TIME BROKERAGE AGREEMENT
This TIME BROKERAGE AGREEMENT (this "Agreement"), made this 24th day of
December, 1996 by and between ENTERTAINMENT COMMUNICATIONS, INC., a Pennsylvania
corporation (the "Programmer") and AMERICAN RADIO SYSTEMS CORPORATION, a
Delaware corporation ("ARS").
RECITALS
A. ARS has entered into an Asset Purchase Agreement under which ARS has
agreed to purchase Station KXOA-FM, Sacramento, California (the "Station") from
The Xxxxx Organization ("Xxxxx") (the "Xxxxx APA") and is currently supplying
programming and other services to the Station under that certain Time Brokerage
Agreement by and between ARS and Xxxxx, dated July 24, 1996 (the "Xxxxx TBA").
B. ARS wishes to retain Programmer to provide programming for the
Station pursuant to the terms and conditions set forth in this Agreement and in
conformity with the Station's policies and practices and the rules and
regulations of the Federal Communications Commission (the "Commission")
concerning such arrangements.
C. Programmer will supply such programming and sell advertising that is
in conformance with the Station's policies and all Commission rules and
regulations, including the requirement that the ultimate control of the Station
be maintained by the authorized licensee of the Station.
D. Programmer and ARS have entered into that certain Asset Purchase
Agreement dated as of October 18, 1996 (the "Purchase Agreement"), pursuant to
which ARS has agreed to
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transfer to Programmer, and Programmer has agreed to acquire from ARS,
substantially all of the assets and businesses of the Station, subject to the
terms and conditions therein. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Purchase Agreement.
THEREFORE, for and in consideration of the mutual covenants herein
contained, the parties, intending to be legally bound, agree as follows:
1. Agreement Term. The term of this Agreement will begin on January 1,
1997 (the "Effective Date"), and will continue until the Programmer acquires the
assets of the Station unless earlier terminated in accordance with the
provisions set forth herein.
2. Programmer's Purchase of Airtime and Provision of Programming.
(a) During the term of this Agreement, Programmer shall supply
programming, including commercials, that it produces or owns to the Station
twenty-four (24) hours per day Monday through Friday and for forty-eight (48)
hours during Saturday through Sunday, provided that ARS or Xxxxx may broadcast
up to two (2) hours of programming for the Station which is aimed at serving the
needs and interests of the community of license of the Station during the
morning(s) of Saturday and/or Sunday subject to Section 12 hereto.
(b) To facilitate delivery of programming by Programmer
hereunder, ARS hereby grants to Programmer the right (which shall be
nonexclusive as to Programmer) for the term of this Agreement to use
substantially all of the equipment located in the Station's studio and offices
currently used by ARS for sales and broadcasting programs on the Station. In
addition, Programmer shall have, and ARS hereby grants to Programmer, a license
(which shall
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be nonexclusive as to Programmer) to enter on the premises currently occupied by
the Station for the purpose of fulfilling its rights and responsibilities
hereunder; provided, however, that ARS shall maintain, for its use, sufficient
space at the Station's studios to enable ARS to conduct its operations and
originate programming. Accordingly, Programmer shall hold ARS harmless from all
costs, fees and expenses incurred with respect to any personal injury suffered
by any employee or agent of Programmer while on the property of ARS. Programmer
shall also be responsible for and shall reimburse ARS for any damage (excluding
ordinary wear and tear) to the property of ARS caused by Programmers' employees
or agents.
3. Representations. Each of ARS and Programmer represent as to itself
that it is authorized to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding, obligation of such party, enforceable
against it in accordance with its terms. Programmer hereby represents and
warrants to ARS that Programmer is an experienced radio broadcast station owner
and operator and is fully familiar with all pertinent legal requirements,
including but not limited to, the Communications Act of 1934, as amended (the
"Act"), and the Commission's rules, regulations, and policies governing the
operation of radio broadcast stations. Programmer will comply with all legal
requirements, including but not limited to the Act and the Commission's rules,
regulations, and policies.
4. Consideration. During the term of this Agreement, Programmer shall
pay ARS the payments set forth on Schedule A hereto.
5. Collection of Accounts Receivable. All cash accounts receivable for
broadcasts on the Station which occur prior to the Effective Date (the "ARS's
Accounts Receivable") shall
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belong to ARS and for broadcasts which occur thereafter shall belong to
Programmer. Within ten (10) days following the Effective Date, ARS shall deliver
to Programmer a Schedule of Cash Accounts Receivable for the Station as of the
Effective date (the "Schedule"). Programmer agrees to collect for ARS the ARS's
Accounts Receivable as shown on the Schedule for a period of one hundred twenty
(120) days following the Effective Date (the "Collection Period"). ARS will
provide Programmer a power of attorney or other required authorization for the
limited purpose of allowing Programmer to endorse and deposit checks and other
instruments received in payment of ARS's Accounts Receivable. All payments
received by Programmer from any customer whose name appears in the Schedule and
who is also a customer of Programmer shall be credited as payment of the account
or invoice designated by such customer. In the absence of any such designation
by the customer, payments shall be first credited to the oldest invoice which is
not disputed by said customer. Programmer shall keep accurate records of the
payment received by it on ARS's Accounts Receivable and ARS shall have access at
reasonable times to Programmer's records to verify such status of ARS's Accounts
Receivable. Within thirty (30) days of the end of each month, Programmer shall
remit to ARS amounts previously collected by Programmer on ARS's Accounts
Receivable, along with a written accounting of same, including without
limitation a detailed open ARS's Accounts Receivable report reflecting payments
remitted therewith, if available using ARS's systems currently maintained at the
Station. Any of ARS's Accounts Receivable that have not been collected as of the
end of the Collection Period shall be returned to ARS, together with all records
in connection therewith, if available using ARS's systems currently maintained
at the Station, including without limitation a detailed open
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ARS's Accounts Receivable report reflecting payments remitted therewith,
whereupon ARS may pursue collection thereof in such manner as it, in its sole
discretion, may determine. Programmer shall not have the right to compromise,
settle or adjust the amounts of any such ARS's Accounts Receivable without ARS's
prior written consent. Programmer's obligation and authority hereunder shall not
extend to the institution of litigation, employment of counsel or a collection
agency or any other extraordinary means of collection. Except to remit collected
ARS's Accounts Receivable in accordance herewith, Programmer shall have no
liability or obligation to ARS with respect to the collection of its accounts.
