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EXHIBIT 10.08
TIME BROKERAGE AGREEMENT
by and among
ENTERTAINMENT COMMUNICATIONS, INC.,
TUSCALOOSA BROADCASTING, INC.,
▇▇▇▇▇▇▇▇ RADIO OF PORTLAND LICENSEE, INC.
and
▇▇▇▇▇▇▇▇ RADIO OF ROCHESTER LICENSEE, INC.
Dated as of January 26, 1998
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TABLE OF SCHEDULES AND EXHIBITS
Schedule 1.1 Programming
Schedule 1.2 Compensation
Schedule 2.1 Programming Policy Statement
Schedule 4.1 Excluded Contracts
Schedule 11.1 Time Broker's Actions and Proceedings
Schedule 11.2 Licensee's Actions and Proceedings
(i)
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TABLE OF CONTENTS
PAGE
ARTICLE I. - SALE OF TIME........................................................................................ 1
Section 1.1. Broadcast of Programming......................................................... 1
Section 1.2. Payment.......................................................................... 2
Section 1.3. Term............................................................................. 2
ARTICLE II. - PROGRAMMING AND OPERATING STANDARDS AND PRACTICES.................................................. 2
Section 2.1. Compliance with Standards........................................................ 2
Section 2.2. Political Broadcasts............................................................. 2
Section 2.3. Handling of Communications....................................................... 3
Section 2.4. Preemption....................................................................... 3
Section 2.5. Broadcasting Obligations of Licensee............................................. 3
Section 2.6. Rights in Programs............................................................... 4
Section 2.7. "Payola" and "Plugola"........................................................... 4
Section 2.8. Advertising and Programming...................................................... 5
Section 2.9. Format and Transmitter Locations................................................. 5
Section 2.10. Compliance with Laws............................................................ 5
Section 2.11. Certifications.................................................................. 6
ARTICLE III. - RESPONSIBILITY FOR EMPLOYEES AND EXPENSES......................................................... 6
Section 3.1. Time Broker's Employees.......................................................... 6
Section 3.2. Licensee's Employees............................................................. 6
Section 3.3. Time Broker's Expenses........................................................... 6
Section 3.4. Operating Expenses............................................................... 7
Section 3.5. Employee Matters................................................................. 7
ARTICLE IV. - ASSIGNMENT OF CERTAIN AGREEMENTS AND RIGHTS........................................................ 9
Section 4.1. Assignment....................................................................... 9
Section 4.2. Proration........................................................................ 10
Section 4.3. Accounts Receivable.............................................................. 10
ARTICLE V. - OPERATION OF STATION................................................................................ 11
ARTICLE VI. - GRANT OF LICENSES.................................................................................. 12
Section 6.1. License to Use Station Facilities................................................ 12
Section 6.2. License of Intellectual Property................................................. 12
ARTICLE VII. - INDEMNIFICATION................................................................................... 12
Section 7.1. Indemnification Rights........................................................... 12
Section 7.2. Procedures....................................................................... 13
(i)
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ARTICLE VIII. - DEFAULT.......................................................................................... 14
Section 8.1. Time Broker Events of Default.................................................... 14
Section 8.2. Licensee's Events of Default..................................................... 14
Section 8.3. Cure Periods..................................................................... 14
Section 8.4. Other Defaults................................................................... 15
ARTICLE IX. - TERMINATION........................................................................................ 15
Section 9.1. Termination...................................................................... 15
Section 9.2. Certain Matters Upon Termination................................................. 16
ARTICLE X. - REMEDIES............................................................................................ 17
ARTICLE XI. - CERTAIN REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE PARTIES................................................................. 17
Section 11.1. Representations and Warranties of Time Broker................................... 17
Section 11.2. Representations, Warranties and Covenants of Licensee........................... 18
ARTICLE XII. - MISCELLANEOUS..................................................................................... 19
Section 12.1. Modification and Waiver......................................................... 19
Section 12.2. No Waiver; Remedies Cumulative.................................................. 19
Section 12.3. Construction.................................................................... 19
Section 12.4. Headings........................................................................ 20
Section 12.5. Successors and Assigns.......................................................... 20
Section 12.6. Force Majeure................................................................... 20
Section 12.7. Broker.......................................................................... 20
Section 12.8. Counterpart Signatures.......................................................... 20
Section 12.9. Notices......................................................................... 20
Section 12.10. Effect of this Agreement....................................................... 22
Section 12.11. Severability................................................................... 22
Section 12.12. No Joint Venture............................................................... 22
Section 12.13. Damage to Stations............................................................. 22
Section 12.14. Noninterference................................................................ 23
Section 12.15. Regulatory Changes............................................................. 23
(ii)
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TIME BROKERAGE AGREEMENT
This Time Brokerage Agreement (this "Agreement") is made as of
the 26th day of January, 1998, by and among Entertainment Communications, Inc.,
a Pennsylvania corporation ("Time Broker"), and Tuscaloosa Broadcasting, Inc., a
Maryland corporation ("Tuscaloosa"), ▇▇▇▇▇▇▇▇ Radio of Portland Licensee, Inc.,
a Maryland corporation ("SRPLI") and ▇▇▇▇▇▇▇▇ Radio of Rochester Licensee, Inc.,
a Maryland corporation ("SRRLI") (Tuscaloosa, SRPLI and SRRLI are sometimes
collectively referred to herein as "Licensee").
Upon the consummation of the transactions contemplated by that
certain Asset Purchase Agreement, dated July 16, 1997, among ▇▇▇▇▇▇▇▇ Broadcast
Group, Inc. ("▇▇▇▇▇▇▇▇") and various subsidiaries of Heritage Media Corporation
("HMC") (control of which subsidiaries, on August 20, 1997, was transferred to
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee) (HMC is sometimes collectively referred to with its
subsidiaries as "Heritage"), SRPLI will become the licensee of broadcast
stations KKSN(AM), Vancouver, Washington, KKSN-FM, Portland, Oregon and
KKRH(FM), Salem, Oregon (collectively, the "Portland Stations"), and SRRLI will
become the licensee of broadcast stations WKLX(FM), Rochester, New York,
WBEE(FM), Rochester, New York, WBBF(AM), Rochester, New York and WQRV(FM), Avon,
New York (collectively, the "Rochester Stations" and together with the Portland
Stations, the "Stations"). Time Broker and Licensee desire to enter into an
agreement providing for the programming and sale, upon the acquisition by
Licensee of the Stations from Heritage, of substantially all of the broadcast
time of the Stations to Time Broker, subject to and in compliance with the rules
and policies of the Federal Communications Commission (the "FCC").
Simultaneously herewith, Time Broker and Licensee are entering
into an Asset Purchase Agreement (the "Purchase Agreement") providing for the
acquisition by Time Broker of the Stations.
Accordingly, in consideration of the foregoing and of the
mutual promises, covenants, and conditions set forth below, the parties agree as
follows:
ARTICLE I.
SALE OF TIME
Section 1.1. Broadcast of Programming.
Effective upon the date (the "Commencement Date") that is the
later to occur of (a) the date that Licensee acquires the Stations from Heritage
or (b) the date that is ten (10) business days after the expiration or early
termination of any waiting period applicable to the transfer of the Stations to
Time Broker under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), Licensee shall broadcast on the Stations, or cause to
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broadcast on the Stations, programs which are presented to it by Time Broker as
described in greater detail on Schedule 1.1 (the "Programming").
Section 1.2. Payment.
Time Broker shall pay Licensee for broadcast of the
Programming the amounts set forth in Schedule 1.2 (the "Monthly Payment"),
subject to adjustment as set forth in Sections 2.4 and 2.5 below. All payments
shall be made by wire transfer of immediately-available funds by the last
business day of each calendar month, in arrears, to which such payment pertains.
Section 1.3. Term.
This Agreement shall commence on the Commencement Date and
shall terminate on the earlier of (i) 12:01 a.m. on the Closing Date (as defined
in the Purchase Agreement) under the Purchase Agreement, (ii) the date the
Purchase Agreement is terminated, or (iii) the date this Agreement is terminated
pursuant to Section 9.1 hereof.
