As filed with the Securities and Exchange Commission on September 5, 2001
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
Under the Securities Act of 1933
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NEXSTAR FINANCE HOLDINGS, L.L.C.
<TABLE>
<CAPTION>
Delaware 4833 23-3063155
<S> <C> <C>
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or
organization) Classification Code Number) Identification No.)
</TABLE>
NEXSTAR FINANCE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 4833 23-3063152
<S> <C> <C>
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or
organization) Classification Code Number) Identification No.)
</TABLE>
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200 Abington Executive Park, Suite 201
Clarks Summit, Pennsylvania 18411
(570) 586-5400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------
Perry A. Sook
200 Abington Executive Park, Suite 201
Clarks Summit, Pennsylvania 18411
(570) 586-5400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies of all communications, including communications sent to agent for
service, should be sent to:
Joshua N. Korff, Esq.
Kirkland & Ellis
Citigroup Center 153 East 53rd Street
New York, New York 10022-4675
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed
Proposed Maximum
Maximum Aggregate Amount of
Title of Each Class of Amount to be Offering Price Offering Registration
Securities to be Registered Registered Per Unit(1) Price(1) Fee
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<S> <C> <C> <C> <C>
16% Series B Senior Discount
Exchange Notes due 2009........ $20,000,000 $1,000 $20,000,000 $5,000
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</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ The information in this prospectus is not complete and may be changed. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to completion, dated September 5, 2001
PROSPECTUS
NEXSTAR FINANCE HOLDINGS, L.L.C.
NEXSTAR FINANCE HOLDINGS, INC.
Offer for all outstanding 16% Senior Discount Notes due 2009 in aggregate
principal amount of $20,000,000 in exchange for up to $20,000,000 aggregate
principal amount 16% Series B Senior Discount Notes due 2009.
Terms of the Exchange Offer
. Expires 5:00 p.m., New . We will not receive any
York City time, , proceeds from the
2001, unless extended. exchange offer.
. Not subject to any . The exchange of notes
condition other than will not be a taxable
that the exchange offer exchange for U.S.
not violate applicable federal income tax
law or any purposes.
interpretation of the
staff of the Securities . You may withdraw
and Exchange tendered outstanding
Commission. 16% Senior Discount
Notes due 2009 any time
before the expiration
of the exchange offer.
. Nexstar can amend or
terminate the exchange
offer.
. Nexstar will exchange
all 16% Senior Discount
Notes due 2009 that are
validly tendered and
not validly withdrawn.
Terms of the Exchange Notes
. The exchange notes and . Nexstar may redeem the
the guarantees are exchange notes at any
senior unsecured debt. time on or after May
The exchange notes rank 15, 2005.
equally with all of
Nexstar's and the . Prior to May 15, 2004,
guarantors' existing Nexstar may redeem up
and future senior debt to 35% of the exchange
and ahead of all of notes with the proceeds
Nexstar's and the of the offering of
guarantors' existing equity interests of
and future unsecured Nexstar's indirect
senior subordinated parent company.
obligations.
. If we sell all or
. The exchange notes substantially all of
mature on May 15, 2009. our assets or
We will not pay any experience specific
cash interest on the kinds of changes of
exchange notes prior to control, we may be
May 15, 2005. From and required to offer to
after May 15, 2005, the repurchase the exchange
Exchange Notes will notes.
bear interest, which
will be payable semi- . The terms of the
annually in cash, at a exchange notes are
rate of 16% per annum identical to our
on each May 15 and outstanding 16% Senior
November 15, commencing Discount Notes due 2009
November 15, 2005. except for transfer
restrictions and
registration rights.
For a discussion of specific risks that you should consider before tendering
your outstanding 16% Senior Discount Notes due 2009 in the exchange offer, see
"Risk Factors" beginning on page 12.
There is no public market for our outstanding 16% Senior Discount Notes due
2009 or the exchange notes. However, you may trade our outstanding 16% Senior
Discount Notes due 2009 in the Private Offerings Resale and Trading through
Automatic Linkages, or PORTAL(TM), market.
Neither the Securities and Exchange Commission nor
any state securities commission has approved or
disapproved of the exchange notes or determined if
this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Certain Definitions and Market and Industry Data.......................... iii
Prospectus Summary........................................................ 5
Risk Factors.............................................................. 12
The Exchange Offer........................................................ 21
Use of Proceeds........................................................... 28
Description of the Reorganization......................................... 28
Capitalization............................................................ 29
Nexstar Finance Holdings, L.L.C. Unaudited Pro Forma Condensed
Consolidated Financial Statements........................................ 30
Selected Historical Consolidated Financial Data........................... 36
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 38
Business.................................................................. 49
Management................................................................ 75
Principal Equityholders................................................... 78
Certain Relationships and Related Transactions............................ 79
Description of Other Indebtedness......................................... 81
Description of the Notes.................................................. 84
United States Federal Income Tax Considerations........................... 124
Plan of Distribution...................................................... 125
Legal Matters............................................................. 126
Experts................................................................... 126
Available Information..................................................... 127
Index to the Financial Statements......................................... F-1
</TABLE>
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As used in this prospectus and unless the context indicated otherwise,
"Notes" refers, collectively, to (a) Nexstar's 16% Senior Discount Notes due
2009, also referred to as the "old notes," and (b) Nexstar's Series B 16%
Senior Discount Notes due 2009, also referred to as the "exchange notes."
As used in this prospectus other than in the section entitled "Description
of the Notes" and unless the context indicates otherwise, (1) "Nexstar" refers
to Nexstar Finance Holdings, L.L.C. and its consolidated subsidiaries including
Nexstar Finance Holdings, Inc.; (2) "Nexstar Finance" refers to Nexstar
Finance, L.L.C. and its consolidated subsidiaries including Nexstar Finance,
Inc.; (3) "Nexstar Broadcasting Group" refers to Nexstar Broadcasting Group,
L.L.C. but not its direct or indirect subsidiaries; (4) "Nexstar Broadcasting"
refers to Nexstar Broadcasting Group, L.L.C., and all of Nexstar Broadcasting
Group, L.L.C.'s direct and indirect subsidiaries, including Nexstar; (5)
"Bastet Group" refers to Bastet Broadcasting, Inc., Mission Broadcasting of
Wichita Falls, Inc. and all of their respective subsidiaries; and (6) all
references to "we," "our," "ours," and "us" refer, collectively, to Nexstar and
the Bastet Group. Nexstar has time brokerage, shared services and joint sales
agreements relating to the television stations owned by the Bastet Group, but
does not own any of the equity interests in the Bastet Group. For a description
of the relationship between Nexstar and the Bastet Group, see "Certain
Relationships and Related Transactions."
i
Cautionary Note Regarding Forward-Looking Statements
This prospectus contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements other than statements of historical fact
are "forward-looking statements" for purposes of federal and state securities
laws, including: any projections of earnings, revenues or other financial
items; any statements of our plans, strategies and objectives for our future
operations; any statements concerning proposed new products, services or
developments; any statements regarding future economic conditions or
performance; any statements of belief; and any statements of assumptions
underlying any of the foregoing. Forward-looking statements may include the
words "may," "will," "estimate," "intend," "continue," "believe," "expect" or
"anticipate" and other similar words. Such forward-looking statements may be
contained in "Prospectus Summary," "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business,"
among other places in this prospectus. Although we believe that the
expectations reflected in any of our forward-looking statements are reasonable,
actual results could differ materially from those projected or assumed in any
of our forward-looking statements. Our future financial condition and results
of operations, as well as any forward-looking statements, are subject to change
and to inherent risks and uncertainties, such as those disclosed in this
prospectus. We do not intend, and undertake no obligation, to update any
forward-looking statement.
ii
CERTAIN DEFINITIONS AND MARKET AND INDUSTRY DATA
In the context of describing ownership of television stations in a
particular market, the term "duopoly" refers to owning or deriving the economic
benefit, through joint sales agreements, time brokerage agreements and shared
services agreements, from two or more stations in a particular market. For more
information on how we derive economic benefit from a duopoly, see "Business"
and "Certain Relationships and Related Transactions."
There are 210 generally recognized television markets, known as Designated
Market Areas, or DMAs, in the United States. DMAs are ranked in size according
to various factors based upon actual or potential audience. DMA rankings
contained in this prospectus are from the Nielsen Station Index dated November
2000 as estimated by the A.C. Nielsen Company as published in BIA Financial
Network--Media Access Pro Television Analysis Database.
Unless the context indicates otherwise: (1) data relating to market rank,
market revenue, estimated advertising revenue growth and audience share are
from BIA Financial Network--Media Access Pro Television Analysis Database; (2)
television household data are from the Nielsen Station Index for November of
the corresponding year; (3) audience rankings have been derived from Nielsen
estimates for November of the corresponding year; (4) general market economic
data is from BIA Financial Network--Media Access Pro Television Analysis
Database and the chambers of commerce in each station's market; (5) the term
"station" or "commercial station" means a television broadcast station and does
not include non-commercial television stations, cable program services or
networks (for example, CNN, MTV and ESPN) or stations that do not meet the
minimum Nielsen reporting standards (for example, weekly cumulative audience
share of at least 2.5% for Sunday to Saturday, 7:00 a.m. to 1:00 a.m.); and (6)
the term "independent" describes a commercial television station that is not
affiliated with the ABC, CBS, NBC, FOX, WB, PAX or UPN television networks.
Reference is made in this prospectus to the following trademarks/tradenames
which are owned by the third parties referenced in parentheses: Dharma & Greg,
King of the Hill, The Simpsons (20th Century Fox Film Corporation); Seinfeld
(Columbia Tristar Television Distribution, a unit of Sony Pictures); Judge
Judy, Entertainment Tonight, Spin City, Montel, Frasier (Paramount
Distribution); The Rosie O'Donnell Show, Extra, Friends (Warner Brothers
Domestic Television Distribution, a division of Time Warner Entertainment Co.
LP); The Maury Povich Show, Sally (Studios USA Television Distribution LLC);
That 70's Show, Third Rock From The Sun (Carsey Werner Distribution LLC); Home
Improvement (Buena Vista Television, Inc.); Everybody Loves Raymond (Eyemark
Entertainment); and The Oprah Winfrey Show, Wheel of Fortune, Jeopardy,
Hollywood Squares (King World Productions, Inc.).
iii
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
It does not contain all the information you may consider important in making
your investment decision. Therefore, you should read the entire prospectus
carefully including in particular "Risk Factors" and the financial data and
related notes. Unless specified, all financial information in this prospectus
is information regarding Nexstar Finance Holdings, L.L.C. and its consolidated
subsidiaries (including Nexstar Finance Holdings, Inc.) and the Bastet Group.
Unless the context indicates otherwise, "on a pro forma basis" or "pro forma"
means on the basis set forth under "Nexstar Finance Holdings, L.L.C. Unaudited
Pro Forma Condensed Consolidated Financial Statements." This data has been
derived from, and should be read in connection with, our consolidated financial
statements and related notes.
Company Overview
We are a leading operator of television stations in small to medium-sized
television markets in the United States. We currently own and operate 17
stations in 13 markets. Our stations are clustered in three regions: the
Northeast, consisting of five stations in Pennsylvania and New York; the
Midwest, consisting of five stations in Illinois, Indiana and Missouri; and the
Southwest, consisting of seven stations in Texas and Louisiana. In three of the
markets in which we operate, we have duopolies. Our television station
portfolio is diverse in network affiliations with six stations affiliated with
NBC, five with CBS, three with ABC, two with FOX and one with UPN. On a pro
forma basis for the year ended December 31, 2000, no single station contributed
more than 16.6% of broadcast cash flow, with the majority of the stations
contributing no more than 6.4% of broadcast cash flow. On a pro forma basis for
the six months ended June 30, 2001, no single station contributed more than
15.7% of broadcast cash flow, with the majority of stations contributing no
more than 6.8% of broadcast cash flow.
We believe there are significant advantages in focusing on small to medium-
sized markets, most of which result from a lower level of local competition
compared to larger markets. First, many of the broadcast television competitors
in our markets are generally less professionally managed and less well
capitalized than we are, and are often family owned and operated. Second, by
providing equity incentives to our station general managers, we are able to
attract management with experience in larger markets who employ marketing and
sales techniques that are not typically utilized in our markets. Lastly, in
negotiating with programming vendors, we are able to exercise leverage because
there are typically more programs available than outlets. In most of our
markets, there are only two or three other competing commercial local
television stations.
We seek to maximize revenue and broadcast cash flow growth through our
operating strategies, which include developing leading local franchises,
emphasizing local sales, maintaining strict cost controls and pursuing
additional duopoly opportunities. By executing these strategies, we have been
able to generate significant growth in revenue and broadcast cash flow while
increasing our margins. The eight stations operated by us from January 1998 to
December 2000 achieved a compound annual growth rate in net revenues of 8.2%
and a compound annual growth rate in broadcast cash flow of 17.0%. We increased
the broadcast cash flow margin at these stations from 40.3% to 46.4% during
this period. On a pro forma basis for the year ended December 31, 2000, our
total net revenue was $127.3 million, our broadcast cash flow was $49.7 million
and our Adjusted EBITDA was $48.0 million. On a pro forma basis for the six
months ended June 30, 2001, our total net revenue was $53.7 million, our
broadcast cash flow was $18.0 million and our Adjusted EBITDA was $16.9
million.
Nexstar's predecessor was formed in 1996 by Perry A. Sook, Nexstar
Broadcasting's President and Chief Executive Officer, and ABRY Partners, LLC.
Mr. Sook has over 23 years of experience in the broadcasting industry including
ownership, management, sales and on-air experience. ABRY is one of the largest
private equity firms specializing in media and broadcasting investments.
1
The following chart sets forth general information about our stations:
<TABLE>
<CAPTION>
Commercial
Market Station Stations in
Station Market Rank Affiliation Rank(/1/) Market(/2/)
------- ------------------------ ------ ----------- --------- -----------
<C> <S> <C> <C> <C> <C>
WBRE Wilkes Barre-Scranton, PA 52 NBC 2 4
WYOU(/3/) Wilkes Barre-Scranton, PA 52 CBS 3 4
WROC Rochester, NY 74 CBS 1 4
KTAL Shreveport, LA 76 NBC 3 5
WCIA/WCFN Champaign-Springfield-
Decatur, IL 83 CBS 1 5
WMBD Peoria-Bloomington, IL 112 CBS 2 4
KBTV Beaumont-Port Arthur, TX 137 NBC 3 3
WTWO Terre Haute, IN 139 NBC 2 3
WJET Erie, PA 142 ABC 3 4
WFXP(/4/) Erie, PA 142 FOX 4 4
KSNF Joplin, MO-Pittsburg, KS 145 NBC 2 (tied) 3
KFDX Wichita Falls, TX-
Lawton, OK 146 NBC 1 (tied) 4
KJTL(/5/) Wichita Falls, TX-
Lawton, OK 146 FOX 4 4
KJBO-LP(/5/) Wichita Falls, TX-
Lawton, OK 146 UPN NA 4
KMID Midland-Odessa, TX 151 ABC 3 4
KTAB Abilene-Sweetwater, TX 160 CBS 1 4
KQTV St. Joseph, MO 192 ABC 1 1
</TABLE>
--------
(1) Station ranking in market is determined by audience shares from November
2000.
(2) The term "commercial station" means a television broadcast station and
does not include non-commercial television stations, cable program
services or networks, or stations that do not meet the minimum Nielson
reporting standards.
(3) Owned by Bastet Broadcasting, Inc. and operated under a shared services
agreement.
(4) Owned by Bastet Broadcasting, Inc. and operated under a time brokerage
agreement.
(5) Owned by Mission Broadcasting of Wichita Falls, Inc. and operated under a
shared services agreement and joint sales agreement.
Operating Strategy
We operate stations in markets with limited competition from other
broadcasters. Our markets have stable employment and population, a diverse base
of employers (government, education and business) and communities receptive to
local programming. Within these markets, we seek to maximize revenue and
broadcast cash flow growth through the following strategies:
Develop Leading Local Franchises. Each of our stations seeks to create a
distinct identity, primarily through the quality of its local news programming.
In 10 of our 13 markets, we rank number one or number two in news viewership.
Strong local news generates high ratings among attractive demographic profiles
and enhances audience loyalty, which results in higher ratings for programs
both preceding and following the news. We continually invest in our stations'
news product and have increased the local news programming of our stations in
the aggregate by 27.4%, to 279 hours per week. Extensive local sports coverage
further differentiates us from our competitors and adds to our local
advertising appeal. In addition, each station actively sponsors community
events, which has led to stronger community relations and increased local
advertising.
Emphasize Local Sales. We employ a high-quality local sales force in each of
our markets to capitalize on our investment in local programming. We seek to
maximize local advertising revenues, which are generally more stable than
national advertising revenues and which we directly manage through our own
local sales forces. For the year ended December 31, 2000, the percentage of our
total spot revenues, excluding political, from local advertising was 61.9%,
while for the six months ended June 30, 2001, our total spot revenues,
excluding political, from local advertising was 62.2%, each of which we believe
is higher than other station groups. While we maintain strict cost controls, in
most of our markets we have increased the size and quality of our local sales
force. Since acquiring our stations, we have added a net total of 26 account
executives, a 30% increase in our overall sales force. We also invest in our
sales personnel by implementing comprehensive training programs and by
employing a sophisticated inventory tracking system to help maximize
advertising rates and the amount of inventory sold in each time period.
2
Maintain Strict Cost Controls. We emphasize strict controls on operating and
programming costs in order to increase broadcast cash flow. We continually seek
to identify and implement cost savings opportunities at each of our stations,
and our overall size benefits each station with respect to negotiating
favorable terms with programming suppliers and other vendors. By leveraging our
size and corporate management expertise, we are able to achieve economies of
scale by providing programming, financial, sales and marketing support to our
entire station portfolio. Due to the significant negotiating leverage afforded
by our scale and limited competition in our markets, we reduced our cash
programming expense to 7.2% of total net revenue for the year ended December
31, 2000 and to 7.5% of total net revenue for the six months ended June 30,
2001, which expense we believe is lower than other station groups.
Attract and Retain High Quality Management. We are able to attract and
retain station general managers with proven track records in larger television
markets by offering equity incentives, which typically are not offered by other
station operators in our markets. All of our station general managers have an
equity interest in Nexstar Broadcasting. Since Nexstar's inception, there has
been no turnover at our general manager level, with the exception of that which
occurred as a result of retirement or actions initiated by us.
Pursue Duopoly Opportunities. We seek to eliminate redundant management and
achieve significant economies of scale in marketing, programming and capital
expenditures by combining the operations of two or three stations in one
market, typically into a single physical facility. For example, in our Wichita
Falls, Texas facility, we simultaneously operate three separate stations, KFDX
(NBC), KJTL (FOX) and KJBO-LP (UPN), with a single general sales manager,
engineering department, production crew and administrative staff. We
selectively evaluate acquisitions and asset exchanges with the objective of
obtaining additional duopolies.
Management and Ownership
Nexstar's predecessor was formed by Perry A. Sook and ABRY. Mr. Sook's
television broadcasting industry experience includes prior positions at Cox
Communications, Inc., Gaylord Broadcasting Company and Superior Communications
Group, Inc. Mr. Sook is supported by Nexstar's corporate officers and the
station general managers, who have an average of over 20 years of experience in
the television broadcasting industry.
ABRY, a Boston-based private equity firm, is one of the largest firms
specializing in media and broadcasting investments. ABRY currently has
approximately $1.6 billion under management including its most recent fund,
ABRY Partners IV, L.P., which closed in October 2000 at $775.0 million. Since
its formation in 1989, ABRY has completed over $7.0 billion of leveraged
acquisitions and other private equity transactions in the media sector. ABRY's
investments have included interests in Citadel Communications, Sullivan
Broadcasting, Avalon Cable, Muzak Holdings LLC and Pinnacle Holdings. ABRY has
extensive experience in television broadcasting. ABRY's first fund was
comprised solely of investments in television stations, and approximately half
of ABRY's investments since its inception have been in the television
broadcasting industry.
Recent Developments
KMID and KTAL Acquisitions. In September 2000, Nexstar acquired the assets
of KMID, the ABC affiliate in Midland-Odessa, Texas, the 151st-largest DMA in
the United States, for approximately $10.0 million. Since closing the
acquisition, we have introduced our sales training and inventory management
techniques to this station and improved its news product and production
capability. In November 2000, Nexstar acquired the assets of KTAL, the NBC
affiliate in Shreveport, Louisiana, the 76th-largest DMA in the United States,
for approximately $35.3 million. Since acquiring this station from the family
that previously owned it, we have overhauled its key management positions,
implemented significant cost reductions and have invested over $1.0 million to
improve the on-air look, technical capabilities and the quality of its news
programs in order to enhance revenue growth at this station. Nexstar financed
both the KMID and KTAL acquisitions with borrowings under our senior credit
facilities.
3
WCIA/WCFN and WMBD Acquisitions. In January 2001, Nexstar acquired the
assets of WCIA/WCFN and WMBD for approximately $108.0 million. WCIA is the CBS
affiliate in Champaign-Springfield-Decatur, Illinois, the 83rd-largest DMA in
the United States, and WMBD is the CBS affiliate in the Peoria-Bloomington,
Illinois market, the 112th-largest DMA in the United States. Nexstar has had
effective operational control of WCIA/WCFN and WMBD since July 1999, when
Nexstar entered into a time brokerage agreement to program and sell advertising
for the stations. Since then, we have been able to eliminate approximately $3.4
million of expenses at these stations. As part of the WCIA purchase, we
acquired WCFN, another full-power station in the Champaign-Springfield-Decatur
market, which is currently used to simulcast the WCIA signal in the Springfield
area. Among other alternatives for WCFN, Nexstar is contemplating entering into
an affiliate agreement with UPN to create an additional broadcasting outlet in
this market. While these discussions may not be successful, launching WCFN as a
stand-alone station would allow us to benefit from additional inventory to sell
in the market and provide substantial operational efficiencies.
We financed the purchase of WCIA/WCFN and WMBD and refinanced our existing
credit facilities with the proceeds of (1) our $275.0 million senior credit
facilities, (2) Nexstar's $40.0 million unsecured interim loan, the proceeds of
which were contributed to Nexstar Finance, and (3) $65.0 million of equity from
ABRY and Mr. Sook.
Debt Offering. On March 16, 2001, Nexstar Finance completed the sale of
$160.0 million aggregate principal amount of senior subordinated notes due
2008. The senior subordinated notes are unconditionally guaranteed by each of
Nexstar Finance's existing and future domestic subsidiaries and by the Bastet
Group. The proceeds from the sale of the senior subordinated notes were used to
(1) repay $30.0 million of the unsecured interim loan, (2) repay $116.2 million
of amounts outstanding under Nexstar's reducing revolving credit facility and
(3) pay fees and expenses of the offering.
Reorganization. As required by the terms of the indenture governing the
Notes, on August 6, 2001, pursuant to an assignment and assumption agreement,
the entity formerly known as Nexstar Finance Holdings, L.L.C. contributed all
of the equity interests of Nexstar Finance, L.L.C. (a 100% wholly owned
subsidiary of the entity formerly known as Nexstar Finance Holdings, L.L.C.)
and all shares of common stock of Nexstar Finance, Inc. (also a 100% wholly
owned subsidiary of the entity formerly known as Nexstar Finance Holdings,
L.L.C.) to a newly created wholly owned subsidiary of the entity formerly known
as Nexstar Finance Holdings, L.L.C., NBG, L.L.C. As a result of this
transaction, all of the net assets of the entity formerly known as Nexstar
Finance Holdings, L.L.C. were transferred to NBG, L.L.C. with the exception of
an intercompany note payable to Nexstar Broadcasting Group, L.L.C. (the
ultimate parent company of the entity formerly known as Nexstar Finance
Holdings, L.L.C.) of $36.1 million plus accrued interest. Simultaneous with
this reorganization, the entity formerly known as Nexstar Finance Holdings,
L.L.C. was renamed Nexstar Finance Holdings II, L.L.C. and NBG, L.L.C. was
renamed Nexstar Finance Holdings, L.L.C. In addition, upon completion of this
reorganization, Nexstar Broadcasting's guaranty of the Notes was released and
all obligations of Nexstar Broadcasting under the indenture governing the Notes
ceased to be effective. The reorganization has been accounted for in a manner
similar to a pooling of interests and, accordingly, the financial information
for Nexstar Finance Holdings, L.L.C. (formerly NBG, L.L.C.) for all periods has
been revised to reflect the reorganization..
Capital Contribution. On August 7, 2001, Nexstar received $20.0 million in
capital contributions from Nexstar Finance Holding II, L.L.C., the proceeds of
which were used to reduce bank debt.
Address and Telephone Number
Nexstar's principal executive offices are located at 200 Abington Executive
Park, Suite 201, Clarks Summit, Pennsylvania 18411, and its telephone number is
(570) 586-5400.
4
PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. This
prospectus contains specific terms of this exchange offer and of the notes we
are offering, as well as information regarding our business and detailed
financial data. We encourage you to read this entire prospectus and the
documents we have referred you to.
The Old Note Offering
Old Notes................... We sold our 16% Senior Discount Notes due 2009 to
Banc of America Securities LLC and Barclays
Capital Inc. on May 17, 2001 in accordance with
the terms of a purchase agreement. The old notes
were sold as part of a unit, each consisting of
one old note and one share of Class B common
stock of Nexstar Equity Corp. The initial
purchasers subsequently resold the old notes to
qualified institutional buyers in accordance with
Rule 144A under the Securities Act of 1933.
Registration Rights We and the initial purchasers entered into a
Agreement................... registration rights agreement on May 17, 2001,
which granted the initial purchasers and any
subsequent holders of the old notes certain
exchange and registration rights. This exchange
offer is intended to satisfy those exchange and
registration rights with respect to the old
notes. After the exchange offer is complete, you
will no longer be entitled to any exchange or
registration rights with respect to your old
notes.
The Exchange Offer
Securities Offered.......... Up to $20,000,000 aggregate principal amount of
16% Series B Senior Discount Notes due 2009. The
terms of the exchange notes and the old notes are
identical in all material respects, except for
certain transfer restrictions and registration
rights relating to the old notes.
The Exchange Offer.......... We are offering to exchange the old notes for a
like principal amount of exchange notes. Old
notes may be exchanged only in integral principal
multiples of $1000.
Expiration Date; Withdrawal
of Tender................... Our exchange offer will expire 5:00 p.m. New York
City time, on , 2001, or a later time if we
choose to extend this exchange offer. You may
withdraw your tender of old notes at any time
prior to the expiration date. All outstanding old
notes that are validly tendered and not validly
withdrawn will be exchanged. Any old notes not
accepted by us for exchange for any reason will
be returned to you at our expense as promptly as
possible after the expiration or termination of
the exchange offer.
5
Resales..................... We believe that you can offer for resale, resell
and otherwise transfer the exchange notes without
complying with the registration and prospectus
delivery requirements of the Securities Act if:
. you acquire the exchange notes in the ordinary
course of business;
. you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate,
in the distribution of the exchange notes; and
. you are not an "affiliate" of ours, as defined
in Rule 405 of the Securities Act.
If any of these conditions is not satisfied and
you transfer any exchange notes without
delivering a proper prospectus or without
qualifying for a registration exemption, you may
incur liability under the Securities Act. We do
not assume or indemnify you against this
liability.
Each broker-dealer acquiring exchange notes
issued for its own account in exchange for old
notes, which it acquired through market-making
activities or other trading activities, must
acknowledge that it will deliver a proper
prospectus when any exchange notes issued in the
exchange offer are transferred. A broker-dealer
may use this prospectus for an offer to resell, a
resale or other retransfer of the exchange notes
issued in the exchange offer.
Conditions to the Exchange Our obligation to accept for exchange, or to
Offer....................... issue the exchange notes in exchange for, any old
notes is subject to certain customary conditions
relating to compliance with any applicable law,
or any applicable interpretation by any staff of
the Securities and Exchange Commission, or any
order of any governmental agency or court of law.
We currently expect that each of the conditions
will be satisfied and that no waivers will be
necessary. See "The Exchange Offer--Conditions to
the Exchange Offer."
Procedures for Tendering
Notes Held in the Form of Most of the old notes were issued as global
Book-Entry Interests........ securities and were deposited upon issuance with
the United States Trust Company of New York. The
United States Trust Company of New York issued
certificateless depositary interests in those
outstanding old notes, which represent a 100%
interest in those old notes, to The Depository
Trust Company. Beneficial interests in the
outstanding old notes, which are held by direct
or indirect participants in the Depository Trust
Company, are shown on, and transfers of the old
notes can only be made through, records
maintained in book-entry form by The Depository
Trust Company.
6
You may tender your outstanding old notes:
. through a computer-generated message
transmitted by The Depository Trust Company's
Automated Tender Offer Program system and
received by the exchange agent and forming a
part of a confirmation of book-entry transfer
in which you acknowledge and agree to be bound
by the terms of the letter of transmittal; or
. by sending a properly completed and signed
letter of transmittal, which accompanies this
prospectus, and other documents required by the
letter of transmittal, or a facsimile of the
letter of transmittal and other required
documents, to the exchange agent at the address
on the cover page of the letter of transmittal;
And either:
. a timely confirmation of book-entry transfer of
your outstanding old notes into the exchange
agent's account at The Depository Trust
Company, under the procedure for book-entry
transfers described in this prospectus under
the heading "The Exchange Offer--Book Entry
Transfers" must be received by the exchange
agent on or before the expiration date; or
. the documents necessary for compliance with the
guaranteed delivery described in "The Exchange
Offer--Guaranteed Delivery Procedures" must be
received by the exchange agent.
Procedures for Tendering
Notes held in the Form of If you hold registered old notes, you must tender
Registered Notes............ your registered old notes by sending a properly
completed and signed letter of transmittal,
together with other documents required by it, and
your certificates, to the exchange agent, in
accordance with the procedures described in this
prospectus under the heading "The Exchange
Offer--Procedures for Tendering Old Notes."
United Series Federal
Income Tax Considerations... The exchange offer should not result in any
income, gain or loss to the holders of old notes
or to us for United States Federal Income Tax
Purposes. See "United States Federal Income Tax
Considerations."
Use of Proceeds............. We will not receive any proceeds from the
issuance of the exchange notes in the exchange
offer.
The proceeds from the offering of the old notes
were used to refinance Nexstar's existing
indebtedness and to pay a dividend to Nexstar's
parent company to repay its indebtedness.
Exchange Agent.............. The United States Trust Company of New York is
serving as the exchange agent for the exchange
offer.
Shelf Registration In limited circumstances, holders of old notes
Statement................... may require us to register their old notes under
a shelf registration statement.
7
The Exchange Notes
Co-Issuers.................. Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
The Exchange Notes
Aggregate Amount............ $20,000,000 in aggregate principal amount of 16%
Senior Discount Notes due 2009.
Yield and Interest.......... The old notes were sold at a substantial discount
from their principal amount at maturity and we
will not pay any cash interest on the Notes prior
to May 15, 2005. From and after May 15, 2005, the
Notes will bear interest, which will be payable
semi-annually in cash, at a rate of 16% per annum
on each May 15 and November 15, commencing
November 15, 2005.
Maturity.................... May 15, 2009
Ranking..................... The Notes are senior unsecured obligations.
Accordingly, they will rank:
. behind all of Nexstar's existing and future
senior secured debt;
. equally with all of Nexstar's existing and
future unsecured senior debt; and
. ahead of any of Nexstar's future debt that
expressly provides that it is subordinated to
the Notes.
At June 30, 2001 the Notes were effectively
subordinated to approximately $160.0 million of
senior secured debt, excluding Nexstar Finance's
guarantee of a $3.0 million loan for a related
party. See "Certain Relationships and Related
Transactions." At June 30, 2001 there were $65.0
million of unused commitments under our senior
credit facilities. No debt of Nexstar's having an
equal ranking with the Notes would have been
outstanding on June 30, 2001.
Optional Redemption......... On or after May 15, 2005, Nexstar may redeem some
or all of the Notes at any time at the redemption
prices listed under "Description of the Notes--
Optional Redemption."
Prior to May 15, 2004, Nexstar may redeem all,
but not less than all, of the Notes with the
proceeds from a qualified equity offering, at the
redemption price listed under "Description of the
Notes--Optional Redemption."
Mandatory Redemption........ On November 15, 2006, Nexstar is required to
redeem a principal amount of Notes outstanding on
that date sufficient to ensure that the Notes
will not be "applicable high yield discount
obligations" within the meaning of Section
163(i)(1) of the Internal Revenue Code of 1986.
8
Mandatory Offer to If Nexstar sells certain assets or experiences
Repurchase.................. specific kinds of changes of control, Nexstar
must offer to repurchase the Notes at the prices
listed under "Description of the Notes--
Repurchase at the Option of Holders."
Certain Covenants........... The Indenture governing the Notes will, among
other things, restrict Nexstar's ability and the
ability of Nexstar's restricted subsidiaries and
the Bastet Group to:
. incur or guarantee additional indebtedness;
. pay dividends or distributions on, or redeem or
repurchase, capital stock;
. make investments;
. engage in transactions with affiliates;
. transfer or sell assets;
. incur liens or enter into any sale/leaseback
transactions; and
. consolidate, merge or transfer all or
substantially all of our assets.
For more details, see "Description of the Notes."
You should refer to the section "Risk Factors" for an explanation of certain
risks associated with the Notes.
9
SUMMARY HISTORICAL AND PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL DATA
The summary consolidated financial data set forth below is only a summary.
You should read it together with "Unaudited Pro Forma Condensed Consolidated
Financial Statements," "Selected Historical Consolidated Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our financial statements and the related notes appearing
elsewhere in this prospectus.
The unaudited pro forma statement of operations data (a) give effect to
Nexstar's recent acquisitions and related financing transactions described
under "Prospectus Summary--Recent Developments," as if they had occurred on
January 1, 2000 and (b) do not purport to represent what our results of
operations or financial position actually would have been if Nexstar's recent
acquisitions and related financing transactions had occurred as of the date
indicated or what our results of operations or financial position will be for
future periods. See "Use of Proceeds."
<TABLE>
<CAPTION>
Historical Pro forma
-------------------------------------------------- ---------------------------
Six Months Year Ended Six Months
Year Ended December 31, Ended June 30, December 31, Ended June 30,
----------------------------- ------------------- ------------ --------------
1998 1999 2000 2000 2001 2000 2001
--------- -------- -------- -------- --------- ------------ --------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net broadcast
revenue(/1/)........... $ 56,005 $ 78,490 $107,085 $ 48,071 $ 48,659 $115,781 $ 48,659
Trade and barter
revenue................ 6,606 8,470 10,382 4,237 4,992 11,527 4,992
--------- -------- -------- -------- --------- -------- --------
Total net revenue....... 62,611 86,960 117,467 52,308 53,651 127,308 53,651
Operating costs and
expenses:
Station operating
expenses.............. 16,960 23,760 29,269 14,566 15,544 31,545 15,544
Selling, general and
administrative........ 15,514 23,645 28,790 13,709 13,865 30,471 13,865
Depreciation and
amortization(/2/)..... 30,226 34,047 40,838 19,072 24,542 52,248 24,542
--------- -------- -------- -------- --------- -------- --------
Income (loss) from
operations............. (89) 5,508 18,570 4,961 (300) 13,044 (300)
Interest expense, net... 11,452 16,020 19,736 11,167 19,187 38,155 18,967
Other expense, net...... 125 249 259 188 420 259 420
--------- -------- -------- -------- --------- -------- --------
Loss before provision
for income taxes and
extraordinary item..... (11,666) (10,761) (1,425) (6,394) (19,907) (25,370) (19,687)
(Provision) benefit for
income taxes........... (98) (658) (1,098) 5 368 (969) 359
--------- -------- -------- -------- --------- -------- --------
Loss before
extraordinary
item(/3/).............. $ (11,764) $(11,419) $ (2,523) $ (6,389) $ (19,539) $(26,339) $(19,328)
========= ======== ======== ======== ========= ======== ========
Balance Sheet Data (end
of period):
Cash, cash equivalents
and restricted cash.... $ 1,964 $ 2,989 $ 2,750 $ 6,427 $ 12,880
Total assets............ 209,610 287,229 318,275 282,252 434,223
Total debt(/4/)......... 140,545 203,531 253,556 226,059 333,115
Total member's
interest............... 45,470 34,187 31,524 (8,593) 67,630
Other Financial Data:
Net cash provided by
(used in):
Operating activities... $ 6,188 $ 9,707 $ 16,555 $ 3,861 $ 3,011
Investing activities... (167,565) (88,999) (52,088) (8,463) (111,900)
Financing activities... 161,112 80,318 35,294 8,040 108,518
Broadcast cash
flow(/5/).............. 23,285 30,244 47,592 19,232 18,019 $ 49,666 $ 18,019
Broadcast cash flow
margin(/6/)............ 41.6% 38.5% 44.4% 40.0% 37.0% 42.9% 37.0%
EBITDA(/7/)............. $ 21,334 $ 27,583 $ 44,501 $ 17,807 $ 16,661 $ 46,575 $ 16,661
Adjusted EBITDA(/7/)................................................... 48,034 16,929
Adjusted EBITDA margin(/8/)............................................ 41.5% 34.8%
</TABLE>
10
--------
(1) Net broadcast revenue is defined as revenues net of agency commissions and
excluding trade and barter revenue.
(2) Depreciation and amortization includes amortization of program contract
costs and net realizable value adjustments, depreciation and amortization
of property and equipment, and amortization of acquired intangible
broadcasting assets.
(3) For the year ended December 31, 1999, the extraordinary item, net of
income tax benefit, was a charge of $2.8 million, as a result of the
write-off of certain debt financing costs. For the six month period ended
June 30, 2001, the extraordinary item, net of income tax benefit, was a
charge of $0.3 million as a result of the write-off of certain debt
financing costs.
(4) Total debt excludes Nexstar Finance's guarantee of a $3.0 million loan for
a related party.
(5) Broadcast cash flow is defined as net income before interest expense,
income taxes, depreciation and amortization, other income/(expense),
corporate overhead, non-cash trade and barter expenses and non-recurring
expenses (including time brokerage agreement fees), less payments on
program obligations and non-cash trade and barter revenue. Broadcast cash
flow is not a measure of performance calculated in accordance with United
States generally accepted accounting principles, or GAAP, should not be
considered in isolation or as a substitute for net income, operating
income or cash flow as reflected in our consolidated financial statements
and is not intended to represent a measure of funds available for debt
service, dividends, reinvestment or other discretionary uses. In addition,
this definition of broadcast cash flow may not be comparable to similarly
titled measures reported by other companies. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" for the
calculation of broadcast cash flow.
(6) Broadcast cash flow margin is defined as broadcast cash flow divided by
net broadcast revenue.
(7) EBITDA is defined as broadcast cash flow less corporate expenses. Adjusted
EBITDA is defined as EBITDA adjusted to eliminate the impact of certain
non-recurring charges and to reflect the estimated impact of operational
and organizational changes to the businesses we have acquired based on
estimates and assumptions made and we believe to be reasonable. We
consider both EBITDA and Adjusted EBITDA to be important indicators of the
operational strength and performance of our business. The Indenture refers
to Adjusted EBITDA as "Consolidated Cash Flow" and specifically excludes
these expenses in determining compliance with the debt incurrence covenant
in the Indenture. See "Description of the Notes--Certain Definitions."
EBITDA and Adjusted EBITDA should not be considered alternatives to
operating or net income as indicators of Nexstar's performance, or as
alternatives to cash flows from operating activities as measures of
liquidity, in each case determined in accordance with GAAP. In addition,
these definitions of EBITDA and Adjusted EBITDA may not be comparable to
similarly titled measures reported by other companies.
<TABLE>
<CAPTION>
Pro Forma
----------------------------------
Year Ended Six Months Ended
December 31, 2000 June 30, 2001
----------------- ----------------
(in thousands)
<S> <C> <C>
Adjusted EBITDA is determined as
follows:
EBITDA................................ $46,575 $16,661
------- -------
Adjustments:
Buy-outs of certain program
contracts............................ 372 268
Reductions of corporate overhead...... 122 --
Net reduction in operating headcount
and compensation adjustments,
including severance.................. 557 --
Stay bonus incurred prior to
acquisition.......................... 100 --
Defined pension plan termination
curtailment costs.................... 308 --
------- -------
Total adjustments................... 1,459 268
------- -------
Adjusted EBITDA....................... $48,034 $16,929
======= =======
</TABLE>
(8) Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net
broadcast revenue.
11
RISK FACTORS
You should consider carefully all of the information in this prospectus,
including the following risk factors and warnings, before deciding whether to
exchange your old notes for the exchange notes to be issued in this exchange
offer. Except for the first three risk factors described below, these risk
factors apply to both the old notes and the exchange notes.
Risks Related To The Offering
You may have difficulty selling the old notes which you do not exchange, since
outstanding old notes will continue to have restrictions on transfer and cannot
be sold without registration under securities laws or exemptions from
registration.
If a large number of outstanding old notes are exchanged for exchange notes
issued in the exchange offer, it may be difficult for holders of outstanding
old notes that are not exchanged in the exchange offer to sell their old notes,
since those old notes may not be offered or sold unless they are registered or
there are exemptions from registration requirements under the Securities Act or
state laws that apply to them. In addition, if there are only a small number of
old notes outstanding, there may not be a very liquid market in those old
notes. There may be few investors that will purchase unregistered securities in
which there is not a liquid market. See "The Exchange Offer--You May Suffer
Adverse Consequences if You Fail to Exchange Outstanding Notes."
In addition, if you do not tender your outstanding old notes or if we do not
accept some outstanding old notes, those old notes will continue to be subject
to the transfer and exchange provisions of the indenture and the existing
transfer restrictions of the old notes that are described in the legend on the
old notes and in the prospectus relating to the old notes.
Resale Restrictions--If you exchange your old notes, you may not be able to
resell the exchange notes you receive in the exchange offer without registering
them and delivering a prospectus.
You may not be able to resell exchange notes you receive in the exchange
offer without registering those exchange notes or delivering a prospectus.
Based on interpretations by the Commission in no-action letters, we believe,
with respect to exchange notes issued in the exchange offer, that:
1. holders who are not "affiliates" of Nexstar within the meaning of Rule
405 of the Securities Act;
2. holders who acquire their exchange notes in the ordinary course of
business; and
3. holders who do not engage in, intend to engage in, or have arrangements
to participate in a distribution (within the meaning of the Securities
Act) of the exchange notes;
do not have to comply with the registration and prospectus delivery
requirements of the Securities Act.
Holders described in the preceding sentence must tell us in writing at our
request that they meet these criteria. Holders that do not meet these criteria
could not rely on interpretations of the Commission in no-action letters, and
would have to register the exchange notes they receive in the exchange offer
and deliver a prospectus for them. In addition, holders that are broker-dealers
may be deemed "underwriters" within the meaning of the Securities Act in
connection with any resale of exchange notes acquired in the exchange offer.
Holders that are broker-dealers must acknowledge that they acquired their
outstanding exchange notes in market-making activities or other trading
activities and must deliver a prospectus when they resell the exchange notes
they acquire in the exchange offer in order not to be deemed an underwriter.
You should review the more detailed discussion in "The Exchange Offer--
Procedures for Tendering Old Notes and Consequences of Exchanging Outstanding
Old Notes.
12
Risks Related To The Offering
Substantial Leverage--Our substantial indebtedness could adversely affect our
financial position and prevent us from fulfilling our obligations under the
exchange notes.
We have a significant amount of indebtedness.
<TABLE>
<CAPTION>
As of June 30, 2001
----------------------
Actual
----------------------
(dollars in thousands)
<S> <C>
Total indebtedness(/1/).................................. $333,115
Member's interest........................................ 67,630
--------
Total capitalization..................................... $400,745
========
Debt to total capitalization ratio....................... 83.1%
</TABLE>
--------
(1) Excludes Nexstar Finance's guarantee of a $3.0 million loan for a related
party. At June 30, 2001, there were $65.0 million of unused commitments
under our senior credit facilities.
Our substantial indebtedness could have important consequences to you. For
example, it could:
. limit our ability to borrow additional amounts for working capital,
capital expenditures, acquisitions, debt service requirements, execution
of our growth strategy or other purposes;
. require us to dedicate a substantial portion of our cash flow to pay
principal and interest on our debt, which will reduce the funds
available for working capital, capital expenditures, acquisitions and
other general corporate purposes;
. limit our flexibility in planning for and reacting to changes in our
business and in the industry in which we operate that could make us more
vulnerable to adverse changes in general economic, industry and
competitive conditions and adverse changes in government regulation; and
. place us at a disadvantage compared to our competitors that have less
debt.
Any of the above listed factors could materially adversely affect us. See
"Description of the Notes--Repurchase at Option of Holders--Change of Control"
and "Description of Other Indebtedness."
Ability to Service Debt--To service our indebtedness, we will require a
significant amount of cash. Our ability to generate cash depends on many
factors beyond our control.
Our ability to pay the principal of and interest on the Notes, to service
our other debt and to finance indebtedness when necessary depends on our
financial and operating performance, each of which is subject to prevailing
economic conditions and to financial, business, legislative and regulatory
factors as well as other factors beyond our control.
We cannot assure you that we will generate sufficient cash flow from
operations or that we will be able to obtain sufficient funding to satisfy all
of our obligations, including the Notes. If we are unable to pay our debts, we
will be required to pursue one or more alternative strategies, such as selling
assets, refinancing or restructuring our indebtedness or selling additional
debt or equity securities. In addition, the ability to borrow funds under our
senior credit facilities in the future will depend on our meeting the financial
covenants in the agreements governing these facilities, including a minimum
interest coverage test and a maximum leverage ratio test. We cannot assure you
that our business will generate cash flow from operations or that future
borrowings will be available to us under our senior credit facilities, in an
amount sufficient to enable us to pay our debt or to fund other liquidity
needs. As a result, we may need to refinance all or a portion of our debt on or
before maturity. However, we cannot assure you that any alternative strategies
will be feasible at the time or
13
prove adequate. Also, some alternative strategies will require the consent of
our lenders before we engage in those strategies. See "Description of the
Exchange Notes" and "Description of Other Indebtedness."
We may not receive all available cash generated by, or be able to obtain the
assets of, stations owned by the Bastet Group.
The Bastet Group consists of entities 100% owned by an independent third
party. Collectively, these entities own, operate and program the following
television stations: WYOU-TV, WFXP-TV, KJTL-TV, and KJBO-TV. Nexstar does not
own or control the television stations owned by the Bastet Group, but it has
entered into various management and service arrangements with them. Nexstar
also guarantees the Bastet Group's combined debt. In addition, the Bastet Group
has granted Nexstar options to purchase the stations owned by the Bastet Group.
The Bastet Group is considered a special purpose entity in accordance with
financial accounting standards. As such, the financial results of operations of
these entities have been consolidated with those of Nexstar in its consolidated
financial statements.
The management and service arrangements that Nexstar has entered into with
the Bastet Group do not entitle Nexstar to all monies generated by the stations
owned by the Bastet Group. In addition, in the event that a bankruptcy claim
were filed by or against us under the U.S. Bankruptcy Code, Nexstar cannot
assure you that it will be able to exercise the options that the Bastet Group
has granted to Nexstar to obtain the assets of the stations owned by the Bastet
Group for the benefit of Nexstar's creditors.
Structural Subordination--The Notes are obligations of a holding company which
has no operations and depends on its subsidiaries for cash.
As a holding company, Nexstar will not hold any assets other than our
investments in and advances to our operating subsidiaries. Consequently, our
subsidiaries conduct all of our consolidated operations and own substantially
all of our consolidated assets. The cash that our subsidiaries generate from
their operations and their borrowings is the only source of the cash from which
we can pay current interest on the Notes and our other obligations and repay
the principal amount of these obligations, including the Notes.
Our subsidiaries' ability to pay dividends or make other payments or
advances to us will depend upon their operating results and will be subject to
applicable laws and contractual restrictions. Our senior credit facilities will
permit our subsidiaries to distribute cash to us to pay interest on the Notes,
but only so long as they are not in default under our senior credit facilities.
Original Issue Discount--You will be required to include original issue
discount in your gross income for federal income tax purposes.
The old notes were sold at a substantial discount from their principal
amount at maturity as part of a unit that included shares of common stock of
Nexstar Equity Corp. As a result, the exchange notes will be considered issued
with original issue discount for federal income tax purposes. Consequently, a
holder of exchange notes will have income for tax purposes arising from such
original issue discount prior to the receipt of cash in respect of such income.
See "Certain U.S. Federal Income Tax Considerations."
If a bankruptcy case is commenced by or against Nexstar under the United
States Bankruptcy Code, the claim of a holder of any of the Notes with respect
to the principal amount thereof may be limited to an amount equal to the sum
of:
. The initial offering price of the units allocable to the Notes;
. That portion of the original issue discount which is not deemed to
constitute "unmatured interest" for purposes of the Bankruptcy Code; and
. Any original issue discount that was not amortized as of any such
bankruptcy filing would constitute "unmatured interest."
14
Lack of Security--Your right to receive payment on the Notes are subject to
all of Nexstar's and Nexstar Broadcasting Group's senior secured debt.
The Notes are general unsecured obligations, equal in right of payment to
all existing and future secured senior debt of Nexstar and of Nexstar
Broadcasting Group, including obligations under our senior credit facilities.
The Notes are not secured by any of Nexstar's or Nexstar Broadcasting Group's
assets, and as such will be effectively subordinated to any secured debt that
Nexstar or Nexstar Broadcasting Group may have now or may incur in the future
to the extent of the value of the assets securing that debt.
At June 30, 2001, the Notes ranked junior to $160.0 million of outstanding
senior secured debt (excluding Nexstar Finance's guarantee of a $3.0 million
loan for a related party) and there are $65.0 million of unused commitments
under our senior credit facilities. In addition, the indenture governing the
Notes, the indenture governing Nexstar Finance's senior subordinated notes and
the credit agreements governing our senior credit facilities permit, subject
to specified limitations, the incurrence of additional debt, some or all of
which may be secured. See "Description of the Exchange Notes--Certain
Covenants" and "Description of Other Indebtedness."
Possible Additional Borrowings--Despite current indebtedness levels, we may
still be able to incur more debt. This could further exacerbate the risks
described above.
We may be able to incur additional indebtedness in the future. The terms of
the indenture governing the Notes, the indenture governing Nexstar Finance's
senior subordinated notes and the terms of the credit agreements governing our
senior credit facilities do not fully prohibit us from doing so. At June 30,
2001 there were $65.0 million of unused commitments under our senior credit
facilities. All of the borrowings under our credit facilities are secured by
substantially all of our existing assets and will, therefore, be effectively
senior to the Notes to the extent of these assets. The addition of new debt to
our current debt levels could increase the leverage-related risks described
above. See "Description of the Exchange Notes" and "Description of Other
Indebtedness."
Restrictive Covenants--The indenture for the exchange notes, the indenture
governing Nexstar Finance's senior subordinated notes and the credit
agreements governing our senior credit facilities contain various covenants
that limit our management's discretion in the operation of Nexstar's business.
The indenture governing the exchange notes, the indenture governing Nexstar
Finance's senior subordinated notes and the credit agreements governing our
senior credit facilities contain various provisions that limit our
management's discretion by restricting our ability to:
. incur additional debt and issue preferred stock;
. pay dividends and make other distributions;
. make investments and other restricted payments;
. enter into sale and leaseback transactions;
. create liens;
. sell assets; and
. enter into certain transactions with affiliates.
These restrictions on our management's ability to operate our business in
accordance with its discretion could have a material adverse effect on our
business.
In addition, our senior credit facilities require us to meet certain
financial ratios in order to draw funds.
15
If we default under any financing agreements, our lenders could:
. elect to declare all amounts borrowed to be immediately due and payable,
together with accrued and unpaid interest; and/or
. terminate their commitments, if any, to make further extensions of
credit.
If we are unable to pay our obligations to our senior secured lenders, they
could proceed against any or all of the collateral securing our indebtedness to
them. The collateral under our senior credit facilities consists of
substantially all of our existing assets. In addition, a breach of certain of
these restrictions or covenants, or an acceleration by our senior secured
lenders of our obligations to them, would cause a default under the Notes and
Nexstar Finance's senior subordinated notes. We may not have, or be able to
obtain, sufficient funds to make accelerated payments, including payments on
the Notes, or to repay the Notes in full after we pay our senior secured
lenders to the extent of their collateral. See "Description of Other
Indebtedness" and "Description of the Notes."
No Prior Market for Exchange Notes--You cannot be sure that an active trading
market will develop for the Notes.
There is no established trading market for the Notes. Although the initial
purchasers of the old notes have informed us that they currently intend to make
a market in the exchange notes, the initial purchasers have no obligation to do
so and may discontinue making a market at any time without notice.
We do not intend to apply for listing of the Notes on any securities
exchange.
The liquidity of any market for the Notes will depend upon the number of
holders of the Notes, our performance, the market for similar securities, the
interest of securities dealers in making a market in the Notes and other
factors. A liquid trading market may not develop for the Notes.
Price Volatility--The trading price of the Notes notes may be volatile.
The trading price of the Notes could be subject to significant fluctuation
in response to, among other factors, variations in operating results,
developments in industries in which we do business, general economic
conditions, changes in securities analysts' recommendations regarding our
securities and changes in the market for noninvestment grade securities
generally. This volatility may adversely affect the market price of the Notes.
Financing Change of Control Offer--We may not have the ability to raise the
funds necessary to finance the change of control offer required by the
indenture governing the Notes.
If a change of control occurs, you will have the right to require Nexstar to
repurchase any or all of your Notes at a price equal to 101% of the principal
amount thereof, together with any interest Nexstar owes you. Upon a change of
control, Nexstar also may be required immediately to repay the outstanding
principal, any accrued interest on and any other amounts owed by us under our
senior credit facilities and any other indebtedness or preferred stock then
outstanding. We cannot assure you that we would be able to repay amounts
outstanding under our senior credit facilities or obtain necessary consents
under our senior credit facilities to purchase the Notes. Any requirement to
offer to purchase any outstanding Notes may result in our having to refinance
our outstanding indebtedness, which we may not be able to do. In addition, even
if we were able to refinance this indebtedness, the financing may be on terms
unfavorable to us. If Nexstar fails to repurchase the Notes tendered for
purchase upon the occurrence of a change of control, the failure will be an
event of default under the indenture governing the Notes. In addition, the
change of control covenant contained in the indenture governing the Notes does
not cover all corporate reorganizations, mergers or similar transactions and
may not provide you with protection in a highly leveraged transaction.
16
Risks Related to Our Broadcast Television Business
Our broadcast operations could be adversely affected if we fail to renew on
favorable terms, if at all, our network affiliation agreements.
We have six primary affiliation agreements with NBC, five with CBS, three
with ABC, two with FOX and one with UPN. Each of NBC, CBS and ABC generally
provides our stations affiliated with these networks with up to 22 hours of
prime time programming per week, while FOX and UPN each provides up to 15 hours
of prime time programming per week. With respect to our affiliation agreements
with NBC, CBS and ABC, our affiliated stations broadcast network-inserted
commercials during the programming and receive cash network compensation.
Although network affiliates generally have achieved higher ratings than
unaffiliated independent stations in the same market, we cannot assure you of
the future success of each network's programming or the continuation of that
programming. Our network affiliation agreements are subject to termination by
the networks under certain circumstances. We believe that we enjoy a good
relationship with each of NBC, CBS, ABC, FOX and UPN. However, we cannot assure
you that our affiliation agreements will be renewed or that each network will
continue to provide programming or compensation to affiliates on the same basis
as it currently provides programming or compensation. The non-renewal or
termination of a network affiliation agreement could adversely affect our
business. For information about when we must review our network affiliation
agreements, see "Business--Industry Background."
The planned industry conversion to digital television could adversely affect
our broadcast business.
Under current FCC guidelines, all commercial television stations in the
United States must start broadcasting in digital format by May 2002 and must
abandon the present analog format by December 31, 2006, provided that 85% of
households within the relevant DMA have the capability to receive a digital
signal. The implementation of these regulations will expose our business to the
following additional risks:
. It will be expensive to convert from the current analog format to
digital format. We estimate that this conversion will require an average
initial capital expenditure of approximately $250,000 per station for
low-power transmission of digital signal programming and an average
additional capital expenditure of approximately $750,000 per station to
complete the roll-out to full-power transmission of digital signal
programming. In addition, for some of our stations we may have to
undertake capital expenditures to purchase studio and production
equipment that can support digital format.
. The digital technology may allow us and our competitors to broadcast
multiple channels, compared to only one today. We do not know now what
impact this will have on the competitive landscape or on our results of
operations.
. The FCC sought to replicate the coverage area of existing stations'
analog signals when it assigned stations' digital channels. Because
existing stations operating on very high frequency, or VHF, channels
generally have larger geographic service areas than stations operating
on ultra high frequency, or UHF, channels, the FCC generally made
available to VHF stations digital channel allocations that allow higher
power operation in order to replicate those stations' current analog
coverage areas. In addition, to achieve a certain level of comparable
geographic signal coverage, a station operating on a UHF channel must
operate with considerably higher power than a station operating on a VHF
channel. Nine of our stations including one low-power station (which may
not be eligible for a digital channel assignment) presently operate on
UHF channels. Eight of our stations now operate on VHF channels. Some of
our stations which currently operate on UHF were allocated VHF digital
channels and vice versa. The geographic coverage and power disparities
could put us at a disadvantage to at least some of our competitors in
certain markets. Furthermore, the higher power required to operate those
of our analog VHF channels that were assigned UHF digital channels with
comparable geographic signal coverage may translate into higher
operating costs for these stations. These higher operating costs could
have a negative effect on our results of operations.
17
. In some cases, when we convert a station to digital television, the
signal may not be received in as large a coverage area, or it may suffer
from additional interference. Also, the digital signal may be subject to
reception problems to a greater degree than current analog
transmissions. As a result, viewers using antennas located inside their
homes, as opposed to outdoor, roof-top antennas, may not receive
reliable signals. If viewers do not receive high-quality, reliable
signals from our stations, our audience viewership may suffer, and in
turn, our ability to sell time to advertisers could be impaired.
. The FCC is considering whether to require cable companies to carry both
the analog and the digital signals of their local broadcasters during
the transition period when television stations will be broadcasting
both. The FCC stated its preliminary conclusion not to require cable
carriage of both signals during this transition period. If the FCC does
not require such dual carriage, cable systems in our broadcast markets
may not carry our digital signal or our analog signal, which could
affect us adversely.
The new federal satellite legislation could adversely affect our broadcast
business.
The Satellite Home Viewer Improvement Act of 1999 could have an adverse
effect on our stations' audience shares and advertising revenues. This
legislation allows satellite carriers to provide, under certain circumstances,
the signals of distant stations with the same network affiliations as our
stations to more television viewers in our markets than would have been
permitted under previous law. In addition, the legislation allows satellite
carriers to provide local television signals by satellite within a station's
market, but does not require satellite carriers to carry all local stations in
a market until January 2002. Until then, satellite carriers could decide to
carry other stations in our markets, but not our stations, which could
adversely affect our stations' audience shares and revenues.
18
Other Risks of Our Business
We face certain other regulatory risks.
The television broadcast industry is subject to regulation by the FCC under
the Communications Act of 1934 and, to a certain extent, by other federal laws
and state and local authorities. Proceedings to implement the Communications
Act are on-going, and we cannot predict the outcomes of these proceedings or
their effect on our business. Approval by the FCC is required for the issuance,
renewal and assignment of station operating licenses and the transfer of
control of station licensees. In particular, our business is dependent upon our
continuing to hold television broadcast licenses from the FCC, which since
January 1997 are issued for maximum terms of eight years. Although in the vast
majority of cases the FCC renews these licenses, we cannot assure you that our
licenses will be renewed at their expiration dates. If the FCC cancels,
revokes, suspends, or fails to renew any of these licenses, it could have a
harmful effect on our business.
Apart from the FCC, federal agencies that administer the antitrust laws also
monitor market concentrations in television, including through local marketing
agreements that are permitted by the FCC. While the stations that we currently
own and operate have already passed through necessary approvals, unfavorable
rulings in the future by these federal agencies could limit partially or
altogether our ability to create new agreements with other stations in our
markets through shared services, joint sales and/or local marketing agreements.
We face significant competition and rapidly changing technology; the
competitive landscape changes constantly.
Generally, we compete for our audience against all the other leisure
activities in which one could choose to engage rather than watch television.
Specifically, our stations compete for audience share, programming and
advertising revenue with other television stations in their respective markets
and with other advertising media, including cable operators, new television
networks such as Paxson Communications Corporation (in which NBC has an equity
investment) and the Internet. Due to rapid technological change, the nature of
our competition, both general and specific, is continually shifting.
Competition could adversely affect our stations' future revenues and
performance.
The markets in which we operate are in a constant state of change arising
from, among other things, technological improvements, economic and regulatory
developments as well as industry consolidation. One or more of these factors
may vary unpredictably, which could materially adversely affect our business.
We may not be able to compete effectively or adjust our contemplated plan of
development to meet changing market conditions. We are unable to predict what
forms of competition will develop in the future, the extent of that competition
or its possible effects on our businesses.
Our programming costs may increase.
Our most significant operating cost is syndicated programming. There can be
no assurance that we will not be exposed in the future to increased syndicated
programming costs, which may adversely affect our operating results.
Acquisition of program rights is often made two or three years in advance,
making it difficult to predict accurately how a program will perform. In some
instances, programs must be replaced before their costs have been fully
amortized, resulting in write-offs that increase station operating costs.
We are dependent upon key personnel.
Nexstar Broadcasting believes that its success depends upon its ability to
retain the services of Perry A. Sook, its President and Chief Executive
Officer. The loss of Mr. Sook's services could adversely affect our ability to
effectively manage our overall operations or successfully execute current or
future business strategies.
19
In addition, we believe that our success depends on our ability to identify,
hire and retain skilled managers and other personnel, including our present
officers and general managers. We may be unsuccessful in attracting and
retaining our personnel and this failure could materially adversely affect our
business.
We are dependent on advertising revenues which are affected by local and
national economic conditions.
Our revenues are primarily derived from the sale of advertising time on our
stations. Our reliance on advertising revenue makes our operating results
particularly susceptible to prevailing economic conditions because the demand
for advertising time may decrease during an economic recession or downturn. Our
revenues could be adversely affected by a future national recessionary
environment and, due to the substantial portion of revenues derived from local
advertisers, our operating results in individual markets could be adversely
affected by local or regional economic downturns.
Our revenues are subject to the biennial cycle that affects the television
broadcasting industry.
The television industry operates in a biennial cycle in which even-numbered
years tend to have higher advertising revenues than odd numbered years. Even
numbered years benefit from higher revenues associated with political
advertising, as there are congressional elections every even year, and from
Olympic Games advertising, as there is the Summer or Winter Olympic Games every
even year. Our financial results for the year ended December 31, 2000 were
affected by political advertising and the Sydney Summer Olympic Games, which
were carried by our six NBC affiliates. Our results in the future may continue
to be affected by this biennial cycle and we have no control over the extent to
which our stations may benefit from increased political advertising or whether
our stations will be affiliated with the networks that carry the Olympic Games
programming. To a lesser extent, our revenues may also fluctuate based on our
ability to telecast high profile sporting and entertainment events such as the
Super Bowl.
Control by Principal Equityholders--The interests of Nexstar's equityholders
may not be aligned with the interests of the holders of the Notes.
ABRY Broadcast Partners II, L.P. and ABRY Broadcast Partners III, L.P.
collectively own securities representing approximately 80.9% of the voting
power of Nexstar Broadcasting and therefore indirectly controls the affairs and
policies of Nexstar. Additionally, ABRY Broadcast Partners II, L.P. is the
manager of Nexstar Broadcasting Group, L.L.C., Nexstar's ultimate parent
company and therefore indirectly controls the affairs and policies of Nexstar.
Circumstances may occur in which the interests of ABRY could be in conflict
with the interests of the holders of the exchange notes. In addition, ABRY may
have an interest in pursuing acquisitions, divestitures or other transactions
that, in their judgment, could enhance their equity investment, even though
these transactions might involve risks to the holders of the exchange notes.
See "Management," "Principal Equityholders" and "Certain Relationships and
Related Transactions."
20
THE EXCHANGE OFFER
Terms of the Exchange Offer; Period for Tendering Outstanding Exchange Notes
On May 17, 2001, Nexstar sold the old notes to Banc of America Securities
LLC and Barclays Capital Inc. When we sold the old notes, we entered into a
registration rights agreement with Banc of America Securities LLC and Barclays
Capital. The registration rights agreement requires that we register the old
notes sold on May 17, 2001 with the Commission and offer to exchange the new
registered exchange notes for the outstanding old notes sold on May 17, 2001.
We will accept any validly tendered old notes that you do not withdraw
before 5:00 p.m., New York City time, on the expiration date. We will issue
$1,000 of principal amount of exchange notes in exchange for each $1,000
principal amount of your outstanding old notes. You may tender some or all of
your old notes in the exchange offer.
The form and terms of the exchange notes are the same as the form and terms
of the outstanding old notes except that:
(1) the exchange notes being issued in the exchange offer will be
registered under the Securities Act and will not have legends
restricting their transfer,
(2) the exchange notes being issued in the exchange offer will not contain
the registration rights and liquidated damages provisions contained in
the outstanding old notes, and
(3) interest on the exchange notes will accrue from the last interest date
on which interest was paid on your old notes.
Outstanding old notes that we accept for exchange will not accrue interest
after we complete the exchange offer.
The exchange offer will expire at 5:00 p.m., New York City time, on
2001, unless we extend it. If we extend the exchange offer, we will issue a
notice by press release or other public announcement before 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date.
We reserve the right, in our sole discretion:
(1) to extend the exchange offer,
(2) to delay accepting your old notes,
(3) to terminate the exchange offer and not accept any old notes for
exchange if any of the conditions have not been satisfied, or
(4) to amend the exchange offer in any manner.
We will promptly give oral or written notice of any extension, delay, non-
acceptance, termination or amendment. We will also file a post-effective
amendment with the Commission if we amend the terms of the exchange offer.
If we extend the exchange offer, old notes that you have previously tendered
will still be subject to the exchange offer and we may accept them. We will
promptly return your old notes if we do not accept them for exchange for any
reason without expense to you after the exchange offer expires or terminates.
21
Procedures for Tendering Old Notes
Only you may tender your old notes in the exchange offer.
To tender your old notes in the exchange offer, you must:
(1) complete, sign and date the letter of transmittal which accompanied
this prospectus, or a copy of it;
(2) have the signature on the letter of transmittal guaranteed if required
by the letter of transmittal; and
(3) mail, fax or otherwise deliver the letter of transmittal or copy to the
exchange agent;
OR
if you tender your notes under The Depository Trust Company's book-entry
transfer procedures, transmit an agent's message to the exchange agent on or
before the expiration date.
In addition, either:
(1) the exchange agent must receive certificates for outstanding old notes
and the letter of transmittal; or
(2) the exchange agent must receive a timely confirmation of a book-entry
transfer of your old notes into the exchange agent's account at The
Depository Trust Company, along with the agent's message; or
(3) you must comply with the guaranteed delivery procedures described
below.
An agent's message is a computer-generated message transmitted by The
Depository Trust Company through its Automated Tender Offer Program to the
exchange agent.
To tender your old notes effectively, you must make sure that the exchange
agent receives a letter of transmittal and other required documents before the
expiration date.
When you tender your outstanding old notes and we accept them, the tender
will be a binding agreement between you and us in accordance with the terms and
conditions in this prospectus and in the letter of transmittal.
The method of delivery of outstanding old notes, letters of transmittal and
all other required documents to the exchange agent is at your election and
risk. We recommend that you use an overnight or hand delivery service instead
of mail. If you do deliver by mail, we recommend that you use registered mail,
properly insured, with return receipt requested. In all cases, you should allow
enough time to make sure your documents reach the exchange agent before the
expiration date. Do not send a letter of transmittal or notes directly to us.
You may request your brokers, dealers, commercial banks, trust companies, or
nominees to make the exchange on your behalf.
Unless you are a registered holder who requests that the exchange notes to
be mailed to you and issued in your name, or unless you are an eligible
institution, you must have your signature guaranteed on a letter of transmittal
or a notice of withdrawal by an eligible institution. An eligible institution
is a firm which is a financial institution that is a member of a registered
national securities exchange or a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchanges Medallion Program.
If the person who signs the letter of transmittal and tenders the old notes
is not the registered holder of the old notes, the registered holders must
endorse the old notes or sign a written instrument of transfer or exchange that
is included with the old notes, with the registered holder's signature
guaranteed by an eligible institution. We will decide whether the endorsement
or transfer instrument is satisfactory.
22
We will decide all questions about the validity, form, eligibility,
acceptance and withdrawal of tendered old notes, and our determination will be
final and binding on you. We reserve the absolute right to:
(1) reject any and all tenders of any particular note not properly
tendered;
(2) refuse to accept any old note if, in our judgment or the judgment of
our counsel, the acceptance would be unlawful; and
(3) waive any defects or irregularities or conditions of the exchange offer
as to any particular old note either before or after the expiration
date. This includes the right to waive the ineligibility of any holder
who seeks to tender old notes in the exchange offer.
Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and
binding on all parties. You must cure any defects or irregularities in
connection with tenders of old notes as we will determine. Neither we, the
exchange agent nor any other person will incur any liability for failure to
notify you of any defect or irregularity with respect to your tender of old
notes.
If the letter of transmittal is signed by a person or persons other than the
registered holder or holders of outstanding old notes, the outstanding old
notes must be endorsed or accompanied by powers of attorney, in either case
signed exactly as the name or names of the registered holder or holders that
appear on the outstanding old notes.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign the letter of transmittal or any notes or power of attorney on
your behalf, those persons must indicate their capacity when signing, and
submit satisfactory evidence to us with the letter of transmittal demonstrating
their authority to act on your behalf.
To participate in the exchange offer, we require that you represent to us
that:
(1) you or any other person acquiring exchange notes for your outstanding
old notes in the exchange offer is acquiring them in the ordinary
course of business;
(2) neither you nor any other person acquiring exchange notes in exchange
for your outstanding old notes is engaging in or intends to engage in a
distribution of the exchange notes issued in the exchange offer;
(3) neither you nor any other person acquiring exchange notes in exchange
for your outstanding old notes has an arrangement or understanding with
any person to participate in the distribution of exchange notes issued
in the exchange offer;
(4) neither you nor any other person acquiring exchange notes in exchange
for your outstanding old notes is our "affiliate" as defined under Rule
405 of the Securities Act; and
(5) if you or another person acquiring exchange notes for your outstanding
old notes is a broker-dealer, you will receive exchange notes for your
own account, you acquired exchange notes as a result of market-making
activities or other trading activities, and you acknowledge that you
will deliver a prospectus in connection with any resale of your
exchange notes.
If you are our "affiliate," as defined under Rule 405 of the Securities Act,
you are a broker-dealer who acquired your outstanding old notes in the initial
offering and not as a result of market-making or trading activities, or if you
are engaged in or intend to engage in or have an arrangement or understanding
with any person to participate in a distribution of exchange notes acquired in
the exchange offer, you or that person:
(1) may not rely on the applicable interpretations of the staff of the
Commission; and
(2) must comply with the registration and prospectus delivery requirements
of the Securities Act when reselling the exchange notes.
Broker-dealers who cannot make the representations in item (5) of the
paragraph above cannot use this exchange offer prospectus in connection with
resales of the exchange notes issued in the exchange offer.
23
Acceptance of Outstanding Old Notes for Exchange; Delivery of Exchange Notes
Issued in the Exchange Offer
We will accept validly tendered old notes when the conditions to the
exchange offer have been satisfied or we have waived them. We will have
accepted your validly tendered old notes when we have given oral or written
notice to the exchange agent. The exchange agent will act as agent for the
tendering holders for the purpose of receiving the exchange notes from us. If
we do not accept any tendered old notes for exchange because of an invalid
tender or other valid reason, the exchange agent will return the certificates,
without expense, to the tendering holder. If a holder has tendered old notes by
book-entry transfer, we will credit the notes to an account maintained with The
Depository Trust Company. We will return certificates or credit the account at
The Depository Trust Company as promptly as practicable after the exchange
offer terminates or expires.
Book-Entry Transfers
The exchange agent will make a request to establish an account at The
Depository Trust Company for purposes of the exchange offer within two business
days after the date of this prospectus. Any financial institution that is a
participant in The Depository Trust Company's systems must make book-entry
delivery of outstanding old notes by causing The Depository Trust Company to
transfer those outstanding old notes into the exchange agent's account at The
Depository Trust Company in accordance with The Depository Trust Company's
Automated Tender Offer Procedures. The participant should transmit its
acceptance to The Depository Trust Company on or before the expiration date or
comply with the guaranteed delivery procedures described below. The Depository
Trust Company will verify acceptance, execute a book-entry transfer of the
tendered outstanding old notes into the exchange agent's account at The
Depository Trust Company and then send to the exchange agent confirmation of
the book-entry transfer. The confirmation of the book-entry transfer will
include an agent's message confirming that The Depository Trust Company has
received an express acknowledgment from the participant that the participant
has received and agrees to be bound by the letter of transmittal and that we
may enforce the letter of transmittal against the participant. Delivery of
exchange notes issued in the exchange offer may be effected through book-entry
transfer at The Depository Trust Company. However, the letter of transmittal or
facsimile of it or an agent's message, with any required signature guarantees
and any other required documents, must:
(1) be transmitted to and received by the exchange agent at the address
listed below under "Exchange Agent" on or before the expiration date;
or
(2) the guaranteed delivery procedures described below must be complied
with.
Guaranteed Delivery Procedures
If you are a registered holder of outstanding old notes who desires to
tender old notes but your old notes are not immediately available, or time will
not permit your old notes or other required documents to reach the exchange
agent before the expiration date, or the procedure for book-entry transfer
cannot be completed on a timely basis, you may effect a tender if:
(1) you tender the old notes through an eligible institution;
(2) before the expiration date, the exchange agent received from the
eligible institution a notice of guaranteed delivery in the form we
have provided. The notice of guaranteed delivery will state the name
and address of the holder of the old notes being tendered and the
amount of old notes being tendered, that the tender is being made and
guarantee that within five New York Stock Exchange trading days after
the notice of guaranteed delivery is signed, the certificates for all
physically tendered old notes, in proper form for transfer, or a book-
entry confirmation, together with a properly completed and signed
letter of transmittal with any required signature guarantees and any
other documents required by the letter of transmittal will be deposited
by the eligible institution with the exchange agent; and
24
(3) the certificates for all physically tendered outstanding old notes, in
proper form for transfer, or a book-entry confirmation, together with a
properly completed and signed letter of transmittal with any required
signature guarantees and all other documents required by the letter of
transmittal, are received by the exchange agent within five New York
Stock Exchange trading days after the date of execution of the notice
of guaranteed delivery.
Withdrawal Rights
You may withdraw your tender of outstanding notes at any time before 5:00
p.m., New York City time, on the expiration date.
For a withdrawal to be effective, you must make sure that, before 5:00 p.m.,
New York City time, on the expiration date, the exchange agent receives a
written notice of withdrawal at one of the addresses below or, if you are a
participant of The Depository Trust Company, an electronic message using The
Depository Trust Company's Automated Tender Offer Program.
A notice of withdrawal must:
(1) specify the name of the person that tendered the old notes to be
withdrawn;
(2) identify the old notes to be withdrawn, including the principal amount
of the old notes;
(3) be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the old notes were tendered or be
accompanied by documents of transfer; and
(4) if you have transmitted certificates for outstanding old notes, specify
the name in which the old notes are registered, if different from that
of the withdrawing holder, and identify the serial numbers of the
certificates.
If you have tendered old notes under the book-entry transfer procedure, your
notice of withdrawal must also specify the name and number of an account at The
Depository Trust Company to which your withdrawn old notes can be credited.
We will decide all questions as to the validity, form and eligibility of the
notices and our determination will be final and binding on all parties. Any
tendered old notes that you withdraw will be not be considered to have been
validly tendered. We will return any outstanding old notes that have been
tendered but not exchanged, or credit them to The Depository Trust Company
account, as soon as practicable after withdrawal, rejection of tender, or
termination of the exchange offer. You may retender properly withdrawn old
notes by following one of the procedures described above before the expiration
date.
Conditions to the Exchange Offer
We are not required to accept for exchange, or to issue exchange notes in
exchange for, any outstanding old notes. We may terminate or amend the exchange
offer, if at any time before the acceptance of outstanding notes:
(1) any federal law, statute, rule or regulation has been adopted or
enacted which, in our judgment, would reasonably be expected to impair
our ability to proceed with the exchange offer;
(2) if any stop order is threatened or in effect with respect to the
registration statement which this prospectus is a part of or the
qualification of the indenture under the Trust Indenture Act of 1939;
or
(3) there is a change in the current interpretation by the staff of the
Commission which permits holders who have made the required
representations to us to resell, offer for resale, or otherwise
transfer exchange notes issued in the exchange offer without
registration of the exchange notes and delivery of a prospectus, as
discussed above.
25
These conditions are for our sole benefit and we may assert or waive them at
any time and for any reason. However, the exchange offer will remain open for
at least five business days following any waiver of the preceding conditions.
Our failure to exercise any of the foregoing rights will not be a waiver of our
rights.
Exchange Agent
You should direct all signed letters of transmittal to the exchange agent,
United States Trust Company of New York. You should direct questions, requests
for assistance, and requests for additional copies of this prospectus, the
letter of transmittal and the notice of guaranteed delivery to the exchange
agent addressed as follows:
By Registered or By Hand Delivery (before
Certified Mail: 4:30 p.m.):
By Overnight Courier and By Hand after 4:30 p.m. on
the Expiration Date:
United States Trust United States Trust Company of New York
Company of New York 30 Broad Street, B-Level
P.O. Box 112 Bowling Green Station New York, New York 10004-2304
New York, New York 10274-0084
United States Trust Company of New York
30 Broad Street 14th Floor
New York, New York 10004-2304
By Facsimile:
(212) 422-0183
or
(646) 458-8111
Attn: Customer Service
Confirm by telephone:
(800) 548-6565
Delivery or fax of the letter of transmittal to an address or number other
than those above is not a valid delivery of the letter of transmittal.
Fees and Expenses
We will not make any payment to brokers, dealers, or others soliciting
acceptances of the exchange offer except for reimbursement of mailing expenses.
We will pay the estimated cash expenses connected with the exchange offer.
We estimate that these expenses will be approximately $150,000.
Accounting Treatment
The exchange notes will be recorded at the same carrying value as the
existing old notes, as reflected in our accounting records on the date of
exchange. Accordingly, we will recognize no gain or loss for accounting
purposes. The expenses of the exchange offer will be expensed over the term of
the exchange notes.
Transfer Taxes
If you tender outstanding old notes for exchange you will not be obligated
to pay any transfer taxes. However, if you instruct us to register exchange
notes in the name of, or request that your old notes not tendered or not
accepted in the exchange offer be returned to, a person other than you, you
will be responsible for paying any transfer tax owed.
26
You May Suffer Adverse Consequences if You Fail to Exchange Outstanding
Exchange Notes
If you do not tender your outstanding old notes, you will not have any
further registration rights, except for the rights described in the
registration rights agreements and described above, and your old notes will
continue to be subject to restrictions on transfer when we complete the
exchange offer. Accordingly, if you do not tender your notes in the exchange
offer, your ability to sell your old notes could be adversely affected. Once we
have completed the exchange offer, holders who have not tendered notes will not
continue to be entitled to any increase in interest rate that the indenture
provides for if we do not complete the exchange offer.
Holders of the exchange notes issued in the exchange offer and old notes
that are not tendered in the exchange offer will vote together as a single
class under the indenture governing the Notes.
Consequences of Exchanging Outstanding Old Notes
If you make the representations that we discuss above, we believe that you
may offer, sell or otherwise transfer the exchange notes to another party
without registration of your notes or delivery of a prospectus.
We base our belief on interpretations by the staff of the Commission in no-
action letters issued to third parties. If you cannot make these
representations, you cannot rely on this interpretation by the Commission's
staff and you must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a resale of the old
notes. A broker-dealer that receives exchange notes for its own account in
exchange for its outstanding old notes must acknowledge that it acquired as a
result of market making activities or other trading activities and that it will
deliver a prospectus in connection with any resale of the exchange notes.
Broker-dealers who can make these representations may use this exchange offer
prospectus, as supplemented or amended, in connection with resales of exchange
notes issued in the exchange offer.
However, because the Commission has not issued a no-action letter in
connection with this exchange offer, we cannot be sure that the staff of the
Commission would make a similar determination regarding the exchange offer as
it has made in similar circumstances.
Shelf Registration
The registration rights agreement also requires that we file a shelf
registration statement if:
(1) we cannot file a registration statement for the exchange offer because
the exchange offer is not permitted by law;
(2) law or Commission policy prohibits a holder from participating in the
exchange offer;
(3) a holder cannot resell the exchange notes it acquires in the exchange
offer without delivering a prospectus and this prospectus is not
appropriate or available for resales by the holder; or
(4) a holder is a broker-dealer and holds notes acquired directly from us
or one of our affiliates.