6. ARS Control of the Station.
(a) ARS will have full authority, power and control over the
management and operations of the Station during the term of this Agreement. ARS
will bear all responsibility for the Station's compliance with all applicable
provisions of the Act, the rules, regulations and policies of the Commission and
all other applicable laws, including without limitation, the retention of
control over the policies, programming and operation of the Station, including
the right to preempt programming which in its good faith judgement it deems
unsuitable or contrary to the public interest. ARS shall be solely responsible
for and pay in a timely manner all real and personal property taxes, mortgage
fees and expenses and other real property costs, all studio and transmitter site
leases, any utilities (excluding telephone charges), and all costs and expenses
for the maintenance of all transmitter equipment. Programmer shall cooperate
with and assist ARS in complying with all Commission rules and regulations.
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(b) ARS retains ultimate control over the Station and its
premises. Accordingly, all employees of Programmer present at the Station or on
its premises must comply with the policies and rules promulgated by ARS. In no
event shall Programmer, or Programmer's employees, represent, depict, describe,
or portray Programmer as the licensee of the Station. To this end, all employees
of Programmer, whose work involves the Station, shall be informed as to ARS's
ultimate control over the Station and Programmer's subordinate capacity.
(c) The Station's transmission equipment shall be maintained
by ARS in a condition consistent with good engineering practices and in
compliance in all material respects with the Act and all other applicable rules,
regulations and technical standards of the Commission, subject to reimbursement
by Programmer as set forth on Schedule A hereto. All capital expenditures
reasonably required to maintain the technical quality of the transmission and
studio equipment and the compliance of such equipment with applicable laws and
regulations shall be made at the sole expense of ARS in a timely fashion.
(d) ARS shall, at its expense, employ at the Station at least
one management- level employee as ARS's Station Manager and such other person(s)
as necessary to fulfill ARS's duties hereunder and its obligations under the
Commission's rules. The Station Manager shall direct the day-to-day operations
of the Station and shall report to and be accountable to ARS. ARS shall be
responsible for the salaries, taxes, insurance and related costs for all
personnel it employs at the Station.
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7. ARS's Representations and Warranties. ARS shall not knowingly take
any action or omit to take any action which would have a material adverse impact
upon the Authorizations, ARS's assets utilized in the operation of the Station,
or upon ARS's ability to perform this Agreement. All reports, annual regulatory
fees and applications required to be filed with the Commission or any other
governmental body have been and during the course of the term of this Agreement
or any extension thereof will be filed in a timely and complete manner. The
Station's local public records file will be maintained in all material respects
in accordance with the rules and regulations of the Commission and such
applications, records, lists and other documents as are required to be placed in
said file shall be filed there in a timely manner. The facilities of the Station
are and will continue to be in compliance in all material respects with the
engineering requirements set forth in the Authorizations of the respective
station. ARS shall not, during the term of this Agreement, dispose of, transfer
or assign any of such assets and properties which will materially interfere with
the operation of the Station or materially adversely impact Programmer except
with the prior written consent of Programmer.
8. Programmer Responsibility.
(a) Programmer shall be solely responsible for all expenses
incurred in the origination and/or delivery of programming from any remote
location and for all operating expenses of the Station (including telephone
expenses), excluding those expenses for which ARS is making direct payments as
set forth in Section 6 of this Agreement (the "Other Expenses"), subject to the
ultimate authority and control of ARS. Subject to ARS's obligations under
Section 8.6 of the Purchase Agreement, Programmer shall be responsible for the
routine maintenance of
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the studio equipment and shall keep such equipment in good operating order,
reasonable wear and tear excepted.
(b) Programmer shall employ and be solely responsible for the
salaries, taxes, insurance and related costs for all personnel employed by
Programmer (including, without limitation, salespeople, traffic personnel, board
operators and programming staff) and shall maintain insurance covering
Programmer's activities in connection with the operations and business of the
Station.
(c) Programmer shall cause the Station to transmit any
required tests of the Emergency Broadcast System or successor Emergency Action
Notification System at such times as are directed by ARS.
