LOCAL MARKETING AGREEMENT
This Local Marketing Agreement (the "Agreement") is made as of February
16, 1998, effective for all purposes on the Effective Date (as defined below),
between Cumulus Broadcasting, Inc. ("Programmer") and Xxx X. XxXxx ("Licensee").
Recitals
A. Licensee owns and operates radio broadcast station WJLW-FM (the
"Station") pursuant to licenses issued by the Federal Communications Commission
(the "FCC").
B. Licensee and Programmer have contemporaneously entered into an Asset
Purchase Agreement (the "Purchase Agreement") which will provide for the
acquisition by Programmer of substantially all of the assets used or useful in
connection with the operation of the Station, on the terms and subject to the
conditions set forth therein.
C. Pending execution of the Purchase Agreement and closing thereunder,
Programmer desires to purchase from Licensee and Licensee desires to sell to
Programmer certain airtime on the Stations, all in accordance with the
Communications Act of 1934, as amended, and the rules, regulations, and policies
of the FCC (the "FCC Requirements").
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants, representations, warranties and agreements contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement agree as
follows:
1. Effective Date and Term.
1.1 Effective Date. This Agreement shall become effective for all purposes
at 12:01 a.m. on February 16, 1998.
1.2 Term. The term of this Agreement (the "Term") shall begin on the
Effective Date and shall continue until December 31, 1998, unless earlier
terminated in accordance with the provisions set forth in this Agreement.
2. Purchase of Airtime. Programmer hereby purchases from Licensee all
airtime on the Station during the Term, other than airtime between 9:00 a.m. to
9:30 a.m., local time on Sundays, on the terms specified herein (such purchased
airtime period is referred to herein as the "Broadcasting Period"). During the
Broadcasting Period, Licensee shall broadcast on the Station programming
supplied by Programmer (collectively, the "Program" or "Programs"). Programmer
will ensure that the Programs meet technical and quality standards equal to
those of programming broadcast by commercial radio stations generally in the
United States. If Licensee in the reasonable
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exercise of its discretion finds that any Program(s) does not meet these
standards, then it shall advise Programmer in writing of the specific technical
deficiencies. If such technical deficiencies have not been corrected within ten
(10) days after receipt of notice, then Licensee shall have no obligation to
broadcast such Program(s) until such time as the technical deficiencies are
corrected.
3. Licensee's Broadcasting Obligations. In consideration for the payments
made and to be made by Programmer hereunder, Licensee shall make available to
Programmer, beginning on the Effective Date, all of the Station's airtime during
the Broadcasting Period and shall cause to be broadcast on the Station the
Programs pursuant to Section 2 hereof. Throughout the Term, unless otherwise
mutually agreed by the parties, Licensee shall maintain the operating power of
the Station at its maximum licensed level and shall operate and maintain in good
working condition the Station's transmission facilities and broadcasting
equipment, excluding improvements and additions made by Programmer. Throughout
the Term, Licensee shall also, with respect to the Station:
(a) employ a General Manager who will report to Licensee and direct
the performance of Licensee's obligations hereunder and who shall have no
employment, consulting, or other material relationship to Programmer;
(b) employ at least one full time employee to assist the General
Manager in performing Licensee's obligations hereunder, including
maintaining the Station's transmission facilities, and who shall have no
employment, consulting or other material relationship with Programmer;
(c) retain ultimate control over the personnel, finances,
programming and operation of the Station;
(d) maintain a main studio consistent with the FCC Requirements at
which the General Manager and the other full time employee(s) of the
Station will be available during normal business hours;
(e) comply with the FCC Requirements with respect to the
ascertainment of community problems, needs and interests; broadcast
programming responsive thereto; and timely prepare and place in the
Station's public inspection files appropriate documentation thereof;
(f) comply with all other FCC Requirements which may be applicable
to the operation of the Station.
4. Consideration. In consideration of the airtime made available to
Programmer pursuant to this Agreement, Programmer shall pay Licensee as set
forth in Appendix A attached hereto.
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5. Operation, Ownership and Control of the Stations.
5.1 Control Vested in Licensee. Notwithstanding anything to the contrary
in this Agreement, as long as Licensee remains the FCC licensee of the Stations,
Licensee will have full authority, power and control over the operation of the
Station and over all persons employed by it. Licensee will bear the
responsibility for the Station's compliance with, and shall cause the Station to
comply with, all applicable laws, including the FCC Requirements. Nothing
contained herein shall prevent or hinder Licensee from: (a) rejecting or
refusing Programs that Licensee believes in good faith to be unsuitable or
contrary to the public interest; (b) substituting programs which Licensee
believes in good faith to be of greater local or national importance or which
are designed to address the problems, needs and interests of the local
community: (c) preempting any Program in the event of a local, territorial or
national emergency; (d) refusing to broadcast any Program that does not meet the
FCC Requirements; or (e) deleting any commercial announcements that do not
comply with the FCC Requirements or the requirements of the Federal Trade
Commission, or any state, local or federal law.
