Exhibit 2.6
PROGRAM SERVICE AND TIME BROKERAGE AGREEMENT
This Program Service and Time Brokerage Agreement ("Agreement") entered
into as of the 31st day of October, 1997 by and between Cumulus Broadcasting,
Inc., a Nevada Corporation, ("Programmer"), and Tallahassee Broadcasting
Company, a Florida corporation ("Licensee"), licensee of Radio Station
WGLF-FM, Tallahassee, Florida (the "Station").
WHEREAS, Licensee holds licenses from the Federal Communications
Commission ("FCC") authorizing it to operate the Station;
WHEREAS, the studio of the Station is located at 0000 Xxxx Xxxxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxx ("Studio") and the transmitter facilities of the Station
are located in Jefferson County, 2.9 kilometers SSE of Lloyd, Florida and
approximately 00 xxxxx xxxx xx Xxxxxxxxxxx, Xxxxxxx ("Transmitter");
WHEREAS, Licensee has available for sale broadcast time on the Station;
WHEREAS, Programmer desires to purchase time on Licensee's Station for the
broadcast of programming on the Station and to sell advertising time for
inclusion in that programming; and
WHEREAS, Licensee and Programmer have concurrently entered into an Option
Agreement (the "Option Agreement"), pursuant to which (a) Licensee has granted
Programmer and its affiliate Cumulus Licensing Corp. ("Licensing Company") an
option to purchase substantially all of the assets of Licensee used or useful in
the operation of the Station, and (b) Programmer and its affiliate Licensing
Company have granted Licensee an option to require Programmer and Licensing
Company to purchase such assets, pursuant to an Asset Purchase Agreement (the
"Asset Purchase Agreement") attached as Exhibit A to the Option Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties have agreed as follows:
1. TIME SALE. Subject to the provisions of this Agreement, Licensee agrees
to make the Station's Studio and Transmitter broadcasting facilities, and all
other equipment used or useful in the operation of the Station, available to
Programmer for broadcast of Programmer's programs on the Station and the
Station's subcarriers. The Station time made available to Programmer is
described in Exhibit A hereto.
2. PAYMENT. Programmer hereby agrees to pay Licensee compensation for the
broadcast of Programmer's programming in the amounts and at the times set forth
in Exhibit B hereto.
3. TERM. The initial term of this Agreement shall be for a period
beginning November
1, 1997 (the "Effective Date") and ending on the earlier of (i) the date of
closing of the transactions contemplated by the Asset Purchase Agreement, or
(ii) the date on which the Asset Purchase Agreement is terminated (or such other
termination date as may be mutually agreed by the parties under Section 2 of the
Option Agreement).
4. PROGRAMS. Programmer shall furnish programming material for broadcast
by Licensee twenty-four (24) hours a day, seven (7) days a week, except for the
time reserved for Licensee's programming as set forth in Exhibit B hereto, and
except for downtime occasioned by routine maintenance. Programmer shall furnish
the artistic personnel and materials for its programming. Programmer represents
and warrants that all of the programming, advertising and promotional material
it broadcasts on the Station shall be in accordance with the rules, regulations
and policies of the Commission and the Communications Act of 1934, as amended
(the "Act"). All rights (including without limitation copyrights) to the use and
ownership of the programs shall be and remain vested in Programmer at all times.