(d) Programmer shall maintain and deliver to ARS all records
and information required by the Commission to be placed in the public inspection
file of the Station pertaining to the broadcast of political programming and
advertisements, in accordance with the provisions of Sections 73.1940 and
73.3526 of the Commission's rules, and agrees to broadcast sponsored programming
addressing political issues, in accordance with the provisions of Section
73.1212 of the Commission's rules. Programmer also shall consult with ARS and
adhere strictly to all applicable statutes and the rules, regulations and
policies of the Commission, as announced from time to time, with respect to the
carriage of political advertisements and programming (including, without
limitation, the rights of candidates and, as appropriate, others to "equal
opportunities") and the charges permitted therefor. Programmer shall furnish
within its programming, on behalf of ARS, all station identification
announcements required by the Commission's rules.
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Programmer shall provide information with respect to any of its programming
which is responsive to the public needs and interests of the area served by the
Station so as to assist ARS in the preparation of any required programming
reports, and provide other information to enable ARS to prepare other records,
reports and logs required by the Commission or other local, state or federal
governmental agencies.
(e) Programmer shall cooperate fully with ARS in responding to
any questions, comment, inquiry, or complaint from any third party, including
any governmental authority or agent thereof, that may relate to or arise from
the Station or its operations, including the programming. In the event of
Programmer's receipt of any question, comment, inquiry, or complaint that may
relate to or arise from the Station or its operations, Programmer shall promptly
notify ARS of the same.
9. Contracts. Programmer shall assume, from and after the Effective
Date, the rights and obligations of ARS from and after the Effective Date under
the Contracts listed on Schedule 4.1.7 of the Purchase Agreement. In addition,
subject to proration under Section 8.2 of the Purchase Agreement, Programmer
shall succeed to all receivables under all of the Station's trade and barter
agreements and shall assume all obligations of the Station thereunder.
Programmer shall assume all of ARS's rights and obligations under the Contracts
and the trade and barter agreements that are freely assignable, or, if consent
is required from the other contracting party, ARS shall use reasonable efforts
to obtain such consent as promptly as practicable. If ARS is unable to obtain
any necessary consent for the assignment of any Material Contract, as identified
in the Purchase Agreement, to be assigned to Programmer, ARS shall act as
Programmer's agent
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and the parties shall cooperate to allow Programmer to receive the benefit of
such contract in exchange for Programmer's performance of ARS's rights and
obligations thereunder (including the payment to ARS of all amounts due under
any contract other than trade and barter agreements on or after the Effective
Date for services provided by ARS).
10. Employees. Schedule 4.1.19 of the Purchase Agreement contains a
listing of the name, salary or compensation, job title and original employment
date of all current employees of the Station.
11. Prorations.
(a) Except as otherwise provided herein, all prepaid and
deferred income and expenses relating to the Station, the Assets (as defined
under the Purchase Agreement) or the Contracts assumed by Entercom under this
Agreement pursuant to Section 9, and arising from the conduct of the business
and operations of the Station, but excluding any proration of such matters
relating to the Leases (as defined in the Purchase Agreement), shall be prorated
between Programmer and ARS in accordance with generally accepted accounting
principles as of 12:00 a.m. on the Effective Date. Such prorations shall not
include any items paid by ARS under Section 6 hereof, but shall include, without
limitation, business and license fees, music and other license fees (including
any retroactive adjustments thereof, which retroactive adjustments shall not be
subject to the ninety-day limitation set forth in Section 11(c) herein), wages,
salaries, commissions and bonuses, accrued vacation days, sick days and personal
days (and associated payroll taxes) of such of ARS's employees who become
employees of Programmer upon the Effective Date, utility expenses, time sales
agreements, trade and barter agreements in excess of
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Twenty Thousand Dollars ($20,000.00), amounts due or to become due under the
Contracts listed on Schedule 4.1.7 of the Purchase Agreement, and all similar
prepaid and deferred items and other items of income and expense attributable to
the ownership and operation of the Station.
(b) Except as otherwise provided herein, the prorations and
adjustments contemplated by this Section 11, to the extent practicable, shall be
made not later than three business days after the Effective Date. As to those
prorations and adjustments not then capable of being ascertained, an adjustment
and proration shall be made within ninety (90) calendar days of the Effective
Date.
12. Public Affairs Programming. Notwithstanding any other provision of
this Agreement, Programmer recognizes that ARS has certain obligations to
broadcast programming to meet the needs and interests of the communities of
license for the Station. ARS shall have the right to air specific programming on
issues of importance to the local community. Nothing in this Agreement shall
abrogate the unrestricted authority of ARS to discharge its obligations to the
public and to comply with the law, rules and policies of the Commission with
respect to meeting the ascertained needs and interests of the public.
Accordingly, ARS may broadcast public affairs programming as outlined in Section
2 hereof. ARS may air this programming in either one two (2) hour block or any
combination of half hour or full hour blocks of time during the hours of 6 a.m.
to 9 a.m. on Saturday and/or Sunday.
