Exhibit 99.2
EXECUTION COPY
LOCAL MARKETING AGREEMENT
This Local Marketing Agreement (the "Agreement"), made as of the 14th
day of July 2005, is between Infinity Radio Inc., a Delaware corporation
("Licensee"), and NextMedia Operating, Inc., a Delaware corporation
("Programmer").
RECITALS
Licensee is the licensee of and operates radio broadcast station
KEZR(FM), San Jose, California (Facility ID No. 1176), and radio broadcast
station KBAY(FM), Gilroy, California (Facility ID No. 35401) (each of the
foregoing, a "Station," and collectively, the "Stations").
Licensee and Programmer are parties to an asset purchase agreement of
even date herewith (the "Purchase Agreement"), pursuant to which Licensee has
agreed to sell and Programmer, together with NM Licensing LLC, a Delaware
limited liability company, has agreed to purchase the Stations on the terms and
conditions set forth therein. Capitalized terms used but not defined in this
Agreement shall have the meanings set forth in the Purchase Agreement.
Pending consummation of the transactions provided in the Purchase
Agreement, Programmer desires to acquire time on the Stations for its
programming and advertising time, subject to the limitations set forth herein
and in accordance with the rules, regulations and policies of the Federal
Communications Commission (the "FCC").
Therefore, for and in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. SALE OF TIME
1.1 Broadcast of Programming. During the Term (as defined below),
Licensee shall make available broadcast time on the Stations for the broadcast
of Programmer's programs (the "Programming") for up to 168 hours a week except
for: (i) downtime occasioned by routine maintenance consistent with prior
practice and upon 48 hours prior notice to Programmer; (ii) 2 hours between 5:00
a.m. and 9:00 a.m. on Sunday mornings on Station KBAY(FM) and 2 hours between
5:00 a.m. and 9:00 a.m. on Sunday mornings on Station KEZR(FM) and at other
times mutually agreeable to Licensee and Programmer during which time Licensee
may broadcast programming designed to address the concerns, needs and interests
of the Stations' listeners; (iii) times when Programmer's programs are not
accepted or are preempted by Licensee in accordance with this Agreement; and
(iv) times when the Stations are not broadcasting because of Force Majeure
Events (as defined below).
1.2 Advertising and Programming Revenues. During the broadcast time on
the Stations made available to Programmer pursuant to the terms of this
Agreement, Programmer shall have full authority to sell for its own account
commercial time on the Stations. Programmer shall retain all revenues from the
broadcast or sale of all advertising time on any and all of the Stations and all
other sources of revenue and advertising, to the extent the foregoing relate to
programming provided for broadcast on the Stations by Programmer or to the
extent such revenues relate solely to the actions or activities of Programmer
related to any or all of the Stations on or after the Commencement Date, and all
the same shall be the sole and exclusive assets of Programmer.
1.3 Force Majeure. Any failure or impairment of facilities, any delay
or interruption in broadcasting the Programming, or any failure at any time to
furnish the facilities, in whole or in part, for broadcasting, due to acts of
God, strikes or threats thereof, war, acts of terrorism, civil disturbance,
force majeure, or any other causes beyond the reasonable control of Licensee or
Programmer (collectively, "Force Majeure Events"), shall not constitute a breach
of this Agreement, and neither Licensee nor Programmer, as the case may be, will
be liable to the other party therefor.
1.4 Main Studio and Studio Equipment. Programmer shall originate the
Programming from Licensee's existing office and studio facilities for the
Stations located at 000 Xxxx Xxxxxx Xxxxx, Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx (the
"Main Studio"), using the studio equipment located in the Main Studio (the
"Studio Equipment"). To enable Programmer to fulfill its obligations hereunder,
Licensee shall make the Main Studio and Studio Equipment available, for no
additional consideration, to Programmer for its use for the production of the
Programming and sale of advertising under this Agreement. Programmer shall not
allow any other persons other than its employees, advisors, consultants or
representatives to enter the Main Studio without the express prior permission of
Licensee. Programmer agrees to take reasonable care of the Main Studio and the
Studio Equipment, subject to ordinary wear and tear. Programmer agrees to
indemnify and hold harmless Licensee and its Affiliates from any and all claims
for damages for injuries to or death of persons and for damages to property
arising out of Programmer's use and/or occupancy of the Main Studio or the
Studio Equipment. On the Commencement Date, Licensee shall transfer title to all
vehicles used in the operation of the Stations to Programmer, subject to
Programmer's obligation to return such vehicles to Licensee as provided in
Section 8.2(a)(vi).
1.5 Payments. In consideration of the rights granted under this
Agreement, Programmer shall pay Licensee the fee and reimburse certain of
Licensee's costs as provided in Schedule 1.5 hereto.
1.6 Term. The term of this Agreement (the "Term") shall commence at
12:01 a.m., San Jose, California time (the "LMA Effective Time"), one (1)
business day after the expiration or early termination of any waiting period
applicable to the Purchase Agreement under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "Commencement Date"), and shall
terminate on the earlier of (a) 12:01 a.m. on the date of the consummation of
the purchase of the Stations pursuant to the Purchase Agreement, (b) 12:01 a.m.
on the date which is six (6) months after the date of the termination of the
Purchase Agreement for any reason other than the closing thereunder, except
that, if the Purchase Agreement is terminated, Licensee shall have the option to
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terminate this Agreement upon thirty (30) days written notice to Programmer, and
(c) such time as this Agreement is terminated in accordance with its terms
pursuant to Section 8.