We will also register the exchange notes under the securities laws of
jurisdictions that holders may request before offering or selling notes in a
public offering. We do not intend to register exchange notes in any
jurisdiction unless a holder requests that we do so.
Old notes will be subject to restrictions on transfer until:
(1) a person other than a broker-dealer has exchanged the old notes in the
exchange offer;
(2) a broker-dealer has exchanged the old notes in the exchange offer and
sells them to a purchaser that receives a prospectus from the broker,
dealer on or before the sale;
(3) the old notes are sold under an effective shelf registration statement
that we have filed; or
(4) the old notes are sold to the public under Rule 144 of the Securities
Act.
27
USE OF PROCEEDS
The old notes were issued as part of units that were sold to the initial
purchasers on May 17, 2001. Each unit consisted of one old note and one share
of Class B Common Stock of Nexstar Equity Corp. The net proceeds of the
offering of the units was $19.2 million after deducting fees and expenses.
Nexstar used the net proceeds of the offering of the units to repay $11.2
million (including accrued interest) of an unsecured interim loan and $8.0
million to redeem certain preferred equity interests held by ABRY. The
unsecured interim loan was a $40.0 million senior unsecured facility, of which
approximately $11.2 million (including accrued interest) was outstanding at the
time of the offering of the units, which would have matured in January 2008 and
bore an effective interest rate of 14% at the time of the offering of the
units. The unsecured interim loan accreted quarterly and was to become cash-pay
in January 2005.
We will not receive any cash proceeds from the issuance of the exchange
notes in the exchange offer. In consideration for issuing the exchange notes as
contemplated in this prospectus, we will receive existing old notes in equal
principal amount at maturity, the terms of which are the same in all material
respects to the exchange notes. The old notes surrendered in exchange for the
exchange notes will be retired or cancelled and not reissued. Accordingly, the
issuance of the exchange notes will not result in any increase or decrease in
our debt.
DESCRIPTION OF THE REORGANIZATION
As required by the terms of the indenture governing the Notes, on August 6,
2001, pursuant to an assignment and assumption agreement, the entity formerly
known as Nexstar Finance Holdings, L.L.C. contributed all of the equity
interests of Nexstar Finance, L.L.C. (a 100% wholly owned subsidiary of the
entity formerly known as Nexstar Finance Holdings, L.L.C.) and all shares of
common stock of Nexstar Finance, Inc. (also a 100% wholly owned subsidiary of
the entity formerly known as Nexstar Finance Holdings, L.L.C.) to a newly
created wholly owned subsidiary of the entity formerly known as Nexstar Finance
Holdings, L.L.C., NBG, L.L.C. As a result of this transaction, all of the net
assets of the entity formerly known as Nexstar Finance Holdings, L.L.C. were
transferred to NBG, L.L.C. with the exception of an intercompany note payable
to Nexstar Broadcasting Group, L.L.C. (the ultimate parent company of the
entity formerly known as Nexstar Finance Holdings, L.L.C.) of $36.1 million
plus accrued interest. Simultaneous with this reorganization, the entity
formerly known as Nexstar Finance Holdings, L.L.C. was renamed Nexstar Finance
Holdings II, L.L.C. and NBG, L.L.C. was renamed Nexstar Finance Holdings,
L.L.C. In addition, upon completion of this reorganization, Nexstar
Broadcasting's guaranty of the Notes was released and all obligations of
Nexstar Broadcasting under the indenture governing the Notes ceased to be
effective. The reorganization has been accounted for in a manner similar to a
pooling of interests and, accordingly, the financial information for Nexstar
Finance Holdings, L.L.C. (formerly NBG, L.L.C.) for all periods has been
revised to reflect the reorganization.
28
CAPITALIZATION
The following table sets forth our cash, cash equivalents and capitalization
as of June 30, 2001. You should read this table in conjunction with the section
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our consolidated financial statements and related notes
included elsewhere in this prospectus.
<TABLE>
<CAPTION>
As of
June 30,
2001
----------
Actual
----------
(in
thousands)
<S> <C>
Cash, cash equivalents and restricted cash........................... $ 12,880
========
Debt:
Senior credit facilities(/1/)...................................... 160,143
Senior subordinated notes, net of discount......................... 153,790
Senior discount notes, net of discount............................. 19,135
Other.............................................................. 47
--------
Total debt....................................................... 333,115
--------
Member's interest:
Contributed capital................................................ 119,737
Accumulated deficit................................................ (52,107)
--------
Total member's interest.......................................... 67,630
--------
Total capitalization............................................. $400,746
========
</TABLE>
--------
(1) At June 30, 2001, there are $65.0 million of unused commitments under our
senior credit facilities. Excludes Nexstar Finance's guarantee of a $3.0
million loan for a related party.
29
NEXSTAR FINANCE HOLDINGS, L.L.C.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The tables on the following pages have been prepared by Nexstar and are
based on the historical financial statements of Nexstar, KMID, KTAL, WCIA/WCFN
and WMBD and the assumptions and adjustments described in the accompanying
notes.
The unaudited pro forma condensed consolidated statements of operations (a)
give effect to the acquisitions and financing transactions as described under
"Prospectus Summary-Recent Developments," as if each had occurred on January 1,
2000 and (b) do not purport to represent what our results of operations or
financial position actually would have been if the acquisitions and financing
transactions had occurred as of the date indicated or what our results of
operations or financial position will be for future periods. See "Use of
Proceeds."
Prior to acquisition by Nexstar, KMID operated as part of GOCOM
Communications, KTAL operated as part of KCMC, Inc., a subsidiary of Camden
News Publishing Company and WCIA/WCFN and WMBD were operated as part of Midwest
Television, Inc. The historical carve-out financial data presented on the
following pages reflect periods during which none of KMID, KTAL, WCIA/WCFN and
WMBD operated as an independent company and, accordingly, certain allocations
were made in preparing such carve-out financial data. Therefore, such carve-out
financial data may not reflect the results of operations or the financial
condition which would have resulted if KMID, KTAL, WCIA/WCFN and WMBD had each
operated as a separate independent company, and are not necessarily indicative
of the future results of operations or financial position of any of KMID, KTAL,
WCIA/WCFN and WMBD.
30
NEXSTAR FINANCE HOLDINGS, L.L.C.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2001
<TABLE>
<CAPTION>
Pro Forma Unaudited
Historical(/1/) Adjustments(/2/)(/3/)(/4/) Pro Forma
--------------- -------------------------- ---------
(in thousands)
<S> <C> <C> <C>
Statement of Operations
Data:
Net broadcast revenue.... $ 48,659 -- $ 48,659
Trade and barter
revenue................. 4,992 -- 4,992
-------- ----- --------
Total net revenue........ 53,651 -- 53,651
Operating costs and
expenses:
Station operating
expenses.............. 15,544 -- 15,544
Selling, general and
administrative........ 13,865 -- 13,865
Amortization of program
rights................ 7,804 -- 7,804
Depreciation and
amortization.......... 16,738 -- 16,738
-------- ----- --------
Loss from operations..... (300) -- (300)
Interest expense......... 19,343 (220)(a) 19,123
Interest income.......... (156) -- (156)
Other income, net........ 420 -- 420
-------- ----- --------
Income (loss) before
benefit for income
taxes................... (19,907) 220 (19,687)
(Provision) benefit for
income taxes............ 368 (9)(b) 359
-------- ----- --------
Net income (loss)........ $(19,539) $ 211 $(19,328)
======== ===== ========
</TABLE>
See notes to unaudited pro forma condensed consolidated statement of
operations.
31
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2001
(dollars in thousands)
(1) Includes the unaudited consolidated statement of operations of Nexstar
for the six months ended June 30, 2001.
(2)(a) To record the interest expense and amortization of debt financing
costs relating to Nexstar's issuance of Units herein and the
Reorganization.
<TABLE>
<S> <C>
Pro forma interest expense on senior credit facilities (assuming
weighted average rate of 8.75%)(/1/)........................... $ 6,569
Pro forma interest expense on senior subordinated notes
(assuming rate of 12.875%)..................................... 9,889
Pro forma interest expense on Notes (assuming rate of 17.07%)... 1,600
Pro forma amortization of debt financing costs.................. 1,065
Elimination of historical interest expense (includes
amortization of debt financing costs).......................... (19,343)
-------
Pro forma adjustment............................................ $ (220)
=======
</TABLE>
--------
(1) If the assumed interest rate on the senior credit facilities
increased by 0.125%, total pro forma interest expense would increase
by $48.
(b) To record income tax adjustment of $9 required to result in a pro forma
income tax provision based on Nexstar's historical tax provision using
historical amounts and the direct tax effect of the pro forma
transactions.
(3) Does not include the results of operations of WCIA/WCFN and WMBD for the
twelve days prior to acquisition on January 12, 2001. Amounts are deemed
de minimus.
(4) Does not reflect a $20,000 capital contribution to Nexstar Finance
Holdings, L.L.C. from Nextstar Finance Holdings II, L.L.C. on August 7,
2001, the proceeds of which were used to reduce such debt.
32
NEXSTAR FINANCE HOLDINGS, L.L.C.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000
<TABLE>
<CAPTION>
WCIA/WCFN
and Pro Forma Unaudited
Historical(/1/) KMID(/2/) KTAL(/3/) WMBD(/4/) Adjustments(/5/)(/6/) Pro Forma
--------------- --------- --------- --------- --------------------- ---------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net broadcast revenue... $107,085 $1,299 $7,283 $ -- $ 174(a) $115,781
(60)(b)
Other revenue........... -- -- -- 4,665 (4,665)(b) --
Trade and barter
revenue................ 10,382 98 1,047 1,109 (1,109)(b) 11,527
-------- ------ ------ ----- -------- --------
Total net revenue....... 117,467 1,397 8,330 5,774 (5,660) 127,308
Operating costs and
expenses:
Station operating
expenses.............. 29,269 453 1,823 1,082 (1,082)(b) 31,545
Selling, general and
administrative........ 28,790 439 3,143 289 (1,914)(b) 30,471
(276)(c)
Amortization of program
rights................ 16,905 239 1,697 3,084 (3,084)(b) 18,841
Depreciation and
amortization.......... 23,933 304 185 944 8,041(d) 33,407
-------- ------ ------ ----- -------- --------
Income (loss) from
operations............. 18,570 (38) 1,482 375 (7,345) 13,044
Interest expense........ 20,045 210 -- -- 18,223(e) 38,478
Interest income......... (309) -- (14) -- -- (323)
Other expense........... 259 -- -- -- -- 259
-------- ------ ------ ----- -------- --------
Income (loss) before
provision for income
taxes.................. (1,425) (248) 1,496 375 (25,568) (25,370)
(Provision) benefit for
income taxes........... (1,098) -- (576) (6) 711(f) (969)
-------- ------ ------ ----- -------- --------
Net income (loss)....... $ (2,523) $ (248) $ 920 $ 369 $(24,857) $(26,339)
======== ====== ====== ===== ======== ========
</TABLE>
See notes to unaudited pro forma condensed consolidated statement of
operations.
33
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000
(dollars in thousands)
(1) Includes the audited consolidated statement of operations of Nexstar for
the year ended December 31, 2000.
(2) Nexstar acquired KMID on September 24, 2000. The results of operations
include the actual unaudited results for KMID from January 1, 2000 through
September 23, 2000.
(3) Nexstar acquired KTAL on November 1, 2000. The results of operations
includes the actual audited results for KTAL from January 1, 2000 through
October 31, 2000.
(4) Nexstar acquired WCIA/WCFN and WMBD on January 12, 2001. The results of
operations includes the actual unaudited results for WCIA/WCFN and WMBD
from December 1, 1999 through November 30, 2000.
(5)(a) To reduce national representative commissions by $174. Nexstar did not
assume contracts from any entity acquired. Therefore, commissions on
revenues from acquisitions prior to ownership have been calculated at
Nexstar's contractual rate.
(b) To eliminate fees and reimbursable expenses related to Nexstar's time
brokerage agreements with WCIA/WCFN and WMBD and KMID.
(c) To eliminate ABRY management fee of $276 incurred under Nexstar's
management agreement with ABRY, which was terminated as of December 31,
2000 in conjunction with the offering of the senior subordinated notes.
(d) To record depreciation and amortization due to excess of purchase price
over historical cost generated from the acquisitions of KMID, KTAL and
WCIA/WCFN and WMBD as of January 1, 2000.
At December 31, 2000, on a pro forma basis based on the purchase price
allocation of KMID, KTAL and WCIA/WCFN and WMBD, intangible assets and
property and equipment consisted of the following:
<TABLE>
<CAPTION>
Intangible Assets
--------------------------------------
Useful Life Pro
(years) Forma
------------ --------
<S> <C> <C>
Goodwill........ 40 101,216
Network
affiliation
agreement...... 15 169,855
FCC license..... 15 77,044
Debt financing
costs.......... term of debt 594
Other........... 1-15 5,788
--------
$354,497
========
</TABLE>
<TABLE>
<CAPTION>
Property and Equipment
---------------------------------------
Useful Life Pro
(years) Forma
------------- -------
<S> <C> <C>
Buildings, land
and
improvements... 39 18,422
Leasehold
improvements... term of lease 1,216
Studio
equipment...... 5-7 37,706
Transmission
equipment...... 5-15 23,243
Office
equipment and
furniture...... 5-7 4,726
Vehicles....... 5 3,853
Construction in
progress....... N/A 308
-------
$89,474
=======
</TABLE>
34
<TABLE>
<S> <C>
Pro forma depreciation and amortization........................... $ 33,407
Elimination of historical depreciation and amortization........... (25,366)
--------
Pro forma adjustment.............................................. $ 8,041
========
</TABLE>
(e) To record interest expense and amortization of debt financing costs
relating to Nexstar's recent acquisitions, financing transactions and
the Reorganization.
<TABLE>
<S> <C>
Pro forma interest expense on senior credit facilities
(assuming weighted average rate of 8.75%)(1).................. $ 13,138
Pro forma interest expense on senior subordinated notes
(assuming rate of 12.875%).................................... 19,779
Pro forma interest expense on Notes (assuming rate of 17.07%).. 3,199
Pro forma amortization of debt financing costs................. 2,362
Elimination of historical interest expense (includes
amortization of debt financing costs)......................... (20,255)
--------
Pro forma adjustment........................................... $ 18,223
========
</TABLE>
--------
(1) If the assumed interest rate on the senior credit facilities
increased by 0.125%, total pro forma interest expense would increase
by $190.
(f) To record income tax adjustment of $711 required to result in a pro
forma income tax provision based on our historical tax provision using
historical amounts and the direct tax effect of the pro forma
transactions.
(g) Does not reflect a $20,000 capital contribution to Nexstar Finance
Holdings, L.L.C. from Nexstar Finance Holdings II, L.L.C. on August 7,
2001, the proceeds of which were used to reduce such debt.
35
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The selected historical consolidated financial data presented below for the
years ended December 31, 1998, 1999 and 2000 has been derived from our audited
consolidated financial statements contained elsewhere in this prospectus. The
selected historical financial and other data presented below for the six month
periods ended June 30, 2000 and 2001, has been derived from the unaudited
financial statements of Nexstar contained elsewhere in this prospectus which in
the opinion of management reflect all adjustments necessary to present fairly
the financial position and results of operations for the periods presented. The
selected historical combined consolidated financial data presented below for
the years ended December 31, 1996 and 1997 have been derived from the audited
combined financial statements of Nexstar's predecessor entities. These entities
have been presented on a combined basis because they were under the common
control of ABRY, the principal equityholder of Nexstar Broadcasting Group until
they were reorganized into Nexstar Broadcasting Group on January 5, 1998. While
the Bastet Group is comprised of special purpose entities which are
consolidated in Nexstar's financial statements, the Bastet Group are not
guarantors of the Notes. You should read the following financial data in
conjunction with the section "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements
and related notes included elsewhere in this prospectus.
<TABLE>
<CAPTION>
Six Months Ended
Fiscal Year Ended December 31, June 30,
---------------------------------------------- -----------------
1996 1997 1998 1999 2000 2000 2001
------- ------- -------- -------- -------- ------- --------
(dollars in thousands)
Predecessor Unaudited
---------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net broadcast
revenue(/1/)........... $ 3,940 $20,876 $ 56,005 $ 78,490 $107,085 $48,071 $ 48,659
Trade and barter
revenue................ 366 2,683 6,606 8,470 10,382 4,237 4,992
------- ------- -------- -------- -------- ------- --------
Total net revenue....... 4,306 23,559 62,611 86,960 117,467 52,308 53,651
Operating costs and
expenses:
Station operating
expenses.............. 1,903 6,556 16,960 23,760 29,269 14,566 15,544
Selling, general and
administrative........ 1,022 9,807 15,514 23,645 28,790 13,709 13,865
Amortization of program
rights................ 397 3,077 8,972 13,580 16,905 7,263 7,804
Depreciation and
amortization.......... 2,239 5,698 21,254 20,467 23,933 11,809 16,738
------- ------- -------- -------- -------- ------- --------
Income (loss) from
operations............. (1,255) (1,579) (89) 5,508 18,570 4,961 (300)
Interest expense........ 893 2,669 11,588 16,282 20,045 11,284 19,343
Interest income......... -- (37) (136) (262) (309) (117) (156)
Other expense........... -- -- 125 249 259 188 420
------- ------- -------- -------- -------- ------- --------
Loss before benefit for
income taxes and
extraordinary item..... (2,148) (4,211) (11,666) (10,761) (1,425) (6,394) (19,907)
(Provision) benefit for
income taxes........... -- 731 (98) (658) (1,098) 5 368
------- ------- -------- -------- -------- ------- --------
Loss before
extraordinary item..... (2,148) (3,480) (11,764) (11,419) (2,523) (6,389) (19,539)
Extraordinary item, net
of income tax benefit.. -- -- -- (2,829) -- -- (262)
------- ------- -------- -------- -------- ------- --------
Net loss................ $(2,148) $(3,480) $(11,764) $(14,248) $ (2,523) $(6,389) $(19,801)
======= ======= ======== ======== ======== ======= ========
Balance Sheet Data (end
of period):
Cash, cash equivalents
and restricted cash.... $ 608 $ 1,358 $ 1,964 $ 2,989 $ 2,750 $ 6,427 $ 12,880
Total assets............ 20,462 66,973 209,610 287,229 318,275 282,225 434,223
Total debt(/2/)......... 17,500 35,168 140,545 203,531 253,556 226,059 333,115
Total members'
interest............... 852 14,907 45,470 34,187 31,524 (8,593) 67,630
Other Financial Data:
Capital expenditures.... $ 62 $ 228 $ 5,495 $ 6,621 $ 5,596 $ 3,541 $ 3,951
Cash payments for
program obligations.... 191 1,813 4,464 6,916 8,426 4,196 4,008
Broadcast cash
flow(/3/).............. 908 8,803 23,285 30,244 47,592 19,232 18,019
Broadcast cash flow
margin(/4/)............ 23.0% 42.2% 41.6% 38.5% 44.4% 40.0% 37.0%
EBITDA(/5/)............. $ 908 $ 6,747 $ 21,334 $ 27,583 $ 44,501 $17,807 $ 16,661
Ratio of earnings to
fixed charges(/6/)..... -- -- -- 1.3x 1.9x 1.4x --
</TABLE>
See notes to selected historical consolidated financial data
36
NOTES TO THE SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
(dollars in thousands)
(1) Net broadcast revenue is defined as revenue net of agency commissions and
excluding barter and trade.
(2) Excludes Nexstar Finance's guarantee of a $3.0 million loan for a related
party. Additionally, total debt does not include accrued interest on the
note payable to Nexstar Broadcasting Group.
(3) Broadcast cash flow is defined as net income before interest expense,
income taxes, depreciation and amortization, other income/(expense),
corporate overhead, non-cash trade and barter expenses and non-recurring
expenses (including time brokerage agreement fees), less payments on
program obligations and non-cash trade and barter revenue. Broadcast cash
flow is not a measure of performance calculated in accordance with GAAP,
should not be considered in isolation or as a substitute for net income,
operating income or cash flow as reflected in our consolidated financial
statements and is not intended to represent a measure of funds available
for debt service, dividends, reinvestment or other discretionary uses. In
addition, this definition of broadcast cash flow may not be comparable to
similarly titled measures reported by other companies. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
for the calculation of broadcast cash flow.
(4) Broadcast cash flow margin is defined as broadcast cash flow divided by
net broadcast revenue.
(5) EBITDA is defined as broadcast cash flow less corporate expenses. We
consider EBITDA to be an important indicator of the operational strength
and performance of our business. The Indenture refers to EBITDA as
"Consolidated Cash Flow" and specifically excludes these expenses in
determining compliance with the debt incurrence covenant in the Indenture.
See "Description of the Notes--Certain Definitions." EBITDA should not be
considered an alternative to operating or net income as an indicator of
our performance, or as an alternative to cash flows from operating
activities as measures of liquidity, in each case determined in accordance
with GAAP. In addition, this definition of EBITDA may not be comparable to
EBITDA reported by other companies.
(6) For purposes of calculating the ratio of earnings to fixed charges,
earnings represent income (loss) from operations and fixed charges. Fixed
charges consist of interest expense (net) and the portion of the operating
rental expense which management believes is representative of the interest
component of rental expense. Historical earnings were deficient in
covering fixed charges by $1,255, $1,579 and $89 during the years ended
1996, 1997 and 1998 and by $300 for the six months ended June 30, 2001. On
a pro forma basis for the year ended December 31, 2000, our ratio of
earnings to fixed charges was 1.4x and on a pro forma basis for the six
months ended June 30, 2001, our earnings were deficient in covering our
fixed charges by $300.
37
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
section "Selected Historical Consolidated Financial Data" and the consolidated
financial statements and related notes included elsewhere in this prospectus.
The forward-looking statements in this discussion regarding the television
broadcasting industry, our expectations regarding our future performance,
liquidity and capital resources and other non-historical statements in this
discussion include numerous risks and uncertainties, as described under "Risk
Factors." Our actual results may differ materially from those contained in any
forward-looking statements.
We make references throughout our "Management's Discussion and Analysis of
Financial Condition and Results of Operations" to comparisons on a "same
station basis." These comparisons refer to stations which we have owned at the
beginning and end of a particular period. In particular, references to a
comparison on a same station basis for the three and six months ended June 30,
2000 versus the three and six months ended June 30, 2001 include the following
stations: WYOU, KQTV, WTWO, WBRE, KFDX, KSNF, KBTV, WJET, WFXP, WROC, KJTL,
KJBO and KTAB. References to a comparison on a same station basis for the year
ended December 31, 1999 versus the year ended December 31, 2000 include the
following stations: WYOU, KQTV, WTWO, KFDX, WBRE, KSNF, KBTV, WJET and WFXP.
References to a comparison on a same station basis for the year ended December
31, 1998 versus the year ended December 31, 1999 include the following
stations: WYOU, KQTV, WTWO, KFDX, WBRE, KSNF, KBTV and WJET.
Introduction
The operating revenues of our stations are derived primarily from
advertising revenue, which in turn depends on the economic conditions of the
markets in which we operate, the demographic makeup of those markets and the
marketing strategy we employ in each market. The primary operating expenses
consist of commissions on revenues, employee compensation and related benefits,
news gathering and programming costs. A large percentage of the costs involved
in the operation of our stations remain relatively fixed.
The networks provide programming to our stations during various time periods
of the day. The networks compensate our stations for distributing the networks'
product over the air and for keeping a portion of advertising inventory during
those time periods. Each station purchases licenses to broadcast programming in
non-news time periods during the remainder of the day. The licenses are either
purchased from a syndicator for cash or the syndicator is allowed to retain
some of the inventory as compensation to eliminate or reduce the cash cost for
the license. The station records the estimated fair market value of the
inventory given to the syndicator as a barter asset and liability. Over the
term of the contract, these values are amortized as barter revenue and expense.
Advertising is sold in time increments and is priced primarily on the basis
of the popularity of the program among targeted demographic groups, as measured
by periodic audience surveys performed by an independent company. Advertising
rates are also affected by the number of advertisers competing for the
available time and the availability of alternative advertising media in the
market. Rates are normally highest during the most heavily viewed hours. The
ratings of a local station affiliated with a television network can be affected
by ratings of that network's programming.
Most advertising contracts are short-term and generally run for a few weeks.
Excluding political revenue, 61.9% and 62.2% of our spot revenue for the year
ended December 31, 2000 and six months ended June 30, 2001, respectively was
generated from local advertising which is sold by a station's sales staff. The
remainder of our advertising revenue represents inventory sold for national or
political advertising. Each station has an agreement with a national
representative firm that normally provides for representation outside the
particular station's market. National commission rates vary within the industry
but are governed by each station's agreement. All national and political
revenue is placed by advertising agencies. The agencies receive a commission
rate of 15.0% for the gross amount of advertising schedules placed by them.
Local advertising
38
agencies place most of the local spot revenue; however, some advertisers place
their schedules directly with the local sales staff, thereby eliminating the
agency commission.
The advertising revenue of our stations is generally highest in the second
and fourth quarters of each year, due in part to increases in consumer
advertising in the spring and retail advertising in the period leading up to,
and including, the holiday season. In addition, advertising revenue is
generally higher during even numbered years resulting from political
advertising and advertising aired during the Olympic Games.
We define broadcast cash flow as net income before interest expense, income
taxes, depreciation, amortization, other income/expenses, corporate overhead,
non-cash trade and barter expenses and time brokerage fees less payments on
program obligations and non-cash trade and barter revenue. Other television
broadcasting companies may measure broadcast cash flow in a different manner.
We have included broadcast cash flow data because such data is commonly used as
a measure of performance for broadcast companies and is also used by investors
to measure a company's ability to service debt. Broadcast cash flow is not, and
should not be used as, an indicator or alternative to operating income, net
income or cash flow as reflected in our consolidated financial statements, is
not intended to represent funds available for debt service, dividends,
reinvestment or other discretionary uses, is not a measure of financial
performance under GAAP and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with generally
accepted accounting principles.
Our acquisitions during each of the fiscal years ended December 31, 1998,
1999 and 2000 affect the year-to-year comparability of the operating results
discussed below. In 2000, Nexstar acquired the assets of KMID, the ABC
affiliate in Midland-Odessa, Texas, for approximately $10.0 million and the
assets of KTAL, the NBC affiliate in Shreveport, Louisiana, for approximately
$35.3 million. In 1999, Nexstar acquired the assets of WROC, the CBS affiliate
in Rochester, New York, for approximately $46.0 million and substantially all
of the assets of KTAB, the CBS affiliate in Abilene-Sweetwater, Texas, for
approximately $17.3 million; Nexstar also entered into a time brokerage
agreement with WCIA/WCFN and WMBD. Also in 1999, the Bastet Group acquired
substantially all of the assets of KJTL, the FOX affiliate in Wichita Falls,
Texas-Lawton, Oklahoma, and KJBO-LP, the UPN affiliate in Wichita Falls, Texas-
Lawton, Oklahoma, for approximately $15.5 million. In 1998, the Bastet Group
acquired the FCC license and other assets of WFXP, the FOX affiliate in Erie,
Pennsylvania, for approximately $1.5 million, and Nexstar purchased the time
brokerage agreement to program and sell advertising time for WFXP for
approximately $6.5 million.
Recent Developments
On January 12, 2001, Nexstar acquired the assets of WCIA/WCFN and WMBD for
approximately $108.0 million. WCIA is the CBS affiliate in the Champaign-
Springfield-Decatur, Illinois market, and WMBD is the CBS affiliate in the
Peoria-Bloomington, Illinois market. We financed the purchase of WCIA/WCFN and
WMBD with the proceeds of (1) our $275.0 million senior credit facilities, (2)
Nexstar's $40.0 million unsecured interim loan, the proceeds of which were
contributed to Nexstar Finance, and (3) $65.0 million of equity from ABRY and
Mr. Sook.
On March 16, 2001, Nexstar Finance completed the sale of $160.0 million
aggregate principal amount of senior subordinated notes due 2008. The senior
subordinated notes are unconditionally guaranteed by each of Nexstar Finance's
existing and future domestic subsidiaries and by the Bastet Group. The proceeds
from the sale of the senior subordinated notes were used to (1) repay $30.0
million of the unsecured interim loan, (2) repay $116.2 million of Nexstar's
reducing revolving credit facility and (3) pay fees and expenses of the
financing.
As required by the terms of the indenture governing the Notes, on August 6,
2001, pursuant to an assignment and assumption agreement, the entity formerly
known as Nexstar Finance Holdings, L.L.C. contributed all of the equity
interests of Nexstar Finance, L.L.C. (a 100% wholly owned subsidiary of the
entity formerly known as Nexstar Finance Holdings, L.L.C.) and all shares of
common stock of Nexstar Finance, Inc.
39
(also a 100% wholly owned subsidiary of the entity formerly known as Nexstar
Finance Holdings, L.L.C.) to a newly created wholly owned subsidiary of the
entity formerly known as Nexstar Finance Holdings, L.L.C., NBG, L.L.C. As a
result of this transaction, all of the net assets of the entity formerly known
as Nexstar Finance Holdings, L.L.C. were transferred to NBG, L.L.C. with the
exception of an intercompany note payable to Nexstar Broadcasting Group, L.L.C.
(the ultimate parent company of the entity formerly known as Nexstar Finance
Holdings, L.L.C.) of $36.1 million plus accrued interest. Simultaneous with
this reorganization, the entity formerly known as Nexstar Finance Holdings,
L.L.C. was renamed Nexstar Finance Holdings II, L.L.C. and NBG, L.L.C. was
renamed Nexstar Finance Holdings, L.L.C. In addition, upon completion of this
reorganization, Nexstar Broadcasting's guaranty of the Notes was released and
all obligations, of Nexstar Broadcasting under the indenture governing the
Notes ceased to be effective. The reorganization has been accounted for in a
manner similar to a pooling of interests and, accordingly, the financial
information for Nexstar Finance Holdings, L.L.C. (formerly NBG, L.L.C.) for all
periods has been revised to reflect the reorganization.
On August 7, 2001, Nexstar received $20.0 million in capital contributions
from Nexstar Finance Holdings II, L.L.C., the proceeds of which were used to
reduce bank debt.
Historical Performance
Revenues
The following table sets forth the principal types of revenues received by
our stations for the periods indicated and the percentage contribution of each
subcategory of our total revenues, as well as agency and national sales
representative commissions:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1998 1999 2000
------------- ------------- --------------
Amount % Amount % Amount %
------- ----- ------- ----- -------- -----
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Local............................... $36,111 55.8 $49,953 54.9 $ 62,595 50.2
National............................ 19,656 30.4 32,212 35.3 38,602 31.0
Political........................... 3,338 5.2 1,703 1.9 15,126 12.1
Network compensation................ 4,360 6.7 5,440 6.0 6,258 5.0
Other............................... 1,226 1.9 1,751 1.9 2,050 1.7
------- ----- ------- ----- -------- -----
Total gross revenue................ 64,691 100.0 91,059 100.0 124,631 100.0
Less: Agency and national
representative commissions......... 8,686 13.4 12,569 13.8 17,546 14.1
------- ----- ------- ----- -------- -----
Net broadcast revenue.............. 56,005 86.6 78,490 86.2 107,085 85.9
Trade and barter.................... 6,606 8,470 10,382
------- ------- --------
Total net revenue................... $62,611 $86,960 $117,467
======= ======= ========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- ---------------------------
2000 2001 2000 2001
------------- ------------- ------------- -------------
Amount % Amount % Amount % Amount %
------- ----- ------- ----- ------- ----- ------- -----
(dollars in thousands) (dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Local................... $16,297 53.1 $16,480 55.6 $29,507 52.9 $31,568 56.1
National................ 11,338 37.0 10,298 34.8 20,257 36.3 19,163 34.1
Political............... 941 3.1 532 1.8 1,812 3.3 637 1.1
Network compensation.... 1,581 5.2 1,759 5.9 3,032 5.4 3,513 6.3
Other................... 506 1.6 574 1.9 1,182 2.1 1,365 2.4
------- ----- ------- ----- ------- ----- ------- -----
Total gross revenue.... 30,663 100.0 29,643 100.0 55,790 100.0 56,246 100.1
Less: Agency and
national representative
commissions............ 4,321 14.1 4,064 13.7 7,719 13.8 7,587 13.5
------- ----- ------- ----- ------- ----- ------- -----
Net broadcast revenue.. 26,342 85.9 25,579 86.3 48,071 86.2 48,659 86.5
Trade and barter........ 2,046 2,467 4,237 4,992
------- ------- ------- -------
Total net revenue....... $28,388 $28,046 $52,308 $53,651
======= ======= ======= =======
</TABLE>
40
Results of Operations
The following table sets forth a summary of our operations for the periods
indicated and their percentages of total net revenue:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
1998 1999 2000
-------------- ------------- --------------
Amount % Amount % Amount %
------- ----- ------- ----- -------- -----
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Total net revenue................. $62,611 100.0 $86,960 100.0 $117,467 100.0
Operating expenses:
Station operating, net of trade.. 15,076 24.1 21,824 25.1 27,591 23.5
Selling, general and
administrative.................. 15,514 24.8 23,645 27.2 28,790 24.5
Trade and barter................. 6,480 10.3 8,311 9.6 10,227 8.7
Depreciation and amortization.... 21,254 33.9 20,467 23.5 23,933 20.4
Amortization of program license
rights, net of barter........... 4,376 7.0 7,205 8.3 8,356 7.1
------- ------- --------
Operating income (loss)........... $ (89) $ 5,508 $ 18,570
======= ======= ========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- ----------------------------
2000 2001 2000 2001
------------- ------------- ------------- --------------
Amount % Amount % Amount % Amount %
------- ----- ------- ----- ------- ----- ------- -----
(dollars in thousands) (dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total net revenue....... $28,388 100.0 $28,046 100.0 $52,308 100.0 $53,651 100.0
Operating expenses:
Station operating, net
of trade.............. 6,740 23.7 7,034 25.1 13,432 25.7 14,357 26.8
Selling, general and
administrative........ 7,200 25.4 6,740 24.0 13,709 26.2 13,865 25.8
Trade and barter....... 1,937 6.8 2,528 9.0 4,179 8.0 5,092 9.5
Depreciation and
amortization.......... 5,858 20.6 8,380 29.9 11,809 22.6 16,738 31.2
Amortization of program
license rights, net of
barter................ 2,094 7.4 1,887 6.7 4,218 8.1 3,899 7.3
------- ------- ------- -------
Operating income
(loss)................. $ 4,559 $ 1,477 $ 4,961 $ (300)
======= ======= ======= =======
</TABLE>
Broadcast Cash Flow
The following table sets forth certain operating data for the periods
indicated. Please refer to the "Liquidity and Capital Resources" section for a
discussion of operating cash flows.
<TABLE>
<CAPTION>
Three Months Six Months
Year Ended December 31, Ended June 30, Ended June 30,
------------------------- ---------------- ----------------
1998 1999 2000 2000 2001 2000 2001
------- ------- ------- ------- ------- ------- -------
Amount Amount Amount Amount Amount Amount Amount
------- ------- ------- ------- ------- ------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating income
(loss)................. $ (89) $ 5,508 $18,570 $ 4,559 $ 1,477 $ 4,961 $ (300)
Add:
Amortization of program
license rights, net of
barter................ 4,376 7,205 8,356 2,094 1,887 4,218 3,899
Depreciation and
amortization.......... 21,254 20,467 23,933 5,858 8,380 11,809 16,738
Corporate
expenses(/1/)......... 1,951 2,661 3,091 791 571 1,425 1,358
Non-recurring license
and marketing
agreement fees........ 247 1,216 1,914 492 -- 957 77
Trade and barter
expense............... 6,480 8,311 10,227 1,937 2,528 4,179 5,092
Interest income........ 136 262 309 71 109 117 156
Less:
Trade and barter
revenue............... 6,606 8,470 10,382 2,046 2,467 4,237 4,992
Payments for program
license liabilities... 4,464 6,916 8,426 2,035 1,996 4,197 4,009
------- ------- ------- ------- ------- ------- -------
Broadcast cash flow..... $23,285 $30,244 $47,592 $11,721 $10,489 $19,232 $18,019
======= ======= ======= ======= ======= ======= =======
Broadcast cash flow
margin(/2/)............ 41.6% 38.5% 44.4% 44.5% 41.0% 40.0% 37.0%
</TABLE>
--------
(1) Corporate expenses represent costs associated with the centralized
management of our stations.
(2) Broadcast cash flow margin is defined as broadcast cash flow divided by net
broadcast revenue.
41
Three Months Ended June 30, 2001 Compared to Three Months Ended June 30, 2000
Net broadcast revenue for the three months ended June 30, 2001 was $25.6
million, a decrease of $0.7 million, compared to $26.3 million for the three
months ended June 30, 2000. An increase in net broadcast revenue of $1.2
million was attributed to stations acquired after January 1, 2000. On a same
station basis, net broadcast revenue for the three months ended June 30, 2001
was $18.6 million as compared to $20.5 million
for June 30, 2000, a decrease of 9.3%. Of this decrease, a sluggish national
advertising market accounted for $1.3 million while $0.5 million was a result
of reduced spending in the local markets for the second quarter of 2001.
Operating expenses, including selling, general and administrative expenses
and corporate overhead for the three months ended June 30, 2001 were $13.8
million, compared to $13.9 million for the three months ended June 30, 2000, a
decrease of $0.1 million. A $0.4 million increase was attributed to stations
acquired after January 1, 2000. On a same station basis, operating expenses for
the three months ended June 30, 2001 were $10.0 million as compared to $10.6
million for the three months ended June 30, 2000, a 5.7% decrease.
Amortization of program license rights, net of barter, for the three months
ended June 30, 2001 was $1.9 million, compared to $2.1 million for the three
months ended June 30, 2000, a decrease of $0.2 million. The stations acquired
after January 1, 2000 accounted for an increase of $0.1 million. On a same
station basis, amortization of program license rights for the three months
ended June 30, 2001 was $1.3 million, as compared to $1.6 million for the three
months ended June 30, 2000, a 19.0% decrease. This decrease was primarily
associated with cost reductions of renewed or replacement programs.
Depreciation of property and equipment and amortization of intangibles was
$8.4 million for the three months ended June 30, 2001, compared to $5.9 million
for the three months ended June 30, 2000, an increase of $2.5 million. An
increase of $2.7 million was attributed to stations acquired after January 1,
2000 with a $0.2 million offsetting decrease from previously owned stations.
The operating income for the three months ended June 30, 2001 was $1.5
million, compared to $4.6 million for the three months ended June 30, 2000, a
decrease of $3.1 million. Of the $3.1 million decrease, approximately $2.6
million was attributed to stations purchased after January 1, 2000. On a same
station basis, the operating income for the three months ended June 30, 2001
was $1.6 million, as compared to $2.1 million for the three months ended June
30, 2000.
Interest expense for the three months ended June 30, 2001 was $11.5 million,
compared to $5.8 million for the same period in 2000. The increase was
primarily attributed to the increased indebtedness for the stations purchased
in 2000 and 2001.
As a result of the factors discussed above, our net loss was $10.2 million
for the three months ended June 30, 2001, compared to a net loss of $1.4
million for the same period in 2000, an increase in net loss of $8.8 million.
Broadcast cash flow for the three months ended June 30, 2001 was $10.5
million, compared to $11.7 million for the same period in 2000. The stations
acquired after January 1, 2000 accounted for a $0.3 million increase. On a same
station basis, broadcast cash flow for the three months ended June 30, 2001 was
$7.8 million, compared to $9.3 million for the same period in 2000. Broadcast
cash flow margins for the three months ended June 30, 2001 decreased to 41.0%
from 44.5% for the same period in 2000. The decrease in margin was primarily a
result of a decrease in net broadcast revenue offset, in part, by lower
operating costs.
Six Months Ended June 30, 2001 Compared to Six Months Ended June 30, 2000
Net broadcast revenue for the six months ended June 30, 2001 was $48.7
million, an increase of $0.6 million, compared to $48.1 million for the six
months ended June 30, 2000. An increase in net broadcast
42
revenue of $3.4 million was attributed to stations acquired after January 1,
2000. On a same station basis, net broadcast revenue for the six months ended
June 30, 2001 was $34.9 million as compared to $37.6 million for June 30, 2000,
a decrease of 7.2%. Of this decrease, $2.0 million was due to a decline in
national revenue while $0.6 million was from limited political activity for the
first six months of 2001.
Operating expenses, including selling, general and administrative expenses
and corporate overhead for the six months ended June 30, 2001 were $28.2
million, compared to $27.1 million for the six months ended June 30, 2000, an
increase of $1.1 million. A $1.4 million increase was attributed to stations
acquired after January 1, 2000. On a same station basis, operating expenses for
the six months ended June 30, 2001 were $20.4 million as compared to $20.7
million for the six months ended June 30, 2000, a 1.5% decrease.
Amortization of program license rights, net of barter, for the six months
ended June 30, 2001 was $3.9 million, compared to $4.2 million for the six
months ended June 30, 2000, a decrease of $0.3 million. The stations acquired
after January 1, 2000 accounted for an increase of $0.2 million. On a same
station basis, amortization of program license rights for the six months ended
June 30, 2001 were $2.7 million, as compared to $3.2 million for the six months
ended June 30, 2000, a 15.6% decrease. This decrease was primarily associated
with cost reductions of renewed or replacement programs.
Depreciation of property and equipment and amortization of intangibles was
$16.7 million for the six months ended June 30, 2001, compared to $11.8 million
for the six months ended June 30, 2000, an increase of $4.9 million. The
increase of $4.9 million was attributed to stations acquired after January 1,
2000.
The operating loss for the six months ended June 30, 2001 was $0.3 million,
compared to operating income of $5.0 million for the six months ended June 30,
2000, a decrease of $5.3 million. Of the $5.3 million decrease, approximately
$4.9 million was attributed to stations purchased after January 1, 2000. On a
same station basis, the operating income for the six months ended June 30, 2001
was $0.6 million, as compared to $0.9 million for the six months ended June 30,
2000.
Interest expense for the six months ended June 30, 2001 was $19.3 million,
compared to $11.3 million for the same period in 2000. The increase was
primarily attributed to the increased indebtedness for the stations purchased
in 2000 and 2001.
For the six months ended June 30, 2001, we wrote off $0.3 million of debt
financing costs, net of tax effect, as a result of refinancing our senior
credit facilities in January 2001.
As a result of the factors discussed above, our net loss before
extraordinary items was $19.5 million for the six months ended June 30, 2001,
compared to a net loss of $6.4 million for the same period in 2000, an increase
in net loss of $13.1 million.
Broadcast cash flow for the six months ended June 30, 2001 was $18.0
million, compared to $19.2 million for the same period in 2000. The stations
acquired after January 1, 2000 accounted for a $0.9 million increase. On a same
station basis, broadcast cash flow for the six months ended June 30, 2001 was
$13.2 million, compared to $15.3 million for the same period in 2000. Broadcast
cash flow margins for the six months ended June 30, 2001 decreased to 37.0%
from 40.0% for the same period in 2000.
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999.
Net broadcast revenue for the year ended December 31, 2000 was $107.1
million, an increase of $28.6 million, compared to $78.5 million for the year
ended December 31, 1999. Of the $28.6 million increase, approximately $20.9
million was attributed to stations acquired after January 1, 1999. On a same
station basis, net broadcast revenue for the year ended December 31, 2000 was
$65.5 million as compared to $57.8 million for December 31, 1999, a 13.3%
increase. Most of this increase was attributed to increased political
advertising as 2000 had a close presidential election, congressional elections
and senatorial elections in Missouri, Texas,
43
Indiana, Pennsylvania and New York, while 1999 had only state and local
elections. Local and national revenues were relatively flat as the increased
demand for political advertising crowded out local and national advertisers.
The increased pressure on inventory during the months nearest the November
election resulted in increased rates and the amount of inventory sold in each
time period. Local and national revenues for our NBC affiliates benefited from
the Olympic Games.
Operating expenses, including selling, general and administrative expenses
and corporate overhead for the year ended December 31, 2000 were $56.4 million,
compared to $45.5 million for the year ended December 31, 1999, an increase of
$10.9 million. Of this $10.9 million net increase, approximately $11.6 million
was attributed to stations acquired after January 1, 1999. On a same station
basis, operating expenses for the year ended December 31, 2000 were $31.8
million as compared to $32.5 million for the year ended December 31, 1999, a
2.2% decline. Cost controls implemented at the stations accounted for this
decrease.
Amortization of program license rights, net of barter, for the year ended
December 31, 2000 was $8.4 million, compared to $7.2 million for the year ended
December 31, 1999, an increase of $1.2 million. The increase of $1.2 million
was attributable to the stations acquired in 1999 and 2000. Depreciation of
property and equipment and amortization of intangibles was $23.9 million for
the year ended December 31, 2000, compared with $20.5 million for the
comparable period in 1999, an increase of $3.4 million. The increase of $3.4
million is attributable to the amortization of intangibles and the effect of
the stations acquired in 1999 and 2000.
Operating income for the year ended December 31, 2000 was $18.6 million as
compared to $5.5 million for the year ended December 31, 1999, an increase of
$13.1 million. Of the $13.1 million increase, approximately $6.8 million was
attributable to stations acquired after January 1, 1999. On a same station
basis, operating income for the year ended December 31, 2000 was $10.3 million
as compared to $4.0 million for the year ended December 31, 1999. The increase
was primarily attributable to internal revenue growth.
Interest expense for the year ended December 31, 2000 was $20.0 million,
compared to $16.3 million for the same period in 1999, an increase of $3.7
million. The increase was primarily attributable to the full year effect of the
additional indebtedness to acquire the stations in 1999 and 2000.
In 1999, we wrote off $2.8 million of debt financing costs, net of the tax
effect, as a result of refinancing our senior credit facilities during the year
ended 1999.
As a result of the factors discussed above, our net loss was $2.5 million
for the year ended December 31, 2000, compared to a net loss of $14.2 million
for the same period in 1999, a decrease in net loss of $11.7 million.
Broadcast cash flow for the year ended December 31, 2000 was $47.6 million,
compared with $30.2 million for the year ended December 31, 1999, an increase
of $17.4 million. Of the $17.4 million increase, approximately $9.1 million was
attributable to stations acquired after January 1, 1999. On a same station
basis, broadcast cash flow for the year ended December 31, 2000 was $31.9
million as compared to $23.6 million for the year ended December 31, 1999, a
35.1% increase. Broadcast cash flow margins for the year ended December 31,
2000 increased to 44.4% from 38.5% in 1999. The increase in broadcast cash flow
and broadcast cash flow margins was attributable to lower operating costs on a
same station basis coupled with an increase in net revenue.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998.
Net broadcast revenue for the year ended December 31, 1999 was $78.5
million, an increase of $22.5 million compared to $56.0 million for the year
ended December 31, 1998. Stations acquired after January 1, 1998 accounted for
$21.8 million of the increase. On a same station basis, net broadcast revenue
increased from $55.4 million in 1998 to $56.1 million in 1999, a 1.3% increase.
The increase in local and national revenues more than offset the decline of
political revenue from 1998.
44
Operating expenses, including selling, general and administrative expenses
and corporate overhead for the year ended December 31, 1999 were $45.5 million,
compared to $30.6 million, for the year ended December 31, 1998, an increase of
$14.9 million. Of the $14.9 million increase, approximately $13.9 million was
attributable to stations acquired after January 1, 1998. On a same station
basis, operating expenses for the year ended December 31, 1999 were $31.4
million as compared to $30.4 million for the year ended December 31, 1998, a
3.2% increase.
Amortization of program license rights, net of barter, for the year ended
December 31, 1999 was $7.2 million, compared to $4.4 million for the year ended
December 31, 1998, an increase of $2.8 million due to the stations acquired in
1998 and 1999. Depreciation of property and equipment and amortization of
intangibles was $20.5 million for the year ended December 31, 1999, compared
with $21.3 million for the comparable period in 1998, a decrease of $0.8
million. The decrease was primarily the result of the write-off of debt
financing costs as an extraordinary item.
Operating income for the year ended December 31, 1999 was $5.5 million as
compared to an operating loss of $0.1 million for the year ended December 31,
1998, an increase of $5.6 million. Of the $5.6 million increase, $0.8 million
was attributable to stations acquired after January 1, 1998. On a same station
basis, operating income for the year ended December 31, 1999 was $4.9 million
as compared to $0.1 million for the year ended December 31, 1998. The increase
was in part attributable to a decline in amortization of advertising contracts
purchased when we acquired WBRE in 1998.
Interest expense for the year ended December 31, 1999 was $16.3 million,
compared to $11.6 million for the same period in 1998, an increase of $4.7
million. The increase was primarily attributable to indebtedness incurred as a
result of the acquisitions of WROC, KTAB, KJTL, and KJBO-LP.
As a result of the factors discussed above, our net loss was $14.2 million
for the year ended December 31, 1999, compared with net loss of $11.8 million
for the same period in 1998, an increase in loss of $2.4 million. The loss
increase was attributable to the write-off of debt financing costs in 1999.
This was accounted for as an extraordinary loss, net of tax.
Broadcast cash flow for the year ended December 31, 1999 was $30.2 million,
compared with $23.3 million for the year ended December 31, 1998, an increase
of $6.9 million. All of the increase was attributed to stations acquired after
January 1, 1998. On a same station basis, broadcast cash flow was essentially
flat as a result of a decrease in political advertising spending. Broadcast
cash flow margin for the year ended December 31, 1999 decreased to 38.5% from
41.6% for the same period in 1998. The decrease in broadcast cash flow and
broadcast cash flow margin was attributable to the impact of a nonpolitical
year.
Liquidity and Capital Resources
As of June 30, 2001, cash and cash equivalents were $2.4 million compared to
$6.4 million as of June 30, 2000.
Our primary sources of liquidity are cash flows from operating activities
and senior credit facilities. Cash flows provided by operating activities were
$3.0 million for the six months ended June 30, 2001, compared to $3.9 million
for the six months ended June 30, 2000.
Cash used for investing activities was $111.9 million for the six months
ended June 30, 2001, as compared to $8.5 million for the six months ended June
30, 2000. Cash used for investing activities for the six months ended June 30,
2001 was the result of an outlay of approximately $108.0 million for the
purchase of WCIA and WMBD, as well as ongoing capital expenditures at the
stations. Our capital expenditures were $4.0 million for the six months ended
June 30, 2001 and $3.5 million for the six months ended June 30, 2000.
Cash flows from financing activities were $108.5 million for the six months
ended June 30, 2001, compared to $8.0 million for the six months ended June 30,
2000. The change in cash flows from financing
45
activities for the six months ended June 30, 2001 was the result of (1)
borrowings under the new senior credit facilities of $278.8 million with a
subsequent borrowing and repayment of $160.1 million as a result of the
amendment on June 14, 2001 on the credit agreement governing our senior credit
facilities to allow for a $50.0 Term A facility, a $75.0 million Term B
facility and a $100.0 million revolving facility, (2) borrowings of $153.6
million under the newly issued senior subordinated notes (3) borrowing and
subsequent repayment of a $40.0 million interim loan (4) borrowings of $18.7
million from the issuance of the senior discount notes and (5) additional
equity proceeds of $58.3 million (net of an $8.0 million distribution) less the
repayment of the existing senior credit facility.
As of December 31, 2000, cash and cash equivalents were $2.8 million,
compared to $3.0 million as of December 31, 1999.
Cash flows from operating activities were $16.6 million for the year ended
December 31, 2000, compared to $9.7 million for the year ended December 31,
1999. Changes in our net cash flows from operating activities are primarily the
result of higher broadcast cash flows offset by increases in working capital
needs.
Cash used for investing activities was $52.1 million for the year ended
December 31, 2000, as compared to $89.0 million for the year ended December 31,
1999. Cash used for investing activities for the year ended December 31, 2000
was the result of an outlay of approximately $10.0 million for the purchase of
KMID and approximately $35.3 million for the purchase of KTAL and the related
transaction costs, as well as ongoing capital expenditures at the stations. Our
capital expenditures were $5.6 million for the year ended December 31, 2000 and
$6.6 million for the year ended December 31, 1999. We anticipate that capital
expenditures for 2001 will be consistent with 2000 levels. We may, however,
increase the level of capital expenditures in 2001 depending upon the timing of
costs associated with the conversion to digital transmission.
Cash flows from financing activities were $35.3 million for the year ended
December 31, 2000, as compared to $80.3 million for the year ended December 31,
1999. The change in cash flows from financing activities for the year ended
December 31, 2000 was the result of fewer acquisitions and principal payments.
We believe, based on current operations and projected growth, that our cash
flow from operations, together with borrowings available under our senior
credit facilities, will be sufficient to meet our future requirements for
working capital, capital expenditures, interest payments and scheduled
principal payments.
Senior Credit Facilities
On January 12, 2001, Nexstar and the Bastet Group each entered into a senior
secured credit facility with a group of commercial banks. The terms of the
credit agreement governing the Nexstar facility provide for a reducing
revolving credit facility in the amount of $72.0 million and a term loan
facility in the amount of $110.0 million. The Nexstar facility was subsequently
amended on June 14, 2001, to allow for a $50.0 million term loan facility, a
$75.0 million term loan facility and a $57.0 million reducing revolving
facility. The terms of the credit agreement governing the Bastet Group facility
provide for a revolving credit facility in the amount of $43.0 million.
Interest rates associated with the Nexstar and the Bastet Group credit
facilities are based, at our option, on the prevailing prime rate plus an
applicable margin or the LIBOR rate plus an applicable margin. Interest is
fixed for a period ranging from one month to 12 months, depending on
availability of the interest basis selected, except if we select a prime-based
loan, in which case the interest rate will fluctuate during the period as the
prime rate fluctuates. Interest is payable periodically based on the type of
interest rate selected. In addition, Nexstar and the Bastet Group are required
to pay quarterly commitment fees based on our consolidated total leverage ratio
for that particular quarter on the unused portion of the revolving commitments.
The reducing revolving credit facility and the term loans are subject to
amortization schedules. The revolving facilities and the $50.0 million facility
are due and payable on, January 12, 2007, while the maturity date of the $75.0
million term loan facility is July 12, 2007. The senior credit facilities
contain covenants which require us to comply with certain limitations on the
incurrence of additional indebtedness, issuance of equity, payment of dividends
and on certain other business activities. We were in compliance with all
covenants at June 30, 2001.
46
Senior Subordinated Notes
On March 16, 2001, Nexstar Finance issued $160.0 million of 12% senior
subordinated notes at a price of 96.012%. The senior subordinated notes mature
on April 1, 2008. Interest is payable every six months in arrears on April 1
and October 1. The senior subordinated notes are guaranteed by the Bastet
Group and all of the domestic existing and future restricted subsidiaries of
Nexstar and the Bastet Group. They are general unsecured senior subordinated
obligations subordinated to all of our senior debt. The senior subordinated
notes are redeemable on or after April 1, 2005 and Nexstar Finance may redeem
up to 35% of the aggregate principal amount of the notes before April 1, 2004
with the net cash proceeds from qualified equity offerings. The senior
subordinated notes require Nexstar Finance to comply with certain limitations
on the incurrence of additional indebtedness, issuance of equity, payment of
dividends and on certain other business activities.
Unsecured Interim Loan
On January 12, 2001, Nexstar was issued an unsecured interim loan by its
primary lender in the amount of $40.0 million. The interim loan bears interest
at an initial rate of 13.5% per year, which shall automatically increase by
0.5% on each three-month anniversary of the closing date, not to exceed 18.0%
per year. Interest becomes payable quarterly in arrears until maturity,
commencing after January 12, 2005. The interim loan matures on January 12,
2008. The interim loan is subject to a mandatory prepayment in the event of a
direct or indirect public offering or private placement of debt or equity
securities of any entity of Nexstar Broadcasting subject to certain
exceptions. The interim loan is effectively subordinate to the prior payment
in full of all senior debt either outstanding or to be created, incurred,
assumed or guaranteed. In conjunction with the offering of the senior
subordinated notes, $30.0 million of the interim loan was repaid. The
remaining $11.2 million (including accrued interest) was repaid with proceeds
of the offering of the units.
Quantitative and Qualitative Disclosure Relating to Market Risks
Interest Rate Risk
Our exposure to market risk for changes in interest rates relates primarily
to our long-term debt obligations.
All borrowings at June 30, 2001 under our senior credit facilities bear
interest at the base rate, or Eurodollar rate, plus the applicable margin, as
defined (ranging from 7.11% to 7.90% at June 30, 2001). Interest is payable in
accordance with the credit agreement.
At June 30, 2001, Nexstar had in effect two interest rate swap agreements,
with commercial banks, with notional amounts of $93.3 million and $20.0
million. Nexstar's interest rate swap agreements require Nexstar to pay a
fixed rate and receive a floating rate thereby creating fixed rate debt. The
agreements are designated as a hedge of interest rates, and the differential
to be paid or received on the swaps is accrued as an adjustment to interest
expense. Nexstar is exposed to credit loss in the event of nonperformance by
the counterparty. The financial instruments expire on December 31, 2002 and
November 8, 2002, respectively.
Impact of Inflation
We believe that our results of operations are not dependent upon moderate
changes in the inflation rate.
Recently Issued Accounting Standards
In June 1998, the Financial Accounting Standards Board issued Statement of
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities." Subsequently, SFAS No. 133 was amended by the issuance of
Statement of Accounting Standards No. 137 and Statement of Accounting
Standards No. 138. These amendments modify the provisions and effective date
of SFAS No. 133. SFAS
47
No. 133, as amended, is effective for fiscal quarters beginning after January
1, 2001. Upon adoption of SFAS No. 133, on January 1, 2001, we recorded other
comprehensive loss to recognize at fair value all derivatives that were
designated as cash flow hedging instruments, which was comprised of unrealized
losses related to our interest rate swaps of $0.2 million. This unrealized loss
increased by $2.1 million during the six months ended June 30, 2001 and as of
June 30, 2001, the cumulative unrealized loss on our interest rate swaps was
$2.3 million.
We use derivative financial instruments for purposes other than trading,
such as hedging for long-term debt and does so to reduce its exposure to
fluctuations in interest rates, as dictated by their credit agreement. All
derivatives are recognized on the balance sheet at their fair value. Changes in
the fair value of derivatives are recorded each period in current earnings or
other comprehensive income, depending on whether a derivative is designated as
part of a hedge transaction and, if it is, the type of hedge transaction. We
assess, both at its inception and on an on-going basis, whether the derivatives
that are used in hedging transactions are highly effective in offsetting the
changes in cash flows of hedged items. We assess hedge ineffectiveness on a
quarterly basis and records the gain or loss related to the ineffective portion
to current earnings, to the extent it is significant. If we determine that a
cash flow hedge is no longer probable of occurring, we discontinue hedge
accounting for the affected portion of the forecasted transaction, and any
unrealized gain or loss on the contract is recognized in current earnings.
In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that all
business combinations be accounted for under the purchase method only and that
certain acquired intangible assets in a business combination be recognized as
assets apart from goodwill. SFAS No. 142 requires that ratable amortization of
goodwill be replaced with periodic tests of the goodwill's impairment and that
intangible assets other than goodwill be amortized over their useful lives.
SFAS No. 141 is effective for all business combinations initiated after June
30, 2001 and for all business combinations accounted for by the purchase method
for which the date of acquisition is after June 30, 2001. The provisions of
SFAS No. 142 will be effective for fiscal years beginning after December 15,
2001 and will thus be adopted by the Company, as required, in fiscal year 2002.
The Company is currently assessing the impact of this new statement on our
consolidated financial position and results of operations and have not yet
determined the impact of adoption.
48
BUSINESS
Nexstar's predecessor was formed in 1996 to own and operate television
stations in small and medium-sized markets across the United States. We
completed our first acquisition in June 1996 with the purchase of WYOU, the CBS
affiliate in Wilkes Barre-Scranton, Pennsylvania. We currently own and operate
17 stations in 13 markets. In three of the markets in which we operate, we have
duopolies. Our stations are geographically diverse, existing in seven states
stretching from Texas to New York. We also benefit from diversity in our
network affiliations. Specifically, the stations in our group have primary
affiliation agreements with all four major networks (six with NBC, five with
CBS, three with ABC, two with FOX) and one with UPN. On a pro forma basis for
the year ended December 31, 2000, no single station contributed more than 15.0%
of total net revenue or 16.6% of broadcast cash flow, with the majority of the
stations contributing no more than 6.2% of total net revenue or 6.4% of
broadcast cash flow. On a pro forma basis for the six months ended June 30,
2001, no single station contributed more than 11.7% of total net revenue or
15.7% of broadcast cash flow with the majority of the stations contributing no
more than 6.0% of total net revenue or 6.8% of broadcast cash flow.
We believe there are significant advantages in focusing on small to medium-
sized markets, most of which result from a lower level of local competition
compared to larger markets. First, many of the broadcast television competitors
in our markets are generally less professionally managed and less well
capitalized than we are, and are often family owned and operated. Second, by
providing equity incentives to our station general managers, we are able to
attract management with experience in larger markets who employ marketing and
sales techniques that are not typically utilized in our markets. Lastly, in
negotiating with programming vendors, we are able to exercise leverage because
there are typically more programs available than outlets. In many of our
markets, there are only two or three other competing commercial local
television stations.
We target markets that have stable employment and population, a diverse base
of employers (government, education, business), and communities receptive to
local programming. Broadcast television stations in these markets offer an
opportunity to generate attractive and stable broadcast cash flows while
providing limited competition for viewers and syndicated programming. As a
result of the implementation of our business strategies, discussed below, we
have experienced significant growth. On a pro forma basis for the year ended
December 31, 2000, our total net revenue was $127.3 million, our broadcast cash
flow was $49.7 million and our Adjusted EBITDA was $48.0 million. On a pro
forma basis for the six months ended June 30, 2001, our total net revenue was
$53.7 million, our broadcast cash flow was $18.0 million and our Adjusted
EBITDA was $16.9 million.
Business Strategy
Within our markets, we seek to maximize revenue growth and broadcast cash
flow through the following strategies:
Develop Leading Local Franchises. Each of our stations seeks to create a
distinct identity, primarily through the quality of its local news programming.
In 10 of our 13 markets, we rank number one or number two in news viewership.
Strong local news generates high ratings among attractive demographic profiles
and enhances audience loyalty, which results in higher ratings for programs
both preceding and following the news. We continually invest in our stations'
news product and have increased the local news programming of our stations in
the aggregate by 27.4% to 279 hours per week. Extensive local sports coverage
further differentiates us from our competitors and adds to our local
advertising appeal. In addition, each station actively sponsors community
events, which has led to stronger community relations and increased local
advertising.
Emphasize Local Sales. We employ a high-quality local sales force in each of
our markets to capitalize on our investment in local programming. We seek to
maximize local advertising revenues, which are generally more stable than
national advertising revenues and which we directly manage through our own
local sales forces. For the year ended December 31, 2000, the percentage of our
total spot revenues, excluding political, from local advertising was 61.9%,
while for the six months ended June 30, 2001, our total spot revenues,
49
excluding political, from local advertising was 62.2%, each of which we believe
is higher than other station groups. While we maintain strict cost controls, in
most of our markets we have increased the size and quality of our local sales
force. Since acquiring our stations, we have added a net total of 26 account
executives, a 30% increase in our overall sales force. We also invest in our
sales personnel by implementing comprehensive training programs and employing a
sophisticated inventory tracking system to help maximize advertising rates and
the amount of inventory sold in each time period.
Maintain Strict Cost Controls. We emphasize strict controls on operating and
programming costs in order to increase broadcast cash flow. We continually seek
to identify and implement cost savings opportunities at each of our stations,
and our overall size benefits each station with respect to negotiating
favorable terms with programming suppliers and other vendors. By leveraging our
size and corporate management expertise, we are able to achieve economies of
scale by providing programming, financial, sales and marketing support to our
entire station portfolio. Due to the significant negotiating leverage afforded
by our scale and limited competition in our markets, we reduced our cash
programming expense to 7.2% of the total net revenue for the year ended
December 31, 2000, and to 7.5% of our total net revenue for the six months
ended June 30, 2001, which expense we believe is lower than other station
groups.
Attract and Retain High Quality Management. We are able to attract and
retain station general managers with proven track records in larger television
markets by offering equity incentives, which typically are not offered by other
station operators in our markets. All of Nexstar's station general managers
have an equity interest in Nexstar Broadcasting. Our station general managers
have an average of over 20 years of experience in the television broadcasting
industry. Since Nexstar's inception, there has been no turnover at our general
manager level, with the exception of that which occurred as a result of
retirement or actions initiated by us.
Pursue Duopoly Opportunities. We seek to eliminate redundant management and
achieve significant economies of scale in marketing, programming and capital
expenditures by combining the operations of two or three stations in one
market, typically into a single physical facility. For example, in our Wichita
Falls, Texas facility, we simultaneously operate three separate stations, KFDX
(NBC), KJTL (FOX) and KJBO-LP (UPN), with a single general sales manager,
engineering department, production crew and administrative staff. We
selectively evaluate acquisitions and asset exchanges with the objective of
obtaining additional duopolies.
50
Our Stations
The following chart sets forth general information about our stations:
<TABLE>
<CAPTION>
Commercial
Market Station Stations in
Station Market Rank Affiliation Rank(/1/) Market(/2/)
------- --------------------------------- ------ ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
WBRE Wilkes Barre-Scranton, PA 52 NBC 2 4
WYOU(/3/) Wilkes Barre-Scranton, PA 52 CBS 3 4
WROC Rochester, NY 74 CBS 1 4
KTAL Shreveport, LA 76 NBC 3 5
WCIA/WCFN Champaign-Springfield-Decatur, IL 83 CBS 1 5
WMBD Peoria-Bloomington, IL 112 CBS 2 4
KBTV Beaumont-Port Arthur, TX 137 NBC 3 3
WTWO Terre Haute, IN 139 NBC 2 3
WJET Erie, PA 142 ABC 3 4
WFXP(/4/) Erie, PA 142 FOX 4 4
KSNF Joplin, MO-Pittsburgh, KS 145 NBC 2 (tied) 3
KFDX Wichita Falls, TX-Lawton, OK 146 NBC 1 (tied) 4
KJTL(/5/) Wichita Falls, TX-Lawton, OK 146 FOX 4 4
KJBO-
LP(/5/) Wichita Falls, TX-Lawton, OK 146 UPN NA 4
KMID Midland-Odessa, TX 151 ABC 3 4
KTAB Abilene-Sweetwater, TX 160 CBS 1 4
KQTV St. Joseph, MO 192 ABC 1 1
</TABLE>
--------
(1) Station ranking in market is determined by audience shares from November
2000.
(2) The term "commercial station" means a television broadcast station and does
not include non-commercial television stations, cable program services or
networks, or stations that do not meet the minimum Nielson reporting
standards.
(3) Owned by Bastet Broadcasting, Inc. and operated under a shared services
agreement.
(4) Owned by Bastet Broadcasting, Inc. and operated under a time brokerage
agreement.
(5) Owned by Mission Broadcasting of Wichita Falls, Inc. and operated under a
shared services agreement and joint sales agreement.
The following is a description of each of our stations and their markets:
WBRE and WYOU (Wilkes Barre-Scranton, Pennsylvania)
Market Profile. Wilkes Barre-Scranton, Pennsylvania is the 52nd-largest DMA
in the United States, with a population of approximately 1.5 million and
550,000 television households. Cable penetration in the Wilkes Barre-Scranton
market is estimated to be 82%. The Wilkes Barre-Scranton market experienced
compound annual revenue growth of approximately 5.0% from 1998 to 2000 and is
expected to grow at a compound annual rate of 5.7% through 2003. Average
household income is estimated to be $38,754.
The diversified economy in the Wilkes Barre-Scranton market is comprised
mainly of professional services, agriculture, wholesale/retail, government and
manufacturing jobs. Major employers include Prudential Investments, Fleet
Financial Group, General Dynamics, HarperCollins Publishers, and JC Penney
Catalog Customer Service Centers.
There are four commercial television stations in the Wilkes Barre-Scranton,
Pennsylvania DMA. The table below provides an overview of the commercial
stations licensed to the DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- ---------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
WBRE 28 NBC Nexstar Broadcasting Group 13% 14% 15% 16%
WYOU 22 CBS Bastet Broadcasting 11% 11% 12% 11%
WNEP 16 ABC The New York Times Company 17% 23% 20% 19%
WOLF/WILF 56/53 FOX Pegasus Communications Corporation 6% 4% 5% 4%
</TABLE>
51
WBRE
Station Profile. Nexstar acquired WBRE, an NBC affiliate, in January 1998.
For the November 2000 ratings period, WBRE ranked second in its market, with a
sign-on to sign-off audience share of 13%. The station's syndicated programming
includes Wheel of Fortune, Jeopardy, The Oprah Winfrey Show and Seinfield.
In January 1998, Nexstar significantly increased its operating efficiencies
by entering into a shared services agreement with WYOU, a Bastet Group station,
which Nexstar believes was the first shared services agreement allowed by the
FCC. As a result of combining the operations of two traditional network
affiliates, Nexstar was able to achieve significant cost reductions. Nexstar
integrated both stations' operations into a new facility and significantly
upgraded the technical capabilities and news sets of both stations, creating
substantial opportunities for future growth.
Since the successful implementation of the shared services agreement,
Nexstar has focused on increasing revenue share. Nexstar recently hired a new
general manager, a general sales manager and a local sales manager. Nexstar has
significantly improved advertising rates by refocusing the station operations
and concentrating on inventory management. Nexstar has also enhanced
programming, strengthened the local news product and upgraded its weather
system to position WBRE to achieve future revenue growth.
WYOU
Station Profile. Nexstar acquired WYOU, a CBS affiliate, in June 1996 and
sold it to the Bastet Group in 1998, when a shared services agreement was
entered into with WBRE. For the November 2000 ratings period, WYOU ranked third
in its market, with a sign-on to sign-off audience share of 11%. The station's
syndicated programming includes Montel, Entertainment Tonight, and Judge Judy.
To increase visibility of WYOU, the station recently unveiled a new, street-
level newsroom in Scranton. In order to increase audience share, Nexstar
relaunched the station's news product in January 2001 with a newly designed
logo and enhanced graphics. In addition, the station has improved its
syndicated programming, expanded its promotional efforts and begun using a new
transmitter to improve the station's signal reach and coverage.
WROC (Rochester, New York)
Market Profile. Rochester, New York is the 74th-largest DMA in the United
States, with a population of approximately 975,000 and 377,000 television
households. Cable penetration in the Rochester market is estimated to be 73%.
The Rochester market experienced compound annual revenue growth of
approximately 0.9% from 1998 to 2000 and is expected to grow at a compound
annual rate of 4.2% through 2003. Average household income is estimated to be
$44,023.
The most prominent industries in Rochester are services, retail trade and
manufacturing. The largest employers in this market are Eastman Kodak Co.,
Xerox Corporation, University of Rochester, Strong Memorial Hospital,
ViaHealth, and Wegmans Food Markets Inc.
There are four commercial television stations in the Rochester, New York
DMA. The table below provides an overview of the commercial stations licensed
to the DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- ------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
WROC 8 CBS Nexstar Broadcasting Group 17% 16% 20% 18%
WHEC 10 NBC Hubbard Broadcasting Inc 15% 16% 15% 16%
WORK 13 ABC Ackerley Group 16% 19% 16% 15%
WUHF 31 FOX Sinclair Broadcasting Group 8% 9% 9% 9%
(under time brokerage agreement)
</TABLE>
52
Station Profile. Nexstar acquired WROC, a CBS affiliate, in December 1999.
For the November 2000 ratings period, WROC ranked first in its market, with a
sign-on to sign-off audience share of 17%. The station's syndicated programming
includes Jeopardy, Wheel of Fortune and Entertainment Tonight.
Nexstar believes this station has substantial potential for increased
revenues because, in spite of its number one position in audience share, it has
captured less than 20% of the revenues in this four-station market. Since
acquisition, Nexstar has installed a new management team and increased the size
of its local salesforce in order to focus on local sales. Nexstar hired a new
general manager with significant regional experience, as well as a new local
sales manager and a new promotions manager. Nexstar also added three local
account executives. In addition, Nexstar overhauled the station's newscast in
2000 with an upgraded news set and graphics.
KTAL (Shreveport, Louisiana)
Market Profile. Shreveport, Louisiana is the 76th-largest DMA in the United
States, with a population of approximately 998,000 and 371,000 television
households. Cable penetration in the Shreveport market is estimated to be 60%.
The Shreveport market experienced compound annual revenue growth of
approximately 6.4% from 1998 to 2000 and is expected to grow at a compound
annual rate of 6.0% through 2003. Average household income is estimated to be
$35,489.
The Shreveport economy is primarily focused on agribusiness, manufacturing,
distribution, research and technology and is also home to a growing casino
industry and Barksdale Air Force Base. The Greater Shreveport-Northwest
Louisiana region is a designated Customs Port of Entry and Foreign Trade Zone.
There are five commercial television stations in the Shreveport, Louisiana
DMA. The table below provides an overview of the commercial stations licensed
to the DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- ----------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
KTAL 6 NBC Nexstar Broadcasting Group 8% 10% 11% 11%
KTBS 3 ABC Wray, Florence 14% 17% 16% 13%
KSLA 12 CBS Raycom Media Incorporated 17% 17% 21% 23%
KMSS 33 FOX Communication Corp of America 5% 4% 6% 5%
KSHV 45 UPN/WB White Knight Broadcasting 2% 3% 3% 2%
</TABLE>
Station Profile. Nexstar acquired KTAL, an NBC affiliate, in November 2000.
For the November 2000 ratings period, KTAL ranked third in its market, with a
sign-on to sign-off audience share of 8%. The station's syndicated programming
includes Wheel of Fortune, Hollywood Squares and Sally.
Under the previous family-ownership of KTAL, Nexstar believes there was a
lack of expertise in television broadcasting, creating opportunities for
revenue increases and cost reductions. Since acquisition, Nexstar has
redirected the station's focus away from Texarkana to the more profitable and
substantially larger Shreveport segment of the market. Nexstar has completely
replaced the prior management team, hiring a new general manager, who
previously led KSLA, another Shreveport station, to the number one ranked
station in the market during his tenure. Nexstar has also hired a new general
sales manager, news director, chief engineer and operations manager. Nexstar
has implemented cost reductions and an incentive-based commission structure. To
improve the station's viewership and revenue share in this growing market,
Nexstar has invested approximately $1.0 million to upgrade and improve the on-
air look and the quality of the station, particularly in news programming.
WCIA/WCFN (Champaign-Springfield-Decatur, Illinois)
Market Profile. Champaign-Springfield-Decatur, Illinois is the 83rd-largest
DMA in the United States, with a population of approximately 902,000 and
345,000 television households. Cable penetration in the
53
Champaign-Springfield-Decatur market is estimated to be 76%. The Champaign-
Springfield-Decatur market experienced a compound annual decrease in revenue of
approximately 0.1% from 1998 to 2000 but is expected to grow at a compound
annual rate of 3.7% through 2003. Average household income is estimated to be
$43,064.
The Champaign-Springfield area is recognized as a center for computing and
technology, with a diverse group of traditional and high-technology companies.
The top employers are the University of Illinois at Urbana-Champaign, Carle
Clinic Association, Carle Foundation Hospital and Kraft Foods, Inc.
There are five commercial television stations in the Champaign-Springfield-
Decatur, Illinois DMA. The table below provides an overview of the commercial
stations licensed to the DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- ------------------------------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
WCIA/WCFN 3/49 CBS Nexstar Broadcasting Group 18% 19% 20% 21%
WAND 17 ABC LIN Television Corporation 14% 15% 15% 14%
WICS/WICD 20/15 NBC Sinclair Broadcast Group 14% 15% 13% 16%
WBUI 23 WB Acme Television LLC 2% 3% 2% --
WRSP/WCCU 55/27 FOX Bahakel Communications Limited 5% 5% 7% 5%
</TABLE>
WCIA
Station Profile. In January 2001, Nexstar acquired WCIA, a CBS affiliate
located in Champaign. WCIA had been operated by Nexstar under a time brokerage
agreement since July 1999. For the November 2000 ratings period, WCIA ranked
first in its market, with a sign-on to sign-off audience share of 18%. The
station's syndicated programming includes The Oprah Winfrey Show, Hollywood
Squares and Frasier.
Because WCIA is ranked number one in its market for news, Nexstar believes
that the station provides a powerful base to drive revenue growth with
increased marketing and promotion. To capture revenue opportunities not
realized by the previous ownership, which concentrated primarily on the
Champaign side of the market, Nexstar has increased its sales efforts in the
Springfield area and added a Springfield-based sales force to enhance its local
presence. When Nexstar entered into the time brokerage agreement, it was able
to reduce expenses at this station by approximately $2.7 million through
employee consolidation, increased vendor discounts and elimination of certain
corporate expenses. With its number one ranked news product, the anticipated
addition of a local sales manager and Nexstar's sports broadcast agreement with
the University of Illinois, Nexstar believes that WCIA is strategically
positioned for future growth.
WCFN
Station Profile. Nexstar acquired WCFN, which is located in Springfield, in
conjunction with WCIA. Nexstar is currently using WCFN to simulcast WCIA to the
southwest segment of the DMA. The FCC has granted duopoly status for WCFN, and
Nexstar is in the process of increasing WCFN's transmission power. Among other
strategic alternatives, Nexstar is contemplating the possibility of entering
into an affiliate agreement with UPN to create an additional broadcasting
outlet. While any such discussions may not be successful, launching WCFN as a
stand-alone station would allow the station to benefit from substantial
operational efficiencies, and would result in additional inventory to sell in
the market. This would become our 18th station and fourth effective duopoly.
WMBD (Peoria-Bloomington, Illinois)
Market Profile. Peoria-Bloomington, Illinois is the 112th-largest DMA in the
United States, with a population of approximately 614,000 and 231,000
television households. Cable penetration in the Peoria-Bloomington market is
estimated to be 72%. The Peoria-Bloomington market experienced compound annual
54
revenue growth of approximately 0.3% from 1998 to 2000 and is expected to grow
at a compound annual rate of 4.7% through 2003. Average household income is
estimated to be $46,184.
The Peoria-Bloomington market is approximately equidistant from Chicago, St.
Louis, and Indianapolis. Major colleges and universities in the area include
Bradley University, Illinois Central College, the University of Illinois
College of Medicine, and Illinois State University. Major employers include
Caterpillar, State Farm Insurance Companies and Mitsubishi Motor Manufacturing
of America.
There are four commercial television stations in the Peoria-Bloomington,
Illinois DMA. The table below provides an overview of the commercial stations
licensed to the DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- -------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
WMBD 31 CBS Nexstar Broadcasting Group 15% 17% 18% 20%
WHOI 19 ABC Benedek Broadcasting Corporation 12% 14% 12% 10%
WEEK 25 NBC Granite Broadcasting Corporation 18% 19% 18% 19%
WYZZ 43 FOX Sinclair Broadcasting Group 7% 5% 8% 7%
</TABLE>
Station Profile. Nexstar acquired WMBD, a CBS affiliate located in Peoria,
in January 2001. For the November 2000 ratings period, WMBD ranked second in
its market, with a sign-on to sign-off audience share of 15%. The station's
syndicated programming includes Wheel of Fortune, Jeopardy and Hollywood
Squares.
Since Nexstar's acquisition of WMBD, Nexstar has replaced the general sales
manager and hired a new local sales manager. Nexstar has strengthened WMBD's
position in the local news market by refocusing its sales effort and news
programming on Bloomington, a large population center where competitors have no
physical presence. WMBD has gained market recognition and loyalty for its
Morning Mix talk show program, which has improved ratings in the time period
more than four-fold since its inception. In addition, Nexstar has reduced
expenses (including program costs) from $5.6 million in 1998 to $4.9 million in
2000 as a result of cost controls at this station.
KBTV (Beaumont-Port Arthur, Texas)
Market Profile. Beaumont-Port Arthur, Texas is the 137th-largest DMA in the
United States, with a population of approximately 452,000 and 165,000
television households. Cable penetration in the Beaumont-Port Arthur market is
estimated to be 70%. The Beaumont-Port Arthur market experienced compound
annual revenue growth of approximately 2.7% from 1998 to 2000 and is expected
to grow at a compound annual rate of 3.7% through 2003. Average household
income is estimated to be $38,791.
Beaumont is the county seat of Jefferson County, while Port Arthur is a
major port of entry into the United States. Major employers include the
Beaumont Independent School District, Christus St. Elizabeth Hospital, Huntsman
Corporation and the Mobil Oil Corporation.
There are three commercial television stations in the Beaumont-Port Arthur,
Texas DMA. The table below provides an overview of the commercial stations
licensed to the DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
KBTV 4 NBC Nexstar Broadcasting Group 10% 13% 12% 15%
KFDM 6 CBS Freedom Broadcasting, Inc 25% 26% 29% 27%
KBMT 12 ABC Texas Television 13% 14% 14% 13%
</TABLE>
Station Profile. Nexstar acquired KBTV, an NBC affiliate, in January 1998.