ARTICLE II.
PROGRAMMING AND OPERATING STANDARDS AND PRACTICES
Section 2.1. Compliance with Standards.
All Programming delivered by Time Broker during the term of
this Agreement shall be in accordance with applicable statutes, FCC requirements
and the programming policies set forth on Schedule 2.1. Licensee reserves the
right to refuse to broadcast any Programming containing matter which the
Licensee believes is unsuitable or not consistent with the needs and interests
of its service area or may be violative of any right of any third party, or
which may constitute a "personal attack" as that term is and has been defined by
the FCC or which Licensee reasonably determines is, or in the reasonable opinion
of Licensee may be deemed to be, indecent (and not broadcast during the safe
harbor for indecent programming established by the FCC) or obscene by the FCC or
any court or other regulatory body with authority over Licensee or the Station.
Section 2.2. Political Broadcasts.
Time Broker shall maintain and deliver to Licensee all records
and information required by the FCC to be placed in the public inspection files
of the Stations pertaining to the broadcast of political programming and
controversial issue advertisements, in accordance with the provisions of
Sections 73.1212 and 73.3526 of the FCC's rules, and agrees to broadcast
sponsored programming addressing political issues or controversial subjects of
public importance, in accordance with the provisions of Section 73.1212 of the
FCC's rules. Time Broker shall consult and cooperate with Licensee and adhere to
all applicable statutes and the rules, regulations and policies of the FCC, as
announced from time to time, with respect to the
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carriage of political advertisements and programming and the charges permitted
therefor. Time Broker shall promptly provide to Licensee such documentation
relating to such programming as Licensee is required to maintain in its public
inspection files or as Licensee shall reasonably request. Licensee shall be
responsible for the maintenance of the public inspection files of the Stations.
Section 2.3. Handling of Communications.
Time Broker shall cooperate with Licensee in promptly
responding to all mail, cables, telegrams or telephone calls directed to the
Stations in connection with the Programming provided by Time Broker or any other
matter relevant to its responsibilities hereunder. Promptly upon receipt, Time
Broker shall provide copies of all such correspondence to Licensee. Time Broker
shall promptly advise Licensee of any public or FCC complaint or inquiry known
to Time Broker concerning such Programming, and shall provide Licensee with
copies of any letters to Time Broker from the public, including complaints
concerning such Programming. Upon Licensee's request, Time Broker shall provide
Licensee with such information as will allow Licensee to respond to such
complaints and inquiries. Notwithstanding the foregoing, Licensee shall handle
all matters or inquiries relating to FCC complaints and any other matters
required to be handled by Licensee under the rules and regulations of the FCC.
Section 2.4. Preemption.
Licensee may, from time to time, preempt portions of the
Programming to broadcast emergency information or programs it deems would better
serve the public interest. Time Broker shall be notified at least one week in
advance of any preemption of any of the Programming for the purpose of
broadcasting programs Licensee deems necessary to better serve the public
interest unless such advance notice is impossible or impractical, in which case
Licensee shall notify Time Broker promptly upon making such determination. In
the event of any such preemption, Time Broker shall be entitled to a credit
against any other amounts due Licensee under this Agreement in an amount equal
to the product of (a) the Monthly Payment and (b) the result of dividing the
number of hours so affected by the aggregate number of hours available for
Programming during such month. Licensee represents and covenants that preemption
pursuant to this Section 2.4 shall only occur to the extent Licensee deems
necessary to carry out its obligations as an FCC licensee, and expressly agrees
that its right of preemption shall not be exercised for the commercial advantage
of Licensee or others.
Section 2.5. Broadcasting Obligations of Licensee.
During the term of this Agreement, except as set forth in
Sections 2.1 and 2.4 and this Section 2.5, Licensee will broadcast the
Programming in its entirety (including commercials), without interruption,
deletion or addition of any kind:
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(i) Licensee may temporarily refrain from broadcasting the
Programming from the main transmitter of each Station between the hours of 12:30
a.m. and 5:30 a.m. (or at such other time in the event that weather conditions
or contractual arrangements relating to transmitter sites dealing with the
exposure of humans to RF radiation so require or as may otherwise be required
under compelling circumstances that cannot be rescheduled between the hours of
12:30 a.m. and 5:30 a.m.) in order to perform normal, customary and routine
maintenance on the Station's main transmitting facilities; provided, that
Licensee shall provide written notice to Time Broker of its intent to refrain
from broadcasting the Programming from the main transmitter of each Station at
least forty-eight (48) hours in advance, except when an emergency requires such
suspension, and provided further that Licensee shall use its best efforts to
minimize the impact, frequency and duration of such interruptions, including
without limitation by way of use of any auxiliary transmitter that may be
available for the applicable Station; and
(ii) Licensee may temporarily cease broadcasting the
Programming from the main transmitter of each Station as a result of a technical
malfunction, natural disaster, act of public enemy, act of God, or any other
cause beyond the control of Licensee; provided that in any such case, Licensee
will act expediently and use its best efforts to resume the broadcast of the
Programming from the main transmitter of each Station as quickly as the
applicable circumstances will allow, and will use its best efforts to broadcast
the Programming from any auxiliary transmitter that may be available for the
applicable Station.
In the event of any interruption pursuant to this Section
(other than (a) interruption pursuant to Section 2.5(i) occurring between the
hours of 12:30 a.m. and 5:30 a.m. and (b) interruption pursuant to Section
2.5(ii)), if Licensee is not able to broadcast the Programming from an available
auxiliary transmitter, Time Broker shall be entitled to a credit against the
Monthly Payment or any other sums due hereunder, in an amount equal to the
product of (a) the Monthly Payment and (b) the result of dividing the number of
hours so affected by the aggregate number of hours available for Programming
during such month.
Section 2.6. Rights in Programs.
All right, title and interest in and to the Programming, and
the right to authorize the use of the Programming in any manner and in any media
whatsoever, shall be and remain vested at all times solely in Time Broker.
Section 2.7. "Payola" and "Plugola".
Time Broker agrees that it will not accept any gift, gratuity
or other consideration, including, but not limited to, a commission, discount,
bonus, material supplies or other merchandise, services or labor (collectively,
the "Consideration"), directly or indirectly, from any person or company for the
playing of records, the presentation of any programming or the broadcast of any
commercial announcement over the Stations unless the payor is identified in the
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program for which Consideration was provided as having paid for or furnished
such Consideration, in accordance with the Communications Act of 1934, as
amended (the "Communications Act") and the FCC requirements. It is further
understood and agreed that no commercial message, plugs, or undue reference
shall be made in programming presented over the Stations to any business
venture, profit-making activity or other interest (other than non-commercial
announcements for bona fide charities, church activities or other public service
activities) unless the payor is identified in the program for which
Consideration was provided as having paid for or furnished such Consideration,
in accordance with the Communications Act and the FCC requirements. In addition,
Time Broker agrees that it will take steps, including the continuation of
Licensee's system for periodic execution of affidavits, reasonably designed to
assure that it, its employees and agents comply with this Section 2.7.
Section 2.8. Advertising and Programming.
Beginning with the Commencement Date, Time Broker shall be
solely responsible for any expenses incurred in connection with and shall be
entitled to all revenue from the sale of advertising or program time in the
Programming. Except as otherwise provided herein, Time Broker does not assume
any obligation of Licensee under any contract or advertising arrangement entered
into by Licensee on or after the Commencement Date. Licensee shall indemnify
Time Broker for the amount of any lost revenue caused by any sale of advertising
time made by Licensee that would lower the Station's lowest unit charge for
political advertising.
Section 2.9. Format and Transmitter Locations.
