LOCAL MARKETING AGREEMENT
This Local Marketing Agreement (the "Agreement") is made as of February
10, 1998, effective for all purposes on the Effective Date (as defined below),
between Cumulus Broadcasting, Inc., a Nevada corporation ("Programmer"), and
Wiskes/Abaris Communications KQIZ Partnership, an Illinois limited partnership
(the "Licensee").
Recitals
A. Licensee holds the license to operate radio broadcast station KQIZ-FM
(the "Station") pursuant to authorizations issued by the Federal Communications
Commission (the "FCC").
B. Licensee and Programmer entered into an Asset Purchase Agreement
effective December 5, 1997, as amended (the "Purchase Agreement") , which
provides for the acquisition by Programmer of substantially all of the assets
used in connection with the operation of the Station, on the terms and subject
to the conditions set forth therein.
C. Pending closing pursuant to the Purchase Agreement, Programmer desires
to purchase from Licensee and Licensee desires to sell to Programmer certain
airtime on the Station, all in accordance with the Communications Act of 1934,
as amended, and the rules, regulations, and policies of the FCC (the "FCC
Requirements").
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants, representations, warranties and agreements contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement agree as
follows:
1. Effective Date and Term.
1.1 Effective Date. This Agreement shall become effective for all purposes
on February 15, 1998.
1.2 Term. The term of this Agreement (the "Term") shall begin on the
Effective Date and shall continue until December 31, 2001, unless earlier
terminated in accordance with the provisions set forth in this Agreement.
2. Purchase of Airtime. Programmer hereby purchases from Licensee all
airtime on the Station during the Term, other than airtime between 7:00 a.m.,
local time and 8:00 a.m., local time on Saturdays, on the terms specified herein
(such purchased airtime period is referred to herein as the "Broadcasting
Period"). During the Broadcasting Period, Licensee shall broadcast on the
Station programming supplied by Programmer (collectively, the "Program" or
"Programs"). Programmer will ensure that the Programs meet technical and quality
standards equal to those of
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programming broadcast by commercial radio stations generally in the United
States. If Licensee in the reasonable exercise of its discretion finds that any
Program(s) does not meet these standards, then it shall advise Programmer in
writing of the specific technical deficiencies. If such technical deficiencies
have not been corrected within ten (10) days after receipt of notice, then
Licensee shall have no obligation to broadcast such Program(s) until such time
as the technical deficiencies are corrected. Programmer shall not substantially
alter the format of the Station during the Term.
3. Licensee's and Programmer's Obligations. In consideration for the
payments made and to be made by Programmer hereunder, Licensee shall make
available to Programmer, beginning on the Effective Date, all of the Station's
airtime during the Broadcasting Period and shall cause to be broadcast on the
Station the Programs pursuant to Section 2 hereof. As of the Effective Date,
Programmer hereby accepts delivery and possession of the tangible assets
identified in Section 2(h) of the Disclosure Schedule to the Purchase Agreement,
and the leases and other agreements to be assigned as of Closing, as having
satisfied the delivery of such property in the condition required under the
Purchase Agreement; provided, however, that in the event of termination of the
Purchase Agreement, all such property shall be returned to Licensee upon the
termination of this Agreement in its current condition, ordinary wear and tear
excepted. Throughout the Term, unless otherwise mutually agreed by the parties,
Programmer shall maintain Station's transmission facilities, including the
maintenance of the operating power of the Station at no less than its current
level, and shall operate and maintain in good working conditoin the aforesaid
property, including but not limited to the Station's transmission facilities and
broadcasting equipment, provided that the Licensee shall retain ultimate control
over the operation of the Station as required under the FCC's rules and
regulations. Throughout the Term, Licensee shall also, with respect to the
Station:
(a) employ a General Manager (Xxxxx Xxxxxxx) who will report to
Licensee and direct the performance of Licensee's obligations hereunder
and who shall have no employment, consulting, or other material
relationship to Programmer;
(b) employ at least employee (Xxxxxx Xxxx) to assist the General
Manager in performing Licensee's obligations hereunder and who shall have
no employment, consulting or other material relationship with Programmer;
(c) retain ultimate control over the personnel, finances,
programming and operation of the Station;
(d) maintain a main studio consistent with the FCC Requirements at
which the General Manager and the other full time employee(s) of the
Station will be available during normal business hours consistent with
their current duties and hours (Programmer will provide Licensee's
employees with office space and telephone consistent with current Licensee
practices);
(e) comply with the FCC Requirements with respect to the
ascertainment of community problems, needs and interests; broadcast
programming responsive thereto; and
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timely prepare and place in the Station's public inspection files
appropriate documentation thereof;
(f) comply with all other FCC Requirements which may be applicable
to the operation of the Station.
