Exhibit 99.2
EXECUTION COPY
LOCAL MARKETING AGREEMENT
This Local Marketing Agreement (the "Agreement"), made as of the
14th
day of July 2005, is between Infinity Radio
Inc., a Delaware corporation
("Licensee"), and NextMedia Operating,
Inc., a Delaware corporation
("Programmer").
RECITALS
Licensee is the licensee of and operates radio broadcast
station
KEZR(FM), San Jose, California (Facility ID
No. 1176), and radio broadcast
station KBAY(FM), Gilroy, California
(Facility ID No. 35401) (each of the
foregoing, a "Station," and collectively,
the "Stations").
Licensee and Programmer are parties to an asset purchase agreement
of
even date herewith (the "Purchase
Agreement"), pursuant to which Licensee has
agreed to sell and Programmer, together
with NM Licensing LLC, a Delaware
limited liability company, has agreed to
purchase the Stations on the terms and
conditions set forth therein. Capitalized
terms used but not defined in this
Agreement shall have the meanings set forth
in the Purchase Agreement.
Pending consummation of the transactions provided in the
Purchase
Agreement, Programmer desires to acquire
time on the Stations for its
programming and advertising time, subject
to the limitations set forth herein
and in accordance with the rules,
regulations and policies of the Federal
Communications Commission (the "FCC").
Therefore, for and in consideration of the mutual covenants
herein
contained, and for other good and valuable
consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. SALE
OF TIME
1.1 Broadcast of Programming. During the Term (as defined
below),
Licensee shall make available broadcast
time on the Stations for the broadcast
of Programmer's programs (the
"Programming") for up to 168 hours a week except
for: (i) downtime occasioned by routine
maintenance consistent with prior
practice and upon 48 hours prior notice to
Programmer; (ii) 2 hours between 5:00
a.m. and 9:00 a.m. on Sunday mornings on
Station KBAY(FM) and 2 hours between
5:00 a.m. and 9:00 a.m. on Sunday mornings
on Station KEZR(FM) and at other
times mutually agreeable to Licensee and
Programmer during which time Licensee
may broadcast programming designed to
address the concerns, needs and interests
of the Stations' listeners; (iii) times
when Programmer's programs are not
accepted or are preempted by Licensee in
accordance with this Agreement; and
(iv) times when the Stations are not
broadcasting because of Force Majeure
Events (as defined below).
1.2 Advertising and Programming Revenues. During the broadcast time
on
the Stations made available to Programmer
pursuant to the terms of this
Agreement, Programmer shall have full
authority to sell for its own account
commercial time on the Stations. Programmer
shall retain all revenues from the
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broadcast or sale of all advertising time
on any and all of the Stations and all
other sources of revenue and advertising,
to the extent the foregoing relate to
programming provided for broadcast on the
Stations by Programmer or to the
extent such revenues relate solely to the
actions or activities of Programmer
related to any or all of the Stations on or
after the Commencement Date, and all
the same shall be the sole and exclusive
assets of Programmer.
1.3 Force Majeure. Any failure or impairment of facilities, any
delay
or interruption in broadcasting the
Programming, or any failure at any time to
furnish the facilities, in whole or in
part, for broadcasting, due to acts of
God, strikes or threats thereof, war, acts
of terrorism, civil disturbance,
force majeure, or any other causes beyond
the reasonable control of Licensee or
Programmer (collectively, "Force Majeure
Events"), shall not constitute a breach
of this Agreement, and neither Licensee nor
Programmer, as the case may be, will
be liable to the other party therefor.
