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EXHIBIT 10(a)
TIME BROKERAGE AGREEMENT
Time Brokerage Agreement ("Agreement") dated as of March 4, 1999, by
and among REGENT BROADCASTING OF KINGMAN, INC., a Delaware corporation ("RBK"),
REGENT LICENSEE OF KINGMAN, INC., a Delaware corporation ("RLK") (RBK and RLK
referred to herein collectively as "Licensee"), and MAG MILE MEDIA, L.L.C., a
Delaware limited liability company ("Broker").
WHEREAS, RBK and RLK are the owner and licensee, respectively, of the
radio stations set forth on Attachment A hereto (referred to herein collectively
as the "Stations"); and
WHEREAS, RBK, RLK and Broker have entered into an Asset Purchase
Agreement dated as of March 4, 1999 (the "Purchase Agreement") for the
acquisition by Broker of all of the tangible and intangible assets of Licensee
used or held for use in the operation of the Stations, and the licenses issued
by the Federal Communications Commission for the operation of the Stations; and
WHEREAS, Licensee, while maintaining control over the Stations'
finances, personnel matters and programming desires to accept and broadcast
programming supplied by Broker on the Stations subject to the terms and
conditions set forth herein.
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained, the parties hereto have agreed and do agree as follows:
1. Air Time and Transmission Services. Licensee agrees, beginning on
April 1, 1999 (the "Commencement Date") to make the Stations' studio and
broadcast facilities available to Broker, and to broadcast, or cause to be
broadcast, on the Stations, according to the terms hereof, programming
designated and provided by Broker (the "Programming").
2. Payments. Broker hereby agrees to pay Licensee the amounts specified
in Attachment B for the right, from and after the Commencement Date, to
broadcast the Programming on the terms and conditions herein provided. Payments
of the Monthly Fee (as defined in Attachment B), are due and payable in full on
the first day of each calendar month for which such payment is intended to be
applied and shall be prorated for any partial calendar month at the beginning or
end of the term hereof. The failure of Licensee to demand or insist upon prompt
payment in accordance herewith shall not constitute a waiver of its right to do
so. Broker shall receive a payment credit for any Programming not broadcast by
any Station (a "Credit"), such Credit to be determined by multiplying the
monthly payment by the ratio of the amount of time preempted or not accepted to
the total number of hours of Programming each month. No credit shall be due on
account of any Programming rejected for failure to comply with the standards for
Programming set forth in this Agreement.
3. Term. The term of this Agreement shall begin on the Commencement
Date and end on the earliest of (i) the Closing Date, as defined in the Purchase
Agreement, or (ii) the
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date which is ten (10) days following any termination of the Purchase Agreement
in accordance with the terms thereof (such date hereinafter referred to as the
"Termination Date," and such period of time as the "Term").
4. Programming. Broker shall furnish or cause to be furnished the
Programming, which shall be an entertainment format and may include, without
limitation, news, promotions (including on-air giveaways), contests, syndicated
programs, barter programs, paid-for programs, locally-produced programs,
advertising commercial matter, including that in both program or spot
announcement forms, and public service information; provided, however, that the
Programming on each Station shall include news, public service announcements and
other programming on issues of importance to the local community as reasonably
requested by Licensee. The Programming shall be consistent with the standards
set forth in Attachment D. All actions or activities of Broker under this
Agreement, and all Programming provided by Broker shall be in accordance with
(i) the Communications Act of 1934, as amended; (ii) Federal Communications
Commission (the "FCC") rules, requirements and policies, including, without
limitation, the FCC's rules on plugola/payola, lotteries, station
identification, minimum operating schedule, sponsorship identification,
political programming and political advertising rates; (iii) all applicable
federal, state and local regulations and policies; and (iv) generally accepted
industry quality standards. Broker agrees that, if in the sole, good faith
judgment of the Licensee or any of the Stations' General Managers, Broker does
not comply with the standards of this paragraph, Licensee may suspend or cancel
any Programming not in compliance. Broker shall not be entitled to a Credit for
Programming not broadcast over the Station on account of any Programming
rejected for failure to comply with the standards for Programming set forth in
this Section 4. The right to use the Programming and to authorize its use in any
manner and in any media whatsoever shall be, and remain, vested solely in
Broker, subject in all events to the rights, if any, of others in such
Programming.
5. Special Events. Licensee reserves the right in its discretion, and
without liability, to preempt, delay or delete any of the broadcasts of the
Programming and to substitute programming which in Licensee's judgment is of
greater local, regional or national importance. In all such cases, Licensee
shall use its best efforts to give Broker reasonable notice of its intention to
preempt such Programming, and, in the event of such preemption, Broker shall
receive a payment credit for the Programming so omitted consistent with the
intent and pursuant to the terms of Section 2 hereof.
6. Advertising and Programming Revenues. Broker shall retain all
advertising and other revenues, and all accounts receivable, with respect to
Programming broadcast during the Term, and relating to the Programming it
delivers to the Stations for broadcast during the Term, including without
limitation, promotion-related revenues. Licensee and Broker each shall have the
right, at their own expense, to seek copyright royalty payments for their own
programming. Broker may sell advertising on the Stations in combination with the
sale of
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advertising on other broadcasting stations of its choosing, subject to
compliance with applicable law.