4. Consideration. In consideration of the airtime made available to
Programmer pursuant to this Agreement, Programmer shall pay Licensee as set
forth in Appendix A attached hereto.
5. Operation, Ownership and Control of the Stations.
5.1 Control Vested in Licensee. Notwithstanding anything to the contrary
in this Agreement, as long as Licensee remains the FCC licensee of the Stations,
Licensee will have full authority, power and control over the operation of the
Station and over all persons employed by it. Licensee will bear the
responsibility for the Station's compliance with, and shall cause the Station to
comply with, all applicable laws, including the FCC Requirements. Nothing
contained herein shall prevent or hinder Licensee from: (a) rejecting or
refusing Programs that Licensee believes in good faith to be unsuitable or
contrary to the public interest; (b) substituting programs which Licensee
believes in good faith to be of greater local or national importance or which
are designed to address the problems, needs and interests of the local
community: (c) preempting any Program in the event of a local, territorial or
national emergency; (d) refusing to broadcast any Program that does not meet the
FCC Requirements; or (e) deleting any commercial announcements that do not
comply with the FCC Requirements or the requirements of the Federal Trade
Commission, or any state, local or federal law.
5.2 Notice of Complaints. Programmer will immediately serve Licensee with
notice and a copy of any letters of complaint that Programmer receives
concerning any Program for Licensee's review and inclusion in its public
inspection files. Licensee will immediately serve Programmer with notice and a
copy of any letters of complaint that it receives concerning any Program.
5.3 Programmer Access to the Station's Studios. During the Term, Licensee
shall make available to Programmer for no additional consideration the areas in
the Station's studios as may be reasonably necessary or appropriate for
Programmer to exercise its rights and perform its obligations under this
Agreement. Programmer shall, to the extent commercially feasible, use Licensee's
current studios and other facilities to exercise its rights and perform its
obligations under this Agreement.
5.4 Employees. Programmer shall employ and be responsible for the
salaries, taxes, insurance, and related costs for all Station personnel
(excluding those employees described in Sections 3(a) and 3(b) above, which
employees are covered in Appendix A) and all personnel used in the production of
the programs supplied to the Station hereunder, and all other costs incurred by
Programmer for the production of such programs. Licensee shall pay all
compensation owed to its employees up to and including the Effective Date.
Programmer shall, after the Effective Date,
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employ those of Licensee's employees as Programmer may elect on terms and
conditions determined by Programmer in Programmer's sole discretion, other than
those employees employed by Licensee in the operation of the Station after the
Effective Date, who shall remain in Licensee's sole employ and control. Upon
termination of this Agreement, Licensee shall be free to re-employ Programmer's
employees on such terms and conditions as may be determined by Licensee.
5.5 Mutual Cooperation. Programmer and Licensee agree to cooperate
reasonably with each other as necessary to fulfill their rights and obligations
hereunder.
6. Program Rights and Music Licenses. During the Term, Licensee shall make
available to Programmer for its use, on the dates and at the times specified by
Programmer, all of Licensee's rights to programs under any program rights
agreements of the Stations (together with the music licenses described below,
the "Program Rights Agreements"). Licensee shall use its best efforts to secure
all consents, if any, from third parties that are necessary to permit Programmer
to use the programs under Program Rights Agreements. Licensee shall maintain all
necessary performing rights licenses to musical compositions included in any
Program, subject to reimbursement by Programmer for the cost thereof under
Section 4 and Appendix A of this Agreement.
