EXHIBIT 10.1
PAXSON CONSULTING
AND NONCOMPETITION AGREEMENT
This PAXSON CONSULTING AND
NONCOMPETITION AGREEMENT, (this “Agreement”) is made as
of this 7 th day of November, 2005, by and among Paxson
Communications Corporation (“PCC”), NBC Universal,
Inc., a Delaware corporation (“NBCU”), and Lowell W.
Paxson, (the “Consultant”) (collectively, the
“Parties” each individually a “Party”).
WHEREAS, the Parties (together with
certain other parties) have, as of the date hereof, entered into a
Master Transaction Agreement (the “Master Transaction
Agreement”) which contemplates execution and delivery by
various parties of certain documentation specified therein (such
Master Transaction Agreement, including all documents and
instruments to be delivered thereunder, collectively the
“Definitive Documentation”);
WHEREAS, pursuant to the Call
Agreement (as defined in the Master Transaction Agreement),
Consultant and certain of his affiliated entities are providing
NBCU with a new right to purchase the Consultant’s and
certain affiliated entities’ interests in PCC (the “New
Call Right”);
WHEREAS, pursuant to a Company Stock
Purchase Agreement (the “PCC Purchase Agreement”), PCC
has agreed to purchase Consultant’s and certain affiliated
entities’ interests in PCC in the event that the Investor
Call Right Termination (as defined in the Call Agreement)
occurs;
WHEREAS, PCC wishes to obtain from
the Consultant consulting services with respect to significant
legislative, regulatory and policy initiatives and developments
affecting the conduct of the business and operations of the PCC
broadcast television stations and the Consultant has agreed to
refrain from certain activities as set forth herein;
WHEREAS, in the event of the Call
Closing (as defined in the Call Agreement), NBCU or its Permitted
Transferee (as defined in the Call Agreement) wishes to obtain from
the Consultant consulting services with respect to significant
legislative, regulatory and policy initiatives and developments
affecting the conduct of the business and operations of the PCC and
NBCU broadcast television stations and the Consultant has agreed to
refrain from certain activities as set forth herein; and
WHEREAS, the Parties have agreed to
enter into this Agreement concurrent with, or immediately
following, execution of the Master Transaction Agreement;
NOW THEREFORE, in exchange for the
mutual promises contained herein, the Parties agree as follows:
SECTION 1. DEFINITIONS . All capitalized terms in this
Agreement not defined herein shall have the meaning ascribed to
them in the Master Transaction Agreement or such other agreement
referred to herein.
SECTION 2. TERM . This Agreement is valid and binding on
all Parties as of the date hereof. The term of this Agreement shall
commence upon the date hereof, and shall remain in full force and
effect for a period of five (5) years from the later of the
Call Closing under the Call Agreement or the Class B Closing
under the PCC Purchase Agreement (the “Term”).
SECTION 3. PAYMENTS . The total amount payable to the
Consultant hereunder shall be Five Million Dollars ($5,000,000),
which amount shall be paid as follows:
(a) Payments
by PCC . PCC shall pay the Consultant Two Hundred Fifty
Thousand Dollars ($250,000) upon the execution and delivery of this
Agreement and Seven Hundred Fifty Thousand Dollars ($750,000) six
months and one day thereafter and subject to Section 3(b), PCC
shall pay the Consultant One Million Dollars ($1,000,000) on each
anniversary of this Agreement (or on the first business day
thereafter if any such anniversary falls on a day that is not a
business day). The total payments made by PCC pursuant to this
clause (a) are the “PCC Payments.”
(b) Payments
by NBCU or a Permitted Transferee . In the event of the Call
Closing pursuant to the Call Agreement, the obligations of PCC to
make the PCC Payments shall terminate and NBCU or its Permitted
Transferee (as defined in the Call Agreement), as applicable, shall
pay the Consultant One Million Dollars ($1,000,000) on each
anniversary of this Agreement (or on the first business day
thereafter if any such anniversary falls on a day that is not a
business day) that occurs following the Call Closing until such
time as the aggregate amount of the payments made by NBCU or its
Permitted Transferee, as applicable, plus the PCC Payments equal
Five Million Dollars ($5,000,000), at which time NBCU or its
Permitted Transferee, as applicable, shall not be required to make
any further payments hereunder.
(c) Allocation
of Payments . The Parties acknowledge and agree that Two
Hundred Fifty Thousand Dollars ($250,000) of each payment required
by this Section 3 shall be paid to the Consultant for the
consulting services he will provide hereunder (such portion of each
payment is a “Consulting Payment”) and the remaining
Seven Hundred Fifty Thousand Dollars ($750,000) of each such
payment shall be paid as consideration for compliance with the
terms of Section 5 (Noncompetition) below (such portion of
each payment is a “Noncompete Payment”). All payments
shall be made to the Consultant by wire transfer of immediately
available funds to such account or accounts specified in writing by
the Consultant. In the event of Consultant’s death or
disability prior to the end of the Term, (i) neither PCC, NBCU
nor a Permitted Transferee shall be required to make any further
Consulting Payments and (ii) the Noncompete Payments shall
continue to be due and payable on the dates indicated above and
shall be paid to one or more individuals or entities as the
Consultant shall specify in an estate planning directive. For the
purpose of making any Noncompete Payment following the death of the
Consultant, a Party shall be permitted to rely on any written
payment instruction provided by an executor or administrator of the
Consultant’s estate.
(d) In the
event of the Call Closing, NBCU or its Permitted Transferee, as
applicable, shall, within three business days following the Call
Closing, reimburse PCC for the total amount of the PCC Payments by
wire transfer of immediately available funds to an account or
accounts designated by PCC in writing to NBCU or the Permitted
Transferee, as applicable, at least one business day prior to the
Call Closing, if any.
SECTION 4. CONSULTING SERVICES . Upon request made by PCC
or, in the event of the Call Closing, by NBCU or its Permitted
Transferee, as applicable, following the Call Closing, and in
either case, during the Term, the Consultant shall provide PCC,
NBCU or the Permitted Transferee with special government affairs
services as further described and limited herein (the
“Consulting Services”):
(a) The Consulting Services
shall be offered in the following subject areas:
(i) Multicast must-carry rights
for PCC’s broadcast television stations;
(ii) Transition of PCC’s
broadcast television stations to digital transmission, including
transition timing and rights to continue analog transmissions
during the transition;
(iii) Obligations of PCC’s
broadcast television stations for the carriage of children’s
programming;
(iv) Development and
implementation of broadcaster codes of conduct, including enabling
legislation and regulations;
(v) Adoption of new media
ownership rules for broadcast television stations; and
(vi) Review of broadcast
“localism” rules and development of modified or new
regulatory obligations of licensees of digital television
stations.
(b) The Consultant will offer
the Consulting Services in the following venues:
(i) Before the House and Senate
Commerce Committees and their respective Subcommittees and the
Members thereof;
(ii) Before the Commissioners of
the Federal Communications Commission and their Legal
Assistants;
(iii) Before the Office of the
Chief, Media Bureau, Federal Communications Commission;
(iv) Before the Senior Staff and
Governing Board of Association of Maximum Service Television;
and
(v) Before the Senior Staff and
Governing Board of the National Association of Broadcasters.
(c) PCC, NBCU and the Permitted
Transferee, as the case may be, shall ensure that all uses of the
Consulting Services adhere strictly to the requirements of
applicable laws and regulations, and PCC, NBCU and the Permitted
Transferee shall be responsible for obtaining and making,
preparing, and facilitating, with the Cons
