breach by either Party of any of the provisions of this
Agreement will cause the other Party irreparable injury and damage.
Therefore, upon the occurrence of an event of Default, the non-defaulting
Party shall be entitled as a matter of right to seek specific performance of
the
defaulting Party's obligations and warranties hereunder, and/or declaratory,
injunctive or other equitable relief in court to correct the Event of
Default.
No exercise of this right to specific performance shall constitute a waiver
of
such Party's other rights or remedies otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall be
effective upon receipt; provided, however, that the refusal to accept receipt
will constitute receipt for this purpose, in each case addressed:
If to Permittee, to: Jeffery Narod
1879 Jeffery Court
Wantagh, New York 11793
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Mullin, Rhyne, Emmons and Topel
Att: Robert Levine
1225 Connecticut Avenue, N.W., Suite
300
Washington, D.C. 20036-2604
provided, however, that if any party shall have designated a different address
by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to comply
with any provision of this Agreement by the other Party shall not be
construed as or constitute a continuing waiver of such provision or a waiver
of any other provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior agreements,
covenants, arrangements, communications, representations, or warranties,
whether oral or written, by any Party (or any officer, employee, or
representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed and
enforced in accordance with and governed by the internal substantive law of
the State of and of the United States of America. The
headings
of the Sections of this Agreement are inserted for convenience of reference
only and shall not be deemed to constitute a part hereof. Unless otherwise
stated, references in this Agreement to sections refer to the Sections of this
Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the Parties,
except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable in
whole or in part to carry out its obligations hereunder, the Party shall not
be
deemed in violation or default during the period of such inability. The term
"force majeure" as used herein shall mean the following: acts of God; acts of
public enemies; orders of any kind of the government of the United States of
America or of any state or state departments, agencies, political
subdivisions,
or officials, or any civil or military authority; insurrections; riots;
epidemic;
landslides; lightning; earthquakes; fires; hurricanes; volcanic activity;
storms
of extraordinary force; floods; washouts; drought; civil disturbances;
explosions; or any other cause or event not reasonably within the control of
the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart shall be
deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold
itself out to be, vested with any power or right to contractually bind, act
on
behalf of the other as its contracting broker, agent or otherwise for
committing, selling, conveying or transferring any of the other Party's
assets
or property, contracting for or in the name of the other Party, or making any
agreement contractually binding upon such Party.
24. Severability. If any provision of this Agreement is declared void by any
court of competent jurisdiction, the validity of any other provision of this
Agreement shall not be affected.
25. Time of the Essence. Time shall be of the essence in the performance of
this Agreement.
26. Survival. This Agreement shall be binding upon and inure to the benefit
of the Parties hereto and their respective assigns, heirs, successors and
legal
representatives.
27. Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other Party, which consent shall not
be unreasonably withheld or delayed, except that NTI may assign this
Agreement to an affiliated entity or subsidiary without Permittee's prior
approval.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI to
employ an attorney to enforce its rights pursuant to this Agreement because
of the default of the other Party, the defaulting Party shall reimburse the
prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or
NTI that there by any third party beneficiary to this Agreement, and this
Agreement is exclusively for the benefit of Permittee and NTI and their
respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be construed
as creating an employer-employee relationship, partnership or joint venture
by and between Permittee and NTI, and Permittee shall not be held
responsible for the acts or omissions of NTI and vice versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in the
drafting and preparation of this Agreement. Hence, in any construction to be
made of this Agreement, the same shall not, as a matter of law, be construed
against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third party to
purchase its Construction Permit or License, and Permittee desires to accept
such offer, Permittee, within five (5) days of receiving such offer, shall
notify
NTI in writing and provide NTI with a copy of the same, and NTI shall have
the right to acquire Permittee's Construction Permit or License on the same
terms and conditions as offered by the third party, such right to be exercised
by NTI within thirty (30) days of written notice by Permittee.
(b) In the event NTI does not exercise its right of first refusal hereunder,
then
Permittee shall be free to assign or transfer its Construction Permit or
License
to the third party, subject to the condition that the assignee or transferee,
as
the case may be, agrees to be bound by all of the terms and conditions of this
Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ Jeffery Narod
Its:
NORTHEAST TELECOM, INC.
By: /s/ Stephen J. Peters
Stephen J. Peters, VP Operations
EXHIBIT 10.7
________________________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Lloyd Johnson (the "Lease") for
the operation of one (1) Low Power Television station in Poplar Bluff, MO,
having the Call sign K56FP and operating on channel 56 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution of
this
agreement.
3. Assignor herein further represents and warrants that he has full power
and
authority to execute and deliver this agreement and to conclude the
transaction contemplated herein. Assignor also represents and warrants that
the has all the rights, title, and interest to the Lease and the Channel and
that
there are no existing or anticipated liabilities or legal action associated
with
the Lease or the Channel, to the best of his knowledge and Assignor has not
transferred (or agreed to transfer), nor will it transfer prior to the
completion
of the transaction contemplated herein, any portion of his interest in the
Lease
or the Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of the
Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid, to the
Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction. It is expressly
understood, however, that the Parties hereto intend each and every provision
of this Agreement to be valid and enforceable and hereby knowingly waive
all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws of the
state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Lloyd Johnson
Rte. 1, Box 85
Karlstad, Mn. 56732
Re: Notice of Lease Assignment: Poplar Bluff, MO
LPTV Ch.K56FP
Dear Mr. Johnson:
This letter will serve to notify you of Northeast Telecom's intentions to
assign
your management and lease agreements, to another company. It will be
necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Lloyd Johnson
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 21 day
of June, 1994 by and between Northeast Telecom Inc. (NTI), and Lloyd
Johnson ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of Low Power Television ("LPTV") stations as defined
in Section 74.701(F) of the Commission's Rules, to provide subscription
television ("STV") service on their authorized channels, subject to FCC rules
and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 56 at Poplar Bluff, Mo. (Call Sign K56FP) ("Channel"), and has
determined that it desires to provide STV service on such Channel on a
twenty-four (24) hour per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
1. Definitions. As used in this Agreement, the following terms shall have
the meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and data
programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign )
which
issued by the FCC to Permittee to construct the Channel and provide service
on the Channel on a seven (7) day per week, twenty (24) hours per day basis,
and shall specifically include any regular, modified or renewal authorizations
to operate the Channel.
1.3 License Date means the date on which a License Application is filed
with the FCC certifying the completion of construction of the transmission
facilities, but not later than the date specified on the Construction Permit,
unless extended.
1.4 Transmission Facilities means the equipment and facilities to be owned
by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement, including
without limitation restaurants, bars, offices and businesses that receive LPTV
Service under contract with NTI or under rights granted by NTI.
2. Term. The term of this Agreement shall begin on the date hereof and
shall continue for a period of ten (10) years following the License Date,
provided that Permittee's authorization to operate the Channel has been
renewed as necessary by the FCC. Permittee shall use its reasonable best
efforts to obtain such renewals. This Agreement shall be authormatically
renewed for an additional ten (10) years, unless NTI shall have submitted to
Permittee at least six (6) months' advance written notice of its intent to
terminate this Agreement upon the expiration of the initial term.
3. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel for STV
services seven (7) days per week, twenty-four (24) hours per day, subject to
FCC Rules and Regulations and all of the terms and conditions set forth in
this Agreement. For purposes of this Agreement, such transmission on the
Channel shall include all rights to transmit both video programming and data
over the entire frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions of service
to Subscribers uniformly; provided, diivided into reasonable classifications
approved by the FCC, and the imposition of different sets of conditions may
be applied to Subscribers in different classifications; and (b) for good
cause,
within such classifications, deposits may be required of some Subscribers
and not of others.
4. Control of Facilities. Notwithstanding anything in this Agreement to the
contrary, Permittee, as the FCC permittee for the Channel, shall be
responsible for compliance with all applicable FCC rules and regulations.
Permittee shall have control, in operation, management and maintenance of
the station to the extent necessary to comply with such rules and regulations,
of the construction, operation, management and maintenance of the station
to the extent necessary to comply with such rules and regulations. Nothing
in this Agreement shall be construed to: (a) prevent or hinder Permittee
from
rejecting or refusing any STV broadcast program that it reasonably believes
to be unsatisfactory, unsuitable or contrary to the public interest, or from
substituting a program that in its opinion is of greater local or national
importance; (b) deprive Permittee of the right of ultimate decision
concerning the maximum amount of any STV program charge or fee; or (c)
delegate to any other individual or entity ultimate authority over the
scheduling of STV programs.
5. Payments. In consideration of Permittee's agreement to permit NTI to
transmit on the Channel, NTI agrees to pay Permittee a monthly transmission
fee of Ten Cents ($.10) per Subscriber ("Transmission Fee"), beginning with
and including the first calendar month immediately following the license
date. Payment will be due no later than the twentieth (20th) day of the
following month.
5.2 The number of Subscribers shall be determined by adding the number of
Subscribers as of the last day of the prior month to the number of Subscribers
as of the then-current month, and then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency of the
United States of America by negotiable bank check drawn upon a United
States bank insured by the FDIC made payable to the order of Lloyd Johnson
and mailed to Lloyd Johnson or to such other address as Permittee shall
designate in writing to NTI. Payments shall be made by the twentieth (20th)
day of the following month.
6. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
7. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated with
the
construction of the Transmission Facilities and any subsequent modifications
thereto. NTI shall also bear the costs of any licenses, permits,
authorizations,
or of such sites. NTI shall, at its sole cost and expense, complete
construction of the Transmission Facilities as authorized by the FCC. Upon
completion of construction of the Transmission Application on the
then-prescribed FCC form for submission to the FCC. Permittee agrees to
timely file the License Application with the FCC after its receipt from NTI.
NTI shall not be liable to make any payments under Section 5 hereof during
any delay caused by Permittee's failure to promptly file such License
Application. All lease, construction, legal, licensing and engineering costs
or any other costs associated therewith shall be the sole responsibility of
and
be paid by NTI, and NTI shall reimburse Permittee within fifteen (15) days
after receipt of invoice for reasonable payments made by Permittee and first
approved in writing by NTI, which approval will not be unreasonably
withheld or delayed.
7.1 Lease of Transmission Facilities to Permittee. In consideration of the
sum of ONE DOLLAR ($1.00), the receipt and sufficiency of which is
hereby acknowledged, NTI shall lease the Transmission Facilities to
Permittee for a term equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of Section 4, NTI
shall, at its sole cost and expense, operate and maintain the Transmission
Facilities in good operating condition and repair with Permittee being
notified of all such repairs. All persons performing maintenance, repairs or
any other duties shall work under ANTI's direct and continuing supervision
and in accordance with good engineering practices consistent with industry
standards. In the event transmission service is interrupted for any reason,
NTI shall notify Permittee immediately. NTI shall be solely responsible for
the origination of all programming to be transmitted over the Channel,
subject to the provisions of Section 4 hereof and applicable FCC rules and
regulations. All personnel required to install, operate and maintain any
program origination and delivery facilities shall be provided by NTI, at its
sole cost and expense, and such personnel shall be under NTI's exclusive
control, and shall not be considered to be employees or agents of Permittee
for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties agree to take
no action that would jeopardize or otherwise impair the Construction Permit
or any other FCC approval or authorization necessary for the LPTV Service.
Permittee shall use its reasonable best efforts, and NTI shall cooperate with
Permittee, to obtain any and all FCC or other governmental licenses, permits,
authorizations or approvals required to carry out the transactions
contemplated by this Agreement; provided, however, that Permittee shall not
be required to pay for the relocation, reconstruction or similar costs
associated with the Channel, which costs shall be the sole responsibility of
NTI. Permittee also shall use its reasonable best efforts to cause the
authorization for the Channel to be renewed.
7.4 Access. Throughout the term of this Agreement, including any renewals
hereof, NTI shall provide, and/or cause others to provide, Permittee with
reasonable access to all Transmission Facilities for emergency repairs and
routine inspection, provided that Permittee shall not utilize such access in a
manner which unreasonably interferes with NTI's use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to lease or
lease for the transmission site and shall be responsible for bearing all
expenses in connection with such site, including the payment of rent and all
other costs and expenses of every nature. The site lease, if any, shall be
maintained and renewed by NTI throughout the term of this Agreement,
including any renewals hereof.
8. Representations and Warranties of NTI. NTI represents and warrants as
follows:
8.1 Organization. NTI is a corporation duly organized, validly existing, and
in good standing under the laws of the State of New Jersey. NTI is qualified
or otherwise entitled to do business in all jurisdictions in which such
qualifications or entitlement is required by reason of its business,
activities,
ownership or property. NTI has all requisite power and authority to own its
properties and to carry on its business. NTI has all requisite power to
execute, deliver, and, subject to the regulatory authority of the FCC, perform
this Agreement. The person executing this Agreement on behalf of NTI is
authorized to do so execute and to bind NTI to the term hereof.
8.2 Authorization. All necessary actions on the part of NTI to authorize the
execution and delivery of this Agreement and the performance of the
obligations of NTI herein have been taken. This Agreement is valid and
legally binding upon NTI and enforceable in accordance with its terms except
to the extent that enforceability thereof may be limited by bankruptcy,
insolvency, or the laws relating to the enforcement of creditor's rights or by
the application of equitable principles. The person executing this Agreement
on behalf of NTI is authorized to so execute and bind NTI to the terms
hereof.
8.3 No Violations. The exectution, delivery, and performance of this
Agreement and all actions and transactions contemplated hereby: (a) will not
violate any provision of law or the Articles of Incorporation or By-Laws of
NTI, any order of any court or other agency of government to which NTI is
a party or by which it or any of its properties is bound, and (b) will not
violate, be in conflict with, result in a breach of, or constitute (with
notice or
lapse of time or both) a default under any applicable law, order, or
regulation,
indenture, agreement, or other instrument to which NTI is a party of, by
which it or any of its properties is bound and which has not been waived or
consented to, or result in the creation or imposition of any lien, charge, or
encumbrance of any nature whatsoever upon any of its property or assets.
9. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and payable
under this Agreement within twenty (20) days after the date upon which a
payment is due hereunder, and NTI does not cure such default within thirty
(30) days after notice of default is provided by Permittee to NTI; (b) any of
the material "Representations or Warranties" of either party materially
breaches any covenant or agreement herein or fails to comply with any
material provision of this Agreement, and any such breach, failure or default
continues for thirty (30) days after written notice thereof, as contemplated
herein, shall have been sent by the non-defaulting Party to the defaulting
Party.
10. Termination. Upon an Event of Default, the non-defaulting Party may
cancel this Agreement and may pursue such legal and equitable remedies as
may be available.
11. Indemnification. Each Party shall indemnify, defend, and hold the other
Party harmless from and against any and all claims, damages, causes of
action, penalties, statutory damages, interest and costs and expenses,
including attorneys' fees, arising directly or indirectly out of the acts,
omissions, negligence or willful misconduct of said party, its employees or
agents in connection with the performance of this Agreement.
12. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited partnership, is
duly organized, validly existing and in good standing in the state of its
formation. Permittee is qualified or otherwise entitled to do business in all
jurisdictions in which such qualification or entitlement is required by reason
of its business, activities, ownership or property. Permittee has all
requisite
power and authority to own its own properties and to carry on its business.
Permittee has all requisite power to execute, deliver, and, subject to the
regulatory authority of the FCC, perform this Agreement. The person signing
this Agreement on behalf of Permittee is authorized to so execute and to bind
Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee to
authorize the execution and delivery of this Agreement and the performance
of the obligations of Permittee herein have been taken. This Agreement is
valid and legally binding upon Permittee and enforceable in accordance with
its terms except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of creditor's
rights or by the application of equitable principles. The person executing
this
Agreement on behalf of Permittee is authorized to so execute and bind
Permittee to the terms thereof.
12.3 Valid Construction Permit. The Construction Permit is in full force and
effect.
12.4 No Violation. The execution and delivery of this Agreement by
Permittee and the performance of Permittee's obligations hereunder are not
in violation or breach of, do not conflict with or constitute a default under,
and will not accelerate or permit the acceleration of the performance required
by any of the terms or provisions of any note, debt instrument, security
agreement, or mortgage or any other contract or agreement, written oral, to
which Permittee is a party or by which its Construction Permit is bound and
will not be an event which, after notice or lapse or time or both, will
result
in any such violation, notice or lapse of time or both, will result in any
such
violation, breach, conflict, default, or acceleration, or under any law,
judgment, decree, order, rule or regulation of any governmental authority or
authority applicable to Permittee and will not result in the creation or
imposition of any lien (whether or not perfected), encumbrance, equity or
restriction in favor of any third person upon the Construction Permit;
provided, however, that the Permittee shall not be in default of this
provision
if the FCC determines that any provision of this Agreement, or the
Agreement as a whole, violates FCC rules or policies or the Communications
Act of 1934 as amended. In such event, the Parties shall negotiate in good
faith such changes to the Agreement so as to effectuate compliance with FCC
requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the aggregate
amount actually paid by NTI to Permittee pursuant to Section 5 of this
Agreement. Permittee shall not be liable for any consequential or similar
damages. This Section provides only for a limitation of damages otherwise
awardable, and shall not be construed to create an entitlement or legal right
to the amounts of damages specified herein upon an Event of Default. No
liability for damages shall be assessed under this Section except as a result
of a final judgment on a complaint for damages awarded by a court of
competent jurisdiction, or as otherwise agreed by the Parties to this
Agreement.
14. Permittee's Access to Records. From time to time and upon reasonable
notice to NTI, Permittee or its accountants shall have the right to request
information or be permitted at all reasonable times to inspect and copy all
records of NTI which Permittee or its accountants or attorneys reasonably
consider necessary to verify NTI's compliance with the terms and provisions
of this Agreement. It is understood by Permittee that such information is to
be held in confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably withheld or
delayed.
15. Specific Performance. The Parties acknowledge and agree that all of the
rights reserved thereunder are necessarily of a special, unique, unusual and
extraordinary character, which gives them a peculiar value, the loss of which
cannot be adequately or reasonably compensated for in damages in an action
at law, and that the breach by either Party of any of the provisions of this
Agreement will cause the other Party irreparable injury and damage.
Therefore, upon the occurrence of an event of Default, the non-defaulting
Party shall be entitled as a matter of right to seek specific performance of
the
defaulting Party's obligations and warranties hereunder, and/or declaratory,
injunctive or other equitable relief in court to correct the Event of
Default.
No exercise of this right to specific performance shall constitute a waiver of
such Party's other rights or remedies otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall be
effective upon receipt; provided, however, that the refusal to accept receipt
will constitute receipt for this purpose, in each case addressed:
If to Permittee, to: Lloyd Johnson
Rte. 1, Box 85
Karlstad, Mn 56752
If to NTI, to: Howard B. Winkler, President
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Stephen E. Coran, Esq.
Rini & Coran, P.C.
1350 Connecticut Avenue, N.W., Suite
900
Washington, D.C. 20036
provided, however, that if any party shall have designated a different address
by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to comply
with any provision of this Agreement by the other Party shall not be
construed as or constitute a continuing waiver of such provision or a waiver
of any other provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior agreements,
covenants, arrangements, communications, representations, or warranties,
whether oral or written, by any Party (or any officer, employee, or
representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed and
enforced in accordance with and governed by the internal substantive law of
the State of and of the United States of America. The
headings
of the Sections of this Agreement are inserted for convenience of reference
only and shall not be deemed to constitute a part hereof. Unless otherwise
stated, references in this Agreement to sections refer to the Sections of this
Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the Parties,
except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable in
whole or in part to carry out its obligations hereunder, the Party shall not
be
deemed in violation or default during the period of such inability. The term
"force majeure" as used herein shall mean the following: acts of God; acts
of public enemies; orders of any kind of the government of the United States
of America or of any state or state departments, agencies, political
subdivisions, or officials, or any civil or military authority; insurrections;
riots; epidemic; landslides; lightning; earthquakes; fires; hurricanes;
volcanic
activity; storms of extraordinary force; floods; washouts; drought; civil
disturbances; explosions; or any other cause or event not reasonably within
the control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart shall be
deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold
itself out to be, vested with any power or right to contractually bind, act on
behalf of the other as its contracting broker, agent or otherwise for
committing, selling, conveying or transferring any of the other Party's
assets
or property, contracting for or in the name of the other Party, or making any
agreement contractually binding upon such Party.
24. Severability. If any provision of this Agreement is declared void by any
court of competent jurisdiction, the validity of any other provision of this
Agreement shall not be affected.
25. Time of the Essence. Time shall be of the essence in the performance of
this Agreement.
26. Survival. This Agreement shall be binding upon and inure to the benefit
of the Parties hereto and their respective assigns, heirs, successors and
legal
representatives.
27. Assignment. This Agreement may be assigned by NTI without the prior
consent of the permittee.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI to
employ an attorney to enforce its rights pursuant to this Agreement because
of the default of the other Party, the defaulting Party shall reimburse the
prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or
NTI that there by any third party beneficiary to this Agreement, and this
Agreement is exclusively for the benefit of Permittee and NTI and their
respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be construed
as creating an employer-employee relationship, partnership or joint venture
by and between Permittee and NTI, and Permittee shall not be held
responsible for the acts or omissions of NTI and vice versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in the
drafting and preparation of this Agreement. Hence, in any construction to
be made of this Agreement, the same shall not, as a matter of law, be
construed against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third party to
purchase its Construction Permit or License, and Permittee desires to accept
such offer, Permittee, within five (5) days of receiving such offer, shall
notify
NTI in writing and provide NTI with a copy of the same, and NTI shall have
the right to acquire Permittee's Construction Permit or License on the same
terms and conditions as offered by the third party, such right to be exercised
by NTI within thirty (30) days of written notice by Permittee.
(b) In the event NTI does not exercise its right of first refusal hereunder,
then
Permittee shall be free to assign or transfer its Construction Permit or
License
to the third party, subject to the condition that the assignee or transferee,
as
the case may be, agrees to be bound by all of the terms and conditions of this
Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ Lloyd Johnson
Its:
NORTHEAST TELECOM, INC.
By: /s/ Michael Taylor
Michael Taylor, Vice President
EXHIBIT 10.8
____________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Marie Johnson (the "Lease") for
the operation of one (1) Low Power Television station in Poplar Bluff, MO,
having the Call sign K61FY and operating on channel 61 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights
to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution of
this
agreement.
3. Assignor herein further represents and warrants that he has full power
and
authority to execute and deliver this agreement and to conclude the
transaction contemplated herein. Assignor also represents and warrants that
the has all the rights, title, and interest to the Lease and the Channel and
that
there are no existing or anticipated liabilities or legal action associated
with
the Lease or the Channel, to the best of his knowledge and Assignor has not
transferred (or agreed to transfer), nor will it transfer prior to the
completion
of the transaction contemplated herein, any portion of his interest in the
Lease
or the Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of the
Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid, to the
Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction. It is expressly
understood, however, that the Parties hereto intend each and every provision
of this Agreement to be valid and enforceable and hereby knowingly waive all
rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws of the
state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Marie Johnson
Rte. 1, Box 85
Karlstad, Mn. 56732
Re: Notice of Lease Assignment: Poplar Bluff, MO
LPTV Ch.K61FP, K59FE
Dear Mrs. Johnson:
This letter will serve to notify you of Northeast Telecom's intentions to
assign
your management and lease agreements, to another company. It will be
necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Marie Johnson
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 21 day
of June, 1994 by and between Northeast Telecom Inc. (NTI), and Marie
Johnson ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has authorized
licensees of Low Power Television ("LPTV") stations as defined in Section
74.701(F) of the Commission's Rules, to provide subscription television
("STV") service on their authorized channels, subject to FCC rules and
policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 61 at Poplar Bluff, Mo. (Call Sign K61FY) ("Channel"), and has
determined that it desires to provide STV service on such Channel on a
twenty-four (24) hour per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
1. Definitions. As used in this Agreement, the following terms shall have
the
meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and data
programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign K61FY) which
issued by the FCC to Permittee to construct the Channel and provide service
on the Channel on a seven (7) day per week, twenty (24) hours per day basis,
and shall specifically include any regular, modified or renewal authorizations
to operate the Channel.
1.3 License Date means the date on which a License Application is filed with
the FCC certifying the completion of construction of the transmission
facilities, but not later than the date specified on the Construction Permit,
unless extended.
1.4 Transmission Facilities means the equipment and facilities to be owned
by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement, including
without limitation restaurants, bars, offices and businesses that receive LPTV
Service under contract with NTI or under rights granted by NTI.
2. Term. The term of this Agreement shall begin on the date hereof and
shall
continue for a period of ten (10) years following the License Date, provided
that Permittee's authorization to operate the Channel has been renewed as
necessary by the FCC. Permittee shall use its reasonable best efforts to
obtain
such renewals. This Agreement shall be authormatically renewed for an
additional ten (10) years, unless NTI shall have submitted to Permittee at
least
six (6) months' advance written notice of its intent to terminate this
Agreement upon the expiration of the initial term.
3. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel for STV
services seven (7) days per week, twenty-four (24) hours per day, subject to
FCC Rules and Regulations and all of the terms and conditions set forth in
this Agreement. For purposes of this Agreement, such transmission on the
Channel shall include all rights to transmit both video programming and data
over the entire frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions of service
to Subscribers uniformly; provided, however, that: (a) Subscribers may be
divided into reasonable classifications approved by the FCC, and the
imposition of different sets of conditions may be applied to Subscribers in
different classifications; and (b) for good cause, within such
classifications,
deposits may be required of some Subscribers and not of others.
4. Control of Facilities. Notwithstanding anything in this Agreement to the
contrary, Permittee, as the FCC permittee for the Channel, shall be
responsible
for compliance with all applicable FCC rules and regulations. Permittee
shall
have control, in operation, management and maintenance of the station to the
extent necessary to comply with such rules and regulations, of the
construction, operation, management and maintenance of the station to the
extent necessary to comply with such rules and regulations. Nothing in this
Agreement shall be construed to: (a) prevent or hinder Permittee from
rejecting or refusing any STV broadcast program that it reasonably believes
to be unsatisfactory, unsuitable or contrary to the public interest, or from
substituting a program that in its opinion is of greater local or national
importance; (b) deprive Permittee of the right of ultimate decision concerning
the maximum amount of any STV program charge or fee; or (c) delegate to
any other individual or entity ultimate authority over the scheduling of STV
programs.
5. Payments. In consideration of Permittee's agreement to permit NTI to
transmit on the Channel, NTI agrees to pay Permittee a monthly transmission
fee of Ten Cents ($.10) per Subscriber ("Transmission Fee"), beginning with
and including the first calendar month immediately following the license
date.
Payment will be due no later than the twentieth (20th) day of the following
month.
5.2 The number of Subscribers shall be determined by adding the number of
Subscribers as of the last day of the prior month to the number of Subscribers
as of the then-current month, and then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency of the
United States of America by negotiable bank check drawn upon a United
States bank insured by the FDIC made payable to the order of Marie Johnson
and mailed to Marie Johnson or to such other address as Permittee shall
designate in writing to NTI. Payments shall be made by the twentieth (20th)
day of the following month.
6. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
7. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated with the
construction of the Transmission Facilities and any subsequent modifications
thereto. NTI shall also bear the costs of any licenses, permits,
authorizations,
or of such sites. NTI shall, at its sole cost and expense, complete
construction
of the Transmission Facilities as authorized by the FCC. Upon completion of
construction of the Transmission Application on the then-prescribed FCC
form for submission to the FCC. Permittee agrees to timely file the License
Application with the FCC after its receipt from NTI. NTI shall not be liable
to make any payments under Section 5 hereof during any delay caused by
Permittee's failure to promptly file such License Application. All lease,
construction, legal, licensing and engineering costs or any other costs
associated therewith shall be the sole responsibility of and be paid by NTI,
and
NTI shall reimburse Permittee within fifteen (15) days after receipt of
invoice
for reasonable payments made by Permittee and first approved in writing by
NTI, which approval will not be unreasonably withheld or delayed.
7.1 Lease of Transmission Facilities to Permittee. In consideration of the
sum of ONE DOLLAR ($1.00), the receipt and sufficiency of which is hereby
acknowledged, NTI shall lease the Transmission Facilities to Permittee for a
term equal to the duration of this Agreement, including any renewals.
7.2 Operation and Maintenance. Subject to the provisions of Section 4, NTI
shall, at its sole cost and expense, operate and maintain the Transmission
Facilities in good operating condition and repair with Permittee being
notified
of all such repairs. All persons performing maintenance, repairs or any other
duties shall work under ANTI's direct and continuing supervision and in
accordance with good engineering practices consistent with industry
standards. In the event transmission service is interrupted for any reason,
NTI
shall notify Permittee immediately. NTI shall be solely responsible for the
origination of all programming to be transmitted over the Channel, subject to
the provisions of Section 4 hereof and applicable FCC rules and regulations.
All personnel required to install, operate and maintain any program
origination
and delivery facilities shall be provided by NTI, at its sole cost and
expense,
and such personnel shall be under NTI's exclusive control, and shall not be
considered to be employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties agree to take
no action that would jeopardize or otherwise impair the Construction
Permit or any other FCC approval or authorization necessary for the
LPTV Service. Permittee shall use its reasonable best efforts, and NTI
shall cooperate with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals required to
carry out the transactions contemplated by this Agreement; provided,
however, that Permittee shall not be required to pay for the relocation,
reconstruction or similar costs associated with the Channel, which costs
shall be the sole responsibility of NTI. Permittee also shall use its
reasonable best efforts to cause the authorization for the Channel to be
renewed.
7.4 Access. Throughout the term of this Agreement, including any renewals
hereof, NTI shall provide, and/or cause others to provide, Permittee with
reasonable access to all Transmission Facilities for emergency repairs and
routine inspection, provided that Permittee shall not utilize such access in
a manner which unreasonably interferes with NTI's use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to lease or
lease for the transmission site and shall be responsible for bearing all
expenses in connection with such site, including the payment of rent and
all other costs and expenses of every nature. The site lease, if any, shall
be maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
8. Representations and Warranties of NTI. NTI represents and warrants as
follows:
8.1 Organization. NTI is a corporation duly organized, validly existing, and
in good standing under the laws of the State of New Jersey. NTI is
qualified or otherwise entitled to do business in all jurisdictions in which
such qualifications or entitlement is required by reason of its business,
activities, ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business. NTI has all
requisite power to execute, deliver, and, subject to the regulatory authority
of the FCC, perform this Agreement. The person executing this
Agreement on behalf of NTI is authorized to do so execute and to bind
NTI to the term hereof.
8.2 Authorization. All necessary actions on the part of NTI to authorize the
execution and delivery of this Agreement and the performance of the
obligations of NTI herein have been taken. This Agreement is valid and
legally binding upon NTI and enforceable in accordance with its terms
except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles. The person
executing this Agreement on behalf of NTI is authorized to so execute and
bind NTI to the terms hereof.
8.3 No Violations. The exectution, delivery, and performance of this
Agreement and all actions and transactions contemplated hereby: (a) will
not violate any provision of law or the Articles of Incorporation or By-Laws
of NTI, any order of any court or other agency of government to
which NTI is a party or by which it or any of its properties is bound, and
(b) will not violate, be in conflict with, result in a breach of, or
constitute
(with notice or lapse of time or both) a default under any applicable law,
order, or regulation, indenture, agreement, or other instrument to which
NTI is a party of, by which it or any of its properties is bound and which
has not been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature whatsoever
upon any of its property or assets.
9. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and payable
under this Agreement within twenty (20) days after the date upon which a
payment is due hereunder, and NTI does not cure such default within thirty
(30) days after notice of default is provided by Permittee to NTI; (b) any of
the material "Representations or Warranties" of either party materially
breaches any covenant or agreement herein or fails to comply with any
material provision of this Agreement, and any such breach, failure or default
continues for thirty (30) days after written notice thereof, as contemplated
herein, shall have been sent by the non-defaulting Party to the defaulting
Party.
10. Termination. Upon an Event of Default, the non-defaulting Party may
cancel this Agreement and may pursue such legal and equitable remedies as
may be available.
11. Indemnification. Each Party shall indemnify, defend, and hold the other
Party Harmless from and against any and all claims, damages, causes of
action, penalties, statutory damages, interest and costs and expenses,
including attorneys' fees, arising directly or indirectly out of the acts,
omissions, negligence or willful misconduct of said party, its employees or
agents in connection with the performance of this Agreement.
12. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited partnership, is
duly
organized, validly existing and in good standing in the state of its
formation. Permittee is qualified or otherwise entitled to do business in
all jurisdictions in which such qualification or entitlement is required by
reason of its business, activities, ownership or property. Permittee has all
requisite power and authority to own its own properties and to carry on its
business. Permittee has all requisite power to execute, deliver, and,
subject to the regulatory authority of the FCC, perform this Agreement.
The person signing this Agreement on behalf of Permittee is authorized
to so execute and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee to
authorize the execution and delivery of this Agreement and the performance
of the obligations of Permittee herein have been taken. This Agreement is
valid and legally binding upon Permittee and enforceable in accordance with
its terms except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles. The person
executing this Agreement on behalf of Permittee is authorized to so
execute and bind Permittee to the terms thereof.
12.3 Valid Construction Permit. The Construction Permit is in full force and
effect.
12.4 No Violation. The execution and delivery of this Agreement by
Permittee and the performance of Permittee's obligations hereunder are not
in violation or breach of, do not conflict with or constitute a default under,
and will not accelerate or permit the acceleration of the performance
required by any of the terms or provisions of any note, debt instrument,
security agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its Construction
Permit is bound and will not be an event which, after notice or lapse or
time or both, will result in any such violation, notice or lapse of time or
both, will result in any such violation, breach, conflict, default, or
acceleration, or under any law, judgment, decree, order, rule or regulation
of any governmental authority or authority applicable to Permittee and
will not result in the creation or imposition of any lien (whether or not
perfected), encumbrance, equity or restriction in favor of any third person
upon the Construction Permit; provided, however, that the Permittee shall
not be in default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole, violates FCC
rules or policies or the Communications Act of 1934 as amended. In such
event, the Parties shall negotiate in good faith such changes to the
Agreement so as to effectuate compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the aggregate
amount actually paid by NTI to Permittee pursuant to Section 5 of this
Agreement. Permittee shall not be liable for any consequential or similar
damages. This Section provides only for a limitation of damages otherwise
awardable, and shall not be construed to create an entitlement or legal right
to the amounts of damages specified herein upon an Event of Default. No
liability for damages shall be assessed under this Section except as a result
of
a final judgment on a complaint for damages awarded by a court of competent
jurisdiction, or as otherwise agreed by the Parties to this Agreement.
14. Permittee's Access to Records. From time to time and upon reasonable
notice to NTI, Permittee or its accountants shall have the right to request
information or be permitted at al reasonable times to inspect and copy all
records of NTI which Permittee or its accountants or attorneys reasonably
consider necessary to verify NTI's compliance with the terms and provisions
of this Agreement. It is understood by Permittee that such information is to
be held in confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably withheld or
delayed.
15. Specific Performance. The Parties acknowledge and agree that all of the
rights reserved thereunder are necessarily of a special, unique, unusual and
extraordinary character, which gives them a peculiar value, the loss of which
cannot be adequately or reasonably compensated for in damages in an action
at law, and that the breach by either Party of any of the provisions of this
Agreement will cause the other Party irreparable injury and damage.
Therefore, upon the occurrence of an event of Default, the non-defaulting
Party shall be entitled as a matter of right to seek specific performance of
the
defaulting Party's obligations and warranties hereunder, and/or declaratory,
injunctive or other equitable relief in court to correct the Event of
Default.
No exercise of this right to specific performance shall constitute a waiver of
such Party's other rights or remedies otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall be
effective upon receipt; provided, however, that the refusal to accept receipt
will constitute receipt for this purpose, in each case addressed:
If to Permittee, to: Marie Johnson
Rte. 1, Box 85
Karlstad, Mn 56752
If to NTI, to: Howard B. Winkler, President
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Stephen E. Coran, Esq.
Rini & Coran, P.C.
1350 Connecticut Avenue, N.W., Suite 900
Washington, D.C. 20036
provided, however, that if any party shall have designated a different address
by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to comply
with any provision of this Agreement by the other Party shall not be construed
as or constitute a continuing waiver of such provision or a waiver of any
other
provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior agreements,
covenants, arrangements, communications, representations, or warranties,
whether oral or written, by any Party (or any officer, employee, or
representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed and
enforced in accordance with and governed by the internal substantive law of
the State of and of the United States of America. The headings
of
the Sections of this Agreement are inserted for convenience of reference only
and shall not be deemed to constitute a part hereof. Unless otherwise
stated,
references in this Agreement to sections refer to the Sections of this
Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the Parties,
except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable in
whole or in part to carry out its obligations hereunder, the Party shall not
be
deemed in violation or default during the period of such inability. The term
"force majeure" as used herein shall mean the following: acts of God; acts of
public enemies; orders of any kind of the government of the United States of
America or of any state or state departments, agencies, political
subdivisions,
or officials, or any civil or military authority; insurrections; riots;
epidemic;
landslides; lightning; earthquakes; fires; hurricanes; volcanic activity;
storms
of extraordinary force; floods; washouts; drought; civil disturbances;
explosions; or any other cause or event not reasonably within the control of
the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart shall be
deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold
itself out to be, vested with any power or right to contractually bind, act
on
behalf of the other as its contracting broker, agent or otherwise for
committing, selling, conveying or transferring any of the other Party's assets
or property, contracting for or in the name of the other Party, or making any
agreement contractually binding upon such Party.
24. Severability. If any provision of this Agreement is declared void by any
court of competent jurisdiction, the validity of any other provision of this
Agreement shall not be affected.
25. Time of the Essence. Time shall be of the essence in the performance of
this Agreement.
26. Survival. This Agreement shall be binding upon and inure to the benefit
of the Parties hereto and their respective assigns, heirs, successors and
legal
representatives.
27. Assignment. This Agreement may be assigned by NTI without the prior
consent of the permittee.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI to
employ an attorney to enforce its rights pursuant to this Agreement because
of the default of the other Party, the defaulting Party shall reimburse the
prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or
NTI that there by any third party beneficiary to this Agreement, and this
Agreement is exclusively for the benefit of Permittee and NTI and their
respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be construed
as creating an employer-employee relationship, partnership or joint venture by
and between Permittee and NTI, and Permittee shall not be held responsible
for the acts or omissions of NTI and vice versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in the
drafting and preparation of this Agreement. Hence, in any construction to be
made of this Agreement, the same shall not, as a matter of law, be construed
against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third party to
purchase its Construction Permit or License, and Permittee desires to
accept such offer, Permittee, within five (5) days of receiving such offer,
shall notify NTI in writing and provide NTI with a copy of the same, and
NTI shall have the right to acquire Permittee's Construction Permit or
License on the same terms and conditions as offered by the third party,
such right to be exercised by NTI within thirty (30) days of written notice
by Permittee.
(b) In the event NTI does not exercise its right of first refusal hereunder,
then
Permittee shall be free to assign or transfer its Construction Permit or
License to the third party, subject to the condition that the assignee or
transferee, as the case may be, agrees to be bound by all of the terms and
conditions of this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ Marie Johnson
Its:
NORTHEAST TELECOM, INC.
By: /s/ Michael Taylor
Michael Taylor, Vice President
EXHIBIT 10.9
__________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Marie Johnson (the "Lease") for
the operation of one (1) Low Power Television station in Poplar Bluff, MO,
having the Call sign K59FE and operating on channel 59 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution of
this
agreement.