During the term of this Agreement, except as otherwise
consented to in writing by Licensee or as otherwise provided in the following
sentence, Time Broker agrees that it will not make any material changes in the
Stations' existing programming formats or seek to change the location of any of
the Stations' studio or transmitting facilities. Notwithstanding the foregoing,
(i) the parties expressly agree that Time Broker, in its sole discretion, is
permitted during the term of this Agreement to exchange the programming formats
on KKSN(AM) and KFXX(AM) (which is owned and operated by Time Broker) (it being
understood that, should this Agreement terminate other than as a result of the
Closing (as defined in the Purchase Agreement) under the Purchase Agreement,
Time Broker shall, promptly upon such termination, change the programming
formats on each such station back to their programming formats substantially as
they exist on the date of this Agreement) and (ii) Licensee agrees that it will
not unreasonably withhold consent to any request by Time Broker to change the
programming format for WBBF(AM).
Section 2.10. Compliance with Laws.
At all times during the term of this Agreement, Time Broker
and Licensee shall comply in all material respects with all applicable federal,
state and local laws, rules and regulations.
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Section 2.11. Certifications.
Pursuant to Section 73.3555(a)(3)(ii) of the FCC's rules,
Licensee certifies that it maintains ultimate control over the Station's
facilities, including specifically control over station finances, personnel and
programming, and Time Broker certifies that this Agreement complies with the
provisions of Section 73.3555(a) of the FCC's rules.
ARTICLE III.
RESPONSIBILITY FOR EMPLOYEES AND EXPENSES
Section 3.1. Time Broker's Employees.
Time Broker shall employ and be responsible for the payment of
salaries, taxes, insurance and all other costs related to all personnel used in
the production of the Programming. Except as provided in Section 3.5 with
respect to Transferred Employees, Time Broker will not incur any liability on
account of Licensee's employees arising and accruing prior to the Commencement
Date including, without limitation, any such liability on account of
unemployment insurance contributions, termination and severance payments,
accrued sick leave or accrued vacation.
Section 3.2. Licensee's Employees.
Licensee shall employ and be responsible for the payment of
salaries, taxes, insurance and all other costs related to the personnel
necessary to fulfill its obligations as Licensee and under this Agreement, and
to produce Licensee's programming on the Stations subject to reimbursement as
provided in Schedule 1.2. Time Broker shall have no authority and shall not
supervise persons in the employ of Licensee after the Commencement Date.
Licensee acknowledges that its employees may have access to certain confidential
information of Time Broker. Licensee shall, therefore, inform its employees of
the confidential nature of such information and require that each such employee
keep such information confidential.
Section 3.3. Time Broker's Expenses.
Time Broker shall pay for all costs associated with the
production and delivery of the Programming, including but not limited to (i) all
ASCAP, BMI, SESAC and other copyright fees, (ii) any expenses incurred in
connection with its sale of advertising time hereunder (including without
limitation sales commissions) in connection with the Programming and (iii) the
salaries, taxes, insurance and related costs for all of Time Broker's personnel
used in the production of the Programming and all of Time Broker's sales
personnel (including salespeople, traffic personnel, and programming staff).
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Section 3.4. Operating Expenses.
Licensee shall be responsible for the payment when due of all
fees and expenses relating to operation and maintenance of the Stations to the
extent necessary for Licensee to maintain the licensed transmitting capability
of the Stations and to fulfill its obligations as an FCC licensee, including,
without limitation, salaries, benefits and similar expenses for Licensee's
employees, Licensee's federal, state and local taxes, rent, utilities (excluding
telephone), maintenance and repairs at each of the Station's transmitter and
studio sites, any capital expense at each of the Station's transmitter and
studio sites, insurance on the Stations' equipment, insurance deductibles on
claims on the Stations' equipment, and ad valorem property taxes, subject to
reimbursement as provided in Schedule 1.2.
Section 3.5. Employee Matters.
On the Commencement Date, Time Broker shall offer employment
to each of the employees of the Stations (including those on leave of absence,
whether short-term, long-term, family, maternity, disability, paid, unpaid or
other), other than those employees that are retained by Licensee pursuant to
Section 3.2 above during the term of this Agreement, at a comparable salary,
position and place of employment as held by each such employee immediately prior
to the Commencement Date (such employees who are given such offers of employment
are referred to herein as the "Transferred Employees"). Nothing in this Section
3.5.1 is intended to guarantee employment for any Transferred Employee for any
length of time after the Commencement Date.
(i) Except as provided otherwise in this Section 3.5, Licensee
shall pay, discharge and be responsible for (a) all salary and wages arising out
of or relating to the employment of the employees of the Stations prior to the
Commencement Date and (b) any employee benefits arising under the Benefit Plans
(as defined in the Purchase Agreement) of Licensee and their Affiliates during
the period prior to the Commencement Date. From and after the Commencement Date,
Time Broker shall pay, discharge and be responsible for all salary, wages and
benefits arising out of or relating to the employment of the Transferred
Employees by Time Broker on and after the Commencement Date. Time Broker shall
be responsible for all severance Liabilities (as such term is defined in the
Purchase Agreement), and all COBRA Liabilities for any Transferred Employees of
the Stations terminated on or after the Commencement Date.
(ii) Time Broker shall cause all Transferred Employees as of
the Commencement Date to be eligible to participate in the "employee welfare
benefit plans" and "employee pension benefit plans" (as defined in Section 3(1)
and 3(2) of ERISA, respectively) of Time Broker in which similarly situated
employees of Time Broker are generally eligible to participate; provided,
however, that all Transferred Employees and their spouses and dependents shall
be eligible for coverage immediately after the Commencement Date (and shall not
be
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excluded from coverage on account of any preexisting condition) to the extent
provided under such plans with respect to Transferred Employees.
(iii) For purposes of any length of service requirements,
waiting periods, vesting periods or differential benefits based on length of
service in any such plan for which a Transferred Employee may be eligible after
the Commencement Date, Time Broker shall ensure that, to the extent permitted by
law, service by such Transferred Employee with Heritage, Licensee or any
Affiliate of Heritage or Licensee shall be deemed to have been service with the
Time Broker. In addition, Time Broker shall ensure that each Transferred
Employee receives credit under any welfare benefit plan of Time Broker for any
deductibles or co-payments paid by such Transferred Employee and his or her
dependents for the current plan year under a plan maintained by Heritage or
Licensee or any Affiliate of Heritage or Licensee. Time Broker shall grant
credit to each Transferred Employee for all sick leave in accordance with the
policies of Time Broker applicable generally to its employees after giving
effect to service for Heritage or Licensee as service for Time Broker. To the
extent taken into account in determining prorations under Section 4.2 hereunder,
Time Broker shall assume and discharge Licensee's liabilities for the payment of
all unused vacation leave accrued by Transferred Employees as of the
Commencement Date. To the extent any claim with respect to such accrued vacation
leave is lodged against Licensee, with respect to any Transferred Employee, Time
Broker shall indemnify, defend and hold harmless Licensee from and against any
and all losses, directly or indirectly, as a result of, or based upon or arising
from the same, up to the amount of the proration credit received by Time Broker
under Section 4.2 for such items.
(iv) [Intentionally omitted]
(v) As soon as practicable following the Commencement Date,
Time Broker shall establish and maintain a defined contribution plan or plans
(which may be a preexisting plan or plans) (the "Time Broker's Plan") intended
to be qualified under Section 401(a) and 401(k) of the Internal Revenue Code of
1986, as amended (the "Code"), for the benefit of the Transferred Employees.
Effective as of the Commencement Date, Licensee shall cause appropriate
amendments to be made to its defined contribution plan or plans (the "Licensee's
Plan") to provide that the Transferred Employees shall be fully vested in their
accounts under the Licensee's Plan. As soon as practicable after the
Commencement Date, Time Broker shall take all necessary action to qualify Time
Broker's Plan under the applicable provisions of the Code (including but not
limited to Section 401), if it is not yet so qualified, and Time Broker and
Licensee shall make any and all filings and submissions to the appropriate
governmental agencies required to be made by them in connection with the
transfer of assets described hereafter. As soon as practicable following the
earlier of the receipt of a favorable determination letter from the Internal
Revenue Service regarding the qualified status of both the Licensee's Plan and
the Time Broker's Plan (each as amended to the date of transfer) or sooner, if
Licensee and Time Broker so agree, Licensee shall cause to be transferred to
Time Broker's Plan, in cash, all of the individual account balances of
Transferred Employees under the Licensee's Plan, including any outstanding plan
participant loan receivables allocated to such accounts.