7. Programs to Serve the Public Interest. Licensee acknowledges that it is
familiar with the type of programming Programmer intends to provide and has
determined that the broadcast of such programming on the Station would serve the
public interest and is otherwise suitable. Programmer shall cooperate with
Licensee to ensure that the Programs include material that is responsive to
community problems, needs, and interests.
8. Programming Standards. Programmer shall use its best efforts to ensure
that the Programs conform to all FCC Requirements applicable to broadcast radio
stations.
9. Expenses, Revenues and Accounts Receivable.
9.1 Expenses. The Station's cash expenses arising or relating to the
period before the Effective Date shall be the responsibility of Licensee, and
Programmer shall not be obligated to reimburse Licensee for any expenses
allocable to such period. During the Term, Programmer will reimburse Licensee
for its expenses incurred in accordance with Section 4 hereof. Programmer shall
be solely responsible for all expenses with respect to the operation of the
Station, other than reimbursed expenses covered in Appendix A, including but not
limited to those attributable to the origination and/or delivery of the Programs
by Programmer to Licensee.
9.2 Cash Accounts Receivable, Advertising and Programming Revenues.
(a) Promptly after the Effective Date, Licensee shall furnish to
Programmer a list of the Accounts Receivable that arose out of the operations of
the Stations as of the close of business on the day preceding the Effective Date
but are due and payable thereafter. For a period of 120 days
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after the Effective Date, Programmer, as Licensee's agent, shall, without
compensation, collect the accounts receivable for Licensee. Immediately after
the end of each month of the Term (not later than the fifth day of the
subsequent month), Programmer shall remit to Licensee the amount collected by
Programmer during that month with respect to the Accounts Receivable and
Programmer shall provide Licensee with a report setting forth the Accounts
Receivable collected by Programmer that month. Programmer shall furnish Licensee
with such records and other information as Licensee may reasonably require to
verify the amounts collected by Programmer with respect to the Accounts
Receivable. Upon five days' prior written notice from Licensee, Programmer shall
terminate all collection efforts on behalf of Licensee with respect to the
Accounts Receivable specified in the notice and those Accounts Receivable shall
no longer be considered Accounts Receivable for purposes of this section 9.2.
Programmer shall set all commercial advertising during the Broadcasting Period
for its own account and shall be entitled to collect all Accounts Receivable
arising thereunder. At the end of the 120-day collection period, the Programmer
will turn back to the Licensee all of the accounts receivable of the Station as
of the Closing Date owing to the Licensee which have not yet been collected. The
Programmer will thereafter have no further responsibility with respect to the
collection of such receivables, which shall remain the exclusive property of the
Licensee from that point, and Licensee shall be free to take all commercially
reasonable measures to collect such receivables.
(b) For the purpose of determining amounts collected by Programmer with
respect to the Accounts Receivable, (i) in the absence of a bona fide dispute
between an account debtor and Licensee, all payments by an account debtor shall
first be applied to Accounts Receivable due from the account debtor, and (ii)
any amount received by Programmer which is from an account debtor to Licensee
who claims to have a bona fide dispute with Licensee shall be deemed to have
been received with respect to the accounts receivable due Programmer to the
extent of such dispute.
(c) Programmer shall not be required to retain a collection agency, bring
any suit, or take any other action out of the ordinary course of business to
collect any of the Accounts Receivable. Programmer shall not compromise, settle
or adjust the amount of any of the Accounts Receivable without the written
consent of Licensee.
(d) Programmer's obligation to collect and remit Accounts Receivable
hereunder shall continue, at the option of Licensee, in the event of termination
of this Agreement pursuant to Section 11.5 hereof.
9.3 Political Time. Licensee shall, with respect to the Station, oversee
and take ultimate responsibility with respect to the provision of equal
opportunities, lowest unit charge, and reasonable access to political
candidates, and compliance with the political broadcasting provisions of the FCC
Requirements. Programmer shall cooperate with Licensee in complying with such
provisions, and shall supply promptly to Licensee such information reasonably
requested by Licensee for such purposes. Licensee, in consultation with
Programmer, will develop a statement which discloses its political broadcasting
rates and policies to political candidates, and Programmer will follow those
respective policies in the sale of political programming and advertising for the
Station. Programmer
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shall provide any rebates due to political advertisers and release advertising
availabilities to Licensee during the Broadcasting Period sufficient to permit
Licensee to comply with political broadcasting provisions of the FCC
Requirements. Revenues received by Licensee as a result of any such release of
advertising time shall be for the account of Programmer.