3. Assignor herein further represents and warrants that he has full power
and
authority to execute and deliver this agreement and to conclude the
transaction contemplated herein. Assignor also represents and warrants that
the has all the rights, title, and interest to the Lease and the Channel and
that
there are no existing or anticipated liabilities or legal action associated
with
the Lease or the Channel, to the best of his knowledge and Assignor has not
transferred (or agreed to transfer), nor will it transfer prior to the
completion
of the transaction contemplated herein, any portion of his interest in the
Lease
or the Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of the
Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid, to the
Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction. It is expressly
understood, however, that the Parties hereto intend each and every provision
of this Agreement to be valid and enforceable and hereby knowingly waive
all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws of the
state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year First written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Marie Johnson
Rte. 1, Box 85
Karlstad, Mn. 56732
Re: Notice of Lease Assignment: Poplar Bluff, MO
LPTV Ch.K61FP, K59FE
Dear Mrs. Johnson:
This letter will serve to notify you of Northeast Telecom's intentions to
assign
your management and lease agreements, to another company. It will be
necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Marie Johnson
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 21 day
of June, 1994
by and between Northeast Telecom Inc. (NTI), and Marie Johnson
("Permittee"), together
"the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of
Low Power Television ("LPTV") stations as defined in Section 74.701(F) of
the
Commission's Rules, to provide subscription television ("STV") service on
their authorized
channels, subject to FCC rules and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 59 at
Poplar Bluff, Mo. (Call Sign K59FE) ("Channel"), and has determined that
it desires to
provide STV service on such Channel on a twenty-four (24) hour per day,
seven (7) day per
week basis;
WHERAS, NTI is in the business of providing STV management and
operational services
and seeks to provide such services on Permittee's Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction
Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee
and NTI, intending to be legally bound, hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the
meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and data
programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign
K59FE)
which issued by the FCC to Permittee to construct the Channel and
provide service on the Channel on a seven (7) day per week, twenty
(24)
hours per day basis, and shall specifically include any regular,
modified
or renewal authorizations to operate the Channel.
1.3 License Date means the date on which a License Application is filed
with
the FCC certifying the completion of construction of the
transmission
facilities, but not later than the date specified on the
Construction
Permit,
unless extended.
1.4 Transmission Facilities means the equipment and facilities to be
owned
by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including
without limitation restaurants, bars, offices and businesses that
receive
LPTV Service under contract with NTI or under rights granted by NTI.
2. Term. The term of this Agreement shall begin on the date hereof and
shall
continue for a period of ten (10) years following the License Date,
provided that
Permittee's authorization to operate the Channel has been renewed as
necessary by
the FCC. Permittee shall use its reasonable best efforts to obtain such
renewals.
This Agreement shall be authormatically renewed for an additional ten
(10) years,
unless NTI shall have submitted to Permittee at least six (6) months'
advance
written notice of its intent to terminate this Agreement upon the
expiration
of the
initial term.
3. Transition on Channel. Commencing on the License Date, Permittee
hereby
authorizes NTI to transmit a broadcast signal on the Channel for STV
services
seven (7) days per week, twenty-four (24) hours per day, subject to FCC
Rules and
Regulations and all of the terms and conditions set forth in this
Agreement. For
purposes of this Agreement, such transmission on the Channel shall
include all
rights to transmit both video programming and data over the entire
frequency
spectrum of Permittee's Channel. Consistent with applicable FCC rules,
NTI will
apply charges, terms and conditions of service to Subscribers uniformly;
provided,
however, that: (a) Subscribers may be divided into reasonable
classifications
approved by the FCC, and the imposition of different sets of conditions
may be
applied to Subscribers in different classifications; and (b) for good
cause,
within
such classifications, deposits may be required of some Subscribers and
not
of
others.
4. Control of Facilities. Notwithstanding anything in this Agreement to the
contrary,
Permittee, as the FCC permittee for the Channel, shall be responsible for
compliance with all applicable FCC rules and regulations. Permittee
shall
have
control, in operation, management and maintenance of the station to the
extent
necessary to comply with such rules and regulations, of the construction,
operation,
management and maintenance of the station to the extent necessary to
comply with
such rules and regulations. Nothing in this Agreement shall be construed
to: (a)
prevent or hinder Permittee from rejecting or refusing any STV broadcast
program
that it reasonably believes to be unsatisfactory, unsuitable or contrary
to
the public
interest, or from substituting a program that in its opinion is of
greater
local or
national importance; (b) deprive Permittee of the right of ultimate
decision
concerning the maximum amount of any STV program charge or fee; or
(c)
delegate to any other individual or entity ultimate authority over the
scheduling of
STV programs.
5. Payments. In consideration of Permittee's agreement to permit NTI to
transmit on
the Channel, NTI agrees to pay Permittee a monthly transmission fee of
Ten Cents
($.10) per Subscriber ("Transmission Fee"), beginning with and including
the first
calendar month immediately following the license date. Payment will be
due no
later than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the number
of
Subscribers as of the last day of the prior month to the number of
Subscribers as of the then-current month, and then dividing by
two (2).
5.3 All payments from NTI to Permittee shall be paid in currency of the
United States of America by negotiable bank check drawn upon a
United
States bank insured by the FDIC made payable to the order of Marie
Johnson and mailed to Marie Johnson or to such other address as
Permittee shall designate in writing to NTI. Payments shall be made
by
the twentieth (20th) day of the following month.
6. Insurance. It is agreed that Permittee shall be insured as a third party
insured under
any liability insurance obtained by NTI.
7. Construction. NTI shall bear all costs, including but not limited to,
consultant,
design, engineering, licensing and legal fees, associated with the
construction of the
Transmission Facilities and any subsequent modifications thereto. NTI
shall also
bear the costs of any licenses, permits, authorizations, or of such
sites.
NTI shall
, at its sole cost and expense, complete construction of the Transmission
Facilities
as authorized by the FCC. Upon completion of construction of the
Transmission
Application on the then-prescribed FCC form for submission to the FCC.
Permittee agrees to timely file the License Application with the FCC
after
its
receipt from NTI. NTI shall not be liable to make any payments under
Section 5
hereof during any delay caused by Permittee's failure to promptly file
such
License
Application. All lease, construction, legal, licensing and engineering
costs
or any
other costs associated therewith shall be the sole responsibility of and
be
paid by
NTI, and NTI shall reimburse Permittee within fifteen (15) days after
receipt of
invoice for reasonable payments made by Permittee and first approved in
writing
by NTI, which approval will not be unreasonably withheld or delayed.
7.1 Lease of Transmission Facilities to Permittee. In consideration of
the
sum
of ONE DOLLAR ($1.00), the receipt and sufficiency of which is
hereby
acknowledged, NTI shall lease the Transmission Facilities to
Permittee
for
a term equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of Section 4,
NTI
shall, at its sole cost and expense, operate and maintain the
Transmission
Facilities in good operating condition and repair with Permittee
being
notified of all such repairs. All persons performing maintenance,
repairs
or any other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering practices
consistent
with industry standards. In the event transmission service is
interrupted
for any reason, NTI shall notify Permittee immediately. NTI shall
be
solely responsible for the origination of all programming to be
transmitted
over the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required to
install,
operate and maintain any program origination and delivery facilities
shall
be provided by NTI, at its sole cost and expense, and such personnel
shall
be under NTI's exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties agree to
take
no action that would jeopardize or otherwise impair the Construction
Permit or any other FCC approval or authorization necessary for the
LPTV Service. Permittee shall use its reasonable best efforts,
and NTI
shall cooperate with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals required
to
carry out the transactions contemplated by this Agreement; provided,
however, that Permittee shall not be required to pay for the
relocation,
reconstruction or similar costs associated with the Channel, which
costs
shall be the sole responsibility of NTI. Permittee also shall use
its
reasonable best efforts to cause the authorization for the Channel
to be
renewed.
7.4 Access. Throughout the term of this Agreement, including any
renewals
hereof, NTI shall provide, and/or cause others to provide, Permittee
with
reasonable access to all Transmission Facilities for emergency
repairs
and
routine inspection, provided that Permittee shall not utilize such
access
in
a manner which unreasonably interferes with NTI's use of the
Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to lease
or
lease for the transmission site and shall be responsible for
bearing all
expenses in connection with such site, including the payment of rent
and
all other costs and expenses of every nature. The site lease, if
any,
shall
be maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
8. Representations and Warranties of NTI. NTI represents and warrants as
follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing,
and
in good standing under the laws of the State of New Jersey. NTI is
qualified or otherwise entitled to do business in all jurisdictions
in
which
such qualifications or entitlement is required by reason of its
business,
activities, ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business. NTI
has all
requisite power to execute, deliver, and, subject to the regulatory
authority
of the FCC, perform this Agreement. The person executing this
Agreement on behalf of NTI is authorized to do so execute and to
bind
NTI to the term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize
the
execution and delivery of this Agreement and the performance of the
obligations of NTI herein have been taken. This Agreement is valid
and
legally binding upon NTI and enforceable in accordance with its
terms
except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles.
The
person
executing this Agreement on behalf of NTI is authorized to so
execute
and
bind NTI to the terms hereof.
8.3 No Violations. The exectution, delivery, and performance of this
Agreement and all actions and transactions contemplated hereby: (a)
will
not violate any provision of law or the Articles of Incorporation or
By-Laws of NTI, any order of any court or other agency of government to
which NTI is a party or by which it or any of its properties is
bound,
and
(b) will not violate, be in conflict with, result in a breach of, or
constitute
(with notice or lapse of time or both) a default under any
applicable
law,
order, or regulation, indenture, agreement, or other instrument to
which
NTI is a party of, by which it or any of its properties is bound and
which
has not been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever
upon any of its property or assets.
9. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default"
hereunder if: (a) NTI fails to make any payment due and payable under
this
Agreement within twenty (20) days after the date upon which a payment
is due
hereunder, and NTI does not cure such default within thirty (30) days
after
notice
of default is provided by Permittee to NTI; (b) any of the material
"Representations
or Warranties" of either party materially breaches any covenant or
agreement
herein or fails to comply with any material provision of this Agreement,
and any
such breach, failure or default continues for thirty (30) days after
written
notice
thereof, as contemplated herein, shall have been sent by the
non-defaulting
Party
to the defaulting Party.
10. Termination. Upon an Event of Default, the non-defaulting Party may
cancel this
Agreement and may pursue such legal and equitable remedies as may be
available.
11. Indemnification. Each Party shall indemnify, defend, and hold the other
Party
harmless from and against any and all claims, damages, causes of action,
penalties,
statutory damages, interest and costs and expenses, including attorneys'
fees,
arising directly or indirectly out of the acts, omissions, negligence or
willful
misconduct of said party, its employees or agents in connection with the
performance of this Agreement.
12. Representations, Warranties, and Covenants of Permittee. Permittee
represents and
warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is
duly
organized, validly existing and in good standing in the state of its
formation. Permittee is qualified or otherwise entitled to do
business
in
all jurisdictions in which such qualification or entitlement is
required
by
reason of its business, activities, ownership or property.
Permittee has
all
requisite power and authority to own its own properties and to
carry on
its
business. Permittee has all requisite power to execute, deliver,
and,
subject to the regulatory authority of the FCC, perform this
Agreement.
The person signing this Agreement on behalf of Permittee is
authorized
to so execute and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee to
authorize
the execution and delivery of this Agreement and the performance of
the
obligations of Permittee herein have been taken. This Agreement is
valid
and legally binding upon Permittee and enforceable in accordance
with
its terms except to the extent that enforceability thereof may be
limited
by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles.
The
person
executing this Agreement on behalf of Permittee is authorized to so
execute and bind Permittee to the terms thereof.
12.3 Valid Construction Permit. The Construction Permit is in full force
and
effect.
12.4 No Violation. The execution and delivery of this Agreement by
Permittee
and the performance of Permittee's obligations hereunder are not in
violation or breach of, do not conflict with or constitute a default
under,
and will not accelerate or permit the acceleration of the
performance
required by any of the terms or provisions of any note, debt
instrument,
security agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction
Permit is bound and will not be an event which, after notice or
lapse or
time or both, will result in any such violation, notice or lapse of
time
or
both, will result in any such violation, breach, conflict,
default, or
acceleration, or under any law, judgment, decree, order, rule or
regulation
of any governmental authority or authority applicable to Permittee
and
will not result in the creation or imposition of any lien (whether
or not
perfected), encumbrance, equity or restriction in favor of any third
person
upon the Construction Permit; provided, however, that the Permittee
shall
not be in default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole, violates
FCC
rules or policies or the Communications Act of 1934 as amended. In
such
event, the Parties shall negotiate in good faith such changes to the
Agreement so as to effectuate compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in
connection with this Agreement shall not exceed the aggregate amount
actually
paid by NTI to Permittee pursuant to Section 5 of this Agreement.
Permittee shall
not be liable for any consequential or similar damages. This Section
provides only
for a limitation of damages otherwise awardable, and shall not be
construed to
create an entitlement or legal right to the amounts of damages specified
herein
upon an Event of Default. No liability for damages shall be assessed
under this
Section except as a result of a final judgment on a complaint for damages
awarded
by a court of competent jurisdiction, or as otherwise agreed by the
Parties
to this
Agreement.
14. Permittee's Access to Records. From time to time and upon reasonable
notice to
NTI, Permittee or its accountants shall have the right to request
information or be
permitted at al reasonable times to inspect and copy all records of NTI
which
Permittee or its accountants or attorneys reasonably consider necessary
to
verify
NTI's compliance with the terms and provisions of this Agreement. It is
understood by Permittee that such information is to be held in confidence
and not
disclosed to any third parties without the prior written consent of NTI,
which
consent shall not be unreasonably withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of the
rights
reserved thereunder are necessarily of a special, unique, unusual and
extraordinary
character, which gives them a peculiar value, the loss of which cannot be
adequately or reasonably compensated for in damages in an action at law,
and that
the breach by either Party of any of the provisions of this Agreement
will
cause the
other Party irreparable injury and damage. Therefore, upon the
occurrence
of an
event of Default, the non-defaulting Party shall be entitled as a matter
of
right to
seek specific performance of the defaulting Party's obligations and
warranties
hereunder, and/or declaratory, injunctive or other equitable relief in
court
to correct
the Event of Default. No exercise of this right to specific performance
shall
constitute a waiver of such Party's other rights or remedies otherwise
existing law
or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall
be in writing, sent by U.S. registered Mail and shall be effective upon
receipt;
provided, however, that the refusal to accept receipt will constitute
receipt
for this
purpose, in each case addressed:
If to Permittee, to: Marie Johnson
Rte. 1, Box 85
Karlstad, Mn 56752
If to NTI, to: Howard B. Winkler, President
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Stephen E. Coran, Esq.
Rini & Coran, P.C.
1350 Connecticut Avenue, N.W., Suite 900
Washington, D.C. 20036
provided, however, that if any party shall have designated a different
address by
notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to comply
with any
provision of this Agreement by the other Party shall not be construed as
or
constitute a continuing waiver of such provision or a waiver of any other
provision
of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the
Parties hereto and supersedes all prior agreements, covenants,
arrangements,
communications, representations, or warranties, whether oral or written,
by any
Party (or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed and
enforced
in accordance with and governed by the internal substantive law of the
State of
and of the United States of America. The headings of the
Sections of this
Agreement are inserted for convenience of reference only and shall not be
deemed
to constitute a part hereof. Unless otherwise stated, references in this
Agreement
to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only
by an instrument in writing duly executed by the Parties, except as
otherwise
provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable in
whole or in
part to carry out its obligations hereunder, the Party shall not be
deemed
in
violation or default during the period of such inability. The term
"force
majeure"
as used herein shall mean the following: acts of God; acts of public
enemies; orders
of any kind of the government of the United States of America or of any
state or
state departments, agencies, political subdivisions, or officials, or
any civil
or
military authority; insurrections; riots; epidemic; landslides;
lightning;
earthquakes;
fires; hurricanes; volcanic activity; storms of extraordinary force;
floods;
washouts;
drought; civil disturbances; explosions; or any other cause or event not
reasonably
within the control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by
the Parties hereto, and each fully executed counterpart shall be deemed
an
original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold
itself out
to be, vested with any power or right to contractually bind, act on
behalf
of the
other as its contracting broker, agent or otherwise for committing,
selling,
conveying or transferring any of the other Party's assets or property,
contracting
for or in the name of the other Party, or making any agreement
contractually
binding upon such Party.
24. Severability. If any provision of this Agreement is declared void by any
court of
competent jurisdiction, the validity of any other provision of this
Agreement shall
not be affected.
25. Time of the Essence. Time shall be of the essence in the performance of
this
Agreement.
26. Survival. This Agreement shall be binding upon and inure to the benefit
of the
Parties hereto and their respective assigns, heirs, successors and legal
representatives.
27. Assignment. This Agreement may be assigned by NTI without the prior
consent
of the permittee.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI to
employ an
attorney to enforce its rights pursuant to this Agreement because of the
default of
the other Party, the defaulting Party shall reimburse the prevailing
Party
for
reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or
NTI that
there by any third party beneficiary to this Agreement, and this
Agreement
is
exclusively for the benefit of Permittee and NTI and their respective
assigns.
30. Independent Relationship. Nothing in this Agreement shall be construed
as
creating an employer-employee relationship, partnership or joint venture
by and
between Permittee and NTI, and Permittee shall not be held responsible
for the acts
or omissions of NTI and vice versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in the
drafting and
preparation of this Agreement. Hence, in any construction to be made of
this
Agreement, the same shall not, as a matter of law, be construed against
any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to
purchase its Construction Permit or License, and Permittee desires
to
accept such offer, Permittee, within five (5) days of receiving such
offer,
shall notify NTI in writing and provide NTI with a copy of the same,
and
NTI shall have the right to acquire Permittee's Construction Permit
or
License on the same terms and conditions as offered by the third
party,
such right to be exercised by NTI within thirty (30) days of written
notice
by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder,
then
Permittee shall be free to assign or transfer its Construction
Permit or
License to the third party, subject to the condition that the
assignee or
transferee, as the case may be, agrees to be bound by all of the
terms
and
conditions of this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the
day and year first above written.
PERMITTEE:
By: /s/ Marie Johnson
Its:
NORTHEAST TELECOM, INC.
By: /s/ Michael Taylor
Michael Taylor, Vice President
EXHIBIT 10.10
__________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Jeffrey Narod (the "Lease") for
the operation of one (1) Low Power Television station in Poplar Bluff, MO,
having the Call sign K35EP and operating on channel 35 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution of
this
agreement.
3. Assignor herein further represents and warrants that he has full power
and
authority to execute and deliver this agreement and to conclude the
transaction contemplated herein. Assignor also represents and warrants that
the has all the rights, title, and interest to the Lease and the Channel and
that
there are no existing or anticipated liabilities or legal action associated
with
the Lease or the Channel, to the best of his knowledge and Assignor has not
transferred (or agreed to transfer), nor will it transfer prior to the
completion
of the transaction contemplated herein, any portion of his interest in the
Lease
or the Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of the
Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid, to the
Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction. It is expressly
understood, however, that the Parties hereto intend each and every provision
of this Agreement to be valid and enforceable and hereby knowingly waive
all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws of the
state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year First written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Jeffrey Narod
1879 Jeffery Court
Wantagh, New York 11793
Re: Notice of Lease Assignment: Poplar Bluff, MO
LPTV Ch.K35EP
Dear Mrs. Johnson:
This letter will serve to notify you of Northeast Telecom's intentions to
assign
your management and lease agreements, to another company. It will be
necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Jeffrey Narod
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 21 day
of June, 1994
by and between Northeast Telecom Inc. (NTI), and Jeffrey Narod
("Permittee"), together
"the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of
Low Power Television ("LPTV") stations as defined in Section 74.701(F) of
the
Commission's Rules, to provide subscription television ("STV") service on
their authorized
channels, subject to FCC rules and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 35 at
Poplar Bluff, Mo. (Call Sign K35EP) ("Channel"), and has determined that
it desires to
provide STV service on such Channel on a twenty-four (24) hour per day,
seven (7) day per
week basis;
WHERAS, NTI is in the business of providing STV management and
operational services
and seeks to provide such services on Permittee's Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction
Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee
and NTI, intending to be legally bound, hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the
meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and data
programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign K35EP)
which issued by the FCC to Permittee to construct the Channel and
provide service on the Channel on a seven (7) day per week, twenty
(24)
hours per day basis, and shall specifically include any regular,
modified
or renewal authorizations to operate the Channel.
1.3 License Date means the date on which a License Application is filed
with
the FCC certifying the completion of construction of the
transmission
facilities, but not later than the date specified on the
Construction
Permit,
unless extended.
1.4 Transmission Facilities means the equipment and facilities to be
owned
by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including
without limitation restaurants, bars, offices and businesses that
receive
LPTV Service under contract with NTI or under rights granted by NTI.
2. Term. The term of this Agreement shall begin on the date hereof and
shall
continue for a period of ten (10) years following the License Date,
provided that
Permittee's authorization to operate the Channel has been renewed as
necessary by
the FCC. Permittee shall use its reasonable best efforts to obtain such
renewals.
This Agreement shall be authormatically renewed for an additional ten
(10) years,
unless NTI shall have submitted to Permittee at least six (6) months'
advance
written notice of its intent to terminate this Agreement upon the
expiration
of the
initial term.
3. Transition on Channel. Commencing on the License Date, Permittee
hereby
authorizes NTI to transmit a broadcast signal on the Channel for STV
services
seven (7) days per week, twenty-four (24) hours per day, subject to FCC
Rules and
Regulations and all of the terms and conditions set forth in this
Agreement. For
purposes of this Agreement, such transmission on the Channel shall
include all
rights to transmit both video programming and data over the entire
frequency
spectrum of Permittee's Channel. Consistent with applicable FCC rules,
NTI will
apply charges, terms and conditions of service to Subscribers uniformly;
provided,
however, that: (a) Subscribers may be divided into reasonable
classifications
approved by the FCC, and the imposition of different sets of conditions
may be
applied to Subscribers in different classifications; and (b) for good
cause,
within
such classifications, deposits may be required of some Subscribers and
not
of
others.
4. Control of Facilities. Notwithstanding anything in this Agreement to the
contrary,
Permittee, as the FCC permittee for the Channel, shall be responsible for
compliance with all applicable FCC rules and regulations. Permittee
shall
have
control, in operation, management and maintenance of the station to the
extent
necessary to comply with such rules and regulations, of the construction,
operation,
management and maintenance of the station to the extent necessary to
comply with
such rules and regulations. Nothing in this Agreement shall be construed
to: (a)
prevent or hinder Permittee from rejecting or refusing any STV broadcast
program
that it reasonably believes to be unsatisfactory, unsuitable or contrary
to
the public
interest, or from substituting a program that in its opinion is of
greater
local or
national importance; (b) deprive Permittee of the right of ultimate
decision
concerning the maximum amount of any STV program charge or fee; or
(c)
delegate to any other individual or entity ultimate authority over the
scheduling of
STV programs.
5. Payments. In consideration of Permittee's agreement to permit NTI to
transmit on
the Channel, NTI agrees to pay Permittee a monthly transmission fee of
Ten Cents
($.10) per Subscriber ("Transmission Fee"), beginning with and including
the first
calendar month immediately following the license date. Payment will be
due no
later than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the number
of
Subscribers as of the last day of the prior month to the number of
Subscribers as of the then-current month, and then dividing by
two (2).
5.3 All payments from NTI to Permittee shall be paid in currency of the
United States of America by negotiable bank check drawn upon a
United
States bank insured by the FDIC made payable to the order of Marie
Johnson and mailed to Marie Johnson or to such other address as
Permittee shall designate in writing to NTI. Payments shall be made
by
the twentieth (20th) day of the following month.
6. Insurance. It is agreed that Permittee shall be insured as a third party
insured under
any liability insurance obtained by NTI.
7. Construction. NTI shall bear all costs, including but not limited to,
consultant,
design, engineering, licensing and legal fees, associated with the
construction of the
Transmission Facilities and any subsequent modifications thereto. NTI
shall also
bear the costs of any licenses, permits, authorizations, or of such
sites.
NTI shall
, at its sole cost and expense, complete construction of the Transmission
Facilities
as authorized by the FCC. Upon completion of construction of the
Transmission
Application on the then-prescribed FCC form for submission to the FCC.
Permittee agrees to timely file the License Application with the FCC
after
its
receipt from NTI. NTI shall not be liable to make any payments under
Section 5
hereof during any delay caused by Permittee's failure to promptly file
such
License
Application. All lease, construction, legal, licensing and engineering
costs
or any
other costs associated therewith shall be the sole responsibility of and
be
paid by
NTI, and NTI shall reimburse Permittee within fifteen (15) days after
receipt of
invoice for reasonable payments made by Permittee and first approved in
writing
by NTI, which approval will not be unreasonably withheld or delayed.
7.1 Lease of Transmission Facilities to Permittee. In consideration of
the
sum
of ONE DOLLAR ($1.00), the receipt and sufficiency of which is
hereby
acknowledged, NTI shall lease the Transmission Facilities to
Permittee
for
a term equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of Section 4,
NTI
shall, at its sole cost and expense, operate and maintain the
Transmission
Facilities in good operating condition and repair with Permittee
being
notified of all such repairs. All persons performing maintenance,
repairs
or any other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering practices
consistent
with industry standards. In the event transmission service is
interrupted
for any reason, NTI shall notify Permittee immediately. NTI shall
be
solely responsible for the origination of all programming to be
transmitted
over the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required to
install,
operate and maintain any program origination and delivery facilities
shall
be provided by NTI, at its sole cost and expense, and such personnel
shall
be under NTI's exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties agree to
take
no action that would jeopardize or otherwise impair the Construction
Permit or any other FCC approval or authorization necessary for the
LPTV Service. Permittee shall use its reasonable best efforts, and
NTI
shall cooperate with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals required
to
carry out the transactions contemplated by this Agreement; provided,
however, that Permittee shall not be required to pay for the
relocation,
reconstruction or similar costs associated with the Channel, which
costs
shall be the sole responsibility of NTI. Permittee also shall use
its
reasonable best efforts to cause the authorization for the Channel
o be
renewed.
7.4 Access. Throughout the term of this Agreement, including any
renewals
hereof, NTI shall provide, and/or cause others to provide, Permittee
with
reasonable access to all Transmission Facilities for emergency
repairs
and
routine inspection, provided that Permittee shall not utilize such
access
in
a manner which unreasonably interferes with NTI's use of the
Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to lease
or
lease for the transmission site and shall be responsible for
bearing all
expenses in connection with such site, including the payment of rent
and
all other costs and expenses of every nature. The site lease, if
any,
shall
be maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
8. Representations and Warranties of NTI. NTI represents and warrants as
follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing,
and
in good standing under the laws of the State of New Jersey. NTI is
qualified or otherwise entitled to do business in all jurisdictions
in
which
such qualifications or entitlement is required by reason of its
business,
activities, ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business. NTI
has all
requisite power to execute, deliver, and, subject to the regulatory
authority
of the FCC, perform this Agreement. The person executing this
Agreement on behalf of NTI is authorized to do so execute and to
bind
NTI to the term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize
the
execution and delivery of this Agreement and the performance of the
obligations of NTI herein have been taken. This Agreement is valid
and
legally binding upon NTI and enforceable in accordance with its
terms
except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles.
The
person
executing this Agreement on behalf of NTI is authorized to so
execute
and
bind NTI to the terms hereof.
8.3 No Violations. The exectution, delivery, and performance of this
Agreement and all actions and transactions contemplated hereby: (a)
will
not violate any provision of law or the Articles of Incorporation or
By-Laws of NTI, any order of any court or other agency of government to
which NTI is a party or by which it or any of its properties is
bound,
and
(b) will not violate, be in conflict with, result in a breach of, or
constitute
(with notice or lapse of time or both) a default under any
applicable
law,
order, or regulation, indenture, agreement, or other instrument to
which
NTI is a party of, by which it or any of its properties is bound and
which
has not been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever
upon any of its property or assets.
9. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default"
hereunder if: (a) NTI fails to make any payment due and payable under
this
Agreement within twenty (20) days after the date upon which a payment
is due
hereunder, and NTI does not cure such default within thirty (30) days
after
notice
of default is provided by Permittee to NTI; (b) any of the material
"Representations
or Warranties" of either party materially breaches any covenant or
agreement
herein or fails to comply with any material provision of this Agreement,
and any
such breach, failure or default continues for thirty (30) days after
written
notice
thereof, as contemplated herein, shall have been sent by the non-
defaulting
Party
to the defaulting Party.
10. Termination. Upon an Event of Default, the non-defaulting Party may
cancel this
Agreement and may pursue such legal and equitable remedies as may be
available.
11. Indemnification. Each Party shall indemnify, defend, and hold the other
Party
harmless from and against any and all claims, damages, causes of action,
penalties,
statutory damages, interest and costs and expenses, including attorneys'
fees,
arising directly or indirectly out of the acts, omissions, negligence or
willful
misconduct of said party, its employees or agents in connection with the
performance of this Agreement.
12. Representations, Warranties, and Covenants of Permittee. Permittee
represents and
warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is
duly
organized, validly existing and in good standing in the state of its
formation. Permittee is qualified or otherwise entitled to do
business
in
all jurisdictions in which such qualification or entitlement is
required
by
reason of its business, activities, ownership or property.
Permittee has
all
requisite power and authority to own its own properties and to
carry on
its
business. Permittee has all requisite power to execute, deliver,
and,
subject to the regulatory authority of the FCC, perform this
Agreement.
The person signing this Agreement on behalf of Permittee is
authorized
to so execute and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee to
authorize
the execution and delivery of this Agreement and the performance of
the
obligations of Permittee herein have been taken. This Agreement is
valid
and legally binding upon Permittee and enforceable in accordance
with
its terms except to the extent that enforceability thereof may be
limited
by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles.
The
person
executing this Agreement on behalf of Permittee is authorized to so
execute and bind Permittee to the terms thereof.
12.3 Valid Construction Permit. The Construction Permit is in full force
and
effect.
12.4 No Violation. The execution and delivery of this Agreement by
Permittee
and the performance of Permittee's obligations hereunder are not in
violation or breach of, do not conflict with or constitute a default
under,
and will not accelerate or permit the acceleration of the
performance
required by any of the terms or provisions of any note, debt
instrument,
security agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction
Permit is bound and will not be an event which, after notice or
lapse or
time or both, will result in any such violation, notice or lapse of
time
or
both, will result in any such violation, breach, conflict, default,
or
acceleration, or under any law, judgment, decree, order, rule or
regulation
of any governmental authority or authority applicable to
Permittee and
will not result in the creation or imposition of any lien (whether
or not
perfected), encumbrance, equity or restriction in favor of any third
person
upon the Construction Permit; provided, however, that the Permittee
shall
not be in default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole, violates
FCC
rules or policies or the Communications Act of 1934 as amended. In
such
event, the Parties shall negotiate in good faith such changes to the
Agreement so as to effectuate compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in
connection with this Agreement shall not exceed the aggregate amount
actually
paid by NTI to Permittee pursuant to Section 5 of this Agreement.
Permittee shall
not be liable for any consequential or similar damages. This Section
provides only
for a limitation of damages otherwise awardable, and shall not be
construed to
create an entitlement or legal right to the amounts of damages specified
herein
upon an Event of Default. No liability for damages shall be assessed
under this
Section except as a result of a final judgment on a complaint for damages
awarded
by a court of competent jurisdiction, or as otherwise agreed by the
Parties
to this
Agreement.
14. Permittee's Access to Records. From time to time and upon reasonable
notice to
NTI, Permittee or its accountants shall have the right to request
information or be
permitted at al reasonable times to inspect and copy all records of NTI
which
Permittee or its accountants or attorneys reasonably consider necessary
to
verify
NTI's compliance with the terms and provisions of this Agreement. It is
understood by Permittee that such information is to be held in confidence
and not
disclosed to any third parties without the prior written consent of NTI,
which
consent shall not be unreasonably withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of the
rights
reserved thereunder are necessarily of a special, unique, unusual and
extraordinary
character, which gives them a peculiar value, the loss of which cannot be
adequately or reasonably compensated for in damages in an action at law,
and that
the breach by either Party of any of the provisions of this Agreement
will
cause the
other Party irreparable injury and damage. Therefore, upon the
occurrence
of an
event of Default, the non-defaulting Party shall be entitled as a
matter of
right to
seek specific performance of the defaulting Party's obligations and
warranties
hereunder, and/or declaratory, injunctive or other equitable relief in
court
to correct
the Event of Default. No exercise of this right to specific performance
shall
constitute a waiver of such Party's other rights or remedies otherwise
existing law
or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall
be in writing, sent by U.S. registered Mail and shall be effective upon
receipt;
provided, however, that the refusal to accept receipt will constitute
receipt
for this
purpose, in each case addressed:
If to Permittee, to: Jeffrey Narod
1879 Jeffery Court
Wantagh, New York 11793
If to NTI, to: Howard B. Winkler, President
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Stephen E. Coran, Esq.
Rini & Coran, P.C.
1350 Connecticut Avenue, N.W., Suite 900
Washington, D.C. 20036
provided, however, that if any party shall have designated a different
address by
notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to comply
with any
provision of this Agreement by the other Party shall not be construed as
or
constitute a continuing waiver of such provision or a waiver of any other
provision
of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the
Parties hereto and supersedes all prior agreements, covenants,
arrangements,
communications, representations, or warranties, whether oral or written,
by any
Party (or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed and
enforced
in accordance with and governed by the internal substantive law of the
State of
and of the United States of America. The headings of the
Sections of this
Agreement are inserted for convenience of reference only and shall not be
deemed
to constitute a part hereof. Unless otherwise stated, references in this
Agreement
to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only
by an instrument in writing duly executed by the Parties, except as
otherwise
provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable in
whole or in
part to carry out its obligations hereunder, the Party shall not be
deemed
in
violation or default during the period of such inability. The term
"force
majeure"
as used herein shall mean the following: acts of God; acts of public
enemies; orders
of any kind of the government of the United States of America or of any
state or
state departments, agencies, political subdivisions, or officials, or
any civil
or
military authority; insurrections; riots; epidemic; landslides;
lightning;
earthquakes;
fires; hurricanes; volcanic activity; storms of extraordinary force;
floods;
washouts;
drought; civil disturbances; explosions; or any other cause or event not
reasonably
within the control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by
the Parties hereto, and each fully executed counterpart shall be deemed
an
original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold
itself out
to be, vested with any power or right to contractually bind, act on
behalf
of the
other as its contracting broker, agent or otherwise for committing,
selling,
conveying or transferring any of the other Party's assets or property,
contracting
for or in the name of the other Party, or making any agreement
contractually
binding upon such Party.
24. Severability. If any provision of this Agreement is declared void by any
court of
competent jurisdiction, the validity of any other provision of this
Agreement shall
not be affected.
25. Time of the Essence. Time shall be of the essence in the performance of
this
Agreement.
26. Survival. This Agreement shall be binding upon and inure to the benefit
of the
Parties hereto and their respective assigns, heirs, successors and legal
representatives.
27. Assignment. This Agreement may be assigned by NTI without the prior
consent
of the permittee.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI to
employ an
attorney to enforce its rights pursuant to this Agreement because of the
default of
the other Party, the defaulting Party shall reimburse the prevailing
Party
for
reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or
NTI that
there by any third party beneficiary to this Agreement, and this
Agreement
is
exclusively for the benefit of Permittee and NTI and their respective
assigns.
30. Independent Relationship. Nothing in this Agreement shall be construed
as
creating an employer-employee relationship, partnership or joint venture
by and
between Permittee and NTI, and Permittee shall not be held responsible
for the acts
or omissions of NTI and vice versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in the
drafting and
preparation of this Agreement. Hence, in any construction to be made of
this
Agreement, the same shall not, as a matter of law, be construed against
any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to
purchase its Construction Permit or License, and Permittee desires
to
accept such offer, Permittee, within five (5) days of receiving such
offer,
shall notify NTI in writing and provide NTI with a copy of the same,
and
NTI shall have the right to acquire Permittee's Construction Permit
or
License on the same terms and conditions as offered by the third
party,
such right to be exercised by NTI within thirty (30) days of written
notice
by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder,
then
Permittee shall be free to assign or transfer its Construction
Permit or
License to the third party, subject to the condition that the
assignee or
transferee, as the case may be, agrees to be bound by all of the
terms
and
conditions of this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the
day and year first above written.
PERMITTEE:
By: /s/ Jeffrey Narod
Its:
NORTHEAST TELECOM, INC.
By: /s/ Michael Taylor
Michael Taylor, Vice President
EXHIBIT 10.11
_____________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from James W. Pringle (the "Lease")
for the operation of one (1) Low Power Television station in Poplar Bluff,
MO, having the Call sign K28ED and operating on channel 28 (the
"Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights
to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution of
this
agreement.
3. Assignor herein further represents and warrants that he has full power
and
authority to execute and deliver this agreement and to conclude the
transaction contemplated herein. Assignor also represents and warrants that
the has all the rights, title, and interest to the Lease and the Channel and
that
there are no existing or anticipated liabilities or legal action associated
with
the Lease or the Channel, to the best of his knowledge and Assignor has not
transferred (or agreed to transfer), nor will it transfer prior to the
completion
of the transaction contemplated herein, any portion of his interest in the
Lease
or the Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of the
Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid, to the
Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction. It is expressly
understood, however, that the Parties hereto intend each and every provision
of this Agreement to be valid and enforceable and hereby knowingly waive all
rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws of the
state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Mr. James W. Pringle
1195 Legend Circle
Vallejo, CA 94591
Re: Notice of Lease Assignment: Poplar Bluff, MO
LPTV Ch.K29ED
Dear Mr. Pringle:
This letter will serve to notify you of Northeast Telecom's intentions to
assign
your management and lease agreements, to another company. It will be
necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ James W. Pringle
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 14 day
of July, 1994 by and between Northeast Telecom Inc. (NTI), and James
Pringle ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has authorized
licensees of Low Power Television ("LPTV") stations as defined in Section
74.701(F) of the Commission's Rules, to provide subscription television
("STV") service on their authorized channels, subject to FCC rules and
policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 28 at Poplar Bluff, Mo. (Call Sign K28ED) ("Channel"), and has
determined that it desires to provide STV service on such Channel on a
twenty-four (24) hour per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
1. Definitions. As used in this Agreement, the following terms shall have
the
meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and data
programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign K28ED) which
issued by the FCC to Permittee to construct the Channel and provide
service on the Channel on a seven (7) day per week, twenty (24) hours per
day basis, and shall specifically include any regular, modified or renewal
authorizations to operate the Channel.
1.3 License Date means the date on which a License Application is filed with
the FCC certifying the completion of construction of the transmission
facilities, but not later than the date specified on the Construction Permit,
unless extended.
1.4 Transmission Facilities means the equipment and facilities to be owned
by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement, including
without limitation restaurants, bars, offices and businesses that receive
LPTV Service under contract with NTI or under rights granted by NTI.
2. Term. The term of this Agreement shall begin on the date hereof and
shall
continue for a period of ten (10) years following the License Date, provided
that Permittee's authorization to operate the Channel has been renewed as
necessary by the FCC. Permittee shall use its reasonable best efforts to
obtain
such renewals. This Agreement shall be authormatically renewed for an
additional ten (10) years, unless NTI shall have submitted to Permittee at
least
six (6) months' advance written notice of its intent to terminate this
Agreement upon the expiration of the initial term.
3. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel for STV
services seven (7) days per week, twenty-four (24) hours per day, subject to
FCC Rules and Regulations and all of the terms and conditions set forth in
this
Agreement. For purposes of this Agreement, such transmission on the
Channel shall include all rights to transmit both video programming and data
over the entire frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions of service
to Subscribers uniformly; provided, however, that: (a) Subscribers may be
divided into reasonable classifications approved by the FCC, and the
imposition of different sets of conditions may be applied to Subscribers in
different classifications; and (b) for good cause, within such
classifications,
deposits may be required of some Subscribers and not of others.
