Exhibit 10.43
EXECUTION COPY
SHARED SERVICES AGREEMENT
This Shared Services Agreement ("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.
("Nexstar"), a Delaware limited partnership. Mission and Nexstar are referred to
collectively as the "Parties."
WHEREAS, Mission owns and operates television broadcast stations KJTL(TV)
and KJBO-LP, Wichita Falls, Texas ("KJTL/KJBO-LP"), and owns 100% of the stock
of Mission Broadcasting of Wichita Falls License, Inc., the licensee of
KJTL/KJBO-LP. Television station KFDX-TV, Wichita Falls, Texas ("KFDX") is
licensed to Nexstar.
WHEREAS, KJTL/KJBO-LP and KFDX are collectively referred to as the
"Stations."
NOW, THEREFORE, for their mutual benefit and in order to enhance the
respective abilities of Nexstar and Mission to compete with other television and
media outlets serving the Wichita Falls, Texas market, Nexstar and Mission agree
as follows:
1. SHARING ARRANGEMENTS GENERALLY. From time to time, Nexstar and Mission
may agree to share the costs of certain services and procurements which they
individually require in connection with the ownership and operation of the
Stations. Such sharing arrangements may take the form of joint or cooperative
buying arrangements, or the performance of certain functions relating to the
operation of one Station by employees of the owner and operator of the other
Station (subject in all events to the supervision and control of personnel of
the owner and operator of the Station to which such functions relate), or may be
otherwise structured, and will be governed by terms and conditions upon which
Nexstar and Mission may agree from time to time. Such sharing arrangements may
include the co-location of the studio, non-managerial administrative and/or
master control and technical facilities of the Stations and the sharing of
grounds keeping, maintenance, security and other services relating to those
facilities. In performing services under any such sharing arrangement (including
those described in Section 4), personnel of one Party will be afforded access
to, and have the right to utilize, without charge, assets and properties of the
other Party to the extent necessary or desirable in the performance of such
services.
2. CERTAIN SERVICES NOT TO BE SHARED.
(a) Senior Management Personnel. At all times, each Station will have
personnel performing the typical functions of a general manager and a business
manager. Such personnel will (i) be retained solely by the Party which owns and
operates such Station and will report solely to such Party, and (ii) will have
no involvement or responsibility in respect of the operation of the other
Station.
(b) Programming and Sales. Each Party will maintain for the Station
owned and operated by it separate managerial and other personnel to carry out
the selection and procurement of programming for such Station, and in no event
will the Parties or the Stations share services, personnel, or information
pertaining to such matters, except as set forth in Section 4(f)(i) below. In
addition, the Parties contemplate entering into a joint sales agreement pursuant
to which Nexstar will have the right to sell advertising and commercial time on
the Station.
3. GENERAL PRINCIPLES GOVERNING SHARING ARRANGEMENTS. All arrangements
contemplated by this Agreement will be subject to, and are intended to comply in
all respects with, the Communications Act of 1934, as amended, the rules,
regulations and policies of the Federal Communications Commission (the "FCC"),
as in effect from time to time (the "FCC Rules and Regulations"), and all other
applicable laws. The arrangements made pursuant to this Agreement will not be
deemed to constitute "joint sales," "program services," "time brokerage," "local
marketing," or similar arrangements or a partnership, joint venture, or agency
relationship between the Parties or the Stations, and no such arrangement will
be deemed to give either Party any right to control the policies, operations,
management or any other matter relating to the Station owned and operated by the
other Party.
4. CERTAIN SPECIFIC SHARING ARRANGEMENTS. In furtherance of the general
agreements set forth in Sections 1 through 3 above, Nexstar and Mission have
agreed as follows with respect to the sharing of certain services:
(a) Execution of Promotional Policies. Nexstar personnel will
implement and execute the promotional policy developed by Nexstar personnel for
KFDX from time to time. Subject to direction and control by Mission management
personnel, Nexstar personnel will also implement and execute the promotional
policy for KJTL/KJBO-LP. Such implementation and execution will include such
tasks as graphic design, production and media placement and buying.
(b) Continuity and Traffic Support. Nexstar personnel will carry out
continuity and other tasks necessary to support management personnel and
functions for KFDX. Subject to direction and control by management personnel of
Mission, Nexstar personnel will also carry out continuity and such other tasks
with respect to KJTL/KJBO-LP.
