LOCAL MARKETING AGREEMENT
EXHIBIT
10.4
[Execution Version]
This LOCAL MARKETING AGREEMENT (the “Agreement”), made as of this 26th day of June, 2006, by
and between Xxxxxx Broadcasting Company, a Washington corporation (“Xxxxxx”), and African-American
Broadcasting of Bellevue, Inc., a Washington corporation (“Operator”).
W I T N E S S E T H:
WHEREAS, Operator is the owner of substantially all of the assets used or useful for the
operation of the television station KWOG, Bellevue, Washington (the “Station”);
WHEREAS, Xxxxxx and Xxxxxxxxxxx Xxxxxx, an individual residing in the State of Washington, who
owns 100% of the capital stock of Operator (“Racine”) have entered into a Stock Purchase Agreement,
dated as of the date hereof, for the sale of all of the issued and outstanding capital stock of
Operator to Xxxxxx, a copy of which is attached hereto as Exhibit A (the “Purchase Agreement”);
WHEREAS, Xxxxxx desires to assist Operator in providing programming to be transmitted on the
Station and to provide management and operation services with respect to the Station; and
WHEREAS, Operator desires to accept Xxxxxx’x assistance and transmit programming supplied by
Xxxxxx on the Station while maintaining ultimate control over the Station’s finances, personnel
matters and programming, as well as continuing to broadcast Operator’s own public interest
programming;
NOW, THEREFORE, in consideration of these premises and the mutual promises, undertakings,
covenants and agreements of the parties contained in this Agreement, the parties hereto do hereby
agree as follows:
ARTICLE 1 — PROGRAMMING
Section 1.1 Programming. Xxxxxx hereby agrees to provide, and Operator agrees to transmit on
the Station (including, without limitation, its subcarriers, vertical blanking intervals and any
additional authorizations or spectrum allocated to the Station in the future, including, without
limitation, its digital television channels), news, sports, informational, public affairs and
entertainment programming and associated advertising, promotional and public service programming
and announcement matter sufficient to program a substantial amount of each Station’s broadcast day
on a daily basis beginning at the Commencement Time (defined below) and continuing thereafter
throughout the term of this Agreement (hereinafter the “Xxxxxx Programming”).
Section 1.2 Operator Programming. Operator will retain ultimate responsibility for
ascertaining the needs of the Station’s community of license and service area, including
specifically the informational and educational needs of the children therein. Beginning at the
Commencement Time and thereafter during the term of this Agreement (including, without limitation,
any renewals), Xxxxxx will consult regularly with Operator regarding Operator’s
ascertainment of community issues, including the educational and informational needs of
children within the Station’s community of license. Based upon these consultations, the Xxxxxx
Programming will include news, public affairs and children’s programming relevant to the Station’s
community of license and of sufficient quality to assist Operator in satisfying its obligations to
respond to the needs of the community, including at least three (3) hours per week of core
children’s programming consistent with the FCC’s rules. Operator shall have the right and
obligation to broadcast at reasonably agreeable times such additional programming, either produced
or purchased by Operator, as it in good faith determines appropriate to respond to the ascertained
issues of community concern (“Operator Programming”), and to delete or preempt in its sole good
faith discretion any Xxxxxx Programming for the purpose of transmitting such Operator Programming.
In all cases of deletion or preemption of Xxxxxx Programming by Operator, except those involving
breaking news, Operator shall make reasonable efforts to provide Xxxxxx with not less than fifteen
(15) days notice of Operator’s intention to delete or preempt Xxxxxx Programming.
Section 1.3 Preemption. In addition to the above right of Operator to delete or preempt
Xxxxxx Programming in order to transmit programming responsive to issues of concern to the
Station’s community of license and service area, and to children, Operator maintains the
independent right to preempt or delete any Xxxxxx Programming which Operator reasonably believes in
good faith to be unsatisfactory or unsuitable or contrary to the public interest, or to substitute
programming which, in Operator’s reasonable determination, is of greater local or national
importance.
Section 1.4 Access to and Use of Assets. Operator hereby grants to Xxxxxx, and Xxxxxx hereby
accepts from Operator, access to and the right to use, at any time and from time to time after the
Commencement Time and continuing thereafter during the term of this Agreement and under the
supervision and control of Operator, antennae, transmitters, equipment, assets, studio space,
rights under leases and all other property owned or leased by Operator and used and useful in
connection with the business and operation of the Station (collectively, the “Operator Assets”),
pursuant to the terms and subject to the conditions of this Agreement.
Section 1.5 Conditions to Use of Operator Assets.
(a) Xxxxxx shall use the Operator Assets only to perform its obligations under this Agreement.