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(vi) Subject to Section 3.2, Time Broker acknowledges and
agrees that Time Broker's obligations pursuant to this Section 3.5 are in
addition to, and not in limitation of, Time Broker's obligation to assume the
employment contracts set forth on Schedule 2.1.8 to the Purchase Agreement.
(vii) Except as otherwise provided in this Section 3.5 or in
any employment, severance or retention agreements of any Transferred Employees,
all Transferred Employees shall be at-will employees, and Time Broker may
terminate their employment or change their terms of employment at will. No
employee (or beneficiary of any employee) of Seller may ▇▇▇ to enforce the terms
of this Agreement, including specifically this Section 3.5, and no employee or
beneficiary shall be treated as a third party beneficiary of this Agreement.
Except to the extent provided for herein, Time Broker may cover the Transferred
Employees under existing or new benefit plans, programs, and arrangements, and
may amend or terminate any such plans, programs, or arrangements at any time.
(viii) Upon the Closing (as defined in the Purchase Agreement)
of the Purchase Agreement, Time Broker shall offer employment to each of the
employees of the Stations that have been retained during the term of this
Agreement by Licensee pursuant to Section 3.2. Such offer of employment will be
at a comparable salary, position and place of employment as held by each such
employee immediately prior to the Closing Date (as defined in the Purchase
Agreement) (such employees who are given such offers of employment are referred
to herein as the "Closing Date Transferred Employees"). Nothing in this Section
3.5.9 is intended to guarantee employment for any such Closing Date Transferred
Employee for any length of time after the Closing Date (as defined in the
Purchase Agreement). Upon the Closing (as defined in the Purchase Agreement) of
the Purchase Agreement, the provisions of Sections 3.5.2 through and including
3.5.8 of this Agreement shall also apply to such Closing Date Transferred
Employees after substituting (i) "Closing Date Transferred Employees" for
"Transferred Employees," in each instance, and (ii) "Closing Date" for
"Commencement Date," in each instance.
ARTICLE IV.
ASSIGNMENT OF CERTAIN AGREEMENTS AND RIGHTS
Section 4.1. Assignment.
On the Commencement Date, Licensee shall assign to Time Broker
all Station Contracts (as defined in the Purchase Agreement) other than those
contracts and other agreements identified on Schedule 4.1 (the "Excluded
Contracts"). All such Station Contracts to be assigned hereunder are referred to
collectively as the "Assigned Contracts." Time Broker shall assume, pay,
perform, and discharge all liabilities arising on or after the Commencement Date
under the Assigned Contracts (including, without limitation, Trade-out
Agreements) pursuant to their terms (except for liabilities for any breaches
thereunder by Licensee or Heritage occurring prior to the Commencement Date).
Licensee has provided Time Broker with true and
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complete copies, including amendments, of the Assigned Contracts. The Assigned
Contracts are freely assignable, or, if consent of the other contracting party
to the assignment is required, Licensee shall make reasonable best efforts to
obtain all such consents prior to the Commencement Date. Subject to and in
compliance with the provisions of Section 3.3 of the Purchase Agreement, to the
extent that any such consents are not obtained prior to the Commencement Date,
during the period between the Commencement Date and the date that Licensee
obtains such consent, the parties shall cooperate to cause Time Broker to
receive the benefit of the Assigned Contract in exchange for performance by Time
Broker of all of Licensee's obligations under such Assigned Contract (including
but not limited to the payment to Licensee of all amounts due under the Assigned
Contract on and after the Commencement Date for services provided by Licensee).
Section 4.2. Proration.
All expenses and income arising under the Assigned Contracts
shall be prorated between Licensee and Time Broker as of the Commencement Date
in a manner such that the costs and benefits thereunder through the date before
the Commencement Date shall be for the account of Licensee and, thereafter,
during the term of this Agreement, for the account of Time Broker. With respect
to any items of salary, accrued vacation or other benefits relating to
Transferred Employees, such prorations shall also include an amount payable for
applicable payroll taxes. Such proration shall include an adjustment for
Trade-out Agreements (as defined in the Purchase Agreement) which are included
in the Assigned Contracts only to the extent that any Net Negative Trade Balance
(as defined below) for the Stations exceeds $50,000. "Net Negative Trade
Balance" means the extent, if any, to which the value (at current rates for time
on each Station as of the Commencement Date) of unfulfilled obligations of the
Station under Trade-out Agreements exceed the stated consideration yet to be
received by the Station pursuant to such Trade-out Agreements. Such prorations
shall be completed and any necessary payments on account of such prorations paid
within sixty (60) days of the Commencement Date. If any disagreement with
respect to the proration of such income and expenses cannot be resolved by the
parties, Licensee and Time Broker will select a certified public accountant
knowledgeable in the broadcast industry to resolve the dispute. The parties will
use their best efforts in good faith to cause to occur as expeditiously as
possible the appointment of the certified public accountant, and once appointed,
the resolution of the dispute. The resolution of such accountant shall be
binding on the parties and subject to judicial enforcement. Payment of the cost
of the accountant shall be shared equally between Time Broker and Licensee.
Section 4.3. Accounts Receivable.
All cash accounts receivable for broadcasts on the Stations
which occur prior to the Commencement Date (the "Accounts Receivable") shall
belong to Licensee and all Accounts Receivable for Programming which occurs
thereafter shall belong to Time Broker. Within ten business (10) days following
the Commencement Date, Licensee shall deliver to Time Broker a schedule of Cash
Accounts Receivable for the Stations as of the Commencement Date, by
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accounts and the amounts then owing (the "Schedule of Accounts Receivable").
Time Broker agrees to use its reasonable efforts (with at least the care and
diligence that Time Broker uses to collect its own accounts receivable) to
collect for Licensee its Accounts Receivable as shown on the Schedule of
Accounts Receivable delivered by Licensee for a period of one hundred fifty
(150) days following the Commencement Date; provided, that Time Broker's
obligation to collect the Accounts Receivable shall survive the Closing Date (as
defined in the Purchase Agreement) to the extent necessary for Time Broker to
collect the Accounts Receivable for a period of one hundred fifty (150) days
following the Commencement Date. All payments received by Time Broker from any
customer whose name appears in the Schedule of Accounts Receivable shall be
first applied to the oldest balance then due on the Accounts Receivable unless
the account debtor indicates in writing that payment is to be applied otherwise
due to a dispute over an Account Receivable. Time Broker shall keep accurate
records of the payment received by it on such Accounts Receivable and Licensee
shall have access at reasonable times to Time Broker's records to verify such
status of the Accounts Receivable. On the fifth day following the last day of
each month during such one hundred fifty (150) day period (or, if any such day
is a Saturday, Sunday or holiday, on the next day on which banking transactions
are resumed), Time Broker shall remit to Licensee collections received by Time
Broker with respect to the Accounts Receivable. Any Accounts Receivable that
have not been collected within such one hundred fifty (150) day period shall be
reassigned, without recourse to Time Broker, to Licensee, together with all
records in connection therewith, whereupon Licensee may pursue collection
thereof in such manner as it, in its sole discretion, may determine. Time Broker
shall not make any referral or compromise of any Accounts Receivable to a
collection agency or attorney for collection and shall not compromise for less
than full value any Account Receivable without the prior written consent of
Licensee. Except to remit collected Accounts Receivable in accordance herewith,
Time Broker shall have no liability or obligation to Licensee with respect to
the collection of its accounts and shall not be obligated to take any action to
collect such accounts.
ARTICLE V.
