EXHIBIT 10.1
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TIME BROKERAGE AGREEMENT
This Time Brokerage Agreement ("Agreement") is made this 15th day of
February, 1995, by and between GE RADIO COMPANY ("Licensee") and ALTA CALIFOR-
NIA BROADCASTING, INC., a corporation organized under the laws of the State of
California ("Broker") ("Licensee" and "Broker" being jointly referred to herein
as the "Parties").
WHEREAS, Licensee is authorized to operate Radio Stations KHSL(AM) and
KHSL-FM (the "Stations"), Chico and Paradise, California, pursuant to authori-
zations issued by the Federal Communications Commission ("FCC");
WHEREAS, the Parties have carefully considered the FCC's time brokerage
policies and intend that this Agreement in all respects comply with such
policies;
WHEREAS, Licensee desires to enter into this Agreement to provide a
regular source of diverse programming and income to sustain the operations of
the Stations;
WHEREAS, Broker desires to provide an over-the-air program service to the
Chico and Paradise, California area using the facilities of the Stations;
WHEREAS, Licensee agrees to provide time on the Stations exclusively to
Broker on terms and conditions that conform to policies of the Stations and the
FCC for time brokerage arrangements and that are as set forth herein;
WHEREAS, Broker agrees to utilize the facilities of the Stations solely to
broadcast such programming of its selection that conforms with the policies of
Licensee as set forth in Exhibit A hereto and with all rules, regulations, and
policies of the FCC, and as set forth herein; and
WHEREAS, the Licensee and the Broker have entered into an Asset Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"), by which the
Broker will purchase the assets of, and accept the assignment of the licenses
issued by the FCC with respect to, the Stations.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
promises set forth herein, Licensee and Broker, intending to be bound legally,
hereby agree as follows:
1. FACILITIES. Licensee agrees to make the broadcasting studio and
transmission facilities of the Stations available to Broker and to broadcast on
the Stations, or cause to be broadcast, Broker's programs which shall originate
either from Broker's own studios or from other studios contracted for by
Broker. To the extent necessary or desired by Broker, the Stations' studio
building, transmitter site and transmission facilities and equipment shall be
made available by Licensee to Broker for Broker's use at Seller's out-of-pocket
cost during the Term of this Agreement, to the extent that such facilities are
not actually needed or in use for Licensee's own broadcasts on the Stations.
2. PAYMENT.
(a) BASIC PAYMENT.
As consideration for Licensee's permitting Broker to air its
programming on the Stations pursuant to this Agreement, Broker shall pay to
Licensee the sum of Three Thousand Dollars ($3,000.00) on the first day of each
month during which this Agreement is in effect (the "Monthly Payment"). In the
even that, for any month, this Agreement is in effect for less than the full
month,m the consideration to be paid pursuant to this Paragraph shall be pro
rated such that Licensee shall be compensated for that portion of the month
during which the Agreement is in effect.
(b) LICENSEE'S ACCOUNTS RECEIVABLE.
On the Commencement Date, Licensee shall assign to Broker for
purposes of collection only, all of the Licensee's accounts receivable except
each account more than sixty (60) days overdue and upon which no payment has
been received within the sixty (60) days prior to Commencement Date. Broker
shall use such efforts as are reasonable and in the ordinary course of business
to collect the accounts receivable for a period of one hundred twenty (120)
days following the Commencement Date (the "Collection Period"). This obliga-
tion, however, shall not extend to the institution of litigation, employment of
counsel, or any other extraordinary means of collection. So long as the
accounts receivable are in Broker's possession, neither Licensee nor its agents
shall make any solicitation of them for collection purposes or institute
litigation for the collection of any amounts due thereunder. All payments
received by Broker during the Collection Period from any person or entity
obligated with respect to any of the accounts receivable shall be applied first
to Licensee's account and only after full satisfaction thereof to Broker's
account; provided, however, that if during the Collection Period any account
debtor contests in writing the validity of its obligation with respect to any
account receivable, then Broker shall return that account receivable to
Licensee after which Licensee shall be solely responsible for the collection
thereof. Within ten (10) days after the end of each calendar month during the
Collection Period (or if such day is a weekend or holiday, on the next business
day), Broker shall furnish Licensee with a list of the accounts receivable
collected during the prior calendar month and shall pay to Licensee the full
amount collected with respect to the accounts receivable during such month.