(b) The Operator Assets will, to the extent used by Xxxxxx throughout the term of this
Agreement, be used in all material respects in accordance with all applicable FCC rules and
policies and subject to Operator’s ultimate oversight and control. Xxxxxx may not, without
Operator’s prior written consent or except as otherwise provided in this Agreement, make
alterations in or modifications to the Operator Assets.
(c) Xxxxxx shall not use or permit the Operator Assets to be used in any manner or for any
purpose for which the Operator Assets are not designed or reasonably suitable or otherwise in a
manner that is inconsistent with good engineering practices. Xxxxxx shall comply with all
governmental laws, rules and regulations concerning the operation of the Operator Assets.
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(d) Operator shall retain title to all of the Operator Assets throughout the term of this
Agreement and nothing contained herein shall be deemed to effect any transfer of such title.
ARTICLE 2 — OPERATIONS
Section 2.1 Compliance With FCC Regulations.
(a) Operator will retain responsibility for and employ such personnel as is necessary to
assure compliance with all FCC rules and policies, including, without limitation, all FCC rules and
policies relating to (i) technical operations of the Station, (ii) programming content
requirements, (iii) the maintenance of a main studio and a meaningful managerial and staff presence
at that main studio, (iv) ascertainment of, and programming in response to, community needs and
concerns and the needs and concerns of children, (v) political programming, (vi) sponsorship
identification, (vii) lotteries and contests, (viii) the maintenance of the Station’s public and
political files and (ix) the compilation of appropriate quarterly programs/issues lists, children’s
programming lists and employment records.
(b) Operator expressly acknowledges that its duty to maintain the Station’s public inspection
files is non-delegable, and it retains sole responsibility for maintenance of the files. Xxxxxx
will provide to Operator monthly documentation of the programs it has provided to the Station that
it believes address issues of concern to the Station’s community of license. Xxxxxx also will
forward to Operator, within twenty-four (24) hours of receipt by Xxxxxx, any letter from a
Station’s viewer addressing the Station’s programming and any documentation that comes into
Xxxxxx’x custody that Xxxxxx believes is required to be included in the Station’s public inspection
file.
(c) Operator will be responsible for ensuring proper broadcast of the Station’s identification
announcements; provided, however, that Xxxxxx will provide appropriate identification announcements
for the Station that comply with FCC rules and policies in a form reasonably acceptable to
Operator.
(d) Xxxxxx agrees that neither it nor its agents, employees, consultants or personnel will
accept any consideration, compensation, gift or gratuity of any kind whatsoever, regardless of its
value or form, including, without limitation, a commission, discount, bonus, materials, supplies or
other merchandise, services or labor (collectively, “Consideration”), whether or not pursuant to
written contracts or agreements between Xxxxxx and merchants or advertisers, unless the person or
entity paying such Consideration is identified in the program for which the Consideration was
provided as having paid or furnished such Consideration in accordance with the Communications Act
of 1934, as amended (the “Communications Act”), applicable FCC rules and policies and any other
applicable laws and governmental regulations.
(e) Operator shall retain full responsibility for overseeing compliance with the FCC’s
political programming rules and policies. At least ninety (90) days prior to the beginning of any
primary or general election period, subject to Operator’s approval, Xxxxxx shall propose reasonable
rates to be charged to legally qualified political candidates which rates conform with applicable
election law and FCC rules and policies. Xxxxxx agrees to provide Operator with
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access to its documentation concerning the pricing of advertising sold on the Station as is
necessary to permit Operator to ascertain that the political rate is appropriate. Within
twenty-four (24) hours of any request to purchase time on a Station on behalf of a legally
qualified candidate, Xxxxxx will report to Operator the request and the disposition of such
request. Operator shall be responsible for placing appropriate records in the Station’s political
files.
Section 2.2 Maintenance.
(a) After the Commencement Time and thereafter during the term of this Agreement, Xxxxxx shall
use its commercially reasonable efforts to assist Operator, at all times under the supervision and
ultimate control of Operator, in the operation the Station.
(b) Operator shall retain ultimate operational control over the Station and shall retain full
responsibility for ensuring compliance with all FCC technical rules and policies. Operator will
employ a chief operator, as defined by the FCC rules and policies (and who may also hold the
position of chief engineer), who will be responsible for, without limitation, ensuring compliance
by the Station with the technical operating and reporting requirements established by the FCC, and
overseeing maintenance of the Station’s transmission facilities. Operator shall also employ at
least one other full-time employee of Operator’s choice, to be present at the Station’s main studio
in compliance with the FCC’s rules and policies. Xxxxxx shall not take any action, or fail to take
any action which it is obligated to take under this Agreement, which will cause the Station not to
comply with applicable law, and Xxxxxx will provide reasonable assistance to Operator to ensure
that the Station complies with applicable law.
