Time Brokerage Agreement, DTD 2/12/1997

Exhibit 10.6


TIME BROKERAGE AGREEMENT


TIME BROKERAGE AGREEMENT ("Agreement"), made and entered into this 12th day of February 1997, by and among Manahawkin Communications Corporation ("Licensee"), the permittee of the FM radio station on 105.7 MHz, Manahawkin, New Jersey, Jersey Devil Broadcasting, Inc., Southern Ocean Broadcasting, Inc. ("Southern Ocean") and Great American Communications Co. (collectively the "Licensee Shareholder Corporations"), and Nassau Broadcasting Partners, L.P. ("Broker").


WHEREAS, Licensee will have available broadcasting time and will be engaged in the business of radio broadcasting on the FM radio station on 105.7 MHz, Manahawkin, New Jersey (hereinafter, the assets including all property of every kind used in conjunction with FM station on 105.7 MHz and the licenses and associated authorizations for FM radio station on 105.7 MHz, Manahawkin, New Jersey presently held or hereafter acquired by Licensee, referred to as the "Station");


WHEREAS, Broker desires to use Station's broadcasting time for the presentation of programming, including the sale of advertising time;


WHEREAS, Licensee Shareholder Corporations are owners of all of the issued and outstanding shares of the capital stock of Licensee (the "Shares"); and


WHEREAS, in consideration of the obligations incurred by the Broker in entering into and performing this Agreement, Licensee and Licensee Shareholder Corporations are granting an option to purchase the Shares.


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NOW, THEREFORE, for and in consideration of the mutual covenants herein contained, the parties hereto have agreed and do agree as follows:


1. FACILITIES. Commencing on the Effective Date as described in Section 3, Licensee agrees to make its broadcasting transmission facilities available to Broker and to broadcast on the Station, or cause to be broadcast on the Station, Broker's programs which will originate from Broker's own facilities. A description of Broker's programs is contained in Attachment I hereto.


2. PAYMENTS. Commencing on the Effective Date as described in Section 3, Broker agrees to pay Licensee for the broadcast of the programs hereunder during the Term the sum of FIFTEEN THOUSAND DOLLARS ($15,000) per month for the first twelve (12) months of the Term, and EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY DOLLARS ($18,750.00) for the next twelve months, and Twenty-Three Thousand Four Hundred Thirty-Seven Dollars and Fifty Cents ($23,437.50) per month thereafter until the termination, including any extensions, of this Agreement, due and payable in advance on the first day of each month (the "LMA Payment"). Payment for the first month of this Agreement will be prorated if the effective date of this Agreement is not the first day of the month. In addition, the Broker will additionally pay to the Licensee its verifiable legitimate expenses incurred in the operation of the Station as described in Attachment II, with such expense payments to be remitted to Licensee by Broker within fifteen (15) days of Licensee's providing to Broker invoices or evidence of such expenses. The LMA Payment shall be applied as follows: 70% of this amount will constitute payment for programs broadcast during the hours of 5:00 a.m. to 9:00 a.m. and 3:00


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p.m. to 7:00 p.m. Monday through Friday; 25% of this amount will constitute payment for programs broadcast between 10:00 a.m. and 3:00 p.m. Monday through Friday and 7:00 a.m. to 7:00 p.m. Saturday and Sunday; and the remaining 5% for all other hours, with any credit to Broker to be determined on this basis. The Broker shall receive a payment credit for any programming provided by it to the Station and not broadcast by Station for whatever reason except for time utilized by Licensee under Section 6(i) and Section 6(ii), such credit to be determined each month by multiplying the monthly payment and reimbursements due by the ratio of the amount of time preempted or not accepted to the total number of broadcast hours produced by Broker in accordance with the percentages above with regard to the time period that the programming did not run. Each separate block of Broker's programming preempted or not accepted by Licensee that is of a length of less than eight (8) hours in duration shall be for the purposes of this computation be regarded as eight (8) hours in duration, such time that is the difference between the actual time and eight (8) hours to extend in equal lengths before and after the actual time preempted for the purpose of this computation. Where practicable, the Licensee shall give Broker advance notice of an intention to preempt Broker's programming. Broker shall promptly reimburse (and in no event later than 30 days) Licensee for payments by Licensee for programming with respect to ASCAP, BMI, SESAC, and any other copyright holders for Broker's programming broadcast on the Station.