For the November 2000 ratings period, KBTV ranked third in its market, with a
sign-on to sign-off audience share of 10%. The station's syndicated programming
includes Jeopardy, Hollywood Squares and The Maury Povich Show.
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Since the acquisition of KBTV, Nexstar relocated most departments of the
station from Port Arthur to a high-traffic area in a premier location in
Beaumont, the retail hub of the market, greatly improving the station's local
image. In the fourth quarter of 1999, Nexstar relaunched the station with new
call letters, graphics, on-air talent, and promotions. KBTV's market revenue
share has increased since 1998 from 22.6% to 27.0%. Furthermore, Nexstar
believes that the station has grown from number three to number two in market
revenue share and that this station is well positioned for continued growth as
a result of Nexstar's investment, increased community involvement and marketing
partnerships.
WTWO (Terre Haute, Indiana)
Market Profile. Terre Haute, Indiana is the 139th-largest DMA in the United
States, with a population of approximately 412,000 and 157,000 television
households. Cable penetration in the Terre Haute market is estimated to be 62%.
The Terre Haute market experienced compound annual revenue growth of
approximately 4.7% from 1998 to 2000 and is expected to grow at a compound
annual rate of 4.7% through 2003. Average household income is estimated to be
$37,108.
The major employers in the Terre Haute market include Pfizer, Inc., Eli
Lilly and Co., Columbia House, and Bemis Corporation.
There are three commercial stations in the Terre Haute, Indiana DMA. The
table below provides an overview of the commercial stations licensed to the
DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- ------------------------------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
WTWO 2 NBC Nexstar Broadcasting Group 14% 16% 14% 16%
WTHI 10 CBS Emmis Communications 20% 21% 22% 24%
WBAK 38 FOX Bahakel Communications Limited 4% 4% 6% 4%
</TABLE>
Station Profile. Nexstar acquired WTWO, an NBC affiliate, in April 1997. For
the November 2000 ratings period, WTWO ranked second in its market, with a
sign-on to sign-off audience share of 14%. The station's syndicated programming
includes The Oprah Winfrey Show, Jeopardy and Wheel of Fortune.
Since acquisition, Nexstar hired a new general manager, sales manager,
operations manager, news director and promotion manager and completely replaced
the sales force, increasing the number of account executives from five to
seven. In addition, Nexstar has added a noon and a five o'clock news program.
WTWO recently won or tied for first place in every targeted demographic news
category. Nexstar believes that additional revenue growth will be driven by
non-traditional opportunities from sources such as the television and radio
broadcast rights for Indiana State University sporting events, which rights we
obtained in 1999. Nexstar believes WTWO is well positioned to continue to
achieve revenue growth and capitalize on the market's growing economy by
leveraging the station's leading news position with its experienced local sales
team.
WJET and WFXP (Erie, Pennsylvania)
Market Profile. Erie, Pennsylvania is the 142nd-largest DMA in the United
States, with a population of approximately 414,000 and 153,000 television
households. Cable penetration in the Erie market is estimated to be 67%. The
Erie market experienced compound annual revenue growth of approximately 7.3%
from 1998 to 2000 and is expected to grow at a compound annual rate of 4.7%
through 2003. Average household income is estimated to be $40,742.
The Erie economy is based on manufacturing, paper milling, financial and
other services. Major employers in the Erie market include General Electric
Company, Wegmans Food Markets, Inc., International Paper Company and Plastek
Industries. Major area universities and colleges include Allegheny College,
Gannon University and Edinboro University.
56
There are four commercial stations in the Erie, Pennsylvania DMA. The table
below provides an overview of the commercial stations licensed to the DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
WJET 24 ABC Nexstar Broadcasting Group 15% 17% 18% 17%
WFXP 66 FOX Bastet Broadcasting 4% 4% 5% 5%
WICU 12 NBC SJL Communications LP 18% 15% 15% 16%
WSEE 35 CBS WSEE Television Inc 18% 17% 20% 19%
</TABLE>
WJET
Station Profile. Nexstar acquired WJET, an ABC affiliate, in January 1998.
For the November 2000 ratings period, WJET ranked third in its market, with a
sign-on to sign-off audience share of 15%. The station's syndicated programming
includes Frasier, Seinfeld and Everybody Loves Raymond.
Nexstar purchased WJET from the family who founded the station over 40 years
ago. Through cost reductions, the station's broadcast cash flow margin has
improved to 43.4% for the year ended December 31, 2000 from previously negative
levels. Building on its top ranked evening newscast, Nexstar launched a morning
news program three months after acquisition that also achieved top ranking
within 15 months. Nexstar believes it can continue revenue and broadcasting
cash flow growth through a refocused sales effort and an aggressive promotional
campaign.
WFXP
Station Profile. Nexstar began its time brokerage agreement with WFXP, a FOX
affiliate, in August 1998. In November 1998, a member of the Bastet Group
acquired WFXP. For the November 2000 ratings period, WFXP ranked fourth in its
market, with a sign-on to sign-off audience share of 4%. WFXP's syndicated
programming includes Friends and The Simpsons.
Since the station began its time brokerage agreement with WJET, WFXP's
broadcast cash flow has significantly increased, due to the leverage of WJET's
existing asset base and the efficiencies afforded by the time brokerage
agreement. We have made significant investments to strengthen WFXP's news
product and syndicated programming in order to improve ratings. We have doubled
the sales force since acquisition to continue to drive revenue growth and
believe the station has substantially increased its revenue share.
KSNF (Joplin, Missouri-Pittsburg, Kansas)
Market Profile. Joplin, Missouri-Pittsburg, Kansas is the 145th-largest DMA
in the United States, with a population of approximately 375,000 and 148,000
television households. Cable penetration in the Joplin-Pittsburg market is
estimated to be 57%. The Joplin-Pittsburg market experienced compound annual
revenue growth of approximately 6.4% from 1998 to 2000 and is expected to grow
at a compound annual rate of 6.0% through 2003. Average household income is
estimated to be $32,204.
The Joplin-Pittsburg market is located seven miles from the Kansas border,
ten miles from the Oklahoma border, and 50 miles from the Arkansas border.
Joplin is recognized as the retail center in the four-states area. Major
employers in the market include Contract Freighters, Inc., St. John's Regional
Medical Center, Freeman Health System, and Eagle Picher Industries.
57
There are three commercial stations in the Joplin, Missouri-Pittsburg,
Kansas DMA. The table below provides an overview of the commercial stations
licensed to the DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- -------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
KSNF 16 NBC Nexstar Broadcasting Group 15% 15% 14% 15%
KOAM 7 CBS Saga Communications Incorporated 19% 18% 22% 22%
KODE 12 ABC GOCOM Holdings LLC 15% 16% 16% 15%
</TABLE>
Station Profile. Nexstar acquired KSNF, an NBC affiliate, in January 1998.
For the November 2000 ratings period, KSNF tied for second in its market, with
a sign-on to sign-off audience share of 15%. The station's syndicated
programming includes Frasier, Judge Judy and The Rosie O'Donnell Show.
Since acquisition, Nexstar hired ten new employees including three
department managers, two salespeople and an on-air professional from a
competitor. In addition, Nexstar launched a 6:00 a.m. and a 5:00 p.m. newscast,
both of which are now ranked number one. In aggregate, the station has
increased its total locally produced news programming by 54% to 18.5 hours per
week. KSNF's newscasts are the market leaders in all saleable demographics, and
in 1999, KSNF won the prestigious Edward R. Murrow Award for the best small
market newscast in the Midwest region. Nexstar believes that KSNF is well
positioned to continue to achieve revenue growth and capitalize on the market's
growing economy by leveraging the station's number one news position with its
experienced local sales team.
KFDX, KJTL and KJBO-LP (Wichita Falls, Texas-Lawton, Oklahoma)
Market Profile. Wichita Falls, Texas-Lawton, Oklahoma is the 146th-largest
DMA in the United States, with a population of approximately 421,000 and
148,000 television households. Cable penetration in the Wichita Falls-Lawton
market is estimated to be 67%. The Wichita Falls-Lawton market experienced
compound annual revenue growth of approximately 5.1% from 1998 to 2000 and is
expected to grow at a compound annual rate of 5.9% through 2003. Average
household income is estimated to be $35,463.
Historically an oil and cotton-based economy, Wichita Falls also is home to
Sheppard Air Force Base and is a major medical hub for North Texas and Southern
Oklahoma residents.
There are four commercial television stations in the Wichita Falls, Texas-
Lawton, Oklahoma DMA. The table below provides an overview of the commercial
stations licensed to the DMA, exclusive of our UPN affiliate, KJBO-LP:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- -------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
KFDX 3 NBC Nexstar Broadcasting Group 14% 15% 14% 15%
KJTL 18 FOX Mission Broadcasting 6% 5% 8% 6%
KAUZ 6 CBS Benedek Broadcasting Corporation 14% 14% 15% 15%
KSWO 7 ABC Drewry Communications Group 12% 14% 15% 11%
</TABLE>
KFDX
Station Profile. Nexstar acquired KFDX, an NBC affiliate, in January 1998.
For the November 2000 ratings period, KFDX tied for the number one ranking in
its market, with a sign-on to sign-off audience share of 14%. The station's
syndicated programming includes Entertainment Tonight, Montel and The Rosie
O'Donnell Show.
KFDX is the market leader in news in most demographic groups targeted by
advertisers. Since acquisition of KFDX, Nexstar has increased audience share
and has become the number one ranked news station in the market by increasing
promotions and focusing on community relations. For example, KFDX was the
official station of the Dallas Cowboys training camp, held at Midwestern State
University for the 1999, 2000 and 2001
58
seasons. Nexstar believes that KFDX is well positioned for continued growth
through ongoing community projects, local programming enhancements and
increased marketing initiatives.
KJTL
Station Profile. A member of the Bastet Group acquired KJTL, a FOX
affiliate, in June 1999. For the November 2000 ratings period, KJTL ranked
fourth in its market, with a sign-on to sign-off audience share of 6%. The
station's syndicated programming includes Frasier, Spin City and Judge Judy.
Through its joint sales agreement and shared services agreement with KFDX,
KJTL and KJBO-LP have achieved significant operating efficiencies. KJTL, KFDX
and KJBO-LP leverage their resources and realize savings by eliminating
duplicative costs related to equipment, vehicles, vendor contracts and
personnel in engineering, production, and operations. However, KJTL maintains a
separate identity, targeting a younger demographic than KFDX, allowing KJTL to
reach a broader section of the market. Nexstar recently implemented new
incentive programs for KJTL's advertisers and is working to improve the brand
recognition of this station, with the goal of increasing the demand for the
station's inventory and improving the station's advertising rates.
KJBO-LP
Station Profile. A member of the Bastet Group acquired KJBO-LP, a UPN
affiliate, in June 1999. Operating through its joint sales agreement and shared
services agreement with KFDX, KJBO-LP is a highly efficient operation. Improved
marketing and additional inventory combined with this station's marginal
expenses present an opportunity for increasing broadcast cash flow.
KMID (Midland-Odessa, Texas)
Market Profile. Midland-Odessa, Texas is the 151st-largest DMA in the United
States, with a population of approximately 391,000 and 138,000 television
households. Cable penetration in the Midland-Odessa market is estimated to be
73%. The Midland-Odessa market experienced compound annual revenue growth of
approximately 0.3% from 1998 to 2000 and is expected to grow at a compound
annual rate of 5.0% through 2003. Average household income is estimated to be
$39,286.
Midland-Odessa serves as an administrative center for the Permian Basin,
where approximately 20% of America's oil reserves are located.
There are four commercial television stations in the Midland-Odessa, Texas
DMA. The table below provides an overview of the commercial stations licensed
to the DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- ------------------------------------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
KMID 2 ABC Nexstar Broadcasting Group 11% 13% 13% 11%
KPEJ 24 FOX Communication Corporation of America 7% 6% 8% 6%
KOSA 7 CBS ICA Broadcasting 13% 13% 14% 13%
KWES/KWAB 9/4 NBC Drewry Communications Group 12% 14% 14% 15%
</TABLE>
Station Profile. Nexstar acquired KMID, an ABC affiliate, in September 2000.
For the November 2000 ratings period, KMID ranked third in its market, with a
sign-on to sign-off audience share of 11%. The station's syndicated programming
includes The Oprah Winfrey Show, Wheel of Fortune and Jeopardy.
Since acquisition, Nexstar has hired a new general manager with larger
market experience and a new sales manager. Nexstar believes that by investing
approximately $400,000 in capital expenditures since
59
acquisition it has significantly enhanced the news product and local commercial
production capability of the station. In addition, Nexstar has introduced its
sales training and inventory management techniques to achieve future revenue
growth.
KTAB (Abilene-Sweetwater, Texas)
Market Profile. Abilene-Sweetwater, Texas is the 160th-largest DMA in the
United States, with a population of approximately 295,000 and 114,000
television households. Cable penetration in the Abilene-Sweetwater market is
estimated to be 69%. The Abilene-Sweetwater market experienced compound annual
revenue growth of approximately 3.5% from 1998 to 2000 and is expected to grow
at a compound annual rate of 3.2% through 2003. Average household income is
estimated to be $33,138.
The Abilene-Sweetwater economy is primarily based on oil and gas,
agriculture, retail trade and the military. Major employers include Dyess Air
Force Base, Hendrick Health System, BlueCross BlueShield and Coca Cola of
Abilene. Area universities include Abilene Christian University and Hardin-
Simmons University.
There are four commercial television stations in the Abilene-Sweetwater,
Texas DMA. The table below provides an overview of the commercial stations
licensed to the DMA:
<TABLE>
<CAPTION>
Audience Share
---------------------------
Call Channel Affiliation Owner Nov-00 May-00 Nov-99 May-99
---- ------- ----------- --------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
KTAB 32 CBS Nexstar Broadcasting Group 18% 20% 20% 18%
KRBC 9 NBC STC, Inc. 11% 11% 12% 12%
KTXS 12 ABC Lamco Communications Incorporated 14% 14% 14% 13%
KIDZ-LP 54 FOX/UPN Sage Broadcasting Corp. 4% 4% 5% 2%
</TABLE>
Station Profile. Nexstar purchased KTAB, a CBS affiliate, in August 1999.
For the November 2000 ratings period, KTAB ranked first in its market, with a
sign-on to sign-off audience share of 18%. The station's syndicated programming
includes The Oprah Winfrey Show, Wheel of Fortune and Jeopardy.
Since acquisition, Nexstar has made substantial operating improvements and
rebuilt the station's news, promotion, sales, and personnel infrastructure.
Nexstar has installed a new general manager with local market experience and
increased the number of sales account executives from two to six. KTAB was
ranked number one for the 6:00 p.m. and 10:00 p.m. newscasts for the November
2000 ratings period. With the launch of a 90-minute early news program, KTAB
has increased locally produced news programming more than 2.5 times to 17 hours
per week and has increased available sales inventory.
KQTV (St. Joseph, Missouri)
Market Profile. St. Joseph, Missouri is the 192nd-largest DMA in the United
States, with a population of approximately 145,000 and 54,000 television
households. Cable penetration in the St. Joseph market is estimated to be 67%.
The St. Joseph market experienced compound annual revenue growth of
approximately 9.3% from 1998 to 2000 and is expected to grow at a compound
annual rate of 5.2% through 2003. Average household income is estimated to be
$35,812.
St. Joseph's job base is diversified, with the ten largest employers
encompassing nine different industries. The Frontier Riverboat Casino is a
recent addition to St. Joseph's growing tourism industry.
Station Profile. Nexstar acquired KQTV, an ABC affiliate, in April 1997.
KQTV is the only commercial television market in the St. Joseph, Missouri DMA.
In the November 2000 ratings period, KQTV had a sign on/sign off audience share
of 21%. The station's syndicated programming includes The Oprah Winfrey Show,
Wheel of Fortune and The Rosie O'Donnell Show.
60
As the only commercial television station in the market, KQTV has
considerable influence on rates in the market due to the lack of commercial
advertising alternatives. Additionally, since acquisition, Nexstar has been
able to attract advertising revenue from the nearby Kansas City market, which
has a DMA rank of 30. KQTV has implemented new sales promotions and increased
promotional activity in adjacent counties and towns to capitalize on its award-
winning news and children's programming. In addition, KQTV has increased its
total locally produced news programming by 37% to 18.5 hours per week to create
additional sales inventory.
Industry Background
The Television Broadcasting Industry
Commercial television broadcasting began in the United States on a regular
basis in the 1940s. There are a limited number of channels available for
broadcasting in any one geographic area. Television stations can be
distinguished by the frequency on which they broadcast. Television stations
that broadcast over the very high frequency or VHF band (channels 2-13) of the
spectrum generally have some competitive advantage over television stations
which broadcast over the ultra-high frequency or UHF band (channels above 13)
of the spectrum because the former usually have better signal coverage and
operate at a lower transmission cost. However, the improvement of UHF
transmitters and receivers, the complete elimination from the marketplace of
VHF-only receivers and the expansion of cable television systems have reduced
the VHF signal advantage. Any disparity between VHF and UHF is likely to
diminish even further in the coming era of digital television.
The Market for Television Programming
Television station revenues are primarily derived from local, regional and
national advertising and, to a lesser extent, from network compensation and
revenues from studio rental and commercial production activities. Advertising
rates are based upon a variety of factors, including a program's popularity
among the viewers an advertiser wishes to attract, the number of advertisers
competing for the available time, the size and demographic makeup of the market
served by the station, and the availability of alternative advertising media in
the market area. Rates are also determined by a station's overall ratings and
share in its market, as well as the station's ratings and share among
particular demographic groups which an advertiser may be targeting. Because
broadcast television stations rely on advertising revenues, declines in
advertising budgets, particularly in recessionary periods, adversely affect the
broadcast industry, and as a result may contribute to a decrease in the
revenues of broadcast television stations.
All television stations in the country are grouped by A.C. Nielsen Company,
a national audience measuring service, into 210 generally recognized television
markets that are ranked in size according to various metrics based upon actual
or potential audience. Each DMA is determined as an exclusive geographic area
consisting of all counties in which the home-market commercial stations receive
the greatest percentage of total viewing hours. Nielsen periodically publishes
data on estimated audiences for the television stations in the various
television markets throughout the country. The estimates are expressed in terms
of the station's "rating," which is a percentage of the total potential
audience in the market viewing a station, or the station's "share," which is
the percentage of the audience actually watching television. Nielsen provides
this data on the basis of local television households and selected demographic
groupings in the market. Nielsen uses two methods of determining a station's
ability to attract viewers. In larger geographic markets, ratings are
determined by a combination of meters connected directly to selected television
sets and weekly diaries of television viewing, while in smaller markets only
weekly diaries are completed.
Whether or not a station is affiliated with one of the four major networks
(NBC, ABC, CBS or FOX) has a significant impact on the composition of the
station's revenues, expenses and operations. A typical network affiliate
receives the majority of its programming each day from the network. This
programming, along with cash payments, is provided to the affiliate by the
network in exchange for a substantial majority of the advertising time during
network programs. The network then sells this advertising time and retains the
61
revenues. The affiliates retains the revenues from the time sold during breaks
in and between network programs and programs the affiliate produces or
purchases from non-network sources.
Broadcast television stations compete for advertising revenues primarily
with other broadcast television stations, and to a lesser extent, with radio
stations and cable system operators serving the same market. Non-commercial,
religious and Spanish-language broadcasting stations in many markets compete
with commercial stations for viewers. In addition, the Internet and other
leisure activities may draw viewers away from commercial stations.
Developments in the Television Market
Through the 1970s, network television broadcasting enjoyed virtual dominance
in viewership and television advertising revenue, because network-affiliated
stations competed only with each other in most local markets. Beginning in the
1980s and continuing through the 1990s, however, this level of dominance
changed as more local stations were authorized by the FCC and marketplace
choices expanded with the growth of independent stations, new networks such as
UPN, WB and PAX, and cable television services.
Cable television systems, which grew at a rapid rate beginning in the early
1970s, were initially used to retransmit broadcast television programming to
paying subscribers in areas with poor broadcast signal reception. In the
aggregate, cable-originated programming has emerged as a significant competitor
for viewers of broadcast television programming. With the increase in cable
penetration in the 1980s and 1990s, the advertising share of cable networks has
increased. Notwithstanding these increases in cable viewership and advertising,
over-the-air broadcasting remains the primary distribution system for mass
market television advertising. Basic cable penetration (the percentage of
television households which are connected to a cable system) in our television
markets ranges from 57% to 82%.
In acquiring programming to supplement network programming, network
affiliates compete with other broadcasting stations in their markets. Cable
systems generally do not compete with local stations for programming. In the
past, the cost of programming increased dramatically, primarily because of an
increase in the number of new independent stations and a shortage of desirable
programming. Recently, however, program prices have stabilized as a result of
increases in the supply of programming.
The FCC finalized its allotment of new advanced television channels to
existing broadcast stations in the first half of 1998. Advanced television is a
digital television, or DTV, transmission system that delivers improved video
and audio signals including high definition television and also has substantial
multiplexing and data transmission capabilities. For each licensed television
station, the FCC has allocated a matching DTV channel. Under current FCC
guidelines, all commercial television station operators must complete
construction of and begin broadcasting with their digital transmission systems
no later than May 1, 2002. Network affiliated stations in the top 10 markets
were required to begin digital broadcasting by May 1999, and in the top 30
markets by November 1, 1999. By the end of 2006, the FCC expects television
broadcasters to cease non-digital broadcasting and return one of their channels
to the U.S. government, provided that 85% of households within the relevant DMA
have the capability to receive a digital signal.
Advertising Sales
General
Television station revenues are primarily derived from the sale of local and
national advertising. Television stations compete for advertising revenues
primarily with other broadcast television stations, radio stations, cable
system operators and programmers, and newspapers serving the same market.
All network-affiliated stations are required to carry spot advertising sold
by their networks which reduces the amount of advertising spots available for
sale by our stations. Our stations directly sell all of the remaining
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advertising to be inserted in network programming and all of the advertising in
non-network programming, retaining all of the revenues received from these
sales. A national syndicated program distributor will often retain a portion of
the available advertising time for programming it supplies in exchange for no
fees or reduced fees charged to the stations for such programming. These
programming arrangements are called barter programming.
Advertisers wishing to reach a national audience usually purchase time
directly from the networks, or advertise nationwide on a case-by-case basis.
National advertisers who wish to reach a particular region or local audience
often buy advertising time directly from local stations through national
advertising sales representative firms. Local businesses purchase advertising
time directly from the stations' local sales staffs.
Advertising rates are based upon a program's popularity among the viewers
that an advertiser wishes to target, the number of advertisers competing for
the available time, the size and the demographic composition of the market
served by the station, the availability of alternative advertising media in the
market area, and the effectiveness of the stations' sales force. Advertising
rates are also determined by a station's overall ability to attract viewers in
its market area, as well as the station's ability to attract viewers among
particular demographic groups that an advertiser may be targeting. Advertising
revenues are positively affected by strong local economies, national and
regional political election campaigns, and certain events such as the Olympic
Games or the Super Bowl. Because television broadcast stations rely on
advertising revenues, declines in advertising budgets, particularly in
recessionary periods, adversely affect the broadcast industry, and as a result
may contribute to a decrease in the revenues of broadcast television stations.
Local Sales
Local advertising time is sold by each station's local sales staff who call
upon advertising agencies and local businesses, which typically include car
dealerships, retail stores and restaurants. Compared to revenues from national
advertising accounts, revenues from local advertising are generally more stable
and more controllable. We seek to attract new advertisers to television, and to
increase the amount of advertising time sold to existing local advertisers by
relying on experienced local sales forces with strong community ties, producing
news and other programming with local advertising appeal and sponsoring or co-
promoting local events and activities. We place a strong emphasis on experience
of our local sales staff and maintain an on-going training program for sales
personnel.
National Sales
National advertising time is sold through national sales representative
firms which call upon advertising agencies, whose clients typically include
automobile manufacturers and dealer groups, telecommunications companies, fast
food franchisers, and national retailers (some of which may advertise locally).
Network Affiliations
Each of our network-affiliated stations is affiliated with its network
pursuant to an affiliation agreement. WBRE, WTWO, KTAL, KBTV, KFDX and KSNF are
affiliated with NBC. KTAB, WROC, WCIA/WCFN, WMBD and WYOU are affiliated with
CBS. WJET, KMID and KQTV are affiliated with ABC. KJTL and WFXP are affiliated
with FOX and KJBO-LP is affiliated with UPN.
Each affiliation agreement provides the affiliated station with the right to
broadcast all programs transmitted by the network with which it is affiliated.
In exchange, the network has the right to sell a substantial majority of the
advertising time during these broadcasts. In addition, for each hour that the
station elects to broadcast network programming, the network pays the station a
fee (with the exception of FOX and UPN), specified in each affiliation
agreement, which varies with the time of day. Typically, "prime-time"
programming (Monday through Saturday from 8:00 p.m. to 11:00 p.m., Eastern time
and Sunday from 7:00 p.m. to 11:00 p.m., Eastern time) generates the highest
hourly rates.
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Our NBC affiliation agreements for WBRE and WTWO expire on December 31,
2001. Our NBC affiliation agreements for KBTV, KFDX, and KSNF expire on August
1, 2002, while our NBC affiliation agreement for KTAL expires on December 31,
2005. Our CBS affiliate agreement for KTAB expires on December 31, 2004. Our
CBS affiliation agreement for WROC expires on January 31, 2005 and our CBS
affiliation agreement for WCIA/WCFN and WMBD expires on September 30, 2005. Our
CBS affiliation agreement with WYOU expires on December 31, 2007. Our ABC
affiliation agreement for WJET expires on January 2, 2005. Our ABC network
affiliation agreement for KMID expires on July 15, 2005. Our ABC network
affiliation agreement for KQTV expires on April 15, 2007. Our FOX affiliation
agreement for KJTL expires on November 30, 2003, while our FOX affiliation
agreement for WFXP expires on March 31, 2006. Our UPN affiliation agreement for
KJBO-LP expires on September 1, 2004; however, UPN may cancel this affiliation
agreement at any time upon 30 days prior written notice.
Competition
Competition in the television industry takes place on several levels:
competition for audience, competition for programming (including news) and
competition for advertisers. Additional factors that are material to a
television station's competitive position include signal coverage and assigned
frequency. The broadcasting industry is continually faced with technological
change and innovation, the possible rise in popularity of competing
entertainment and communications media, and governmental restrictions or
actions of federal regulatory bodies, including the FCC and the Federal Trade
Commission, any of which could have a material effect on our operations.
Audience. Stations compete for viewership generally against other leisure
activities in which one could choose to engage rather than watch television.
Broadcast stations compete for audience share specifically on the basis of
program popularity, which has a direct effect on advertising rates. A portion
of the daily programming on our NBC, CBS, ABC, FOX and UPN affiliated stations
is supplied by the network with which each station is affiliated. In those
periods, the stations are dependent upon the performance of the network
programs in attracting viewers. Our stations program non-network time periods
with a combination of self-produced news, public affairs and other
entertainment programming, including news and syndicated programs purchased for
cash, cash and barter, or barter only. A majority of the daily programming on
our FOX and UPN affiliated stations consists of programming of this kind.
Through the 1970s, network television broadcasting enjoyed virtual dominance
in viewership and television advertising revenues because network-affiliated
stations competed only with each other in most local markets. However, the
development of methods of video transmission other than over-the-air
broadcasting, and in particular the growth of cable television, has
significantly altered competition for audience share in the television
industry. These other transmission methods can increase competition for a
broadcasting station by bringing into its market distant broadcasting signals
not otherwise available to the station's audience. Other sources of competition
include home entertainment systems, such as VCRs, DVDs and television game
devices. Transmission of video programming over broadband Internet may be a
future source of competition to television broadcasters.
Although cable television systems were initially used to retransmit
broadcast television programming to subscribers in areas with poor broadcast
signal reception, significant increases in cable television penetration
occurred throughout the 1970s and 1980s in areas that did not have signal
reception problems. As the technology of satellite program delivery to cable
systems advanced in the late 1970s, development of programming for cable
television accelerated dramatically, resulting in the emergence of multiple,
national-scale program alternatives and the rapid expansion of cable television
and higher subscriber growth rates. Historically, cable operators have not
sought to compete with broadcast stations for a share of the local news
audience. Recently, however, certain cable operators have elected to compete
for these audiences, and the increased competition could have an adverse effect
on our advertising revenues.
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Further advances in technology may increase competition for household
audiences and advertisers. Video compression techniques, now under development
for use with current cable channels or direct broadcast satellites, are
expected to reduce the bandwidth required for television signal transmission.
These compression techniques, as well as other technological developments, are
applicable to all video delivery systems, including over-the-air broadcasting,
and have the potential to provide vastly expanded programming to highly
targeted audiences. Reduction in the cost of creating additional channel
capacity could lower entry barriers for new channels and encourage the
development of increasingly specialized "niche" programming. This ability to
reach very narrowly defined audiences is expected to alter the competitive
dynamics for advertising expenditures. We are unable to predict the effect that
these or other technological changes will have on the broadcast television
industry or on the future results of our operations.
Programming. Competition for programming involves negotiating with national
program distributors or syndicators that sell first-run and rerun packages of
programming. Our stations compete against in-market broadcast station operators
for exclusive access to off-network reruns (such as Seinfeld) and first-run
product (such as Entertainment Tonight) in their respective markets. Cable
systems generally do not compete with local stations for programming, although
various national cable networks from time to time have acquired programs that
would have otherwise been offered to local television stations. AOL/Time
Warner, Inc., Viacom Communications, Inc. and The News Corporation Limited,
each of which has a television network, also own or control major production
studios, which are the primary source of programming for the networks. It is
uncertain whether in the future such programming, which is generally subject to
short-term agreements between the studios and the networks, will be moved to
the new networks. Television broadcasters also compete for non-network
programming unique to the markets they serve. As such, stations strive to
provide exclusive news stories, unique features such as investigative reporting
and coverage of community events and to secure broadcast rights for regional
and local sporting events.
Advertising. Advertising rates are based upon a number of factors including:
. the size of the market in which the station operates;
. a program"s popularity among the viewers that an advertiser wishes to
attract;
. the number of advertisers competing for the available time;
. the demographic makeup of the market served by the station;
. the availability of alternative advertising media in the market area;
. the effectiveness of the sales forces; and
. development of projects, features and programs that tie advertiser
messages to programming.
In addition to competing with other media outlets for audience share, our
stations compete for advertising revenues with:
. other television stations in their respective markets; and
. other advertising media, such as newspapers, radio stations, magazines,
outdoor advertising, transit advertising, yellow page directories, direct
mail, local cable systems and the Internet.
Competition for advertising dollars in the broadcasting industry occurs
primarily within individual markets. Generally, a television broadcasting
station in a particular market does not compete with stations in other market
areas.
Federal Regulation of Television Broadcasting
The following is a brief discussion of certain provisions of the
Communications Act of 1934, as amended, and FCC's regulations and policies that
affect the business operations of television broadcasting stations. For
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more information about the nature and extent of FCC regulation of television
broadcasting stations you should refer to the Communications Act of 1934 and
FCC's rules, public notices, and rulings. Over the years Congress and the FCC
have added, amended and deleted statutory and regulatory requirements to which
station owners are subject. Some of these changes have a minimal business
impact whereas others may significantly affect the business or operation of
individual stations or the broadcast industry as a whole. The following
discussion summarizes statutory and regulatory requirements and policies
currently in effect.
License Grant and Renewal. Television broadcast licenses are granted for a
maximum term of eight years and are subject to renewal upon application to the
FCC. The FCC is required to grant an application for license renewal if during
the preceding term the station served the public interest, the licensee did not
commit any serious violations of the Communications Act or the FCC's rules, and
the licensee committed no other violations of the Communications Act or the
FCC's rules which, taken together, would constitute a pattern of abuse. The
vast majority of renewal applications are routinely renewed under this
standard. If a licensee fails to meet this standard the FCC may still grant
renewal on terms and conditions that it deems appropriate, including a monetary
forfeiture or renewal for a term less than the normal eight-year period.
During certain limited periods after a renewal application is filed,
interested parties, including members of the public, may file petitions to deny
a renewal application, to which the licensee/renewal applicant is entitled to
respond. After reviewing the pleadings, if the FCC determines that there is a
substantial and material question of fact whether grant of the renewal
application would serve the public interest, the FCC is required to hold a
trial-type hearing on the issues presented. If, after the hearing, the FCC
determines that the renewal applicant has met the renewal standard the FCC must
grant the renewal application. If the licensee/renewal applicant fails to meet
the renewal standard or show that there are mitigating factors entitling it to
renewal subject to appropriate sanctions, the FCC can deny the renewal
application. In the vast majority of cases where a petition to deny is filed
against a renewal, the FCC ultimately grants the renewal without a hearing.
No competing application for authority to operate a station and replace the
incumbent licensee may be filed against a renewal application unless the FCC
first determines that the incumbent licensee is not entitled to license
renewal.
In addition to considering rule violations in connection with a license
renewal application, the FCC may sanction a station operator for failing to
observe FCC rules and policies during the license term, including the
imposition of a monetary forfeiture.
The FCC prohibits the assignment or the transfer of control of a
broadcasting licensee without prior FCC approval.
Ownership Matters. The FCC has rules which establish limits on the ownership
of broadcast stations. The ownership limits apply only to attributable
interests in a station licensee held by an individual, corporation, partnership
or other entity. In the case of corporations, officers, directors and voting
stock interests of five percent or more (twenty percent or more in the case of
qualified investment companies, such as insurance companies and bank trust
departments) are considered attributable interests. For partnerships, all
general partners and non-insulated limited partners are attributable. Limited
liability companies are treated the same as partnerships. The FCC also
considers attributable the holder of more than thirty-three percent of a
licensee's total assets (defined as total debt plus total equity), if that
person or entity also provides over fifteen percent of the station's total
weekly broadcast programming or has an attributable interest in another media
entity in the same market which is subject to the FCC's ownership rules, such
as a radio or television station, cable television system, or daily newspaper.
Local Ownership (Duopoly Rule). Prior to August 1999, no party could have
attributable interests in two television stations if those stations had
overlapping service areas (which generally meant one station per market),
although the FCC did not attribute local marketing agreements involving a
second station with an overlapping service area. In August 1999, the FCC
adopted new rules which allowed the ownership of two
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stations in a single market (defined using A.C. Nielsen Company's DMAs) if (1)
the two stations do not have overlapping service areas, or (2) after the
combination there are at least eight independently owned and operating full-
power television stations and one of the commonly owned stations is not ranked
among the top four stations in the DMA. The FCC will consider waivers of the
rule to permit the ownership of a second market station in cases where the
second station is a failed, failing or unbuilt. Absent these circumstances
ownership of only one television station in a market is permitted. "Satellite"
stations were an exception to the prior FCC local ownership/duopoly rules and
remain an exception under the new rules.
The FCC now attributes and counts towards the local ownership limits another
in-market station that a station owner operates pursuant to a local marketing
agreement if it provides more than 15 percent of the second station's weekly
broadcast programming. However, local marketing agreements entered into prior
to November 5, 1996, are exempt from attribution for approximately five years
from the adoption of the revised rule (which was adopted in 1999); this
"grandfathered" period is subject to possible extension. Parties to local
marketing agreements entered into on or after November 5, 1996, that would
result in attribution of two stations in a market in violation of the ownership
limits have until August 5, 2001, to come into compliance with the new
ownership rules.
The only market in which we currently operate stations that has the eight or
more stations that allow us to own two stations in the market is Champaign-
Springfield, Illinois. In all of the markets where we have entered into joint
sales agreements, except for one, we do not provide programming other than news
to the second station and are not therefore attributed with the second station.
In the one market where we do provide programming to the second station, Erie,
Pennsylvania, that local marketing agreement was entered into prior to November
5, 1996. Therefore, it is exempt from the FCC's ownership rules and we may
continue to operate under the terms of that agreement until at least the end of
2004.
National Ownership. There is no nationwide limit on the number of television
stations which a party may own. However, no party may have an attributable
interest in television stations which, in the aggregate, cover more than 35% of
all U.S. television households. In calculating the nationwide audience
coverage, the ownership of UHF stations is counted as 50% of a market's
percentage of the total national audience. The stations we own have a combined
national audience reach of approximately 3% of television households.
Radio Television Cross-Ownership Rule. The "one-to-a-market" rule limits the
common ownership or control of radio and television stations in the same
market. In August 1999, the FCC amended its rules to increase the number of
stations that may be commonly owned, subject to standards based on the number
of independently owned media voices that would remain in the market after the
combination. In markets with at least twenty independently owned media outlets,
ownership of one television station and up to seven radio stations, or two
television stations (if allowed under the television duopoly rule) and six
radio stations is permitted. If the number of independently owned media outlets
is fewer than twenty but greater than or equal to ten, ownership of one
television station (or two if allowed) and four radio stations is permitted. In
markets with fewer than ten independent media voices, ownership of one
television station (or two if allowed) and one radio station is permitted. In
calculating the number of independent media voices the FCC includes all radio
and television stations, independently owned cable systems (counted as one
voice if cable is generally available in the market), and independently owned
daily newspapers which have circulation that exceeds five percent of the
households in the market. When the FCC adopted the new one-to-a-market limits
in August 1999, it eliminated the waiver policy that previously applied for
failed stations.
Local Television/Cable Cross-Ownership Rule. The FCC prohibits any cable
television system (including all parties under common control) from carrying
the signal of any television broadcast station that has a predicted service
area that overlaps, in whole or in part, the cable system's service area, if
the cable system (or any of its attributable principals) has an attributable
interest in the television station.
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Local Television/Newspaper Cross-Ownership Rule. The FCC prohibits any party
from having an attributable interest in a television station and a daily
newspaper if the television station's Grade A signal contour encompasses the
entire community in which the newspaper is published.
Cable "Must-Carry" or Retransmission Consent Rights. Every three years
television broadcasters are required to make an election whether they choose to
exercise their "must-carry" or retransmission consent rights in connection with
the carriage of their analog signal on cable television systems within their
DMA. The most recent election was made October 1, 1999, and is effective for
the three-year period beginning January 1, 2000. The next election date is
October 1, 2002, for the three-year period beginning January 1, 2003.
If a broadcaster chooses to exercise its must-carry rights, it may request
cable system carriage on its over-the-air channel or another channel on which
it was carried on the cable system as of a specified date. A cable system
generally must carry the station's signal in compliance with the station's
carriage request, and in a manner that makes the signal available to all cable
subscribers. However, must-carry rights are not absolute, and whether a cable
system is required to carry the station on its system, or in the specific
manner requested, depends on variables such as the location, size and number of
activated channels of the cable system and whether the station's programming
duplicates, or substantially duplicates the programming of another station
carried on the cable system. If certain conditions are met, a cable system may
decline to carry a television station that has elected must carry status,
although it is unusual for all the required conditions to exist.
If a broadcaster chooses to exercise its retransmission consent rights, a
cable television system which is subject to that election may not carry the
station's signal without the station's consent. This generally requires the
cable system and television station operator to negotiate the terms under which
the television station will consent to the cable system's carriage of the
station.
In most instances, Nexstar's stations have elected to exercise their
retransmission consent rights rather than must-carry status, and have
negotiated retransmission consent agreements with cable television systems in
their markets. The terms of these agreements generally range from three to ten
years and provide for the carriage of the stations' signals. Except for WYOU,
the Bastet Group stations generally have opted for must-carry status.
Direct-to-Home Satellite Services and Must-Carry. In November 1999, Congress
enacted the Satellite Home Viewer Improvement Act of 1999, or SHVIA. This
statute requires providers of direct broadcast satellite services such as
Direct TV and Echostar, by January 1, 2002, to carry upon request the signals
of all local television stations in a DMA in which the satellite service
provider is carrying at least one local television station's signal. Until
January 1, 2002, satellite service providers are allowed (but not required) to
retransmit a local station's signal within its market upon that station's
consent. Satellite providers also may provide network service from a station
outside a local market to subscribers in the market who are "unserved" by a
local station affiliated with the same network. Unserved generally refers to a
satellite subscriber who is unable, using a conventional outdoor rooftop
antenna, to receive a "Grade B" signal of a local network affiliated station.
If a subscriber is able to receive a Grade B quality signal from a local
network affiliate then, subject to certain exceptions, the subscriber is not
eligible to receive that network's programming from an out-of-market affiliate
carried on the satellite service.
In those markets where satellite service providers have elected to provide
carriage of local television stations, such carriage has generally been limited
to the local affiliates of the major networks, including ABC, CBS, NBC and FOX.
At this time there is no satellite carriage of any of the local stations in any
market in which we operate television stations. We cannot state when or if such
carriage will commence.
In November 2000, the FCC adopted rules implementing the requirements of
SHVIA. These include requiring commercial television stations to elect between
retransmission consent and must carry status. The first election, which is to
be made by July 1, 2001, for carriage to commence January 1, 2002, will be for
a four-year period. Beginning in 2006, the cable and satellite election periods
will coincide and occur every three years. Market areas are based on Nielsen's
DMAs. Satellite carriers are not required to carry duplicative
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network signals from a local market unless the stations are licensed to
different communities in different states. Satellite carriers are required to
carry all local television stations in a contiguous manner on their channel
line-up and may not discriminate in their carriage of stations.
Digital Television. Advanced television is a digital television, or DTV,
transmission system that delivers video and audio signals of higher quality
(including high definition television) than the existing analog transmission
system. DTV also has substantial capabilities for multiplexing (the broadcast
of several programs concurrently) and data transmission. The FCC assigned new
advanced television channels to existing broadcast stations in the first half
of 1998. For each licensed television station the FCC allocated a matching DTV
channel (which is different from the station's analog channel). In general, the
DTV channels assigned to television stations are intended to allow stations to
have their DTV coverage area replicate their analog coverage area. However,
there are a number of variables which will ultimately determine the extent to
which a station's DTV operation will provide such replication. Under certain
circumstances, a station's DTV operation may reduce its geographic coverage
area. The introduction of digital television will require consumers to purchase
new televisions that are capable of receiving and displaying DTV signals, or
adapters to receive DTV signals and convert them to an analog signal for
display on their existing receivers.
Under current FCC guidelines, all commercial television station operators
must begin broadcasting with their DTV transmission systems no later than May
1, 2002. Stations affiliated with the four largest networks (ABC, CBS, NBC and
FOX) in the top 10 markets were required to begin digital broadcasting by May
1, 1999, and in the top 30 markets by November 1, 1999. Once a station begins
broadcasting its DTV signal, it may broadcast both its analog and DTV signals
until December 31, 2006, after which, subject to certain conditions described
below, the FCC expects to reclaim one of the channels and broadcasters will
operate a single DTV channel. Starting April 1, 2003, commercial station
operators must simulcast at least 50 percent of the video programming broadcast
on their analog channel on their DTV channel. The required simulcast percentage
increases annually until April 1, 2005, when an operator must simulcast 100
percent of its programming on its analog and DTV channels.
Channels now used for analog broadcasts range from 2 through 69. The FCC
designated Channels 2 through 51 as the "core" channels which will be used for
DTV broadcasts. However, because of the limited number of available core DTV
channels currently available, the FCC assigned many stations DTV channels above
Channel 51 (Channels 52 through 69) for use during the transition period from
simultaneous digital and analog transmission to DTV only operation. At the end
of the transition period these stations will have to change their DTV operation
to one of the DTV core channels. This has created three categories of
television stations with respect to their analog and DTV channel assignments:
(1) stations with both their analog and DTV channels within the "core"
channels; (2) stations with either an analog or DTV channel inside the core and
the other outside the core; and (3) stations with both their analog and DTV
channels outside the core. All of our stations currently fall within the first
or second group. We have no markets in which both our analog and DTV channels
are outside the core.
Station operators with both their analog and DTV channels inside the core
must select, no later than December 31, 2003, which of their assigned channels
they will use for permanent DTV operation at the end of the transition period.
These operators may elect to continue to use their current DTV channel or
switch their DTV operation to their current analog channel. The channel not
selected for permanent DTV operation will be returned to the FCC at the end of
the transition period. Most of our stations and those stations with which we
have local marketing agreements fall in this category. The FCC has not yet
established the permanent DTV channel selection process for stations that have
one or both channels outside the DTV core channels.
The Communications Act provides that under certain conditions the DTV
transition period may be extended beyond December 31, 2006. The transition is
to be extended in any market in which one of the following conditions is met:
(1) a station licensed to one of the four largest networks (ABC, CBS, NBC and
FOX) is not broadcasting a digital signal and that station has qualified for an
extension of the FCC's DTV construction deadline; (2) digital-to-analog
converter technology is not generally available in the market; or (3)
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fifteen percent or more of the television households in the market do not
subscribe to a multichannel video programming distributor (cable, direct
broadcast satellite) that carries the digital channel of each of the television
stations in the market broadcasting a DTV channel, and do not have at least one
television receiver capable of receiving the stations' DTV broadcasts or an
analog television receiver equipped with a digital-to-analog converter capable
of receiving the stations' DTV broadcasts. We cannot predict whether conditions
will exist in any of our markets such that the DTV transition period will be
extended under any of these provisions.
We estimate that the conversion to DTV will require an average initial
capital expenditure of approximately $250,000 per station for low-power
transmission of digital signal programming and an average additional capital
expenditure of approximately $750,000 per station to complete the roll-out to
full-power transmission of digital signal programming. In addition, for some of
our stations we may have to undertake capital expenditures to purchase studio
and production equipment that can support digital format.
With respect to cable system carriage of television stations which are
broadcasting both an analog and DTV signal, such stations may choose must carry
status or retransmission consent for their analog signals, but only
retransmission consent for their digital signals. Such stations do not
presently have the right to assert must carry rights for both their analog and
DTV signals. The FCC has pending a rule making proceeding examining whether to
allow such stations to assert must carry rights for both their analog and DTV
signals, but has tentatively concluded that it will not do so. The FCC has
requested further comments on this issue in order to develop a more complete
record before issuing a final decision. If a television station operates only a
DTV signal, or returns its analog channel to the FCC and converts to digital
operations, it may assert must carry rights for its DTV signal.
The exercise of must carry rights by a television station for its DTV signal
applies only to a single programming stream and other program-related content.
If a television station is concurrently broadcasting more than one program
stream on its DTV signal it may select which program stream is subject to its
must carry election. Cable systems are not required to carry internet, e-
commerce or other ancillary services provided over DTV signals if those
services are not related to the station's primary video programming carried on
the cable system. Digital television signals that are carried on a cable system
must be available to subscribers on the system's basic service tier.
With respect to direct-to-the-home satellite service providers, the FCC in
November 2000 declined to address whether television stations' must carry
rights as to satellite service providers, which go into effect January 1, 2002,
will also apply to stations' DTV signals. The FCC said it would address this
issue at the same time it considers digital carriage issues for cable
television.
Television station operators may use their DTV signals to provide ancillary
services, such as computer software distribution, internet, interactive
materials, e-commerce, paging services, audio signals, subscription video, or
data transmission services. To the extent a station provides such ancillary
services it is subject to the same regulations as are applicable to other
analogous services under the FCC's rules and policies. Commercial television
stations also are required to pay the FCC five percent of the gross revenue
derived from all ancillary services provided over their DTV signal for which
the station received a fee in exchange for the service or received compensation
from a third party in exchange for transmission of material from that third
party, not including commercial advertisements used to support broadcasting.
Programming and Operation. The Communications Act of 1934 requires
broadcasters to serve "the public interest." Since the late 1970s, the FCC
gradually has relaxed or eliminated many of the more formalized procedures it
had developed to promote the broadcast of certain types of programming
responsive to the needs of a station's community of license. However,
television station licensees are still required to present programming that is
responsive to community problems, needs and interests and to maintain certain
records demonstrating such responsiveness. The FCC may consider complaints from
viewers concerning programming when it evaluates a station's license renewal
application, although viewer complaints also may be filed and
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considered by the FCC at any time. Stations also must follow various rules
promulgated under the Communications Act that regulate, among other things:
. children's television programming (requiring television stations to
present programming specifically directed to the "educational and
informational" needs of children and limiting the amount of commercials
during children's programming);
. political advertising;
. sponsorship identifications;
. contest and lottery advertising;
. obscene and indecent broadcasts; and
. technical operations, including limits on radio frequency radiation.
In April 2000, the FCC's new Equal Employment Opportunity rules became
effective, which require broadcast licensees to develop and implement
recruiting programs designed to assure that notices of job vacancies are
broadly disseminated throughout a station's community. The EEO rules also
require stations to maintain available for public review information concerning
their recruitment efforts, and to submit biennial reports to the FCC certifying
their compliance with the EEO requirements. However, in January 2001, a three-
judge panel of the U.S. Court of Appeals for the District of Columbia Circuit
issued a ruling finding the FCC's EEO rules unconstitutional. As a result of
that decision, the FCC has suspended the requirements and reporting obligations
of its EEO rules. The FCC and other organizations have asked the entire
District of Columbia Circuit to rehear this decision of the three-judge panel.
The Telecommunications Act of 1996 directs the FCC to establish, if the
broadcast industry does not do so on a voluntary basis, guidelines and
procedures for rating programming that contains sexual, violent, or other
indecent material. A multi-industry task force developed a ratings plan which
the FCC has ratified. The FCC also has issued rules that require television
manufacturers to install appropriate technology, such as a "V-Chip" that can
block programming based on an electronically encoded rating, to facilitate the
implementation of the ratings guidelines.
Proposed Legislation and Regulations. With the exception of the FCC's
ongoing rule making proceeding concerning implementation of the transition from
analog to digital television broadcasts, there are no pending rule making
proceedings which are likely to have a significant impact on the television
industry or the operation of our stations. However, the FCC may decide to
initiate new rule making proceedings, on its own or in response to requests
from the private sector, which might have such an impact. Congress also may act
to amend the Communications Act in a manner that would impact our stations or
the television broadcast industry. Other matters that could affect our
broadcast properties include technological innovations affecting the mass
communications industry such as spectrum allocation matters, including
assignment by the FCC of channels for additional broadcast stations, low power
television stations and multichannel video program service providers, including
cable television, direct broadcast satellite and wireless cable systems, with
respect to the carriage of local television stations and their relationship to
and competition with television stations.
Employees
As of June 30, 2001, Nexstar had a total of 1,019 employees comprised of 885
full-time and 134 part-time and temporary employees. As of June 30, 2001, 210
of Nexstar's employees are covered by collective bargaining agreements. We
believe that our employee relations are satisfactory, and we have not
experienced any work stoppages at any of our facilities.
71
Properties
Nexstar leases its primary corporate headquarters which are located at 200
Abington Executive Park, Suite 201, Clarks Summit, Pennsylvania 18411 and
occupy approximately 1,636 square feet. None of the individual leases are
material to our operations and we do not anticipate difficulty in replacing
those facilities or obtaining additional facilities, if needed.
We lease and own facilities in the following locations:
<TABLE>
<CAPTION>
Square
Footage/Acreage
Owned or Approximate Expiration
Station Metropolitan Area and Use Leased Size of Lease
--------------------------------- ---------- --------------- -----------
<S> <C> <C> <C>
WBRE--Wilkes Barre-Scranton, PA
Office-Studio 100% Owned 34,838 Sq. Ft. --
Office-Studio 100% Owned 49,556 Sq. Ft. --
Office-Studio--Williamsport Bureau Lease 811 Sq. Ft. Month/Month
Tower/Transmitter Site--Williamsport 33% Owned 1.33 Acres --
Tower/Transmitter Site--Sharp Mountain 33% Owned 0.23 Acres --
Tower/Transmitter Site--Blue Mountain 100% Owned 0.998 Acres --
Tower/Transmitter Site--Penobscot
Mountain 100% Owned 20 Acres --
WYOU--Wilkes Barre-Scranton, PA
</TABLE>
<TABLE>
<S> <C> <C> <C>
Office-Studio--News Bureau/Office Lease 6,977 Sq. Ft. 12/1/04
Sales Office Lease 1,200 Sq. Ft. 10/31/01
Tower/Transmitter Site 100% Owned 120.33 Acres --
Tower/Transmitter Site 100% Owned 7.2 Acres --
Tower/Transmitter Site--Williamsport 33% Owned 1.33 Acres --
Tower/Transmitter Site--Sharp Mountain 33% Owned 0.23 Acres --
Tower/Transmitter Site Lease 10,000 Sq. Ft. Month/Month
KTAL--Shreveport, LA
Office-Studio 100% Owned 2 Acres --
Office-Studio 100% Owned 16,000 Sq. Ft. --
Office-Studio--Texarkana 100% Owned 7,245 Sq. Ft. --
Office-Studio--Texarkana 100% Owned 1.687 Acres --
Tower/Transmitter Site 100% Owned 109 Acres --
Tower/Transmitter Site 100% Owned 2,284 Sq. Ft. --
WROC--Rochester, NY
Office-Studio 100% Owned 3.9 Acres --
Office-Studio 100% Owned 48,000 Sq. Ft. --
Tower/Transmitter Site 50% Owned 0.24 Acre --
WCIA/WCFN--Champaign-Springfield-Decatur,
IL
Office-Studio 100% Owned 20,000 Sq. Ft. --
Office-Studio 100% Owned 1.5 Acres --
Office-Studio--Sales Bureau Lease 162.75 Sq. Ft. 12/31/01
Office-Studio--News Bureau Lease 350 Sq. Ft. 9/30/02
Office-Studio--Decatur News Bureau Lease 300 Sq. Ft. 5/31/01
Tower/Transmitter Site--WCIA Tower 100% Owned 38.06 Acres --
Tower/Transmitter Site--Springfield Tower 100% Owned 2.0 Acres --
Tower/Transmitter Site--Dewitt Tower 100% Owned 1.0 Acres --
</TABLE>
72
<TABLE>
<S> <C> <C> <C>
WMBD--Peoria-Bloomington, IL
Office-Studio 100% Owned 0.556 Acres --
Office-Studio 100% Owned 18,360 Sq. Ft. --
Office-Studio Lease 1,128 Sq. Ft. 8/31/02
Tower/Transmitter Site 100% Owned 34.93 Acres --
Tower/Transmitter Site 100% Owned 1.0 Acres --
KBTV--Beaumont-Port Arthur, TX
Office-Studio 100% Owned 1.2 Acres --
Office-Studio 100% Owned 26,160 Sq. Ft. --
Office-Studio Leased 8,000 Sq. Ft. 9/01/09
Tower/Transmitter Site 100% Owned 40 Acres --
WTWO--Terre Haute, IN
Office-Studio 100% Owned 4.774 Acres --
Office-Studio 100% Owned 17,375 Sq. Ft. --
Office-Studio Lease 1,425 Sq. Ft. 11/30/04
WJET--Erie, PA
Tower/Transmitter Site Lease 2 Sq. Ft. Month/Month
WFXP--Erie, PA
Tower/Transmitter Site Lease 1 Sq. Ft. 6/30/04
ENTERTAINMENT REALTY CORP., Erie, PA
Office-Studio(1) 100% Owned 9.87 Acres --
Office-Studio(1) 100% Owned 15,533 Sq. Ft. --
KFDX--Wichita Falls. TX--Lawton, OK
Office-Studio 100% Owned 28.06 Acres --
Office-Studio 100% Owned 13,568 Sq. Ft. --
KJTL--Wichita Falls, TX--Lawton, OK
Office-Studio -- -- --
Tower/Transmitter Site Lease 40 Acres 1/30/15
KJBO-LP--Wichita Falls, TX--Lawton, OK
Office-Studio -- -- --
Tower/Transmitter Site Lease 5 Acres Year/Year
KSNF--Joplin, MO--Pittsburg, KS
Office-Studio 100% Owned 13.36 Acres --
Office-Studio 100% Owned 13,169 Sq. Ft. --
Tower/Transmitter Site Lease 900 Sq. Ft. 10/5/02
KMID--Midland-Odessa, TX
Office-Studio 100% Owned 1.127 Acres --
Office-Studio 100% Owned 14,000 Sq. Ft. --
Tower/Transmitter Site 100% Owned 69.87 Acres --
Tower/Transmitter Site 100% Owned 0.322 Acres
KTAB--Abilene-Sweetwater, TX
Office-Studio 100% Owned 2.98 Acres --
Office-Studio 100% Owned 14,532 Sq. Ft. --
Tower/Transmitter Site 100% Owned 25.55 Acres --
KQTV--St Joseph, MO
Office-Studio 100% Owned 3 Acres --
Office-Studio 100% Owned 9,360 Sq. Ft. --
Tower/Transmitter Site 100% Owned 13,169 Sq. Ft. --
CORPORATE OFFICE
--Clarks Summit, PA Lease 1,636 Sq. Ft. Month/Month
CORPORATE BRANCH OFFICE--Terre Haute, IN Lease 1,227 Sq. Ft. 7/31/04
</TABLE>
73
--------
(1) Each of WJET and WFXP operate in facilities owned by Entertainment Realty
Corporation, a subsidiary of Nexstar and a guarantor of the Notes.
(2) The office space and studio used by KJTL and KJBO-LP is owned by KFDX.
Litigation
From time to time, we are involved in litigation that arises from the
ordinary operations of our business, such as contractual or employment disputes
or other general actions. In the event of an adverse outcome of these
proceedings, we believe the resulting liabilities would not have a material
adverse effect on our financial condition or results of operations.
74
MANAGEMENT
The table below sets forth information about Nexstar's board of managers, or
directors, and executive officers:
<TABLE>
<CAPTION>
Name Age Position With Company
---- --- ---------------------
<S> <C> <C>
Perry A. Sook.............. 43 President, Chief Executive Officer and Director
Duane A. Lammers........... 40 Executive Vice President
Shirley E. Green........... 41 Vice President, Finance
Susana G. Schuler.......... 34 Vice President, Corporate News Director
Richard Stolpe............. 44 Vice President, Director of Engineering
Peni A. Garber............. 37 Vice President, Assistant Secretary and Director
Jay M. Grossman............ 41 Vice President, Assistant Secretary and Director
Peggy Koenig............... 43 Vice President and Assistant Secretary
Royce Yudkoff.............. 45 Vice President, Assistant Secretary and Director
</TABLE>
Perry A. Sook formed Nexstar's predecessor in 1996. Since its inception, Mr.
Sook has served as Nexstar's President and Chief Executive Officer and as a
Director. From 1991 to 1996, Mr. Sook was a principal of Superior
Communications Group, Inc. Mr. Sook currently serves as a director of
Pennsylvania Association of Broadcasters and the Television Bureau of
Advertising.
Duane A. Lammers was promoted to Nexstar's Executive Vice President in
February of 2001. Prior to that, Mr. Lammers served as Nexstar's Vice
President, Director of Sales and Marketing from 1998 until January 2001. He was
employed as a Nexstar station general manager from 1997 to 1999. Prior to
joining Nexstar, Mr. Lammers was the General Manager of WHTM, the ABC affiliate
in Harrisburg, Pennsylvania from 1994 to 1997.
Shirley E. Green was promoted to Nexstar's Vice President, Finance in
February 2001. Prior to that, Ms. Green served as Nexstar's Controller since
1997. Prior to her employment at Nexstar, from 1994 to 1997, Ms. Green was
Business Manager at KOCB, Oklahoma City, Oklahoma, which was owned by Superior
Communications Group, Inc.
Susana G. Schuler has served as Nexstar's Vice President, Corporate News
Director since 1997. She served as Assistant News Director for WHTM from
January 1, 1994 to 1997. Prior to that, Ms. Schuler was the Assistant News
Director for KFDX from 1992 to December 31, 1993.
Richard Stolpe has served as Nexstar's Vice President, Director of
Engineering since January 2000. Prior to that, Mr. Stolpe served as Director of
Engineering from 1998 to 2000. Prior to joining Nexstar, Mr. Stolpe was
employed by WYOU, our CBS affiliate in the Wilkes Barre-Scranton, Pennsylvania
area from 1996 to 1998 as both Assistant Chief Engineer and Chief Engineer.
Peni A. Garber has served as a Vice President, Assistant Secretary and a
Director of Nexstar since 1997. Ms. Garber is a Partner at ABRY. From 1990 to
2000, she had served as a Principal and Secretary of ABRY. Prior to joining
ABRY, Ms. Garber served as Senior Accountant at Price Waterhouse LLP. Ms.
Garber is presently a director (or the equivalent) of several private
companies, including Network Music Holdings, LLC, Quorum Broadcast Holdings LLC
and Muzak Holdings LLC.
Jay M. Grossman has served as a Vice President, Assistant Secretary and a
Director of Nexstar since 1997. Since 1996, Mr. Grossman has served as a
Partner of ABRY. Prior to joining ABRY, Mr. Grossman
75
was an investment banker specializing in media and entertainment at Kidder
Peabody and at Prudential Securities. Mr. Grossman currently serves as a
director (or the equivalent) of several private companies including TV Fanfare,
Consolidated Theaters, WideOpenWest and Network Music Holdings, LLC.
Peggy Koenig has served as a Vice President and Assistant Secretary of
Nexstar since 1997. Ms. Koenig is a partner in ABRY, which she joined in 1993.
From 1988 to 1992, Ms. Koenig was a Vice President, partner and member of the
Board of Directors of Sillerman Communication Management Corporation, a
merchant bank, which made investments principally in the radio industry. Ms.
Koenig was the Director of Finance from 1986 to 1988 for Magera Management, an
independent motion picture financing company. She is presently a director (or
the equivalent) of Connoisseur Communications Partners, L.P., Pinnacle Holdings
Inc., Network Music Holdings LLC and Mercom.
Royce Yudkoff has served as a Vice President, Assistant Secretary and a
Director of Nexstar since 1997. Since 1989, Mr. Yudkoff has served as the
President and Managing Partner of ABRY. Prior to joining ABRY, Mr. Yudkoff was
affiliated with Bain & Company, serving as a partner from 1985 to 1988. Mr.
Yudkoff is presently a director (or the equivalent) of several companies,
including Quorum Broadcast Holdings LLC, Metrocall, Inc. and Muzak Holdings
LLC.
Executive Compensation
In order to secure the services of its management team, Nexstar entered into
employment arrangements with its senior executive management. These employment
arrangements include employment agreements and restricted stock grants
summarized in the table below.
The following table sets forth information concerning the annual and long-
term compensation for services in all capacities to Nexstar for the year ended
December 31, 2000 of those persons who served as (i) the chief executive
officer during 2000 and (ii) the other four most highly compensated executive
officers of Nexstar for 2000, who are collectively referred to in this
prospectus as the Named Executive Officers:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
-------------------- All Other
Salary Bonus Compensation
---------- --------------------- ---
<S> <C> <C> <C> <C>
Perry A. Sook............................. $ 280,000 -- $11,248
President, Chief Executive Officer and
Director
Duane A. Lammers.......................... 180,000 40,000 3,084
Executive Vice President
Susana G. Schuler......................... 110,000 10,000 1,276
Vice President, News Director
Shirley E. Green.......................... 95,000 20,000 5,785
Vice President, Finance
Richard Stolpe............................ 65,000 10,000 1,099
Vice President, Corporate Chief Engineer
</TABLE>
Employment Agreements
Perry A. Sook. Mr. Sook is employed under an employment agreement with
Nexstar Broadcasting Group, Inc. as President and Chief Executive Officer. The
initial term of the agreement expires on December 31, 2004, but automatically
renews for successive one-year periods unless either party notifies the other
of their intention not to renew the agreement. Under the agreement, Mr. Sook's
current base salary is $150,000 for the six months ended December 31, 2001,
$400,000 for the year ended December 31, 2002, $415,000 for the year ended
December 31, 2003, and $430,000 for the year ended December 31, 2004 and each
subsequent year. In
76
addition to his base salary, Mr. Sook is eligible to earn a targeted annual
bonus of $75,000 after the 2001 fiscal year, $100,000 after the 2002 fiscal
year, $103,750 after the 2003 fiscal year, and $107,500 after the 2004 fiscal
year and each subsequent fiscal year, upon achievement of goals established by
the board of directors. In the event of termination for reasons other than
cause, Mr. Sook is eligible to receive his base salary for a period that is the
shorter of one year or until the term of his employment would otherwise be
completed.
Duane A. Lammers. Mr. Lammers is employed under an amended employment
agreement with Nexstar Broadcasting Group, Inc. as Executive Vice President.
The agreement terminates on December 31, 2003 and automatically renews for
successive one-year periods unless either party notifies the other of its
intention not to renew the agreement. Under the agreement, Mr. Lammers' base
salary is $185,000 for the year ended December 31, 2001, $200,000 for the year
ended December 31, 2002 and $205,000 for the year ended December 31, 2003. In
addition to his base salary, Mr. Lammers is eligible to receive a targeted
annual bonus of $45,000 for the year ended April 30, 2001, $50,000 for the year
ended April 30, 2002, and $55,000 for the year ended April 30, 2003 at the
discretion of Nexstar's Chief Executive Officer, upon attainment of, among
other things, certain financial performance targets. In the event of
termination for reasons other than cause, Mr. Lammers is eligible to receive
his base salary for a period of six months.
Shirley E. Green. Ms. Green is employed under an amended employment
agreement with Nexstar Broadcasting Group, Inc. as Vice President, Finance. The
initial term of the agreement ends on February 28, 2002 and automatically
renews for successive one-year periods unless either party notifies the other
of its intention not to renew the agreement. Under the agreement, Ms. Green's
current base salary is $100,000. In addition to her base salary, Ms. Green is
eligible to earn a targeted annual bonus of $10,000 at the discretion of
Nexstar's Chief Executive Officer, based on Ms. Green's attainment of goals set
by Nexstar's Chief Executive Officer. In the event of termination for reasons
other than cause, Ms. Green is eligible to receive her base salary for a period
of six months.
Susana G. Schuler. Ms. Schuler is employed under an employment agreement
with Nexstar Broadcasting Group, Inc. as Vice President, Corporate News
Director. The initial term of the agreement terminates on January 1, 2004 and
automatically renews for successive one-year periods unless either party
notifies the other of its intention not to renew the agreement. Under the
agreement, Ms. Schuler's base salary is $115,000 for the year ended December
31, 2001, $120,000 for the year ended December 31, 2002, and $125,000 for each
successive year thereafter. In addition to her base salary, Ms. Schuler is
eligible to earn an annual bonus, at the discretion of Nexstar's Chief
Executive Officer. In the event of termination for reasons other than cause,
Ms. Schuler is eligible to receive her base salary for a period of six months.
Richard Stolpe. Mr. Stolpe is employed under an employment agreement with
Nexstar Broadcasting Group, Inc. as Vice President, Corporate Chief Engineer.
The initial term of the agreement ends on January 1, 2004 and automatically
renews for successive one-year periods unless either party notifies the other
of their intention not to renew the agreement. Under the agreement, Mr.
Stolpe's base salary is $70,000 for the year ended December 31, 2001, $75,000
for the year ended December 31, 2002, and $80,000 for each successive year
thereafter. In addition to his base salary, Mr. Stolpe is eligible to earn a
targeted annual bonus of $10,000 at the discretion of Nexstar's Chief Executive
Officer, upon attainment of certain goals. In the event of termination for
reasons other than cause, Mr. Stolpe is eligible to receive his base salary for
a period of six months.
Compensation of Managers
Nexstar currently reimburses members of the board of managers for any
reasonable out-of-pocket expenses incurred by them in connection with
attendance at board and committee meetings.
77
PRINCIPAL EQUITYHOLDERS
The equity interests of Nexstar are indirectly 100% owned by Nexstar's
indirect parent company, Nexstar Broadcasting Group, L.L.C. David S. Smith owns
100% of the equity interests in the Bastet Group.
The following table sets forth, as of August 15, 2001, information regarding
the equity interests of Nexstar Broadcasting beneficially owned by (1) each
equityholder who is known by Nexstar to beneficially own in excess of five
percent of the outstanding equity interests of Nexstar Broadcasting, (2) each
of Nexstar's managers and directors, (3) each of Nexstar's named executive
officers, and (4) all of Nexstar's executive officers, managers and directors
as a group. Unless otherwise indicated below, (1) the persons and entities
named in the table have sole voting and investment power with respect to all
equity interests beneficially owned, subject to applicable community property
laws and (2) the address of each of the individuals listed in the table is in
care of Nexstar Broadcasting Group, L.L.C., 200 Abington Executive Park, Suite
201, Clarks Summit, PA 18411.
<TABLE>
<CAPTION>
Number of Percentage of
Equity Interests Total Equity
Beneficially Interests
Name and Address of Beneficial Owner Owned Outstanding(/1/)
------------------------------------ ---------------- ----------------
<S> <C> <C>
ABRY Broadcast Partners II, L.P. ........... 3,274,787 49.4%
18 Newbury Street
Boston, MA 02116
ABRY Broadcast Partners III, L.P. .......... 2,091,132 31.5%
18 Newbury Street
Boston, MA 02116
BancAmerica Capital Investors I, L.P.(/2/).. 613,264 9.2%
Nexstar Financial Holdings II, L.L.C.(/3/).. -- --
Royce Yudkoff(/4/)(/5/)..................... 5,365,919 80.9%
Perry A. Sook............................... 432,626 6.5%
Shirley E. Green(/6/)....................... 9,850 *
Richard Stolpe(/7/)......................... 3,110 *
Susana G. Schuler(/8/)...................... 3,110 *
Duane A. Lammers(/9/)....................... 23,315 *
Jay M. Grossman(/5/)........................ -- --
Peni Garber(/5/)............................ -- --
All managers, directors and executive 5,837,930 88.1%
officers as a group (8 persons)............
</TABLE>
--------
* Less than 1%
(1) Nexstar Broadcasting has nine classes of equity interests outstanding. Each
class of equity interest has been assigned a "point value." The number of
equity interests beneficially owned and the percentage of total equity
interests outstanding indicated in this table are reported on a point
basis.
(2) The address of BancAmerica Capital Investors I, L.P. is 100 North Tryon
Street, 25th Floor, Charlotte, NC 28255-0001. Does not include 40,000
shares of Series AA preferred membership interests with an aggregate
liquidation preference of $40,000,000. The Series AA preferred interests do
not have a point value assigned to them.
(3) Nexstar Financial Holdings II, L.L.C., an indirect subsidiary of Nexstar
Broadcasting Group, L.L.C., is the sole manager of Nexstar Financial
Holdings, L.L.C.
(4) Mr. Yudkoff is the sole trustee of ABRY Holdings III, Co., which is the
sole member of ABRY Holdings III LLC, which is the sole general partner of
ABRY Equity Investors, L.P., the sole general partner of ABRY Broadcast
Partners III, L.P. Mr. Yudkoff is also the trustee of ABRY Holdings Co.,
which is the sole member of ABRY Holdings LLC, which is the sole general
partner of ABRY Capital, L.P., which is the sole general partner of ABRY
Broadcast Partners II, L.P.
(5) The address of Mr. Yudkoff, Mr. Grossman and Ms. Garber is the address of
ABRY.
(6) Includes 1,685, or 25%, of Ms. Green's class C-1 equity interests, subject
to forfeiture if Ms. Green's employment is terminated prior to March 1,
2002; and 2,177, or 70%, of Ms. Green's class C-2 equity interests,
subject to forfeiture if Ms. Green's employment is terminated prior to
January 1, 2002, decreasing to 1,555, or 50%, if termination occurs
between January 1, 2002 and January 1, 2003 and 777.5, or 25%, if
termination occurs between January 1, 2003 and January 1, 2004.
(7) Includes 2,177, or 70%, of Mr. Stolpe's class C-2 equity interests,
subject to forfeiture if Mr. Stolpe's employment is terminated prior to
January 1, 2002, decreasing to 1,555, or 50%, if termination occurs
between January 1, 2002 and January 1, 2003 and 777.50, or 25%, if
termination occurs between January 1, 2003 and January 1, 2004.
(8) Includes 2,177, or 70%, of Ms. Schuler's class C-2 equity interests,
subject to forfeiture if Ms. Schuler's employment is terminated prior to
January 1, 2002, decreasing to 1,555, or 50%, if termination occurs
between January 1, 2002 and January 1, 2003 and 777.50, or 25%, if
termination occurs between January 1, 2003 and January 1, 2004.
(9) Includes 5,051, or 25%, of Mr. Lammers' class C-1 equity interests,
subject to forfeiture if Mr. Lammers' employment is terminated prior to
May 1, 2002; and 2,177, or 70%, of Mr. Lammers class C-2 equity interests,
subject to forfeiture if Mr. Lammers' employment is terminated prior to
January 1, 2002, decreasing to 1,555, or 50%, if termination occurs
between January 1, 2002 and January 1, 2003 and 777.50, or 25%, if
termination occurs between January 1, 2003 and January 1, 2004.
78
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
L.L.C. Agreement
ABRY Broadcast Partners II, L.P., ABRY Broadcast Partners III, L.P. and each
of the members of Nexstar Broadcasting Group, L.L.C., including Perry Sook,
Shirley Green, Duane Lammers, Susana Schuler and Richard Stolpe, are parties to
a fourth amended and restated limited liability company agreement dated as of
August 7, 2001, pursuant to which Nexstar Broadcasting Group, L.L.C. is
organized. The agreement provides for capital contributions to be made by the
members in exchange for membership interests, which are allocated at the
discretion of ABRY Broadcast Partners II, L.P., as manager of Nexstar
Broadcasting Group, L.L.C. As manager, ABRY Broadcast Partners II, L.P.
exercises full control over all of the activities of Nexstar Broadcasting
Group, L.L.C. and is reimbursed for all expenses incurred as manager. Nexstar
Broadcasting Group, L.L.C. may be dissolved upon a vote by those members owning
a majority of the outstanding class A interests.
Investor Rights Agreement
Nexstar Broadcasting Group, ABRY Broadcast Partners II, L.P., ABRY Broadcast
Partners III, L.P., Nexstar Equity Corp. and each of the other members of
Nexstar Broadcasting Group, L.L.C., including Perry Sook, Shirley Green, Duane
Lammers, Susana Schuler and Richard Stolpe, are parties to a fourth amended and
restated investor rights agreement, dated as of August 7, 2001. Pursuant to the
investors agreement, the parties agreed to vote their equity interests in
Nexstar Broadcasting Group to elect Mr. Sook to the board of directors. The
investors agreement also contains (1) co-sale rights exercisable in the event
of certain sales by ABRY Broadcast Partners II, L.P. and ABRY Broadcast
Partners III, L.P., (2) restrictions on transfers of equity interests by all
members and their permitted transferees, and (3) drag-along sale rights
exercisable by the holders of a majority of the class A interests of Nexstar
Broadcasting Group in the event of an approved sale of Nexstar Broadcasting
Group. The voting, co-sale, drag-along and transfer restrictions will terminate
upon the consummation of the first to occur of (a) a public offering within
certain parameters that are set forth in the investors agreement, or (b) a sale
of all of the equity securities or assets of Nexstar Broadcasting Group to
independent third party.
ABRY Management and Consulting Services Agreement
Pursuant to a second amended and restated management and consulting services
agreement between Nexstar Broadcasting Group, Inc. and ABRY Partners, LLC (as
successor to ABRY Partners, Inc.), dated as of January 5, 1998, ABRY Partners,
LLC was entitled to a management fee for certain financial and management
consulting services provided to Nexstar Broadcasting Group, Inc., including in
connection with any acquisitions or divestitures in which ABRY Partners, LLC
had substantially assisted in the organization or structuring. Under the
agreement, the management fee was based on the purchase price of any such
acquisition or divestiture, as well as a certain amount per annum paid for each
broadcast station owned or managed by Nexstar Broadcasting Group, L.L.C. or its
subsidiaries. ABRY Partners, LLC was also reimbursed for any reasonable out-of-
pocket expenses incurred. ABRY Partners, LLC terminated the agreement effective
December 31, 2000.
Perry Sook Guaranty
Pursuant to an individual loan agreement dated January 5, 1998, Bank of
America National Trust and Savings Association has established a loan facility
under which Mr. Sook, Nexstar's President and Chief Executive Officer, may
borrow an aggregate amount of up to $3.0 million. As of the date of this
prospectus, approximately $2.1 million in principal amount of loans were
outstanding under that facility. The proceeds of those loans have been and will
be used by Mr. Sook in part to invest in Nexstar Broadcasting Group, L.L.C.
Nextar Broadcasting Group, L.L.C., Nextar Finance Holdings, L.L.C's indirect
parent has guaranteed the payment of up to $3.0 million in principal amount of
those loans, pursuant to a continuing guaranty dated August 12, 1998.
Time Brokerage Agreement, Shared Services Agreements, and Joint Sales
Agreement
Nexstar has agreements in place with entities that are part of the Bastet
Group in three markets: Erie, Pennsylvania, Wichita Falls, Texas, and Wilkes
Barre-Scranton, Pennsylvania.
79
Nexstar Broadcasting of Erie, L.L.C., an indirect subsidiary of Nexstar, and
Bastet Broadcasting, Inc. are parties to an amended time brokerage agreement
dated as of July 31, 1998, which expires on August 16, 2006 and may be renewed
for one term of five years with 90 days notice. This agreement allows Nexstar
to program most of WFXP's broadcast time, sell the station's advertising time
and retain the advertising revenue.
Mission Broadcasting of Wichita Falls, Inc. ("Mission Broadcasting") and
Nexstar Broadcasting of Wichita Falls, L.L.C., an indirect subsidiary of
Nexstar, are parties to a shared services agreement dated as of June 1, 1999,
which has an initial term of 10 years. Under this agreement, Nexstar
Broadcasting of Wichita Falls agreed with Mission Broadcasting to share the
costs of certain services that Nexstar's station KFDX and Mission
Broadcasting's stations KJTL and KJBO-LP individually incurred. These shared
services include news production, technical maintenance, and security, among
other services, but do not include the services of senior management personnel,
programming or sales. In consideration of certain services provided to KJTL and
KJBO-LP by KFDX personnel, Mission Broadcasting pays Nexstar a monthly service
fee, calculated based on the cash flow of KJTL and KJBO-LP.
Mission Broadcasting and Nexstar Broadcasting of Wichita Falls, L.L.C. are
also parties to an agreement for the sale of commercial time dated as of June
1, 1999, which has an initial term of 10 years. Under this agreement, called a
joint sales agreement, Nexstar Broadcasting of Wichita Falls, L.L.C. purchases
advertising time on KJTL and KJBO-LP and retains the advertising revenue, in
return for payments to Mission Broadcasting of $100,000 per month, subject to
adjustment to assure that each payment equals Mission Broadcasting's actual
operating costs plus $10,000 per month.
Nexstar Broadcasting of Northeastern Pennsylvania, L.L.C., an indirect
subsidiary of Nexstar, and Bastet Broadcasting, Inc. are parties to a shared
services agreement dated as of January 5, 1998, which has an initial term of 10
years. The terms of this agreement are substantially similar to the terms of
Nexstar's shared services agreement with Mission Broadcasting and provides for
the parties to share the costs of certain services that Nexstar's station WBRE
and Bastet's station WYOU otherwise would separately incur.
Option Agreements
In consideration of Nexstar's guarantee of indebtedness incurred by entities
in the Bastet Group, Nexstar also has options to purchase the assets of the
Bastet group's stations in Erie, Wichita Falls and Wilkes Barre-Scranton
(subject to prior FCC approval). In Erie, Bastet Broadcasting, Inc., David S.
Smith, and Nexstar Broadcasting Group, L.L.C., Nexstar's indirect parent, are
parties to an option agreement dated as of November 30, 1998. In Wichita Falls,
Mission Broadcasting of Wichita Falls, Inc., David S. Smith, and Nexstar
Broadcasting of Wichita Falls, L.L.C., an indirect subsidiary of Nexstar, are
parties to an option agreement dated as of June 1999. In Wilkes Barre-Scranton,
Bastet Broadcasting, Inc., David S. Smith, and Nexstar Broadcasting of
Northeastern Pennsylvania, L.L.C., an indirect subsidiary of Nexstar, are
parties to an option agreement dated as of May 19, 1998. Under the terms of
these option agreements, Nexstar may exercise its option upon written notice to
the counterparty to the relevant option agreement. In each option agreement,
the exercise price of the option equals the station's existing indebtedness
plus assumption of the station's operating liabilities. The relevant Bastet
Group entity and/or David S. Smith may terminate each option agreement by
written notice any time after the seventh anniversary date of the relevant
option agreement.
Management Agreement
Bastet Broadcasting, Inc., Mission Broadcasting of Wichita Falls, Inc.,
Mission Broadcasting of Amarillo, Inc., David S. Smith and Nancie J. Smith, the
wife of David S. Smith, are parties to a compensation agreement. Under this
agreement, the Bastet Group pays David S. Smith and Nancie J. Smith
collectively up to $200,000 per year for certain management services.
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DESCRIPTION OF OTHER INDEBTEDNESS
Senior Credit Facilities
In January 2001, Nexstar Finance and the Bastet Group each entered into new
senior credit facilities with Bank of America, N.A. as administrative agent and
a syndicate of other lenders providing for an aggregate borrowing limit of up
to $225.0 million. The Nexstar facility was subsequently amended and restated
on June 14, 2001. Our current senior credit facilities consist of:
. a $50.0-million term loan facility which matures on January 12, 2007,
referred to as the Term Loan A facility;
. a $75.0-million term loan facility which matures on July 12, 2007,
referred to as the Term Loan B facility;
. a $57.0-million reducing revolving credit facility which matures on
January 12, 2007; and
. a $43.0-million revolving credit facility which matures on January 12,
2007.
