TIME BROKERAGE AGREEMENT
This Time Brokerage Agreement, dated as of the 3rd day of February, 1997,
is made by and between Xxxxxxxx Media System, Inc., a Texas corporation
("Licensee"), and Heart Unlimited Company, a Delaware corporation ("Broker").
W I T N E S S E T H:
WHEREAS, Licensee has available broadcasting time and is engaged in the
business of radio broadcasting on radio station KXTN-AM in San Antonio, Texas
(the "Station"); and
WHEREAS, Broker desires to avail itself of Station's broadcast time for
the presentation of programming service, including the sale of advertising
time; and
WHEREAS, Licensee is the holder of all licenses issued by governmental
authorities used in the operation of the Station; and
WHEREAS, Broker and Licensee have entered into an Option Agreement (the
"Option Agreement");
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained, the parties hereto have agreed and do agree as follows:
1. FACILITIES. Licensee agrees to make broadcasting transmission
facilities available to Broker and to broadcast on the Station, or cause to
be broadcast, Broker's programs which will originate from Broker's studios.
Broker will provide a broadcast quality signal to the Station's transmitter
site, either by STL or phone lines, from its broadcast and transmission
studios.
2. TERM OF AGREEMENT. This Agreement shall commence at 12:01 a.m. on
March 1, 1997 (the "Effective Date") and, subject to the terms and
conditions of this Agreement, shall continue for a period of 24 months.
Notwithstanding the foregoing, (A) if in any 30-day period Licensee rejects,
fails to accept or preempts broadcast programs provided by Broker in the
aggregate amount of 48 hours, Broker may terminate this Agreement in its
discretion without any further liability to Licensee; and (B) Licensee may
terminate this Agreement upon 90 days notice to Broker and upon payment to
Broker of an amount in cash equal to the greater of (i) the sum of the
payments received by Licensee from the Broker during the 12 month period
preceding the termination date or (ii) $50,000.
3. PAYMENTS.
3.1 AMOUNT OF PAYMENTS. Broker hereby agrees to pay Licensee for
the broadcast of the programs hereunder the sum of $4,000 per month during
the first
12 months of the term hereof and $5,000 per month during months 13 through 24
of the term hereof. Broker further agrees to reimburse Licensee, on a
monthly basis, for the costs of operating Licensee's transmitter in the
amount set forth on Schedule 3.1 hereto.
3.2 MANNER OF PAYMENTS. Monthly payments shall be due and payable
in full in advance on the first business day of each month during the term
hereof with the first payment hereunder paid upon the execution of this
Agreement and shall be prorated for partial months. The failure of Licensee
to demand or insist upon prompt payment in accordance herewith shall not
constitute a waiver of its right to do so. If Broker shall have produced and
made available programming to air on the Station as provided herein and such
programming does not air due to Licensee preempting such programming other in
accordance with Section 10 or 11 below, or if for any reason Licensee is
unable to broadcast such programming through no fault of Broker, or if this
Agreement is terminated for any reason (other than a breach of this Agreement
by Broker) prior to the end of a month, then Broker shall receive a payment
credit to be determined by multiplying the monthly payment by the ratio of
the amount of time not aired to the total number of broadcast hours allotted
to Broker each month pursuant to Section 5.1 below.
4. PROGRAMS. Broker shall furnish or cause to be furnished the
artistic personnel and material for the programs as provided by this
Agreement, and all programs shall be in accordance with the requirements and
regulations of the Federal Communications Commission ("Commission"). All
programs shall be prepared and presented in conformity with the regulations
of the Commission. All advertising spots and promotional material or
announcements shall comply with all applicable federal, state and local
regulations and policies and shall be produced in accordance with quality
standards established by Licensee.
5. STATION FACILITIES.
5.1 OPERATION OF STATION. Throughout the term of this Agreement,
Licensee shall make the Station available to the Broker for operation with
the authorized facilities 24 hours a day, seven days a week, except for (i)
at least two hours each week on Sunday morning between the hours of 7:00 a.m.
