UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the quarter period ended: March 31, 1996
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the transition period from: to
Commission file number: 33-5902-NY
MICRO-LITE TELEVISION
---------------------
(Exact name of registrant as specified in its charter)
Nevada 22-2774460
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9 Exchange Place, Suite 210, Salt Lake City, Utah 84111
- - --------------------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 595-0104
Indicate by check mark whether the registrant (1) has filed all reports
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
The number of shares outstanding of the registrant's common stock on
May 28, 1996 was 6,959,632 of which 1,004,167 have stop payment orders. The net
shares outstanding of the registrant's common stock on May 28, 1996 was
5,955,465.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
The following Condensed Consolidated Financial Statements of the
Company and its subsidiaries and related notes are included herein:
Condensed Consolidated Balance Sheet as of December 31, 1995 and March
31, 1996;
Condensed Consolidated Statements of Income for the three months ended
March 31, 1996 and for the three months ended March 31, 1995;
Condensed Consolidated Statement of Cash Flows for the three months
ended March 31, 1996 and March 31, 1995;
Notes to Condensed Consolidated Financial Statements.
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<TABLE>
<CAPTION>
MICRO-LITE TELEVISION
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND December 31, 1995
(UNAUDITED)
December 31, March 31,
ASSETS 1995 1996
- - ------ ----------------- -----------------
<S> <C> <C>
Current Assets:
Cash $ 7,019 $ 14,047
Marketable Securities 906 906
Notes Receivable 500 15,500
Accounts Receivable & Prepaids 334 334
----------------- -----------------
Total Current Assets 8,759 30,787
Property, Plant & Equipment 254,571 243,070
Other Assets:
Organizational Costs 450 337
Notes Receivable - other 0 0
Deposits 7,824 11,825
Licenses and Other 1,360,138 1,336,914
----------------- -----------------
1,368,412 1,349,076
TOTAL ASSETS $ 1,631,742 $ 1,622,933
================= =================
LIABILITIES & SHAREHOLDERS EQUITY
Current Liabilities:
Accounts Payable $ 84,870 $ 84,570
Accrued Liabilities 768,762 789,678
Note Payable 176,000 287,038
Income Taxes Payable 800 800
Current Portion of Long-Term Debt 12,684 12,684
Payable - Related Parties 571,560 663,306
----------------- -----------------
Total Current Liabilities 1,614,676 1,838,076
Long-Term Debt 11,627 8,297
----------------- -----------------
Total Liabilities 1,626,303 1,846,373
Shareholders Equity:
Common Stock, $.001 par value;
Authorized 200,000,000 shares;
Issued and Outstanding 5,816,427
at December 31, 1995 and 5,955,465
at March 31, 1996 5,816 5,955
Additional Paid-in Capital 2,050,120 2,052,232
Retained Earnings (Deficit) (2,050,497) (2,281,627)
----------------- -----------------
Total Shareholder's Equity 5,439 (223,440)
TOTAL LIABILITIES & EQUITY $ 1,631,742 $ 1,622,933
================= =================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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<PAGE>
<TABLE>
<CAPTION>
MICRO-LITE TELEVISION
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1995 AND MARCH 31, 1996
(UNAUDITED)
Three Months Three Months
Ended Ended
March 31, March 31,
1995 1996
----------------- ----------------
<S> <C> <C>
Revenues $ 3,000 $ 600
Net Profit (Loss) from Stock Sales 60,275 0
General & Administrative Expenses:
Interest Expense 132 380
Brochures & Marketing 210 101
Travel & Auto Expense 5,731 9,918
Postage & Delivery 1,880 2,841
Payroll Taxes 5,392 6,745
Office Expenses 2,216 1,756
Outside and Professional Services 7,705 32,224
Rent 5,439 7,673
Salaries - Officers 41,250 41,250
Salaries - Others 47,083 55,669
Depreciation & Amortization 9,135 40,837
Bank Charges 544 1,401
Insurance 7,619 4,627
Equipment Rental 2,424 1.896
Moving Expense 200 0
Channel Lease Payments 1,850 12,420
FCC Filing Fees 3,630 4,200
Telephone Expense 8,696 6,739
Computer Expense 944 743
Other Taxes & Licenses 10 125
Miscellaneous Expense 2,031 185
----------------- ----------------
Total General & Administrative Expense 154,121 231,730
Income Taxes 800 0
----------------- ----------------
Net Income (Loss) $ (91,646) $ (231,130)
================= =================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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<TABLE>
<CAPTION>
MICRO-LITE TELEVISION
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1995 AND MARCH 31, 1996
(UNAUDITED)
Three Months Three Months
Ended Ended
March 31, March 31,
1995 1996
----------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income (Loss) $ (91,647) $ (231,130)
Adjustments:
Cost of Stock Sold 137,500 0
Unrealized Loss (Gain) on Securities (68,422) 0
Depreciation and Amortization 9,135 40,837
Changes in current accounts (70,606) 12,867
(Increase) Decrease in Notes Receivable 0 (15,000)
----------------- -----------------
Net Cash Required by Operating Activities (84,040) (192,426)
FINANCING ACTIVITIES
Loans 57,514 199,454
Repayment of Loans 0 0
----------------- -----------------
Net Cash Provided (Required) by Investing
Activities 57,514 199,454
Increase (Decrease) in Cash and Cash
Equivalents (26,526) 7,028
Cash and Cash Equivalents at Beginning
of Period 31,388 7,019
Cash and Cash Equivalents at End of
Period $ 4,862 $ 14,047
================= =================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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<PAGE>
MICRO-LITE TELEVISION
A NEVADA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1996 AND MARCH 31, 1995
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principals for complete
financial statements. In the opinion of the Company's management, all
adjustments (consisting of normal accruals) considered necessary for a fair
presentation of these financial statements have been included. The Company's
activities to date have been purely developmental and the Company has not yet
commenced significant commercial operations.
NOTE 2: CAPITALIZATION
The Company was incorporated in the State of Nevada on July 24, 1984 and
authorized 200,000,000 shares of $0.001 par value common stock. On March 16,
1994 the Company effected a 1 share for 30 share reverse stock split. The split
reduced the total outstanding shares from 32,272,000 to 1,075,807. On March 16,
1994 the Company issued 6,500,000 shares of post reverse-split stock to Marrco
Communications, Inc. in the conjunction with the purchase of all of Marrco's
assets and the assumption of all of Marrco's liabilities.
NOTE 3: RELATED PARTY TRANSACTIONS
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their business
interests. The Company has not formulated a policy for the resolution of such
conflicts.
At March 31, 1996 the Company owed $663,306 to related parties for loans and
sales to and payments made on behalf of the Company. This balance was equal to
$409,631 as of March 31, 1995 and was equal to $571,560 as of December 31, 1995.
NOTE 4: INCOME TAXES
The Company has available at March 31, 1996, net operating loss carryforwards of
approximately $2.7 million which may provide future tax benefits expiring in
June of 2008.