13. Additional ARS Obligations. Although both parties shall cooperate
in the broadcast of emergency information over the Station, ARS shall also
retain the right to interrupt Programmer's programming in case of an emergency
or for programming which, in the
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reasonable good faith judgment of ARS, is of overriding public importance. ARS
shall also coordinate with Programmer the Station's hourly station
identification announcements to be aired in accord with Commission rules. ARS
shall continue to maintain a main studio for each station, as that term is
defined by the Commission, within the principal community contour of each
station and shall staff the main studio as required by the Commission. ARS shall
be responsible for the salaries, taxes, insurance and related costs for all
personnel it employs at the Station. In addition, ARS shall pay any federal
regulatory fees, maintain the local public inspection file within the community
of license of each station and shall prepare and place in such inspection file
all required documents including, but not limited to, its quarterly issues and
program lists on a timely basis. ARS shall also receive and respond to telephone
inquires from the general public. Programmer shall provide ARS with information
with respect to certain of Programmer's programs which may be included in ARS's
quarterly issues and programs lists.
14. License Renewal. Unless this Agreement is terminated prior to the
required filing date of the application for the renewal of the Authorizations,
ARS shall timely file all necessary applications and pay all requisite fees in
connection with obtaining renewal of the Authorizations from the Commission and
shall thereafter prosecute such renewal applications with all reasonable
diligence and otherwise use its commercially reasonable efforts to obtain the
grant of such renewal applications as expeditiously as possible. Furthermore,
ARS shall be responsible for broadcasting those announcements required by the
Commission of broadcast radio stations filing for license renewal. Programmer
shall cooperate fully in ARS's efforts to obtain renewal of the Authorizations.
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15. Broadcast Station Programming Policy Statement. ARS has adopted and
will enforce a Broadcast Station Programming Policy Statement (the "Policy
Statement"), a copy of which appears as Attachment I hereto and which may be
amended to meet changing regulatory requirements by ARS upon reasonable advance
written notice to Programmer. Programmer agrees and covenants to comply in all
material respects with the Policy Statement and with all rules and regulations
of the Commission. If ARS reasonably determines that a program, commercial or
other material supplied by Programmer does not comply with the Policy Statement,
or ARS reasonably believes that some or all of a program, commercial or other
material is unsuitable or contrary to the public interest, it may suspend or
cancel such program, commercial or other material and shall provide written
notice to Programmer of such decision. Programmer shall provide programs only in
accordance with the Policy Statement and Commission requirements. All
advertising spots and promotional material or announcements shall comply with
applicable federal, state and local regulation and policies and the Policy
Statement, and shall be produced in accordance with quality standards
established by ARS.
16. Compliance with Copyright Act. Programmer represents and warrants
to ARS that Programmer has full authority to broadcast its programming on the
Station and that Programmer shall not broadcast any material in violation of any
law, rule, regulation or the Copyright Act. All music supplied by Programmer
shall be: (i) licensed by ASCAP, SESAC or BMI; (ii) in the public domain; or
(iii) cleared at the source by Programmer. Programmer and ARS will each maintain
as appropriate their own ASCAP, BMI and SESAC licenses for the performance of
Programmer's programs and Programmer shall reimburse ARS for the costs of
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such licenses as provided in Schedule A. The right to use the programming and to
authorize its use in any manner shall be and remain solely vested in Programmer,
except as provided herein.
17. Payola. Programmer agrees that neither it nor its employees or
agents will accept any consideration compensation, gift or gratuity of any kind
whatsoever, regardless of its value or form, including, but not limited to, a
commission, discount, bonus, material, supplies or other merchandise, service or
labor (collectively "Consideration"), whether or not pursuant to written
contracts or agreements between Programmer and merchants or advertisers, unless
the third party providing such compensation, gift or gratuity is identified in
the program for which Consideration was provided as having paid for or furnished
such Consideration, in accordance with the Communications Act and Commission
requirements. Programmer agrees to execute and to provide ARS with payola
affidavits from itself, and all of its employees and agents who are involved
with providing programming on the Station, at such times as ARS may reasonably
request.
18. Sale of Advertising. ARS grants Programmer the sole and exclusive
right to sell advertising on the Station during the term of this Agreement,
except as provided in this Section 18. Programmer shall retain all revenues from
the sales of advertising time within the programming it provides to ARS and pay
all expenses attributable thereto. Programmer may sell advertising, consistent
with applicable rules, regulations and the Policy Statement, on the Station in
combination with any other broadcast station of its choosing, subject to
compliance with applicable law. Programmer shall be responsible for payment of
the commissions due to any national sales representative engaged by it for the
purpose of selling national advertising which is
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carried during the programming it provides to ARS. ARS may retain all revenues
from the sale of the Station's advertising during the hours each week in which
ARS airs its own non- entertainment programming as provided in Section 12
hereof.
19. Time Brokerage Challenge. If this Agreement is challenged at the
Commission, counsel for ARS and counsel for the Programmer shall defend the
Agreement and the parties' performance thereunder throughout all Commission
proceedings with the Programmer and ARS each being responsible for its own
costs. If portions of this Agreement do not receive the approval of the
Commission staff, then the parties shall reform the Agreement subject to their
respective reasonable business judgment and advice of counsel or, at ARS's or
Programmer's option, seek reversal of the staff decision and approval from the
full Commission on appeal.
20. Confidential Review. Prior to the provision of any programming by
Programmer to ARS under this Agreement, Programmer shall acquaint ARS with the
nature and type of the programming to be provided. ARS, solely for the purpose
of ensuring Programmer's compliance with the law, Commission rules and the
Station's policies, shall be entitled to review at its discretion from time to
time on a confidential basis any programming material and any other documents it
may reasonably request, including all rate cards and disclosure statements
related to Programmer's political advertising. Programmer shall promptly provide
ARS with copies of all correspondence and complaints received from the public as
well as copies of all program logs and promotional materials.
