EXHIBIT 10.08.01
LOCAL PROGRAMMING AND MARKETING AGREEMENT
-----------------------------------------
This Local Programming and Marketing Agreement (the "Agreement"), dated as
of June 13, 1997, is entered into by and between SONSINGER, INC. (the
"Licensee"), the licensee of radio station KKOL(AM), Seattle, Washington (the
"Station"), pursuant to authorizations issued by the Federal Communications
Commission (the "FCC"), and INSPIRATION MEDIA, INC. (the "Programmer").
WHEREAS, the Licensee has available broadcasting time and is engaged in the
business of radio broadcasting on the Station; and
WHEREAS, the Programmer desires to avail itself of Station's broadcast time
for the presentation of a programming service, including the sale of program and
advertising time, in accordance with procedures and policies approved by the
FCC;
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained, the parties hereto have agreed and do agree as follows:
1. PURCHASE OF AIR TIME AND BROADCAST OF THE PROGRAMMING. The Licensee
-----------------------------------------------------
agrees to make the broadcasting transmission facilities of the Station available
to the Programmer and to broadcast on the Station, or cause to be broadcast, the
Programmer's programs for up to 24 hours a day, seven days a week (the
"Programming"). The studio facilities and the transmitting equipment of the
Licensee relating to the Station, including any equipment owned by the Licensee
not currently in service, shall be made available to the Programmer for its use
during the term of this Agreement.
2. CONSIDERATION. The terms and conditions of payment to the Licensee for
-------------
the broadcasting of the Programming during the term of this Agreement shall be
as set forth in Schedule 2.
----------
3. TERM. This Agreement shall commence at 12:00:01 a.m. on June 13, 1997
----
("Commencement Date"). Unless earlier terminated as provided by this Agreement,
the term of this Agreement shall terminate on the tenth (10th) anniversary of
the Commencement Date; provided that either party hereto may terminate this
Agreement on thirty (30) days written notice. In the event that either party
receives formal or informal notice from the FCC that this Agreement or any of
its terms is contrary to the public interest or violates any FCC statute,
regulation, rule or policy, either party shall have the right to terminate this
Agreement immediately by written notice to the other party.
4. STATION FACILITIES.
------------------
4.1 OPERATION OF STATION. Throughout the term of this Agreement, the
--------------------
Licensee shall make the Station available to the Programmer for operation with
the maximum authorized facilities, as defined below, for up to 24 hours a day,
seven days a week, except for downtime occasioned by routine maintenance which
will be performed between the hours of 12
1
midnight and 6:00 a.m. Any maintenance work affecting the operation of the
Station at full power shall be scheduled upon at least 48 hours prior notice
with the agreement of the Programmer, such agreement not to be unreasonably
withheld. For purposes of this Agreement, the term "maximum authorized
facilities" is used with reference to the Station's signal as of the date of
commencement of this Agreement.
4.2 INTERRUPTION OF NORMAL OPERATIONS. If the Station suffers loss
---------------------------------
or damage of any nature to its transmission facilities which results in the
interruption of service or the inability of the Station to operate with its
maximum authorized facilities, the Licensee shall immediately notify the
Programmer, and shall undertake such repairs as necessary to restore the full-
time operation of the Station with its maximum authorized facilities as quickly
as reasonably practicable, but in no event more than seven (7) days from the
occurrence of such loss or damage.
5. HANDLING OF MAIL. The Programmer shall provide to the Licensee the
----------------
original or a copy of any correspondence which it receives from a member of the
public relating to the Programming to enable the Licensee to comply with FCC
rules and policies, including those regarding the maintenance of the public
inspection file (which shall at all times remain the responsibility of the
Licensee).