Any of the accounts receivable that are not collected during the Collection
Period shall be reassigned to Licensee after which Broker shall have no further
obligation to Licensee with respect to the accounts receivable; provided,
however, that all funds subsequently received by Broker (without time limita-
tion) that can be specifically identified, whether by accompanying invoice or
otherwise, as payment on any account receivable belonging to Licensee shall be
promptly paid to Licensee. Broker shall not have the right to compromise,
settle or adjust the amounts of any of the accounts receivable without
Licensee's prior written consent, or to withhold any proceeds or the accounts
receivable or to retain any uncollected accounts receivable after the
expiration of the Collection Period for any reason whatsoever. Licensee shall
be responsible for the payment of all commissions due with respect to the
accounts receivable.
3. TERM. This Agreement shall commence on February 15, 1995. The Term
of this Agreement shall be coincident with the duration of the Purchase
Agreement, such that this Agreement will terminate automatically upon the
consummation or termination of the Purchase Agreement, unless earlier
terminated as provided in this Agreement.
4. PROGRAMS. Broker shall furnish or cause to be furnished the programs
to be broadcast, which shall be in good taste and in accordance with the rules,
regulations and policies of the Federal Communications Commission ("Commission"
and/or "FCC") and the Communications Act of 1934, as amended (the
"Communications Act"). Licensee is aware that Broker's current intention is to
program the Stations with the programming that is directed to the country and
western music audience. The Broker may place programming over the Stations up
to a maximum of one hundred sixty-six hours per week per station and shall
supply Licensee with no less than one hundred sixty hours per week per station
of programming. Broker recognizes that Licensee continues to have obligations
under certain barter agreements into which the Licensee has entered.
5. STATION FACILITIES.
5.1 OPERATION OF STATIONS.
The Licensee represents that the Stations will operate
throughout the Term of this Agreement in accordance with the authorizations
issued to it by the FCC and all applicable FCC Rules. The Licensee's reserved
air time of at least two (2) hours per week shall be scheduled between the
hours of 7:00 a.m. and 12:00 noon on Sundays. Any routine or non-emergency
maintenance work affecting the operation of the Stations at full power shall be
scheduled with at least forty-eight (48) hours prior notice to the Broker.
5.2 INTERRUPTION OF NORMAL OPERATIONS.
If the Stations suffer any damage or loss of any nature to their
transmission or studio facilities which results in the interruption of service
or the inability of the Stations to operate with maximum authorized facilities,
Licensee shall immediately notify Broker and shall inform Broker whether it is
willing to effectuate those repairs or replace that equipment necessary to
return the Stations to maximum power operation. If the Licensee notifies the
Broker that it is unwilling to make such repairs or replace such equipment,
Broker, at its option, may (1) terminate this Agreement or (2) agree to
reimburse Licensee for the repair or replacement of such facilities, any
equipment purchased shall become the property of the Broker.
5.3 MAIN STUDIO LOCATION.
Licensee shall maintain a main studio for the Stations within
the Stations' principal community contours and shall staff the main studio of
the Stations consistent with the FCC's rules and policies.
6. COMPLIANCE WITH FCC RULES; HANDLING OF MAIL. Licensee shall comply
with Commission rules and policies, including those regarding the maintenance
of the Stations' local public inspection files (which shall at all times remain
the responsibility of the Licensee). Licensee shall also be required to
receive or handle mail, cables, telegraph messages or telephone calls in
connection with the Licensee's operation of the Stations. Any mail or other
written communications received by Broker that deal with the operations of the
Stations shall be forwarded promptly by the Broker to the Licensee.
7. PROGRAMMING AND THE PUBLIC INTEREST. The programming provided by
Broker shall consist of such materials as are determined by Broker to be
appropriate and/or in the public interest including, without limitation, such
public affairs programming, public service announcements, music, news, weather
reports, sports, promotional material, and advertising, as are determined and
selected by Broker. Licensee shall have the full and unrestricted right to
delete and not broadcast any material contained in any part of the programming
provided by Broker which it regards as being unsuitable for broadcast or the
broadcast of which it believes would be contrary to the public interest.