1.7 License to Use Call Sign and Trademarks. Licensee hereby grants
Programmer a license to use Licensee's call signs and trademarks and names used
primarily in the operation of the Stations (the "Marks") in connection with the
broadcast and promotion of the Programming during the Term. Programmer agrees
that the nature and quality of all services rendered by it in connection with
the Marks shall conform to reasonable quality standards set by and under the
control of Licensee. If Licensee becomes aware of any fact which in its opinion
indicates that Programmer is using the Marks in connection with programming that
does not conform with Licensee's reasonable quality standards, Licensee may
notify Programmer in writing of such facts and request that Programmer conform
its use of the Marks to Licensee's reasonable quality standards. If Programmer
does not immediately conform its use of the Marks, Licensee may terminate the
license granted hereby upon written notice to Programmer. Programmer agrees to
cooperate with Licensee to control the nature and use of the Marks, to supply
Licensee with audio tapes and uses of the Marks upon Licensee's reasonable
request, and to use the Marks only in connection with its providing programming
on the Stations hereunder. Programmer further agrees to notify Licensee in
writing of any legal action commenced against it which relates to the Marks or
to the quality of the Programming within ten (10) days of notice to Programmer
of such action.
2. OBLIGATIONS AND RIGHTS OF LICENSEE
Programmer acknowledges and agrees that Licensee is and shall remain
responsible for operating the Stations in the public interest and controlling
the day-to-day operations of the Stations in conformance with its FCC licenses,
permits and authorizations. Without limiting the generality of the foregoing,
Licensee and Programmer agree as follows:
2.1 Licensee's Absolute Right to Reject Programming. Licensee shall
have the absolute right to reject any Programming, including advertising
announcements or other material, which Licensee in its sole discretion deems
contrary to the public interest, the Communications Act of 1934, as amended (the
"Communications Act"), or the FCC's rules, regulations and policies (the
"Rules," and together with the Communications Act, the "Communications Laws").
Licensee reserves the right to refuse to broadcast any Programming containing
any matter that Licensee in its sole discretion believes is, or may be
determined by the FCC or any court or other regulatory body with authority over
Licensee or the Stations to be, violative of any third party intellectual
property rights, defamatory, indecent, obscene, profane or otherwise in
violation of law. Licensee may take any other actions necessary to ensure the
Stations' operations comply with the laws of the United States, the laws of the
State of California, the Communications Laws (including the prohibition on
unauthorized transfers of control), and the rules, regulations and policies of
other federal government authorities, including the Federal Trade Commission and
the Department of Justice. Licensee may suspend, cancel or refuse to broadcast
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any portion of the Programming pursuant to this Section 2.1 without reduction or
offset in the payments due Licensee under this Agreement.
2.2 Licensee's Right to Preempt Programming for Special Events and
Public Interest Programming. Licensee shall have the absolute right to preempt
Programming in order to broadcast a program deemed by Licensee, in its sole
discretion, to be of greater national, regional or local public interest or
significance, or to provide public service programming, and to use part or all
of the hours of operation of the Stations for the broadcast of events of special
importance. In all such cases, Licensee will use commercially reasonable efforts
to give Programmer reasonable advance notice of its intention to preempt the
Programming. Licensee may preempt the Programming under this Section 2.2 without
reduction or offset in the payments due Licensee under this Agreement.
2.3 Licensee's Public Service Programming. Licensee shall have the
right to preempt Programming in order to broadcast public service programming at
the times set forth in Section 1.1 hereof.
2.4 Political Advertising, Public File, Etc. The parties acknowledge
that Licensee is ultimately responsible for complying with the Communications
Laws with respect to (a) the carriage of political advertisements and
programming (including, without limitation, the rights of candidates and, as
appropriate, others to equal opportunities, lowest unit charge and reasonable
access); (b) the broadcast and nature of public service programming; (c) the
maintenance of political and public inspection files and the Stations' logs; (d)
the ascertainment of issues of community concern and (e) the preparation of all
quarterly issues/programs lists.
2.5 Maintenance and Repair of Transmission Facilities. Licensee shall
use commercially reasonable efforts to maintain the Stations' transmission
equipment and facilities, including the antennas, transmitters and transmission
lines, in good operating condition, and Licensee shall continue to contract with
local utility companies for the delivery of electrical power to the Stations'
transmitting facilities at all times in order to ensure operation of the
Stations. Licensee shall undertake such repairs as are necessary to maintain
full-time operation of the Stations with their maximum authorized facilities as
expeditiously as reasonably possible following the occurrence of any loss or
damage preventing such operation.
2.6 Main Studio. Licensee shall maintain a main studio for the Stations
as required under the Communications Laws.
3. OBLIGATIONS AND RIGHTS OF PROGRAMMER
Programmer shall not take any action, or omit to take any action,
inconsistent with Licensee's obligations under the Communications Laws to retain
ultimate responsibility for the programming and technical operations of the
Stations. Whenever at the Main Studio or otherwise on the Stations' premises,
all of Programmer's personnel shall be subject to the supervision and the
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direction of the General Manager and/or the Stations' Chief Operator. Without
limiting the generality of the foregoing, Programmer agrees as follows:
3.1 Compliance with Laws and Station Policies. Programmer has advised
Licensee of the nature of the Programming. Programmer will make no material
changes in the Programming after the Commencement Date without the prior written
consent of Licensee, which shall not be unreasonably withheld. All Programming
shall conform in all material respects to all applicable provisions of the
Communications Laws, all other laws or regulations applicable to the broadcast
of programming by the Stations, and the programming regulations prescribed in
Schedule 3.1 hereto. At no time during the Term shall Programmer or its
employees or agents represent, hold out, describe or portray Programmer as the
licensee of the Stations.
