JOINT SELLING AGREEMENT
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This JOINT SELLING AGREEMENT (this "Agreement") is made and entered
into as of this 1st day of April, 1997, by and between ROOK BROADCASTING OF
IDAHO, INC., an Idaho corporation with its principal place of business in
Spokane, Washington ("Licensee"), and TRIATHLON BROADCASTING OF SPOKANE, INC.,
a Delaware corporation with its principal place of business in Spokane,
Washington ("Broker").
WHEREAS, Licensee is the owner and operator of radio broadcast
station KCDA(FM), Coeur d'Alene, Idaho (the "Station"); and
WHEREAS, Licensee wishes to sell to Broker certain commercial
advertising time of the Station; and
WHEREAS, Broker desires to purchase such commercial advertising time
of the Station subject to the terms and conditions hereof;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto have agreed
and do agree as follows:
1. Advertising Time. Commencing at 12:01 AM on April 1, 1997 (the
"Effective Date"), Broker will have the exclusive right to sell all available
commercial time on the Station other than commercial advertising time
allocated to network broadcasters, as long as the total of such commercial
time does not exceed fifteen percent (15%) of the Station's total broadcast
time in any seven (7) day period. Broker shall have the right to resell such
commercial time to advertisers or their agents at such rates and in such
manner as it may choose, subject to all applicable rules and regulations of
the Federal Communications Commission ("FCC") and to Licensee's review as
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provided for in Section 3 hereof. All advertising provided by Broker to
Licensee for broadcast on the Station shall be placed at mutually agreeable
breaks in the programming of the Station. Broker shall be entitled to market
the commercial advertising time on the Station jointly with the sale of
commercial air time on stations owned or operated by Broker, provided that any
purchaser will continue to have the right to buy time on the Station
individually.
2. Term. The term of this Agreement (the "Term") shall commence on
the Effective Date and shall terminate at 11:59 p.m. on December 31, 2001. The
parties shall have the right to extend the Term of this Agreement for an
additional five (5) year term (the "Extended Term") on terms to be negotiated
between and mutually agreed to by the parties, in which event all references
in this Agreement to the "Term" shall include the "Extended Term" as the
context shall require.
3. Content of Advertising. All advertising provided by Broker to the
Station shall be in good taste, compatible with the Station's format and in
accordance with good broadcast standards. All advertising spots and advertiser
promotional announcements supplied by Broker shall comply with all applicable
federal, state, FCC and local regulations and policies and with the
advertising standards of Licensee. Licensee shall have the absolute right to
review and refuse to broadcast due to objectionable content any particular
advertising furnished by Broker, and nothing in this Agreement shall be
construed as impinging on Licensee's discretion to do so as the licensee of
the Station.
4. Control of Station and Licensee Obligations.
4.1 Licensee Control and Authority Absolute. Notwithstanding
anything to the contrary in this Agreement, Licensee shall have full and
exclusive authority and power over the operation of the Station during the
Term of this Agreement. The general manager of the Station shall report solely
to and be accountable solely to Licensee and shall direct the day-to-day
operation of the Station in accordance with Licensee's direction. Licensee
shall retain control in its absolute discretion over the policies,
programming, personnel, operations and finances of the Station,
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including, without limitation, the right to make all programming decisions,
the right to reject any advertisements and the right to take any other actions
necessary for compliance with the laws of the United States, the State of
Washington and the rules, regulations and policies of the FCC. Nothing in this
Agreement shall be construed as giving to Broker any authority to dilute,
diminish, assume any control from, or substitute for, the exclusive authority
of Licensee in regard to the aforesaid matters.