Initial borrowings under the senior credit facilities were used to refinance
our existing indebtedness and to partially finance acquisitions by Nexstar that
were completed after December 31, 2000, which are described under "Prospectus
Summary--Recent Developments." Additional borrowings will be available to
finance permitted acquisitions and for other general corporate purposes. At
June 30, 2001, we have approximately $65.0 million of unused borrowing capacity
under the term and revolving credit facilities.
Nexstar Broadcasting Group, L.C.C. and each of its direct and indirect
subsidiaries (other than Nexstar Finance, L.L.C.) and Bastet Broadcasting, Inc.
and Mission Broadcasting of Wichita Falls, Inc. and each of their direct and
indirect subsidiaries guarantee Nexstar Finance's reducing revolving credit
facility and our term loan facilities. Nexstar Broadcasting Group and each of
its direct and indirect subsidiaries (other than Nexstar Finance, L.L.C.) and
each of Bastet Broadcasting, Inc.'s and Mission Broadcasting of Wichita Falls,
Inc. and each of their direct and indirect subsidiaries guarantee the Bastet
Group's $43.0 million revolving credit facility. In addition, our senior credit
facilities are secured by the following:
. substantially all of the equity interests of each of (1) Nexstar
Finance, (2) Nexstar Broadcasting Group and (3) the Bastet Group; and
. all other assets (other than FCC licenses and, unless requested in
writing by Bank of America, real estate assets) owned by (1) Nexstar
Finance, (2) Nexstar Broadcasting and (3) the Bastet Group.
Our borrowings under the senior credit facilities bear interest at a
floating rate, which can be either a base rate plus an applicable margin or, at
our option, a London Interbank Offered Rate, or LIBOR, plus an applicable
margin. Base rate is defined in the senior credit facilities as the higher of
(x) the Bank of America prime rate and (y) the federal funds effective rate,
plus 0.5% per annum. LIBOR loans bear interest at LIBOR, as specified in the
senior credit facilities.
The initial applicable margin is 1.625% for the base rate loans and 3.25%
for the LIBOR loans for both the revolving credit facilities and the Term Loan
A facility. Thereafter, subject to our consolidated total leverage ratio, the
applicable base rate margin will vary from 0.375% to 1.625%, and the applicable
LIBOR margin will vary from 2.00% to 3.25%. The Term Loan B facility has a
fixed applicable margin of 2.375% for base rate loans and 4.00% for LIBOR
loans.
The interest rate payable under our senior credit facilities will increase
by 2.0% per annum during the continuance of an event of default.
Prior to the maturity date, funds under the revolving credit facilities may
be borrowed, repaid, and reborrowed, without premium or penalty. The revolving
credit facility is due in full at maturity. Each of the commitments under the
reducing revolving credit facility, or the Nexstar Reducing Revolver, and the
principal
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amount under each of our Term Loan A facility and our Term Loan B facility,
will, commencing on March 31, 2003 and ending on January 12, 2007, reduce
quarterly by the following annual amounts:
<TABLE>
<CAPTION>
Reduction Amount
----------------------
Nexstar
Reducing Term Term
Year Revolver Loan A Loan B
---- -------- ------ ------
<S> <C> <C> <C>
1........................................................ 0% 0% 0%
2........................................................ 0% 0% 1%
3........................................................ 15% 15% 1%
4........................................................ 20% 20% 1%
5........................................................ 30% 30% 1%
6........................................................ 35% 35% 1%
7........................................................ n/a n/a 95%
</TABLE>
Voluntary prepayments of amounts outstanding under our senior credit
facilities are permitted at any time, so long as we give notice as required by
the facility. However, if a prepayment is made with respect to a LIBOR loan,
and the prepayment is made on a date other than an interest payment date, we
must pay a fee to compensate the lender for losses and expenses incurred as a
result of the prepayment.
Commitment fees on unused commitments under the revolving credit facilities
are determined by a formula based on our total leverage ratio. Our initial
commitment fee was 0.50%, and will decline to 0.375% when our total leverage
ratio is less than 5.50x. In addition, we are required to pay a per annum
commitment fee of 0.5% on the $15,000,000 portion of the Term A Loan facility
that was not funded upon the funding of the Term B Loan facility.
We are required to prepay amounts outstanding under the senior credit
facilities in an amount equal to:
. the lesser of (i) 50% of the net proceeds of any equity issuances and
(ii) the amount required to repay the senior credit facilities so that
the total leverage ratio is not greater than 3.00x;
. 100% of all insurance recoveries in excess of amounts used to replace or
restore any properties subject to a $1 million basket;
. 50% of the excess cash flow of Nexstar Finance when the total leverage
ratio is greater than 5.00x, and 30% of the excess cash flow of Nexstar
Finance when the total leverage is less than 5.00x but greater than or
equal to 4.00x (in each case reduced by $1,000,000) commencing with the
fiscal year ending December 31, 2001;
. 100% of the net cash proceeds of any dispositions of assets or property,
other than in the ordinary course of business;
. 100% of the excess cash flow of the Bastet Group beginning with the
fiscal year ending December 31, 2001;
. 100% of the net proceeds of any capital contributions made pursuant to
the ABRY Capital Contribution Agreement; and
. 100% of certain debt issuances not used to repay the unsecured interim
loan.
All mandatory prepayments must be used to repay Nexstar Finance, L.L.C.'s
term loan facilities and to reduce any balance under Nexstar Finance, L.L.C.'s
reducing revolving credit facility on a pro rata basis and to permanently
reduce revolving commitments.
The senior credit facilities require us to meet certain financial tests,
including without limitation, a minimum interest coverage ratio, a minimum pro
forma debt service ratio, a maximum senior leverage ratio and a maximum total
leverage ratio. In addition, the senior credit facilities contain certain
covenants that, among other things, limit the incurrence of additional
indebtedness, investments, dividends, transactions with affiliates, asset
sales, acquisitions, capital expenditures, cash film payments, mergers and
consolidations, liens and encumbrances and other matters customarily
restricted in such agreements.
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The senior credit facilities contain customary events of default, including
without limitation, payment defaults, breaches of representations and
warranties, covenant defaults, cross-defaults to certain other indebtedness in
excess of specified amounts, certain events of bankruptcy and insolvency,
judgements in excess of specified amounts, ERISA defaults, termination of
material licenses, failure of any guaranty or security document supporting the
senior credit facilities to be in full force and effect and a change of
control.
Senior Subordinated Notes due 2008
On March 16, 2001, Nexstar Finance issued $160.0 million of 12% senior
subordinated notes due 2008 at a price of 96.012%. The senior subordinated
notes mature on April 1, 2008. Interest is payable every six months in arrears
on April 1 and October 1. The senior subordinated notes are guaranteed by all
of the domestic existing and future restricted subsidiaries of Nexstar Finance
and by the Bastet Group. They are general unsecured senior subordinated
obligations subordinated to all of Nexstar Finance's senior debt. The senior
subordinated notes are redeemable on or after April 1, 2005 and Nexstar Finance
may redeem up to 35% of the aggregate principal amount of the senior
subordinated notes before April 1, 2004 with the net cash proceeds from
qualified equity offerings.
The senior subordinated notes contain covenants which require Nexstar
Finance to comply with certain limitations on the incurrence of additional
indebtedness, issuance of equity, payment of dividends and on certain other
business activities.
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DESCRIPTION OF THE NOTES
You can find the definitions of certain terms used in this description under
the subheading "Certain Definitions." In this description, the word "Nexstar
Holdings" refers only to Nexstar Finance Holdings, L.L.C. and Nexstar Finance
Holdings, Inc. and not to any of its subsidiaries.
Nexstar Holdings will issue the Notes under an Indenture among itself, the
Guarantor, Bastet/Mission and United States Trust Company of New York, as
trustee, in a private transaction that is not subject to the registration
requirements of the Securities Act. See "Notice to Investors." The terms of the
Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939.
The following description is a summary of the material provisions of the
Indenture and the registration rights agreement. It does not restate those
agreements in their entirety. We urge you to read the Indenture and the
registration rights agreement because they, and not this description, define
your rights as holders of the Notes. Copies of the Indenture and the
registration rights agreement are available as set forth below under "--
Additional Information." Certain defined terms used in this description but not
defined below under "--Certain Definitions" have the meanings assigned to them
in the Indenture.
The registered Holder of a Note will be treated as the owner of it for all
purposes. Only registered Holders will have rights under the Indenture.
Brief Description of the Notes and the Guarantee
The Notes
The notes:
. are general unsecured obligations of Nexstar Holdings;
. are pari passu in right of payment with all existing and future senior
Indebtedness of Nexstar Holdings;
. are senior in right of payment to any future subordinated Indebtedness of
Nexstar Holdings; and
. are unconditionally guaranteed by the Guarantor.
The Guarantee
The exchange notes are guaranteed by Nexstar Broadcasting Group, L.L.C. The
guarantee will be automatically released upon the consummation of the
Reorganization.
The guarantee of the exchange notes:
. is a general unsecured obligation of the Guarantor;
. is pari passu in right of payment with all existing and future senior
Indebtedness of the Guarantor; and
. is senior in right of payment to any future subordinated Indebtedness of
the Guarantor.
As of the date of the Indenture, all of our subsidiaries and all of the
Bastet/Mission Entities will be "Restricted Subsidiaries." However, under the
circumstances described below under the subheading "--Certain Covenants--
Designation of Restricted and Unrestricted Subsidiaries," we will be permitted
to designate certain of our subsidiaries as "Unrestricted Subsidiaries." Our
Unrestricted Subsidiaries will not be subject to many of the restrictive
covenants in the Indenture. Our Subsidiaries will not guarantee the Notes.
The operations of Nexstar Holdings are conducted through its subsidiaries
and, therefore, Nexstar Holdings depends on the cash flow of its subsidiaries
to meet its obligations, including its obligations under the Notes. The Notes
will be effectively subordinated in right of payment to all Indebtedness and
other liabilities and
84
commitments (including trade payables and lease obligations) of Nexstar
Holdings' subsidiaries. Any right of Nexstar Holdings to receive assets of any
of its subsidiaries upon the subsidiary's liquidation or reorganization (and
the consequent right of the holders of the Notes to participate in those
assets) will be effectively subordinated to the claims of that subsidiary's
creditors, except to the extent that Nexstar Holdings is itself recognized as a
creditor of the subsidiary, in which case the claims of Nexstar Holdings would
still be subordinate in right of payment to any security in the assets of the
subsidiary and any indebtedness of the subsidiary senior to that held by
Nexstar Holdings. As of March 31, 2001, Nexstar Holdings' subsidiaries had
approximately $356.5 million of Indebtedness and $45.5 million of accounts
payable and other liabilities outstanding. See "Risk Factors--Holding Company
Structure."
Principal, Maturity and Interest
Nexstar Holdings will issue Notes with a maximum aggregate principal amount
at maturity of $100,000,000, of which $36,988,000 will be issued in this
offering. Nexstar Holdings may issue additional Notes from time to time after
this offering. Any offering of additional Notes is subject to the covenant
described below under the caption "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock." The Notes and any additional
Notes subsequently issued under the Indenture will be treated as a single class
for all purposes under the Indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase. The Notes offered hereby will
be offered at a substantial discount from their principal amount at maturity
and will generate gross proceeds to Nexstar Holdings of 20,000,512. Nexstar
Holdings will issue Notes in denominations of $1,000 and integral multiples of
$1,000. The Notes will mature on May 15, 2009.
No interest will accrue on the Notes prior to May 15, 2005. Instead, the
Accreted Value of each Note will increase (representing amortization of
original issue discount) between the date of original issuance and May 15, 2005
at a rate of 16% per annum calculated on a semi-annual bond equivalent basis
using a 360-day year comprised of twelve 30-day months, such that the Accreted
Value on May 15, 2005 will be equal to the full principal amount at maturity of
the Notes. Beginning on May 15, 2005 interest on the Notes will accrue at a
rate of 16% per annum and will be payable in cash semi-annually in arrears on
each May 15 and November 15, commencing on November 15, 2005. Nexstar Holdings
will make each interest payment to the holders of record on the immediately
proceeding May 1 and November 1.
Interest on the Notes will accrue from the date on which interest was most
recently paid or, if no interest has been paid, from May 15, 2005. Interest
will be computed on the basis of a 360-day year comprised of twelve 30-day
months.
Methods of Receiving Payments on the Exchange Notes
If a Holder has given wire transfer instructions to Nexstar Holdings,
Nexstar Holdings will pay all principal, interest and premium and Liquidated
Damages, if any, on that Holder's exchange notes in accordance with those
instructions. All other payments on the Notes will be made at the office or
agency of the paying agent and registrar within the City and State of New York
unless Nexstar Holdings elects to make interest payments by check mailed to the
Holders at their address set forth in the register of Holders.
Paying Agent and Registrar for the Exchange Notes
The trustee will initially act as paying agent and registrar. Nexstar
Holdings may change the paying agent or registrar without prior notice to the
Holders of the Notes, and Nexstar Holdings or any of its Subsidiaries may act
as paying agent or registrar.
Transfer and Exchange
A Holder may transfer or exchange the Notes in accordance with the
Indenture. The registrar and the trustee may require a Holder to furnish
appropriate endorsements and transfer documents in connection
85
with a transfer of Notes. Holders will be required to pay all taxes due on
transfer. Nexstar Holdings is not required to transfer or exchange any Note
selected for redemption. Also, Nexstar Holdings is not required to transfer or
exchange any Note for a period of 15 days before a selection of Notes to be
redeemed.
Note Guarantee
The Notes will be guaranteed by Nexstar.
The Guarantor may not sell or otherwise dispose of all or substantially all
of its assets to, or consolidate with or merge with or into (whether or not the
Guarantor is the surviving Person), another Person, other than Nexstar
Holdings, unless:
(1) immediately after giving effect to that transaction, no Default or
Event of Default exists; and
(2) the Person acquiring the property in any such sale or disposition or
the Person formed by or surviving any such consolidation or merger assumes
all the obligations of the Guarantor under the Indenture, its Note
Guarantee and the registration rights agreement pursuant to a supplemental
Indenture satisfactory to the trustee.
The Note Guarantee of the Guarantor, and all other obligations of the
Guarantor under the Indenture (including all covenants of the Guarantor under
the Indenture described below), will be automatically released upon
consummation of the Reorganization.
Optional Redemption
At any time prior to May 15, 2004, Nexstar Holdings may redeem all (but not
less than all) of the accreted value of the outstanding Notes issued under the
Indenture at a redemption price of 116% of the Accreted Value thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, to the redemption
date, with the net cash proceeds of an Equity Offering; provided the redemption
occurs within 90 days of the date of the closing of such Equity Offering.
Except pursuant to the preceding paragraph, the Notes will not be redeemable
at Nexstar Holdings' option prior to May 15, 2005.
After May 15, 2005, Nexstar Holdings may redeem all or a part of the Notes
upon not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, on the Notes redeemed, to the
applicable redemption date, if redeemed during the twelve-month period
beginning on May 15 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2005.............................. 108.00%
2006.............................. 104.00%
2007 and thereafter............... 100.00%
</TABLE>
Mandatory Redemption
On November 15, 2006, Nexstar Holdings shall redeem a principal amount of
Notes outstanding on such date equal to the AHYDO Amount on a pro rata basis at
a redemption price of 100% of the principal amount of the Notes so redeemed.
The "AHYDO Amount" equals the amount such that the Notes will not be
"applicable high yield discount obligations" within the meaning of Section
163(i)(1) of the Code.
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Repurchase at the Option of Holders
Change of Control
If a Change of Control occurs, each Holder of Notes will have the right to
require Nexstar Holdings to repurchase all or any part (equal to $1,000 or an
integral multiple of $1,000) of that Holder's Notes pursuant to a Change of
Control Offer on the terms set forth in the Indenture. In the Change of Control
Offer, Nexstar Holdings will offer a Change of Control Payment in cash equal to
101% of the Accreted Value of Notes repurchased to the date of purchase (if
prior to May 15, 2005) or 101% of the aggregate principal amount of Notes
repurchased plus accrued and unpaid interest and Liquidated Damages, if any, on
the Notes repurchased, to the date of purchase (if on or after May 15, 2005).
Within 60 days following any Change of Control, Nexstar Holdings will mail a
notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes on the Change
of Control Payment Date specified in the notice, which date will be no earlier
than 30 days and no later than 60 days from the date such notice is mailed,
pursuant to the procedures required by the Indenture and described in such
notice. Nexstar Holdings will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to
the extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the Change
of Control provisions of the Indenture, Nexstar Holdings will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Change of Control provisions of the
Indenture by virtue of such conflict.
On the Change of Control Payment Date, Nexstar Holdings will, to the extent
lawful:
(1) accept for payment all Notes or portions of Notes properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the paying agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly
tendered; and
(3) deliver or cause to be delivered to the trustee the Notes properly
accepted together with an officers' certificate stating the aggregate
principal amount (or, if prior to May 15, 2005, Accreted Value) of Notes or
portions of Notes being purchased by Nexstar Holdings.
The paying agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount (or, if prior to May 15, 2005,
Accreted Value) to any unpurchased portion of the Notes surrendered, if any;
provided that each new Note will be in a principal amount at maturity of $1,000
or an integral multiple of $1,000.
Prior to complying with any of the provisions of this "Change of Control"
covenant, but in any event within 90 days following a Change of Control,
Nexstar Holdings will either repay all outstanding Indebtedness of the
Restricted Subsidiaries or obtain the requisite consents, if any, under all
agreements governing outstanding Indebtedness of the Restricted Subsidiaries to
permit the repurchase of Notes required by this covenant. Nexstar Holdings will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The provisions described above that require Nexstar Holdings to make a
Change of Control Offer following a Change of Control will be applicable
whether or not any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the Holders of the Notes to require that Nexstar
Holdings repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
Nexstar Holdings will not be required to make a Change of Control Offer upon
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the
87
requirements set forth in the Indenture applicable to a Change of Control Offer
made by Nexstar Holdings and purchases all Notes properly tendered and not
withdrawn under the Change of Control Offer.
The definition of Change of Control includes a phrase relating to the direct
or indirect sale, lease, transfer, conveyance or other disposition of "all or
substantially all" of the properties or assets of Nexstar Holdings and its
Subsidiaries taken as a whole. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
Holder of Notes to require Nexstar Holdings to repurchase its Notes as a result
of a sale, lease, transfer, conveyance or other disposition of less than all of
the assets of Nexstar Holdings and its Subsidiaries taken as a whole to another
Person or group may be uncertain.
Asset Sales
(A) Nexstar Holdings and Bastet/Mission will not, and will not permit any of
the Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) Nexstar Holdings (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of the Asset Sale at least equal to the
fair market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) the fair market value is determined by Nexstar Holdings' Board of
Directors and evidenced by a resolution of the Board of Directors set forth
in an officers' certificate delivered to the trustee; and
(3) at least 75% of the consideration received in the Asset Sale by
Nexstar Holdings or such Restricted Subsidiary is in the form of cash or
Cash Equivalents, except to the extent Nexstar Holdings is undertaking a
Permitted Asset Swap. For purposes of this provision and the next
paragraph, each of the following will be deemed to be cash:
(a) any liabilities, as shown on Nexstar Holdings' or any of the
Restricted Subsidiaries' most recent balance sheet, of Nexstar Holdings
or any of the Restricted Subsidiaries (other than contingent
liabilities and liabilities that are by their terms subordinated to the
Notes) that are assumed by the transferee of any such assets pursuant
to a customary novation agreement that releases Nexstar Holdings or
such Restricted Subsidiary from further liability; and
(b) any securities, Notes or other obligations received by Nexstar
Holdings or any of the Restricted Subsidiaries from such transferee
that are converted by Nexstar Holdings or such Restricted Subsidiary
within 90 days into cash or Cash Equivalents, to the extent of the cash
received in that conversion.
The 75% limitation referred to in clause (3) above will not apply to any
Asset Sale in which the cash or Cash Equivalents portion of the consideration
received therefrom, determined in accordance with the preceding provision, is
equal to or greater than what the after-tax proceeds would have been had such
Asset Sale complied with the aforementioned 75% limitation.
Notwithstanding the foregoing, Nexstar Holdings or any Restricted Subsidiary
will be permitted to consummate an Asset Sale without complying with the
foregoing if:
(x) Nexstar Holdings or such Restricted Subsidiary, as applicable,
receives consideration at the time of such Asset Sale at least equal to the
fair market value of the assets or other property sold, issued or otherwise
disposed of;
(y) the fair market value is determined by Nexstar Holdings' Board of
Directors and evidenced by a resolution of the Board of Directors set forth
in an officers' certificate delivered to the trustee; and
(z) at least 75% of the consideration for such Asset Sale constitutes a
controlling interest in a Permitted Business, assets used or useful in a
Permitted Business and/or cash;
88
provided that any cash (other than any amount deemed cash under clause (3)(a)
of the preceding paragraph) received by Nexstar Holdings or such Restricted
Subsidiary in connection with any Asset Sale permitted to be consummated under
this paragraph shall constitute Net Proceeds subject to the provisions of the
next paragraph.
(B) Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, Nexstar Holdings or such Restricted Subsidiary, as applicable, may apply
those Net Proceeds at its option:
(1) to permanently repay or repurchase Indebtedness of Nexstar Holdings
or any of the Restricted Subsidiaries;
(2) to acquire all or substantially all of the assets of, or a majority
of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure; or
(4) to acquire other assets that are used or useful in a Permitted
Business.
Pending the final application of any Net Proceeds, Nexstar Holdings may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by the Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $10.0 million, Nexstar Holdings
will make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in the Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount
of Notes and such other pari passu Indebtedness that may be purchased out of
the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to
100% of the Accreted Value of the Notes on the date of purchase plus accrued
and unpaid Liquidated Damages thereon, if any (if prior to May 15, 2005) or
100% of the aggregate principal amount of Notes plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase (if on or
after May 15, 2005), in each case which price will be payable in cash. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, Nexstar
Holdings may use those Excess Proceeds for any purpose not otherwise prohibited
by the Indenture. If the Accreted Value or aggregate principal amount, as
applicable, of Notes and other pari passu Indebtedness tendered into such Asset
Sale Offer exceeds the amount of Excess Proceeds, the trustee will select the
Notes and such other pari passu Indebtedness to be purchased on a pro rata
basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds
will be reset at zero.
(C) Nexstar Holdings will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to
the extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of the Indenture, Nexstar Holdings will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of the Indenture by virtue of such
conflict.
Nexstar Holdings will, and will cause the Restricted Subsidiaries to utilize
the proceeds of sales of assets received by it in accordance with clause (11)
of the covenant described under the caption "Restricted Payments" as if such
proceeds were the Net Proceeds of an Asset Sale.
The agreements governing the outstanding Indebtedness of Nexstar Holdings
and the Restricted Subsidiaries currently prohibit Nexstar Holdings and the
Guarantor from purchasing any Notes and also provides that certain change of
control or asset sale events with respect to Nexstar Holdings and the Guarantor
would constitute a default under these agreements. Any future credit agreements
or other agreements relating to Indebtedness of Nexstar Holdings and the
Restricted Subsidiaries to which Nexstar Holdings and the Guarantor becomes a
party may contain similar restrictions and provisions. In the event a Change of
Control or Asset Sale
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occurs at a time when Nexstar Holdings is prohibited from purchasing Notes,
Nexstar Holdings could seek the consent of its senior lenders to the purchase
of Notes or could attempt to refinance the borrowings that contain such
prohibition. If Nexstar Holdings does not obtain such a consent or repay such
borrowings, Nexstar Holdings will remain prohibited from purchasing Notes. In
such case, Nexstar Holdings' failure to purchase tendered Notes would
constitute an Event of Default under the Indenture which would, in turn,
constitute a default under such Indebtedness of Nexstar Holdings and the
Restricted Subsidiaries.
Selection and Notice
If less than all of the Notes are to be redeemed at any time, the trustee
will select Notes for redemption as follows:
(1) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities exchange, on
a pro rata basis, by lot or by such method as the trustee deems fair and
appropriate.
No Notes of $1,000 or less can be redeemed in part. Notices of redemption
will be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior
to a redemption date if the notice is issued in connection with a defeasance of
the Notes or a satisfaction and discharge of the Indenture. Notices of
redemption may not be conditional.
If any Note is to be redeemed in part only, the notice of redemption that
relates to that Note will state the portion of the principal amount of that
Note that is to be redeemed. A new Note in principal amount equal to the
unredeemed portion of the original Note will be issued in the name of the
Holder of Notes upon cancellation of the original Note. Notes called for
redemption become due on the date fixed for redemption. On and after the
redemption date, interest ceases to accrue on Notes or portions of them called
for redemption.
Certain Covenants
Restricted Payments
Nexstar Holdings, Bastet/Mission and the Guarantor will not, and will not
permit any of the Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of Nexstar Holdings', the Guarantor's or any of the
Restricted Subsidiaries' Equity Interests (including, without limitation,
any payment in connection with any merger or consolidation involving
Nexstar Holdings, the Guarantor or any of the Restricted Subsidiaries) or
to the direct or indirect holders of Nexstar Holdings', the Guarantor's or
any of the Restricted Subsidiaries' Equity Interests in their capacity as
such (other than dividends or distributions payable in Equity Interests
(other than Disqualified Stock) of Nexstar Holdings or the Guarantor and
other than (x) dividends or distributions payable to Nexstar Holdings or
the Restricted Subsidiaries and (y) dividends or other distributions
payable by a Restricted Subsidiary of the Guarantor (other than Nexstar
Holdings and the Restricted Subsidiaries) to the Guarantor or the
Restricted Subsidiaries);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving Nexstar Holdings or the Guarantor) any Equity
Interests of Nexstar Holdings or any direct or indirect parent of Nexstar
Holdings (other than any such Equity Interests owned by Nexstar Holdings or
the Restricted Subsidiaries);
(3) make any payment on or with respect to, or purchase, redeem, defease
or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes or the Note Guarantee, except a payment of
interest or principal at the Stated Maturity thereof; or
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(4) make any Restricted Investment (all such payments and other actions
set forth in these clauses (1) through (4) above being collectively
referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment;
(2) Nexstar Holdings would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Leverage Ratio test set forth in the first paragraph of the covenant
described below under the caption "--Incurrence of Indebtedness and
Issuance of Preferred Stock;" and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by Nexstar Holdings, the Guarantor and the
Restricted Subsidiaries after the date of the Indenture (excluding (x)
Restricted Payments permitted by clauses (1), (2), (3), (4), (5), (7), (8),
(9), (11), (12) and (13) of the next succeeding paragraph and (y) following
the consummation of the Reorganization, Restricted Payments made by the
Guarantor, which would otherwise have been deducted in calculating the sum
set forth below), is less than the sum, without duplication, of:
(a) (i) 100% of the aggregate Consolidated Cash Flow of Nexstar
Holdings (or, in the event such Consolidated Cash Flow shall be a
deficit, minus 100% of such deficit) accrued for the period beginning
on the first day of the first calendar month commencing after the Issue
Date and ending on the last day of Nexstar Holdings' most recent
calendar month for which financial Information is available to Nexstar
Holdings ending prior to the date of such proposed Restricted Payment,
taken as one accounting period, less (ii) 1.4 times Consolidated
Interest Expense for the same period, plus
(b) 100% of the aggregate net proceeds (including the fair market
value of property other than cash) received by Nexstar Holdings or
Bastet/Mission as a contribution to the equity capital of Nexstar
Holdings or Bastet/Mission or from the issue or sale since the date of
the Indenture of Equity Interests of Nexstar Holdings or Bastet/Mission
(other than Disqualified Stock), or of Disqualified Stock or debt
securities of Nexstar Holdings or Bastet/Mission that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Restricted
Subsidiary and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock), plus
(c) to the extent that any Unrestricted Subsidiary is redesignated
as a Restricted Subsidiary after the date of the Indenture, the fair
market value of such Subsidiary as of the date of such redesignation,
plus
(d) the aggregate amount returned in cash with respect to
Investments (other than Permitted Investments) made after the issue
date whether through interest payments, principal payments, dividends
or other distributions, plus
(e) the net cash proceeds received by Nexstar Holdings or any of the
Restricted Subsidiaries from the disposition, retirement or redemption
of all or any portion of such Investments referred to in clause (d)
above (other than to a Restricted Subsidiary).
The preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of Nexstar Holdings or
Bastet/Mission or of any Equity Interests of Nexstar Holdings or the
Guarantor in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than
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to a Restricted Subsidiary) of, Equity Interests of Nexstar Holdings or
Bastet/Mission (other than Disqualified Stock); provided that the amount of
any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition will be excluded
from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of Nexstar Holdings or Bastet/Mission with the
net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary to the
holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of Nexstar Holdings or the payment of a
dividend to any Affiliates of Nexstar Holdings to effect the repurchase,
redemption, acquisition or retirement of Nexstar Holdings or Affiliate's
equity interest, that are held by any member or former member of Nexstar
Holdings' (or any of the Restricted Subsidiaries' or any of their
Affiliates') management, or by any of their respective directors, employees
or consultants; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests may not exceed
the sum of (a) $750,000 in any calendar year (with unused amounts in any
calendar year being available to be so utilized in succeeding calendar
years) and (b) the net cash proceeds to Nexstar Holdings from any issuance
or reissuance of Equity Interests of Nexstar or its Affiliates (other than
Disqualified Stock) to members of management (which are excluded from the
calculation set forth in clause (3)(b) of the proceeding paragraph) and the
net cash proceeds to Nexstar Holdings of any "keyman" life insurance
proceeds; provided that the cancellation of Indebtedness owing to Nexstar
Holdings from members of management shall not be deemed Restricted
Payments;
(6) the payment of the dividends on Disqualified Stock the incurrence of
which was permitted by the Indenture;
(7) repurchases of Equity Interests deemed to occur upon the exercise of
stock options;
(8) payments to Affiliates of Nexstar Holdings and holders of Equity
Interests in Nexstar Holdings in amounts equal to (i) the amounts required
to pay any Federal, state or local income taxes to the extent that (A) such
income taxes are attributable to the income of Nexstar Holdings and the
Restricted Subsidiaries (but limited, in the case of taxes based upon
taxable income, to the extent that cumulative taxable net income subsequent
to the Closing Date is positive) or (B) such taxes are related to
Indebtedness between or among any of Nexstar Holdings and any of the
Restricted Subsidiaries and (y) the amounts required to pay any Federal,
State or local taxes in connection with the sale of all or substantially
all of the assets of a Restricted Subsidiary made in accordance with clause
(11) below;
(9) so long as no Default or Event of Default exists both before and
after giving effect thereto, Nexstar Holdings may authorize, declare and
pay dividends to its shareholders, partners or members, as applicable, for
the purpose of paying the corporate overhead expenses of Nexstar or its
Subsidiaries in an aggregate amount for all such overhead expenses not to
exceed $500,000 in any Fiscal Year;
(10) the retirement of any shares of Disqualified Stock of Nexstar
Holdings by conversion into, or by exchange for, shares of Disqualified
Stock of Nexstar Holdings or out of the net cash proceeds of the
substantially concurrent sale (other than to a Subsidiary of Nexstar
Holdings) of other shares of Disqualified Stock of Nexstar Holdings;
(11) the distribution of all or substantially all of the assets of a
Restricted Subsidiary to a Subsidiary of Nexstar; provided that (x) such
distribution is made within one business day of the consummation of the
sale of the assets so distributed, (y) such asset sale is made in
compliance with clause (A) of the covenant described above under "Asset
Sales" as if the seller of such assets were a Restricted Subsidiary and (z)
the Net Proceeds of such asset sale (determined as if such asset sale were
an Asset Sale) are contributed to Nexstar Holdings within one business day
following the consummation of such asset sale;
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(12) other Restricted Payments not to exceed $15.0 million in the
aggregate;
(13) payments to Nexstar and its Subsidiaries to permit repayment of
principal of ABRY Subordinated Debt (including all interest accrued
thereon) in accordance with the terms thereof.
In addition, the Indenture will provide that notwithstanding anything to the
foregoing, no Bastet/Mission Entity shall make a Restricted Payment (other than
Restricted Investments) to any person other than Nexstar Holdings or a
Restricted Subsidiary.
The Boards of Directors of Nexstar Holdings and the Guarantor may designate
any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation
would not cause a Default. For purposes of making such determination, all
outstanding Investments by Nexstar Holdings, the Guarantor and the Restricted
Subsidiaries (except to the extent repaid in cash) in the Subsidiary so
designated shall be deemed to be Restricted Payments at the time of such
designation and shall reduce the amount available for Restricted Payments under
the first paragraph of this covenant. All such outstanding Investments shall be
deemed to constitute Investments in an amount equal to the fair market value of
such Investments at the time of such designation. Such designation shall only
be permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
The amount of all Restricted Payments (other than cash) will be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by Nexstar Holdings, the
Guarantor or such Restricted Subsidiary, as the case may be, pursuant to the
Restricted Payment. The fair market value of any assets or securities that are
required to be valued by this covenant will be determined by the Board of
Directors whose resolution with respect thereto will be delivered to the
trustee. The Board of Directors' determination must be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing if the fair market value exceeds $10.0 million. Not later
than the date of making any Restricted Payment, Nexstar Holdings or the
Guarantor, as the case may be, will deliver to the trustee an officers'
certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this "Restricted Payments"
covenant were computed, together with a copy of any fairness opinion or
appraisal required by the Indenture.
The Indenture will provide that, prior to the consummation of the
Reorganization, Nexstar Holdings and the Restricted Subsidiaries shall not make
any payments in respect of debt owed to Nexstar or its Subsidiaries (other than
Nexstar Holdings and the Restricted Subsidiaries).
The obligations of the Guarantor under this covenant will be released upon
the consummation of the Reorganization.
Incurrence of Indebtedness and Issuance of Preferred Stock
Nexstar Holdings and Bastet/Mission will not, and will not permit any of the
Restricted Subsidiaries to, directly, or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and that Nexstar Holdings and
Bastet/Mission will not issue any Disqualified Stock and will not permit any of
the Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that Nexstar Holdings or any Restricted Subsidiary may incur
Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock or
preferred stock if Nexstar Holdings' Leverage Ratio at the time of incurrence
of such Indebtedness or the issuance of such Disqualified Stock or such
preferred stock, as the case may be, after giving pro forma effect to such
incurrence or issuance as of such date and to the use of the proceeds therefrom
as if the same had occurred at the beginning of the most recently ended four
full fiscal quarter period of Nexstar Holdings for which internal financial
statements are available, would have been no greater than (a) 7.5 to 1, if such
incurrence or issuance is on or prior to May 15, 2003, and (b) 7.0 to 1, if
such incurrence or issuance is after May 15, 2003.
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The first paragraph of this covenant will not prohibit the incurrence of any
of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by Nexstar Holdings or the Restricted Subsidiaries of
Indebtedness under the Credit Agreements (with letters of credit being
deemed to have a principal amount equal to the maximum potential liability
of Nexstar Holdings and the Restricted Subsidiaries thereunder) and related
Guarantees under the Credit Agreements; provided that the aggregate
principal amount (or accreted value, as applicable) of all Indebtedness of
Nexstar Holdings and the Restricted Subsidiaries then classified as having
been incurred pursuant to this clause (1) after giving effect to such
incurrence, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any other Indebtedness incurred pursuant to
this clause (1) does not exceed an amount equal to $225.0 million less the
aggregate amount applied by Nexstar Holdings and the Restricted
Subsidiaries to permanently reduce the availability of Indebtedness under
the Credit Agreements pursuant to the covenant described under the caption
"--Repurchase at the Option of Holders--Asset Sales";
(2) the incurrence by Nexstar Holdings and the Restricted Subsidiaries
of Existing Indebtedness;
(3) the incurrence by Nexstar Holdings of Indebtedness represented by
the Notes in accordance with the terms of the Indenture;
(4) the incurrence by Nexstar Holdings, the Guarantor or any of the
Restricted Subsidiaries of Permitted Refinancing Indebtedness;
(5) the incurrence by Nexstar Holdings or any of the Restricted
Subsidiaries of intercompany Indebtedness between or among Nexstar Holdings
and any of the Restricted Subsidiaries; provided, however, that (i) any
subsequent event or issuance or transfer of Equity Interests that results
in any such Indebtedness being held by a Person other than Nexstar Holdings
or the Restricted Subsidiaries and (ii) any sale or other transfer of any
such Indebtedness to a Person that is not Nexstar Holdings or the
Restricted Subsidiaries shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by Nexstar Holdings or such Restricted
Subsidiary, as the case may be, that was not permitted by this clause (5);
(6) the incurrence by Nexstar Holdings or any of the Restricted
Subsidiaries of Hedging Obligations that are incurred in the ordinary
course of business for the purpose of fixing or hedging currency, commodity
or interest rate risk (including with respect to any floating rate
Indebtedness that is permitted by the terms of the Indenture to be
outstanding) in connection with the conduct of their respective businesses
and not for speculative purposes;
(7) the guarantee by Nexstar Holdings of Indebtedness of any of the
Restricted Subsidiaries so long as the incurrence of such Indebtedness by
such Restricted Subsidiary is permitted to be incurred by another provision
of this covenant;
(8) the guarantee by any Restricted Subsidiary of Indebtedness of
Nexstar Holdings;
(9) Indebtedness consisting of customary indemnification, adjustments of
purchase price or similar obligations, in each case, incurred or assumed in
connection with the acquisition of any business or assets;
(10) Indebtedness incurred by Nexstar Holdings or any of the Restricted
Subsidiaries constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business, including without
limitation to letters of credit in respect to workers' compensation claims
or self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims; provided, however, that
upon the drawing of such letters of credit or the incurrence of such
Indebtedness, such obligations are reimbursed within 30 days following such
drawing or incurrence;
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(11) Indebtedness of Nexstar Holdings and the Restricted Subsidiaries
represented by Capital Lease Obligations, mortgage financings or purchase
money obligations, in each case incurred for the purpose of financing all
or any part of the purchase price or cost of construction or improvement of
property, plant or equipment whether through the direct purchase of assets
or at least a majority of the Voting Stock of any person owning such
assets, in an aggregate principal amount not to exceed $5.0 million at any
time outstanding;
(12) Obligations in respect of performance and surety bonds and
completion guarantees provided by Nexstar Holdings or any of the Restricted
Subsidiaries in the ordinary course of business;
(13) Acquisition Debt of Nexstar Holdings or a Restricted Subsidiary if
(w) such Acquisition Debt is incurred within 270 days after the date on
which the related definitive acquisition agreement or LMA, as the case may
be, was entered into by Nexstar Holdings or such Restricted Subsidiary, (x)
the aggregate principal amount of such Acquisition Debt is no greater than
the aggregate principal amount of Acquisition Debt set forth in a notice
from Nexstar Holdings to the Trustee (an "Incurrence Notice") within ten
days after the date on which the related definitive acquisition agreement
or LMA, as the case may be, was entered into by Nexstar Holdings or such
Restricted Subsidiary, which notice shall be executed on Nexstar Holdings'
behalf by the chief financial officer of Nexstar Holdings in such capacity
and shall describe in reasonable detail the acquisition or LMA, as the case
may be, which such Acquisition Debt will be incurred to finance, (y) after
giving pro forma effect to the acquisition or LMA, as the case may be,
described in such Incurrence Notice, Nexstar Holdings or such Restricted
Subsidiary could have incurred such Acquisition Debt under the Indenture as
of the date upon which Nexstar Holdings delivers such Incurrence Notice to
the Trustee and (z) such Acquisition Debt is utilized solely to finance the
acquisition or LMA, as the case may be, described in such Incurrence Notice
(including to repay or refinance indebtedness or other obligations incurred
in connection with such acquisition or LMA, as the case may be, and to pay
related fees and expenses);
(14) guarantees by Nexstar Holdings or any Restricted Subsidiary of
Indebtedness of officers of Nexstar Holdings in an aggregate principal
amount not to exceed $3.0 million at any time outstanding;
(15) the incurrence by Nexstar Holdings or any of the Restricted
Subsidiaries of additional Indebtedness, including Attributable Debt
incurred after the date of the Indenture, in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any other Indebtedness incurred pursuant to this clause (15), not to exceed
$10.0 million; and
(16) the incurrence by Nexstar Holdings of additional notes in payment
of Liquidated Damages as required under the Registration Rights Agreement
(as defined in the Indenture).
For purposes of determining compliance with this "Incurrence of Indebtedness
and Issuance of Preferred Stock" covenant, in the event that an item of
proposed Indebtedness meets the criteria of more than one of the categories of
Permitted Debt described in clauses (1) through (16) above, or is entitled to
be incurred pursuant to the first paragraph of this covenant, Nexstar Holdings
will be permitted to classify such item of Indebtedness on the date of its
incurrence in any manner that complies with this covenant. In addition, Nexstar
Holdings may, at any time, change the classification of an item of
Indebtedness, or any portion thereof, to any other clause or to the first
paragraph of this covenant; provided that Nexstar Holdings or a Restricted
Subsidiary would be permitted to incur the item of Indebtedness, or portion of
the item of Indebtedness, under the other clause or the first paragraph of this
covenant, as the case may be, at the time of reclassification. Accrual of
interest, accretion or amortization of original issue discount and the
accretion of accreted value will not be deemed to be an incurrence of
Indebtedness for purposes of this covenant. Indebtedness under the Credit
Agreements outstanding on the date on which notes are first issued and
authenticated under the Indenture will be deemed to have been incurred on such
date in reliance on the exception provided by clause (1) of the definition of
Permitted Debt.
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Liens
Nexstar Holdings and Bastet/Mission will not, and will not permit any of
the Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Lien of any kind securing Indebtedness, Attributable
Debt, or trade payables on any asset now owned or hereafter acquired, except
Permitted Liens, unless all payments due under the Notes, the guarantees, and
the Indenture are secured on an equal and ratable basis with the obligation so
secured until such obligations are no longer secured by a Lien.
Dividend and Other Payment Restrictions Affecting Subsidiaries
Nexstar Holdings and Bastet/Mission will not, and will not permit any of
the Restricted Subsidiaries to, directly or indirectly, create or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
to Nexstar Holdings or any of the Restricted Subsidiaries, or with respect
to any other interest or participation in, or measured by, its profits, or
pay any indebtedness owed to Nexstar Holdings or any of the Restricted
Subsidiaries;
(2) make loans or advances to Nexstar Holdings or any of the Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to Nexstar Holdings or any
of the Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities as
in effect on the date of the Indenture and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of those agreements; provided that the amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive, taken as a whole, with
respect to such dividend and other payment restrictions than those
contained in those agreements on the date of the Indenture;
(2) the Indenture, the Notes and the Note Guarantee;
(3) applicable law, rule, regulation or order;
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by Nexstar Holdings or any of the Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so acquired,
provided that, in the case of Indebtedness, such Indebtedness was permitted
by the terms of the Indenture to be incurred;
(5) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(6) purchase money obligations (including Capital Lease Obligations) for
property acquired in the ordinary course of business that impose
restrictions on that property of the nature described in clause (3) of the
preceding paragraph;
(7) contracts for the sale of assets, including without limitation any
agreement for the sale or other disposition of a Subsidiary that restricts
distributions by that Subsidiary pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced;
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(9) Liens securing Indebtedness otherwise permitted to be incurred under
the provisions of the covenant described above under the caption "--Liens"
that limit the right of the debtor to dispose of the assets subject to such
Liens;
(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, assets sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business;
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
and
(12) agreements governing Indebtedness of the Restricted Subsidiaries
permitted to be incurred under the Indenture.
Merger, Consolidation or Sale of Assets
Nexstar Holdings may not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not Nexstar Holdings is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of Nexstar Holdings and the
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(1) either: (a) Nexstar Holdings is the surviving corporation; or (b)
the Person formed by or surviving any such consolidation or merger (if
other than Nexstar Holdings) or to which such sale, assignment, transfer,
conveyance or other disposition has been made is a corporation organized or
existing under the laws of the United States, any state of the United
States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than Nexstar Holdings) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made assumes
all the obligations of Nexstar Holdings under the Notes, the Indenture and
the registration rights agreement pursuant to agreements reasonably
satisfactory to the trustee;
(3) immediately after such transaction no Default or Event of Default
exists; and
(4) Nexstar Holdings or the Person formed by or surviving any such
consolidation or merger (if other than Nexstar Holdings), or to which such
sale, assignment, transfer, conveyance or other disposition has been made
(a) will, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had occurred
at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Leverage
Ratio test set forth in the first paragraph of the covenant described above
under the caption "--Incurrence of Indebtedness and Issuance of Preferred
Stock," or (b) would have a lower Leverage Ratio immediately after the
transaction, after giving pro forma effect to the transaction as if the
transaction had occurred at the beginning of the applicable four quarter
period, than Nexstar Holdings' Leverage Ratio immediately prior to the
transaction.
The preceding clause (4) will not prohibit: (a) a merger between Nexstar
Holdings and one of Nexstar Holdings' Wholly Owned Subsidiaries; (b) a merger
between Nexstar Holdings and one of Nexstar Holdings' Affiliates incorporated
solely for the purpose of reincorporating as a corporation; (c) a merger
between Nexstar Holdings and one of Nexstar Holdings' Affiliates incorporated
solely for the purpose of reincorporating in another state of the United
States; or (d) the Reorganization.
In addition, Nexstar Holdings may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Merger, Consolidation or Sale of
Assets" covenant will not apply to a sale, assignment, transfer, conveyance or
other disposition of assets between or among Nexstar Holdings and any of its
Wholly Owned Restricted Subsidiaries.
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Transactions with Affiliates
Nexstar Holdings and Bastet/Mission will not, and will not permit any of the
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less favorable to
Nexstar Holdings or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by Nexstar Holdings or
such Restricted Subsidiary with an unrelated Person; and
(2) Nexstar Holdings delivers to the trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$1.0 million, a resolution of the Board of Directors set forth in an
officers' certificate certifying that such Affiliate Transaction
complies with this covenant and that such Affiliate Transaction has
been approved by a majority of the disinterested members of the Board
of Directors; and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$7.5 million, an opinion as to the fairness to the Holders of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing.
The following items will not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
(1) any employment agreement entered into by Nexstar Holdings or any of
the Restricted Subsidiaries in the ordinary course of business of Nexstar
Holdings or such Restricted Subsidiary;
(2) transactions between or among Nexstar Holdings and/or the Restricted
Subsidiaries;
(3) loans, advances, payment of reasonable fees, indemnification of
directors, or similar arrangements to officers, directors, employees and
consultants who are not otherwise Affiliates of Nexstar Holdings;
(4) sales of Equity Interests (other than Disqualified Stock) of Nexstar
Holdings to Affiliates of Nexstar Holdings;
(5) transactions under any contract or agreement in effect on the date
of the Indenture as the same may be amended, modified or replaced from time
to time so long as any amendment, modification, or replacement is no less
favorable to Nexstar Holdings and the Restricted Subsidiaries than the
contract or agreement as in effect on the date of the Indenture; and
(6) Permitted Investments and Restricted Payments that are permitted by
the provisions of the Indenture described above under the caption "--
Restricted Payments."
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate fair market value of all outstanding Investments owned by Nexstar
Holdings and the Restricted Subsidiaries in the Subsidiary properly designated
will be deemed to be an Investment made as of the time of the designation and
will reduce the amount available for Restricted Payments under the first
paragraph of the covenant described above under the caption "--Restricted
Payments" or Permitted Investments, as determined by Nexstar Holdings. That
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of
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Directors may redesignate any Unrestricted Subsidiary to be a Restricted
Subsidiary if the redesignation would not cause a Default.
Sale and Leaseback Transactions
Nexstar Holdings and Bastet/Mission will not, and will not permit any of the
Restricted Subsidiaries to, enter into any sale and leaseback transaction;
provided that Nexstar Holdings or Bastet/Mission or a Restricted Subsidiary may
enter into a sale and leaseback transaction if:
(1) Nexstar Holdings or such Restricted Subsidiary could have (a)
incurred Indebtedness in an amount equal to the Attributable Debt relating
to such sale and leaseback transaction and (b) incurred a Lien to secure
such Indebtedness pursuant to the covenant described above under the
caption "--Liens;"
(2) the gross cash proceeds of that sale and leaseback transaction are
at least equal to the fair market value, as determined in good faith by the
Board of Directors and set forth in an officers' certificate delivered to
the trustee, of the property that is the subject of that sale and leaseback
transaction; and
(3) the transfer of assets in that sale and leaseback transaction is
permitted by, and Nexstar Holdings or such Restricted Subsidiary applies
the proceeds of such transaction in compliance with, the covenant described
above under the caption "--Repurchase at the Option of Holders--Asset
Sales."
Business Activities
Nexstar Holdings and Bastet/Mission will not, and will not permit any of the
Restricted Subsidiaries to, engage in any business other than Permitted
Businesses, except to such extent as would not be material to Nexstar Holdings
and the Restricted Subsidiaries taken as a whole.
Payments for Consent
Nexstar Holdings and Bastet/Mission will not, and will not permit any of
their Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of the Indenture or the Notes unless such consideration is offered
to be paid and is paid to all Holders of the Notes that consent, waive or agree
to amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement.
Reorganization
Nexstar Holdings and the Guarantor will consummate, or cause to be
consummated, the Reorganization on or prior to November 30, 2001.
Reports
Whether or not required by the Commission, so long as any Notes are
outstanding, Nexstar Holdings and will furnish to the Holders of Notes, within
the time periods specified in the Commission's rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and
10-K if Nexstar Holdings were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report on
the annual financial statements by Nexstar Holdings' certified independent
accountants; and
(2) all current reports that would be required to be filed with the
Commission on Form 8-K if Nexstar Holdings were required to file such
reports.
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If Nexstar Holdings has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of Nexstar
Holdings and the Restricted Subsidiaries separate from the financial condition
and results of operations of the Unrestricted Subsidiaries.
In addition, following the consummation of the exchange offer contemplated
by the registration rights agreement, whether or not required by the
Commission, Nexstar Holdings will file a copy of all of the information and
reports referred to in clauses (1) and (2) above with the Commission for public
availability within the time periods specified in the Commission's rules and
regulations (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. In addition, Nexstar Holdings has agreed that, for so long as any
Notes remain outstanding, it will furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Events of Default and Remedies
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes;
(2) default in payment when due of the principal of, or premium, if any,
on the Notes;
(3) failure by Nexstar Holdings to comply with the provisions described
under the caption "--Repurchase at the Option of Holders--Change of
Control;"
(4) failure by Nexstar Holdings for 30 days after notice from the
trustee or holders of at least 25% in principal amount (or, if prior to May
15, 2005, Accreted Value) of the Notes to comply with the provisions
described under the captions "--Repurchase at the Option of Holders--Asset
Sales," "--Certain Covenants--Restricted Payments," or "--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock;"
(5) failure by Nexstar Holdings or any of the Restricted Subsidiaries
for 60 days after notice from the trustee or holders of at least 25% in
principal amount (or, if prior to May 15, 2005, Accreted Value) of the
Notes to comply with any of the other agreements in the Indenture;
(6) default under any mortgage, Indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by Nexstar Holdings or any of the
Restricted Subsidiaries (or the payment of which is guaranteed by Nexstar
Holdings or any of the Restricted Subsidiaries) whether such Indebtedness
or guarantee now exists, or is created after the date of the Indenture, if
that default:
(a) is caused by a failure to pay principal of such Indebtedness at
the final stated maturity thereof or
(b) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
described under clauses (a) and (b) above, aggregates $5.0 million or
more;
(7) failure by Nexstar Holdings or any of the Restricted Subsidiaries to
pay final judgments aggregating in excess of $5.0 million not covered by
insurance, which judgments are not paid, discharged or stayed for a period
of 60 days;
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(8) at any time prior to the consummation of the Reorganization, except
as permitted by the Indenture, the Note Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or the Guarantor, or any Person
acting on behalf of the Guarantor, shall deny or disaffirm its obligations
under its Note Guarantee;
(9) certain events of bankruptcy or insolvency described in the
Indenture with respect to Nexstar Holdings or any of the Restricted
Subsidiaries;
In the event of a declaration of acceleration of the Notes because an Event
of Default has occurred and is continuing as a result of the acceleration of
any Indebtedness described in clause (6) of the preceding paragraph, the
declaration of acceleration of the Notes shall be automatically annulled if the
holders of any Indebtedness described in clause (6) of the preceding paragraph
have rescinded the declaration of acceleration in respect of the Indebtedness
within 30 days of the date of the declaration and if:
(1) the annulment of the acceleration of Notes would not conflict with
any judgment or decree of a court of competent jurisdiction; and
(2) all existing Events of Default, except nonpayment of principal or
interest on the Notes that became due solely because of the acceleration of
the Notes, have been cured or waived.
In the case of an Event of Default arising from certain events of bankruptcy
or insolvency, with respect to Nexstar Holdings, any Restricted Subsidiary that
is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, the principal amount (or,
if prior to May 15, 2005, Accreted Value) of all outstanding Notes will become
due and payable immediately without further action or notice. If any other
Event of Default occurs and is continuing, the trustee or the Holders of at
least 25% in principal amount (or, if prior to May 15, 2005, Accreted Value) of
the then outstanding Notes may declare the principal amount (or, if prior to
May 15, 2005, Accreted Value) of all the Notes to be due and payable
immediately.
Holders of the Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount (or, if prior to May 15, 2005, Accreted Value) of
the then outstanding Notes may direct the trustee in its exercise of any trust
or power. The trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default if it determines that withholding Notes
is in their interest, except a Default or Event of Default relating to the
payment of principal or interest or Liquidated Damages.
The Holders of a majority in aggregate principal amount (or, if prior to May
15, 2005, Accreted Value) of the Notes then outstanding by notice to the
trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest or Liquidated
Damages on, or the principal of, the Notes.
In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of Nexstar Holdings with
the intention of avoiding payment of the premium that Nexstar Holdings would
have had to pay if Nexstar Holdings then had elected to redeem the Notes
pursuant to the optional redemption provisions of the Indenture, an equivalent
premium will also become and be immediately due and payable to the extent
permitted by law upon the acceleration of the Notes. If an Event of Default
occurs prior to, by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of Nexstar Holdings with the intention of avoiding the
prohibition on redemption of the Notes prior to May 15, 2005, then the premium
specified in the Indenture will also become immediately due and payable to the
extent permitted by law upon the acceleration of the Notes.
Nexstar Holdings is required to deliver to the trustee annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, Nexstar Holdings is required to deliver to the trustee a
statement specifying such Default or Event of Default.
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No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of Nexstar
Holdings or the Guarantor, as such, will have any liability for any obligations
of Nexstar Holdings or the Guarantor under the Notes, the Indenture, the Note
Guarantee, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
Legal Defeasance and Covenant Defeasance
Nexstar Holdings may, at its option and at any time, elect to have all of
its obligations discharged with respect to the outstanding Notes and all
obligations of the Guarantor discharged with respect to the Note Guarantee
("Legal Defeasance") except for:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium and Liquidated Damages,
if any, on such Notes when such payments are due from the trust referred to
below;
(2) Nexstar Holdings' obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost
or stolen Notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the trustee,
and Nexstar Holdings' and the Guarantor's obligations in connection
therewith; and
(4) the Legal Defeasance provisions of the Indenture.
In addition, Nexstar Holdings may, at its option and at any time, elect to
have the obligations of Nexstar Holdings and the Guarantor released with
respect to certain covenants that are described in the Indenture ("Covenant
Defeasance") and thereafter any omission to comply with those covenants will
not constitute a Default or Event of Default with respect to the Notes. In the
event Covenant Defeasance occurs, certain events (not including non-payment,
bankruptcy, receivership, rehabilitation and insolvency events) described under
"Events of Default and Remedies" will no longer constitute an Event of Default
with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) Nexstar Holdings must irrevocably deposit with the trustee, in
trust, for the benefit of the Holders of the Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S.
dollars and non-callable Government Securities, in amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, or interest and premium and
Liquidated Damages, if any, on the outstanding Notes on the stated maturity
or on the applicable redemption date, as the case may be, and Nexstar
Holdings must specify whether the Notes are being defeased to maturity or
to a particular redemption date;
(2) in the case of Legal Defeasance, Nexstar Holdings has delivered to
the trustee an opinion of counsel reasonably acceptable to the trustee
confirming that (a) Nexstar Holdings has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the date
of the Indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such opinion
of counsel will confirm that, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, Nexstar Holdings has delivered
to the trustee an opinion of counsel reasonably acceptable to the trustee
confirming that the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance
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and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(4) no Default or Event of Default has occurred and is continuing on the
date of such deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit);
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the Indenture) to which Nexstar
Holdings or any of the Restricted Subsidiaries is a party or by which
Nexstar Holdings or any of the Restricted Subsidiaries is bound;
(6) Nexstar Holdings must deliver to the trustee an officers'
certificate stating that the deposit was not made by Nexstar Holdings with
the intent of preferring the Holders of notes over the other creditors of
Nexstar Holdings with the intent of defeating, hindering, delaying or
defrauding creditors of Nexstar Holdings or others; and
(7) Nexstar Holdings must deliver to the trustee an officers'
certificate and an opinion of counsel, which opinion may be subject to
customary assumptions and exclusions, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance have
been complied with.
Amendment, Supplement and Waiver
Except as provided in the next three succeeding paragraphs, the Indenture or
the Notes may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the Notes (or, prior to May 15, 2005,
the Accreted Value of the Notes) then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes), and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the Notes (or, prior to May 15,
2005, the Accreted Value of the Notes) then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note or
alter the provisions with respect to the scheduled redemption of the Notes
(other than provisions relating to the covenants described above under the
caption "--Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest on any
Note;
(4) waive a Default or Event of Default in the payment of principal of,
or interest or premium, or Liquidated Damages, if any, on the Notes (except
a rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount (or, if prior to May 15, 2005,
Accreted Value) of the Notes and a waiver of the payment default that
resulted from such acceleration);
(5) make any Note payable in money other than that stated in the Notes;
(6) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of, or interest or premium or Liquidated Damages, if
any, on the Notes;
(7) waive a redemption payment with respect to any Note (other than a
payment required by one of the covenants described above under the caption
"--Repurchase at the Option of Holders"); or
(8) make any change in the preceding amendment and waiver provisions.
103
In addition, any amendment to, or waiver of, the provisions of the Indenture
relating to the release of the Guarantor from any of its obligations under its
Note Guarantee or the Indenture, except in accordance with the terms of the
Indenture will require the consent of the Holders of at least 75% in aggregate
principal amount (or, if prior to May 15, 2005, Accreted Value) of Notes then
outstanding.
Notwithstanding the preceding, without the consent of any Holder of Notes,
Nexstar Holdings, the Guarantor and the trustee may amend or supplement the
Indenture or the Notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to provide for the assumption of Nexstar Holdings' obligations to
Holders of Notes in the case of a merger or consolidation or sale of all or
substantially all of Nexstar Holdings' assets;
(4) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the
legal rights under the Indenture of any such Holder; or
(5) to comply with requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act;
(6) to provide for the issuance of additional Notes in accordance with
the limitations set forth in the Indenture as of its date; or
(7) to allow the Guarantor to execute a Note Guarantee with respect to
the Notes.
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further effect as
to all Notes issued thereunder, when:
(1) either:
(a) all Notes that have been authenticated, except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose
payment money has been deposited in trust and thereafter repaid to
Nexstar Holdings, have been delivered to the trustee for cancellation;
or
(b) all Notes that have not been delivered to the trustee for
cancellation have become due and payable by reason of the mailing of a
notice of redemption or otherwise or will become due and payable within
one year and Nexstar Holdings or the Guarantor has irrevocably
deposited or caused to be deposited with the trustee as trust funds in
trust solely for the benefit of the Holders, cash in U.S. dollars, non-
callable Government Securities, or a combination of cash in U.S.
dollars and non-callable Government Securities, in amounts as will be
sufficient without consideration of any reinvestment of interest, to
pay and discharge the entire indebtedness on the Notes not delivered to
the trustee for cancellation for principal, premium and Liquidated
Damages, if any, and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default has occurred and is continuing on the
date of the deposit or will occur as a result of the deposit and the
deposit will not result in a breach or violation of, or constitute a
default under, any other instrument to which Nexstar Holdings or any
Restricted Subsidiary is a party or by which Nexstar Holdings or any
Restricted Subsidiary is bound;
(3) Nexstar Holdings or the Guarantor has paid or caused to be paid all
sums payable by it under the Indenture; and
(4) Nexstar Holdings has delivered irrevocable instructions to the
trustee under the Indenture to apply the deposited money toward the payment
of the Notes at maturity or the redemption date, as the case may be.
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In addition, Nexstar Holdings must deliver an officers' certificate and an
opinion of counsel, which opinion may be subject to customary assumptions and
exclusions, to the trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Concerning the Trustee
If the trustee becomes a creditor of Nexstar Holdings or the Guarantor, the
Indenture limits its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security
or otherwise. The trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the Commission for permission to continue or
resign.
The Holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
occurs and is continuing, the trustee will be required, in the exercise of its
power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
Holder of Notes, unless such Holder has offered to the trustee security and
indemnity satisfactory to it against any loss, liability or expense.
Additional Information
Anyone who receives this offering memorandum may obtain a copy of the
Indenture and registration rights agreement without charge by writing to
Nexstar Finance Holdings, L.L.C., 200 Abington Executive Park, Suite 201,
Clarks Summit, Pennsylvania 18411, Attention: chief financial officer.
Book-Entry, Delivery and Form
The Notes are being offered and sold to qualified institutional buyers in
reliance on Rule 144A ("Rule 144A Notes"). Notes also may be offered and sold
in offshore transactions in reliance on Regulation S ("Regulation S Notes").
Except as set forth below, Notes will be issued in registered, global form in
minimum denominations of $1,000 and integral multiples of $1,000 in excess of
$1,000. Notes will be issued at the closing of this offering only against
payment in immediately available funds.
Rule 144A Notes initially will be represented by one or more Notes in
registered, global form without interest coupons (collectively, the "Rule 144A
Global Notes"). Regulation S Notes initially will be represented by one or more
temporary Notes in registered, global form without interest coupons
(collectively, the "Regulation S Temporary Global Notes"). The Rule 144A Global
Notes and the Regulation S Temporary Global Notes will be deposited upon
issuance with the trustee as custodian for The Depository Trust Company
("DTC"), in New York, New York, and registered in the name of DTC or its
nominee, in each case for credit to an account of a direct or indirect
participant in DTC as described below. Through and including the 40th day after
the later of the commencement of this offering and the closing of this offering
(such period through and including such 40th day, the "Restricted Period"),
beneficial interests in the Regulation S Temporary Global Notes may be held
only through the Euroclear System ("Euroclear") and Clearstream Banking, S.A.
("Clearstream") (as indirect participants in DTC), unless transferred to a
person that takes delivery through a Rule 144A Global Note in accordance with
the certification requirements described below. Within a reasonable time period
after the expiration of the Restricted Period, the Regulation S Temporary
Global Notes will be exchanged for one or more permanent Notes in registered,
global form without interest coupons (collectively, the "Regulation S Permanent
Global Notes" and, together with the Regulation S Temporary Global Notes, the
"Regulation S Global Notes" (the Regulation S Global Notes and Rule 144A Global
Notes, collectively being the "Global Notes")) upon delivery to DTC of
certification of compliance with the transfer restrictions applicable to the
Notes and pursuant to Regulation S as provided in the Indenture. Beneficial
interests in the
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Rule 144A Global Notes may not be exchanged for beneficial interests in the
Regulation S Global Notes at any time except in the limited circumstances
described below. See "--Exchanges between Regulation S Notes and Rule 144A
Notes."
Except as set forth below, the Global Notes may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for
Notes in certificated form except in the limited circumstances described below.
See "--Exchange of Book-Entry Notes for Certificated Notes." Except in the
limited circumstances described below, owners of beneficial interests in the
Global Notes will not be entitled to receive physical delivery of Notes in
certificated form.
Rule 144A Notes (including beneficial interests in the Rule 144A Global
Notes) will be subject to certain restrictions on transfer and will bear a
restrictive legend as described under "Notice to Investors." Regulation S Notes
will also bear the legend as described under "Notice to Investors." In
addition, transfers of beneficial interests in the Global Notes will be subject
to the applicable rules and procedures of DTC and its direct or indirect
participants (including, if applicable, those of Euroclear and Clearstream),
which may change from time to time.
Depository Procedures
The following description of the operations and procedures of DTC, Euroclear
and Clearstream are provided solely as a matter of convenience. These
operations and procedures are solely within the control of the respective
settlement systems and are subject to changes by them. Nexstar Holdings takes
no responsibility for these operations and procedures and urges investors to
contact the system or their participants directly to discuss these matters.
DTC has advised Nexstar Holdings that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic book-
entry changes in accounts of its Participants. The Participants include
securities brokers and dealers (including the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations. Access to
DTC's system is also available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "Indirect Participants"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interests in, and transfers of ownership
interests in, each security held by or on behalf of DTC are recorded on the
records of the Participants and Indirect Participants.
DTC has also advised Nexstar Holdings that, pursuant to procedures
established by it:
(1) upon deposit of the Global Notes, DTC will credit the accounts of
Participants designated by the Initial Purchasers with portions of the
principal amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on,
and the transfer of ownership of these interests will be effected only
through, records maintained by DTC (with respect to the Participants) or by
the Participants and the Indirect Participants (with respect to other
owners of beneficial interest in the Global Notes).
Investors in the Rule 144A Global Notes who are Participants in DTC's system
may hold their interests therein directly through DTC. Investors in the Rule
144A Global Notes who are not Participants may hold their interests therein
indirectly through organizations (including Euroclear and Clearstream) which
are Participants in such system. Investors in the Regulation S Global Notes
must initially hold their interests therein through Euroclear or Clearstream,
if they are participants in such systems, or indirectly through organizations
that are participants in such systems. After the expiration of the Restricted
Period (but not earlier), investors may also hold interests in the Regulation S
Global Notes through Participants in the DTC system other than Euroclear and
Clearstream. Euroclear and Clearstream will hold interests in the Regulation S
Global Notes on behalf of
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their participants through customers' securities accounts in their respective
names on the books of their respective depositories, which are Morgan Guaranty
Trust Company of New York, Brussels office, as operator of Euroclear, and
Citibank, N.A., as operator of Clearstream. All interests in a Global Note,
including those held through Euroclear or Clearstream, may be subject to the
procedures and requirements of DTC. Those interests held through Euroclear or
Clearstream may also be subject to the procedures and requirements of such
systems. The laws of some states require that certain Persons take physical
delivery in definitive form of securities that they own. Consequently, the
ability to transfer beneficial interests in a Global Note to such Persons will
be limited to that extent. Because DTC can act only on behalf of Participants,
which in turn act on behalf of Indirect Participants, the ability of a Person
having beneficial interests in a Global Note to pledge such interests to
Persons that do not participate in the DTC system, or otherwise take actions in
respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests.
Except as described below, owners of interest in the Global Notes will not
have Notes registered in their names, will not receive physical delivery of
Notes in certificated form and will not be considered the registered owners or
"Holders" thereof under the Indenture for any purpose.
Payments in respect of the principal of, and interest and premium and
Liquidated Damages, if any, on a Global Note registered in the name of DTC or
its nominee will be payable to DTC in its capacity as the registered Holder
under the Indenture. Under the terms of the Indenture, Nexstar Holdings and the
trustee will treat the Persons in whose names the Notes, including the Global
Notes, are registered as the owners of the Notes for the purpose of receiving
payments and for all other purposes. Consequently, neither Nexstar Holdings,
the trustee nor any agent of Nexstar Holdings or the trustee has or will have
any responsibility or liability for:
(1) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interest in the Global Notes or for maintaining, supervising or
reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the
Global Notes; or
(2) any other matter relating to the actions and practices of DTC or any
of its Participants or Indirect Participants.
DTC has advised Nexstar Holdings that its current practice, upon receipt of
any payment in respect of securities such as the notes (including principal and
interest), is to credit the accounts of the relevant Participants with the
payment on the payment date unless DTC has reason to believe it will not
receive payment on such payment date. Each relevant Participant is credited
with an amount proportionate to its beneficial ownership of an interest in the
principal amount of the relevant security as shown on the records of DTC.
Payments by the Participants and the Indirect Participants to the beneficial
owners of Notes will be governed by standing instructions and customary
practices and will be the responsibility of the Participants or the Indirect
Participants and will not be the responsibility of DTC, the trustee or Nexstar
Holdings. Neither Nexstar Holdings nor the trustee will be liable for any delay
by DTC or any of its Participants in identifying the beneficial owners of the
Notes, and Nexstar Holdings and the trustee may conclusively rely on and will
be protected in relying on instructions from DTC or its nominee for all
purposes.
Subject to the transfer restrictions set forth under "Notice to Investors,"
transfers between Participants in DTC will be effected in accordance with DTC's
procedures, and will be settled in same-day funds, and transfers between
participants in Euroclear and Clearstream will be effected in accordance with
their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the Notes
described herein, cross-market transfers between the Participants in DTC, on
the one hand, and Euroclear or Clearstream participants, on the other hand,
will be effected through DTC in accordance with DTC's rules on behalf of
Euroclear or Clearstream, as the case may be, by its respective depositary;
however, such cross-market transactions will require delivery of instructions
to Euroclear or Clearstream, as the case may be, by the counterparty in such
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system in accordance with the rules and procedures and within the established
deadlines (Brussels time) of such system. Euroclear or Clearstream, as the
case may be, will, if the transaction meets its settlement requirements,
deliver instructions to its respective depositary to take action to effect
final settlement on its behalf by delivering or receiving interests in the
relevant Global Note in DTC, and making or receiving payment in accordance
with normal procedures for same-day funds settlement applicable to DTC.
Euroclear participants and Clearstream participants may not deliver
instructions directly to the depositories for Euroclear or Clearstream.
DTC has advised Nexstar Holdings that it will take any action permitted to
be taken by a Holder of Notes only at the direction of one or more
Participants to whose account DTC has credited the interests in the Global
Notes and only in respect of such portion of the aggregate principal amount of
the Notes as to which such Participant or Participants has or have given such
direction. However, if there is an Event of Default under the Notes, DTC
reserves the right to exchange the Global Notes for legended Notes in
certificated form, and to distribute such Notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the Rule 144A Global Notes
and the Regulation S Global Notes among participants in DTC, Euroclear and
Clearstream, they are under no obligation to perform or to continue to perform
such procedures, and may discontinue such procedures at any time. Neither
Nexstar Holdings nor the trustee nor any of their respective agents will have
any responsibility for the performance by DTC, Euroclear or Clearstream or
their respective participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for definitive Notes in registered
certificated form ("Certificated Notes") if:
(1) DTC (a) notifies Nexstar Holdings that it is unwilling or unable to
continue as depositary for the Global Notes and Nexstar Holdings fails to
appoint a successor depositary or (b) has ceased to be a clearing agency
registered under the Exchange Act;
(2) Nexstar Holdings, at its option, notifies the trustee in writing
that it elects to cause the issuance of the Certificated Notes; or
(3) there has occurred and is continuing a Default or Event of Default
with respect to the Notes.
In addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon prior written notice given to the trustee by or on
behalf of DTC in accordance with the Indenture. In all cases, Certificated
Notes delivered in exchange for any Global Note or beneficial interests in
Global Notes will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the depositary (in accordance with
its customary procedures) and will bear the applicable restrictive legend
referred to in "Notice to Investors," unless that legend is not required by
applicable law.
Exchange of Certificated Notes for Global Notes
Certificated Notes may not be exchanged for beneficial interests in any
Global Note unless the transferor first delivers to the trustee a written
certificate (in the form provided in the Indenture) to the effect that such
transfer will comply with the appropriate transfer restrictions applicable to
such Notes. See "Notice to Investors."
Exchanges Between Regulation S Notes and Rule 144A Notes
Prior to the expiration of the Restricted Period, beneficial interests in
the Regulation S Global Note may be exchanged for beneficial interests in the
Rule 144A Global Note only if:
(1) such exchange occurs in connection with a transfer of the Notes
pursuant to Rule 144A; and
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(2) the transferor first delivers to the trustee a written certificate
(in the form provided in the indenture) to the effect that the Notes are
being transferred to a Person:
(a) who the transferor reasonably believes to be a qualified
institutional buyer within the meaning of Rule 144A;
(b) purchasing for its own account or the account of a qualified
institutional buyer in a transaction meeting the requirements of Rule
144A; and
(c) in accordance with all applicable securities laws of the states
of the United States and other jurisdictions.
Beneficial interest in a Rule 144A Global Note may be transferred to a
Person who takes delivery in the form of an interest in the Regulation S Global
Note, whether before or after the expiration of the Restricted Period, only if
the transferor first delivers to the trustee a written certificate (in the form
provided in the Indenture) to the effect that such transfer is being made in
accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available) and
that, if such transfer occurs prior to the expiration of the Restricted Period,
the interest transferred will be held immediately thereafter through Euroclear
or Clearstream.
Transfers involving exchanges of beneficial interests between the Regulation
S Global Notes and the Rule 144A Global Notes will be effected in DTC by means
of an instruction originated by the trustee through the DTC Deposit/Withdraw at
Custodian system. Accordingly, in connection with any such transfer,
appropriate adjustments will be made to reflect a decrease in the principal
amount of the Regulation S Global Note and a corresponding increase in the
principal amount of the Rule 144A Global Note or vice versa, as applicable. Any
beneficial interest in one of the Global Notes that is transferred to a Person
who takes delivery in the form of an interest in the other Global Note will,
upon transfer, cease to be an interest in such Global Note and will become an
interest in the other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions and other procedures applicable to beneficial
interest in such other Global Note for so long as it remains such an interest.
The policies and practices of DTC may prohibit transfers of beneficial
interests in the Regulation S Global Note prior to the expiration of the
Restricted Period.
Payments; Certifications by Holders of the Regulation S Temporary Global Notes
A holder of a beneficial interest in the Regulation S Temporary Global Notes
must provide Euroclear or Clearstream, as the case may be, with a certificate
in the form required by the Indenture certifying that the beneficial owner of
the interest in the Regulation S Temporary Global Notes is either not a United
States Person (as defined below) or has purchased such interest in a
transaction that is exempt from the registration requirements under the
Securities Act (the "Regulation S Certificate"), and Euroclear or Clearstream,
as the case may be, must provide to the trustee (or the paying agent if other
than the trustee) a certificate in the form required by the indenture, prior to
any exchange of such beneficial interest for a beneficial interest in the
Regulation S Permanent Global Notes.
"U.S. Person" means
(1) any individual resident in the United States;
(2) any partnership or corporation organized or incorporated under the
laws of the United States;
(3) any estate of which an executor or administrator is a United States
Person (other than an estate governed by foreign law and of which at least
one executor or administrator is a non-U.S. Person who has sole or shared
investment discretion with respect to its assets);
(4) any trust of which any trustee is a United States Person (other than
a trust of which at least one trustee is a non-U.S. Person who has sole or
shared investment discretion with respect to its assets and no beneficiary
of the trust (and no settler if the trust is revocable) is a United States
Person);
109
(5) any agency or branch of a foreign entity located in the United
States;
(6) any non-discretionary or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a
United States Person;
(7) any discretionary or similar account (other than an estate or trust)
held by a dealer of other fiduciary organized, incorporated or (if an
individual) resident in the United States (other than such an account held
for the benefit or account of a non-U.S. Person);
(8) any partnership or corporation organized or incorporated under the
laws of a foreign jurisdiction and formed by a United States Person
principally for the purpose of investing in securities not registered under
the Securities Act (unless it is organized or incorporated, and owned, by
accredited investors within the meaning of Rule 501(a) under the Securities
Act who are not natural persons, estates or trusts); provided, however,
that the term "U.S. Person" will not include:
(a) a branch or agency of a United States Person that is located and
operating outside the United States for valid business purposes as a
locally regulated branch or agency engaged in the banking or insurance
business;
(b) any employee benefit plan established and administered in
accordance with the law, customary practices and documentation of a
foreign country; and
(c) the international organizations set forth in Section 902(o)(7)
of Regulation S under the Securities Act and any other similar
international organizations, and their agencies, affiliates and pension
plans.
Same Day Settlement and Payment
Nexstar Holdings will make payments in respect of the Notes represented by
the Global Notes (including principal, premium, if any, interest and Liquidated
Damages, if any) by wire transfer of immediately available funds to the
accounts specified by the Global Note Holder. Nexstar Holdings will make all
payments of principal, interest and premium and Liquidated Damages, if any,
with respect to Certificated Notes by wire transfer of immediately available
funds to the accounts specified by the Holders of the Certificated Notes or, if
no such account is specified, by mailing a check to each such Holder's
registered address. The Notes represented by the Global Notes are expected to
be eligible to trade in the PORTAL market and to trade in DTC's Same-Day Funds
Settlement System, and any permitted secondary market trading activity in such
Notes will, therefore, be required by DTC to be settled in immediately
available funds. Nexstar Holdings expects that secondary trading in any
Certificated Notes will also be settled in immediately available funds.
Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a Global Note from a
Participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Clearstream participant, during the securities
settlement processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC. DTC has advised
Nexstar Holdings that cash received in Euroclear or Clearstream as a result of
sales of interests in a Global Note by or through a Euroclear or Clearstream
participant to a Participant in DTC will be received with value on the
settlement date of DTC but will be available in the relevant Euroclear or
Clearstream cash account only as of the business day for Euroclear or
Clearstream following DTC's settlement date.
Certain Definitions
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"ABRY" means ABRY Partners, LLC.
"ABRY III" means ABRY Broadcast Partners III, L.P., a Delaware limited
partnership.
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"ABRY Subordinated Debt" means indebtedness of Nexstar or any of its
Subsidiaries (other than Nexstar Finance and the Restricted Subsidiaries) in
principal amount not to exceed $30.0 million in the aggregate at any time
outstanding (a) that is owed, directly or indirectly, to ABRY III, ABRY or any
other investment fund controlled by ABRY and the proceeds of which are
contributed to the equity capital of Nexstar Finance, (b) which shall provide
that: (i) no payments of principal (or premium, if any) or interest on or
otherwise due in respect of such Indebtedness may be permitted for so long as
any Default or Event of Default exists and (ii) no payments in respect of
interest, premium or other amounts (other than principal) shall be payable in
securities or instruments of Nexstar Finance or any Restricted Subsidiary,
cash or other property and (c) that shall automatically convert into common
equity of Nexstar or any of its Subsidiaries (other than Nexstar Finance or
any Restricted Subsidiary) within 18 months of the date of issuance thereof,
unless refinanced.
"Accreted Value" means, as of any date of determination prior to May 15,
2005, the sum of (a) the initial offering price of each Note and (b) that
portion of the excess of the principal amount at maturity of each Note over
such initial offering price as shall have been accreted thereon through such
date, such amount to be so accreted on a daily basis at the rate of 16% per
annum of the initial offering price of the Notes, compounded semi-annually on
each May 15 and November 15 from the date of issuance of the Notes through the
date of determination.
"Acquisition Debt" means Indebtedness the proceeds of which are utilized
solely to (x) acquire all or substantially all of the assets or a majority of
the Voting Stock of an existing television broadcasting business franchise or
station or (y) finance an LMA (including to repay or refinance indebtedness or
other obligations incurred in connection with such acquisition or LMA, as the
case may be, and to pay related fees and expenses).
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or
in contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise. For purposes of this definition, the
terms "controlling," "controlled by" and "under common control with" have
correlative meanings.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than in the ordinary course of business; provided that the
sale, conveyance or other disposition of all or substantially all of the
assets of Nexstar Holdings and the Restricted Subsidiaries taken as a whole
will be governed by the provisions of the Indenture described above under
the caption "--Repurchase at the Option of Holders--Change of Control"
and/or the provisions described above under the caption "--Certain
Covenants--Merger, Consolidation or Sale of Assets" and not by the
provisions of the Asset Sale covenant; and
(2) the issuance of Equity Interests in any Restricted Subsidiary or
Bastet/Mission or the sale of Equity Interests in any Restricted Subsidiary
of Nexstar Holdings or Bastet/Mission.
Notwithstanding the preceding, the following items will not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that
involves assets or Equity Interests having a fair market value of $1.0
million or less;
111
(2) a transfer of assets between or among Nexstar Holdings and the
Restricted Subsidiaries;
(3) an issuance of Equity Interests to Nexstar Holdings or to another
Restricted Subsidiary;
(4) the sale or lease of equipment, inventory, accounts receivable or
other assets in the ordinary course of business;
(5) the sale and leaseback of any assets within 90 days of the
acquisition thereof;
(6) foreclosures on assets;
(7) the disposition of equipment no longer used or useful in the
business of such entity;
(8) the sale or other disposition of cash or Cash Equivalents;
(9) a Restricted Payment or Permitted Investment that is permitted by
the covenant described above under the caption "--Certain Covenants--
Restricted Payments;" and
(10) the licensing of intellectual property.