3.2 Cooperation with Licensee. Programmer, on behalf of Licensee, shall
furnish or insert within the Programming all Station identification
announcements required by the Communications Laws, and shall, upon request by
Licensee, provide (a) information about Programming that is responsive to the
public needs and interests of the area served by the Stations, so as to assist
Licensee in the preparation of any required programming reports, and (b) other
information to enable Licensee to prepare other records, reports and logs
required by the FCC or other local, state or federal governmental agencies.
Programmer shall maintain and deliver to Licensee all records and information
required by the FCC to be placed in the public inspection file of the Stations,
including all records and information pertaining to the broadcast of political
programming and advertisements, in accordance with the provisions of Sections
73.1943 and 73.3526 of the Rules and The Bipartisan Campaign Reform Act of 2002.
Programmer additionally agrees that broadcasts of sponsored programming
addressing political issues or controversial subjects of public importance will
comply with the provisions of Section 73.1212 of the Rules. Programmer shall
consult with Licensee and adhere strictly to all applicable provisions of the
Communications Laws, with respect to the carriage of political advertisements
and political programming (including, without limitation, the rights of
candidates and, as appropriate, other parties, to "equal opportunities") and the
charges permitted for such programming or announcements. Programmer shall
cooperate with Licensee to ensure compliance with the Rules regarding Emergency
Alert System tests and alerts.
3.3 Payola and Plugola. Programmer shall provide to Licensee in advance
any information known to Programmer regarding any money or other consideration
which has been paid or accepted, or has been promised to be paid or to be
accepted, for the inclusion of any matter as a part of any programming or
commercial material to be supplied to Licensee by Programmer for broadcast on
the Stations, unless the party making or accepting such payment is identified in
the program as having paid for or furnished such consideration in accordance
with the Communications Laws. Commercial matter with obvious sponsorship
identification will not require disclosure beyond the sponsorship identification
contained in the commercial copy. Programmer shall at all times endeavor to
proceed in good faith to comply with the requirements of Sections 317 and 507 of
the Communications Act and the related Rules.
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3.4 Handling of Communications. Programmer shall provide Licensee with
the original or a copy of any correspondence from a member of the public
relating to the Programming to enable Licensee to comply with the requirements
of the Communications Laws, including those regarding the maintenance of the
public inspection file. Licensee shall not be required to receive or handle
mail, facsimiles, e-mails or telephone calls in connection with the Programming
unless Licensee has agreed to do so in writing. Licensee shall promptly forward
to Programmer all correspondence, payments, communications or other information
and/or documents which it receives and which relate to the Programming,
including without limitation, invoices, billing inquiries, checks, money orders,
wire transfers or other payments for services or advertising.
3.5 Compliance with Copyright Act. Programmer shall not broadcast any
material on the Stations in violation of the Copyright Act or the rights of any
Person. All music supplied by Programmer shall be (a) licensed by a music
licensing agent such as ASCAP, BMI, or SESAC, (b) in the public domain or (c)
cleared at the source by Programmer. Licensee shall not be obligated to pay any
music licensing fees or other similar expenses required in connection with the
material broadcast by Programmer on the Stations.
4. RESPONSIBILITY FOR EMPLOYEES AND EXPENSES
4.1 Licensee's Responsibility for Employees and Expenses.
(a) Licensee will employ a full-time management-level employee for the
Stations (the "General Manager"), who shall report and be solely accountable to
Licensee and shall be responsible for overseeing the operations of the Stations,
and a staff-level employee, who shall report to and assist the General Manager
in the performance of his or her duties. Licensee shall also retain a qualified
Chief Operator, as that term is defined in the Communications Laws, for the
Stations. The Chief Operator shall have the duties and responsibilities of a
"Chief Operator" under the Communications Laws.
(b) Subject to Schedule 1.5 hereto, Licensee shall be responsible for
timely paying: (i) all lease payments for the Stations' transmitter sites,
whether in use or not, and all taxes and other costs incident thereto, including
insurance costs, (ii) all utility costs (telephone, electricity, etc.) relating
to the transmitter sites, (iii) all maintenance and repair costs for the
transmitting equipment that are Licensee's responsibility under Section 2.5,
(iv) all costs, including utilities, taxes, insurance and maintenance, relating
to the ownership of the building housing the Main Studio, (v) the salaries,
taxes, insurance and related costs for Licensee's Station personnel and (vi) all
FCC regulatory or filing fees.
4.2 Programmer's Responsibility for Employees and Expenses.
(a) Programmer shall be responsible for the artistic personnel and
material for the production of the Programming to be provided under this
Agreement. Programmer shall provide any transmitter duty operators required for
the operation of the Stations during any period when the Programming is being
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broadcast. Programmer shall employ and be responsible for the salaries, taxes,
insurance and related costs for all of its own personnel and facilities used in
fulfillment of its rights and obligations under this Agreement.
(b) Programmer shall be responsible for timely paying all costs
associated with production and listener responses, including utility costs, fees
to ASCAP, BMI and SESAC, any other copyright fees, and all other costs or
expenses attributable to the Programming that is delivered by Programmer for
broadcast on the Stations. In addition, Programmer shall be responsible for
timely paying all salaries, taxes, insurance and related costs of personnel
other than the Licensee's Station personnel. Programmer shall also timely pay
all maintenance and repair costs for the Main Studio and Studio Equipment. The
parties acknowledge and agree that Programmer shall obtain its own ASCAP, BMI
and SESAC licenses as of the Commencement Date and shall not use, operate under,
or be responsible for the payment of any fees in connection with, the ASCAP, BMI
or SESAC licenses held by Licensee.