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21. Major Defaults; Termination.
21.1 Programmer's Major Defaults. The occurrence of any of the
following, after the expiration of the applicable cure periods, if any, will be
deemed to be a "Major Default" by Programmer under this Agreement: (a)
Programmer's failure to timely pay any of the consideration provided for in
Section 4 and Schedule A hereof or other payments required hereunder; (b) except
as otherwise provided for in this Agreement, the failure of Programmer to supply
the programs for broadcast on the Station in accordance with Section 2 hereof;
or (c) any termination of this Agreement by Programmer other than as permitted
in Sections 1, 21.4 or 21.5.
21.2. ARS's Major Defaults. The occurrence of any of the following,
after the expiration of the applicable cure periods, if any, will be deemed to
be a "Major Default" by ARS under this Agreement: (a) except as otherwise
provided for in this Agreement, the failure of ARS to broadcast the programs
supplied by Programmer in accordance with Section 2 hereof, or (b) any
termination of this Agreement by ARS other than as permitted in Sections 1, 21.4
or 21.5.
21.3. Cure Periods. The cure periods before any event listed in
Sections 21.1 or 21.2 shall become a Major Default are as follows:
(a) Payment by Programmer. The consideration to be paid to ARS
must be received by ARS within five (5) business days after ARS gives written
notice of non-payment to Programmer.
(b) Certain Matters. There shall be no cure period for (i) a
termination by Programmer described in Section 21.1(c), or (ii) a termination by
ARS described in Section 21.2(b) hereof.
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(c) Programs and Broadcast Matters. With respect to
Programmer's failure to provide programs referred to in Section 21.1(b) hereof
or ARS's failure to broadcast programs referred to in Section 21.2(a) hereof,
the period allowed for cure shall be three (3) business days from the giving of
written notice of such failure to the defaulting party by the non-defaulting
party.
21.4. Termination Upon Occurrence of Major Default. Upon the occurrence
and continuation of a Major Default the non-defaulting party may terminate this
Agreement by giving written notice to the defaulting party within sixty (60)
days of such occurrence, provided that the non-defaulting party has not also
committed a Major Default hereunder which has not been waived. Such written
notice shall specify an effective date of termination which is not less than
seven (7) days nor more than ninety (90) days from the date such notice is
given. In the event the non-defaulting party does not exercise such right of
termination by giving such written notice within such sixty (60) day period,
then the Major Default giving rise to such right of termination shall be deemed
waived and the Agreement shall continue in full force and effect.
21.5. Termination Upon Termination of Purchase Agreement.
Notwithstanding any other provision hereof, this Agreement may be terminated
upon not less than seven (7) days' prior written notice by either party at any
time following termination of the Purchase Agreement pursuant to its terms.
22. All Other Defaults. The remedy of the non-defaulting party for any
uncured defaults hereunder shall be indemnification as provided herein.
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23. Liabilities Upon Termination. Programmer shall be solely
responsible for all of its liabilities, debts and obligations incident to its
purchase of broadcast time hereunder, including, without limitation, accounts
payable and unaired advertisements, but not for ARS's federal, state, and local
tax liabilities associated with Programmer's payments to ARS as provided herein.
Upon termination pursuant to Sections 21.4 or 21.5 hereto, ARS shall be under no
further obligation to make available to Programmer any broadcast time or
broadcast transmission facilities, provided that, if termination is not due to a
Major Default by Programmer, ARS agrees that it will cooperate reasonably with
Programmer to discharge in exchange for reasonable compensation any remaining
obligations of Programmer in the form of air time following the effective date
of termination. At the date of termination, Programmer shall return to ARS any
equipment or property of the Station used by Programmer, its employees or
agents, in substantially the same condition as such equipment existed on the
Effective Date of this Agreement, shall restore ARS's technical facilities to
substantially the same condition as such facilities existed on the Effective
Date of this Agreement, ordinary wear and tear excepted, shall reassign to ARS
all of the Contracts relating to the Station which were assumed by Programmer
upon the Effective Date and any new contracts entered into by Programmer
relating to the Station, and shall otherwise take such actions, including the
payment of prorations in the manner set forth in Section 11 hereof, to restore
to the extent then practicable the parties hereto to their respective positions
prior to the Effective Date of this Agreement. Notwithstanding anything in the
foregoing to the contrary, termination shall not extinguish any rights of either
party as may be provided by Sections 24 and 25 hereof.
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24. ARS's Indemnification. ARS shall indemnify, defend, hold and save
Programmer and its stockholders, directors, partners, officers, agents,
employees, successors and assigns, harmless from and against any and all claims,
losses, costs, liabilities, damages, Commission forfeitures, and expenses,
including reasonable counsel fees (at trial and on appeal), or every kind,
nature, and description, including libel, slander, illegal competition or trade
practices, or infringement of trade marks or program titles, violation of rights
of privacy, and infringement of copyrights and proprietary rights arising out of
(i) ARS's operation of the Station (not including the operation of the Station
by Programmer) under this Agreement and (ii) breach of any material warranty,
representation, covenant, agreement or obligation of ARS contained in this
Agreement.