7. Station Facilities. Subject to the qualifications set forth in this
Agreement, throughout the term of this Agreement, Licensee shall make the
facilities and equipment of the Stations in good operating condition and repair
available to Broker for operation and broadcast with the maximum authorized
facilities twenty-four (24) hours a day, seven (7) days a week, except for
downtime occasioned by either (i) emergency maintenance or (ii) routine
maintenance not to exceed two (2) hours each Sunday morning between the hours of
12 midnight and 5:00 a.m., and except for such programs and announcements
prepared by and put on the air by Licensee in order to meet local needs and
issues requirements, said programs and announcements not to exceed one (1) hour
each Sunday morning at a mutually agreed upon time between the hours of 5:00
a.m. and 7:00 a.m. Broker shall not be entitled to a Credit for Programming not
broadcast over the Stations for periods specified in this Section 7 hereof. To
the extent practicable, any maintenance work affecting the operation of the
Stations at full power shall be scheduled upon at least forty-eight (48) hours
prior notice with the agreement of Broker, such agreement not to be unreasonably
withheld.
8. Right of Access. Broker and Broker's employees or agents shall at
all times be afforded reasonable access to the Stations in order to perform
their duties in connection with the production and transmission of the
Programming over the facilities of the Stations. Broker shall have the right to
install at Licensee's and/or Broker's premises, and to maintain throughout the
term of this Agreement, at Broker's expense, any microwave studio/transmitter
relay equipment, telephone lines, transmitter remote control, monitoring devices
or any other equipment necessary for the proper transmission of the Programming
on the Stations, and Licensee and Broker shall take all steps reasonably
necessary to prepare and file any applications with the FCC to effectuate such
proper transmission.
9. Force Majeure. Any failure or impairment of facilities or any delay
or interruption in broadcasting the Programming, or failure at any time to
furnish facilities, in whole or in part, for broadcasting, due to acts of God,
strikes, or threats thereof, force majeure, or due to causes beyond the control
of Licensee, shall not constitute a breach of this Agreement, and Licensee shall
not be liable to Broker for any damages or adjustments for such failure,
impairment, delay or interruption, except to the extent of allowing in each such
case an appropriate payment credit for Programming available to Licensee but not
carried consistent with the intent and pursuant to the terms of Section 2
hereof.
10. Licensee Control of Stations. Notwithstanding anything to the
contrary in this Agreement, Licensee shall have full authority, control and
power over the operation of the Stations during the period of this Agreement.
Licensee shall retain control, said control to be reasonably exercised, over the
policies, programming and operations of the Stations, including, without
limitation, the right to decide whether to accept or reject any Programming or
advertisements, the right to preempt any Programming in order to broadcast a
program deemed
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by Licensee to be of greater national, regional, or local interest, and the
right to take any other actions necessary for compliance with the laws of the
United States; the laws of the relevant states; the rules, regulations, and
policies of the FCC (including without limitation the prohibition on
unauthorized transfers of control); and the rules, regulations and policies of
other federal governmental authorities, including without limitation the Federal
Trade Commission and the Department of Justice. Licensee shall be responsible
for ensuring that FCC requirements are met with respect to ascertainment of the
problems, needs and interests of the community, public service programming, main
studio staffing, maintenance of public inspection files and the preparation of
quarterly issues/programs lists. Broker shall, upon request by Licensee, provide
Licensee with information with respect to such of Broker's programs which are
responsive to the problems, needs and interests of the community, so as to
assist Licensee in the preparation of required quarterly issues/programs lists,
and shall provide upon request other information to enable Licensee to prepare
other records, reports and logs required by the FCC or other local, state or
federal governmental agencies. Whenever on the Stations' premises, all Broker
personnel shall be subject to the supervision and the direction of Licensee's
designated personnel.
11. Responsibility for Employees and Expenses. Licensee shall employ
two full time employees at each main studio of the Stations, one of whom shall
be a manager, both of whom shall report to and be accountable to Licensee, and
who shall be ultimately responsible for the day-to-day operation of the
Stations. Licensee shall be directly responsible for paying the salaries, taxes,
insurance and related costs for such employees (the "Licensee Employee
Expenses"). Licensee shall be responsible for paying directly (i) transmitter
site rent/mortgage for the Stations; (ii) costs for maintenance and repair of
the transmission and other technical equipment; (iii) costs for capital
improvements and replacements; and (iv) transmitter site utilities for the
Stations ("Licensee Transmitter Expenses"). Licensee shall be responsible for
paying directly all income taxes relating to Licensee's earnings from this
arrangement. Broker shall employ and be responsible for the salaries, taxes,
insurance and related costs in accordance with Brokers employment practices for
all personnel used by it, excluding Licensee's two full time employees, in the
production of the Programming (including, without limitation, salespeople,
traffic personnel, administrative and programming staff) for Broker's use of the
studio and for routine maintenance and repair thereto (as opposed to maintenance
and repair of the transmission and other technical equipment and capital
improvements and replacements which shall be Licensee's responsibility).