"Attributable Debt" in respect of a sale and leaseback transaction means, at
the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bastet/Mission" means Bastet Broadcasting, Inc. and Mission Broadcasting of
Wichita Falls, Inc.
"Bastet/Mission Entities" means Bastet/Mission and any Person that is a
direct or indirect Subsidiary of Bastet/Mission.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Board of Directors" means, as to any Person, the board of directors of such
Person (or if such Person is a limited liability company, the board of managers
of such Person) or similar governing body or any duly authorized committee
thereof.
"Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality of the United
States government (provided that the full faith and credit of
112
the United States is pledged in support of those securities) having
maturities of not more than one year from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities
of one year or less from the date of acquisition, bankers' acceptances with
maturities not exceeding one year and overnight bank deposits, in each
case, with (x) any lender party to the Credit Agreements, (y) any domestic
commercial bank having capital and surplus in excess of $500.0 million and
a Thomson Bank Watch Rating of "B" or better or (z) Brown Brothers
Harriman;
(4) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper having one of the two highest ratings obtainable
from Moody's Investors Service, Inc. or Standard & Poor's Rating Services
and in each case maturing within one year after the date of acquisition;
and
(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of Nexstar Holdings and the Restricted Subsidiaries
taken as a whole to any "person" (as that term is used in Section 13(d)(3)
of the Exchange Act) other than a Principal or a Related Party of a
Principal;
(2) the adoption of a plan relating to the liquidation or dissolution of
Nexstar Holdings;
(3) the consummation of any transaction (including, without limitation,
any merger or consolidation) the result of which is that any "person" (as
defined above), other than the Principals and their Related Parties,
becomes the Beneficial Owner, directly or indirectly, of more than 50% of
the Voting Stock of Nexstar Holdings, measured by voting power rather than
number of shares; or
(4) the first day on which a majority of the members of the Board of
Directors of Nexstar Holdings are not Continuing Directors.
"Consolidated Cash Flow" means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss realized
by such Person or any of the Restricted Subsidiaries in connection with (a)
an Asset Sale or (b) the disposition of any securities by such Person or
any of the Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of the Restricted Subsidiaries, to the
extent such losses were deducted in computing such Consolidated Net Income;
plus
(2) provision for taxes based on income or profits of such Person and
the Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
plus
(3) Consolidated Interest Expense of such Person and the Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received pursuant
to Hedging Obligations), to the extent that any such expense was deducted
in computing such Consolidated Net Income; plus
113
(4) depreciation, amortization (including amortization of goodwill and
other intangibles and amortization of programming costs but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash expenses (excluding any such non-cash expense to the extent
that it represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and the Restricted Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash expenses
were deducted in computing such Consolidated Net Income; plus
(5) any extraordinary or non-recurring expenses of such Person and the
Restricted Subsidiaries for such period to the extent that such charges
were deducted in computing such Consolidated Net Income; plus
(6) any non-capitalized transaction costs incurred in connection with
actual or proposed financings, acquisitions or transactions; minus
(7) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business; minus
(8) programming rights payments made during such period,
in each case, on a consolidated basis and determined in accordance with
GAAP.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication of:
(1) the consolidated interest expense of such Person and the Restricted
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net payments (if
any) pursuant to Hedging Obligations);
(2) the consolidated interest expense of such Person and the Restricted
Subsidiaries that was capitalized during such period;
(3) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or any of the Restricted Subsidiaries or secured
by a Lien on assets of such Person or any of the Restricted Subsidiaries
(whether or not such guarantee or Lien is called upon); and
(4) the product of:
(a) all cash dividend payments (and non-cash dividend payments in
the case of a Person that is a Restricted Subsidiary) on any series of
preferred stock of such Person or any of the Restricted Subsidiaries,
times
(b) a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in each
case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and the Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting will
be included only to the extent of the amount of dividends or distributions
paid in cash to the specified Person or a Restricted Subsidiary of the
Person;
(2) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition will be
excluded; and
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(3) the cumulative effect of a change in accounting principles will be
excluded.
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors of Nexstar Holdings who:
(1) was a member of such Board of Directors on the date of the
Indenture;
(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election; or
(3) was nominated by Principals beneficially owning at least 20% of the
Voting Stock of Nexstar Holdings.
"Control Investment Affiliate" means any Person, any other Person which (a)
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person and (b) is organized by such Person primarily for the
purpose of making equity or debt investments in one or more companies or a
Person controlled by such Person. For purposes of this definition, "control" of
a Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.
"Credit Agreements" means (a) that certain Credit Agreement, dated as of
January 12, 2001, by and among Nexstar Finance, the guarantors party thereto,
Bank of America, N.A., as administrative agent and the lenders party thereto,
providing for up to $232.0 million aggregate principal amount of credit
borrowings, including any related notes, guarantees, collateral documents,
instruments and agreements executed in case as amended, modified, renewed,
refunded, replaced or refinanced from time to time (including any increase in
principal amount whether or not with the same lenders or agents), and (b) that
certain Credit Agreement, dated as of January 12, 2001, by and among
Bastet/Mission, the guarantors party thereto, Bank of America, N.A., as
administrative agent and the lenders party thereto, providing for up to $43.0
million aggregate principal amount of credit borrowings, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time (including any increase in principal
amount).
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreements) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.
"Default" means any event that is, or with the passage of time or the giving
of notice or both would be, an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require Nexstar Holdings to
repurchase such Capital Stock upon the occurrence of a change of control or an
asset sale will not constitute Disqualified Stock if the terms of such Capital
Stock provide that Nexstar Holdings may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with the covenant described above under the caption "--Certain
Covenants--Restricted Payments."
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"Domestic Subsidiary" means any Subsidiary that was formed under the laws
of the United States or any state of the United States or the District of
Columbia.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering of Capital Stock (other than
Disqualified Stock) of (x) Nexstar Holdings or (y) Nexstar or one of its
Subsidiaries (other than a Subsidiary of Nexstar Finance), the net proceeds of
which are contributed to Nexstar Holdings, in each case to any Person that is
not an Affiliate of Nexstar Holdings, which offering results in at least $35.0
million of net aggregate proceeds to Nexstar Holdings.
"Existing Indebtedness" means Indebtedness of Nexstar Holdings and the
Restricted Subsidiaries (other than Indebtedness under the Credit Agreements)
in existence on the date of the Indenture, until such amounts are repaid.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the Indenture.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantor" means Nexstar and its permitted successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates, currency rates or commodity prices.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price
of any property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) representing any Hedging Obligations,
If and to the extent any of the preceding items (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of the specified Person prepared in accordance with GAAP. In addition,
the term "Indebtedness" includes all Indebtedness of others secured by a Lien
on any asset of the
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specified Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the Guarantee by the
specified Person of any indebtedness of any other Person; provided that
Indebtedness shall not include our pledge of the Capital Stock of one of our
Unrestricted Subsidiaries to secure Non-Recourse Debt of that Unrestricted
Subsidiary.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any interest
on the Indebtedness that is more than 30 days past due, in the case of any
other Indebtedness.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If Nexstar
Holdings or any Restricted Subsidiary sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary such that, after
giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary, Nexstar Holdings will be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Restricted Subsidiary not sold or
disposed of in an amount determined as provided in the final paragraph of the
covenant described above under the caption "--Certain Covenants--Restricted
Payments."
"Leverage Ratio" means the ratio of (i) the aggregate outstanding amount of
Indebtedness of each of Nexstar Holdings and the Restricted Subsidiaries as of
the last day of the most recently ended fiscal quarter for which financial
statements are internally available as of the date of calculation on a combined
consolidated basis in accordance with GAAP (subject to the terms described in
the next paragraph) plus the aggregate liquidation preference of all
outstanding Disqualified Stock of Nexstar Holdings and preferred stock of the
Restricted Subsidiaries (except preferred stock issued to Nexstar Holdings or
any of the Restricted Subsidiaries) as of the last day of such fiscal quarter
to (ii) the aggregate Consolidated Cash Flow of Nexstar Holdings for the last
four full fiscal quarters for which financial statements are internally
available ending on or prior to the date of determination (the "Reference
Period").
For purposes of this definition, (i) the amount of Indebtedness which is
issued at a discount shall be deemed to be the accreted value of such
Indebtedness as of the last day of the Reference Period, whether or not such
amount is the amount then reflected on a balance sheet prepared in accordance
with GAAP, and (ii) the aggregate outstanding principal amount of Indebtedness
of Nexstar Holdings and the Restricted Subsidiaries and the aggregate
liquidation preference of all outstanding preferred stock of such Restricted
Subsidiaries for which such calculation is made shall be determined on a pro
forma basis as if the Indebtedness and preferred stock giving rise to the need
to perform such calculation had been incurred and issued and the proceeds
therefrom had been applied, and all other transactions in respect of which such
Indebtedness is being incurred or preferred stock is being issued had occurred,
on the first day of such Reference Period. In addition to the foregoing, for
purposes of this definition, the Leverage Ratio shall be calculated on a pro
forma basis after giving effect to (i) the incurrence of the Indebtedness of
such Person and the Restricted Subsidiaries and the issuance of the preferred
stock of such Subsidiaries (and the application of the proceeds therefrom)
giving rise to the need to make such calculation and any incurrence (and the
application of the proceeds therefrom) or repayment of other Indebtedness or
preferred stock, at any time subsequent to the beginning of the Reference
Period and on or prior to the date of determination (including any such
incurrence or issuance which is the subject of an Incurrence Notice delivered
to the Trustee during such period pursuant to clause (13) of the definition of
Permitted Debt), as if such incurrence or issuance (and the application of the
proceeds thereof), or the repayment, as the case may be, occurred on the first
day of the Reference Period (except that, in making
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such computation, the amount of Indebtedness under any revolving credit
facility shall be computed based upon the average balance of such Indebtedness
at the end of each month during such period) and (ii) any acquisition at any
time on or subsequent to the first day of the Reference Period and on or prior
to the date of determination (including any such acquisition which is the
subject of an Incurrence Notice delivered to the Trustee during such period
pursuant to clause (13) of the definition of Permitted Debt), as if such
acquisition (including the incurrence, assumption or liability for any such
Indebtedness and the issuance of such preferred stock and also including any
Consolidated Cash Flow associated with such acquisition) occurred on the first
day of the Reference Period giving pro forma effect to any non-recurring
expenses, non-recurring costs and cost reductions within the first year after
such acquisition Nexstar Holdings reasonably anticipates in good faith if
Nexstar Holdings delivers to the Trustee an officer's certificate executed by
the chief financial or accounting officer of Nexstar Holdings certifying to and
describing and quantifying with reasonable specificity such non-recurring
expenses, non-recurring costs and cost reductions. Furthermore, in calculating
Consolidated Interest Expense for purposes of the calculation of Consolidated
Cash Flow, (a) interest on Indebtedness determined on a fluctuating basis as of
the date of determination (including Indebtedness actually incurred on the date
of the transaction giving rise to the need to calculate the Leverage Ratio) and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness as in effect on the date of determination and (b) notwithstanding
(a) above, interest determined on a fluctuating basis, to the extent such
interest is covered by Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"LMA" means a local marketing arrangement, joint sales agreement, time
brokerage agreement, shared services agreement, management agreement or similar
arrangement pursuant to which a Person, subject to customary preemption rights
and other limitations (i) obtains the right to sell a portion of the
advertising inventory of a television station of which a third party is the
licensee, (ii) obtains the right to exhibit programming and sell advertising
time during a portion of the air time of a television station or (iii) manages
a portion of the operations of a television station.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with: (a) any
Asset Sale; or (b) the disposition of any securities by such Person or any
of the Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of the Restricted Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by Nexstar
Holdings or any of the Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness secured by a
Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
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"Nexstar" means Nexstar Broadcasting Group, L.L.C., the indirect parent of
Nexstar Holdings, and any successor thereto.
"Nexstar Finance" means Nexstar Finance, L.L.C., a wholly-owned subsidiary
of Nexstar Holdings.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither Nexstar Holdings nor any of the Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(2) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any holder of any other Indebtedness (other than the Notes) of Nexstar
Holdings or any of the Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of Nexstar Holdings or any of
the Restricted Subsidiaries (other than the Capital Stock of an
Unrestricted Subsidiary).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness and in all cases whether direct or
indirect, absolute or contingent, now outstanding or hereafter created, assumed
or incurred and including, without limitation, interest accruing subsequent to
the filing of a petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceedings at the rate provided in the relevant
documentation, whether or not an allowed claim, and any obligation to redeem or
defease any of the foregoing.
"Permitted Asset Swap" means, with respect to any Person, the substantially
concurrent exchange of assets of such Person (including Equity Interests of a
Restricted Subsidiary) for assets of another Person, which assets are useful to
the business of such aforementioned Person.
"Permitted Business" means any business engaged in by Nexstar Holdings or
the Restricted Subsidiaries as of the Closing Date or any business reasonably
related, ancillary or complementary thereto.
"Permitted Investments" means:
(1) any Investment in Nexstar Holdings or in a Restricted Subsidiary, or
any Investment by the Guarantor in its Subsidiaries; provided that the
proceeds are invested directly or indirectly in Nexstar Holdings or in the
Restricted Subsidiaries;
(2) any Investment in Cash Equivalents;
(3) any Investment by Nexstar Holdings or any Restricted Subsidiary in a
Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary; or
(b) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is
liquidated into, Nexstar Holdings or a Restricted Subsidiary;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption "--
Repurchase at the Option of Holders--Asset Sales";
(5) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of Nexstar Holdings;
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(6) any Investments received in compromise of obligations of such
persons incurred in the ordinary course of trade creditors or customers
that were incurred in the ordinary course of business, including pursuant
to any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of any trade creditor or customer;
(7) Hedging Obligations;
(8) guarantees of loans to management incurred pursuant to clause (14)
of the definition of Permitted Debt; or
(9) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (9) that are at the time
outstanding, not to exceed $5.0 million.
"Permitted Liens" means:
(1) Liens securing Indebtedness of a Restricted Subsidiary that was
permitted by the terms of the Indenture to be incurred, and Liens securing
Indebtedness incurred under of the Credit Facilities that was permitted by
the terms of the Indenture to be incurred;
(2) Liens in favor of Nexstar Holdings or the Restricted Subsidiaries;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with Nexstar Holdings or any Restricted
Subsidiary; provided that such Liens were not incurred in contemplation of
such merger or consolidation and do not extend to any assets other than
those of the Person merged into or consolidated with Nexstar Holdings or
the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of the
property by Nexstar Holdings or any Restricted Subsidiary; provided that
such Liens were not incurred in contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
initially permitted by clause (11) of the second paragraph of the covenant
entitled "--Certain Covenants--Incurrence of Indebtedness and Issuance of
Preferred Stock" covering only the assets acquired with such Indebtedness;
(7) Liens existing on the date of the Indenture;
(8) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as is required in
conformity with GAAP has been made therefor;
(9) Liens incurred in the ordinary course of business of Nexstar
Holdings or any Restricted Subsidiary with respect to obligations that do
not exceed $5.0 million at any one time outstanding;
(10) Liens on assets of Unrestricted Subsidiaries that secure Non-
Recourse Debt of Unrestricted Subsidiaries;
(11) Liens securing Permitted Refinancing Indebtedness where the Liens
securing indebtedness being refinanced were permitted under the Indenture;
(12) easements, rights-of-way, zoning and similar restrictions and other
similar encumbrances or title defects incurred or imposed, as applicable,
in the ordinary course of business and consistent with industry practices;
(13) any interest or title of a lessor under any Capital Lease
Obligation;
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(14) Liens securing reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating to
letters of credit and products and proceeds thereof;
(15) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty, including rights of offset
and set-off;
(16) Liens securing Hedging Obligations which Hedging Obligations relate
to indebtedness that is otherwise permitted under the Indenture;
(17) leases or subleases granted to others;
(18) Liens under licensing agreements;
(19) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(20) judgment Liens not giving rise to an Event of Default;
(21) Liens encumbering property of Nexstar Holdings or a Restricted
Subsidiary consisting of carriers, warehousemen, mechanics, materialmen,
repairmen and landlords and other Liens arising by operation of law and
incurred in the ordinary course of business for sums which are not overdue
or which are being contested in good faith by appropriate proceedings and
(if so contested) for which appropriate reserves with respect thereto have
been established and maintained on the books of Nexstar Holdings or any of
the Restricted Subsidiaries in accordance with GAAP; and
(22) Liens encumbering property of Nexstar Holdings or any of the
Restricted Subsidiaries incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance, or other
forms of governmental insurance or benefits, or to secure performance of
bids, tenders, statutory obligations, leases, and contracts (other than for
Indebtedness) entered into in the ordinary course of business of Nexstar
Holdings or any of the Restricted Subsidiaries.
"Permitted Refinancing Indebtedness" means any Indebtedness of Nexstar
Holdings or any of the Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of Nexstar Holdings or any of the Restricted
Subsidiaries (other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest on the
Indebtedness and the amount of all expenses and premiums incurred in
connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Principals" means (ii) ABRY and its Control Investment Affiliates,
including ABRY III and (ii) the members of management of Nexstar Holdings or
any of the Restricted Subsidiaries, in each case, together with any spouse or
immediate family member (including adoptive children), estate, heirs,
executors, personal representatives and administrators of such Person.
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"Related Party" means:
(1) any controlling stockholder, 80% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of any Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of any one or
more Principals and/or such other Persons referred to in the immediately
preceding clause (1).
"Restricted Entities" means all Bastet/Mission Entities, other than
Unrestricted Subsidiaries.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" all current and future Domestic Subsidiaries of
Nexstar Holdings, other than Unrestricted Subsidiaries, and all Restricted
Entities.
"Reorganization" means the transfer of all of the assets of Nexstar Holdings
to a Wholly Owned Restricted Subsidiary and the assumption by such Wholly Owned
Restricted Subsidiary of all of Nexstar Holdings' obligations under the Notes
of the Indenture.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees of the corporation, association
or other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the
only general partners of which are that Person or one or more Subsidiaries
of that Person (or any combination thereof).
"Unrestricted Subsidiary" means any Subsidiary of Nexstar Holdings or
Bastet/Mission that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with Nexstar Holdings or any of the Restricted Subsidiaries
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to Nexstar Holdings or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of Nexstar Holdings or Bastet/Mission;
(3) is a Person with respect to which neither Nexstar Holdings nor any
of the Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
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(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of Nexstar Holdings or any of the
Restricted Subsidiaries.
Any designation of a Subsidiary of Nexstar Holdings or a Bastet/Mission
Entity as an Unrestricted Subsidiary will be evidenced to the trustee by filing
with the trustee a certified copy of the Board Resolution giving effect to such
designation and an officers' certificate certifying that such designation
complied with the preceding conditions and was permitted by the covenant
described above under the caption "--Certain Covenants--Restricted Payments."
If, at any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it will thereafter cease to be an
Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of
such Subsidiary will be deemed to be incurred by a Restricted Subsidiary as of
such date and, if such Indebtedness is not permitted to be incurred as of such
date under the covenant described under the caption "--Certain Covenants--
Incurrence of Indebtedness and Issuance of Preferred Stock," Nexstar Holdings
will be in default of such covenant. The Board of Directors of Nexstar Holdings
or any Bastet/Mission Entity may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation will
be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
will only be permitted if (1) such Indebtedness is permitted under the covenant
described under the caption "--Certain Covenants--Incurrence of Indebtedness
and Issuance of Preferred Stock," calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period;
and (2) no Default or Event of Default would be in existence following such
designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of
such payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
will at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion, including the opinion of counsel described below,
is based upon current provisions of the Internal Revenue Code of 1986, as
amended, applicable Treasury regulations, judicial authority and administrative
rulings and practice as of the date hereof. The Internal Revenue Service may
take a contrary view, and no ruling from the Service has been or will be
sought. Legislative, judicial or administrative changes or interpretations may
be forthcoming that could alter or modify the following statements and
conditions. Any changes or interpretations may or may not be retroactive and
could affect the tax consequences to holders. Some holders, including insurance
companies, tax-exempt organizations, financial institutions, broker-dealers,
foreign corporations and persons who are not citizens or residents of the
United States, may be subject to special rules not discussed below. We
recommend that each holder consult his own tax advisor as to the particular tax
consequences of exchanging such holder's old notes for exchange notes,
including the applicability and effect of any state, local or foreign tax law.
Kirkland & Ellis has advised us that, in its opinion, the exchange of the
old notes for exchange notes pursuant to the exchange offer will not be treated
as an "exchange' for federal income tax purposes because the exchange notes
will not be considered to differ materially in kind or extent from the old
notes. Rather, the exchange notes received by a holder will be treated as a
continuation of the old notes in the hands of such holder. As a result, there
will be no federal income tax consequences to holders exchanging old notes for
exchange notes pursuant to the exchange offer.
124
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account under
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of exchange notes.
This prospectus, as it may be amended or supplemented from time to time, may
be used by a broker-dealer in connection with resales of exchange notes
received in exchange for old notes if the old senior subordinated notes were
acquired as a result of market-making activities or other trading activities.
We and our guarantor subsidiaries have agreed to make this prospectus, as
amended or supplemented, available to any broker-dealer to use in connection
with any such resale for a period of at least 90 days after the expiration
date. In addition, until , 2001, all dealers effecting transactions in the
exchange notes may be required to deliver a prospectus.
Neither we nor our guarantor subsidiaries will receive any proceeds from any
sale of exchange notes by broker-dealers. Exchange notes received by broker-
dealers for their own accounts under the exchange offer may be sold from time
to time in one or more transactions
. in the over-the-counter market,
. in negotiated transactions,
. through the writing of options on the exchange notes or a combination of
such methods of resale,
. at market prices prevailing at the time of resale,
. at prices related to such prevailing market prices, or
. at negotiated prices.
Any resale may be made directly to purchasers or to or through brokers or
dealers. Brokers or dealers may receive compensation in the form of commissions
or concessions from any broker-dealer or the purchasers of any such exchange
notes. An "underwriter" within the meaning of the Securities Act of 1933
includes:
(1) any broker-dealer that resells exchange notes that were received by
it for its own account pursuant to the exchange offer; or
(2) any broker or dealer that participates in a distribution of such
exchange notes.
Any profit on any resale of exchange notes and any commissions or
concessions received by any persons may be deemed to be underwriting
compensation under the Securities Act of 1933. The letter of transmittal states
that, by acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act of 1933.
Based on interpretations by the staff of the Securities and Exchange
Commission in no-action letters issued to third parties, we believe that a
holder or other person who receives exchange notes will be allowed to resell
the exchange notes to the public without further registration under the
Securities Act of 1933 and without delivering to the purchasers of the exchange
notes a prospectus that satisfies the requirements of Section 10 of the
Securities Act of 1933. The holder (other than a person that is an "affiliate"
of Nexstar within the meaning of Rule 405 under the Securities Act of 1933) who
receives exchange notes in exchange for old notes in the ordinary course of
business and who is not participating, need not intend to participate or have
an arrangement or understanding with person to participate in the distribution
of the exchange notes.
However, if any holder acquires exchange notes in the exchange offer for the
purpose of distributing or participating in a distribution of the exchange
notes, the holder cannot rely on the position of the staff of the Securities
and Exchange Commission enunciated in such no-action letters or any similar
interpretive letters. The holder must comply with the registration and
prospectus delivery requirements of the Securities Act of
125
1933 in connection with any resale transaction. A secondary resale transaction
should be covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K under the Securities Act of 1933, unless an exemption from
registration is otherwise available.
Further, each broker-dealer that receives exchange notes for its own account
in exchange for old notes, where the old notes were acquired by such
participating broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of any exchange notes. We and each of our guarantor
subsidiaries have agreed, for a period of not less than 90 days from the
consummation of the exchange offer, to make this prospectus available to any
broker-dealer for use in connection with any such resale.
For a period of not less than 90 days after the expiration date we will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests those
documents in the letter of transmittal. We and each of our guarantor
subsidiaries have jointly and severally agreed to pay all expenses incident to
the exchange offer, including the expenses of one counsel for the holders of
the old notes, other than commissions or concessions of any brokers or dealers.
We will indemnify the holders of the old notes against liabilities under the
Securities Act of 1933, including any broker-dealers.
LEGAL MATTERS
Kirkland & Ellis, New York, New York will issue an opinion with respect to
the issuance of the exchange notes offered hereby; including:
(1) our existence and good standing under our jurisdiction of
incorporation;
(2) our authorization of the sale and issuance of the exchange notes;
and
(3) the enforceability of the exchange notes.
EXPERTS
The consolidated financial statements of Nexstar Finance Holdings, L.L.C., a
wholly-owned indirect subsidiary of Nexstar Broadcasting Group, L.L.C. as of
December 31, 2000 and 1999 and for each of the three years in the period ended
December 31, 2000, included in this prospectus have been so included in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
The financial statements of WCIA-TV/WCFN-TV and WMBD-TV as of May 31, 2000
and 1999 and for each of the three years in the period ended May 31, 2000,
included in this prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The financial statements of WROC-TV as of March 31, 1999 and for the three
month period ended March 31, 1999, included in this prospectus have been so
included in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The financial statements of Shooting Star Broadcasting/KTAB-TV, LP as of
April 30, 1999 and December 31, 1998 and for the four month period ended April
30, 1999 and for the year ended December 31, 1998, included in this prospectus
have been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of KTAL-TV, Inc. at October 31, 2000 and December
31, 1999 and 1998 and for the ten month period ended October 31, 2000, and for
each of the two years in the period ended December 31, 1999, included in this
Registration Statement and related Prospectus have been audited by Ernst &
Young LLP, independent accountants, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report given
on the authority of such firm as experts in accounting and auditing.
126
AVAILABLE INFORMATION
We are not currently subject to the periodic reporting and other
informational requirements of the Securities Exchange Act of 1934. However, we
have agreed that, whether or not we are required to do so by the rules and
regulations of the Securities and Exchange Commission, for so long as any of
the notes remain outstanding, we will furnish to the holders of the notes and
file with the Securities and Exchange Commission (unless the Securities and
Exchange Commission will not accept such a filing) (1) all quarterly and annual
financial information that would be required to be contained in such a filing
with the Securities and Exchange Commission on Forms 10-Q and 10-K if we were
required to file such forms, including a "Management's Discussion and Analysis
of Results of Operations and Financial Condition" and, with respect to the
annual information only, a report thereon by our certified independent public
accountants, and (2) all reports that would be required to be filed with the
Securities and Exchange Commission on Form 8-K if we were required to file such
reports. In addition, for so long as any of the notes remain outstanding, we
have agreed to make available to any prospective purchaser of the notes or
beneficial owner of the notes in connection with any sale thereof, the
information required by Rule 144A(d)(4) under the Securities Act of 1933.
Information contained in this prospectus contains "forward-looking
statements" which can be identified by the use of forward-looking terminology
such as "believes," "expects," "may," "will," "should," or "anticipates" or the
negative thereof or other similar terminology, or by discussions of strategy.
Our actual results could differ materially from those "Risk Factors" beginning
on page 10 and elsewhere in this prospectus.
127
INDEX TO THE FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Nexstar Finance Holdings, L.L.C.
Unaudited Financial Statements
Consolidated Balance Sheets as of December 31, 2000 and June 30, 2001... F-3
Consolidated Statements of Operations for the three months and six
months ended June 30, 2000 and 2001.................................... F-4
Consolidated Statement of Changes in Member's Interest for the six
months ended June 30, 2001............................................. F-5
Consolidated Statements of Cash Flows for the six months ended June 30,
2000 and 2001.......................................................... F-6
Notes to Consolidated Financial Statements.............................. F-7
Audited Financial Statements
Report of Independent Accountants....................................... F-15
Consolidated Balance Sheets as of December 31, 1999 and 2000............ F-16
Consolidated Statements of Operations for the years ended December 31,
1998, 1999 and 2000.................................................... F-17
Consolidated Statements of Changes in Member's Interest for the years
ended December 31, 1998, 1999 and 2000................................. F-18
Consolidated Statements of Cash Flows for the years ended December 31,
1998, 1999 and 2000.................................................... F-19
Notes to Consolidated Financial Statements.............................. F-20
WCIA-TV/WCFN-TV and WMBD-TV (a Division of Midwest Television, Inc.)
Report of Independent Accountants....................................... F-36
Balance Sheets as of May 31, 1999 and 2000 and November 30, 2000
(unaudited)............................................................ F-37
Statements of Operations for the years ended May 31, 1998, 1999 and 2000
and for the six months ended November 30, 1999 and 2000 (unaudited).... F-38
Statement of Stockholders' Net Investment for the years ended May 31,
1998, 1999 and 2000 and for the six months ended November 30, 2000
(unaudited)............................................................ F-39
Statements of Cash Flows for the years ended May 31, 1998, 1999 and 2000
and for the six months ended November 30, 1999 and 2000 (unaudited).... F-40
Notes to Financial Statements........................................... F-41
Shooting Star Broadcasting/KTAB-TV, LP
Report of Independent Accountants....................................... F-49
Balance Sheets as of December 31, 1998 and April 30, 1999............... F-50
Statements of Operations for the year ended December 31, 1998 and for
the four months ended April 30, 1999................................... F-51
Statement of Changes in Members' Equity for the year ended December 31,
1998 and for the four months ended April 30, 1999...................... F-52
Statements of Cash Flows for the year ended December 31, 1998 and for
the four months ended April 30, 1999................................... F-53
Notes to Financial Statements........................................... F-54
WROC-TV (a Division of STC Broadcasting, Inc.)
Report of Independent Accountants....................................... F-60
Balance Sheet at March 31, 1999......................................... F-61
Statement of Operations for the three months ended March 31, 1999....... F-62
Statement of Changes in Stockholder's Net Investment for the three
months ended March 31, 1999............................................ F-63
Statement of Cash Flows for the three months ended March 31, 1999....... F-64
Notes to Financial Statements........................................... F-65
</TABLE>
F-1
<TABLE>
<CAPTION>
Page
----
<S> <C>
KTAL-TV, Inc.
Report of Independent Auditors.......................................... F-71
Balance Sheets as of December 31, 1998 and 1999 and October 31, 2000.... F-72
Statements of Income for the years ended December 31, 1998 and 1999 and
for the ten months ended October 31, 2000.............................. F-73
Statement of Retained Earnings for the years ended December 31, 1998 and
1999 and for the ten months ended October 31, 2000..................... F-74
Statements of Cash Flows for the years ended December 31, 1998 and 1999
and for the ten months ended October 31, 2000.......................... F-75
Notes to Financial Statements........................................... F-76
</TABLE>
F-2
NEXSTAR FINANCE HOLDINGS, L.L.C.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
2000 2001
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents--unrestricted.......... $ 2,750,058 $ 2,379,872
Cash--restricted................................. -- 10,500,000
Accounts receivable, net of allowance for
doubtful accounts of $415,000 and $432,000,
respectively.................................... 23,273,690 22,955,525
Current portion of broadcast rights.............. 10,865,789 5,594,238
Prepaid expenses and other current assets........ 530,157 743,367
Deferred tax assets.............................. 279,572 742,187
------------ ------------
Total current assets........................... 37,699,266 42,915,189
Property and equipment, net........................ 55,343,529 62,231,904
Broadcast rights................................... 4,180,989 4,866,982
Due from parent entities........................... 494,387 305,753
Other noncurrent assets............................ 76,789 66,465
Intangible assets, net............................. 220,479,636 323,837,192
------------ ------------
Total assets................................... $318,274,596 $434,223,485
============ ============
LIABILITIES AND MEMBER'S INTEREST
Current liabilities:
Current portion of debt.......................... $ 11,125,000 $ 187,500
Current portion of capital lease obligations..... 60,839 43,177
Current portion of broadcast rights payable...... 10,754,398 5,504,736
Accounts payable................................. 7,058,999 6,233,212
Unrealized losses on derivative instruments...... -- 2,298,427
Taxes payable.................................... 624,719 161,410
Interest payable................................. 308,477 6,369,225
Deferred revenue................................. 367,876 553,968
Due to Midwest Television, Inc................... 2,255,809 --
------------ ------------
Total current liabilities...................... 32,556,117 21,351,655
Debt............................................... 242,346,850 332,880,486
Capital lease obligations.......................... 22,699 3,797
Broadcast rights payable........................... 4,262,200 4,794,512
Deferred tax liabilities........................... 7,562,548 7,562,548
------------ ------------
Total liabilities.............................. 286,750,414 366,592,998
------------ ------------
Member's interest:
Contributed capital.............................. 61,531,387 119,737,276
Accumulated deficit.............................. (30,007,205) (49,808,362)
Accumulated other comprehensive loss on
derivative instruments.......................... -- (2,298,427)
------------ ------------
Total member's interest........................ 31,524,182 67,630,487
------------ ------------
Total liabilities and member's interest........ $318,274,596 $434,223,485
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
NEXSTAR FINANCE HOLDINGS, L.L.C.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- --------------------------
2000 2001 2000 2001
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues (excluding
trade and barter)...... $30,662,539 $ 29,642,542 $ 55,789,823 $ 56,246,173
Less: commissions....... (4,320,515) (4,064,205) (7,719,023) (7,587,619)
----------- ------------ ------------ ------------
Net revenues (excluding
trade and barter)...... 26,342,024 25,578,337 48,070,800 48,658,554
Trade and barter
revenues............... 2,046,190 2,467,288 4,237,553 4,992,189
----------- ------------ ------------ ------------
Total net revenues.. 28,388,214 28,045,625 52,308,353 53,650,743
----------- ------------ ------------ ------------
Expenses:
Operating............. 7,275,688 7,726,525 14,565,799 15,544,019
Selling, general and
administrative....... 7,199,857 6,740,332 13,709,363 13,864,821
Amortization of
broadcast rights..... 3,495,868 3,721,873 7,262,649 7,803,786
Amortization of
intangible assets.... 3,633,455 5,123,842 7,427,526 10,556,266
Depreciation.......... 2,224,251 3,256,263 4,381,850 6,181,692
----------- ------------ ------------ ------------
Total expenses...... 23,829,119 26,568,835 47,347,187 53,950,584
----------- ------------ ------------ ------------
Income (loss) from
operations............. 4,559,095 1,476,790 4,961,166 (299,841)
Interest expense,
including amortization
of debt financing
costs.................. (5,774,632) (11,478,224) (11,284,023) (19,343,241)
Interest income......... 71,404 108,900 117,008 156,456
Other expense, net...... (176,930) (423,015) (188,187) (420,030)
----------- ------------ ------------ ------------
Loss before income
taxes.................. (1,321,063) (10,315,549) (6,394,036) (19,906,656)
Income tax (expense)
benefit................ (41,953) 145,403 4,584 368,020
----------- ------------ ------------ ------------
Loss before
extraordinary loss from
modification of credit
facility............... (1,363,016) (10,170,146) (6,389,452) (19,538,636)
Extraordinary loss from
modification of credit
facility, net of income
tax effect............. -- -- -- (262,521)
----------- ------------ ------------ ------------
Net loss................ (1,363,016) (10,170,146) (6,389,452) (19,801,157)
----------- ------------ ------------ ------------
Other comprehensive
loss:
Cumulative effect of
change in accounting
principle.............. -- -- -- (241,235)
Change in market value
of derivative
instruments............ -- (91,945) -- (2,057,192)
----------- ------------ ------------ ------------
Net loss and other
comprehensive loss...... $(1,363,016) $(10,262,091) $ (6,389,452) $(22,099,584)
=========== ============ ============ ============
</TABLE>
F-4
NEXSTAR FINANCE HOLDINGS, L.L.C.
CONSOLIDATED STATEMENT OF CHANGES IN MEMBER'S INTEREST
<TABLE>
<CAPTION>
Total
Contributed Accumulated Comprehensive Member's
Capital Deficit Loss Interest
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Balance at December 31,
2000................... $ 61,531,387 $(30,007,205) $ -- $ 31,524,182
Contributions ........ 66,259,990 -- -- 66,259,990
Distributions......... (8,054,101) -- -- (8,054,101)
Net loss.............. -- (19,801,157) -- (19,801,157)
Cumulative effect of
change in accounting
principle............ -- -- (241,235) (241,235)
Change in market value
of derivative
instruments.......... -- -- (2,057,192) (2,057,192)
------------ ------------ ----------- ------------
Balance at June 30, 2001
(unaudited)............ $119,737,276 $(49,808,362) $(2,298,427) $ 67,630,487
============ ============ =========== ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
NEXSTAR FINANCE HOLDINGS, L.L.C.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------
2000 2001
------------ -------------
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss......................................... $ (6,389,452) $ (19,801,157)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Deferred income taxes........................... (271,672) (447,086)
Depreciation of property and equipment.......... 4,381,850 6,181,692
Amortization of intangible assets............... 7,427,526 10,556,266
Amortization of debt financing costs............ 121,909 2,453,424
Amortization of broadcast rights, net of
barter......................................... 4,217,486 3,899,057
Payments for broadcast rights................... (4,195,875) (4,008,112)
Loss on asset disposal, net..................... 216,157 346,749
Loss from modification of credit facility, net
of tax......................................... -- 262,251
Amortization of debt discount................... -- 562,559
Changes in assets and liabilities:
(Increase) decrease in accounts receivable...... (338,010) 506,799
(Increase) decrease in prepaid expenses and
other current assets........................... 198,601 (213,210)
Decrease in other noncurrent assets............. 25,732 10,324
Increase (decrease) in accounts payable......... 839,905 (825,787)
Increase (decrease) in taxes payable............ 250,128 (463,309)
Increase (decrease) in interest payable......... (219,689) 6,060,748
Increase (decrease) in deferred revenue......... (36,900) 186,092
Decrease in due to Midwest Television, Inc...... (2,366,420) (2,255,809)
------------ -------------
Net cash provided by operating activities..... 3,861,276 3,011,491
------------ -------------
Cash flows from investing activities:
Additions to property and equipment.............. (3,540,747) (3,950,916)
Proceeds from sale of assets..................... 77,252 7,553
Acquisition of broadcast properties.............. (5,000,000) (107,956,151)
------------ -------------
Net cash used for investing activities........ (8,463,495) (111,899,514)
------------ -------------
Cash flows from financing activities:
Proceeds from debt issuance...................... 20,500,000 638,837,814
Repayment of loans............................... (36,596) (572,340,800)
Proceeds from revolver draws..................... 3,000,000 12,500,000
Note payable to related party.................... (14,522,000) --
Payments for debt finance and transaction costs.. (901,218) (18,185,066)
Cash escrowed for debt service................... -- (10,500,000)
Capital contributions............................ -- 66,259,990
Distributions.................................... -- (8,054,101)
------------ -------------
Net cash provided by financing activities..... 8,040,186 108,517,837
------------ -------------
Net increase (decrease) in cash................... 3,437,967 (370,186)
Cash and cash equivalents at beginning of period.. 2,989,121 2,750,058
------------ -------------
Cash and cash equivalents at end of period........ $ 6,427,088 $ 2,379,872
============ =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Business Operations
Nexstar Finance Holdings, L.L.C. ("Nexstar") owns, operates and programs,
through its subsidiaries, six NBC-affiliated television stations, three ABC-
affiliated television stations and four CBS-affiliated television stations in
the United States of America. Through two special purpose entities, Nexstar (i)
programs one Fox-affiliated television station under a Time Brokerage Agreement
("TBA") and has a Shared Services Agreement ("SSA") with a CBS-affiliated
television station and (ii) has an SSA and a Joint Sales Agreement ("JSA") with
a Fox-affiliated television station and a low-power UPN-affiliated television
station. The television stations described above are located in New York,
Pennsylvania, Illinois, Indiana, Missouri, Texas and Louisiana.
Nexstar was organized as a limited liability company ("LLC") on May 30, 2001
under the laws of the State of Delaware under a plan of reorganization for the
purpose of executing various financing transactions described in Note 7. On
August 6, 2001, in connection with the reorganization, substantially all of the
assets and liabilities of Nexstar Finance Holdings II, L.L.C. ("Nexstar II"),
except those related to Nexstar Broadcasting Group, L.L.C., were transferred to
Nexstar. The reorganization has been accounted for as a combination of entities
under common control in a manner similar to a pooling of interests and,
accordingly, the financial statements for all periods have been restated to
reflect the exchange of members' interest.
Nexstar is a wholly-owned subsidiary of Nexstar II, formerly known as
Nexstar Finance Holdings, L.L.C., which was organized as an LLC on December 5,
2000 in the State of Delaware to execute the financing transactions referenced
above. Nexstar and Nexstar II are wholly-owned, indirect subsidiaries of
Nexstar Broadcasting Group, L.L.C. ("Nexstar Broadcasting") which was organized
as a LLC on December 12, 1996 in the State of Delaware. Nexstar Broadcasting
commenced operations on April 15, 1997.
Television broadcasting is subject to the jurisdiction of the Federal
Communications Commission ("FCC") under the Communications Act of 1934, as
amended (the "Communications Act"). The Communications Act prohibits the
operation of television broadcasting stations, except under a license issued by
the FCC, and empowers the FCC, among other things, to issue, revoke, and modify
broadcasting licenses, determine the location of the stations, regulate the
equipment used by the stations, adopt regulations to carry out the provisions
of the Communications Act and impose penalties for the violation of such
regulations.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of Nexstar, its
wholly-owned subsidiaries and Bastet Broadcasting, Inc. ("Bastet") and Mission
Broadcasting of Wichita Falls, Inc. ("Mission") (collectively, the "Company").
Bastet and Mission are special purpose entities. All intercompany accounts and
transactions have been eliminated in consolidation.
The financial statements as of June 30, 2001 and for the six months ended
June 30, 2000 and 2001 are unaudited. However, in the opinion of management,
such statements include all adjustments (consisting solely of normal recurring
adjustments) necessary for the fair statement of the financial information
included herein in accordance with generally accepted accounting principles in
the United States of America and pursuant to the rules and regulations of the
Securities and Exchange Commission. The preparation of consolidated financial
statements in conformity with generally accepted accounting principles in the
United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates. Results of operations for
interim periods are not necessarily indicative of results for the full year.
Certain prior period amounts have been reclassified to conform to current
period presentation.
F-7
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
Cash--Restricted
On occasion, the Nexstar may enter into certain escrow agreements
restricting the use of certain funds. These amounts are designated as such on
the balance sheet.
Derivatives and Hedging Activities
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No.133, "Accounting for Derivative
Instruments and Hedging Activities", ("SFAS No. 133") which establishes new
guidelines for accounting for such transactions. Subsequently, SFAS No. 133 was
amended by the issuance of Statement of Accounting Standards No. 137 and
Statement of Accounting Standards No. 138. These amendments modify the
provisions and effective date of SFAS No. 133. SFAS No. 133, as amended, is
effective for fiscal quarters beginning after January 1, 2001. The Company
adopted SFAS No. 133 on January 1, 2001.
The Company uses derivative financial instruments for purposes other than
trading, such as hedging for long-term debt and does so to reduce its exposure
to fluctuations in interest rates, as dictated by their credit agreement. All
derivatives are recognized on the balance sheet at their fair value. Changes in
the fair value of derivatives are recorded each period in current earnings or
other comprehensive income, depending on whether a derivative is designated as
part of a hedge transaction and, if it is, the type of hedge transaction. The
Company assesses, both at its inception and on an on-going basis, whether the
derivatives that are used in hedging transactions are highly effective in
offsetting the changes in cash flows of hedged items. The Company assesses
hedge ineffectiveness on a quarterly basis and records the gain or loss related
to the ineffective portion to current earnings, to the extent it is
significant. If the Company determines that a cash flow hedge is no longer
probable of occurring, the Company discontinues hedge accounting for the
affected portion of the forecasted transaction, and any unrealized gain or loss
on the contract is recognized in current earnings.
Comprehensive Income
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income", ("SFAS No. 130") requires the display of comprehensive
income or loss and its components as part of the Company's full set of
financial statements. Comprehensive income or loss is comprised of net income
or loss and other comprehensive income or loss. Other comprehensive income or
loss includes certain changes in equity that are excluded from net income, such
as translation adjustments and unrealized holding gains and losses on
available-for-sale marketable securities and certain derivative instruments,
net of tax.
Prior to January 1, 2001, the Company did not have any transactions that
qualified as comprehensive income or loss. Upon adoption of SFAS No. 133, on
January 1, 2001, the Company recorded other comprehensive loss to recognize the
fair value of all derivatives that were designated as cash flow hedging
instruments, which was comprised of unrealized losses related to the Company's
interest rate swaps of $0.2 million. This unrealized loss increased by $2.1
million during the first six months of 2001. As of June 30, 2001, the
cumulative unrealized losses on the Company's interest rate swaps were $2.3
million.
Recently Issued Accounting Pronouncements
In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and SFAS
No. 142, "Goodwill and Other Intangible Assets". SFAS No. 141 requires that all
business combinations be accounted for under the purchase method only and that
certain acquired intangible assets in a business combination be recognized as
assets apart from goodwill. SFAS No. 142 requires that ratable amortization of
goodwill be replaced with periodic tests of the goodwill's impairment and that
intangible assets other than goodwill be amortized over
F-8
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
their useful lives. SFAS No. 141 is effective for all business combinations
initiated after June 30, 2001 and for all business combinations accounted for
by the purchase method for which the date of acquisition is after June 30,
2001. The provisions of SFAS No. 142 will be effective for fiscal years
beginning after December 15, 2001 and will thus be adopted by the Company, as
required, in fiscal year 2002. The Company is currently assessing the impact of
this new statement on our consolidated financial position and results of
operations and have not yet determined the impact of adoption.
3. Acquisitions
WCIA/WCFN and WMBD
On January 12, 2001, Nexstar acquired substantially all of the assets of
WCIA/WCFN and WMBD from Midwest Television, Inc. ("Midwest") for approximately
$108.0 million, exclusive of transaction costs. Included in the purchase price
was $500,000, which was paid directly to the owner of Midwest for the building
that houses WCIA. The acquisition has been accounted for under the purchase
method and, accordingly, the purchase price was allocated to assets acquired
and liabilities assumed based on their estimated fair value on the acquisition
date. The excess of the consideration paid over the estimated fair value of the
tangible and identifiable intangible assets acquired is being amortized using
the straight-line method over 40 years. TBA fees in the amount of $2.25 million
were paid to Midwest at the time of closing.
The unaudited pro forma consolidated information for the six months ended
June 30, 2000 and 2001, determined as if the Midwest acquisition described
above and the KMID and KTAL acquisitions that closed subsequent to June 30,
2000 had occurred on January 1 of each period, would have resulted in the
following:
<TABLE>
<CAPTION>
June 30, 2000 June 30, 2001
--------------------- ---------------------
As Reported As Reported
(unaudited) Pro Forma (unaudited) Pro Forma
----------- --------- ----------- ---------
(dollars in thousands)
<S> <C> <C> <C> <C>
Revenues (excluding trade and
barter)......................... $48,071 $ 53,186 $ 48,659 $ 48,659
Total net revenues............... 52,308 57,905 53,651 53,651
Income (loss) from operations.... 4,961 (9,625) (300) (300)
------- -------- -------- --------
Net loss......................... $(6,389) $(14,659) $(19,801) $(19,801)
======= ======== ======== ========
</TABLE>
--------
(1) The June 30, 2001 pro forma amounts do not include the results of Midwest
for the 12 days prior to acquisition on January 12, 2001. Amounts deemed de
minimus.
The unaudited pro forma information is presented for illustrative purposes
only and is not necessarily indicative of results of operations in future
periods or results that would have been achieved had the Company and the
acquired companies been combined during the specified periods.
4. Related Party Transactions
Guaranty--Chief Executive Officer
Pursuant to a continuing guaranty agreement dated January 5, 1998 with the
Company's primary lender, the Company has entered into an agreement to
guarantee a $3.0 million nonrevolving line of credit to its President and Chief
Executive Officer to enable him to purchase equity units of the Company. The
line of credit is full-recourse to the officer and is available until December
31, 2004.
F-9
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. Related Party Transactions (Continued)
Management Services Agreement
The Company pays management and consulting fees to ABRY Partners L.L.C.
("ABRY"). The Company incurred fees for the three and six months ended June 30,
2000 of $69,656 and $139,310, respectively, which are included in selling,
general and administrative expenses. Effective December 31, 2000 ABRY
terminated its management services agreement with the Company.
Bridge Loan
The Company was issued a bridge loan by one of the ABRY partnerships in
conjunction with the Company's acquisition of WROC in 1999. The principal
amount of $14.5 million and accrued interest thereon, was paid in full on May
12, 2000. Interest accrued annually at a rate of 9.0%. The Company recorded
$116,976 and $454,476 of interest expense for the three and six months ended
June 30, 2000, respectively.
5. Property and Equipment
<TABLE>
<CAPTION>
Estimated
Useful Life December 31, June 30,
(years) 2000 2001
------------- ------------ ------------
(unaudited)
<S> <C> <C> <C>
Buildings and building
improvements.................. 39 $ 13,364,654 $ 15,579,589
Land and land improvements..... N/A-39 2,749,546 2,741,774
Leasehold improvements......... term of lease 1,211,913 1,337,442
Studio equipment............... 5-7 32,244,527 32,908,155
Transmission equipment......... 5-15 20,128,298 27,791,513
Office equipment and
furniture..................... 5-7 3,832,869 5,004,571
Vehicles....................... 5 3,281,492 4,185,570
Construction in progress....... N/A 308,169 94,387
------------ ------------
77,121,468 89,643,001
Less: accumulated
depreciation.................. (21,777,939) (27,411,097)
------------ ------------
Property and equipment, net of
accumulated depreciation...... $ 55,343,529 $ 62,231,904
============ ============
</TABLE>
6. Intangible Assets
<TABLE>
<CAPTION>
Estimated
Useful Life December 31, June 30,
(years) 2000 2001
------------ ------------ ------------
(unaudited)
<S> <C> <C> <C>
Goodwill........................ 40 $ 66,447,765 $ 99,096,800
Network affiliation agreement... 15 129,639,292 170,092,045
FCC license..................... 15 57,019,233 77,108,080
Debt financing costs term of debt 593,693 15,972,919
Other intangibles............... 1-15 5,788,233 16,550,141
------------ ------------
259,488,216 378,819,985
Less: accumulated amortization.. (39,008,580) (54,982,793)
------------ ------------
Intangible assets, net of
accumulated amortization....... $220,479,636 $323,837,192
============ ============
</TABLE>
F-10
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. Debt
Long term debt consists of the following:
<TABLE>
<CAPTION>
December 31, June 30,
2000 2001
------------ ------------
(unaudited)
<S> <C> <C>
Term loan..................................... $119,500,000 $110,000,000
Revolving credit facility..................... 133,971,850 50,142,695
Senior subordinated notes, net of discount.... -- 153,790,756
Senior discount notes, net of discount........ 19,134,535
------------ ------------
253,471,850 333,067,986
Less: current portion......................... (11,125,000) (187,500)
------------ ------------
$242,346,850 $332,880,486
============ ============
</TABLE>
Bank Debt
On June 1, 1999, the existing Nexstar credit agreements were amended and
restated to include a term loan for an aggregate maximum amount of $125.0
million, a revolving credit facility of $80.0 million and an available
incremental revolving credit facility not to exceed $75.0 million. On January
12, 2001, the debt outstanding was repaid with the proceeds of the senior
secured credit facility, with a subsequent reborrowing and repayment related to
the amendment on June 14, 2001 as described below.
On June 1, 1999, the Bastet existing credit facility was amended to increase
the aggregate maximum amount to $45.0 million and to include Mission as a co-
borrower. On January 12, 2001, the debt outstanding was repaid with the
proceeds of the senior secured credit facility described below.
New Bank Debt Facility Agreements
The Nexstar Senior Secured Credit Facility
On January 12, 2001, Nexstar entered into a senior secured credit facility
with a group of commercial banks. The terms of the credit agreement provided
for a revolving credit facility (the "Nexstar revolver") in the amount of
$122.0 million and a term loan facility (the "Nexstar term loan") in the amount
of $110.0 million. The revolving credit facility was subsequently reduced to
$72.0 million after the issuance of the Senior Subordinated Notes discussed
below. The credit facility was subsequently amended on June 14, 2001 to allow
for a $50.0 million Term A facility, a $75.0 million Term B facility and a
$57.0 million revolving facility. Interest rates associated with the Nexstar
revolver and term loans are based, at the option of the Company, on the
prevailing prime rate plus an applicable margin or the LIBOR rate plus an
applicable margin, as defined (ranging from 7.15% to 7.9% at June 30, 2001).
Interest is fixed for a period ranging from one month to 12 months, depending
on availability of the interest basis selected, except if the Company selects a
prime-based loan, in which case the interest rate will fluctuate during the
period as the prime rate fluctuates. Interest is payable periodically based on
the type of interest rate selected. In addition, the Company is required to pay
quarterly commitment fees based on the Company's leverage ratio for that
particular quarter on the unused portion of the Nexstar revolver loan
commitment. The Nexstar term loans are subject to scheduled mandatory
repayments and the Nexstar revolver is subject to scheduled mandatory
reductions commencing in 2003. Any excess amount outstanding at the time of a
mandatory reduction is payable at that time. The borrowings under the Nexstar
senior secured credit facility are guaranteed, jointly and severally, by
Nexstar, Bastet and Mission, and by each existing and subsequently acquired or
organized subsidiary of the Company.
F-11
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. Debt (Continued)
The Bastet/Mission Senior Secured Credit Facility
On January 12, 2001, Bastet and Mission entered into a credit agreement (the
"Bastet/Mission credit facility") with a group of commercial banks. The terms
provide for the banks to make revolving loans to Bastet and Mission, not to
exceed the aggregate commitment of $43.0 million. Bastet and Mission are
jointly and severally liable for the outstanding amount of the loan. Nexstar
has entered into a guarantor agreement, whereby Nexstar guarantees full payment
of any obligations outstanding in the event of Bastet and/or Mission's default.
Interest rates associated with the Bastet/Mission credit facility are based, at
the option of Bastet and Mission, on the prevailing prime rate plus an
applicable margin or the LIBOR rate plus an applicable margin, as defined
(7.11% at June 30, 2001). Interest is fixed for a period ranging from one month
to 12 months, depending on availability of the interest basis selected, except
if Bastet or Mission selects a prime-based loan, in which case the interest
rate will fluctuate during the period as the prime rate fluctuates. Interest is
payable periodically based on the type of interest rate selected. In addition,
Bastet and Mission are required to pay quarterly commitment fees based on their
leverage ratio for that particular quarter on the unused portion of the
Bastet/Mission credit facility loan commitment. The Bastet/Mission credit
facility is due and payable on the maturity date, January 12, 2007. Any excess
amount outstanding at the time of a mandatory reduction is payable at that
time.
The Company's reducing revolver credit facilities and term loan principal
amounts are reduced quarterly by the following annual amounts:
<TABLE>
<CAPTION>
Reduction Amount
--------------------------------
Loan Year Reducing
(as defined) Revolver Term A Loan Term B Loan
------------ -------- ----------- -----------
<S> <C> <C> <C>
1........................................ 0.00% 0.00% 0.00%
2........................................ 0.00% 0.00% 1.00%
3........................................ 15.00% 15.00% 1.00%
4........................................ 20.00% 20.00% 1.00%
5........................................ 30.00% 30.00% 1.00%
6........................................ 35.00% 35.00% 1.00%
7........................................ 0.00% 0.00% 95.00%
</TABLE>
Debt Covenants
The credit agreements described above contain covenants which require the
Company to comply with certain financial ratios, capital expenditures and film
cash payments and other limits. The Company was in compliance with all
covenants at June 30, 2001.
Senior Subordinated Notes
On March 16, 2001, Nexstar Finance, L.L.C., a wholly-owned subsidiary of
Nexstar, issued $160.0 million of 12% Senior Subordinated Notes (the "notes")
at a price of 96.012%. The notes mature on April 1, 2008. Interest is payable
every six months in arrears on April 1 and October 1. The notes are guaranteed
by all of the domestic existing and future restricted subsidiaries of the
Company. The notes are general unsecured senior subordinated obligations which
are subordinated to all of the Company's senior debt. The notes are redeemable
on or after April 1, 2005 and the Company may redeem up to 35.0% of the
aggregate principal amount of the notes before April 1, 2004 with the net cash
proceeds from qualified equity offerings.
F-12
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. Debt (Continued)
The notes contain covenants, which require the Company to comply with
certain limitations on the incurrence of additional indebtedness, issuance of
equity, payment of dividends and on certain other business activities.
The proceeds of the offering were used to partially refinance existing
indebtedness of the Company. The remainder will be used to finance its
operations and for working capital needs.
Senior Discount Notes
On May 17, 2001, Nexstar issued $36.988 million principal amount at maturity
of Senior Discount Notes (the "discount notes") at a price of 54.0373%. The
discount notes mature on May 15, 2009. Each discount note will have an accreted
value at maturity of $1,000. The effective interest rate on the discount notes
is 17.07% at June 30, 2001. The discount notes will not begin to accrue cash
interest until May 15, 2005 with payments to be made every six months in
arrears on May 15 and November 15. They are general unsecured senior
obligations effectively subordinated to all of the Company's senior secured
debt and are structurally subordinated to the Senior Subordinated Notes
described above.
Unsecured Interim Loan
On January 12, 2001, the Company was issued an unsecured interim loan by its
primary lender (the "interim loan") in the amount of $40.0 million. The
interest rate was 13.5% through April 12, 2001 at which time it increased to
14%. In conjunction with the offering of the Senior Subordinated Notes
described above, $30.0 million of the interim loan was repaid. The remaining
$10.0 million plus accrued interest was repaid with the proceeds from the
Senior Unsecured Notes described above.
Interest Rate Swap Agreements
At June 30, 2001, Nexstar had in effect two interest rate swap agreements
required by their credit facility agreements, with commercial banks, with
notional amounts of $93.3 million and $20.0 million. Nexstar's interest rate
swap agreements require Nexstar to pay a fixed rate and receive a floating
rate, thereby creating fixed rate debt. The agreements are designated as a
hedge of interest rates, and the differential to be paid or received on the
swaps is accrued as an adjustment to interest expense. The fair value of the
interest rate swap agreements representing the cash the Company would pay to
settle the agreements, was approximately $0.2 million and $2.3 million at
December 31, 2000 and June 30, 2001, respectively. There were no amounts of
hedge ineffectiveness related to the Company's interest rate swaps and no gains
or losses were excluded from the assessment of hedge effectiveness.
Debt Financing Costs
In conjunction with the amendment and restatement of the credit facility in
January 2001, the Company expensed $262,521 related to certain debt financing
costs. The amount, net of tax benefit, has been presented as an extraordinary
item.
8. Member's Interest
On January 12, 2001, Nexstar received $65.0 million in capital contributions
from Nexstar II (known then as Nexstar Finance Holdings, L.L.C.). On May 17,
2001, concurrent with the funding from the senior discount notes, $8.0 million
was distributed back to Nexstar II.
F-13
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Income Taxes
The Company's income tax benefit increased to $368,020 for the six months
ended June 30, 2001 from a benefit of $4,584 for the six months ended June 30,
2000. The effective tax rate increased to a benefit of 2.0% for the six months
ended June 30, 2001 from a benefit of less than 1.0% for the six months ended
June 30, 2000. The significant differences from the statutory rate and the
effective tax rate for the six months ended June 30, 2000 and 2001 include an
increase in the valuation allowance, amortization of goodwill and income earned
by entities not subject to corporate income tax. The benefit increase in the
effective tax rate resulted from the current year's projected permanent
differences between book and tax income being a lower percentage of pre-tax
loss and an increase in the Company's net loss for the six months ended June
30, 2001, as compared to the six months ended June 30, 2000.
10. Commitments and Contingencies
From time to time, the Company is involved with claims that arise out of the
normal course of business. In the opinion of management, the ultimate liability
with respect to these claims will not have a material adverse effect on the
financial statements of the Company.
11. Nexstar Finance Holdings, Inc.
Nexstar Finance Holdings, Inc. was incorporated on December 5, 2000 in the
State of Delaware for the purpose of facilitating future financings. Nexstar
Finance Holdings, Inc. was capitalized with an immaterial amount of equity and
had no balance sheet or statement of operation activities, except for those
with respect to the discount notes, for the six month period ended June 30,
2001.
12. Subsequent Events
On August 7, 2001, Nexstar received $20.0 million in capital contributions
from Nexstar II, the proceeds of which were used to reduce bank debt.
F-14
REPORT OF INDEPENDENT ACCOUNTANTS
To the Member of Nexstar Finance Holdings, L.L.C.:
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of member's interest and of cash flows
present fairly, in all material respects, the financial position of Nexstar
Finance Holdings, L.L.C., an indirect subsidiary of Nexstar Broadcasting Group,
L.L.C., and its subsidiaries (the "Company"), at December 31, 1999 and 2000,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America which
require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
PricewaterhouseCoopers LLP
February 21, 2001, except as to Note 16 which is
as of March 13, 2001
F-15
NEXSTAR FINANCE HOLDINGS, L.L.C.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
--------------------------
1999 2000
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................ $ 2,989,120 $ 2,750,058
Accounts receivable, net of allowance for
doubtful accounts of $352,000 and $415,000,
respectively.................................... 21,743,561 23,273,690
Current portion of broadcast rights.............. 10,560,573 10,865,789
Prepaid expenses and other current assets........ 453,361 530,157
Deferred tax assets.............................. 227,111 279,572
------------ ------------
Total current assets........................... 35,973,726 37,699,266
Property and equipment, net........................ 48,884,255 55,343,529
Broadcast rights................................... 2,728,919 4,180,989
Due from Nexstar Broadcasting Group, L.L.C......... 449,041 494,387
Other noncurrent assets............................ 126,795 76,789
Intangible assets, net............................. 199,066,050 220,479,636
------------ ------------
Total assets................................... $287,228,786 $318,274,596
============ ============
LIABILITIES AND MEMBER'S INTEREST
Current liabilities:
Current portion of debt.......................... 6,431,970 11,125,000
Current portion of capital lease obligations..... 91,260 60,839
Current portion of broadcast rights payable...... 11,019,120 10,754,398
Accounts payable................................. 3,097,890 4,263,807
Accrued expenses................................. 3,795,439 2,795,192
Taxes payable.................................... 68,767 624,719
Interest payable................................. 2,399,061 308,477
Deferred revenue................................. 168,560 367,876
Note payable to related party.................... 14,522,000 --
Due to Midwest Television, Inc................... 4,070,331 2,255,809
------------ ------------
Total current liabilities...................... 45,664,398 32,556,117
Debt............................................... 196,971,851 242,346,850
Capital lease obligations.......................... 35,840 22,699
Broadcast rights payable........................... 2,310,571 4,262,200
Deferred tax liabilities........................... 8,058,800 7,562,548
------------ ------------
Total liabilities.............................. 253,041,460 286,750,414
============ ============
Commitments and contingencies (Note 12)
Member's interest:
Contributed capital.............................. 61,671,357 61,531,387
Accumulated deficit.............................. (27,484,031) (30,007,205)
------------ ------------
Total member's interest........................ 34,187,326 31,524,182
------------ ------------
Total liabilities and member's interest........ $287,228,786 $318,274,596
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-16
NEXSTAR FINANCE HOLDINGS, L.L.C.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
1998 1999 2000
------------- ------------- -------------
<S> <C> <C> <C>
Revenues (excluding trade and
barter).......................... $ 64,690,389 $ 91,058,642 $ 124,631,537
Less: commissions................. (8,685,544) (12,569,261) (17,546,379)
------------- ------------- -------------
Net revenues (excluding trade and
barter).......................... 56,004,845 78,489,381 107,085,158
Trade and barter revenues......... 6,606,273 8,470,246 10,382,055
------------- ------------- -------------
Total net revenues............ 62,611,118 86,959,627 117,467,213
------------- ------------- -------------
Expenses:
Operating....................... 16,959,857 23,759,883 29,268,667
Selling, general and
administrative................. 15,513,980 23,645,436 28,790,286
Amortization of broadcast
rights......................... 8,971,968 13,579,961 16,904,799
Amortization of intangible
assets......................... 16,042,965 12,982,847 14,749,982
Depreciation.................... 5,211,169 7,483,072 9,183,433
------------- ------------- -------------
Total expenses................ 62,699,939 81,451,199 98,897,167
------------- ------------- -------------
Income (loss) from operations..... (88,821) 5,508,428 18,570,046
Interest expense, including
amortization of debt financing
costs............................ (11,587,745) (16,282,388) (20,045,177)
Interest income................... 135,570 261,542 308,656
Other expense, net................ (125,437) (249,334) (259,029)
------------- ------------- -------------
Loss before income taxes.......... (11,666,433) (10,761,752) (1,425,504)
Income tax expense................ (97,945) (657,778) (1,097,670)
------------- ------------- -------------
Loss before extraordinary loss
from modification of credit
facility, net of tax............. (11,764,378) (11,419,530) (2,523,174)
Extraordinary loss from
modification of credit facility
(Note 9)......................... -- (2,828,999) --
------------- ------------- -------------
Comprehensive net loss............ $ (11,764,378) $ (14,248,529) $ (2,523,174)
============= ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-17
NEXSTAR FINANCE HOLDINGS, L.L.C.
CONSOLIDATED STATEMENT OF CHANGES IN MEMBER'S INTEREST
<TABLE>
<CAPTION>
Total
Member's Accumulated Member's
Interests Deficit Interest
----------- ------------ ------------
<S> <C> <C> <C>
Balance at December 31, 1997........... $ 8,100,000 $ (1,471,124) $ 6,628,876
Contributions ....................... 50,605,439 -- 50,605,439
Net loss............................. -- (11,764,378) (11,764,378)
----------- ------------ ------------
Balance at December 31, 1998........... 58,705,439 (13,235,502) 45,469,937
Contributions........................ 3,022,794 -- 3,022,794
Distributions........................ (56,876) -- (56,876)
Net loss............................. -- (14,248,529) (14,248,529)
----------- ------------ ------------
Balance at December 31, 1999........... 61,671,357 (27,484,031) 34,187,326
Contributions........................ 10,156 -- 10,156
Distributions........................ (150,126) -- (150,126)
Net loss............................. -- (2,523,174) (2,523,174)
----------- ------------ ------------
Balance at December 31, 2000........... $61,531,387 $(30,007,205) $ 31,524,182
=========== ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-18
NEXSTAR FINANCE HOLDINGS, L.L.C.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1998 1999 2000
------------- ------------- ------------
<S> <C> <C> <C>
Cash flows from operating
activities:
Net loss.......................... $ (11,764,378) $ (14,248,529) $ (2,523,174)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Deferred income taxes............ (772,976) (367,247) (548,713)
Depreciation of property and
equipment....................... 5,211,169 7,483,072 9,183,433
Amortization of intangible
assets.......................... 16,042,965 12,982,847 14,749,982
Amortization of debt financing
costs........................... 262,713 154,527 177,774
Amortization of broadcast rights,
net of barter................... 4,375,523 7,205,152 8,355,728
Payments for broadcast rights.... (4,464,409) (6,915,516) (8,426,260)
Loss on asset disposal, net...... 125,437 249,334 259,029
Noncash trade revenue, net....... (125,813) (159,175) (154,528)
Loss from modification of credit
facility........................ -- 2,828,999 --
Changes in assets and liabilities:
Increase in accounts receivable.. (2,997,229) (8,967,285) (1,530,129)
(Increase) decrease in prepaid
expenses and other current
assets.......................... (577,246) 314,559 (76,796)
Increase in due from Nexstar
Broadcasting Group, L.L.C....... (25,796) (423,245) (45,346)
(Increase) decrease in other
noncurrent assets............... (105,205) 94,357 50,006
Increase in accounts payable..... 551,078 1,324,416 1,165,917
Increase (decrease) in accrued
expenses........................ (36,407) 2,054,346 (917,227)
Increase (decrease) in taxes
payable......................... 388,566 (251,106) 540,952
Increase (decrease) in interest
payable......................... 72,913 2,399,061 (2,090,584)
Increase (decrease) in deferred
revenue......................... 26,674 (121,804) 199,316
Increase (decrease) in due to
Midwest Television, Inc......... -- 4,070,331 (1,814,522)
------------- ------------- ------------
Net cash provided by operating
activities...................... 6,187,579 9,707,094 16,554,858
------------- ------------- ------------
Cash flows from investing
activities:
Additions to property and
equipment, net................... (5,494,644) (6,621,251) (5,595,602)
Acquisition of broadcast
properties....................... (162,070,736) (82,378,206) (46,492,785)
------------- ------------- ------------
Net cash used for investing
activities...................... (167,565,380) (88,999,457) (52,088,387)
------------- ------------- ------------
Cash flows from financing
activities:
Proceeds from debt issuance....... 87,729,280 160,871,850 --
Repayment of loans................ (1,237,606) (128,398,964) (13,543,563)
Proceeds from revolver draws,
net.............................. 24,015,000 30,356,850 63,500,000
Note payable to related party..... -- 14,522,000 (14,522,000)
Capital contributions............. 50,605,439 3,022,794 10,156
Distributions..................... -- (56,876) (150,126)
------------- ------------- ------------
Net cash provided by financing
activities...................... 161,112,113 80,317,654 35,294,467
------------- ------------- ------------
Net increase (decrease) in cash.... (265,688) 1,025,291 (239,062)
Cash at beginning of year.......... 2,229,517 1,963,829 2,989,120
------------- ------------- ------------
Cash at end of year................ $ 1,963,829 $ 2,989,120 $ 2,750,058
============= ============= ============
Supplemental schedule of noncash
activities:
Cash paid for interest............ $ 9,287,964 $ 13,292,097 $ 21,609,581
============= ============= ============
Cash paid for taxes............... $ 712,793 $ 1,110,387 $ 1,070,144
============= ============= ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-19
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Business Operations
Nexstar Finance Holdings, L.L.C. ("Nexstar") owns, operates and programs,
through its subsidiaries, six NBC-affiliated television stations, three ABC-
affiliated television stations and two CBS-affiliated television stations in
the United States of America. Through two special purpose entities (Note 4),
Nexstar (i) programs one Fox-affiliated television station under a Time
Brokerage Agreement ("TBA") and has a Shared Services Agreement ("SSA") with a
CBS-affiliated television station and (ii) has an SSA and a Joint Sales
Agreement ("JSA") with a Fox-affiliated television station and a low-power UPN-
affiliated television station. Additionally, Nexstar programs two CBS-
affiliated television stations under two TBAs and purchased the underlying
licenses and assets in January 2001 (Note 5). The television stations described
above are located in New York, Pennsylvania, Illinois, Indiana, Missouri, Texas
and Louisiana.
Nexstar was organized as a Limited Liability Company ("LLC") on December 5,
2000 in the State of Delaware under a plan of reorganization for the purpose of
executing various financing transactions described in Note 15. The
reorganization has been accounted for as a combination of entities under common
control in a manner similar to a pooling of interests and, accordingly, the
financial statements for all periods have been restated to reflect the exchange
of members' interest.
Nexstar is an indirect subsidiary of Nexstar Broadcasting Group, L.L.C.
("Nexstar Broadcasting") which was organized as a LLC on December 12, 1996 in
the State of Delaware. Nexstar Broadcasting commenced operations on April 15,
1997.
Television broadcasting is subject to the jurisdiction of the Federal
Communications Commission ("FCC") under the Communications Act of 1934, as
amended (the "Communications Act"). The Communications Act prohibits the
operation of television broadcasting stations, except under a license issued by
the FCC, and empowers the FCC, among other things, to issue, revoke, and modify
broadcasting licenses, determine the location of the stations, regulate the
equipment used by the stations, adopt regulations to carry out the provisions
of the Communications Act and impose penalties for the violation of such
regulations.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of Nexstar, its
wholly-owned subsidiaries and Bastet Broadcasting, Inc. ("Bastet") and Mission
Broadcasting of Wichita Falls, Inc. ("Mission") (collectively, the "Company").
Bastet and Mission are special purpose entities (Note 4). All intercompany
accounts and transactions have been eliminated in consolidation.
Certain prior year amounts have been reclassified to conform to current year
presentation.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and use assumptions that affect the reported
amounts of assets and liabilities and the disclosure for contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. The more significant
estimates made by management include those relating to the allowance for
doubtful accounts, the recoverability of broadcast program rights and the
useful lives of intangible assets. Actual results may vary from estimates used.
F-20
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
Cash and Cash Equivalents
The Company considers all highly liquid investments in debt securities
purchased with an original maturity of ninety days or less to be cash
equivalents.
Concentration of Credit Risk
Financial instruments which potentially expose the Company to a
concentration of credit risk consist principally of cash investments and
accounts receivable. The Company invests primarily in high quality debt
securities with original maturities of ninety days or less. Accordingly, these
investments are subject to minimal credit and market risk. The Company
maintained cash in excess of federally insured deposits at financial
institutions on December 31, 1998, 1999 and 2000. The Company does not believe
that such deposits are subject to any unusual credit risk beyond the normal
credit risk associated with operating its business. A significant portion of
the Company's accounts receivable are due from local and national advertising
agencies. Such accounts are generally unsecured. The Company has not
experienced significant losses related to receivables from individual customers
or by geographical area. Additionally, the Company maintains reserves for
potential credit losses.
Revenue Recognition
Advertising revenues are recognized in the period during which the time
spots are aired. Revenues from other sources, which may include income from
production and other similar activities from time to time, are recognized in
the period during which the goods or services are provided.
Trade and Barter Transactions
The Company trades certain advertising time for various goods and services.
These transactions are recorded at the estimated fair value of the goods or
services received. Revenue from trade transactions is recognized when
advertisements are broadcast and services or merchandise received are charged
to expense or capitalized when received or used.
The Company barters advertising time for certain program material. These
transactions are recorded at management's estimate of the value of the
advertising time exchanged, which approximates the fair value of the program
material received. The value of advertising time exchanged is estimated by
applying average historical advertising rates for specific time periods.
Broadcast Rights and Broadcast Rights Payable
Broadcast rights, primarily in the form of syndicated programs and feature
film packages, represent amounts paid or payable to program suppliers for the
limited right to broadcast the suppliers' programming and are recorded when
available for use. Broadcast rights are stated at the lower of unamortized cost
or net realizable value. Amortization is computed using the straight-line
method based on the license period or usage, whichever is greater. The current
portion of broadcast rights represents those rights available for broadcast
which will be amortized in the succeeding year.
Property and Equipment
Purchased property and equipment is stated at the basis of cost. Purchase
business combinations are stated at estimated fair value at the date of
acquisition and time trade transactions are stated at estimated fair value at
the date they are entered into. Major renewals and betterments are capitalized
and ordinary repairs and
F-21
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
maintenance are charged to expense in the period incurred. Depreciation is
computed on a straight-line basis over the estimated useful lives of the assets
ranging from 5 to 39 years.
Intangible Assets
Intangible assets represent the estimated fair value of both identifiable
intangible assets and goodwill resulting from the acquisitions by the Company
(Note 3). Identifiable intangible assets include FCC broadcast licenses,
network affiliation agreements and commercial advertising contracts and are
being amortized on a straight-line basis over periods ranging from 1 to 15
years. Goodwill is the excess of the purchase price over the fair market value
of the net assets acquired and is amortized over 40 years using the straight-
line method.
Long-Lived Assets
The Company evaluates the recoverability of its tangible and intangible
assets whenever adverse events or changes in business climate indicate that the
expected undiscounted future cash flows from the related assets may be less
than previously anticipated. If the net book value of the related asset exceeds
the fair value of the asset, the carrying value would be reduced to its fair
value, which is measured as the present value of its expected future cash flows
and an impairment loss would be recognized. The Company did not recognize any
impairment loss for the years ended December 31, 1998, 1999 and 2000.
Debt Financing Costs
Debt financing costs represent direct costs incurred to obtain long-term
financing and are amortized to interest expense over the term of the underlying
debt utilizing the effective interest method.
Interest Rate Swap
The Company uses derivative financial instruments for purposes other than
trading, such as hedging for long-term debt or anticipated transactions, and
does so to reduce its exposure to fluctuations in interest rates. Interest
payments receivable and payable under the terms of the interest rate swap are
accrued over the period to which the payments relate. The interest payments
accrued on the swap and any swap fees paid at the inception of the interest
rate swap are treated as an adjustment to interest expense related to the
underlying liabilities. Changes in the underlying market value of the remaining
swap payments are not recognized.
Advertising Expense
The cost of advertising is expensed as incurred. The Company incurred
advertising costs in the amount of $835,712, $922,522 and $1,450,191 for the
years ended December 31, 1998, 1999 and 2000, respectively.
Financial Instruments
The carrying amount of cash and cash equivalents, accounts receivable,
broadcast rights payable, accounts payable and accrued expenses approximates
fair value due to their short-term nature. The fair value of derivative
financial instruments is obtained from financial institution quotes. The
interest rates on substantially all of the Company's bank borrowings are
adjusted regularly to reflect current market rates. Accordingly, the carrying
amount of the Company's short-term and long-term borrowings also approximates
fair value.
F-22
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
Accounting for Income Taxes
Nexstar is an LLC that is treated as a partnership for income tax purposes.
No provision for income taxes is required by Nexstar as its income and expenses
are taxable to or deductible by its members. Bastet, Mission and the wholly-
owned corporate subsidiaries of Nexstar are subject to income taxes and account
for income taxes under the asset and liability method which requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts and tax
basis of assets and liabilities.
Recently Issued Accounting Standards
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"), which establishes new
guidelines for accounting for such transactions. Subsequently, SFAS No. 133 was
amended by the issuance of Statement of Accounting Standards No. 137 and
Statement of Accounting Standards No. 138. These amendments modify the
provisions and effective date of SFAS No. 133. SFAS No. 133, as amended, is
effective for fiscal quarters beginning after January 1, 2001 for the Company
and its adoption is not expected to have a material impact on the Company's
financial position or results of operations.
In December 1999, the Securities and Exchange Commission ("SEC") released
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements," as amended by SAB 101B, which is effective no later than
the year ended December 31, 2000. The bulletin clarifies the SEC's views
regarding recognition of revenue. The Company adopted SAB 101 in the fourth
quarter. The application of the guidance in SAB 101 had no material impact on
the Company's results of operations.
3. Acquisitions
During 1998, 1999 and 2000, the Company made the acquisitions set forth
below, each of which has been accounted for under the purchase method and,
accordingly, the purchase price was allocated to assets acquired and
liabilities assumed based on their estimated fair value on the acquisition
date. The consolidated financial statements include the operating results of
each business from the date of acquisition.
The WBRE-TV Acquisition
On January 5, 1998, Nexstar acquired substantially all of the assets of
WBRE-TV from Northeastern Television Investors, LP for approximately $51.7
million, exclusive of transaction costs. The excess of the consideration paid
over the estimated fair market value of the tangible net assets and
identifiable intangible assets acquired approximated $6.7 million and is being
amortized using the straight-line method over 40 years.
The WJET-TV Acquisition
On January 5, 1998, Nexstar acquired substantially all of the assets of
WJET-TV from The Jet Broadcasting Co., Inc. for approximately $16.0 million,
exclusive of transaction costs. The excess of the consideration paid over the
estimated fair market value of the tangible net assets and identifiable
intangible assets acquired approximated $1.2 million and is being amortized
using the straight-line method over 40 years. Additionally, on January 5, 1998,
Nexstar acquired the stock of Entertainment Realty Corporation ("ERC"), for
approximately $2.0 million. ERC holds the land and buildings for WJET-TV. The
excess of the consideration paid over the estimated fair market value of the
tangible net assets and identifiable intangible assets acquired approximated
$1.1 million and is being amortized using the straight-line method over 40
years.
F-23
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Acquisitions (Continued)
The KFDX-TV, KBTV-TV (formerly KJAC-TV) and KSNF-TV Acquisitions
On January 12, 1998, Nexstar acquired substantially all of the assets of
KFDX-TV, KBTV-TV and KSNF-TV from US Broadcast Group, LLC for approximately
$64.3 million, exclusive of transaction costs. The excess of the consideration
paid over the estimated fair market value of the tangible net assets and
identifiable intangible assets acquired approximated $17.0 million and is being
amortized using the straight-line method over 40 years.
The WFXP-TV Acquisition
On July 31, 1998, Nexstar acquired the TBA of WFXP-TV from SJL
Communications, LP for $6.5 million, exclusive of transaction costs. The excess
of the consideration paid over the estimated fair market value of the tangible
net assets and identifiable intangible assets acquired approximated $2.3
million and is being amortized using the straight-line method over 40 years. On
November 30, 1998, Bastet acquired the FCC license and other assets of WFXP-TV
from NV Acquisition, Inc. for approximately $1.5 million, exclusive of
transaction costs.
The WROC-TV Acquisition
In 1999, Nexstar acquired substantially all of the assets of WROC-TV from
STC Broadcasting, Inc. for approximately $46.0 million, exclusive of
transaction costs. The excess of the consideration paid over the estimated fair
market value of the tangible net assets and identifiable intangible assets
acquired approximated $1.2 million and is being amortized using the straight-
line method over 40 years.