3. EFFECTIVE DATE. The effective date of the time brokerage provisions of Agreement shall be the date upon which program test authority for Station commences, pursuant to Section 73.1260 of the Federal Communications Commission ("Commission") Rules, 47 C.F.R.ss. 73.1260, or successor rule ("Effective Date"). Prior to the Effective Date, this Agreement


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nonetheless represents the legal and binding obligations of the Licensee and Broker.


4. TERM. This Agreement will be in effect between the parties for a term that ends: on the date three (3) years after the Effective Date described in Section 3 above; or, in the event the Option is exercised by the Broker, upon a closing of any such transaction or termination as otherwise provided under this Agreement ( "Term"), provided, however, that if the Broker has failed to exercise the Option by the end of the Option Term, as defined in Section 18.1, either Licensee or Broker shall have the right to terminate this Agreement without penalty to the party giving notice upon its giving 120-days' written notice to the other party.


5. PROGRAMS TO BE CARRIED. Broker shall furnish or cause to be furnished the artistic personnel and material for the programs to be provided under this Agreement and all programs shall be in good taste and in accordance with Federal Communications Commission ("Commission") requirements. All programs shall be prepared and presented in conformity with the regulations prescribed in Attachment III hereto. All advertising spots and promotional material announcements shall comply with all applicable Federal, State and Local regulations and policies. If, in the sole judgment of the Licensee or the station's General Manager, the Broker does not comply with said standards, the Licensee may suspend or cancel any program not in compliance. In offering the commercial inventory of Station for sale to third parties and in otherwise holding itself out to third parties, in no instance will the Broker represent, suggest or otherwise give the impression that Broker has any ownership of, control over or connection with the operation of Station. Broker will affirmatively state to third parties in the sale of the Station's commercial inventory that Broker is acting as a time broker of Station's commercial


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inventory and programming only and that except for such role as a time broker, Broker has no other connection with or control over Station's programming, finances or operations.


6. STATION FACILITIES. Between the date of this Agreement and the Effective Date, Licensee will expeditiously and without delay construct the Station facilities so as to be able to commence broadcasting with the facilities authorized by the Commission. Thereafter, the Licensee will, at all times, operate the Station in accordance with the authorizations issued to it by the Commission. Commencing on the Effective Date and throughout the term of this Agreement, Licensee shall make the Station time available to the Broker for operation with the maximum authorized facilities twenty-four hours a day, seven days a week, except for: (i) downtime occasioned by routine maintenance not to exceed two hours each Sunday morning between the hours of 12 Midnight and 6:00 a.m.; (ii) up to three hours Sunday morning, during which time Licensee shall produce, at its own expense, public service programming designed to address the problems, needs, and issues relevant to the residents throughout the Station's listening area; and (iii) times which Broker's programs are not accepted or preempted by Licensee. Any maintenance work affecting the operation of the Station at full power shall be scheduled upon at least forty-eight hours prior notice with the agreement of the Broker, such agreement not to be unreasonably withheld. If the Station suffers loss or damage of any nature to its transmission facilities which results in the interruption of service or the inability of the Station to operate with its maximum authorized facilities, Licensee shall immediately notify Broker, and Licensee shall undertake such repairs as may be necessary to restore full-time operation of the Station with its maximum authorized facilities within seven days from the occurrence of such loss or damage. If such repairs are not made within seven (7) days, Broker


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may give Licensee twenty (20) days' notice of termination of this Agreement, and the Agreement shall terminate twenty days after such notice if the repairs are not made within the twenty-day period, and Broker shall have no further responsibility to make any payments pursuant to Section 2 of this Agreement, provided, however, that the Option in Section 18.1 shall survive for the Term.


7. HANDLING OF MAIL. Except as required to comply with Commission rules and policies, including those regarding the maintenance of the public inspection file (which shall at all times be the responsibility of Licensee), Licensee shall not required to receive or handle mail, cables, telegraph or telephone calls in connection with programs supplied by Broker hereunder unless Licensee, at the request of Broker, has agreed in writing to do so.