(c) Programmer shall maintain at its expense and with reputable
insurance companies commercially reasonable coverage for broadcaster's liability
insurance, worker's compensation insurance and commercial general liability
insurance.
4.3 Station Employees.
(a) Transferred Employees.
(i) Except as set forth on Schedule 4.3, Programmer shall offer
employment to each Station Employee (as defined in the Purchase Agreement) who
is employed immediately prior to the LMA Effective Time and who is not on
authorized leave of absence, sick leave, short or long term disability leave,
military leave or layoff with recall rights. For the purposes hereof, all
Station Employees who accept Programmer's offer of employment are hereinafter
referred to collectively as the "Transferred Employees," and the "Employment
Commencement Date" as referred to herein shall mean the LMA Effective Time.
Programmer shall employ at-will those Transferred Employees who do not have
employment agreements with Licensee at the same monetary compensation as such
employees are currently earning. The initial terms and conditions of employment
for those Transferred Employees who have employment agreements, including
account executive agreements and bonus term sheets, with the Licensee shall be
dictated by such employment agreements. Programmer may modify, alter or
terminate any of the terms and conditions of employment of the Transferred
Employees. Nothing in this Agreement shall prevent Programmer from terminating
the employment of any Transferred Employee at any time after the LMA Effective
Time.
(ii) Except as otherwise expressly provided herein or in the
Purchase Agreement, Programmer shall not assume any claims, liabilities, or
obligations of Seller as an employer incurred prior to the Effective Time,
including liabilities for wages, supplemental unemployment benefits, severance
benefits, retirement benefits, Federal Consolidated Omnibus Budget
Reconciliation Act of 1985 benefits, Federal Family and Medical Leave Act of
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1993 benefits, Federal Workers Adjustment and Retraining Notification Act
obligations and liabilities, or any other employee benefits, withholding Tax
liabilities, workers' compensation, or unemployment compensation benefits or
premiums, hospitalization or medical claims, occupational disease or disability
claims, or other claims attributable in whole or in part to employment or
termination by Seller or arising out of any labor matter involving Seller as an
employer, and any claims, liabilities and obligations arising from or relating
to the Employee Benefit Plans (as defined in the Purchase Agreement).
(iii) To the extent permitted under Programmer's plans and
subject to the requirements of Programmer's plan administrator, (i) Programmer
shall cause all Transferred Employees to be eligible to participate in its
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA) and its
"defined contribution plans" (as defined in Section 414(i) of the Code) to the
extent Programmer's similarly-situated employees are generally eligible to
participate, (ii) all Transferred Employees and their spouses and dependents
shall be eligible for coverage immediately after the Employment Commencement
Date (and shall not be excluded from coverage under any employee welfare benefit
plan that is a group health plan on account of any pre-existing condition, as
long as such condition was covered under Programmer's group health plan), (iii)
for purposes of any length of service requirements, waiting periods, vesting
periods or differential benefits based on length of service in any such employee
welfare benefit plans (including any severance plans or policies) and defined
contribution plans for which Transferred Employees may be eligible after the
Commencement Date, Programmer shall ensure, to the extent permitted by
applicable Law (including, without limitation, ERISA and the Code), that service
with Licensee (as shown on Schedule 3.14(a) to the Purchase Agreement) shall be
deemed to have been service with Programmer, (iv) Programmer shall cause its
defined contribution plans to accept rollover contributions from the Transferred
Employees of any account balances distributed to them by the Licensee's 401(k)
plan or any 401(k) plan of Licensee's Affiliates, and (v) Programmer shall allow
any such Transferred Employee's outstanding plan loan to be rolled into
Programmer's defined contribution plans. The distribution and rollover described
herein shall comply with applicable Law, and each party shall make all filings
and take any actions required of such party by applicable Law in connection
therewith. Programmer also shall ensure, to the extent permitted by applicable
Law (including, without limitation, ERISA and the Code) and/or Programmer's
plans, that Transferred Employees receive credit under any welfare benefit plan
of Programmer for any deductibles or co-payments paid by Transferred Employees
and their spouses and dependents for the current plan year under a plan
maintained by Licensee.
(iv) Notwithstanding any other provision contained herein,
Programmer shall grant credit for all unused sick leave accrued by Transferred
Employees on the basis of their service during the current calendar year as
employees of Licensee.
(v) Provided that Programmer receives an appropriate proration
under Section 6.1, Programmer will assume all liabilities for unpaid, accrued
vacation and personal days of Transferred Employees as of the LMA Effective Time
("Accrued Vacation"), and shall permit Transferred Employees to use their
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Accrued Vacation entitlement until twelve (12) months from the LMA Effective
Time. Programmer will pay any Transferred Employee to the extent that such
Transferred Employee has any unused Accrued Vacation at the end of such twelve
(12) month period. Service with both the Programmer and the Licensee (as shown
on Schedule 3.14(a) to the Purchase Agreement) shall be taken into account in
determining Transferred Employees' vacation entitlement under the Programmer's
vacation policy after the LMA Effective Time. Except as prohibited by applicable
Law, after the Commencement Date Licensee shall deliver to Programmer originals
or copies of all personnel files and records (excluding medical and benefit plan
records) related to the Transferred Employees, and Licensee shall have
reasonable continuing access to such files and records thereafter.
(b) No Third Party Beneficiary Rights. Nothing herein express or
implied or intended shall create any third party beneficiary rights of any
employee or former employee (including any beneficiary or dependent thereof) of
Licensee in respect of continued employment (or resumed employment) with
Licensee or with Programmer or in respect of any other matter.