10. Call Letters and Frequency. During the Term, Licensee (i) shall retain
all rights (except as provided in the following sentence) to the Station's call
letters and trade names, (ii) shall not change the call letters, and (iii) shall
not seek FCC consent to a modification of facilities which would specify a
frequency change or have a material adverse effect upon the presently authorized
coverage of the Station. Programmer shall include in the Programs for the
Station an announcement in a form reasonably satisfactory to the Licensee in
accordance with the FCC Requirements to identify such Station, as well as any
other announcements required by the FCC Requirements.
11. Events of Default and Termination.
11.1 Programmer's Events of Default. The occurrence and continuation of
any of the following will be deemed an Event of Default by Programmer under this
Agreement:
(a) Programmer fails to make LMA Payments;
(b) Programmer fails to observe or perform any other material
covenant, condition or agreement contained in this Agreement; or
(c) Programmer breaches or violates any material representation or
warranty made by it under this Agreement.
11.2 Licensee's Events of Default. The occurrence and continuation of any
of the following will be deemed an Event of Default by Licensee under this
Agreement:
(a) Licensee fails to observe or perform any material covenant,
condition or agreement contained in this Agreement; or
(b) Licensee breaches or violates any material representation or
warranty made by it under this Agreement.
11.3 Cure Period. The defaulting party shall have thirty (30) days from
the date on which Programmer has provided Licensee or Licensee has provided
Programmer, as the case may be, with written notice specifying the Event(s) of
Default to cure any such Event(s) of Default. If the Event of Default cannot be
cured by the defaulting party within such time period but commercially
reasonably efforts are being made to effect a cure or otherwise secure or
protect the interests of the non-defaulting party (in which case, if successful,
the Event of Default shall be deemed cured), then the defaulting party shall
have an additional period not to exceed thirty (30) days to effect a cure or a
deemed cure; provided, however, in connection with a default under Section
11.1(a) above or any
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other default for failure to pay any sums due the other party, the thirty-day
cure shall be reduced to five days and there shall be no additional thirty-day
period to effect a cure.
11.4 Termination for Uncured Event of Default. If an Event of Default by
Programmer has not been cured or deemed cured within the period set forth in
Section 11.3 above, then Licensee may terminate this Agreement, effective
immediately upon written notice to Programmer, and pursue all remedies available
at law or in equity for breach of this Agreement. If an Event of Default by
Licensee has not been cured or deemed cured within the periods set forth in
Section 11.3 above, then Programmer may terminate this Agreement, effective
immediately upon written notice to Licensee, and pursue all remedies available
at law or in equity for breach of this Agreement.
11.5 Termination Upon Consummation of the Purchase Agreement. This
Agreement shall terminate immediately upon the Closing Date (as defined in the
Purchase Agreement).
11.6 Termination by Licensee To Satisfy the FCC Requirements. If Licensee
is required by the FCC to terminate this Agreement by an FCC order which has
become a Final Order (as that term is defined in the Purchase Agreement),
Licensee shall, or, if the FCC orders that this Agreement be terminated before
its order becomes a Final Order and this Agreement cannot be revised to comply
with applicable FCC Requirements as contemplated by Section 20 hereof, Licensee
may, upon at least sixty (60) days' written notice to Programmer (or such
shorter period as may be required by the FCC) terminate this Agreement.
11.7 [Intentionally Omitted]
12. Certain Representations, Warranties and Covenants.
12.1 Mutual Representations Concerning This Agreement. Licensee represents
and warrants as follows: (a) Licensee is a limitd partnership organized under
the laws of the state of Illinois and qualified to do business in Texas, (b)
Licensee has the power and authority to enter into and perform this Agreement;
and (c) the execution, delivery and performance of this Agreement by Licensee
does not conflict with any other agreement to which Licensee is a party.