Excluding those expenses for which Licensee is making payments as set forth in
this Section 11, during the Term, Broker shall be responsible for paying all
other expenses reasonably and directly related to the continued operation of the
Stations subject to the covenants of the parties to this Agreement (the "Other
Expenses"), and further subject to the ultimate authority, control and power of
Licensee.
11.1 Employee Matters.
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11.1.1 Licensee shall be responsible for the payment
of all compensation and accrued employee benefits payable to all Licensee
employees through the Commencement Date.
11.1.2 Licensee acknowledges and agrees that
Licensee, and not Broker, is and shall be solely responsible for any and all
insurance, supplemental pension, deferred compensation, retirement and any other
benefits, and related costs, premiums and claims due, to become due, committed
or otherwise promised to any person who, up to the Commencement Date who is a
retiree, former employee, or current employee of Licensee, relating to the
period up to the Commencement Date. Broker shall assume no employee benefit
plans, programs or practices, whether or not set forth in writing, maintained by
Licensee at any time. Broker shall have no obligation to any employee of
Licensee employed by Broker beyond the term of this Agreement, and shall not be
responsible for any other costs or expenses relating to the compensation of any
employee not hired or employed prior to the Term of this Agreement. Each
employee of Licensee employed by Broker shall be an employee at will and shall
be entitled to compensation and benefits, as offered, only up to and including
said employees term of employment with Broker.
12. Station Agreements.
12.1 Assignment and Assumption of Station Agreements. On the
Commencement Date, Licensee shall assign to Broker and Broker shall assume,
subject to the provisions of this Section 12, the obligations of Licensee
arising or to be performed on and after the Commencement Date (except to the
extent such obligations represent liabilities for activities, events or
transactions occurring, or conditions existing, on or prior to the Commencement
Date) under (a) all of the contracts which comprise Broadcast Assets (as defined
in the Purchase Agreement), excluding (i) contracts and agreements relating to
the Licensee Employee Expenses, (ii) contracts and agreements relating to the
Licensee Transmitter Expenses, (iii) Licensee's financing agreements and (iv)
corporate level contracts and agreements, except, if any, those listed on
Attachment C (collectively, the contracts and agreements to be assigned by
Licensee and assumed by Broker are referred to as the "Station Agreements").
Licensee hereby makes and incorporates by reference the representations and
warranties of Sellers in Section 14(e) of the Purchase Agreement. Licensee
represents and warrants that the Station Agreements are freely assignable, or,
if consent of the other contracting party to the assignment is required,
Licensee will use its reasonable best efforts to obtain such consent as promptly
as practicable. As of the Commencement Date, Licensee shall have paid all
amounts due on and shall have performed all obligations due under the Station
Agreements as of that date.
12.2 Consents to Assignment. To the extent that any Station
Agreement is not capable of being assigned, transferred, delivered or subleased
without the waiver or consent of any third person (including a government or
governmental unit), or if such assignment, transfer, delivery or sublease or
attempted assignment, transfer, delivery or sublease would
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constitute a breach thereof or a violation of any law or regulation, this
Agreement and any assignment executed pursuant thereto shall not constitute an
assignment, transfer, delivery or sublease or an attempted assignment, transfer,
delivery or sublease thereof. In those cases where consents, assignments,
releases and/or waivers have not been obtained at or prior to the Commencement
Date to the transfer and assignment to Broker of any Station Agreement, this
Agreement and any assignment executed pursuant hereto, to the extent permitted
by law, shall constitute an equitable assignment by Licensee to Broker of all of
Licensee's rights, benefits, title and interest in and to the Station
Agreements, and where necessary or appropriate, Broker shall be deemed to be
Licensee's agent for the purpose of completion, fulfilling and discharging all
of Licensee's rights and liabilities arising after the Commencement Date under
such Station Agreements up to and including the date of termination of this
Agreement. Licensee shall use its reasonable best efforts to provide Broker with
the financial and business benefits of such Station Agreements (including,
without limitation, permitting Broker to enforce any rights of Licensee arising
under such Station Agreements), and Broker shall, to the extent Broker is
provided with the benefits of such Station Agreements, assume, perform and in
due course pay and discharge all debts, obligations and liabilities of Licensee
under such Station Agreements to the extent that Broker was to assume those
obligations pursuant to the terms hereof up to and including the date of
termination of this Agreement.