NOTE 5: INVESTMENT SECURITY
The investment consists of 909 shares of the common stock in CAI Wireless
Systems, Inc. ("CAI") as of December 31, 1995 and March 31, 1996.
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NOTE 6: STOCK OPTION PLAN AND WARRANTS
Since the purchase of Marrco Communications, Inc., the Company has set aside
2,500,000 shares of its common stock for an incentive stock option plan that was
previously in place and fullyvested with certain employees of Marrco
Communications that continued their service in working for the Company. The
exercise is $.88 per share. All of the options are fully vested. None of the
stock options have been exercised. The options expire December 28, 1998. At
March 31, 1996, there are outstanding 66,667 warrants to purchase 66,667 shares
of common stock at $4.50 per share. The warrants expire on July 16, 1997. There
are also 300,000 redeemable Class "B" common stock purchase warrants to purchase
common stock at a price of $2.00 per share and 25,000 redeemable Class "C"
common stock purchase warrants with a price of $4.00 per share. These warrants
expire March 31, 1999 and couldn't be exercised prior to June 16, 1994.
NOTE 7: CONTINGENT LIABILITIES
On April 7, 1994 the California Department of Corporations ("DOC") conducted a
search of the Company's facilities and seized some the Company's records.
The DOC alleges that the Company has violated code sections involving the
unlawful use of devices, schemes or artifices to defraud, the unlawful sale or
purchase of securities, the unlawful offering and selling securities for failure
of proper qualification or registration and offering an investment of any type
whatsoever over the telephone without first being registered with the California
Attorney General's Office.
On December 27, 1994, a Final Judgment of Permanent Injunction and Ancillary
Relief Pursuant to Stipulation was filed in California. The Company believes
that it has complied with all of the terms of the judgment and considers the
matter settled.
NOTE 8: SUBSEQUENT EVENTS
See "PART II - Item 5. Other Information".
7
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Company's loss for the three months ended March 31, 1996 was equal
to $231,130 compared to a loss of $91,647 for the three months ended March 31,
1995. The loss for the current quarter was attributable to the Company's
continuing General and Administrative Expenses of which salaries made up the
largest amount. Total salaries of $96,919 were paid or accrued for the three
months ended March 31, 1996. This equated to 41.8% of the total General and
Administrative expenses for the quarter which totaled $231,730. This is compared
to salaries of $88,333, or 57.3% of the amount of expenses for the three months
ended March 31, 1995. Losses are expected to continue throughout the development
stage of the Company. The Company reported miscellaneous income of $600 for the
three months ended March 31, 1996, compared to a postin of $63,275 in gross
income for the three months ended March 31, 1995. The income reported in the
first quarter of 1995 was as a result of two factors. Firstly, the Company had
booked a reserve to account for an unrealized loss on the CAI stock held as of
December 31, 1994. This publicly traded stock gained all of this loss back
during the three months ended March 31, 1995. As a result the Company recouped
this reserve in the amount of $68,422. The Company also recorded additional
sales of $3,000 on the sale of one of its licenses.
The Company has continued to operate with a working capital deficit
through the first quarter of 1996. As of March 31, 1996, the Company's current
liabilities of $1,838,076 exceeded its current assets of $30,787 by $1,807,289.
Of this negative working capital, $663,306 represents amounts owed to related
parties. The net working capital deficit, excluding payables to related parties,
is equal to $1,143,983. The Company believes that the majority of the current
liabilities can be settled by the issuance of its common stock or by the
assignment of the preferred stock in World Interactive Network, Inc. ("WIN-TV")
which the Company expects to have after the closing of its asset sale to WIN-TV.
(See "Part II - OTHER INFORMATION, Item 5. Other Information. WIN-TV Asset
Sale.")
The Company continues to explore routes of financing to begin its
development plans.
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<PAGE>
PART II - OTHER INFORMATION
ITEM 5. Other Information.
WIN-TV Asset Sale. As previously disclosed in the Form 10-Q dated
September 30, 1995 and the Form 10-K dated December 31, 1995, the Company has
entered into an Agreement to sell certain LPTV and MMDS channel rights to World
Interactive Television, Inc. ("WINTV"). An Agreement was executed between the
parties in August of 1995. The parties decided to change the Agreement between
them and executed a revised contract, which replaced the original agreement, on
February 9, 1996. The sale will include one LPTV station in each of the
following markets: Columbia, KY; Idaho Falls, ID; Marshalltown, IA; Davenport,
IA and Des Moines, IA. The sale will also include the Company's MMDS holdings in
Traverse City, MI, Augusta, ME and Wausau, WI. The agreement will close upon the
completion of WIN's pending merger with Struthers Industries, Inc. ("SIR"), a
publicly traded company on the American Stock Exchange. The Company will receive
274,000 shares of WIN-TV Cumulative Convertible Preferred Series "C" stock with
a liquidation value of $4,567,580. Currently, 249,000 shares of this stock are
being held in escrow in the name of the Company. The remaining 25,000 shares are
being held for distribution to fulfill a commission obligation payable by the
Company to an unrelated third party. Of the total gross proceeds of sale,
approximately $1,500,000 will be used to satisfy commissions on the sale and for
payments to third parties, including license holders and lessors of the channels
transferred to WIN-TV. The Company intends to assign a significant amount of the
WIN stock to certain creditors to satisfy some of its current liabilities.
Bowling Green Asset Sale. On April 9, 1996, the Company entered into a
Agreement with Wireless One, Inc. ("Wireless One") to sell and assign its rights
to certain channel leases in the Bowling Green, Kentucky market. Wireless One
was the successful bidder in the FCC MDS Auction completed in March of 1996 for
the available commercial wireless cable channels in the Bowling Green market,
paying in excess of $1.2M for these channels. This left the Company in a
competitive situation as a wireless cable operator with Wireless One in the
Bowling Green market. The Company accepted payment of $300,000 for the
assignment of its lease to the channels in Bowling Green. This payment was
received in full on April 19, 1996.
Beaumont Transaction. On April 17, 1996, the Company entered into an
agreement with Beaumont Broadcasting Corporation ("BBC") whereby the Company and
BBC agreed to form a Texas limited liability company, Micro-Lite Television of
Beaumont, LLC (the "LLC"), for purposes of owning and operating a wireless cable
system in the Beaumont, Texas market. The Company has paid $5,000 for a 1%
interest in the LLC and BBC has contributed the licenses and leases for 23
wireless cable channels in the market as well as a significant amount of assets,
including transmission equipment, for the remaining 99% of the LLC. BBC has
granted the Company an option to purchase 79% of the LLC for a purchase price of
$4M, and a second purchase option for the remaining 20% of the LLC for an
additional $1M. BBC and the Company are currently finalizing a management
contract by which the Company would be responsible for the launching and
management of the wireless cable system in Beaumont.
