Local Marketing Agreement – Sample Legal Document

Exhibit 10.1

LOCAL PROGRAMMING AND MARKETING AGREEMENT

     THIS LOCAL PROGRAMMING AND MARKETING AGREEMENT (this “Agreement”) is made as of April 3, 2009 among KMVN, LLC and KMVN License, LLC (collectively, “Licensee”) and Grupo Radio Centro LA, LLC (“Programmer”), and solely for the purpose of guaranteeing the obligations of Programmer, Grupo Radio Centro S.A.B. de C.V. (“Guarantor”).

Recitals

     A. Licensee owns and operates radio station KMVN(FM), Los Angeles, California (FCC Facility ID #59987), FM booster station KMVN-FM1, Santa Clarita, California (FCC Facility ID #170041), and associated Part 74 broadcast auxiliary stations (collectively, the “Station”). The Station transmits its signal in both analog and digital modes pursuant to licenses issued by the Federal Communications Commission (the “FCC”).

     B. Licensee desires to obtain programming for the Station, and Programmer desires to provide programming for broadcast on the Station on the terms set forth in this Agreement.

     C. Licensee and Programmer are parties to a Put and Call Agreement of even date herewith (the “Put and Call Agreement”) with respect to the Station. Capitalized terms not otherwise defined herein have the meanings set out in the Put and Call Agreement.

Agreement

     NOW, THEREFORE, taking the foregoing recitals into account, and in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

     1.  Term .

          (a) The term of this Agreement (the “Term”) will begin at 12:01 a.m. on April 15, 2009 (the “LMA Effective Date”) and will continue until the date seven (7) years thereafter, unless earlier terminated in accordance with the terms of this Agreement or extended by the Put and Call Agreement or mutual agreement of the parties. If the Call Period under the Put and Call Agreement is tolled under Section 1.3 thereof, then the Term of this Agreement shall be extended to be coterminous with the Put and Call Agreement.

          (b) If the Station is off the air prior to the LMA Effective Date, then Licensee shall use commercially reasonable efforts to return the Station to the air as promptly as practicable in the ordinary course of business, i.e . Licensee shall restore the Station’s facilities as quickly as it would restore the facilities of any other station licensed to Licensee, its parent or their affiliated companies. Notwithstanding anything herein to the contrary, if the Station is off the air on April 15, 2009, then the LMA Effective Date shall be postponed until the date five (5) business days after the Station returns to the air.

     2.  Programming . During the Term, Programmer shall purchase from Licensee the analog and digital airtime of the Station for the price and on the terms specified below, and shall transmit to Licensee programming that it produces or owns (the “Programs”) for broadcast on the Station twenty-four (24) hours per day, seven (7) days per week, excluding the period from 6:00 a.m. to 8:00 a.m. each Sunday morning (any such programming provided by Licensee, being the “Licensee Programming”). Programmer will supply the Programs, at its own cost to the Station’s origination facilities.

     3.  Broadcasting . Subject to the provisions of Section 6 below, during the Term, Licensee shall make available to Programmer the entire analog and digital programming capacity of the Station for the broadcast of Programs; provided however that Licensee may continue its subcarrier agreement with VNTD Radio, Inc. (and commencing the third year of the Term, all revenue Licensee receives from such subcarrier agreement shall be paid over to Programmer or credited against amounts payable to Licensee by Programmer hereunder, with Licensee retaining all such revenue during the first two years of the Term). To the extent not assumed by Programmer and as reasonably necessary to perform this Agreement, during the Term, Licensee shall provide Programmer with the benefits of any Station Contracts (as that term is defined in the Put and Call Agreement) and Programmer shall perform the obligations of Licensee thereunder.

     4.  Advertising . During the Term, Programmer will be exclusively responsible for the sale of advertising on the Station and for the collection of accounts receivable arising therefrom, and Programmer shall be entitled to all such collections. All contracts for advertising on the Station which may be entered into by Programmer shall terminate upon termination of this Agreement (other than a termination at Closing under the Put and Call Agreement).

     5.  Payments . For the broadcast of the Programs and the other benefits made available to Programmer pursuant to this Agreement, during the Term, Programmer shall pay Licensee as set forth on Schedule A attached hereto.

     6.  Control .

          (a) Notwithstanding anything to the contrary in this Agreement, Licensee shall have full authority, power and control over the operation of the Station and over all persons working at the Station during the Term. Without limiting the generality of the foregoing, Licensee will: (1) employ a manager for the Station, who will report to Licensee and will direct the day-to-day operations of the Station, and who shall have no employment, consulting, or other relationship with Programmer, (2) employ a second employee for the Station, who will report and be solely accountable to the manager, and (3) retain control over the policies, programming and operations of the Station.