8. RESPONSIBILITY FOR EMPLOYEES AND EXPENSES. Broker shall employ and
be responsible for the salaries, commissions, taxes, insurance, and all other
related costs for all personnel involved in the production, broadcast and sale
of its programming and commercial messages including, but not limited to, air
personalities, salespersons, and traffic personnel. Broker shall also be
responsible for all of its promotional expenses in connection with the
programming it is to furnish for broadcast on the Stations. Broker shall be
responsible for delivering the programming and/or the broadcast signal to
Licensee's Studio. Alternatively, Broker may deliver its programming to
Broker's transmitters via radio Studio Transmitter Link. In such event,
however, Broker shall pay for all equipment necessary to connect Broker's STL
equipment to Licensee's remote control unit. Installation of the STL equipment
and any equipment needed to connect the STL equipment to Licensee's remote
control unit shall be at Broker's expense. Broker shall bear full
responsibility for any damage caused by such installation. Prior to the
installation of any STL equipment including, without limitation, any antenna,
Broker shall provide a wind load study performed by a registered professional
engineer demonstrating that the station's tower can support the STL antenna and
a certificate from a registered professional engineer certifying that the
equipment will not cause interference to any other equipment then located at
the station's transmitter site. In the event that the STL equipment causes
interference to the Stations or to any third party:
A. Broker shall cease use of the STL equipment. Broker shall be
responsible for paying certain other operating costs of the Stations,
including, but not limited to the following:
1. All lease payments for use of the Stations' main
studio and offices should they be utilized by Broker; and
provided that Seller is required to and does in fact make such
payments to the owner of the studio and offices;
2. Utility bills for utility services at both the main
studio location and the transmitter sites of the Stations;
3. Telephone system maintenance costs and local exchange
telephone service costs at the Stations' main studios and to and
at the Stations' transmitter sites;
4. Normal maintenance of the transmitting facilities of
the Stations and of all equipment required by the FCC for the
operation of the Stations in compliance with the rules and
policies of the FCC;
B. Licensee shall be responsible for paying the following:
1. Salaries, benefits, payroll taxes, insurance and
related costs of all personnel employed by Licensee for the
Stations;
2. Costs of equipment repair and supplies; such as parts
replacements, major supplies or maintenance requiring the
capabilities of specialized third parties.
3. Costs of engineering or technical personnel necessary
to assure compliance with FCC rules and policies and maintenance
and repair of the Stations' transmission facilities;
4. All insurance premiums on property and casualty
insurance coverage of the Stations' transmission facilities at
the Stations' transmitter site(s) and at the Stations' offices
and main studio facilities; and
5. Personal and real property taxes and regulatory fees.
Broker shall be fully responsible for the supervision and direction of its
employees, and Licensee shall be directly responsible for the supervision and
direction of its employees. Broker shall promptly enter into agreements with
ASCAP, BMI or SESAC, as required to permit the airing of Broker's programming
over the Stations, and shall pay the required license fees to each of such
performance rights societies. Broker shall also pay any and all other
copyright license fees attributable to its programming to be broadcast on the
Stations.
9. ADVERTISING AND PROGRAMMING REVENUES. Broker shall retain all
revenues from the sale of advertising time on the programs it delivers to the
Stations. Licensee shall retain the revenue from the sale of any advertising
on the Stations on programs not provided or delivered to Licensee by Broker.
10. OPERATION OF STATION. Notwithstanding anything to the contrary in
this Agreement, Licensee shall have full authority, power and control over the
operation of the Stations during the period of this Agreement, including,
without limitation, control over the Stations' finances, personnel and
programming. The Stations' General Manager shall direct the day-to-day
operation of the Stations. Licensee shall retain control 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 programs not in the public interest or in order to
broadcast a program deemed by Licensee to be of greater national, regional or
local interest, and the right to take any other actions necessary for
compliance with federal, state and local laws, the Commmunications Act and the
Rules, regulations and policies of the FCC (including the prohibition against
unauthorized transfers of control) and the rules, regulations and polices of
other federal government entities, including the Federal Trade Commission and
the U. S. Department of Justice. Licensee shall at all times be solely
responsible for meeting all of the Commission's requirements with respect to
public service programming, for ascertaining the problems, issues, needs and
interests of the Stations' communities of license and their surrounding area,
maintaining the political and public inspection files and the Stations' logs,
and for the preparation of the Stations' quarterly issues/programs lists.
Licensee shall also retain the right to break into Broker's programming in case
of an emergency. Broker shall, upon request by Licensee, provide Licensee with
information with respect to such of Broker's programs that are responsive to
the problems, needs and issues facing the residents of the Stations' service
area, so as to assist Licensee in the preparation of required programming
reports and will provide upon request such other information necessary to
enable Licensee to prepare other records and reports required by the FCC or
other local, state or federal government entities.
11. STATION IDENTIFICATION. Licensee will be responsible for ensuring
the proper broadcast of FCC-required station identification announcements;
however, Broker shall cooperate with Licensee to ensure that all required
station identification announcements are broadcast with respect to the Stations
in full compliance with FCC rules and policies.
12. SPECIAL EVENTS. Licensee reserves the right, in its discretion, to
preempt any of the broadcasts of Broker's programs for broadcast of special
programs of public importance. In all such cases, Licensee will use its best
efforts to give Broker reasonable notice of its intention to preempt Broker's
programs.