1.4 Main Studio and Studio Equipment. Programmer shall originate
the
Programming from Licensee's existing office
and studio facilities for the
Stations located at 190 Park Center Plaza,
Suite 200, San Jose, California (the
"Main Studio"), using the studio equipment
located in the Main Studio (the
"Studio Equipment"). To enable Programmer
to fulfill its obligations hereunder,
Licensee shall make the Main Studio and
Studio Equipment available, for no
additional consideration, to Programmer for
its use for the production of the
Programming and sale of advertising under
this Agreement. Programmer shall not
allow any other persons other than its
employees, advisors, consultants or
representatives to enter the Main Studio
without the express prior permission of
Licensee. Programmer agrees to take
reasonable care of the Main Studio and the
Studio Equipment, subject to ordinary wear
and tear. Programmer agrees to
indemnify and hold harmless Licensee and
its Affiliates from any and all claims
for damages for injuries to or death of
persons and for damages to property
arising out of Programmer's use and/or
occupancy of the Main Studio or the
Studio Equipment. On the Commencement Date,
Licensee shall transfer title to all
vehicles used in the operation of the
Stations to Programmer, subject to
Programmer's obligation to return such
vehicles to Licensee as provided in
Section 8.2(a)(vi).
1.5 Payments. In consideration of the rights granted under this
Agreement, Programmer shall pay Licensee
the fee and reimburse certain of
Licensee's costs as provided in Schedule
1.5 hereto.
1.6 Term. The term of this Agreement (the "Term") shall commence
at
12:01 a.m., San Jose, California time (the
"LMA Effective Time"), one (1)
business day after the expiration or early
termination of any waiting period
applicable to the Purchase Agreement under
the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the
"Commencement Date"), and shall
terminate on the earlier of (a) 12:01 a.m.
on the date of the consummation of
the purchase of the Stations pursuant to
the Purchase Agreement, (b) 12:01 a.m.
on the date which is six (6) months after
the date of the termination of the
Purchase Agreement for any reason other
than the closing thereunder, except
that, if the Purchase Agreement is
terminated, Licensee shall have the option to
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terminate this Agreement upon thirty (30)
days written notice to Programmer, and
(c) such time as this Agreement is
terminated in accordance with its terms
pursuant to Section 8.
1.7 License to Use Call Sign and Trademarks. Licensee hereby
grants
Programmer a license to use Licensee's call
signs and trademarks and names used
primarily in the operation of the Stations
(the "Marks") in connection with the
broadcast and promotion of the Programming
during the Term. Programmer agrees
that the nature and quality of all services
rendered by it in connection with
the Marks shall conform to reasonable
quality standards set by and under the
control of Licensee. If Licensee becomes
aware of any fact which in its opinion
indicates that Programmer is using the
Marks in connection with programming that
does not conform with Licensee's reasonable
quality standards, Licensee may
notify Programmer in writing of such facts
and request that Programmer conform
its use of the Marks to Licensee's
reasonable quality standards. If Programmer
does not immediately conform its use of the
Marks, Licensee may terminate the
license granted hereby upon written notice
to Programmer. Programmer agrees to
cooperate with Licensee to control the
nature and use of the Marks, to supply
Licensee with audio tapes and uses of the
Marks upon Licensee's reasonable
request, and to use the Marks only in
connection with its providing programming
on the Stations hereunder. Programmer
further agrees to notify Licensee in
writing of any legal action commenced
against it which relates to the Marks or
to the quality of the Programming within
ten (10) days of notice to Programmer
of such action.
2.
OBLIGATIONS AND RIGHTS OF LICENSEE
Programmer acknowledges and agrees that Licensee is and shall
remain
responsible for operating the Stations in
the public interest and controlling
the day-to-day operations of the Stations
in conformance with its FCC licenses,
permits and authorizations. Without
limiting the generality of the foregoing,
Licensee and Programmer agree as
follows:
2.1 Licensee's Absolute Right to Reject Programming. Licensee
shall
have the absolute right to reject any
Programming, including advertising
announcements or other material, which
Licensee in its sole discretion deems
contrary to the public interest, the
Communications Act of 1934, as amended (the
"Communications Act"), or the FCC's rules,
regulations and policies (the
"Rules," and together with the
Communications Act, the "Communications Laws").