Programmer represents and warrants as follows: (a) Programmer is a
corporation duly organized, validly existing and in good standing under the laws
of Nevada; (b) Programmer has the requisite corporate power and authority to
enter into and perform this Agreement; (c) the execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action of Programmer; and (d) the execution, delivery and performance
of this Agreement by Programmer does not conflict with any other agreement to
which Programmer is a party.
12.2 Program Rights and Barter Agreements. Licensee represents and
warrants that (i) it is current in all payment obligations and is not otherwise
in default under the Program Rights Agreements and (ii) there are no Barter
Agreements as defined in the Asset Purchase Agreement
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which extend beyond the Effective Date and which exceed in the aggregate Twenty
Thousand Dollars ($20,000). Programmer agrees to assume the obligations under
such Barter Agreements as provided in the Purchase Agreement.
12.3 Compliance with FCC Requirements. Programmer represents, warrants and
covenants that its execution and performance of this Agreement is, and will
remain, in compliance with the FCC Requirements, including without limitation,
47 C.F.R. ss. 73.3555.
13. Modification and Waiver; Remedies Cumulative. No modification or
waiver of any provision of this Agreement will be effective unless in writing
and signed by all parties. No failure or delay on the part of Programmer or
Licensee in exercising any right or power under this Agreement will operate as a
waiver of such right or power, nor will any single or partial exercise of any
such rights or power or the exercise of any other right or power operate as a
waiver. Except as otherwise provided in this Agreement, the rights and remedies
provided in this Agreement are cumulative and are not exclusive of any rights or
remedies which a party may otherwise have.
14. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their successors and permitted assigns.
Notwithstanding the foregoing, no party may assign its rights or obligations
under this Agreement without the prior written consent of the other party;
provided, however, that Programmer may assign and delegate its rights and
obligations under this Agreement to a party that controls, or is controlled by,
or is under common control with, Programmer, and who is qualified under any
applicable FCC Requirement, upon notice to, but without the prior written
consent of Licensee.
15. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of Illinois without regard to any conflicts-of-law
rules that might apply the laws of another jurisdiction or jurisdictions.
16. Notices. Notices required to be provided by this Agreement shall be
given in the manner provided and to the persons specified in the Purchase
Agreement.
17. Entire Agreement. This Agreement embodies the entire understanding
among the parties with respect to the subject matter hereof, and supersedes any
prior or contemporaneous written or oral agreement between the parties regarding
such subject matter.
18. Relationship of Parties. Programmer and Licensee are not, and shall
not be deemed to be, agents, partners, or representatives of each other.
19. Force Majeure. The failure of a party hereto to comply with its
obligations under this Agreement due to acts of God, strikes or threats thereof
or force majeure or due to causes beyond such party's control will not
constitute an Event of Default under Section 11 of this Agreement and no party
will be liable to the others therefore. Programmer and Licensee each agree to
exercise its commercially reasonable efforts to remedy any such conditions
affecting its own
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facilities as soon as practicable.
20. Subject to Laws; Invalidity. The obligations of the parties under this
Agreement are subject to the FCC Requirements and all other applicable laws. The
parties acknowledge that this Agreement is intended to comply with FCC
Requirements. However, in the event that the FCC determines that the continued
performance of this Agreement is in violation of the FCC Requirements, each
party will use its commercially reasonable efforts to comply with the FCC
Requirements or will in good faith contest or seek to reverse any such action or
agree on the terms of a revision to this Agreement, in each case, on a time
schedule sufficient to meet the FCC Requirements and so long as the fundamental
nature of the business arrangement between the parties evidenced by this
Agreement is maintained. If any provision of this Agreement is otherwise held to
be illegal, invalid, or unenforceable under present or future laws, then such
provision shall be fully severable, this Agreement shall be construed and
enforced as if such provision had never comprised a part thereof, and the
remaining provisions shall remain in full force and effect, in each case so long
as the fundamental nature of the business arrangement between programmer and
Licensee has been maintained.