13. POLITICAL ADVERTISING. Broker shall cooperate with Licensee to
ensure compliance with the political broadcasting requirements of the
Communications Act and the FCC's rules and policies thereunder. Broker shall
supply such information promptly to Licensee as may be necessary to comply with
the lowest unit charge requirements of Section 315 of the Communications Act or
with any statute that may be enacted relating to the provision of air time to
political candidates. To the extent that Licensee believes necessary, in
Licensee's sole discretion, Broker shall release advertising availabilities to
Licensee to permit it to comply with the reasonable access provisions of
Section 312(a)(7) of the Communications Act, or any successor statute, and the
equal opportunities provisions of Section 315 of the Communications Act, or any
successor statute, and the rules and policies of the FCC thereunder; provided,
however, that all revenues realized by Licensee as a result of such a release
of advertising time shall promptly be remitted to Broker. In any event, with
respect to the Stations, Licensee must 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
broadcast rules and policies of the FCC.
14. LICENSEE'S RESPONSIBILITY FOR COMPLIANCE WITH FCC TECHNICAL RULES.
Licensee shall retain, on a full time or part time basis, a qualified Chief
Engineer who shall be responsible for maintaining the transmission facilities
of the Stations. Licensee shall retain a Chief Operator, as that term is
defined by the rules and regulations of the FCC (who may also hold the position
of Chief Engineer), who shall be responsible for ensuring compliance by the
Stations with the technical operating and reporting requirements established by
the FCC.
15. FORCE MAJEURE. Any failure or impairment of facilities or any delay
or interruption in the broadcast of programs, or failure at any time to furnish
facilities, in whole or in part, for broadcast, due to causes beyond the
control of Licensee, shall not constitute a breach of this Agreement and
Licensee will not be liable to Broker; provided, however, that, if the Stations
are off the air or operating at less than ninety percent (90%) of their
authorized power for either two consecutive days or forty-eight (48) hours
(whether or not consecutive) during any consecutive thirty (30) day period,
Broker shall be entitled to an offset in the Monthly Payment as set forth in
Exhibit B, hereto.
16. RIGHT TO USE THE PROGRAMS. The right to use the programs to be
furnished hereunder by Broker and to authorize their use in any manner and in
any media whatsoever shall be, and remain, vested in Broker, subject, however,
to the rights of others (including, without limitation, copyright rights,
trademark and service mark rights and other intellectual property rights) in
and to the programs. By entering into this Agreement, Licensee does not
license Broker to use, in any manner, any programs produced or aired by
Licensee.
17. PAYOLA. Broker agrees that neither it nor any of its employees will
accept any consideration, compensation or gift or gratuity or any kind
whatsoever, regardless of its value or form, including, but not limited to, a
commission, discount, bonus, material, supplies or other merchandise, services
or labor (collectively, "Consideration"), whether or not pursuant to written
contracts or agreements between Broker and merchants or advertisers, in
consideration for the broadcast of any matter on the Stations unless the pay is
identified, in the broadcast for which Consideration was provided, as having
paid for or furnished such Consideration, in accordance with Sections 507 and
317 of the Communications Act and FCC rules and polices. Broker agrees to
execute, and to have each of its employees involved in the section of broadcast
matter on the Stations execute, at least once every six (6) months, payola
Affidavits in the form annexed as an attachment to Exhibit C hereto, and Broker
agrees to deliver the originals of all such Affidavits to Licensee as
expeditiously as possible following their execution.
18. COMPLIANCE WITH LAW. Broker agrees that, throughout the Term of this
Agreement, Broker will comply with all laws, rules, regulations and policies
applicable to the conduct of Licensee's business, and Broker acknowledges that
Licensee has not urged, counseled or advised the use of any unfair business
practice.
19. COMPLIANCE BY BROKER WITH LICENSEE POLICY STATEMENT. Broker hereby
covenants, warrants and represents that it will, at all times during the Term
of this Agreement, comply in all material respects with the Licensee's
Statement of Stations' Policies concerning the Stations, which Statement of
Stations' Policies is annexed hereto as Exhibit A.
20. REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNIFICATION WARRANTY.
20.1(a) AUTHORIZATIONS.
Except as specified in the Asset Purchase Agreement,
Licensee owns and holds all licenses and other permits and authorizations
necessary for the operation of the Station as presently conducted (including
licenses, permits and authorizations issued by the FCC) ("Operating
Authorizations"). There is not now pending or, to Licensee's knowledge
threatened any action by the Commission or other party to revoke, cancel,
suspend, refuse to renew or materially and adversely modify any of such
Operating Authorizations and, to Licensee's knowledge, except as reflected in
the Asset Purchase Agreement, no event has occurred which allows or, after
notice or lapse of time or both, would allow, the revocation or termination of
such Operating Authorizations or the imposition of any restrictions thereon of
such a nature that may limit in any material respect the operation of the
Station as presently conducted. Licensee has no knowledge that any such
Operating Authorizations will not be renewed in due course during the term of
this Agreement. To the best of its knowledge, Licensee is not in violation of
any material respect of any statute, ordinance, rule, regulation, policy, order
or decree of any federal, state, local or foreign government entity, court or
authority having jurisdiction over it or its operations or assets, which wold
have a material adverse effect on Licensee or its assets or on its ability to
perform this Agreement.