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<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Purchase and Assignment Agreement entered into by and
10.1
between Micro-Lite Television and World Interactive
Network, Inc. on February 9, 1996.
Agreement entered into effective April 17, 1996 by and
10.2
between Micro-Lite Television and Beaumont Broadcasting
Communication Partners.
(b) Reports on Form 8-K.
None.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: March 31, 1996
MICRO-LITE TELEVISION
s:/ Jon H. Marple
Jon H. Marple, President and Chairman
s:/ Mary E. Blake
Mary E. Blake, Vice President
and Chief Financial Officer
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<PAGE>
Exhibit 10.1
Purchase and Assignment Agreement entered into by an
between Micro-Lite Television and World Interactive
Network, Inc. on February 9, 1996
<PAGE>
PURCHASE AND ASSIGNMENT AGREEMENT
This Purchase and Assignment Agreement ("Agreement"), dated this 9th day of
February, 1996, is entered into by and between Micro-Lite Television, a Nevada
corporation having its principal place of business at 9 Exchange Place, Suite
210, Salt Lake City, Utah 84111 ("MLTV") and World Interactive Network, Inc., a
Delaware corporation having its principal place of business at 1875 Century Park
East, Suite 930, Los Angeles, California 90067 ("WIN").
I. Introduction
1.1 MLTV has entered into or assumed certain assignment, lease and
operating agreements with certain licensees of certain microwave frequencies
allocated to the Multichannel Multipoint Distribution Services ("MMDS") in the
"Service Areas" as more specifically identified in and attached to Exhibits A
and B hereto (the "MMDS Lease Agreements").
1.2 MLTV has entered into or assumed certain assignment, lease and
operating agreements with certain applicants and tentative selectees for certain
microwave frequencies allocated to MMDS in the "Service Areas" as more
specifically identified in and attached to Exhibit C hereto (the "Lease
Agreements with Applicants").
1.3 MLTV has entered into certain lease agreements with certain applicants
and pending applicants for certain microwave frequencies allocated to the
Instructional Television Fixed Services ("ITFS") in the "Services Areas" as more
specifically identified in and attached to Exhibit D hereto (hereinafter
referred to as the "ITFS Lease Agreements" and together with the "MMDS Lease
Agreements" and "Lease Agreements with Applicants" are sometimes hereinafter
referred to as "Lease Agreements").
1.4 MLTV has purchased the equipment identified in Exhibit E hereto
(hereinafter referred to as the "Equipment").
1.5 MLTV has secured other lease agreements for MMDS and/or ITFS channels
in other markets (the "Other Markets") and wishes to sublease to WIN certain of
these channels as more specifically identified in Exhibits F and G hereto (the
"Subleases" or "Subleased Channels").
1.6 WIN wishes to construct and operate systems which will provide
subscription television programming to customers in the Services Areas on such
MMDS frequencies (the "Systems").
1.7 WIN wishes to acquire the rights held by MLTV under the Lease
Agreements and to obtain ownership of the Equipment and MLTV wishes to assign
such rights and to transfer ownership of such assets to WIN for use in the
construction and operation of such Systems.
1.8 WIN wishes to enter in to the Subleases in order to expand its
potential viewing audience for any contemplated programming or other services
that it desires to air in the Other Markets on the Subleased Channels.
1
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1.9 In the consideration of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
II. Purchase and Sale of Assets
2.1 Assets to be Conveyed. Subject to the terms and conditions set forth in
this Agreement, MLTV agrees to sell and assign to WIN, and WIN agrees to
purchase and acquire from MLTV, the assets set forth below:
(a) The Lease Agreements identified in Exhibits B, C and D hereto,
copies of which documents are attached to Exhibits B, C and D.
(b) The Equipment identified in Exhibit E hereto.
(c) The Subleases as identified in Exhibit G hereto, copies of which
documents are attached to Exhibit G.
(d) The lease or other agreements with third parties relating to the
availability of a transmitter site and other real property which are identified
in Exhibit H hereto and copies of which are attached to Exhibit H.
(e) All records and other documents ( including but not limited to
manuals, warranties and invoices) which were provided to MLTV by third parties
in connection with MLTV's acquisition of the assets to be conveyed hereunder.
2.2 Consideration for Conveyance of Assets. In consideration of the sale
and assignment of the assets identified in Section 2.1 hereof, WIN will make the
following payments and shall assume the following obligations:
(a) Commencing as of the date of this Agreement and continuing until
the Closing, WIN shall pay to MLTV all sums which are to be paid after such date
by MLTV under each of the Lease Agreements, which sums will be non-refundable.
Each such payment will be paid to MLTV by WIN at least ten (10) days prior to
the date that such sums must be paid by MLTV pursuant to the Lease Agreements.
(b) WIN shall cause to be issued to MLTV, or its designees as listed in
Exhibit I attached hereto, Two Hundred Seventy-Four Thousand (274,000) shares of
its Cumulative Convertible Series "C" Preferred Stock with an aggregate
liquidation value of Four Million Five Hundred Sixty Seven Thousand Five Hundred
and Eighty Dollars ($4,567,580). (A liquidation value of $16.67 per share).
(c) In addition to the Stock Distribution contemplated in Section
2.2(b), WIN will, at closing:
(1) Assume the rights and obligations of MLTV under the
Lease Agreements;
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(2) Assume ownership of the Equipment; and
(3) Assume the rights under the Subleases.
III. Representations and Warranties.
3.1 Representations and Warranties of MLTV. MLTV hereby makes the following
representations and warranties to WIN as of the date of this Agreement, which
representations and warranties shall continue in full force and effect from the
date hereof through the Closing Date, as such Closing Date may be determined.
(a) MLTV is a Nevada corporation which is duly organized, validly
existing and in good standing under the laws of the State of Nevada. MLTV has
all requisite power and authority and the legal right to own its properties and
to conduct business as currently conducted, and to execute, deliver and perform
this Agreement. MLTV's execution, delivery, and performance of this Agreement
has been duly and validly authorized by all necessary action on the part of MLTV
and constitutes the legal, valid and binding obligation of MLTV enforceable in
accordance with its terms against MLTV except as may be limited by laws
affecting principles generally; provided, however, that the assignment of
certain of the Lease Agreements requires the consent of the holder of the
License subject to said Lease Agreements (the "Assignments"). Such Assignments
are listed hereto as Exhibit J and are attached to Exhibit J.
(b) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby by MLTV do not and will not violate any
provisions of, conflict with, result in a breach of, constitute default under,
or result in the creation or imposition of any lien or condition under, (i) any
organizational document, including but not limited to any articles of
incorporation, by-laws or shareholders' agreement; (ii) any federal, state or
local law, statute, ordinance, regulation or rule; (iii) any contract,
indenture, instrument, agreement, mortgage, lease, right or other obligation or
restriction to which MLTV is a party or by which MLTV is or may be bound; or
(iv) any order, judgment, writ, injunction, decree, license, franchise, permit
or other authorization of any federal, state or local court, arbitration
tribunal or governmental agency by which MLTV is or may be bound. The execution
and delivery of this Agreement by MLTV and the performance by MLTV of the
transactions contemplated herein will not constitute an act of bankruptcy,
preference, insolvency or fraudulent conveyance under any bankruptcy act of
other law for the protection of debtors or creditors.