OPERATION OF STATION
Notwithstanding any provision of this Agreement to the
contrary, Licensee shall retain full authority and power with respect to the
management and operation of the Stations during the term of this Agreement.
Licensee shall employ the General Manager of the Stations and such other
personnel as Licensee determines may be necessary to fulfill its obligations as
a licensee under the Communications Act and its obligations in accordance with
Section 3.2 hereof. Licensee shall retain full authority and control over the
policies, programming and operations of the Stations, including, without
limitation, the decision whether to preempt Programming in accordance with
Section 2.4 hereof. Licensee shall have ultimate responsibility to effectuate
compliance with the Communications Act and with FCC rules, regulations and
policies. In no event shall Time Broker or its employees represent, depict,
describe or portray Time Broker as the licensee of the Stations.
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ARTICLE VI.
GRANT OF LICENSES
Section 6.1. License to Use Station Facilities.
Effective as of the Commencement Date, Licensee grants Time
Broker permission to access and use all of the studio and office space and other
facilities of the Stations ("Station Facilities") and all equipment and
furnishings contained therein ("Station Equipment") as reasonably necessary for
the production and broadcasting of the Programming and sales and administration
relating thereto, in accordance with the terms set forth in this Article VI.
Time Broker shall not remove from the Station Facilities or modify any Station
Equipment owned by or leased or licensed to Licensee without Licensee's prior
written consent, such consent not to be unreasonably withheld. Licensee shall
not license the use of the Station Facilities to any other party during the term
of this Agreement; and Time Broker's use of the Station Facilities shall be
exclusive except for Licensee's right to use such facilities as it deems
appropriate in connection with the satisfaction of its obligations as the
Licensee of the Station, including the use of such facilities and adequate
office space for the employees of Licensee that are required for Licensee to
comply with its obligations under Sections 3.2 and 5 hereof. Time Broker shall
use due care in the use of any property of Licensee. Time Broker shall indemnify
Licensee for any damage (normal wear and tear excepted) to Licensee's property
caused by Time Broker or any employee, contractor, agent or guest of Time
Broker. Time Broker shall have the right to install any additional equipment at
the Station Facilities deemed by Time Broker to be necessary to deliver the
Programming. If this Agreement shall terminate other than pursuant to the
Closing under the Purchase Agreement, Time Broker shall, promptly after such
termination, remove all such equipment and make all repairs necessitated by such
removal.
Section 6.2. License of Intellectual Property.
Effective as of the Commencement Date and subject to the terms
of any existing license agreement, Licensee grants Time Broker the right to use
all intellectual property owned by or licensed to Licensee and used solely in
the operation of the Stations (including, but not limited to, logos, jingles,
promotional materials, call signs and goodwill). Time Broker shall own all
trademarks, service marks, trade names, characters, formats, jingles,
promotional materials, logos and positioning statements which Time Broker
develops for the Programming during the term of this Agreement.
ARTICLE VII.
INDEMNIFICATION
Section 7.1. Indemnification Rights.
Each party will indemnify and hold harmless the other party,
and the directors, officers, partners, employees, agents and affiliates of such
other party, from and against any and
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all liability, including without limitation reasonable attorneys' fees arising
out of or incident to (i) any breach by such party of a representation, warranty
or covenant made herein, (ii) the programming produced or furnished by such
party hereunder, or (iii) the conduct of such party, its employees, contractors
or agents (including negligence) in performing its or their obligations
hereunder. Without limiting the generality of the foregoing, each party will
indemnify and hold harmless the other party, and the directors, officers,
partners, employees, agents and affiliates of such other party, from and against
any and all liability for libel, slander, infringement of trademarks, trade
names, or program titles, violation of rights of privacy, and infringement of
copyrights and proprietary rights resulting from the programming produced or
furnished by it hereunder. The parties' indemnification obligations hereunder
shall survive any termination or expiration of this Agreement.
Section 7.2. Procedures.
Any party seeking indemnification under this Agreement (the
"Indemnified Party") shall promptly give the party from whom indemnification is
sought (the "Indemnifying Party") written notice of any claim or the
commencement of any action or proceeding for which the Indemnified Party may
seek indemnification, and the Indemnified Party shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation resulting from
such claim, unless injunctive relief is sought against the Indemnified Party in
which case the Indemnified Party shall have the right to join in any defense.
The Indemnified Party's failure to give the Indemnifying Party notice under this
clause shall not preclude the Indemnified Party from seeking indemnification
from the Indemnifying Party except to the extent that the Indemnified Party's
failure has materially prejudiced the Indemnifying Party's ability to defend the
claim or litigation. The Indemnifying Party shall not settle any claim for which
the Indemnified Party seeks indemnification or consent to entry of any judgment
in litigation arising from such a claim without obtaining a written release of
the Indemnified Party from all liability in respect of such claim or litigation.
If the Indemnifying Party shall not assume the defense of any such claim or
litigation resulting therefrom, or if injunctive relief is sought against the
Indemnified Party, the Indemnified Party may defend against or settle such claim
or litigation in such manner as it may deem appropriate, and in such cases, upon
a written demand therefore, the Indemnifying Party shall promptly reimburse the
Indemnified Part for the amount of all reasonable expenses, legal or otherwise,
incurred by the Indemnified Party in connection with the defense against or
settlement of such claim or litigation. In addition, if the Indemnifying Party
shall not assume the defense of any such claim or litigation resulting
therefrom, or if injunctive relief is sought against the Indemnified Party, and
if no settlement of the claim or litigation is made, upon written demand
therefor, the Indemnifying Party shall promptly reimburse the Indemnified Party
for the amount of any judgment rendered with respect to such claim or in such
litigation and for all reasonable expenses, legal or otherwise, incurred by the
Indemnified Party in the defense against such claim or litigation.
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ARTICLE VIII.
DEFAULT
Section 8.1. Time Broker Events of Default.
The occurrence of any of the following, after the expiration
of the applicable cure periods, if any, will be deemed to be an Event of Default
by Time Broker under this Agreement: (a) Time Broker's failure to timely pay any
Monthly Payment provided for in Section 1.2 or other payments required
hereunder; (b) except as otherwise provided for in this Agreement, the failure
of Time Broker to supply the Programming; (c) any termination of this Agreement
by Time Broker other than as permitted in Section 9.1; or (d) the issuance by
the FCC of an order designating an evidentiary hearing which arises out of,
relates to or is attributable solely to the acts or omissions of Time Broker
under this Agreement but excluding issues which are based upon Licensee's
conduct hereunder for which Time Broker may be held responsible.
Section 8.2. Licensee's Events of Default.
The occurrence of any of the following, after the expiration
of the applicable cure periods, if any, will be deemed to be an Event of Default
by Licensee under this Agreement: (a) except as otherwise provided for in this
Agreement, the failure of Licensee to broadcast the Programming; (b) any
termination of this Agreement by Licensee other than as permitted in Section
9.1; or (c) the issuance by the FCC of an order designating an evidentiary
hearing which arises out of, relates to or is attributable solely to the acts or
omissions of Licensee under this Agreement or during any period prior to the
Commencement Date during which Licensee owns the Stations, but excluding issues
which are based upon Time Broker's conduct hereunder for which Licensee may be
held responsible.
Section 8.3. Cure Periods.
The cure periods before any event listed in Sections 8.1 or
8.2 shall become an Event of Default are as follows:
(i) Payment by Time Broker. The Monthly Payment or other
payments required hereunder to be paid to Licensee must be received by Licensee
within five (5) business days after Licensee gives written notice of non-payment
to Time Broker.
a. Certain Matters. There shall be no cure period for
(i) the matters relating to the FCC set forth in Sections 8.1(d) or 8.2(c)
hereof, (ii) a termination by Time Broker described in Section 8.1(c); or (iii)
a termination by Licensee described in Section 8.2(b) hereof.
b. Programs and Broadcast Matters. With respect to Time
Broker's failure to provide the Programming referred to in Section 8.1(b) hereof
or Licensee's failure to
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broadcast the Programming referred to in Section 8.2(a) hereof, the period
allowed for cure shall be three business days from the giving of written notice
of such failure to the defaulting party by the non-defaulting party.
