Exhibit 10.44
EXECUTION COPY
AGREEMENT FOR THE SALE OF COMMERCIAL TIME
This Agreement for the Sale of Commercial Time ("Agreement") is entered
into as of June 1, 1999 by and between Mission Broadcasting of Wichita Falls,
Inc., a Delaware corporation ("Mission"), and Nexstar Broadcasting of Wichita
Falls, L.P., a Delaware limited partnership ("Nexstar"). Nexstar and Mission are
referred to collectively as the "Parties."
WHEREAS, Mission owns and operates television broadcast stations KJTL and
KJBO-LP, Wichita Falls, Texas ("the Stations"), and owns 100% of the stock of
Mission Broadcasting of Wichita Falls License, Inc. ("Mission Licensee"), the
licensee of the Stations pursuant to licenses issued by the Federal
Communications Commission ("FCC"); and Mission is engaged in the business of
television broadcasting and has available advertising time on the Stations;
WHEREAS, Nexstar desires to purchase advertising time on the Stations.
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Term of Agreement. The term of this Agreement shall commence on the date
of execution of this Agreement. The initial term of this Agreement is ten (10)
years. Unless otherwise terminated by either Party, the term of this Agreement
shall be extended for an additional ten (10) year term. Either Party may
terminate this Agreement at the end of the initial ten year term by six months
prior written notice to the other. Notwithstanding the foregoing, the Agreement
will terminate (i) upon the consummation of the purchase and sale of assets of
Mission relating to the Stations by Nexstar, or an assignee of Nexstar, under
the terms of a certain Option Agreement (the "Option Agreement") entered into by
Mission and an affiliate of Nexstar (the "Optionee"), or (ii) at Nexstar's
option, if the assets of Mission relating to the Stations are sold to a party
other than Optionee.
2. Advertising Time. Mission agrees that during the term of this Agreement,
it will sell to Nexstar, and will permit Nexstar to resell to advertisers, all
of the time available for commercial announcements on the Stations. All
advertising announcements furnished by Nexstar shall comply with applicable
federal, state, and local regulations and pertinent governmental policies,
including, but not limited to, lottery restrictions, prohibitions on obscenity
and indecency, deceptive advertising, false representations or deception of any
kind, and political broadcasting rules. Nexstar shall notify Mission in advance
of the broadcast of any material which promotes or opposes any candidate for
public office or any issue to appear on a ballot or takes a position on a
controversial issue of public importance. No material constituting a Personal
Attack within the meaning of the FCC's rules and regulations or which is
defamatory, violates any right of privacy, infringes on any intellectual
property right of another party, or is not in the English language will be
accepted for broadcast. Nexstar shall furnish Mission with all material required
to be made available for public inspection regarding requests for time by
political candidates or the broadcast of controversial issue advertising,
including information regarding receipt of any request by or on behalf of a
candidate for time and the disposition thereof (whether or not time was
furnished and, if so, the terms and conditions thereof), and the names of
officers and directors of any sponsor of controversial issue advertising. All
material furnished by Nexstar for broadcast on the Stations shall include any
and all sponsorship
identification announcements as required by Section 317 of the Communications
Act of 1934, as amended, and the FCC's rules and regulations, and Nexstar shall
undertake in good faith to determine each instance where such announcements are
required. To assist Nexstar in its advertising time sales efforts, Mission
shall, during the term of this Agreement, maintain the same television network
affiliation that is in effect on this date, unless ninety (90) days advance
written notice of an affiliation change is given to Nexstar.
3. Payments. During the term of this Agreement, Nexstar shall pay Mission
the payments set forth on Schedule A hereto.
4. Revenues. Nexstar shall collect on behalf of Mission all of Mission's
accounts receivable pertaining to the Stations in existence as of the first day
of the term of this Agreement (the "Accounts Receivable"). Nexstar shall be
entitled to all revenues attributable to commercial advertisements sold by
Nexstar, and all other advertising time revenue received, in each case with
respect to commercial advertisements broadcast during the term hereof.
Notwithstanding anything herein to the contrary, at the request of an
advertiser, Mission may set a reasonable rate for time on the Stations and sell
time in accordance with such rates for the account of Nexstar for broadcast
during the term of this Agreement.