The KTAB-TV Acquisition
In 1999, Nexstar acquired substantially all of the assets of KTAB-TV from
Shooting Star Broadcasting, LP for approximately $17.3 million, exclusive of
transaction costs. The excess of the consideration paid over the estimated fair
market value of the tangible net assets and identifiable intangible assets
acquired approximated $5.1 million and is being amortized using the straight-
line method over 40 years.
The KJTL-TV and KJBO-TV Acquisition
On June 1, 1999, Mission acquired substantially all of the assets of KJTL-TV
and KJBO-TV from Wicks Broadcast Group, LP for approximately $15.5 million,
exclusive of transaction costs. The excess of the consideration paid over the
estimated fair market value of the tangible net assets and identifiable
intangible assets acquired approximated $3.9 million and is being amortized
using the straight-line method over 40 years.
The KMID-TV Acquisition
On September 21, 2000, Nexstar acquired substantially all the assets of
KMID-TV from GOCOM Communications for approximately $10.0 million, exclusive of
transaction costs. The consideration paid approximated the estimated fair
market value of the tangible net assets and identifiable intangible assets
acquired. As such, no goodwill has been recorded.
The KTAL-TV Acquisition
On November 1, 2000, Nexstar acquired substantially all of the assets of
KTAL-TV from KCMC, Inc. for approximately $35.3 million, exclusive of
transaction costs. The excess of the consideration paid over the
F-24
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Acquisitions (Continued)
estimated fair market value of the tangible net assets and identifiable
intangible assets approximated $3.2 million and is being amortized using the
straight-line method over 40 years.
The unaudited pro forma consolidated information for the years ended
December 31, 1998, 1999 and 2000, determined as if the acquisitions described
above occurred on January 1 of the prior year, would have resulted in the
following:
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1999 December 31, 2000
--------------------- --------------------- ---------------------
As reported Pro forma As reported Pro forma As reported Pro forma
----------- --------- ----------- --------- ----------- ---------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Revenues (excluding
trade and barter)...... $ 64,690 $ 87,765 $ 91,059 $110,063 $124,632 $133,240
Total net revenues...... 62,611 82,552 86,960 103,874 117,467 124,743
Income (loss) from
operations............. (89) (405) 5,508 6,542 18,570 19,207
Net loss................ (14,884) (21,930) (17,777) (22,360) (6,332) (8,496)
</TABLE>
This unaudited pro forma information is presented for illustrative purposes
only and is not necessarily indicative of results of operations in future
periods or results that would have been achieved had the Company and the
acquired companies been combined during the specified periods.
4. Bastet and Mission--Special Purpose Entities
Bastet and Mission are separate entities 100% owned by an independent third
party. Collectively, these entities own, operate and program the following
television stations: WYOU-TV, WFXP-TV, KJTL-TV, and KJBO-TV. Nexstar does not
own or control the television stations, but it has entered into various
management and service arrangements with them (Note 1). In addition to
providing certain services to the television stations, Nexstar is also
guarantor of Bastet's and Mission's combined debt (Note 9). Additionally, the
owner has granted to Nexstar a purchase option on each entity to acquire the
assets of each entity at a price pursuant to the terms of the option agreement.
Pursuant to Emerging Issues Task Force Topic D-14, "Transactions Involving
Special Purpose Entities," Bastet and Mission satisfy the definition of special
purpose entities and as such Nexstar is considered a sponsor of them.
Accordingly, the financial results of operations of these entities have been
consolidated with those of Nexstar in these consolidated financial statements.
Because the relevant entities have a net asset deficit and there is no binding
obligation on the minority party to make good on the deficit, minority interest
in the results of operations and share of net assets has not been recognized.
5. Time Brokerage Agreements
In 1998, 1999 and 2000, the Company had the following arrangements:
The KFDX-TV, KBTV-TV (formerly KJAC-TV) and KSNF-TV Arrangement
In conjunction with the purchase of three stations on January 12, 1998,
Nexstar paid TBA fees of $246,774 to the previous owner relating to the TBA
period which commenced in 1997 and ended on the acquisition date.
F-25
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Time Brokerage Agreements (Continued)
The WROC-TV Arrangement
In 1999, Nexstar entered into a TBA with STC Broadcasting, Inc. to program
WROC-TV. Under the TBA, Nexstar paid fees to the previous owner until the
acquisition was completed. Fees of $174,785 were paid during the TBA period.
The KTAB-TV Arrangement
In 1999, Nexstar entered into a TBA with Shooting Star Broadcasting, LP to
program KTAB-TV. Under the TBA, Nexstar accrued fees to the previous owner
until the acquisition was completed. Fees of $202,916 were paid on the
acquisition date.
The WCIA-TV/WCFN-TV and WMBD-TV Arrangement
In 1999, Nexstar entered into a TBA with Midwest Television, Inc.
("Midwest") to program WCIA-TV/WCFN-TV and WMBD-TV. On January 12, 2001,
Nexstar purchased the assets of the stations for approximately $108.0 million
at which time the TBA terminated (Note 15). A TBA fee of $2.25 million was due
at closing. Nexstar accrued the fee over the term of the agreement at a rate of
$125,000 per month.
The KMID-TV Arrangement
In 2000, Nexstar entered into a TBA with GOCOM Communications to program
KMID-TV. Under the TBA Nexstar paid fees to the previous owner until the
acquisition was completed. Fees of $60,000 were paid during the TBA period.
6. Related Party Transactions
Guaranty--Chief Executive Officer
Pursuant to a continuing guaranty agreement dated January 5, 1998 with the
Company's primary lender, the Company has entered into an agreement to
guarantee a $2.0 million nonrevolving line of credit to its President and Chief
Executive Officer to enable him to purchase equity units of the Company. The
line of credit is full-recourse to the officer and is available until December
31, 2002.
Management Services Agreement
The Company pays management and consulting fees to ABRY Partners LLC
("ABRY"). For the years ended December 31, 1998, 1999 and 2000, the Company
incurred $265,312, $265,354 and $275,887, respectively, of management and
consulting fees which are included in selling, general and administrative
expenses. Effective December 31, 2000 ABRY terminated its management services
agreement with the Company in conjunction with the offering of senior
subordinated notes (Note 16).
F-26
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Related Party Transactions (Continued)
Bridge Loan
The Company was issued a bridge loan by one of the ABRY partnerships in
conjunction with the Company's acquisition of WROC-TV in 1999. The principal
amount of $14.5 million and accrued interest thereon, was due on May 31, 2000.
The outstanding amount was paid in full on May 12, 2000. Interest accrued
annually at a rate of 9.0%. The Company recorded $784,000 and $454,476 of
interest expense for the years ended December 31, 1999 and 2000, respectively.
7. Property and Equipment
<TABLE>
<CAPTION>
Estimated December 31,
Useful Life --------------------------
(years) 1999 2000
------------- ------------ ------------
<S> <C> <C> <C>
Buildings and building
improvements.................... 39 $ 11,087,460 $ 13,297,628
Land and land improvements....... N/A - 39 1,669,346 2,749,546
Leasehold improvements........... term of lease 982,634 1,211,913
Studio equipment................. 5 - 7 25,223,661 32,244,527
Transmission equipment........... 5 - 15 17,071,872 20,128,298
Office equipment and furniture... 5 - 7 3,726,127 3,832,869
Vehicles......................... 5 2,265,214 3,281,492
Construction in progress......... N/A -- 308,169
------------ ------------
62,026,314 77,054,442
Less: accumulated depreciation... (13,142,059) (21,710,913)
------------ ------------
Property and equipment, net of
accumulated depreciation........ $ 48,884,255 $ 55,343,529
============ ============
</TABLE>
8. Intangible Assets
<TABLE>
<CAPTION>
Estimated December 31,
Useful Life --------------------------
(years) 1999 2000
------------ ------------ ------------
<S> <C> <C> <C>
Goodwill.......................... 40 $ 61,884,138 $ 66,447,765
Network affiliation agreement..... 15 112,016,292 129,639,292
FCC license....................... 15 43,990,424 57,019,233
Commercial advertising contracts.. 1 630,848 --
Debt financing costs.............. term of debt 442,877 593,693
Other intangibles................. 1 - 15 4,987,505 5,788,233
------------ ------------
223,952,084 259,488,216
Less: accumulated amortization.... (24,886,034) (39,008,580)
------------ ------------
Intangible assets, net of
accumulated amortization......... $199,066,050 $220,479,636
============ ============
</TABLE>
F-27
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Debt
Long term debt consists of the following:
<TABLE>
<CAPTION>
December 31,
---------------------------
1999 2000
------------- ------------
<S> <C> <C>
Term loan................................... $ 125,000,000 $119,500,000
Revolving credit facility................... 77,471,850 133,971,850
Note payable less unamortized discount of
$68,030 at December 31, 1999............... 931,971 --
------------- ------------
203,403,821 253,471,850
Less: current portion....................... (6,431,970) (11,125,000)
------------- ------------
$ 196,971,851 $242,346,850
============= ============
</TABLE>
Bank Debt
Description of Bank Debt
On April 15, 1997, Nexstar entered into a term loan and revolving credit
facility (collectively "the credit agreement") with a commercial bank as lead
arranger. On January 5, 1998, the credit agreement was amended to include a
term loan for an aggregate maximum amount of $90.0 million and a revolving
credit facility of $50.0 million as a result of acquisitions and working
capital needs. On June 1, 1999, the credit agreement was further amended and
restated to include a term loan for an aggregate maximum amount of $125.0
million, a revolving credit facility of $80.0 million and an available
incremental revolving credit facility not to exceed $75.0 million. On January
12, 2001, the debt outstanding was repaid pursuant to a new financing
arrangement (Note 15).
All borrowings at December 31, 2000 under the credit agreement bear interest
at the base rate, or Eurodollar rate, plus the applicable margin, as defined
(ranging from 8.995% to 9.165% at December 31, 2000). Interest is payable in
accordance with the credit agreement. The term loan is payable in variable
quarterly installments beginning September 2000 through June 2006, with each
payment reducing the aggregate maximum amount available. The maximum amount
available under the revolving credit facility is reduced quarterly beginning
September 2001. The remaining outstanding balance of the revolving credit
facility is payable in full on June 30, 2006. There are no voluntary prepayment
penalties.
On January 5, 1998, Bastet entered into a revolving credit facility (the
"credit facility") with a commercial bank as lead arranger. The credit facility
was for an aggregate maximum amount of $25.0 million. On June 1, 1999, the
credit facility was amended to increase the aggregate maximum amount to $45.0
million and to include Mission as a co-borrower. On January 12, 2001, the debt
outstanding was repaid pursuant to a new financing arrangement (Note 15).
All borrowings at December 31, 2000 under the Bastet and Mission credit
facility bear interest at the base rate, or Eurodollar rate, plus the
applicable margin, as defined (9.015% at December 31, 2000). Interest is
payable in accordance with the credit agreement. The maximum available amount
under the revolving credit facility is reduced quarterly beginning March 2000.
The remaining outstanding balance of the credit facility is payable in full on
June 30, 2006. There are no voluntary prepayment penalties.
Based on borrowing rates currently available to the Company for bank loans
with similar terms and average maturities, the fair value of the Company's
long-term debt approximates carrying value.
F-28
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Debt (Continued)
At December 31, 2000, scheduled maturities of the Company's bank debt are
summarized as follows:
<TABLE>
<S> <C>
2001.......................................................... $ 11,125,000
2002.......................................................... 19,500,000
2003.......................................................... 23,517,095
2004.......................................................... 74,800,000
2005.......................................................... 52,954,755
Thereafter.................................................... 71,575,000
------------
$253,471,850
============
</TABLE>
Interest Rate Swap Agreements
At December 31, 2000, Nexstar had in effect three interest rate swap
agreements, with commercial banks, with notional amounts of $93.3 million,
$20.0 million and $15.0 million. Nexstar's interest rate swap agreements
require Nexstar to pay a fixed rate and receive a floating rate thereby
creating fixed rate debt. The agreements are designated as a hedge of interest
rates, and the differential to be paid or received on the swaps is accrued as
an adjustment to interest expense. Nexstar is exposed to credit loss in the
event of nonperformance by the counterparty. At December 31, 2000, the fair
value of the contracts generated unrealized losses of $75,444 and $223,475 and
an unrealized gain of $57,684 on the three swap agreements, respectively. The
financial instruments expire on December 31, 2002, November 8, 2002 and May 21,
2001, respectively.
Debt Covenants
The credit agreements contain covenants which require the Company to comply
with certain financial ratios, capital expenditure and film cash payment and
other limits. Covenants are formally calculated quarterly and are prepared on a
consolidated basis. The Company was in compliance with all covenants at
December 31, 1998, 1999 and 2000.
Debt Financing Costs
In conjunction with the amendment and restatement of the credit facility
during 1999, the Company expensed $2.8 million related to certain debt
financing costs. The amount, net of tax benefit, has been presented as an
extraordinary item.
Note Payable
A note payable for $4.5 million was issued by the Company as part of the
consideration for the acquisition of KFDX-TV, KBTV-TV and KSNF-TV from US
Broadcast Group, LLC in 1998 (Note 3). The noninterest-bearing note required
payments of $1.0 million, $2.5 million and $1.0 million on December 31, 1998,
1999 and 2000, respectively. The unamortized discount was calculated using an
interest rate of 7.5%, which approximated the Company's incremental borrowing
rate for similar debt at the time of acquisition. The amount remaining
outstanding was paid in full on December 31, 2000.
F-29
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. Members' Equity
The Company has authorized two classes of equity interests: Class A
Interests and Class B Interests (collectively, the "Interests"). Each class of
Interests represents a fractional part of the membership interests of the
Company and has the rights and obligations specified in the Company's LLC
Agreement. Class A Interests are not entitled to voting rights and Class B
Interests are entitled to one vote per Interest held. Class A Interests accrue
a compounded daily yield at a rate of the higher of the base rate as defined in
the Company's credit agreement or 9% per annum. At December 31, 2000, none of
the 1,000 Class A Interests authorized and issued were outstanding. All 13,000
Class B Interests authorized and issued were outstanding.
11. Income Taxes
The provision for income taxes charged to continuing operations was as
follows at December 31:
<TABLE>
<CAPTION>
1998 1999 2000
---------- --------- ----------
<S> <C> <C> <C>
Current tax expense:
Federal............................... $ 746,393 $ 661,852 $1,130,026
State................................. 124,522 157,982 516,357
---------- --------- ----------
870,915 819,834 1,646,383
---------- --------- ----------
Deferred tax expense (benefit):
Federal............................... (670,232) (507,189) (446,995)
State................................. (102,738) 345,133 (101,718)
---------- --------- ----------
(772,970) (162,056) (548,713)
---------- --------- ----------
Net tax expense..................... $ 97,945 $ 657,778 $1,097,670
========== ========= ==========
</TABLE>
The provision for income taxes is different than the amount computed using
the applicable statutory federal income tax rate for the year ended December 31
with the differences summarized below:
<TABLE>
<CAPTION>
1998 1999 2000
----------- ----------- -----------
<S> <C> <C> <C>
Tax benefit at statutory rates.... $(5,175,268) $(4,981,846) $(1,831,883)
Change in valuation allowance..... 919,567 1,295,929 1,301,328
Income earned by a partnership not
subject to corporate income tax.. 4,348,860 4,011,568 1,375,549
State and local taxes, net of
federal benefit.................. (124,113) 128,482 21,221
Other, net........................ 128,899 203,645 231,455
----------- ----------- -----------
Net tax expense................... $ 97,945 $ 657,778 $ 1,097,670
=========== =========== ===========
</TABLE>
The components of the net deferred tax liability are as follows at December
31:
<TABLE>
<CAPTION>
1998 1999 2000
----------- ----------- -----------
<S> <C> <C> <C>
Net operating loss
carryforwards................... $ 863,912 $ 2,306,651 $ 3,817,538
Property and equipment........... (2,126,555) (2,327,253) (2,242,620)
Intangible assets................ (6,205,987) (5,650,042) (5,385,143)
Other............................ 189,261 140,931 130,553
Valuation allowance.............. (919,567) (2,301,976) (3,603,304)
----------- ----------- -----------
Net deferred tax liabilities..... $(8,198,936) $(7,831,689) $(7,282,976)
=========== =========== ===========
</TABLE>
F-30
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. Income Taxes (Continued)
At December 31, 2000, the Company has federal and state net operating loss
carryforwards available to reduce future taxable income of approximately $19.9
million which begin to expire in 2008 if not utilized.
The Company has provided a valuation allowance for certain deferred tax
assets. The allowance relates to the generation of net operating losses and
other deferred tax assets of certain corporate subsidiaries, the benefit of
which may not be realized.
A corporation that undergoes a "change of ownership" pursuant to section 382
of the Internal Revenue Code is subject to limitations on the amount of its net
operating loss carryforwards which may be used in the future. An ownership
change occurred with regard to one subsidiary on April 15, 1997. The amount of
the net operating loss at December 31, 2000 associated with that subsidiary was
approximately $1.6 million. The annual limitation on the use of the net
operating loss is approximately $446,000. The Company estimates the limitation
on the net operating loss will not have a material adverse impact on the
Company's financial position or results of operation. No assurance can be given
that an ownership change will not occur as a result of other transactions
entered into by the Company, or by certain other parties over which the Company
has no control. If a "change in ownership" for income tax purposes occurs, the
Company's ability to use "pre-change losses" could be postponed or reduced,
possibly resulting in accelerated or additional tax payments which, with
respect to tax periods beyond 2000, could have a material adverse impact on the
Company's financial position or results of operations.
12. Commitments and Contingencies
Broadcast Rights Commitments
Broadcast rights acquired for cash and barter under license agreements are
recorded as an asset and a corresponding liability at the inception of the
license period. Future minimum payments arising from unavailable current and
future broadcast license commitments outstanding are as follows at December 31,
2000:
<TABLE>
<S> <C>
2001......................................................... $ 1,971,222
2002......................................................... 3,782,168
2003......................................................... 2,634,272
2004......................................................... 2,312,010
2005......................................................... 1,453,483
Thereafter................................................... 58,500
-----------
Future minimum payments for unavailable cash broadcast
rights...................................................... $12,211,655
===========
</TABLE>
Unavailable broadcast rights commitments represent obligations to acquire
cash and barter program rights for which the license period has not commenced
and, accordingly, for which no asset or liability has been recorded.
Operating and Capital Leases
The Company leases office space, vehicles, antennae sites, studio and other
operating equipment under noncancelable capital and operating lease
arrangements expiring through 2007. Charges to operations for such
F-31
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. Commitments and Contingencies (Continued)
leases aggregated $312,680, $503,836 and $643,463 for the years ended December
31, 1998, 1999 and 2000, respectively. Future minimum lease payments under
these leases are as follows at December 31, 2000:
<TABLE>
<CAPTION>
Capital Operating
Lease Lease
Obligations Obligations
----------- -----------
<S> <C> <C>
2001............................................... $70,204 $ 472,224
2002............................................... 22,699 405,383
2003............................................... -- 385,591
2004............................................... -- 312,623
2005............................................... -- 159,266
Thereafter......................................... -- 495,233
------- ----------
$92,903 $2,230,320
======= ==========
Less: amount representing interest................. (9,365)
=======
Present value of minimum lease payments............ $83,538
=======
</TABLE>
Litigation
From time to time, the Company is involved with claims that arise out of the
normal course of business. In the opinion of management, the ultimate liability
with respect to these claims will not have a material adverse effect on the
financial statements of the Company.
13. Employee Benefit Plan
The Company has established a retirement savings plan under Section 401(k)
of the Internal Revenue Code (the "Plan"). The Plan covers substantially all
employees of the Company who meet minimum age and service requirements, and
allows participants to defer a portion of their annual compensation on a pre-
tax basis. Contributions to the Plan may be made at the discretion of the
Company. Through December 31, 2000, the Company had not elected to make such
contributions, except where required to do so under the terms of specific union
labor contracts. Mandatory amounts contributed pursuant to labor contracts were
$0, $24,820 and $26,360 during the years ended December 31, 1998, 1999 and
2000, respectively.
14. Nexstar Finance Holdings, Inc.
Nexstar Finance Holdings, Inc. was incorporated on December 5, 2000 in the
State of Delaware for the purpose of facilitating future financings. Nexstar
Finance Holdings, Inc. was capitalized with an immaterial amount of equity and
had no operating activities for the year ended December 31, 2000.
15. Subsequent Events--Acquisition and Financing
The WCIA-TV/WCFN-TV and WMBD-TV Acquisition
On January 12, 2001, Nexstar acquired substantially all of the assets of
WCIA-TV/WCFN-TV and WMBD-TV from Midwest for approximately $108.0 million,
exclusive of transaction costs. Included in the purchase price was $500,000
which was paid directly to the owner of Midwest for the building which houses
WCIA-TV. The excess of the consideration paid over the estimated fair value of
the tangible and identifiable intangible assets acquired will be amortized
using the straight-line method over 40 years. TBA fees in the amount of $2.25
million were paid to Midwest at the time of closing (Note 5).
F-32
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. Subsequent Events--Acquisition and Financing (Continued)
The unaudited pro forma consolidated information for the years ended
December 31, 1999 and 2000, determined as if the Midwest acquisition described
above occurred on January 1 of the previous year, would have resulted in the
following:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 2000
-------------------- --------------------
Pro Pro
As reported forma As reported forma
----------- -------- ----------- --------
(dollars in thousands)
<S> <C> <C> <C> <C>
Revenues (excluding trade and
barter)...................... $ 91,059 $120,520 $124,632 $133,240
Total net revenues............ 86,960 113,540 117,467 127,308
Income (loss) from
operations................... 5,508 3,034 18,570 13,044
Net loss...................... (17,777) (34,240) (6,332) (25,516)
</TABLE>
This unaudited pro forma information is presented for illustrative purposes
only and is not necessarily indicative of results of operations in future
periods or results that would have been achieved had the Company and the
acquired company been combined during the specified periods.
New Debt Facility Agreements
On January 12, 2001, in conjunction with the WCIA-TV/WCFN-TV and WMBD-TV
acquisition, the Company retired all of its previous outstanding bank debt and
secured new financing as described below.
The Nexstar Senior Secured Credit Facility
On January 12, 2001, Nexstar entered into a senior secured credit facility
with a group of commercial banks. The terms of the credit agreement provide for
a revolving credit facility (the "Nexstar revolver") in the amount of $122.0
million and a term loan facility (the "Nexstar term loan") in the amount of
$110.0 million. Interest rates associated with the Nexstar revolver and term
loan are based, at the option of the Company, on the prevailing prime rate plus
an applicable margin or the LIBOR rate plus an applicable margin. Interest is
fixed for a period ranging from one month to 12 months, depending on
availability of the interest basis selected, except if the Company selects a
prime-based loan, in which case the interest rate will fluctuate during the
period as the prime rate fluctuates. Interest is payable periodically based on
the type of interest rate selected. In addition, the Company is required to pay
quarterly commitment fees based on the Company's leverage ratio for that
particular quarter on the unused portion of the Nexstar revolver loan
commitment. The Nexstar term loan is subject to scheduled mandatory repayments
and the Nexstar revolver is subject to scheduled mandatory reductions
commencing in 2002. Any excess amount outstanding at the time of a mandatory
reduction is payable at that time.
The borrowings under the Nexstar senior secured credit facility are
guaranteed, jointly and severally, by Nexstar, Bastet and Mission, and by each
existing and subsequently acquired or organized subsidiary of the Company.
The Bastet/Mission Senior Secured Credit Facility
Concurrently with Nexstar, Bastet and Mission entered into a credit
agreement (the "Bastet/Mission credit facility") with a group of commercial
banks. The terms provide for the banks to make revolving loans to Bastet and
Mission, not to exceed the aggregate commitment of $43.0 million. Bastet and
Mission are jointly and severally liable for the outstanding amount of the
loan. Nexstar has entered into a guarantor agreement, whereby Nexstar
guarantees full payment of any obligations outstanding in the event of Bastet
and/or Mission's
F-33
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. Subsequent Events--Acquisition and Financing (Continued)
default. Interest rates associated with the Bastet/Mission credit facility are
based, at the option of Bastet and Mission, on the prevailing prime rate plus
an applicable margin or the LIBOR rate plus an applicable margin. Interest is
fixed for a period ranging from one month to 12 months, depending on
availability of the interest basis selected, except if Bastet or Mission
selects a prime-based loan, in which case the interest rate will fluctuate
during the period as the prime rate fluctuates. Interest is payable
periodically based on the type of interest rate selected. In addition, Bastet
and Mission are required to pay quarterly commitment fees based on their
leverage ratio for that particular quarter on the unused portion of the
Bastet/Mission credit facility loan commitment. The Bastet/Mission credit
facility is due and payable on the maturity date, January 12, 2007. Any excess
amount outstanding at the time of a mandatory reduction is payable at that
time.
Debt Covenants
The credit agreements described above contain covenants which require the
Company to comply with certain financial ratios, capital expenditure and film
cash payments and other limits.
Debt Financing Costs
As a result of the refinancing described above, during the first quarter
2001, the Company will write off approximately $263,000 in previously
capitalized debt financing costs. This amount will be recorded as an
extraordinary item, net of income tax benefit.
Unsecured Interim Loan
On January 12, 2001, the Company was issued an unsecured interim loan by its
primary lender (the "interim loan") in the amount of $40.0 million. The interim
loan bears interest at an initial rate of 13.5% per year, which shall
automatically increase by 0.5% on each three-month anniversary of the closing
date, not to exceed 18.0% per year. Interest becomes payable quarterly in
arrears until maturity, commencing on January 12, 2005. The interim loan
matures on January 12, 2008. The interim loan is subject to a mandatory
prepayment in the event of a direct or indirect public offering or private
placement of debt or equity securities of any entity of the Company subject to
certain exceptions. The interim loan is generally subordinate to the prior
payment in full of all senior debt either outstanding or to be created,
incurred, assumed or guaranteed.
Capital Contribution
On January 12, 2001, the Company received a capital contribution of $15.0
million from its indirect parent, Nexstar Broadcasting. Additionally, on
January 12, 2001, the Company received a $50.0 million equity contribution from
ABRY in exchange for 1,000 Class A Interests (Note 10).
16. Subsequent Events--Senior Subordinated Notes
On March 16, 2001, the Company issued $160.0 million of 12% Senior
Subordinated Notes (the "Notes") at a price of 96.012%. The Notes mature on
April 1, 2008. Interest becomes payable every six months in arrears on April 1
and October 1. The Notes are guaranteed by all of the domestic existing and
future restricted subsidiaries of the Company. They are general unsecured
senior subordinated obligations subordinated to all of the Company's senior
debt. The Notes are redeemable on or after April 1, 2005 and the Company may
redeem up to 35% of the aggregate principal amount of the notes before April 1,
2004 with the net cash proceeds from qualified equity offerings.
F-34
NEXSTAR FINANCE HOLDINGS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. Subsequent Events--Senior Subordinated Notes (Continued)
The Notes contain covenants which require the Company to comply with certain
limitations on the incurrence of additional indebtedness, issuance of equity,
payment of dividends and on certain other business activities.
The proceeds of the offering were used to repay $116.2 million of the
Nexstar revolver and $30.0 million of the interim loan, both described in Note
15. The remainder will be used to finance its operations and working capital
needs.
F-35
REPORT OF INDEPENDENT ACCOUNTANTS
To the Member of Nexstar Finance Holdings, L.L.C., current owner of WCIA-
TV/WCFN-TV and WMBD-TV:
In our opinion, the accompanying balance sheets and the related statements
of operations, of stockholders' net investment and of cash flows present
fairly, in all material respects, the financial position of WCIA-TV/WCFN-TV and
WMBD-TV (a Division of Midwest Television, Inc.) (the "Company") at May 31,
2000 and 1999, and the results of its operations and its cash flows for each of
the three years then ended in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 21, 2001
F-36
WCIA-TV/WCFN-TV AND WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
BALANCE SHEETS
<TABLE>
<CAPTION>
May 31,
---------------------- November 30,
1999 2000 2000
----------- ---------- ------------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash..................................... $ 1,985 $ 400 $ 400
Accounts receivable net of allowance for
doubtful accounts of $205,000, $174,000
and $174,000 (unaudited), respectively.. 4,211,713 25,956 --
Due from Nexstar Finance, L.L.C.......... -- 1,509,960 2,115,523
Prepaid expenses......................... 87,360 31,537 11,544
Current portion of broadcast rights...... 1,250,906 879,300 2,122,714
----------- ---------- ----------
Total current assets................... 5,551,964 2,447,153 4,250,181
----------- ---------- ----------
Broadcast rights........................... 747,191 448,095 102,751
Property and equipment, net................ 3,682,585 2,535,025 2,165,219
Intangible assets, net..................... 283,884 283,586 283,437
----------- ---------- ----------
Total assets........................... $10,265,624 $5,713,859 $6,801,588
=========== ========== ==========
LIABILITIES AND STOCKHOLDERS' NET
INVESTMENT
Current liabilities:
Accounts payable......................... $ 640,926 $ -- $ --
Accrued wages and salaries............... 663,277 -- --
Accrued profit-sharing and pension....... 704,252 19,406 --
Current portion of broadcast rights
payable................................. 1,255,895 938,770 2,123,190
Other current liabilities................ 80,847 28,340 --
----------- ---------- ----------
Total current liabilities.............. 3,345,197 986,516 2,123,190
----------- ---------- ----------
Commitment and contingencies (Note 6)
Broadcast rights payable................... 742,316 412,270 105,750
----------- ---------- ----------
Total liabilities...................... 4,087,513 1,398,786 2,228,940
Stockholders' net investment............... 6,178,111 4,315,073 4,572,648
----------- ---------- ----------
Total liabilities and stockholders' net
investment............................ $10,265,624 $5,713,859 $6,801,588
=========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-37
WCIA-TV/WCFN-TV AND WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended
Year Ended May 31, November 30,
------------------------------------ ----------------------
1998 1999 2000 1999 2000
----------- ----------- ---------- ---------- ----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues (excluding
trade and barter)...... $22,525,516 $22,978,299 $2,518,278 $2,518,278 $ --
Less: commissions....... (2,969,092) (3,043,394) (320,276) (320,276) --
----------- ----------- ---------- ---------- ----------
Net revenues (excluding
trade and barter)...... 19,556,424 19,934,905 2,198,002 2,198,002 --
Trade and barter
revenues............... 1,296,463 1,479,251 1,268,059 392,249 232,712
Other revenues.......... -- -- 4,299,151 1,871,917 2,237,980
----------- ----------- ---------- ---------- ----------
Total net revenues.. 20,852,887 21,414,156 7,765,212 4,462,168 2,470,692
----------- ----------- ---------- ---------- ----------
Expenses:
Operating............. 7,065,569 7,110,393 1,871,035 1,366,550 577,310
Selling, general and
administrative....... 5,580,776 5,752,284 763,551 786,127 311,328
Amortization of
broadcast rights..... 3,090,716 3,736,800 3,484,371 1,523,159 1,123,113
Depreciation and
amortization......... 1,063,562 1,283,429 1,147,858 573,926 369,955
----------- ----------- ---------- ---------- ----------
Total operating
expenses........... 16,800,623 17,882,906 7,266,815 4,249,762 2,381,706
Income before provisions
for income taxes....... 4,052,264 3,531,250 498,397 212,406 88,986
Provision for income
taxes.................. 60,783 52,968 7,476 3,186 1,335
----------- ----------- ---------- ---------- ----------
Net income.............. $ 3,991,481 $ 3,478,282 $ 490,921 $ 209,220 $ 87,651
=========== =========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-38
WCIA-TV/WCFN-TV AND WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
STATEMENT OF STOCKHOLDERS' NET INVESTMENT
<TABLE>
<CAPTION>
Stockholders'
Net
Investment
-------------
<S> <C>
Balance at May 31, 1997........................................... 5,618,099
Comprehensive net income:
Net income...................................................... 3,991,481
Equity adjustment for minimum pension liability................. 24,268
-----------
Total comprehensive net income................................ 4,015,749
Net transfers to Midwest Television, Inc.......................... (3,319,526)
-----------
Balance at May 31, 1998........................................... 6,314,322
Comprehensive net income:
Net income...................................................... 3,478,282
Equity adjustment for minimum pension liability................. (85,784)
-----------
Total comprehensive net income................................ 3,392,498
Net transfers to Midwest Television, Inc.......................... (3,528,709)
-----------
Balance at May 31, 1999........................................... 6,178,111
Comprehensive net income:
Net income...................................................... 490,921
Equity adjustment for minimum pension liability................. (118,150)
-----------
Total comprehensive net income................................ 372,771
Net transfers to Midwest Television, Inc.......................... (2,235,809)
-----------
Balance at May 31, 2000........................................... 4,315,073
Comprehensive net income (unaudited):
Net income (unaudited).......................................... 87,651
Equity adjustment for minimum pension liability (unaudited)..... 209,371
-----------
Total comprehensive net income (unaudited).................... 297,022
Net transfers to Midwest Television, Inc. (unaudited)............. (39,447)
-----------
Balance at November 30, 2000 (unaudited).......................... $ 4,572,648
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-39
WCIA-TV/WCFN-TV AND WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
Year Ended May 31, November 30,
------------------------------------- ----------------------
1998 1999 2000 1999 2000
----------- ----------- ----------- ----------- ---------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net income............ $ 3,991,481 $ 3,478,282 $ 490,921 $ 209,220 $ 87,651
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Loss on sale of
property and
equipment........... 3,258 12,477 -- -- --
Depreciation......... 1,063,264 1,283,130 1,147,560 573,777 369,806
Amortization of
intangible assets... 298 299 298 149 149
Amortization of
broadcasting rights,
excluding barter.... 1,944,703 2,434,722 2,270,030 1,142,727 890,411
Payments for
broadcasting
rights.............. (1,959,982) (2,273,055) (2,246,399) (1,101,441) (910,581)
Changes in assets and
liabilities:
Increase in due from
Nexstar Finance,
L.L.C............... -- -- (1,509,960) (3,887,253) (605,563)
(Increase) decrease
in accounts
receivable.......... (514,268) 129,226 4,185,757 4,070,356 25,956
Decrease (increase)
in prepaid
expenses............ 39,130 (240) 55,823 15,836 19,993
(Increase) decrease
in prepaid pension
benefit............. -- -- -- (6,349) 189,965
Increase (decrease)
in accounts
payable............. 247,679 66,363 (640,926) (591,235) --
Increase (decrease)
in accrued wages and
salaries............ 52,551 44,846 (663,277) (302,499) --
Decrease (increase)
in accrued profit
sharing and
pension............. (77,244) 34,207 (803,096) (704,252) --
Decrease in other
current
liabilities......... (30,362) (86,176) (52,507) (59,493) (28,340)
Increase (decrease)
in equipment
payable............. 549,529 (549,529) -- -- --
----------- ----------- ----------- ----------- ---------
Net cash provided by
(used in) operating
activities......... 5,310,037 4,574,552 2,234,224 (640,457) 39,447
----------- ----------- ----------- ----------- ---------
Cash flows from
investing activities:
Capital
expenditures........ (1,990,511) (1,045,358) -- -- --
----------- ----------- ----------- ----------- ---------
Net cash used in
investing
activities......... (1,990,511) (1,045,358) -- -- --
----------- ----------- ----------- ----------- ---------
Cash flows from
financing activities:
Net transfers (to)
from Midwest
Television, Inc..... (3,319,526) (3,528,709) (2,235,809) 641,714 (39,447)
----------- ----------- ----------- ----------- ---------
Net cash (used in)
provided by
financing
activities......... (3,319,526) (3,528,709) (2,235,809) 641,714 (39,447)
----------- ----------- ----------- ----------- ---------
Net increase (decrease)
in cash............... -- 485 (1,585) 1,257 --
Cash at beginning of
period................ 1,500 1,500 1,985 1,985 400
----------- ----------- ----------- ----------- ---------
Cash at end of period.. $ 1,500 $ 1,985 $ 400 $ 3,242 $ 400
=========== =========== =========== =========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-40
WCIA-TV/WCFN-TV AND WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
NOTES TO FINANCIAL STATEMENTS
1. Organization and Business Operations
WCIA-TV/WCFN-TV and WMBD-TV (the "Company"), a division of Midwest
Television, Inc. ("Midwest"), currently owns, operates and programs two
television stations, WCIA-TV and WMBD-TV, affiliated with Columbia Broadcasting
System ("CBS") in the Champaign, Illinois and Peoria, Illinois broadcast areas,
respectively. WCFN-TV is currently being used by the Company as a conduit to
simulcast, and therefore strengthen, the WCIA-TV signal in the broadcast
market. In November 1998, Midwest adopted a plan to sell the Company to Nexstar
Broadcasting of Illinois, L.L.C. ("Nexstar"). In connection with the proposed
sale, Midwest entered into a Time Brokerage Agreement ("TBA") with Nexstar,
effective July 15, 1999, whereby Nexstar effectively became the operator of the
Company's television stations. Pursuant to the agreement, the Company was paid
a TBA fee of $125,000 per month through closing. Additionally, the Company
received reimbursements for certain operating expenses, including program
payments. On January 12, 2001 Nexstar purchased the assets of the stations for
approximately $108.0 million, at which time the TBA terminated. At closing,
Nexstar also paid the full amount of the TBA fee.
Television broadcasting is subject to the jurisdiction of the Federal
Communications Commission ("FCC") under the Communications Act of 1934, as
amended (the "Communications Act"). The Communications Act prohibits the
operation of television broadcasting stations, except under a license issued by
the FCC, and empowers the FCC, among other things, to issue, revoke, and modify
broadcasting licenses, determine the location of the stations, regulate the
equipment used by the stations, adopt regulations to carry out the provisions
of the Communications Act and impose penalties for the violation of such
regulations.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements include the accounts of WCIA-TV/WCFN-TV and WMBD-
TV, a division of Midwest. The accounts have been prepared using Midwest's
historical bases in the assets and liabilities and the historical results of
operations of the Company. Changes in stockholders' net investment represent
Midwest's transfer of its net investment in the Company, after giving effect to
the net earnings of the Company plus net cash transfers to Midwest and other
transfers from Midwest.
The financial statements include allocations of certain Midwest corporate
expenses, including wages, rent, group insurance, profit sharing, audit and tax
expenses. The expense allocations have been determined on a basis that the
Company and Midwest considered to be a reasonable reflection of the utilization
of services provided to or benefit received by the Company. However, the
financial information included herein may not reflect the financial position of
the Company in the future or what it would have been had the Company been a
separate stand-alone entity during the periods presented.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and use assumptions that affect the reported
amounts of assets and liabilities and disclosures for contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. The more significant
estimates made by management include those relating to the allowance for
doubtful accounts, the recoverability of broadcast program rights and the
useful lives of intangible assets. Actual results could differ from those
estimates.
F-41
WCIA-TV and/WCFN-TV WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
Cash and Cash Equivalents
The Company considers all highly liquid investments in debt securities
purchased with an original maturity of ninety days or less to be cash
equivalents. The Company did not have any such investments at May 31, 1998,
1999 and 2000 or at November 30, 1999 and 2000.
Concentration of Credit Risk
Financial instruments which potentially expose the Company to a
concentration of credit risk consist principally of accounts receivable. A
significant portion of the Company's accounts receivable are due from local and
national advertising agencies as well as direct advertisers. Such accounts are
generally unsecured. The Company has not experienced significant losses related
to receivables from individual customers or by geographical area. Additionally,
the Company maintains reserves for potential credit losses.
Revenue Recognition
Advertising revenues are recognized in the period during which the time
spots are aired. Revenues from other sources which may include income from
production and other similar activities from time to time, are recognized in
the period during which the goods or services are provided.
Other revenues consist of income relating to TBA fees and reimbursable
expenses recognized during the TBA period with Nexstar. Reimbursable expenses
are recognized when incurred.
Trade and Barter Transactions
The Company trades certain advertising time for various goods and services.
These transactions are recorded at the estimated fair value of the goods or
services received. Revenue from trade transactions is recognized when
advertisements are broadcast and services or merchandise received are charged
to expense or capitalized when received or used.
The Company barters advertising time for certain program material. These
transactions are recorded at management's estimate of the value of the
advertising time exchanged, which approximates the fair value of the program
material received. The value of advertising time exchanged is estimated by
applying average historical advertising rates for specific time periods.
Broadcast Rights and Broadcast Rights Payable
Broadcast rights, primarily in the form of syndicated programs and feature
film packages, represent amounts paid or payable to program suppliers for the
limited right to broadcast the suppliers' programming and are recorded when
available for use. Broadcast rights are stated at the lower of unamortized cost
or net realizable value. Amortization is computed using the straight-line
method based on the license period or usage, whichever is greater. The current
portion of broadcast rights represents those rights available for broadcast
which will be amortized in the succeeding year.
Property and Equipment
Purchased property and equipment is stated on the basis of cost. Time trade
transactions are stated at estimated fair value at the date they are entered
into. Expenditures for renewals and improvements that
F-42
WCIA-TV and/WCFN-TV WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
significantly add to productive capacity or extend the useful life of an asset
are capitalized. Expenditures for maintenance and repairs are charged to income
when incurred.
Depreciation is calculated by using straight-line and accelerated methods
over the estimated useful lives of the assets ranging from 5 to 39 years.
Long-Lived Assets
The Company evaluates the recoverability of its tangible and intangible
assets whenever adverse events or changes in business climate indicate that the
expected undiscounted future cash flows from the related intangible assets may
be less than previously anticipated. If the net book value of the related
intangible asset exceeds the fair value of the intangible asset, the carrying
value would be reduced to its fair value, which is measured as the present
value of its expected future cash flows and an impairment loss would be
recognized. The Company did not recognize any impairment loss for the years
ended May 31, 1998, 1999 and 2000.
Intangible Assets
Intangible assets represent the estimated fair value of both identifiable
intangible assets and goodwill resulting primarily from the acquisition of the
Company by Midwest. Identifiable intangible assets include FCC broadcast
licenses and network affiliation agreements which are being amortized on a
straight-line basis over periods ranging from 1 to 15 years.
Goodwill is the excess of the purchase price over the fair value of the net
assets acquired. The Company's goodwill and other intangible assets acquired
prior to November 1, 1970 of $275,850 are not currently being amortized, as the
Company believes there has been no diminution of value. Generally accepted
accounting principles require intangible assets acquired after November 1, 1970
to be amortized over their estimated useful lives not to exceed 40 years. The
Company purchased a FCC license after November 1, 1970 for $11,940 which is
being amortized on a straight-line basis over a 40-year period.
Pension Plan
Pension costs recorded as charges to operations include actuarially
determined current service costs and an amount equivalent to amortization of
prior service costs in accordance with the provisions set forth in SFAS No. 87,
"Employer's Accounting for Pensions." This plan was terminated on October 31,
2000.
Advertising Expense
The cost of advertising is expensed as incurred. The Company incurred
advertising costs in the amount of $261,298, $286,083 and $12,016 for the years
ended May 31, 1998, 1999 and 2000, respectively.
Financial Instruments
The carrying amount of cash, accounts receivable, broadcast rights payable,
accounts payable and accrued expenses approximates fair value due to their
short-term nature.
Unaudited Interim Financial Information
The balance sheet as of November 30, 2000 and the statements of operations
and cash flows for the six months ended November 30, 1999 and 2000 included
herein are unaudited. In the opinion of management, all
F-43
WCIA-TV and/WCFN-TV WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
adjustments necessary for a fair presentation of these financial statements
have been included. Such adjustments consisted only of normal recurring items.
Interim results are not necessarily indicative of results for a full year.
Income Taxes
Historically, the results of the Company's operations have been included in
the federal and state tax returns of Midwest. The income tax expense included
in these financial statements has been calculated as if the operations of the
Company were not eligible to be included in Midwest's tax returns but as if the
Company were a stand-alone taxpayer.
Midwest has elected to be treated as a small business corporation under the
provisions of section 1371 of the Internal Revenue Code. With the exception of
the Illinois replacement tax, all federal and state tax liabilities relating to
the Company's taxable income are borne by the individual stockholders of
Midwest. Midwest is liable for the Illinois replacement tax. The Illinois
replacement tax relating to the operations of the Company have been recorded in
the stockholder's net investment account. No amounts relating to deferred taxes
have been recorded in the Company's financial statements.
Recently Issued Accounting Standards
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Accounting Standards No. 133 ("SFAS No. 133"), "Accounting for
Derivative Instruments and Hedging Activities." Subsequently, SFAS No. 133 was
amended in July 1999 by the issuance of Statement of Accounting Standards Nos.
137 and 138. These statements modify the provisions and effective date of SFAS
No. 133. SFAS No. 133, as amended, is effective for fiscal quarters beginning
after January 1, 2001 for the Company and its adoption is not expected to have
a material impact on the Company's financial position or results of operations.
In December 1999, the Securities and Exchange Commission ("SEC") released
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements," as amended by SAB 101B, which is effective no later than
the year ended December 31, 2000. The bulletin clarifies the Securities and
Exchange Commission's views regarding recognition of revenue. The Company
adopted SAB 101 during the second quarter of fiscal year 2001. The application
of the guidance in SAB 101 had no material impact on the Company's results of
operations.
3. Property and Equipment
<TABLE>
<CAPTION>
Estimated May 31,
Useful Life ----------------------------
(years) 1999 2000
------------- ------------- -------------
<S> <C> <C> <C>
Buildings and building
improvements................ 31-39 $ 1,982,352 $ 1,982,352
Land and land improvements... -- 134,363 134,363
Leasehold improvements....... term of lease 840,189 840,189
Studio equipment............. 5 11,887,638 11,887,638
Transmission equipment....... 5-15 5,574,164 5,574,164
Office equipment and
furniture................... 5-7 1,440,557 1,440,557
Vehicles..................... 5 782,823 782,823
------------- -------------
22,642,086 22,642,086
Less: accumulated
depreciation................ (18,959,501) (20,107,061)
------------- -------------
Property and equipment, net
of accumulated
depreciation................ $ 3,682,585 $ 2,535,025
============= =============
</TABLE>
F-44
WCIA-TV and/WCFN-TV WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
3. Property and Equipment (Continued)
There was no increase in gross property and equipment after May 31, 1999 due
to the fact that Midwest entered into the TBA with Nexstar (Note 1).
4. Intangible Assets
<TABLE>
<CAPTION>
Estimated May 31,
Useful Life ------------------
(years) 1999 2000
----------- -------- --------
<S> <C> <C> <C>
Network affiliation agreement............ 40 $226,215 $226,215
FCC license.............................. 40 34,575 34,575
Goodwill................................. 15 27,000 27,000
-------- --------
287,790 287,790
Less: accumulated amortization........... (3,906) (4,204)
-------- --------
Intangible assets, net of accumulated
amortization............................ $283,884 $283,586
======== ========
</TABLE>
5. Accrued Profit Sharing and Pensions
<TABLE>
<CAPTION>
May 31,
-----------------
1999 2000
--------- -------
<S> <C> <C>
Accrued profit sharing................................. $ 578,322 $ --
Accrued pension cost................................... 125,930 19,406
--------- -------
$ 704,252 $19,406
========= =======
</TABLE>
6. Commitments and Contingencies
Broadcast Rights Commitments
Broadcast rights acquired for cash and barter under license agreements are
recorded as an asset and a corresponding liability at the inception of the
license period. Future minimum payments arising from unavailable current and
future broadcast license commitments outstanding are as follows at May 31,
2000:
<TABLE>
<CAPTION>
<S> <C>
2001.......................................................... $1,437,900
2002.......................................................... 1,676,289
2003.......................................................... 679,484
2004.......................................................... 380,940
2005.......................................................... 387,808
Thereafter.................................................... 97,331
----------
Future minimum payments for unavailable cash broadcast
rights....................................................... $4,659,752
==========
</TABLE>
Unavailable broadcast rights commitments represent obligations to acquire
cash and barter program rights for which the license period has not commenced
and, accordingly, for which no asset or liability has been recorded.
F-45
WCIA-TV and/WCFN-TV WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
6. Commitments and Contingencies (Continued)
Lease Commitments
The Company leases equipment, vehicles, antennae sites, studio and other
operating equipment under noncancelable operating lease arrangements expiring
through 2004. Charges to operations for such leases aggregated $253,685,
$259,661 and $16,037 for the years ended May 31, 1998, 1999 and 2000,
respectively, and $110,100 for the unaudited six months ended November 30, 1999
and 2000.
7. Employee Benefit Plans
Midwest has adopted a defined contribution plan, which covers substantially
all of its employees of WCIA-TV. Midwest had adopted a 401(k) plan for non-
union employees of WMBD-TV. On June 11, 1999, Midwest resolved to terminate the
defined contribution plan and the 401(k) plan. Contributions by the Company to
both the defined contribution plan for WCIA-TV and the 401(k) plan for WMBD-TV
are at the discretion of the Midwest's Board of Directors. The Company made no
contributions and recognized no contribution expense related to the 401(k) plan
or the defined contribution plan for the year ended May 31, 1998, 1999 and 2000
and for the unaudited six months ended November 30, 2000.
Midwest also sponsors a defined benefit pension plan for non-union employees
of WMBD-TV. On June 11, 1999, Midwest resolved to freeze the defined benefit
plan. As of October 31, 2000, the plan was terminated and all benefit plan
liabilities were settled.
F-46
WCIA-TV and/WCFN-TV WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
7. Employee Benefit Plans (Continued)
The following tables provide a reconciliation of the pension plan
obligations and the value of plan assets:
<TABLE>
<CAPTION>
Six Months
Year Ended May 31, Ended
---------------------- November 30,
1999 2000 2000
---------- ---------- ------------
(unaudited)
<S> <C> <C> <C>
Change in Benefit Obligation
Benefit obligation at beginning of
year................................. $1,327,791 $1,435,692 $1,561,438
Service cost.......................... 72,302 7,464 --
Interest cost......................... 103,744 102,059 43,030
Benefits paid......................... (67,908) (64,488) (28,214)
Actuarial (gain) loss................. (237) 319,388 --
Curtailment........................... -- (238,677) --
Settlement............................ -- -- (1,576,254)
---------- ---------- ----------
Benefit obligation at end of year..... $1,435,692 $1,561,438 $ --
========== ========== ==========
Change in Plan Assets
Fair value of plan assets at beginning
of year.............................. $1,152,335 $1,208,654 $1,542,032
Employer contributions................ 84,630 175,000 98,626
Plan participants' contributions...... -- -- --
Actual return on plan assets.......... 39,599 222,865 64,266
Benefits paid......................... (67,908) (64,487) (28,214)
Acquisition........................... -- -- (1,676,710)
---------- ---------- ----------
Fair value of plan assets at end of
year................................. $1,208,656 $1,542,032 $ --
========== ========== ==========
Statement of Funded Status
Funded status......................... $ (227,036) $ (19,406) $ --
Unrecognized prior service cost....... (39,599) -- --
Unrecognized transition obligation
(asset).............................. (55,588) -- --
Unrecognized actuarial (gain) loss.... 287,515 209,371 --
---------- ---------- ----------
Net amount recognized................. $ (34,708) $ 189,965 $ --
========== ========== ==========
The following table provides the amounts recognized in the balance sheet:
<CAPTION>
Six Months
Year Ended May 31, Ended
---------------------- November 30,
1999 2000 2000
---------- ---------- ------------
(unaudited)
<S> <C> <C> <C>
Amounts recognized in the balance
sheet consist of:
Accrued benefit liability........... $ (125,930) $ (19,406) $ --
Accumulated other comprehensive
income............................. 91,222 209,371 --
---------- ---------- ----------
Net amount recognized............... $ (34,708) $ 189,965 $ --
========== ========== ==========
</TABLE>
F-47
WCIA-TV and/WCFN-TV WMBD-TV
(A DIVISION OF MIDWEST TELEVISION, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
7. Employee Benefit Plans (Continued)
The assumptions used in measuring the Company's benefit plan obligations are
as follows:
<TABLE>
<CAPTION>
Six Months
Year Ended May 31, Ended
-------------------- November 30,
1999 2000 2000
--------- --------- ------------
(unaudited)
<S> <C> <C> <C>
Weighted-average assumptions as of May
31:
Discount rate........................ 7.50% 6.75% 6.75%
Expected return on plan assets....... 10.00% 10.00% 10.00%
Rate of compensation increase........ 5.00% 5.00% 5.00%
</TABLE>
The following table provides the components of net periodic benefit cost for
the plan:
<TABLE>
<CAPTION>
Six Months
Year Ended May 31, Ended
---------------------------- November 30,
1998 1999 2000 2000
-------- -------- -------- ------------
(unaudited)
<S> <C> <C> <C> <C>
Components of net periodic
benefit cost:
Service cost.................. $ 62,175 $ 72,302 $ 7,464 $ --
Interest cost................. 94,272 103,744 102,059 43,030
Expected return on plan
assets....................... (100,166) (118,026) (112,849) (64,266)
Amortization of prior service
cost......................... (6,150) (3,630) 389 1,479
Amortization of transition
obligation (asset)........... (3,630) 4,747 (303) --
Amortization of unrecognized
(gain) loss.................. 5,888 (6,150) (511) --
-------- -------- -------- --------
Net periodic benefit cost..... $ 52,389 $ 52,987 $ (3,751) $(19,757)
======== ======== ======== ========
FAS 88 (income) expense....... $ -- $ -- $(45,923) $308,349
======== ======== ======== ========
</TABLE>
F-48
REPORT OF INDEPENDENT ACCOUNTANTS
To the Member of Nexstar Finance Holdings, L.L.C., current owner of Shooting
Star Broadcasting/KTAB-TV, LP:
In our opinion, the accompanying balance sheet and the related statement of
operations, of members' equity and of cash flows present fairly, in all
material respects, the financial position of Shooting Star Broadcasting/KTAB-
TV, LP (the "Company") at December 31, 1998 and April 30, 1999, and the results
of its operations and its cash flows for the year ended December 31, 1998 and
the four months ended April 30, 1999 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 21, 2001
F-49
SHOOTING STAR BROADCASTING/KTAB-TV, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, April 30,
1998 1999
------------ ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $ 168,654 $ 86,718
Accounts receivable, net of allowance for doubtful
accounts of $13,027 and $16,761, respectively....... 926,129 821,256
Current portion of broadcast rights.................. 238,188 156,906
Prepaid expenses and other current assets............ 14,761 5,349
---------- ----------
Total current assets............................... 1,347,732 1,070,229
Property and equipment, net............................ 2,972,090 2,865,687
Intangible assets, net................................. 4,005,472 3,903,423
Broadcast rights....................................... 31,589 24,863
Other assets........................................... 7,431 7,431
---------- ----------
Total assets....................................... $8,364,314 $7,871,633
========== ==========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Current portion of bank debt......................... $ 400,000 $ 450,000
Current portion of capital lease obligation.......... 13,395 13,989
Current portion of broadcast rights payable.......... 232,658 150,653
Accounts payable..................................... 120,169 175,879
Accrued expenses..................................... 73,094 81,072
---------- ----------
Total current liabilities.......................... 839,316 871,593
Bank debt.............................................. 3,000,000 2,850,000
Capital lease obligation............................... 39,054 34,188
Broadcast rights payable............................... 19,115 10,375
---------- ----------
Total liabilities.................................. 3,897,485 3,766,156
---------- ----------
Commitments and contingencies (Note 7)
Members' equity:
Contributed capital.................................... 4,000,100 3,750,100
Retained earnings...................................... 466,729 355,377
---------- ----------
Total members' equity.............................. 4,466,829 4,105,477
---------- ----------
Total liabilities and members' equity.............. $8,364,314 $7,871,633
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-50
SHOOTING STAR BROADCASTING/KTAB-TV, LP
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Four
Months
Year Ended Ended
December 31, April 30,
1998 1999
------------ ----------
<S> <C> <C>
Revenues (excluding trade and barter)................. $4,729,446 $1,463,951
Less: commissions..................................... (849,249) (260,846)
---------- ----------
Net revenues (excluding trade and barter)............. 3,880,197 1,203,105
Trade and barter revenues............................. 100,140 34,270
---------- ----------
Total net revenues................................ 3,980,337 1,237,375
---------- ----------
Expenses:
Operating........................................... 988,836 355,085
Selling, general and administrative................. 1,287,039 560,425
Amortization of broadcast rights.................... 300,698 105,768
Depreciation........................................ 413,584 140,654
Amortization of intangible assets................... 306,151 102,049
---------- ----------
3,296,308 1,263,981
---------- ----------
Income (loss) from operations..................... 684,029 (26,606)
Interest expense, net................................. (339,946) (84,746)
---------- ----------
Net income (loss)..................................... $ 344,083 $ (111,352)
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-51
SHOOTING STAR BROADCASTING/KTAB-TV, LP
STATEMENT OF CHANGES IN MEMBERS' EQUITY
<TABLE>
<CAPTION>
Class A Class B Class C Total
-------------------- ---------------- --------------- Retained Members
Units Amount Units Amount Units Amount Earnings Equity
-------- ---------- ------ -------- ------ ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1997................... 3,463.78 $3,463,789 526.31 $526,311 10,000 $10,000 $ 122,646 $4,122,746
Net income............ -- -- -- -- -- -- 344,083 344,083
-------- ---------- ------ -------- ------ ------- --------- ----------
Balance at December 31,
1998................... 3,463.78 3,463,789 526.31 526,311 10,000 10,000 466,729 4,466,829
Repurchase and
retirement of equity
units................ (173.18) (216,489) (26.31) (32,911) (500) (600) -- (250,000)
Net loss.............. -- -- -- -- -- -- (111,352) (111,352)
-------- ---------- ------ -------- ------ ------- --------- ----------
Balance at April 30,
1999................... 3,290.60 $3,247,300 500.00 $493,400 9,500 $ 9,400 $ 355,377 $4,105,477
======== ========== ====== ======== ====== ======= ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-52
SHOOTING STAR BROADCASTING/KTAB-TV, LP
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Four Months
Year Ended Ended
December 31, April 30,
1998 1999
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss).................................... $ 344,083 $(111,352)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation of property and equipment.............. 413,584 140,654
Amortization of intangible assets................... 306,151 102,049
Amortization of broadcast rights, net of barter..... 224,568 80,125
Payments for broadcast rights....................... (240,690) (82,862)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable.......... (150,495) 104,873
(Increase) decrease in prepaid expenses and other
current assets..................................... (824) 9,412
Increase in accounts payable........................ 14,620 55,710
Increase in accrued expenses........................ 9,292 7,978
----------- ---------
Net cash provided by operating activities.......... 920,289 306,587
----------- ---------
Cash flows from investing activities:
Additions to property and equipment.................. (49,724) (34,251)
----------- ---------
Net cash used for investing activities............. (49,724) (34,251)
----------- ---------
Cash flows from financing activities:
Repayment of promissory note to limited partner...... (698,481) --
Repayment of bank debt............................... (400,000) (100,000)
Cash payment for capital leases...................... (11,761) (4,272)
Repurchase and retirement of equity units............ -- (250,000)
----------- ---------
Net cash used for financing activities............. (1,110,242) (354,272)
----------- ---------
Net decrease in cash.................................. (239,677) (81,936)
Cash at beginning of period........................... 408,331 168,654
----------- ---------
Cash at end of period................................. $ 168,654 $ 86,718
=========== =========
Supplemental schedule of noncash activities:
Cash paid for interest............................... $ 347,788 $ 67,547
=========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-53
SHOOTING STAR BROADCASTING/KTAB-TV, LP
NOTES TO FINANCIAL STATEMENTS
1. Organization and Business Operations
Shooting Star Broadcasting/KTAB-TV, LP (the "Company") was organized as a
limited partnership on January 31, 1997, by and among the following entities:
Shooting Star KTAB Inc., a Delaware corporation, as general partner; Shooting
Star Inc., a Delaware corporation, and Shamrock Holdings Inc., a Texas
corporation, both as limited partners. The Company operates a Columbia
Broadcasting System ("CBS") television affiliate for the Abilene, Texas
broadcast area. The Company's financial and tax reporting year-end is December
31.
In 1999, Nexstar Broadcasting of Abilene, LLC, a wholly-owned indirect
subsidiary of Nexstar Broadcasting Group, L.L.C., ("Nexstar") acquired
substantially all of the assets of the Company from the partners described
above for approximately $17.3 million. These financial statements do not give
effect to the purchase transaction.
Television broadcasting is subject to the jurisdiction of the Federal
Communications Commission ("FCC") under the Communications Act of 1934, as
amended (the "Communications Act"). The Communications Act prohibits the
operation of television broadcasting stations, except under a license issued by
the FCC, and empowers the FCC, among other things, to issue, revoke, and modify
broadcasting licenses, determine the location of the stations, regulate the
equipment used by the stations, adopt regulations to carry out the provisions
of the Communications Act and impose penalties for the violation of such
regulations.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and use assumptions that affect the reported
amounts of assets and liabilities and the disclosure for contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. The more significant
estimates made by management include those relating to the allowance for
doubtful accounts, the recoverability of broadcast program rights and the
useful lives of intangible assets. Actual results may vary from estimates used.
Cash and Cash Equivalents
The Company considers all highly liquid investments in debt securities
purchased with an original maturity of ninety days or less to be cash
equivalents.
Concentration of Credit Risk
Financial instruments which potentially expose the Company to a
concentration of credit risk consist principally of cash investments and
accounts receivable. The Company invests primarily in high quality debt
securities with original maturities of ninety days or less. Accordingly, these
investments are subject to minimal credit and market risk. The Company
maintained cash in excess of federally insured deposits at a financial
institution on December 31, 1998. The Company does not believe that such
deposits are subject to any unusual credit risk beyond the normal credit risk
associated with operating its business. A significant portion of the Company's
accounts receivable are due from local and national advertising agencies. Such
accounts are generally unsecured. The Company has not experienced significant
losses related to receivables from individual customers or by geographical
area. Additionally, the Company maintains reserves for potential credit losses.
F-54
SHOOTING STAR BROADCASTING/KTAB-TV, LP
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
Revenue Recognition
Advertising revenues are recognized in the period during which the time
spots are aired. Revenues from other sources, which may include income from
production and other similar activities from time to time, are recognized in
the period during which the goods or services are provided.
Trade and Barter Transactions
The Company trades certain advertising time for various goods and services.
These transactions are recorded at the estimated fair value of the goods or
services received. Revenue from trade transactions is recognized when
advertisements are broadcast and services or merchandise received are charged
to expense or capitalized when received or used.
The Company barters advertising time for certain program material. These
transactions are recorded at management's estimate of the value of the
advertising time exchanged, which approximates the fair value of the program
material received. The value of advertising time exchanged is estimated by
applying average historical advertising rates for specific time periods.
Broadcast Rights and Broadcast Rights Payable
Broadcast rights, primarily in the form of syndicated programs and feature
film packages, represent amounts paid or payable to program suppliers for the
limited right to broadcast the suppliers' programming and are recorded when
available for use. Broadcast rights are stated at the lower of unamortized cost
or net realizable value. Amortization is computed using the straight-line
method based on the license period or usage, whichever is greater. The current
portion of broadcast rights represents those rights available for broadcast
which will be amortized in the succeeding year.
Property and Equipment
Purchased property and equipment is stated at the basis of cost. Time trade
transactions are stated at estimated fair value at the date they are entered
into. Major renewals and betterments are capitalized and ordinary repairs and
maintenance are charged to expense in the period incurred. Depreciation is
computed on a straight-line basis over the estimated useful lives of the assets
ranging from 5 to 40 years.
Intangible Assets
Intangible assets represent the estimated fair value of identifiable
intangible assets resulting from the acquisition of the Company from Shamrock
Holdings, Inc. in September 1996. Identifiable intangible assets include FCC
broadcast licenses, and network affiliation agreements and are being amortized
on a straight-line basis over a period of 15 years. No goodwill was recorded at
the time of the acquisition.
Long-Lived Assets
The Company evaluates the recoverability of its tangible and intangible
assets whenever adverse events or changes in business climate indicate that the
expected undiscounted future cash flows from the related assets may be less
than previously anticipated. If the net book value of the related asset exceeds
the fair value of the asset, the carrying value would be reduced to its fair
value, which is measured as the present value of its expected future cash flows
and an impairment loss would be recognized. The Company did not recognize any
impairment loss for the year ended December 31, 1998 and the four months ended
April 30, 1999.
F-55
SHOOTING STAR BROADCASTING/KTAB-TV, LP
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
Advertising Expense
The cost of advertising is expensed as incurred. The Company incurred
advertising costs in the amount of $17,482 and $6,593 for the year ended
December 31, 1998 and the four months ended April 30, 1999, respectively.
Financial Instruments
The carrying amount of cash, accounts receivable, broadcast rights payable,
accounts payable and accrued expenses approximates fair value due to their
short-term nature. The interest rates on substantially all of the Company's
bank borrowings are adjusted regularly to reflect current market rates.
Accordingly, the carrying amount of the Company's short-term and long-term
borrowings also approximates fair value.
Accounting for Income Taxes
The Company is organized as a limited partnership that is treated as such
for income tax purposes. The financial statements of the partnership do not
include any provision for federal or state income taxes. All Company income,
losses, tax credits and deductions are allocated among the partners. Each
partner is responsible for reporting its distributed share of company results
in its federal and state income tax returns.
3. Property and Equipment
<TABLE>
<CAPTION>
Estimated
Useful
Life December 31, April 30,
(years) 1998 1999
--------- ------------ ----------
<S> <C> <C> <C>
Land and land improvements............ N/A - 40 $1,209,772 $1,209,772
Buildings and building improvements... 40 440,000 440,000
Studio equipment...................... 5 853,944 857,422
Transmission equipment................ 5 - 25 806,070 821,605
Office equipment and furniture........ 5 - 7 193,827 209,065
Vehicles.............................. 5 101,785 101,785
---------- ----------
3,605,398 3,639,649
Less: accumulated depreciation........ (633,308) (773,962)
---------- ----------
Property and equipment, net of
accumulated depreciation............. $2,972,090 $2,865,687
========== ==========
</TABLE>
Property and equipment include $71,171 at December 31, 1998 and April 30,
1999 of office equipment and furniture acquired under capital lease agreements.
The related accumulated amortization is $20,509 and $25,259 at December 31,
1998 and April 30, 1999, respectively.
4. Intangible Assets
<TABLE>
<CAPTION>
Estimated
Useful
Life December 31, April 30,
(years) 1998 1999
--------- ------------ ----------
<S> <C> <C> <C>
Network affiliation agreement......... 15 $3,181,554 $3,181,554
FCC license........................... 15 1,410,707 1,410,707
4,592,261 4,592,261
---------- ----------
Less: accumulated amortization........ (586,789) (688,838)
---------- ----------
Intangible assets, net of accumulated
amortization......................... $4,005,472 $3,903,423
========== ==========
</TABLE>
F-56
SHOOTING STAR BROADCASTING/KTAB-TV, LP
NOTES TO FINANCIAL STATEMENTS (Continued)
5. Debt
Long term debt consists of the following:
<TABLE>
<CAPTION>
December 31, April 30,
1998 1999
------------ ----------
<S> <C> <C>
Note payable to bank.............................. $3,400,000 $3,300,000
Less: current portion............................. (400,000) (450,000)
---------- ----------
$3,000,000 $2,850,000
========== ==========
</TABLE>
Bank Debt
On January 31, 1997, the Company and Shooting Star KTAB, Inc., its general
partner, entered into a credit agreement with a bank. The terms of the
agreement include provisions for a term loan and a revolving line of credit of
$4.0 million and $500,000, respectively. The outstanding balance of the debt
was repaid at the time of the sale to Nexstar.
All borrowings bear interest at the base rate, or Eurodollar rate, plus the
applicable margin (approximately 7.8% at April 30, 1999), as defined in the
credit agreement. Accrued interest is payable each calendar quarter. The term
loan is payable in variable quarterly installments commencing September 1997
and continuing through March 2002, when the remaining outstanding balance plus
accrued interest is payable in full. The revolving line of credit is payable in
full, plus accrued interest on the maturity date, in March 2002. The revolving
line of credit is subject to mandatory reductions. Any amount outstanding above
the maximum allowed at the time of a reduction becomes immediately due and
payable. The Company did not have any balance outstanding on the line of credit
at December 31, 1998 or April 30, 1999.
Promissory Note to Limited Partner
On January 30, 1998 the Company repaid a promissory note to Shamrock
Holdings, Inc., a limited partner, issued pursuant to the terms of an asset
purchase agreement, dated September 18, 1996. Total principal of $663,575 and
accrued interest of $34,906 was repaid.
The scheduled maturities of the Company's bank debt are summarized as
follows:
<TABLE>
<S> <C>
Twelve months ending April 30,
2000........................................................... $ 450,000
2001........................................................... 650,000
2002........................................................... 2,200,000
2003........................................................... --
2004........................................................... --
Thereafter..................................................... --
----------
$3,300,000
==========
</TABLE>
Debt Covenants
The credit agreement contains covenants which require the Company to comply
with certain financial ratios, capital expenditure and other limits. Covenants
are formally calculated periodically in accordance with the terms of the credit
agreement. The Company was in compliance with all covenants at April 30, 1999.
F-57
SHOOTING STAR BROADCASTING/KTAB-TV, LP
NOTES TO FINANCIAL STATEMENTS (Continued)
5. Debt (Continued)
Guaranty
The Company and its general partner unconditionally and irrevocably guaranty
the full and punctual payment of principal and interest in the event of default
by the Company.
6. Members' Equity
The Company has authorized three classes of equity units: Class A units
("Class A Units"), Class B units ("Class B Units") and Class C units ("Class C
Units") (collectively, the "Units"). Each class of Units represents a
fractional part of the membership interests of the Company and has the rights
and obligations specified in the Company's limited partnership agreement.
Profits and losses are allocated in order of priority of each class of Units
as outlined in the Company's limited partnership agreement.
On January 28, 1999, the Company repurchased 173.18, 26.31 and 500 Class A,
B and C Units for $250,000 from Shamrock Holdings, Inc., a limited partner.
7. Commitments and Contingencies
Broadcast Rights Commitments
Broadcast rights acquired for cash and barter under license agreements are
recorded as an asset and a corresponding liability at the inception of the
license period. Future minimum payments arising from unavailable current and
future broadcast license commitments outstanding are as follows:
<TABLE>
<S> <C>
Twelve months ending April 30,
2000............................................................. $301,420
2001............................................................. 211,377
2002............................................................. 163,147
2003............................................................. 146,084
2004............................................................. 121,131
Thereafter....................................................... 40,646
--------
Future minimum payments for unavailable cash broadcast rights.... $983,805
========
</TABLE>
Unavailable broadcast rights commitments represent obligations to acquire
cash and barter program rights for which the license period has not commenced
and, accordingly, for which no asset or liability has been recorded.
F-58
SHOOTING STAR BROADCASTING/KTAB-TV, LP
NOTES TO FINANCIAL STATEMENTS (Continued)
7. Commitments and Contingencies (Continued)
Operating and Capital Leases
The Company leases office space, vehicles, antennae sites, studio and other
operating equipment under noncancelable capital and operating lease
arrangements expiring through 2004. Charges to operations for such leases
aggregated $9,579 and $2,925 for the year ended December 31, 1998 and the four
months ended April 30, 1999, respectively. Future minimum lease payments under
these leases are as follows:
<TABLE>
<CAPTION>
Capital Operating
Lease Lease
Obligations Obligations
----------- -----------
<S> <C> <C>
Twelve months ending April 30,
2000............................................... $ 19,476 $ 8,165
2001............................................... 19,476 7,586
2002............................................... 16,016 3,466
2003............................................... 3,728 2,572
2004............................................... -- 2,572
-------- -------
58,696 $24,361
======== =======
Less amount representing interest.................. (10,519)
--------
Present value of minimum lease payments............ $ 48,177
========
</TABLE>
Litigation
From time to time, the Company is involved with claims that arise out of the
normal course of business. In the opinion of management, the ultimate liability
with respect to these claims will not have a material adverse effect on the
financial statements of the Company.
8. Employee Benefit Plan
The Company has established a retirement savings plan under Section 401(k)
of the Internal Revenue Code (the "401(k) Plan"). The 401(k) Plan covers
substantially all employees of the Company who meet minimum age and service
requirements, and allows participants to defer a portion of their annual
compensation on a pre-tax basis. Contributions to the 401(k) Plan may be made
at the discretion of the Company. Through April 30, 1999, the Company had not
elected to make such contributions.
F-59
REPORT OF INDEPENDENT ACCOUNTANTS
To the Member of Nexstar Finance Holdings, L.L.C., current owner of WROC-TV:
In our opinion, the accompanying balance sheet and the related statement of
operations, of changes in stockholder's net investment and of cash flows
present fairly, in all material respects, the financial position of WROC-TV (a
Division of STC Broadcasting, Inc.) (the "Company") at March 31, 1999, and the
results of its operations and its cash flows for the three months then ended in
conformity with accounting principles generally accepted in the United States
of America. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 21, 2001
F-60
WROC-TV
(A DIVISION OF STC BROADCASTING, INC.)
BALANCE SHEET
<TABLE>
<CAPTION>
March 31,
1999
-----------
<S> <C>
ASSETS
Current assets:
Cash............................................................. $ 226,585
Accounts receivable, net of allowance for doubtful accounts of
$70,000......................................................... 2,121,637
Current portion of broadcast rights.............................. 846,474
Prepaid expenses................................................. 151,883
-----------
Total current assets........................................... 3,346,579
Property and equipment, net........................................ 5,908,860
Broadcast rights................................................... 13,001
Intangible assets, net............................................. 34,676,496
-----------
Total assets................................................... $43,944,936
===========
LIABILITIES AND STOCKHOLDER'S NET INVESTMENT
Current liabilities:
Accounts payable................................................. $ 170,385
Accrued expenses................................................. 123,149
Accrued payroll expense.......................................... 138,209
Current portion of broadcast rights payable...................... 1,112,401
Deferred revenue................................................. 8,186
-----------
Total current liabilities...................................... 1,552,330
Broadcast rights payable........................................... 13,001
-----------
Total liabilities.............................................. 1,565,331
-----------
Commitments and contingencies (Note 6)
Stockholder's net investment....................................... 42,379,605
-----------
Total liabilities and stockholder's net investment............. $43,944,936
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-61
WROC-TV
(A DIVISION OF STC BROADCASTING, INC.)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months
Ended
March 31, 1999
--------------
<S> <C>
Revenues (excluding trade and barter)............................ $2,780,893
Less: commissions................................................ (283,241)
----------
Net revenues (excluding trade and barter)........................ 2,497,652
Trade and barter revenues........................................ 301,528
----------
Total net revenues........................................... 2,799,180
----------
Expenses:
Operating...................................................... 773,549
Selling, general and administrative............................ 801,404
Amortization of broadcast rights............................... 855,613
Amortization of intangible assets.............................. 662,682
Depreciation................................................... 284,794
----------
3,378,042
----------
Loss before provision for income taxes........................... (578,862)
----------
Income tax expense............................................... (106)
----------
Net loss......................................................... $ (578,968)
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-62
WROC-TV
(A DIVISION OF STC BROADCASTING, INC.)
STATEMENT OF CHANGES IN STOCKHOLDER'S NET INVESTMENT
<TABLE>
<S> <C>
Balance at December 31, 1998....................................... $43,182,415
Net transfers to stockholder..................................... (223,842)
Net loss......................................................... (578,968)
-----------
Balance at March 31, 1999.......................................... $42,379,605
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-63
WROC-TV
(A DIVISION OF STC BROADCASTING, INC.)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months
Ended
March 31, 1999
--------------
<S> <C>
Cash flows from operating activities:
Net loss....................................................... $(578,968)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation of property and equipment........................ 284,794
Amortization of intangible assets............................. 662,682
Amortization of broadcast rights, net of barter............... 594,859
Payments for broadcast rights................................. (495,340)
Changes in assets and liabilities:
Decrease in accounts receivable............................... 222,413
Decrease in prepaid expenses and other current assets......... 51,632
Decrease in accounts payable.................................. (435,088)
Increase in accrued expenses.................................. 6,707
Increase in accrued payroll expense........................... 45,658
Increase in deferred revenue.................................. 8,186
---------
Net cash provided by operating activities................... 367,535
---------
Cash flows from investing activities:
Additions to property and equipment........................... (37,774)
---------
Net cash used for investing activities...................... (37,774)
---------
Cash flows from financing activities:
Net transfers to stockholder.................................. (223,842)
---------
Net cash used for financing activities...................... (223,842)
---------
Net increase in cash............................................ 105,919
Cash at beginning of period..................................... 120,666
---------
Cash at end of period........................................... $ 226,585
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-64
WROC-TV
(A DIVISION OF STC BROADCASTING, INC.)
NOTES TO FINANCIAL STATEMENTS
1. Organization and Business Operations
WROC-TV (the "Company") is a division of STC Broadcasting, Inc. ("STC")
which was acquired by STC on March 1, 1997. STC is a wholly-owned subsidiary of
Sunrise Television Corp., a publicly traded operator of broadcast properties in
the United States of America. The Company operates a Columbia Broadcasting
System ("CBS") television affiliate for the Rochester, New York broadcast area.
In 1999, Nexstar Broadcasting of Rochester, L.L.C. acquired substantially
all of the assets of WROC-TV from STC Broadcasting, Inc. for approximately
$46.0 million. These financial statements do not give effect to the purchase
transaction.
Television broadcasting is subject to the jurisdiction of the Federal
Communications Commission ("FCC") under the Communications Act of 1934, as
amended (the "Communications Act"). The Communications Act prohibits the
operation of television broadcasting stations, except under a license issued by
the FCC, and empowers the FCC, among other things, to issue, revoke, and modify
broadcasting licenses, determine the location of the stations, regulate the
equipment used by the stations, adopt regulations to carry out the provisions
of the Communications Act and impose penalties for the violation of such
regulations.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements include the accounts of WROC-TV, a division of STC.
The accounts have been prepared using STC's historical bases in the assets and
liabilities and the historical results of operations of the Company. Changes in
stockholder's net investment represent STC's transfer of its net investment in
the Company, after giving effect to the net earnings of the Company plus net
cash transfers to STC and other transfers from STC.
The financial statements include allocations of certain STC corporate
expenses, including audit and tax expenses. The expense allocations have been
determined on a basis that the Company and STC considered to be a reasonable
reflection of the utilization of services provided or benefit received by the
Company. However, the financial information included herein may not reflect the
financial position of the Company in the future or what it would have been had
the Company been a separate stand-alone entity during the period presented.
The Company's financial and tax reporting year-end is December 31.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and use assumptions that affect the reported
amounts of assets and liabilities and the disclosure for contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. The more significant
estimates made by management include those relating to the allowance for
doubtful accounts, the recoverability of broadcast program rights and the
useful lives of intangible assets. Actual results may vary from estimates used.
Cash
The Company considers all highly liquid debt securities purchased with an
original maturity of ninety days or less to be cash equivalents. At March 31,
1999, the Company did not have any such investments.
F-65
WROC-TV
(A DIVISION OF STC BROADCASTING, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
Concentration of Credit Risk
Financial instruments which potentially expose the Company to a
concentration of credit risk consist principally of cash maintained in excess
of federally insured deposits and accounts receivable. The Company maintained
cash in excess of federally insured deposits at a financial institution on
March 31, 1999. The Company does not believe that such deposits are subject to
any unusual credit risk beyond the normal credit risk associated with operating
its business. A significant portion of the Company's accounts receivable are
due from local and national advertising agencies. Such accounts are generally
unsecured. The Company has not experienced significant losses related to
receivables from individual customers or by geographical area. Additionally,
the Company maintains reserves for potential credit losses.
Revenue Recognition
Advertising revenues are recognized in the period during which the time
spots are aired. Revenues from other sources, which may include income from
production and other similar activities from time to time, are recognized in
the period during which the goods or services are provided.
Trade and Barter Transactions
The Company trades certain advertising time for various goods and services.
These transactions are recorded at the estimated fair value of the goods or
services received. Revenue from trade transactions is recognized when
advertisements are broadcast and services or merchandise received are charged
to expense or capitalized when received or used.
The Company barters advertising time for certain program material. These
transactions are recorded at management's estimate of the value of the
advertising time exchanged, which approximates the fair value of the program
material received. The value of advertising time exchanged is estimated by
applying average historical advertising rates for specific time periods.
Broadcast Rights and Broadcast Rights Payable
Broadcast rights, primarily in the form of syndicated programs and feature
film packages, represent amounts paid or payable to program suppliers for the
limited right to broadcast the suppliers' programming and are recorded when
available for use. Broadcast rights are stated at the lower of unamortized cost
or net realizable value. Amortization is computed using the straight-line
method based on the license period or usage, whichever is greater. The current
portion of broadcast rights represents those rights available for broadcast
which will be amortized in the succeeding year.
Property and Equipment
Purchased property and equipment is stated at the basis of cost. Time trade
transactions are stated at estimated fair value at the date they are entered
into. Major renewals and betterments are capitalized and ordinary repairs and
maintenance are charged to expense in the period incurred. Depreciation is
computed on a straight-line basis over the estimated useful lives of the assets
ranging from 5 to 20 years.