4. Control of Facilities. Notwithstanding anything in this Agreement to the
contrary, Permittee, as the FCC permittee for the Channel, shall be
responsible
for compliance with all applicable FCC rules and regulations. Permittee
shall
have control, in operation, management and maintenance of the station to the
extent necessary to comply with such rules and regulations, of the
construction, operation, management and maintenance of the station to the
extent necessary to comply with such rules and regulations. Nothing in this
Agreement shall be construed to: (a) prevent or hinder Permittee from
rejecting or refusing any STV broadcast program that it reasonably believes
to be unsatisfactory, unsuitable or contrary to the public interest, or from
substituting a program that in its opinion is of greater local or national
importance; (b) deprive Permittee of the right of ultimate decision
concerning
the maximum amount of any STV program charge or fee; or (c) delegate to
any other individual or entity ultimate authority over the scheduling of STV
programs.
5. Payments. In consideration of Permittee's agreement to permit NTI to
transmit on the Channel, NTI agrees to pay Permittee a monthly transmission
fee of Ten Cents ($.10) per Subscriber ("Transmission Fee"), beginning with
and including the first calendar month immediately following the license
date.
Payment will be due no later than the twentieth (20th) day of the following
month.
5.2 The number of Subscribers shall be determined by adding the number of
Subscribers as of the last day of the prior month to the number of
Subscribers as of the then-current month, and then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency of the
United States of America by negotiable bank check drawn upon a United
States bank insured by the FDIC made payable to the order of J.W.
Pringle and mailed to 2574 Harvest Lane, Napa, CA 94558 or to such
other address as Permittee shall designate in writing to NTI. Payments
shall be made by the twentieth (20th) day of the following month.
6. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
7. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated with the
construction of the Transmission Facilities and any subsequent modifications
thereto. NTI shall also bear the costs of any licenses, permits,
authorizations,
or of such sites. NTI shall, at its sole cost and expense, complete
construction
of the Transmission Facilities as authorized by the FCC. Upon completion of
construction of the Transmission Application on the then-prescribed FCC
form for submission to the FCC. Permittee agrees to timely file the License
Application with the FCC after its receipt from NTI. NTI shall not be liable
to make any payments under Section 5 hereof during any delay caused by
Permittee's failure to promptly file such License Application. All lease,
construction, legal, licensing and engineering costs or any other costs
associated therewith shall be the sole responsibility of and be paid by NTI,
and NTI shall reimburse Permittee within fifteen (15) days after receipt of
invoice for reasonable payments made by Permittee and first approved in
writing by NTI, which approval will not be unreasonably withheld or delayed.
7.1 Lease of Transmission Facilities to Permittee. In consideration of the
sum of ONE DOLLAR ($1.00), the receipt and sufficiency of which is hereby
acknowledged, NTI shall lease the Transmission Facilities to Permittee for
a term equal to the duration of this Agreement, including any renewals.
7.2 Operation and Maintenance. Subject to the provisions of Section 4, NTI
shall, at its sole cost and expense, operate and maintain the Transmission
Facilities in good operating condition and repair with Permittee being
notified of all such repairs. All persons performing maintenance, repairs
or any other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering practices consistent
with industry standards. In the event transmission service is interrupted
for any reason, NTI shall notify Permittee immediately. NTI shall be
solely responsible for the origination of all programming to be transmitted
over the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required to install,
operate and maintain any program origination and delivery facilities shall
be provided by NTI, at its sole cost and expense, and such personnel shall
be under NTI's exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties agree to take
no action that would jeopardize or otherwise impair the Construction
Permit or any other FCC approval or authorization necessary for the
LPTV Service. Permittee shall use its reasonable best efforts, and NTI
shall cooperate with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals required to
carry out the transactions contemplated by this Agreement; provided,
however, that Permittee shall not be required to pay for the relocation,
reconstruction or similar costs associated with the Channel, which costs
shall be the sole responsibility of NTI. Permittee also shall use its
reasonable best efforts to cause the authorization for the Channel to be
renewed.
7.4 Access. Throughout the term of this Agreement, including any renewals
hereof, NTI shall provide, and/or cause others to provide, Permittee with
reasonable access to all Transmission Facilities for emergency repairs and
routine inspection, provided that Permittee shall not utilize such access in
a manner which unreasonably interferes with NTI's use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to lease or
lease for the transmission site and shall be responsible for bearing all
expenses in connection with such site, including the payment of rent and
all other costs and expenses of every nature. The site lease, if any, shall
be maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
8. Representations and Warranties of NTI. NTI represents and warrants as
follows:
8.1 Organization. NTI is a corporation duly organized, validly existing, and
in good standing under the laws of the State of New Jersey. NTI is
qualified or otherwise entitled to do business in all jurisdictions in which
such qualifications or entitlement is required by reason of its business,
activities, ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business. NTI has all
requisite power to execute, deliver, and, subject to the regulatory authority
of the FCC, perform this Agreement. The person executing this
Agreement on behalf of NTI is authorized to do so execute and to bind
NTI to the term hereof.
8.2 Authorization. All necessary actions on the part of NTI to authorize the
execution and delivery of this Agreement and the performance of the
obligations of NTI herein have been taken. This Agreement is valid and
legally binding upon NTI and enforceable in accordance with its terms
except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles. The person
executing this Agreement on behalf of NTI is authorized to so execute and
bind NTI to the terms hereof.
8.3 No Violations. The exectution, delivery, and performance of this
Agreement and all actions and transactions contemplated hereby: (a) will
not violate any provision of law or the Articles of Incorporation or By-Laws
of NTI, any order of any court or other agency of government to
which NTI is a party or by which it or any of its properties is bound, and
(b) will not violate, be in conflict with, result in a breach of, or
constitute
(with notice or lapse of time or both) a default under any applicable law,
order, or regulation, indenture, agreement, or other instrument to which
NTI is a party of, by which it or any of its properties is bound and which
has not been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature whatsoever
upon any of its property or assets.
9. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and payable
under this Agreement within twenty (20) days after the date upon which a
payment is due hereunder, and NTI does not cure such default within thirty
(30) days after notice of default is provided by Permittee to NTI; (b) any of
the material "Representations or Warranties" of either party materially
breaches any covenant or agreement herein or fails to comply with any
material provision of this Agreement, and any such breach, failure or default
continues for thirty (30) days after written notice thereof, as contemplated
herein, shall have been sent by the non-defaulting Party to the defaulting
Party.
10. Termination. Upon an Event of Default, the non-defaulting Party may
cancel this Agreement and may pursue such legal and equitable remedies as
may be available.
11. Indemnification. Each Party shall indemnify, defend, and hold the other
Party harmless from and against any and all claims, damages, causes of action,
penalties, statutory damages, interest and costs and expenses, including
attorneys' fees, arising directly or indirectly out of the acts, omissions,
negligence or willful misconduct of said party, its employees or agents in
connection with the performance of this Agreement.
12. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited partnership, is
duly
organized, validly existing and in good standing in the state of its
formation. Permittee is qualified or otherwise entitled to do business in
all jurisdictions in which such qualification or entitlement is required by
reason of its business, activities, ownership or property. Permittee has all
requisite power and authority to own its own properties and to carry on its
business. Permittee has all requisite power to execute, deliver, and,
subject to the regulatory authority of the FCC, perform this Agreement.
The person signing this Agreement on behalf of Permittee is authorized
to so execute and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee to
authorize the execution and delivery of this Agreement and the performance
of the obligations of Permittee herein have been taken. This Agreement is
valid and legally binding upon Permittee and enforceable in accordance with
its terms except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles. The person
executing this Agreement on behalf of Permittee is authorized to so
execute and bind Permittee to the terms thereof.
12.3 Valid Construction Permit. The Construction Permit is in full force and
effect.
12.4 No Violation. The execution and delivery of this Agreement by
Permittee and the performance of Permittee's obligations hereunder are not
in violation or breach of, do not conflict with or constitute a default under,
and will not accelerate or permit the acceleration of the performance
required by any of the terms or provisions of any note, debt instrument,
security agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its Construction
Permit is bound and will not be an event which, after notice or lapse or
time or both, will result in any such violation, notice or lapse of time or
both, will result in any such violation, breach, conflict, default, or
acceleration, or under any law, judgment, decree, order, rule or regulation
of any governmental authority or authority applicable to Permittee and
will not result in the creation or imposition of any lien (whether or not
perfected), encumbrance, equity or restriction in favor of any third person
upon the Construction Permit; provided, however, that the Permittee shall
not be in default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole, violates FCC
rules or policies or the Communications Act of 1934 as amended. In such
event, the Parties shall negotiate in good faith such changes to the
Agreement so as to effectuate compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the aggregate
amount actually paid by NTI to Permittee pursuant to Section 5 of this
Agreement. Permittee shall not be liable for any consequential or similar
damages. This Section provides only for a limitation of damages otherwise
awardable, and shall not be construed to create an entitlement or legal right
to the amounts of damages specified herein upon an Event of Default. No
liability for damages shall be assessed under this Section except as a
result of
a final judgment on a complaint for damages awarded by a court of competent
jurisdiction, or as otherwise agreed by the Parties to this Agreement.
14. Permittee's Access to Records. From time to time and upon reasonable
notice to NTI, Permittee or its accountants shall have the right to request
information or be permitted at all reasonable times to inspect and copy all
records of NTI which Permittee or its accountants or attorneys reasonably
consider necessary to verify NTI's compliance with the terms and provisions
of this Agreement. It is understood by Permittee that such information is to
be held in confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably withheld or
delayed.
15. Specific Performance. The Parties acknowledge and agree that all of the
rights reserved thereunder are necessarily of a special, unique, unusual and
extraordinary character, which gives them a peculiar value, the loss of which
cannot be adequately or reasonably compensated for in damages in an action
at law, and that the breach by either Party of any of the provisions of this
Agreement will cause the other Party irreparable injury and damage.
Therefore, upon the occurrence of an event of Default, the non-defaulting
Party shall be entitled as a matter of right to seek specific performance of
the
defaulting Party's obligations and warranties hereunder, and/or declaratory,
injunctive or other equitable relief in court to correct the Event of
Default.
No exercise of this right to specific performance shall constitute a waiver of
such Party's other rights or remedies otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall be
effective upon receipt; provided, however, that the refusal to accept receipt
will constitute receipt for this purpose, in each case addressed:
If to Permittee, to: J.W. Pringle
2574 Harvest Lane
Napa, CA 94558
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Stephen E. Coran, Esq.
Rini & Coran, P.C.
1350 Connecticut Avenue, N.W., Suite
900
Washington, D.C. 20036
provided, however, that if any party shall have designated a different address
by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to comply
with any provision of this Agreement by the other Party shall not be construed
as or constitute a continuing waiver of such provision or a waiver of any
other
provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior agreements,
covenants, arrangements, communications, representations, or warranties,
whether oral or written, by any party (or any officer, employee, or
representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed and
enforced in accordance with and governed by the internal substantive law of
the State of and of the United States of America. The
headings
of the Sections of this Agreement are inserted for convenience of reference
only and shall not be deemed to constitute a part hereof. Unless otherwise
stated, references in this Agreement to sections refer to the Sections of this
Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the Parties,
except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable in
whole or in part to carry out its obligations hereunder, the Party shall
not be
deemed in violation or default during the period of such inability. The term
"force majeure" as used herein shall mean the following: acts of God; acts of
public enemies; orders of any kind of the government of the United States of
America or of any state or state departments, agencies, political
subdivisions,
or officials, or any civil or military authority; insurrections; riots;
epidemic;
landslides; lightning; earthquakes; fires; hurricanes; volcanic activity;
storms
of extraordinary force; floods; washouts; drought; civil disturbances;
explosions; or any other cause or event not reasonably within the control of
the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart shall be
deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold
itself out to be, vested with any power or right to contractually bind, act on
behalf of the other as its contracting broker, agent or otherwise for
committing, selling, conveying or transferring any of the other Party's
assets
or property, contracting for or in the name of the other Party, or making any
agreement contractually binding upon such Party.
24. Severability. If any provision of this Agreement is declared void by any
court of competent jurisdiction, the validity of any other provision of this
Agreement shall not be affected.
25. Time of the Essence. Time shall be of the essence in the performance of
this Agreement.
26. Survival. This Agreement shall be binding upon and inure to the benefit
of the Parties hereto and their respective assigns, heirs, successors and
legal
representatives.
27. Assignment. This Agreement may be assigned by NTI without the prior
consent of the permittee.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI to
employ an attorney to enforce its rights pursuant to this Agreement because
of the default of the other Party, the defaulting Party shall reimburse the
prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or
NTI that there by any third party beneficiary to this Agreement, and this
Agreement is exclusively for the benefit of Permittee and NTI and their
respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be construed
as creating an employer-employee relationship, partnership or joint venture by
and between Permittee and NTI, and Permittee shall not be held responsible
for the acts or omissions of NTI and vice versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in the
drafting and preparation of this Agreement. Hence, in any construction to be
made of this Agreement, the same shall not, as a matter of law, be construed
against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third party to
purchase its Construction Permit or License, and Permittee desires to
accept such offer, Permittee, within five (5) days of receiving such offer,
shall notify NTI in writing and provide NTI with a copy of the same, and
NTI shall have the right to acquire Permittee's Construction Permit or
License on the same terms and conditions as offered by the third party,
such right to be exercised by NTI within thirty (30) days of written notice
by Permittee.
(b) In the event NTI does not exercise its right of first refusal hereunder,
then
Permittee shall be free to assign or transfer its Construction Permit or
License to the third party, subject to the condition that the assignee or
transferee, as the case may be, agrees to be bound by all of the terms and
conditions of this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ James W. Pringle
Its:
NORTHEAST TELECOM, INC.
By: /s/ Michael Taylor
Michael Taylor, Vice President
EXHIBIT 10.12
______________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Ana Winkler (the "Lease") for
the operation of one (1) Low Power Television station in Poplar Bluff, MO,
having the Call sign K68FL and operating on channel 68 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution of
this
agreement.
3. Assignor herein further represents and warrants that he has full power
and
authority to execute and deliver this agreement and to conclude the
transaction contemplated herein. Assignor also represents and warrants that
the has all the rights, title, and interest to the Lease and the Channel and
that
there are no existing or anticipated liabilities or legal action associated
with
the Lease or the Channel, to the best of his knowledge and Assignor has not
transferred (or agreed to transfer), nor will it transfer prior to the
completion
of the transaction contemplated herein, any portion of his interest in the
Lease
or the Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of the
Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid, to the
Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction. It is
expressly
understood, however, that the Parties hereto intend each and every provision
of this Agreement to be valid and enforceable and hereby knowingly waive
all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws of the
state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Ana L. Winkler
17 Emerald Drive
Morganville, NJ 07751
Re: Notice of Lease Assignment: Poplar Bluff, MO
LPTV Ch.K68
Dear Ana:
This letter will serve to notify you of Northeast Telecom's intentions to
assign
your management and lease agreements, to another company. It will be
necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Ana L. Winkler
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24 day
of June, 1994
by and between Northeast Telecom Inc. (NTI), and Ana L. Winkler
("Permittee"), together
"the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of
Low Power Television ("LPTV") stations as defined in Section 74.701(F) of
the
Commission's Rules, to provide subscription television ("STV") service on
their authorized
channels, subject to FCC rules and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 68 at
Poplar Bluff, Mo. (Call Sign K68FL) ("Channel"), and has determined that
it desires to
provide STV service on such Channel on a twenty-four (24) hour per day,
seven (7) day per
week basis;
WHERAS, NTI is in the business of providing STV management and
operational services
and seeks to provide such services on Permittee's Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction
Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee
and NTI, intending to be legally bound, hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the
meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and data
programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign K68FL)
which
issued by the FCC to Permittee to construct the Channel and provide
service on the Channel on a seven (7) day per week, twenty (24)
hours
per
day basis, and shall specifically include any regular, modified or
renewal
authorizations to operate the Channel.
1.3 License Date means the date on which a License Application is filed
with
the FCC certifying the completion of construction of the
transmission
facilities, but not later than the date specified on the
Construction
Permit,
unless extended.
1.4 Transmission Facilities means the equipment and facilities to be
owned
by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including
without limitation restaurants, bars, offices and businesses that
receive
LPTV Service under contract with NTI or under rights granted by NTI.
2. Term. The term of this Agreement shall begin on the date hereof and
shall
continue for a period of ten (10) years following the License Date,
provided that
Permittee's authorization to operate the Channel has been renewed as
necessary by
the FCC. Permittee shall use its reasonable best efforts to obtain such
renewals.
This Agreement shall be authormatically renewed for an additional ten
(10) years,
unless NTI shall have submitted to Permittee at least six (6) months'
advance
written notice of its intent to terminate this Agreement upon the
expiration
of the
initial term.
3. Transition on Channel. Commencing on the License Date, Permittee
hereby
authorizes NTI to transmit a broadcast signal on the Channel for STV
services
seven (7) days per week, twenty-four (24) hours per day, subject to FCC
Rules and
Regulations and all of the terms and conditions set forth in this
Agreement. For
purposes of this Agreement, such transmission on the Channel shall
include all
rights to transmit both video programming and data over the entire
frequency
spectrum of Permittee's Channel. Consistent with applicable FCC rules,
NTI will
apply charges, terms and conditions of service to Subscribers uniformly;
provided,
however, that: (a) Subscribers may be divided into reasonable
classifications
approved by the FCC, and the imposition of different sets of conditions
may be
applied to Subscribers in different classifications; and (b) for good
cause,
within
such classifications, deposits may be required of some Subscribers and
not
of
others.
4. Control of Facilities. Notwithstanding anything in this Agreement to the
contrary,
Permittee, as the FCC permittee for the Channel, shall be responsible for
compliance with all applicable FCC rules and regulations. Permittee
shall
have
control, in operation, management and maintenance of the station to the
extent
necessary to comply with such rules and regulations, of the construction,
operation,
management and maintenance of the station to the extent necessary to
comply with
such rules and regulations. Nothing in this Agreement shall be construed
to: (a)
prevent or hinder Permittee from rejecting or refusing any STV broadcast
program
that it reasonably believes to be unsatisfactory, unsuitable or contrary
to
the public
interest, or from substituting a program that in its opinion is of
greater
local or
national importance; (b) deprive Permittee of the right of ultimate
decision
concerning the maximum amount of any STV program charge or fee; or
(c)
delegate to any other individual or entity ultimate authority over the
scheduling of
STV programs.
5. Payments. In consideration of Permittee's agreement to permit NTI to
transmit on
the Channel, NTI agrees to pay Permittee a monthly transmission fee of
Ten Cents
($.10) per Subscriber ("Transmission Fee"), beginning with and including
the first
calendar month immediately following the license date. Payment will be
due no
later than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the number
of
Subscribers as of the last day of the prior month to the number of
Subscribers as of the then-current month, and then dividing by
two (2).
5.3 All payments from NTI to Permittee shall be paid in currency of the
United States of America by negotiable bank check drawn upon a
United
States bank insured by the FDIC made payable to the order of
********** and mailed to SEE SECTION 16 or to such other address
as
Permittee shall designate in writing to NTI. Payments shall be made
by
the twentieth (20th) day of the following month.
6. Insurance. It is agreed that Permittee shall be insured as a third party
insured under
any liability insurance obtained by NTI.
7. Construction. NTI shall bear all costs, including but not limited to,
consultant,
design, engineering, licensing and legal fees, associated with the
construction of the
Transmission Facilities and any subsequent modifications thereto. NTI
shall also
bear the costs of any licenses, permits, authorizations, or of such
sites.
NTI shall
, at its sole cost and expense, complete construction of the Transmission
Facilities
as authorized by the FCC. Upon completion of construction of the
Transmission
Application on the then-prescribed FCC form for submission to the FCC.
Permittee agrees to timely file the License Application with the FCC
after
its
receipt from NTI. NTI shall not be liable to make any payments under
Section 5
hereof during any delay caused by Permittee's failure to promptly file
such
License
Application. All lease, construction, legal, licensing and engineering
costs
or any
other costs associated therewith shall be the sole responsibility of and
be
paid by
NTI, and NTI shall reimburse Permittee within fifteen (15) days after
receipt of
invoice for reasonable payments made by Permittee and first approved in
writing
by NTI, which approval will not be unreasonably withheld or delayed.
7.1 Lease of Transmission Facilities to Permittee. In consideration of
the
sum
of ONE DOLLAR ($1.00), the receipt and sufficiency of which is
hereby
acknowledged, NTI shall lease the Transmission Facilities to
Permittee
for
a term equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of Section 4,
NTI
shall, at its sole cost and expense, operate and maintain the
Transmission
Facilities in good operating condition and repair with Permittee
being
notified of all such repairs. All persons performing maintenance,
repairs
or any other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering practices
consistent
with industry standards. In the event transmission service is
interrupted
for any reason, NTI shall notify Permittee immediately. NTI shall
be
solely responsible for the origination of all programming to be
transmitted
over the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required to
install,
operate and maintain any program origination and delivery facilities
shall
be provided by NTI, at its sole cost and expense, and such personnel
shall
be under NTI's exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties agree to
take
no action that would jeopardize or otherwise impair the Construction
Permit or any other FCC approval or authorization necessary for the
LPTV Service. Permittee shall use its reasonable best efforts, and
NTI
shall cooperate with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals required
to
carry out the transactions contemplated by this Agreement; provided,
however, that Permittee shall not be required to pay for the
relocation,
reconstruction or similar costs associated with the Channel, which
costs
shall be the sole responsibility of NTI. Permittee also shall use
its
reasonable best efforts to cause the authorization for the Channel
to be
renewed.
7.4 Access. Throughout the term of this Agreement, including any
renewals
hereof, NTI shall provide, and/or cause others to provide, Permittee
with
reasonable access to all Transmission Facilities for emergency
repairs
and
routine inspection, provided that Permittee shall not utilize such
access
in
a manner which unreasonably interferes with NTI's use of the
Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to lease
or
lease for the transmission site and shall be responsible for
bearing all
expenses in connection with such site, including the payment of rent
and
all other costs and expenses of every nature. The site lease,
if any,
shall
be maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
8. Representations and Warranties of NTI. NTI represents and warrants as
follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing,
and
in good standing under the laws of the State of New Jersey. NTI is
qualified or otherwise entitled to do business in all jurisdictions
in
which
such qualifications or entitlement is required by reason of its
business,
activities, ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business. NTI
has all
requisite power to execute, deliver, and, subject to the regulatory
authority
of the FCC, perform this Agreement. The person executing this
Agreement on behalf of NTI is authorized to do so execute and to
bind
NTI to the term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize
the
execution and delivery of this Agreement and the performance of the
obligations of NTI herein have been taken. This Agreement is valid
and
legally binding upon NTI and enforceable in accordance with its
terms
except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles.
The
person
executing this Agreement on behalf of NTI is authorized to so
execute
and
bind NTI to the terms hereof.
8.3 No Violations. The exectution, delivery, and performance of this
Agreement and all actions and transactions contemplated hereby: (a)
will
not violate any provision of law or the Articles of Incorporation or
By-Laws of NTI, any order of any court or other agency of government to
which NTI is a party or by which it or any of its properties is
bound,
and
(b) will not violate, be in conflict with, result in a breach of, or
constitute
(with notice or lapse of time or both) a default under any
applicable
law,
order, or regulation, indenture, agreement, or other instrument to
which
NTI is a party of, by which it or any of its properties is bound and
which
has not been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever
upon any of its property or assets.
9. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default"
hereunder if: (a) NTI fails to make any payment due and payable under
this
Agreement within twenty (20) days after the date upon which a payment
is due
hereunder, and NTI does not cure such default within thirty (30) days
after
notice
of default is provided by Permittee to NTI; (b) any of the material
"Representations
or Warranties" of either party materially breaches any covenant or
agreement
herein or fails to comply with any material provision of this Agreement,
and any
such breach, failure or default continues for thirty (30) days after
written
notice
thereof, as contemplated herein, shall have been sent by the
non-defaulting
Party
to the defaulting Party.
10. Termination. Upon an Event of Default, the non-defaulting Party may
cancel this
Agreement and may pursue such legal and equitable remedies as may be
available.
11. Indemnification. Each Party shall indemnify, defend, and hold the other
Party
harmless from and against any and all claims, damages, causes of action,
penalties,
statutory damages, interest and costs and expenses, including attorneys'
fees,
arising directly or indirectly out of the acts, omissions, negligence or
willful
misconduct of said party, its employees or agents in connection with the
performance of this Agreement.
12. Representations, Warranties, and Covenants of Permittee. Permittee
represents and
warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is
duly
organized, validly existing and in good standing in the state of its
formation. Permittee is qualified or otherwise entitled to do
business
in
all jurisdictions in which such qualification or entitlement is
required
by
reason of its business, activities, ownership or property.
Permittee has
all
requisite power and authority to own its own properties and to
carry on
its
business. Permittee has all requisite power to execute, deliver,
and,
subject to the regulatory authority of the FCC, perform this
Agreement.
The person signing this Agreement on behalf of Permittee is
authorized
to so execute and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee to
authorize
the execution and delivery of this Agreement and the performance of
the
obligations of Permittee herein have been taken. This Agreement is
valid
and legally binding upon Permittee and enforceable in accordance
with
its terms except to the extent that enforceability thereof may be
limited
by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles.
The
person
executing this Agreement on behalf of Permittee is authorized to so
execute and bind Permittee to the terms thereof.
12.3 Valid Construction Permit. The Construction Permit is in full force
and
effect.
12.4 No Violation. The execution and delivery of this Agreement by
Permittee
and the performance of Permittee's obligations hereunder are not in
violation or breach of, do not conflict with or constitute a default
under,
and will not accelerate or permit the acceleration of the
performance
required by any of the terms or provisions of any note, debt
instrument,
security agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction
Permit is bound and will not be an event which, after notice or
lapse or
time or both, will result in any such violation, notice or lapse
of time
or
both, will result in any such violation, breach, conflict, default,
or
acceleration, or under any law, judgment, decree, order, rule or
regulation
of any governmental authority or authority applicable to Permittee
and
will not result in the creation or imposition of any lien (whether
or not
perfected), encumbrance, equity or restriction in favor of any third
person
upon the Construction Permit; provided, however, that the Permittee
shall
not be in default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole, violates
FCC
rules or policies or the Communications Act of 1934 as amended. In
such
event, the Parties shall negotiate in good faith such changes to the
Agreement so as to effectuate compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in
connection with this Agreement shall not exceed the aggregate amount
actually
paid by NTI to Permittee pursuant to Section 5 of this Agreement.
Permittee shall
not be liable for any consequential or similar damages. This Section
provides only
for a limitation of damages otherwise awardable, and shall not be
construed to
create an entitlement or legal right to the amounts of damages specified
herein
upon an Event of Default. No liability for damages shall be assessed
under this
Section except as a result of a final judgment on a complaint for damages
awarded
by a court of competent jurisdiction, or as otherwise agreed by the
Parties
to this
Agreement.
14. Permittee's Access to Records. From time to time and upon reasonable
notice to
NTI, Permittee or its accountants shall have the right to request
information or be
permitted at al reasonable times to inspect and copy all records of NTI
which
Permittee or its accountants or attorneys reasonably consider necessary
to
verify
NTI's compliance with the terms and provisions of this Agreement. It is
understood by Permittee that such information is to be held in confidence
and not
disclosed to any third parties without the prior written consent of NTI,
which
consent shall not be unreasonably withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of the
rights
reserved thereunder are necessarily of a special, unique, unusual and
extraordinary
character, which gives them a peculiar value, the loss of which cannot be
adequately or reasonably compensated for in damages in an action at law,
and that
the breach by either Party of any of the provisions of this Agreement
will
cause the
other Party irreparable injury and damage. Therefore, upon the
occurrence
of an
event of Default, the non-defaulting Party shall be entitled as a matter
of
right to
seek specific performance of the defaulting Party's obligations and
warranties
hereunder, and/or declaratory, injunctive or other equitable relief in
court
to correct
the Event of Default. No exercise of this right to specific performance
shall
constitute a waiver of such Party's other rights or remedies otherwise
existing law
or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall
be in writing, sent by U.S. registered Mail and shall be effective upon
receipt;
provided, however, that the refusal to accept receipt will constitute
receipt
for this
purpose, in each case addressed:
If to Permittee, to: Ana Winkler
17 Emerald Drive
Morganville, NJ 07751
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Mullin, Rhyne, Emmons and Topel
Att: Robert Levine
1225 Connecticut Avenue, N.W., Suite 300
Washington, D.C. 20036-2604
provided, however, that if any party shall have designated a different
address by
notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to comply
with any
provision of this Agreement by the other Party shall not be construed as
or
constitute a continuing waiver of such provision or a waiver of any other
provision
of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the
Parties hereto and supersedes all prior agreements, covenants,
arrangements,
communications, representations, or warranties, whether oral or written,
by any
Party (or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed and
enforced
in accordance with and governed by the internal substantive law of the
State of
and of the United States of America. The headings of the
Sections of this
Agreement are inserted for convenience of reference only and shall not be
deemed
to constitute a part hereof. Unless otherwise stated, references in this
Agreement
to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only
by an instrument in writing duly executed by the Parties, except as
otherwise
provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable in
whole or in
part to carry out its obligations hereunder, the Party shall not be
deemed
in
violation or default during the period of such inability. The term
"force
majeure"
as used herein shall mean the following: acts of God; acts of public
enemies; orders
of any kind of the government of the United States of America or of any
state or
state departments, agencies, political subdivisions, or officials,
or any civil
or
military authority; insurrections; riots; epidemic; landslides;
lightning;
earthquakes;
fires; hurricanes; volcanic activity; storms of extraordinary force;
floods;
washouts;
drought; civil disturbances; explosions; or any other cause or event not
reasonably
within the control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by
the Parties hereto, and each fully executed counterpart shall be deemed
an
original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold
itself out
to be, vested with any power or right to contractually bind, act on
behalf
of the
other as its contracting broker, agent or otherwise for committing,
selling,
conveying or transferring any of the other Party's assets or property,
contracting
for or in the name of the other Party, or making any agreement
contractually
binding upon such Party.
24. Severability. If any provision of this Agreement is declared void by any
court of
competent jurisdiction, the validity of any other provision of this
Agreement shall
not be affected.
25. Time of the Essence. Time shall be of the essence in the performance of
this
Agreement.
26. Survival. This Agreement shall be binding upon and inure to the benefit
of the
Parties hereto and their respective assigns, heirs, successors and legal
representatives.
27. Assignment. This Agreement may not be assigned by either Party
without the prior
written consent of the other Party, which consent shall not be
unreasonably
withheld or delayed, except that NTI may assign this Agreement to an
affiliated
entity or subsidiary without Permittee's prior approval.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI to
employ an
attorney to enforce its rights pursuant to this Agreement because of the
default of
the other Party, the defaulting Party shall reimburse the prevailing
Party
for
reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or
NTI that
there by any third party beneficiary to this Agreement, and this
Agreement
is
exclusively for the benefit of Permittee and NTI and their respective
assigns.
30. Independent Relationship. Nothing in this Agreement shall be construed
as
creating an employer-employee relationship, partnership or joint venture
by and
between Permittee and NTI, and Permittee shall not be held responsible
for the acts
or omissions of NTI and vice versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in the
drafting and
preparation of this Agreement. Hence, in any construction to be made of
this
Agreement, the same shall not, as a matter of law, be construed against
any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to
purchase its Construction Permit or License, and Permittee desires
to
accept such offer, Permittee, within five (5) days of receiving such
offer,
shall notify NTI in writing and provide NTI with a copy of the same,
and
NTI shall have the right to acquire Permittee's Construction Permit
or
License on the same terms and conditions as offered by the third
party,
such right to be exercised by NTI within thirty (30) days of written
notice
by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder,
then
Permittee shall be free to assign or transfer its Construction
Permit or
License to the third party, subject to the condition that the
assignee or
transferee, as the case may be, agrees to be bound by all of the
terms
and
conditions of this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the
day and year first above written.
PERMITTEE:
By: /s/ Ana L. Winkler
Its:
NORTHEAST TELECOM, INC.
By: /s/ Stephen J. Peters
Stephen J. Peters, VP Operations
EXHIBIT 10.13
_______________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Ana L. Winker (the "Lease") for
the operation of one (1) Low Power Television station in Lebanon, MO,
having the Call sign K18EK and operating on channel 18 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution of
this
agreement.
3. Assignor herein further represents and warrants that he has full power
and
authority to execute and deliver this agreement and to conclude the
transaction contemplated herein. Assignor also represents and warrants that
the has all the rights, title, and interest to the Lease and the Channel and
that
there are no existing or anticipated liabilities or legal action associated
with
the Lease or the Channel, to the best of his knowledge and Assignor has not
transferred (or agreed to transfer), nor will it transfer prior to the
completion
of the transaction contemplated herein, any portion of his interest in the
Lease
or the Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of the
Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid, to the
Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction. It is
expressly
understood, however, that the Parties hereto intend each and every provision
of this Agreement to be valid and enforceable and hereby knowingly waive
all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws of the
state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Ana L. Winkler
17 Emerald Drive
Morganville, NJ 07751
Re: Notice of Lease Assignment: Lebanon, MO
LPTV Ch.K31EC, K29DA, K18EK, K40EP
Dear Ana:
This letter will serve to notify you of Northeast Telecom's intentions to
assign
your management and lease agreements, to another company. It will be
necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Ana L. Winkler
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24 day
of June, 1995
by and between Northeast Telecom Inc. (NTI), and Ana Winkler
("Permittee"), together "the
Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of
Low Power Television ("LPTV") stations as defined in Section 74.701(F) of
the
Commission's Rules, to provide subscription television ("STV") service on
their authorized
channels, subject to FCC rules and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 18 at
Lebanon, Mo. (Call Sign K18EK), and has determined that it desires to
provide STV service
on such Channel on a twenty-four (24) hour per day, seven (7) day per week
basis;
WHERAS, NTI is in the business of providing STV management and
operational services
and seeks to provide such services on Permittee's Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction
Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee
and NTI, intending to be legally bound, hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the
meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and data
programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign K18EK)
which
issued by the FCC to Permittee to construct the Channel and provide
service on the Channel on a seven (7) day per week, twenty (24)
hours
per
day basis, and shall specifically include any regular, modified or
renewal
authorizations to operate the Channel.
1.3 License Date means the date on which a License Application is filed
with
the FCC certifying the completion of construction of the
transmission
facilities, but not later than the date specified on the
Construction
Permit,
unless extended.
1.4 Transmission Facilities means the equipment and facilities to be
owned
by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including
without limitation restaurants, bars, offices and businesses that
receive
LPTV Service under contract with NTI or under rights granted by NTI.
2. Term. The term of this Agreement shall begin on the date hereof and
shall
continue for a period of ten (10) years following the License Date,
provided that
Permittee's authorization to operate the Channel has been renewed as
necessary by
the FCC. Permittee shall use its reasonable best efforts to obtain such
renewals.
This Agreement shall be authormatically renewed for an additional ten
(10) years,
unless NTI shall have submitted to Permittee at least six (6) months'
advance
written notice of its intent to terminate this Agreement upon the
expiration
of the
initial term.
3. Transition on Channel. Commencing on the License Date, Permittee
hereby
authorizes NTI to transmit a broadcast signal on the Channel for STV
services
seven (7) days per week, twenty-four (24) hours per day, subject to FCC
Rules and
Regulations and all of the terms and conditions set forth in this
Agreement. For
purposes of this Agreement, such transmission on the Channel shall
include all
rights to transmit both video programming and data over the entire
frequency
spectrum of Permittee's Channel. Consistent with applicable FCC rules,
NTI will
apply charges, terms and conditions of service to Subscribers uniformly;
provided,
however, that: (a) Subscribers may be divided into reasonable
classifications
approved by the FCC, and the imposition of different sets of conditions
may be
applied to Subscribers in different classifications; and (b) for good
cause,
within
such classifications, deposits may be required of some Subscribers and
not
of
others.
4. Control of Facilities. Notwithstanding anything in this Agreement to the
contrary,
Permittee, as the FCC permittee for the Channel, shall be responsible for
compliance with all applicable FCC rules and regulations. Permittee
shall
have
control, in operation, management and maintenance of the station to the
extent
necessary to comply with such rules and regulations, of the construction,
operation,
management and maintenance of the station to the extent necessary to
comply with
such rules and regulations. Nothing in this Agreement shall be construed
to: (a)
prevent or hinder Permittee from rejecting or refusing any STV broadcast
program
that it reasonably believes to be unsatisfactory, unsuitable or contrary
to
the public
interest, or from substituting a program that in its opinion is of
greater
local or
national importance; (b) deprive Permittee of the right of ultimate
decision
concerning the maximum amount of any STV program charge or fee; or
(c)
delegate to any other individual or entity ultimate authority over the
scheduling of
STV programs.
5. Payments. In consideration of Permittee's agreement to permit NTI to
transmit on
the Channel, NTI agrees to pay Permittee a monthly transmission fee of
Ten Cents
($.10) per Subscriber ("Transmission Fee"), beginning with and including
the first
calendar month immediately following the license date. Payment will be
due no
later than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the number
of
Subscribers as of the last day of the prior month to the number of
Subscribers as of the then-current month, and then dividing by
two (2).
5.3 All payments from NTI to Permittee shall be paid in currency of the
United States of America by negotiable bank check drawn upon a
United
States bank insured by the FDIC made payable to the order of
********** and mailed to SEE SECTION 16 or to such other address
as
Permittee shall designate in writing to NTI. Payments shall be made
by
the twentieth (20th) day of the following month.
6. Insurance. It is agreed that Permittee shall be insured as a third party
insured under
any liability insurance obtained by NTI.
7. Construction. NTI shall bear all costs, including but not limited to,
consultant,
design, engineering, licensing and legal fees, associated with the
construction of the
Transmission Facilities and any subsequent modifications thereto. NTI
shall also
bear the costs of any licenses, permits, authorizations, or of such
sites.
NTI shall
, at its sole cost and expense, complete construction of the Transmission
Facilities
as authorized by the FCC. Upon completion of construction of the
Transmission
Application on the then-prescribed FCC form for submission to the FCC.
Permittee agrees to timely file the License Application with the FCC
after
its
receipt from NTI. NTI shall not be liable to make any payments under
Section 5
hereof during any delay caused by Permittee's failure to promptly file
such
License
Application. All lease, construction, legal, licensing and engineering
costs
or any
other costs associated therewith shall be the sole responsibility of and
be
paid by
NTI, and NTI shall reimburse Permittee within fifteen (15) days after
receipt of
invoice for reasonable payments made by Permittee and first approved in
writing
by NTI, which approval will not be unreasonably withheld or delayed.
7.1 Lease of Transmission Facilities to Permittee. In consideration of
the
sum
of ONE DOLLAR ($1.00), the receipt and sufficiency of which is
hereby
acknowledged, NTI shall lease the Transmission Facilities to
Permittee
for
a term equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of Section 4,
NTI
shall, at its sole cost and expense, operate and maintain the
Transmission
Facilities in good operating condition and repair with Permittee
being
notified of all such repairs. All persons performing maintenance,
repairs
or any other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering practices
consistent
with industry standards. In the event transmission service is
interrupted
for any reason, NTI shall notify Permittee immediately. NTI shall
be
solely responsible for the origination of all programming to be
transmitted
over the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required to
install,
operate and maintain any program origination and delivery facilities
shall
be provided by NTI, at its sole cost and expense, and such personnel
shall
be under NTI's exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties agree to
take
no action that would jeopardize or otherwise impair the Construction
Permit or any other FCC approval or authorization necessary for the
LPTV Service. Permittee shall use its reasonable best efforts, and
NTI
shall cooperate with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals required
to
carry out the transactions contemplated by this Agreement; provided,
however, that Permittee shall not be required to pay for the
relocation,
reconstruction or similar costs associated with the Channel, which
costs
shall be the sole responsibility of NTI. Permittee also shall use
its
reasonable best efforts to cause the authorization for the Channel
to be
renewed.