5. Mission's Broadcast Obligations. During the term of this Agreement,
Nexstar shall assume, and undertake the administration and servicing of all of
Mission's contracts and other agreements which provide for the sale and
broadcast of advertising and related activities during the term of this
Agreement. All revenues arising from such contracts and agreements for
advertising broadcast during the term of this Agreement shall belong to Nexstar,
even though the time was sold by Mission; and all commissions to employees,
agencies, or representatives payable on account of advertising broadcast during
the term of the Agreement shall be paid by Nexstar. Mission shall remain
obligated to pay all fees, commissions or other amounts due under Mission's
contracts and other agreements, including but not limited to, national sales
representative fees, that arise prior to the first day of the term of this
Agreement, and that are reimbursed by Nexstar pursuant to Section 4 above.
6. Personnel. Nexstar shall employ and be responsible for the salaries,
benefits, employer taxes, and related costs of employment of a sales staff for
the sale of the advertising time and for the collection of accounts receivable
with respect to advertising sold by Nexstar pursuant to this Agreement. Mission
shall retain sufficient staff to oversee those aspects of its business and
financial matters not specifically delegated to Nexstar hereunder.
7. Interruption of Normal Operations. If either of the Stations suffers
loss or damage of any nature to its transmission facilities which results in the
interruption of service or the inability to operate full time at maximum
authorized facilities, Mission shall immediately
-2-
notify Nexstar and shall undertake such repairs as are necessary to restore the
full-time operation of the Station. If the Station does not resume operation
with at least 80% of its authorized signal coverage within one hundred twenty
(120) hours, Mission shall so notify Nexstar. Upon receipt of such notification,
Nexstar may, at its option, terminate this Agreement. In such event, Nexstar
shall be entitled to a pro rata refund of the payments made pursuant to Section
3 hereof.
8. Operation of the Stations. During the term of this Agreement, Mission
shall continue to maintain full control over the operations of the Station,
including programming, editorial policies, employees of Mission, and
Mission-controlled facilities. Mission is responsible for the Stations'
compliance with the Communications Act of 1934, as amended, FCC rules,
regulations, and policies, and all other applicable laws. Mission shall be
solely responsible for and pay in a timely manner all expenses relating to the
operation of the Stations other than for the sale of advertising time, including
but not limited to, maintenance of the studios and transmitting facilities and
all taxes and other costs incident thereto; payments due under any leases,
contracts and agreements; music performance license fees; and all utility costs
relating to the operation of the Stations. Mission shall also maintain insurance
covering the Stations' transmission facilities. Mission may, in its sole
discretion, decline to accept advertising sold by Nexstar, in the event that it
reasonably believes that the broadcast of such advertising would violate
applicable laws or regulations, would damage Mission's reputation in the
community, or would otherwise be contrary to the public interest, or preempt any
of the commercial time sold by Nexstar in order to present program material of
pressing public interest or concern. Mission shall promptly notify Nexstar of
any such rejection or rescheduling of advertising and shall cooperate with
Nexstar in efforts to fulfill Nexstar's commitments to advertisers. In the event
Nexstar sustains any liability or loss of revenue as a result of the rejection
or rescheduling by Mission of any advertising for any reason other than as set
forth above, Mission shall promptly indemnify Nexstar for any and all such
losses. Nexstar shall not enter into any contract, without Mission's approval,
that would be violated if Mission reasonably exercised its foregoing rights.
9. Advertising Rates. The rates for advertising sold by Nexstar shall be
set by Nexstar, provided, however, that Nexstar shall comply with all applicable
statutes and regulations regarding access to airtime and rates charged for
political advertising and shall indemnify Mission against any liability incurred
by Mission as a result of Nexstar's failure to comply with such statutes and
regulations.
10. Delivery of Material for Broadcast. All advertising material furnished
by Nexstar for broadcast on either of the Stations shall be delivered to the
Station on tape cartridges, or other mutually agreeable method, in a format to
be agreed upon by Nexstar and Mission, in a form ready for broadcast on the
Station's existing playback equipment, and with quality suitable for television
broadcast. Mission shall not be required to provide production services or to
copy, reformat, or otherwise manipulate material furnished by Nexstar other than
inserting tape cartridges into machinery for broadcast.