5. ACCOUNTS RECEIVABLE AND EXISTING ADVERTISING COMMITMENTS. All accounts
receivable and accounts payable pertaining to the operation of the Stations,
insofar as they pertain to the period prior to the first day of the Term, will
be property of Licensee. Programmer agrees to use commercially reasonable
efforts (but without responsibility to institute legal or collection
proceedings) to collect such accounts receivable during the 120-day period
following the effective date of this Agreement, and will remit all payments
received on such accounts to the Licensee no later than 120 days following the
effective date of this Agreement. Insofar as any particular account payable or
receivable shall pertain to the operation of the Stations both during the Term
and prior thereto, the parties will prorate amounts payable or receivable, as
the case may be, as soon as reasonably practical following the signing of this
Agreement, and amounts received on such accounts receivable during such 120-day
period shall be applied first to Licensee's receivables and credited to
Licensee. Any accounts which remain uncollected after 120 days shall be returned
to Licensee for collection, and Programmer shall be relieved of any additional
responsibilities with respect to such accounts, and Licensee may use such
commercially reasonable efforts to collect its accounts as it may deem to be in
its best interests. In addition, to the extent that Licensee satisfies with cash
after the effective date of this Agreement, accounts payable incurred before the
Effective Date, and provides Programmer with documentation of such accounts
payable and cash payments, Programmer shall reimburse Licensee for such expenses
no later than the 10th day of the month following that in which the Licensee
makes the cash payments, and such amounts shall be deducted from the balance due
Licensee for its accounts receivable collected by Programmer. All accounts
receivable created after the Effective Date of this Agreement shall be and
remain the sole property of Programmer. Programmer shall be responsible for the
collection of such accounts receivable created after the Effective Date and
shall retain ownership of such accounts upon termination of this Agreement. All
prior existing advertising contracts signed by Licensee prior to the Effective
Date of this Agreement for commercial time to be aired during time periods to be
used by Programmer are identified on Exhibit 4 hereto and shall be performed by
Programmer for the benefit of Programmer, subject to any commissions payable to
sales personnel on collections.
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6. STATION'S FACILITIES.
(a) Licensee Responsibility. Licensee shall be responsible for the
Station's compliance with all applicable provisions of the Act, the rules,
regulations and policies of the FCC and all other applicable laws. Licensee
represents that it holds all permits and authorizations necessary for the
operation of the Station including all FCC permits and authorizations. Licensee
will continue to hold such permits and authorizations throughout the life of
this Agreement and to maintain them in full force and effect.
(b) Broadcast Output. Licensee represents that the Station's
facilities and equipment comply with all applicable laws and regulations and
that, to its knowledge, it is not in material violation of any statute,
ordinance, rule, order or decree of any federal, state or local governmental
agency, court or authority having jurisdiction over the Licensee which would
have an adverse effect on its ability to perform this Agreement. During the term
hereof, Licensee agrees to maintain the Transmitter and other transmission
facilities and the broadcast output in compliance with the FCC's rules and
regulations to allow broadcasting at the maximum authorized power twenty-four
(24) hours a day, seven (7) days a week, except for downtime occasioned by
routine maintenance, if necessary, not to exceed two (2) hours on Sundays
between 12:00 midnight and 6:00 a.m. To the extent practicable, any maintenance
work affecting the operation of the Station at full power shall be scheduled
upon at least forty-eight (48) hours prior notice with the approval of
Programmer, which shall not be unreasonably withheld.
7. HANDLING OF MAIL AND COMPLAINTS. Programmer shall promptly forward to
Licensee any mail which it may receive from any agency of government or any
correspondence from members of the public relating to the Station or to any of
Programmer's programming broadcast on the Station. Licensee shall advise
Programmer of any public or FCC complaint or inquiry concerning the programs
provided by Programmer.
8. PROGRAMMING AND OPERATIONS STANDARDS. Programmer recognizes that the
Licensee has full authority and a duty to control the operation of the Station.
The parties agree that Licensee's authority includes, but it is not limited to,
the right to reject or refuse such portions of Programmer's programming which
Licensee reasonably believes to be contrary to the public interest. Licensee
shall have no obligation to Programmer for the exercise of its rights under this
paragraph. Whenever on the Station's premises, Programmer and its employees and
agents shall be subject to the supervision and direction of Licensee's General
Manager and/or designated personnel.
9. RESPONSIBILITY FOR EMPLOYEES AND EXPENSES. Programmer shall employ and
be responsible for the salaries, commissions, taxes, insurance and all other
related costs for all of its employees, agents, contractors and personnel.
Employees of Programmer shall serve, however, as duty operators of the Station,
under the supervision and direction of the Licensee's General Manager and/or
other designated personnel of Licensee, during all hours the Station is in
operation. Licensee shall be responsible for (a) retaining a contract engineer
to maintain the Station's
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broadcast and transmission equipment, (b) appointment of a Chief Operator, and
(c) compliance with the FCC's main studio staffing requirements (including,
without limitation, the Station's General Manager). Licensee shall be
responsible for the salary, taxes, insurance and related costs for its General
Manager and Chief Operator.