25. Programmer's Indemnification. Programmer shall indemnify, defend,
hold and save ARS and its stockholders, directors, partners, officers, agents,
employees, successors and assigns, harmless from and against any and all claims,
losses, costs, liabilities, damages, Commission forfeitures, and expenses,
including reasonable counsel fees (at trial and on appeal), of every kind,
nature, and description including libel, slander, illegal competition or trade
practices, or infringement of trade marks or program titles, violations of
rights of privacy, and infringement of copyrights and proprietary rights arising
out of (i) the programming furnished by Programmer under this Agreement, (ii)
the actions or failure to act of Programmer's employees or agents under this
Agreement, (iii) breach of any material warranty, representation, covenant,
agreement or obligation of Programmer contained in this Agreement, (iv) any and
all promotions, contests and on-air "give-aways" relating to the Station
conducted by Programmer during the terms of this Agreement, (v) any liability
resulting from Programmer's default under
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the Contracts assumed in accordance with Section 9 hereof, and (vi) all other
matters arising out of or relating to Programmer's activities involving the
Station or use of ARS's facilities or relating to the obligations assumed by
Programmer under this Agreement.
26. Procedure for Indemnification. Any party seeking indemnification
under this Agreement (the "Indemnified Party") shall give the party from whom
indemnification is sought (the "Indemnifying Party") written notice of any claim
or the commencement of any action or proceeding for which the Indemnified Party
seeks indemnification, and the Indemnified Party shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation resulting from
such claim, unless injunctive relief is sought against the Indemnified Party in
which case the Indemnified Party shall have the right to join in any defense.
The Indemnified Party's failure to give the Indemnifying Party notice under this
clause shall not preclude the Indemnified Party from seeking indemnification
from the Indemnifying Party except to the extent that the Indemnified Party's
failure has materially prejudiced the Indemnifying Party's ability to defend the
claim or litigation. The Indemnifying Party shall not settle any claim for which
the Indemnified Party seeks indemnification or consent to entry of any judgment
in litigation arising from such a claim without obtaining a release of the
Indemnified Party from all liability in respect of such claim or litigation. If
the Indemnifying Party shall not assume the defense of any such claim or
litigation resulting therefrom, the Indemnified Party may defend against or
settle such claim or litigation in such manner as it may deem appropriate, and
the Indemnifying Party shall promptly reimburse the Indemnified Party for the
amount of all expenses, legal or otherwise, incurred by the Indemnified Party in
connection with the defense
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against or settlement of such claim or litigation; if no settlement of the claim
or litigation is made, the Indemnifying Party shall promptly reimburse the
Indemnified Party for the amount of any judgment rendered with respect to such
claim or in such litigation and for all expenses, legal or otherwise, incurred
by the Indemnified Party in the defense against such claim or litigation.
27. Dispute Over Indemnification. If upon presentation of a claim for
indemnity hereunder, the Indemnifying Party does not agree that all, or part, of
such claim is subject to the indemnification obligations imposed upon it
pursuant to this Agreement, it shall promptly so notify the Indemnified Party.
Thereupon, the parties shall attempt to resolve their dispute, including where
appropriate reaching an agreement as to that portion of the claim, if any, which
both concede is subject to indemnification. To the extent that the parties are
unable to reach some compromise within thirty (30) days thereafter, the parties
shall be free to pursue all appropriate legal and equitable remedies.
28. Programmer's Remedies for Operational Deficiencies. Except as set
forth in Section 29, and except for scheduled reductions in power or
interruptions occurring between the hours of 1:00 a.m. and 5:00 a.m. as a result
of maintenance or repairs, if any of the normal broadcast transmissions of the
Station is interrupted, interfered with, or in any way impaired with so that the
Station is not operating at full licensed power and antenna height or is off the
air, Programmer shall be entitled to an equitable reduction in the amount of its
monthly fee which is proportionate to the period of time that the Station's
operations are deficient or the Station is off the air.
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29. Force Majeure. Any failure or impairment of the facilities of the
Station or any delay or interruption in the broadcast of programs, or failure at
any time to furnish facilities, in whole or in part, for broadcast due to Acts
of God, strikes, lockouts, material or labor restrictions by any governmental
authority, civil riot, floods and any other cause not reasonably within the
control of ARS (including any obligation of ARS to reduce power or suspend
operation to avoid occupational exposure to harmful RF radiation), shall not
constitute a breach of this Agreement and ARS will not be liable to Programmer.
30. Special Provisions Relating to Xxxxx TBA.
ARS and Programmer acknowledge that ARS is a party to the Xxxxx TBA,
pursuant to which Xxxxx has retained ARS to supply programming and other
services for Stations KQPT(FM), KXOA-FM and KXOA(AM), Sacramento, California.
During the period from the Effective Date of this Agreement until the
termination of the Xxxxx TBA upon consummation of the Xxxxx APA, the parties
hereto covenant and agree as follows:
(a) Programmer shall undertake to provide to ARS all of the programming
for which it has the right and/or obligation to Xxxxx for the broadcast on the
Station under the terms of the Xxxxx TBA.
(b) ARS will obtain the express written consent of Xxxxx to enter into
this Agreement prior to the Effective Date.