(c) Master Control. Master control operators and related employees of
Nexstar may carry out master control functions for KJTL/KJBO-LP subject to the
direction and control of Mission.
(d) Payable Support. Nexstar personnel will not engage in the payment
of accounts payable of Mission arising under contracts for the license of
programming run or to be run on KJTL/KJBO-LP, the payment of Mission's payroll
with respect to KJTL/KJBO-LP, or other obligations of Mission incurred in the
normal course of business.
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(e) Transmission Facilities Maintenance. Nexstar personnel will
maintain and repair (as needed) the transmission facilities of KFDX. Subject to
direction and control by Mission management personnel, Nexstar personnel will
also maintain and repair (as needed) the transmission facilities of
KJTL/KJBO-LP.
(f) Newscast Production.
(i) Production and Delivery. Utilizing both KFDX management
personnel and facilities, Nexstar may provide live-feed, fully-staffed and
produced newscasts for broadcast on KJTL/KJBO-LP at such times as Mission may
request from time to time by reasonable advance notice to Nexstar; provided that
such newscasts will not comprise more than 15% (by duration) of the programming
broadcast on KJTL/KJBO-LP during any broadcast day. Nexstar will be responsible
for delivering such newscasts to KJTL/KJBO-LP's broadcast facilities. Mission
shall make available to Nexstar (A) such space in the KJTL/KJBO-LP studio and
facilities as may be reasonably necessary to produce such newscasts, (B) such
non-management-level news personnel as may be necessary to produce such
newscasts, and (C) such technical facilities of KJTL/KJBO-LP as may be necessary
to produce such newscasts and to deliver such newscasts to KJTL/KJBO-LP's
transmission facilities. Nexstar will use reasonable efforts to provide such
newscasts that are of a quality appropriate to KJTL/KJBO-LP's market. Such
newscasts will be produced exclusively for Mission for broadcast on
KJTL/KJBO-LP, but may include non-exclusive videotape, graphics, news stories,
field reports and other material. Mission personnel will determine the title and
format of such newscasts, and such newscasts will have an "on-air appearance" as
if they had been originated by Mission through KJTL/KJBO-LP.
(ii) Commercial, Advertising and Promotional Spots. Mission will
determine the amount of commercial advertising time and promotional time to be
provided for during such newscasts. Subject to the Sales Agreement, Mission will
have the exclusive right to sell commercial advertising time during such
newscasts and will retain all revenue from the sale of such commercial
advertising time.
(iii) Editorial Control and Responsibility. Nexstar will use
reasonable efforts to maintain a system of editorial review to ensure the
accuracy, prior to broadcast, of all investigative reports and other stories
prepared by Nexstar personnel and included in the newscasts which Nexstar
provides to Mission. Nexstar will indemnify, defend and hold harmless Mission
from any and all demands, claims, actions or causes of action, losses, damages
and liabilities, costs and expenses, including reasonable attorneys' fees,
incurred by Mission as a result of the violation or breach of any third parties'
rights, or of the FCC's Rules and Regulations, as a result of the provision of
any news content provided by Nexstar or its employees in such newscasts. Mission
will indemnify, defend and hold harmless Nexstar from any and all demands,
claims, actions or causes of action, losses, damages and liabilities, costs and
expenses, including reasonable attorneys' fees, incurred by Nexstar as a result
of the violation or breach of any third parties' rights, or of the FCC's Rules
and Regulations, as a result of the provision of any content within such
newscasts by Mission or its employees, or any variation by Mission or its
employees of any content provided by Nexstar or its employees in
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such newscasts. Each Party will maintain the following types of insurance
coverage for no less than the indicated amounts and will deliver to the other
Party upon request a certificate of insurance showing the following: (A)
comprehensive general liability insurance in an amount of $1,000,000; (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, as to which coverage each Party will name the other party as
an additional insured.
(iv) FOX News Feeds. Subject to Nexstar, Mission and FOX
Broadcasting Company entering into a news sharing agreement in form and
substance agreeable to the parties thereto, Nexstar will be free to utilize, at
its discretion, the FOX Network News feed footage in the newscasts it produces
for Mission.