-3-
11. Access to Station Premises. Nexstar shall have access to any available
space at the studio and offices of the Stations for purposes of selling time and
producing commercial announcements to the extent reasonably necessary or
appropriate for Nexstar to exercise its rights and perform its obligations under
this Agreement. When on the Station premises, Nexstar's personnel shall be
subject to the direction and control of Mission's management personnel and shall
not act contrary to the terms of any lease for the premises. If Nexstar utilizes
telephone lines other than those of Mission in connection with its sale of time
on the Station, it shall not answer those lines in a way that implies that the
lines are those of Mission; but Nexstar may use the Stations' call letters in
promotional literature and in answering the telephone (e.g., "KJTL Sales").
12. Billing. Nexstar shall keep written records relating to the sale of
commercial advertising consistent with Nexstar's past practices at its existing
station.
13. Mission's Representations and Warranties.
(a) Mission represents and warrants as follows:
(i) Mission License holds all licenses, permits and
authorizations necessary for the operation of the Stations as presently
conducted. Such licenses, permits and authorizations currently are in full force
and effect, and Mission will undertake in good faith to keep them in full force
and effect throughout the term of this Agreement.
(ii) There is not now pending, nor to Mission's best knowledge is
there threatened, any action by the FCC or any other party to revoke, cancel,
suspend, refuse to renew or otherwise modify any of such licenses, permits or
authorizations.
(iii) Mission is not in material violation of any statute,
ordinance, rule, regulation, policy, order, or decree of any federal, state, or
local entity, court, or authority having jurisdiction over it, the Stations, or
over any part of their operations or assets, which default or violation would
have a materially adverse effect upon Mission, its assets, the Stations, or upon
Mission's ability to perform this Agreement.
(iv) During the term of this Agreement, Mission shall not take
any action or omit to take any action which would put it in material violation
of or in default under any agreement to which Mission or its owners is a party,
which default or violation would have a material adverse impact upon Mission,
its assets, or the Stations or upon Mission's ability to perform this Agreement.
(v) All reports and applications required to be filed with the
FCC or any other governmental body have been, and during the term of this
Agreement will be filed in a timely and complete manner by Mission. Mission
currently maintains and will continue to maintain the Stations' facilities in
accord with good engineering practice and in compliance in all material respects
with the engineering requirements set forth in the Stations' FCC licenses,
-4-
including broadcasting at substantially maximum authorized power (except at such
time that reduction of power is required for routine or emergency maintenance).
(vi) Mission currently has, and throughout the term of this
Agreement, will maintain, good and marketable title to all assets and properties
used in the operation of the Stations.
(vii) Mission may, during the term of this Agreement, dispose of
any of its assets or properties, so long as: (1) such action does not adversely
affect Mission's ability to perform its obligations hereunder; and (2) such
action does not abrogate any of Nexstar's rights hereunder.
(b) Nexstar and Mission each represent and warrant to the other that
it has the power and authority to enter into this Agreement and to engage in the
transactions contemplated by this Agreement. Each of Mission and Nexstar is a
corporation which is in good standing in the state of its formation and
qualified to do business in the State of Texas. The signatures appearing for
Nexstar and Mission, respectively, at the end of this Agreement have been
affixed pursuant to such specific authority as, under applicable law, is
required to bind them. Neither the execution, delivery, nor performance by
Mission or Nexstar of this Agreement conflicts with, results in a breach of, or
constitutes a default or ground for termination under any agreement or judicial
or governmental order or decree to which Mission or Nexstar, respectively, is a
party or by which it is bound.
14. Events of Default. The following shall, after the expiration of the
applicable cure periods, constitute Events of Default under the Agreement:
(a) Non-Payment. Nexstar's failure to remit to Mission any payment
described in Section 3 above in a timely manner.
(b) Default in Covenants. The default by either party hereto in the
material observance or performance of any material covenant, condition, or
agreement contained herein, or if any material misrepresentation or warranty
herein made by either party to the other shall prove to have been false or
misleading as of the time made.