(c) The licenses issued by the FCC as listed on Exhibit K hereto and
which are the subjects of the Lease Agreements identified in Exhibit B hereto
are, and on the Closing Date will be, in unconditional full force and effect,
are valid for the balance of their current terms, and are unimpaired by any acts
or omissions of MLTV or the licensees of such licenses. There are no existing,
or to the knowledge of MLTV threatened, investigations, inquiries or proceedings
by or before the FCC which could result in the revocation, cancellation,
suspension, forfeiture or material adverse modification of any such license or
permit.
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(d) The applicants for MMDS frequencies designated as Tentative
Selectees for such frequencies are listed on Exhibit C hereto and these
applications are the subjects of the Lease Agreements identified in Exhibit B
hereto are, and on the Closing Date will be, in unconditional full force and
effect, are valid for the balance of their current terms, and are unimpaired by
any acts or omissions of MLTV or the applicants of such applications. There are
no existing, or to the knowledge of MLTV threatened, investigations, inquiries
or proceedings by or before the FCC which could result in the revocation,
cancellation, suspension, forfeiture or material adverse modification of any
such license or permit.
(e) The ITFS applications and pending ITFS applications as listed in
Exhibit D hereto and which are the subjects of the Lease Agreements identified
in Exhibit D hereto are, and on the Closing Date will be, in unconditional full
force and effect, are valid for the balance of their current terms, and are
unimpaired by any acts or omissions of MLTV or the applicants of such pending
applications. There are no existing, or to the knowledge of MLTV threatened,
investigations, inquiries or proceedings by or before the FCC which could result
in the revocation, cancellation, suspension, forfeiture or material adverse
modification of any such license or permit.
(f) Each of the Lease Agreements identified in Exhibits B, C and D are,
and on the Closing Date will be, in unconditional full force and effect and are
unimpaired by any act or omission of MLTV. No party to any such Lease Agreement
is in breach thereof and, to the knowledge of MLTV, no claim of breach or threat
of legal action relating to a claim of breach has been made by any person.
(g) All Lease Agreements identified in Exhibits B, C and D hereto may
be assigned to WIN pursuant to the terms thereof, and all necessary consents to
such assignment by the parties thereto have been, or by the Closing Date will
be, obtained in writing by MLTV and conveyed to WIN, in form and substance
reasonably satisfactory to WIN.
(h) MLTV has good, valid, marketable, legal and beneficial title to all
of the Equipment identified in Exhibit E hereto, free and clear of any security
interest, mortgage, pledge, lien, conditional sales agreement or other claim,
encumbrance or charge of any nature whatsoever.
(i) The lease and other agreements with third parties identified in
Exhibit H hereto are, and on the Closing Date will be unconditional full force
and effect and are unimpaired by any act or omission of MLTV. No party to any
such lease or other agreement is in breach thereof and, to the knowledge of
MLTV, no claim of breach or threat of legal action relating to a claim of breach
has been made by any person.
3.2 Representations and Warranties of WIN. WIN hereby makes the following
representations and warranties to MLTV as of the date of this Agreement, which
representations and warranties shall continue in full force and effect from the
date hereof through the Closing Date, as such Closing Date may be determined.
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(a) WIN is a corporation duly organized, validly existing and in good
standing under the law of the State of Delaware. WIN has all requisite power and
authority and the legal right to own properties, to conduct business and to
execute, deliver and perform this Agreement. WIN execution, delivery, and
performance of this Agreement has been duly and validly authorized by all
necessary action on the part of WIN and its Board of Directors. This Agreement
has been duly executed and delivered by WIN and constitutes and constitutes the
valid and binding obligation of WIN enforceable in accordance with its terms
against WIN except as may be limited by laws affecting the enforcement of
creditor's rights or equitable principles generally.
(b) The execution, delivery, or performance of this Agreement by WIN
and the transaction contemplated hereby will not violate any provision of,
conflict with, result in a breach of, constitute a default under, (i) WIN's
organizational documents; (ii) any federal, state or local law, statute,
ordinance, regulation or rule; (iii) any contract, indenture, instrument,
agreement, mortgage, lease, right or other obligation or restriction to which
WIN is a party or by which WIN is bound; or (iv) any order, judgment, writ,
injunction, decree, licenses, franchise, permit or other authorization of any
federal, state or local court , arbitration tribunal or governmental agency by
which WIN is or may be bound.
(c) WIN is aware of no reason any party to the Lease Agreements
identified in Exhibits B, C and D would not accept WIN as assignee thereof.
(d) There is no claim, legal action, counterclaim, suit, arbitration,
or other legal administrative, or tax proceeding not any order, decree, or
judgment, in progress or pending, or to the knowledge of WIN threatened against
or relating to WIN that, if adversely decided, would adversely affect WIN's
ability to consummate this transaction, nor does WIN know or have reason to be
aware of any basis for the same. There are no legal, administrative, or tax
proceedings pursuant to which WIN is or could be made liable for any taxes,
penalties, interest, or other charges the liability for which could extend MLTV
as assignor of the Lease Agreements and Other Assets.
(e) WIN's consummation of the transaction contemplated herein will not
violate any rule or policy of the FCC.
(f) WIN is currently finalizing the sale of all of its assets to
Struthers Industries, Inc., a Delaware corporation listed on the American Stock
Exchange under the symbol "SIR". Should WIN not consummate the sale of its
assets to Struthers by June 30, 1996, MLTV shall have the right, but not the
obligation, to nullify this Agreement.
3.3 Disclosure to Parties. If any party should become aware, prior to
Closing, that any of its representations, warranties or covenants is inaccurate
or incapable of being performed, such party shall promptly give written notice
of such inaccuracy or incapability to the other parties; provided, however, that
nothing contained in this Section 2.3 shall relieve the party bound by such
representation, warranty or covenant from complying with such representation,
warranty or covenant.
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IV. Covenants.
4.1 Covenants of MLTV. MLTV covenants and agrees that between the date
hereof and the Closing Date, MLTV will act in such a manner that the
representations and warranties set forth in Section 3.1 will continue to be
true. MLTV will not take any action which is inconsistent with its obligations
under this Agreement or which could materially hinder or delay the consummation
of the transactions contemplated by this Agreement.
4.2 Covenants of WIN. WIN covenants and agrees that between the date hereof
and the Closing Date, WIN will act in such a manner that the representations and
warranties set forth in Section 3.2 will continue to be true. WIN will not take
any action which is inconsistent with its obligations under this Agreement or
which could materially hinder or delay the consummation of the transactions
contemplated by this Agreement.