(v) Operating Conditions Agreement. Nexstar and Mission will
collaborate to create a newscast operating conditions agreement or procedural
memo which will provide the basis for daily operations, contingencies,
KJTL/KJBO-LP's access to breaking stories, procedures for editorial compliance
with FCC Rules and Regulations (including quarterly programs/issues
requirements), regularly scheduled operations, editorial and ratings reviews and
guidelines for access by Mission personnel and KJTL/KJBO-LP customers to
Nexstar's facilities.
(g) Services Fee. In consideration for the services to be provided to
KJTL/KJBO-LP by Nexstar personnel as described in Sections 4(a) through 4(f),
Mission will pay to Nexstar the fee (the "Services Fee") described in this
Section 4(g).
(i) Base Amount. Subject to the remaining provisions of this
Section 4(g), the base amount of the Services Fee during any calendar year will
be determined in accordance with Section 4(g)(iii), in the case of calendar year
1999, and will be 110% of the Services Fee during the preceding year (without
regard to any deferral of the Services Fee for such preceding year pursuant to
Section 4(g)(ii)), in the case of each subsequent year.
(ii) Deferral. Payment and accrual of the Services Fee in respect
of any calendar year (or partial calendar year, in the case of the calendar
years during which the sharing of services described in Section 4(a) through
4(f) commences and ceases) will be deferred to the extent that the amount of the
Services Fee which otherwise would be payable for such period would exceed
KJTL/KJBO-LP's Available Cash Flow (as that term is defined in Section 4(g)(iv))
for such period; provided that an amount equal to the amount so deferred in
respect of any calendar year or partial calendar year will be added to the base
amount of the Services Fee for the following calendar year or partial calendar
year. In addition, upon a termination of this Agreement pursuant to clause (i)
of Section 7, the entire amount of the Services Fee which has accrued and is
unpaid as of the Cessation Date (as that term is defined in Section 7) will be
waived.
(iii) Payment Terms. The Services Fee will be payable monthly in
equal installments during each calendar year from and after the month during
which this Agreement is executed, and will be prorated on a daily basis for
calendar year 1999 and the
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calendar year during which the sharing arrangements described in Sections 4(a)
through 4(f) are terminated. These monthly payments will be based upon Mission's
good-faith estimate of the non-deferred amount of the Services Fee for each year
or partial year (based on its good faith estimate of the Available Cash Flow for
that year or partial year), consistent with the principle that such non-deferred
amount of the Services Fee shall be equal to 90% of KJTL/KJBO-LP's Available
Cash Flow for that year or partial year. At the conclusion of each calendar
year, when the actual amount of KJTL/KJBO-LP's Available Cash Flow for that year
or partial year is established, Nexstar will pay to Mission or Mission will pay
to Nexstar, as the case may be, any additional amounts as may be necessary to
give effect to any deferral of Services Fees pursuant to Section 4(g)(ii).
(iv) Available Cash Flow Defined. For any period, KJTL/KJBO-LP's
"Available Cash Flow" means Mission's broadcast cash flow in respect of
KJTL/KJBO-LP for such period (determined without deduction for the Service Fee),
reduced by the following, without duplication:
(A) the aggregate amount of all cash paid by Mission in
respect of reasonable capital expenditures relating to KJTL/KJBO-LP during such
period,
(B) the aggregate amount of all cash payments required to be
made by Mission during such period in respect of the principal amount of, and
interest on, indebtedness of Mission for borrowed money incurred in respect of
KJTL/KJBO-LP, and
(C) the aggregate amount of all cash payments made by
Mission during such period in respect of federal, state and local taxes, in each
case to the extent not reflected in such broadcast cash flow for such period or
any prior period, and increased or reduced as Mission and Nexstar may reasonably
agree is appropriate in light of the reduction or increase in the non-cash net
working capital of Mission in respect of KJTL/KJBO-LP during such period.
5. FORCE MAJEURE. If a force majeure event such as a strike, labor dispute,
fire, flood or other act of God, failure or delay of technical equipment, war,
public disaster, or other reason beyond the cause or control of Nexstar or
Mission prevents such Party or its personnel from performing tasks which it is
required to perform under this Agreement during any period of time, then such
failure will not be a breach of this Agreement and such Party will be excused
from such performance during that time.
6. 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
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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 Regulations,
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. Upon such
termination, Mission shall pay to Nexstar all accrued and unpaid Service Fees
and each Party shall be relieved of any further obligations, one to the other.