Licensee reserves the right to refuse to
broadcast any Programming containing
any matter that Licensee in its sole
discretion believes is, or may be
determined by the FCC or any court or other
regulatory body with authority over
Licensee or the Stations to be, violative
of any third party intellectual
property rights, defamatory, indecent,
obscene, profane or otherwise in
violation of law. Licensee may take any
other actions necessary to ensure the
Stations' operations comply with the laws
of the United States, the laws of the
State of California, the Communications
Laws (including the prohibition on
unauthorized transfers of control), and the
rules, regulations and policies of
other federal government authorities,
including the Federal Trade Commission and
the Department of Justice. Licensee may
suspend, cancel or refuse to broadcast
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any portion of the Programming pursuant to
this Section 2.1 without reduction or
offset in the payments due Licensee under
this Agreement.
2.2 Licensee's Right to Preempt Programming for Special Events
and
Public Interest Programming. Licensee shall
have the absolute right to preempt
Programming in order to broadcast a program
deemed by Licensee, in its sole
discretion, to be of greater national,
regional or local public interest or
significance, or to provide public service
programming, and to use part or all
of the hours of operation of the Stations
for the broadcast of events of special
importance. In all such cases, Licensee
will use commercially reasonable efforts
to give Programmer reasonable advance
notice of its intention to preempt the
Programming. Licensee may preempt the
Programming under this Section 2.2 without
reduction or offset in the payments due
Licensee under this Agreement.
2.3 Licensee's Public Service Programming. Licensee shall have
the
right to preempt Programming in order to
broadcast public service programming at
the times set forth in Section 1.1
hereof.
2.4 Political Advertising, Public File, Etc. The parties
acknowledge
that Licensee is ultimately responsible for
complying with the Communications
Laws with respect to (a) the carriage of
political advertisements and
programming (including, without limitation,
the rights of candidates and, as
appropriate, others to equal opportunities,
lowest unit charge and reasonable
access); (b) the broadcast and nature of
public service programming; (c) the
maintenance of political and public
inspection files and the Stations' logs; (d)
the ascertainment of issues of community
concern and (e) the preparation of all
quarterly issues/programs lists.
2.5 Maintenance and Repair of Transmission Facilities. Licensee
shall
use commercially reasonable efforts to
maintain the Stations' transmission
equipment and facilities, including the
antennas, transmitters and transmission
lines, in good operating condition, and
Licensee shall continue to contract with
local utility companies for the delivery of
electrical power to the Stations'
transmitting facilities at all times in
order to ensure operation of the
Stations. Licensee shall undertake such
repairs as are necessary to maintain
full-time operation of the Stations with
their maximum authorized facilities as
expeditiously as reasonably possible
following the occurrence of any loss or
damage preventing such operation.
2.6 Main Studio. Licensee shall maintain a main studio for the
Stations
as required under the Communications
Laws.
3.
OBLIGATIONS AND RIGHTS OF PROGRAMMER
Programmer shall not take any action, or omit to take any
action,
inconsistent with Licensee's obligations
under the Communications Laws to retain
ultimate responsibility for the programming
and technical operations of the
Stations. Whenever at the Main Studio or
otherwise on the Stations' premises,
all of Programmer's personnel shall be
subject to the supervision and the
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direction of the General Manager and/or the
Stations' Chief Operator. Without
limiting the generality of the foregoing,
Programmer agrees as follows:
3.1 Compliance with Laws and Station Policies. Programmer has
advised
Licensee of the nature of the Programming.
Programmer will make no material
changes in the Programming after the
Commencement Date without the prior written
consent of Licensee, which shall not be
unreasonably withheld. All Programming
shall conform in all material respects to
all applicable provisions of the
Communications Laws, all other laws or
regulations applicable to the broadcast
of programming by the Stations, and the
programming regulations prescribed in
Schedule 3.1 hereto. At no time during the
Term shall Programmer or its
employees or agents represent, hold out,
describe or portray Programmer as the
licensee of the Stations.