Section 8.4. Other Defaults.
For any other breach of a representation, warranty or covenant
made herein that is not listed in Sections 8.1 or 8.2, a party's sole remedy
shall be indemnification pursuant to Article VII hereof.
ARTICLE IX.
TERMINATION
This Agreement shall automatically terminate upon the
expiration of the term of this Agreement as set forth in Section 1.3. In
addition, this Agreement shall terminate as provided below.
Section 9.1. Termination.
In addition to other remedies available at law or equity, this
Agreement may be terminated by either Licensee or Time Broker by written notice
to the other, specifying an effective date of termination which is not less than
seven (7) days nor more than ninety (90) days from the date such notice is
given, if the party seeking to terminate is not then in material default or
breach hereof, upon either:
(i) an uncured Event of Default, or
(ii) as provided in Section 12.15, or
(iii) upon the event that the party not seeking to terminate
makes a general assignment for the benefit of creditors, files or has filed
against it a petition for bankruptcy, reorganization or an arrangement for the
benefit of creditors, or for the appointment of a receiver, trustee or similar
creditors' representative for the property or assets of such party under any
federal or state insolvency law, which if filed against such party has not been
dismissed within sixty (60) days thereof.
In the event that the non-defaulting party does not exercise
such right of termination by giving such written notice within sixty (60) days
of the occurrence of an uncured Event of Default, then the Event of Default
giving rise to such right of termination shall be deemed waived and the
Agreement shall continue in full force and effect.
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Section 9.2. Certain Matters Upon Termination.
(i) Upon any termination of this Agreement, Licensee shall
have no further obligation to provide to Time Broker any broadcast time or
broadcast transmission facilities and Time Broker shall have no further
obligations to make any payments to Licensee under Section 1.2 hereof. Upon any
termination, Time Broker shall be responsible for all debts and obligations of
Time Broker to third parties based upon the purchase of air time and use of
Licensee's transmission facilities including, without limitation, accounts
payable, barter agreements and unaired advertisements, but not for Licensee's
federal, state and local income and business franchise tax liabilities or taxes
levied upon Licensee's personal property. Notwithstanding anything herein to the
contrary, to the extent that any invoice, ▇▇▇▇ or statement submitted to
Licensee after the termination of this Agreement or any payment made by Time
Broker prior to the termination of this Agreement relates to expenses incurred
in operating the Stations, for periods both before and after the termination of
this Agreement, such expenses shall be prorated between Licensee and Time Broker
in accordance with the principle that Time Broker shall be responsible for
expenses allocable to the period prior to the termination of this Agreement and
Licensee shall be responsible for expenses allocable to the period on and after
the termination of this Agreement. Such proration shall include an adjustment
for Time Broker's Trade-out Agreements only to the extent that Time Broker's Net
Negative Trade Balance exceeds $50,000. Each party agrees to reimburse the other
party for expenses paid by the other party to the extent appropriate to
implement the proration of expenses pursuant to the preceding sentence.
If this Agreement terminates other than as a result of the
Closing (as defined in the Purchase Agreement), Time Broker shall (i) assign to
Licensee and Licensee shall assume all Assigned Contracts (including those
employment contracts assumed by Time Broker pursuant to this Agreement) and all
renewals, replacements or other contracts entered in the ordinary course of
business relating to the Stations and customary for radio stations of similar
type between the Commencement Date and the date of termination of this Agreement
("Supplemental Contracts") in effect on the date of such termination or
expiration; (ii) be responsible for only those obligations under the Assigned
Contracts and Supplemental Contracts arising on or after the Commencement Date
and prior to the termination of this Agreement and, (iii) terminate, and
Licensee shall hire, all Transferred Employees in accordance with the principles
set forth in Section 3.5, except that, for purposes of this Section 9.2(b)(iii),
"Transferred Employees" shall not include any employees hired by Time Broker
pursuant to Section 3.5 who also perform substantial services for other stations
in the applicable market operated by Time Broker.
Notwithstanding anything in Section 7.1 to the contrary, no
expiration or termination of this Agreement shall terminate the obligation of
each party to indemnify the other for claims under Article VII hereof or limit
or impair any party's rights to receive payments due and owing hereunder on or
before the date of such termination.
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ARTICLE X.
REMEDIES
In addition to a party's rights of termination hereunder (and
in addition to any other remedies available to it or provided under law), in the
event of an uncured Event of Default with respect to either party, the other may
seek specific performance of this Agreement, in which case the defaulting party
shall waive the defense in any such suit that the other party has an adequate
remedy at law and interpose no opposition, legal or otherwise, as to the
propriety of specific performance as a remedy hereunder.
ARTICLE XI.
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PARTIES
Section 11.1. Representations and Warranties of Time Broker.
Time Broker hereby represents and warrants to Licensee as
follows:
(i) Corporate Organization. Time Broker is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its jurisdiction of organization and is duly qualified to do business in and is
in good standing in any jurisdiction where it owns or operates a radio station
and in each other jurisdiction where such qualification is necessary, except for
those jurisdictions where the failure to be so qualified could not, individually
or in the aggregate, have a material adverse effect on the ability of Time
Broker to perform its obligations hereunder.
(ii) Authorization of Agreement; No Breach. Time Broker has
the corporate power and authority to execute, deliver and perform this
Agreement. This Agreement constitutes the valid and binding obligation of Time
Broker, enforceable against Time Broker in accordance with its terms, except as
such enforceability may be limited by bankruptcy and laws affecting the
enforcement of creditors' rights generally or equitable principles. Assuming the
consents and approvals required elsewhere herein are obtained, neither such
execution, delivery and performance nor compliance by Time Broker with the terms
and provisions hereof will conflict with or result in a breach of any of the
terms, conditions or provisions of the organizational documents of Time Broker
or any judgment, order, injunction, decree, regulation or ruling of any court or
any other governmental authority to which Time Broker is subject or any material
agreement or contract to which Time Broker is a party or to which it is subject,
or constitute a material default thereunder.
(iii) Actions and Proceedings. Except as disclosed in Schedule
11.1, Time Broker is not subject to any judgment, award, order, writ,
injunction, arbitration decision or decree which prohibits the performance of
this Agreement or the consummation of any
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transaction contemplated under this Agreement, and there is no litigation,
administrative action, arbitration, proceeding or investigation pending, or to
the knowledge of Time Broker, threatened, against Time Broker or affecting Time
Broker in any federal, state or local court, or before any administrative agency
or arbitrator that would adversely affect Time Broker's ability to perform its
obligations under this Agreement or would prohibit the consummation of the
transactions contemplated hereunder.
(iv) Qualifications. Time Broker is qualified in accordance
with the Communications Act and the rules and policies of the FCC to enter into
this Agreement and provide Programming on the Stations in accordance with its
terms. Between the date hereof and the termination of this Agreement, either by
the Closing of the Purchase Agreement or the earlier termination in accordance
with Article IX hereof, Time Broker will not take any action that Time Broker
knows, or has reason to believe, would disqualify it from providing programming
on the Stations pursuant to this Agreement.
Section 11.2. Representations, Warranties and Covenants of
Licensee.
Licensee hereby represents, warrants and covenants to Time
Broker as follows:
(i) Corporate Organization. Tuscaloosa, SRPLI and SRRLI are
corporations, duly organized, validly existing and in good standing under the
laws of the states of their respective organizations, and are duly qualified to
do business and are in good standing in any jurisdiction where they own or
operate a radio station and in each other jurisdiction where such qualification
is necessary, except for those jurisdictions where the failure to be so
qualified could not, individually or in the aggregate, have a material adverse
effect on the ability of Tuscaloosa, SRPLI or SRRLI to perform their obligations
hereunder.