15. Cure Period and Termination upon Default. An Event of Default shall not
be deemed to have occurred until ten (10) business days after the nondefaulting
party has provided the defaulting party with written notice specifying the event
or events which if not cured would constitute an Event of Default and specifying
the actions necessary to cure within such ten day period. The notice period
provided in this Section shall not preclude Mission from at any time preempting
or refusing to broadcast any advertising furnished by Nexstar. If Nexstar has
defaulted in the performance of its obligations and has failed to cure such
default within the applicable time period, Mission shall be under no further
obligation to make commercial time available to Nexstar, and all amounts then
due and payable to Mission shall immediately be paid to Mission.
-5-
16. Other Agreements. Mission will not enter into any other commercial time
sales (except as permitted by Section 4 hereof), time brokerage, local marketing
or similar agreement for the Stations with any third party during the term of
this Agreement. Mission will also not purchase or accept for broadcast on the
Stations any programming that includes commercial advertising sold by any third
party without Nexstar's consent, excluding national advertising time sold in
network programming and nationally syndicated barter programming aired on the
Stations.
17. Liabilities after Termination. After the expiration or termination of
this Agreement for any reason other than an assignment of the Stations' assets
to Nexstar or any assignee of Nexstar, (i) Mission shall be responsible for
broadcasting such advertising on the Stations as may be required under
advertising contracts entered into by Nexstar during the term of this Agreement
and (ii) Mission shall be entitled to any revenues for advertising broadcast
after termination of this Agreement.
18. [Reserved]
19. Indemnification; Insurance. Nexstar shall indemnify and hold Mission
and its officers, directors, stockholders, agents, and employees harmless
against any and all liability for libel, slander, illegal competition or trade
practice, infringement of trademarks, trade names, or program titles, violation
of rights of privacy, and infringement of copyrights and proprietary rights
resulting from or relating to the advertising or other material furnished by
Nexstar for broadcast on the Stations, along with any fine or forfeiture imposed
by the FCC because of the content of material furnished by Nexstar or any
conduct of Nexstar. Mission shall indemnify and hold Nexstar and its officers,
directors, members, agents, and employees harmless from any failure by Mission
to broadcast advertising material furnished by Nexstar expect as permitted by
Section 8 of this Agreement. Indemnification shall include all liability, costs,
and expenses, including counsel fees (at trial and on appeal). The
indemnification obligations under this Section shall survive any termination of
this Agreement. The obligation of each party to indemnify is conditioned on the
receipt of notice from the party making the claim for indemnification in time to
allow the defending party to timely defend against the claim and upon the
reasonable cooperation of the claiming party in defending against the claim. The
party responsible for indemnification shall select counsel and control the
defense, subject to the indemnified party's reasonable approval, provided,
however, that no claim may be settled by an indemnifying party without the
consent of the indemnified party, and provided further, that if an indemnifying
party and a claimant agree on a settlement and the indemnified party rejects the
settlement unreasonably, the indemnifying party's liability will be limited to
the amounts the claimant agreed to accept in settlement. Nexstar and Mission
shall each carry (A) comprehensive general liability insurance with reputable
companies covering their activities under this Agreement, in an amount not less
than One Million Dollars ($1,000,000.00); (B) worker's compensation and/or
disability insurance; and (C) libel/defamation/First Amendment liability
insurance, with a deductible of no more than $100,000. Each Party will name the
other party as an additional insured on these policies.
-6-
20. No Partnership or Joint Venture. The Agreement is not intended to be,
and shall not be construed as, an agreement to form a partnership, agency
relationship, or a joint venture between the parties. Except as otherwise
specifically provided in the Agreement, neither party shall be authorized to act
as an agent of or otherwise to represent the other party.
21. Successors and Assigns. Neither party may assign its rights and
obligations under this Agreement, either in whole or in part, without the prior
written consent of the other; however, such consent shall not be unreasonably
withheld. The covenants, conditions and provisions hereof are and shall be for
the exclusive benefit of the parties hereto and their permitted successors and
assigns, and nothing herein, express or implied, is intended or shall be
construed to confer upon or to give any person or entity other than the parties
hereto and their permitted successors and assigns any right, remedy or claim,
legal or equitable, under or by reason of this Agreement. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
permitted successors and assigns.