3.2 Cooperation with Licensee. Programmer, on behalf of Licensee,
shall
furnish or insert within the Programming
all Station identification
announcements required by the
Communications Laws, and shall, upon request by
Licensee, provide (a) information about
Programming that is responsive to the
public needs and interests of the area
served by the Stations, so as to assist
Licensee in the preparation of any required
programming reports, and (b) other
information to enable Licensee to prepare
other records, reports and logs
required by the FCC or other local, state
or federal governmental agencies.
Programmer shall maintain and deliver to
Licensee all records and information
required by the FCC to be placed in the
public inspection file of the Stations,
including all records and information
pertaining to the broadcast of political
programming and advertisements, in
accordance with the provisions of Sections
73.1943 and 73.3526 of the Rules and The
Bipartisan Campaign Reform Act of 2002.
Programmer additionally agrees that
broadcasts of sponsored programming
addressing political issues or
controversial subjects of public importance will
comply with the provisions of Section
73.1212 of the Rules. Programmer shall
consult with Licensee and adhere strictly
to all applicable provisions of the
Communications Laws, with respect to the
carriage of political advertisements
and political programming (including,
without limitation, the rights of
candidates and, as appropriate, other
parties, to "equal opportunities") and the
charges permitted for such programming or
announcements. Programmer shall
cooperate with Licensee to ensure
compliance with the Rules regarding Emergency
Alert System tests and alerts.
3.3 Payola and Plugola. Programmer shall provide to Licensee in
advance
any information known to Programmer
regarding any money or other consideration
which has been paid or accepted, or has
been promised to be paid or to be
accepted, for the inclusion of any matter
as a part of any programming or
commercial material to be supplied to
Licensee by Programmer for broadcast on
the Stations, unless the party making or
accepting such payment is identified in
the program as having paid for or furnished
such consideration in accordance
with the Communications Laws. Commercial
matter with obvious sponsorship
identification will not require disclosure
beyond the sponsorship identification
contained in the commercial copy.
Programmer shall at all times endeavor to
proceed in good faith to comply with the
requirements of Sections 317 and 507 of
the Communications Act and the related
Rules.
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3.4 Handling of Communications. Programmer shall provide Licensee
with
the original or a copy of any
correspondence from a member of the public
relating to the Programming to enable
Licensee to comply with the requirements
of the Communications Laws, including those
regarding the maintenance of the
public inspection file. Licensee shall not
be required to receive or handle
mail, facsimiles, e-mails or telephone
calls in connection with the Programming
unless Licensee has agreed to do so in
writing. Licensee shall promptly forward
to Programmer all correspondence, payments,
communications or other information
and/or documents which it receives and
which relate to the Programming,
including without limitation, invoices,
billing inquiries, checks, money orders,
wire transfers or other payments for
services or advertising.
3.5 Compliance with Copyright Act. Programmer shall not broadcast
any
material on the Stations in violation of
the Copyright Act or the rights of any
Person. All music supplied by Programmer
shall be (a) licensed by a music
licensing agent such as ASCAP, BMI, or
SESAC, (b) in the public domain or (c)
cleared at the source by Programmer.
Licensee shall not be obligated to pay any
music licensing fees or other similar
expenses required in connection with the
material broadcast by Programmer on the
Stations.
4.
RESPONSIBILITY FOR EMPLOYEES AND EXPENSES
4.1 Licensee's Responsibility for Employees and Expenses.
(a) Licensee will employ a full-time management-level employee for
the
Stations (the "General Manager"), who shall
report and be solely accountable to
Licensee and shall be responsible for
overseeing the operations of the Stations,
and a staff-level employee, who shall
report to and assist the General Manager
in the performance of his or her duties.
Licensee shall also retain a qualified
Chief Operator, as that term is defined in
the Communications Laws, for the
Stations. The Chief Operator shall have the
duties and responsibilities of a
"Chief Operator" under the Communications
Laws.