(b) FILINGS.
To the best of Licensee's knowledge, all reports and
applications required to be filed within the last two (2) years with the FCC
(including ownership reports and renewal applications) or any other
governmental entity, department or body in respect of the Station have been,
and in the future will be, filed by Licensee in a timely manner and are and
will be true and complete in all material respects. All such reports and
documents, to the extent required to be kept in the public inspection files of
Station, are and will be kept in such files.
(c) FACILITIES.
The Stations' operating equipment will be maintained and comply
in all material respects with the maximum facilities permitted by the Operating
Authorizations and will be maintained, in all material respects, in accordance
with good engineering standards necessary to deliver a high quality technical
signal to the are served by Station and, in all material respects, with all
applicable laws and regulations (including the requirements of the Act and the
rules, regulations, policies and procedures of the FCC promulgated thereunder).
All expenditures reasonably required to maintain the quality of Stations'
signals shall be made promptly and shall be deemed "Operating Expenses," except
as otherwise may be required by the Asset Purchase Agreement.
(d) RETENTION OF PROPERTY.
Licensee will not dispose of, transfer, assign or pledge any
asset, except with the prior written consent of Broker, if such actin would
affect materially and adversely Licensee's performance hereunder or the
business and operations of Broker permitted hereby.
(e) INSURANCE.
Licensee will maintain in full force and effect 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 required by law and as is customary and usual in the
broadcast industry) and in such amounts and on such terms as is conventionally
carried by broadcasters operating radio stations with facilities comparable to
those of the Station. Any insurance proceeds received by Licensee in respect
of damaged property will be used to repair or replace such property so that the
operation of Station conforms with this Agreement.
20.2 Broker shall indemnity and hold Licensee harmless against all
liability for libel, slander, unfair competition or trade practices,
infringement of trademarks, trade names or program titles, violation of rights
of privacy and infringement of copyrights and other proprietary rights
resulting from or caused by the actions or inactions of Broker, and from and
against any and all other claims, damages, and causes of action resulting from
the broadcast of programming furnished by Broker, or any liability resulting
from the broadcast of Broker's programming. Further, Broker warrants that the
broadcasting of its programs will not violate programming. Further, Broker
warrants that the broadcasting of its programs will not violate any applicable
laws or any rights of others, and Broker agrees to hold Licensee, the Stations
and its employees, harmless from any and all claims, damages, liabilities,
costs and expenses, including reasonable attorneys' fees, arising from the
broadcast of such programs. Broker's obligation to hold Licensee harmless
against the liabilities specified above shall survive any termination of this
Agreement until the expiration of all applicable statutes of limitation.
20.3 Licensee shall notify Broker in writing within sixty (60) days
of the occurrence of any event, or of its discovery of any facts, which in its
opinion entitle or may entitle it to indemnification under Paragraph 20.1;
provided, however, that failure to give such notice within such sixty (60) day
period shall not affect the liability of Broker under Paragraph 20.1 unless the
failure to give such notice within such time period materially adversely
affects Broker's ability to defend itself against the claim giving rise to
Licensee's claim. With respect to threatened or asserted claims of third
parties, Broker shall promptly defend such claim by counsel of Broker's own
choosing. Licensee shall reasonably cooperate in such defense.
20.4 If Broker, within a reasonable time after notice of a claim
hereunder, fails to defend such claim, Licensee shall be entitled to undertake
the defense, compromise or settlement of such claim subject to the right of
Broker to assume the defense of such claim at any time prior to the settlement,
compromise or final determination thereof. Anything in this Paragraph 20 to
the contrary notwithstanding: (i) if there is a reasonable probability that a
claim may adversely affect Licensee, Licensee shall have the right to defend,
compromise or settle such claim; (ii) if the facts giving rise to
indemnification hereunder shall involve a possible claim by Licensee against a
third party, Licensee shall have the right, at its own cost and expense, to
undertake the prosecution, compromise and settlement of such claim; (iii)
Broker will not, without Licensee's written consent, settle or compromise any
claim or consent to any entry of judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to
Licensee of a release from all liability in respect to such claim; and (iv)
Broker shall not be liable for any settlement or compromise to which it did not
consent, which consent shall not be unreasonably withheld.