(c) After the Commencement Time and thereafter during the term of this Agreement, Operator
will make available to Xxxxxx at least ninety five percent (95%) of the Station’s effective
radiated power (as operating as of the Commencement Date) for the entire time that such Station is
broadcasting over the air, except for downtime required for occasional maintenance and other
interruptions contemplated by Section 2.2(d) and events described in Section 7.1 hereof. Operator
will use reasonable efforts to provide Xxxxxx with at least forty eight (48) hours advance written
notice of any routine or non-emergency maintenance work affecting the operation of the Station at
full power. Operator will, to the extent possible, (i) schedule such maintenance work to be
performed between the hours of 1:00 a.m. and 6:00 a.m., local time, and (ii) not schedule such
maintenance to take place during a rating period.
(d) After the Commencement Time and thereafter during the term of this Agreement, if the
Station suffers any loss or damage of any nature to its transmission or studio facilities which
results in the interruption of service or the inability of the Station to operate with its FCC
licensed facilities (as operating as of the Commencement Date), Operator will immediately notify
Xxxxxx of such loss or damage and Operator will undertake such repairs as are necessary to restore
full-time operation of the Station as expeditiously as reasonably possible following the occurrence
of any such loss or damage. If Operator is unable to or fails to make such repairs as soon as
reasonably possible after providing such written notice to Xxxxxx, then Xxxxxx may elect to
undertake such repairs with written notice to Operator.
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Section 2.3 Additional Affirmative Covenants.
(a) Operator covenants and agrees that it will fully comply with all applicable federal, state
and local laws, rules and regulations (including, without limitation, all FCC rules and policies)
and pertinent provisions of all contracts, permits and other agreements to which it is a party or
is otherwise bound related to the Station or this Agreement.
(b) (i) Xxxxxx covenants and agrees that it will fully comply with all applicable federal,
state and local laws, rules and regulations (including, without limitation, all FCC rules and
policies) in the provision of the Xxxxxx Programming and other services to Operator pursuant to
this Agreement and otherwise in connection with the performance of its obligations hereunder.
(ii) In performing its obligations hereunder, Xxxxxx shall use its commercially reasonable
efforts to perform or discharge on behalf of Operator the obligations and liabilities under all
contracts related to the business and operation of the Station to which Operator is a party or by
which Operator may be bound (other than the ShopNBC Agreement, as defined herein) (the “Existing
Contracts”) in accordance with the provisions hereof. In connection with the foregoing, Operator
shall use all commercially reasonable efforts to provide Xxxxxx with the benefits of any such
Existing Contract.
(iii) Except as the parties may otherwise agree, Xxxxxx shall not designate or engage any
agent or otherwise subcontract with any third party to perform its duties or obligations under this
Agreement or delegate the performance of such duties or obligations to any third party, including,
without limitation, its duties and obligations hereunder with respect to Xxxxxx Programming and the
advertising sold in connection therewith.
(c) Operator covenants and agrees to (i) promptly cause the termination of the ShopNBC
Agreement (as hereinafter defined) at soon as practicable; (ii) deliver to Xxxxxx a copy of the
notice of termination of Operator pursuant to the foregoing clause; and (iii) notify Xxxxxx of the
effective date of termination of the ShopNBC Agreement.
ARTICLE 3 — FEES AND OTHER CONSIDERATION
Section 3.1 LMA Fee. From and after the Commencement Time, in consideration of the right to
perform the services contemplated under this Agreement, Xxxxxx will pay to Operator a monthly fee
in an amount equal to $150,954.38 (the “LMA Fee”). The LMA Fee will be due and payable by Xxxxxx
each calendar month following the Commencement Date through the expiration or termination hereof
(including a pro rated portion of the LMA Fee for any partial calendar month), and shall be due and
payable on or before the tenth day of each calendar month for such calendar month (provided,
however, that the first payment of the LMA Fee shall be due and payable within ten (10) days
following the Commencement Date).
Section 3.2 Expenses.
(a) Except as otherwise provided in Section 3.2(b), and without limiting the scope of Section
3.2(c), Operator shall be solely responsible for paying any and all of Operator’s expenses in
connection with the business and operation of the Station, including Monthly Costs
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(as defined in Exhibit B) and those expenses contemplated in Section 2.2(b), consistent with
the operations of the Station in the ordinary course and past practice, and Xxxxxx shall have no
obligation to reimburse Operator for such expenses independent of the payment obligation of Xxxxxx
pursuant to the terms and subject to the conditions of Section 3.1; provided, however, that
Operator shall not be responsible for paying (and Xxxxxx shall be responsible for) any such
expenses to the extent that such expenses increase by a material amount due directly to the
performance or exercise of its rights by Xxxxxx under this Agreement.
