.12' Lemme-E a FACILITIES I unwess'irr a mansion Of?ce or the Vice President November 12, 2015 Allan Beltran . ?ee-President for Finance and Administration . University, Inc. 1.. 121's} arid-Park Avenue 9847?? I . .- :Acqnisitienuf Paci?c Lutheran Universlw?adle-Statiens - i. bear Mr. Beiton: This letter (the ?Le-tier oflntenr") is intended to summarize the fu?nrlamental terms- . ender'whichithe,University of Washington Board-of Regents (the "3uyer?], preposegte acquire i?t?l'ie license-sand certain assets (the "Asse'ts? held by Pacific Lutheran University, inc. [the gi?el?lerfi'lzrelating to the following (the "Stations"): Full: Power FM stations: 88.5 90.1 KFU, (Cll'ympiah KPLK, 88.9 and 89.3 KVIX (Port Angeiesl rial translators: Ranaei, Betlingham; rump, Centralia; K212AG, Aberdeen; Kzaasm; Lengviewrand biz-8866 Mount vernen. Washington. .EM..Tran'sla.tnr Construction Permit Ariel, Washington I and any other FM translator ceramic-{inn to seller prior ti: clesingt - In this Letter ef intent, Buyer and Seller are snmetimes each individually referred to as and collectively referred to as the "Parties," and Buyer?s possible acquisition of?the Assets is someti mes called the "Proposed The Par-ties Ingeod faith Wish to commence negatiation of a definitive asset purchase :ag?iaement' for the Proposed Annuisitien [a "Definitive Agreement"). To facilitate the 'n?getiatlen of a. Definitive-Agreement, Buyer's counsel will prepare an initial draft of the . - Definitive Agreement. The execution of a Definitive Agreement is subject to Buyer?s Fjjsatis'fa'c'tory eom'pietinn of its business, legal, engineering, environmental and "financial due 4311 11"? Avenue 600 Box 354993 Seattle. Washington 98105 205-543-3735 far: 206,643.3693 Wm; - .- . . rau? HM -. 1- oH-qu- muu- - Ira- Pacliicjtutheran university, inc. Page? November 12, 2015 diligence and Seller's and Buyer's satisfaction with the terms and conditions of the Definitive lemma?i i Agreemem. By its execution of this Letter of Intent, Buyer proposes the following terms: 1. Basic Transaction. Seller will sell, and Buyer will purchase, the Assets (as de?ned below?) for the price (T'Porchose Price?) of Eight Million Dollars which willbe paid in the following manner: 3 Upon. execution of a Definitive Agreement, Buyer will deliver to a mutuallyr agreed-upon escrow agent an escrow deposit of Five Percent of the cash portilonof the purchase price or Three Hundred Fifty Thousand Dollars {the "Escrow Deposit?); and b. At Closing (as that-term shall be defined in Agreement], Buyeriwiil'direct that the Escrow Deposit be paid to Seller. and shall pay to Seller . by wine transmit-of the-additional sum'of Six'Million Six Hundred Fifty Thousand Dollars plus-or minus any c'tistomarv proratlons in immediately available funds; and . c. The. remaining portion of the Purchase Price will be in the form of underwriting announcements for Seller to be broadcast on Buver?s broadcast stations {to include-the Stations} and other marketing messages forSelier to be deliveredon other media platforms operated by? Buyer, which undenwiting announcements and marketing messages (collectively; -?$eller Messaging?) will :(iihaae an aggregatelvalue of One Million Dollars $1,000,000.00) and ill} be. i used at the ratefof up to One Hundred Thousand Dollars per year for too years_'frdm the-Closing. Up to Ten Thousand Dollars- of Seller Messaging-vallLiejunused in one-year may be carried over to the next year and onto TenTh'ot-isand Dollars of Seller Messaging value unused at'ther-end often years may be'carried over one more year. Other than Seller Messaging carried over from a prior year, anv Seller Messaging In excess of 5100300 in any year will be subject to Buyer?s approval and; .inthat case} the excess shall be applied against the limit for the next year. On each occastn Seller places ajn?orderior Seller Messaging, the value of 'such Seller Messaging Will'bejdetermined on the basis of the amount received bv Buyer during the prior calendar quarter for. comparable underwriting announcements and/or 'ma'rlteting. messaging placed on behalf of other non?profit educational organizations. Assets. The Assets will consist of: liacific Lutheran University, inc. November 12, 2015 Page 3 menial 1 Station assets; All transmitters, transmission lines, antennas, microwave. links, andassociated equipment at each transmitter site (whether deemed real or I 1 personal property} and all studio equipmentand related equipment {including com'putersl' located- o?utside of campus and used in the operations of the Stations. Asse?: Seller?s music library associatedwith. the Stations, along with any licenses or other rights to perform andfor to record the music works in the library will be assigned to Buyer {to the extent assignable), with out Warranty, except as otherwise Speci?ed in the Definitive Agreement. 