4.2 Licensee Obligations. Licensee has exclusive and sole
responsibility for complying with its obligations as licensee of the Station
under the terms of its license, FCC rules and regulations and the
Communications Act of 1934, as amended (the "Communications Act"). While
Broker is obliged hereunder to assure that its own operations in connection
with this Agreement are not inconsistent with the aforesaid requirements,
Licensee has the primary responsibility for such compliance. Such essential
responsibilities of Licensee as licensee include, but are not limited to, the
following, which shall be Licensee's exclusive responsibilities and which
Licensee shall carry out:
(a) Control over all programming, advertising and
promotion;
(b) Control over all Station finances;
(c) Control over all Station personnel;
(d) Preparation and placement into the Station's public
inspection file of all issues/programs lists;
(e) Broadcast of programming responsive to community
issues;
(f) Maintenance of local public inspections file;
(g) Compliance with all pertinent technical operating
requirements;
(h) Broadcast of all Station identifications;
(i) Compliance with all political broadcasting, personal
attack and issue-oriented programming and
advertising requirements;
(j) Compliance with all rules relating to contests,
promotions, lotteries, payola, plugola and telephone
recordings/broadcasts;
(k) Compliance with all rules relating to sponsorship
identification;
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(l) Compliance with all rules, policies and laws
relating to indecent and obscene programming and
false/misleading advertising and programming;
(m) Supervision and direction of all Station personnel
including particularly the general manager, program
director and chief engineer;
(n) Maintenance of a main studio within the principal
city contours of the Station;
(o) Preparation and filing of all required and pertinent
reports and applications at the FCC;
(p) Payment of all of the Station's operating
expenses and existing debt service and for
all existing capital improvements;
(q) Payment of any fines or forfeitures arising from the
operation of the Station payable to any governmental
authorities or third parties, provided such fines
are not the result of acts or omissions of Broker;
and
(r) Maintenance of the Station's equipment in a
condition consistent with good engineering standards
and in compliance with applicable rules, regulations
and policies of the FCC.
5. Licensee Responsibility for Employees and Expenses. Licensee shall
be responsible for the salaries, taxes, insurance and related costs for all
personnel utilized in the management and operation of the Station, including,
but not limited to, its general manager, program director, accounting and
clerical personnel, engineer and on-air announcing staff. Licensee shall also
be responsible for all expenses related to its operations, studios and
broadcast transmission, including, but not limited to, administrative
expenses, music license fees, copyright fees, its consultant and attorney
fees, tower and studio rent, maintenance, utilities, telephone, liability and
property damage insurance on its facilities, insurance for errors and
omissions and broadcast content, automobile expense, property taxes and income
taxes, including income taxes relating to its earnings from the arrangement
contemplated by this Agreement.
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6. Broker Responsibility for Employees and Expenses. Broker shall
employ and be responsible for the salaries, commissions, taxes, insurance and
all other related costs of all of its own personnel involved in the
production, broadcast and sale of its commercial advertising time on and with
respect to the Station including, but not limited to, salespersons, sales
managers, and billing, traffic, and accounts receivable collection personnel.
Broker shall be responsible for delivering the commercial advertising material
in the form to be aired to Licensee's Station. Broker shall be fully
responsible for the supervision and direction of its own employees. Broker
shall be solely responsible for payment of any and all copyright license fees
attributable to its commercial advertising broadcasts on the Station pursuant
to this Agreement, and shall reimburse Licensee for the costs of any license
fees attributable to the broadcast of Broker's commercial advertising on the
Station that shall have been paid by Licensee.
7. Advertising Revenues, Advertising Contracts, Accounts Receivable
and Licensee Payments.
7.1 Advertising Revenues. All revenues from the sale of
advertising time delivered by Broker to the Station pursuant to this Agreement
or sold by Licensee prior to the Effective Date of this Agreement but
scheduled to air during the term of this Agreement shall be the sole and
exclusive property of Broker.
7.2 Performance of Broker's Advertising Contracts. In the
event this Agreement is terminated by Broker or expires in accordance with its
terms, Licensee agrees to assume and perform all advertising contracts entered
into by Broker in the usual and normal course of business and consistent with
past practices prior to the termination date, which are to be performed after
the termination date. All benefits and collections for such advertising time
run after the termination date shall be for the benefit of Licensee.