10. ADVERTISING AND PROGRAMMING REVENUES.
(a) Programming Revenues. Programmer shall retain all revenues from
the sale of advertising time on the programming it broadcasts on the Station.
Programmer will provide, make available to and shall sell time to political
candidates from the time it purchases from Licensee in strict compliance with
the Act, the rules, regulations and policies and the Commission.
(b) Revenue Reports. Throughout the term hereof, Programmer shall
provide to Licensee by the fifteenth day of each month a report of Gross
Revenues (as defined in the Asset Purchase Agreement) of the Station during the
preceding month.
11. OPERATION OF STATION.
(a) Full Authority and Power. Licensee shall have full authority and
power over the operation of the Station during the term of this Agreement.
Licensee and its designated personnel shall have complete access to the
Station's studios at all times. Licensee's General Manager shall direct the
day-to-day operation of the Station and report to and be accountable solely to
Licensee. Licensee's Chief Operator shall oversee and direct the engineering and
technical operation of the Station. Licensee shall retain the right to interrupt
and discontinue Programmer's programming at any time if Licensee determines the
programming is not in the public interest or violates this Agreement, or in case
of an emergency or EAS system activation, or for the purpose of providing
programming which Licensee in its sole discretion determines to be of greater
national, regional or local importance. Programmer will properly prepare and
provide Licensee such information, records and reports belonging to Programmer's
programming, sales or employment practices at the Station in sufficient detail
as is necessary to enable Licensee to comply with all the rules and policies of
the FCC or any other governmental agency.
(b) Political Time. Licensee shall 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 broadcast rules of the FCC. Programmer shall cooperate with Licensee
as Licensee complies with its political broadcast responsibilities, and shall
supply such information promptly to Licensee as may be necessary to comply with
the political time record keeping and lowest unit charge requirements of federal
law. To the extent that Licensee believes necessary, in Licensee's sole
discretion, Programmer shall release advertising availabilities to Licensee
during the term of this Agreement to permit Licensee to comply with the
political broadcast rules of the FCC and the Communications Laws; provided
however, that revenues received by Licensee as a result of any such release of
advertising time shall promptly be remitted to Programmer.
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(c) Facilities. During the term of this Agreement Licensee shall
make available to Programmer, for no additional consideration, areas in the
Station's physical studios and offices as are reasonably necessary for
Programmer to exercise its rights and perform its obligations under this
Agreement.
12. CALL SIGNS AND STATION IDENTIFICATION. Licensee will retain all rights
to the call letters "WGLF-FM" or any other call letters that may be assigned by
the FCC for use by the Station, and shall be responsible for ensuring the proper
broadcast of Station identification announcements in accordance with the FCC
rules and regulations. Programmer is specifically authorized to use the call
letters "WGLF-FM" or any other call letters used by Licensee for the Station,
and will provide appropriate station identification announcements which, in
Licensee's sole discretion, comply with FCC requirements.
13. PAYOLA/PLUGOLA. Programmer agrees that neither it nor its employees
will accept any consideration, compensation or gift of any kind whatsoever,
regardless of its value or form, including, but not limited to, a commission,
discount, bonus, supplies or other merchandise (collectively "Consideration"),
unless the payer is identified in the program for which Consideration was
provided as having paid for or furnished such Consideration, in accordance with
the Act. Programmer agrees to execute and provide Licensee with Payola
Affidavits, substantially in the form of Exhibit D, and to notify Licensee
promptly of any violations of Sections 317 and 508 of the Communications Act of
1934, as amended, of which Programmer learns.
14. COMPLIANCE WITH LAW. Programmer agrees that, throughout the term of
this Agreement, Programmer will comply with all laws, regulations and policies
including, but not limited to, the FCC's technical, political broadcasting,
obscenity and indecency regulations, lottery regulations, sponsorship
identification rules, sale practices regulations and all FCC rules applicable to
programming agreements of this kind. Programmer acknowledges that Licensee has
not urged, advised or agreed in any way to the use of any unfair business
practices.
