Exhibit 10.2

 

Execution Copy

 

 

AGREEMENT FOR THE SALE OF COMMERCIAL TIME

 

This Agreement for the Sale of Commercial Time (“Agreement”) is entered into as
of May 9, 2003 by and between Mission Broadcasting, Inc., a Delaware corporation
(“Mission”), and Nexstar Broadcasting of the Midwest, Inc., a Delaware
corporation (“Nexstar”). Nexstar and Mission are referred to collectively as the
“Parties.”

 

WHEREAS, Mission provides programming to television broadcast station WBAK-TV,
Terre Haute, Indiana (the “Station”), pursuant to a Time Brokerage Agreement
(the “TBA”), and has entered into an Asset Purchase Agreement with Bahakel
Communications, Ltd. and certain other parties (“Bahakel”), pursuant to which it
has agreed to acquire substantially all of the assets of WBAK, both agreements
being dated as of the date hereof.

 

WHEREAS, Nexstar desires to purchase advertising time on the Station.

 

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 Station by Nexstar, or an assignee of Nexstar,
under the terms of a certain Option Agreement (the “Option Agreement”) entered
into by Mission and Nexstar or an affiliate of Nexstar (the “Optionee”), (ii) at
Nexstar’s option, if the assets of Mission relating to the Station are sold to a
party other than Optionee, or (iii) the termination of Mission’s right to
operate the Station under the TBA prior to Mission’s acquisition of the
Station’s assets.

 

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
Station. 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

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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 Station 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 the
Station’s accounts receivable pertaining to the Station 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 Station 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
the Station’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 even if the time was sold by
Mission. 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 the Station 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 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

 

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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 Station.    During the term of this Agreement, Mission,
and during the period from the date hereof until the Closing Date, as defined in
the Purchase Agreement, Bahakel, shall continue to maintain full control over
the operations of the Station, including programming, editorial policies,
employees of Mission (Bahakel), and Mission (Bahakel)-controlled facilities.
Mission, and during the Interim Period, Bahakel, is responsible for the
Station’s 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 Station 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 Station. Mission shall also maintain insurance
covering the Station’ transmission facilities. Mission, and during the Interim
Period, Bahakel, 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
(Bahakel’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 (and during the Interim Period, Bahakel’s) approval,
that would be violated if Mission (Bahakel) 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 the Station 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.

 

11.    Access to Station Premises.    Nexstar shall have access to any available
space at the studio and offices of the Station 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

 

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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
Station’s call letters in promotional literature and in answering the telephone
(e.g., “WBAK Sales”).

 

12.    Billing.    Nexstar shall keep written records relating to the sale of
commercial advertising consistent with Nexstar’s past practices at its existing
stations.

 

13.    Mission’s Representations and Warranties.

 

(a)  Mission represents and warrants as follows:

 

(i)  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.

 

(ii)  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 Station, or over any part
of their operations or assets, which default or violation would have a
materially adverse effect upon Mission, its assets, the Station, or upon
Mission’s ability to perform this Agreement.

 

(iii)  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 Station or upon Mission’s ability to perform this Agreement.

 

(iv)  To the knowledge of Mission, all material reports and applications
required to be filed with the FCC or any other governmental body prior to the
date hereof have been filed in a timely and complete manner. During the term of
this Agreement, Mission will file all reports and applications required to be
filed with the FCC or any other governmental body in a timely and complete
manner. Mission will maintain the Station’s facilities in accord with good
engineering practice and in compliance in all material respects with the
engineering requirements set forth in the Station’s FCC licenses, including
broadcasting at substantially maximum authorized power (except at such time that
reduction of power is required for routine or emergency maintenance).

 

(v)  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 Indiana. The signatures

 

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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.

 

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 Station with any third party during the
term of this Agreement. Mission will also not purchase or accept for broadcast
on the Station 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
Station.

 

17.    Liabilities after Termination.    After the expiration or termination of
this Agreement for any reason other than an assignment of the Station’s assets
to Nexstar or any assignee of Nexstar, (i) Mission shall be responsible for
broadcasting such advertising on the Station 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.    TBA.    This Agreement is subject to the terms of the TBA.

 

19.    Indemnification; Insurance.    Nexstar shall indemnify and hold Mission
and its officers, directors, stockholders, agents, and employees harmless
against any and all liability for

 

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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
Station, 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 except 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.

 

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 Indiana
without regard to principles of conflict of laws. This Agreement, the Shared
Services Agreement which the Parties have entered into on the date hereof, 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.

 

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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 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:   Mission Broadcasting, Inc.

         544 Red Rock Drive

         Wadsworth, OH 44281

         Attention:    David S. Smith, President

 

With a copy (which shall not constitute notice) to:

 

Drinker Biddle & Reath LLP

1500 K Street, N.W., Suite 1100

Washington, D.C. 20005-1209

Attention: Howard M. Liberman

 

  To Nexstar:   Nexstar Broadcasting Group, L.L.C.

         909 Lake Carolyn Parkway

         Suite 1450

         Irving, TX 75039

         Attention: Perry Sook, President & CEO

 

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With a copy (which shall not constitute notice) to:

 

John L. Kuehn, Esq.

Kirkland & Ellis

Citicorp Center

153 East 53rd Street

New York, NY 10022-4675

 

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.

 

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.

 

 

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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, INC.

By:

  /S/    DAVID S. SMITH    

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Name:

  David S. Smith

Title:

  President

NEXSTAR BROADCASTING OF THE

MIDWEST, INC.

By:

  /S/    PERRY SOOK    

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Name:

  Perry Sook

Title:

  President

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SCHEDULE A

 

Nexstar will pay to Mission the sum of $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 Station
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.

 

A-1