12.3 Retained Liabilities. Except as set forth in Sections 11
and 12 hereof, Broker expressly does not, and shall not, assume or agree to pay,
satisfy, discharge or perform and will not be deemed by virtue of the execution
and delivery of this Agreement or any agreement, instrument or document
delivered pursuant to or in connection with this Agreement or otherwise by
reason of or in connection with the consummation of the transactions
contemplated hereby or thereby, to have assumed or to have agreed to pay,
satisfy, discharge or perform, any liabilities, obligations or commitments of
Licensee of any nature whatsoever whether accrued, absolute, contingent or
otherwise and whether or not disclosed by Broker, other than the Station
Agreements. Licensee will retain and pay, satisfy, discharge and perform in
accordance with the terms thereof, all liabilities and obligations of the
Licensee, other than the Station Agreements, including but not limited to, the
obligation to assume, perform, satisfy or pay any liability, obligation,
agreement, debt, charge, claim, judgment or expense incurred by or asserted
against Licensee related to taxes, environmental matters, pension or retirement
plans or trusts, profit-sharing plans, employment contracts, employee benefits,
severance of employees, product liability or warranty, negligence, contract
breach or default, copyright, trademarks, service mark, trade name and other
intellectual property, or other obligations, claims or judgments asserted
against Broker as successor in interest to Licensee. All such liabilities,
obligations and commitments of Licensee described in this Section 12.3 shall be
referred to herein collectively as the "Retained Liabilities."
13. Accounts Receivable. Broker acknowledges that all accounts
receivable arising prior to the Commencement Date in connection with the
operation of the Stations, including but not limited to accounts receivable for
advertising revenues for programs and announcements performed prior to the
Commencement Date and other broadcast revenues for
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services performed prior to the Commencement Date, shall remain the property of
Licensee (the "Licensee Accounts Receivable") and that Broker shall not acquire
any beneficial right or interest therein or responsibility therefor. During the
term of this Agreement ("Collection Period"), Broker agrees to use reasonable
efforts to assist Licensee in collection of the Licensee Accounts Receivable in
the normal and ordinary course of business without remuneration and will apply
all such amounts collected to the debtor's oldest account receivable first,
except that any such accounts collected by Broker from persons who are also
indebted to Broker may be applied to Broker's account under circumstances in
which there is a bona fide dispute between Licensee and such account debtor with
respect to such account provided that such disputed accounts are reassigned to
Licensee. Broker's obligation and authority shall not extend to the institution
of litigation, employment of counsel or a collection agency or any other
extraordinary means of collection. Broker agrees to reasonably cooperate with
Licensee, at Licensee's expense, as to any litigation or other collection
efforts instituted by Licensee to collect any delinquent Licensee Accounts
Receivable. During the Collection Period, neither Licensee nor its agents shall
make any direct solicitation of any account debtor for collection purposes or
institute litigation for the collection of amounts due except with respect to
any accounts that may be reassigned to Licensee. Any amounts relating to the
Licensee Accounts Receivable that are paid directly to the Licensee shall be
retained by the Licensee, but Licensee shall provide Broker with prompt notice
of any such payment.. Amounts collected by Broker on account of Licensee
Accounts Receivable shall be remitted in full to RBK on a monthly basis, by the
fifteenth (15th) day of the month following the month for which remittance is
due, provided that Broker may deduct from such amounts and be responsible for
paying commissions due on the collected Licensee Accounts Receivable in
accordance with Attachment G hereto.
14. Proration of Income and Expenses: Trade Agreements Adjustment.
14.1 Except as otherwise provided herein, all deposits,
reserves and prepaid and deferred income and expenses relating to the Station
Agreements shall be prorated between Broker and Licensee in accordance with
general accepted accounting principles as of 11:59 p.m., Pacific time, on the
date immediately preceding the Commencement Date.
14.2 Schedule 14.2 will include a list of all Trade Agreements
as of the Commencement Date included in the Station Agreements and the aggregate
value of time owed ("Barter Payable") pursuant to each of the Trade Agreements
and the aggregate value of goods and services to be received ("Barter
Receivable") pursuant to each of the Trade Agreements, in each case as of the
date specified on Schedule 14.2 hereof. On the Commencement Date, Licensee shall
deliver to Broker a report, dated as of the Commencement Date (the "Commencement
Date Trade Report"), which report lists all Trade Agreements included in the
Station Agreements and the contract end date for each Trade Agreement together
with a true and correct itemized statement of the aggregate value of the Barter
Payable and Barter Receivable pursuant to each of the Trade Agreements. To the
extent that the aggregate net value as reflected on the Commencement Date Trade
Report of the Stations' Barter Payable
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exceeds the aggregate net value as reflected on the Commencement Date Trade
Report of the Barter Receivable by more than $15,000.00, Broker shall be
entitled to receive the amount of such excess over $15,000.00 as a credit
against the Purchase Price in accordance with the terms of the Purchase
Agreement. In the event that the acquisition of the Station ("Barter Amount") by
Broker from Licensee pursuant to the Purchase Agreement is not consummated for
any reason other than a default by it, Broker shall be entitled to receive cash
for any barter liability below the Barter Amount as of the date hereof and
Licensee shall be entitled to receive cash for any barter liability over the
Barter Amount, as of the date hereof.
14.3 Except as otherwise provided herein, the prorations and
adjustments contemplated by this Section 14, to the extent practicable, shall be
made on the Commencement Date. As to those prorations and adjustments not
capable of being ascertained on the Commencement Date, an adjustment and
proration shall be made within ninety (90) calendar days after the Commencement
Date.