6. PROGRAMMING AND OPERATIONS STANDARDS. All programs supplied by the
------------------------------------
Programmer shall be in good taste and shall meet in all material respects all
requirements of the Communications Act of 1934 and all applicable rules,
regulations and policies of the FCC and the policies of the Station. All
advertising spots and promotional material or announcements shall comply with
all applicable federal, state and local regulations and Station policies. If,
in the judgment of the Licensee or the Station's General Manager, any portion of
the Programming presented by the Programmer does not meet such standards, the
Licensee may suspend or cancel any such portion of the Programming.
7. RESPONSIBILITY FOR EMPLOYEES AND RELATED EXPENSES.
-------------------------------------------------
7.1 PROGRAMMER EMPLOYEES. The Programmer shall furnish or cause to
--------------------
be furnished the personnel and material for the production of the Programming to
be provided by this Agreement. The Programmer shall not pay or reimburse the
salaries or other costs associated with any employees of Station that Licensee
may be required to employ or may elect to employ on or after the date of
commencement of this Agreement.
7.2 LICENSEE EMPLOYEES. The Licensee will provide and have
------------------
responsibility for the Station personnel necessary for the broadcast
transmission of Programmer's programs and compliance with other requirements of
the Licensee as set forth by the FCC and will be responsible for the salaries,
taxes, insurance and related costs for all such Station personnel.
8. OPERATION OF THE STATION.
------------------------
8.1 VERIFICATION OF LICENSEE CONTROL AND RIGHTS OF LICENSEE.
-------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, the Licensee shall
have full authority and power over the operation of the Station during the
period of this Agreement. The Licensee
2
shall retain control over the polices, programming and operations of
the Station, including, without limitation, the right to decide whether to
accept or reject any programming or advertisements which the Licensee deems
unsuitable or contrary to the public interest; the right to preempt any programs
in order to broadcast a program deemed by Licensee to be of greater national,
regional, or local interest; and the right to take any other actions necessary
for compliance with the laws of the United States, the rules, regulations, and
policies of the FCC (including the prohibition on unauthorized transfers of
control), and the rules, regulations and policies of other federal, state or
local governmental authorities, including the Federal Trade Commission and the
Department of Justice. The Licensee agrees that it shall carry its own public
service programming at such times as the parties may agree based on the
reasonable programming needs of the Programmer. With respect to the operation
of the Station, the Licensee shall at all times be solely responsible for
meeting all of the FCC's requirements with respect to the broadcast and nature
of any public service programming, for maintaining the political and public
inspection files and the Station log, and for the preparation of all
programs/issues lists. The Licensee expressly acknowledges that its duty to
maintain the Station's public inspection file is non-delegable and that Licensee
retains sole responsibility for maintenance of such file. The Licensee verifies
that it shall maintain the ultimate control over the Station's facilities,
including specifically control over the finances with respect to its operation
of the Station, over the personnel operating the Station, and over the
programming to be broadcast by the Station.
8.2. VERIFICATION BY PROGRAMMER AND OBLIGATIONS OF PROGRAMMER. The
--------------------------------------------------------
Programmer will, during the term of this Agreement, provide local news and
public affairs programming relevant to the Station's community to assist
Licensee in satisfying its obligations to respond to the needs of its community.
Programmer will also forward to Licensee within twenty-four (24) hours of
receipt by Programmer, any letter from a member of the general public addressing
Station programming or documentation which comes into its custody which is
required to be included in the Station's public file or which is reasonably
requested by Licensee. The Programmer shall furnish within the Programming on
behalf of the Licensee all Station Identification Announcements required by the
FCC rules, and shall, upon request by the Licensee, provide monthly
documentation with respect to such of the Programmer's programs which are
responsive to the public needs and interests of the area served by the Station
in order to assist the Licensee in the preparation of any required programming
reports, and will provide upon request other information to enable the Licensee
to prepare other records, reports and logs required by the FCC or other local,
state or federal governmental agencies.