          (b) Nothing contained herein shall prevent Licensee from (i) rejecting or refusing programs which Licensee in good faith believes to be contrary to the public interest, or (ii) substituting programs which Licensee in good faith believes to be of greater local or national

importance or which are designed to address the problems, needs and interests of the local communities. Without limiting the preceding sentence, Licensee reserves the right to (i) refuse to broadcast any Program containing matter which violates any right of any third party or which does not meet the requirements of the rules, regulations, and policies of the FCC, (ii) preempt any Program in the event of a local, state, or national emergency, or (iii) delete any commercial announcements that do not comply with the requirements of the FCC’s sponsorship identification policy.

          (c) Programmer shall cooperate with Licensee to ensure that EAS transmissions are properly performed in accordance with Licensee’s instructions. Programmer will immediately serve Licensee with notice and a copy of any letters of complaint it receives concerning any Program for Licensee review and inclusion in the Station’s public inspection file.

     7.  Programs .

          (a) Programmer shall ensure that the contents of the Programs conform to all FCC rules, regulations and policies. Programmer shall consult with Licensee in the selection of the Programs to ensure that the Programs’ content contains matters responsive to issues of public concern in the local communities, as those issues are made known to Programmer by Licensee. On or before January 5, April 5, July 5 and October 5 of every year during the Term, Programmer shall provide to Licensee a list of significant community issues addressed in the Programs during the preceding quarter and the specific Programs that addressed such issues.

          (b) Within fifteen (15) days of the LMA Effective Date, Programmer shall obtain from all of its employees and contractors involved in producing or airing programming on the Station (“Programming Personnel”) affidavits affirming their understanding of Section 507 of the Communications Act, 47 USC § 508, and their agreement to comply. Similar affidavits shall be obtained from all subsequently-hired Programming Personnel within fifteen (15) days after their commencement of employment. All Programming Personnel shall execute similar affidavits annually following their commencement of employment. All affidavits shall be promptly provided to Licensee at any time or from time to time upon request.

          (c) Licensee shall 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 of the FCC. During the Term, Programmer shall cooperate with Licensee as Licensee complies with its political broadcast responsibilities, and shall supply such information promptly to Licensee as may be necessary to comply with the political broadcasting provisions of the FCC rules, the Communications Act of 1934, as amended, and federal election laws. Programmer shall release advertising availabilities to Licensee during the Term as necessary to permit Licensee to comply with the political broadcast rules of the FCC; provided, however, that revenues received by Licensee as a result of any such release of advertising time shall be remitted to Programmer within seven (7) days.

          (d) During the Term, subject to Section 5, Licensee and Programmer will maintain music licenses with respect to the Station and the Programs, as appropriate.

     8.  Operations .

          (a) During the Term, Programmer will be responsible for (i) the salaries, taxes, insurance and other costs for all personnel used in the production of the Programs supplied to Licensee, (ii) the costs of delivering the Programs to Licensee and (iii) management of all of its personnel, including employment and labor relations.

          (b) During the Term and subject to Section 5, Licensee shall:

               (i) operate the Station in accordance with the rules and regulations of the FCC and the FCC Licenses in all material respects and file all ownership reports, employment reports, applications, responses, and other documents required to be filed during such period;

               (ii) maintain in full force and effect the FCC Licenses, except for changes to the Part 74 broadcast auxiliary stations included therein in the ordinary course of business;

               (iii) comply in all material respects with all laws, rules, regulations, ordinances, orders, judgments and decrees applicable to the Station and Licensee’s employees thereof;

               (iv) timely renew the lease for the Station’s main transmitter site on Mount Wilson on the terms and conditions set out therein; and

               (v) enforce Licensee’s rights under the Real Property Leases as reasonably necessary to protect and preserve the use of the Leased Real Property for the Station’s business.

          (c) Subject to Section 5, Licensee shall be responsible for timely paying all of the operating expenses of the Station that are required by FCC rules, regulations and policies to the extent required by such rules, regulations and policies, including: (i) all lease payments for the Station’s 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, (iv) all costs, including utilities, taxes, insurance and maintenance, relating to the lease of the building housing the main studio, (v) all maintenance and repair costs for the Station’s studio equipment and any equipment used to link the Station’s studios and transmitting facilities, (vi) the salaries, taxes, insurance and related costs for Licensee’s Station personnel and (vii) all regulatory or filing fees.