14.4 In the event of any disputes between the parties as to
such adjustments, the amounts not in dispute shall nonetheless be paid at the
time provided in Section 14.3 hereof and such disputes shall be determined by an
independent certified public accountant mutually acceptable to the parties, and
the fees and expenses of such accountant shall be paid one-half by Licensee and
one-half by Broker.
15. Indemnification.
15.1 Indemnification. Broker shall indemnify and hold Licensee
and its stockholders, directors, partners, officers, agents, employees,
successors, and assigns harmless from and against any and all claims, expenses,
causes of action and liability resulting from or relating to (i) the broadcast
of Programming during the Term, (ii) any and all promotions, contests and on-air
"giveaways" by Broker relating to the Stations during the Term, (iii) a breach
of Broker's representations, warranties, covenants or agreements contained
herein, (iv) any liability resulting from Broker's default under the Station
Agreements, and (v) all other matters arising out of or related to Broker's
activities involving the Stations or use of the Licensee Station facilities or
relating to the obligations assumed by Broker in connection with this Agreement
including but not limited to any damage caused to Station equipment by Broker,
its employees, or agents. Licensee agrees to indemnify, defend, and hold
harmless Broker and its members, managers, officers, agents, employees,
successors and assigns from and against any and all liability that arises out of
(i) material broadcast by Licensee other than the Programming, programming the
Licensee directs to be broadcast or programming that Licensee refuses to
broadcast, (ii) liabilities (but not loss of advertising revenue) that arise as
a result of Licensee's alteration of any and/or all Programming prior to
broadcast by Licensee; and (iii) the Retained Liabilities.
15.2 Procedures: Third Party and Direct Indemnification
Claims. The indemnified party agrees to give written notice within a reasonable
time to the indemnifying
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party of any demand, suit, claim or assertion of liability by third parties or
other circumstances that could give rise to an indemnification obligation
hereunder against the indemnifying party (hereinafter collectively "Claims," and
individually a "Claim"), it being understood that the failure to give such
notice shall not affect the indemnified party's right to indemnification and the
indemnifying party's obligation to indemnify as set forth in this Agreement,
unless the indemnifying party's ability to contest, defend or settle with
respect to such Claim is thereby demonstrably and materially prejudiced.
The obligations and liabilities of the parties hereto with respect to
their respective indemnities pursuant to Section 15.1 resulting from any Claim
shall be subject to the following additional terms and conditions:
The indemnifying party shall have the right to undertake, by counsel or
other representatives of its own choosing, the defense or opposition to such
Claim.
15.2.1 In the event that the indemnifying party shall
elect not to undertake such defense or opposition, or within ten days after
notice of any such Claim from the indemnified party shall fail to defend or
oppose, the indemnified party (upon further written notice to the indemnifying
party) shall have the right to undertake the defense, opposition, compromise or
settlement of such Claim, by counsel or other representatives of its own
choosing, on behalf of and for the account and risk of the indemnifying party
(subject to the right of the indemnifying party to assume defense of or
opposition to such Claim at any time prior to a binding settlement, compromise
or final determination thereof).
15.2.2 Anything in this Section 15.2 to the
contrary notwithstanding: (a) the indemnified party shall have the right, at its
own cost and expense, to participate in the defense, opposition, compromise or
settlement of the Claim; (b) the indemnifying party shall not, without the
indemnified party's written consent, settle or compromise any Claim or consent
to entry of any judgment which does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the indemnified party of a
release from all liability in respect of such Claim; and (c) in the event that
the indemnifying party undertakes defense of or opposition to any Claim, the
indemnified party, by counsel or other representative of its own choosing and at
its sole cost and expense, shall have the right to consult with the indemnifying
party and its counsel or other representatives concerning such Claim and the
indemnifying party and the indemnified party and their respective counsel or
other representatives shall cooperate in good faith with respect to such Claim.
15.2.3 No undertaking of defense or opposition to a
Claim shall be construed as an acknowledgment by such party that it is liable to
the party claiming indemnification with respect to the Claim at issue or other
similar Claims.
16. Events of Default: Cure Periods and Remedies.
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16.1 Events of Default. The following shall, after the
expiration of the applicable cure periods, constitute Events of Default under
the Agreement:
16.1.1 Non-Payment. Broker's failure to timely pay
the consideration provided for in Section 2 and Attachment B hereof which is not
cured within five (5) business days following notice in accordance with Section
16.2 hereof;
16.1.2 Default in Covenants or Adverse Legal
Action. The default by any party hereto in the material observance or
performance of any material covenant, condition or agreement contained herein
which is not cured within five (5) business days following notice in accordance
with Section 16.2 hereof, or if (a) any party shall make a general assignment
for the benefit of creditors, (b) any party shall file or have filed against it
a petition for bankruptcy, for reorganization or an arrangement, or for the
appointment of a receiver, trustee or similar creditors' representative for the
property or assets of such party under any federal or state insolvency law,
which, if filed against such party, has not been dismissed or discharged within
sixty (60) days thereof, or (c) specifically and without limitation, if
Licensee's successors and assigns, including, without limitation, any assignee
of the FCC license for the Stations, except if such successor or assign is
Broker or an affiliate of Broker, refuses to abide by or terminates this
Agreement during the term of this Agreement.