9. PAYOLA. The Programmer will provide to the Station in advance of
------
broadcast any information known to the Programmer regarding any money or other
consideration which has been paid or accepted, or has been promised to be paid
or to be accepted, for the inclusion of any matter as a part of any programming
or commercial material to be supplied to the Licensee by the Programmer for
broadcast on the Station, unless the party making or accepting such payment is
identified in the program as having paid for or furnished such consideration in
accordance with FCC requirements. Should the Station determine that an
announcement is required by Section 317 of the Communications Act of 1934 and
related FCC rules, the Programmer will insert that announcement in the
Programming. The Programmer will obtain from its employees responsible for the
Programming appropriate anti-payola/plugola affidavits. Commercial matter with
obvious sponsorship identification will not require disclosure beyond the
sponsorship identification
3
contained in the commercial copy. The Programmer will at all times comply, and
seek to have its employees comply, in all material respects with the
requirements of Sections 317 and 507 of the Communications Act of 1934, as
amended, and the related rules and regulations of the FCC.
10. COMPLIANCE WITH LAW. The Programmer will comply in all material
-------------------
respects with all laws and regulations applicable to the broadcast of
programming by the Station.
11. INDEMNIFICATION: RIGHTS OF THE LICENSEE. The Programmer will
---------------------------------------
indemnify and hold the Licensee, its officers, directors, stockholders, partners
and employees harmless from and against all liability for libel, slander,
illegal competition or trade practice, violation of rights of privacy, and
infringement of copyrights or other proprietary rights and violations of the
Communications Act of 1934 or FCC rules resulting from the broadcast of
Programming furnished by the Programmer. Such indemnification shall apply to
any and all claims, damages, liability, forfeitures, costs and expenses,
including reasonable attorneys' fees, arising from the broadcasting of any
programs supplied by the Programmer and shall survive the termination of this
Agreement.
12. EVENTS OF DEFAULT: CURE PERIODS AND REMEDIES.
--------- ----------------------------------
12.1 EVENTS OF DEFAULT. The following shall constitute Events of
-----------------
Default under this Agreement:
12.1.1. NON-PAYMENT. If Programmer shall fail to pay, within five
-----------
business days of the date when due, the fees payable in accordance with Schedule
--------
2, hereof.
-
12.1.2 DEFAULT IN COVENANTS OR ADVERSE LEGAL ACTION. The default by
--------------------------------------------
either party in the performance of any material covenant, condition or
undertaking contained in this Agreement and such default is not cured within
thirty (30) days after receipt of notice of default.
12.1.3 BREACH OF REPRESENTATION. If any material representation or
------------------------
warranty made by either party to this Agreement, or in any certificate or
document furnished by either party to the other pursuant to the provisions of
this Agreement, shall prove to have been false or misleading in any material
respect as of the time made or furnished, and such misrepresentation or breach
of warranty is not cured within thirty (30) days after receipt of notice of
misrepresentation or breach.
12.2. TERMINATION UPON DEFAULT. Upon the occurrence of an Event of
------------------------
Default, the non-defaulting party may terminate this Agreement, provided that it
is not also in material default under this Agreement.
12.3. LIABILITIES UPON TERMINATION. The Programmer shall be
----------------------------
responsible for all of its liabilities, debts and obligations accrued from the
purchase of broadcast time and transmission facilities of the Station,
including, without limitation, indemnification pursuant to
Section 16 hereof; accounts payable, barter agreements and unaired
----------
advertisements, but not for the Licensee's federal, state, and local tax
liabilities associated with Programmer's payments to
4
Licensee as provided for herein, or for any other obligations or liabilities of
the Licensee or the Station unless specifically assumed by the Programmer under
this Agreement. Upon termination, the Programmer shall return to the Licensee
any equipment or property of the Station used by the Programmer, its employees
or agents, in substantially the same condition as such equipment existed on the
date of this Agreement, ordinary wear and tear excepted, provided that the
Programmer shall have no liability to the Licensee for any property of the
Licensee which through ordinary use became obsolete or unusable, and any
equipment purchased by the Programmer, whether or not in replacement of any
obsolete or unusable equipment of the Licensee, shall remain the property of the
Programmer.