(c) Notwithstanding any provisions set forth in the Xxxxx TBA to the
contrary, ARS will not assign and Programmer will not assume the obligations set
forth in the Xxxxx TBA relating to the employees of the Station, including but
not limited to the obligations set forth in
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Section 2.3 of the Xxxxx TBA. The rights and obligations of Programmer relating
to the employees of the Station will be governed by the provisions of the
Purchase Agreement.
(d) Notwithstanding any provisions set forth in the Xxxxx TBA to the
contrary, ARS will not assign and Programmer will not assume the obligations set
forth in the Xxxxx TBA relating to the payment of consideration for the air time
made available, including but not limited to the obligations set forth in
Section 1.4 of the Xxxxx TBA. Programmer will pay ARS the consideration set
forth in Schedule A hereto.
(e) ARS shall at all times have the right to accept or reject any or
all of said programming which it believes in its sole discretion is or may not
be in compliance with its obligations under the Xxxxx TBA, the Communications
Act of 1934, as amended, the rules, regulations and policies of the Commission
or its established corporate policies with respect to public interest standards
and to substitute programming of its own for broadcast on the Station.
(f) In exercising its right to reject programming provided by
Programmer or to substitute programming for broadcast on the Station, ARS shall
be guided by consideration of compliance with federal and state laws, rules and
regulations of the Commission, contractual obligations under the Xxxxx TBA and
established corporate policies with respect to public interest standards, and
not for the commercial advantage of ARS or in any arbitrary manner.
(g) Programmer shall serve as ARS's exclusive agent for the sale of
commercial time on the Station, and shall have and be entitled to exercise as
agent for ARS all of the rights which ARS has under the terms of the Xxxxx TBA,
shall comply with all obligations of ARS with respect to the sale of commercial
time on the Station as set forth in the Xxxxx TBA, and in
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exchange for the obligations undertaken by Programmer hereunder shall be
entitled to keep for its own account any revenues which it may realize from its
activities with respect to the Station.
(h) Programmer shall be liable for and to the extent reasonably
possible will perform all of the obligations and requirements imposed on ARS
under the Xxxxx TBA to the extent that they are attributable to the period
during which this Agreement is in effect, and to the extent that Programmer
cannot reasonably perform any such obligations it shall reimburse ARS for the
actual cost of doing so.
(i) ARS shall use its best efforts to assist Programmer in performing
those obligations under the Xxxxx TBA which cannot reasonably be performed by
Programmer or which are required by the terms of the Xxxxx TBA to be performed
by ARS rather than by an agent or delegate of ARS.
(j) ARS shall use its best efforts to perform all of its obligations
under and to preserve and enforce its rights under the Xxxxx TBA in consultation
and cooperation with Programmer.
31. Other Agreements. During the term of this Agreement, ARS will not
enter into any other time brokerage, program provision, local management or
similar agreement with any third party with respect to the Station.
32. Assignment. This Agreement shall be binding upon and insure to the
benefit of the parties hereto, their successors and assignees, including
specifically any purchaser of the Station from ARS. No party to this Agreement
may assign its rights or delegate its obligations under this Agreement to any
other person or entity without the express prior written consent of
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the other parties, except that (a) Programmer may assign its rights and delegate
its obligations to one or more subsidiary or affiliated entities of Programmer
and (b) in the event that Programmer finds it necessary or is required to
provide to a third party a collateral assignment of Programmer's interest in
this Agreement or any related documents, ARS will cooperate with Programmer and
any third party requesting such assignment, including but not limited to signing
a consent and acknowledgment of such assignment, provided, however, that
Programmer shall remain fully liable as to all of its obligations and agreements
hereunder whether or not delegated or assigned.
33. Entire Agreement. The Purchase Agreement, this Agreement, and the
attachments hereto and thereto embody the entire agreement and understanding of
the parties and supersede any and all prior agreements, arrangements or
understandings relating to the matters provided herein. No amendment, waiver of
compliance with any provision or condition hereof, or consent pursuant to this
Agreement will be effective unless evidenced by an instrument in writing signed
by the parties.
34. Taxes. ARS and Programmer shall each pay its own ad valorem taxes,
if any, which may be assessed on such party's respective personal property for
the periods that such items are owned by such party. Each party shall be
responsible for any sales tax imposed on advertising aired during the
programming provided by that party.
35. Headings. The headings are for convenience only and will not
control or affect the meaning or construction of the provisions of this
Agreement.
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36. Governing Law. The obligations of ARS and Programmer are subject to
applicable federal, state and local law, rules and regulations, including, but
not limited to, the Act and the rules and regulations of the Commission. The
construction and performance of the Agreement will be governed by the laws of
the State of California, without reference to that State's principles of
conflicts of law, with venue to be in California.