15. INDEMNIFICATION.
(a) Programmer's Indemnification. Programmer shall indemnify and
hold Licensee harmless for any material loss, damage, penalty or injury of any
kind sustained by Licensee resulting from Programmer's breach of this Agreement,
from any programming material broadcast by Programmer on the Station, from the
sale of or attempt by Programmer to sell advertising or program time on the
Station, and from any material act or omission of any kind by Programmer.
Programmer shall carry liability insurance (including coverage for libel and
slander) in a minimum liability limit of $1,000,000, with a maximum retention of
$10,000, in which Licensee is named as an additional insured.
(b) Licensee's Indemnification. Licensee shall indemnify and hold
Programmer harmless for any material loss, damage or injury sustained by
Programmer resulting from breach of this Agreement, from the broadcast of
Licensee's programming, from the sale of or attempt by
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Licensee to sell advertising or program time on the Station (except the instant
sale provided for in this Agreement to Programmer), and from any material act or
omission of any kind whatsoever by Licensee.
(c) Survival. Any claim for indemnification must be asserted in
writing delivered to the other party. The representations and obligations of
both parties shall survive any termination of this Agreement and shall continue
until the expiration of all applicable statutes of limitations as to the parties
hereto and to claims of third parties.
16. TERMINATION AND REMEDIES UPON DEFAULT.
(a) Termination. In addition to other remedies available at law or
equity, this Agreement may be terminated by either party by written notice to
the other if the party seeking to terminate is not then in material default or
breach thereof, upon the occurrence of any of the following:
(i) This Agreement is declared invalid or illegal in whole or
in material part upon a final order of the FCC or any administrative agency or
court of competent jurisdiction.
(ii) The other party is in material breach of its obligations
hereunder and has failed to cure such breach within twenty (20) days of receipt
of written notice from the nonbreaching party.
(iii) The mutual consent of both parties.
(iv) The other party shall make a general assignment for the
benefit of creditors, files or has filed against a petition for bankruptcy,
reorganization or appointment of a receiver or a trustee for the property or
assets of such party under any federal or state insolvency law, which filing by
or against such party has not been dismissed within thirty (30) days thereof.
Upon termination of this Agreement according to the provisions of this
paragraph, the monthly payment pursuant to Paragraph 2 above shall be prorated.
Licensee shall cooperate reasonably with the Programmer to the extent permitted
to enable Programmer to fulfill prior to the date of termination of this
Agreement advertising or other programming contracts then outstanding, provided
however, to the extent such contracts are fulfilled by Licensee after the date
of termination of this Agreement, Licensee shall receive as compensation that
which otherwise would have been paid to Programmer pursuant to such contracts.
(b) Programmer's Additional Remedies for Licensee's Technical
Operation Deficiencies. In addition to Programmer's right to terminate for
reasons set forth in Paragraph (a) above, if the Station suffers any damage to
its transmission facilities which results in the inability of the Station to
operate with its presently authorized facilities and Licensee has not restored
full-time operation of the Station with its presently authorized facilities
within seven (7) days of any such
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occurrence, (i) Programmer may give notice to Licensee of Programmer's
termination of this Agreement in which event this Agreement shall terminate upon
giving of such notice, any other provision of this Agreement notwithstanding,
and (ii) any payment due Licensee pursuant to Paragraph 2 above shall be
prorated for such period of time within which full-time operation of the Station
has not been restored.
17. CERTIFICATION. Pursuant to Section 73.3555(a)(3)(ii) of the FCC's
Rules, the following certifications are made: Tallahassee Broadcasting Company
certifies that it shall maintain ultimate control over the Station's facilities,
including specifically control over Station finances, personnel and programming.
Programmer certifies that implementation of this Agreement complies with Section
202 of the Telecommunications Act of 1996.