5. ASSIGNMENT AND ASSUMPTION OF CERTAIN AGREEMENTS, RIGHTS AND OBLIGATIONS
5.1 Assignment and Assumption. Except as set forth in Schedule 5.1
hereto, Licensee shall assign to Programmer, and Programmer shall assume and
undertake to pay, discharge, perform or satisfy (a) the liabilities, obligations
and commitments of Licensee arising or accruing at or after the LMA Effective
Time under the Station Contracts, as defined in the Purchase Agreement (the
"Assumed Contracts"), and (b) the liabilities and obligations relating to
Transferred Employees as specified in Section 4.3 (collectively the "Assumed LMA
Obligations").
5.2 Limitation. Except as set forth in this Section 5, Programmer does
not assume or agree to discharge or perform and will not be deemed by reason of
the execution and delivery of this Agreement to have assumed or to have agreed
to discharge or perform, any liabilities, obligations or commitments of Licensee
of any nature whatsoever whether accrued, absolute, contingent or otherwise and
whether or not disclosed to Programmer.
5.3 Third-Party Consents. Licensee shall use its commercially
reasonable efforts to obtain third-party consents necessary for the assignment
of any Assumed Contract, if any required. Notwithstanding anything in this
Agreement to the contrary, this Agreement shall not constitute an agreement to
assign any Assumed Contract or any claim or right or any benefit arising
thereunder or resulting therefrom if such assignment, without the consent of a
third party thereto, would constitute a breach or other contravention of such
Assumed Contract or in any way adversely affect the rights of Licensee or
Programmer thereunder. If such consent is not obtained prior to the Commencement
Date, Licensee shall use its commercially reasonable efforts to (a) obtain such
consent as soon as possible after the Commencement Date, (b) provide to
Programmer the financial and business benefits of any such Assumed Contract and
(c) enforce, at the request of Programmer, for the account of Programmer, any
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rights of Licensee arising from any such Assumed Contract. Notwithstanding the
foregoing, neither Licensee nor any of its Affiliates shall be required to pay
consideration to any third party to obtain any consent.
6. PRORATIONS; ACCOUNTS RECEIVABLE
6.1 Proration of Income and Expenses. All Assumed LMA Obligations shall
be prorated between Programmer and Licensee as of the LMA Effective Time (the
"Prorated LMA Assumed Obligations") in accordance with the procedures and using
the time frames set forth in Section 1.7 of the Purchase Agreement; provided,
however, (a) references in such section to Seller, Buyer, Effective Time and
Closing Date shall mean Licensee, Programmer, LMA Effective Time and
Commencement Date respectively, (b) any references in such section to Prorated
Station Assets or Prorated Assumed Obligations shall mean the Prorated Assumed
LMA Obligations, and (c) the payment principle described in the first sentence
of subsection (h) of such section shall be replaced with the principle that
payment by the Programmer or Licensee, as the case may be, for the proration
amounts determined pursuant to this Section 6.1 shall be made within ten (10)
business days after the Settlement Statement becomes final and binding upon the
parties.
6.2 Accounts Receivable.
(a) On the Commencement Date, Licensee shall designate Programmer as
its agent solely for the purpose of collecting the accounts receivable for the
Stations existing at the LMA Effective Time (the "Accounts Receivable").
Licensee shall deliver to Programmer, on or immediately after the Commencement
Date, a complete and detailed statement of the Accounts Receivable. Programmer
shall use commercially reasonable efforts to collect the Accounts Receivable
during the period (the "Collection Period") beginning at the LMA Effective Time
and ending on the one hundred twentieth (120th) day following the Commencement
Date consistent with Programmer's practices for collection of its accounts
receivable (but without obligation to institute proceedings or use any other
extraordinary means of collection). Any payment received by Programmer (i) at
any time following the LMA Effective Time, (ii) from a customer of the Stations
after the LMA Effective Time that was also a customer of the Stations prior to
the LMA Effective Time and that is obligated with respect to any Accounts
Receivable and (iii) that is not designated as a payment of a particular invoice
or invoices or as a security deposit or other prepayment, shall be presumptively
applied to the accounts receivable for such customer outstanding for the longest
amount of time and, if such accounts receivable shall be an Accounts Receivable,
remitted to Licensee in accordance with Section 6.2(b); provided further,
however, that if, prior to the LMA Effective Time, Licensee or, after the LMA
Effective Time, Licensee or Programmer received or receives a written notice of
dispute from a customer with respect to an Accounts Receivable that has not been
resolved, then Programmer shall apply any payments from such customer to such
customer's oldest, non-disputed accounts receivable, whether or not an Accounts
Receivable. Programmer shall obtain the prior written approval of Licensee
before referring any of the Accounts Receivable to a collection agency or to an
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attorney for collection. If Licensee receives a payment from an account debtor
of the Stations, Licensee shall promptly notify Programmer thereof.
(b) On or before the fifth (5th) day following the end of each calendar
month in the Collection Period, Programmer shall deposit into an account
identified by Licensee the amounts collected during the preceding month of the
Collection Period with respect to the Accounts Receivable in immediately
available funds by wire transfer. Programmer shall furnish Licensee with a list
of the amounts collected during such calendar month and in any prior calendar
months with respect to the Accounts Receivable and a schedule of the amount
remaining outstanding under each particular account. Licensee shall be entitled
during the sixty-day period following the Collection Period to inspect and/or
audit the records maintained by Programmer pursuant to this Section 6.2, upon
reasonable advance notice and during normal business hours.