(b) Notwithstanding anything in Section 3.2(a) to the contrary, upon a Triggering Termination
Event (as hereinafter defined) and thereafter and during the Extension Period (as hereinafter
defined), Xxxxxx shall pay to Operator, in addition to the LMA Fee due and payable pursuant to the
terms and subject to the conditions of Section 3.1, the amounts described on Exhibit B hereto
pursuant to the terms and subject to the conditions set forth therein.
(c) Xxxxxx shall be responsible for any and all fees charged by ASCAP, BMI, SESAC or similar
performing rights societies on Xxxxxx Programming, whether such fees are assessed against Xxxxxx
based on the Xxxxxx Programming or against Operator based on the ownership of the Station. Xxxxxx
shall not disseminate or authorize dissemination by other parties of information concerning the
ratings of the Station issued by Xxxxxxx Media Research, the Arbitron Company or any other entity,
other than as permitted under Xxxxxx’x valid license with such parties. Operator shall not be
required to purchase a license to receive ratings information but will cooperate with Xxxxxx in
Xxxxxx’x efforts to obtain such a license, provided that any consideration payable under such a
license is paid by Xxxxxx.
ARTICLE 4 — XXXXXX RETAINED REVENUE AND RELATED MATTERS
Section 4.1 Retained Revenue. Without limiting the obligations of Xxxxxx pursuant to the
terms and subject to the conditions of Article 3, Xxxxxx shall retain all revenues resulting from
the sale of advertising and other time on the Station from and after the Commencement Time and
thereafter during the term of this Agreement, including all revenue from the sale of advertising
and other time during the Operator Programming or otherwise resulting from the operation of the
Station during the term of this Agreement.
Section 4.2 Advertising Sales. Beginning at the Commencement Time and thereafter during the
term of this Agreement, Xxxxxx shall have the sole right to (a) sell advertising to be placed in
all programming broadcast on each of the Station, including, without limitation, Operator
Programming; (b) xxxx for and collect the payments for all programs and commercials aired on the
Station; (c) negotiate for and receive all compensation (if any) due to the Station from (i) cable
television systems pursuant to the “retransmission consent” provisions of the Cable Television
Consumer Protection and Competition Act of 1992, as amended, and the FCC’s rules and policies
enacted pursuant thereto, and (ii) satellite service providers pursuant to the Satellite Home
Viewer Improvement Act of 1999, as amended, and the FCC’s rules and policies enacted pursuant
thereto. Operator will take, or refrain from taking, any action as to matters related to clause
(c) above in accordance with Xxxxxx’x commercially reasonable requests.
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Section 4.3 [Intentionally blank.]
Section 4.4 Bank Accounts. Xxxxxx may deposit any sums it is entitled to retain pursuant to
this Agreement or otherwise with respect to the Station into one or more bank accounts of Xxxxxx,
established by Xxxxxx in Xxxxxx’x name for this purpose (the “Xxxxxx Accounts”), and the funds in
the Xxxxxx Accounts will be the property of Xxxxxx except as otherwise provided in this Agreement
or the Purchase Agreement. Solely with respect to payments relating to the Station which Xxxxxx is
authorized to retain under this Agreement, Xxxxxx is authorized to endorse payments received in
names other than Xxxxxx’x (e.g., “KWOG”) in order to deposit such payments into the Xxxxxx
Accounts.
ARTICLE 5 — TERM, TERMINATION AND ASSIGNMENT
Section 5.1 Term. This Agreement shall become binding and effective between the parties as of
the date first set forth above. Subject to the provisions contained herein, the programming rights
and obligations of the parties shall commence on the day immediately following the date on which
that certain Programming Agreement (Renewal), by and between Operator and Value Vision Media, Inc.,
dated effective as of December 1, 2005, for ShopNBC shop at home programming (the “ShopNBC
Agreement”) expires or is terminated, or such other date as may be agreed upon in writing by the
parties (such date, the “Commencement Date”) at 12:01 a.m. local time at the Station (the
“Commencement Time”); provided, however, that in no event shall the Commencement Date be less than
thirty (30) days from the date hereof. The term of this Agreement shall expire upon the earlier to
occur of (a) the Closing (as defined in the Purchase Agreement), or (b) termination of this
Agreement pursuant to Section 5.2 or Section 5.3 hereof; provided, however, that in the event that
the Purchase Agreement is terminated by Racine pursuant to the terms and subject to the conditions
of Section 16.1(b) of the Purchase Agreement (a “Triggering Termination Event”), the term of this
Agreement shall be deemed extended, subject to Section 5.2 hereof, for a period ending on the
second anniversary of the date of the Triggering Termination Event (such period, the “Extension
Period”).
Section 5.2 Termination; Effect of Termination.