7.4 Access. Throughout the term of this Agreement, including any
renewals
hereof, NTI shall provide, and/or cause others to provide, Permittee
with
reasonable access to all Transmission Facilities for emergency
repairs
and
routine inspection, provided that Permittee shall not utilize such
access
in
a manner which unreasonably interferes with NTI's use of the
Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to lease
or
lease for the transmission site and shall be responsible for
bearing all
expenses in connection with such site, including the payment of rent
and
all other costs and expenses of every nature. The site lease,
if any,
shall
be maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
8. Representations and Warranties of NTI. NTI represents and warrants as
follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing,
and
in good standing under the laws of the State of New Jersey. NTI is
qualified or otherwise entitled to do business in all jurisdictions
in
which
such qualifications or entitlement is required by reason of its
business,
activities, ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business. NTI
has all
requisite power to execute, deliver, and, subject to the regulatory
authority
of the FCC, perform this Agreement. The person executing this
Agreement on behalf of NTI is authorized to do so execute and to
bind
NTI to the term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize
the
execution and delivery of this Agreement and the performance of the
obligations of NTI herein have been taken. This Agreement is valid
and
legally binding upon NTI and enforceable in accordance with its
terms
except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles.
The
person
executing this Agreement on behalf of NTI is authorized to so
execute
and
bind NTI to the terms hereof.
8.3 No Violations. The exectution, delivery, and performance of this
Agreement and all actions and transactions contemplated hereby: (a)
will
not violate any provision of law or the Articles of Incorporation or
By-Laws of NTI, any order of any court or other agency of government to
which NTI is a party or by which it or any of its properties is
bound,
and
(b) will not violate, be in conflict with, result in a breach of, or
constitute
(with notice or lapse of time or both) a default under any
applicable
law,
order, or regulation, indenture, agreement, or other instrument to
which
NTI is a party of, by which it or any of its properties is bound and
which
has not been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever
upon any of its property or assets.
9. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default"
hereunder if: (a) NTI fails to make any payment due and payable under
this
Agreement within twenty (20) days after the date upon which a payment
is due
hereunder, and NTI does not cure such default within thirty (30) days
after
notice
of default is provided by Permittee to NTI; (b) any of the material
"Representations
or Warranties" of either party materially breaches any covenant or
agreement
herein or fails to comply with any material provision of this Agreement,
and any
such breach, failure or default continues for thirty (30) days after
written
notice
thereof, as contemplated herein, shall have been sent by the
non-defaulting
Party
to the defaulting Party.
10. Termination. Upon an Event of Default, the non-defaulting Party may
cancel this
Agreement and may pursue such legal and equitable remedies as may be
available.
11. Indemnification. Each Party shall indemnify, defend, and hold the other
Party
harmless from and against any and all claims, damages, causes of action,
penalties,
statutory damages, interest and costs and expenses, including attorneys'
fees,
arising directly or indirectly out of the acts, omissions, negligence or
willful
misconduct of said party, its employees or agents in connection with the
performance of this Agreement.
12. Representations, Warranties, and Covenants of Permittee. Permittee
represents and
warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is
duly
organized, validly existing and in good standing in the state of its
formation. Permittee is qualified or otherwise entitled to do
business
in
all jurisdictions in which such qualification or entitlement is
required
by
reason of its business, activities, ownership or property.
Permittee has
all
requisite power and authority to own its own properties and to
carry on
its
business. Permittee has all requisite power to execute, deliver,
and,
subject to the regulatory authority of the FCC, perform this
Agreement.
The person signing this Agreement on behalf of Permittee is
authorized
to so execute and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee to
authorize
the execution and delivery of this Agreement and the performance of
the
obligations of Permittee herein have been taken. This Agreement is
valid
and legally binding upon Permittee and enforceable in accordance
with
its terms except to the extent that enforceability thereof may be
limited
by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles.
The
person
executing this Agreement on behalf of Permittee is authorized to so
execute and bind Permittee to the terms hereof.
12.3 Valid Construction Permit. The Construction Permit is in full force
and
effect.
12.4 No Violation. The execution and delivery of this Agreement by
Permittee
and the performance of Permittee's obligations hereunder are not in
violation or breach of, do not conflict with or constitute a default
under,
and will not accelerate or permit the acceleration of the
performance
required by any of the terms or provisions of any note, debt
instrument,
security agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction
Permit is bound and will not be an event which, after notice or
lapse or
time or both, will result in any such violation, notice or lapse
of time
or
both, will result in any such violation, breach, conflict, default,
or
acceleration, or under any law, judgment, decree, order, rule or
regulation
of any governmental authority or authority applicable to Permittee
and
will not result in the creation or imposition of any lien (whether
or not
perfected), encumbrance, equity or restriction in favor of any third
person
upon the Construction Permit; provided, however, that the Permittee
shall
not be in default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole, violates
FCC
rules or policies or the Communications Act of 1934 as amended. In
such
event, the Parties shall negotiate in good faith such changes to the
Agreement so as to effectuate compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in
connection with this Agreement shall not exceed the aggregate amount
actually
paid by NTI to Permittee pursuant to Section 5 of this Agreement.
Permittee shall
not be liable for any consequential or similar damages. This Section
provides only
for a limitation of damages otherwise awardable, and shall not be
construed to
create an entitlement or legal right to the amounts of damages specified
herein
upon an Event of Default. No liability for damages shall be assessed
under this
Section except as a result of a final judgment on a complaint for damages
awarded
by a court of competent jurisdiction, or as otherwise agreed by the
Parties
to this
Agreement.
14. Permittee's Access to Records. From time to time and upon reasonable
notice to
NTI, Permittee or its accountants shall have the right to request
information or be
permitted at al reasonable times to inspect and copy all records of NTI
which
Permittee or its accountants or attorneys reasonably consider necessary
to
verify
NTI's compliance with the terms and provisions of this Agreement. It is
understood by Permittee that such information is to be held in confidence
and not
disclosed to any third parties without the prior written consent of NTI,
which
consent shall not be unreasonably withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of the
rights
reserved thereunder are necessarily of a special, unique, unusual and
extraordinary
character, which gives them a peculiar value, the loss of which cannot be
adequately or reasonably compensated for in damages in an action at law,
and that
the breach by either Party of any of the provisions of this Agreement
will
cause the
other Party irreparable injury and damage. Therefore, upon the
occurrence
of an
event of Default, the non-defaulting Party shall be entitled as a matter
of
right to
seek specific performance of the defaulting Party's obligations and
warranties
hereunder, and/or declaratory, injunctive or other equitable relief in
court
to correct
the Event of Default. No exercise of this right to specific performance
shall
constitute a waiver of such Party's other rights or remedies otherwise
existing law
or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall
be in writing, sent by U.S. registered Mail and shall be effective upon
receipt;
provided, however, that the refusal to accept receipt will constitute
receipt
for this
purpose, in each case addressed:
If to Permittee, to: Ana Winkler
17 Emerald Drive
Morganville, NJ 07751
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Mullin, Rhyne, Emmons and Topel
Att: Robert Levine
1225 Connecticut Avenue, N.W., Suite 300
Washington, D.C. 10036-2604
provided, however, that if any party shall have designated a different
address by
notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to comply
with any
provision of this Agreement by the other Party shall not be construed as
or
constitute a continuing waiver of such provision or a waiver of any other
provision
of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the
Parties hereto and supersedes all prior agreements, covenants,
arrangements,
communications, representations, or warranties, whether oral or written,
by any
Party (or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed and
enforced
in accordance with and governed by the internal substantive law of the
State of
and of the United States of America. The headings of the
Sections of this
Agreement are inserted for convenience of reference only and shall not be
deemed
to constitute a part hereof. Unless otherwise stated, references in this
Agreement
to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only
by an instrument in writing duly executed by the Parties, except as
otherwise
provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable in
whole or in
part to carry out its obligations hereunder, the Party shall not be
deemed
in
violation or default during the period of such inability. The term
"force
majeure"
as used herein shall mean the following: acts of God; acts of public
enemies; orders
of any kind of the government of the United States of America or of any
state or
state departments, agencies, political subdivisions, or officials,
or any civil
or
military authority; insurrections; riots; epidemic; landslides;
lightning;
earthquakes;
fires; hurricanes; volcanic activity; storms of extraordinary force;
floods;
washouts;
drought; civil disturbances; explosions; or any other cause or event not
reasonably
within the control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by
the Parties hereto, and each fully executed counterpart shall be deemed
an
original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold
itself out
to be, vested with any power or right to contractually bind, act on
behalf
of the
other as its contracting broker, agent or otherwise for committing,
selling,
conveying or transferring any of the other Party's assets or property,
contracting
for or in the name of the other Party, or making any agreement
contractually
binding upon such Party.
24. Severability. If any provision of this Agreement is declared void by any
court of
competent jurisdiction, the validity of any other provision of this
Agreement shall
not be affected.
25. Time of the Essence. Time shall be of the essence in the performance of
this
Agreement.
26. Survival. This Agreement shall be binding upon and inure to the benefit
of the
Parties hereto and their respective assigns, heirs, successors and legal
representatives.
27. Assignment. This Agreement may not be assigned by either Party
without the prior
written consent of the other Party, which consent shall not be
unreasonably
withheld or delayed, except that NTI may assign this Agreement to an
affiliated
entity or subsidiary without Permittee's prior approval.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI to
employ an
attorney to enforce its rights pursuant to this Agreement because of the
default of
the other Party, the defaulting Party shall reimburse the prevailing
Party
for
reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or
NTI that
there by any third party beneficiary to this Agreement, and this
Agreement
is
exclusively for the benefit of Permittee and NTI and their respective
assigns.
30. Independent Relationship. Nothing in this Agreement shall be construed
as
creating an employer-employee relationship, partnership or joint venture
by and
between Permittee and NTI, and Permittee shall not be held responsible
for the acts
or omissions of NTI and vice versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in the
drafting and
preparation of this Agreement. Hence, in any construction to be made of
this
Agreement, the same shall not, as a matter of law, be construed against
any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to
purchase its Construction Permit or License, and Permittee desires
to
accept such offer, Permittee, within five (5) days of receiving such
offer,
shall notify NTI in writing and provide NTI with a copy of the same,
and
NTI shall have the right to acquire Permittee's Construction Permit
or
License on the same terms and conditions as offered by the third
party,
such right to be exercised by NTI within thirty (30) days of written
notice
by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder,
then
Permittee shall be free to assign or transfer its Construction
Permit or
License to the third party, subject to the condition that the
assignee or
transferee, as the case may be, agrees to be bound by all of the
terms
and
conditions of this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the
day and year first above written.
PERMITTEE:
By: /s/ Ana L. Winkler
Its:
NORTHEAST TELECOM, INC.
By: /s/ Stephen J. Peters
Stephen J. Peters, VP Operations
EXHIBIT 10.14
____________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Ana L. Winker (the "Lease") for
the operation of one (1) Low Power Television station in Lebanon, MO,
having the Call sign K29DA and operating on channel 29 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution of
this
agreement.
3. Assignor herein further represents and warrants that he has full power
and
authority to execute and deliver this agreement and to conclude the
transaction contemplated herein. Assignor also represents and warrants that
the has all the rights, title, and interest to the Lease and the Channel and
that
there are no existing or anticipated liabilities or legal action associated
with
the Lease or the Channel, to the best of his knowledge and Assignor has not
transferred (or agreed to transfer), nor will it transfer prior to the
completion
of the transaction contemplated herein, any portion of his interest in the
Lease
or the Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of the
Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid, to the
Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction. It is expressly
understood, however, that the Parties hereto intend each and every provision
of this Agreement to be valid and enforceable and hereby knowingly waive
all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws of the
state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Ana L. Winkler
17 Emerald Drive
Morganville, NJ 07751
Re: Notice of Lease Assignment: Lebanon, MO
LPTV Ch.K31EC, K29DA, K18EK, K40EP
Dear Ana:
This letter will serve to notify you of Northeast Telecom's intentions to
assign
your management and lease agreements, to another company. It will be
necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Ana L. Winkler
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24 day
of June, 1995
by and between Northeast Telecom Inc. (NTI), and Ana Winkler
("Permittee"), together "the
Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of
Low Power Television ("LPTV") stations as defined in Section 74.701(F) of
the
Commission's Rules, to provide subscription television ("STV") service on
their authorized
channels, subject to FCC rules and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 29 at
Lebanon, Mo. (Call Sign K29DA), and has determined that it desires to
provide STV service
on such Channel on a twenty-four (24) hour per day, seven (7) day per week
basis;
WHERAS, NTI is in the business of providing STV management and
operational services
and seeks to provide such services on Permittee's Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction
Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee
and NTI, intending to be legally bound, hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the
meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and data
programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign K29DA)
which
issued by the FCC to Permittee to construct the Channel and provide
service on the Channel on a seven (7) day per week, twenty (24)
hours
per
day basis, and shall specifically include any regular, modified or
renewal
authorizations to operate the Channel.
1.3 License Date means the date on which a License Application is filed
with
the FCC certifying the completion of construction of the
transmission
facilities, but not later than the date specified on the
Construction
Permit,
unless extended.
1.4 Transmission Facilities means the equipment and facilities to be
owned
by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including
without limitation restaurants, bars, offices and businesses that
receive
LPTV Service under contract with NTI or under rights granted by NTI.
2. Term. The term of this Agreement shall begin on the date hereof and
shall
continue for a period of ten (10) years following the License Date,
provided that
Permittee's authorization to operate the Channel has been renewed as
necessary by
the FCC. Permittee shall use its reasonable best efforts to obtain such
renewals.
This Agreement shall be authormatically renewed for an additional ten
(10) years,
unless NTI shall have submitted to Permittee at least six (6) months'
advance
written notice of its intent to terminate this Agreement upon the
expiration
of the
initial term.
3. Transition on Channel. Commencing on the License Date, Permittee
hereby
authorizes NTI to transmit a broadcast signal on the Channel for STV
services
seven (7) days per week, twenty-four (24) hours per day, subject to FCC
Rules and
Regulations and all of the terms and conditions set forth in this
Agreement. For
purposes of this Agreement, such transmission on the Channel shall
include all
rights to transmit both video programming and data over the entire
frequency
spectrum of Permittee's Channel. Consistent with applicable FCC rules,
NTI will
apply charges, terms and conditions of service to Subscribers uniformly;
provided,
however, that: (a) Subscribers may be divided into reasonable
classifications
approved by the FCC, and the imposition of different sets of conditions
may be
applied to Subscribers in different classifications; and (b) for good
cause,
within
such classifications, deposits may be required of some Subscribers and
not
of
others.
4. Control of Facilities. Notwithstanding anything in this Agreement to the
contrary,
Permittee, as the FCC permittee for the Channel, shall be responsible for
compliance with all applicable FCC rules and regulations. Permittee
shall
have
control, in operation, management and maintenance of the station to the
extent
necessary to comply with such rules and regulations, of the construction,
operation,
management and maintenance of the station to the extent necessary to
comply with
such rules and regulations. Nothing in this Agreement shall be construed
to: (a)
prevent or hinder Permittee from rejecting or refusing any STV broadcast
program
that it reasonably believes to be unsatisfactory, unsuitable or contrary
to
the public
interest, or from substituting a program that in its opinion is of
greater
local or
national importance; (b) deprive Permittee of the right of ultimate
decision
concerning the maximum amount of any STV program charge or fee; or
(c)
delegate to any other individual or entity ultimate authority over the
scheduling of
STV programs.
5. Payments. In consideration of Permittee's agreement to permit NTI to
transmit on
the Channel, NTI agrees to pay Permittee a monthly transmission fee of
Ten Cents
($.10) per Subscriber ("Transmission Fee"), beginning with and including
the first
calendar month immediately following the license date. Payment will be
due no
later than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the number
of
Subscribers as of the last day of the prior month to the number of
Subscribers as of the then-current month, and then dividing by
two (2).
5.3 All payments from NTI to Permittee shall be paid in currency of the
United States of America by negotiable bank check drawn upon a
United
States bank insured by the FDIC made payable to the order of
********** and mailed to SEE SECTION 16 or to such other address
as
Permittee shall designate in writing to NTI. Payments shall be made
by
the twentieth (20th) day of the following month.
6. Insurance. It is agreed that Permittee shall be insured as a third party
insured under
any liability insurance obtained by NTI.
7. Construction. NTI shall bear all costs, including but not limited to,
consultant,
design, engineering, licensing and legal fees, associated with the
construction of the
Transmission Facilities and any subsequent modifications thereto. NTI
shall also
bear the costs of any licenses, permits, authorizations, or of such
sites.
NTI shall
, at its sole cost and expense, complete construction of the Transmission
Facilities
as authorized by the FCC. Upon completion of construction of the
Transmission
Application on the then-prescribed FCC form for submission to the FCC.
Permittee agrees to timely file the License Application with the FCC
after
its
receipt from NTI. NTI shall not be liable to make any payments under
Section 5
hereof during any delay caused by Permittee's failure to promptly file
such
License
Application. All lease, construction, legal, licensing and engineering
costs
or any
other costs associated therewith shall be the sole responsibility of
and be
paid by
NTI, and NTI shall reimburse Permittee within fifteen (15) days after
receipt of
invoice for reasonable payments made by Permittee and first approved in
writing
by NTI, which approval will not be unreasonably withheld or delayed.
7.1 Lease of Transmission Facilities to Permittee. In consideration of
the
sum
of ONE DOLLAR ($1.00), the receipt and sufficiency of which is
hereby
acknowledged, NTI shall lease the Transmission Facilities to
Permittee
for
a term equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of Section 4,
NTI
shall, at its sole cost and expense, operate and maintain the
Transmission
Facilities in good operating condition and repair with Permittee
being
notified of all such repairs. All persons performing maintenance,
repairs
or any other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering practices
consistent
with industry standards. In the event transmission service is
interrupted
for any reason, NTI shall notify Permittee immediately. NTI shall
be
solely responsible for the origination of all programming to be
transmitted
over the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required to
install,
operate and maintain any program origination and delivery facilities
shall
be provided by NTI, at its sole cost and expense, and such personnel
shall
be under NTI's exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties agree to
take
no action that would jeopardize or otherwise impair the Construction
Permit or any other FCC approval or authorization necessary for the
LPTV Service. Permittee shall use its reasonable best efforts, and
NTI
shall cooperate with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals required
to
carry out the transactions contemplated by this Agreement; provided,
however, that Permittee shall not be required to pay for the
relocation,
reconstruction or similar costs associated with the Channel, which
costs
shall be the sole responsibility of NTI. Permittee also shall use
its
reasonable best efforts to cause the authorization for the Channel
to be
renewed.
7.4 Access. Throughout the term of this Agreement, including any
renewals
hereof, NTI shall provide, and/or cause others to provide, Permittee
with
reasonable access to all Transmission Facilities for emergency
repairs
and
routine inspection, provided that Permittee shall not utilize such
access
in
a manner which unreasonably interferes with NTI's use of the
Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to lease
or
lease for the transmission site and shall be responsible for
bearing all
expenses in connection with such site, including the payment of rent
and
all other costs and expenses of every nature. The site lease,
if any,
shall
be maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
8. Representations and Warranties of NTI. NTI represents and warrants as
follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing,
and
in good standing under the laws of the State of New Jersey. NTI is
qualified or otherwise entitled to do business in all jurisdictions
in
which
such qualifications or entitlement is required by reason of its
business,
activities, ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business. NTI
has all
requisite power to execute, deliver, and, subject to the regulatory
authority
of the FCC, perform this Agreement. The person executing this
Agreement on behalf of NTI is authorized to do so execute and to
bind
NTI to the term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize
the
execution and delivery of this Agreement and the performance of the
obligations of NTI herein have been taken. This Agreement is valid
and
legally binding upon NTI and enforceable in accordance with its
terms
except to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles.
The
person
executing this Agreement on behalf of NTI is authorized to so
execute
and
bind NTI to the terms hereof.
8.3 No Violations. The exectution, delivery, and performance of this
Agreement and all actions and transactions contemplated hereby: (a)
will
not violate any provision of law or the Articles of Incorporation or
By-Laws of NTI, any order of any court or other agency of government to
which NTI is a party or by which it or any of its properties is
bound,
and
(b) will not violate, be in conflict with, result in a breach of, or
constitute
(with notice or lapse of time or both) a default under any
applicable
law,
order, or regulation, indenture, agreement, or other instrument to
which
NTI is a party of, by which it or any of its properties is bound and
which
has not been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever
upon any of its property or assets.
9. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default"
hereunder if: (a) NTI fails to make any payment due and payable under
this
Agreement within twenty (20) days after the date upon which a payment
is due
hereunder, and NTI does not cure such default within thirty (30) days
after
notice
of default is provided by Permittee to NTI; (b) any of the material
"Representations
or Warranties" of either party materially breaches any covenant or
agreement
herein or fails to comply with any material provision of this Agreement,
and any
such breach, failure or default continues for thirty (30) days after
written
notice
thereof, as contemplated herein, shall have been sent by the
non-defaulting
Party
to the defaulting Party.
10. Termination. Upon an Event of Default, the non-defaulting Party may
cancel this
Agreement and may pursue such legal and equitable remedies as may be
available.
11. Indemnification. Each Party shall indemnify, defend, and hold the other
Party
harmless from and against any and all claims, damages, causes of action,
penalties,
statutory damages, interest and costs and expenses, including attorneys'
fees,
arising directly or indirectly out of the acts, omissions, negligence or
willful
misconduct of said party, its employees or agents in connection with the
performance of this Agreement.
12. Representations, Warranties, and Covenants of Permittee. Permittee
represents and
warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is
duly
organized, validly existing and in good standing in the state of its
formation. Permittee is qualified or otherwise entitled to do
business
in
all jurisdictions in which such qualification or entitlement is
required
by
reason of its business, activities, ownership or property.
Permittee has
all
requisite power and authority to own its own properties and to
carry on
its
business. Permittee has all requisite power to execute, deliver,
and,
subject to the regulatory authority of the FCC, perform this
Agreement.
The person signing this Agreement on behalf of Permittee is
authorized
to so execute and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee to
authorize
the execution and delivery of this Agreement and the performance of
the
obligations of Permittee herein have been taken. This Agreement is
valid
and legally binding upon Permittee and enforceable in accordance
with
its terms except to the extent that enforceability thereof may be
limited
by
bankruptcy, insolvency, or the laws relating to the enforcement of
creditor's rights or by the application of equitable principles.
The
person
executing this Agreement on behalf of Permittee is authorized to so
execute and bind Permittee to the terms hereof.
12.3 Valid Construction Permit. The Construction Permit is in full force
and
effect.
12.4 No Violation. The execution and delivery of this Agreement by
Permittee
and the performance of Permittee's obligations hereunder are not in
violation or breach of, do not conflict with or constitute a default
under,
and will not accelerate or permit the acceleration of the
performance
required by any of the terms or provisions of any note, debt
instrument,
security agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction
Permit is bound and will not be an event which, after notice or
lapse or
time or both, will result in any such violation, notice or lapse
of time
or
both, will result in any such violation, breach, conflict, default,
or
acceleration, or under any law, judgment, decree, order, rule or
regulation
of any governmental authority or authority applicable to
Permittee and
will not result in the creation or imposition of any lien (whether
or not
perfected), encumbrance, equity or restriction in favor of any third
person
upon the Construction Permit; provided, however, that the Permittee
shall
not be in default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole, violates
FCC
rules or policies or the Communications Act of 1934 as amended. In
such
event, the Parties shall negotiate in good faith such changes to the
Agreement so as to effectuate compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in
connection with this Agreement shall not exceed the aggregate amount
actually
paid by NTI to Permittee pursuant to Section 5 of this Agreement.
Permittee shall
not be liable for any consequential or similar damages. This Section
provides only
for a limitation of damages otherwise awardable, and shall not be
construed to
create an entitlement or legal right to the amounts of damages specified
herein
upon an Event of Default. No liability for damages shall be assessed
under this
Section except as a result of a final judgment on a complaint for damages
awarded
by a court of competent jurisdiction, or as otherwise agreed by the
Parties
to this
Agreement.
14. Permittee's Access to Records. From time to time and upon reasonable
notice to
NTI, Permittee or its accountants shall have the right to request
information or be
permitted at al reasonable times to inspect and copy all records of NTI
which
Permittee or its accountants or attorneys reasonably consider necessary
to
verify
NTI's compliance with the terms and provisions of this Agreement. It is
understood by Permittee that such information is to be held in confidence
and not
disclosed to any third parties without the prior written consent of NTI,
which
consent shall not be unreasonably withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of the
rights
reserved thereunder are necessarily of a special, unique, unusual and
extraordinary
character, which gives them a peculiar value, the loss of which cannot be
adequately or reasonably compensated for in damages in an action at law,
and that
the breach by either Party of any of the provisions of this Agreement
will
cause the
other Party irreparable injury and damage. Therefore, upon the
occurrence
of an
event of Default, the non-defaulting Party shall be entitled as a matter
of
right to
seek specific performance of the defaulting Party's obligations and
warranties
hereunder, and/or declaratory, injunctive or other equitable relief in
court
to correct
the Event of Default. No exercise of this right to specific performance
shall
constitute a waiver of such Party's other rights or remedies otherwise
existing law
or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall
be in writing, sent by U.S. registered Mail and shall be effective upon
receipt;
provided, however, that the refusal to accept receipt will constitute
receipt
for this
purpose, in each case addressed:
If to Permittee, to: Ana Winkler
17 Emerald Drive
Morganville, NJ 07751
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Mullin, Rhyne, Emmons and Topel
Att: Robert Levine
1225 Connecticut Avenue, N.W., Suite 300
Washington, D.C. 10036-2604
provided, however, that if any party shall have designated a different
address by
notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to comply
with any
provision of this Agreement by the other Party shall not be construed as
or
constitute a continuing waiver of such provision or a waiver of any other
provision
of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the
Parties hereto and supersedes all prior agreements, covenants,
arrangements,
communications, representations, or warranties, whether oral or written,
by any
Party (or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed and
enforced
in accordance with and governed by the internal substantive law of the
State of
and of the United States of America. The headings of the
Sections of this
Agreement are inserted for convenience of reference only and shall not be
deemed
to constitute a part hereof. Unless otherwise stated, references in this
Agreement
to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only
by an instrument in writing duly executed by the Parties, except as
otherwise
provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable in
whole or in
part to carry out its obligations hereunder, the Party shall not be
deemed
in
violation or default during the period of such inability. The term
"force
majeure"
as used herein shall mean the following: acts of God; acts of public
enemies; orders
of any kind of the government of the United States of America or of any
state or
state departments, agencies, political subdivisions, or officials,
or any civil
or
military authority; insurrections; riots; epidemic; landslides;
lightning;
earthquakes;
fires; hurricanes; volcanic activity; storms of extraordinary force;
floods;
washouts;
drought; civil disturbances; explosions; or any other cause or event not
reasonably
within the control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by
the Parties hereto, and each fully executed counterpart shall be deemed
an
original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold
itself out
to be, vested with any power or right to contractually bind, act on
behalf
of the
other as its contracting broker, agent or otherwise for committing,
selling,
conveying or transferring any of the other Party's assets or property,
contracting
for or in the name of the other Party, or making any agreement
contractually
binding upon such Party.
24. Severability. If any provision of this Agreement is declared void by any
court of
competent jurisdiction, the validity of any other provision of this
Agreement shall
not be affected.
25. Time of the Essence. Time shall be of the essence in the performance of
this
Agreement.
26. Survival. This Agreement shall be binding upon and inure to the benefit
of the
Parties hereto and their respective assigns, heirs, successors and legal
representatives.
27. Assignment. This Agreement may not be assigned by either Party
without the prior
written consent of the other Party, which consent shall not be
unreasonably
withheld or delayed, except that NTI may assign this Agreement to an
affiliated
entity or subsidiary without Permittee's prior approval.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI to
employ an
attorney to enforce its rights pursuant to this Agreement because of the
default of
the other Party, the defaulting Party shall reimburse the prevailing
Party
for
reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or
NTI that
there by any third party beneficiary to this Agreement, and this
Agreement
is
exclusively for the benefit of Permittee and NTI and their respective
assigns.
30. Independent Relationship. Nothing in this Agreement shall be construed
as
creating an employer-employee relationship, partnership or joint venture
by and
between Permittee and NTI, and Permittee shall not be held responsible
for the acts
or omissions of NTI and vice versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in the
drafting and
preparation of this Agreement. Hence, in any construction to be made of
this
Agreement, the same shall not, as a matter of law, be construed against
any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to
purchase its Construction Permit or License, and Permittee desires
to
accept such offer, Permittee, within five (5) days of receiving such
offer,
shall notify NTI in writing and provide NTI with a copy of the same,
and
NTI shall have the right to acquire Permittee's Construction Permit
or
License on the same terms and conditions as offered by the third
party,
such right to be exercised by NTI within thirty (30) days of written
notice
by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder,
then
Permittee shall be free to assign or transfer its Construction
Permit or
License to the third party, subject to the condition that the
assignee or
transferee, as the case may be, agrees to be bound by all of the
terms
and
conditions of this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the
day and year first above written.
PERMITTEE:
By: /s/ Ana L. Winkler
Its:
NORTHEAST TELECOM, INC.
By: /s/ Stephen J. Peters
Stephen J. Peters, VP Operations
EXHIBIT 10.15
_________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Ana L. Winker (the "Lease") for
the operation of one (1) Low Power Television station in Lebanon, MO,
having the Call sign K31EC and operating on channel 31 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution
of this agreement.
3. Assignor herein further represents and warrants that he has full power
and authority to execute and deliver this agreement and to conclude
the transaction contemplated herein. Assignor also represents and
warrants that the has all the rights, title, and interest to the Lease
and
the Channel and that there are no existing or anticipated liabilities or
legal action associated with the Lease or the Channel, to the best of
his knowledge and Assignor has not transferred (or agreed to
transfer), nor will it transfer prior to the completion of the
transaction
contemplated herein, any portion of his interest in the Lease or the
Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of
the Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid,
to the Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be
determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction. It is expressly understood,
however, that the Parties hereto intend each and every provision of
this Agreement to be valid and enforceable and hereby knowingly
waive all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws
of the state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Ana L. Winkler
17 Emerald Drive
Morganville, NJ 07751
Re: Notice of Lease Assignment: Lebanon, MO
LPTV Ch.K31EC, K29DA, K18EK, K40EP
Dear Ana:
This letter will serve to notify you of Northeast Telecom's intentions to
assign your management and lease agreements, to another company. It will
be necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Ana L. Winkler
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24 day
of June, 1995 by and between Northeast Telecom Inc. (NTI), and Ana
Winkler ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of Low Power Television ("LPTV") stations as defined
in Section 74.701(F) of the Commission's Rules, to provide subscription
television ("STV") service on their authorized channels, subject to FCC rules
and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 31 at Lebanon, Mo. (Call Sign K31EC), and has determined that it
desires to provide STV service on such Channel on a twenty-four (24) hour
per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
8. Definitions. As used in this Agreement, the following terms shall
have the meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and
data programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign
K31EC) which issued by the FCC to Permittee to construct
the Channel and provide service on the Channel on a seven
(7) day per week, twenty (24) hours per day basis, and shall
specifically include any regular, modified or renewal
authorizations to operate the Channel.
1.3 License Date means the date on which a License Application
is filed with the FCC certifying the completion of
construction of the transmission facilities, but not later than
the date specified on the Construction Permit, unless
extended.
1.4 Transmission Facilities means the equipment and facilities to
be owned by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including without limitation restaurants, bars, offices and
businesses that receive LPTV Service under contract with
NTI or under rights granted by NTI.
9. Term. The term of this Agreement shall begin on the date hereof and
shall continue for a period of ten (10) years following the License
Date, provided that Permittee's authorization to operate the Channel
has been renewed as necessary by the FCC. Permittee shall use its
reasonable best efforts to obtain such renewals. This Agreement shall
be authormatically renewed for an additional ten (10) years, unless
NTI shall have submitted to Permittee at least six (6) months'
advance written notice of its intent to terminate this Agreement upon
the expiration of the initial term.
10. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel
for STV services seven (7) days per week, twenty-four (24) hours per
day, subject to FCC Rules and Regulations and all of the terms and
conditions set forth in this Agreement. For purposes of this
Agreement, such transmission on the Channel shall include all rights
to transmit both video programming and data over the entire
frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions
of service to Subscribers uniformly; provided, however, that: (a)
Subscribers may be divided into reasonable classifications approved
by the FCC, and the imposition of different sets of conditions may be
applied to Subscribers in different classifications; and (b) for good
cause, within such classifications, deposits may be required of some
Subscribers and not of others.
11. Control of Facilities. Notwithstanding anything in this Agreement to
the contrary, Permittee, as the FCC permittee for the Channel, shall
be responsible for compliance with all applicable FCC rules and
regulations. Permittee shall have control, in operation, management
and maintenance of the station to the extent necessary to comply with
such rules and regulations, of the construction, operation,
management and maintenance of the station to the extent necessary
to comply with such rules and regulations. Nothing in this
Agreement shall be construed to: (a) prevent or hinder Permittee
from rejecting or refusing any STV broadcast program that it
reasonably believes to be unsatisfactory, unsuitable or contrary to the
public interest, or from substituting a program that in its opinion is of
greater local or national importance; (b) deprive Permittee of the right
of ultimate decision concerning the maximum amount of any STV
program charge or fee; or (c) delegate to any other individual or entity
ultimate authority over the scheduling of STV programs.
12. Payments. In consideration of Permittee's agreement to permit NTI
to transmit on the Channel, NTI agrees to pay Permittee a monthly
transmission fee of Ten Cents ($.10) per Subscriber ("Transmission
Fee"), beginning with and including the first calendar month
immediately following the license date. Payment will be due no later
than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the
number of Subscribers as of the last day of the prior month to
the number of Subscribers as of the then-current month, and
then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency
of the United States of America by negotiable bank check
drawn upon a United States bank insured by the FDIC made
payable to the order of ********** and mailed to SEE
SECTION 16 or to such other address as Permittee shall
designate in writing to NTI. Payments shall be made by the
twentieth (20th) day of the following month.
13. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
14. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated
with the construction of the Transmission Facilities and any
subsequent modifications thereto. NTI shall also bear the costs of
any licenses, permits, authorizations, or of such sites. NTI shall , at
its sole cost and expense, complete construction of the Transmission
Facilities as authorized by the FCC. Upon completion of
construction of the Transmission Application on the then-prescribed
FCC form for submission to the FCC. Permittee agrees to timely file
the License Application with the FCC after its receipt from NTI. NTI
shall not be liable to make any payments under Section 5 hereof
during any delay caused by Permittee's failure to promptly file such
License Application. All lease, construction, legal, licensing and
engineering costs or any other costs associated therewith shall be the
sole responsibility of and be paid by NTI, and NTI shall reimburse
Permittee within fifteen (15) days after receipt of invoice for
reasonable payments made by Permittee and first approved in writing
by NTI, which approval will not be unreasonably withheld or
delayed.
7.1 Lease of Transmission Facilities to Permittee. In
consideration of the sum of ONE DOLLAR ($1.00), the
receipt and sufficiency of which is hereby acknowledged, NTI
shall lease the Transmission Facilities to Permittee for a term
equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of
Section 4, NTI shall, at its sole cost and expense, operate and
maintain the Transmission Facilities in good operating
condition and repair with Permittee being notified of all such
repairs. All persons performing maintenance, repairs or any
other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering
practices consistent with industry standards. In the event
transmission service is interrupted for any reason, NTI shall
notify Permittee immediately. NTI shall be solely responsible
for the origination of all programming to be transmitted over
the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required
to install, operate and maintain any program origination and
delivery facilities shall be provided by NTI, at its sole cost
and expense, and such personnel shall be under NTI's
exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties
agree to take no action that would jeopardize or otherwise
impair the Construction Permit or any other FCC approval or
authorization necessary for the LPTV Service. Permittee
shall use its reasonable best efforts, and NTI shall cooperate
with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals
required to carry out the transactions contemplated by this
Agreement; provided, however, that Permittee shall not be
required to pay for the relocation, reconstruction or similar
costs associated with the Channel, which costs shall be the
sole responsibility of NTI. Permittee also shall use its
reasonable best efforts to cause the authorization for the
Channel to be renewed.
7.4 Access. Throughout the term of this Agreement, including
any renewals hereof, NTI shall provide, and/or cause others
to provide, Permittee with reasonable access to all
Transmission Facilities for emergency repairs and routine
inspection, provided that Permittee shall not utilize such
access in a manner which unreasonably interferes with NTI's
use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to
lease or lease for the transmission site and shall be
responsible for bearing all expenses in connection with such
site, including the payment of rent and all other costs and
expenses of every nature. The site lease, if any, shall be
maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
15. Representations and Warranties of NTI. NTI represents and warrants
as follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
New Jersey. NTI is qualified or otherwise entitled to do
business in all jurisdictions in which such qualifications or
entitlement is required by reason of its business, activities,
ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business.
NTI has all requisite power to execute, deliver, and, subject
to the regulatory authority of the FCC, perform this
Agreement. The person executing this Agreement on behalf
of NTI is authorized to do so execute and to bind NTI to the
term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize the execution and delivery of this Agreement and
the performance of the obligations of NTI herein have been
taken. This Agreement is valid and legally binding upon NTI
and enforceable in accordance with its terms except to the
extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of NTI is authorized to so execute and bind NTI to the
terms hereof.
8.3 No Violations. The exectution, delivery, and performance of
this Agreement and all actions and transactions contemplated
hereby: (a) will not violate any provision of law or the
Articles of Incorporation or By-Laws of NTI, any order of
any court or other agency of government to which NTI is a
party or by which it or any of its properties is bound, and (b)
will not violate, be in conflict with, result in a breach of, or
constitute (with notice or lapse of time or both) a default
under any applicable law, order, or regulation, indenture,
agreement, or other instrument to which NTI is a party of, by
which it or any of its properties is bound and which has not
been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of its property or assets.
16. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and
payable under this Agreement within twenty (20) days after the date
upon which a payment is due hereunder, and NTI does not cure such
default within thirty (30) days after notice of default is provided by
Permittee to NTI; (b) any of the material "Representations or
Warranties" of either party materially breaches any covenant or
agreement herein or fails to comply with any material provision of
this Agreement, and any such breach, failure or default continues for
thirty (30) days after written notice thereof, as contemplated herein,
shall have been sent by the non-defaulting Party to the defaulting
Party.
17. Termination. Upon an Event of Default, the non-defaulting Party
may cancel this Agreement and may pursue such legal and equitable
remedies as may be available.
18. Indemnification. Each Party shall indemnify, defend, and hold the
other Party harmless from and against any and all claims, damages,
causes of action, penalties, statutory damages, interest and costs and
expenses, including attorneys' fees, arising directly or indirectly out
of the acts, omissions, negligence or willful misconduct of said party,
its employees or agents in connection with the performance of this
Agreement.
19. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is duly organized, validly existing and in good
standing in the state of its formation. Permittee is qualified or
otherwise entitled to do business in all jurisdictions in which
such qualification or entitlement is required by reason of its
business, activities, ownership or property. Permittee has all
requisite power and authority to own its own properties and
to carry on its business. Permittee has all requisite power to
execute, deliver, and, subject to the regulatory authority of the
FCC, perform this Agreement. The person signing this
Agreement on behalf of Permittee is authorized to so execute
and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee
to authorize the execution and delivery of this Agreement and
the performance of the obligations of Permittee herein have
been taken. This Agreement is valid and legally binding upon
Permittee and enforceable in accordance with its terms except
to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of Permittee is authorized to so execute and bind
Permittee to the terms hereof.
12.3 Valid Construction Permit. The Construction Permit is in full
force and effect.