(ii) Authorization of Agreement; No Breach. Tuscaloosa, SRPLI
and SRRLI have the corporate power and authority to execute, deliver and perform
this Agreement. This Agreement constitutes the valid and binding obligation of
each of Tuscaloosa, SRPLI and SRRLI, enforceable against each in accordance with
its terms, except as such enforceability may be limited by bankruptcy and laws
affecting the enforcement of creditors' rights generally or equitable
principles. Assuming the consents and approvals required elsewhere herein are
obtained and that this Agreement is filed with the FCC, neither such execution,
delivery and performance nor compliance by Tuscaloosa, SRPLI and SRRLI with the
terms and provisions hereof will conflict with or result in a breach of any of
the terms, conditions or provisions of the organizational documents of such
entities or any judgment, order, injunction, decree, regulation or ruling of any
court or any other governmental authority to which each is subject or any
material agreement or contract to which each is a party or to which they are
subject, or constitute a material default thereunder.
(iii) Actions and Proceedings. Except as disclosed in Schedule
11.2, none of Tuscaloosa, SRPLI or SRRLI is subject to any judgment, award,
order, writ, injunction,
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arbitration decision or decree which prohibits or prevents the performance of
this Agreement or the consummation of any transaction contemplated under this
Agreement, and there is no litigation, administrative action, arbitration,
proceeding or investigation pending, or to the knowledge of Tuscaloosa, SRPLI or
SRRLI, threatened, against each or affecting each in any federal, state or local
court or before any administrative agency or arbitrator that would adversely
affect Tuscaloosa's, SRPLI's or SRRLI's ability to perform their obligations
under this Agreement or would prohibit the consummation of the transactions
contemplated hereunder.
(iv) Maintenance of Current Operations. The Stations'
transmission equipment shall be maintained by Tuscaloosa, SRPLI and SRRLI in a
condition consistent with good engineering practices and in compliance in all
material respects with the Communications Act and all other applicable rules,
regulations and technical standards of the FCC.
(v) Other Agreements. During the term of this Agreement,
Tuscaloosa, SRPLI and SRRLI will not enter into any other time brokerage,
program provision, local management or similar agreement with any third party
with respect to the Stations.
ARTICLE XII.
MISCELLANEOUS
Section 12.1. Modification and Waiver.
No modification or waiver of any provision of this Agreement
shall in any event be effective unless the same shall be in writing signed by
the party against whom the waiver is sought to be enforced, and then such waiver
and consent shall be effective only in the specific instance and for the purpose
for which given.
Section 12.2. No Waiver; Remedies Cumulative.
Except as otherwise provided herein, no failure or delay on
the part of Licensee or Time Broker in exercising any right or power hereunder
shall operate as a waiver thereof, nor any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, shall preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of Licensee
and Time Broker herein provided are cumulative and are not exclusive of any
rights or remedies which they may otherwise have.
Section 12.3. Construction.
The construction and performance of this Agreement shall be
governed by the laws of the State of New York, excluding choice of law
provisions thereunder, and the obligations of the parties hereto are subject to
all federal, state or municipal laws or regulations
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now or hereafter in force and to the regulations of the FCC and all other
governmental bodies or authorities presently or hereafter duly constituted.
Section 12.4. Headings.
The headings contained in this Agreement are included for
convenience only and no such heading shall in any way alter the meaning of any
provision.
Section 12.5. Successors and Assigns.
Any party may assign all or any part of this Agreement or the
rights and obligations hereunder to a person or entity controlling, controlled
by or under common control with such party, provided that any such assignment
shall not relieve such party of its obligations hereunder. Except as otherwise
provided herein, this Agreement and the rights and obligations hereunder may not
be assigned by any party hereto without the prior written consent of the other
parties hereto, which consent shall not be unreasonably withheld. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns.
Section 12.6. Force Majeure.
The parties acknowledge and agree that a party will not be
liable for any failure to timely perform any of its obligations under this
Agreement if such failure is due, in whole or in part, directly or indirectly,
to accidents, fires, floods, governmental actions, war, civil disturbances,
other causes beyond such party's control or any other occurrence which would
generally be considered an event of force majeure.
Section 12.7. Broker.
The parties agree to indemnify and hold each other harmless
against any claims from any broker or finder based upon any agreement,
arrangement, or understanding alleged to have been made by the indemnifying
party.
Section 12.8. Counterpart Signatures.
This Agreement may be signed in one or more counterparts.
Section 12.9. Notices.
Any notice, report, demand, waiver or consent required or
permitted hereunder shall be in writing and shall be given by hand delivery, by
prepaid registered or certified mail, with return receipt requested, by an
established national overnight courier providing proof of delivery for next
business day delivery or by telecopy addressed as follows:
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If the notice is to Time Broker:
Entertainment Communications, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Field, President
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel
Entertainment Communications, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
If the notice is to Licensee:
▇▇▇▇▇▇▇▇ Communications, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇, Chief Financial Officer
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ ▇. Quicksilver, General Counsel
▇▇▇▇▇▇▇▇ Communications, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
The date of any such notice and service thereof shall be
deemed to be: (i) the day of delivery if hand delivered or delivered by
overnight courier; (ii) the day of delivery as indicated on the return receipt
if dispatched by mail; or (iii) the date of telecopy transmission as
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indicated on the telecopier transmission report provided that any telecopy
transmission shall not be effective unless a paper copy is sent by overnight
delivery on the date of the telecopy transmission. Either party may change its
address for the purpose of notice by giving notice of such change in accordance
with the provisions of this Section.
Section 12.10. Effect of this Agreement.
This Agreement and the Purchase Agreement, together with the
exhibits and schedules hereto and thereto and a letter agreement among Time
Broker and ▇▇▇▇▇▇▇▇ Communications, Inc. dated of even date herewith, set forth
the entire understanding of the parties and supersede any and all prior written
or oral agreements, arrangements or understandings relating to the subject
matter hereof. No representation, promise, inducement or statement of intention
has been made by either party which is not embodied in this Agreement, the
Purchase Agreement or the letter agreement referenced above and neither party
shall be bound by, or be liable for, any alleged representation, promise,
inducement or statement of intention not embodied herein unless same shall have
been made subsequent hereto in writing and signed by the party to be charged
therewith. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
Section 12.11. Severability.
Except as expressly set forth in Section 12.15, if any
provision contained in this Agreement is held to be invalid, illegal or
unenforceable in any respect by any court or other authority, then such
provision shall be deemed limited to the extent that such court or other
authority deems it reasonable and enforceable, and as so limited shall remain in
full force and effect. In the event that such court or other authority shall
deem any such provision wholly unenforceable, this shall not affect any other
provision hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or provisions had not been contained herein.
Section 12.12. No Joint Venture.
The parties agree that nothing herein shall constitute a joint
venture or agency between them. The parties acknowledge that call letters,
trademarks and other intellectual property shall at all times remain the
property of the respective parties and that neither party shall obtain any
ownership interest in the other party's intellectual property by virtue of this
Agreement (subject to Section 6.2).
Section 12.13. Damage to Stations.
In the event of damage or destruction to any of the
Stations (other than damage or destruction caused by Time Broker), Licensee
shall proceed to repair, replace or restore the applicable Station to its former
condition as promptly as is commercially reasonable. If Time
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Broker causes damage or destruction to any of the Stations, Time Broker shall
proceed to repair, replace or restore the applicable Station to its former
condition as promptly as is commercially reasonable. If Time Broker must
undertake repairs, replacements or restorations pursuant to the previous
sentence, Licensee shall reimburse Time Broker for the cost of such repairs,
replacements or restorations out of the proceeds from any insurance policies
maintained by Licensee that are received by Licensee as a result of such damage
or destruction. Licensee shall use reasonable efforts to effect the maximum
possible recovery for such damage or destruction under such insurance policies.
Section 12.14. Noninterference.
During the term of this Agreement, neither Licensee nor any of
their employees shall take any actions that might impair the operations of Time
Broker conducted hereunder, except to the extent expressly contemplated by this
Agreement or as otherwise required by law.
Section 12.15. Regulatory Changes.