(a) In the event that either party shall be in breach of this Agreement for the nonperformance
of a material obligation, the non-breaching party may, in addition to pursuing any other remedies
available at law or in equity, terminate this Agreement if such breach shall continue for a period
of fifteen (15) days following the receipt of written notice from the non-breaching party, which
notice shall set forth and describe the nature of such breach, except if the breaching party has
commenced a cure of such breach within such fifteen (15) day period and continues to act in good
faith to cure and such breach is cured within a reasonable time not to exceed thirty (30) days. A
breach by Xxxxxx or by Xxxxxx (which shall be considered to be a breach by Operator solely in
connection with the termination provisions of this Agreement) of the Purchase Agreement shall be
considered a breach of this Agreement, provided, however, that the cure periods for such breach
shall be governed by the Purchase Agreement and not the foregoing cure periods set forth above in
this subsection (a).
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(b) In the event that the Purchase Agreement is terminated pursuant to Section 16.1(g)
thereof, then Xxxxxx shall have the right, on ninety (90) days advance written notice to Operator,
to terminate this Agreement.
(c) In the event that the sale of the Closing Shares and the Initial Shares pursuant to the
terms and subject to the conditions of Section 16.4 of the Purchase Agreement is consummated (a
“Drag-Along Closing”), this Agreement shall terminate automatically upon such Drag-Along Closing.
(d) In the event of termination of this Agreement as a result of a breach by Xxxxxx pursuant
to Section 5.2(a), Xxxxxx shall cooperate in good faith with Operator and shall take such actions
at no additional cost to Xxxxxx as may be reasonably necessary in order to transition the
programming of the Station from Xxxxxx Programming and to permit Operator to program the Station’s
broadcast day on a daily basis for at least the minimum operating schedule specified in Section
73.1740 of the FCC’s rules including, without limitation, by (i) assigning to Operator any
agreements for the provision of any Xxxxxx Programming as Operator may reasonably request and (ii)
prior to the effectiveness of such assignment or to the extent that such assignment cannot be made
or an attempted assignment of any contract related to the Xxxxxx Programming is ineffective, taking
all reasonably necessary actions to provide Operator with the benefits of any such contract,
provided that to the extent Operator is provided with the benefits of such contract, Operator shall
perform or discharge on behalf of Xxxxxx the obligations and liabilities under such contract in
accordance with the provisions thereof. With respect to any actions in connection with the
foregoing that would result in any additional cost or fee to Xxxxxx, Xxxxxx shall only be required
to take such actions to the extent Operator agrees, in writing, to pay or reimburse Xxxxxx for such
additional cost or fee in advance of the incurrence of such cost or fee.
(e) [Intentionally blank.]
(f) In the event of termination of this Agreement (other than by reason of the Closing (as
defined in the Purchase Agreement)), the parties shall pro rate the revenues, expenses, and
liabilities attributable to the Station, including the power and utilities, ad valorem property
taxes (upon the basis of the most recent assessment available), rents, income and sales taxes, and
similar accruing, prepaid and deferred items, in accordance with the principles that Xxxxxx will be
allocated revenues earned or accrued, and expenses, costs and liabilities incurred in or allocable
with respect to the business and operation of the Station from the Commencement Time through the
effective time at which this Agreement terminates (the “Termination Time”) and Operator will be
allocated revenues earned or accrued, and expenses, costs and liabilities incurred in or allocable,
with respect to the business and operation of the Station after the Termination Time.
(g) In the event of termination of this Agreement (other than by reason of the Closing (as
defined in the Purchase Agreement)), Operator shall reimburse Xxxxxx for any capital expenditures
paid by Xxxxxx (or reimbursed by Xxxxxx to Operator) to the extent that (i) such capital
expenditure relates to the repair or replacement of any of the assets relating to the Station and
(ii) Operator consented in writing to such capital expenditures prior to the incurrence thereof
after written notice to Operator seeking such consent and describing in reasonable detail the basis
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therefor (such capital expenditures the “Approved Expenditures”). Any Approved Expenditures
shall be payable by Operator after the Termination Time and within ten (10) days following receipt
of written notice from Xxxxxx with a final accounting of all Approved Expenditures, including a
certificate executed by an officer of Xxxxxx setting forth the Approved Expenditures actually
incurred by Xxxxxx with attached thereto reasonable documentation in support thereof.
(h) In the event of termination of this Agreement (other than by reason of the Closing (as
defined in the Purchase Agreement)), Xxxxxx shall assign to Operator all right, title and interest
it shall have or may have in and to (i) any assets acquired or leased by Xxxxxx pursuant to any
Approved Expenditure and (ii) any other fixture or improvement owned or leased by Xxxxxx, and
Xxxxxx and Operator shall execute and deliver all instruments necessary to effectuate the
foregoing.
Section 5.3 Renegotiation Upon FCC Action.