20.5 Licensee shall indemnify and hold Broker harmless against all
liability for libel, slander, unfair competition or trade practices,
infringement of trademarks, service marks, trade names or program titles,
violation of rights or privacy and infringement of copyrights and to the
proprietary rights resulting from or caused by the actions or inactions of
Licensee, and from and against any and all other claims, damages and causes of
action resulting from the broadcast on the Stations of the programming
furnished by Licensee. Licensee agrees to hold Broker and its employees
harmless from any and all claims, damages, liabilities, costs and expenses,
including reasonable attorneys' fees, accruing to Broker and arising from the
broadcast on the Stations of the programs to be aired by Licensee. Licensee's
obligation to hold Broker harmless against the liabilities specified above
shall survive any termination of this Agreement until the expiration of all
applicable statutes of limitation.
20.6 Broker shall notify Licensee in writing within sixty (60) days
of the occurrence of any event, or of its discovery of any facts, which in its
opinion entitle or may entitle it to indemnification under Paragraph 20.4;
provided, however, that failure to give such notice within such sixty (60) day
period shall not affect the liability or Licensee under Paragraph 20.4 unless
the failure to give such notice within such time period materially adversely
affects Licensee's ability to defend itself against the claim giving rise to
Broker's claim for indemnification or to cure the default giving rise to such
claim. With respect to threatened or asserted claims of third parties,
Licensee shall promptly defend such claim by counsel of the Licensee's own
choosing, Broker shall reasonably cooperate in such defense.
20.7 If Licensee, within a reasonable time after notice of a claim
hereunder, fails to defend such claim, Broker shall be entitled to undertake
the defense, compromise or settlement of such claim subject to the right of
Licensee to assume the defense of such claim at any time prior to the
settlement, compromise or final determination thereof. Anything in this
Paragraph 20 to the contrary notwithstanding (i) if there is a reasonable
probability that a claim may adversely affect Broker, Broker shall have the
right to defend, compromise or settle such claim; (ii) if the facts giving rise
to indemnification hereunder shall involve a possible claim by Broker against a
third party, Broker shall have the right, at its own cost and expense, to
undertake the prosecution, compromise and settlement of such claim; (iii)
Licensee shall not, without Broker's written consent, settle or compromise any
claim or consent to any entry of judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to
Broker of a release from all liability in respect to such claim; and (iv)
Licensee shall not be liable for any settlement or compromise to which it did
not consent, which consent shall not be unreasonably withheld.
20.8 Broker and Licensee each shall maintain, in forms and amounts
customary in the radio broadcast industry, general liability insurance with
respect to all programming to be broadcast by Broker or Licensee, as the case
may be, over the Stations and shall add one another as an additional insured on
all such insurance policies.
21. EVENTS OF DEFAULT; CURE PERIODS AND REMEDIES. The following shall,
after the expiration of the applicable cure periods without the curing of the
acts or omissions set forth below, constitute Events of Default;
21.1 NON-PAYMENT.
Broker's failure to fully and timely pay the consideration
provided for in Paragraph 2 above; or
21.2 DEFAULT IN COVENANTS OR ADVERSE LEGAL ACTION.
The default by either party hereto in the material observance or
performance of any material covenant, condition or agreement contained herein,
or if Broker (i) shall make a general assignment for the benefit of creditors,
(ii) files or has filed against it a petition for bankruptcy, reorganization or
an arrangement for the benefit of creditors, 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
21.3 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 or
misleading in any material respect as of the time made or furnished.
21.4 CURE PERIODS.
An Event of Default (except where such Event Of Default arises
from Broker's failure to fully and timely make payments provided for in
Paragraph 2 hereof) shall not be deemed to have occurred until thirty (30)
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 action necessary to cure the
Default within such 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. Where an
Event of Default (other than Broker's failure to pay to Licensee the sum
specified in Paragraph 2 hereof) arises from Broker's failure to fully and
timely perform the other terms hereof. Such an Event of Default shall not be
deemed to have occurred until fifteen (15) days after the Licensee shall have
provided the Broker with written notice specifying the non-payment or lateness
in payment that if not cured would constitute an Event of Default. If the
default is not cured by Broker following notice by Licensee, this Agreement may
be terminated (except for the indemnification provisions of this Agreement
which shall survive any such termination), unless Licensee shall, in its sole
discretion, in writing, agree to continuation of this Agreement in force. If
Broker fails to make timely payment under Paragraph 2 hereof, Licensee may
terminate the Agreement at any time.
21.5 TERMINATION UPON DEFAULT.
Upon the occurrence of an Event of Default, which shall not have
been cured within the applicable cure period provided for hereinabove, the non-
defaulting party may terminate this Agreement provided that it is not also in
material default hereunder. 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 during
calendar months following the calendar month in which such Event of Default
shall have occurred.