and 11:00 a.m. during which Licensee will be responsible for public affairs
programming dealing with issues affecting the Station's service area and (ii)
downtime occasioned by routine maintenance not to exceed two hours each
Sunday morning between the hours of 1:00 a.m. and 5:00 a.m. Any maintenance
work affecting the operation of the Station at full power shall be scheduled
upon at least 48 hours' prior notice with the agreement of the Broker, such
agreement not to be unreasonably withheld. It is further understood and
agreed that Licensee shall continue to retain full authority and control over
operation of the Station during the course of this Agreement; to be
responsible for assessment of the needs and interests of the community; and
to
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determine that the programs presented are responsive to such needs and
interests, and that all programming continues to meet all federal, state and
local laws, including those that govern political broadcast time,
presentation of lottery material, proper sponsor identification, and other
programming in the public interest. Broker also agrees that all such
programming as presented by Broker will be in full compliance with all such
applicable rules and regulations. Licensee shall also continue to be
responsible for maintenance of the Station's public file in good order as
required by the Commission, including timely placement of a copy of this
Agreement in that file; to prepare and timely file in such file the quarterly
issues/programs list as required by the Commission's rules; to timely file
with the Commission all required reports or other records as required by the
Commission; and to otherwise comply in all respects with the Commission rules
and regulations, including those rules and regulations regarding requests for
political advertising. Broker agrees to cooperate fully in the gathering,
compilation and completion of all such reports as may be required by Licensee.
5.2 INTERRUPTION OF NORMAL OPERATIONS. If the Station suffers loss
or damage of any nature to its transmission facilities which results in the
interruption of service or the inability of the Station to operate with its
authorized facilities, Licensee shall immediately notify Broker, and shall
undertake (or authorize Broker to undertake on Licensee behalf and at
Licensee's expense) such repairs as necessary to restore the full-time
operation of the Station with its authorized facilities as soon as
practicable.
5.3 STUDIO LOCATION. Licensee shall maintain a main studio capable
of providing a broadcast quality signal to the Station's transmission
facility, such main studio to be located within the Station's city-grade
contour. Broker shall be responsible for providing a broadcast quality
signal for its programming either to such main studio location or directly to
the Station's transmission facility.
5.4 TRANSMISSION FACILITY. Licensee shall operate the Station's
transmission facility in accordance with the authorizations issued to
Licensee by the Commission.
6. HANDLING OF MAIL. Except as required to comply with Commission
rules and policies, including those regarding the maintenance of the public
inspection file (which shall at all times remain the responsibility of
Licensee), Licensee shall not be required to receive or handle mail, cables,
telegraph or telephone calls in connection with programs broadcast hereunder
unless Licensee at the request of Broker has agreed in writing to do so.
7. PROGRAMMING AND OPERATIONS STANDARDS. Broker understands that
broadcast program content must comply with certain proscriptions including
but not limited to those governing the broadcast of obscenity and indecency;
presentation of contests; lottery information; credit terms; broadcast of
telephone conversations; and political equal access and covenants that any
such programming supplied by Broker
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will be in full compliance with such restrictions. In addition, Broker will
immediately notify Licensee of any violation of any such restriction that
takes place and agrees to hold Licensee harmless for any damages, fines or
other liability or loss that might result from any such broadcast program.
Broker further agrees to cooperate fully with Licensee in the compliance with
the Commission's applicable rules and regulations that govern sale and
placement of political advertising.
8. RESPONSIBILITY FOR EMPLOYEES AND EXPENSES.
(a) Broker shall employ and be responsible for the salaries, taxes,
insurance and related costs for all personnel used in the production and
transmission of its programming (including without limitation salespeople,
traffic personnel, board operators and programming staff). Broker agrees to
abide by any and all legal provisions relating to its own employees,
including any equal employment policies contained in Title VII of the CIVIL
RIGHTS ACT OF 1964 or in any other applicable federal, state or local statute
or regulation and any rule or policy applied or enforced by the Equal
Employment Opportunity Commission or by the Commission, as applicable, and to
cooperate fully with Licensee in the preparation of any Annual Employment
Report (Commission Form 395-B or similar such form) that may be required.
Licensee will provide and be responsible for the Station personnel specified
in Section 10 hereof. All personnel shall be subject to the overall
supervision of Licensee consistent with the Broker's right to the use of the
Station's facilities as provided hereunder.
(b) Broker shall be responsible for all costs associated with the
production and delivery to the Station's transmitter site of Broker's
programming and shall also pay for all telephone calls associated with
production and listener responses, for all fees to ASCAP, BMI and SESAC,
license fees and for any other copyright fees attributable to its programming
broadcast or revenues generated on the Station.
(c) Licensee shall remain responsible for costs associated with the
transmission of all programming at the Station's transmitter site (including
but not limited to rent, utilities, taxes and insurance). Licensee shall be
reimbursed for such costs as provided in Section 3.1 hereof.