(a) Should a change in FCC rules or policies make it necessary to obtain FCC consent for the
implementation, continuation or further effectuation of any element of this Agreement, the parties
hereto shall use their commercially reasonable efforts diligently to prepare, file and prosecute
before the FCC all petitions, waivers, applications, amendments, rulemaking comments and other
related documents necessary to secure or retain FCC approval of all aspects of this Agreement.
Operator and Xxxxxx shall each bear their own costs incurred in connection with the preparation of
such documents and prosecution of such actions. Notwithstanding anything in this Agreement to the
contrary, it is understood that no filing shall be made with the FCC with respect to this Agreement
unless each party hereto has had an opportunity to review such filing and to provide comments
thereon. Each party shall use its commercially reasonable efforts to incorporate the comments
(whether in whole or in part) of the other parties to any filing to be made with the FCC with
respect to this Agreement.
(b) If any court or federal, state or local government authority (including the FCC) orders or
takes any action which becomes effective and which requires the termination or material
modification of this Agreement to comply with such action or otherwise with applicable law (a
“Permissibility Determination”), the parties shall use their commercially reasonable efforts to
renegotiate this Agreement in good faith and recast this Agreement in terms that are likely to cure
the defects caused by the Permissibility Determination while maintaining the benefit of the bargain
to the parties hereunder and to return a balance of benefits to both parties comparable to the
balance of benefits provided by the Agreement in its current terms. If the parties are unable to
recast this Agreement in a manner that cures such defects and otherwise is mutually agreeable to
the parties, this Agreement will terminate effective on such date as the parties’ activities are
required to terminate pursuant to the Permissibility Determination. Upon such termination of this
Agreement, Operator will reasonably cooperate with Xxxxxx to the extent permitted in order to
enable Xxxxxx to fulfill advertising or other programming contracts then outstanding, and Xxxxxx
will reasonably cooperate with Operator in order to effectuate a reasonable transition period from
the Xxxxxx Programming to other programming on the Station.
Section 5.4 Assignability. No party hereto may assign this Agreement without the prior
written consent of the other parties; provided, however, that this Agreement shall be
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assigned in connection with any assignment by any party of its rights and obligations under
the Purchase Agreement that is permitted under the terms of the Purchase Agreement. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
ARTICLE 6 — INDEMNIFICATION
Section 6.1 Indemnification by Xxxxxx. Xxxxxx will indemnify, defend and hold harmless
Operator, its affiliates and all officers, directors, employees, stockholders, partners, members
and agents of Operator and their affiliates (individually, an “Operator Indemnitee”) from and
against any and all claims, demands, costs, damages, losses, liabilities, joint and several,
expenses of any nature (including, without limitation, reasonable attorneys’, accountants’ and
experts’ fees and disbursements), judgments, fines, settlements and other amounts (collectively,
“Damages”) arising from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative (collectively, “Claims”) in which an Operator Indemnitee
may be involved, as a party or otherwise, arising out of: (a) the activities, acts or omissions of
Xxxxxx, or Xxxxxx’x employees, agents or contractors, under or in connection with this Agreement or
with respect to the Station which activities, acts or omissions involve or result in, among other
things, (i) libel and slander; (ii) infringement of trade marks, service marks or trade names;
(iii) violations of law, rules, regulations, or orders (including the FCC’s rules and policies); or
(iv) invasion of rights of privacy or infringement of copyrights or other proprietary rights; or
(b) any breach by Xxxxxx of its obligations under this Agreement.
Section 6.2 Indemnification by Operator. Operator will indemnify, defend and hold harmless
Xxxxxx, its affiliates and all officers, directors, employees, stockholders, partners, members and
agents of Xxxxxx and their affiliates (individually, a “Xxxxxx Indemnitee”) from and against any
and all Damages arising from any and all Claims in which a Xxxxxx Indemnitee may be involved, as a
party or otherwise, arising out of: (a) the activities, acts or omissions of Operator, or
Operator’s employees, agents or contractors, under or in connection with this Agreement or with
respect to the Station which activities, acts or omissions involve or result in, among other
things, (i) libel and slander; (ii) infringement of trade marks, service marks or trade names;
(iii) violations of law, rules, regulations, or orders (including the FCC’s rules and policies); or
(iv) invasion of rights of privacy or infringement of copyrights or other proprietary rights; or
(b) any breach by Operator of its obligations under this Agreement.
Section 6.3 Insurance. Xxxxxx will maintain broadcasters’ liability insurance policies
covering libel, slander, invasion of privacy and the like, general liability, blanket crime,
property damage, business interruption, automobile liability, and workers’ compensation insurance
in forms and amounts customary in the television broadcast industry (to the extent commercially
reasonable, for example, Xxxxxx shall not be required to obtain insurance specifically with respect
to property it does not own), and Operator will maintain the existing insurance policies on the
Station or other policies providing substantially similar coverages, and each of the parties hereto
will name the other as an additional insured under such policies to the extent that their
respective interests may appear and will provide for notice to the other party prior to
cancellation thereof. Upon request, each party will provide the other with certificates evidencing
such insurance, and will further provide certificates evidencing renewal thereof prior to the
expiration of such policies.