5.2 Notice of Complaints. Programmer will immediately serve Licensee with
notice and a copy of any letters of complaint that Programmer receives
concerning any Program for Licensee's review and inclusion in its public
inspection files. Licensee will immediately serve Programmer with notice and a
copy of any letters of complaint that it receives concerning any Program.
5.3 Programmer Access to the Station's Studios. During the Term, Licensee
shall make available to Programmer for no additional consideration the areas in
the Station's studios as may be reasonably necessary or appropriate for
Programmer to exercise its rights and perform its obligations under this
Agreement. Programmer shall, to the extent commercially feasible, use Licensee's
current studios and other facilities to exercise its rights and perform its
obligations under this Agreement.
5.4 Employees. Programmer shall employ and be responsible for the
salaries, taxes, insurance, and related costs for all personnel used in the
production of the programs supplied to the Station hereunder, and all other
costs incurred by Programmer for the production of such programs. Licensee shall
pay all compensation owed to its employees up to and including the Effective
Date. Programmer may, after the Effective Date, employ those of Licensee's
employees as Programmer may elect on terms and conditions determined by
Programmer in Programmer's sole discretion, other than those employees employed
by Licensee in the operation of the Station after the Effective Date, who shall
remain in Licensee's sole employ and control. Upon termination of this
Agreement, Licensee shall be free to re-employ Programmer's employees on such
terms and conditions as may be determined by Licensee.
5.5 Mutual Cooperation. Programmer and Licensee agree to cooperate
reasonably with each other as necessary to fulfill their rights and obligations
hereunder.
6. Program Rights and Music Licenses. During the Term, Licensee shall make
available to Programmer for its use, on the dates and at the times specified by
Programmer, all of
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Licensee's rights to programs under any program rights agreements of the
Stations (together with the music licenses described below, the "Program Rights
Agreements"). Licensee shall use its best efforts to secure all consents, if
any, from third parties that are necessary to permit Programmer to use the
programs under Program Rights Agreements. Licensee shall maintain all necessary
performing rights licenses to musical compositions included in any Program,
subject to reimbursement by Programmer for the cost thereof under Section 4 and
Appendix A of this Agreement.
7. Programs to Serve the Public Interest. Licensee acknowledges that it is
familiar with the type of programming Programmer intends to provide and has
determined that the broadcast of such programming on the Station would serve the
public interest and is otherwise suitable. Programmer shall cooperate with
Licensee to ensure that the Programs include material that is responsive to
community problems, needs, and interests.
8. Programming Standards. Programmer shall use its best efforts to ensure
that the Programs conform to all FCC Requirements applicable to broadcast radio
stations.
9. Expenses, Revenues and Accounts Receivable.
9.1 Expenses. The Station's cash expenses arising or relating to the
period before the Effective Date shall be the responsibility of Licensee, and
Programmer shall not be obligated to reimburse Licensee for any expenses
allocable to such period. During the Term, Programmer will reimburse Licensee
for its expenses incurred in accordance with Section 3 hereof. Programmer shall
be solely responsible for all expenses attributable to the origination and/or
delivery of the Programs by Programmer to Licensee.
9.2 Cash Accounts Receivable, Advertising and Programming Revenues.
(a) Promptly after the Effective Date, Licensee shall furnish to
Programmer a list of the Accounts Receivable that arose out of the operations of
the Stations as of the close of business on the day preceding the Effective Date
but are due and payable thereafter. For a period of 120 days after the Effective
Date, Programmer, as Licensee's agent, shall, without compensation, collect the
accounts receivable for Licensee (including accounts receivable for airtime
reserved by Licensee under Section 2 above). At the end of each month during the
120-day period, Programmer shall remit to Licensee the amount collected by
Programmer during that month with respect to the Accounts Receivable and
Programmer shall provide Licensee with a report setting for the Accounts
Receivable collected by Programmer that month. Programmer shall furnish Licensee
with such records and other information as Licensee may reasonably require to
verify the amounts collected by Programmer with respect to the Accounts
Receivable. Upon five days' prior written notice from Licensee, Programmer shall
terminate all collection efforts on behalf of Licensee with respect to the
Accounts Receivable specified in the notice and those Accounts Receivable shall
no longer be considered Accounts Receivable for purposes of this section 9.2.