12.4 No Violation. The execution and delivery of this Agreement
by Permittee and the performance of Permittee's obligations
hereunder are not in violation or breach of, do not conflict
with or constitute a default under, and will not accelerate or
permit the acceleration of the performance required by any of
the terms or provisions of any note, debt instrument, security
agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction Permit is bound and will not be an event which,
after notice or lapse or time or both, will result in any such
violation, notice or lapse of time or both, will result in any
such violation, breach, conflict, default, or acceleration, or
under any law, judgment, decree, order, rule or regulation of
any governmental authority or authority applicable to
Permittee and will not result in the creation or imposition of
any lien (whether or not perfected), encumbrance, equity or
restriction in favor of any third person upon the Construction
Permit; provided, however, that the Permittee shall not be in
default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole,
violates FCC rules or policies or the Communications Act of
1934 as amended. In such event, the Parties shall negotiate in
good faith such changes to the Agreement so as to effectuate
compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the
aggregate amount actually paid by NTI to Permittee pursuant to
Section 5 of this Agreement. Permittee shall not be liable for any
consequential or similar damages. This Section provides only for a
limitation of damages otherwise awardable, and shall not be
construed to create an entitlement or legal right to the amounts of
damages specified herein upon an Event of Default. No liability for
damages shall be assessed under this Section except as a result of a
final judgment on a complaint for damages awarded by a court of
competent jurisdiction, or as otherwise agreed by the Parties to this
Agreement.
14. Permittee's Access to Records. From time to time and upon
reasonable notice to NTI, Permittee or its accountants shall have the
right to request information or be permitted at al reasonable times to
inspect and copy all records of NTI which Permittee or its
accountants or attorneys reasonably consider necessary to verify
NTI's compliance with the terms and provisions of this Agreement.
It is understood by Permittee that such information is to be held in
confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably
withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of
the rights reserved thereunder are necessarily of a special, unique,
unusual and extraordinary character, which gives them a peculiar
value, the loss of which cannot be adequately or reasonably
compensated for in damages in an action at law, and that the breach
by either Party of any of the provisions of this Agreement will cause
the other Party irreparable injury and damage. Therefore, upon the
occurrence of an event of Default, the non-defaulting Party shall be
entitled as a matter of right to seek specific performance of the
defaulting Party's obligations and warranties hereunder, and/or
declaratory, injunctive or other equitable relief in court to correct the
Event of Default. No exercise of this right to specific performance
shall constitute a waiver of such Party's other rights or remedies
otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall
be effective upon receipt; provided, however, that the refusal to
accept receipt will constitute receipt for this purpose, in each case
addressed:
If to Permittee, to: Ana Winkler
17 Emerald Drive
Morganville, NJ 07751
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Mullin, Rhyne, Emmons and Topel
Att: Robert Levine
1225 Connecticut Avenue, N.W., Suite 300
Washington, D.C. 10036-2604
provided, however, that if any party shall have designated a different
address by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to
comply with any provision of this Agreement by the other Party shall
not be construed as or constitute a continuing waiver of such
provision or a waiver of any other provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior
agreements, covenants, arrangements, communications,
representations, or warranties, whether oral or written, by any Party
(or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed
and enforced in accordance with and governed by the internal
substantive law of the State of and of the United
States of
America. The headings of the Sections of this Agreement are inserted
for convenience of reference only and shall not be deemed to
constitute a part hereof. Unless otherwise stated, references in this
Agreement to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the
Parties, except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable
in whole or in part to carry out its obligations hereunder, the Party
shall not be deemed in violation or default during the period of such
inability. The term "force majeure" as used herein shall mean the
following: acts of God; acts of public enemies; orders of any kind of
the government of the United States of America or of any state or
state departments, agencies, political subdivisions, or officials, or any
civil or military authority; insurrections; riots; epidemic; landslides;
lightning; earthquakes; fires; hurricanes; volcanic activity; storms of
extraordinary force; floods; washouts; drought; civil disturbances;
explosions; or any other cause or event not reasonably within the
control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart
shall be deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold itself out to be, vested with any power or right to contractually
bind, act on behalf of the other as its contracting broker, agent or
otherwise for committing, selling, conveying or transferring any of
the other Party's assets or property, contracting for or in the name of
the other Party, or making any agreement contractually binding upon
such Party.
24. Severability. If any provision of this Agreement is declared void by
any court of competent jurisdiction, the validity of any other
provision of this Agreement shall not be affected.
25. Time of the Essence. Time shall be of the essence in the performance
of this Agreement.
26. Survival. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective assigns, heirs,
successors and legal representatives.
27. Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed, except that NTI may
assign this Agreement to an affiliated entity or subsidiary without
Permittee's prior approval.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI
to employ an attorney to enforce its rights pursuant to this Agreement
because of the default of the other Party, the defaulting Party shall
reimburse the prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or NTI that there by any third party beneficiary to this Agreement,
and this Agreement is exclusively for the benefit of Permittee and
NTI and their respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be
construed as creating an employer-employee relationship, partnership
or joint venture by and between Permittee and NTI, and Permittee
shall not be held responsible for the acts or omissions of NTI and vice
versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in
the drafting and preparation of this Agreement. Hence, in any
construction to be made of this Agreement, the same shall not, as a
matter of law, be construed against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to purchase its Construction Permit or License, and
Permittee desires fer from a third
party to purchase its Construction Permit or License, and
Permittee desires to accept such offer, Permittee, within five
(5) days of receiving such offer, shall notify NTI in writing
and provide NTI with a copy of the same, and NTI shall have
the right to acquire Permittee's Construction Permit or
License on the same terms and conditions as offered by the
third party, such right to be exercised by NTI within thirty
(30) days of written notice by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder, then Permittee shall be free to assign or transfer its
Construction Permit or License to the third party, subject to
the condition that the assignee or transferee, as the case may
be, agrees to be bound by all of the terms and conditions of
this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ Ana L. Winkler
Its:
NORTHEAST TELECOM, INC.
By: /s/ Stephen J. Peters
Stephen J. Peters, VP Operations
EXHIBIT 10.16
_________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Ana L. Winker (the "Lease") for
the operation of one (1) Low Power Television station in Lebanon, MO,
having the Call sign K40EP and operating on channel 40 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution
of this agreement.
3. Assignor herein further represents and warrants that he has full power
and authority to execute and deliver this agreement and to conclude
the transaction contemplated herein. Assignor also represents and
warrants that the has all the rights, title, and interest to the Lease
and
the Channel and that there are no existing or anticipated liabilities or
legal action associated with the Lease or the Channel, to the best of
his knowledge and Assignor has not transferred (or agreed to
transfer), nor will it transfer prior to the completion of the
transaction
contemplated herein, any portion of his interest in the Lease or the
Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of
the Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid,
to the Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be
determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction. It is expressly understood,
however, that the Parties hereto intend each and every provision of
this Agreement to be valid and enforceable and hereby knowingly
waive all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws
of the state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Ana L. Winkler
17 Emerald Drive
Morganville, NJ 07751
Re: Notice of Lease Assignment: Lebanon, MO
LPTV Ch.K31EC, K29DA, K18EK, K40EP
Dear Ana:
This letter will serve to notify you of Northeast Telecom's intentions to
assign your management and lease agreements, to another company. It will
be necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Ana L. Winkler
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24 day
of June, 1995 by and between Northeast Telecom Inc. (NTI), and Ana
Winkler ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of Low Power Television ("LPTV") stations as defined
in Section 74.701(F) of the Commission's Rules, to provide subscription
television ("STV") service on their authorized channels, subject to FCC rules
and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 40 at Lebanon, Mo. (Call Sign K40EP), and has determined that it
desires to provide STV service on such Channel on a twenty-four (24) hour
per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
8. Definitions. As used in this Agreement, the following terms shall
have the meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and
data programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign
K40EP) which issued by the FCC to Permittee to construct
the Channel and provide service on the Channel on a seven
(7) day per week, twenty (24) hours per day basis, and shall
specifically include any regular, modified or renewal
authorizations to operate the Channel.
1.3 License Date means the date on which a License Application
is filed with the FCC certifying the completion of
construction of the transmission facilities, but not later than
the date specified on the Construction Permit, unless
extended.
1.4 Transmission Facilities means the equipment and facilities to
be owned by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including without limitation restaurants, bars, offices and
businesses that receive LPTV Service under contract with
NTI or under rights granted by NTI.
9. Term. The term of this Agreement shall begin on the date hereof and
shall continue for a period of ten (10) years following the License
Date, provided that Permittee's authorization to operate the Channel
has been renewed as necessary by the FCC. Permittee shall use its
reasonable best efforts to obtain such renewals. This Agreement shall
be authormatically renewed for an additional ten (10) years, unless
NTI shall have submitted to Permittee at least six (6) months'
advance written notice of its intent to terminate this Agreement upon
the expiration of the initial term.
10. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel
for STV services seven (7) days per week, twenty-four (24) hours per
day, subject to FCC Rules and Regulations and all of the terms and
conditions set forth in this Agreement. For purposes of this
Agreement, such transmission on the Channel shall include all rights
to transmit both video programming and data over the entire
frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions
of service to Subscribers uniformly; provided, however, that: (a)
Subscribers may be divided into reasonable classifications approved
by the FCC, and the imposition of different sets of conditions may be
applied to Subscribers in different classifications; and (b) for good
cause, within such classifications, deposits may be required of some
Subscribers and not of others.
11. Control of Facilities. Notwithstanding anything in this Agreement to
the contrary, Permittee, as the FCC permittee for the Channel, shall
be responsible for compliance with all applicable FCC rules and
regulations. Permittee shall have control, in operation, management
and maintenance of the station to the extent necessary to comply with
such rules and regulations, of the construction, operation,
management and maintenance of the station to the extent necessary
to comply with such rules and regulations. Nothing in this
Agreement shall be construed to: (a) prevent or hinder Permittee
from rejecting or refusing any STV broadcast program that it
reasonably believes to be unsatisfactory, unsuitable or contrary to the
public interest, or from substituting a program that in its opinion is of
greater local or national importance; (b) deprive Permittee of the right
of ultimate decision concerning the maximum amount of any STV
program charge or fee; or (c) delegate to any other individual or entity
ultimate authority over the scheduling of STV programs.
12. Payments. In consideration of Permittee's agreement to permit NTI
to transmit on the Channel, NTI agrees to pay Permittee a monthly
transmission fee of Ten Cents ($.10) per Subscriber ("Transmission
Fee"), beginning with and including the first calendar month
immediately following the license date. Payment will be due no later
than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the
number of Subscribers as of the last day of the prior month to
the number of Subscribers as of the then-current month, and
then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency
of the United States of America by negotiable bank check
drawn upon a United States bank insured by the FDIC made
payable to the order of ********** and mailed to SEE
SECTION 16 or to such other address as Permittee shall
designate in writing to NTI. Payments shall be made by the
twentieth (20th) day of the following month.
13. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
14. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated
with the construction of the Transmission Facilities and any
subsequent modifications thereto. NTI shall also bear the costs of
any licenses, permits, authorizations, or of such sites. NTI shall , at
its sole cost and expense, complete construction of the Transmission
Facilities as authorized by the FCC. Upon completion of
construction of the Transmission Application on the then-prescribed
FCC form for submission to the FCC. Permittee agrees to timely file
the License Application with the FCC after its receipt from NTI. NTI
shall not be liable to make any payments under Section 5 hereof
during any delay caused by Permittee's failure to promptly file such
License Application. All lease, construction, legal, licensing and
engineering costs or any other costs associated therewith shall be the
sole responsibility of and be paid by NTI, and NTI shall reimburse
Permittee within fifteen (15) days after receipt of invoice for
reasonable payments made by Permittee and first approved in writing
by NTI, which approval will not be unreasonably withheld or
delayed.
7.1 Lease of Transmission Facilities to Permittee. In
consideration of the sum of ONE DOLLAR ($1.00), the
receipt and sufficiency of which is hereby acknowledged, NTI
shall lease the Transmission Facilities to Permittee for a term
equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of
Section 4, NTI shall, at its sole cost and expense, operate and
maintain the Transmission Facilities in good operating
condition and repair with Permittee being notified of all such
repairs. All persons performing maintenance, repairs or any
other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering
practices consistent with industry standards. In the event
transmission service is interrupted for any reason, NTI shall
notify Permittee immediately. NTI shall be solely responsible
for the origination of all programming to be transmitted over
the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required
to install, operate and maintain any program origination and
delivery facilities shall be provided by NTI, at its sole cost
and expense, and such personnel shall be under NTI's
exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties
agree to take no action that would jeopardize or otherwise
impair the Construction Permit or any other FCC approval or
authorization necessary for the LPTV Service. Permittee
shall use its reasonable best efforts, and NTI shall cooperate
with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals
required to carry out the transactions contemplated by this
Agreement; provided, however, that Permittee shall not be
required to pay for the relocation, reconstruction or similar
costs associated with the Channel, which costs shall be the
sole responsibility of NTI. Permittee also shall use its
reasonable best efforts to cause the authorization for the
Channel to be renewed.
7.4 Access. Throughout the term of this Agreement, including
any renewals hereof, NTI shall provide, and/or cause others
to provide, Permittee with reasonable access to all
Transmission Facilities for emergency repairs and routine
inspection, provided that Permittee shall not utilize such
access in a manner which unreasonably interferes with NTI's
use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to
lease or lease for the transmission site and shall be
responsible for bearing all expenses in connection with such
site, including the payment of rent and all other costs and
expenses of every nature. The site lease, if any, shall be
maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
15. Representations and Warranties of NTI. NTI represents and warrants
as follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
New Jersey. NTI is qualified or otherwise entitled to do
business in all jurisdictions in which such qualifications or
entitlement is required by reason of its business, activities,
ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business.
NTI has all requisite power to execute, deliver, and, subject
to the regulatory authority of the FCC, perform this
Agreement. The person executing this Agreement on behalf
of NTI is authorized to do so execute and to bind NTI to the
term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize the execution and delivery of this Agreement and
the performance of the obligations of NTI herein have been
taken. This Agreement is valid and legally binding upon NTI
and enforceable in accordance with its terms except to the
extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of NTI is authorized to so execute and bind NTI to the
terms hereof.
8.3 No Violations. The exectution, delivery, and performance of
this Agreement and all actions and transactions contemplated
hereby: (a) will not violate any provision of law or the
Articles of Incorporation or By-Laws of NTI, any order of
any court or other agency of government to which NTI is a
party or by which it or any of its properties is bound, and (b)
will not violate, be in conflict with, result in a breach of, or
constitute (with notice or lapse of time or both) a default
under any applicable law, order, or regulation, indenture,
agreement, or other instrument to which NTI is a party of, by
which it or any of its properties is bound and which has not
been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of its property or assets.
16. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and
payable under this Agreement within twenty (20) days after the date
upon which a payment is due hereunder, and NTI does not cure such
default within thirty (30) days after notice of default is provided by
Permittee to NTI; (b) any of the material "Representations or
Warranties" of either party materially breaches any covenant or
agreement herein or fails to comply with any material provision of
this Agreement, and any such breach, failure or default continues for
thirty (30) days after written notice thereof, as contemplated herein,
shall have been sent by the non-defaulting Party to the defaulting
Party.
17. Termination. Upon an Event of Default, the non-defaulting Party
may cancel this Agreement and may pursue such legal and equitable
remedies as may be available.
18. Indemnification. Each Party shall indemnify, defend, and hold the
other Party harmless from and against any and all claims, damages,
causes of action, penalties, statutory damages, interest and costs and
expenses, including attorneys' fees, arising directly or indirectly out
of the acts, omissions, negligence or willful misconduct of said party,
its employees or agents in connection with the performance of this
Agreement.
19. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is duly organized, validly existing and in good
standing in the state of its formation. Permittee is qualified or
otherwise entitled to do business in all jurisdictions in which
such qualification or entitlement is required by reason of its
business, activities, ownership or property. Permittee has all
requisite power and authority to own its own properties and
to carry on its business. Permittee has all requisite power to
execute, deliver, and, subject to the regulatory authority of the
FCC, perform this Agreement. The person signing this
Agreement on behalf of Permittee is authorized to so execute
and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee
to authorize the execution and delivery of this Agreement and
the performance of the obligations of Permittee herein have
been taken. This Agreement is valid and legally binding upon
Permittee and enforceable in accordance with its terms except
to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of Permittee is authorized to so execute and bind
Permittee to the terms hereof.
12.3 Valid Construction Permit. The Construction Permit is in full
force and effect.
12.4 No Violation. The execution and delivery of this Agreement
by Permittee and the performance of Permittee's obligations
hereunder are not in violation or breach of, do not conflict
with or constitute a default under, and will not accelerate or
permit the acceleration of the performance required by any of
the terms or provisions of any note, debt instrument, security
agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction Permit is bound and will not be an event which,
after notice or lapse or time or both, will result in any such
violation, notice or lapse of time or both, will result in any
such violation, breach, conflict, default, or acceleration, or
under any law, judgment, decree, order, rule or regulation of
any governmental authority or authority applicable to
Permittee and will not result in the creation or imposition of
any lien (whether or not perfected), encumbrance, equity or
restriction in favor of any third person upon the Construction
Permit; provided, however, that the Permittee shall not be in
default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole,
violates FCC rules or policies or the Communications Act of
1934 as amended. In such event, the Parties shall negotiate in
good faith such changes to the Agreement so as to effectuate
compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the
aggregate amount actually paid by NTI to Permittee pursuant to
Section 5 of this Agreement. Permittee shall not be liable for any
consequential or similar damages. This Section provides only for a
limitation of damages otherwise awardable, and shall not be
construed to create an entitlement or legal right to the amounts of
damages specified herein upon an Event of Default. No liability for
damages shall be assessed under this Section except as a result of a
final judgment on a complaint for damages awarded by a court of
competent jurisdiction, or as otherwise agreed by the Parties to this
Agreement.
14. Permittee's Access to Records. From time to time and upon
reasonable notice to NTI, Permittee or its accountants shall have the
right to request information or be permitted at al reasonable times to
inspect and copy all records of NTI which Permittee or its
accountants or attorneys reasonably consider necessary to verify
NTI's compliance with the terms and provisions of this Agreement.
It is understood by Permittee that such information is to be held in
confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably
withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of
the rights reserved thereunder are necessarily of a special, unique,
unusual and extraordinary character, which gives them a peculiar
value, the loss of which cannot be adequately or reasonably
compensated for in damages in an action at law, and that the breach
by either Party of any of the provisions of this Agreement will cause
the other Party irreparable injury and damage. Therefore, upon the
occurrence of an event of Default, the non-defaulting Party shall be
entitled as a matter of right to seek specific performance of the
defaulting Party's obligations and warranties hereunder, and/or
declaratory, injunctive or other equitable relief in court to correct the
Event of Default. No exercise of this right to specific performance
shall constitute a waiver of such Party's other rights or remedies
otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall
be effective upon receipt; provided, however, that the refusal to
accept receipt will constitute receipt for this purpose, in each case
addressed:
If to Permittee, to: Ana Winkler
17 Emerald Drive
Morganville, NJ 07751
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Mullin, Rhyne, Emmons and Topel
Att: Robert Levine
1225 Connecticut Avenue, N.W., Suite 300
Washington, D.C. 10036-2604
provided, however, that if any party shall have designated a different
address by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to
comply with any provision of this Agreement by the other Party shall
not be construed as or constitute a continuing waiver of such
provision or a waiver of any other provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior
agreements, covenants, arrangements, communications,
representations, or warranties, whether oral or written, by any Party
(or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed
and enforced in accordance with and governed by the internal
substantive law of the State of and of the United
States of
America. The headings of the Sections of this Agreement are inserted
for convenience of reference only and shall not be deemed to
constitute a part hereof. Unless otherwise stated, references in this
Agreement to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the
Parties, except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable
in whole or in part to carry out its obligations hereunder, the Party
shall not be deemed in violation or default during the period of such
inability. The term "force majeure" as used herein shall mean the
following: acts of God; acts of public enemies; orders of any kind of
the government of the United States of America or of any state or
state departments, agencies, political subdivisions, or officials, or any
civil or military authority; insurrections; riots; epidemic; landslides;
lightning; earthquakes; fires; hurricanes; volcanic activity; storms of
extraordinary force; floods; washouts; drought; civil disturbances;
explosions; or any other cause or event not reasonably within the
control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart
shall be deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold itself out to be, vested with any power or right to contractually
bind, act on behalf of the other as its contracting broker, agent or
otherwise for committing, selling, conveying or transferring any of
the other Party's assets or property, contracting for or in the name of
the other Party, or making any agreement contractually binding upon
such Party.
24. Severability. If any provision of this Agreement is declared void by
any court of competent jurisdiction, the validity of any other
provision of this Agreement shall not be affected.
val. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective assigns, heirs,
successors and legal representatives.
27. Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed, except that NTI may
assign this Agreement to an affiliated entity or subsidiary without
Permittee's prior approval.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI
to employ an attorney to enforce its rights pursuant to this Agreement
because of the default of the other Party, the defaulting Party shall
reimburse the prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or NTI that there by any third party beneficiary to this Agreement,
and this Agreement is exclusively for the benefit of Permittee and
NTI and their respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be
construed as creating an employer-employee relationship, partnership
or joint venture by and between Permittee and NTI, and Permittee
shall not be held responsible for the acts or omissions of NTI and vice
versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in
the drafting and preparation of this Agreement. Hence, in any
construction to be made of this Agreement, the same shall not, as a
matter of law, be construed against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to purchase its Construction Permit or License, and
Permittee desires to accept such offer, Permittee, within five
(5) days of receiving such offer, shall notify NTI in writing
and provide NTI with a copy of the same, and NTI shall have
the right to acquire Permittee's Construction Permit or
License on the same terms and conditions as offered by the
third party, such right to be exercised by NTI within thirty
(30) days of written notice by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder, then Permittee shall be free to assign or transfer its
Construction Permit or License to the third party, subject to
the condition that the assignee or transferee, as the case may
be, agrees to be bound by all of the terms and conditions of
this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ Ana L. Winkler
Its:
NORTHEAST TELECOM, INC.
By: /s/ Stephen J. Peters
Stephen J. Peters, VP Operations
EXHIBIT 10.17
________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Jeffrey Narod (the "Lease") for
the operation of one (1) Low Power Television station in Lebanon, MO,
having the Call sign K51ES and operating on channel 51 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution
of this agreement.
3. Assignor herein further represents and warrants that he has full power
and authority to execute and deliver this agreement and to conclude
the transaction contemplated herein. Assignor also represents and
warrants that the has all the rights, title, and interest to the Lease
and
the Channel and that there are no existing or anticipated liabilities or
legal action associated with the Lease or the Channel, to the best of
his knowledge and Assignor has not transferred (or agreed to
transfer), nor will it transfer prior to the completion of the
transaction
contemplated herein, any portion of his interest in the Lease or the
Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of
the Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid,
to the Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be
determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction. It is expressly understood,
however, that the Parties hereto intend each and every provision of
this Agreement to be valid and enforceable and hereby knowingly
waive all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws
of the state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Jeffrey Narod
1879 Jeffrey Court
Wantagh, New York 11793
Re: Notice of Lease Assignment: Lebanon, MO
LPTV Ch. K51ES, K55HD, K59FD, K53FK
Dear Jeffrey:
This letter will serve to notify you of Northeast Telecom's intentions to
assign your management and lease agreements, to another company. It will
be necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Jeffrey Narod
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24 day
of June, 1995 by and between Northeast Telecom Inc. (NTI), and Jeffrey
Narod ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of Low Power Television ("LPTV") stations as defined
in Section 74.701(F) of the Commission's Rules, to provide subscription
television ("STV") service on their authorized channels, subject to FCC rules
and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 51 at Lebanon, Mo. (Call Sign K51ES), and has determined that it
desires to provide STV service on such Channel on a twenty-four (24) hour
per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
8. Definitions. As used in this Agreement, the following terms shall
have the meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and
data programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign
K51ES) which issued by the FCC to Permittee to construct
the Channel and provide service on the Channel on a seven
(7) day per week, twenty (24) hours per day basis, and shall
specifically include any regular, modified or renewal
authorizations to operate the Channel.
1.3 License Date means the date on which a License Application
is filed with the FCC certifying the completion of
construction of the transmission facilities, but not later than
the date specified on the Construction Permit, unless
extended.
1.4 Transmission Facilities means the equipment and facilities to
be owned by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including without limitation restaurants, bars, offices and
businesses that receive LPTV Service under contract with
NTI or under rights granted by NTI.
9. Term. The term of this Agreement shall begin on the date hereof and
shall continue for a period of ten (10) years following the License
Date, provided that Permittee's authorization to operate the Channel
has been renewed as necessary by the FCC. Permittee shall use its
reasonable best efforts to obtain such renewals. This Agreement shall
be authormatically renewed for an additional ten (10) years, unless
NTI shall have submitted to Permittee at least six (6) months'
advance written notice of its intent to terminate this Agreement upon
the expiration of the initial term.
10. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel
for STV services seven (7) days per week, twenty-four (24) hours per
day, subject to FCC Rules and Regulations and all of the terms and
conditions set forth in this Agreement. For purposes of this
Agreement, such transmission on the Channel shall include all rights
to transmit both video programming and data over the entire
frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions
of service to Subscribers uniformly; provided, however, that: (a)
Subscribers may be divided into reasonable classifications approved
by the FCC, and the imposition of different sets of conditions may be
applied to Subscribers in different classifications; and (b) for good
cause, within such classifications, deposits may be required of some
Subscribers and not of others.
11. Control of Facilities. Notwithstanding anything in this Agreement to
the contrary, Permittee, as the FCC permittee for the Channel, shall
be responsible for compliance with all applicable FCC rules and
regulations. Permittee shall have control, in operation, management
and maintenance of the station to the extent necessary to comply with
such rules and regulations, of the construction, operation,
management and maintenance of the station to the extent necessary
to comply with such rules and regulations. Nothing in this
Agreement shall be construed to: (a) prevent or hinder Permittee
from rejecting or refusing any STV broadcast program that it
reasonably believes to be unsatisfactory, unsuitable or contrary to the
public interest, or from substituting a program that in its opinion is of
greater local or national importance; (b) deprive Permittee of the right
of ultimate decision concerning the maximum amount of any STV
program charge or fee; or (c) delegate to any other individual or entity
ultimate authority over the scheduling of STV programs.
12. Payments. In consideration of Permittee's agreement to permit NTI
to transmit on the Channel, NTI agrees to pay Permittee a monthly
transmission fee of Ten Cents ($.10) per Subscriber ("Transmission
Fee"), beginning with and including the first calendar month
immediately following the license date. Payment will be due no later
than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the
number of Subscribers as of the last day of the prior month to
the number of Subscribers as of the then-current month, and
then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency
of the United States of America by negotiable bank check
drawn upon a United States bank insured by the FDIC made
payable to the order of ********** and mailed to SEE
SECTION 16 or to such other address as Permittee shall
designate in writing to NTI. Payments shall be made by the
twentieth (20th) day of the following month.
13. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
14. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated
with the construction of the Transmission Facilities and any
subsequent modifications thereto. NTI shall also bear the costs of
any licenses, permits, authorizations, or of such sites. NTI shall , at
its sole cost and expense, complete construction of the Transmission
Facilities as authorized by the FCC. Upon completion of
construction of the Transmission Application on the then-prescribed
FCC form for submission to the FCC. Permittee agrees to timely file
the License Application with the FCC after its receipt from NTI. NTI
shall not be liable to make any payments under Section 5 hereof
during any delay caused by Permittee's failure to promptly file such
License Application. All lease, construction, legal, licensing and
engineering costs or any other costs associated therewith shall be the
sole responsibility of and be paid by NTI, and NTI shall reimburse
Permittee within fifteen (15) days after receipt of invoice for
reasonable payments made by Permittee and first approved in writing
by NTI, which approval will not be unreasonably withheld or
delayed.
7.1 Lease of Transmission Facilities to Permittee. In
consideration of the sum of ONE DOLLAR ($1.00), the
receipt and sufficiency of which is hereby acknowledged, NTI
shall lease the Transmission Facilities to Permittee for a term
equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of
Section 4, NTI shall, at its sole cost and expense, operate and
maintain the Transmission Facilities in good operating
condition and repair with Permittee being notified of all such
repairs. All persons performing maintenance, repairs or any
other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering
practices consistent with industry standards. In the event
transmission service is interrupted for any reason, NTI shall
notify Permittee immediately. NTI shall be solely responsible
for the origination of all programming to be transmitted over
the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required
to install, operate and maintain any program origination and
delivery facilities shall be provided by NTI, at its sole cost
and expense, and such personnel shall be under NTI's
exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties
agree to take no action that would jeopardize or otherwise
impair the Construction Permit or any other FCC approval or
authorization necessary for the LPTV Service. Permittee
shall use its reasonable best efforts, and NTI shall cooperate
with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals
required to carry out the transactions contemplated by this
Agreement; provided, however, that Permittee shall not be
required to pay for the relocation, reconstruction or similar
costs associated with the Channel, which costs shall be the
sole responsibility of NTI. Permittee also shall use its
reasonable best efforts to cause the authorization for the
Channel to be renewed.
7.4 Access. Throughout the term of this Agreement, including
any renewals hereof, NTI shall provide, and/or cause others
to provide, Permittee with reasonable access to all
Transmission Facilities for emergency repairs and routine
inspection, provided that Permittee shall not utilize such
access in a manner which unreasonably interferes with NTI's
use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to
lease or lease for the transmission site and shall be
responsible for bearing all expenses in connection with such
site, including the payment of rent and all other costs and
expenses of every nature. The site lease, if any, shall be
maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
15. Representations and Warranties of NTI. NTI represents and warrants
as follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
New Jersey. NTI is qualified or otherwise entitled to do
business in all jurisdictions in which such qualifications or
entitlement is required by reason of its business, activities,
ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business.
NTI has all requisite power to execute, deliver, and, subject
to the regulatory authority of the FCC, perform this
Agreement. The person executing this Agreement on behalf
of NTI is authorized to do so execute and to bind NTI to the
term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize the execution and delivery of this Agreement and
the performance of the obligations of NTI herein have been
taken. This Agreement is valid and legally binding upon NTI
and enforceable in accordance with its terms except to the
extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of NTI is authorized to so execute and bind NTI to the
terms hereof.
8.3 No Violations. The exectution, delivery, and performance of
this Agreement and all actions and transactions contemplated
hereby: (a) will not violate any provision of law or the
Articles of Incorporation or By-Laws of NTI, any order of
any court or other agency of government to which NTI is a
party or by which it or any of its properties is bound, and (b)
will not violate, be in conflict with, result in a breach of, or
constitute (with notice or lapse of time or both) a default
under any applicable law, order, or regulation, indenture,
agreement, or other instrument to which NTI is a party of, by
which it or any of its properties is bound and which has not
been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of its property or assets.
16. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and
payable under this Agreement within twenty (20) days after the date
upon which a payment is due hereunder, and NTI does not cure such
default within thirty (30) days after notice of default is provided by
Permittee to NTI; (b) any of the material "Representations or
Warranties" of either party materially breaches any covenant or
agreement herein or fails to comply with any material provision of
this Agreement, and any such breach, failure or default continues for
thirty (30) days after written notice thereof, as contemplated herein,
shall have been sent by the non-defaulting Party to the defaulting
Party.
17. Termination. Upon an Event of Default, the non-defaulting Party
may cancel this Agreement and may pursue such legal and equitable
remedies as may be available.
18. Indemnification. Each Party shall indemnify, defend, and hold the
other Party harmless from and against any and all claims, damages,
causes of action, penalties, statutory damages, interest and costs and
expenses, including attorneys' fees, arising directly or indirectly out
of the acts, omissions, negligence or willful misconduct of said party,
its employees or agents in connection with the performance of this
Agreement.
19. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is duly organized, validly existing and in good
standing in the state of its formation. Permittee is qualified or
otherwise entitled to do business in all jurisdictions in which
such qualification or entitlement is required by reason of its
business, activities, ownership or property. Permittee has all
requisite power and authority to own its own properties and
to carry on its business. Permittee has all requisite power to
execute, deliver, and, subject to the regulatory authority of the
FCC, perform this Agreement. The person signing this
Agreement on behalf of Permittee is authorized to so execute
and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee
to authorize the execution and delivery of this Agreement and
the performance of the obligations of Permittee herein have
been taken. This Agreement is valid and legally binding upon
Permittee and enforceable in accordance with its terms except
to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of Permittee is authorized to so execute and bind
Permittee to the terms hereof.
12.3 Valid Construction Permit. The Construction Permit is in full
force and effect.
12.4 No Violation. The execution and delivery of this Agreement
by Permittee and the performance of Permittee's obligations
hereunder are not in violation or breach of, do not conflict
with or constitute a default under, and will not accelerate or
permit the acceleration of the performance required by any of
the terms or provisions of any note, debt instrument, security
agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction Permit is bound and will not be an event which,
after notice or lapse or time or both, will result in any such
violation, notice or lapse of time or both, will result in any
such violation, breach, conflict, default, or acceleration, or
under any law, judgment, decree, order, rule or regulation of
any governmental authority or authority applicable to
Permittee and will not result in the creation or imposition of
any lien (whether or not perfected), encumbrance, equity or
restriction in favor of any third person upon the Construction
Permit; provided, however, that the Permittee shall not be in
default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole,
violates FCC rules or policies or the Communications Act of
1934 as amended. In such event, the Parties shall negotiate in
good faith such changes to the Agreement so as to effectuate
compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the
aggregate amount actually paid by NTI to Permittee pursuant to
Section 5 of this Agreement. Permittee shall not be liable for any
consequential or similar damages. This Section provides only for a
limitation of damages otherwise awardable, and shall not be
construed to create an entitlement or legal right to the amounts of
damages specified herein upon an Event of Default. No liability for
damages shall be assessed under this Section except as a result of a
final judgment on a complaint for damages awarded by a court of
competent jurisdiction, or as otherwise agreed by the Parties to this
Agreement.
14. Permittee's Access to Records. From time to time and upon
reasonable notice to NTI, Permittee or its accountants shall have the
right to request information or be permitted at al reasonable times to
inspect and copy all records of NTI which Permittee or its
accountants or attorneys reasonably consider necessary to verify
NTI's compliance with the terms and provisions of this Agreement.
It is understood by Permittee that such information is to be held in
confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably
withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of
the rights reserved thereunder are necessarily of a special, unique,
unusual and extraordinary character, which gives them a peculiar
value, the loss of which cannot be adequately or reasonably
compensated for in damages in an action at law, and that the breach
by either Party of any of the provisions of this Agreement will cause
the other Party irreparable injury and damage. Therefore, upon the
occurrence of an event of Default, the non-defaulting Party shall be
entitled as a matter of right to seek specific performance of the
defaulting Party's obligations and warranties hereunder, and/or
declaratory, injunctive or other equitable relief in court to correct the
Event of Default. No exercise of this right to specific performance
shall constitute a waiver of such Party's other rights or remedies
otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall
be effective upon receipt; provided, however, that the refusal to
accept receipt will constitute receipt for this purpose, in each case
addressed:
If to Permittee, to: Jeffrey Narod
1879 Jeffrey Court
Wantagh, New York 11793
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Mullin, Rhyne, Emmons and Topel
Att: Robert Levine
1225 Connecticut Avenue, N.W., Suite 300
Washington, D.C. 10036-2604
provided, however, that if any party shall have designated a different
address by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to
comply with any provision of this Agreement by the other Party shall
not be construed as or constitute a continuing waiver of such
provision or a waiver of any other provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior
agreements, covenants, arrangements, communications,
representations, or warranties, whether oral or written, by any Party
(or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed
and enforced in accordance with and governed by the internal
substantive law of the State of and of the United
States of
America. The headings of the Sections of this Agreement are inserted
for convenience of reference only and shall not be deemed to
constitute a part hereof. Unless otherwise stated, references in this
Agreement to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the
Parties, except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable
in whole or in part to carry out its obligations hereunder, the Party
shall not be deemed in violation or default during the period of such
inability. The term "force majeure" as used herein shall mean the
following: acts of God; acts of public enemies; orders of any kind of
the government of the United States of America or of any state or
state departments, agencies, political subdivisions, or officials, or any
civil or military authority; insurrections; riots; epidemic; landslides;
lightning; earthquakes; fires; hurricanes; volcanic activity; storms of
extraordinary force; floods; washouts; drought; civil disturbances;
explosions; or any other cause or event not reasonably within the
control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart
shall be deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold itself out to be, vested with any power or right to contractually
bind, act on behalf of the other as its contracting broker, agent or
otherwise for committing, selling, conveying or transferring any of
the other Party's assets or property, contracting for or in the name of
the other Party, or making any agreement contractually binding upon
such Party.
24. Severability. If any provision of this Agreement is declared void by
any court of competent jurisdiction, the validity of any other
provision of this Agreement shall not be affected.
25. Time of the Essence. Time shall be of the essence in the performance
of this Agreement.
26. Survival. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective assigns, heirs,
successors and legal representatives.
27. Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed, except that NTI may
assign this Agreement to an affiliated entity or subsidiary without
Permittee's prior approval.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI
to employ an attorney to enforce its rights pursuant to this Agreement
because of the default of the other Party, the defaulting Party shall
reimburse the prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or NTI that there by any third party beneficiary to this Agreement,
and this Agreement is exclusively for the benefit of Permittee and
NTI and their respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be
construed as creating an employer-employee relationship, partnership
or joint venture by and between Permittee and NTI, and Permittee
shall not be held responsible for the acts or omissions of NTI and vice
versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in
the drafting and preparation of this Agreement. Hence, in any
construction to be made of this Agreement, the same shall not, as a
matter of law, be construed against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to purchase its Construction Permit or License, and
Permittee desires to accept such offer, Permittee, within five
(5) days of receiving such offer, shall notify NTI in writing
and provide NTI with a copy of the same, and NTI shall have
the right to acquire Permittee's Construction Permit or
License on the same terms and conditions as offered by the
third party, such right to be exercised by NTI within thirty
(30) days of written notice by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder, then Permittee shall be free to assign or transfer its
Construction Permit or License to the third party, subject to
the condition that the assignee or transferee, as the case may
be, agrees to be bound by all of the terms and conditions of
this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ Jeffrey Narod
Its:
NORTHEAST TELECOM, INC.
By: /s/ Stephen J. Peters
Stephen J. Peters, VP Operations
EXHIBIT 10.18
___________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Jeffrey Narod (the "Lease") for
the operation of one (1) Low Power Television station in Lebanon, MO,
having the Call sign K53FK and operating on channel 53 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution
of this agreement.
3. Assignor herein further represents and warrants that he has full power
and authority to execute and deliver this agreement and to conclude
the transaction contemplated herein. Assignor also represents and
warrants that the has all the rights, title, and interest to the Lease
and
the Channel and that there are no existing or anticipated liabilities or
legal action associated with the Lease or the Channel, to the best of
his knowledge and Assignor has not transferred (or agreed to
transfer), nor will it transfer prior to the completion of the
transaction
contemplated herein, any portion of his interest in the Lease or the
Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of
the Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid,
to the Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be
determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction. It is expressly understood,
however, that the Parties hereto intend each and every provision of
this Agreement to be valid and enforceable and hereby knowingly
waive all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws
of the state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Jeffrey Narod
1879 Jeffrey Court
Wantagh, New York 11793
Re: Notice of Lease Assignment: Lebanon, MO
LPTV Ch. K51ES, K55HD, K59FD, K53FK
Dear Jeffrey:
This letter will serve to notify you of Northeast Telecom's intentions to
assign your management and lease agreements, to another company. It will
be necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Jeffrey Narod
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24 day
of June, 1995 by and between Northeast Telecom Inc. (NTI), and Jeffrey
Narod ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of Low Power Television ("LPTV") stations as defined
in Section 74.701(F) of the Commission's Rules, to provide subscription
television ("STV") service on their authorized channels, subject to FCC rules
and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 53 at Lebanon, Mo. (Call Sign K53FK), and has determined that it
desires to provide STV service on such Channel on a twenty-four (24) hour
per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
8. Definitions. As used in this Agreement, the following terms shall
have the meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and
data programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign
K53FK) which issued by the FCC to Permittee to construct
the Channel and provide service on the Channel on a seven
(7) day per week, twenty (24) hours per day basis, and shall
specifically include any regular, modified or renewal
authorizations to operate the Channel.