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ARTICLE 7 — MISCELLANEOUS
Section 7.1 Force Majeure. Notwithstanding anything contained in this Agreement to the
contrary, no party shall be liable to another party for failure to perform any obligation under
this Agreement if prevented from doing so by reason of fires, acts of terrorism, strikes, labor
unrest, embargoes, civil commotion, rationing or other orders or requirements, acts of civil or
military authorities, acts of God or other contingencies, including, without limitation, equipment
failures, beyond the reasonable control of the parties, and all requirements as to notice and other
performance required hereunder within a specified period shall be automatically extended to
accommodate the period of pendency of such contingency which shall interfere with such performance.
Section 7.2 Confidentiality and Press Releases.
(a) Each party shall hold in strict confidence all documents and information concerning the
other and its business and properties and, if this Agreement is terminated, such confidences shall
be maintained, and all documents and information (in written form) shall immediately thereafter be
returned to the party originally furnishing such documents and information.
(b) No press release or public disclosure, either written or oral, of the existence or terms
of this Agreement or the transactions contemplated hereby shall be made by either party to this
Agreement without the consent of the other (which consent shall not be unreasonably withheld,
conditioned or delayed), and each party shall furnish to the other advance copies of any release
which it proposes to make public concerning this Agreement or the transactions contemplated hereby
and the date upon which such party proposes to make public such press release.
(c) Notwithstanding anything contained herein to the contrary, no party shall be prohibited
from (i) making any disclosures to any governmental authority that it is required to make by law,
including, without limitation, the filing of this Agreement with the FCC and placing a copy of this
Agreement in the Station’s public inspection files, (ii) disclosing this Agreement or its terms to
its attorneys, accountants, agents or advisors, (iii) filing this Agreement with, or disclosing the
terms of this Agreement to, any institutional lender to such party or (iv) disclosing to its
investors and broker/dealers such terms of this transaction as are customarily disclosed to them in
connection with similar transactions.
Section 7.3 Trademarks. Operator hereby grants Xxxxxx an unlimited, royalty-free license to
use in connection with providing programming on the Station any and all trademarks, service marks,
patents, trade names, jingles, slogans, logotypes and other intangible rights owned and used or
held for use by Operator in conjunction with the Station. Operator agrees to execute such
additional documentation as may be necessary or desirable to effectuate the license granted under
this paragraph.
Section 7.4 Notices. All notices, demands and requests required or permitted to be given
under the provisions of this Agreement shall be (i) in writing, (ii) delivered by personal delivery
or sent by commercial delivery service or certified mail, return receipt requested,
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(iii) deemed to have been given on the date of personal delivery or the date set forth in the
records of the delivery service or on the return receipt and (iv) addressed as follows:
(a) If to Operator:
African-American Broadcasting of Bellevue, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
with a copy to (which shall not constitute notice):
Xxxxxxxx Xxxxx & Xxxxxxxx, PLC
0000 Xxxxx 00xx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Esq.
0000 Xxxxx 00xx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Esq.
(b) If to Xxxxxx:
Xxxxxx Broadcasting Company
000 0xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention:
000 0xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention:
with a copy to (which shall not constitute notice):
Xxxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxx., XX
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxxx
0000 Xxxxxxxxxxxx Xxx., XX
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxxx
or to any other or additional persons and addresses as the parties may from time to time designate
in a writing delivered in accordance with this Section 7.4.
Section 7.5 Severability. If any covenant or provision hereof is determined to be void or
unenforceable in whole or in part, it shall not be deemed to affect or impair the validity of any
other covenant or provision, each of which is hereby declared to be separate and distinct. If any
provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted
to be only so broad as is enforceable. If any provision of this Agreement is declared invalid or
unenforceable for any reason other than overbreadth, the offending provision will be modified so as
to maintain the essential benefits of the bargain among the parties hereto to the maximum extent
possible, consistent with law and public policy.
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Section 7.6 Payment of Expenses. Except as otherwise provided, Operator and Xxxxxx shall pay
their own expenses incident to the preparation and carrying out of this Agreement, including,
without limitation, all fees and expenses of their respective counsel.
