Time Brokerage Agreement

TIME BROKERAGE AGREEMENT


THIS AGREEMENT, is made as of this 25th day of October, 1999, by and between SPANISH BROADCASTING SYSTEM OF FLORIDA, INC., a Florida corporation ("Licensee"), and RAUL ALARCON, SR. ("Broker").


WHEREAS, Licensee is authorized to operate Radio Stations WZMQ(FM), Key Largo, Florida, and WVMQ(FM), Key West, Florida (collectively, "Stations"), pursuant to licenses issued by the Federal Communications Commission ("FCC"); and


WHEREAS, the parties hereto have carefully considered the FCC's time brokerage policies and intend that this Agreement in all respects comply with such policies; and


WHEREAS, the Key West and Key Largo, Florida area radio and advertising markets are highly competitive and will remain so, unaffected by the transactions contemplated hereunder; and


WHEREAS, Licensee desires to enter into this Agreement to provide a regular source of diverse programming for the Stations; and


WHEREAS, Broker desires to provide an over-the-air program service to the Key West and Key Largo, Florida area using the facilities of the Stations; and 2
WHEREAS, Licensee agrees to provide time 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 select and broadcast programming that conforms with the policies of Licensee and with all rules, regulations, and policies of the FCC, and as set forth herein; and


WHEREAS, Licensee and Broker have filed with the FCC an application seeking an assignment of the licenses, permits and authorizations for Stations from Licensee to Broker.


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 cause to be broadcast, Broker's programs which will originate from Broker's own studios, subject at all times to Licensee's right to reject any programming as specified in this Agreement, including but not limited to Section 9 below. The Broker's program service is described in Exhibit A hereto and made a part hereof.


2. TERM. The term of this Agreement shall be for the period commencing November 2, 1999 and ending upon consummation of the sale of the Stations to Broker, or five (5)


2 3 days following the FCC order refusing to approve the sale of Stations to Broker.


3. PROGRAMS. Broker shall furnish or cause to be furnished programs to be broadcast on the Stations 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 ("Act"), as well as the programming policies of the Licensee. The Broker shall make available to Licensee its programming during a sufficient number of hours to enable the Stations to meet the minimum hours of operation required under the FCC's Rules. All advertising messages and promotional material or announcements to be furnished by Broker shall comply with all applicable federal, state and local laws, regulations and policies, and shall be subject to the review and approval of the Licensee.


4. STATIONS FACILITIES.


A. OPERATION OF STATIONS. The Stations operate and will continue to operate throughout the term of this Agreement in accordance with the authorizations issued to it by the FCC. Throughout the term of this Agreement, Licensee shall make the Stations available to the Broker for program transmission for One Hundred Sixty-Seven (167) hours per week, Sunday through Saturday, except for downtime occasioned by routine maintenance


3 4 and a one-hour time period between 6:00 A.M. and 7:00 A.M. Sunday mornings to be broadcast with programming to be supplied by the Licensee at its option. Licensee shall provide at least 48-hours prior notice to Broker of any routine or non-emergency maintenance work affecting the operation of the Stations.


B. INTERRUPTION OF NORMAL OPERATIONS. If the Stations suffer any loss or damage of any nature to its transmission or studio facilities which results in the interruption of service or the inability of the Stations to operate with their maximum authorized facilities, Licensee shall immediately notify Broker and Licensee shall undertake such repairs as are necessary to restore full-time operation of the Stations with their maximum authorized facilities as expeditiously as possible following the occurrence of any such loss or damage. If Broker or any of its agents or employees causes any damage to any of the Stations' Facilities, Broker shall promptly reimburse Licensee for any such damages.


C. STUDIO LOCATION. Licensee shall maintain a main studio within the Stations' principal community of licensee and shall staff the Stations consistent with the FCC's Rules and policies, including maintaining a general manager who will, among other things, review and approve the programming of Broker.


5. PUBLIC FILE. Licensee is required to comply with Commission Rules and policies, including those regarding the


4 5 maintenance of the Stations' local public inspection file (which shall at all times remain the responsibility of the Licensee). Licensee shall also be required to receive or handle mail, faxes, cables, telegraph messages or telephone calls in connection with programs submitted by Broker and broadcast by the Stations.


6. PROGRAMMING AND THE PUBLIC INTEREST. The programming provided by Broker shall consist of such public affairs programming, public service announcements, music, news, weather reports, sports, promotional material, commercial and advertising, as are deemed appropriate by Broker. Licensee shall have the full and unrestricted right to delete and not broadcast any material contained in any part of the brokered 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. Licensee shall have the unrestricted right not to broadcast programming as specified in Section 10 of this Agreement.


7. RESPONSIBILITY FOR EMPLOYEES AND EXPENSES. Broker shall be responsible for the salaries, commissions, taxes, insurance and all other related costs for all personnel involved in the production and sale of the programming and commercial messages submitted to and broadcast by the Stations, including, but not limited to, air personalities, salespersons, traffic personnel, etc. Broker shall be responsible for delivering the


5 6 programming and/or the broadcast signal to Licensee's Stations. Licensee shall be responsible for paying all direct operating costs of the Stations as follows:


a. Lease payments for use of the Stations' transmitter and
antenna sites;


b. Utility bills for utility services at both the main
studio location and the transmitter site of the
Stations;


c. 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;


d. Salaries, payroll taxes, insurance and related costs of the
minimum number and type of personnel required by the policies
and rules of the FCC to be employed by Licensee for the
Stations which shall consist of no more than a general manager
and an office worker;


e. Music performance rights license fees payable by Licensee to
ASCAP, BMI and SESAC;


f. Costs of equipment repair and supplies; and


g. Costs of engineering or technical personnel necessary to
assure compliance with FCC rules and policies and maintenance
and repair of the Stations' technical facilities.


6 7 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, with the understanding that Broker's employees are subject to the supervision and direction of the Licensee consistent with this Agreement. Broker shall be solely responsible for payment of any and all copyright license fees attributable to its programming broadcast on the Stations pursuant to this Agreement, to the extent that the programming of the Broker to be broadcast on the Stations requires any copyright licenses other than those to be secured by Licensee under Licensee's music performance rights license agreements with ASCAP, BMI and SESAC. Licensee agrees to maintain performance rights licenses issued by ASCAP, BMI and SESAC as now are or hereinafter may be in general use by radio broadcasting Stations. In the event that ASCAP, BMI or SESAC demands that Broker obtain its own separate performance rights license with such performance rights society(ies), Broker shall promptly enter into such agreements and 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.


8. ADVERTISING AND PROGRAMMING REVENUES. Broker shall retain all revenue ...