1.3 License Date means the date on which a License Application
is filed with the FCC certifying the completion of
construction of the transmission facilities, but not later than
the date specified on the Construction Permit, unless
extended.
1.4 Transmission Facilities means the equipment and facilities to
be owned by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including without limitation restaurants, bars, offices and
businesses that receive LPTV Service under contract with
NTI or under rights granted by NTI.
9. Term. The term of this Agreement shall begin on the date hereof and
shall continue for a period of ten (10) years following the License
Date, provided that Permittee's authorization to operate the Channel
has been renewed as necessary by the FCC. Permittee shall use its
reasonable best efforts to obtain such renewals. This Agreement shall
be authormatically renewed for an additional ten (10) years, unless
NTI shall have submitted to Permittee at least six (6) months'
advance written notice of its intent to terminate this Agreement upon
the expiration of the initial term.
10. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel
for STV services seven (7) days per week, twenty-four (24) hours per
day, subject to FCC Rules and Regulations and all of the terms and
conditions set forth in this Agreement. For purposes of this
Agreement, such transmission on the Channel shall include all rights
to transmit both video programming and data over the entire
frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions
of service to Subscribers uniformly; provided, however, that: (a)
Subscribers may be divided into reasonable classifications approved
by the FCC, and the imposition of different sets of conditions may be
applied to Subscribers in different classifications; and (b) for good
cause, within such classifications, deposits may be required of some
Subscribers and not of others.
11. Control of Facilities. Notwithstanding anything in this Agreement to
the contrary, Permittee, as the FCC permittee for the Channel, shall
be responsible for compliance with all applicable FCC rules and
regulations. Permittee shall have control, in operation, management
and maintenance of the station to the extent necessary to comply with
such rules and regulations, of the construction, operation,
management and maintenance of the station to the extent necessary
to comply with such rules and regulations. Nothing in this
Agreement shall be construed to: (a) prevent or hinder Permittee
from rejecting or refusing any STV broadcast program that it
reasonably believes to be unsatisfactory, unsuitable or contrary to the
public interest, or from substituting a program that in its opinion is of
greater local or national importance; (b) deprive Permittee of the right
of ultimate decision concerning the maximum amount of any STV
program charge or fee; or (c) delegate to any other individual or entity
ultimate authority over the scheduling of STV programs.
12. Payments. In consideration of Permittee's agreement to permit NTI
to transmit on the Channel, NTI agrees to pay Permittee a monthly
transmission fee of Ten Cents ($.10) per Subscriber ("Transmission
Fee"), beginning with and including the first calendar month
immediately following the license date. Payment will be due no later
than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the
number of Subscribers as of the last day of the prior month to
the number of Subscribers as of the then-current month, and
then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency
of the United States of America by negotiable bank check
drawn upon a United States bank insured by the FDIC made
payable to the order of ********** and mailed to SEE
SECTION 16 or to such other address as Permittee shall
designate in writing to NTI. Payments shall be made by the
twentieth (20th) day of the following month.
13. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
14. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated
with the construction of the Transmission Facilities and any
subsequent modifications thereto. NTI shall also bear the costs of
any licenses, permits, authorizations, or of such sites. NTI shall , at
its sole cost and expense, complete construction of the Transmission
Facilities as authorized by the FCC. Upon completion of
construction of the Transmission Application on the then-prescribed
FCC form for submission to the FCC. Permittee agrees to timely file
the License Application with the FCC after its receipt from NTI. NTI
shall not be liable to make any payments under Section 5 hereof
during any delay caused by Permittee's failure to promptly file such
License Application. All lease, construction, legal, licensing and
engineering costs or any other costs associated therewith shall be the
sole responsibility of and be paid by NTI, and NTI shall reimburse
Permittee within fifteen (15) days after receipt of invoice for
reasonable payments made by Permittee and first approved in writing
by NTI, which approval will not be unreasonably withheld or
delayed.
7.1 Lease of Transmission Facilities to Permittee. In
consideration of the sum of ONE DOLLAR ($1.00), the
receipt and sufficiency of which is hereby acknowledged, NTI
shall lease the Transmission Facilities to Permittee for a term
equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of
Section 4, NTI shall, at its sole cost and expense, operate and
maintain the Transmission Facilities in good operating
condition and repair with Permittee being notified of all such
repairs. All persons performing maintenance, repairs or any
other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering
practices consistent with industry standards. In the event
transmission service is interrupted for any reason, NTI shall
notify Permittee immediately. NTI shall be solely responsible
for the origination of all programming to be transmitted over
the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required
to install, operate and maintain any program origination and
delivery facilities shall be provided by NTI, at its sole cost
and expense, and such personnel shall be under NTI's
exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties
agree to take no action that would jeopardize or otherwise
impair the Construction Permit or any other FCC approval or
authorization necessary for the LPTV Service. Permittee
shall use its reasonable best efforts, and NTI shall cooperate
with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals
required to carry out the transactions contemplated by this
Agreement; provided, however, that Permittee shall not be
required to pay for the relocation, reconstruction or similar
costs associated with the Channel, which costs shall be the
sole responsibility of NTI. Permittee also shall use its
reasonable best efforts to cause the authorization for the
Channel to be renewed.
7.4 Access. Throughout the term of this Agreement, including
any renewals hereof, NTI shall provide, and/or cause others
to provide, Permittee with reasonable access to all
Transmission Facilities for emergency repairs and routine
inspection, provided that Permittee shall not utilize such
access in a manner which unreasonably interferes with NTI's
use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to
lease or lease for the transmission site and shall be
responsible for bearing all expenses in connection with such
site, including the payment of rent and all other costs and
expenses of every nature. The site lease, if any, shall be
maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
15. Representations and Warranties of NTI. NTI represents and warrants
as follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
New Jersey. NTI is qualified or otherwise entitled to do
business in all jurisdictions in which such qualifications or
entitlement is required by reason of its business, activities,
ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business.
NTI has all requisite power to execute, deliver, and, subject
to the regulatory authority of the FCC, perform this
Agreement. The person executing this Agreement on behalf
of NTI is authorized to do so execute and to bind NTI to the
term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize the execution and delivery of this Agreement and
the performance of the obligations of NTI herein have been
taken. This Agreement is valid and legally binding upon NTI
and enforceable in accordance with its terms except to the
extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of NTI is authorized to so execute and bind NTI to the
terms hereof.
8.3 No Violations. The exectution, delivery, and performance of
this Agreement and all actions and transactions contemplated
hereby: (a) will not violate any provision of law or the
Articles of Incorporation or By-Laws of NTI, any order of
any court or other agency of government to which NTI is a
party or by which it or any of its properties is bound, and (b)
will not violate, be in conflict with, result in a breach of, or
constitute (with notice or lapse of time or both) a default
under any applicable law, order, or regulation, indenture,
agreement, or other instrument to which NTI is a party of, by
which it or any of its properties is bound and which has not
been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of its property or assets.
16. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and
payable under this Agreement within twenty (20) days after the date
upon which a payment is due hereunder, and NTI does not cure such
default within thirty (30) days after notice of default is provided by
Permittee to NTI; (b) any of the material "Representations or
Warranties" of either party materially breaches any covenant or
agreement herein or fails to comply with any material provision of
this Agreement, and any such breach, failure or default continues for
thirty (30) days after written notice thereof, as contemplated herein,
shall have been sent by the non-defaulting Party to the defaulting
Party.
17. Termination. Upon an Event of Default, the non-defaulting Party
may cancel this Agreement and may pursue such legal and equitable
remedies as may be available.
18. Indemnification. Each Party shall indemnify, defend, and hold the
other Party harmless from and against any and all claims, damages,
causes of action, penalties, statutory damages, interest and costs and
expenses, including attorneys' fees, arising directly or indirectly out
of the acts, omissions, negligence or willful misconduct of said party,
its employees or agents in connection with the performance of this
Agreement.
19. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is duly organized, validly existing and in good
standing in the state of its formation. Permittee is qualified or
otherwise entitled to do business in all jurisdictions in which
such qualification or entitlement is required by reason of its
business, activities, ownership or property. Permittee has all
requisite power and authority to own its own properties and
to carry on its business. Permittee has all requisite power to
execute, deliver, and, subject to the regulatory authority of the
FCC, perform this Agreement. The person signing this
Agreement on behalf of Permittee is authorized to so execute
and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee
to authorize the execution and delivery of this Agreement and
the performance of the obligations of Permittee herein have
been taken. This Agreement is valid and legally binding upon
Permittee and enforceable in accordance with its terms except
to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of Permittee is authorized to so execute and bind
Permittee to the terms hereof.
12.3 Valid Construction Permit. The Construction Permit is in full
force and effect.
12.4 No Violation. The execution and delivery of this Agreement
by Permittee and the performance of Permittee's obligations
hereunder are not in violation or breach of, do not conflict
with or constitute a default under, and will not accelerate or
permit the acceleration of the performance required by any of
the terms or provisions of any note, debt instrument, security
agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction Permit is bound and will not be an event which,
after notice or lapse or time or both, will result in any such
violation, notice or lapse of time or both, will result in any
such violation, breach, conflict, default, or acceleration, or
under any law, judgment, decree, order, rule or regulation of
any governmental authority or authority applicable to
Permittee and will not result in the creation or imposition of
any lien (whether or not perfected), encumbrance, equity or
restriction in favor of any third person upon the Construction
Permit; provided, however, that the Permittee shall not be in
default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole,
violates FCC rules or policies or the Communications Act of
1934 as amended. In such event, the Parties shall negotiate in
good faith such changes to the Agreement so as to effectuate
compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the
aggregate amount actually paid by NTI to Permittee pursuant to
Section 5 of this Agreement. Permittee shall not be liable for any
consequential or similar damages. This Section provides only for a
limitation of damages otherwise awardable, and shall not be
construed to create an entitlement or legal right to the amounts of
damages specified herein upon an Event of Default. No liability for
damages shall be assessed under this Section except as a result of a
final judgment on a complaint for damages awarded by a court of
competent jurisdiction, or as otherwise agreed by the Parties to this
Agreement.
14. Permittee's Access to Records. From time to time and upon
reasonable notice to NTI, Permittee or its accountants shall have the
right to request information or be permitted at al reasonable times to
inspect and copy all records of NTI which Permittee or its
accountants or attorneys reasonably consider necessary to verify
NTI's compliance with the terms and provisions of this Agreement.
It is understood by Permittee that such information is to be held in
confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably
withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of
the rights reserved thereunder are necessarily of a special, unique,
unusual and extraordinary character, which gives them a peculiar
value, the loss of which cannot be adequately or reasonably
compensated for in damages in an action at law, and that the breach
by either Party of any of the provisions of this Agreement will cause
the other Party irreparable injury and damage. Therefore, upon the
occurrence of an event of Default, the non-defaulting Party shall be
entitled as a matter of right to seek specific performance of the
defaulting Party's obligations and warranties hereunder, and/or
declaratory, injunctive or other equitable relief in court to correct the
Event of Default. No exercise of this right to specific performance
shall constitute a waiver of such Party's other rights or remedies
otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall
be effective upon receipt; provided, however, that the refusal to
accept receipt will constitute receipt for this purpose, in each case
addressed:
If to Permittee, to: Jeffrey Narod
1879 Jeffrey Court
Wantagh, New York 11793
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Mullin, Rhyne, Emmons and Topel
Att: Robert Levine
1225 Connecticut Avenue, N.W., Suite 300
Washington, D.C. 10036-2604
provided, however, that if any party shall have designated a different
address by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to
comply with any provision of this Agreement by the other Party shall
not be construed as or constitute a continuing waiver of such
provision or a waiver of any other provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior
agreements, covenants, arrangements, communications,
representations, or warranties, whether oral or written, by any Party
(or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed
and enforced in accordance with and governed by the internal
substantive law of the State of and of the United
States of
America. The headings of the Sections of this Agreement are inserted
for convenience of reference only and shall not be deemed to
constitute a part hereof. Unless otherwise stated, references in this
Agreement to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the
Parties, except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable
in whole or in part to carry out its obligations hereunder, the Party
shall not be deemed in violation or default during the period of such
inability. The term "force majeure" as used herein shall mean the
following: acts of God; acts of public enemies; orders of any kind of
the government of the United States of America or of any state or
state departments, agencies, political subdivisions, or officials, or any
civil or military authority; insurrections; riots; epidemic; landslides;
lightning; earthquakes; fires; hurricanes; volcanic activity; storms of
extraordinary force; floods; washouts; drought; civil disturbances;
explosions; or any other cause or event not reasonably within the
control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart
shall be deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold itself out to be, vested with any power or right to contractually
bind, act on behalf of the other as its contracting broker, agent or
otherwise for committing, selling, conveying or transferring any of
the other Party's assets or property, contracting for or in the name of
the other Party, or making any agreement contractually binding upon
such Party.
24. Severability. If any provision of this Agreement is declared void by
any court of competent jurisdiction, the validity of any other
provision of this Agreement shall not be affected.
25. Time of the Essence. Time shall be of the essence in the performance
of this Agreement.
26. Survival. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective assigns, heirs,
successors and legal representatives.
27. Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed, except that NTI may
assign this Agreement to an affiliated entity or subsidiary without
Permittee's prior approval.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI
to employ an attorney to enforce its rights pursuant to this Agreement
because of the default of the other Party, the defaulting Party shall
reimburse the prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or NTI that there by any third party beneficiary to this Agreement,
and this Agreement is exclusively for the benefit of Permittee and
NTI and their respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be
construed as creating an employer-employee relationship, partnership
or joint venture by and between Permittee and NTI, and Permittee
shall not be held responsible for the acts or omissions of NTI and vice
versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in
the drafting and preparation of this Agreement. Hence, in any
construction to be made of this Agreement, the same shall not, as a
matter of law, be construed against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to purchase its Construction Permit or License, and
Permittee desires to accept such offer, Permittee, within five
(5) days of receiving such offer, shall notify NTI in writing
and provide NTI with a copy of the same, and NTI shall have
the right to acquire Permittee's Construction Permit or
License on the same terms and conditions as offered by the
third party, such right to be exercised by NTI within thirty
(30) days of written notice by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder, then Permittee shall be free to assign or transfer its
Construction Permit or License to the third party, subject to
the condition that the assignee or transferee, as the case may
be, agrees to be bound by all of the terms and conditions of
this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ Jeffrey Narod
Its:
NORTHEAST TELECOM, INC.
By: /s/ Stephen J. Peters
Stephen J. Peters, VP Operations
EXHIBIT 10.19
___________________________
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Agreement") is effective
as of October 17, 1996, by and between NORTHEAST TELECOM, INC.
("Assignor") and MISSOURI CABLE TV CORP. ("Assignee") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Jeffrey Narod (the "Lease") for
the operation of one (1) Low Power Television station in Lebanon, MO,
having the Call sign K55HD and operating on channel 55 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution
of this agreement.
3. Assignor herein further represents and warrants that he has full power
and authority to execute and deliver this agreement and to conclude
the transaction contemplated herein. Assignor also represents and
warrants that the has all the rights, title, and interest to the Lease
and
the Channel and that there are no existing or anticipated liabilities or
legal action associated with the Lease or the Channel, to the best of
his knowledge and Assignor has not transferred (or agreed to
transfer), nor will it transfer prior to the completion of the
transaction
contemplated herein, any portion of his interest in the Lease or the
Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of
the Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid,
to the Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid,
to the Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be
determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction. It is expressly understood,
however, that the Parties hereto intend each and every provision of
this Agreement to be valid and enforceable and hereby knowingly
waive all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws
of the state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Jeffrey Narod
1879 Jeffrey Court
Wantagh, New York 11793
Re: Notice of Lease Assignment: Lebanon, MO
LPTV Ch. K51ES, K55HD, K59FD, K53FK
Dear Jeffrey:
This letter will serve to notify you of Northeast Telecom's intentions to
assign your management and lease agreements, to another company. It will
be necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Jeffrey Narod
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24 day
of June, 1995 by and between Northeast Telecom Inc. (NTI), and Jeffrey
Narod ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of Low Power Television ("LPTV") stations as defined
in Section 74.701(F) of the Commission's Rules, to provide subscription
television ("STV") service on their authorized channels, subject to FCC rules
and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 55 at Lebanon, Mo. (Call Sign K55HD), and has determined that it
desires to provide STV service on such Channel on a twenty-four (24) hour
per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
8. Definitions. As used in this Agreement, the following terms shall
have the meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and
data programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign
K55HD) which issued by the FCC to Permittee to construct
the Channel and provide service on the Channel on a seven
(7) day per week, twenty (24) hours per day basis, and shall
specifically include any regular, modified or renewal
authorizations to operate the Channel.
1.3 License Date means the date on which a License Application
is filed with the FCC certifying the completion of
construction of the transmission facilities, but not later than
the date specified on the Construction Permit, unless
extended.
1.4 Transmission Facilities means the equipment and facilities to
be owned by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including without limitation restaurants, bars, offices and
businesses that receive LPTV Service under contract with
NTI or under rights granted by NTI.
9. Term. The term of this Agreement shall begin on the date hereof and
shall continue for a period of ten (10) years following the License
Date, provided that Permittee's authorization to operate the Channel
has been renewed as necessary by the FCC. Permittee shall use its
reasonable best efforts to obtain such renewals. This Agreement shall
be authormatically renewed for an additional ten (10) years, unless
NTI shall have submitted to Permittee at least six (6) months'
advance written notice of its intent to terminate this Agreement upon
the expiration of the initial term.
10. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel
for STV services seven (7) days per week, twenty-four (24) hours per
day, subject to FCC Rules and Regulations and all of the terms and
conditions set forth in this Agreement. For purposes of this
Agreement, such transmission on the Channel shall include all rights
to transmit both video programming and data over the entire
frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions
of service to Subscribers uniformly; provided, however, that: (a)
Subscribers may be divided into reasonable classifications approved
by the FCC, and the imposition of different sets of conditions may be
applied to Subscribers in different classifications; and (b) for good
cause, within such classifications, deposits may be required of some
Subscribers and not of others.
11. Control of Facilities. Notwithstanding anything in this Agreement to
the contrary, Permittee, as the FCC permittee for the Channel, shall
be responsible for compliance with all applicable FCC rules and
regulations. Permittee shall have control, in operation, management
and maintenance of the station to the extent necessary to comply with
such rules and regulations, of the construction, operation,
management and maintenance of the station to the extent necessary
to comply with such rules and regulations. Nothing in this
Agreement shall be construed to: (a) prevent or hinder Permittee
from rejecting or refusing any STV broadcast program that it
reasonably believes to be unsatisfactory, unsuitable or contrary to the
public interest, or from substituting a program that in its opinion is of
greater local or national importance; (b) deprive Permittee of the right
of ultimate decision concerning the maximum amount of any STV
program charge or fee; or (c) delegate to any other individual or entity
ultimate authority over the scheduling of STV programs.
12. Payments. In consideration of Permittee's agreement to permit NTI
to transmit on the Channel, NTI agrees to pay Permittee a monthly
transmission fee of Ten Cents ($.10) per Subscriber ("Transmission
Fee"), beginning with and including the first calendar month
immediately following the license date. Payment will be due no later
than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the
number of Subscribers as of the last day of the prior month to
the number of Subscribers as of the then-current month, and
then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency
of the United States of America by negotiable bank check
drawn upon a United States bank insured by the FDIC made
payable to the order of ********** and mailed to SEE
SECTION 16 or to such other address as Permittee shall
designate in writing to NTI. Payments shall be made by the
twentieth (20th) day of the following month.
13. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
14. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated
with the construction of the Transmission Facilities and any
subsequent modifications thereto. NTI shall also bear the costs of
any licenses, permits, authorizations, or of such sites. NTI shall , at
its sole cost and expense, complete construction of the Transmission
Facilities as authorized by the FCC. Upon completion of
construction of the Transmission Application on the then-prescribed
FCC form for submission to the FCC. Permittee agrees to timely file
the License Application with the FCC after its receipt from NTI. NTI
shall not be liable to make any payments under Section 5 hereof
during any delay caused by Permittee's failure to promptly file such
License Application. All lease, construction, legal, licensing and
engineering costs or any other costs associated therewith shall be the
sole responsibility of and be paid by NTI, and NTI shall reimburse
Permittee within fifteen (15) days after receipt of invoice for
reasonable payments made by Permittee and first approved in writing
by NTI, which approval will not be unreasonably withheld or
delayed.
7.1 Lease of Transmission Facilities to Permittee. In
consideration of the sum of ONE DOLLAR ($1.00), the
receipt and sufficiency of which is hereby acknowledged, NTI
shall lease the Transmission Facilities to Permittee for a term
equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of
Section 4, NTI shall, at its sole cost and expense, operate and
maintain the Transmission Facilities in good operating
condition and repair with Permittee being notified of all such
repairs. All persons performing maintenance, repairs or any
other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering
practices consistent with industry standards. In the event
transmission service is interrupted for any reason, NTI shall
notify Permittee immediately. NTI shall be solely responsible
for the origination of all programming to be transmitted over
the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required
to install, operate and maintain any program origination and
delivery facilities shall be provided by NTI, at its sole cost
and expense, and such personnel shall be under NTI's
exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties
agree to take no action that would jeopardize or otherwise
impair the Construction Permit or any other FCC approval or
authorization necessary for the LPTV Service. Permittee
shall use its reasonable best efforts, and NTI shall cooperate
with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals
required to carry out the transactions contemplated by this
Agreement; provided, however, that Permittee shall not be
required to pay for the relocation, reconstruction or similar
costs associated with the Channel, which costs shall be the
sole responsibility of NTI. Permittee also shall use its
reasonable best efforts to cause the authorization for the
Channel to be renewed.
7.4 Access. Throughout the term of this Agreement, including
any renewals hereof, NTI shall provide, and/or cause others
to provide, Permittee with reasonable access to all
Transmission Facilities for emergency repairs and routine
inspection, provided that Permittee shall not utilize such
access in a manner which unreasonably interferes with NTI's
use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to
lease or lease for the transmission site and shall be
responsible for bearing all expenses in connection with such
site, including the payment of rent and all other costs and
expenses of every nature. The site lease, if any, shall be
maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
15. Representations and Warranties of NTI. NTI represents and warrants
as follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
New Jersey. NTI is qualified or otherwise entitled to do
business in all jurisdictions in which such qualifications or
entitlement is required by reason of its business, activities,
ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business.
NTI has all requisite power to execute, deliver, and, subject
to the regulatory authority of the FCC, perform this
Agreement. The person executing this Agreement on behalf
of NTI is authorized to do so execute and to bind NTI to the
term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize the execution and delivery of this Agreement and
the performance of the obligations of NTI herein have been
taken. This Agreement is valid and legally binding upon NTI
and enforceable in accordance with its terms except to the
extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of NTI is authorized to so execute and bind NTI to the
terms hereof.
8.3 No Violations. The exectution, delivery, and performance of
this Agreement and all actions and transactions contemplated
hereby: (a) will not violate any provision of law or the
Articles of Incorporation or By-Laws of NTI, any order of
any court or other agency of government to which NTI is a
party or by which it or any of its properties is bound, and (b)
will not violate, be in conflict with, result in a breach of, or
constitute (with notice or lapse of time or both) a default
under any applicable law, order, or regulation, indenture,
agreement, or other instrument to which NTI is a party of, by
which it or any of its properties is bound and which has not
been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of its property or assets.
16. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and
payable under this Agreement within twenty (20) days after the date
upon which a payment is due hereunder, and NTI does not cure such
default within thirty (30) days after notice of default is provided by
Permittee to NTI; (b) any of the material "Representations or
Warranties" of either party materially breaches any covenant or
agreement herein or fails to comply with any material provision of
this Agreement, and any such breach, failure or default continues for
thirty (30) days after written notice thereof, as contemplated herein,
shall have been sent by the non-defaulting Party to the defaulting
Party.
17. Termination. Upon an Event of Default, the non-defaulting Party
may cancel this Agreement and may pursue such legal and equitable
remedies as may be available.
18. Indemnification. Each Party shall indemnify, defend, and hold the
other Party harmless from and against any and all claims, damages,
causes of action, penalties, statutory damages, interest and costs and
expenses, including attorneys' fees, arising directly or indirectly out
of the acts, omissions, negligence or willful misconduct of said party,
its employees or agents in connection with the performance of this
Agreement.
19. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is duly organized, validly existing and in good
standing in the state of its formation. Permittee is qualified or
otherwise entitled to do business in all jurisdictions in which
such qualification or entitlement is required by reason of its
business, activities, ownership or property. Permittee has all
requisite power and authority to own its own properties and
to carry on its business. Permittee has all requisite power to
execute, deliver, and, subject to the regulatory authority of the
FCC, perform this Agreement. The person signing this
Agreement on behalf of Permittee is authorized to so execute
and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee
to authorize the execution and delivery of this Agreement and
the performance of the obligations of Permittee herein have
been taken. This Agreement is valid and legally binding upon
Permittee and enforceable in accordance with its terms except
to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of Permittee is authorized to so execute and bind
Permittee to the terms hereof.
12.3 Valid Construction Permit. The Construction Permit is in full
force and effect.
12.4 No Violation. The execution and delivery of this Agreement
by Permittee and the performance of Permittee's obligations
hereunder are not in violation or breach of, do not conflict
with or constitute a default under, and will not accelerate or
permit the acceleration of the performance required by any of
the terms or provisions of any note, debt instrument, security
agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction Permit is bound and will not be an event which,
after notice or lapse or time or both, will result in any such
violation, notice or lapse of time or both, will result in any
such violation, breach, conflict, default, or acceleration, or
under any law, judgment, decree, order, rule or regulation of
any governmental authority or authority applicable to
Permittee and will not result in the creation or imposition of
any lien (whether or not perfected), encumbrance, equity or
restriction in favor of any third person upon the Construction
Permit; provided, however, that the Permittee shall not be in
default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole,
violates FCC rules or policies or the Communications Act of
1934 as amended. In such event, the Parties shall negotiate in
good faith such changes to the Agreement so as to effectuate
compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the
aggregate amount actually paid by NTI to Permittee pursuant to
Section 5 of this Agreement. Permittee shall not be liable for any
consequential or similar damages. This Section provides only for a
limitation of damages otherwise awardable, and shall not be
construed to create an entitlement or legal right to the amounts of
damages specified herein upon an Event of Default. No liability for
damages shall be assessed under this Section except as a result of a
final judgment on a complaint for damages awarded by a court of
competent jurisdiction, or as otherwise agreed by the Parties to this
Agreement.
14. Permittee's Access to Records. From time to time and upon
reasonable notice to NTI, Permittee or its accountants shall have the
right to request information or be permitted at al reasonable times to
inspect and copy all records of NTI which Permittee or its
accountants or attorneys reasonably consider necessary to verify
NTI's compliance with the terms and provisions of this Agreement.
It is understood by Permittee that such information is to be held in
confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably
withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of
the rights reserved thereunder are necessarily of a special, unique,
unusual and extraordinary character, which gives them a peculiar
value, the loss of which cannot be adequately or reasonably
compensated for in damages in an action at law, and that the breach
by either Party of any of the provisions of this Agreement will cause
the other Party irreparable injury and damage. Therefore, upon the
occurrence of an event of Default, the non-defaulting Party shall be
entitled as a matter of right to seek specific performance of the
defaulting Party's obligations and warranties hereunder, and/or
declaratory, injunctive or other equitable relief in court to correct the
Event of Default. No exercise of this right to specific performance
shall constitute a waiver of such Party's other rights or remedies
otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall
be effective upon receipt; provided, however, that the refusal to
accept receipt will constitute receipt for this purpose, in each case
addressed:
If to Permittee, to: Jeffrey Narod
1879 Jeffrey Court
Wantagh, New York 11793
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Mullin, Rhyne, Emmons and Topel
Att: Robert Levine
1225 Connecticut Avenue, N.W., Suite 300
Washington, D.C. 10036-2604
provided, however, that if any party shall have designated a different
address by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to
comply with any provision of this Agreement by the other Party shall
not be construed as or constitute a continuing waiver of such
provision or a waiver of any other provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior
agreements, covenants, arrangements, communications,
representations, or warranties, whether oral or written, by any Party
(or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed
and enforced in accordance with and governed by the internal
substantive law of the State of and of the United
States of
America. The headings of the Sections of this Agreement are inserted
for convenience of reference only and shall not be deemed to
constitute a part hereof. Unless otherwise stated, references in this
Agreement to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the
Parties, except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable
in whole or in part to carry out its obligations hereunder, the Party
shall not be deemed in violation or default during the period of such
inability. The term "force majeure" as used herein shall mean the
following: acts of God; acts of public enemies; orders of any kind of
the government of the United States of America or of any state or
state departments, agencies, political subdivisions, or officials, or any
civil or military authority; insurrections; riots; epidemic; landslides;
lightning; earthquakes; fires; hurricanes; volcanic activity; storms of
extraordinary force; floods; washouts; drought; civil disturbances;
explosions; or any other cause or event not reasonably within the
control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart
shall be deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold itself out to be, vested with any power or right to contractually
bind, act on behalf of the other as its contracting broker, agent or
otherwise for committing, selling, conveying or transferring any of
the other Party's assets or property, contracting for or in the name of
the other Party, or making any agreement contractually binding upon
such Party.
24. Severability. If any provision of this Agreement is declared void by
any court of competent jurisdiction, the validity of any other
provision of this Agreement shall not be affected.
25. Time of the Essence. Time shall be of the essence in the performance
of this Agreement.
26. Survival. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective assigns, heirs,
successors and legal representatives.
27. Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed, except that NTI may
assign this Agreement to an affiliated entity or subsidiary without
Permittee's prior approval.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI
to employ an attorney to enforce its rights pursuant to this Agreement
because of the default of the other Party, the defaulting Party shall
reimburse the prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or NTI that there by any third party beneficiary to this Agreement,
and this Agreement is exclusively for the benefit of Permittee and
NTI and their respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be
construed as creating an employer-employee relationship, partnership
or joint venture by and between Permittee and NTI, and Permittee
shall not be held responsible for the acts or omissions of NTI and vice
versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in
the drafting and preparation of this Agreement. Hence, in any
construction to be made of this Agreement, the same shall not, as a
matter of law, be construed against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to purchase its Construction Permit or License, and
Permittee desires to accept such offer, Permittee, within five
(5) days of receiving such offer, shall notify NTI in writing
and provide NTI with a copy of the same, and NTI shall have
the right to acquire Permittee's Construction Permit or
License on the same terms and conditions as offered by the
third party, such right to be exercised by NTI within thirty
(30) days of written notice by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder, then Permittee shall be free to assign or transfer its
Construction Permit or License to the third party, subject to
the condition that the assignee or transferee, as the case may
be, agrees to be bound by all of the terms and conditions of
this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ Jeffrey Narod
Its:
") (Collectively
referred to as "Parties").
WITNESSETH
Whereas, Assignor has received a lease from Jeffrey Narod (the "Lease") for
the operation of one (1) Low Power Television station in Lebanon, MO,
having the Call sign K59FD and operating on channel 59 (the "Channel").
Whereas, Assignor desires to assign its rights to the Lease pursuant to
section
27 of the Lease; and
Whereas, Assignee desires to assume Assignor's rights to the Lease and the
Channel, as described above.
Now Therefore, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration as hereinafter set forth,
the Parties agree as follows:
1. Assignor hereby assigns, sells, conveys and transfers to Assignee his
rights to Lease the Channel.
2. Assignee hereby agrees to assume any fees related to the execution
of this agreement.
3. Assignor herein further represents and warrants that he has full power
and authority to execute and deliver this agreement and to conclude
the transaction contemplated herein. Assignor also represents and
warrants that the has all the rights, title, and interest to the Lease
and
the Channel and that there are no existing or anticipated liabilities or
legal action associated with the Lease or the Channel, to the best of
his knowledge and Assignor has not transferred (or agreed to
transfer), nor will it transfer prior to the completion of the
transaction
contemplated herein, any portion of his interest in the Lease or the
Channel to any other entity.
4. Assignor shall notify Channel holder of assignment per section 27 of
the Lease.
5. Notices: All notices and other communications hereunder shall be in
writing and shall be deemed given if hand delivered by, postage paid,
to the Parties named below:
IF TO ASSIGNEE: MISSOURI CABLE TV CORP.
8748 QUARTERS LAKE ROAD
BATON ROUGE, LA 70809
c/o DAVID M. LOFLIN
IF TO ASSIGNOR: NORTHEAST TELECOM INC.
4400 ROUTE 9 SOUTH
FREEHOLD, NJ 07728
c/o STEPHEN J. PETERS
6. Severability: Any provisions of this Agreement which may be
determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction. It is expressly understood,
however, that the Parties hereto intend each and every provision of
this Agreement to be valid and enforceable and hereby knowingly
waive all rights to object to any provisions of this agreement.
7. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
8. This Agreement shall be governed by and construed under the laws
of the state of Louisiana, without regard to conflict of law provisions.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first written above.
Assignor: Assignee:
NORTHEAST TELECOM INC. MISSOURI CABLE TV CORP.
By: /s/ Stephen J. Peters By: /s/ David M. Loflin
Its: President Its: CEO
August 7, 1996
Jeffrey Narod
1879 Jeffrey Court
Wantagh, New York 11793
Re: Notice of Lease Assignment: Lebanon, MO
LPTV Ch. K51ES, K55HD, K59FD, K53FK
Dear Jeffrey:
This letter will serve to notify you of Northeast Telecom's intentions to
assign your management and lease agreements, to another company. It will
be necessary for you to sign and return to us this letter acknowledging your
approval of this action, as per paragraph 27 in the agreement. Enclosed you
will find a copy for your records and a prepared Fed Ex return package.
Please understand this action is necessary to assure the construction of your
channels and the issuance of your broadcast licenses. The new assignee will
be bound to all the terms and conditions of the agreement.
Copies of the assignment documents will be sent to you just as soon as they
are completed.
Sincerely yours,
NORTHEAST TELECOM, INC. PERMITTEE:
/s/ Stephen J. Peters /s/ Jeffrey Narod
Stephen J. Peters, President
Telecommunications Division
MANAGEMENT AND LEASE AGREEMENT
This Management and Lease Agreement ("Agreement") is made this 24 day
of June, 1995 by and between Northeast Telecom Inc. (NTI), and Jeffrey
Narod ("Permittee"), together "the Parties".
WHERAS, the Federal Communications Commission ("FCC") has
authorized licensees of Low Power Television ("LPTV") stations as defined
in Section 74.701(F) of the Commission's Rules, to provide subscription
television ("STV") service on their authorized channels, subject to FCC rules
and policies;
WHERAS, Permittee has been granted a Construction Permit for LPTV
Channel 59 at Lebanon, Mo. (Call Sign K59FD), and has determined that it
desires to provide STV service on such Channel on a twenty-four (24) hour
per day, seven (7) day per week basis;
WHERAS, NTI is in the business of providing STV management and
operational services and seeks to provide such services on Permittee's
Channel; and
WHERAS, Permittee wishes NTI to provide it such services, consistent with
its Construction Permit and all FCC Rules and Regulations.
NOW, THEREFORE, in consideration, of their mutual promises set forth
below; Permittee and NTI, intending to be legally bound, hereby agree as
follows:
8. Definitions. As used in this Agreement, the following terms shall
have the meanings attributed to them in this Section 1:
1.1 Business or LPTV Service means the provision of video and
data programming of any kind to subscribers via the Channel.
1.2 Construction Permit means the authorization (Call Sign
K59FD which issued by the FCC to Permittee to construct the
Channel and provide service on the Channel on a seven (7)
day per week, twenty (24) hours per day basis, and shall
specifically include any regular, modified or renewal
authorizations to operate the Channel.
1.3 License Date means the date on which a License Application
is filed with the FCC certifying the completion of
construction of the transmission facilities, but not later than
the date specified on the Construction Permit, unless
extended.
1.4 Transmission Facilities means the equipment and facilities to
be owned by NTI and used by NTI in its business.
1.5 Subscriber means a residential unit or other establishement,
including without limitation restaurants, bars, offices and
businesses that receive LPTV Service under contract with
NTI or under rights granted by NTI.
9. Term. The term of this Agreement shall begin on the date hereof and
shall continue for a period of ten (10) years following the License
Date, provided that Permittee's authorization to operate the Channel
has been renewed as necessary by the FCC. Permittee shall use its
reasonable best efforts to obtain such renewals. This Agreement shall
be authormatically renewed for an additional ten (10) years, unless
NTI shall have submitted to Permittee at least six (6) months'
advance written notice of its intent to terminate this Agreement upon
the expiration of the initial term.
10. Transition on Channel. Commencing on the License Date, Permittee
hereby authorizes NTI to transmit a broadcast signal on the Channel
for STV services seven (7) days per week, twenty-four (24) hours per
day, subject to FCC Rules and Regulations and all of the terms and
conditions set forth in this Agreement. For purposes of this
Agreement, such transmission on the Channel shall include all rights
to transmit both video programming and data over the entire
frequency spectrum of Permittee's Channel. Consistent with
applicable FCC rules, NTI will apply charges, terms and conditions
of service to Subscribers uniformly; provided, however, that: (a)
Subscribers may be divided into reasonable classifications approved
by the FCC, and the imposition of different sets of conditions may be
applied to Subscribers in different classifications; and (b) for good
cause, within such classifications, deposits may be required of some
Subscribers and not of others.
11. Control of Facilities. Notwithstanding anything in this Agreement to
the contrary, Permittee, as the FCC permittee for the Channel, shall
be responsible for compliance with all applicable FCC rules and
regulations. Permittee shall have control, in operation, management
and maintenance of the station to the extent necessary to comply with
such rules and regulations, of the construction, operation,
management and maintenance of the station to the extent necessary
to comply with such rules and regulations. Nothing in this
Agreement shall be construed to: (a) prevent or hinder Permittee
from rejecting or refusing any STV broadcast program that it
reasonably believes to be unsatisfactory, unsuitable or contrary to the
public interest, or from substituting a program that in its opinion is of
greater local or national importance; (b) deprive Permittee of the right
of ultimate decision concerning the maximum amount of any STV
program charge or fee; or (c) delegate to any other individual or entity
ultimate authority over the scheduling of STV programs.
12. Payments. In consideration of Permittee's agreement to permit NTI
to transmit on the Channel, NTI agrees to pay Permittee a monthly
transmission fee of Ten Cents ($.10) per Subscriber ("Transmission
Fee"), beginning with and including the first calendar month
immediately following the license date. Payment will be due no later
than the twentieth (20th) day of the following month.
5.2 The number of Subscribers shall be determined by adding the
number of Subscribers as of the last day of the prior month to
the number of Subscribers as of the then-current month, and
then dividing by two (2).
5.3 All payments from NTI to Permittee shall be paid in currency
of the United States of America by negotiable bank check
drawn upon a United States bank insured by the FDIC made
payable to the order of ********** and mailed to SEE
SECTION 16 or to such other address as Permittee shall
designate in writing to NTI. Payments shall be made by the
twentieth (20th) day of the following month.
13. Insurance. It is agreed that Permittee shall be insured as a third party
insured under any liability insurance obtained by NTI.
14. Construction. NTI shall bear all costs, including but not limited to,
consultant, design, engineering, licensing and legal fees, associated
with the construction of the Transmission Facilities and any
subsequent modifications thereto. NTI shall also bear the costs of
any licenses, permits, authorizations, or of such sites. NTI shall , at
its sole cost and expense, complete construction of the Transmission
Facilities as authorized by the FCC. Upon completion of
construction of the Transmission Application on the then-prescribed
FCC form for submission to the FCC. Permittee agrees to timely file
the License Application with the FCC after its receipt from NTI. NTI
shall not be liable to make any payments under Section 5 hereof
during any delay caused by Permittee's failure to promptly file such
License Application. All lease, construction, legal, licensing and
engineering costs or any other costs associated therewith shall be the
sole responsibility of and be paid by NTI, and NTI shall reimburse
Permittee within fifteen (15) days after receipt of invoice for
reasonable payments made by Permittee and first approved in writing
by NTI, which approval will not be unreasonably withheld or
delayed.