9. ADVERTISING AND PROGRAM REVENUES. Broker shall retain all revenues
for the sale of advertising time on the programs it delivers to the Station
and may sell such advertising in combination with the sale of advertising on
any other broadcast stations of its choosing. Licensee shall retain the
revenue from the sale of any advertising on the Station on programs not
produced or delivered to it by Broker.
10. CONTROL OF STATION. Notwithstanding anything to the contrary in
this Agreement, Licensee shall have full authority and power over the
operation of the Station during the period of this Agreement. Licensee shall
provide and pay for a management level employee and another employee who
shall report solely to and be
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accountable solely to Licensee and who shall direct the day-to-day operation
of the Station. Licensee shall retain control over the policies, programming
and operations of the Station, including, without limitation, the right to
decide whether to accept or reject any programming or advertisements, the
right to preempt any programs in order to broadcast a program deemed by
Licensee to be of greater national, regional or local interest, and the right
to take any other actions necessary for compliance with the laws of the
United States; the State of Texas; the rules, regulations, and policies of
the Commission (including the prohibition on unauthorized transfers of
control); and the rules, regulations and policies of other federal
governmental authorities. From time to time as requested by Licensee, Broker
shall provide Licensee with information to enable Licensee to prepare
records, reports and logs required by the Commission or other local, state or
federal governmental agencies.
11. SPECIAL EVENTS. Licensee reserves the right, in its discretion, to
preempt any of the broadcasts of the programs referred to herein, and to use
part or all of the time contracted for herein by Broker for the broadcast of
events of special importance. In all such cases, Licensee will use its best
efforts to give Broker reasonable notice of its intention to preempt such
broadcast or broadcasts.
12. FORCE MAJEURE. Any failure or impairment of the Station facilities
or any delay or interruption in broadcasting programs, or the failure at any
time to furnish facilities, in whole or in part, for broadcasting, due to
acts of God, strikes, or threats thereof, FORCE MAJEURE, or to causes beyond
the control of Licensee, shall not constitute a breach of this Agreement, and
Licensee will not be liable to Broker, except to the extent allowing in each
such case an appropriate payment credit for time not provided or broadcasts
not carried based upon a PRO RATA adjustment to amounts due as specified in
Section 3 calculated upon the length of time during which the failure or
impairment exists or continues.
13. RIGHT TO USE THE PROGRAMS AND CALL LETTERS. The right to use the
programs produced by Broker and to authorize their use in any manner and in
any media whatsoever shall be, and remain, vested solely in Broker. Broker
shall retain all copyrights to programs, slogans, trade names, logos and all
other rights associated with the programs produced by Broker. Licensee shall
retain all rights to the use of the call sign KXTN-AM. However, Licensee
recognizes the substantial investment to be made by Broker in the programming
and promotion of Broker's programming on the Station, and Licensee agrees
that Licensee will assign to Broker the right to use any new call sign
assigned to the Station during the term hereof. Licensee agrees to apply for
a new call sign specified by Broker upon Broker's request.
14. PAYOLA. Broker agrees that it will not accept any compensation or
any kind of gift or gratuity of any kind whatsoever, regardless of its value
or form, including, but not limited to, a commission, discount, bonus,
materials, supplies or other merchandise, services or labor, whether or not
pursuant to written contracts or
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agreements between Broker and merchants or advertisers, unless the payer is
identified in the program as having paid for or furnished such consideration
in accordance with the Commission's requirements.
15. COMPLIANCE WITH LAW. Broker agrees that, throughout the term of
this Agreement, Broker will comply with all laws and regulations applicable
in the conduct of Licensee's business and Broker acknowledges that Licensee
has not urged, counseled or advised the use of any unfair business practice.
In the event that any new law or regulation is adopted which results in a
material change in the terms of this arrangement (for example, but not
limited to, a restriction on the number of hours which may be brokered), the
parties agree to negotiate in good faith to modify this Agreement to conform
as closely as possible to the interests of both Broker and Licensee and, in
the event of their inability to so modify the Agreement, Broker or Licensee
may without penalty terminate the Agreement on 60 days' notice to Licensee or
such earlier time as the FCC may require.