7.3 Collection of Broker's Accounts Receivable. In the event
this Agreement is terminated by Broker or expires in accordance with its
terms, as of the termination date, Broker shall
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continue to collect its own accounts receivable arising out of the conduct of
the Broker's sale of commercial advertising time on the Station prior to the
termination date.
7.4 Payments To Licensee. In consideration for the sale to
Broker of the commercial advertising on the Station, Broker shall pay to
Licensee during the Term the Guaranteed Fixed Monthly Payments and the Net
Profits Payments in the amounts and on the dates set forth in Schedule A.
8. Warranties and Representations of Licensee. Licensee
warrants and represents to Broker that each of the following is now true and
correct, and all will continue to be true at all times during the Term hereof:
8.1 Licenses and Permits. Licensee has all licenses and
permits (including, without limitation, all FCC authorizations) necessary to
operate the Station and to broadcast as required by this Agreement.
8.2 Material Compliance. Licensee is in material
compliance with all requirements set forth in each of the FCC licenses
pertaining to the Station and in material compliance with all legal
requirements associated with the operation of the Station.
8.3 No Default. The execution, delivery and performance
of this Agreement shall not constitute a breach or default under any agreement
to which Licensee is a party.
8.4 Facilities. The broadcast facilities of the Station are
in good working order, normal wear and tear excepted, and such facilities
shall be maintained in good working order and condition throughout the Term of
this Agreement.
9. Warranties and Representations of Broker. Broker represents and
warrants to Licensee that the execution, delivery and performance by Broker of
this Agreement has been duly
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authorized by all necessary corporate action of Broker, that Broker has the
financial capability and personnel to perform its obligations under this
Agreement and that the execution, delivery and performance by Broker of this
Agreement shall not constitute a breach or default under Broker's charter or
bylaws or any agreement to which it is a party.
10. Additional Covenants and Agreements of Broker. In addition
to its other obligations under this Agreement, Broker covenants and agrees
that throughout the Term hereof:
10.1 Advertising Log. Broker shall prepare and furnish to
Licensee prior to each day's broadcasts an advertising log which shall list
every commercial advertising announcement which Broker has furnished to
Licensee in any of the particular forms described in Section 10.2 hereof and
which Licensee is to broadcast in accordance with the schedule set forth in
such log.
10.2 Advertising Materials. Broker shall furnish to Licensee
prior to each day's broadcasts all necessary materials to permit Licensee to
broadcast the commercial advertising messages listed in the advertising log
described in Section 10.1. These materials may variously consist of
typewritten advertising continuity to be read live by the on-air announcer,
transcriptions such as, but not limited to, tape cassettes, recordable CD
discs, or feeds from telephone lines, radios, satellites or a combination
thereof. Such materials shall be broadcast ready and in form and format
acceptable to Licensee, and Licensee shall have no obligation to provide
additional production with respect thereto other than in accordance with its
customary past practices.
10.3 Political and Issue-Oriented Broadcasts. During the
Term of this Agreement, Broker shall not sell paid political programming or
announcements without the prior written approval of Licensee, and if so
granted Broker shall be responsible for preparing, and shall maintain and
deliver to the Station, such records and information required by the FCC to be
placed in the public inspection files of the Station pertaining to the
broadcast of paid political programming and advertisement furnished by Broker
in accordance with the provisions of Sections 73.1940 and 73.3526 of the FCC's
rules, and pertaining to the broadcast of paid issue-oriented programming and
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advertisements addressing political issues or controversial subjects of public
importance, in accordance with the provisions of Section 73.1212 of the FCC's
rules. Broker shall also consult with Licensee and adhere strictly to the
political advertising policies of Licensee and to the rules, regulations and
policies of the FCC, as announced from time to time, with respect to the
furnishing to Licensee for broadcast of paid political advertisements and
programming (including, without limitation, the rights of candidates and, as
appropriate, others to "equal opportunities" and the carriage of contrasting
points of view with respect to such "issue-oriented" advertising as may be
broadcast) and the charges permitted therefor. Broker will provide to Licensee
such documentation relating to such programming as Licensee shall reasonably
request.