22. TERMINATION OPTIONS. 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 two
percent (2%) or more of the total hours of Broker programming operation of the
Stations during any calendar month. In the event Broker elects to terminate
this Agreement pursuant to this provision, it shall give the Licensee notice of
such election at least thirty (30) days prior to the effective date of such
termination. Upon termination, all sums owing to the Licensee through the
effective date of such termination and all credits due the Broker pursuant to
the provisions of this Agreement shall be paid and neither party shall have any
further liability to the other except as may be provided by Paragraph 20 above.
Notwithstanding anything to the contrary above, any preemption by Licensee for
the purpose of (a) broadcasting programming to address a public emergency
situation or (b) providing political advertising time as required by statute or
by FCC rule or policy, shall be specifically excluded from the two percent (2%)
calculation. Licensee may terminate this Agreement for material violation of
the Agreement by Broker or if Broker ceases to perform its obligation under the
Asset Purchase Agreement.
23. TERMINATION UPON ORDER OF GOVERNMENTAL AUTHORITY. In the event that
a federal, state or local governmental authority (including, without
limitation, the FCC) orders, or takes or announces other action that requires
the termination of its Agreement and/or the curtailment, in any material
manner, of the relationship between the parties hereto or the provision of
programming by Broker hereunder, Broker, at its option, may: (a) seek
administrative or judicial relief from such order(s) (in which event Licensee
shall cooperate with Broker, provided that Broker shall be responsible for
legal fees and costs incurred in such proceedings); or (b) notify Licensee that
it will terminate this Agreement upon ten (10) days' prior written notice to
Licensee. In the event of termination of this Agreement by Broker pursuant to
clause (b) of the preceding sentence, and in the event that the effective date
of termination of this Agreement shall occur in the middle of a calendar month
(i.e., on any date other than the first day of the calendar month), the Broker
shall be entitled to a proration of the sums owed to or paid to Licensee
pursuant to Paragraph 2 hereof, provided that Broker is not in default under
this Agreement as of the effective date of such termination of this Agreement.
If the FCC designates the license renewal application of the Stations for a
hearing as a consequence of this Agreement or for any other reason, or
initiates any revocation or other proceeding with respect to the authorizations
issued to the Licensee for the operation of the Stations, and Licensee elects
to contest the action, then Licensee shall be responsible for its expenses
incurred as a consequence of the FCC proceedings; provided, however, that
Broker shall at its own expense cooperate and comply with any reasonable
request of Licensee to assemble and provide to the Commission information
relating to Broker's performance under this Agreement. In the event of
termination upon any government order(s), Licensee shall cooperate reasonably
with Broker to the extent permitted to enable Broker to fulfill advertising or
other programming contracts then outstanding, in which event Licensee shall
receive as compensation for the carriage of such programming that which
otherwise would have been paid to the Broker hereunder. In the event of
termination of this Agreement upon any governmental order(s), Broker shall be
entitled to pursue collection of its own accounts receivable accrued from any
advertiser which has contracted directly with Broker for the purchase of
advertising time on the Stations. In the event that any change in FCC rules or
policies calls into question the validity of any portion of this Agreement, the
parties hereunder shall consult with the FCC and its staff concerning such
matters and shall negotiate in good faith a modification to this Agreement
which would obviate any such FCC questions as to validity while preserving, to
the extent possible, the intent of the parties and the economic and other
benefits of this Agreement.
24. MUTUAL REPRESENTATIONS AND WARRANTIES. 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. Both
Licensee and Broker warrant, represent, covenant and certify that Licensee
maintains, and shall continue to maintain, ultimate control over the Stations'
facilities during the Term of this Agreement, including, without limitation,
control over the Stations' finances, personnel and programming. Each party
hereto represents and warrants that it has taken all necessary corporate or
other necessary action to make this Agreement legally binding on such party,
and that the individual signing this Agreement on behalf of such party has been
fully authorized and empowered to execute this Agreement on behalf of such
party. Broker and Licensee each represents to the other that, with the
exception of R. Dean Meiszer of Crisler Capital Company in connection with the
Purchase Agreement, it has not engaged a broker in connection with this
Agreement and agrees to indemnity the other and hold the other harmless against
any claim from any broker or finder based upon any agreement, arrangement, or
understanding alleged to have been made by Broker or by Licensee, as the case
may be.
25. CERTIFICATION. Pursuant to Section 73.3555(a)(2)(ii) of the FCC's
rules, Licensee certifies that it will maintain ultimate control over the
Stations' facilities, including control over the Stations' finances, personnel
and programming, and Broker certifies that the arrangement contemplated by this
Agreement complies with the provision of Sections 73.3555(a)(1) and
73.3555(e)(1) of the FCC's rules.