'Donor Records; Subject to any-limitations imposed by specific- donorsgor applicable privacy laws-all lists of. donors to any or all of the Stations, including - anv software for managing such lists {owned or licensed, as the case may be); Website and?Inteliectual Propertvr The design, right to operate, antil agreements associated with-the KPLUJwebsites,including audio streaming-capability and a'ii 'of rights with respect to the logos, slogans, trademarks, service marks- antl other intellectual property used in'the operation of the Stations and-the KPLU streaming; sewices (including, but not limited to, domain names andthe Tia-tam" and i?Paclfic Public Media? serviCe marks, but excluding the call sign to the extent the same are assignable. Assumed Leases. Buyer will assume and perform in the ordinary tourse of buainess all transmitter site leases for the Stations. Assumed Affiliation-Agreements- Buyer will assume and perform the Jazz 24 Affiliation Agreements with stations or other entities not owned by Seller, but not assume Seller's membership agreement, with NPR. KPLU is affiliated with NW News Network {as is The parties will need to assess how to address that affiliation. Excluded Assets and Excluded Liabilities. Buyer will not acquire and/or assume the following. assets and liabilities: Cash or cash equivalents held by Selier as of Closing. ?Ail accounts receivable, except that pledges that have not been paid to KPLU at Closing will be assigned, without warranty, to Buyer. Paged manual I Paci?clLutheran University. inc. November 12, 2015 - CPB- grant funds, including (256 grant funds, except with the prior written consent of CPB. Studio eqUipment locatedo'n main campus at the Neeb Building, 12189 - Park Mange 3.. Tacoma, WA 93447. and the transmission tower located on the upper FLU campus at same address. . Funds oil-deposit with. lessors or thirdroarty'vendors. Of?ce. equipment iotateo at Stations' studios. Leasesz'or'bther agreements to occupy officelspace, studio space or storage soacele?xcept Storage space at'th'e' site's}. Program Affilietlon Egreernents with stations or other entitles except for the Jazz-24 affiliationagreements. The-callsign Employees and employment agreements. Amend all contracts and liabilities not expresst assumed'by- UW, including, but'riot liotitedto? liabilities cram; kind relating to operation of the Stations . prior to closing on the acquisition . 1. ..5el er_ has'a contract with the Screen Actors Guild elemen?can Federation . of Television and Radio Artists, 3 union representing-some of employees. Buyerwill not beessuming Seller?s Under that contract.? Seller will provide applicable notices to that Union. Althougnnotobllgate?d to hire any of KPLU's employng Buyer will carefully consider all of- employees for employment. 'Eentingencies. l. The Definitive Agreement will be subject to approval by Buyer?s and Seller?s governing bodies. - Page-5 (mutual: 10. 11, - I-Paci?c Lutheran University, Inc, November 12,. 2015 2. Thesale will be contingent on obtaining approvals of all applicable third parties. 3. Prior to executing the Definitive Agreement, Seller will be obtaining a lifairness?: opinion, and. it 1i'rill.contiitinn the Definitive Agreement on receiving an. opinion-acteptable to Seller. 4. Buyer- ass'ores Seller that'rthas sufficient funds to pay the Purchasefli?rice Without obtaining additionalflnancing and therefore the sale will not be contingent on such financing. Representations, Warranties. Covenants and indemni?es. Through the Definitive Agreement, Seller amt-Quiver will each make representations-and . - warrantiesito the other Party, and will preside covenants, indemnities, and for the benefitef-thia other Partv, as are customary in a transaction.th this :Wpe'with respecttothe period of time each Part5? owned and operated the Stations. . FCC-Approvals Closing wlli he contingent'upon' the approval of the. Federal Communications Commission the a'ssignrnent'of the'Statiens to Buyer, 'withinftwo'hun'dred seventyi-ZTOJ days after-an application for coinsent to assignment-af?nelicenses of the Stations is filed'_with the FCC, unless the - Parties extend that deadlinebv mutual agreement. The Parties will, at their cosh; cooperatewltheach ether inthe preparation and prosecution of the assignment applicationin order to timely process the approvals. lilo-sing. Date. The transfer of ownership of the Assets will occur within (10] - business-"clays after-thaFQC?S-grant of the assignment application becomes .a ?