V. Conditions Precedent.
5.1 Conditions Precedent to Obligations of WIN. This Agreement and the
obligations of WIN to perform hereunder shall be subject to the following
conditions at Closing.
(a) All representations and warranties of MLTV contained in this
Agreement shall be true and correct as of the date hereof and until and through
the closing Date.
(b) MLTV shall have obtained and delivered to WIN all necessary
consents and approvals of third parties to permit WIN to assume the Lease
Agreements.
(c) MLTV shall have delivered to WIN each of the documents specified in
Section 6.1 hereof and to the Representative each of the documents specified in
Section 6.1 (a) (4) hereof.
(d) This Agreement shall have been approved by the affirmative vote or
consent of shareholders or Board of Directors of MLTV as required by and
pursuant to the terms of the MLTV Corporate Charter.
5.2 Conditions Precedent to Obligations of MLTV. This Agreement and the
obligations of MLTV to perform hereunder shall be subject to the following
conditions at Closing:
(a) WIN shall have delivered to MLTV certified copies of the
resolution(s) of the Board of Directors of WIN authorizing the execution,
delivery and performance of this Agreement by WIN.
(b) All representations and warranties of WIN contained in this
Agreement shall be true and correct as of the date hereof, and until and through
the Closing Date.
(c) WIN shall have delivered to MLTV each of the items specified in
Section 6.2 hereof.
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(d) This Agreement shall have been approved by the affirmative vote or
consent of shareholders or Board of Directors of WIN as required by and pursuant
to the terms of the WIN Corporate Charter.
VI. Deliveries.
6.1 Deliveries by MLTV. MLTV shall deliver to WIN each of the following
items at or prior to Closing.
(a) At or prior to the Closing of the transactions contemplated by
Section 1.2 (e) hereof:
(1) One or more bills of sale and/or other assignment and transfer
documents conveying to WIN all of the Lease Agreements and Equipment to be
acquired hereunder, free and clear of any and all encumbrances and liens of any
nature.
(2) Written consents to the assignment of the Lease Agreements.
(3) The documents described in Section 2.1(d) hereof;
6.2 Deliveries by WIN. WIN shall deliver to MLTV each of the following
items at or prior to Closing.
(a) At or prior to the closing of the transaction contemplated by
Section 2.2(b) hereof:
(1) The sums and securities specified at Section 2 of this
Agreement.
(2) The certified resolutions described in Section 5.2(a) hereof.
(3) A certification by a duly authorized officer of WIN evidencing
that WIN has accepted the assignment of the Lease Agreement and has assumed all
rights and obligations stated therein.
(4) A certification by a duly authorized officer of WIN attesting
to the truthfulness as of the Closing Date of all representations and warranties
made in this Agreement.
(5) A form of certification evidencing that WIN has accepted the
assignment of the Lease Agreements and has assumed all rights and obligations
stated therein, to be executed at the time that the Lease Agreements and other
assets are assigned and transferred to WIN by MLTV.
VII. Remedies.
7.1 Termination Due to Breach. In the event that MLTV fails to comply
with any material term or obligation or breaches any representation or warranty
contained in this
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Agreement in any material respect and does not cure such failure within ten (10)
days of receiving written notice from WIN, then WIN may at its option, by
written notice to MLTV and in lieu of other remedies which may be available at
law or equity, terminate this Agreement without further obligation or liability
of WIN to MLTV; provided, however, that WIN is not in material breach of this
Agreement at the time of such notice, In the event that WIN fails to comply with
any material term or obligation or breaches any representation or warranty
contained in this Agreement in any material respect and does not cure such
failure within ten (10) days of receiving written notice thereof, then MLTV may
by written notice to WIN and in lieu of other remedies which may be available at
law or equity, terminate this Agreement without further obligation or liability
to WIN; provided, however, that MLTV is not in material breach of this agreement
at the time of such notice.
7.2 Specific Performance. The parties agree that the Lease Agreements are a
unique property and that there is no adequate remedy at law for damage which WIN
might sustain upon a failure by MLTV to consummate this Agreement in accordance
with its terms, and accordingly, WIN is entitled to the remedy of specific
performance to enforce such consummation upon and subject to the terms and
conditions provided in this Agreement.
VIII. General Provisions.
8.1 Expenses. Each party to this Agreement shall pay its own expenses
(including without limitation the fees and expenses of its agents,
representatives, counsel , and accountants) incidental to the negotiation,
drafting, and performance of this Agreement; provided, however, that in the
event any party shall bring an action in connection with the performance, breach
or necessary interpretation of this Agreement, the prevailing party in any such
action shall be entitled to recover from the losing party all reasonable costs
and expenses of such action, including attorney's fees.
8.2 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective heirs, representatives,
successors and permitted assigns, but shall not be assignable or delegable in
whole or in part by any party without the prior written consent of the other
parties, such consent not to be unreasonably withheld.
8.3 Amendments, Supplements, Etc. This Agreement may be amended or modified
only by a written instrument executed by each party which states specifically
that it is intended to amend or modify this Agreement. If, at any time, the FCC
or any other applicable federal, state, or local governmental authority, or any
court or tribunal having jurisdiction determines that any provision of this
Agreement is void, invalid or unenforceable, then the terms of this Agreement
will, if possible, be modified, and this Agreement will be reformulated to the
extent necessary to be deemed valid or enforceable or to obtain the
authorizations necessary to effect the transaction contemplated by this
Agreement in compliance with all FCC or other rules, regulations, order, and
policies, and to preserve each part's benefits and equities hereunder.
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8.4 Waiver. No provision of this Agreement shall be deemed waived by course
of conduct unless such waiver is made in a writing signed by the parties stating
that it is intended specifically to modify this Agreement, not shall any course
of conduct operate or be construed as a waiver of any subsequent breach of this
Agreement, whether of a similar or dissimilar nature.
8.5 Entire Agreement. This Agreement (together with the Exhibits and
Exhibits hereto) supersedes any other agreement, whether written or oral, that
may have been made or entered into by the parties (or by any director, officer,
agent, or other representative of such parties) relating to the matters
contemplated hereby. This Agreement (together with the Exhibits and Exhibits
hereto) constitutes the entire agreement by and among the parties and there are
no agreements or commitments except as expressively set forth herein.
8.6 Further Assurances. Each of the parties hereto agrees to execute all
documents and instruments and to take or to cause to be taken all actions which
are necessary or appropriate to complete the transaction contemplated by this
Agreement.