10.4 Sponsorship. Broker, in compliance with Section 508 of
the Communications Act, will, in advance of any sale of advertising time,
disclose to Licensee any information of which Broker has knowledge, or which
has been disclosed to it, as to any money, service or other valuable
consideration which any person has paid or accepted, or has agreed to pay or
to accept, for the inclusion of any matter as a part of the commercial matter
to be supplied to Licensee pursuant to this Agreement. Broker will cooperate
with Licensee as necessary to ensure compliance with the Communications Act's
sponsorship identification requirements and with all rules, laws and
regulations pertaining to false and misleading advertising and programming.
Broker further agrees that it will at all times proceed in good faith to
assure compliance with the Federal Trade Commission rulings on installment
sales and other advertising practices.
10.5 Contests. Any commercial advertising time sold by
Broker under this Agreement for broadcast by Licensee which contains material
that deals with contests, similar commercial promotions and related schemes,
shall comply with all appropriate FCC rules and policies.
11. Additional Covenants and Agreements of Licensee.
In addition to its other obligations under this Agreement, Licensee covenants
and agrees that throughout the Term hereof:
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11.1 Rights to Advertising Materials. Licensee shall have no
right, title or interest in and to all advertising copy, continuity,
transcriptions, tapes, jingles, music, trademarks and trade names and all
manner of other intellectual property rights generated, arising out of or
connected with the advertising furnished by Broker to Licensee for broadcast
(whether or not any of such materials were produced at the Station or by the
Station's personnel) except for a license from Broker to broadcast same over
the Station pursuant to this Agreement.
11.2 Public Affairs. Licensee shall provide to Broker as
soon as practical prior to any broadcast of same a schedule of Licensee's
public affairs programming so that Broker may take account of same in
scheduling advertising announcements.
11.3 Affidavits of Deletion. Licensee shall provide to
Broker on a weekly basis during the Term hereof electronic or written
notification of which commercial advertising furnished by Broker was not
broadcast as scheduled during the preceding week.
12. Force Majeure. Any failure or impairment of facilities
or any delay or interruption in broadcasting due to acts of God, strikes or
force majeure, shall not constitute a breach of this Agreement. If desired,
broadcast interruption insurance shall be carried by Broker at Broker's
expense.
13. Compliance With Law. Broker and Licensee each agrees
that throughout the Term of this Agreement in their respective performance
hereunder, they will comply with all laws and regulations applicable in the
conduct of the Station's business.
14. Broker Events of Default. The following shall, after the
expiration of the applicable cure periods, constitute Events of Default by
Broker under this Agreement:
14.1 Non-Payment. If the Broker shall fail to timely
pay the amounts provided for in Section 7.4 hereof and which are set forth on
Schedule A.
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14.2 Default in Covenants. If the Broker shall
default in the material observance or performance of any material covenant,
condition or agreement contained herein.
14.3 Breach of Representation. If any material
representation or warranty made herein by Broker, or in any certificate or
document furnished to Licensee pursuant to the provisions hereof, shall prove
to be false or misleading in any material respect as of the time made or
furnished.
15. Licensee Events of Default. The following shall, after
the expiration of the applicable cure periods, constitute Events of Default by
Licensee under this Agreement:
15.1 Default in Covenants. If the Licensee shall
default in the material observance or performance of any material covenant,
condition or agreement contained herein.
15.2 Breach of Representation. If any material
representation or warranty made herein by Licensee, or in any certificate or
document furnished to Broker pursuant to the provisions hereof, shall prove to
be false or misleading in any material respect as of the time made or
furnished.
15.3 Failure to Broadcast. If Licensee shall fail to
broadcast ten percent (10%) of the advertising programs submitted by Broker
pursuant to this Agreement in any month during the term of this Agreement.
Notwithstanding the provisions of Section 16 hereof, there shall be no "cure"
period for an event of default pursuant to this Section 15.3.