(c) Following the expiration of the Collection Period, Programmer shall
have no further obligations under this Section 6.2, except that Programmer shall
immediately pay over to Licensee any amounts subsequently paid to it with
respect to any Accounts Receivable. Following the Collection Period, Licensee
may pursue collections of all the Accounts Receivable, and Programmer shall
deliver to Licensee all files, records, notes and any other materials relating
to the Accounts Receivable and shall otherwise cooperate with Licensee for the
purpose of collecting any outstanding Accounts Receivable. (d) If Programmer
fails to remit any amounts collected pursuant to this Section 6.2, such amount
shall bear interest at the prime rate (as reported by The Wall Street Journal
or, if not reported thereby, by another authoritative source) as in effect from
time to time from the date such amount was due until the date of actual payment.
7. INDEMNIFICATION
7.1 Indemnification. From and after the Commencement Date, each of
Programmer and Licensee shall indemnify, defend, protect and hold harmless the
other, its Affiliates, and their respective employees, officers, directors,
shareholders and agents, and the successors and assigns of any of them, from and
against, and reimburse them for, all claims, damages, liabilities, costs and
expenses, including reasonable attorneys' fees and expenses arising from (a) any
programming provided by such party for broadcast on the Stations; (b) any claim
for libel, slander, infringement of copyright or other intellectual property
right, or violation of any right of privacy or proprietary right, as a result of
the broadcast on the Stations of the programming provided by such party; (c)
such party's use of the Stations, the Main Studio or the Studio Equipment; (d)
any breach by such party of any representation, warranty, covenant or other
agreement hereunder; (e) any action taken by such party or its employees or
agents with respect to the Stations, or any failure by such party or its
employees or agents to take any action with respect to the Stations, including
but not limited to such party's payment and performance of obligations and
liabilities, unless resulting from a failure by the other party to perform
hereunder; or (f) any other claims of any nature, including any investigation
11
initiated or fines or forfeitures imposed by the FCC, as a result of the
broadcast on the Stations of the programming provided by such party.
7.2 Procedure for Indemnification. The indemnified party shall give
prompt written notice to the indemnifying party of any demand, suit, claim or
assertion of liability by third parties or other circumstances that could give
rise to an indemnification obligation hereunder against the indemnifying party
(a "Claim"), but a failure to give or a delay in giving such notice shall not
affect the indemnified party's right to indemnification and the indemnifying
party's obligation to indemnify as set forth in this Agreement, except to the
extent the indemnifying party's ability to remedy, contest, defend or settle
with respect to such Claim is thereby materially prejudiced. The obligations and
liabilities of the parties with respect to any Claim shall be subject to the
following additional terms and conditions:
(a) The indemnifying party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense or opposition
to such Claim.
(b) In the event that the indemnifying party shall elect not to
undertake such defense or opposition, or, within twenty (20) days after written
notice (which shall include sufficient description of background information
explaining the basis for such Claim) of any such Claim from the indemnified
party, the indemnifying party shall fail to undertake to defend or oppose, the
indemnified party (upon further written notice to the indemnifying party) shall
have the right to undertake the defense, opposition, compromise or settlement of
such Claim, by counsel or other representatives of its own choosing, on behalf
of and for the account and risk of the indemnifying party (subject to the right
of the indemnifying party to assume defense of or opposition to such Claim at
any time prior to settlement, compromise or final determination thereof).
(c) Anything herein to the contrary notwithstanding (i) the indemnified
party shall have the right, at its own cost and expense, to participate in the
defense, opposition, compromise or settlement of the Claim, (ii) the
indemnifying party shall not, without the indemnified party's written consent,
settle or compromise any Claim or consent to entry of any judgment, unless (x)
the indemnifying party pays all amounts in full and (y) such judgment,
settlement or compromise includes the giving by the claimant to the indemnified
party of a release from all liability in respect of such Claim, and (iii) in the
event that the indemnifying party undertakes defense of or opposition to any
Claim, the indemnified party, by counsel or other representative of its own
choosing and at its sole cost and expense, shall have the right to consult with
the indemnifying party and its counsel or other representatives concerning such
Claim and the indemnifying party and the indemnified party and their respective
counsel or other representatives shall cooperate in good faith with respect to
such Claim.
8. TERMINATION FOR ANY REASON OTHER THAN THE CLOSING
8.1 Termination. This Agreement may be terminated as set forth below by
either Licensee or Programmer, by written notice to the other party if the party
12
seeking to terminate is not then in material default or breach of its
obligations hereunder, upon the occurrence of any of the following:
(a) Subject to Section 11.4, this Agreement shall have been declared
invalid or illegal in whole or in material part by an order or a decree of the
FCC or any other administrative agency or court of competent jurisdiction, and
such order or decree shall have become final and shall no longer be subject to
further administrative or judicial review;
(b) The mutual consent of both parties;
(c) In the event the Purchase Agreement shall have been terminated in
accordance with its terms, such time as Licensee enters into a binding agreement
to sell the Stations to a third party and is permitted to enter into a local
marketing agreement for the Stations with such third party;
(d) Subject to Section 11.4, there shall have been a change in FCC
rules, policies, or case law that would cause this Agreement or any material
provision hereof to be in substantial violation thereof, and such change shall
not be the subject of an appeal or further administrative or judicial
reconsideration or review; or
(e) Following the termination of the Purchase Agreement in accordance
with its terms, the other party shall be in material default or breach of its
representations, warranties, covenants or obligations hereunder, and shall have
failed to have cured such default or breach within (30) days after written
notice has been given by the terminating party.