8.7 Notices. All notices, demands, requests, and other communications
hereunder shall be in writing and shall be deemed to have been duly given and
shall be effective upon receipt if delivered by hand, or sent by certified or
registered United States mail, postage prepaid and return receipt requested, or
by prepaid and return receipt requested, or by prepared overnight express
service. Notices shall be sent to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice, provided
that such notice shall be effective only upon receipt thereof):
If to MLTV:
Jon H. Marple, President
Micro-Lite Television
9 Exchange place, Suite 210
Salt Lake City, UT 84111
With a copy to (which shall not constitute notice hereunder):
Jeffrey R. Matsen
Jeffrey R. Matsen & Associates
3 Imperial Promenade, Suite 445
Santa Ana, CA 92707
If to WIN:
Sean P. O'Keefe
World Interactive Network, Inc.
1875 Century Park East, Suite 930
Los Angeles, California 90067
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With a copies to (which shall not constitute notice hereunder):
Saad I. Khayat/David Meyers
World Interactive Network, Inc.
1875 Century Park East, Suite 930
Los Angeles, California 90067
Grier Newlin
Schnader Harrison Segal & Lewis
303 Peachtree Street, Suite 2800
Atlanta, Georgia 30308
8.8 Application of Law. This Agreement and the legal relations between the
parties hereto shall be governed by an construed in accordance with the
substantive laws of the State of California without giving effect to the
principles of conflict of laws thereof.
8.9 Titles and Headings. Titles and Headings to sections hereof are
inserted for conveniences of reference only, and are not intended to be a part
of, or to affect the meaning or interpretation of this Agreement.
8.10 Counterparts; Effective Date. This Agreement maybe executed in any
number of counterparts, each of which will be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement will
become effective on the date that the last signed counterpart is executed.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date written below.
Micro-Lite Television World Interactive Network, Inc.
By: s:/ Jon H. Marple By: s:/ Sean P. O'Keef
Jon H. Marple, President Sean P. O'Keefe, President
Dated: 2/9/96 Dated: 2/9/96
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Exhibit 10.2
Agreement entereed into effective April 17, 1996 by
and between Micro-Lite Television and Beaumont
Broadcasting Communication Partners
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AGREEMENT
THIS AGREEMENT is entered into effective the 17th day of April, 1996, by and
between Micro-Lite Television, a Nevada corporation ("MLTV") and Beaumont
Broadcast Communication Partners, a California joint venture ("BBC"), comprised
of Golden Triangle Wireless Television Partners, a California general
partnership ("Golden Triangle") and Texas Communications, Inc., a California
corporation ("TexCom").
Introduction
MLTV is in the business of acquiring, developing, operating and marketing
wireless cable television facilities. BBC owns and possesses several wireless
cable leases, licenses and transmitting and receiving equipment in the
metropolitan area of Beaumont, Port Arthur and Orange, Texas.
MLTV and BBC are desirous of forming a new Texas limited liability company (the
"LLC") for the purpose of developing, operating and marketing the wireless cable
channels and equipment that BBC has acquired and possesses.
MLTV and BBC are executing this Agreement in order to provide for their
respective rights and responsibilities, including, but not limited to, the
management and operation of the LLC.
It is therefore agreed as follows:
ARTICLE I
Formation of Limited Liability Company
1.01 Organization. The parties hereto shall cause the LLC to be formed
by filing the appropriate Articles of Organization with the Texas
Secretary of State's Office immediately upon the execution of this
Agreement. The Articles of Organization shall be in the form of Exhibit
"A" attached hereto and incorporated herein by reference.
1.02 Name. The name of the LLC shall be Micro-Lite Television of
Beaumont, a Limited Liability Company.
1.03 Registered Agent. The registered agent for the LLC shall
initially be Rick Canady, whose address is 5675 Eastex Freeway, Suite
2A, Beaumont, Texas, 77706.
Thereafter, the agent shall be appointed by the Manager of the LLC.
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1.04 Principal Place of Business. The LLC's principal place of
business shall be located at 5675 Eastex Freeway, Suite 2A, Beaumont,
Texas, 77706.
1.05 Legal Counsel. The legal counsel for the LLC shall be Jeffrey R.
Matsen of Santa Ana, California.
1.06 Authorized Number of Shares. The total number of the Member Shares
the LLC shall be authorized to issue shall be five million (5,000,000)
shares. Each Member of the LLC shall be entitled to one (1) vote per
share and shall have a share of the principal and income and profits
and losses of the LLC based on the ratio of the number of shares each
Member owns individually in proportion to the total number of shares
that are issued and outstanding.
1.07 Operating Agreement. The LLC will be governed and operated by an
Operating Agreement in the form of Exhibit "B" attached hereto and
incorporated herein by eference.
ARTICLE II
Contribution to Capital and Issuance of Shares
2.01 Issuance of Shares. Upon the formation of the LLC, the organizer
shall cause the LLC to issue the following shares to the following
Members in exchange for the following consideration:
Entity Number Consideration
of Shares
- - ------------- ---------------- -----------------------------------------------
MLTV 5,000 $5,000 in cash.
- - ------------- ---------------- ------------------------------------------------
BBC 4,995,000 Its interest in the leases, licenses
and transmitting and receiving equipment set
forth and delineated on Schedule "A" attached
hereto and incorporated herein
by reference.
- - ------------- ---------------- ------------------------------------------------
2.02 Preemptive Rights. The Members shall be entitled to full
preemptive or preferential rights to subscribe for or purchase their
proportional part of any Member Shares that may be issued at any time
by the LLC.
2.03 Cumulative Voting. The Members shall be entitled to exercise
cumulative voting rights with respect to their Member Shares.
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2.04 Assignment of Interest. No Member shall sell, assign, transfer,
mortgage, hypothecate or encumber his Member Shares without the consent
of the majority of the other Members (on a prorata share basis).
Notwithstanding the foregoing, it is agreed that any Member Share
ultimately held by TexCom can be transferred on a one-time basis only
without such consent to no more than 10 different entities or
individuals.
2.05 Non-Voting Shares. Notwithstanding anything herein to the
contrary, if at any time the Shares of the LLC are distributed to a
non-voting joint venturer of BBC, then such Shares of the LLC shall be
converted to non-voting Shares with no more rights than the non-voting
joint venturer has in BBC.
ARTICLE III
Management
3.01 Management Committee. The management, control and supervision of
the LLC shall be vested in a Management Committee which shall be
comprised of from one to five members. The initial Management Committee
members shall be Rick Canady, Victor Fore, Robert Green, Mike Rich and
Ron Derouen and Rick Canady shall serve as the Management Committee
Chairman. A majority decision of the Management Committee members shall
be binding and conclusive on the other Management Committee members and
on the Members of the LLC.
3.02 Approval of Members. The following actions will require the
written approval and consent of the majority of the LLC Member Shares:
(a) Mergers or consolidations involving the LLC;
(b) Amendment or repeal of the Articles of Organization;
(c) Issuance of Member Shares or other rights relating to
Membership in the LLC;
(d) The sale, assignment, transfer, hypothecation or
encumbrance of a Member's Share;
(e) Transfer of all or substantially all of the assets of
the LLC; or
(f) Amendment of this Agreement.