Programmer shall set all commercial advertising during the Broadcasting Period
for its own account and shall be entitled to
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collect all Accounts Receivable arising thereunder.
(b) For the purpose of determining amounts collected by Programmer with
respect to the Accounts Receivable, (i) in the absence of a bona fide dispute
between an account debtor and Licensee, all payments by an account debtor shall
first be applied to Accounts Receivable due from the account debtor, and (ii)
any amount received by Programmer which is from an account debtor to Licensee
who claims to have a bona fide dispute with Licensee shall be deemed to have
been received with respect to the accounts receivable due Programmer to the
extent of such dispute.
(c) Programmer shall not be required to retain a collection agency, bring
any suit, or take any other action out of the ordinary course of business to
collect any of the Accounts Receivable. Programmer shall not compromise, settle
or adjust the amount of any of the Accounts Receivable without the written
consent of Licensee.
(d) Programmer's obligation to collect and remit Accounts Receivable
hereunder shall continue, at the option of Licensee, in the event of termination
of this Agreement pursuant to Section 11.5 hereof.
9.3 Political Time. Licensee shall, with respect to the Station, oversee
and take ultimate responsibility with respect to the provision of equal
opportunities, lowest unit charge, and reasonable access to political
candidates, and compliance with the political broadcasting provisions of the FCC
Requirements. Programmer shall cooperate with Licensee in complying with such
provisions, and shall supply promptly to Licensee such information reasonably
requested by Licensee for such purposes. Licensee, in consultation with
Programmer, will develop a statement which discloses its political broadcasting
rates and policies to political candidates, and Programmer will follow those
respective policies in the sale of political programming an advertising for the
Station. Programmer shall provide any rebates due to political advertisers and
release advertising availabilities to Licensee during the Broadcasting Period
sufficient to permit Licensee to comply with political broadcasting provisions
of the FCC Requirements. Revenues received by Licensee as a result of any such
release of advertising time shall be for the account of Programmer.
10. Call Letters and Frequency. During the Term, Licensee (i) shall retain
all rights (except as provided in the following sentence) to the Station's call
letters and trade names, (ii) shall not change the call letters, and (iii) shall
not seek FCC consent to a modification of facilities which would specify a
frequency change or have a material adverse effect upon the presently authorized
coverage of the Station. Programmer shall include in the Programs for the
Station an announcement in a form reasonably satisfactory to the Licensee in
accordance with the FCC Requirements to identify such Station, as well as any
other announcements required by the FCC Requirements.
11. Events of Default and Termination.
11.1 Programmer's Events of Default. The occurrence and continuation of
any of the following will be deemed an Event of Default by Programmer under this
Agreement:
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(a) Programmer fails to make LMA Payments;
(b) Programmer fails to observe or perform any other material
covenant, condition or agreement contained in this Agreement; or
(c) Programmer breaches or violates any material representation or
warranty made by it under this Agreement.
11.2 Licensee's Events of Default. The occurrence and continuation of any
of the following will be deemed an Event of Default by Licensee under this
Agreement:
(a) Licensee fails to observe or perform any material covenant,
condition or agreement contained in this Agreement; or
(b) Licensee breaches or violates any material representation or
warranty made by it under this Agreement.
11.3 Cure Period. The defaulting party shall have ten (10) days from the
date on which Programmer has provided Licensee or Licensee has provided
Programmer, as the case may be, with written notice specifying the Event(s) of
Default to cure any such Event(s) of Default. If the Event of Default cannot be
cured by the defaulting party within such time period but commercially
reasonably efforts are being made to effect a cure or otherwise secure or
protect the interests of the non-defaulting party (in which case, if successful,
the Event of Default shall be deemed cured), then the defaulting party shall
have an additional period not to exceed ten (10) days to effect a cure or a
deemed cure; provided, however, that such additional ten (10) day period shall
not be available in the case of a default under Section 11.1(a) above.
11.4 Termination for Uncured Event of Default. If an Event of Default by
Programmer has not been cured or deemed cured within the period set forth in
Section 11.3 above, then Licensee may terminate this Agreement, effective
immediately upon written notice to Programmer, and pursue all remedies available
at law or in equity for breach of this Agreement. If an Event of Default by
Licensee has not been cured or deemed cured within the periods set forth in
Section 11.3 above, then Programmer may terminate this Agreement, effective
immediately upon written notice to Licensee, and pursue all remedies available
at law or in equity for breach of this Agreement.