(Final bitter" as that'term-will be defined in the Definitive Agreement. gag Diligence; Buyer will have__untii 5:00 pm. Pacific Time on December 18, 21315. {"Termination. Time"} to complete. its due diligence review. anal-enter- into. the Datin'itiueAgreement. During that time period, Seller agrees to allow Bayer full access {atisuch times as are reasonable} to the Stations, Seller?s properties, contracts, books and records and all? documents and data pertaining to- the Assets and the Stations. Buyer shall be the sole judge as-to whether ~itscitie diligente examination is satisft-ictori,r to it in all respects.- If the Parties have not . exchtE-d the Definitive Agreement as of the Termination Time, the Parties shall have no further dqtiesorpbligations under this Letter of intent, except as specified in Paragraph 12 below. Pacific Lutheran _iJ niversity, inc. November 121 2015' Page 6 a No 3th .. Between the execution of. this Letter of Intent and-the Termination 12. 13. 14. . 15. 16. 17. reason-l 1 Time; shall not, directly or' indireCtitr, through any'representative or othemisLessoii-citpr entertainoifers from, negotiate With or in any manner encourage, discuss, accept or consider any proposal of any other person or . entity'relatingto the acquisititin of the Assets in whole or in part, whether directly 0r indirectly, through purchase, merger, consolidation or otherwise, Condoct of?Bosiriess. Prior to Closing, Buyer will not proiride programming, any other services, of anti ?nancing to. any of the Stations. During the penod from. the-extrication of this tetter'of intent tintii either the execution'hythe Parties of a De?nitive Agreement orthe?i'e?rn?iination Time; Seller-she'll operate its hosiness in 'tit'e'or'dinary! hoarse, withoutany reduction or material change in'its mdsic - programming seminars, and shall refrain from an? extraordinary transactions, unless mutu'aliv agreed japan in writing by both. Parties. Joint-Massaging.- Seller and Boyer will agree on Joint messaging about; the -- transition 'of the Stations ?fomISeiier to Buyer that will be released . simultaneously as of the merning of November 12, 2015; Further,. Seller and .Birverifointiy will: issue a message tothe Stations? donors with respect to the . transition, which! message will expia'ln that the Stations? donor information Is to be prodded-to Bayonhut thattherStations? donorwill have the right fora period "of time? to opt out ofsuch'disciosure to Buyer. The Parties. previously have entered into'a. No?ndisoiosure' isheing amended in a separate document to be executed contemporaneouny With the execution of this Letter of intent. Seller will eachhe responsible for and beanail of its own - .,respeotii.re costs and- expenses (including the expensesof. its representatives} incurred at any time in connection with pursuing or consummating the Ami-limb.? Each Patti} 'repfeS?nts to the: other that-no broker or ?nder has'been involved in the Proposed Acquisition. Non?Binding.: Except as expressly provided herein, this Letter of intent is) is not Intended?to be; and is'not', a binding agreementbetween the Parties not merely constitutes an .exp_ression of their intent with regard to the transactions described herein and (bi-imposes no or binding obiigation on either Party. Notwithstanding the foregoing; Paragraphs 12, 15,. 16 and ?ithe ?Binding Provisions?) constitute binding agreements of the Parties enforceable in accordance with their respective terms. Except as expressly provided in'the .. :le. Pacific Lutheran-University, inc. November 12, 2015 Page 7 Binding Provisions {or- as expressly provided in any binding written agreement that the Parties may enter intoin the fUtur'e], no past or future action; course of conduct. or failure to act related to the Proposed Acquisition; orrelatingto? the negotiation of the terms of the Proposed Acquisition or any De?nith Agreement, willigiue rise to or serve as a basis for any obligation or other liability on the 'part of-the Parties; ifyou a re in agreement with the foregoing, please sign. and return one copy of this letter agreement. The proposal setforth'in this Letter of intent will remain In effect until 5:00 gm, 1 sans: Time,'on the fifth business day after the date of this Letter of Intent, and will expire unless accepted by such time. - - . Very truly yours, interim Vice President Finance and Facilities - AND AGREED To "jean: LUTHERAN UNIVERSITY, Allan Belton Vite President for Finance and Administration 1131-!