          (d) Subject to Section 5, Licensee shall maintain all of the Station’s equipment and facilities, including the studios, origination equipment, studio transmitter links, transmitter building, antennas, transmitters and transmission lines in normal operating condition consistent with the general practice of Licensee, Licensee’s parent and their affiliated companies at the broadcast stations they control, and Licensee shall continue to contract with local utility companies for the delivery of electrical power to the Station’s studios and transmitting facilities at all times in order to operate the Station in the ordinary course of business. Subject to Section 5, Licensee shall undertake such repairs as are necessary to restore the full-time operation of the Station with its full authorized facilities ( i.e. , within licensed parameters) following the occurrence of any loss or damage preventing such operation. Subject to Section 5, such restoration of Station operation shall be made consistent with the repair and restoration practice of Licensee and Licensee’s Affiliates at the broadcast stations they control following the occurrence of any loss or damage preventing such operation. Licensee shall promptly satisfy and discharge all liens encumbering the Station Assets, except for Permitted Liens, as defined in the Put and Call Agreement.

     9.  Format and Call Sign . During the Term, Licensee will retain all rights to the call letters of the Station or any other call letters which may be assigned by the FCC for use by the Station, and will ensure that proper station identification announcements are made with such call letters in accordance with FCC rules and regulations; provided, that subject to Licensee’s consent, which shall not be unreasonably delayed, conditioned or withheld, (i) at the reasonable request of Programmer, Licensee shall file a request with the FCC for a change in the Station’s call sign and (ii) Programmer shall be entitled to change the format of the Station upon at least ten (10) days prior notice to Licensee. Programmer shall include in the Programs an announcement at the beginning of each hour of such Programs to identify such call letters, as well as any other announcements required by the rules and regulations of the FCC.

     10.  Employees .

          (a) Licensee has provided Programmer a list showing employee positions and annualized pay rates for employees of the Station who are available to Programmer to hire. Programmer may, at Programmer’s sole discretion, offer employment to any of such employees, such employment to become effective as of the LMA Effective Date, on such terms and conditions as may be acceptable to any such employee. With respect to each employee who accepts an offer of employment from Programmer (collectively, the “Transferred Employees”), on the LMA Effective Date employment with Licensee shall terminate and employment with Programmer shall commence. Programmer shall provide Licensee with a list of the Transferred Employees reasonably prior to the LMA Effective Date.

          (b) With respect to Transferred Employees, Licensee shall be responsible for all compensation, benefits and other liabilities arising prior to the LMA Effective Date, and Programmer shall be responsible for all compensation, benefits and other liabilities arising after the LMA Effective Date.

          (c) Licensee acknowledges and agrees that Programmer shall not acquire any rights or interests of Licensee in, or assume or have any obligations or liabilities of Licensee under, any benefit plans maintained by, or for the benefit of any employee of Licensee, including obligations, if any, for severance or vacation accrued but not taken.

          (d) Licensee acknowledges and agrees that Programmer may, at any reasonable time, but subject to the specific prior approval of Licensee, prior to the LMA Effective Date interview and discuss employment terms and issues with the employees of the Station who are on the list described in Section 10(a) hereof, so long as such interviews and discussions do not disrupt the business and operation of the Station.

          (e) Nothing herein express or implied or intended shall create any third party beneficiary rights of any employee or former employee (including any beneficiary or dependent thereof) of Licensee in respect of continued employment (or resumed employment) with Licensee or with Programmer or in respect of any other matter.

     11.  Assumed Contracts .

          (a) On the LMA Effective Date, pursuant to an assignment and assumption agreement in the form of Exhibit A attached hereto, Licensee shall assign to Programmer, and Programmer shall assume and undertake to pay, discharge, perform or satisfy the liabilities, obligations and commitments of Licensee arising during, or attributable to, any period of time on or after the LMA Effective Date under the contracts set forth on Schedule B hereto (the “Assumed Contracts”) (collectively, the “LMA Assumed Obligations”). Except for the LMA Assumed Obligations and except as otherwise provided in this Agreement, Programmer does not assume or agree to discharge or perform and will not be deemed by reason of the execution and delivery of this Agreement to have assumed or to have agreed to discharge or perform any other liabilities, obligations or commitments of Licensee.