11.5 Termination Upon Failure or Consummation of the Purchase Agreement.
Notwithstanding any other provision hereof, this Agreement shall terminate with
no further action by Licensee or Programmer upon the termination of the Purchase
Agreement in accordance with the terms thereof, or upon the Closing Date (as
defined in the Purchase Agreement).
11.6 Termination by Licensee To Satisfy the FCC Requirements. If Licensee
is required by the FCC to terminate this Agreement by an FCC order which has
become a Final Order as that term is defined in the Purchase Agreement),
Licensee shall, or, if the FCC orders that this Agreement
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be terminated before its order becomes a Final Order and this Agreement cannot
be revised to comply with applicable FCC Requirements as contemplated by Section
20 hereof, Licensee may, upon at least thirty (30) days' written notice to
Programmer (or such shorter period as may be required by the FCC) terminate this
Agreement.
11.7 Termination by Programmer. Programmer may unilaterally terminate this
Agreement during the term upon one hundred twenty (120) days' written notice to
Licensee.
12. Certain Representations, Warranties and Covenants.
12.1 Mutual Representations Concerning This Agreement. Licensee represents
and warrants as follows: (a) Licensee is an individual citizen of the State of
Wisconsin, (b) Licensee has the power and authority to enter into and perform
this Agreement; and (c) the execution, delivery and performance of this
Agreement by Licensee does not conflict with any other agreement to which
Licensee is a party.
Programmer represents and warrants as follows: (a) Programmer is a
corporation duly organized, validly existing and in good standing under the laws
of Nevada; (b) Programmer has the requisite corporate power and authority to
enter into and perform this Agreement; (c) the execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action of Programmer; and (d) the execution, delivery and performance
of this Agreement by Programmer does not conflict with any other agreement to
which Programmer is a party.
12.2 Budget Information; Reimbursement Requests. Licensee represents,
warrants and covenants that all budgets submitted to Programmer pursuant to
Appendix A, and all reimbursement requests now and hereafter made of Programmer,
shall relate only to financial obligations arising out of the Station's
operations during the Term and shall not include any financial obligations
arising out of breach of any representation or warranty or violation of any
covenant of Licensee under this Agreement or Purchase Agreement.
12.3 Program Rights and Barter Agreements. Licensee represents and
warrants that, except as disclosed in the Disclosure Schedule to the Purchase
Agreement, (i) it is current in all payment obligations and is not otherwise in
default under the Program Rights Agreements and (ii) there are no trade-outs,
time-sales, barter or other similar obligations with respect to the Stations
which extend beyond the Effective Date, other than obligations not to exceed in
the aggregate Ten Thousand Dollars ($10,000).
12.4 Compliance with FCC Requirements. Programmer represents, warrants and
covenants that its execution and performance of this Agreement is, and will
remain, in compliance with the FCC Requirements, including without limitation,
47 C.F.R. ss. 73.3555.
13. Modification and Waiver; Remedies Cumulative. No modification or
waiver of any provision of this Agreement will be effective unless in writing
and signed by all parties. No failure
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or delay on the part of Programmer or Licensee in exercising any right or power
under this Agreement will operate as a waiver of such right or power, nor will
any single or partial exercise of any such rights or power or the exercise of
any other right or power operate as a waiver. Except as otherwise provided in
this Agreement, the rights and remedies provided in this Agreement are
cumulative and are not exclusive of any rights or remedies which a party may
otherwise have.
14. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their successors and permitted assigns.
Notwithstanding the foregoing, no party may assign its rights or obligations
under this Agreement without the prior written consent of the other party;
provided, however, that Programmer may assign and delegate its rights and
obligations under this Agreement to a party that controls, or is controlled by,
or is under common control with, Programmer, and who is qualified under any
applicable FCC Requirement, upon notice to, but without the prior written
consent of Licensee.
15. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of Wisconsin without regard to any conflicts-of-law
rules that might apply the laws of another jurisdiction or jurisdictions.
16. Notices. Notices required to be provided by this Agreement shall be
given in the manner provided and to the persons specified in the Purchase
Agreement.
17. Entire Agreement. This Agreement embodies the entire understanding
among the parties with respect to the subject matter hereof, and supersedes any
prior or contemporaneous written or oral agreement between the parties regarding
such subject matter.
18. Relationship of Parties. Programmer and Licensee are not, and shall
not be deemed to be, agents, partners, or representatives of each other.
19. Force Majeure. The failure of a party hereto to comply with its
obligations under this Agreement due to acts of God, strikes or threats thereof
or force majeure or due to causes beyond such party's control will not
constitute an Event of Default under Section 11 of this Agreement and no party
will be liable to the others therefore. Programmer and Licensee each agree to
exercise its commercially reasonable efforts to remedy any such conditions
affecting its own facilities as soon as practicable.