16. INDEMNIFICATION; WARRANTY. Broker will indemnify and hold Licensee
harmless against all liability for libel, slander, illegal competition or
trade practice, infringement of trade marks, trade names, or program titles,
violation of rights of privacy, and infringement of copyrights and
proprietary rights resulting from the broadcast or programming furnished by
Broker. Further, Broker warrants that the broadcasting of its programs will
not violate any rights of others and Broker agrees to indemnify and hold
Licensee, the Station, and their respective officers, directors, agents,
stockholders, employees, and subsidiaries, harmless from any and all claims,
damages, liability, costs and expenses, including reasonable attorneys' fees,
arising from the broadcasting of such programs. Licensee reserves the right
to refuse to broadcast any and all programs containing matter which is, or in
the reasonable opinion of Licensee may be, or which a third-party claims to
be, violative of any right of theirs or which may constitute a personal
attack as the term is and has been defined by the Commission. Licensee will
indemnify and hold Broker harmless against any and all liability for libel,
slander, illegal competition or trade practice, infringement of trade marks,
trade names, or program titles, violation of rights of privacy, and
infringement of copyrights and proprietary rights arising from Licensee's
preemption and broadcast of Licensee's own programs. Further, Broker's and
Licensee's obligation to hold each other harmless against the liabilities
specified above shall survive any termination of this Agreement until the
expiration of all applicable statutes of limitation. Unless an indemnifying
party assumes the defense of a claim for which indemnity is sought hereunder
on behalf of the indemnified party, the indemnified party shall have the
right to employ its own counsel to conduct such defense (which shall be at
the expense of the indemnifying party). The indemnified party shall render
to the indemnifying party and its counsel such assistance as they may
reasonably require in order to ensure the proper and adequate defense of any
claim for which indemnity is sought hereunder. Neither party will settle any
claim for which indemnity is sought or owed under this
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Section 16 in a manner which imposes any cost or penalty on the other party
without the other party's prior written consent.
17. EVENTS OF DEFAULT; CURE PERIODS AND REMEDIES.
17.1 EVENTS OF DEFAULT. The following shall, after the expiration
of the applicable cure periods, constitute Events of Default under the
Agreement:
17.1.1 NON-PAYMENT. Broker's failure to timely pay the
consideration provided for in Section 3 hereof ("Payment Default").
17.1.2 DEFAULT IN COVENANTS. The default by either party
hereto in the observance or performance of any material covenant, condition
or agreement contained herein.
17.2 CURE PERIODS. An Event of Default shall not be deemed to
have occurred until 20 business days (five business days for Payment
Defaults) after the non-defaulting party has provided the defaulting party
with written notice specifying the event or events that if not cured would
constitute an Event of Default and specifying the actions necessary to cure
within such period, except for such Events of Default which threaten to
affect the validity of the Station's licenses which must be cured
immediately. Except in the event of a Payment Default or a default by
Licensee which results in Licensee's inability or unwillingness to make
available to Broker the Station's facilities as provided herein, this period
shall be extended for a reasonable period of time if the defaulting party is
acting in good faith to cure and such delay is not materially adverse to the
other party, except for such Events of Default which threaten to affect the
validity of the Station's licenses which must be cured immediately. The
defaulting party shall use its best efforts to cure. In the event of default
by Licensee which can be cured by payment of money, Broker has the right to
cure default by directly making such payment, in which case Broker may offset
such payment against Broker's obligations in Section 3 above.
17.3 TERMINATION UPON DEFAULT. If an Event of Default occurs, the
non-defaulting party may terminate this Agreement and receive from the
defaulting party such damages or other remedies as are available at law or at
equity.
17.4 LIABILITIES UPON TERMINATION. Broker shall be responsible
for all liabilities, debts and obligations of Broker accrued from the
purchase of air time and transmission facilities including, without
limitation, accounts payable, barter agreements and unaired advertisements.
Upon termination, Broker shall return to Licensee any equipment or property
of the Station used by Broker, its employees or agents, in substantially the
same condition as such equipment existed on the Effective Date, ordinary wear
and tear excepted.
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18. REPRESENTATION AND WARRANTIES.
18.1 CORPORATE AUTHORITY. Each of Licensee and Broker represents
to the other that it is legally qualified, empowered and able to enter into
this Agreement, and that the execution, delivery and performance hereof shall
not constitute a breach or violation of any agreement, contract or other
obligation to which it is subject or by which it is bound.
18.2 TIME BROKERAGE CHALLENGE. If this Agreement is challenged at
the Commission, Licensee and Broker will jointly defend this Agreement. If
portions of this Agreement do not thereafter receive the approval of the
Commission staff, the parties shall reform this Agreement, or at Broker's
option and expense, seek reversal of the staff decision and approval from the
full Commission on appeal.