16.1.3 Breach of Representation. If any material
representation or warranty herein made by either party hereto, or in any
certificate or document furnished by either party to the other pursuant to the
provisions hereof, shall prove to have been false in any material respect as of
the time made or furnished and is not cured within thirty (30) days following
notice in accordance with Section 16.2 hereof.
16.1.4 Breach of Purchase Agreement. The breach by
any party or their affiliates in the observance or performance of any
representation, warranty, covenant, condition or agreement in the Purchase
Agreement which is not cured within any time period provided for such cure under
the Purchase Agreement and which breach gives rise to a right to a party to
terminate the Purchase Agreement pursuant to Section 28 of the Purchase
Agreement, provided that no party may use its or its Affiliate's own breach
under the Purchase Agreement as grounds to terminate this Agreement.
16.2 Cure Periods. An Event of Default shall not be deemed to
have occurred until after the nondefaulting party has provided the defaulting
party with written notice specifying the event or events that if not cured would
constitute an Event of Default and specifying the actions necessary to cure
within the relevant cure period. The Event of Default shall not be deemed to
have occurred if actions necessary to cure are completed during the relevant
cure period.
16.3 Termination Upon Default. Upon the occurrence of an Event
of Default, the non-defaulting party may terminate this Agreement provided that
it is not also in material default hereunder, and may seek such remedies at law
and/or equity as are available, including
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without limitation specific performance. If Broker has defaulted in the
performance of its obligations, Licensee shall be under no further obligation to
make available to Broker any further broadcast time or broadcast transmission
facilities and, without limitation of remedies, all amounts accrued or payable
to Licensee up to the date of termination which have not been paid, less any
payment credits, shall immediately become due and payable.
16.4 Liabilities Upon Termination. Upon termination of this
Agreement, Broker shall be responsible for all liabilities, debts and
obligations of Broker accrued from the purchase of air time and transmission
services including, without limitation, accounts payable, barter agreements and
unaired advertisements, but not for Licensee's federal, state, and local tax
liabilities associated with Broker's payments to Licensee as provided for
herein. With respect to Broker's obligations to broadcast material over the
Stations after termination hereunder, Broker may propose compensation to
Licensee for meeting these obligations, but Licensee shall be under no duty to
accept such compensation or to perform such obligations. Upon termination,
Broker shall return to Licensee any equipment or property of the Stations used
by Broker except for such equipment purchased by Broker, its employees or
agents, in substantially the same condition and location as such equipment
existed on the date of this Agreement, ordinary wear and tear excepted, and
Broker shall assign to Licensee the still outstanding Station Agreements that
were assigned to Broker pursuant to Section 12 hereof and any new contracts
entered into by Broker relating to the Stations that Licensee expressly agrees
to assume. Notwithstanding anything in the foregoing to the contrary,
termination shall not extinguish any rights of either party as may be provided
by Section 15 hereof.
17. Broker Termination Option. Broker may elect to terminate this
Agreement at any time during the term hereof in the event that Licensee preempts
or substitutes other programming for that supplied by the Broker during ten
percent (10%) or more of the total hours of operation of the Stations during any
calendar month. In the event Broker elects to terminate this Agreement pursuant
to this provision, it shall give Licensee notice of such election at least ten
(10) days prior to the termination date. Upon termination, neither party shall
have any further liability to the other except as may be provided by Sections 15
and 16.4 hereof.
18. Responsive Programming. Broker and Licensee mutually acknowledge
their interest in ensuring that the Stations serve the needs and interests of
the residents of the Stations' community of license and service areas and agree
to cooperate in doing so. Licensee shall, on a regular basis, assess the issues
of concern to residents of the Stations' community of license and service areas
and address those issues in its public service programming. Licensee shall
describe those issues and responsive programming and place issues/programs lists
in the Stations' public inspection file as required by FCC rules. The
Programming shall include material that is responsive to the issues identified
by Licensee. Licensee may request, and Broker shall provide, information
concerning such of Broker's Programming that is responsive to community issues
so as to assist Licensee in the satisfaction of its public service programming
obligations. Broker shall also provide to Licensee upon request such other
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information necessary to enable Licensee to prepare records and reports required
by the FCC or other local, state or federal government entities.
19. Time Brokerage Challenge. If this Agreement is challenged in
whole or in part at or by a governmental authority or is challenged in whole or
in part in a judicial forum, counsel for the Licensee and counsel for the Broker
shall jointly defend this Agreement and the parties' performance thereunder
throughout all such proceedings. If this Agreement is declared invalid or
illegal in whole or in substantial part by a ruling, order or decree of a
governmental authority or court, and such ruling, order or decree has become
effective, then the parties shall endeavor in good faith to reform the Agreement
as necessary. If the parties are unable to reform this Agreement within thirty
(30) days of the effective date of such ruling, order or decree, then this
Agreement shall terminate, and all sums owing to Licensee shall be paid and
neither party shall have any further liability to the other except as may be
provided by Section 15 hereof.