8.2 Effect of Termination.
(a) If this Agreement expires or is terminated for any reason other
than the occurrence of the Closing under the Purchase Agreement, the parties
shall cooperate in good faith to restore the status quo ante, including but not
limited to the following:
(i) Programmer shall assign, transfer and convey
to Licensee all of Programmer's rights in, to and under the
Assumed Contracts that remain in effect on the date of such
termination and all agreements with advertisers existing on the
date of such termination (collectively the "Reassumed
Contracts"). Programmer shall use commercially reasonable
efforts to promptly obtain and deliver to Licensee (or to such
other person as is directed by Licensee), at Licensee's expense,
any necessary consents to the assignment of the Reassumed
Contracts to Licensee (or such other person as is directed by
Licensee).
(ii) Licensee shall assume from Programmer all
liabilities, obligations and commitments of Programmer arising
or accruing on or after the date of termination pursuant to the
Reassumed Contracts, and Programmer shall be responsible only
for those obligations under the Reassumed Contracts arising at
or after the LMA Effective Time and prior to the termination of
this Agreement.
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(iii) Licensee and Programmer shall prorate to
the effective date of termination and promptly pay thereafter
the payments, reimbursements and fees provided for hereunder.
(iv) Licensee shall cooperate reasonably with
Programmer to the extent necessary and take all actions
reasonably necessary to enable Programmer to fulfill all
advertising or other programming contracts and commitments then
outstanding, in which event Licensee shall be entitled to
receive as compensation for the carriage of such advertising or
programming that consideration which shall have already been
paid to Programmer, or which otherwise would have been paid to
Programmer in respect of such advertising.
(v) Licensee shall use its commercially
reasonable efforts to collect the accounts receivable of
Programmer in respect of the Stations generated pursuant to this
Agreement and to remit the same to Programmer for a period of
one hundred and twenty (120) days following the date of
termination of this Agreement in accordance with the procedures
set forth in Section 6.2 (substituting Programmer for Licensee
and Licensee for Programmer, as appropriate).
(vi) Programmer shall return to Licensee any
equipment or property of the Stations used by Programmer, its
employees or agents, in the same condition as such equipment
existed on the date hereof, reasonable and ordinary wear and
tear expected.
(vii) Licensee shall offer employment to the
Transferred Employees who are then employed by Programmer on the
date of termination as provided in Section 4.3(a)(i). Such
employees shall cease to participate in Programmer's benefit
plans described in Section 4.3(a)(ii) as of the date of
termination.
(b) No expiration or termination of this Agreement shall terminate the
indemnification obligations of Programmer or Licensee hereunder.
9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
9.1 Representations, Warranties and Agreements of Licensee. Licensee
hereby represents and warrants that:
(a) Corporate Existence and Power. Licensee is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to own and operate the
Stations and to carry on the Stations' business as now conducted by it. Licensee
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the Stations are located.
14
(b) Corporate Authorization.
(i) The execution and delivery by Licensee of this Agreement,
the performance by Licensee of its obligations hereunder and the consummation by
Licensee of the transactions contemplated hereby are within Licensee's corporate
powers and have been duly authorized by all requisite corporate action on the
part of Licensee.
(ii) This Agreement has been duly executed and delivered by
Licensee. This Agreement (assuming due authorization, execution and delivery by
Programmer) constitutes the legal, valid and binding obligation of Licensee,
enforceable against Licensee in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar Laws
affecting or relating to enforcement of creditors' rights generally and general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity).
(c) Noncontravention. Except as set forth in the Purchase Agreement,
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby do not and will not (a) violate or
conflict with the certificate of incorporation or by-laws of Licensee; (b)
conflict with or violate any Law or Governmental Order applicable to Licensee;
or (c) require any consent or other action by or notification to any Person
under, constitute a default under, give to any Person any rights of termination,
amendment, acceleration or cancellation of any right or obligation of Licensee
under, any provision of any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other agreement or instrument to
which Licensee is a party or by which any of Licensee's assets is or may be
bound, except, in the cases of clauses (b) and (c), for any such violations,
consents, actions, defaults, rights or losses as could not have, individually or
in the aggregate, a material adverse effect on the ability of Licensee to
satisfy its obligations under this Agreement.
9.2 Representations and Warranties of Programmer. Programmer hereby
represents and warrants that:
(a) Corporate Existence and Power. Programmer is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted. Programmer is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
Station Assets are located.
(b) Corporate Authorization.
(i) The execution and delivery by Programmer of this Agreement,
the performance by Programmer of its obligations hereunder and the consummation
by Programmer of the transactions contemplated hereby are within Programmer's
15
corporate powers and have been duly authorized by all requisite corporate action
on the part of Programmer.
(ii) This Agreement has been duly executed and delivered by
Programmer. This Agreement (assuming due authorization, execution and delivery
by Licensee) constitutes the legal, valid and binding obligation of Programmer,
enforceable against Programmer in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar Laws
affecting or relating to enforcement of creditors' rights generally and general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity).
(c) Noncontravention. Except as set forth in the Purchase Agreement,
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby do not and will not (a) violate or
conflict with the certificate of incorporation or by-laws of Programmer; (b)
conflict with or violate any Law or Governmental Order applicable to Programmer;
or (c) require any consent or other action by or notification to any Person
under, constitute a default under, give to any Person any rights of termination,
amendment, acceleration or cancellation of any right or obligation of Programmer
under, any provision of any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other agreement or instrument to
which Programmer is a party or by which any of Programmer's assets is or may be
bound, except, in the cases of clauses (b) and (c), for any such violations,
consents, actions, defaults, rights or losses as could not have, individually or
in the aggregate, a material adverse effect on the ability of Programmer to
satisfy its obligations under this Agreement.