///
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ARTICLE IV
Financial
4.01 Loans to LLC. If necessary to fund the operations of the LLC, any
Member with the written consent of the Management Committee, may loan
funds to the LLC reasonably necessary to pay the LLC expenses. Any such
loan by a Member to the LLC shall be separately entered in the books of
the LLC as a loan to the LLC and shall bear interest at one point over
the prevailing fair market prime rate, adjusted semi-annually, not to
exceed the maximum legal rate. Principal and interest of such loan
shall be payable to the lending Member prior to any distribution of
profits to the Members.
4.02 Fiscal Year. For purposes of this Agreement, the "Fiscal Year"
shall mean the one (1) year period from January 1st of any given year
to December 31st of such year.
4.03 Books of Account. Complete and accurate accounts of all
transactions of the LLC shall be kept by LLC in proper books in
accordance with generally accepted accounting principles.
4.04 Inspection of Books. The books of account and other records of the
LLC shall be kept at the headquarters of the LLC and each of the
Members shall, during normal business hours, have access to, and may
inspect and copy, any of them at such Member's sole expense.
4.05 Accountings. As soon after the close of each fiscal year as is
reasonably practicable, a full and accurate inventory and accounting of
the affairs of the LLC as of the close of such fiscal year shall be
made by an independent CPA selected by the Management Committee.
4.06 Bank Accounts. All funds of the LLC shall be deposited in accounts
in the name of the LLC at such banks, savings and loans, money market
accounts, and other financial institutions as may from time to time be
selected by the Management Committee Members. All withdrawals from any
such account or accounts shall be made by check or other written
instrument signed by at least two (2) Management Committee Members.
4.07 Allocation of Profits and Losses. The net profits and losses from
the operations of the LLC shall be allocated among the Members pursuant
to their share ownership in the LLC. All available cash of the LLC
shall be distributed at periodic intervals not less frequently than
annually. "Available Cash" shall be defined as the cash on hand from
the LLC at any particular time after payment of the expenses of the LLC
and
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taking into account the LLC's debt and contractual obligations less
such adequate reserves as the Management Committee deems reasonably
necessary for the proper operation of the LLC's business.
ARTICLE V
Additional Covenants of BBC
5.01 Bid for Additional Channels. BBC has won the bid in the FCC MDS
Auction Spectrum for an additional five (5) Beaumont wireless cable
television channels. BBC will make the initial down payment and the
first installment with respect to such bid and will cause the licenses
and/or leases with respect to such channels to be conveyed, transferred
and assigned to the LLC. The LLC will thereafter make all subsequent
payments.
5.02 Purchase of Additional Equipment. In addition to the contribution
to capital set forth in Article II, BBC will contribute the sum of Two
Hundred Thousand Dollars ($200,000) to the capital of the LLC for
purposes of providing the wherewithal for the LLC to purchase specific
receiving equipment.
ARTICLE VI
Grant of Option to MLTV
6.01 Grant of Option. BBC hereby grants to MLTV an option (the
"Original Option") to purchase an aggregate of three million nine
hundred ninety-five thousand (3,995,000) shares of BBC's Member Shares
on the terms and conditions herein set forth.
6.02 Purchase Price. The purchase price of the Shares covered by the
Original Option shall be $4 Million in the aggregate or $0.99875 per
share.
6.03 Term of Original Option. The term of the Original Option shall be
eighteen (18) months from the date hereof. The purchase price of the
Shares as to which the Original Option shall be exercised shall be paid
by MLTV in cash. MLTV shall not have any of the rights of a Member with
respect to the Shares covered by the Original Option until one (1) or
more certificates for such Shares shall have been delivered to it, upon
the due exercise of the Original Option.
6.04 Nontransferability. The Original Option shall not be transferable
and may be exercised only by MLTV. More particularly (but without
limiting the generality of the foregoing) the Original Option may not
be assigned, transferred, pledged or hypothecated in any way, shall not
be assignable by operation of law, and shall not
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be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge or hypothecation or other disposition of
the Original Option contrary to the provisions hereof, and the levy of
any execution, attachment or similar process upon the Original Option
shall be null and void and without effect.
6.05 Changes in Capital Structure. In the event of a reorganization,
recapitalization, share split, combination of shares, merger,
consolidations, rights, offering or any other changes in the structure
of shares of the LLC, the number and kinds of shares subject to the
Original Option and the Original Option price thereof shall be
proportionately adjusted.
6.06 Method of Exercising Option. Subject to the terms and conditions
of the Original Option, the Original Option may be exercised by written
notice to BBC at its principal place of business. Such notice shall
state the election to exercise the Original Option and the number of
Shares in respect of which it is being exercised and shall be signed by
an authorized agent of MLTV.
6.07 The Additional Option. Upon the exercise of the Original Option,
MLTV will have an additional option (the "Additional Option") to
purchase the remaining one million (1,000,000) member shares of BBC in
the LLC for a total purchase price of $1 Million (the "Additional
Option"). The term of the Additional Option shall be for a period of
one (1) year from the date of the exercise of the Original Option and
shall be exercisable in the same manner as the Original Option.
6.08 The BBC Option. Upon the exercise of the Original Option, BBC
shall then have an option exercisable at any time after the expiration
of one (1) year from MLTV's exercise of the Original Option to obligate
MLTV to purchase its remaining one million (1,000,000) shares in the
LLC for a price of $1 Million.
6.09 MLTV Directors. Upon the exercise of the Original Option by MLTV,
BBC shall have the right to elect one of the directors of MLTV and such
elected director shall be entitled to directors' fees and expenses in
an amount equal to those received by the other MLTV directors. Such
director shall also be entitled to receive up to Seventeen Hundred
Fifty Dollars ($1,750) per year for microwave convention expenses.
6.10 Negative Covenants of MLTV. MLTV expressly agrees and represents
that, upon the exercise of the Original Option and/or the Additional
Option, it will not cause either the assets of the LLC or its own LLC
membership interest to be sold for a period of at least twelve (12)
months from the exercise of the Original Option. Notwithstanding the
foregoing, however, MLTV shall have the right to sell its own publicly
registered stock in a public offering and to take such other related
action with respect to the LLC and the assets being conveyed thereto,
as may be reasonably necessary to cause a public offering or merger of
MLTV to occur.
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ARTICLE VII
Administrative Matters
7.01 Management Agreement. Upon the formation of the LLC, MLTV and the
LLC will enter into a management agreement with respect to the
management and development of the microwave television assets being
conveyed by BBC to the LLC. In this regard, it is the intention of MLTV
to do all things necessary and expedient with respect to the
construction, building, developing, operating and management of the
MLTV Beaumont wireless cable system. This will include, inter alia:
hiring personnel, purchasing and operating equipment, obtaining
subscribers, marketing, engineering analysis and related matters. MLTV
intends to provide the funds necessary to carry on these activities and
will work with BBC to complete the MDS Audio Spectrum acquisition and
to obtain additional channels.