7.1 Lease of Transmission Facilities to Permittee. In
consideration of the sum of ONE DOLLAR ($1.00), the
receipt and sufficiency of which is hereby acknowledged, NTI
shall lease the Transmission Facilities to Permittee for a term
equal to the duration of this Agreement, including any
renewals.
7.2 Operation and Maintenance. Subject to the provisions of
Section 4, NTI shall, at its sole cost and expense, operate and
maintain the Transmission Facilities in good operating
condition and repair with Permittee being notified of all such
repairs. All persons performing maintenance, repairs or any
other duties shall work under ANTI's direct and continuing
supervision and in accordance with good engineering
practices consistent with industry standards. In the event
transmission service is interrupted for any reason, NTI shall
notify Permittee immediately. NTI shall be solely responsible
for the origination of all programming to be transmitted over
the Channel, subject to the provisions of Section 4 hereof and
applicable FCC rules and regulations. All personnel required
to install, operate and maintain any program origination and
delivery facilities shall be provided by NTI, at its sole cost
and expense, and such personnel shall be under NTI's
exclusive control, and shall not be considered to be
employees or agents of Permittee for any purpose.
7.3 Governmental and Third Party Authorizations. The Parties
agree to take no action that would jeopardize or otherwise
impair the Construction Permit or any other FCC approval or
authorization necessary for the LPTV Service. Permittee
shall use its reasonable best efforts, and NTI shall cooperate
with Permittee, to obtain any and all FCC or other
governmental licenses, permits, authorizations or approvals
required to carry out the transactions contemplated by this
Agreement; provided, however, that Permittee shall not be
required to pay for the relocation, reconstruction or similar
costs associated with the Channel, which costs shall be the
sole responsibility of NTI. Permittee also shall use its
reasonable best efforts to cause the authorization for the
Channel to be renewed.
7.4 Access. Throughout the term of this Agreement, including
any renewals hereof, NTI shall provide, and/or cause others
to provide, Permittee with reasonable access to all
Transmission Facilities for emergency repairs and routine
inspection, provided that Permittee shall not utilize such
access in a manner which unreasonably interferes with NTI's
use of the Channel.
7.5 Site Lease. NTI either owns or has obtained a valid option to
lease or lease for the transmission site and shall be
responsible for bearing all expenses in connection with such
site, including the payment of rent and all other costs and
expenses of every nature. The site lease, if any, shall be
maintained and renewed by NTI throughout the term of this
Agreement, including any renewals hereof.
15. Representations and Warranties of NTI. NTI represents and warrants
as follows:
8.1 Organization. NTI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
New Jersey. NTI is qualified or otherwise entitled to do
business in all jurisdictions in which such qualifications or
entitlement is required by reason of its business, activities,
ownership or property. NTI has all requisite power and
authority to own its properties and to carry on its business.
NTI has all requisite power to execute, deliver, and, subject
to the regulatory authority of the FCC, perform this
Agreement. The person executing this Agreement on behalf
of NTI is authorized to do so execute and to bind NTI to the
term hereof.
8.2 Authorization. All necessary actions on the part of NTI to
authorize the execution and delivery of this Agreement and
the performance of the obligations of NTI herein have been
taken. This Agreement is valid and legally binding upon NTI
and enforceable in accordance with its terms except to the
extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of NTI is authorized to so execute and bind NTI to the
terms hereof.
8.3 No Violations. The exectution, delivery, and performance of
this Agreement and all actions and transactions contemplated
hereby: (a) will not violate any provision of law or the
Articles of Incorporation or By-Laws of NTI, any order of
any court or other agency of government to which NTI is a
party or by which it or any of its properties is bound, and (b)
will not violate, be in conflict with, result in a breach of, or
constitute (with notice or lapse of time or both) a default
under any applicable law, order, or regulation, indenture,
agreement, or other instrument to which NTI is a party of, by
which it or any of its properties is bound and which has not
been waived or consented to, or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of its property or assets.
16. Defaults. For the purpose of this Agreement, it shall be an "Event of
Default" hereunder if: (a) NTI fails to make any payment due and
payable under this Agreement within twenty (20) days after the date
upon which a payment is due hereunder, and NTI does not cure such
default within thirty (30) days after notice of default is provided by
Permittee to NTI; (b) any of the material "Representations or
Warranties" of either party materially breaches any covenant or
agreement herein or fails to comply with any material provision of
this Agreement, and any such breach, failure or default continues for
thirty (30) days after written notice thereof, as contemplated herein,
shall have been sent by the non-defaulting Party to the defaulting
Party.
17. Termination. Upon an Event of Default, the non-defaulting Party
may cancel this Agreement and may pursue such legal and equitable
remedies as may be available.
18. Indemnification. Each Party shall indemnify, defend, and hold the
other Party harmless from and against any and all claims, damages,
causes of action, penalties, statutory damages, interest and costs and
expenses, including attorneys' fees, arising directly or indirectly out
of the acts, omissions, negligence or willful misconduct of said party,
its employees or agents in connection with the performance of this
Agreement.
19. Representations, Warranties, and Covenants of Permittee. Permittee
represents and warrants as follows:
12.1 Organization. Permittee, if a corporation or a limited
partnership, is duly organized, validly existing and in good
standing in the state of its formation. Permittee is qualified or
otherwise entitled to do business in all jurisdictions in which
such qualification or entitlement is required by reason of its
business, activities, ownership or property. Permittee has all
requisite power and authority to own its own properties and
to carry on its business. Permittee has all requisite power to
execute, deliver, and, subject to the regulatory authority of the
FCC, perform this Agreement. The person signing this
Agreement on behalf of Permittee is authorized to so execute
and to bind Permittee to the terms hereof.
12.2 Authorization. All necessary actions on the part of Permittee
to authorize the execution and delivery of this Agreement and
the performance of the obligations of Permittee herein have
been taken. This Agreement is valid and legally binding upon
Permittee and enforceable in accordance with its terms except
to the extent that enforceability thereof may be limited by
bankruptcy, insolvency, or the laws relating to the
enforcement of creditor's rights or by the application of
equitable principles. The person executing this Agreement on
behalf of Permittee is authorized to so execute and bind
Permittee to the terms hereof.
12.3 Valid Construction Permit. The Construction Permit is in full
force and effect.
12.4 No Violation. The execution and delivery of this Agreement
by Permittee and the performance of Permittee's obligations
hereunder are not in violation or breach of, do not conflict
with or constitute a default under, and will not accelerate or
permit the acceleration of the performance required by any of
the terms or provisions of any note, debt instrument, security
agreement, or mortgage or any other contract or agreement,
written oral, to which Permittee is a party or by which its
Construction Permit is bound and will not be an event which,
after notice or lapse or time or both, will result in any such
violation, notice or lapse of time or both, will result in any
such violation, breach, conflict, default, or acceleration, or
under any law, judgment, decree, order, rule or regulation of
any governmental authority or authority applicable to
Permittee and will not result in the creation or imposition of
any lien (whether or not perfected), encumbrance, equity or
restriction in favor of any third person upon the Construction
Permit; provided, however, that the Permittee shall not be in
default of this provision if the FCC determines that any
provision of this Agreement, or the Agreement as a whole,
violates FCC rules or policies or the Communications Act of
1934 as amended. In such event, the Parties shall negotiate in
good faith such changes to the Agreement so as to effectuate
compliance with FCC requirements.
13. Limitation of Damages. The liability of NTI for damages of any kind
arising in connection with this Agreement shall not exceed the
aggregate amount actually paid by NTI to Permittee pursuant to
Section 5 of this Agreement. Permittee shall not be liable for any
consequential or similar damages. This Section provides only for a
limitation of damages otherwise awardable, and shall not be
construed to create an entitlement or legal right to the amounts of
damages specified herein upon an Event of Default. No liability for
damages shall be assessed under this Section except as a result of a
final judgment on a complaint for damages awarded by a court of
competent jurisdiction, or as otherwise agreed by the Parties to this
Agreement.
14. Permittee's Access to Records. From time to time and upon
reasonable notice to NTI, Permittee or its accountants shall have the
right to request information or be permitted at al reasonable times to
inspect and copy all records of NTI which Permittee or its
accountants or attorneys reasonably consider necessary to verify
NTI's compliance with the terms and provisions of this Agreement.
It is understood by Permittee that such information is to be held in
confidence and not disclosed to any third parties without the prior
written consent of NTI, which consent shall not be unreasonably
withheld or delayed.
15. Specific Performance. The Parties acknowledge and agree that all of
the rights reserved thereunder are necessarily of a special, unique,
unusual and extraordinary character, which gives them a peculiar
value, the loss of which cannot be adequately or reasonably
compensated for in damages in an action at law, and that the breach
by either Party of any of the provisions of this Agreement will cause
the other Party irreparable injury and damage. Therefore, upon the
occurrence of an event of Default, the non-defaulting Party shall be
entitled as a matter of right to seek specific performance of the
defaulting Party's obligations and warranties hereunder, and/or
declaratory, injunctive or other equitable relief in court to correct the
Event of Default. No exercise of this right to specific performance
shall constitute a waiver of such Party's other rights or remedies
otherwise existing law or equity.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, sent by U.S. registered Mail and shall
be effective upon receipt; provided, however, that the refusal to
accept receipt will constitute receipt for this purpose, in each case
addressed:
If to Permittee, to: Jeffrey Narod
1879 Jeffrey Court
Wantagh, New York 11793
If to NTI, to: Stephen J. Peters, Vice President of Operations
Northeast Telecom, Inc.
4400 Route 9 South
Freehold, New Jersey 07728
With a copy to: Mullin, Rhyne, Emmons and Topel
Att: Robert Levine
1225 Connecticut Avenue, N.W., Suite 300
Washington, D.C. 10036-2604
provided, however, that if any party shall have designated a different
address by notice to the others, then to the last address so designated.
17. Waivers. Any waiver by any Party of any breach of or failure to
comply with any provision of this Agreement by the other Party shall
not be construed as or constitute a continuing waiver of such
provision or a waiver of any other provision of this Agreement.
18. Complete Agreement. This Agreement sets forth the entire
understanding of the Parties hereto and supersedes all prior
agreements, covenants, arrangements, communications,
representations, or warranties, whether oral or written, by any Party
(or any officer, employee, or representative of any Party).
19. Governing Law; Construction. This Agreement shall be construed
and enforced in accordance with and governed by the internal
substantive law of the State of and of the United
States of
America. The headings of the Sections of this Agreement are inserted
for convenience of reference only and shall not be deemed to
constitute a part hereof. Unless otherwise stated, references in this
Agreement to sections refer to the Sections of this Agreement.
20. Amendment; Termination. This Agreement may be amended or
terminated only by an instrument in writing duly executed by the
Parties, except as otherwise provided in this Agreement.
21. Force Majeure. If by reason of force majeure either party is unable
in whole or in part to carry out its obligations hereunder, the Party
shall not be deemed in violation or default during the period of such
inability. The term "force majeure" as used herein shall mean the
following: acts of God; acts of public enemies; orders of any kind of
the government of the United States of America or of any state or
state departments, agencies, political subdivisions, or officials, or any
civil or military authority; insurrections; riots; epidemic; landslides;
lightning; earthquakes; fires; hurricanes; volcanic activity; storms of
extraordinary force; floods; washouts; drought; civil disturbances;
explosions; or any other cause or event not reasonably within the
control of the adversely affected Party.
22. Counterparts. More than one counterpart of this Agreement may be
executed by the Parties hereto, and each fully executed counterpart
shall be deemed an original.
23. Dealings with Third Parties. Neither Party is, nor shall either Party
hold itself out to be, vested with any power or right to contractually
bind, act on behalf of the other as its contracting broker, agent or
otherwise for committing, selling, conveying or transferring any of
the other Party's assets or property, contracting for or in the name of
the other Party, or making any agreement contractually binding upon
such Party.
24. Severability. If any provision of this Agreement is declared void by
any court of competent jurisdiction, the validity of any other
provision of this Agreement shall not be affected.
25. Time of the Essence. Time shall be of the essence in the performance
of this Agreement.
26. Survival. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective assigns, heirs,
successors and legal representatives.
27. Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed, except that NTI may
assign this Agreement to an affiliated entity or subsidiary without
Permittee's prior approval.
28.. Attorney's Fees. If it shall be necessary for either Permittee or NTI
to employ an attorney to enforce its rights pursuant to this Agreement
because of the default of the other Party, the defaulting Party shall
reimburse the prevailing Party for reasonable attorney's fees.
29. No Third Party Beneficiaries. It is not the intent of either Permittee
or NTI that there by any third party beneficiary to this Agreement,
and this Agreement is exclusively for the benefit of Permittee and
NTI and their respective assigns.
30. Independent Relationship. Nothing in this Agreement shall be
construed as creating an employer-employee relationship, partnership
or joint venture by and between Permittee and NTI, and Permittee
shall not be held responsible for the acts or omissions of NTI and vice
versa.
31. No Conclusion as to Draftsmanship. Each Party has cooperated in
the drafting and preparation of this Agreement. Hence, in any
construction to be made of this Agreement, the same shall not, as a
matter of law, be construed against any Party.
32. Right of First Refusal.
(a) In the event Permittee receives a bona fide offer from a third
party to purchase its Construction Permit or License, and
Permittee desires to accept such offer, Permittee, within five
(5) days of receiving such offer, shall notify NTI in writing
and provide NTI with a copy of the same, and NTI shall have
the right to acquire Permittee's Construction Permit or
License on the same terms and conditions as offered by the
third party, such right to be exercised by NTI within thirty
(30) days of written notice by Permittee.
(b) In the event NTI does not exercise its right of first refusal
hereunder, then Permittee shall be free to assign or transfer its
Construction Permit or License to the third party, subject to
the condition that the assignee or transferee, as the case may
be, agrees to be bound by all of the terms and conditions of
this Agreement as if it was an original party hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
PERMITTEE:
By: /s/ Jeffrey Narod
Its:
NORTHEAST TELECOM, INC.
By: /s/ Stephen J. Peters
Stephen J. Peters, VP Operations
EXHIBIT 10.21
__________________________
ASSIGNMENT
For good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the undersigned, Gulf Atlantic Communications, Inc.,
a Louisiana corporation ("Assignor"), hereby assigns, sells, conveys and
transfers to Winter Entertainment, Inc., a Delaware corporation ("Assignee"),
all of its right, title and interest under that certain Contract for
Programming
(the "Agreement"), dated December 1, 1995, between Video Catalog
Channel, Inc. ("VCC") and Gulf Atlantic Communications, Inc., a copy of
which is attached hereto as Annex I and incorporated herein by this reference,
the subject of the Agreement being the provision of programming by VCC
to Assignee, all as more specifically described in the Agreement.
GULF ATLANTIC COMMUNICATIONS, INC.
By: /s/ David M. Loflin
David M. Loflin
President
________________________________
ANNEX I
________________________________
CONTRACT FOR PROGRAMMING
The following shall serve as a contractual agreement between Video Catalog
Channel, Inc. (VCC) and Gulf Atlantic Communications, licensee K13VE,
E. Baton Rouge, LA ("Station").
Station agrees to broadcast VCC programming in its entirety, without editing
or interruption begining on Nov. 1995. The hours will be at least 20 hours
per day, 7 days a week for the duration of this contract and any extensions.
In consideration of this performance, VCC will pay to Station TEN
PERCENT (10%) of sales in Station's Zip Codes, minus returns. Said
payment will be made within fifteen (15) days of receipt by VCC Station's
standard Proof of Performance Affidavit form.
Any commissions included in this Agreement will be based on a list of Zip
Codes provided to VCC by Station, representing the Zip Codes of all area
comprising the principal coverage area of Station. Any purchases by VCC
customers registered prior to the date of this agreement will be deducted
prior
to payment.
The term of this agreement is one (1) year from the date this Agreement, with
the automatic renewal of additional terms of one (1) year each until either
party notifies the other in writing at least ninety (90) days prior to the
end of
any such term of a desire to not renew. Video Catalog Channel has the right
to void this contractual agreement at any time upon a 30 day notice should
sales fail to maintain such a level as to be profitable for VCC.
Signed: Video Catalog Channel, Inc.
/s/
Title: Pres. & CEO Date: 11/27/95
Signed: Station K13VE
/s/ David M. Loflin
Title: Pres. & CEO Date: 12/1/95
EXHIBIT 10.22
_______________________________
LETTER OF UNDERSTANDING BETWEEN MEDIA
ENTERTAINMENT, INC. AND OPEN NET, INC.
This "Letter of Understanding" is entered into on January 6, 1997, by and
between Media Entertainment, Inc. and Open Net, Inc. (Collectively referred
to as "Parties").
WHEREAS, Open Net, Inc., located at: 2618 J Street, Suite 3, Sacramento,
California 95816, has developed a Wireless Internet Access System to proved
a customer base in any city where Open Net, Inc. has an operating system.
The Open Net system utilizes Radio Modems manufactured by GRE America,
Inc.; 2.4 Ghz Ethernet radios manufactured by Wavepoint, and a
configuration developed by Open Net, Inc.
WHEREAS, Open Net, Inc. desires to license Media Entertainment, Inc., the
BTA rights to Open Net's systems including: Radio and Configuration.
WHEREAS, Media Entertainment, Inc. desires to license Open Net's system
in multiple markets.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and other good and valuable consideration as hereinafter set
forth, the Parties agree as follows:
1) Open Net, Inc. hereby agrees to license to Media Entertainment, Inc. the
BTA rights to Wireless Internet Access Systems.
2) Open Net, Inc. hereby grants Media Entertainment, Inc. the "Option" by
way of the right of "First Refusal" to license Open Net's complete system in
the following markets:
Alexandria, Louisiana
Astoria, Oregon
Bainbridge, Georgia
Dallas, Texas
Houston, Texas
Lebanon, Missouri
Macon/Milledgeville, Georgia
New Orleans, Louisiana
Poplar Bluff, Missouri
Port Angeles, Washington
Portland, Oregon
Sandpoint, Idaho
Seattle, Washington
The Dalles, Oregon
3) Media Entertainment, Inc. hereby agrees to pay the sum of $50,000 per
system licensed from Open Net, Inc.; and will pay a customer-maintenance fee
of $5.00 per customer, if Media Entertainment, Inc. invokes its "Option" in
the markets listed above.
4) In consideration of Open Net's "Option" to Media Entertainment, Inc.
hereby makes payment of $50 to Open Net, Inc., thus entering into this
agreement.
5) This "Letter of Understanding" shall be binding upon and inure to the
benefit of the Parties hereto and the respective successors and assignees.
In witness whereof, the Parties have executed the "Letter of Understanding"
as of the date and year first written above.
OPEN NET, INC. MEDIA ENTERTAINMENT, INC.
By: /s/ Harry Reed By: David M. Loflin
Title: CEO Title: President
EXHIBIT 10.23
________________________________
JOINT VENTURE AGREEMENT
OF
WEB ONE WIRELESS I.S.P. - BATON ROUGE, J.V.
This Joint Venture Agreement, dated as of January 24, 1997, by and between
Media
Entertainment, Inc., a Nevada corporation ("MEI"), and Web One, Inc.,
a Louisiana
corporation ("WebOne"), MEI and WebOne collectively sometimes referred to
as the
"Joint Venturers" or the "Venturers" herein.
SECTION I - GENERAL
1.1 Venture Name. The name of the Joint Venture is Web One Wireless
I.S.P. - Baton
Rouge, J.V.
1.2 Addresses of Venturers. The address of MEI is 8478 Quarters Lake Road,
Baton
Rouge, Florida 70809. The address of WebOne is 8478 Quarters Lake Road, Baton
Rouge, Louisiana 70809.
SECTION II - DEFINITIONS
2.1 "Affiliate" means any person or entity directly or indirectly
controlling, controlled
by or under common control with another person or entity.
2.2 "Agreement" means this Joint Venture Agreement of Web One Wireless
I.S.P. -
Baton Rouge, J.V.
2.3 "Capital Account" means, for each Venturer, the amount of its capital
contribution,
which amount shall be increased by (i) its additional capital contributions
to the Joint
Venture, if any, and (ii) his proportionate share of Joint Venture profits
and gains, and
decreased by (iii) distributions by the Joint Venture to such Venturer
and (iv) such
Venturer's proportionate share of Joint Venture losses.
2.4 "Gross Receipts" means the amount of Joint Venture revenue from all
sources
whatsoever.
2.5 "Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended.
2.6 "Joint Venture" means the joint venture formed under this Agreement
under the name
"Web One Wireless I.S.P. - Baton Rouge, J.V."
2.7 "Joint Venture Agreement" means this Joint Venture Agreement of Web One
Wireless I.S.P. - Baton Rouge, J.V.
2.8. "Managing Venturer" means Web One, Inc., a Louisiana corporation.
2.9 "Net Cash Flow" means Gross Receipts from Joint Venture operations for
each fiscal
year, less cash operating expenses for each fiscal year.
2.10 "Registered Agent" means the person named in the Joint Venture Agreement
to
receive legal service upon the Joint Venture.
2.11 "Registered Office" means the office named in the Joint Venture
Agreement where
all of the Joint Venture's books and records will be kept.
2.12 "Remaining Net Cash Flow" means Net Cash Flow less payments for the
satisfaction
of current debts and obligations of the Joint Venture and establishing such
Working
Capital Reserves as the Managing Venturer deems necessary for Joint Venture
operations.
2.13 "Unrecovered Cash Contributions" means the amount of cash contributed to
the
capital of the Joint Venture which has not been returned to the contributing
Joint Venturer
by distributions from the Joint Venture pursuant to Section VIII.
2.14 "Working Capital Reserves" means the amount of cash reserves taken from
Net Cash
Flow of the Joint Venture, which the Managing Venturer deems necessary to the
prudent
operation of the Joint Venture.
SECTION III - TERM
3.1 The term of the Joint Venture shall be from the date of the execution
of this Joint
Venture Agreement until December 31, 2021, unless extended or sooner
terminated in
accordance with this Agreement.
SECTION IV - PURPOSE
4.1 The purpose of the Joint Venture is to establish a plan of business for,
and operate
as, a wireless Internet Service Provider in the City of Baton Rouge,
Louisiana, all to earn
a profit.
SECTION V - JOINT VENTURE OFFICE
AND REGISTERED AGENT
5.1 Joint Venture Office. The Registered Office of the Joint Venture in the
State of
Louisiana shall be 8478 Quarters Lake Road, Baton Rouge, Louisiana 70809,
or at such
other location as the Venturers may determine.
5.2 Registered Agent. The Registered Agent of the Joint Venture in the
State of
Louisiana shall be David M. Loflin, 8478 Quarters Lake Road, Baton Rouge,
Louisiana
70809.
5.3 Documents to be Maintained. The Managing Venturer shall keep the
following
documents at the Registered Office of the Joint Venture specified in
Section 5.1
hereinabove:
(a) a copy of this Agreement and all amendments hereto;
(b) copies of the Joint Venture's federal, state and local tax returns and
reports for the
three (3) most recent years, if any; and
(c) copies of financial statements of the Joint Venture for the three (3)
most recent years,
if any.
Such documents shall be available for inspection and copying during
ordinary business
hours at the request of, and at the expense of, the requesting Venturer.
SECTION VI - CAPITAL AND CONTRIBUTIONS
6.1 Upon formation of the Joint Venture, the Managing Venturer will
contribute to the
capital of the Joint Venture cash in the amount of $5,000.
6.2 Upon formation of the Joint Venture, MEI will contribute to the
capital of the Joint
Venture cash in the amount of $5,000.
6.3 Capital Accounts. Each Venturer's capital account shall be increased
(credited) by
(a) the amount of its capital contributions to the Joint Venture pursuant to
Sections 6.1
and 6.2;
(b) the amount of income from operations allocated to it pursuant to
Section 7.1(a);
(c) the amount of gains allocated to it pursuant to Section 7.2(b);
and shall be decreased (debited) by
(d) the amount of losses from operations allocated to it pursuant to
Section 8.1;
(e) all amounts paid or distributed to it pursuant to Section 8.1 (other
than distributions
to any Venturers in repayment of principal and interest on loans); and
(f) the amount of any losses allocated to it pursuant to Section 8.2.
SECTION VII - NET INCOME AND LOSSES FROMOPERATIONS;
AND NET GAINS AND LOSSES FROM DISPOSITION OF ASSETS
7.1 Operations. All "net income" and "net losses" of the Joint Venture
from operations
for any calendar quarter or part thereof, as determined for federal income
tax purposes,
shall be allocated as follows:
(a) for each fiscal year of the Joint Venture from date of its formation,
all net losses shall
be allocated 50% to MEI and 50% to WebOne;
(b) for each fiscal year of the Joint Venture from the date of its
formation, all net income
shall be allocated 50% to MEI and 50% to WebOne.
7.2 Interim Capital Transactions. All net gains and net losses of the
Joint Venture, as
determined for Federal income tax purposes, in connection with the sale of
software
programs, licensing or sale of other assets, and any similar transactions
which, in
accordance with generally accepted accounting principles, are attributable
to capital but
which do not result in dissolution of the Joint Venture (an "Interim Capital
Transaction")
shall be allocated as follows:
(a) first, an amount of the net gains up to the amount of proceeds to be
distributed
pursuant to Section 8.2(a)(i) shall be allocated to the Joint Venturers
in the same amounts
as the proceeds are to be distributed;
(b) then, after adjustment of the capital accounts of the Joint Venturers
to reflect the
allocation of gains under Section 7.1 and distributions and amounts
available for
distribution pursuant to Section 8.2(a)(i), the net gains or net losses
shall be allocated as
provided for allocation of net gains and losses pursuant to
Sections 7.1(a) (losses) and (b)
(gains).
7.3 Dissolution and Termination. All net gains and net losses of the
Joint Venture, as
determined for Federal income tax purposes, in connection with a dissolution
and
termination of the Joint Venture, shall be allocated between the Joint
Venturers as follows:
(a) 50% to MEI and 50% to WebOne.
SECTION VIII - DISTRIBUTIONS
8.1 Definition of "Taxable Distributable Income". "Taxable Distributable
Income" shall
be determined at the end of each fiscal year of the Joint Venture, and shall
mean Gross
Receipts from operations of the Joint Venture for each fiscal year, less cash
operating
expenses for each fiscal year. For purposes of determining Net Operating
Income and Net
Cash Flow, "Gross Receipts" shall mean proceeds from sales of products by
the Joint
Venture in excess of the cost to the Joint Venture for such products.
8.2 (a) Operations. During the period of operations of the Joint Venture,
from the date
of its formation and ending upon the dissolution and termination of the
Joint Venture,
after providing for the satisfaction of the current debts and obligations of
the Joint
Venture and establishing such working capital reserves (the "Working Capital
Reserves")
as the Managing Venturer deems necessary for Joint Venture purposes. The
Managing
Venturer, may, in his sole discretion, make distributions of "Remaining Cash
Flow" (Net
Cash Flow less the above payments), at the end of each calendar quarter,
as follows:
(i) 50% to MEI and 50% to WebOne;
(ii) any Working Capital Reserves subsequently included in Remaining
Net Cash Flow and
distributed shall be distributed in the same manner as described in
Section 8.2(a)(i).
(b) Dissolution and Termination Proceeds. Upon the dissolution and
termination of the
Joint Venture, the Net Gross Proceeds of the sale of all the assets of the
Joint Venture
after making payment of or provision for the liabilities and obligations of
the Joint
Venture shall be distributed or paid, as appropriate, in the following order
of priority:
(i) first, an amount equal to the unpaid interest and principal of any
unpaid loan by a
Venturer to the Joint Venture, such distributions being treated first as
in payment of
accumulated interest and next as in payment of principal of such loans;
(ii) next, 50% to MEI and 50% to WebOne.
8.3 Cash Distributions. All cash distributions to the Joint Venturers
shall be made to the
Joint Venturers at the addresses specified in Section 1.2 or such other
addresses of which
the Joint Venturers shall notify the Joint Venture in writing.
8.4 Limitation to Cash in Return of Capital. No Venturer shall be
entitled to demand and
receive property other than cash in return for its capital contributions
to the Joint Venture.
SECTION IX - CONTROL AND MANAGEMENT
9.1 Management. The Managing Venturer shall, except as specifically limited
herein,
have full, exclusive and complete discretion in the management and control
of the Joint
Venture for the purposes set forth in Section 4.1. In any exercise of
management
authority by the Managing Venturer under this Section, the Managing Venturer
agrees to
manage and control the affairs of the Joint Venture to the best of its
ability, and to
conduct the operations contemplated under this Agreement in a careful and
prudent
manner and in accordance with good industry practice.
9.2 Specific Management Rights. Subject to any limitations expressly set
forth in this
Agreement, the Managing Venturer shall invest the capital of the Joint
Venture in pursuit
of the purposes of the Joint Venture as set forth in Section IV hereof.
Without limiting
the generality of the foregoing, the Managing Venturer is expressly
authorized on behalf
of the Joint Venture to:
(a) enter into a Joint Venture Management Agreement with WebOne in the form
attached
hereto as Exhibit "A";
(b) procure and maintain with responsible companies such insurance as may
be available
in such amounts and with respect to such risks as are deemed appropriate
by the
Managing Venturer;
(c) execute and deliver on behalf of and in the name of the Joint Venture,
or in the name
of an agent of the Joint Venture, notes, financing statements, any and all
documents,
agreements and undertakings relating to institutional financing, leases,
subleases, bills of
sale and any and all other instruments necessary or incidental to the
conduct of the Joint
Venture's business;
(d) coordinate all accounting and clerical functions of the Joint Venture
and employ such
accountants, lawyers, managers, agents or other personnel as may be required
from time
to time to carry on the business of the Joint Venture; and
(e) control and perform, or cause to be performed, all other activities
incident to
managing the operations and affairs of the Joint Venture unless otherwise
specifically
stated in Section 9.3 hereinbelow.
9.3 Limitation on Management Rights. Notwithstanding the generality of the
foregoing,
the Managing Venturer shall not, without the consent of MEI, be empowered to:
(a) do any act in contravention of this Agreement;
(b) do any act which would make it impossible to carry on the ordinary
business of the
Joint Venture;
(c) confess a judgment against the Joint Venture;
(d) possess Joint Venture property or assign any rights in specific Joint
Venture property
for other than a Joint Venture purpose; and
(e) change or reorganize the Joint Venture into any other legal form.
9.4 Conflicts of Interest. Any Venturer may engage in or possess an
interest in other
business ventures of any nature or description independently or with others,
except that
no venturer shall invest in, manage, own, participate in directly or
indirectly in any
business, corporation, partnership or other juridical entity, including a
sole proprietorship,
having a business substantially similar to that embodied in the business
to be established
hereunder. To the extent any venturer shall engage in or possess an
interest in any other
business not prohibited hereunder, no other venturer shall have any rights
in or to such
independent ventures or the income or profits derived therefrom.
9.5 Limitations on Managing Venturer's Liability. The Managing Venturer
will not be
liable, responsible or accountable in damages or otherwise to its
co-venturer for any acts
performed by it, or for its failure to act, in good faith and within the
scope of this
Agreement, and not attributable to gross negligence, malfeasance, fraud,
breach of
fiduciary duty or breach of any express warranty or representation in this
Agreement; and
the Joint Venture, but not any Venturer, shall indemnify and hold harmless
the Managing
Venturer from any loss, damage, liability, cost or expense (including
reasonable attorneys'
fees) arising out of any act or failure to act by it, if such act or failure
to act is in good
faith, within the scope of this Agreement, and is not attributable to
gross negligence,
malfeasance, fraud, breach of fiduciary duty or breach of any express
warranty or
representation in this Agreement.
SECTION X - OBLIGATIONS OF THE MANAGING VENTURER
10.1 Joint Venture Management. The Managing Venturer shall act as the
agent of the
Joint Venture as sole Manager and in such capacity shall perform for the
Joint Venture
all services customarily performed by a managing venturer of a joint venture
engaged in
the activity to be undertaken by the Joint Venture.
SECTION XI - DISSOLUTION AND TERMINATION
11.1 Dissolution. The Joint Venture shall be dissolved and its business
wound up, upon
the earliest to occur of:
(a) December 31, 2021;
(b) the unanimous written consent of the Joint Venturers, that the
Joint Venture should
be dissolved;
(c) the bankruptcy or insolvency of the Managing Venturer; or
(d) the sale of all or substantially all of the Joint Venture's assets.
For the purposes of this Agreement, the term "Bankruptcy" means the filing
of a petition
for relief as to any person as debtor or bankrupt under the Federal
bankruptcy laws
(except if such petition is contested by such person); or the filing by
such person or by
another of a petition or application to declare the insolvency of such
person or for the
appointment of a receiver or a trustee for such person or a substantial part
of his assets;
provided that if such proceeding is commenced by another and such person
indicates his
approval of such proceeding, consents thereto or acquiesces therein, such
proceeding is
not contested by such person. The insolvency of a person shall be deemed
to occur when
such person's assets are insufficient to pay his liabilities and he shall
so admit to the
Venturers.
11.2 No Release of Contractual Obligations. It is understood and agreed,
however, that
no dissolution of the Joint Venture shall release or relieve any of the
parties hereto of
their contractual obligations under this Agreement.
11.3 Distributions of Cash or In Kind. Upon any such dissolution, all
Joint Venture assets
shall be sold and the proceeds distributed, or such assets distributed in
kind if the
Managing Venturer so elects, to the Venturers in their respective shares
as provided
herein.
SECTION XII - ACCOUNTING
12.1 Fiscal Year. The fiscal year of the Joint Venture shall be the
calendar year.
12.2 Method of Accounting. The Managing Venturer may maintain the Joint
Venture's
management reports on a cash transaction basis; nevertheless, it shall
keep, or cause to
be kept, full and accurate records of all transactions of the Joint Venture
either on a cash
or accrual method of accounting.
12.3 Books of Accounts. All of such books of account shall, at all times,
be maintained
at the Registered Office of the Joint Venture, and shall be open during
reasonable business
hours for the reasonable inspection and examination by the Joint Venturers
or their
authorized representatives, who shall have the right to make copies thereof.
12.4 Tax Returns. The Managing Venturer, at Joint Venture expense, shall
prepare or
cause to be prepared (by March 1st of the year after the tax year to which
such tax return
relates), a federal income tax return and such state tax returns as are
required for the Joint
Venture on either the accrual or cash method of accounting.
SECTION XIII - REPORTS AND STATEMENTS
13.1 Reports and Statements.
(a) Within sixty (60) days after the end of each fiscal year of the Joint
Venture, the
Managing Venturer shall cause to be delivered to the Joint Venturers an
annual Cash Flow
Report for the prior fiscal year of the Joint Venture showing all income
and expenses for
said fiscal year. Said report shall be delivered to the Joint Venturers
together with any
amounts distributable to such Joint Venturers pursuant to Section VIII.
(b) On or before March 15th of the year following the end of each fiscal
year of the Joint
Venture, the Managing Venturer shall cause to be delivered to each of the
Venturers such
information as shall be necessary (including a statement for that year of
each such
Venturer's share of net income, net gains and losses, and other items of
the Joint Venture)
for the preparation by each Venturer of federal and state income and other
tax returns.
(c) Within ninety (90) days after the end of each fiscal year of the Joint
Venture,
beginning with the fiscal year ending December 31, 1997, the Managing
Venturer shall
cause to be delivered to the Joint Venturers financial statements which
shall have been
certified by a firm of Certified Public Accountants, at the expense of the
Joint Venture,
which certification shall state that such statements fairly present the
financial position and
results of operations of the Joint Venture in accordance with generally
accepted
accounting principles applied on a consistent basis.
SECTION XIV - BANK ACCOUNTS
14.1 The Managing Venturer shall open and maintain a special bank account
or accounts
in which shall be deposited all funds of the Joint Venture. Withdrawals
from such
account or accounts shall be made upon the signature or signatures of such
person or
persons as the Managing Venturer shall designate.
SECTION XV - NOTICES
15.1 Whenever any notice is required or permitted to be given under any
provisions of
this Agreement, such notice shall be in writing, signed by or on behalf
of the person
giving the notice, and shall be deemed to have been given when delivered
by personal
delivery or mailed by certified mail, postage prepaid, return receipt
requested, addressed
to the person or persons to whom such notice is to be given at the offices
set forth in
Section 1.2.
SECTION XVI - ARBITRATION
16.1 Any dispute arising under this Joint Venture agreement shall be
resolved by
arbitration in New Orleans, Louisiana, under the Rules of the American
Arbitration
Association, as then in effect. The determination and award of the
arbitrator shall be final
and binding on the parties and may be entered as a judgment in any court of
competent
jurisdiction.
SECTION XVII - BINDING EFFECT
17.1 Except as herein otherwise provided to the contrary, this Agreement
shall be binding
upon, and inure to the benefit of, the parties hereto, their successors and
assigns.
SECTION XVIII - NO ORAL MODIFICATION
18.1 No modification or waiver of this Agreement or any part hereof shall
be valid or
effective unless in writing and signed by the party or parties sought to be
charged
therewith; and no waiver of any breach or condition of this Agreement shall
be deemed
to be a waiver of any other subsequent breach or condition, whether of like
or different
nature.
SECTION XIX - APPLICABLE LAWS
19.1 This Agreement shall be governed by, and construed in accordance with,
the laws
of the State of Louisiana.
SECTION XX - COUNTERPARTS
20.1 This Agreement may be executed in counterparts, each of which shall be
deemed an
original, and said counterparts shall constitute but one and the same
instrument which may
be sufficiently evidenced by one counterpart.
SECTION XXI - ENTIRE AGREEMENT
21.1 This Agreement constitutes the entire agreement and understanding
between the
parties and may not be modified or amended, except as specifically provided
for in this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and certified this Joint
Venture Agreement as of the day and year first above written.
MEDIA ENTERTAINMENT, INC. WEB ONE, INC.
By: /s/ David M. Loflin By: /s/ Ross S. Bravata
David M. Loflin Ross S. Bravata
President President
EXHIBIT 10.24
________________________
LICENSE AGREEMENT
This License Agreement is made and entered into as of the 20th day of
February, 1997, between Web One, Inc., a Louisiana corporation
("Licensor"), and Media Entertainment, Inc., a Nevada corporation
("Licensee").
W I T N E S S E T H:
WHEREAS, Licensor owns the right to use the name "Web One" in
commerce;
WHEREAS, Licensee desires to acquire a license to use the name "Web One"
in commerce;
WHEREAS, Licensor desires to grant to Licensee an exclusive license to use
the name "Web One" in commerce.
NOW, THEREFORE, it is agreed as follows:
1. Exclusive License. Licensor hereby grants to Licensee the exclusive,
worldwide right and license to use the name "Web One" (the "Trademark")
in commerce; provided however, that such license shall not be exclusive as
Licensor or to a Louisiana joint venture known as "Web One Wireless I.S.P.
- - Baton Rouge, J.V."
(a) Licensor hereby grants to Licensee the right to grant sublicenses;
provided however, that any sublicenses shall be subject to the provisions of
this License Agreement.
(b) The exclusive rights and license herein granted shall include all
variations and derivatives of the Trademark.
2. Representations by Licensor. Licensor represents that Licensor is the
exclusive owner of the rights to the name "Web One", has the right to grant
the exclusive license hereby granted, has executed no agreement in conflict
herewith, and has not granted to any other person, firm or corporation any
right, license, or privilege granted hereunder. Licensor has no trademark
protection with respect to the Trademark.
3. Representations and Warranties of Licensee. Licensee represents and
warrants that Licensee shall not permit, allow or otherwise condone the use
of the Trademark other than in strict accordance with the terms and
conditions of this License Agreement.
4. Royalties. Licensee shall pay to Licensor an annual royalty of $100.00.
Such annual royalty shall be payable in advance, commencing on the date of
the execution hereof and continuing for the term hereof, and any extensions.
In the event Licensee fails to pay such annual royalty as provided for herein,
this License Agreement shall be considered in default and subject to
termination in accordance with paragraph 5(a).