22. Authority; Construction; Entire Agreement. Both Mission and Nexstar
represent that they are legally qualified and able to enter into this Agreement,
which shall be construed in accordance with the laws of the State of Texas
without regard to principles of conflict of laws. This Agreement, the Shared
Services Agreement, and the Option Agreement embody the entire agreement between
the parties with respect to the subject matter hereof and thereof, and there are
not other agreements, representations, or understandings, oral or written,
between them with respect thereto.
23. Modification and Waiver. No modification or waiver of any provision of
the Agreement shall be effective unless in writing and signed by the party
against whom such modification or waiver is asserted, and no failure to exercise
any right, power, or privilege hereunder shall operate to restrict the exercise
of the same right, power, or privilege upon any other occasion nor to restrict
the exercise of any other right, power, or privilege upon the same or any other
occasion. The rights, powers, privileges, and remedies of the parties hereto are
cumulative and are not exclusive of any rights, powers, privileges, or remedies
which they may have at law, in equity, by statute, under this Agreement, or
otherwise.
24. Unenforceability. If any provision of this Agreement or the application
thereof to any person or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provision to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law, except that if such invalidity
or unenforceability should change the basic economic positions of the Parties,
they shall negotiate in good faith such changes in other terms as shall be
practicable in order to restore them to their prior positions. In the event that
the FCC alters or modifies its rules or policies in a fashion which would raise
substantial and material questions as to the validity of any provision of this
Agreement, the Parties shall negotiate in good faith to revise any such
provision of this Agreement in an effort to comply with all applicable FCC rules
and policies, while attempting to preserve the intent of the Parties as embodied
in the provisions of this Agreement. The Parties agree that, upon the request of
either of them, they will join in requesting the view of
-7-
the staff of the FCC, to the extent necessary, with respect to the revision of
any provision of this Agreement in accordance with the foregoing. If the Parties
are unable to negotiate a mutually acceptable modified Agreement, then either
party may terminate this Agreement upon written notice to the other, and each
Party shall be relieved of any further obligations, one to the other.
25. Notices. Any notice required hereunder shall be in writing and any
payment, notice, or other communication shall be deemed given when delivered
personally or, in the case of communications other than payments, delivered by
facsimile as follows:
To Mission: ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To Nexstar: Nexstar Broadcasting of Wichita Falls, L.P.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President/General Manager
With a copy (which shall not constitute notice) to:
Nexstar Broadcasting of Wichita Falls, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, President
and
▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
26. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.
-8-
27. Headings. The headings are for convenience only and will not control or
affect the meaning or construction of the provisions of this Agreement.
28. Schedules. Any schedules attached hereto are an integral part of this
Agreement with the same force and effect as if set forth in full in the text of
the Agreement.
29. Waiver of Jury Trial. AS A SPECIFICALLY BARGAINED INDUCEMENT FOR EACH
OF THE PARTIES TO ENTER INTO THIS AGREEMENT (EACH PARTY HAVING HAD OPPORTUNITY
TO CONSULT COUNSEL), EACH PARTY EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN
ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREIN.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-9-
SIGNATURE PAGE TO
AGREEMENT FOR THE SALE OF COMMERCIAL TIME
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
MISSION BROADCASTING OF WICHITA FALLS, INC.
By: /s/ ▇▇▇▇▇. ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
NEXSTAR BROADCASTING OF WICHITA FALLS, L.P.
By: NEXSTAR BROADCASTING OF WICHITA FALLS GP,
INC., its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
SCHEDULE A
Nexstar will pay to Mission the sum of One Hundred Thousand Dollars
($100,000) per month, subject to an equitable adjustment reasonably acceptable
to both parties to assure that the amount of any such monthly payment shall be
equal to Mission's Expenses (as defined below) for such month (the "Equitable
Adjustment"). Except for the Equitable Adjustment, if any, which shall be paid
by the first of the following month, all payments hereunder shall be payable in
advance on or before the first calendar day of such month. For purposes of this
Section, the term "Expenses" shall include reasonable and prudent operating
costs associated with the Stations as may be incurred by Mission in the ordinary
course of business consistent with past practice and debt service, plus $10,000
per month; or as may be required to be paid by Mission under FCC rules and
policies.