7.02 Consulting Agreement. Upon the formation of the LLC, BBC will
enter into a consulting agreement with the LLC wherein the BBC
Management Group of five managing partners will be reimbursed on a
monthly consulting fee basis in the amount of $1,000 per month for each
Member, except for the chairman who shall be reimbursed in the amount
of $1200 per month. In addition, the chairman of the Management Group
will be entitled to receive expenses in an amount not to exceed $1,750
per year per BBC Managing Partner for attendance at a wireless cable
convention or conventions. This Consulting Agreement shall continue to
exist for a period of three (3) years.
7.03 Proxy Statement. In order to obtain the proper approvals with
respect to the terms of this Agreement and the transfer to the LLC of
the assets of BBC, and the granting of the above-mentioned options to
MLTV, it will be necessary for Golden Triangle to send out a proxy
statement and related documentation to its partners. This proxy
statement shall also contain information and request the approval for a
settlement agreement between Golden Triangle and TexCom which includes
amending the original BBC Joint Venture Agreement.
ARTICLE VIII
Miscellaneous
8.01 Term of Agreement. This Agreement shall remain in effect for a
period of twenty-four (24) months unless both MLTV and BBC agree
otherwise in writing or unless, after a period of twelve (12) months,
MLTV has not exercised the Original Option delineated in Article VI,
above, and BBC elects in writing to terminate this Agreement.
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8.02 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be deemed to have been given only if
mailed, certified return receipt requested, or if sent by Federal
Express or other well recognized private courier ("Courier") or if
personally delivered to, or if sent by fax with the original thereof
sent by Courier to:
If to MLTV: MICRO-LITE TELEVISION
9 EXCHANGE PLACE STE 210
SALT LAKE CITY UT 84111
Fax (801) 595-0104
With a copy to: JEFFREY R. MATSEN & ASSOCIATES
3 IMPERIAL PROMENADE STE 445
SANTA ANA CA 92707-5908
Fax (714) 433-7815
If to BBC: BEAUMONT BROADCAST COMPANY
5675 EASTEX FWY STE 2A
BEAUMONT TX 77706
Fax (409) 892-5980
All notices, requests and other communications shall be deemed received
on the date of acknowledgment or other evidence of actual receipt in
the case of certified mail, Courier delivery or personal delivery or,
in the case of fax delivery, upon the date of fax receipt provided that
the original is delivered within two (2) business days. Any party
hereto may designate different or additional parties for the receipt of
notice, pursuant to notice given in accordance with the foregoing.
8.03 Consents and Agreements. Any and all consents and agreements
provided for or permitted by this Agreement shall be in writing and a
signed copy thereof shall be filed and kept with the books of the LLC.
8.04 Attorneys' Fees. Should any litigation be commenced between the
parties hereto or their personal representatives concerning any
provision of this Agreement or the rights and duties of any person in
relation thereto, the party or parties prevailing in such litigation
shall be entitled, in addition to such other relief as may be granted,
to a reasonable sum as and for their or his attorneys fees in such
litigation which shall be determined by the court in such litigation or
in a separate action brought for that purpose.
8.05 Miscellaneous. This instrument contains the sole and only
agreement of the parties hereto relating to the matters contained
herein and correctly sets forth the rights, duties, and obligations of
each to the others as of its date. Any prior agreements,
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promises, negotiations, or representations not expressly set forth in
this Agreement are of no force and effect. Should any term, provision
or paragraph of this Agreement be determined to be illegal or void or
of no force and effect, the balance of the Agreement shall survive.
Time is expressly declared to be of the essence of this Agreement. The
waiver of any breach of this Agreement by either party shall not
constitute a continual waiver or a waiver of any subsequent breach,
either of the same or of another provision of this Agreement. This
Agreement shall be binding upon and inure to the benefit of the
parties' heirs, assigns, successors in interest and legal
representatives. This Agreement shall be interpreted according to the
laws of the State of Texas.
8.06 Legend. Each certificate representing shares of the LLC shall
bear the following legend:
The shares represented by this certificate are subject to
transfer and other restrictions by an Agreement dated April
17, 1996.
8.07 Conflict of Interest. The parties each acknowledge that counsel
for MLTV, Jeffrey R. Matsen ("Matsen"), drafted this Agreement
representing MLTV and the LLC. BBC, Golden Triangle and TexCom
acknowledge that they have been advised by Matsen that their interests
in this Agreement may conflict with those of MLTV and acknowledge that
they have received a full disclosure from Matsen of the facts causing
this conflict of interest. BBC, Golden Triangle and TexCom acknowledge
that they have been advised by Matsen to seek independent counsel
regarding this Agreement and its tax consequences. All parties are
aware that if a dispute between the parties concerning this Agreement
arises in the future, Matsen may be required to withdraw from
representing one or all of the parties. The parties hereby jointly and
severally consent to the ongoing representation by Matsen of MLTV and
the LLC under these circumstances.
///
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8.08 Venue. This Agreement is executed and entered into in Jefferson
County, Texas and Jefferson County shall be the proper venue for any
litigation concerning this Agreement.
IN WITNESS WHEREOF, we have executed this Agreement on the day and year first
above written.
MLTV: BBC:
MICRO-LITE TELEVISION, BEAUMONT BROADCAST
a Nevada corporation COMMUNICATION PARTNERS,
a California joint venture
By: s:/ Jon H. Marple By: GOLDEN TRIANGLE WIRELESS
JON H. MARPLE, TELEVISION PARTNERS,
President a California general partnership
By: THE PARTNERSHIP
MANAGEMENT COMMITTEE
By: s:/ Rick Canady
Rick Canady
s:/ Victor Fore
Victor Fore
s:/ Robert Green
Robert Green
s:/ Mike Rich
Mike Rich
s:/ Ron Derouen
Ron Derouen
By: TEXAS COMMUNICATIONS, INC.,
a California corporation
By: s:/ James Coburn
JAMES COBURN, President
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Micro-
Lite Television March 31, 1996 financial statements and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 000793986
<NAME> MICRO-LITE TELEVISION
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 14,047
<SECURITIES> 906
<RECEIVABLES> 15,834
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,787
<PP&E> 355,494
<DEPRECIATION> (112,424)
<TOTAL-ASSETS> 1,622,933
<CURRENT-LIABILITIES> 1,838,076
<BONDS> 0
0
0
<COMMON> 5,955
<OTHER-SE> (229,395)
<TOTAL-LIABILITY-AND-EQUITY> 1,622,933
<SALES> 0
<TOTAL-REVENUES> 600
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 231,350
<LOSS-PROVISION> 230,750
<INTEREST-EXPENSE> 380
<INCOME-PRETAX> (231,130)
<INCOME-TAX> 0
<INCOME-CONTINUING> (231,130)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (231,130)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