F-66
WROC-TV
(A DIVISION OF STC BROADCASTING, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
Intangible Assets
Intangible assets represent the estimated fair value of identifiable
intangible assets resulting from the acquisition of the Company by STC (Note
4). Identifiable intangible assets include a network affiliation agreement and
an FCC license, both of which are being amortized on a straight-line basis over
a period of 15 years. Goodwill is the excess of the purchase price over the
estimated fair market value of the tangible and identifiable intangible assets
acquired by STC. The amount is being amortized on a straight-line basis over 40
years.
Long-Lived Assets
The Company evaluates the recoverability of its tangible and intangible
assets whenever adverse events or changes in business climate indicate that the
expected undiscounted future cash flows from the related assets may be less
than previously anticipated. If the net book value of the related asset exceeds
the fair value of the asset, the carrying value would be reduced to its fair
value, which is measured as the present value of its expected future cash flows
and an impairment loss would be recognized. The Company did not recognize any
impairment loss for the three months ended March 31, 1999.
Advertising Expense
The cost of advertising is expensed as incurred. The Company incurred
advertising costs in the amount of $2,900 for the three months ended March 31,
1999.
Financial Instruments
The carrying amount of cash, accounts receivable, broadcast rights payable,
accounts payable and accrued expenses approximates fair value due to their
short-term nature.
Accounting for Income Taxes
Historically, the results of the Company's operations have been included in
the federal and state tax returns of STC. The income tax expense and other tax
related information included in these financial statements have been calculated
as if the operations of the Company were not eligible to be included in STC tax
returns but was rather a stand-alone taxpayer.
The Company and STC has historically operated at a loss and as a result, the
Company has provided valuation allowances for the deferred tax assets as the
benefit of these assets may not be realized. Since the division has operated at
a loss and the deferred tax assets have a full valuation allowance against
them, no amounts relating to deferred taxes have been included in the
intercompany accounts of the division. The current state tax payable has been
recorded to the intercompany account of the division.
F-67
WROC-TV
(A DIVISION OF STC BROADCASTING, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
3. Property and Equipment
<TABLE>
<CAPTION>
Estimated
Useful Life March 31,
(years) 1999
----------- ----------
<S> <C> <C>
Studio equipment................................... 5 $3,728,664
Buildings and building improvements................ 20 1,743,000
Transmission equipment............................. 15 853,467
Office equipment and furniture..................... 5 593,315
Other equipment.................................... 5 476,206
Land and land improvements N/A - 15 584,048
Vehicles........................................... 5 161,629
----------
8,140,329
Less: accumulated depreciation..................... (2,231,469)
----------
Property and equipment, net of accumulated
depreciation...................................... $5,908,860
==========
</TABLE>
4. Intangible Assets
<TABLE>
<CAPTION>
Estimated
Useful Life March 31,
(years) 1999
----------- -----------
<S> <C> <C>
Network affiliation agreement..................... 15 $29,820,845
FCC license....................................... 15 9,417,109
Goodwill.......................................... 40 698,034
Tower space income agreements..................... 15 261,507
-----------
40,197,495
Less: accumulated amortization.................... (5,520,999)
-----------
Intangible assets, net of accumulated
amortization..................................... $34,676,496
===========
</TABLE>
5. Income Taxes
The provision for income taxes charged to operations was as follows:
<TABLE>
<CAPTION>
Three Months
Ended
March 31,
1999
------------
<S> <C>
Current tax expense
Federal..................................................... $ --
State....................................................... 106
----
Net tax expense............................................... $106
====
</TABLE>
The provision for income taxes is different than the amount computed using
the applicable statutory income tax rate for the three months ended March 31,
1999 with the differences summarized below:
<TABLE>
<S> <C>
Tax benefit at statutory rates................................. $(202,602)
Change in valuation allowance.................................. 236,578
State and local taxes, net of federal benefit.................. (33,870)
---------
$ 106
=========
</TABLE>
F-68
WROC-TV
(A DIVISION OF STC BROADCASTING, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
5. Income Taxes (Continued)
The components of the net deferred tax assets at March 31, 1999 are as
follows:
<TABLE>
<S> <C>
Net operating losses.......................................... $ 1,232,579
Allowance for doubtful accounts............................... 17,217
Amortization.................................................. (24,752)
Vacation accrual.............................................. 25,368
Valuation allowance........................................... (1,250,412)
-----------
Net deferred tax assets....................................... $ --
===========
</TABLE>
6. Commitments and Contingencies
Broadcast Rights Commitments
Broadcast rights acquired for cash and barter under license agreements are
recorded as an asset and a corresponding liability at the inception of the
license period. Future minimum payments arising from unavailable current and
future broadcast license commitments are as follows:
<TABLE>
<S> <C>
Twelve months ending March 31,
2000.......................................................... $ 922,132
2001.......................................................... 895,266
2002.......................................................... 405,600
2003.......................................................... 169,000
2004.......................................................... --
Thereafter.................................................... --
----------
Future minimum payments for unavailable cash broadcast
rights....................................................... $2,391,998
==========
</TABLE>
Unavailable broadcast rights commitments represent obligations to acquire
cash and barter program rights for which the license period has not commenced
and, accordingly, for which no asset or liability has been recorded.
Operating Leases
The Company leases vehicles under noncancelable operating lease arrangements
expiring through 2001. Charges to operations for such leases aggregated $3,297
for the period ended March 31, 1999. Future minimum lease payments under these
leases are as follows:
<TABLE>
<CAPTION>
Operating
Lease
Obligations
-----------
<S> <C>
Twelve months ending March 31,
2000........................................................... $ 9,899
2001........................................................... 9,600
2002........................................................... --
2003........................................................... --
2004........................................................... --
Thereafter..................................................... --
-------
Total.......................................................... $19,499
=======
</TABLE>
F-69
WROC-TV
(A DIVISION OF STC BROADCASTING, INC.)
NOTES TO FINANCIAL STATEMENTS (Continued)
6. Commitments and Contingencies (Continued)
Litigation
From time to time, the Company is involved with claims that arise out of the
normal course of business. In the opinion of management, the ultimate liability
with respect to these claims will not have a material adverse effect on the
financial statements of the Company.
7. Employee Benefit Plan
The Company has established a retirement savings plan under Section 401(k)
of the Internal Revenue Code (the "Plan"). The Plan covers substantially all
employees of the Company who meet minimum age and service requirements, and
allows participants to defer a portion of their annual compensation on a pre-
tax basis. Matching contributions to the Plan may be made by the Company in
accordance with the terms of the Plan. For the three months ended March 31,
1999, the Company made matching contributions of $17,858.
F-70
REPORT OF INDEPENDENT AUDITORS
To the Member of Nexstar Finance Holdings, L.L.C., current owner of KTAL-TV,
Inc.
We have audited the accompanying balance sheets of KTAL-TV, Inc. as of
October 31, 2000, December 31, 1999 and 1998, and the related statements of
income, retained earnings, and cash flows for the ten months ended October 31,
2000 and the years ended December 31, 1999 and 1998. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of KTAL-TV, Inc. at October
31, 2000, December 31, 1999 and 1998, and the results of its operations and its
cash flows for the ten months ended October 31, 2000 and the years ended
December 31, 1999 and 1998 in conformity with accounting principles generally
accepted in the United States.
Ernst & Young LLP
Little Rock, Arkansas
December 1, 2000
F-71
KTAL-TV, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
--------------------- October
1998 1999 31, 2000
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash........................................ $ 661,901 $ 592,275 $ 823,791
Accounts receivable, less allowance for
uncollectible accounts of $217,405 in 2000
and $68,677 in 1999 and 1998,
respectively............................... 1,627,630 1,858,200 1,253,908
Due from affiliates--income taxes........... 849,883 309,976 --
--other.............................. 92,257 154,009 47
State income tax receivable................. -- -- 174
Current portion of program rights (Note 2).. 438,768 546,331 569,988
Prepaid expenses............................ 43,427 39,001 40,055
---------- ---------- ----------
Total current assets...................... 3,713,866 3,499,792 2,687,963
Property and equipment, at cost:
Land........................................ 70,419 70,419 70,419
Buildings and improvements.................. 389,675 346,570 352,400
Communication equipment..................... 4,943,618 2,925,831 2,945,895
Transportation equipment.................... 177,378 177,378 177,378
Furniture and fixtures...................... 303,345 291,242 295,187
---------- ---------- ----------
5,884,435 3,811,440 3,841,279
Less accumulated depreciation............... 4,871,058 2,953,922 3,139,187
---------- ---------- ----------
Net property and equipment.................... 1,013,377 857,518 702,092
Other assets:
Program rights (Note 2)..................... 10,975 59,224 19,425
Deposits and other.......................... 8,240 8,240 8,240
---------- ---------- ----------
Total other assets........................ 19,215 67,464 27,665
---------- ---------- ----------
$4,746,458 $4,424,774 $3,417,720
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable............................ $ 63,470 $ 45,341 $ 35,616
Current maturities of obligations for
program rights............................. 499,641 612,238 619,542
Accrued liabilities......................... 133,555 149,943 86,579
Due to affiliates--income taxes............. -- -- 86,973
--other (Note 5)...................... -- 56,489 149,540
State income taxes payable.................. 9,123 10,488 --
---------- ---------- ----------
Total current liabilities................. 705,789 874,499 978,250
Obligations for program rights (Note 2)....... 3,764 15,474 18,100
Commitments and contingencies (Note 3)........ -- -- --
Common stock, $1,000 stated value;
authorized 2,000 shares, issued and
outstanding 1,310 shares................... 1,310,000 1,310,000 1,310,000
Additional paid-in capital.................. 785 785 785
Retained earnings........................... 2,726,120 2,224,016 1,110,585
---------- ---------- ----------
Total stockholder's equity................ 4,036,905 3,534,801 2,421,370
---------- ---------- ----------
Total liabilities and stockholder's
equity................................... $4,746,458 $4,424,774 $3,417,720
========== ========== ==========
</TABLE>
See accompanying notes.
F-72
KTAL-TV, INC.
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended December Ten Months
31, Ended
---------------------- October
1998 1999 31, 2000
---------- ----------- ----------
<S> <C> <C> <C>
Operating revenue.......................... $9,619,502 $10,282,012 $8,329,503
Operating expenses (Notes 2 and 5):
Technical expenses....................... 375,313 357,699 303,108
Program expenses......................... 3,485,278 3,989,626 3,216,793
Selling expenses......................... 2,069,817 2,165,602 1,848,750
General and administrative expenses...... 1,181,644 1,290,154 1,193,590
Corporate expenses....................... 529,811 522,134 100,316
Depreciation............................. 276,525 274,488 185,265
---------- ----------- ----------
Total operating expenses............... 7,918,388 8,599,703 6,847,822
---------- ----------- ----------
Operating income........................... 1,701,114 1,682,309 1,481,681
Other income (expenses):
Interest income.......................... 12,694 12,532 13,660
Other.................................... 1,567 (7,673) --
---------- ----------- ----------
Total other income..................... 14,261 4,859 13,660
---------- ----------- ----------
Income before income taxes................. 1,715,375 1,687,168 1,495,341
Income taxes (benefit) (Notes 4 and 5):
Current:
Federal................................ 561,534 565,987 552,545
State.................................. 74,721 124,364 108,785
Deferred................................. 529 (26,079) (85,558)
---------- ----------- ----------
Provision for income taxes................. 636,784 664,272 575,772
---------- ----------- ----------
Net income................................. $1,078,591 $ 1,022,896 $ 919,569
========== =========== ==========
</TABLE>
See accompanying notes.
F-73
KTAL-TV, INC.
STATEMENT OF RETAINED EARNINGS
<TABLE>
<S> <C>
Balance at January 1, 1998......................................... $ 2,292,529
Net income....................................................... 1,078,591
Cash dividends................................................... (645,000)
-----------
Balance at December 31, 1998....................................... 2,726,120
Net income....................................................... 1,022,896
Cash dividends................................................... (1,525,000)
-----------
Balance at December 31, 1999....................................... 2,224,016
Net income....................................................... 919,569
Cash dividends................................................... (2,033,000)
-----------
Balance at October 31, 2000........................................ $ 1,110,585
===========
</TABLE>
See accompanying notes.
F-74
KTAL-TV, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Ten Months
Year Ended December 31, Ended
------------------------ October 31,
1998 1999 2000
----------- ----------- -----------
<S> <C> <C> <C>
Operating activities
Net income............................. $ 1,078,591 $ 1,022,896 $ 919,569
Adjustments to reconcile net income to
net cash provided by operating
activities:
Provision for bad debts.............. 47,427 66,692 142,375
Depreciation......................... 276,525 274,488 185,265
Amortization of program rights....... 466,826 678,291 649,538
Loss on disposal of property and
equipment........................... -- 7,680 --
Changes in operating assets and
liabilities:
Accounts receivable................ (161,645) (297,262) 461,917
Due to/from affiliates............. (255,256) 534,644 643,962
Prepaid expenses................... (1,793) 4,426 (1,054)
State income taxes
refundable/payable................ 60,664 1,365 (10,662)
Accounts payable................... 5,860 (18,129) (9,725)
Accrued liabilities................ 12,068 16,388 (63,364)
----------- ----------- -----------
Net cash provided by operating
activities............................ 1,529,267 2,291,479 2,917,821
Investing activities
Purchases of property and equipment.... (165,994) (126,309) (29,839)
----------- ----------- -----------
Net cash used in investing activities.. (165,994) (126,309) (29,839)
Financing activities
Payments of obligations for program
rights................................ (581,734) (709,796) (623,466)
Dividends paid......................... (645,000) (1,525,000) (2,033,000)
----------- ----------- -----------
Net cash used in financing activities.. (1,226,734) (2,234,796) (2,656,466)
----------- ----------- -----------
Net increase (decrease) in cash........ 136,539 (69,626) 231,516
Cash at beginning of year.............. 525,362 661,901 592,275
----------- ----------- -----------
Cash at end of year.................... $ 661,901 $ 592,275 $ 823,791
=========== =========== ===========
</TABLE>
See accompanying notes.
F-75
KTAL-TV, INC.
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
1. Accounting Policies
Organization
KTAL-TV, Inc. (the "Company") is a wholly owned subsidiary of KCMC, Inc.
KCMC, Inc. is a wholly owned subsidiary of Camden News Publishing Company.
Description of Business
The Company operates the National Broadcasting Company television affiliate
for the Shreveport and Texarkana broadcast area. Accounts receivable are
comprised of a diversified customer base that results in a lack of
concentration of credit risk. In addition, the Company employs credit-
monitoring policies that, in management's opinion, effectively reduce any
potential credit risk to an acceptable level.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Property and Equipment
Depreciation is provided using the declining-balance and straight-line
methods over the following estimated useful lives:
<TABLE>
<CAPTION>
Years
-----
<S> <C>
Buildings and improvements........................................... 5-25
Communication equipment.............................................. 4-12
Transportation equipment............................................. 3
Furniture and fixtures............................................... 5-10
</TABLE>
Program Rights
Program rights represent amounts capitalized for syndicated television
programming. The Company follows the gross payment method in recording program
license agreements with capitalized program costs being amortized based on
usage. The capitalized costs of program rights are included in the accompanying
balance sheets at the lower of unamortized cost or estimated net realizable
value. Program rights are classified as current or noncurrent assets in the
accompanying balance sheets based on estimated time of usage. The related
liabilities are segregated between current and noncurrent based upon the
payment terms.
Advertising Expenses
Advertising expenses are charged to operations in the period incurred.
Advertising expenses for the ten months ended October 31, 2000 and the years
ended December 31, 1999 and 1998, including advertising expenses associated
with barter transactions, were $79,803, $105,278, and $155,157, respectively.
Revenue Recognition
The Company's primary source of revenue is the sale of television time to
advertisers. Revenue is recorded when the advertisements are broadcast.
F-76
KTAL-TV, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. Accounting Policies (Continued)
Barter
Revenue and expense associated with the barter of syndicated programs are
recorded at the estimated fair value of advertising time given in the exchange.
Certain program contracts provide for the exchange of advertising airtime in
lieu of cash payments for the rights to such programming. Barter revenue and
expense totaled $1,047,460 for the ten months ended October 31, 2000 and
$1,484,813 and $1,309,359 for the years ended December 31, 1999 and 1998,
respectively. Revenue and expense associated with barter of nonprogramming
services totaled $14,799 in 2000 and $24,626 and $63,571 in 1999 and 1998,
respectively.
Impairment of Assets
The Company accounts for any impairment of its long-lived assets using SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of". Under SFAS No. 121, impairment losses are recognized
when information indicates the carrying amount of long-lived assets,
identifiable intangibles and goodwill related to those assets will not be
recovered through future operations or sale.
2. Obligations for Program Rights
The Company has contracts with various companies under which the Company has
obtained the right to air certain syndicated television programs. The
amortization included in program expenses in the accompanying statements of
income related to these contracts total $616,792 for the ten months ended
October 31, 2000, $678,291 and $466,826 in 1999 and 1998, respectively. Program
rights contracts totaling $615,980, $751,180, and $493,235 were entered into
during the ten months ended October 31, 2000, and the year ended December 31,
1999, and 1998, respectively.
Obligations for program rights of $18,100 are payable in 2002.
At October 31, 2000, the Company had commitments totaling $1,022,410 for
rights to air programs for which the contracts did not become effective until
2001 and beyond.
3. Commitments and Contingencies
The Company is one of the multiple guarantors of the $185,000,000 Credit
Agreement, which expires December 31, 2004, between Camden News Publishing
Company and a group of eight banks led by the Bank of New York as
administrative agent.
The Company has commitments under various operating leases, all of which
expire within five years. Future minimum lease commitments under operating
leases at October 31, 2000 total $71,860, composed of $33,541 for 2001, $25,909
for 2002, and $12,410 for 2003.
4. Income Taxes
The Company and its parent are included in the consolidated federal income
tax returns of Camden News Publishing Company. In accordance with the
provisions of a tax allocation agreement, income taxes are allocated as if
separate returns were filed by the Company. Federal income taxes, both current
and deferred, are reflected in the accompanying financial statements as due to
or due from affiliates. State income tax returns are filed separately by the
Company.
F-77
KTAL-TV, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Income Taxes (Continued)
The reasons for the difference between the actual income taxes and the
expected income taxes computed at the statutory federal income tax rate are as
follows:
<TABLE>
<CAPTION>
Year Ended December 31,
Ten Months Ended ---------------------------------
October 31, 2000 1999 1998
---------------- ---------------- ----------------
Amount Percent Amount Percent Amount Percent
-------- ------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Tax at statutory rate... $508,416 34.0% $573,637 34.0% $583,228 34.0%
State income taxes, net
of federal income tax
benefit................ 63,289 4.2 86,420 5.1 47,742 2.8
Other, net.............. 4,067 .3 4,215 .3 5,814 .3
-------- ---- -------- ---- -------- ----
$575,772 38.5% $664,272 39.4% $636,784 37.1%
======== ==== ======== ==== ======== ====
</TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The Company's
significant temporary differences result in deferred tax liabilities and assets
being recorded by Camden News Publishing Company under the tax allocation
agreement. As of October 31, 2000, December 31, 1999 and 1998, these deferred
tax liabilities amount to $125,437, $169,886 and $193,938, respectively, and
result primarily from tax over book depreciation and accrued expenses. As of
October 31, 2000, December 31, 1999 and 1998, the deferred tax assets amount to
$85,397, $44,288 and $42,261, respectively, and result primarily from the
allowance for uncollectible accounts.
Cash paid for state income taxes, net of refunds, was $119,446, $120,744,
and $25,000 for the ten months ended October 31, 2000, and the year ended
December 31, 1999, and 1998, respectively.
5. Related Party Transactions
Significant transactions with affiliates include the following expenses:
<TABLE>
<CAPTION>
Ten Months Year Ended
Ended December 31,
October 31, -----------------
2000 1999 1998
----------- -------- --------
<S> <C> <C> <C>
Administrative, accounting, management and
data processing services................... $ 65,304 $471,354 $486,159
Income taxes................................ 552,545 565,987 561,534
</TABLE>
Current amounts due from and due to affiliates, all of which are owned
directly or indirectly by Camden News Publishing Company, are noninterest
bearing.
The $400,000 management fee, which has been charged to the Company annually
in both 1999 and 1998 by Camden News Publishing Company, has not been allocated
to the Company in 2000 due to the sale of certain assets of the Company on
November 1, 2000.
6. Subsequent Events
On November 1, 2000, Nexstar Broadcasting of Louisiana, LLC, purchased all
of the Company's tangible and intangible assets used or useful in connection
with the Company's business for $35,250,000. This purchase of assets includes
licenses and assumed contracts but excludes cash, cash equivalents, contracts
of insurance, employee benefit plans, fringe benefits, accounts receivable, and
all claims for copyright royalties for broadcasts prior to the closing date.
The Company recorded a gain of approximately $33.5 million.
F-78
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Through and including , 2001, (the 90th day after the date of this
prospectus) all dealers that effect transactions in these securities, whether
or not participating in this exchange offer, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to unsold allotments or
subscriptions.
NEXSTAR FINANCE HOLDINGS, L.L.C.
NEXSTAR FINANCE HOLDINGS, INC.
16% Series B Senior Discount Notes due 2009
-------------------------------------
PROSPECTUS
, 2001
-------------------------------------
Banc of America Securities LLC
Barclays Capital
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Nexstar Finance Holdings, L.L.C. is a limited liability company organized
under the laws of the State of Delaware, and Nexstar Finance Holdings, Inc. is
a corporation organized under the laws of the State of Delaware.
(a) Article 8 of Nexstar Finance Holdings, L.L.C.'s Third Amended and
Restated Limited Liability Company Agreement provides that:
Liability of Member. The Member shall not have any liability for the
obligations or liabilities of the Company except to the extent provided in
the Delaware Limited Liability Company Act.
(b) Article 8 of Nexstar Finance Holdings, Inc.'s Certificate of
Incorporation provides that:
Section 1. Nature of Indemnity. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he (or a person of
whom he is the legal representative), is or was a director or officer of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary, or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis of such
proceeding is alleged action in an official capacity as a director,
officer, employee, fiduciary or agent or in any other capacity while
serving as a director, officer, employee, fiduciary or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
which it is empowered to do so by the General Corporation Law of the State
of Delaware, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment) against all
expense, liability and loss (including attorneys' fees actually and
reasonably incurred by such person in connection with such proceeding and
such indemnification shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that, except as provided
in Section 2 of this Article Eight, the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding
initiated by such person only if such proceeding was authorized by the
Board of Directors of the Corporation. The right to indemnification
conferred in this Article Eight shall be a contract right and, subject to
Sections 2 and 5 of this Article Eight, shall include the right to payment
by the Corporation of the expenses incurred in defending any such
proceeding in advance of its final disposition. The Corporation may, by
action of the Board of Directors, provide indemnification to employees and
agents of the Corporation with the same scope and effect as the foregoing
indemnification of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the Corporation under Section 1
of this Article Eight or advance of expenses under Section 5 of this
Article Eight shall be made promptly, and in any event within 30 days, upon
the written request of the director or officer. If a determination by the
Corporation that the director or officer is entitled to indemnification
pursuant to this Article Eight is required, and the Corporation fails to
respond within sixty days to a written request for indemnity, the
Corporation shall be deemed to have approved the request. If the
Corporation denies a written request for indemnification or advancing of
expenses, in whole or in part, or if payment in full pursuant to such
request is not made within 30 days, the right to indemnification or
advances as granted by this Article Eight shall be enforceable by the
director or officer in any court of competent jurisdiction. Such person's
costs and expenses incurred in connection with successfully establishing
his right to indemnification, in whole or in part, in any such action shall
also be indemnified by the Corporation. It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition
II-1
where the required undertaking, if any, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which
make it permissible under the General Corporation Law of the State of
Delaware for the Corporation to indemnify the claimant for the amount
claimed, but the burden of such defense shall be on the Corporation.
Neither the failure of the Corporation (including the Board of Directors,
independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification
of the claimant is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in the General Corporation Law
of the State of Delaware, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 3. Nonexclusivity of Article Eight. The rights to
indemnification and the payment of expenses incurred in defending a
proceeding in advance of its final disposition conferred in this Article
Eight shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute, provision of the certificate of
incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
Section 4. Insurance. The Corporation may purchase and maintain
insurance on its own behalf and on behalf of any person who is or was a
director, officer, employee, fiduciary, or agent of the Corporation or was
serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, whether or not the Corporation would
have the power to indemnify such person against such liability under this
Article Eight.
Section 5. Expenses. Expenses incurred by any person described in
Section 1 of this Article Eight in defending a proceeding shall be paid by
the Corporation in advance of such proceeding's final disposition unless
otherwise determined by the Board of Directors in the specific case upon
receipt of an undertaking by or on behalf of the director or officer to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation. Such expenses incurred by
other employees and agents may be so paid upon such terms and conditions,
if any, as the Board of Directors deems appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article Eight and who are or were employees or
agents of the Corporation, or who are or were serving at the request of the
Corporation as employees or agents of another corporation, partnership,
joint venture, trust or other enterprise, may be indemnified to the extent
authorized at any time or from time to time by the Board of Directors.
Section 7. Contract Rights. The provisions of this Article Eight shall
be deemed to be a contract right between the Corporation and each director
or officer who serves in any such capacity at any time while this Article
Eight and the relevant provisions of the General Corporation Law of the
State of Delaware or other applicable law are in effect, and any repeal or
modification of this Article Eight or any such law shall not affect any
rights or obligations then existing with respect to any state of facts or
proceeding then existing.
Section 8. Merger or Consolidation. For purposes of this Article Eight,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify
its directors, officers, and employees or agents, so that any person who is
or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall
stand in the same position under this Article Eight with respect to the
resulting or surviving corporation as he or she would have with respect to
such constituent corporation if its separate existence had continued.
II-2
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits.
See Exhibit Index.
(b) Financial Statement Schedules.
All schedules have been omitted because they are not applicable or
because the required information is shown in the financial statements or
notes thereto.
Item 22. Undertakings.
The undersigned registrants hereby undertake:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which individually or in the
aggregate, represent a fundamental change in the information in the
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(b) That, for the purpose of determining by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrants pursuant to the provisions described
under Item 20 or otherwise, the registrants have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by a registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue
The undersigned registrants hereby undertake:
(d) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(e) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Clarks
Summit, State of Pennsylvania on September 5, 2001.
Nexstar Finance Holdings, L.L.C.
/s/ Shirley E. Green
By: _________________________________
Name: Shirley E. Green
Title: Vice President,
Finance and
Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Shirley E. Green his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Nexstar Finance Holdings, L.L.C., to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act
of 1933, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact
and agent or his substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on September 5, 2001.
<TABLE>
<CAPTION>
Signature Capacity
--------- --------
<S> <C> <C>
/s/ Perry A. Sook President and Chief Executive Officer
___________________________________________ (Principal Executive Officer)
Perry Sook
/s/ Shirley E. Green Vice President, Finance and Secretary
___________________________________________ (Principal Financial Officer and
Shirley E. Green Accounting Officer)
/s/ Perry A. Sook President and Chief Executive Officer of
___________________________________________ Nexstar Finance Holdings II, L.L.C. (sole
Nexstar Financial Holdings II, L.L.C. member of Nexstar Finance Holdings,
By: Perry A. Sook L.L.C.)
</TABLE>
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Clarks
Summit, State of Pennsylvania on September 5, 2001.
Nexstar Finance Holdings, Inc.
/s/ Shirley E. Green
By: _________________________________
Name: Shirley E. Green
Title: Vice President,
Finance and
Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Shirley E. Green his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Nexstar Finance Holdings, L.L.C., to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act
of 1933, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact
and agent or his substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on September 5, 2001.
<TABLE>
<CAPTION>
Signature Capacity
--------- --------
<S> <C> <C>
/s/ Perry A. Sook President, Chief Executive Officer and
___________________________________________ Director (Principal Executive Officer)
Perry Sook
/s/ Shirley E. Green Vice President, Finance and Secretary
___________________________________________ (Principal Financial Officer and
Shirley E. Green Accounting Officer)
/s/ Jay M. Grossman Vice President, Assistant Secretary and
___________________________________________ Director
Jay M. Grossman
/s/ Peni A. Garber Director
___________________________________________
Peni A. Garber
/s/ Royce Yudkoff Vice President, Assistant Secretary and
___________________________________________ Director
Royce Yudkoff
</TABLE>
II-5
EXHIBIT INDEX
<TABLE>
<C> <S>
3.1 Certificate of Formation of NBG, L.L.C.
3.2 Certificate of Amendment to the Certificate of Formation on NBG, L.L.C.
3.3 Limited Liability Company Agreement of NBG, L.L.C.
3.4 Amendment No. 1 to the Limited Liability Company Agreement of NBG,
L.L.C.
3.5 Articles of Incorporation of Nexstar Finance Holdings, Inc.
3.6 By-laws of Nexstar Finance Holdings, Inc.
4.1 Indenture, among Nexstar Finance Holdings, L.L.C., Nexstar Finance
Holdings, Inc., Bastet Broadcasting, Inc., Mission Broadcasting of
Wichita Falls, Inc., Nexstar Broadcasting Group, L.L.C. and United
States Trust Company of New York, dated as of May 17, 2001.
4.2 Supplemental Indenture, among Nexstar Finance Holdings, L.L.C., Nexstar
Finance Holdings, Inc., Nexstar Finance Holdings II, L.L.C. and The
Bank of New York, dated August 6, 2001.
4.3 Form of exchange note (Included in Exhibit 4.1 hereto).
4.4 Registration Rights Agreement, by and among Nexstar Finance Holdings,
L.L.C., Nexstar Finance Holdings, Inc., Banc of America Securities LLC
and Barclays Capital Inc. dated as of May 17, 2001.
5.1 Opinion of Kirkland & Ellis.
8.1 Opinion of Kirkland & Ellis regarding federal tax consequences.
10.1 Purchase Agreement, by and among Nexstar Finance Holdings, L.L.C.,
Nexstar Finance Holdings, Inc., Nexstar Equity Corp., Nexstar
Broadcasting Group, L.L.C., Banc of America Securities LLC and Barclays
Capital Inc., dated as of May 14, 2001.
10.2 Unit Agreement, among Nexstar Finance Holdings, L.L.C., Nexstar Finance
Holdings, Inc., Nexstar Equity Corp., Nexstar Broadcasting Group,
L.L.C. and United States Trust Company of New York, dated as of May 17,
2001.
10.3 Reimbursement Agreement, between Nexstar Equity Corp. and Nexstar
Broadcasting Group, L.L.C., dated as of May 17, 2001.
10.4 Amended and Restated Credit Agreement, dated as of June 14, 2001, by
and among Nexstar Finance, L.L.C., Nexstar Broadcasting Group, L.L.C.
and certain of its Subsidiaries from time to time parties thereto, the
several financial institutions from time to time parties thereto, Bank
of America, N.A., Barclays Bank PLC and First Union National Bank.
10.5 First Amendment to Credit Agreement and Limited Consent, among Nexstar
Finance, L.L.C., Nexstar Broadcasting Group, L.L.C., the Parent
Guarantors named therein, the several Banks named therein and Bank of
America, N.A., dated as of May 17, 2001.
10.6 Credit Agreement, by and among Nexstar Finance, L.L.C., the parent
guarantors party thereto, Banc of America, N.A., CIBC Inc., Firstar
Bank, N.A., Barclays Bank PLC and First Union National Bank, dated as
of January 12, 2001. (Incorporated by reference to Exhibit 10.2 to
Registration Statement on Form S-4 (File No. 333-62916) filed by
Nexstar Finance, L.L.C. and Nexstar Finance, Inc.)
10.7 Credit Agreement, by and among Bastet Broadcasting, Inc., Mission
Broadcasting of Wichita Falls, Inc., Bank of America, N.A., Barclays
Bank PLC and First Union National Bank, dated as of January 12, 2001.
(Incorporated by reference to Exhibit 10.3 to Registration Statement on
Form S-4 (File No. 333-62916) filed by Nexstar Finance, L.L.C. and
Nexstar Finance, Inc.)
</TABLE>
II-6
<TABLE>
<C> <S>
10.8 Guaranty Agreement, dated as of January 12, 2001, executed by Nexstar
Broadcasting Group, L.L.C. and Nexstar Finance Holdings, L.L.C. in
favor of the guaranteed parties defined therein. (Incorporated by
reference to Exhibit 10.5 to the Registration Statement on Form S-4
(File No. 333-62916) filed by Nexstar Finance, L.L.C. and Nexstar
Finance, Inc.)
10.9 Guaranty Agreement, dated as of January 12, 2001, executed by Nexstar
Finance Holdings, Inc. in favor of the guaranteed parties defined
therein. (Incorporated by reference to Exhibit 10.6 to the
Registration Statement on Form S-4 (File No. 333-62916) filed by
Nexstar Finance, L.L.C. and Nexstar Finance, Inc.)
10.10 Guaranty Agreement, dated as of January 12, 2001, executed by Bastet
Broadcasting, Inc. and Mission Broadcasting of Wichita Falls, Inc.
(Incorporated by reference to Exhibit 10.7 to the Registration
Statement on Form S-4 (File No. 333-62916) filed by Nexstar Finance,
L.L.C. and Nexstar Finance, Inc.)
10.11 Security Agreement, dated as of January 12, 2001, made by each of the
Nexstar entities defined therein in favor of Bank of America, N.A.,
as collateral agent. (Incorporated by reference to Exhibit 10.8 to
the Registration Statement on Form S-4 (File No. 333-62916) filed by
Nexstar Finance, L.L.C. and Nexstar Finance, Inc.)
10.12 Pledge and Security Agreement, dated as of January 12, 2001, made by
each of the Nexstar entities defined therein in favor of Bank of
America, N.A., as collateral agent. (Incorporated by reference to
Exhibit 10.9 to the Registration Statement on Form S-4 (File No. 333-
62916) filed by Nexstar Finance, L.L.C. and Nexstar Finance, Inc.)
10.13 Executive Employment Agreement, dated as of January 5, 1998, by and
between Perry A. Sook and Nexstar Broadcasting Group, Inc., as
amended on January 5, 1999. (Incorporated by reference to Exhibit
10.10 to the Registration Statement on Form S-4 (File No. 333-62916)
filed by Nexstar Finance, L.L.C. and Nexstar Finance, Inc.)
10.14 Amendment to Employment Agreement, dated as of May 10, 2001, by and
between Perry A. Sook and Nexstar Broadcasting Group, Inc.
(Incorporated by reference to Exhibit 10.12 to the Registration
Statement on Form S-4 (File No. 333-62916) filed by Nexstar Finance,
L.L.C. and Nexstar Finance, Inc.)
10.15 Executive Employment Agreement, dated as of January 5, 1998, by and
between Duane Lammers and Nexstar Broadcasting Group, Inc., as
amended on December 31, 1999. (Incorporated by reference to Exhibit
10.13 to the Registration Statement on Form S-4 (File No. 333-62916)
filed by Nexstar Finance, L.L.C. and Nexstar Finance, Inc.)
10.16 Addendum to Employment Agreement, dated February 9, 2001, by and
between Duane Lammers and Nexstar Broadcasting Group, Inc.
(Incorporated by reference to Exhibit 10.14 to the Registration
Statement on Form S-4 (File No. 333-62916) filed by Nexstar Finance,
L.L.C. and Nexstar Finance, Inc.)
10.17 Executive Employment Agreement, dated as of ,January 5, 1998, by and
between Shirley Green and Nexstar Broadcasting Group, Inc., as
amended on December 31, 1999. (Incorporated by reference to Exhibit
10.16 to the Registration Statement on Form S-4 (File No. 333-62916)
filed by Nexstar Finance, L.L.C. and Nexstar Finance, Inc.)
10.18 Executive Employment Agreement, dated as of December 31, 1999, by and
between Susana G. Willingham and Nexstar Broadcasting Group, Inc.
(Incorporated by reference to Exhibit 10.18 to the Registration
Statement on Form S-4 (File No. 333-62916) filed by Nexstar Finance,
L.L.C. and Nexstar Finance, Inc.)
10.19 Executive Employment Agreement, dated as of December 31, 1999, by and
between Richard Stolpe and Nexstar Broadcasting Group, Inc.
(Incorporated by reference to Exhibit 10.19 to the Registration
Statement on Form S-4 (File No. 333-62916) filed by Nexstar Finance,
L.L.C. and Nexstar Finance, Inc.)
</TABLE>
II-7
<TABLE>
<C> <S>
10.20 Assignment and Assumption Agreement, dated as of August 6, 2001, by
Nexstar Finance Holdings II, L.L.C. and Nexstar Finance Holdings,
L.L.C.
12.1 Statement re computation of ratio of earnings to fixed charges.
21.1 Subsidiaries of the registrant.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Ernst and Young LLP.
23.3 Consent of Kirkland & Ellis (included in Exhibit 5.1).
23.4 Consent of Kirkland & Ellis with respect to opinion regarding federal
tax consequences (included in Exhibit 8.1).
25.1 Statement re Eligibility of Trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Tender Instructions.
</TABLE>
II-8
Exhibit 3.1
CERTIFICATE OF FORMATION
OF
NBG, L.L.C.
This Certificate of Formation of NBG, L.L.C. (the "LLC") has been duly
---
executed and is being filed by the undersigned, as an authorized person, to form
a limited liability company under the Delaware Limited Liability Act
(6 Del.C.(S).18-201, et. seq.).
------ --------
FIRST. The name of the limited liability company formed hereby is NBG,
L.L.C.
SECOND. The address of the registered office of the LLC in the State of
Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400,
Wilmington, New Castle County, Delaware 19808.
THIRD. The name and address of the registered agent for service of process
on the LLC in the State of Delaware is Corporation Service Company, 2711
Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of
Formation as of this 30th day of May, 2001.
/s/ Shirley Green
---------------------------------
Shirley Green
Authorized Person
Exhibit 3.2
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF FORMATION
OF
NBG, L.L.C.
Under Section 18-202 of the Delaware Limited Liability Company Act
------------------------------------------------------------------
Pursuant to Section 18-202 of the Limited Liability Company Act of the
State of Delaware, the undersigned, being the sole member of NBG, L.L.C., a
Delaware limited liability company (the "Company") does hereby certify the
-------
following:
FIRST: The name of the limited liability company is NBG, L.L.C.
SECOND: The original Certificate of Formation of the Company was filed with
the Secretary of State of Delaware on May 30, 2001.
THIRD: The Certificate of Formation of the Company is hereby amended to
effect a change in Article First thereof, relating to the name of the Company.
Accordingly, Article First of the Certificate of Formation shall be amended to
read in its entirety as follows:
"FIRST. The name of the limited liability company formed hereby is Nexstar
Finance Holdings, L.L.C."
FOURTH: The amendment to the Certificate of Formation of the Company
effected hereby was approved by the sole member of the Company.
IN WITNESS WHEREOF, the undersigned affirms as true the foregoing under
penalties of perjury, and has executed this Certificate this 6th day of August,
2001.
NBG, L.L.C.
By: Nexstar Finance Holdings, L.L.C.
Its: Sole Member
By: /s/ Perry A. Sook
----------------------------------
Name: Perry A. Sook
Title: President
Exhibit 3.3
LIMITED LIABILITY COMPANY AGREEMENT
OF
NBG, L.L.C.
LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of NBG,
----------
L.L.C. is entered into as of May 30, 2001 by Nexstar Finance Holdings, L.L.C.,
a Delaware limited liability company, as sole member (the "Member").
------
1. Name. The name of the limited liability company
----
governed hereby is NBG, L.L.C. (the "Company").
-------
2. Purpose. The Company does and will exist for the
-------
object and purpose of, and the nature of the business to be conducted
and promoted by the Company is and will be, engaging in any lawful act
or activity for which limited liability companies may be formed under
the Delaware Limited Liability Company Act (6 Del.C. (S) 18-101,
-----
et seq.), as in effect from time to time (the "Act"), and engaging in
-- --- ---
any and all activities necessary or incidental to the foregoing.
3. Members. The name and mailing address of the sole
-------
Member are as follows:
Name Address
---- -------
Nexstar Finance 200 Abington Executive Park,
Holdings, L.L.C. Suite 201 Clarks Summit,
PA 18411
4. Powers. The Member of the Company, shall manage the
------
Company in accordance with this Agreement. The actions of the Member
taken in such capacity and in accordance with this Agreement shall bind
the Company. The Company shall not have any "manager," as that term is
defined in the Act.
(i) The Member shall have full, exclusive and
complete discretion to manage and control the business and
affairs of the Company, to make all decisions affecting the
business, operations and affairs of the Company and to take
all such actions as it deems necessary or appropriate to
accomplish the purpose of the Company as set forth herein.
Subject to the provisions of this Agreement, the Member (and
the officers appointed under clause (ii) below) shall have
general and active management of the day to day business and
operations of the Company. In addition, the Member shall have
such other powers and duties as may be prescribed by this
Agreement. Such duties may be delegated by the Member to
officers, agents or employees of the Company as the Member may
deem appropriate from time to time.
(ii) The Member may, from time to time, designate one
or more persons to be officers of the Company. No officer need
be a member of the Company. Any officers so designated will
have such authority and perform such duties as the Member may,
from time to time, delegate to them. The Member may assign
titles to particular officers, including, without limitation,
chairman, chief executive officer, president, vice president,
chief operating officer, secretary, assistant secretary,
treasurer and assistant treasurer. Each officer will hold
office until his or her successor will be duly designated and
will qualify or until his or her death or until he or she will
resign or will have been removed. Any number of offices may be
held by the same person. The salaries or other compensation,
if any, of the officers and agents of the Company will be
fixed from time to time by the Member or by any officer acting
within his or her authority. Any officer may be removed as
such, either with or without cause, by the Member whenever in
his, her or its judgment the best interests of the Company
will be served thereby. Any vacancy occurring in any office of
the Company may be filled by the Member. The names of the
initial officers of the Company, and their respective titles,
are set forth on the attached Schedule 1. Such officers are
authorized to control the day to day operations and business
of the Company.
5. Tax Elections. The fiscal and taxable year of the
-------------
Company shall be the calendar year.
6. Dissolution. The Company shall dissolve, and its
-----------
affairs shall be wound up upon the first to occur of the following (a)
the written consent of the Member, (b) the death, retirement,
resignation, expulsion, insolvency, bankruptcy or dissolution of the
Member, or (c) the occurrence of any other event which terminates the
continued membership of the Member in the Company.
7. Allocation of Profits and Losses. The Company's
--------------------------------
profits and losses shall be allocated to the Member.
8. Liability of Member. The Member shall not have any
-------------------
liability for the obligations or liabilities of the Company except to
the extent provided in the Act.
9. Governing Law. This Agreement shall be governed by,
-------------
and construed under, the internal laws of the State of Delaware, all
rights and remedies being governed by said laws.
* * * * *
-2-
IN WITNESS WHEREOF, the undersigned, intending to be legally
bound hereby, has duly executed this Limited Liability Company Agreement as of
the date first written above.
NBG, L.L.C.
By: Nexstar Finance Holdings, L.L.C.
Its: Sole Member
/s/ Shirley Green
By: ____________________________
Shirley Green, Secretary
Schedule 1
Initial Officers
----------------
Perry Sook President and Chief Executive Officer
Shirley Green Vice President - Finance and Secretary
Royce Yudkoff Vice President and Assistant Secretary
Peggy Koenig Vice President and Assistant Secretary
Jay Grossman Vice President and Assistant Secretary
-4-
Exhibit 3.4
EXECUTION COPY
--------------
AMENDMENT NO. 1
TO THE
LIMITED LIABILITY COMPANY AGREEMENT
OF
NBG, L.L.C.
This AMENDMENT NO. 1 TO THE LIMITED LIABILITY COMPANY AGREEMENT OF
NBG, L.L.C. (this "Amendment") is dated as of August 6, 2001.
---------
Nexstar Finance Holdings II, L.L.C. (f/k/a Nexstar Finance Holdings,
L.L.C.) is the sole member of that certain Limited Liability Company Agreement
of NBG, L.L.C. dated as of May 30, 2001 (the "NBG L.L.C. Agreement").
--------------------
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the NBG L.L.C. Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto agree as follows:
1. Amendment to the NBG L.L.C. Agreement. The NBG L.L.C. Agreement is
-------------------------------------
hereby amended as follows:
Section 1 to the NBG L.L.C. Agreement is amended in its entirety to
read as follows:
" Name. The name of the limited liability company governed hereby is
----
Nexstar Finance Holdings, L.L.C. (the "Company")."
-------
Section 3 to the NBG L.L.C. Agreement is amended in its entirety to
read as follows:
" Members. The name and mailing address of the sole Member are as
-------
follows:
Name Address
---- -------
Nexstar Finance Holdings II, L.L.C. 200 Abington Executive Park,
Suite 201
Clarks Summit, PA 18411."
2. Miscellaneous.
(a) This Amendment may be executed in one or more counterparts,
each of which shall be deemed to be an original and all of which, when taken
together, shall constitute one and the same instrument.
(b) This Amendment shall be governed by and construed in accordance
with the internal laws of the State of Delaware, without reference to the choice
of law or conflicts of law principles thereof.
(c) Except as amended hereby, the NBG L.L.C. Agreement shall remain
in full force and effect.
(d) Time is of the essence for each and every provision of this
Agreement.
* * * * *
IN WITNESS WHEREOF, the Party hereto has caused this Amendment to
be duly executed as of the date and year first above written.
NEXSTAR FINANCE HOLDINGS II, L.L.C.
Sole Member
/s/ Shirley Green
By: _____________________________
Name: Shirley Green
Title: Secretary
EXHIBIT 3.5
CERTIFICATE OF INCORPORATION
OF
NEXSTAR FINANCE HOLDINGS, INC.
ARTICLE ONE
-----------
The name of the corporation is Nexstar Finance Holdings, Inc.
(hereinafter called the "Corporation").
-----------
ARTICLE TWO
-----------
The address of the Corporation's registered office in the state of
Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, in
the City of Wilmington, County of New Castle. The name of its registered agent
at such address is Corporation Service Company.
ARTICLE THREE
-------------
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
ARTICLE FOUR
------------
The total number of shares which the Corporation shall have the
authority to issue is one thousand (1,000) shares, all of which shall be shares
of Common Stock, with a par value of $0.01 (one cent) per share.
ARTICLE FIVE
------------
The name and mailing address of the incorporator is as follows:
Name Address
---- -------
Henry Rosas c/o Kirkland & Ellis
153 East 53rd Street
39th Floor
New York, NY 10022
ARTICLE SIX
-----------
The directors shall have the power to adopt, amend or repeal By-Laws,
except as may be otherwise be provided in the By-Laws.
ARTICLE SEVEN
-------------
The Corporation expressly elects not to be governed by Section 203 of
the General Corporation Law of the State of Delaware.
ARTICLE EIGHT
-------------
Section 1. Nature of Indemnity. Each person who was or is made a
--------- -------------------
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he (or a person of whom
he is the legal representative), is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee,
fiduciary or agent or in any other capacity while serving as a director,
officer, employee, fiduciary or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent which it is empowered to do so by the
General Corporation Law of the State of Delaware, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment) against all expense, liability and loss (including attorneys' fees
actually and reasonably incurred by such person in connection with such
proceeding and such indemnification shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that, except as provided
in Section 2 of this Article Eight, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding initiated by such
person only if such proceeding was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in this Article Eight shall
be a contract right and, subject to Sections 2 and 5 of this Article Eight,
shall include the right to payment by the Corporation of the expenses incurred
in defending any such proceeding in advance of its final disposition. The
Corporation may, by action of the Board of Directors, provide indemnification to
employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers.
--------- -------------------------------------------------------
Any indemnification of a director or officer of the Corporation under Section 1
of this Article Eight or advance of expenses under Section 5 of this Article
Eight shall be made promptly, and in any event within 30 days, upon the written
request of the director or officer. If a determination by the Corporation that
the director or officer is entitled to indemnification pursuant to this Article
Eight is required, and the Corporation fails to respond within sixty days to a
written request for indemnity, the Corporation shall be deemed to have approved
the request. If the Corporation denies a written request for indemnification or
advancing of expenses, in whole or in part, or if payment in full pursuant to
such
2
request is not made within 30 days, the right to indemnification or advances as
granted by this Article Eight shall be enforceable by the director or officer in
any court of competent jurisdiction. Such person's costs and expenses incurred
in connection with successfully establishing his right to indemnification, in
whole or in part, in any such action shall also be indemnified by the
Corporation. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any proceeding in
advance of its final disposition where the required undertaking, if any, has
been tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the General Corporation Law of the State
of Delaware for the Corporation to indemnify the claimant for the amount
claimed, but the burden of such defense shall be on the Corporation. Neither the
failure of the Corporation (including the Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the General Corporation Law of the State of Delaware, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
Section 3. Nonexclusivity of Article Eight. The rights to
--------- -------------------------------
indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred in this Article Eight shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of the certificate of incorporation, by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
Section 4. Insurance. The Corporation may purchase and maintain
--------- ---------
insurance on its own behalf and on behalf of any person who is or was a
director, officer, employee, fiduciary, or agent of the Corporation or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or her and incurred by him
or her in any such capacity, whether or not the Corporation would have the power
to indemnify such person against such liability under this Article Eight.
Section 5. Expenses. Expenses incurred by any person described in
--------- --------
Section 1 of this Article Eight in defending a proceeding shall be paid by the
Corporation in advance of such proceeding's final disposition unless otherwise
determined by the Board of Directors in the specific case upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Corporation. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the Board of Directors deems
appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
--------- --------------------
foregoing provisions of this Article Eight and who are or were employees or
agents of the Corporation, or who are or were serving at the request of the
Corporation as employees or agents of another corporation, partnership, joint
venture, trust or other enterprise, may be indemnified to the extent authorized
at any time or from time to time by the Board of Directors.
3
Section 7. Contract Rights. The provisions of this Article Eight
--------- ---------------
shall be deemed to be a contract right between the Corporation and each director
or officer who serves in any such capacity at any time while this Article Eight
and the relevant provisions of the General Corporation Law of the State of
Delaware or other applicable law are in effect, and any repeal or modification
of this Article Eight or any such law shall not affect any rights or obligations
then existing with respect to any state of facts or proceeding then existing.
Section 8. Merger or Consolidation. For purposes of this Article
--------- -----------------------
Eight, references to "the Corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article
Eight with respect to the resulting or surviving corporation as he or she would
have with respect to such constituent corporation if its separate existence had
continued.
ARTICLE NINE
------------
The Corporation reserves the right to amend or repeal any provisions
contained in this Certificate of Incorporation from time to time and at any time
in the manner now or hereafter prescribed by the laws of the State of Delaware,
and all rights conferred upon stockholders and directors are granted subject to
such reservation.
I, the undersigned, being the sole incorporator hereinbefore named,
for the purpose of forming a corporation in pursuance of the General Corporation
Law of the State of Delaware, do make and file this Certificate, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 30th day of November, 2000.
/s/ Henry Rosas
______________________________
Henry Rosas
Sole Incorporator
4
EXHIBIT 3.6
BYLAWS
OF
NEXSTAR FINANCE HOLDINGS, INC.
A Delaware Corporation
ARTICLE I
---------
OFFICES
-------
Section 1. Registered Office. The registered office of the corporation in
--------- -----------------
the State of Delaware shall be located at 2711 Centerville Road, Suite 400,
Wilmington Delaware 19808, in the County of New Castle. The name of the
corporation's registered agent at such address shall be Corporation Service
Company. The registered office and/or registered agent of the corporation may
be changed from time to time by action of the board of directors.
Section 2. Other Offices. The corporation may also have offices at such
--------- -------------
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place and Time of Meetings. An annual meeting of the
--------- --------------------------
stockholders shall be held each year for the purpose of electing directors and
conducting such other proper business as may come before the meeting. The date,
time and place of the annual meeting may be determined by resolution of the
board of directors or as set by the president of the corporation.
Section 2. Special Meetings. Special meetings of stockholders may be
--------- ----------------
called for any purpose (including, without limitation, the filling of board
vacancies and newly created directorships), and may be held at such time and
place, within or without the State of Delaware, as shall be stated in a notice
of meeting or in a duly executed waiver of notice thereof. Such meetings may be
called at any time by two or more members of the board of directors, the
president or the holders of shares entitled to cast not less than a majority of
the votes at the meeting or the holders of fifty percent (50%) of the
outstanding shares of any series or class of the corporation's capital stock.
1
Section 3. Place of Meetings. The board of directors may designate any
--------- -----------------
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. If no designation is made, or if a special meeting is otherwise
called, the place of meeting shall be the principal executive office of the
corporation.
Section 4. Notice. Whenever stockholders are required or permitted to
--------- ------
take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose(s), of such meeting,
shall be given to each stockholder entitled to vote at such meeting not less
than 10 nor more than 60 days before the date of the meeting. All such notices
shall be delivered, either personally or by mail, by or at the direction of the
board of directors, the president or the secretary, and if mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the stockholder at his, her or its address as the
same appears on the records of the corporation. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Stockholders List. The officer having charge of the stock
--------- -----------------
ledger of the corporation shall make, at least 10 days before every meeting of
the stockholders, a complete list of the stockholders entitled to vote at such
meeting arranged in alphabetical order, showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least 10 days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. Except as otherwise provided by applicable law or by
--------- ------
the corporation's certificate of incorporation, a majority of the outstanding
shares of the corporation entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of stockholders. If less than a majority
of the outstanding shares are represented at a meeting, a majority of the shares
so represented may adjourn the meeting from time to time in accordance with
Section 7 of this Article, until a quorum shall be present or represented.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
--------- ------------------
time and place, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting, at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
2
Section 8. Vote Required. When a quorum is present, the affirmative vote
--------- -------------
of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the corporation's certificate of incorporation a different
vote is required, in which case such express provision shall govern and control
the decision of such question. Where a separate vote by class is required, the
affirmative vote of the majority of shares of such class present in person or
represented by proxy at the meeting shall be the act of such class, unless the
question is one upon which by express provisions of an applicable law or of the
corporation's certificate of incorporation a different vote is required, in
which case such express provision shall govern and control the decision of such
question..
Section 9. Voting Rights. Except as otherwise provided by the General
--------- -------------
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto, every stockholder shall at every
meeting of the stockholders be entitled to one vote in person or by proxy for
each share of common stock held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
---------- -------
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person(s) to act for him, her or it by
proxy. Every proxy must be signed by the stockholder granting the proxy or by
his, her or its attorney-in-fact. No proxy shall be voted or acted upon after
three years from its date, unless the proxy provides for a longer period. A
duly executed proxy shall be irrevocable if it states that it is irrevocable and
if, and only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A proxy may be made irrevocable regardless of
whether the interest with which it is coupled is an interest in the stock itself
or an interest in the corporation generally.
Section 11. Action by Written Consent. Unless otherwise provided in the
---------- -------------------------
corporation's certificate of incorporation, any action required to be taken at
any annual or special meeting of stockholders of the corporation, or any action
which may be taken at any annual or special meeting of such stockholders, may be
taken without a meeting, without prior notice and without a vote, if a
consent(s) in writing, setting forth the action so taken and bearing the dates
of signature of the stockholders who signed the consent(s), shall be signed by
the holders of outstanding shares of stock having not less than a majority of
the shares entitled to vote, or, if greater, not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted and shall be
delivered to the corporation by delivery to its registered office in the state
of Delaware, or the corporation's principal place of business, or an officer or
agent of the corporation having custody of the book(s) in which proceedings of
meetings of the stockholders are recorded. Delivery made to the corporation's
registered office shall be by hand or by certified or registered mail, return
receipt requested, provided, however, that no consent(s) delivered by certified
or registered mail shall be deemed delivered until such consent(s) are actually
received at the registered office. All consents properly delivered in
accordance with this section shall be deemed to be recorded when so delivered.
No written consent shall be effective to take the corporate action referred to
therein unless, within sixty days of the earliest dated consent
3
delivered to the corporation as required by this section, written consents
signed by the holders of a sufficient number of shares to take such corporate
action are so recorded. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing. Any action taken pursuant to
such written consent(s) of the stockholders shall have the same force and effect
as if taken by the stockholders at a meeting thereof.
ARTICLE III
-----------
DIRECTORS
---------
Section 1. General Powers. The business and affairs of the corporation
--------- --------------
shall be managed by or under the direction of the board of directors.
Section 2. Number, Election and Term of Office. The number of directors
--------- -----------------------------------
which shall constitute the first board shall be four, which number may be
increased or decreased from time to time by resolution of the board. The
directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote in the
election of directors. The directors shall be elected in this manner at the
annual meeting of the stockholders, except as provided in Section 4 of this
Article III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
--------- -----------------------
directors may be removed at any time, with or without cause, by the holders of a
majority of the shares then entitled to vote at an election of directors;
provided however, whenever the holders of any class or series are entitled to
-------- -------
elect one or more directors by the provisions of the corporation's certificate
of incorporation, the provisions of this section shall apply, in respect to the
removal without cause or a director or directors so elected, to the vote of the
holders of the outstanding shares of that class or series and not to the vote of
the outstanding shares as a whole; provided further, in the event any of the
-------- -------
stockholders of the corporation have entered into an agreement which provides
for the manner in which the directors of the corporation are to be elected, and
such stockholders have so caused the election of such directors, a director(s)
may be removed from the board of directors only in accordance with such
agreement (as the same may be amended from time to time, the "Stockholders
Agreement"), for so long as (i) such agreement has been filed with the
corporation and (ii) has not been terminated. Any director may resign at any
time upon written notice to the corporation.
Section 4. Vacancies. Except as otherwise provided by the certificate of
--------- ---------
incorporation of the corporation or any amendments thereto, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, though
less than a quorum, or by a sole remaining director or by a majority vote of the
holders of the corporation's outstanding stock entitled to vote thereon. Each
director so chosen shall hold
4
office until a successor is duly elected and qualified or until his or her
earlier death, resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
--------- ---------------
board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
--------- -------------------------
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at
the request of the president or vice president on at least 24 hours notice to
each director, either personally, by telephone, by mail, or by telegraph; in
like manner and on like notice the president must call a special meeting on the
written request of at least a majority of the directors.
Section 7. Quorum, Required Vote and Adjournment. A majority of the
--------- -------------------------------------
total number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of directors present at a meeting at which a
quorum is present shall be the act of the board of directors. If a quorum shall
not be present at any meeting of the board of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution passed
--------- ----------
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these bylaws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law. The board of directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Such
committee(s) shall have such name(s) as may be determined from time to time by
resolution adopted by the board of directors. Each committee shall keep regular
minutes of its meetings and report the same to the board of directors when
required.
Section 9. Committee Rules. Each committee of the board of directors may
--------- ---------------
fix its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member(s) thereof present at any meeting and not disqualified
from voting, whether or not such member(s) constitute a quorum, may unanimously
appoint another member of the board of directors to act at the meeting in place
of any such absent or disqualified member.
5
Section 10. Communications Equipment. Members of the board of directors
---------- ------------------------
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of the
---------- ------------------------------------------
board of directors or any committee thereof who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting except when such
member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the person acting as the secretary of the meeting before the adjournment
thereof or shall be forwarded by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by the
---------- -------------------------
corporation's certificate of incorporation, any action required or permitted to
be taken at any meeting of the board of directors, or of any committee thereof,
may be taken without a meeting if all members of the board or committee, as the
case may be, consent thereto in writing, and the writing(s) are filed with the
minutes of proceedings of the board or committee.
ARTICLE IV
----------
OFFICERS
--------
Section 1. Number. The officers of the corporation shall be elected by
--------- ------
the board of directors and shall consist of a chairman, if any is elected, a
president, one or more vice presidents, a secretary, a treasurer, and such other
officers and assistant officers as may be deemed necessary or desirable by the
board of directors. Any number of offices may be held by the same person. In
its discretion, the board of directors may choose not to fill any office for any
period as it may deem advisable.
Section 2. Election and Term of Office. The officers of the corporation
--------- ---------------------------
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
may be. The president shall appoint other officers to serve for such terms as
he or she deems desirable. Vacancies may be filled or new offices created and
filled at any meeting of the board of directors. Each officer shall hold office
until a successor is duly elected and qualified or until his or her earlier
death, resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
--------- -------
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
6
Section 4. Vacancies. Any vacancy occurring in any office because of
--------- ---------
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by
--------- ------------
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. The President. The president shall be the chief executive
--------- -------------
officer of the corporation. In the absence of the Chairman of the Board or if a
Chairman of the Board shall have not been elected, the president (i) shall
preside at all meetings of the stockholders and board of directors at which he
or she is present; (ii) subject to the powers of the board of directors, shall
have general charge of the business, affairs and property of the corporation,
and control over its officers, agents and employees; and (iii) shall see that
all orders and resolutions of the board of directors are carried into effect.
The president shall have such other powers and perform such other duties as may
be prescribed by the board of directors or as may be provided in these bylaws.
Section 7. Vice-Presidents. The vice-president, if any, or if there shall
--------- ---------------
be more than one, the vice-presidents in the order determined by the board of
directors shall, in the absence or disability of the president, act with all of
the powers and be subject to all the restrictions of the president. The vice-
presidents shall also perform such other duties and have such other powers as
the board of directors, the president or these bylaws may, from time to time,
prescribe.
Section 8. The Secretary and Assistant Secretaries. The secretary shall
--------- ---------------------------------------
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book(s) to be kept for that purpose. Under the president's
supervision, the secretary (i) shall give, or cause to be given, all notices
required to be given by these bylaws or by law; (ii) shall have such powers and
perform such duties as the board of directors, the president or these bylaws
may, from time to time, prescribe; and (iii) shall have custody of the corporate
seal of the corporation. The secretary, or an assistant secretary, shall have
authority to affix the corporate seal to any instrument requiring it and when so
affixed, it may be attested by his or her signature or by the signature of such
assistant secretary. The board of directors may give general authority to any
other officer to affix the seal of the corporation and to attest the affixing by
his or her signature. The assistant secretary, or if there be more than one,
the assistant secretaries in the order determined by the board of directors,
shall, in the absence or disability of the secretary, perform the duties and
exercise the powers of the secretary and shall perform such other duties and
have such other powers as the board of directors, the president, or secretary
may, from time to time, prescribe.
Section 9. The Treasurer and Assistant Treasurers. The treasurer (i)
--------- --------------------------------------
shall have the custody of the corporate funds and securities; (ii) shall keep
full and accurate accounts of receipts and disbursements in books belonging to
the corporation; (iii) shall deposit all monies and other valuable effects in
the name and to the credit of the corporation as may be ordered by the board of
directors;
7
(iv) shall cause the funds of the corporation to be disbursed when such
disbursements have been duly authorized, taking proper vouchers for such
disbursements; (v) shall render to the president and the board of directors, at
its regular meeting or when the board of directors so requires, an account of
the corporation; and (vi) shall have such powers and perform such duties as the
board of directors, the president or these bylaws may, from time to time,
prescribe. If required by the board of directors, the treasurer shall give the
corporation a bond (which shall be rendered every six years) in such sums and
with such surety or sureties as shall be satisfactory to the board of directors
for the faithful performance of the duties of the office of treasurer and for
the restoration to the corporation, in case of death, resignation, retirement,
or removal from office, of all books, papers, vouchers, money, and other
property of whatever kind in the possession or under the control of the
treasurer belonging to the corporation. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by the
board of directors, shall in the absence or disability of the treasurer, perform
the duties and exercise the powers of the treasurer. The assistant treasurers
shall perform such other duties and have such other powers as the board of
directors, the president or treasurer may, from time to time, prescribe.
Section 10. Other Officers, Assistant Officers and Agents. Officers,
---------- ---------------------------------------------
assistant officers and agents, if any, other than those whose duties are
provided for in these bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 11. Absence or Disability of Officers. In the case of the absence
---------- ---------------------------------
or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
---------
CERTIFICATES OF STOCK
---------------------
Section 1. Form. Every holder of stock in the corporation shall be
--------- ----
entitled to have a certificate, signed by, or in the name of the corporation by
(i) the chairman of the board, the president or a vice-president and (ii) the
secretary or an assistant secretary of the corporation, certifying the number of
shares owned by such holder in the corporation. If such a certificate is
countersigned (1) by a transfer agent or an assistant transfer agent other than
the corporation or its employee or (2) by a registrar, other than the
corporation or its employee, the signature of any such chairman of the board,
president, vice-president, secretary, or assistant secretary may be facsimiles.
In case any officer(s) who have signed, or whose facsimile signature(s) have
been used on, any such certificate(s) shall cease to be such officer(s) of the
corporation whether because of death, resignation or otherwise before such
certificate(s) have been delivered by the corporation, such certificate(s) may
nevertheless be issued and delivered as though the person or persons who signed
such certificate(s) or whose facsimile signature(s) have been used thereon had
not ceased to be such officer(s) of the corporation. All certificates for
shares shall be consecutively numbered or otherwise identified. The name of the
8
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the books of the corporation.
Shares of stock of the corporation shall only be transferred on the books of the
corporation by the holder of record thereof or by such holder's attorney duly
authorized in writing, upon surrender to the corporation of the certificate(s)
for such shares endorsed by the appropriate person(s), with such evidence of the
authenticity of such endorsement, transfer, authorization, and other matters as
the corporation may reasonably require, and accompanied by all necessary stock
transfer stamps. In that event, it shall be the duty of the corporation to
issue a new certificate to the person entitled thereto, cancel the old
certificate(s), and record the transaction on its books. The board of directors
may appoint a bank or trust company organized under the laws of the United
States or any state thereof to act as its transfer agent or registrar, or both
in connection with the transfer of any class or series of securities of the
corporation.
Section 2. Lost Certificates. The board of directors may direct a new
--------- -----------------
certificate(s) to be issued in place of any certificate(s) previously issued by
the corporation alleged to have been lost, stolen, or destroyed, upon the making
of an affidavit of that fact by the person claiming the certificate of stock to
be lost, stolen, or destroyed. When authorizing such issue of a new
certificate(s), the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen, or
destroyed certificate(s), or his or her legal representative, to give the
corporation a bond sufficient to indemnify the corporation against any claim
that may be made against the corporation on account of the loss, theft or
destruction of any such certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that
--------- ---------------------------------------------
the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no record date is fixed by the board
of directors, the record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be the close of business on the
day immediately preceding the day on which notice is given, or if notice is
waived, at the close of business on the day immediately preceding the day on
which the meeting is held. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the board of directors may
fix a new record date for the adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In order
--------- --------------------------------------------------
that the corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
statute, shall be the first date on which a signed
9
written consent setting forth the action taken or proposed to be taken is
delivered to the corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the board of directors and prior action by
the board of directors is required by statute, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the board of
directors adopts the resolution taking such prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
--------- ---------------------------------------
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights of the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than sixty days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board of directors adopts the
resolution relating thereto.
Section 6. Registered Stockholders. Prior to the surrender to the
--------- -----------------------
corporation of the certificate(s) for a share(s) of stock with a request to
record the transfer of such share(s), the corporation may treat the registered
owner as the person entitled to receive dividends, to vote, to receive
notifications, and otherwise to exercise all the rights and powers of an owner.
The corporation shall not be bound to recognize any equitable or other claim to
or interest in such share(s) on the part of any other person, whether or not it
shall have express or other notice thereof.
Section 7. Subscriptions for Stock. Unless otherwise provided for in the
--------- -----------------------
subscription agreement, subscriptions for shares shall be paid in full at such
time, or in such installments and at such times, as shall be determined by the
board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.
ARTICLE VI
----------
GENERAL PROVISIONS
------------------
Section 1. Dividends. Dividends upon the capital stock of the
--------- ---------
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares
10
of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum(s) as the directors
from time to time, in their absolute discretion, think proper as a reserve(s) to
meet contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the corporation, or any other purpose and the directors may
modify or abolish any such reserve in the manner in which it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders
--------- ------------------------
for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer(s), agent(s) of the corporation, and in such manner, as shall be
determined by resolution of the board of directors or a duly authorized
committee thereof.
Section 3. Contracts. The board of directors may authorize any
--------- ---------
officer(s), or any agent(s), of the corporation to enter into any contract or to
execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 4. Loans. The corporation may lend money to, or guarantee any
--------- -----
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed
--------- -----------
by resolution of the board of directors.
Section 6. Corporate Seal. The board of directors shall provide a
--------- --------------
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words "Corporate Seal, Delaware."
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 7. Voting Securities Owned By Corporation. Voting securities in
--------- --------------------------------------
any other corporation held by the corporation shall be voted by the president,
unless the board of directors specifically confers authority to vote with
respect thereto, which authority may be general or confined to specific
instances, upon some other person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.
Section 8. Inspection of Books and Records. Any stockholder of record, in
--------- -------------------------------
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock
11
ledger, a list of its stockholders, and its other books and records, and to make
copies or extracts therefrom. A proper purpose shall mean any purpose reasonably
related to such person's interest as a stockholder. In every instance where an
attorney or other agent shall be the person who seeks the right to inspection,
the demand under oath shall be accompanied by a power of attorney or such other
writing which authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath shall be directed to the corporation at its
registered office in the State of Delaware or at its principal place of
business.
Section 9. Section Headings. Section headings in these bylaws are for
--------- ----------------
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision of
---------- -----------------------
these bylaws is or becomes inconsistent with any provision of the corporation's
certificate of incorporation, the General Corporation Law of the State of
Delaware or any other applicable law, such provision of these bylaws shall not
be given any effect to the extent of such inconsistency but shall otherwise be
given full force and effect.
ARTICLE VII
-----------
AMENDMENTS
----------
These bylaws may be amended, altered, or repealed and new bylaws adopted at
any meeting of the board of directors by a majority vote. The fact that the
power to adopt, amend, alter, or repeal the bylaws has been conferred upon the
board of directors shall not divest the stockholders of the same powers.
12
EXHIBIT 4.1
EXECUTION COPY
--------------------------------------------------------------------------------
____________________
NEXSTAR FINANCE HOLDINGS, L.L.C.
NEXSTAR FINANCE HOLDINGS, INC.
SERIES A AND SERIES B 16% SENIOR DISCOUNT NOTES DUE 2009
____________________
INDENTURE
Dated as of May 17, 2001
____________________
United States Trust Company of New York
Trustee
____________________
--------------------------------------------------------------------------------
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
310(a)(1).................................................................. 7.10
(a)(2).................................................................. 7.10
(a)(3).................................................................. N.A.
(a)(4).................................................................. N.A.
(a)(5).................................................................. 7.10
(b)..................................................................... 7.10
(c)..................................................................... N.A.
311(a)..................................................................... 7.11
(b)..................................................................... 7.11
(c)..................................................................... N.A.
312(a)..................................................................... 2.05
(b)..................................................................... 11.03
(c)..................................................................... 11.03
313(a)..................................................................... 7.06
(b)(2).................................................................. 7.07
(c)..................................................................... 7.06;11.02
(d)..................................................................... 7.06
314(a)..................................................................... 4.03;11.02
(c)(1).................................................................. 11.04
(c)(2).................................................................. 11.04
(c)(3).................................................................. N.A.
(e)..................................................................... 11.05
(f)..................................................................... N.A.
315(a)..................................................................... 7.01
(b)..................................................................... 7.05,11.02
(c)..................................................................... 7.01
(d)..................................................................... 7.01
(e)..................................................................... 6.11
316(a) (last sentence)..................................................... 2.09
(a)(1)(A)............................................................... 6.05
(a)(1)(B)............................................................... 6.04
(a)(2).................................................................. N.A.
(b)..................................................................... 6.07
(c)..................................................................... 2.12
317(a)(1).................................................................. 6.08
(a)(2).................................................................. 6.09
(b)..................................................................... 2.04
318(a)..................................................................... 11.01
(b)..................................................................... N.A.
(c)..................................................................... 11.01
</TABLE>
N.A. means not applicable.
*This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions...................................................... 1
Section 1.02. Other Definitions................................................ 20
Section 1.03. Incorporation by Reference of Trust Indenture Act................ 20
Section 1.04. Rules of Construction............................................ 21
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.................................................. 21
Section 2.02. Execution and Authentication..................................... 22
Section 2.03. Registrar and Paying Agent....................................... 23
Section 2.04. Paying Agent to Hold Money in Trust.............................. 23
Section 2.05. Holder Lists..................................................... 23
Section 2.06. Transfer and Exchange............................................ 24
Section 2.07. Replacement Notes................................................ 36
Section 2.08. Outstanding Notes................................................ 36
Section 2.09. Treasury Notes................................................... 36
Section 2.10. Temporary Notes.................................................. 37
Section 2.11. Cancellation..................................................... 37
Section 2.12. Defaulted Interest............................................... 37
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee............................................... 37
Section 3.02. Selection of Notes to Be Redeemed................................ 38
Section 3.03. Notice of Redemption............................................. 38
Section 3.04. Effect of Notice of Redemption................................... 39
Section 3.05. Deposit of Redemption Price...................................... 39
Section 3.06. Notes Redeemed in Part........................................... 39
Section 3.07. Optional Redemption.............................................. 39
Section 3.08. Mandatory Redemption............................................. 40
Section 3.09. Offer to Purchase by Application of Excess Proceeds.............. 40
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes................................................. 42
Section 4.02. Maintenance of Office or Agency.................................. 42
Section 4.03. Reports.......................................................... 43
Section 4.04. Compliance Certificate........................................... 43
Section 4.05. Taxes............................................................ 44
Section 4.06. Stay, Extension and Usury Laws................................... 44
Section 4.07. Restricted Payments.............................................. 44
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries... 48
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock....... 49
Section 4.10. Asset Sales...................................................... 52
</TABLE>
i
<TABLE>
<S> <C>
Section 4.11. Transactions with Affiliates................................... 54
Section 4.12. Liens.......................................................... 55
Section 4.13. Business Activities............................................ 55
Section 4.14. Corporate Existence............................................ 55
Section 4.15. Offer to Repurchase Upon Change of Control..................... 55
Section 4.16. Sale and Leaseback Transactions................................ 56
Section 4.17. Payments for Consent........................................... 57
Section 4.18. Designation of Restricted and Unrestricted Subsidiaries........ 57
Section 4.19. Reorganization................................................. 57
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets....................... 57
Section 5.02. Successor Corporation Substituted.............................. 58
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.............................................. 59
Section 6.02. Acceleration................................................... 60
Section 6.03. Other Remedies................................................. 61
Section 6.04. Waiver of Past Defaults........................................ 61
Section 6.05. Control by Majority............................................ 62
Section 6.06. Limitation on Suits............................................ 62
Section 6.07. Rights of Holders of Notes to Receive Payment.................. 62
Section 6.08. Collection Suit by Trustee..................................... 62
Section 6.09. Trustee May File Proofs of Claim............................... 63
Section 6.10. Priorities..................................................... 63
Section 6.11. Undertaking for Costs.......................................... 64
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.............................................. 64
Section 7.02. Rights of Trustee.............................................. 65
Section 7.03. Individual Rights of Trustee................................... 65
Section 7.04. Trustee's Disclaimer........................................... 66
Section 7.05. Notice of Defaults............................................. 66
Section 7.06. Reports by Trustee to Holders of the Notes..................... 66
Section 7.07. Compensation and Indemnity..................................... 66
Section 7.08. Replacement of Trustee......................................... 67
Section 7.09. Successor Trustee by Merger, etc............................... 68
Section 7.10. Eligibility; Disqualification.................................. 68
Section 7.11. Preferential Collection of Claims Against Company.............. 68
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance....... 69
Section 8.02. Legal Defeasance and Discharge................................. 69
Section 8.03. Covenant Defeasance............................................ 69
Section 8.04. Conditions to Legal or Covenant Defeasance..................... 70
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions................................. 71
</TABLE>
ii
<TABLE>
<S> <C>
Section 8.06. Repayment to Company........................................................ 71
Section 8.07. Reinstatement............................................................... 72
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes......................................... 72
Section 9.02. With Consent of Holders of Notes............................................ 73
Section 9.03. Compliance with Trust Indenture Act......................................... 74
Section 9.04. Revocation and Effect of Consents........................................... 74
Section 9.05. Notation on or Exchange of Notes............................................ 75
Section 9.06. Trustee to Sign Amendments, etc............................................. 75
ARTICLE 10.
NOTE GUARANTEE
Section 10.01. Guarantee.................................................................. 75
Section 10.02. Limitation on Guarantor Liability.......................................... 76
Section 10.03. Execution and Delivery of Note Guarantee................................... 76
Section 10.04. Guarantor May Consolidate, etc., on Certain Terms.......................... 77
Section 10.05. Release of Guarantor....................................................... 77
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge................................................. 78
Section 11.02. Application of Trust Money................................................. 78
ARTICLE 12.
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls............................................... 79
Section 12.02. Notices.................................................................... 79
Section 12.03. Communication by Holders of Notes with Other Holders of Notes.............. 80
Section 12.04. Certificate and Opinion as to Conditions Precedent......................... 81
Section 12.05. Statements Required in Certificate or Opinion.............................. 81
Section 12.06. Rules by Trustee and Agents................................................ 81
Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders... 81
Section 12.08. Governing Law.............................................................. 82
Section 12.09. Submission to Jurisdiction; Service of Process; Waiver of Jury Trial....... 82
Section 12.10. No Adverse Interpretation of Other Agreements.............................. 82
Section 12.11. Successors................................................................. 82
Section 12.12. Severability............................................................... 83
Section 12.13. Counterpart Originals...................................................... 83
Section 12.14. Table of Contents, Headings, etc........................................... 83
EXHIBITS
Exhibit A-1 FORM OF NOTE
Exhibit A-2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF NOTE GUARANTEE
</TABLE>
iii
INDENTURE dated as of May 17, 2001 among Nexstar Finance Holdings, L.L.C.,
a Delaware limited liability company, Nexstar Finance Holdings, Inc., a Delaware
corporation (together, the "Company"), as the joint and several obligors, Bastet
Broadcasting, Inc., a Delaware corporation, Mission Broadcasting of Wichita
Falls, Inc., a Delaware corporation, Nexstar Broadcasting Group, L.L.C., a
Delaware limited liability company (the "Guarantor") and United States Trust
Company of New York, as Trustee (the "Trustee").
The Company, Bastet Broadcasting, Inc., Mission Broadcasting of Wichita
Falls, Inc., the Guarantor and the Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders of the 16%
Senior Discount Notes due 2009 (the "Series A Notes") and the 16% Series B
Senior Discount Notes due 2009 (the "Series B Notes" and, together with the
Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a global note substantially in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"ABRY" means ABRY Partners, LLC.
"ABRY III" means ABRY Broadcast Partners III, L.P., a Delaware limited
partnership.
"ABRY Subordinated Debt" means indebtedness of Nexstar or any of its
Subsidiaries (other than Nexstar Finance and the Restricted Subsidiaries) in
principal amount not to exceed $30.0 million in the aggregate at any time
outstanding (a) that is owed, directly or indirectly, to ABRY III, ABRY or any
other investment fund controlled by ABRY and the proceeds of which are
contributed to the equity capital of Nexstar Finance, (b) which shall provide
that: (i) no payments of principal (or premium, if any) or interest on or
otherwise due in respect of such Indebtedness may be permitted for so long as
any Default or Event of Default exists and (ii) no payments in respect of
interest, premium or other amounts (other than principal) shall be payable in
securities or instruments of Nexstar Finance or any Restricted Subsidiary, cash
or other property and (c) that shall automatically convert into common equity of
Nexstar or any of its Subsidiaries (other than Nexstar Finance or any Restricted
Subsidiary) within 18 months of the date of issuance thereof, unless refinanced.
"Accreted Value" means, as of any date of determination prior to May 15,
2005, the sum of (a) the initial offering price of each Note and (b) that
portion of the excess of the principal amount at maturity of each Note over such
initial offering price as shall have been accreted thereon through such date,
such amount to be so accreted on a daily basis at the rate of 16% per annum of
the initial offering price of the Notes, compounded semi-annually on each May 15
and November 15 from the date of issuance of the Notes through the date of
determination.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such specified Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
1
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person and (ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Acquisition Debt" means Indebtedness the proceeds of which are utilized
solely to (x) acquire all or substantially all of the assets or a majority of
the Voting Stock of an existing television broadcasting business franchise or
station or (y) finance an LMA (including to repay or refinance indebtedness or
other obligations incurred in connection with such acquisition or LMA, as the
case may be, and to pay related fees and expenses).
"Additional Notes" means up to $63,012,000 aggregate principal amount at
maturity of Notes (other than the Initial Notes) issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than in the ordinary course of business; provided that the
sale, conveyance or other disposition of all or substantially all of the
assets of the Company and the Restricted Subsidiaries taken as a whole will
be governed by the provisions of this Indenture described in Sections 4.15
and/or 5.01 and not by the provisions of Section 4.10; and
(2) the issuance of Equity Interests in any Restricted Subsidiary of
the Company or Bastet/Mission or the sale of Equity Interests in any
Restricted Subsidiary of the Company or Bastet/Mission.