7. TERM OF SHARING ARRANGEMENTS. 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
sharing arrangements contemplated by this Agreement will terminate (i) upon the
consummation of the purchase and sale of assets of Mission relating to
KJTL/KJBO-LP 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 KJTL/KJBO-LP are sold to a party other than
Optionee (in either case, the date upon which such purchase and sale is
consummated being the "Cessation Date"). Except as provided in Section 4(g)(ii),
no termination of this Agreement, whether pursuant to this Section 7 or
otherwise, will affect Mission's duty to pay any Services Fee accrued, or to
reimburse any cost or expense incurred, prior to the effective date of that
termination.
8. AMENDMENT AND WAIVER. This Agreement may be amended and any provision of
this Agreement may be waived; provided that any such amendment or waiver will be
binding upon a Party only if such amendment or waiver is set forth in a writing
executed by such Party.
9. NOTICES. All notices, demands and other communications given or
delivered under this Agreement will be in writing and will be deemed to have
been given when personally delivered or delivered by express courier service.
Notices, demands and communications to Nexstar or Mission will, unless another
address is specified in writing, be sent to the address indicated below:
To Mission: Xxxxx X. Xxxxx
000 X. Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
With a copy (which shall not constitute notice) to:
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Xxxxxx X. Xxxxxxxx, Esq.
Xxxxx & Xxxxxx LLP
0000 X Xxxxxx, XX
Xxxxx 000X
Xxxxxxxxxx, XX 00000
To Nexstar:
Nexstar Broadcasting of Wichita Falls, L.P.
X.X. Xxx 0000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Vice President/General Manager
With a copy (which shall not constitute notice) to:
Nexstar Broadcasting of Wichita Falls, L.P.
000 Xxxxxxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxx, President
and
Xxxx X. Xxxxx, Esq.
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
10. ASSIGNMENT; BINDING AGREEMENT. Neither party may assign its rights and
obligations, 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.
11. NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the Parties to express their mutual intent.
In the event an ambiguity or question of intent or interpretation arises, this
Agreement will be construed as if
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drafted jointly by the Parties, and no presumption or burden of proof will arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement.
12. CAPTIONS. The captions used in this Agreement are for convenience of
reference only, do not constitute a part of this Agreement and will not be
deemed to limit, characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement will be enforced and construed
as if no caption had been used in this Agreement.
13. AUTHORITY; ENTIRE AGREEMENT. Both Mission and Nexstar represent that
they are legally qualified and able to enter into this Agreement. This 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.
14. COUNTERPARTS. This agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which taken
together will constitute one and the same instrument.
15. GOVERNING LAW. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by and construed in accordance
with the internal laws of the State of Texas, without giving effect to any
choice of law or conflict of law provision (whether of the State of Texas or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Texas. In furtherance of the foregoing, the
internal law of the State of Texas will control the interpretation and
construction of this Agreement (and all schedules and exhibits hereto), even if
under that jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.
16. PARTIES IN INTEREST. Nothing in this Agreement, express or implied, is
intended to confer on any person or entity other than the Parties and their
respective permitted successors and assigns any rights or remedies under or by
virtue of this Agreement.
17. 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.
18. OTHER DEFINITIONAL PROVISIONS. The terms "hereof," "herein" and
"hereunder" and terms of similar import will refer to this Agreement as a whole
and not to any particular provision of this Agreement. Section references
contained in this Agreement are references to Sections in this Agreement, unless
otherwise specified. Each defined term used in
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this Agreement has a comparable meaning when used in its plural or singular
form. Each gender-specific term used in this Agreement has a comparable meaning
whether used in a masculine, feminine or gender-neutral form. Whenever the term
"including" is used in this Agreement (whether or not that term is followed by
the phrase "but not limited to" or "without limitation" or words of similar
effect) in connection with a listing of items within a particular
classification, that listing will be interpreted to be illustrative only and
will not be interpreted as a limitation on, or an exclusive listing of, the
items within that classification.
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SIGNATURE PAGE TO
SHARED SERVICES AGREEMENT
IN WITNESS WHEREOF, the Parties have executed this Shared Services
Agreement as of the date first written above.
MISSION BROADCASTING OF WICHITA FALLS, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President
NEXSTAR BROADCASTING OF WICHITA FALLS, L.P.
By: NEXSTAR BROADCASTING OF WICHITA FALLS GP,
INC., its general partner
By: /s/ Xxxxx X. Xxxx
-------------------
Name: Xxxxx X. Xxxx
Title: President