8. STATION EQUIPMENT, PERSONNEL AND EXPENSES


8.1. Licensee's Equipment. The equipment and fixtures at the Station, its transmitter site and any related studio equipment shall be and remain the sole property of the Licensee. Licensee shall be responsible for the maintenance of the Licensee's transmitter, tower, antenna and any related equipment, with such costs to be reimbursed by the Broker within fifteen (15) days after presentation of evidence of payment by Licensee of such costs. Prior to expending any funds for which the Licensee expects Broker reimbursement, the Licensee shall seek the consent of the Broker for such expenditure, and such consent shall not be unreasonably withheld. Notwithstanding the foregoing, nothing in this Section shall be interpreted to restrict or inhibit the Licensee from making repairs, changes and improvements to the Station for which the Licensee does not seek reimbursement.


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8.2. Responsibility for Employees and Expenses. Broker shall employ and be responsible for the salaries, taxes, insurance and related costs for all personnel and equipment used in the production of its programming and the transmission of its programming to the Station (including salespeople, traffic personnel, board operators, programming and satellite programming source installation staff). Licensee will provide and be responsible for the Station personnel necessary for the broadcast transmission of Broker's programs (including, without limitation, the selection and salaries of Station General Manager, Chief Operator, and any other necessary employees), and will be responsible for the salaries, taxes, insurance, and related costs for all the Station personnel used in the broadcast transmission of Broker's programs, as well as all equipment at the site where the Station's tower and transmitter are located. Whenever on the Station's premises, all personnel shall be subject to the supervision and the direction of the Licensee's General Manager and/or Chief Operator. Licensee shall pay all license fees for programming in respect to ASCAP, BMI, SESAC, and any other copyright holders for programming broadcast by Broker on the Station, which payments shall be promptly (and in no event later than 30 days) reimbursed by Broker upon notice of payment. Licensee will not spend or cause to be spent any funds not covered under this Agreement for which reimbursement is sought without the written consent of Broker.


9. ADVERTISING REVENUES. Broker shall retain all revenues derived from the sale of local, regional and national advertising time on the programs it delivers to the Station, and also any programming delivered directly to the Station by satellite facilities, and may sell such advertising in combination with the sale of advertising on any other broadcasting station of its choosing. Other than the brokered time sold to Broker under this Agreement, Licensee shall not


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sell any advertising or other time in exchange for cash, services or merchandise, except for political time that may be required by law to be sold by the Licensee in which case the Licensee shall promptly remit any such revenues obtained from the sale of such time to the Broker.


10. OPERATION OF STATION. Notwithstanding anything to the contrary in this Agreement, Licensee shall have full authority and power over the operation of the Station during the Term. Licensee's General Manager for the Station shall report solely to and be accountable solely to the Licensee, and shall direct the day-to-day operation of the Station. Licensee shall have complete control over the policies, programming and operations of the Station, including, without limitation, the right to decide whether to accept or reject any programming or advertisements and the right to preempt any programs in order to broadcast programs deemed by Licensee to be of greater national, regional, or local interest. Licensee shall retain the right to take any other actions necessary for compliance with the laws of the United States of America; the State of New Jersey; the rules, regulations, and policies of the Commission; and the rules, regulations and policies of other federal governmental authorities, including the Federal Trade Commission and the Department of Justice. Licensee shall at all times, be solely responsible for meeting all of the Commission's requirements with respect to emergency broadcast system tests, public service programming, and for maintaining the Station's political and public inspection files and for the preparation of Issues/Programs Lists. Broker shall maintain daily program logs as long as any applicable law should at any time direct and all program logs, or copies, shall be available for inspection or reproduction by Licensee. Licensee shall prepare and place in the public file, the quarterly Issues/Programs Lists. Licensee shall be ultimately responsible for all requests for political time from political candidates, and Broker


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shall coordinate with Licensee all such sales of political time in accord with Commission rules and regulations. Broker shall, upon request by Licensee, provide Licensee with information with respect to such of Broker's programs which are responsive to public needs and interests to assist Licensee in the preparation of required programming reports, and will provide upon request other information to enable Licensee to prepare other records, reports and logs required by the Commission or other local, state or federal governmental agencies.


11. LICENSEE'S UNFETTERED RIGHT OF PREEMPTION. The Licensee specifically reserves the right, in its sole discretion, to preempt, delete or not broadcast as the case may be any of the Broker's programs which the Licensee regards as being unsuitable for broadcast or the broadcast of which it believes would be contrary to the public interest. In all such cases, the Licensee will use its best efforts to give Broker reasonable notice of its intention to preempt such programs and, in the event of such preemption, Broker shall receive a payment credit for the p ...