In the event of any order or decree of an administrative
agency or court of competent jurisdiction, including without limitation any
material change or clarification in FCC rules, policies, or precedent, that
would cause this Agreement to be invalid or violate any applicable law, and such
order or decree has become effective and has not been stayed, the parties will
use their respective best efforts and negotiate in good faith to modify this
Agreement to the minimum extent necessary so as to comply with such order or
decree without material economic detriment to either party, and this Agreement,
as so modified, shall then continue in full force and effect. In the event that
the parties are unable to agree upon a modification of this Agreement so as to
cause it to comply with such order or decree without material economic detriment
to either party, then this Agreement shall be terminated.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Time
Brokerage Agreement as of the date first above written.
ENTERTAINMENT COMMUNICATIONS, INC.
By:
-------------------------------
Title:
TUSCALOOSA BROADCASTING, INC.
By:
-------------------------------
Title:
▇▇▇▇▇▇▇▇ RADIO OF PORTLAND
LICENSEE , INC.
By:
-------------------------------
Title:
▇▇▇▇▇▇▇▇ RADIO OF ROCHESTER
LICENSEE , INC.
By:
-------------------------------
Title:
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SCHEDULE 1.1
PROGRAMMING
The Programming shall consist of one hundred sixty-six (166)
hours per week on each of the Stations in an entertainment format to be chosen
by Time Broker, subject to Article II of this Agreement. The Programming shall
include (a) news and weather information; (b) public service announcements; (c)
an announcement in form sufficient to meet the station identification
requirements of the FCC at the beginning of each hour; (d) an announcement at
the beginning of each segment of Programming to indicate that program time has
been purchased by Time Broker; and (e) any other announcement that may be
required by applicable law or regulation. Time Broker shall maintain and deliver
to Licensee copies of all programming information, including, without
limitation, information concerning portions of the Programming that are
responsive to issues of public importance identified to Time Broker by Licensee,
necessary for Licensee to maintain its FCC public inspection file, and all other
records required to be kept by FCC rule or policy. Time Broker shall have the
sole and exclusive right to sell advertising to be included in the Programming
and shall be entitled to retain all the revenues derived from the sale thereof,
provided, however, that Licensee shall be entitled to sell such time as it deems
necessary to comply with the political advertising rules of the FCC in the event
the Programming does not comply with such rules.
Notwithstanding any other provision of this Agreement, Time
Broker recognizes that Licensee has certain obligations to broadcast programming
to meet the needs and interests of the communities of license for the Stations.
Licensee shall have the right to air specific programming on issues of local
importance to the communities. Nothing in this Agreement shall abrogate the
unrestricted authority of Licensee to discharge its obligations to the public
and to comply with the laws, rules and policies of the FCC with respect to
meeting the ascertained needs and interests of the public. Accordingly, Licensee
may air or cause Time Broker to produce and present under Licensee's supervision
two (2) hours a week on each of the Stations such public affairs programming
that responds to the needs and interests of listeners in each such Station's
community of license. Such public affairs programming shall be presented between
6:00 a.m. and 9:00 a.m. on Saturdays and/or Sundays or at such other times as
the public interest may require.
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SCHEDULE 1.2
COMPENSATION
(A) Beginning on the Commencement Date, Time Broker shall pay
a monthly fee (the "Monthly Payment") in the amount of the Monthly Projected
Broadcast Cash Flow (as defined below) for the Stations. The "Monthly Projected
Broadcast Cash Flow" for the Stations shall be the broadcast cash flow for the
Stations that is projected by the parties in good faith for the term of this
Agreement, and is expressly agreed to equal $631,500 per month.
In the event that the Commencement Date occurs on a day other
than the first day of a month, the initial Monthly Payment shall be an amount
equal to the Monthly Payment as determined above multiplied by a ratio, the
numerator of which is the number of days between the Commencement Date and the
end of the month in which the Commencement Date occurs and the denominator of
which is the number of days in the month in which the Commencement Date occurs.
In the event that the day in which the term of this Agreement ends is not the
last day of a month, the Monthly Payment for the month in which such day occurs
shall be similarly prorated.
(B) Except as otherwise provided in this Agreement
(specifically including Paragraph (C) to this Schedule 1.2 below), Time Broker
shall reimburse Licensee for all of its ordinary and customary expenses
(excluding only Licensee's federal, state and local income taxes) incurred in
operating the Stations (the "Operating Expenses"), including but not limited to,
rent, utilities (excluding telephone expenses incurred by Licensee), maintenance
and repairs at each of the Stations' studio and transmitter sites, insurance on
the Stations' equipment, insurance deductibles on claims on the Stations'
equipment payable in respect of damage to the Stations' equipment caused by Time
Broker, and ad valorem property taxes. Licensee shall ▇▇▇▇ Time Broker for such
Operating Expenses on a monthly basis by delivery of a statement in reasonable
detail with back-up invoices, payment for which shall be due within thirty (30)
days of such billing.
(C) During the term of this Agreement, Licensee shall make all
capital expenditures required to maintain the Stations consistent with past
practice of the Stations and as required to make the Stations operate in full
compliance with all FCC rules and regulations. At the Closing of the Purchase
Agreement, Time Broker shall reimburse Licensee for all costs of such capital
expenditures.
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SCHEDULE 2.1
PROGRAMMING POLICY STATEMENT
Time Broker agrees to cooperate with Licensee in the
broadcasting of programs of the highest possible standard of excellence and for
this purpose to observe the following regulations in the preparation, writing
and broadcasting of its programs. Further, Time Broker agrees that all material
broadcast on the Stations shall comply with all federal, state and local
applicable laws, rules and regulations.
1 1. No Plugola or Payola. The broadcast of any material
for which any money, service or other valuable
consideration is directly or indirectly paid, or
promised to or charged or accepted by, the Time
Broker, from any person, shall be prohibited, unless,
at the time the same is broadcast, it is announced as
paid for or furnished by such person.
2. Political Broadcasting. Within thirty (30) days of
the Commencement Date, Time Broker shall distribute
to all parties making requests for the purchase of
political time on the Stations, and provide Licensee
with, a written political advertising disclosure
statement which fully and accurately discloses how
the Time Broker sells programming and advertising
time and which makes parties purchasing political
programming and advertising time fully aware of the
lowest unit charge provisions of Section 315 of the
Communications Act. In addition, at least thirty (30)
days before the start of any primary or election
campaign, Time Broker will clear with the Stations'
general manager the rate Time Broker will charge for
the time to be sold to candidates to make certain
that the rate charged is in conformance with the
applicable law and station policy.
3. Required Announcements. Time Broker shall broadcast
(i) announcements in a form satisfactory to Licensee
at the beginning of each hour to identify the
Stations and (ii) any other announcements that may be
required by law, regulation, or Licensee's station
policy.
4. No Illegal Announcements. No announcements,
broadcasts or promotions prohibited by federal, state
or local law shall be made over the Stations. This
prohibition specifically includes, but is not limited
to, any and all unlawful programming or other
broadcast material concerning tobacco or alcohol
related products. The airing of any broadcast
material concerning contests, lotteries or games must
be conducted in accordance with all applicable law,
including FCC rules and regulations. Any obscene,
indecent, or fraudulent programming is prohibited.
All sponsored programming or other broadcast material
must be identified in accordance with applicable law,
including FCC rules and regulations.
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5. Licensee Discretion Paramount. In accordance with the
Licensee's responsibility under the Communications
Act and the rules and regulations of the FCC,
Licensee reserves the right to reject or terminate
any programming (including advertising) proposed to
be presented or being presented over the Stations
which is in conflict with station policy or which in
Licensee's or its general manager's reasonable
judgment would not serve the public interest.
In any case where questions of policy or interpretation arise,
Time Broker should submit the same to Licensee for decision before making any
commitments in connection therewith.
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SCHEDULE 4.1
EXCLUDED CONTRACTS
[To be provided by ▇▇▇▇▇▇▇▇]
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