(b) Subject to Schedule 1.5 hereto, Licensee shall be responsible
for
timely paying: (i) all lease payments for
the Stations' transmitter sites,
whether in use or not, and all taxes and
other costs incident thereto, including
insurance costs, (ii) all utility costs
(telephone, electricity, etc.) relating
to the transmitter sites, (iii) all
maintenance and repair costs for the
transmitting equipment that are Licensee's
responsibility under Section 2.5,
(iv) all costs, including utilities, taxes,
insurance and maintenance, relating
to the ownership of the building housing
the Main Studio, (v) the salaries,
taxes, insurance and related costs for
Licensee's Station personnel and (vi) all
FCC regulatory or filing fees.
4.2 Programmer's Responsibility for Employees and Expenses.
(a) Programmer shall be responsible for the artistic personnel
and
material for the production of the
Programming to be provided under this
Agreement. Programmer shall provide any
transmitter duty operators required for
the operation of the Stations during any
period when the Programming is being
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broadcast. Programmer shall employ and be
responsible for the salaries, taxes,
insurance and related costs for all of its
own personnel and facilities used in
fulfillment of its rights and obligations
under this Agreement.
(b) Programmer shall be responsible for timely paying all costs
associated with production and listener
responses, including utility costs, fees
to ASCAP, BMI and SESAC, any other
copyright fees, and all other costs or
expenses attributable to the Programming
that is delivered by Programmer for
broadcast on the Stations. In addition,
Programmer shall be responsible for
timely paying all salaries, taxes,
insurance and related costs of personnel
other than the Licensee's Station
personnel. Programmer shall also timely pay
all maintenance and repair costs for the
Main Studio and Studio Equipment. The
parties acknowledge and agree that
Programmer shall obtain its own ASCAP, BMI
and SESAC licenses as of the Commencement
Date and shall not use, operate under,
or be responsible for the payment of any
fees in connection with, the ASCAP, BMI
or SESAC licenses held by Licensee.
(c) Programmer shall maintain at its expense and with reputable
insurance companies commercially reasonable
coverage for broadcaster's liability
insurance, worker's compensation insurance
and commercial general liability
insurance.
4.3 Station Employees.
(a) Transferred Employees.
(i) Except as set forth on Schedule 4.3, Programmer shall offer
employment to each Station Employee (as
defined in the Purchase Agreement) who
is employed immediately prior to the LMA
Effective Time and who is not on
authorized leave of absence, sick leave,
short or long term disability leave,
military leave or layoff with recall
rights. For the purposes hereof, all
Station Employees who accept Programmer's
offer of employment are hereinafter
referred to collectively as the
"Transferred Employees," and the "Employment
Commencement Date" as referred to herein
shall mean the LMA Effective Time.
Programmer shall employ at-will those
Transferred Employees who do not have
employment agreements with Licensee at the
same monetary compensation as such
employees are currently earning. The
initial terms and conditions of employment
for those Transferred Employees who have
employment agreements, including
account executive agreements and bonus term
sheets, with the Licensee shall be
dictated by such employment agreements.
Programmer may modify, alter or
terminate any of the terms and conditions
of employment of the Transferred
Employees. Nothing in this Agreement shall
prevent Programmer from terminating
the employment of any Transferred Employee
at any time after the LMA Effective
Time.
(ii) Except as otherwise expressly provided herein or in the
Purchase Agreement, Programmer shall not
assume any claims, liabilities, or
obligations of Seller as an employer
incurred prior to the Effective Time,
including liabilities for wages,
supplemental unemployment benefits, severance
benefits, retirement benefits, Federal
Consolidated Omnibus Budget
Reconciliation Act of 1985 benefits,
Federal Family and Medical Leave Act of
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1993 benefits, Federal Workers Adjustment
and Retraining Notification Act
obligations and liabilities, or any other
employee benefits, withholding Tax
liabilities, workers' compensation, or
unemployment compensation benefits or
premiums, hospitalization or medical
claims, occupational disease or disability
claims, or other claims attributable in
whole or in part to employment or
termination by Seller or arising out of any
labor matter involving Seller as an
employer, and any claims, liabilities and
obligations arising from or relating
to the Employee Benefit Plans (as defined
in the P