20. Additional Representations, Warranties and Covenants.
20.1 Mutual Representations, Warranties and Covenants.
Both Licensee and Broker represent that they are legally qualified, empowered,
and able to enter into this Agreement, and that the execution, delivery and
performance hereof shall not constitute a breach or violation of any agreement,
contract or other obligation to which either party is subject or by which it is
bound.
20.2 Additional Licensee Representations, Warranties and
Covenants. Licensee makes the following further representations, warranties and
covenants:
20.2.1 Authorizations. During the term of this
Agreement, Licensee shall own and hold all licenses and other permits and
authorizations necessary for the operation of the Stations as presently
conducted (including licenses, permits and authorizations issued by the FCC),
and such licenses, permits and authorizations shall be in full force and effect
for the entire Term hereunder, unimpaired by any acts or omissions of Licensee,
its principals, employees or agents. Licensee hereby makes and incorporates by
reference the representations, warranties and covenants of Sellers set forth in
the Purchase Agreement that pertain to Licensee, its assets or its operation of
the Stations.
20.2.2 Payment of Obligations. Licensee shall not
incur any debt, obligation or liability without the prior written consent of
Broker if such undertaking would adversely affect Licensee's performance
hereunder or the business and operations of the Broker permitted hereby. Subject
to the provisions of Sections 2 and 11 hereof, Licensee shall pay in a timely
fashion all of its debts, assessments and obligations, including without
limitation tax liabilities and payments in each case attributable to the
operations of the Stations, as they come due during the Term of this Agreement.
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20.2.3 Broadcast Obligations. Licensee has no
agreement, contract, commitment or understanding to broadcast on the Stations on
or after the Commencement Date, any programs or commercial matter other than the
Station Agreements. Licensee shall not incur any other programming obligations
without the prior written consent of Broker except in connection with
programming obligations incurred by Licensee for programming that replaces
Programming that does not meet the standards set forth in this Agreement.
20.2.4 Licensee Control. Licensee hereby verifies
that for the term of this Agreement it shall maintain ultimate control over the
Stations' facilities, including specifically control over the Stations'
finances, personnel and programming, and nothing herein shall be interpreted as
depriving Licensee of the power or right of such ultimate control.
20.2.5 Insurance. Licensee shall maintain in full
force and effect (at Broker's expense) throughout the term of this Agreement
insurance with responsible and reputable insurance companies or associations
covering such risks (including fire and other risks insured against by extended
coverage, public liability insurance, insurance for claims against personal
injury or death or property damage and such other insurance as may be
applicable) and in such amounts and on such terms as is conventionally carried
by broadcasters operating radio stations with facilities in the area comparable
to those of the Stations. Broker shall be listed as an additional insured on
such insurance policies. Any insurance proceeds received by Licensee in respect
of damaged property shall be used to repair or replace such property so that the
operations of the Stations conform with this Agreement. Licensee shall present
to Broker prior to the execution of this Agreement certificates of insurance or
binders for such insurance policies. If requested by Broker, Licensee shall
maintain, at Broker's expense, business interruption insurance for Broker's
benefit.
20.2.6 Compliance with Law. Licensee covenants that,
throughout the term of this Agreement, Licensee shall comply with all laws and
regulations applicable in the conduct of Licensee's business and Licensee
acknowledges that Broker has not urged, counseled, or advised the use of any
unfair business practice.
20.3 Additional Broker Representations, Warranties and
Covenants.
20.3.1 Compliance with 47 C.F.R. Section 73.3555(a).
Broker hereby verifies that execution and performance of this Agreement complies
with the Commission's restrictions on local radio ownership set out in Section
73.3555(a) of the FCC Rules.
20.3.2 Compliance with Applicable Law. Broker
covenants that its performance of its obligations under this Agreement and its
furnishing of Programming shall be in compliance with, and shall not violate,
any applicable laws or any applicable rules, regulations, or orders of the FCC
or any other governmental agency and Broker acknowledges that Licensee has not
urged, counseled, or advised the use of any unfair business practice.
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20.3.3 Handling of Complaints. Broker shall promptly
advise Licensee of any public or FCC complaint or inquiry that Broker receives
concerning the Programming on the Stations and shall cooperate with Licensee and
take all actions as may be reasonably requested by Licensee in responding to any
such complaint or inquiry.
20.3.4 Copyright and Licensing. Broker represents and
warrants to Licensee that Broker has and shall have throughout the term of this
Agreement the full authority to broadcast the Programming on the Stations and
that Broker shall not broadcast on the Stations any material in violation of the
Copyright Act. All music supplied by Broker shall be: (i) licensed by ASCAP,
SESAC or BMI; (ii) in the public domain; or (iii) cleared at the source by
Broker.