10. REQUIRED FCC CERTIFICATIONS
10.1 Licensee's Certification. Licensee hereby certifies that it shall
maintain ultimate control over the Stations' facilities, including specifically
control over the Stations' finances, personnel, and programming.
10.2 Programmer's Certification. Programmer hereby certifies that this
Agreement complies with the provisions of Section 73.3555(a) of the FCC's rules
and regulations.
11. MISCELLANEOUS
11.1 Amendment, Modification or Waiver. No amendment, modification or
waiver of any provision of this Agreement shall be effective unless made in
writing and signed by the party adversely affected, and any such waiver and
consent shall be effective only in the specific instance and for the purpose for
which such consent was given.
11.2 No Waiver; Remedies Cumulative. No failure or delay on the part of
Licensee or Programmer in exercising any right or power under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
16
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the parties
to this Agreement are cumulative and are not exclusive of any right or remedies
which either may otherwise have.
11.3 Governing Law; Waiver of Jury Trial. The construction and
performance of this Agreement shall be governed by the laws of the State of New
York without regard to its principles of conflict of law. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in a New York state or federal court located in New York County, New
York, and the parties hereto irrevocably submit to the exclusive jurisdiction of
such courts in any such action or proceeding and irrevocably waive the defense
of an inconvenient forum to the maintenance of any such action or proceeding.
Each party agrees not to bring any action or proceeding arising out of or
relating to this Agreement in any other court. THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING IN ANY WAY TO THIS AGREEMENT, INCLUDING WITH RESPECT TO ANY
COUNTERCLAIM MADE IN SUCH ACTION OR PROCEEDING, AND AGREE THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE DECIDED SOLELY BY A JUDGE. The parties hereto hereby
acknowledge that they have each been represented by counsel in the negotiation,
execution and delivery of this Agreement and that their lawyers have fully
explained the meaning of the Agreement, including in particular the jury-trial
waiver.
11.4 Change in FCC Rules or Policies; Severability. In the event that
the FCC determines that this Agreement does not comply with the Communications
Laws, the parties shall negotiate in good faith and attempt to agree to an
amendment to this Agreement that will provide the parties with a valid and
enforceable agreement that conforms to the Communications Laws. In the event
that any of the provisions of this Agreement shall be held unenforceable, then
the remaining provisions shall be construed as if such unenforceable provisions
were not contained herein. Any provision of this Agreement that is unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such unenforceability without invalidating the remaining provisions hereof,
and any such unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto hereby waive any provision of law now or
hereafter in effect that renders any provision hereof unenforceable in any
respect.
11.5 Construction. Any question of doubtful interpretation shall not be
resolved by any rule providing for interpretation against the party who causes
the uncertainty to exist or against the drafter of this Agreement.
11.6 No Partnership or Joint Venture. This Agreement is not intended to
be and shall not be construed as a partnership or joint venture agreement
between the parties. Except as otherwise specifically provided in this
Agreement, no party to this Agreement shall be authorized to act as agent of or
otherwise represent any other party to this Agreement.
17
11.7 Entire Agreement. This Agreement and the Purchase Agreement, and
the exhibits and schedules hereto and thereto, embody the entire agreement and
understanding of the parties hereto and supersede any and all prior agreements,
arrangements and understandings relating to the matters provided for herein.
11.8 Benefit and Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. Neither party may assign its rights under this Agreement without
the other party's prior written consent, which consent may not be unreasonably
withheld or delayed; provided that Licensee may at its option assign this
Agreement (in whole or part) to an Affiliate or to a trustee holding and
operating the Stations pursuant to a trust agreement, provided (i) such trustee
assumes Licensee's duties and obligations hereunder and (ii) such assignment
shall not relieve Licensee of its duties hereunder and Licensee shall guarantee
each of the duties and obligations of such assignee.
11.9 Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
11.10 Notices. Any notice, demand or request required or permitted to
be given under the provisions of this Agreement shall be in writing, addressed
to the following addresses, or to such other address as any party may request in
writing.
If to Licensee:
Infinity Radio Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
With a copy, which shall not constitute notice, to:
Viacom Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
and
Xxxxxxxxx Xxxxxx & Xxxxxx PLLC
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
18
If to Programmer:
NextMedia Operating, Inc.
0000 X. Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000X
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Facsimile: (000) 000-0000
With a copy, which shall not constitute notice, to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
Any such notice, demand or request shall be deemed to have been duly delivered
and received (i) on the date of personal delivery, or (ii) on the date of
transmission, if sent by facsimile and received prior to 5:00 p.m. in the place
of receipt (but only if a hard copy is also sent by overnight courier), or (iii)
on the date of receipt, if mailed by registered or certified mail, postage
prepaid and return receipt requested, or (iv) on the date of a signed receipt,
if sent by an overnight delivery service, but only if sent in the same manner to
all persons entitled to receive notice or a copy.
11.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. Faxed copies of this
Agreement and faxed signature pages shall be binding and effective as to all
parties and may be used in lieu of the original Agreement, and, in particular,
in lieu of original signatures, for any purpose whatsoever.
[Signature page follows]
19
SIGNATURE PAGE TO LOCAL MARKETING AGREEMENT
-------------------------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
INFINITY RADIO INC.
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
NEXTMEDIA OPERATING, INC.
By: /s/ Xxxx Xxxxxx
------------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