21. Reciprocal Indemnity.
21.1 Indemnification by Programmer. Programmer shall indemnify, defend,
and hold harmless Licensee from and against any and all claims, losses, costs,
liabilities, damages, and expenses (including reasonable attorneys' fees and
other expenses incidental thereto) of every kind, nature and description,
including but not limited to those relating to copyright infringement, libel,
slander, defamation or invasion of privacy, arising out of: (a) Programmer's
broadcasts of the Programs; (b) any misrepresentation or breach of any warranty
of Programmer; or (c) any breach of any covenant, agreement, or obligation of
Programmer. If Programmer is required to indemnify Licensee as a result of
programs broadcast hereunder which are supplied by a third party pursuant to a
contract with Licensee, it is agreed that Programmer shall be subrogated to any
rights which Licensee may have against such third party, including the right to
indemnification by such third party.
21.2 Indemnification by Licensee. Licensee shall indemnify, defend, and
hold harmless Programmer from and against any and all claims, losses, costs,
liabilities, damages, and expenses (including reasonable attorneys' fees and
other expenses incidental thereto) of every kind, nature and description,
including but not limited to those relating to copyright infringement, libel,
slander, defamation or invasion of privacy, arising out of: (a) Licensee's
broadcast of programs on its own behalf, other than Programs; (b) any
misrepresentation or breach of any warranty of Licensee; or (c) any breach of
any covenant, agreement, or obligation of Licensee. If Licensee is required to
indemnify Programmer as a result of programs broadcast hereunder which are
supplied by a third party pursuant to a contract with Licensee, it is agreed
that Licensee shall be subrogated to any rights which Programmer may have
against such third party, including the right to indemnification by such third
party.
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22. Headings. The headings of the sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
23. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart
were upon the same instrument.
24. Survival. All representations, warranties, covenants and agreements
made by any party in this Agreement or pursuant hereto shall survive execution
and delivery of this Agreement.
25. Waiver. The provisions of the Purchase Agreement are hereby waived by
Programmer or deemed satisfied hereby:
(a) All Seller's operating requirements in Section 4 of the
Purchase Agreement with respect to the Station and Acquired
Assets to the extent undertaken by Programmer hereunder; and
(b) Sections 2(f)(i), 4(e) (subsequent to the Effective Date), and
4(m) (to the extent loss, damage, or destruction of assets is
the result of actions by Programmer).
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******
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective duly authorized officers as of the date first written above.
PROGRAMMER: CUMULUS BROADCASTING, INC.
By:_____________________________
Xxxxxxx Xxxxxxx
Chairman
LICENSEE: WISKES/ABARIS COMMUNICATIONS KQIZ
PARTNERSHIP
By:_____________________________
Printed Name:___________________
Title:__________________________
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APPENDIX A
LMA PAYMENTS
In consideration of the airtime made available to Programmer pursuant to
this Agreement, during the Term, Programmer shall reimburse Licensee monthly in
advance on the first day of each month (pro rated to date of termination) the
Station Expenses (defined below) for which Licensee has submitted to Programmer
a written reimbursement request supported by appropriate documentation of
expenses. The term "Station Expenses" as used herein means the reasonable and
prudent expense actually incurred by Licensee in operating the Station in
compliance with the terms of this Agreement (including without limitation
Sections 3 and 6) and consistent with past practice (except for changes
resulting from the transactions contemplated by this Agreement), including
without limitation, those expenses set forth below.
In addition, (1) Programmer shall pay Licensee a monthly LMA fee (payable
monthly in advance on the first day of each month during the Term) (pro rated to
the date of termination) equal to Fifteen Thousand Dollars ($15,000.00), which
amount shall be increased by five percent (5%) on each twelve-month anniversary
of the Effective Date during the Term; and (2) a one-time reimbursement for
invoiced attorneys' fees related to the preparation of this Agreement, not to
exceed Two Thousand Dollars ($2,000) .
Monthly Station expenses shall include the following:
Employees
Xxxxx Xxxxxxx, General Manager $
Xxxxxx Xxxx
Payroll Taxes (Fica, Futa, State taxes)
Health Insurance
Life Insurance
Workers Compensation Insurance
Engineering:
Utilities $
Maintenance and Repairs
Music License Fees:
Ascap, BMI, Sesac
Property Insurance and taxes
Station and Tower Rent ________
Total Expenses $
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