5. Term. This License Agreement and the licenses granted hereby shall
remain and continue in full force and effect for a period of fifteen years
from
the date first above written.
(a) If any payment is in default for 30 days after written notice is given to
Licensee either by telegram, telex or registered mail, or if Licensee is in
default in performing any of the other terms of this License Agreement and
such default continues for a period of 30 days after written notice thereof is
given to Licensee, or if Licensee is adjudicated bankrupt or insolvent, or
enters into a composition with its creditors, or if a receiver is appointed
for
any substantial portion of Licensee's assets, then Licensor shall have the
right
immediately to terminate this License Agreement, and thereupon this License
Agreement and the rights and licenses granted hereunder to Licensee shall
become void without prejudice to any remedy of Licensor for the recovery
of any moneys due it under this License Agreement and without prejudice to
any other rights or remedies of Licensor.
(b) Upon termination pursuant to subparagraph (a) of this Paragraph 5,
Licensee shall duly account to Licensor and transfer to it all rights which it
may have to the Trademark, and all rights to any sublicense or sublicenses
which may have been granted pursuant to the terms hereof.
6. Arbitration. Any controversy or claim arising out of, or relating to,
this
License Agreement, or the breach thereof, shall be settled by arbitration in
New Orleans, Louisiana, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the Arbitrator(s) may be entered in any court having jurisdiction
thereof.
7. Notice. Any notice required under this License Agreement shall be
addressed as follows:
If to Licensor: Web One, Inc.
8478 Quarters Lake Road
Baton Rouge, Louisiana 70809
If to Licensee: Media Entertainment, Inc.
8478 Quarters Lake Road
Baton Rouge, Louisiana 70809
With a copy to: Newlan & Newlan
5525 North MacArthur Boulevard
Suite 670
Irving, Texas 75038
8. Benefit. This License Agreement shall be binding upon and inure to the
benefit of the legal representatives, successors and assigns of the parties
hereto; provided, however, neither this License Agreement nor the rights
and/or licenses granted to Licensee hereunder shall be assignable or
transferable without the prior written consent of Licensor.
9. Governing Law. The validity, performance and construction of this
License Agreement shall be governed by the laws of the State of Louisiana.
IN WITNESS WHEREOF, the parties hereto have executed this License
Agreement as of the date first above written.
"LICENSOR": "LICENSEE":
WEB ONE, INC. MEDIA ENTERTAINMENT, INC.
By: /s/ Ross S. Bravata By: /s/ David M. Loflin
Ross S. Bravata David M. Loflin
President President
EXHIBIT 10.25
_______________________________
CONSULTING AND LEGAL SERVICES AGREEMENT
This Agreement is made as of the 1st day of February, 1997, by and
between Newlan & Newlan, Attorneys at Law, a Texas general partnership
consisting of L. A. Newlan, Jr. and Eric Newlan ("Consultant"), and
Media Entertainment, Inc., a Nevada corporation (the "Company").
WHEREAS, Consultant possesses experience in the field of international
and domestic financing, domestic and international taxation, Federal and
state securities laws, secondary securities trading, business acquisitions
and dispositions and matters of general and special law; and
WHEREAS, the Company is to become publicly-held company required to
file periodic reports pursuant to the requirements of the Securities
Exchange Act of 1934; and
WHEREAS, the Company desires advice and guidance relating to the areas
of expertise of Consultant, as aforesaid; and
WHEREAS, the Company desires to hire Consultant and Consultant is
willing to accept the Company as a client.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed:
1. The Company hereby engages Consultant to render advice and counsel
with respect to law, corporate organization, corporate finance, business
opportunities and taxation. Consultant hereby accepts such engagement and
agrees to render such advice throughout the term of this Agreement.
2. The services to be rendered by Consultant hereunder shall consist of the
following:
A. Giving advice and counsel on legal compliance by the Company with
all securities laws and regulations and communications laws and regulations
applicable to its business, state, federal and foreign;
B. Giving advice and counsel on legality of corporate business
transactions, contracts, including drafting and, at the Company's request,
negotiation of contracts;
C. Giving advice and counsel on business strategies, corporate finance,
secondary trading in the Company's securities, advice and, at the
Company's request, assistance in negotiation and evaluation of mergers,
consolidations and acquisitions, spin-offs, split-ups and other dispositions
and recapitalizations;
D. Giving advice and counsel on matters of income taxation, domestic and
international, and matters relating to import and export laws and
regulations; and
E. Giving advice and counsel in matters relating to protection and
preservation of assets of the Company, including, without limitation,
engaging in litigation in courts in which Consultant is, or reasonably can
be, admitted to practice, and supervising litigation in places where
Consultant is not so admitted and cannot reasonably gain admission to
practice.
Anything contained herein to the contrary notwithstanding, Consultant shall
not render services hereunder in connection with the offer or sale of
securities in a capital-raising transaction, in keeping with the proscription
thereof contained in Section A of the General Instructions as to the use of
Form S-8 promulgated by the Securities and Exchange Commission.
3. The term of this Agreement shall commence upon execution of this
Agreement and shall continue until January 31, 1998.
4. In consideration of the services to be performed by Consultant, the
Company agrees to pay to Consultant the sum of $3,500 in cash monthly
and to issue immediately upon the execution hereof 150,000 shares of the
Company's $.0001 par value Common Stock, at a price of $.40 per share.
In addition to the fee payable hereunder, Consultant shall, from time to
time during the term of this Agreement, be reimbursed for costs paid and
incurred by Consultant on behalf of the Company for travel, per diem,
lodging, long distance communications, courier services, photocopying and
printing. Reimbursement is to be made on receipt of invoice by the
Company.
The Company agrees that it will, after it has become subject to the periodic
reporting requirements of the Securities Exchange Act of 1934 and at its
cost, register with the Securities and Exchange Commission all of the
shares of Company Common Stock issued to Consultant hereunder pursuant
to a Registration Statement on Form S-8, at Consultant's request.
5. The Company represents and warrants to Consultant that:
A. The Company will cooperate fully and timely with Consultant to enable
Consultant to perform its obligations hereunder.
B. The execution and performance of this Agreement by the Company has
been duly authorized by the Board of Directors of the Company.
C. The performance by the Company of this Agreement will not violate
any applicable court decree, law or regulation, nor will it violate any
provisions of the organizational documents of the Company or any
contractual obligation by which the Company may be bound.
6. Until such time as the same may become publicly known, the parties
agree that any information provided to either of them by the other of a
confidential nature will not be revealed or disclosed to any person or entity,
except in the performance of this Agreement, and upon completion of
Consultant's services and upon the written request of the Company, any
original documentation provided by the Company will be returned to it.
Consultant will not directly or indirectly buy or sell the securities of the
Company at any time when it is privy to non-public information.
7. All notices hereunder shall be in writing and addressed to the party at
the address herein set forth, or at such other address as to which notice
pursuant to this section may be given, and shall be given by personal
delivery, by certified mail (return receipt requested), Express Mail or by
national or international overnight courier. Notices will be deemed given
upon the earlier of actual receipt of three (3) business days after being
mailed or delivered to such courier service.
Notices shall be addressed to Consultant at:
Newlan & Newlan, Attorneys at Law
5525 North MacArthur Boulevard
Suite 670
Irving Texas 75038
and to the Company at:
Media Entertainment, Inc.
8748 Quarters Lake Road
Baton Rouge, Louisiana 70809
8. Consultant consents to the placement of the following legend, or a
legend similar thereto, on the certificates representing the shares of
Common Stock issued hereunder:
THESE SECURITIES HAVE BEEN ISSUED IN RELIANCE UPON THE
EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 4(2)
OF THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE TRANSFERRED WITHOUT AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT
ANY SUCH PROPOSED TRANSFER IS IN ACCORDANCE WITH ALL
APPLICABLE LAWS, RULES AND REGULATIONS.
9. Miscellaneous.
A. In the event of a dispute between the parties, both Consultant and the
Company agree to settle said dispute through the American Arbitration
Association (the "Association") at the Association's Dallas, Texas, offices,
in accordance with the then-current rules of the Association; the award
given by the arbitrators shall be binding and a judgment can be obtained on
any such award in any court of competent jurisdiction. It is expressly
agreed that the arbitrators, as part of their award, can award attorneys fees
to the prevailing party.
B. This Agreement is not assignable in whole or in any part, and shall be
binding upon the parties, their heirs, representatives, successors or assigns.
C. This Agreement may be executed in multiple counterparts which shall
be deemed an original. It shall not be necessary that each party execute
each counterpart, or that any one counterpart be executed by more than one
party, if each party executes at least one counterpart.
D. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Texas.
MEDIA ENTERTAINMENT, INC.
(a Nevada corporation)
By: /s/ David M. Loflin
David M. Loflin
President
NEWLAN & NEWLAN
(a Texas general partnership)
By: /s/ L. A. Newlan, Jr.
L. A. Newlan, Jr.
Partner
EXHIBIT 10.26
___________________________
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered into as of March 7, 1997, by and
between Media Entertainment, Inc., a Nevada corporation with offices at
8748 Quarters Lake Road, Baton Rouge, Louisiana 70809 ("MEI"), and
Michael Cohn, an individual resident of the State of Louisiana ("Cohn"), in
light of the following facts:
1. MEI, through subsidiaries, is engaged in the Wireless Cable Television,
Community Television and Wireless Internet industries;
2. Cohn desires to acquire shares of Common Stock of MEI; and
3. MEI desires to issue shares of its Common Stock to Cohn.
WITNESSETH:
THEREFORE, the Agreement of the parties, the promises of each being
consideration for the promises of the other:
I. DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
meanings set forth below, including the exhibit hereto or amendments hereof.
(a) "Agreement" shall mean this Stock Purchase Agreement and all exhibits
hereto or amendments hereof.
(b) "Cohn" shall mean Michael Cohn, an individual resident of the State of
Louisiana.
(c) "MEI" shall mean Media Entertainment, Inc., a Nevada corporation, and
its subsidiaries: (1) Winter Entertainment, Inc., a Delaware corporation; and
(2) Missouri Cable TV Corp., a Louisiana corporation.
(d) "Knowledge of MEI" or matters "known to MEI" shall mean matters
actually known to the Board of Directors or officers of MEI, or which
reasonably should be or should have been known by them upon reasonable
investigation.
(e) "Securities Act" shall mean the Securities Act of 1933, as amended, and
includes the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, as such shall then be in effect.
Any term used herein to which a special meaning has been ascribed shall be
construed in accordance with either (1) the context in which such term is
used, or (2) the definition provided for such terms in the place in this
Agreement at which such term is first used.
II. DISCLOSURES
A copy of a Registration Statement on Form S-1 to be filed by MEI with the
Securities and Exchange Commission, which document includes information
with respect to MEI's business and prospects, is attached hereto as Exhibit
"A" and incorporated herein by this reference. Cohn hereby acknowledges
that it has examined Exhibit "A", has had the opportunity to ask questions of,
and receive answers from, the principals of MEI regarding matters contained
in Exhibit "A" and otherwise investigate the matters contained in Exhibit
"A".
III. PURCHASE AND SALE
MEI hereby sells to Cohn and Cohn hereby buys from MEI 20,000 shares of
the $.0001 par value Common Stock of MEI, at the price and subject to all
of the terms and conditions set forth herein.
IV. PURCHASE PRICE - PAYMENT
Cohn shall deliver to MEI the sum of $50,000 in payment of the 20,000
shares of MEI Common Stock purchased by Cohn hereunder, a per share
price of $2.50, which payment shall be delivered as provided in paragraph VI
hereinbelow.
V. ISSUANCE OF THE COMMON STOCK
MEI shall cause the 20,000 shares of its Common Stock purchased and sold
hereunder to be issued and delivered herewith.
VI. THE EXCHANGE
MEI is delivering, along with an executed copy of this Agreement, a stock
certificate representing 20,000 shares of its Common Stock. Upon execution
by Cohn of this Agreement, Cohn agrees to deliver forthwith the sum of
$50,000 required to be delivered pursuant to paragraph IV hereinabove.
VII. REPRESENTATIONS AND WARRANTIES OF MEI
MEI represents and warrants to Cohn:
(a) Organization and Corporate Authority. MEI is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada and is qualified to do business as a foreign corporation in all
jurisdictions where the ownership of property or maintenance of an office
would require qualification. MEI has all requisite corporate power and
authority, governmental permits, consents, authorizations, registrations,
licenses and memberships necessary to own its property and to carry on its
business in the places where such properties are now owned and operated or
such business is being conducted.
(b) Subsidiaries. Media Entertainment, Inc., the issuer of the Common Stock
sold hereunder, has two subsidiary corporations: (1) Winter Entertainment,
Inc., a Delaware corporation; and (2) Missouri Cable TV Corp., a Louisiana
corporation.
(c) Options, Warrants and Rights. MEI has no outstanding options, warrants
or rights, conversion rights or other agreements for the purchase or
acquisition from MEI of any shares of its capital stock not otherwise
disclosed in Exhibit "A" attached hereto.
(d) Issuance of the Common Stock. The shares of Common Stock of MEI,
when issued and delivered in accordance with this Agreement, will be duly
and validly issued, fully paid and nonassessable, and will be free and
clear of
any liens or encumbrances and, to the knowledge of MEI, will be issued in
compliance with applicable state and federal laws.
(e) Financial Condition. MEI is a development stage company without
significant revenues and has, since inception, operated at a loss.
(f) Undisclosed or Contingent Liabilities. To the best knowledge of MEI
and to its officers and directors, MEI has no material liabilities not
reflected
in Exhibit "A", and, to the best knowledge of the officers and directors of
MEI, MEI has no contingent liabilities.
(g) Litigation. Except as described in Exhibit "A" attached hereto, MEI
is not
a party to any suit, action, proceeding, investigation or labor dispute
(collectively "actions") pending or currently threatened against it other than
administrative matters arising in the ordinary course of business and which,
if determined against MEI would result in a materially adverse effect.
(h) Compliance with Agreements. The execution and performance of this
Agreement will not result in any violation or be in conflict with any
agreement to which MEI is a party.
(i) Title to Property and Assets. MEI has good and marketable title to its
properties and assets free and clear of all mortgages, liens, security
interests
and incumbrances, except (1) as described in Exhibit "A", (2) for liens for
current taxes not yet delinquent and (3) for liens imposed by law or incurred
in the ordinary course of business.
(j) Franchises, Permits, etc. To the knowledge of MEI, it has all
franchises,
permits, licenses, orders and approvals of any federal, state, local or
foreign
government of self regulatory body (collectively, the "Permits") that are
material to or necessary for the conduct of its business.
(k) Governmental Consents. To the knowledge of MEI, no consent,
approval, order or authorization of, or registration, qualification,
designation,
declaration or filing with, any governmental authority on the part of MEI is
required in connection with the valid execution, delivery and performance of
this Agreement, except for the possible filing of a Notice under Regulation
D promulgated under the Securities Act of 1933, as amended (the "Act"), and
any filings required by applicable state securities laws, all of which
shall be
properly and timely filed by MEI.
(m) Authorization. All corporate action on the part of MEI and its
officers,
directors and shareholders necessary for the authorization, execution and
delivery of this Agreement, for the performance of MEI's obligations
hereunder and for the issuance and delivery of the Common Stock has been
taken or will be taken prior to the Closing. This Agreement, when executed
and delivered, shall constitute a legal, valid and binding obligation of MEI.
VIII. REPRESENTATIONS AND WARRANTIES OF COHN
(a) Cohn represents and warrants to MEI that he is under no legal disability
with respect to entering into this Agreement.
(b) Cohn represents and warrants that it is an "accredited investor" with the
meaning of that term as used in Rule 501 of Regulation D of the Rules and
Regulations of the Securities and Exchange Commission and is capable,
through experience and financial strength, to make and understand an
investment decision leading to the purchase of the Common Stock of MEI
contemplated herein.
(c) Cohn represents and warrants that the shares of Common Stock, are being
purchased by him solely for his own account for investment purposes only
and not for the account of any other person and not for distribution,
assignment or resale to others.
(d) Cohn further consents to the placement of the following legend, or a
legend similar thereto, on the certificates representing shares of Common
Stock:
THESE SECURITIES, AND THE SECURITIES INTO WHICH THEY
MAY BE CONVERTED, HAVE BEEN ISSUED IN RELIANCE UPON
THE EXEMPTION FROM REGISTRATION AFFORDED BY SECTION
4(2) OF THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE TRANSFERRED WITHOUT AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT
ANY SUCH PROPOSED TRANSFER IS IN ACCORDANCE WITH ALL
APPLICABLE LAWS, RULES AND REGULATIONS.
IX. MISCELLANEOUS
Survival of Covenants. Unless otherwise waived as provided herein, all
covenants agreements, representations and warranties of the parties made in
this Agreement and in the financial statements or other written information
delivered or furnished in connection therewith and herewith shall survive the
Exchange hereunder, and shall be binding upon, and inure to the benefit of,
the parties and their respective successors and assigns.
Governing Law. This Agreement shall be deemed to be a contract made
under, governed by and construed in accordance with the substantive laws of
the State of Louisiana.
Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which when so executed and delivered shall be taken to
be an original; but such counterparts shall together constitute but one
and the
same documents.
Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties
hereto.
Entire Agreement. This Agreement, the other agreements and the other
documents delivered pursuant hereto and thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
day and year first above written.
"MEI":
MEDIA ENTERTAINMENT, INC.
By: /s/ David M. Loflin
David M. Loflin
President
"COHN":
/s/ Michael Cohn
Michael Cohn
EXHIBIT 10.27
___________________________
PROMISSORY NOTE
October 14, 1996
Baton Rouge, Louisiana
$25,000.00
FOR VALUE RECEIVED, Missouri Cable TV Corp., a Louisiana
corporation ("Maker"), promises to pay to David M. Loflin, an individual
resident of the State of Louisiana ("Payee"), the sum of TWENTY-FIVE
THOUSAND DOLLARS ($25,000.00), plus interest at the rate of eight
percent (8%) per annum, on demand.
Place of Payment
All payments shall be made to Payee at 8748 Quarters Lake Road, Baton
Rouge, Louisiana 70809.
Waiver of Protest and Extension of Time
Each maker, endorser and guarantor or other surety of this Promissory Note
does hereby waive demand, grace, notice, presentment for payment and
protest, and further does hereby agree and consent that this Promissory Note
may be renewed, and the time for payment extended without notice, and
without releasing any of the parties.
Costs of Collection
Maker will pay on demand all reasonable costs of collection, legal expenses
and attorney's fees actually paid by the holder in collecting or enforcing
this
Promissory Note on default.
Waiver
No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Promissory Note. A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any future occasion.
Definitions
As used in this Promissory Note, the word "holder" shall mean the payee or
other endorsee of this Promissory Note who is in possession of it, or the
bearer of this Promissory Note, if this Promissory Note is at the time payable
to the bearer. The word "maker" shall mean the undersigned, unless such
signer shall indicate on this instrument that it is signed in the capacity
of a
guarantor.
MISSOURI CABLE TV CORP.
(a Louisiana corporation)
By: /s/ Waddell D. Loflin
Waddell D. Loflin
Vice President
EXHIBIT 10.28
_______________________________
PROMISSORY NOTE
October 22, 1996
Baton Rouge, Louisiana
$15,000.00
FOR VALUE RECEIVED, Winter Entertainment, Inc., a Delaware
corporation ("Maker"), promises to pay to David M. Loflin, an individual
resident of the State of Louisiana ("Payee"), the sum of FIFTEEN
THOUSAND DOLLARS ($15,000.00), plus interest at the rate of eight
percent (8%) per annum, on demand.
Place of Payment
All payments shall be made to Payee at 8748 Quarters Lake Road, Baton
Rouge, Louisiana 70809.
Waiver of Protest and Extension of Time
Each maker, endorser and guarantor or other surety of this Promissory Note
does hereby waive demand, grace, notice, presentment for payment and
protest, and further does hereby agree and consent that this Promissory Note
may be renewed, and the time for payment extended without notice, and
without releasing any of the parties.
Costs of Collection
Maker will pay on demand all reasonable costs of collection, legal expenses
and attorney's fees actually paid by the holder in collecting or enforcing
this
Promissory Note on default.
Waiver
No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Promissory Note. A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any future occasion.
Definitions
As used in this Promissory Note, the word "holder" shall mean the payee or
other endorsee of this Promissory Note who is in possession of it, or the
bearer of this Promissory Note, if this Promissory Note is at the time payable
to the bearer. The word "maker" shall mean the undersigned, unless such
signer shall indicate on this instrument that it is signed in the capacity
of a
guarantor.
WINTER ENTERTAINMENT, INC.
(a Delaware corporation)
By: Waddell D. Loflin
Waddell D. Loflin
Vice President
EXHIBIT 10.29
______________________________
PROMISSORY NOTE
November 15, 1996
Baton Rouge, Louisiana
$20,000.00
FOR VALUE RECEIVED, Missouri Cable TV Corp., a Louisiana
corporation ("Maker"), promises to pay to David M. Loflin, an individual
resident of the State of Louisiana ("Payee"), the sum of TWENTY
THOUSAND DOLLARS ($20,000.00), plus interest at the rate of eight
percent (8%) per annum, on demand.
Place of Payment
All payments shall be made to Payee at 8748 Quarters Lake Road, Baton
Rouge, Louisiana 70809.
Waiver of Protest and Extension of Time
Each maker, endorser and guarantor or other surety of this Promissory Note
does hereby waive demand, grace, notice, presentment for payment and
protest, and further does hereby agree and consent that this Promissory Note
may be renewed, and the time for payment extended without notice, and
without releasing any of the parties.
Costs of Collection
Maker will pay on demand all reasonable costs of collection, legal expenses
and attorney's fees actually paid by the holder in collecting or enforcing
this
Promissory Note on default.
Waiver
No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Promissory Note. A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any future occasion.
Definitions
As used in this Promissory Note, the word "holder" shall mean the payee or
other endorsee of this Promissory Note who is in possession of it, or the
bearer of this Promissory Note, if this Promissory Note is at the time payable
to the bearer. The word "maker" shall mean the undersigned, unless such
signer shall indicate on this instrument that it is signed in the capacity
of a
guarantor.
MISSOURI CABLE TV CORP.
(a Louisiana corporation)
By: /s/ Waddell D. Loflin
Waddell D. Loflin
Vice President
EXHIBIT 10.30
________________________
PROMISSORY NOTE
January 31, 1997
Baton Rouge, Louisiana
$8,000.00
FOR VALUE RECEIVED, Media Entertainment, Inc., a Nevada
corporation ("Maker"), promises
to pay to David M. Loflin, an individual resident of the State of
Louisiana ("Payee"), the sum of
EIGHT THOUSAND DOLLARS ($8,000.00), plus interest at the rate of
eight percent (8%) per
annum, on demand.
Place of Payment
All payments shall be made to Payee at 8748 Quarters Lake Road, Baton Rouge,
Louisiana 70809.
Waiver of Protest and Extension of Time
Each maker, endorser and guarantor or other surety of this Promissory Note
does hereby waive
demand, grace, notice, presentment for payment and protest, and further
does hereby agree and
consent that this Promissory Note may be renewed, and the time for payment
extended without
notice, and without releasing any of the parties.
Costs of Collection
Maker will pay on demand all reasonable costs of collection, legal expenses
and attorney's fees
actually paid by the holder in collecting or enforcing this Promissory Note
on default.
Waiver
No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a
waiver of such right or of any other right under this Promissory Note.
A waiver on any one occasion
shall not be construed as a bar to or waiver of any right or remedy on
any future occasion.
Definitions
As used in this Promissory Note, the word "holder" shall mean the payee or
other endorsee of this
Promissory Note who is in possession of it, or the bearer of this Promissory
Note, if this Promissory
Note is at the time payable to the bearer. The word "maker" shall mean the
undersigned, unless such
signer shall indicate on this instrument that it is signed in the capacity
of a guarantor.
MEDIA ENTERTAINMENT, INC.
(a Nevada corporation)
By: /s/ Waddell D. Loflin
Waddell D. Loflin
Vice President
EXHIBIT 10.31
________________________________
AGREEMENT APPOINTING SECURITIES TRANSFER
CORPORATION AS TRANSFER AGENT AND REGISTRAR
This Agreement is made this 6th day of February, 1997, between Securities
Transfer Corporation, a Texas corporation, and Media Entertainment, Inc.,
a Nevada corporation (the "Company").
1. Appointment. Securities Transfer Corporation is hereby appointed transfer
agent and registrar of the following shares of the Company's stock:
Number of Shares
Number of Shares
Par Value Authorized in Certificate
Covered by
Class Per Share of Incorporation This
Appointment
Common $.0001 100,000,000
100,000,000
By special resolution adopted by the Company's Board of Directors,
Securities Transfer Corporation may from time to time be appointed to act in
the capacity of dividend disbursing agent, warrant agent, exchange agent,
redemption agent, escrow agent or any other similar capacity as may be
agreed upon by Securities Transfer Corporation and the Company.
2. Originally Issued Shares. Securities Transfer Corporation is hereby
authorized originally to issue, register and countersign certificates
(that is,
certificates not issued upon transfer and cancellation of existing
certificates
then outstanding) of the Company's stock covered by this appointment upon
being furnished with an appropriate written request signed by an officer
of the
Company, a certified copy of a resolution of the Board of Directors
authorizing such original issue and, if specifically requested by Securities
Transfer Corporation, an opinion of counsel as described in Paragraph
15(g)(i), (ii) and (iii), below.
3. Transfer of Outstanding Shares. Securities Transfer Corporation is hereby
authorized to accept for transfer any outstanding certificates representing
the
Company's stock covered by this appointment, and to issue and countersign
new certificates in place thereof, except that Securities Transfer Corporation
may refuse to transfer such certificate if it in good faith believes that the
certificate, when surrendered for transfer, is not validly or genuinely
endorsed
or is otherwise not in compliance with law. Securities Transfer Corporation
reserves the right to refuse to transfer shares until it is satisfied that the
requested transfer is legally authorized and it shall incur no liability for
the
refusal in good faith to make transfers which it, in its judgment, believes
may
be improper, unauthorized or for any reason not permitted by law. Securities
Transfer Corporation may, in effecting transfers, rely upon Simplification
Acts
or the Uniform Commercial Code which it believes may protect Securities
Transfer Corporation and the Company in not requiring complete
documentation. In cases in which Securities Transfer Corporation is not
directed or otherwise required to maintain the consolidated records of
stockholders' accounts, Securities Transfer Corporation shall not be liable
for
any loss which may arise by reason of not having such records where it has
exercised ordinary diligence. Securities Transfer Corporation shall be under
no duty to use a greater degree of diligence by reason of not having such
records.
4. Transfer or Cancellation of Treasury Shares. Securities Transfer
Corporation is hereby authorized to transfer or cancel certificates of the
Company's stock covered by this appointment in the name of or belonging to
the Treasury of the Company, upon receipt of the certificate(s) endorsed by
an officer of the Company, a certified copy of a resolution of the Board of
Directors authorizing such endorsement and such transfer or cancellation, and,
in the case of a transfer only, an opinion of counsel as described in
Paragraph
15(g)(iii), below.
5. Lost of Destroyed Certificates. Securities Transfer Corporation may
issue
new certificates in place of certificates represented to have been lost,
stolen
or destroyed in accordance with the Board of Directors' resolution described
in Paragraph 15(h), below, upon receiving a bond or other indemnity
satisfactory to Securities Transfer Corporation. Securities Transfer
Corporation is further authorized in its discretion to issue a new
certificate in
exchange for, and upon surrender of, an identifiable mutilated certificate.
6. Delivery of Certificates by Mail. Securities Transfer Corporation is
hereby
authorized to forward stock certificate, scrips and warrants of the Company
by mail in accordance with the terms of a blanket bond or other satisfactory
indemnity covering non-receipt of such mailed instruments. Said bond shall
name, directly or indirectly, the Company and Securities Transfer Corporation
as obliges. In the event of the non-receipt of such certificates mailed by
Securities Transfer Corporation, the Company hereby authorizes the issuance
of new certificates for a like amount in place thereof upon receipt of a
properly executed affidavit and proof of loss provided under said blanket bond
and the issuance by the surety company of an assumption of the loss under
said blanket bond, all without further action or approval of the Board of
Directors of the Company.
7. Unclaimed or Undelivered Stock Certificates. Where a stock certificate,
for any reason, is in the possession of Securities Transfer Corporation
and has
not been claimed by the registered holder or cannot be delivered to the
registered holder through usual channels, Securities Transfer Corporation
may, after the expiration of two years from the date said certificate was
issued, return said certificate to the Company to be held by the Company for
the registered holder or transferred in accordance with applicable laws.
8. Books and Records. Securities Transfer Corporation is hereby authorized
to establish and maintain such books of the Company as may be required in
the performance of its agency, and to establish and maintain stock ledgers for
the Company and to make entries therein of all certificates issued, cancelled
and transferred. In case of any request or demand for the inspection of such
stock books, Securities Transfer Corporation will endeavor to notify the
Company and to secure instructions as to permitting or refusing such
inspection. Securities Transfer Corporation reserves the right however, to
exhibit the stock books to any person if it is advised by its counsel that
it may
be held liable for the failure to exhibit the stock books to such person.
9. Instructions, Opinions of Counsel and Signatures. At any time Securities
Transfer Corporation may apply to an officer of the Company for instructions
or information, and may consult counsel for the Company or its own counsel,
in respect to any matter arising in connection with the agency, and it
shall not
be liable for any action taken or omitted by it in good faith in accordance
with
such instructions, information or the advice or opinion of counsel.
Securities
Transfer Corporation shall be protected in acting upon any paper or document
believed by it to be genuine and to have ben signed by the proper person or
persons and shall not be held to have notice of any change of authority of any
person, until receipt of written notice thereof from the Company. It
shall also
be protected in recognizing stock certificates which it reasonably believes
bear
the proper manual or facsimile signatures of the officers of the Company and
the proper counter-signature of a transfer agent or registrar, or of a con-
transfer agent or co-registrar. Securities Transfer Corporation may rely
conclusively, for any and all purposes, upon any advice of transfers made in
the course of transfer or representing original issuances, retirements or
cancellation of shares; upon advice of stop transfer orders placed, released
or
in effect against outstanding certificates; and upon any certification or
notification as to the number of shares issued, the certificates representing
such shares and other information which Securities Transfer Corporation may
receive from time to time from any co-transfer agent or co-registrar. It
shall
be protected in relying upon all information contained in Appendix A hereto
or otherwise supplied to Securities Transfer Corporation by the Company in
accordance with the provisions of this Agreement.
10. Indemnification. Securities Transfer Corporation shall not be liable for
any act or omission in connection with this agency except for its own
negligence or willful misconduct. The Company assumes full responsibility
and will indemnify Securities Transfer Corporation and save it harmless from
and against any and all actions or suits, whether groundless or otherwise, and
from and against any all losses, damages, costs, charges, counsel fees,
payments, expenses and liabilities arising out of the agency relationship,
where
Securities Transfer Corporation has acted without negligence and without
willful misconduct. Securities Transfer Corporation shall not be under any
obligation to prosecute any action or suit in respect of any agency
relationship
which, in its sole judgment, may involve it in expense or liability. In any
action or suit the Company shall, as often as requested, furnish Securities
Transfer Corporation with satisfactory indemnity against any expense or
liability growing out of such action or suit by or against Securities Transfer
Corporation in its agency capacity.
11. Previous Transfer Agent. The Company shall indemnify, protect and hold
harmless Securities Transfer Corporation for many liability arising from any
actions or failures to act on the part of any previous stock transfer agents
retained by the Company, specifically including, but not limited to, liability
arising from any lack of completeness or validity of the records maintained by
any such previous stock transfer agents or provided to Securities Transfer
Corporation by such previous stock transfer agents.
Securities Transfer Corporation agrees to exercise reasonable diligence in
converting the records and information of any such previous stock transfer
agent to Securities Transfer Corporation's system, and in researching the
records of any such previous stock transfer agent to identify and resolve
errors and discrepancies contained therein.
12. Compliance With Law. Securities Transfer Corporation may, without
liability to the Company, refuse to perform any act in connection with this
agency where in good faith reliance upon the opinion of its counsel, it
believes
in good faith that such act may subject it or its officers or employees to
criminal liability under any law of any state or of the United States and, in
particular, under the Securities Act of 1933.
13. Stock Certificates and Signatures. The Company shall furnish Securities
Transfer Corporation with a sufficient supply of blank stock certificates and
from time to time will renew such supply upon the request of Securities
Transfer. Such blank stock certificates shall be properly signed by
officers of
the Company authorized by law or by the Company's bylaws to sign stock
certificates and, if required, shall bear the corporate seal or facsimile
thereof.
The Company shall file promptly with Securities Transfer Corporation written
notice of any change in the officers authorized to sign stock certificates,
written instructions or requests, together with specimen signature of each
newly authorized officer. In case of any officer of the Company who shall
have properly signed blank stock certificates shall die, resign or be removed
prior to the issuance of such certificates, Securities Transfer Corporation as
transfer agent and/or as registrar may issue or register such stock
certificates
as the stock certificates of the Company notwithstanding such death,
resignation or removal; and the Company shall file promptly with Securities
Transfer Corporation such approval, adoption or ratification as may be
required by law.
14. Effective Date. This appointment shall be effective the opening of
business February 7, 1997.
15. Necessary Documentation. Prior to the effective date of this
appointment, the Company shall furnish the following documents to Securities
Transfer Corporation:
(a) A copy of the resolution of the Board of Directors ratifying, confirming
and approving this Agreement, certified by the Secretary of the Company.
(b) A copy of the Company's Certificate of Incorporation and all amendments
thereto, certified by the Secretary of State of the State of the Company's
incorporation.
(c) A copy of the bylaws of the Company and all amendments thereto,
certified by the Secretary of the Company.
(d) Specimen stock certificates for each class of stock (outstanding or to be
outstanding) of the Company for which Securities Transfer Corporation is
being appointed transfer agent and registrar.
(e) A list, certified by the Secretary of the Company or the transfer agent
which Securities Transfer Corporation is succeeding, showing the number and
date of each outstanding certificate, the name in which issued, the number of
shares represented thereby, the address and taxpayer identifying number of the
stockholder, all stop transfer orders in respect to such certificate and the
reason for such orders and, finally, all certificates issued as replacements
for
those reported lost, stolen or destroyed.
(f) A list, certified by the Secretary of the Company, showing the number and
date of each outstanding Insider (Non-Registered) certificate, the name in
which issued, the number of shares represented thereby, and the address and
taxpayer identifying number of the stockholder.
(g) An opinion of the Company's counsel as to:
(i) The validity of the Company's organization and continuing existence;
(ii) The validity of the issuance of the stock for which Securities
Transfer
Corporation is being appointed;
(iii) The status of all such stock, including shares which are
reserved for
specific purposes, under the Securities Act of 1933, and any other applicable
Federal or State statute (i.e., if registration is necessary, the effective
date of
the registration statement or, if exempt, the specific basis theretofore).
(h) A copy of the resolution of the Board of Directors, certified by the
Secretary of the Company, authorizing Securities Transfer Corporation to
proceed from time to time with any necessary replacements of lost, stolen or
destroyed certificates, upon bond(s) or other indemnity satisfactory to
Securities Transfer Corporation.
(i) Any additional information as may be specifically requested by Securities
Transfer Corporation in connection with its appointment or the performance
of its duties.
16. Future Amendments of Charter and Bylaws. The Company shall file with
Securities Transfer Corporation certified copies of all amendments to its
articles of incorporation or bylaws made after the date of creation of the
agency.
17. Fees. The Company shall pay to Securities Transfer Corporation such
fees for Securities Transfer's services as are reflected in the Fee Schedule
attached hereto as Appendix A and incorporated herein by this reference, and
shall reimburse Securities Transfer Corporation for all extraordinary out-of-
pocket expenses incurred in the performance of its duties hereunder.
18. Printing of New Stock Certificates. Prior to printing of any new stock
certificates which we will countersign, proofs thereof must be submitted to
Securities Transfer Corporation for approval.
19. Stock Listed on a Securities Exchange. If the class of stock for which
Securities Transfer Corporation is appointed is listed on a Securities
Exchange, the Company will comply with the rules and regulations of such
Exchange including application to the Exchange for the listing of additional
shares sufficiently in advance so as to permit, upon receipt by Securities
Transfer Corporation of such authorization from the Exchange as may be
required, the timely issuance and delivery as Transfer Agent or registration
as
Registrar of certificates representing such additional shares. Securities
Transfer Corporation may rely upon any listing application, letters or other
written instruments executed by an officer of the Company and directed to the
Exchange by counsel for the Company as though such letters, instruments, or
opinions had been addressed or submitted to Securities Transfer Corporation
itself and with the same rights of indemnification as described in
paragraph 10
above.
20. Notice to Securities Transfer Corporation. The Company shall promptly
notify Securities Transfer Corporation:
A. All action, when declared, with respect to the payment or non-payment of
cash dividends..
B. Any prospectus, preliminary and final, of the Company as filed with the
Securities and Exchange Commission.
C. All material, including that for annual or special meetings, mailed by the
Company to its stockholders.
21. Filing Requirements. The Company will promptly file with Securities
Transfer Corporation when effective or available, a copy of each of the
following:
A. Any final listing application for additional amounts of listed securities.
B. Any prospectus, preliminary and final, of the Company as filed with the
Securities and Exchange Commission.
C. All material, including that for annual or special meetings, mailed by the
Company to its shareholders.
22. Termination. This Agreement may be terminated by either party without
cause upon receipt of written notice thirty days prior to the termination
date.
Securities Transfer Corporation further reserves the right to terminate this
Agreement upon 72 hours' advance notice to the Company in the event of a
disagreement concerning the lawfulness of any transfer or other action
requested by the Company, failure to timely pay fees due Securities Transfer
Corporation or other cause, whether or not similar to the foregoing.
Securities Transfer Corporation shall be reimbursed for all reasonable
expenses, including charges for the shipment of records, associated with
termination of the agency created by this Agreement by either party, and the
termination fee stated in Exhibit A.
23. Successor Transfer Agent. Any corporation into which STC may be
merged or converted or with which its may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
STC may be a party, or any corporation succeeding to the corporate trust
business of STC, shall be the successor to STC hereunder without the
execution or filing of any paper or any further act of a party or the parties
hereto. In any such event that the name of STC is changed, STC or such
successor may adopt the countersignatures of the original transfer agent and
any countersign such certificates either in the name of the predecessor
transfer
agent or in the name of the successor transfer agent.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
SECURITIES TRANSFER CORPORATION
By: /s/ Kevin Halter, Jr.
Authorized Signature
MEDIA ENTERTAINMENT, INC.
By: /s/ David M. Loflin
David M. Loflin
President
EXHIBIT 22.1
________________________
Subsidiaries of Registrant
1. Winter Entertainment, Inc., a Delaware corporation
2. Missouri Cable TV Corp., a Louisiana corporation
EXHIBIT 24.1
______________________________________
CONSENT OF INDEPENDENT AUDITORS
As independent auditors, we hereby consent to the incorporation by reference
in this Form S-1 Registration Statement of our reports dated April 3, 1997,
relating to (1) the consolidated financial statements of Media Entertainment,
Inc. and Subsidiaries, for the period from inception (November 1, 1996) to
December 31, 1996, (2) the financial statements of Winter Entertainment,
Inc. for the year ended December 31, 1996, and the period from inception
(December 28, 1995) to December 31, 1995, and (3) the financial statements
of Missouri Cable TV Corp. for the period from inception (October 9, 1996)
to December 31, 1996, included in the Form S-1 Registration Statement. We
also consent to the reference to this firm under the heading "Experts" in this
Registration Statement.
/s/
WEAVER AND TIDWELL, L.L.P.
Certified Public Accountants
Fort Worth, Texas
April 21, 1997
EXHIBIT 24.2
___________________________
Consent of Newlan & Newlan is included in the Opinion
filed as Exhibit 5.1 hereto