19. MODIFICATION AND WAIVER. No modification or waiver of any provision
of this Agreement shall in any event be effected unless the same shall be in
writing and signed by the party adversely affected by the waiver or
modification, and then such waiver and consent shall be effective only in the
specific instance and for the purpose for which given.
20. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
Licensee or Broker in exercising any right or power hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
right or power, or any abandonment or discontinuance of steps to enforce such
a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of Licensee
and Broker herein provided are cumulative and are not exclusive of any right
or remedies which it may otherwise have.
21. CONSTRUCTION. This Agreement shall be construed in accordance with
the laws of the State of Texas, and the obligations of the parties hereto are
subject to all federal, state or municipal laws or regulations now or
hereafter in force and to the regulations of the Commission and all other
governmental bodies or authorities presently or hereafter to be constituted.
22. HEADINGS. The headings contained in this Agreement are included for
convenience only and no such heading shall in any way alter the meaning of
any provision.
23. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
assigns, including, without limitation, any assignee of the Commission
license for the Station.
24. COUNTERPART SIGNATURES. This Agreement may be signed in one or more
counterparts, each of which shall be deemed a duplicate original, binding on the
parties
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hereto notwithstanding that the parties are not signatory to the original or
the same counterpart. This Agreement shall be effective as of the date on
which the executed counterparts are exchanged by the parties.
25. NOTICES. Any notice required hereunder shall be in writing and any
payment, notice or other communications shall be deemed given when delivered
by certified mail or Federal Express, postage prepaid, with return receipt
requested, and addressed as follows:
If to Licensee, to:
Xxxxxxxx Media System, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: XxXxxxx X. Xxxxxxxx, Xx., President
If to Broker, to:
Heart Unlimited Company
0000 Xxxxxxxxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
26. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the parties and there are no other agreements, representations,
warranties, or understandings, oral or written, between them with respect to
the subject matter hereof. No alterations, modification or change of this
Agreement shall be valid unless by like written instrument.
27. SEVERABILITY. The event that any of the provisions contained in
this Agreement is held to be invalid, illegal or unenforceable shall not
affect any other provision hereof, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provisions had not been contained
herein.
28. PURCHASE OPTION. This Agreement is subject to a purchase option
contained in the Option Agreement.
29. INTENDED BENEFICIARIES. The rights and obligations contained in
this Agreement are hereby declared by the parties hereto to have been
provided expressly for the exclusive benefit of such entities as set forth
herein and shall not benefit, and do not benefit, any unrelated third parties.
30. MUTUAL CONTRIBUTION. The parties to this Agreement and their counsel
have mutually contributed to its drafting. Consequently, no provision of this
Agreement shall be construed against any party on the ground that such party
drafted
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the provision or caused it to be drafted or the provision contains a covenant
of such party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXXXXX MEDIA SYSTEM, INC.
By: /s/ XxXxxxx X. Xxxxxxxx, Xx.
-------------------------------------
[BROKER]
HEART UNLIMITED COMPANY
By: /s/ XxXxxxx X. Xxxxxxxx
-------------------------------------
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CERTIFICATION
Xxxxxxxx Media System, Inc., licensee of Station KXTN-AM, San Antonio,
Texas, hereby certifies pursuant to Section 73.3555(a)(2)(ii) of the Rules
and Regulations of the Federal Communications Commission, 47 C.F.R. Section
73.3555(a)(2)(ii) (1992), that it has and will continue to maintain ultimate
control over the facilities of Station KXTN-AM in connection with the
implementation of the Time Brokerage Agreement of even date herewith,
including specifically with respect to control over station finances,
personnel and programming.
XXXXXXXX MEDIA SYSTEM, INC.
By: /s/ XxXxxxx X. Xxxxxxxx, Xx.
-------------------------------------
CERTIFICATION
Heart Unlimited Co., in compliance with Section 73.3555(a)(2)(ii) of the
Rules and Regulations of the Federal Communications Commission, hereby
verifies that the Time Brokerage Agreement dated as of February 3, 1997, by and
between Xxxxxxxx Media System, Inc. and the undersigned complies with the
provisions of paragraph (a)(1), the radio contour overlap rule, and with the
provisions of paragraph (e)(1), the national multiple ownership rule, of
Section 73.3555, the multiple ownership rule, of the Commission's rules.
[BROKER]
HEART UNLIMITED COMPANY
By: /s/ XxXxxxx X. Xxxxxxxx, Xx.
-------------------------------------