          (b) Licensee, with the cooperation of Programmer, shall use commercially reasonable efforts to obtain any third party consents necessary for the assignment to Programmer of any Assumed Contract (which shall not require any payment to any such third party), but no such consents are conditions to LMA commencement. To the extent that any Assumed Contract may not be assigned without the consent of any third party, and such consent is not obtained prior to the LMA Effective Date, this Agreement and any assignment executed pursuant to this Agreement shall not constitute an assignment of such Assumed Contract; provided, however, with respect to each such Assumed Contract, Licensee and Programmer shall cooperate to the extent feasible in effecting a lawful and commercially reasonable arrangement under which Programmer shall receive the benefits under the Assumed Contract from and after the LMA Effective Date, and to the extent of the benefits received, Programmer shall pay and perform Licensee’s obligations arising under the Assumed Contract from and after the LMA Effective Date in accordance with its terms.

          (c) All prepaid and deferred income and expenses relating to the Assumed Contracts and arising from the operation of the Station shall be prorated between Programmer and Licensee in accordance with accounting principles generally accepted in the United States (“GAAP”) as of the LMA Effective Date. Such prorations shall include without limitation music and other license fees, utility expenses, rent and other amounts under Assumed Contracts and similar prepaid and deferred items. Licensee shall receive a credit for all of the Station’s deposits and prepaid expenses relating to the Assumed Contracts. Sales commissions related to the sale of advertisements by Licensee broadcast on the Station prior to the LMA Effective Date shall be the responsibility of Licensee, and sales commissions related to the sale of advertisements by Programmer broadcast on the Station after the LMA Effective Date shall be the responsibility of Programmer.

     12.  Facilities and Shared Services .

          (a) During the Term, subject to any necessary landlord consent, Licensee shall provide Programmer access to and the use of the designated space at Licensee’s studio and offices for the Station as shown on Schedule C attached hereto (for purposes of conducting Programmer’s business with respect to the Station pursuant to this Agreement and for no other purpose), as well as reasonable access to the Station’s transmission facilities upon prior notice to and with a representative of Licensee. Programmer may only use such designated space and may use no other space at Licensee’s studio facilities. When on Licensee’s premises, Programmer shall not (i) act contrary to the terms of the lease for the premises or any applicable law, rule or regulation, (ii) permit to exist any lien, claim or encumbrance on the premises, or (iii) interfere with the business and operation of Licensee’s stations or Licensee’s use of such premises. This Section is subject and subordinate to Licensee’s lease for such studio and office facilities and does not constitute a grant of any real property interest, and if such lease expires or is terminated for any reason, then Licensee shall give Programmer prompt notice of such termination within two (2) business days of Licensee’s obtaining knowledge thereof, and Programmer’s right to use the facilities under this Agreement shall end with the termination of the lease.

          (b) In addition, during the Term, subject to Section 5, Licensee shall provide Programmer certain services (for purposes of conducting Programmer’s business with respect to the Station pursuant to this Agreement and for no other purpose), as described on Schedule D attached hereto.

     13.  Representations and Warranties of Licensee .

     Licensee makes the following representations and warranties to Programmer as of the date of this Agreement:

          (a) Each of KMVN, LLC and KMVN License, LLC is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which any of the Station Assets are located (if

such qualification is required). Each of KMVN, LLC and KMVN License, LLC has the requisite limited liability company power and authority to execute, deliver and perform this Agreement.

          (b) The execution, delivery and performance of this Agreement by each of KMVN, LLC and KMVN License, LLC have been duly authorized and approved by all necessary limited liability company action of Licensee, including any required proceedings of its members and managers, and do not require any further authorization or consent of KMVN, LLC or KMVN License, LLC. This Agreement is a legal, valid and binding agreement of Licensee enforceable in accordance with its terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

          (c) Except for consents to assign certain of the Assumed Contracts as set forth on Schedule B attached hereto, the execution, delivery and performance by each of KMVN, LLC and KMVN License, LLC of this Agreement does not (i) conflict with any of KMVN, LLC’s or KMVN License, LLC’s certificate of formation, limited liability company operating agreement or other organizational documents; (ii) with or without the giving of notice or the passage of time, or both, result in a breach of, or violate, or be in conflict with, or constitute a default under or permit the termination of, or cause or permit acceleration under any material contract or instrument or any debt or obligation to which either of KMVN, LLC or KMVN License, LLC is a party or to or by which either of KMVN, LLC or KMVN License, LLC or any of the Station Assets is subject or bound, or result in the loss or adverse modification of any of the FCC Licenses; (iii) result in the creation or imposition of any lien upon any of the Station Assets (except Permitted Liens); (iv) violate any law, rule or regulation or any order, judgment, decree or award of any court, governmental authority or arbitrator to or by which any of KMVN, LLC or KMVN License, LLC or any of the Station Assets is subject or bound or (v)&