16. Cure Periods. Except as provided in Section 15.3, an Event of
Default shall not be deemed to have occurred until ten (10) business days
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 the default
within said period, and such cure has not occurred within said time period.
This period may be extended for a reasonable period of time, if the defaulting
party is acting in good faith to cure the default and such delay is not
materially adverse to the other party.
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17. Termination.
17.1 Upon Default. In the event of the occurrence of an
Event of Default, the non-defaulting party may terminate this Agreement
provided that such party is not then also in default. In the event that a
dispute arises under this provision and litigation ensues, the prevailing
party in said litigation shall be entitled to recover reasonable attorneys'
fees and its related costs, and the parties agree that New York law shall
govern in any such dispute with the matter to be decided by the courts in the
State of New York. The parties agree that this Agreement has been executed in
the State of New York and both agree to be subject to the jurisdiction of the
state and federal courts in New York.
17.2 Upon Revocation, Non-Renewal or Other Governmental
Action. This Agreement shall terminate without further liability on the part
of either party hereto in the event that Licensee's license to operate the
Station is not renewed or is revoked by a final order of the FCC, or in the
event the parties are required to terminate this Agreement by judicial order
or any binding and enforceable order of any other administrative or
governmental entity. For the purposes of this Agreement, "final order" shall
mean an order of the FCC which has not been reversed or stayed, as to which no
administrative or judicial appeal, reconsideration, or review is pending or
has been requested, and with respect to which the time for the institution of
any further judicial or administrative appellate proceedings has expired.
18. No Joint Venture. This Agreement shall not create, nor
shall it be construed to create, any partnership or joint venture between the
parties hereto.
19. Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties and supersedes all prior
understandings, agreements or representations by or between the parties,
whether written or oral, which relate in any way to the subject matter hereof.
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20. Modification and Waiver. No modification or waiver of any
provision of this Agreement shall in any event be effective unless the same
shall be in writing signed by the party sought to be charged with such
modification or waiver, and then such waiver or modification and consent shall
be effective only in the specific instance and for the purpose for which
given.
21. No Waiver; Remedies Cumulative. No failure or delay on the part
of either party 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 either party of 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.
22. Construction. This Agreement shall be construed in accordance
with the laws of the State of New York, and the obligations of the parties
hereto are subject to all federal, state and municipal laws or regulations now
or hereafter in effect and to the regulations of the FCC and all other
governmental bodies or authorities presently or hereafter constituted.
23. Severability. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision or
portion of this Agreement shall be adjudicated to be invalid or unenforceable,
this Agreement shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of this section in the particular jurisdiction in
which such adjudication is made.
24. 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.
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25. Benefit and Assignment. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns, including any subsequent purchaser or
assignee of the Station or the Station's FCC licenses. Broker may not assign
any or all of its interests under this Agreement to a third party without the
prior written approval of Licensee, which approval shall not be unreasonably
withheld; provided, however, that Broker may assign its interests under this
Agreement to (a) any purchaser of all of Broker's radio stations, other than
Citadel Broadcasting Company, or (b) an affiliate or a wholly-owned subsidiary
of Broker, in either event without Licensee's consent.
26. Notices. Any notice required hereunder shall be in writing and
any payment, notice or other communication shall be deemed to have been duly
delivered and received on the date of personal delivery or on the date of
receipt, if mailed by registered or certified mail, postage prepaid and return
receipt requested, or on the date of a stamped receipt, if sent by an
overnight delivery service, and shall be addressed to the following addresses,
or to such other address as any party may request:
If to Licensee: Rook Broadcasting of Idaho, Inc.
450 University City Shopping Center
Spokane, Washington 99206
Attention: John Rook, President
Copy to: Vincent Pepper, Esq.
Pepper & Corazzini, P.A.
1776 K Street, N.W.
Suite 200
Washington, D.C. 20006
If to Broker: Triathlon Broadcasting of Spokane, Inc.