20. Subject to Laws; Invalidity. The obligations of the parties under this
Agreement are subject to the FCC Requirements and all other applicable laws. The
parties acknowledge that this Agreement is intended to comply with FCC
Requirements. However, in the event that the FCC determines that the continued
performance of this Agreement is in violation of the FCC Requirements, each
party will use its commercially reasonable efforts to comply with the FCC
Requirements or will in good faith contest or seek to reverse any such action or
agree on the terms of a revision to this Agreement, in each case, on a time
schedule sufficient to meet the FCC Requirements and so long as the fundamental
nature of the business arrangement between the parties
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evidenced by this Agreement is maintained. If any provision of this Agreement is
otherwise held to be illegal, invalid, or unenforceable under present or future
laws, then such provision shall be fully severable, this Agreement shall be
construed and enforced as if such provision had never comprised a part thereof,
and the remaining provisions shall remain in full force and effect, in each case
so long as the fundamental nature of the business arrangement between programmer
and Licensee has been maintained.
21. Reciprocal Indemnity.
21.1 Indemnification by Programmer.Programmer shall indemnify, defend, and
hold harmless Licensee from and against any and all claims, losses, costs,
liabilities, damages, and expenses (including reasonable attorneys' fees and
other expenses incidental thereto) of every kind, nature and description,
including but not limited to those relating to copyright infringement (except as
may result from a breach of the warranty in Section 6 hereof by Licensee),
libel, slander, defamation or invasion of privacy, arising out of: (a)
Programmer's broadcasts of the Programs; (b) any misrepresentation or breach of
any warranty of Programmer; or (c) any breach of any covenant, agreement, or
obligation of Programmer. If Programmer is required to indemnify Licensee as a
result of programs broadcast hereunder which are supplied by a third party
pursuant to a contract with Licensee, it is agree that Programmer shall be
subrogated to any rights which Licensee may have against such third party,
including the right to indemnification by such third party.
21.2 Indemnification by Licensee. Licensee shall indemnify, defend, and
hold harmless Licensee from and against any and all claims, losses, costs,
liabilities, damages, and expenses (including reasonable attorneys' fees and
other expenses incidental thereto) of every kind, nature and description,
including but not limited to those relating to copyright infringement (except as
may result from a breach of the warranty in Section 6 hereof by Licensee),
libel, slander, defamation or invasion of privacy, arising out of: (a)
Licensee's broadcast of programs on its own behalf, other than Programs; (b) any
misrepresentation or breach of any warranty of Licensee; or (c) any breach of
any covenant, agreement, or obligation of Licensee. If Programmer is required to
indemnify Licensee as a result of programs broadcast hereunder which are
supplied by a third party pursuant to a contract with Licensee, it is agreed
that Programmer shall be subrogated to any rights which Licensee may have
against such third party, including the right to indemnification by such third
party.
22. Covenant Not to Compete. For a period of two (2) years from the
Effective Date, other than with respect to the pending applications listed in
Appendix B to this Agreement, Licensee will not apply for, own or operate a
commercial FM radio station to be licensed to a community within Xxxxx County,
Wisconsin; provided, however, that Licensee shall be permitted to provide
consulting services in such geographic area.
23. Headings. The headings of the sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
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24. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart
were upon the same instrument.
25. Survival. All representations, warranties, covenants and agreements
made by any party in this Agreement or pursuant hereto shall survive execution
and delivery of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective duly authorized officers as of the date first written above.
PROGRAMMER: CUMULUS BROADCASTING, INC.
By:____________________________
Printed Name:__________________
Title:_________________________
LICENSEE: XXX X. XXXXX
_______________________________
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APPENDIX A
LMA PAYMENTS
In consideration of the airtime made available to Programmer pursuant to
this Agreement, during the Term, Programmer shall reimburse Licensee on a
monthly basis, in advance, the Station Expenses (defined below) for the upcoming
month for which Licensee has submitted to Programmer a written reimbursement
request supported by appropriate documentation of expenses. The term "Station
Expenses" as used herein means the reasonable and prudent expense actually
incurred by Licensee in operating the Stations in compliance with the terms of
this Agreement (including without limitation Sections 3 and 6) and consistent
with past practice (except for changes resulting from the transactions
contemplated by this Agreement), including without limitation, those expenses
set forth on Attachment 1 hereto. Estimated expenses shall be reconciled with
actual expenses on a regular basis on a schedule to be agreed by Programmer and
Licensee.
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