Section 7.7 Relationship and Dealings with Third Parties. Each of the parties hereto is an
independent contractor, and no party is, nor shall be considered to be, the agent of another party
for any purpose whatsoever. No party has any authorization to enter into any contracts nor assume
any obligations for another party nor make any warranties or representations on behalf of another
party, other than as expressly authorized herein. Nothing in this Agreement shall be construed as
establishing an agency, partnership, fiduciary relationship or joint venture relationship between
the parties hereto. No party is nor shall hold itself out to be vested with any power or right to
bind contractually or act on behalf of another party as another party’s contracting broker, agent
or otherwise for committing, selling, conveying or transferring any of another party’s assets or
property, contracting for or in the name of another party or making any representations
contractually binding another party.
Section 7.8 Conflict. Nothing in this Agreement is intended to modify or amend the rights and
obligations of the parties or Racine under the Purchase Agreement, including, without limitation,
the treatment of and disputes regarding the Initial Payment (as defined in the Purchase Agreement).
Section 7.9 Further Assurances. Subject to the terms and conditions of this Agreement, from
time to time each party hereto will use commercially reasonable efforts to take, or cause to be
taken, all such actions and to do or cause to be done, all things necessary, proper or advisable
under the FCC’s rules and policies or other applicable law to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation, executing and
delivering such documents as the other party may reasonably request in connection with the
performance of this Agreement and the consummation of the other transactions contemplated hereby.
Section 7.10 Governing Law. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and construed and enforced in accordance with, the laws of the
State of Washington without regard to its conflict of law rules, as though entered into by
Washington residents and to be performed entirely within the State of Washington.
Section 7.11 Waiver of Compliance; Consents. Except as otherwise provided in this Agreement,
any failure of any of the parties to comply with any obligation, representation, warranty,
covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof
only by a written instrument signed by the party granting such waiver, but such waiver shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever
this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall
be given in writing in a manner consistent with the requirements for a waiver of compliance as set
forth in this Section 7.11.
Section 7.12 Survival. The covenants and agreements of the parties contained herein to be
performed in any respect after the expiration or termination of this Agreement shall survive the
expiration or termination of this Agreement until fully discharged and performed. Any
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payments, due to Operator by Xxxxxx that shall have accrued during the term hereof and that
are due and outstanding after the Closing (as defined in the Purchase Agreement) shall be paid to
Racine as full satisfaction of any such payment obligation.
Section 7.13 Headings. The headings in this Agreement are for the sole purpose of convenience
of reference and shall not in any way limit or affect the meaning or interpretation of any of the
terms or provisions of this Agreement.
Section 7.14 Entire Agreement. This Agreement, the Schedules and Exhibits hereto, the
Purchase Agreement and all documents, certificates and other documents to be delivered by the
parties pursuant hereto or thereto, collectively represent the entire understanding and agreement
between Buyer and Operator with respect to the subject matter of this Agreement. This Agreement
supersedes all prior negotiations between the parties and cannot be amended, supplemented or
changed except by an agreement in writing that is signed by the parties hereto.
Section 7.15 Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
document. Each party hereto will receive by delivery or facsimile or other electronic transmission
a duplicate original of the Agreement executed by each party, and each party agrees that the
delivery of the Agreement by facsimile or other electronic transmission will be deemed to be an
original of the Agreement so transmitted.
Section 7.16 Required Certifications.
(a) Operator hereby certifies that it has, and shall maintain ultimate control over the
Station’s facilities, including specifically control over the finances, personnel, and program
content of the Station. Operator represents and warrants that this certification may be relied
upon by the FCC, as well as by Xxxxxx.
(b) Xxxxxx certifies that the arrangement with Operator as set forth in this Agreement and as
contemplated in all aspects of operation is and shall remain in compliance with 47 C.F.R. §
73.3555(b) and (c), and that it will provide to the FCC any documents, exhibits, or other material
necessary to demonstrate such compliance. Xxxxxx represents and warrants that this certification
may be relied upon by the FCC, as well as by Operator.
Section 7.17 Payola/Plugola. Upon Operator’s reasonable prior request, Xxxxxx shall provide
Operator with anti-payola/plugola affidavits, substantially in the form attached hereto as Exhibit
C, signed by such of Xxxxxx’x employees engaged in production of the Xxxxxx Programming and its
broadcast on the Station, and at such times, as Operator may reasonably request in writing, and
Xxxxxx shall notify Operator promptly of any violations it learns of relating to the Communications
Act, including Sections 317 and 508 thereof.
[Remainder of Page Intentionally Left Blank]
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[Execution Version]
IN WITNESS WHEREOF, this Local Marketing Agreement has been executed by the duly authorized
officers of Xxxxxx and Operator as of the date first written above.
African-American Broadcasting of Bellevue, Inc.
By: |
/s/ Xxxxxxxxxxx X. Xxxxxx | |||
| Title: President |
Xxxxxx Broadcasting Company
By: |
/s/ Xxxxxxx X. Xxxxx | |||
| Title: President & CEO |
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