26. LIABILITIES UPON TERMINATION.
26.1 Broker shall be responsible for all debts and obligations of
Broker to third parties based upon the purchase of air time and use of
Licensee's transmission facilities including, without limitation, accounts
payable, barter agreements and unaired advertisements, but not for Licensee's
federal, state and local income and business franchise tax liabilities or taxes
levied upon Licensee's real estate or personal property. Any and all tax
obligations with respect to the Licensee's employees are the responsibility of
the Licensee and any and all tax obligations with respect to the employees of
Broker are the responsibility of Broker.
26.2 If Broker terminates this Agreement pursuant to the terms
hereof, Broker shall have no further obligations or liabilities to Licensee
under this Agreement, except for the indemnification obligations set forth in
Paragraph 20.1 above and the obligations set forth in Paragraph 26.1 above.
27. NOTICES. Any notice, demand, or request required or permitted to be
given under the provisions of the Agreement shall be in writing and shall be
deemed to have been duly delivered 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, and shall be deemed to have been received on the date
of personal deliver or on the date set forth on the return receipt, to the
following addresses or to such other address as party may request, in the case
of Broker, by notifying Licensee and in the case of Licensee by notifying
Broker:
To Broker:
John Power, President
Alta California Broadcasting, Inc.
c/o Redwood MicroCap Fund, Inc.
Building A, Suite 5-I
7518 Elbow Bend Road
Carefree, Arizona 85377
with copy (which shall not constitute notice) to
Gregg P. Skall, Esquire
Pepper & Corazzini
1776 K Street, N.W.
Washington, D.C. 20006
To Licensee:
Mr. and Mrs. Hugh McClung
G.E. Radio Company
271 Fourteenth Avenue
San Francisco, California 94118
with copy (which shall not constitute notice) to
Michael H. Bader, Esquire
Haley, Bader & Potts
Suite 900
4350 North Fairfax Drive
Arlington, Virginia 22203-1633
and
Leland H. Faust, Esquire
Taylor & Faust, A Professional Corporation
Suite 2525, Telesis Tower
One Montgomery Street
San Francisco, CA 94104
28. MODIFICATION AND WAIVER. No modification of any provision of this
Agreement shall in any event be effective unless the same shall be in writing
and then such modification shall be effective only in the specific instance and
for the purpose for which given.
29. CONSTRUCTION. This Agreement shall be construed in accordance with
the laws of the State of California except for the choice of law rules utilized
in that state, and the obligations of the parties hereto are subject to all
federal, state and local laws and regulations now or hereafter in force and to
the rules, regulations and policies of the Commission and all other
governmental entities or authorities presently or hereafter to be constituted.
Nothing in this Agreement shall be construed or interpreted to make Licensee
and Broker partners or joint venturers, or to make one an agent or
representative of the other, or to afford any rights to any third party other
than as expressly provided herein. Neither Broker nor Licensee is authorized
to bind the other to any contract, agreement or understanding. Broker and
Licensee acknowledge that call letters, trademarks and other intellectual
property shall at all times remain the property of the respective parties, and
that neither party shall obtain any ownership interest in the other party's
intellectual property by virtue of this Agreement.
30. 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.
31. ASSIGNMENT. This Agreement may not be assigned by either party
hereto without the express written approval of the other party hereto, except
that Licensee may take appropriate action to implement the provisions of law
incident to the Estate of Ruth (Mickey) McClung, relative to Stations.
32. COUNTERPART SIGNATURE. 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 effective as of the
date first above written.
33. ENTIRE AGREEMENT. This Agreement supersedes any prior agreements
between the parties and contains all of the terms agreed upon with respect to
the subject matter hereof.
34. NO PARTNERSHIP OR JOINT VENTURE CREATED. Nothing in this Agreement
shall be construed to make Licensee and Broker partners or joint venturers or
to afford any rights to any third party other than as expressly provided
herein.
35. SEVERABILITY. Subject to the provisions of Paragraph 23, above, in
the event any provision contained in this Agreement is held to be invalid,
illegal or unenforceable, such holding shall not affect any other provision
hereof and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had not been contained herein.
36. LEGAL EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, their heirs, executors, personal
representatives, successors and assigns.
37. GUARANTEE. Broker shall cause its parent corporation to guarantee
its performance hereunder and shall provide a written undertaking of such
guarantee in Exhibit C hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date above written.
G.E. RADIO COMPANY
By ---------------------------------------------
Hugh McClung, President
By ---------------------------------------------
Barbara McClung, Secretary
ALTA CALIFORNIA BROADCASTING, INC.
By ---------------------------------------------
John Power, President
By ---------------------------------------------
, Secretary