20.3.5 Information For FCC Reports. Upon request by
Licensee, Broker shall provide in a timely manner any such information in its
possession which shall enable Licensee to prepare, file or maintain the records
and reports required by the FCC.
20.3.6 Payola/Plugola. Broker covenants that it shall
not accept, and shall instruct its employees not to 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,
materials, supplies or other merchandise, services or labor, whether or not
pursuant to written contracts or agreements between Broker and merchants or
advertisers, unless the payer is identified in the program as having paid for or
furnished such consideration, in accordance with FCC requirements. Broker agrees
to annually, or more frequently at the request of Licensee, execute and provide
Licensee with an affidavit regarding payola/plugola compliance.
21. Intellectual Property. Effective as of the Commencement Date,
Licensee licenses to Broker the exclusive right to use all intellectual property
owned by or licensed to Licensee and used solely in the operation of the
Stations (including, but not limited to, logos, jingles, promotional materials,
call signs, goodwill, trademarks, service marks, slogans, trade names,
copyrights and any applications and registrations therefor) (the "IP License").
In the event of termination of this Agreement, the IP License shall terminate.
22. Subcarrier Rights. Licensee and Broker acknowledge and agree that
any subsidiary communications services transmitted on a subcarrier within the FM
baseband signal of any of the Stations ("Subcarrier"), and any uses of the
Subcarrier authorized by the FCC ("Subcarrier Uses"), are subject to the terms
and conditions of this Agreement. Licensee hereby agrees (a) to apply, at
Broker's expense, for any additional authorization from the FCC or any other
governmental agency or entity that may be necessary in order to make use of any
Subcarrier Uses, and (b) that Broker has the sole and exclusive right, subject
to the terms and conditions hereof, to make use of any Subcarrier Uses and
collect the revenues therefrom. Broker hereby agrees to reimburse Licensee for
Licensee's reasonable expenses incurred in
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carrying out Licensee's obligations pursuant to this Section 22, including
reasonable attorneys and engineering fees and expenses.
23. Publicity. Licensee and Broker shall not issue any press release or
otherwise make any public statement with respect to the transactions
contemplated herein except as may be required by law or regulation or as agreed
to by Licensee and Broker.
24. No Waiver; Remedies Cumulative. No failure or delay on the part of
Licensee or Broker in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of Licensee and Broker herein
provided are cumulative and are not exclusive of any right or remedies which it
may otherwise have.
25. Construction. This Agreement shall be construed in accordance with
the laws of the State of Arizona, without giving effect to the choice of law
provisions thereunder, and the obligations of the parties hereto are subject to
all federal, state or municipal laws or regulations now or hereafter in force
and to the regulations of the FCC and all other governmental bodies or
authorities presently or hereafter to be constituted.
26. 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.
27. Parties in Interest; Assignment. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties to this
Agreement shall bind and inure to the benefit of their respective successors and
assigns, whether so expressed or not. 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 the other parties, which
consent shall not be unreasonably withheld.
28. Notices. All notices, demands, requests, or other communications
which may be or are required to be given or made by any party to any other party
pursuant to this Agreement shall be in writing and shall be hand delivered,
mailed by first-class registered or certified mail, return receipt requested,
postage prepaid, delivered by overnight air courier, or transmitted by telegram,
telex, or facsimile transmission addressed in accordance with the listing set
forth in Attachment E hereto or such other address as the addressee may indicate
by written notice to the other parties. Each notice, demand, request, or
communication which shall be given or made in the manner described above shall
be deemed sufficiently given or made for all purposes at such time as it is
delivered to the addressee (with the return receipt, the delivery receipt, the
affidavit of messenger or (with respect to a telex or facsimile) the answerback
being deemed conclusive but not exclusive evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
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29. Entire Agreement. This Agreement and the Purchase Agreement and
related documents embody the entire agreement between the parties and there are
no other agreements, representations, warranties, or understandings, oral or
written, between them with respect to the subject matter hereof. No alterations,
modification or change of this Agreement shall be valid unless made in writing,
and signed by like written instrument. No waiver of any provision hereof shall
be valid unless in writing and signed by the party adversely affected by the
waiver, and then such waiver shall be effective only in the specified instance
and for the purpose for which given.
30. Severability. In the event that any of the provisions contained in
this Agreement is held to be invalid, illegal or unenforceable such event shall
not affect any other provision hereof, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provisions had not been contained
herein.
31. Counterpart Signatures. This Agreement may be signed in one or more
counterparts, each of which shall be deemed a duplicate original, binding on the
parties hereto notwithstanding that the parties are not signatory to the
original or the same counterpart. This Agreement shall be binding and effective
as of the date on which the executed counterparts are exchanged by the parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
REGENT BROADCASTING OF KINGMAN, INC.
By:_____________________________
Name:___________________________
Title:__________________________
REGENT LICENSEE OF KINGMAN, INC.
By: /s/_________________________
Name: /s/_______________________
Title: /s/______________________
MAG MILE MEDIA, L.L.C.
By: /s/_________________________
Name: /s/_______________________
Title: /s/______________________