37. Notices. Any notice, demand or request required or permitted to be
given under the provisions of this Agreement shall be in writing and shall be
given by hand delivery, by prepaid registered or certified mail, with return
receipt requested, by an established overnight courier providing proof of
delivery for next business day delivery or by telecopy addressed as follows:
To ARS: American Radio Systems Corporation
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, President
Telecopy Number: 000-000-0000
with a copy to: Dow, Xxxxxx and Xxxxxxxxx
0000 Xxx Xxxxxxxxx Xxx., XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Xx., Esq.
Telecopy Number: 000-000-0000
If to Programmer: Entertainment Communications, Inc.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attn: Xxxxxx X. Field, President
Telecopy Number: 000-000-0000
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with a copy to: Entertainment Communications, Inc.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Telecopy Number: 000-000-0000
and a copy to: Xxxxxxxxx, Xxxxxx & Xxxxxx
0000 X Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telecopier number: 202-293-7783
The date of any such notice and service thereof shall be deemed to be:
(i) the day of delivery if hand delivered or delivered by overnight courier;
(ii) the day of delivery as indicated on the return receipt if dispatched by
mail; or (iii) the date of telecopy transmission as indicated on the telecopier
transmission report provided that any telecopy transmission shall not be
effective unless a paper copy sent by overnight courier on the date of the
telecopy transmission is delivered. Either party may change its address for the
purpose of notice by giving notice of such change in accordance with the
provisions of this paragraph.
38. Severability. If any provision of this Agreement or the application
thereof to any person or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provision to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
39. Certifications.
(a) Control of Station. Subject to, and consistent with the
rights of Xxxxx under the Xxxxx TBA during the term of that agreement, ARS
hereby verifies that it will
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maintain control of the Station and its facilities, including specifically
control over the Station's finances, personnel and programming during the term
of this Agreement.
(b) Compliance with Ownership Rules. Programmer hereby
verifies that the arrangement contemplated by this Agreement complies with the
provisions of Section 73.3555(a) of the rules and regulations of the Commission.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
ENTERTAINMENT COMMUNICATIONS, INC.
By:
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President
AMERICAN RADIO SYSTEMS CORPORATION
By: /s/Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
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SCHEDULE A
PAYMENT SCHEDULE
In exchange for the air time supplied to Programmer pursuant to this
Agreement, Programmer shall pay ARS the following monthly fee (the "Monthly
Fee") during each of the specified calendar months:
January, 1997 $100,000
February, 1997 $100,000
March, 1997 $200,000
April, 1997 $200,000
May, 1997 $200,000
June, 1997 $200,000
The first Monthly Fee is due and payable on Effective Date and each
successive payment is due on the first day of each month thereafter. The Monthly
Fee shall be reduced pro rata for any partial month at the beginning or end of
the term of this Agreement.
In addition to the Monthly Fee, Programmer shall promptly reimburse ARS
the amount of Station expenses for which ARS is making direct payments as set
forth in Section 6 hereof, and for all other payments related to the continued
operation of the Station incurred by ARS which are not paid directly by
Programmer, as they are incurred during the term of this Agreement, exclusive of
any payments of any nature (a) made with respect to capital expenditures made to
continue the operation of the Station as provided in Section 6 and under Section
6.1.6 of the Purchase Agreement or (b) made to, with respect of, or on behalf of
any of ARS's employees at the Station after the Effective Date. ARS shall
deliver a statement in reasonable detail with back-up documentation for such
expenses evidencing payment thereof, and Programmer shall pay ARS such expenses
within ten (10) business days of receipt of such statement.
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ATTACHMENT I
Programmer agrees to cooperate with ARS in the broadcasting of programs
in a manner consistent with the standards of ARS, as set forth below:
1. Election Procedures. At least 90 days before the start of any
primary or regular election campaign, Programmer will coordinate with ARS's
Station Manager the rate Programmer will charge for time to be sold to
candidates for public office and/or their supporters to make certain that the
rate charged conforms to all applicable laws and the Station's policy.
Throughout a campaign, Programmer will comply with all applicable laws and rules
concerning political candidacy broadcasts and will promptly notify ARS's Station
Manager of any disputes concerning either the treatment of or rate charged a
candidate or supporter.
2. Required Announcements. Programmer shall broadcast an announcement
in a form satisfactory to ARS at the beginning of each hour to identify the
Station, and any other announcement that may be required by law, regulation, or
the Station's policy.
3. Commercial Recordkeeping. Programmer shall maintain such records of
the receipt of, and provide such disclosure to ARS of, any consideration,
whether in money, goods, services, or otherwise, which is paid or promised to be
paid, either directly or indirectly, by any person or company for the
presentation of any programming over the Station as are required by Sections 317
and 507 of the Communications Act and the rules and regulations of the FCC.
4. No Illegal Announcements. No announcements or promotion prohibited
by federal or state law or regulation of any lottery, game or contest shall be
made over the Station.
5. Indecency, Hoaxes. No programming violative of applicable laws and
rules concerning indecency or hoaxes will be broadcast over the Station.
6. Controversial Issues. Any broadcast over the Station concerning
controversial issues of public importance shall comply with the then current FCC
rules and policies.
7. Respectful of Faiths. The subject of religion and particular faiths,
tenets and customs shall be treated with respect at all times.
8. ARS's Discretion Paramount. In accordance with ARS's responsibility
under the Communications Act of 1934, as amended, and the rules and regulations
of the
- 31 -
Federal Communications Commission, ARS reserves the right to reject or terminate
any advertising proposed to be presented or being presented over the Station
which is in conflict with the Station's policy or which in the judgment of ARS
or its Station Manager would not serve the public interest.
ARS may waive any of the foregoing regulations in specific instances
if, in its reasonable opinion, good broadcasting in the public interest will be
served thereby.