13. TERMINATION UPON ORDER OF JUDICIAL OR GOVERNMENTAL AUTHORITY. If any
------------------------------------------------------------
court of competent jurisdiction or any federal, state or local governmental
authority designates a hearing with respect to the continuation or renewal of
any license or authorization held by the Licensee for the operation of the
Station, advises any party to this Agreement of its intention to investigate or
to issue a challenge to or a complaint concerning the activities permitted by
this Agreement, or orders the termination of this Agreement and/or the
curtailment in any manner material to the relationship between the parties to
this Agreement of the provision of programming by the Programmer, the Programmer
shall have the option to seek administrative or judicial appeal of or relief
from such order(s) (in which event the Licensee shall cooperate with the
Programmer provided that the Programmer shall be responsible for legal fees
incurred in such proceedings) or the Programmer shall notify the Licensee that
the Agreement will be terminated in accordance with such order(s). If the FCC
designates the renewal application of the Station for a hearing as a consequence
of this Agreement or for any other reason, the Licensee shall be responsible for
its expenses incurred as a consequence of the FCC proceeding; provided, however,
that the Programmer shall cooperate and comply with any reasonable request of
the Licensee to assemble and provide to the FCC information relating to the
Programmer's performance under this Agreement. Upon termination following such
governmental order(s), the Programmer shall pay to the Licensee any fees due but
unpaid as of the date of termination as may be permitted by such order(s), and
the Licensee shall reasonably cooperate with the Programmer to the extent
permitted to enable the Programmer to fulfill advertising or other programming
contracts then outstanding. Thereafter, neither party shall have any liability
to the other.
14. MODIFICATION AND WAIVER. No modification or waiver of any provision
-----------------------
of this Agreement shall be effective unless made in writing and signed by the
party adversely affected, and any such waiver and consent shall be effective
only in the specific.
15. NO WAIVER: REMEDIES CUMULATIVE. No failure or delay on the part of
------------------------------
the Licensee or the Programmer in exercising any right or power under this
Agreement shall operate as a waiver thereof; nor shall 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, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the parties to this Agreement are cumulative and are not exclusive of any right
or remedies which either may otherwise have.
5
16. CONSTRUCTION. This Agreement shall be construed in accordance with
------------
the laws of the Station is located. The obligations of the parties to this
Agreement are subject to all federal, state or local laws or regulations,
including those of the FCC, now or hereafter in force.
17. HEADINGS. The headings contained in this Agreement are included for
--------
convenience only and shall not in any way alter the meaning of any provision.
18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties and their respective successors and assigns.
19. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
----------------
between the parties and there are no other agreements, representations,
warranties, or understandings, oral or written, between them with respect to the
subject matter hereof.
20. SEVERABILITY. The event that any of the provisions contained in this
------------
Agreement is held to be invalid, illegal or unenforceable shall not affect any
other provision hereof; and this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had not been contained herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SONSINGER, INC. INSPIRATION MEDIA, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------- -------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President Vice President
6
SCHEDULE 2
CALCULATION OF LMA FEE
BASE FEE
--------
1. CALCULATION. The Licensee shall be paid, in advance on the first day
-----------
of each month, a base monthly fee equal to the sum of:
(a) ______________, and
(b) The operational costs of the Station paid by Licensee.
Operational costs under this Subsection (b) shall include without limitation any
-------------
rental expenses associated with studio and transmitter locations, music license
fees, maintenance and utilities and any other expenses associated with operation
of the Station which, by virtue of existing contracts with Licensee or
otherwise, must continue to be paid directly by Licensee during the term of this
Agreement. Operational costs shall not include professional fees or any
principal or interest payments on notes payable. All other operational costs of
the Station shall be paid directly by the Programmer.