750 B Street
Suite 1920
San Diego, California 92101
Attention: Norman Feuer, President and CEO
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Copy to: Howard Berkower, Esq.
Baker & McKenzie
805 Third Avenue
New York, New York 10022
27. Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
ROOK BROADCASTING OF IDAHO, INC.
By: /s/John Rook
-------------------------------
Name: John Rook
Title: President
TRIATHLON BROADCASTING OF SPOKANE, INC.
By: /s/ Norman Feuer
--------------------------------
Name: Norman Feuer
Title: President and CEO
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SCHEDULE A
1. During each month of the Term of this Agreement, Broker agrees to
pay to Licensee the following amounts (the "Guaranteed Fixed Monthly
Payments") by no later than the tenth (10th) day of each month:
April 1997 through December 1997 $25,000 per month
January 1998 through December 1998 $31,000 per month
January 1999 through December 1999 $37,000 per month
January 2000 through December 2000 $42,000 per month
January 2001 through December 2001 $47,000 per month
Broker shall first deduct from the Guaranteed Fixed Monthly Payments due to
Licensee an amount sufficient to cover the monthly debt obligations owed by
Licensee to Deschutes and First Interstate (together, the "Licensee Debt
Obligations") for such month; and Broker shall, on Licensee's behalf each
month, pay to the holders of the Licensee Debt Obligations the amount so
deducted and shall remit to Licensee the balance of the Guaranteed Fixed
Monthly Payments.
2. During the Term of this Agreement, Broker shall pay to Licensee as
additional consideration for the right to sell the commercial advertising on
the Station an additional fee (the "Net Profits Payment") equal to (i) sixty
percent (60%) of the amount by which the Net Collected Revenues (as
hereinafter defined) for the Station in calendar year 1997 exceed $450,000
net; and (ii) in each of the remaining years of the Term, if the Station's
gross billings equal or exceed the Minimum Gross Billing Amount set forth
below, fifty percent (50%) of the amount by which the Net Collected Revenues
for the Station derived from the Minimum Gross Billing Amount exceed the Net
Collected Revenues derived from the Base Gross Billing Amount set forth below:
Year Minimum Gross Billing Amount Base Gross Billing Amount
---- ---------------------------- -------------------------
1998 $715,000.00 $660,000.00
1999 $786,500.00 $720,000.00
2000 $865,150.00 $798,600.00
2001 $951,665.00 $878,460.00
For the purposes of this Agreement, "Net Collected Revenues" shall mean all
revenues which are collected in any calendar year for the sale of commercial
advertising on the Station, whether local, regional or national, less all
sales and agency commissions. The Net Profits Payment shall be payable in
arrears within thirty (30) days following the end of each calendar year during
the Term of this Agreement.
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3. Licensee and Broker agree that each will pay fifty percent (50%)
of all advertising and promotion expenses incurred at the Station in
accordance with a promotional budget to be mutually agreed upon between the
parties.
4. Licensee shall have the right to utilize the services of Broker's
engineer at the Station at no cost to Licensee, and such engineer shall be
entitled to make required repairs to the Station's facilities at Licensee's
expense, subject to Licensee's prior approval for non-emergency repairs.
5. Broker shall pay that portion of the Station's ASCAP and BMI
Licensing Fees which are billed to the Station based upon the amount of the
Station's net billings each year in excess of the net billings derived from
the Gross Billings set forth below:
Year Net Billings in Excess Of Gross Billings Of
---- -------------------------------------------
1997 $600,000.00
1998 $660,000.00
1999 $720,000.00
2000 $798,600.00
2001 $878,460.00
6. All advertising rates for combination sales for the Station and
radio station KNFR(FM) shall be allocated proportionally between the stations
based on the Arbitron ratings for the stations in the Adults 25-54, 6 a.m. to
midnight, Monday to Sunday, demographic in the four (4) most recent Arbitron
books. The allocation between the stations shall be re-evaluated and
re-calculated every six (6) months during the Term.
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