18. NOTICES. All necessary notices, demands, requests permitted or
required under this Agreement shall be in writing and shall be deemed given four
(4) days after being mailed by certified mail, return receipt requested,
addressed as follows:
If to Licensee:
Tallahassee Broadcasting Company
0000 Xxxxxxx Xxxxxx X.X., Xxxxx 0
Xxxxxxxxxxx, XX 00000
Attn: Mr. Xxxxx Xxxx
Copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Pennington, Moore, Xxxxxxxxx & Xxxxxx, P.A.
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxx, XX 00000
and
Law Offices of Xxxxxx X. Xxxx
0000 Xxxxxxxxxxxx Xxx., X.X., Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
(Neither of which copies shall constitute notice to Licensee)
If to Programmer:
Cumulus Broadcasting, Inc.
x/x Xxxxxxxx Xxxxxxxxxx Xxxxxxxxxxx
000 X. Xxxxxxxx Ave., Ste 250
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Milwaukee, WI 53202
Attn: Xxxxxxxx X. Xxxxx
Copy to:
Cumulus Broadcasting, Inc.
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
and
Xxxxx & Xxxxxxx
000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
(Neither of which copies shall constitute notice to Programmer)
19. MODIFICATION AND WAIVER. No modification of any provision of this
Agreement shall in any event be effective unless it is in writing and executed
by both parties hereto, and such modification shall be effective only in the
specific instance as for the purpose for which given. No waiver of any default,
misrepresentation, or breach of any condition or covenant hereof, whether or not
intentional, shall be deemed to extend to any prior or subsequent default,
misrepresentation or breach of the same or any other condition or covenant
hereof, or affect in any way such prior or subsequent occurrence.
20. CONSTRUCTION. This Agreement shall be construed in accordance with the
laws of Florida, and the obligations of the parties hereto are subject to all
federal, state and local laws and regulations now or hereafter in force and to
the rules, regulations and policies of the FCC and all other governmental
entities or authorities.
21. NO PARTNERSHIP OR JOINT VENTURE CREATED. Nothing in this Agreement
shall be construed or interpreted to make Licensee and Programmer partners or
joint venturers, or to make one an agent or representative of the other.
22. EXCLUSIVITY. During the term of this Agreement, Licensee will not (i)
solicit, initiate, or encourage the submission of any proposal or offer from any
person relating to any (A) liquidation, dissolution, or recapitalization, (B)
merger or consolidation, (C) acquisition or purchase of the Station or any the
assets subject to the Asset Purchase Agreement, or (D) similar transaction or
business combination involving any of Licensee or the Station; or (ii)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any person to do or seek any of the
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foregoing.
23. COUNTERPARTS. This agreement may be executed in one more counterparts,
each of which shall be deemed an original but all of which together will
constitute one and the same instrument.
* * * * * *
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.
PROGRAMMER:
CUMULUS BROADCASTING, INC.
By: _____________________________
Xxxxxxx Xxxxxxx, its Chairman
LICENSEE:
TALLAHASSEE BROADCASTING COMPANY
By: ____________________________
Xxxxx X. Xxxx, its President
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EXHIBIT A
PROGRAMMING
Subject to all other provisions of this Agreement, Programmer will have
the exclusive right to broadcast on the Station and the Station's subcarriers up
to twenty-four (24) hours of programming each day during the term of this
Agreement, provided however, Licensee reserves three (3) hours of Station time
for its own use on Sunday morning, between 7:00 a.m. and 11:00 am. Licensee
shall have the sole right and responsibility to decide the scheduling of such
Sunday hours but shall consult with Programmer as to that schedule.
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EXHIBIT B
COMPENSATION PAYMENT SCHEDULE
Programmer shall pay to Licensee monthly the sum of (1) Five Thousand and
00/100 Dollars ($5,000.00) plus applicable sales tax (which payment shall be
made monthly in advance), and (2) up to Seven Thousand and 00/100 Dolllars
($7,000.00) in reimbursement of Licensee's reasonable out-of-pocket operating
expenses for the Station, as documented by Licensee to Programmer at least
monthly (which payment shall be made within ten (10) days after Licensee's
submission to Programmer of documentation of such expenses).
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EXHIBIT C
EXISTING ADVERTISING CONTRACTS
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EXHIBIT D
PAYOLA AFFIDAVIT
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