Notwithstanding the preceding, the following items will not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that
involves assets or Equity Interests having a fair market value of $1.0
million or less;
(2) a transfer of assets between or among the Company and the
Restricted Subsidiaries;
(3) an issuance of Equity Interests to the Company or to another
Restricted Subsidiary;
(4) the sale or lease of equipment, inventory, accounts receivable or
other assets in the ordinary course of business;
(5) the sale and leaseback of any assets within 90 days of the
acquisition thereof;
2
(6) foreclosures on assets;
(7) the disposition of equipment no longer used or useful in the
business of such entity;
(8) the sale or other disposition of cash or Cash Equivalents;
(9) a Restricted Payment or Permitted Investment that is permitted by
Section 4.07; and
(10) the licensing of intellectual property.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Bastet/Mission" means Bastet Broadcasting, Inc. and Mission Broadcasting
of Wichita Falls, Inc.
"Bastet/Mission Entities" means Bastet/Mission and any Person that is a
direct or indirect Subsidiary of Bastet/Mission.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Board of Directors" means, as to any Person, the board of directors of
such Person (or if such Person is a limited liability company, the board of
managers of such Person) or similar governing body or any duly authorized
committee thereof.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
3
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars; (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality of the United States government (provided that the
full faith and credit of the United States is pledged in support of those
securities) having maturities of not more than one year from the date of
acquisition; (iii) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank deposits,
in each case, with (x) any lender party to the Credit Agreements, (y) any
domestic commercial bank having capital and surplus in excess of $500.0 million
and a Thompson Bank Watch Rating of "B" or better, or (z) Brown Brothers
Harriman; (iv) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above; (v) commercial paper having one of the two highest
ratings obtainable from Moody's Investors Service, Inc. or Standard & Poor's
Ratings Services and in each case maturing within one year after the date of
acquisition; and (vi) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (i) through (v) of
this definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Company and the Restricted Subsidiaries taken
as a whole to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act) other than a Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or dissolution
of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than
50% of the Voting Stock of the Company, measured by voting power rather
than number of shares; or
(4) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors.
"Clearstream" means Clearstream Banking, SA.
"Company" means Nexstar Finance Holdings, L.L.C. and Nexstar Finance
Holdings, Inc., and any and all successors thereto.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of the Restricted Subsidiaries in connection
with (a) an Asset Sale or (b) the disposition of any securities by such
Person or any of the Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of the Restricted Subsidiaries, to the
extent such losses were deducted in computing such Consolidated Net Income;
plus
4
(2) provision for taxes based on income or profits of such Person and
the Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
plus
(3) Consolidated Interest Expense of such Person and the Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received pursuant
to Hedging Obligations), to the extent that any such expense was deducted
in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill
and other intangibles and amortization of programming costs but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash expenses (excluding any such non-cash expense to the extent
that it represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and the Restricted Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash expenses
were deducted in computing such Consolidated Net Income; plus
(5) any extraordinary or non-recurring expenses of such Person and
the Restricted Subsidiaries for such period to the extent that such charges
were deducted in computing such Consolidated Net Income; plus
(6) any non-capitalized transaction costs incurred in connection with
actual or proposed financings, acquisitions or transactions; minus
(7) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business; minus
(8) programming rights payments made during such period,
in each case, on a consolidated basis and determined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication of:
(1) the consolidated interest expense of such Person and the
Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net payments (if
any) pursuant to Hedging Obligations);
(2) the consolidated interest expense of such Person and the
Restricted Subsidiaries that was capitalized during such period;
5
(3) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or any of the Restricted Subsidiaries or secured
by a Lien on assets of such Person or any of the Restricted Subsidiaries
(whether or not such Guarantee or Lien is called upon); and
(4) the product of:
(a) all cash dividend payments (and non-cash dividend payments
in the case of a Person that is a Restricted Subsidiary) on any series of
preferred stock of such Person or any of the Restricted Subsidiaries, times
(b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and the Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends
or distributions paid in cash to the specified Person or a Restricted
Subsidiary of the Person;
(2) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition will be
excluded; and
(3) the cumulative effect of a change in accounting principles will
be excluded.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of this Indenture; (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election; or (iii) was nominated by Principals beneficially owning
at least 20% of the Voting Stock of the Company.
"Control Investment Affiliate" means any Person, any other Person which (a)
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person and (b) is organized by such Person primarily for the
purpose of making equity or debt investments in one or more companies or a
Person controlled by such Person. For purposes of this definition, "control" of
a Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreements" means (a) that certain Credit Agreement, dated as of
January 12, 2001, by and among Nexstar Finance, the guarantors party thereto,
Bank of America, N.A., as administrative agent and the lenders party thereto,
providing for up to $232.0 million aggregate principal amount of credit
borrowings, including any related notes, Guarantees, collateral documents,
instruments and agreements executed in case as amended, modified, renewed,
refunded, replaced or refinanced from time to time (including any increase in
principal amount whether or not with the same lenders or agents), and (b) that
certain Credit Agreement, dated as of January 12, 2001, by and among
Bastet/Mission, the guarantors
6
party thereto, Bank of America, N.A., as administrative agent and the lenders
party thereto, providing for up to $43.0 million aggregate principal amount of
credit borrowings, including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time (including any increase in principal amount).
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreements) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A-1 hereto except that such Note shall not bear the
Global Note Legend and shall not have the "Schedule of Exchanges of Interests in
the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date on
which the Notes mature. Notwithstanding the preceding sentence, any Capital
Stock that would constitute Disqualified Stock solely because the holders of the
Capital Stock have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale will not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with the provisions of
Section 4.07.
"Domestic Subsidiary" means any Subsidiary that was formed under the laws
of the United States or any state of the United States or the District of
Columbia.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering of Capital Stock (other than
Disqualified Stock) of (x) the Company or (y) Nexstar or one of its Subsidiaries
(other than a Subsidiary of the Company), the net proceeds of which are
contributed to the Company, in each case to any Person that is not an Affiliate
of the Company, which offering results in at least $35.0 million of net
aggregate proceeds to the Company.
7
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and the
Restricted Subsidiaries (other than Indebtedness under the Credit Agreements) in
existence on the date of this Indenture, until such amounts are repaid.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, substantially in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit and reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantor" means Nexstar Broadcasting Group, L.L.C. and its permitted
successors and assigns.
"Hedging Obligations" means, with respect to any specific Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates, currency rates or commodity prices.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means the global Note substantially in the form of
Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and
8
registered in the name of the Depositary or its nominee that will be issued in a
denomination equal to the outstanding principal amount of the Notes sold to
Institutional Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness'' includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person; provided that
Indebtedness shall not include our pledge of the Capital Stock of one of our
Unrestricted Subsidiaries to secure Non-Recourse Debt of that Unrestricted
Subsidiary.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due, in the
case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the first $36,988,000 aggregate principal amount at
maturity of Notes issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
9
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests
of any direct or indirect Restricted Subsidiary such that, after giving effect
to any such sale or disposition, such Person is no longer a Restricted
Subsidiary, the Company will be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Leverage Ratio" means the ratio of (i) the aggregate outstanding amount of
Indebtedness of each of the Company and the Restricted Subsidiaries as of the
last day of the most recently ended fiscal quarter for which financial
statements are internally available as of the date of calculation on a combined
consolidated basis in accordance with GAAP (subject to the terms described in
the next paragraph) plus the aggregate liquidation preference of all outstanding
Disqualified Stock of the Company and preferred stock of the Restricted
Subsidiaries (except preferred stock issued to the Company or any of the
Restricted Subsidiaries) as of the last day of such fiscal quarter to (ii) the
aggregate Consolidated Cash Flow of the Company for the last four full fiscal
quarters for which financial statements are internally available ending on or
prior to the date of determination (the "Reference Period").
For purposes of this definition, (i) the amount of Indebtedness which is
issued at a discount shall be deemed to be the accreted value of such
Indebtedness as of the last day of the Reference Period, whether or not such
amount is the amount then reflected on a balance sheet prepared in accordance
with GAAP, and (ii) the aggregate outstanding principal amount of Indebtedness
of the Company and the Restricted Subsidiaries and the aggregate liquidation
preference of all outstanding preferred stock of such Restricted Subsidiaries
for which such calculation is made shall be determined on a pro forma basis as
if the Indebtedness and preferred stock giving rise to the need to perform such
calculation had been incurred and issued and the proceeds therefrom had been
applied, and all other transactions in respect of which such Indebtedness is
being incurred or preferred stock is being issued had occurred, on the first day
of such Reference Period. In addition to the foregoing, for purposes of this
definition, the Leverage Ratio shall be calculated on a pro forma basis after
giving effect to (i) the incurrence of the Indebtedness of such Person and the
Restricted Subsidiaries and the issuance of the preferred stock of such
Subsidiaries (and the application of the proceeds therefrom) giving rise to the
need to make such calculation and any incurrence (and the application of the
proceeds therefrom) or repayment of other Indebtedness or preferred stock, at
any time subsequent to the beginning of the Reference Period and on or prior to
the date of determination (including any such incurrence or issuance which is
the subject of an Incurrence Notice delivered to the Trustee during such period
pursuant to clause (xiii) of the definition of Permitted Debt), as if such
incurrence or issuance (and the application of the proceeds thereof), or the
repayment, as the case may be, occurred on the first day of the Reference Period
(except that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based upon the average balance of
such Indebtedness at the end of each month during such period) and (ii) any
acquisition at any time on or subsequent to the first day of the Reference
Period and on or prior to the date of determination (including any such
incurrence or issuance which is the subject of an Incurrence Notice delivered to
the Trustee during such period pursuant to clause (xiii) of the definition of
Permitted Debt), as if such acquisition (including the incurrence, assumption or
liability for any such Indebtedness and the
10
issuance of such preferred stock and also including any Consolidated Cash Flow
associated with such acquisition) occurred on the first day of the Reference
Period giving pro forma effect to any non-recurring expenses, non-recurring
costs and cost reductions within the first year after such acquisition the
Company reasonably anticipates in good faith if the Company delivers to the
Trustee an officer's certificate executed by the chief financial or accounting
officer of the Company certifying to and describing and quantifying with
reasonable specificity such non-recurring expenses, non-recurring costs and cost
reductions. Furthermore, in calculating Consolidated Interest Expense for
purposes of the calculation of Consolidated Cash Flow, (a) interest on
Indebtedness determined on a fluctuating basis as of the date of determination
(including Indebtedness actually incurred on the date of the transaction giving
rise to the need to calculate the Leverage Ratio) and which will continue to be
so determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness as in effect on the
date of determination and (b) notwithstanding (a) above, interest determined on
a fluctuating basis, to the extent such interest is covered by Hedging
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"LMA" means a local marketing arrangement, joint sales agreement, time
brokerage agreement, shared services agreement, management agreement or similar
arrangement pursuant to which a Person, subject to customary preemption rights
and other limitations (i) obtains the right to sell a portion of the advertising
inventory of a television station of which a third party is the licensee, (ii)
obtains the right to exhibit programming and sell advertising time during a
portion of the air time of a television station or (iii) manages a portion of
the operations of a television station.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any Asset Sale, or (b) the
disposition of any securities by such Person or any of the Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
the Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of the Restricted Subsidiaries; and (ii) any extraordinary gain
(but not loss), together with any related provision for taxes on such
extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of the Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, taxes paid or payable as a result of the
Asset Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, and amounts required to be applied
to the repayment of Indebtedness secured by a Lien on the asset or assets that
were the subject of such Asset Sale and any reserve for adjustment in respect of
the sale price of such asset or assets established in accordance with GAAP.
11
"Nexstar" means Nexstar Broadcasting Group, L.L.C., the indirect parent of
the Company, and any successors thereto.
"Nexstar Finance" means Nexstar Finance, L.L.C., a wholly-owned subsidiary
of the Company.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of the Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(2) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any holder of any other Indebtedness (other than the Notes) of the Company
or any of the Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment of the Indebtedness to be accelerated or
payable prior to its Stated Maturity; and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Company or any of
the Restricted Subsidiaries (other than the Capital Stock of an
Unrestricted Subsidiary).
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Guarantee" means the Guarantee by the Guarantor of the Company's
payment obligations under this Indenture and on the Notes, executed pursuant to
the provisions of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness and in all cases whether direct or
indirect, absolute or contingent, now outstanding or hereafter created, assumed
or incurred and including, without limitation, interest accruing subsequent to
the filing of a petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceedings at the rate provided in the relevant
documentation, whether or not an allowed claim, and any obligation to redeem or
defease any of the foregoing.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 12.05
hereof.
12
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Asset Swap" means, with respect to any Person, the substantially
concurrent exchange of assets of such Person (including Equity Interests of a
Restricted Subsidiary) for assets of another Person, which assets are useful to
the business of such aforementioned Person.
"Permitted Business" means any business engaged in by the Company or the
Restricted Subsidiaries as of the Closing Date or any business reasonably
related, ancillary or complementary thereto.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary, or
any Investment by the Guarantor in its Subsidiaries; provided that the
proceeds are invested directly or indirectly in the Company or in the
Restricted Subsidiaries;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary in a
Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary; or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10;
(5) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company;
(6) any Investments received in compromise of obligations of such
persons incurred in the ordinary course of trade creditors or customers
that were incurred in the ordinary course of business, including pursuant
to any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of any trade creditor or customer;
(7) Hedging Obligations;
(8) guarantees of loans to management incurred pursuant to clause
(14) of the definition of Permitted Debt; or
(9) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in
13
value), when taken together with all other Investments made pursuant to
this clause (9) that are at the time outstanding, not to exceed $5.0
million.
"Permitted Liens" means:
(1) Liens securing Indebtedness of a Restricted Subsidiary that was
permitted by the terms of this Indenture to be incurred, and Liens securing
Indebtedness incurred under the Credit Facilities that were permitted by
the terms of the Indenture to be incurred;
(2) Liens in favor of the Company or the Restricted Subsidiaries;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Restricted
Subsidiary; provided that such Liens were not incurred in contemplation of
such merger or consolidation and do not extend to any assets other than
those of the Person merged into or consolidated with the Company or the
Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of the
property by the Company or any Restricted Subsidiary; provided that such
Liens were not incurred in contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) initially permitted by clause (xi) of the second paragraph of
Section 4.09 covering only the assets acquired with such Indebtedness;
(7) Liens existing on the date hereof;
(8) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as is required in
conformity with GAAP has been made therefor;
(9) Liens incurred in the ordinary course of business of the Company
or any Restricted Subsidiary with respect to obligations that do not exceed
$5.0 million at any one time outstanding;
(10) Liens on assets of Unrestricted Subsidiaries that secure Non-
Recourse Debt of Unrestricted Subsidiaries;
(11) Liens securing Permitted Refinancing Indebtedness where the Liens
securing indebtedness being refinanced were permitted under this Indenture;
(12) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred or imposed, as
applicable, in the ordinary course of business and consistent with industry
practices;
(13) any interest or title of a lessor under any Capital Lease
Obligation;
14
(14) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to letters of credit and products and proceeds thereof;
(15) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual or warranty, including rights of
offset and set-off;
(16) Liens securing Hedging Obligations which Hedging Obligations
relate to indebtedness that is otherwise permitted under this Indenture;
(17) leases or subleases granted to others;
(18) Liens under licensing agreements;
(19) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(20) judgment Liens not giving rise to an Event of Default;
(21) Liens encumbering property of the Company or a Restricted
Subsidiary consisting of carriers, warehousemen, mechanics, materialmen,
repairmen and landlords and other Liens arising by operation of law and
incurred in the ordinary course of business for sums which are not overdue
or which are being contested in good faith by appropriate proceedings and
(if so contested) for which appropriate reserves with respect thereto have
been established and maintained on the books of the Company or any of the
Restricted Subsidiaries in accordance with GAAP; and
(22) Liens encumbering property of the Company or any of the
Restricted Subsidiaries incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance, or other
forms of governmental insurance or benefits, or to secure performance of
bids, tenders, statutory obligations, leases, and contracts (other than for
Indebtedness) entered into in the ordinary course of business of the
Company or any of the Restricted Subsidiaries.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of the Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of the Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest on the
Indebtedness and the amount of all expenses and premiums incurred in
connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
15
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Principals" means (i) ABRY and its Control Investment Affiliates,
including ABRY III and (ii) the members of management of the Company or any of
the Restricted Subsidiaries, in each case, together with any spouse or immediate
family member (including adoptive children), estate, heirs, executors, personal
representatives and administrators of such Person.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of May 17, 2001, by and among the Company and the other parties named
on the signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time, and, with respect to any Additional Notes, one
or more registration rights agreements between the Company and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Note in the
form of Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Note in the
form of Exhibit A-2 hereto bearing the Private Placement Legend and deposited
with or on behalf of and registered in the name of the Depositary or its
nominee, issued in a denomination equal to the outstanding principal amount of
the Notes initially sold in reliance on Rule 903 of Regulation S.
"Related Party" means:
(1) any controlling stockholder, 80% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of any Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which
16
consist of any one or more Principals and/or such other Persons referred to
in the immediately preceding clause (1).
"Reorganization" means the transfer of all of the assets of the Company to
a Wholly Owned Restricted Subsidiary and the assumption by such Wholly Owned
Restricted Subsidiary of all of the Company's obligations under the Notes of the
Indenture..
"Restricted Entities" means all Bastet/Mission Entities, other than
Unrestricted Subsidiaries.
"Representative" means this Indenture Trustee or other Trustee, agent or
representative for any Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" means all current and future Domestic Subsidiaries
of the Company, other than Unrestricted Subsidiaries, and Restricted Entities.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Separation Date" means the earliest to occur of:
(1) 180 days after the closing of the offering of the Units;
(2) in the event the Note Issuers are required to make a Change of
Control Offer pursuant to Section 4.15 hereof, the date on which notice of
the offer is mailed to the holders of Notes;
(3) the date on which a registration statement with respect to the
Notes or a registered exchange offer for the Notes is declared effective
under the Securities Act;
17
(4) immediately prior to the redemption of any Notes with the
proceeds of an Equity Offering, as defined herein;
(5) the consummation of an Initial Public Offering by Nexstar or any
successor entity; or
(6) such earlier date as determined by Banc of America Securities LLC
in its sole discretion.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person: (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
Trustees of the corporation, association or other business entity is at the time
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and (ii) any
partnership (a) the sole general partner or the managing general partner of
which is such person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or
any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note substantially in
the form of Exhibit A-1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company or
Bastet/Mission that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
18
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any of the Restricted Subsidiaries unless
the terms of any such agreement, contract, arrangement or understanding are
no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of
the Company or Bastet/Mission;
(3) is a Person with respect to which neither the Company nor any of
the Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of the Restricted
Subsidiaries.
Any designation of a Subsidiary of the Company or a Bastet/Mission Entity
as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with
the Trustee a certified copy of the Board Resolution giving effect to such
designation and an officers' certificate certifying that such designation
complied with the preceding conditions and was permitted by the terms of Section
4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet
the preceding requirements as an Unrestricted Subsidiary, it will thereafter
cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted
Subsidiary as of such date and, if such Indebtedness is not permitted to be
incurred as of such date pursuant to Section 4.09, the Company will be in
default under such section. The Board of Directors of the Company or any
Bastet/Mission Entity may at any time designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided that such designation will be deemed to be
an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is permitted pursuant to Section 4.09
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing: (a) the sum of the
products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness,
by (y) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment, by (b) the then
outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
19
Section 1.02. Other Definitions
<TABLE>
<CAPTION>
Defined in
Term Section
---- -------
<S> <C>
"Affiliate Transaction"............................................................ 4.11
"Asset Sale Offer"................................................................. 3.09
"Authentication Order"............................................................. 2.02
"Change of Control Offer".......................................................... 4.15
"Change of Control Payment"........................................................ 4.15
"Change of Control Payment Date"................................................... 4.15
"Covenant Defeasance".............................................................. 8.03
"Event of Default"................................................................. 6.01
"Excess Proceeds".................................................................. 4.10
"incur"............................................................................ 4.09
"Legal Defeasance"................................................................. 8.02
"Offer Amount"..................................................................... 3.09
"Offer Period"..................................................................... 3.09
"Paying Agent"..................................................................... 2.03
"Payment Blockage Notice".......................................................... 10.03
"Permitted Debt"................................................................... 4.09
"Purchase Date".................................................................... 3.09
"Registrar"........................................................................ 2.03
"Restricted Payments".............................................................. 4.07
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantee means the Company and
the Guarantor, respectively, and any successor obligor upon the Notes and the
Note Guarantee, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
20
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof, except that
Notes to pay Liquidated Damages may be in other denominations.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantor, Bastet/Mission and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound
thereby. However, to the extent any provision of any Note conflicts with the
express provisions of this Indenture, the provisions of this Indenture shall
govern and be controlling.
(b) Global Notes. Notes issued in global form shall be substantially
in the form of Exhibits A-1 or A-2 attached hereto (including the Global Note
Legend thereon and the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Notes issued in definitive form shall be substantially in the
form of Exhibit A-1 attached hereto (but without the Global Note Legend thereon
and without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount at maturity of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount at maturity of
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount at maturity of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in accordance with instructions given by the Holder thereof as required by
Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S Temporary
Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Clearstream, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The Restricted Period shall be terminated upon
the receipt by the Trustee of (i) a written certificate from the Depositary,
together with copies of certificates from Euroclear and Clearstream certifying
that they have received
21
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Note (except to the extent
of any beneficial owners thereof who acquired an interest therein during the
Restricted Period pursuant to another exemption from registration under the
Securities Act and who will take delivery of a beneficial ownership interest in
a 144A Global Note or an IAI Global Note bearing a Private Placement Legend, all
as contemplated by Section 2.06(a)(ii) hereof), and (ii) an Officers'
Certificate from the Company. Following the termination of the Restricted
Period, beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for beneficial interests in Regulation S Permanent Global Notes
pursuant to the Applicable Procedures. Simultaneously with the authentication of
Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S
Temporary Global Note. The aggregate principal amount at maturity of the
Regulation S Temporary Global Note and the Regulation S Permanent Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.
(d) Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Temporary Global Note and
the Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Clearstream.
Section 2.02. Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers (an "Authentication Order"), authenticate Notes for original issue up
to the aggregate principal amount at maturity stated in paragraph 4 of the
Notes. The aggregate principal amount at maturity of Notes outstanding at any
time may not exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying
22
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA (S) 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee; provided that in no event shall
the Regulation S Temporary Global Note be exchanged by the Company for
Definitive Notes prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof,
23
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Temporary Regulation S Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person (other
than an Initial Purchaser). Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer
or exchange referred to in (1) above; provided that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial
interests in the Regulation S Temporary Global Note prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of
any certificates required pursuant to Rule 903 under the Securities Act.
Upon consummation of an Exchange Offer by the Company in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall
be deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the Holder
of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the
Notes or otherwise applicable under the Securities Act, the Trustee shall
adjust the principal amount at maturity of the relevant Global Note(s)
pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof
24
in the form of a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial
interest in the 144A Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications
in item (1) thereof;
(B) if the transferee will take delivery in the form of a beneficial
interest in the Regulation S Temporary Global Note or the Regulation S
Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a beneficial
interest in the IAI Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications
and certificates and Opinion of Counsel required by item (3) thereof, if
applicable.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global
Note for Beneficial Interests in the Unrestricted Global Note. A beneficial
interest in any Restricted Global Note may be exchanged by any holder thereof
for a beneficial interest in an Unrestricted Global Note or transferred to a
Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note if the exchange or transfer complies with the
requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the holder
of the beneficial interest to be transferred, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate
from such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note, a certificate from such holder in the
form of Exhibit B hereto, including the certifications in item (4)
thereof;
25
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount at maturity equal to the aggregate
principal amount of beneficial interests transferred pursuant to subparagraph
(B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-
U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
26
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such beneficial interest is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount at maturity of the
applicable Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount at maturity. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this Section
2.06(c) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and
shall be subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Regulation S Temporary Global Note to
Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes delivery
thereof in the form of a Definitive Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in
the case of a transfer pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A Holder of a beneficial interest in a Restricted Global Note
may exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a broker-
dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
27
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a
Person who shall take delivery thereof in the form of a Definitive
Note that does not bear the Private Placement Legend, a certificate
from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(h) hereof, and the Company shall execute and the
Trustee shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount at maturity.
Any Definitive Note issued in exchange for a beneficial interest pursuant to
this Section 2.06(c)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the Depositary
and the Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to transfer
such Restricted Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Note, then, upon receipt by
the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in
item (1) thereof;
28
(C) if such Restricted Definitive Note is being transferred to a Non-
U.S. Person in an offshore transaction in accordance with Rule 903 or Rule
904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant
to an exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(b) thereof;
or
(G) if such Restricted Definitive Note is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount at maturity of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause (B)
above, the 144A Global Note, in the case of clause (C) above, the Regulation S
Global Note, and in all other cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to exchange
such Notes for a beneficial interest in the Unrestricted Global Note,
a certificate from
29
such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount at
maturity of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount at
maturity of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
or (iii) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount at maturity equal to the principal amount at maturity of
Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (1) thereof;
30
(B) if the transfer will be made pursuant to Rule 903 or Rule 904,
then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel required
by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes proposes
to exchange such Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery thereof in
the form of an Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests, an Opinion of Counsel in form reasonably acceptable to the
Company to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who
takes delivery thereof in the form of an Unrestricted Definitive Note. Upon
receipt of a request to register such a transfer, the Registrar shall register
the Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.
31
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount at maturity equal to the principal amount of the
beneficial interests in the Restricted Global Notes tendered for acceptance by
Persons that certify in the applicable Letters of Transmittal that (x) they are
not broker-dealers, (y) they are not participating in a distribution of the
Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the
Company, and accepted for exchange in the Exchange Offer and (ii) Definitive
Notes in an aggregate principal amount at maturity equal to the principal amount
at maturity of the Restricted Definitive Notes accepted for exchange in the
Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall
cause the aggregate principal amount at maturity of the applicable Restricted
Global Notes to be reduced accordingly, and the Company shall execute and the
Trustee shall authenticate and deliver to the Persons designated by the Holders
of Definitive Notes so accepted Definitive Notes in the appropriate principal
amount at maturity.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(i) (a) TO A PERSON WHO IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT,
(d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINE DIN RULE 501(a)(1),
(2), (3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR")) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH
CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF NOTES LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE ISSUE THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION
32
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE ISSUER SO REQUESTS),
(ii) TO THE ISSUER, OR
(iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(iii),
(c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.06 (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following
form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
(iv) Unit Legend: Each Note issued prior to the Separation Date
shall bear a legend in substantially the following form:
"THE NOTES EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS, EACH OF WHICH CONSIST OF $1,000 PRINCIPAL AMOUNT AT MATURITY
OF THE NOTES AND ONE SHARE (COLLECTIVELY, THE "COMMON SHARES") OF CLASS B COMMON
STOCK, PAR VALUE $0.01 PER SHARE OF NEXSTAR EQUITY CORP. PRIOR TO THE CLOSE OF
BUSINESS UPON THE EARLIEST TO OCCUR OF (i) 180 DAYS AFTER THE CLOSING OF THE
OFFERING OF THE UNITS, (ii) IN THE EVENT THE ISSUERS ARE REQUIRED TO MAKE A
CHANGE OF CONTROL OFFER AS SPECIFIED IN THE
33
INDENTURE, THE DATE ON WHICH NOTICE OF THE OFFER IS MAILED TO THE HOLDERS OF
NOTES, (iii) THE DATE ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO THE
NOTES OR A REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (iv) IMMEDIATELY PRIOR TO THE REDEMPTION OF ANY NOTES WITH
THE PROCEEDS OF AN EQUITY OFFERING AS SPECIFIED IN THE INDENTURE, (v) THE
CONSUMMATION OF AN INITIAL PUBLIC OFFERING BY NEXSTAR BROADCASTING GROUP,
L.L.C., OR (vi) SUCH EARLIER DATE AS DETERMINED BY BANC OF AMERICA SECURITIES
L.L.C. IN ITS SOLE DISCRECTION, THE NOTES EVIDENCED BY THIS CERTIFICATE MAY NOT
BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED
ONLY TOGETHER WITH, THE COMMON SHARES."
(v) Original Issue Discount Legend. Each Note shall bear a legend in
substantially the following form:
"FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THIS SECURITY IS BEING OFFERED WITH ORIGINAL ISSUE DISCOUNT;
FOR EACH $1,000 PRINCIPAL AMOUNT AT MATURITY OF THIS SECURITY, THE ISSUE PRICE
ALLOCATED TO THE NOTE IS $506.75, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS
$493.25, THE ISSUE DATE IS MAY 17, 2001 AND THE YIELD TO MATURITY IS 16% PER
ANNUM."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount at maturity of Notes represented by such Global Note
shall be reduced accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note by
the Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
34
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part or (C) to register the transfer of or to exchange a Note between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as
not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the
35
Company or a Subsidiary of the Company shall not be deemed to be outstanding for
purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the Accreted Value (if prior to May 15, 2005) or the principal amount
(if on or after May 15, 2005) of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount at
maturity of Notes have concurred in any direction, waiver or consent, Notes
owned by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, the Company,
jointly and severally, shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Notes and in Section 4.01 hereof. The Company shall notify
the Trustee in writing of the amount of defaulted interest proposed to be paid
on each Note and the date of the proposed
36
payment. The Company shall fix or cause to be fixed each such special record
date and payment date, provided that no such special record date shall be less
than 10 days prior to the related payment date for such defaulted interest. At
least 15 days before the special record date, the Company (or, upon the written
request of the Company, the Trustee in the name and at the expense of the
Company) shall mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of such interest to
be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the Accreted Value (if
prior to May 15, 2005) or the principal amount (if on or after May 15, 2005) of
Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee shall select the Notes to be redeemed or
purchased among the Holders of the Notes in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the Accreted Value (if prior to May 15, 2005) or the principal
amount (if on or after May 15, 2005) thereof to be redeemed. Notes and portions
of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the Accreted
Value (if prior to May 15, 2005) or the principal amount (if on or after May 15,
2005) of such Note to be redeemed and that,
37
after the redemption date upon surrender of such Note, a new Note or Notes in
principal amount at maturity equal to the unredeemed portion shall be issued
upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue or accrete, as
applicable, on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued (or accreted)
interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue (or accrete) on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the expense of the Company a
38
new Note equal in Accreted Value (if prior to May 15, 2005) or the principal
amount (if on or after May 15, 2005) to the unredeemed portion of the Note
surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.07, the
Company shall not have the option pursuant to this Section 3.07 to redeem the
Notes prior to May 15, 2005. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Liquidated Damages
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on May 15 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2005............................................................................. 108.000%
2006............................................................................. 104.000%
2007 and thereafter.............................................................. 100.000%
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this Section 3.07,
at any time prior to May 15, 2004, the Company may redeem all (but not less than
all) of the outstanding Notes with the net proceeds of one or more Equity
Offerings at a redemption price equal to 116% of the Accreted Value thereof;
provided that such redemption occurs within 90 days of the date of the closing
of such Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
On November 15, 2006, the Company shall redeem a principal amount of
Notes outstanding on such date equal to the AHYDO Amount on a pro rata basis at
a redemption price of 100% of the principal amount of the Notes so redeemed. The
"AHYDO Amount" equals the amount such that the Notes will not be "applicable
high yield discount obligations" within the meaning of Section 163(i)(1) of the
Code.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase Accreted Value (if prior to May 15, 2005) or the
principal amount (if on or after May 15, 2005) of Notes required to be purchased
pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than the Offer
Amount has been tendered, all Notes tendered in response to the Asset Sale
Offer. Payment for any Notes so purchased shall be made in the same manner as
interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is
39
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09
and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or
accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may elect to have Notes purchased in integral multiples of $1,000
only;
(f) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount (or, if prior to May 15,
2005, Accreted Value) of Notes surrendered by Holders exceeds the Offer Amount,
the Company shall select the Notes to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company so that only Notes
in denominations of $1,000, or integral multiples thereof, shall be purchased);
and
(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount (or, if prior to May 15, 2005, Accreted
Value)to the unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase
40
price of the Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Note, and the Trustee, upon
written request from the Company shall authenticate and mail or deliver such new
Note to such Holder, in a principal amount (or, if prior to May 15, 2005,
Accreted Value) equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the Asset
Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company shall, jointly and severally, pay or cause to be paid the
principal of, premium, if any, and interest on the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. The
Company shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.
The Company shall, jointly and severally, pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 1% per annum in excess of the then applicable
interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.
41
Section 4.03. Reports
(a) Whether or not required by the SEC, so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes, within the time
periods specified in the SEC's rules and regulations (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the SEC on Forms 10-Q and 10-K if the Company were required to file such
forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report on the annual financial statements by the Company's certified independent
accountants; and (ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such reports. In
addition, following consummation of the Exchange Offer, whether or not required
by the SEC, the Company shall file a copy of all of the information and reports
referred to in clauses (i) and (ii) above with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. The Company shall at
all times comply with TIA (S) 314(a).
(b) For so long as any Notes remain outstanding, the Company shall
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
(c) If the Company or the Guarantor has designated any of its
Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual
financial information required by the preceding paragraph will include a
reasonably detailed presentation, either on the face of the financial statements
or in the footnotes thereto, and in Management's Discussion and Analysis of
Financial Condition and Results of Operations, of the financial condition and
results of operations of the Company and the Restricted Subsidiaries separate
from the financial condition and results of operations of the Unrestricted
Subsidiaries.
Section 4.04. Compliance Certificate.
(a) The Company and the Guarantor (to the extent that the Guarantor is so
required under the TIA) shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such
42
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of the Restricted Subsidiaries
to pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
Each of the Company and the Guarantor covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and each of the
Company and the Guarantor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07. Restricted Payments.
The Company, Bastet/Mission and the Guarantor shall not, and shall not
permit any of the Restricted Subsidiaries to, directly or indirectly: (i)
declare or pay any dividend or make any other payment or distribution on account
of the Company's, the Guarantor's or any of the Restricted Subsidiaries' Equity
Interests (including, without limitation, any payment in connection with any
merger or consolidation involving the Company, the Guarantor or any of the
Restricted Subsidiaries) or to the direct or indirect holders of the Company's,
the Guarantor's or any of the Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or the Guarantor and
other than (x) dividends or distributions payable to the Company or the
Restricted Subsidiaries) (y) dividends or other distributions payable by a
Restricted Subsidiary of the Guarantor (other than the Company and the
Restricted Subsidiaries) to the Guarantor or the Restricted Subsidiaries; (ii)
purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation involving the Company
or the Guarantor) any Equity Interests of the Company or any direct or indirect
parent of the Company (other than any such Equity Interests owned by the Company
or the Restricted Subsidiaries); (iii) make any payment on or with respect to,
or purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or the Note Guarantee, except a
payment of interest or principal at Stated Maturity thereof; or (iv) make any
Restricted Investment (all such payments and other actions set forth in clauses
(i) through (iv) above being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence of such Restricted Payment;
43
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio
test set forth in Section 4.09 and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company, the Guarantor and the Restricted
Subsidiaries after the date hereof (excluding (x) Restricted Payments permitted
by clauses (a), (b), (c), (d), (e), (g), (h), (i), (k), (l), (m) and (n) of the
next succeeding paragraph and (y) following the consummation of the
Reorganization, Restricted Payments made by the Guarantor, which would otherwise
have been deducted in calculating the sum set forth below), is less than the
sum, without duplication, of:
(i) (x) 100% of the aggregate Consolidated Cash Flow of the Company
(or, in the event such Consolidated Cash Flow shall be a deficit, minus
100% of such deficit) accrued for the period beginning on the first day of
the first calendar month commencing after the issue date and ending on the
last day of the Company's most recent calendar month for which financial
information is available to the Company ending prior to the date of such
proposed Restricted Payment, taken as one accounting period, less (y) 1.4
times Consolidated Interest Expense for the same period, plus
(ii) 100% of the aggregate net proceeds (including the fair market
value of property other than cash) received by the Company or
Bastet/Mission as a contribution to the equity capital of the Company or
Bastet/Mission or from the issue or sale since the date hereof of Equity
Interests of the Company or Bastet/Mission (other than Disqualified Stock),
or of Disqualified Stock or debt securities of the Company or
Bastet/Mission that have been converted into such Equity Interests (other
than Equity Interests (or Disqualified Stock or convertible debt
securities) sold to a Restricted Subsidiary and other than Disqualified
Stock or convertible debt securities that have been converted into
Disqualified Stock), plus
(iii) to the extent that any Unrestricted Subsidiary is redesignated
as a Restricted Subsidiary after the date hereof, the fair market value of
such Subsidiary as of the date of such redesignation, plus
(iv) the aggregate amount returned in cash with respect to
Investments (other than Permitted Investments) made after the issue date
whether through interest payments, principal payments, dividends or other
distributions, plus
(v) the net cash proceeds received by the Company or any of the
Restricted Subsidiaries from the disposition, retirement or redemption of
all or any portion of such Investments referred to in clause (iv) in the
first paragraph of this Section 4.07 (other than to a Restricted
Subsidiary).
The preceding provisions shall not prohibit:
(a) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of this Indenture;
(b) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or
Bastet/Mission or of any Equity Interests of the Company or the Guarantor
in exchange for, or out of the net cash proceeds of the substantially
44
concurrent sale (other than to a Restricted Subsidiary) of, Equity
Interests of the Company or Bastet/Mission (other than Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (c) (ii) of the preceding
paragraph;
(c) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or Bastet/Mission with the net
cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(d) the payment of any dividend by a Restricted Subsidiary to the
holders of its Equity Interests on a pro rata basis;
(e) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or the payment of a dividend
to any Affiliates of the Company to effect the repurchase, redemption,
acquisition or retirement of the Company or Affiliate's equity interest,
that are held by any member or former member of the Company's (or any of
the Restricted Subsidiaries' or any of their Affiliates') management, or
by any of their respective directors, employees or consultants; provided
that the aggregate price paid for all such repurchased, redeemed, acquired
or retired Equity Interests may not exceed the sum of (i) $750,000 in any
calendar year (with unused amounts in any calendar year being available to
be so utilized in succeeding calendar years) and (ii) the net cash proceeds
to the Company from any issuance or reissuance of Equity Interests of
Nexstar or its Affiliates (other than Disqualified Stock) to members of
management (which are excluded from the calculation set forth in clause
(c)(ii) of the proceeding paragraph) and the net cash proceeds to the
Company of any "keyman" life insurance proceeds; provided that the
cancellation of Indebtedness owing to the Company from members of
management shall not be deemed Restricted Payments;
(f) the payment of the dividends on Disqualified Stock the incurrence
of which was permitted by this Indenture;
(g) repurchases of Equity Interests deemed to occur upon the exercise
of stock options;
(h) payments to Affiliates of the Company and holders of Equity
Interests in the Company in amounts equal to (i) the amounts required to
pay any Federal, state or local income taxes to the extent that (x) such
income taxes are attributable to the income of the Company and the
Restricted Subsidiaries (but limited, in the case of taxes based upon
taxable income, to the extent that cumulative taxable net income subsequent
to the Closing Date is positive) or (y) such taxes are related to
Indebtedness between or among any of the Company and any of the Restricted
Subsidiaries and (ii) the amounts required to pay any Federal, State or
local taxes in connection with the sale of all or substantially all of the
assets of a Restricted Subsidiary made in accordance with clause (k) below;
(i) so long as no Default or Event of Default exists both before and
after giving effect thereto, the Company may authorize, declare and pay
dividends to its shareholders, partners or members, as applicable, for the
purpose of paying the corporate overhead expenses of Nexstar or its
Subsidiaries in an aggregate amount for all such overhead expenses not to
exceed $500,000 in any Fiscal Year;
(j) the retirement of any shares of Disqualified Stock of the Company
by conversion into, or by exchange for, shares of Disqualified Stock of the
Company, or out of the net cash
45
proceeds of the substantially concurrent sale (other than to a Subsidiary
of the Company) of other shares of Disqualified Stock of the Company;
(k) the distribution of all or substantially all of the assets of a
Restricted Subsidiary to a Subsidiary of Nexstar; provided that (x) such
distribution is made within one business day of the consummation of the
sale of the assets so distributed, (y) such asset sale is made in
compliance with clause (a) of Section 4.10 as if the seller of such assets
were a Restricted Subsidiary and (z) the Net Proceeds of such asset sale
(determined as if such asset sale were an Asset Sale) are contributed to
the Company within one business day following the consummation of such
asset sale;
(l) other Restricted Payments not to exceed $15.0 million in the
aggregate;
(m) distributions made on the issue date to Nexstar or its
Subsidiaries which are used to repay the Interim Loan; and
(n) payments to Nexstar and its Subsidiaries to permit repayment of
principal of ABRY Subordinated Debt (including all interest accrued
thereon) in accordance with the terms thereof.
Notwithstanding anything to the foregoing, no Bastet/Mission Entity shall
make a Restricted Payment (other than Restricted Investments) to any person
other than the Company or a Restricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company, the Guarantor or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 shall be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Trustee. The Board of
Director's determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if such
fair market value exceeds $10.0 million. Not later than the date of making any
Restricted Payment, the Company or the Guarantor, as the case may be, shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by this Section 4.07 were computed, together with a copy of any
fairness opinion or appraisal required by this Indenture.
Prior to the consummation of the Reorganization, the Company and the
Restricted Subsidiaries shall not make any payments in respect of debt owed to
Nexstar or its Subsidiaries (other than the Company and the Restricted
Subsidiaries).
The obligations of the Guarantor under this covenant shall be released upon
the consummation of the Reorganization.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Company and Bastet/Mission shall not, and shall not permit any of the
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
46
(a) pay dividends or make any other distributions on its Capital Stock to
the Company or any of the Restricted Subsidiaries, or with respect to any other
interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the Company or any of the Restricted Subsidiaries;
(b) make loans or advances to the Company or any of the Restricted
Subsidiaries; or
(c) transfer any of its properties or assets to the Company or any of the
Restricted Subsidiaries,
The preceding restrictions shall not apply to encumbrances or restrictions
existing under or by reason of:
(i) agreements governing Existing Indebtedness and Credit
Facilities as in effect on the date of this Indenture and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements; provided that the
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive, taken as a
whole, with respect to such dividend and other payment restrictions than
those contained in those agreements on the date of this Indenture;
(ii) this Indenture, the Notes and the Note Guarantee;
(iii) applicable law, rule, regulation or order;
(iv) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of the Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so acquired;
provided that, in the case of Indebtedness, such Indebtedness was permitted
by the terms of this Indenture to be incurred;
(v) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices;
(vi) purchase money obligations (including Capital Lease
Obligations) for property acquired in the ordinary course of business that
impose restrictions on that property of the nature described in clause (c)
above;
(vii) contracts for the sale of assets, including without limitation
any agreement for the sale or other disposition of a Subsidiary that
restricts distributions by that Subsidiary pending its sale or other
disposition;
(viii) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;
(ix) Liens securing Indebtedness otherwise permitted to be incurred
under the provisions of Section 4.12 that limit the right of the debtor to
dispose of the assets subject to such Liens;
47
(x) provisions with respect to the disposition or distribution
of assets or property in joint venture agreements, assets sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business;
(xi) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course of
business; and
(xii) agreements governing Indebtedness of the Restricted
Subsidiaries permitted to be incurred under this Indenture.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company and Bastet/Mission shall not, and shall not permit any of the
Restricted Subsidiaries to, directly, or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and the Company and Bastet/Mission shall
not issue any Disqualified Stock and shall not permit any of the Restricted
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Company or any Restricted Subsidiary may incur Indebtedness (including Acquired
Debt) or issue shares of Disqualified Stock or preferred stock if the Company's
Leverage Ratio at the time of incurrence of such Indebtedness or the issuance of
such Disqualified Stock or such preferred stock, as the case may be, after
giving pro forma effect to such incurrence or issuance as of such date and to
the use of the proceeds therefrom as if the same had occurred at the beginning
of the most recently ended four full fiscal quarter period of the Company for
which internal financial statements are available, would have been no greater
than (i) 7.5 to 1, if such incurrence or issuance is on or prior to May 15,
2003, and (ii) 7.0 to 1, if such incurrence or issuance is May 15, 2003.
The provisions of the first paragraph of this Section 4.09 shall not
prohibit the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Company or the Restricted
Subsidiaries of Indebtedness under the Credit Agreements (with letters of
credit being deemed to have a principal amount equal to the maximum
potential liability of the Company and the Restricted Subsidiaries
thereunder) and related Guarantees under the Credit Agreements; provided
that the aggregate principal amount (or accreted value, as applicable) of
all Indebtedness of the Company and the Restricted Subsidiaries then
classified as having been incurred pursuant to this clause (i) after giving
effect to such incurrence, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any other Indebtedness incurred
pursuant to this clause (i) does not exceed an amount equal to $225.0
million less the aggregate amount applied by the Company and the Restricted
Subsidiaries to permanently reduce the availability of Indebtedness under
the Credit Agreements pursuant to Section 4.10;
(ii) the incurrence by the Company and the Restricted
Subsidiaries of Existing Indebtedness;
(iii) the incurrence by the Company of Indebtedness represented
by the Notes in accordance with the terms of this Indenture;
(iv) the incurrence by the Company, the Guarantor or any of the
Restricted Subsidiaries of Permitted Refinancing Indebtedness;
48
(v) the incurrence by the Company or any of the Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
of the Restricted Subsidiaries; provided, however, that (x) any subsequent event
or issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary and (y) any sale or other transfer of any such Indebtedness to a
Person that is not the Company or the Restricted Subsidiaries shall be deemed,
in each case, to constitute an incurrence of such Indebtedness by the Company or
such Restricted Subsidiary, as the case may be, that was not permitted by this
clause (v);
(vi) the incurrence by the Company or any of the Restricted
Subsidiaries of Hedging Obligations that are incurred in the ordinary course of
business for the purpose of fixing or hedging currency, commodity or interest
rate risk (including with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding) in connection with
the conduct of their respective businesses and not for speculative purposes;
(vii) the Guarantee by the Company of Indebtedness of any of the
Restricted Subsidiaries so long as the incurrence of such Indebtedness by such
Restricted Subsidiary is permitted to be incurred by another provision of this
covenant;
(viii) the Guarantee by any Restricted Subsidiary of Indebtedness of
the Company;
(ix) Indebtedness consisting of customary indemnification,
adjustments of purchase price or similar obligations, in each case, incurred or
assumed in connection with the acquisition of any business or assets;
(x) Indebtedness incurred by the Company or any of the Restricted
Subsidiaries constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including without limitation
to letters of credit in respect to workers' compensation claims or self-
insurance, or other Indebtedness with respect to reimbursement type obligations
regarding workers' compensation claims; provided, however, that upon the drawing
of such letters of credit or the incurrence of such Indebtedness, such
obligations are reimbursed within 30 days following such drawing or incurrence;
(xi) Indebtedness of the Company and the Restricted Subsidiaries
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvement of property, plant
or equipment whether through the direct purchase of assets or at least a
majority of the Voting Stock of any person owning such assets, in an aggregate
principal amount not to exceed $5.0 million at any time outstanding;
(xii) Obligations in respect of performance and surety bonds and
completion Guarantees provided by the Company or any of the Restricted
Subsidiaries in the ordinary course of business;
(xiii) Acquisition Debt of the Company or a Restricted Subsidiary if
(w) such Acquisition Debt is incurred within 270 days after the date on which
the related definitive acquisition agreement or LMA, as the case may be, was
entered into by the Company or such Restricted Subsidiary, (x) the aggregate
principal amount of such Acquisition Debt is no greater than the aggregate
principal amount of Acquisition Debt set forth in a notice from the Company to
the Trustee (an "Incurrence Notice") within ten days after the date on which the
related definitive acquisition agreement or LMA, as the case may be, was entered
into by the Company
49
or such Restricted Subsidiary, which notice shall be executed on the
Company's behalf by the chief financial officer of the Company in such
capacity and shall describe in reasonable detail the acquisition or LMA, as
the case may be, which such Acquisition Debt shall be incurred to finance,
(y) after giving pro forma effect to the acquisition or LMA, as the case
may be, described in such Incurrence Notice, the Company or such Restricted
Subsidiary could have incurred such Acquisition Debt under this Indenture
as of the date upon which the Company delivers such Incurrence Notice to
the Trustee and (z) such Acquisition Debt is utilized solely to finance the
acquisition or LMA, as the case may be, described in such Incurrence Notice
(including to repay or refinance indebtedness or other obligations incurred
in connection with such acquisition or LMA, as the case may be, and to pay
related fees and expenses);
(xiv) Guarantees by the Company or any Restricted Subsidiary of
Indebtedness of officers of the Company in an aggregate principal amount
not to exceed $3.0 million at any time outstanding;
(xv) the incurrence by the Company or any of the Restricted
Subsidiaries of additional Indebtedness, including Attributable Debt
incurred after the date of this Indenture, in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any other Indebtedness incurred pursuant to this clause (xv), not to exceed
$10.0 million; and
(xvi) the incurrence by the Company of additional notes in
payment of Liquidated Damages as required under the Registration Rights
Agreement.
For purposes of determining compliance with this Section 4.09, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xvi) above, or is
entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Company shall be permitted to classify such item of Indebtedness on the date
of its incurrence in any manner that complies with this Section 4.09. In
addition, the Company may, at any time, change the classification of an item of
Indebtedness, or any portion thereof, to any other clause or to the first
paragraph of this Section 4.09, provided that the Company or a Restricted
Subsidiary would be permitted to incur the item of Indebtedness, or portion of
the item of Indebtedness, under the other clause or the first paragraph of this
Section 4.09, as the case may be, at the time of reclassification. Accrual of
interest, accretion or amortization of original issue discount and the accretion
of accreted value shall not be deemed to be an incurrence of Indebtedness for
purposes of this Section 4.09. Indebtedness under Credit Agreements outstanding
on the date on which Notes are first issued and authenticated under this
Indenture shall be deemed to have been incurred on such date in reliance on the
exception provided by clause (i) of the definition of Permitted Debt.
Section 4.10. Asset Sales.
(a) The Company and Bastet/Mission shall not, and shall not permit
any of the Restricted Subsidiaries to, consummate an Asset Sale unless:
(i) The Company (or the Restricted Subsidiary, as the case may
be) receives consideration at the time of the Asset Sale at least equal to
the fair market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(ii) the fair market value is determined by the Company's Board
of Directors and evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee; and
50
(iii) at least 75% of the consideration received in the Asset Sale by
the Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents, except to the extent the Company is undertaking a Permitted
Asset Swap. For purposes of this provision and the next paragraph, each of
the following shall be deemed to be cash:
(A) any liabilities, as shown on the Company's or any of the
Restricted Subsidiaries' most recent balance sheet, of the Company or
any of the Restricted Subsidiaries (other than contingent liabilities
and liabilities that are by their terms subordinated to the Notes)
that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability; and
(B) any securities, notes or other obligations received by
the Company or any of the Restricted Subsidiaries from such transferee
that are converted by the Company or such Restricted Subsidiary within
90 days into cash or Cash Equivalents, to the extent of the cash
received in that conversion.
The 75% limitation referred to in clause (iii) above shall not apply to any
Asset Sale in which the cash or Cash Equivalents portion of the consideration
received therefrom, determined in accordance with the preceding provision, is
equal to or greater than what the after-tax proceeds would have been had such
Asset Sale complied with the aforementioned 75% limitation.
Notwithstanding the foregoing, the Company or any Restricted Subsidiary
shall be permitted to consummate an Asset Sale without complying with the
foregoing if:
(x) the Company or such Restricted Subsidiary , as applicable,
receives consideration at the time of such Asset Sale at least equal to
the fair market value of the assets or other property sold, issued or
otherwise disposed of:
(y) the fair market value is determined by the Company's Board of
Directors and evidenced by a resolution of the Board of Directors set
forth in an officers' certificate delivered to the Trustee; and
(z) at least 75% of the consideration for such Asset Sale constitutes
a controlling interest in a Permitted Business, assets used or useful in a
Permitted Business and/or cash;
provided that any cash (other than any amount deemed cash under clause
(iii)(A) of the preceding paragraph) received by the Company or such Restricted
Subsidiary in connection with any Asset Sale permitted to be consummated under
this paragraph shall constitute Net Proceeds subject to the provisions of the
next paragraph.
(b) Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or such Restricted, as applicable, Subsidiary may apply those
Net Proceeds at its option:
(i) to permanently repay or repurchase Indebtedness of the Company
or any of the Restricted Subsidiaries;
(ii) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(iii) to make a capital expenditure; or
51
(iv) to acquire other assets that are used or useful in a Permitted
Business.
Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph shall constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall
make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount of
Notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer shall be equal to 100%
of the Accreted Value of the Notes on the date of purchase plus accrued and
unpaid Liquidated Damages thereon, if any (if prior to May 15, 2005), or 100% of
the aggregate principal amount of Notes plus accrued and unpaid interest and
Liquidated Damages, if any, to the date of purchase, (if on or after May 15,
2005), in each case which price shall be payable in cash. If any Excess Proceeds
remain after consummation of an Asset Sale Offer, the Company may use those
Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If
the Accreted Value or aggregate principal amount, as applicable, of Notes and
other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and such other
pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of
each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(c) The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
(d) The Company shall, and shall cause the Restricted Subsidiaries to
utilize the proceeds of sales of assets received by it in accordance with clause
(k) of Section 4.07 as if such proceeds were the Net Proceeds of an Asset Sale.
Section 4.11. Transactions with Affiliates.
The Company and Bastet/Mission shall not, and shall not permit any of the
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or Guarantee with, or for the
benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:
(a) the Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and
(b) the Company delivers to the Trustee:
(i) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess
of $1.0 million, a resolution of the
52
Board of Directors set forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with this Section 4.11 and that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors; and
(ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess
of $7.5 million, an opinion as to the fairness to the Holders of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, shall not be subject to the provisions of the prior paragraph:
(a) any employment agreement entered into by the Company or any of
the Restricted Subsidiaries in the ordinary course of business of the Company or
such Restricted Subsidiary;
(b) transactions between or among the Company and/or the Restricted
Subsidiaries;
(c) loans, advances, payment of reasonable fees, indemnification of
directors, or similar arrangements to officers, directors, employees and
consultants who are not otherwise Affiliates of the Company;
(d) sales of Equity Interests (other than Disqualified Stock) of the
Company to Affiliates of the Company;
(e) transactions under any contract or agreement in effect on the
date hereof as the same may be amended, modified or replaced from time to time
so long as any amendment, modification, or replacement is no less favorable to
the Company and the Restricted Subsidiaries than the contract or agreement as in
effect on the date of this Indenture; and
(f) Permitted Investments and Restricted Payments that are permitted
by the provisions of this Indenture described under Section 4.07.
Section 4.12. Liens.
The Company and Bastet/Mission shall not, and shall not permit any of the
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien of any kind securing Indebtedness, Attributable Debt,
or trade payables on any asset now owned or hereafter acquired, except Permitted
Liens, unless all payments due under the Notes, the Notes Guarantees, and this
Indenture are secured on an equal and ratable basis with the obligation so
secured until such obligations are no longer secured by a Lien.
Section 4.13. Business Activities.
The Company and Bastet/Mission shall not, and shall not permit any of the
Restricted Subsidiaries to, engage in any business other than Permitted
Businesses, except to such extent as would not be material to the Company and
the Restricted Subsidiaries taken as a whole.
Section 4.14. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or
53
other existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary and (ii) the rights (charter and statutory),
licenses and franchises of the Company and its Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders of the Notes.
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer (a "Change of Control Offer") to each Holder to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price equal to 101% of the Accreted Value of Notes
repurchased to the date of purchase (if prior to May 15, 2005), or 101% of the
aggregate principal amount of Notes repurchased plus accrued and unpaid interest
and Liquidated Damages thereon, if any, to the date of purchase (if on or after
May 15, 2005) (the "Change of Control Payment"). Within 60 days following any
Change of Control, the Company shall mail a notice to each Holder stating: (1)
that the Change of Control Offer is being made pursuant to this Section 4.15 and
that all Notes tendered will be accepted for payment; (2) the purchase price and
the purchase date, which shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest or accrete, as
applicable; (4) that, unless the Company defaults in the payment of the Change
of Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer shall cease to accrue or accrete, as applicable, interest after
the Change of Control Payment Date; (5) that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer will be required to surrender
the Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the third Business Day preceding
the Change of Control Payment Date; (6) that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the second Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and (7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount (or, if prior to May 15,
2005, Accreted Value) to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal amount at maturity or
an integral multiple thereof. The Company shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes in connection with a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof properly tendered and (3) deliver or cause to be delivered
to the Trustee the Notes properly accepted together with an Officers'
Certificate stating the aggregate principal amount (or, if prior to May 15,
2005, Accreted Value) of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note shall be in a
principal amount of $1,000 or an
54
integral multiple thereof. The Company shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.15 and Section 3.09 hereof and all other provisions of this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes properly tendered and not withdrawn under the Change of
Control Offer.
Section 4.16. Sale and Leaseback Transactions.
The Company and Bastet/Mission shall not, and shall not permit any of the
Restricted Subsidiaries to, enter into any sale and leaseback transaction;
provided that the Company or Bastet/Mission or a Restricted Subsidiary may enter
into a sale and leaseback transaction if (i) the Company or such Restricted
Subsidiary could have (a) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction and (b)
incurred a Lien to secure such Indebtedness pursuant to the provisions of
Section 4.12 hereof, (ii) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the fair market value, as determined in good
faith by the Board of Directors and set forth in an Officers' Certificate
delivered to the Trustee, of the property that is the subject of such sale and
leaseback transaction and (iii) the transfer of assets in such sale and
leaseback transaction is permitted by, and the Company or such Restricted
Subsidiary applies the proceeds of such transaction in compliance with, Section
4.10 hereof.
Section 4.17. Payments for Consent.
The Company and Bastet/Mission shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.18. Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Company and the
Restricted Subsidiaries in the Subsidiary properly designated will be deemed to
be an Investment made as of the time of the designation and will reduce the
amount available for Restricted Payments under the first paragraph of Section
4.07 or Permitted Investments, as determined by the Company. That designation
will only be permitted if the Investment would be permitted at that time and if
the Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
Section 4.19. Reorganization.
The Company and the Guarantor shall consummate, or cause to be consummated,
the Reorganization, on or prior to November 30, 2001.
55
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and the
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(i) either: (x) the Company is the surviving corporation; or (y)
the Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer,
conveyance or other disposition has been made is a corporation organized or
existing under the laws of the United States, any state of the United
States or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made assumes
all the obligations of the Company under the Notes, this Indenture and the
Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists; and
(iv) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition has been made (x)
shall, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had occurred
at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Leverage
Ratio test set forth in the first paragraph of Section 4.09, or (y) would
have a lower Leverage Ratio immediately after the transaction, after giving
pro forma effect to the transaction as if the transaction had occurred at
the beginning of the applicable four quarter period, than the Company's
Leverage Ratio immediately prior to the transaction.
The preceding clause (iv) shall not prohibit: (w) a merger between the
Company and one of the Company's Wholly Owned Subsidiaries; (x) a merger between
the Company and one of the Company's Affiliates incorporated solely for the
purpose of reincorporating as a corporation; (y) a merger between the Company
and one of the Company's Affiliates incorporated solely for the purpose of
reincorporating in another state of the United States; or (z) the
Reorganization.
In addition, the Company shall not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. The provisions of this Section 5.01 shall not
apply to a sale, assignment, transfer, conveyance or other disposition of assets
between or among the Company and any of its Wholly Owned Restricted
Subsidiaries.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.01 hereof, the successor corporation formed
by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to,
56
and be substituted for (so that from and after the date of such consolidation,
merger, sale, lease, conveyance or other disposition, the provisions of this
Indenture referring to the "Company" shall refer instead to the successor
corporation and not to the Company), and may exercise every right and power of
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; provided, however, that the
predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale, assignment,
transfer, conveyance or other disposition of all of the Company's assets that
meets the requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes and such default continues for a
period of 30 days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise;
(c) the Company fails to comply with any of the provisions of Section
4.15 hereof;
(d) the Company fails to comply with any of the provisions of Sections
4.07, 4.09, 4.10 or 5.01 hereof for 30 days after notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount (or, if
prior to May 15, 2005, Accreted Value) of the Notes (including Additional Notes,
if any) then outstanding voting as a single class;
(e) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture, the Notes for 60
days after notice to the Company by the Trustee or the Holders of at least 25%
in aggregate principal amount (or, if prior to May 15, 2005, Accreted Value) of
the Notes (including Additional Notes, if any) then outstanding voting as a
single class;
(f) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of the Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of the
Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or
is created after the date hereof, which default (i) is caused by a failure to
pay principal of such Indebtedness at the final Stated Maturity thereof or (ii)
results in the acceleration of such Indebtedness prior to its express maturity
and, in each case, the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness described under clauses (i) and
(ii) aggregates $5.0 million or more;
(g) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary and such judgment or
judgments remain undischarged for a period (during which execution shall not be
effectively stayed) of 60 days, provided that the aggregate of all such
undischarged judgments exceeds $5.0 million;
57
(h) the Company or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days;
or
(j) at any time prior to the consummation of the Reorganization, the Note
Guarantee is held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or the Guarantor, or
any Person acting on behalf of the Guarantor, shall deny or disaffirm its
obligations under the Guarantor's Note Guarantee.
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in clause
(g) or (h) of Section 6.01 hereof with respect to the Company, any Significant
Subsidiary or any group of Significant Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount (or, if prior to May 15,
2005, Accreted Value) of the then outstanding Notes may declare the principal
amount (or, if prior to May 15, 2005, Accreted Value) of all Notes to be due and
payable immediately. Upon any such declaration, the principal amount (or, if
prior to May 15, 2005, Accreted Value) of the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (h) or (i) of Section 6.01 hereof occurs with respect to the Company, any
of its Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary, all outstanding Notes shall be
due and payable immediately without further action or notice. The Holders of a
majority in aggregate principal amount (or, if prior to May 15, 2005, Accreted
Value) of the then outstanding
58
Notes by written notice to the Trustee may on behalf of all of the Holders
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.
If an Event of Default occurs on or after May 15, 2005 by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium
shall also become and be immediately due and payable, to the extent permitted by
law, anything in this Indenture or in the Notes to the contrary notwithstanding.
If an Event of Default occurs prior to May 15, 2005 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Notes prior to
such date, then, upon acceleration of the Notes, an additional premium shall
also become and be immediately due and payable in an amount, for each of the
years beginning on May 15, 2005 of the years set forth below, as set forth below
(expressed as a percentage of the Accreted Value of the Notes to the date of
payment that would otherwise be due but for the provisions of this sentence):
<TABLE>
<CAPTION>
Year Percentage
---- ------------
<S> <C>
2001............................................. 116.000%
2002............................................. 114.000%
2003............................................. 112.000%
2004 and thereafter.............................. 110.000%
</TABLE>
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount (or, if
prior to May 15, 2005, Accreted Value) of the then outstanding Notes by notice
to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium and Liquidated Damages, if any, or interest on, the Notes (including in
connection with an offer to purchase) (provided, however, that the Holders of a
majority in aggregate principal amount (or, if prior to May 15, 2005, Accreted
Value) of the then outstanding Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
59
Section 6.05. Control by Majority.
Holders of a majority in principal amount (or, if prior to May 15, 2005,
Accreted Value) of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee determines may be unduly prejudicial to the rights of other
Holders of Notes or that may involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount (or, if prior to May
15, 2005, Accreted Value) of the then outstanding Notes make a written request
to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount (or, if prior to May 15, 2005, Accreted Value) of the then outstanding
Notes do not give the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
60
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium and Liquidated
Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to
61
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
(or, if prior to May 15, 2005, Accreted Value) of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any,
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or interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date hereof, and for so long as Notes remain outstanding, the Trustee shall mail
to the Holders of the Notes a brief report dated as of such reporting date that
complies with TIA (S) 313(a) (but if no event described in TIA (S) 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA (S) 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA (S) 313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall, jointly and severally, pay to the Trustee from time to
time reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall, jointly and
severally, reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall, jointly and severally, indemnify the Trustee against any
and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company or any Holder or any other person) or liability
in connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the
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fees and expenses of its agents and counsel) are intended to constitute expenses
of administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to the
extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount (or, if prior to May 15, 2005,
Accreted Value) of the then outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has been a Holder
for at least six months, fails to comply with Section 7.10, such Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
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Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA (S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall
be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders
of outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Notes when such payments
are due, (b) the Company's obligations with respect to such Notes under Article
2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (d) this Article 8. Subject to compliance with this Article Eight, the
Company may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 hereof.
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Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof and clause (iv) of Section
5.01 hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(c) through 6.01(f) hereof shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium and Liquidated Damages, if any,
and interest on the outstanding Notes on the stated date for payment thereof or
on the applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
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(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Notes pursuant to this Article Eight concurrently
with such incurrence) or insofar as Sections 6.01(g) or 6.01(h) hereof is
concerned, at any time in the period ending on the 91st day after the date of
deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Opinion of Counsel
(which may be subject to customary exceptions) to the effect that on the 91st
day following the deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
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Section 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
and premium, if any, or interest has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Note shall thereafter look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantor
and the Trustee may amend or supplement this Indenture, the Note Guarantee or
the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof (including the
related definitions) in a manner that does not materially adversely affect any
Holder;
(c) to provide for the assumption of the Company's or the Guarantor's
obligations to the Holders of the Notes by a successor to the Company pursuant
to Article 5 or Article 11 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA;
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(f) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture as of the date hereof; or
(g) to allow the Guarantor to execute a supplemental indenture and/or a
Note Guarantee with respect to the Notes.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantor in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the Trustee
may amend or supplement this Indenture (including Section 3.09, 4.10 and 4.15
hereof), the Note Guarantee and the Notes with the consent of the Holders of at
least a majority in principal amount of the Notes (or, if prior to May 15, 2005,
Accreted Value of the Notes) (including Additional Notes, if any) then
outstanding voting as a single class (including consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes), and,
subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Indenture, the Note Guarantee or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
Notes (or, if prior to May 15, 2005, Accreted Value of the Notes) then
outstanding (including Additional Notes, if any) voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for, or purchase of, the Notes). Without the consent of at least 75% in
principal amount of the Notes (or, if prior to May 15, 2005, Accreted Value of
the Notes) then outstanding (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, such Notes), no waiver or
amendment to this Indenture may make any change relating to release of the
Guarantor from any of its obligations under its Note Guarantee or this
Indenture, except in accordance with the terms of this Indenture. Section 2.08
hereof shall determine which Notes are considered to be "outstanding" for
purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental indenture
unless such amended or supplemental indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
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any way impair or affect the validity of any such amended or supplemental
indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount (or, if prior to May 15, 2005, Accreted
Value) of the Notes (including Additional Notes, if any) then outstanding voting
as a single class may waive compliance in a particular instance by the Company
with any provision of this Indenture or the Notes. However, without the consent
of each Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount at maturity of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or
alter or waive any of the provisions with respect to the redemption of the Notes
except as provided above with respect to Sections 3.09, 4.10 and 4.15 hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in aggregate principal amount
(or, if prior to May 15, 2005, Accreted Value) of the then outstanding Notes
(including Additional Notes, if any) and a waiver of the payment default that
resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or interest on the Notes;
(g) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions; or
(h) waive a redemption payment with respect to any Note except as
provided above with respect to Sections 3.09, 4.10 and 4.15 hereof.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental indenture that complies with the TIA as then
in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
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Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
NOTE GUARANTEE
Section 10.01. Guarantee.
Subject to this Article 10, the Guarantor hereby unconditionally guarantees
to each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the obligations of the Company
hereunder or thereunder, that: (a) the principal of and interest on the Notes
will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
on the Notes, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantor shall be obligated to pay the same immediately. The Guarantor agrees
that this is a Guarantee of payment and not a Guarantee of collection.
The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. The Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note
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Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantor or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantor, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
The Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. The Guarantor
further agrees that, as between the Guarantor, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for the
purposes of this Note Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantor for
the purpose of this Note Guarantee.
Section 10.02. Limitation on Guarantor Liability.
The Guarantor, and by its acceptance of Notes, each Holder, hereby confirms
that it is the intention of all such parties that the Note Guarantee of the
Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to the
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantor hereby irrevocably agree that the obligations of the Guarantor
will, after giving effect to such maximum amount and all other contingent and
fixed liabilities of the Guarantor that are relevant under such laws, result in
the obligations of the Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.
Section 10.03. Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 10.01, the Guarantor
hereby agrees that a notation of such Note Guarantee substantially in the form
included in Exhibit E shall be endorsed by an Officer of the Guarantor on each
Note authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of the Guarantor by its President or one of its Vice
Presidents.
The Guarantor hereby agrees that its Note Guarantee set forth in Section
10.01 shall remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note Guarantee
no longer holds that office at the time the Trustee authenticates the Note on
which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Note Guarantee set forth in this
Indenture on behalf of the Guarantor.
73
Section 10.04. Guarantor May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 10.05, the Guarantor may not
consolidate with or merge with or into (whether or not the Guarantor is the
surviving Person) another Person whether or not affiliated with the Guarantor
unless:
(a) subject to Section 10.05 hereof, the Person formed by or surviving
any such consolidation or merger (if other than the Guarantor or the Company)
unconditionally assumes all the obligations of the Guarantor, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes, this Indenture and the Note Guarantee on the terms set
forth herein or therein; and
(b) immediately after giving effect to such transaction, no Default or
Event of Default exists.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as the Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Note Guarantee to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantee so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantee theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note Guarantee
had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses
(a) and (b) above, nothing contained in this Indenture or in any of the Notes
shall prevent any consolidation or merger of the Guarantor with or into the
Company or shall prevent any sale or conveyance of the property of the Guarantor
as an entirety or substantially as an entirety to the Company.
Section 10.05. Release of Guarantor.
All obligations of the Guarantor under this Indenture and its Note
Guarantee (including all covenants of the Guarantor herein) will be released
upon consummation of the Reorganization.
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as
to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Company) have been delivered to the Trustee for
cancellation; or
74
(b) all Notes that have not been delivered to the Trustee for cancellation
have become due and payable by reason of the making of a notice of
redemption or otherwise or will become due and payable within one year
and the Company or the Guarantor has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as
will be sufficient without consideration of any reinvestment of
interest, to pay and discharge the entire indebtedness on the Notes
not delivered to the Trustee for cancellation for principal, premium
and Liquidated Damages, if any, and accrued interest to the date of
maturity or redemption;
(2) no Default or Event of Default shall have occurred and be continuing on the
date of such deposit or shall occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a
default under, any other instrument to which the Company or the Guarantor
is a party or by which the Company or the Guarantor is bound;
(3) the Company or the Guarantor has paid or caused to be paid all sums payable
by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to the Trustee under
this Indenture to apply the deposited money toward the payment of the Notes
at maturity or the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money
shall have been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section, the provisions of Section 11.02 and Section 8.06 shall
survive.
Section 11.02. Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 11.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 11.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
and the Guarantor's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
11.01; provided that if the Company has made any payment of principal of,
premium, if any, or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.
75
ARTICLE 12.
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S)318(c), the imposed duties shall control.
Section 12.02. Notices.
Any notice or communication by the Company, the Guarantor or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company and/or the Guarantor:
Nexstar Finance Holdings, L.L.C.
c/o Nexstar Broadcasting Group, L.L.C.
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
Telecopier No.: (570) 586-8745
Attention: Shirley Green
With a copy to:
Kirkland & Ellis
153 East 53/rd/ Street
New York, NY 10022
Telecopier No.: (212) 446-4900
Attention: John Kuehn
If to Bastet/Mission:
Bastet Broadcasting, Inc.
Mission Broadcasting of Wichita Falls, Inc.
544 Red Rock Drive
Wadsworth, OH 44281-2211
Telecopier No.: (330) 335-8808
Attention: David S. Smith
With a copy to:
Arter & Hadden LLP
181 K Street, N.W., Suite 400K
Washington, DC 20006
Telecopier No.: (202) 857-0172
Attention: Howard M. Liberman
76
If to the Trustee:
United States Trust Company of New York
114 West 47/th/ Street
New York, NY 10036
Telecopier No.: (212) 852-1626
Attention: Corporate Trust Division
The Company, the Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 12.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
77
Section 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA (S)
314(e) and shall include:
(c) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(d) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(e) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(f) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 12.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or the Guarantor, as such, shall have any liability
for any obligations of the Company or the Guarantor under the Notes, the Note
Guarantee, this Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 12.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEE WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09. Submission to Jurisdiction; Service of Process; Waiver of Jury
Trial.
Each party hereto hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Indenture, the Notes, the Note
Guarantee or the transactions contemplated hereby and thereby. Each party hereto
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the State of New York. Without limiting the foregoing, the
parties agree that service of process upon such party at the address
78
referred to in Section 12.02, together with written notice of such service to
such party, shall be deemed effective service of process upon such party. Each
of the parties hereto irrevocably waives any and all rights to trial by jury in
any legal proceeding arising out of or relating to this Indenture, the Notes,
the Note Guarantee or the transactions contemplated hereby and thereby.
Section 12.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.11. Successors.
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of the Guarantor in this Indenture shall bind its
successors, except as otherwise provided in Section 10.04.
Section 12.12. Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 12.13. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 12.14. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
79
SIGNATURES
Dated as of May 17, 2001
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
/s/ Shirley Green
By: ______________________
Name:
Title:
Nexstar Broadcasting Group, L.L.C.
/s/ Shirley Green
By: ______________________
Name:
Title:
Bastet Broadcasting, Inc.
/s/ David S. Smith
By: ______________________
Name:
Title: President
Mission Broadcasting of Wichita Falls, Inc.
/s/ David S. Smith
By: ______________________
Name:
Title: President
United States Trust Company of New York
/s/ Margaret M. Ciesmelewski
By: ______________________
Name: Margaret M. Ciesmelewski
Title: Assistant Vice President
80
EXHIBIT A-1
[Face of Note]
--------------------------------------------------------------------------------
"FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THIS SECURITY IS BEING OFFERED WITH ORIGINAL ISSUE DISCOUNT;
FOR EACH $1,000 PRINCIPAL AMOUNT AT MATURITY OF THIS SECURITY, THE ISSUE PRICE
ALLOCATED TO THE NOTE IS $506.75, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS
$493.25, THE ISSUE DATE IS MAY 17, 2001 AND THE YIELD TO MATURITY IS 16% PER
ANNUM."
CUSIP/CINS ____________
16% [Series A] [Series B] Senior Discount Notes due 2009
No. ___ $____________
NEXSTAR FINANCE HOLDINGS, L.L.C.
NEXSTAR FINANCE HOLDINGS, INC.
promise, jointly and severally, to pay to ______________________________________
or registered assigns,
the principal sum of ___________________________________________________________
Dollars on May 15, 2009.
Interest Payment Dates: May 15 and November 15, commencing November 15, 2005
Record Dates: May 1 and November 1
Dated: _______________, ____
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
By: ________________________
Name:
Title:
By: ________________________
Name:
Title:
(SEAL)
This is one of the Notes referred to
in the within-mentioned Indenture:
United States Trust Company of New York,
as Trustee
A-1-1
By: _________________________
Authorized Signatory
--------------------------------------------------------------------------------
A-1-2
[Back of Note]
16% [Series A] [Series B] Senior Discount Notes due 2009
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
[Insert the Unit Legend, if applicable pursuant to the provisions of the
Indenture]
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Nexstar Finance Holdings, Inc., a Delaware corporation, and
Nexstar Finance Holdings, L.L.C., a Delaware limited liability company,
(together, the "Company"), promise, jointly and severally, to pay interest on
the principal amount of this Note at 16% per annum from May 15, 2005 until
maturity and to pay the Liquidated Damages payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company will pay interest
and Liquidated Damages semi-annually in arrears on May 15 and November 15 of
each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). The Notes will accrete at a rate
of 16% per annum, compounded semi-annually to an aggregate principal amount of
$36,988,000 at May 15, 2005. Thereafter, interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from May 15, 2005. No cash interest will be payable on the Notes prior to
November 15, 2005. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect; it shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the May 1 or November 1 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium and Liquidated Damages, if any, and interest
at the office or agency of the Company maintained for such purpose within or
without the City and State of New York, or, at the option of the Company,
payment of interest and Liquidated Damages may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, and provided
that payment by wire transfer of immediately available funds will be required
with respect to principal of and interest, premium and Liquidated Damages on,
all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Company or the Paying Agent. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided
that Liquidated Damages may be paid through the issuance of additional notes
having an Accreted Value at the time of issuance equal to the amount of
Liquidated Damages so paid.
3. Paying Agent and Registrar. Initially, United States Trust Company of
New York, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
A-1-3
4. Indenture. The Company issued the Notes under an Indenture dated as of
May 17, 2001 ("Indenture") among the Company, Bastet Broadcasting, Inc., a
Delaware corporation, Mission Broadcasting of Wichita Falls, Inc., a Delaware
corporation, Nexstar Broadcasting Group, L.L.C. (the "Guarantor") and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code (S)(S) 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $36,988,000 in
aggregate principal amount at maturity, plus amounts, if any, issued to pay
Liquidated Damages on outstanding Notes as set forth in Paragraph 2 hereof.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to May 15, 2005.
Thereafter, the Company shall have the option to redeem the Notes, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on May 15
of the years indicated below:
Year Percentage
---- ----------
2005............................................................ 108.000%
2006............................................................ 104.000%
2007 and thereafter............................................. 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5,
at any time prior to May 15, 2004, the Company may redeem all (but not less than
all) of the outstanding Notes with the net proceeds of one or more Equity
Offerings at a redemption price equal to 116% of the Accreted Value thereof;
provided such redemption occurs within 90 days of the date of the closing of
such Equity Offering.
6. Mandatory Redemption.
On November 15, 2006, the Company shall redeem a principal amount of Notes
outstanding on such date equal to the AHYDO Amount on a pro rata basis at a
redemption price of 100% of the principal amount of the Notes so redeemed. The
"AHYDO Amount" equals the amount such that the Notes will not be "applicable
high yield discount obligations" within the meaning of Section 163(i)(1) of the
Code.
7. Repurchase at Option Holder.
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the Accreted Value thereof or the date of purchase (if
prior to May 15, 2005) or 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (if on or after May 15, 2005) (in either case, the "Change of
Control Payment"). Within 60 days following any Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
A-1-4
(b) If the Company or a Subsidiary consummates any Asset Sales, within
five days of each date on which the aggregate amount of Excess Proceeds exceeds
$10.0 million, the Company shall commence an offer to all Holders of Notes (as
"Asset Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the
maximum principal amount of Notes (including any Additional Notes) that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the Accreted Value thereof on the date fixed for the closing of
such offer (if prior to May 15, 2005) or 100% of the principal amount thereof
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
date fixed for the closing of such offer (if on or after May 15, 2005), in
accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes (including any Additional Notes) tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company (or such
Subsidiary) may use such deficiency for general corporate purposes. If the
aggregate principal amount or, if prior to May 15, 2005, Accreted Value) of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture, the Note Guarantee or the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount (or, if
prior to May 15, 2005, Accreted Value) of the then outstanding Notes and
Additional Notes, if any, voting as a single class, and any existing default or
compliance with any provision of the Indenture, the Note Guarantee or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes and Additional Notes, if any, voting as a single
class. Without the consent of any Holder of a Note, the Indenture, the Note
Guarantee or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company's
or Guarantor's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the requirements
of the SEC in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act, to provide for the Issuance of Additional Notes
in accordance with the limitations set forth
A-1-5
in the Indenture, or to allow the Guarantor to execute a supplemental indenture
to the Indenture and/or a Note Guarantee with respect to the Notes.
12. Defaults and Remedies. Events of Default include: (i) default for 30
days in the payment when due of interest or Liquidated Damages on the Notes;
(ii) default in payment when due of principal of or premium, if any, on the
Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company to comply with Section 4.15 of the Indenture; (iv) failure by the
Company for 30 days after notice to the Company by the Trustee or the Holders of
at least 25% in principal amount (or, if prior to May 15, 2005, Accreted Value)
of the Notes (including Additional Notes, if any) then outstanding voting as a
single class to comply with Section 4.07, 4.09 or 4.10 of the Indenture; (v)
failure by the Company for 60 days after notice to the Company by the Trustee or
the Holders of at least 25% in principal amount (or, if prior to May 15, 2005,
Accreted Value) of the Notes (including Additional Notes, if any) then
outstanding voting as a single class to comply with certain other agreements in
the Indenture, the Notes; (vi) default under certain other agreements relating
to Indebtedness of the Company which default is caused by a failure to pay
principal of such Indebtedness at the final maturity thereof or results in the
acceleration of such Indebtedness prior to its express maturity; (vii) certain
final judgments for the payment of money that remain undischarged for a period
of 60 days; (viii) certain events of bankruptcy or insolvency with respect to
the Company or any of its Material Subsidiaries; and (ix) except as permitted by
the Indenture, any Note Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or the Guarantor or any Person acting on its behalf shall deny or
disaffirm its obligations under the Guarantor's Note Guarantee. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount (or, if prior to May 15, 2005, Accreted Value) of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount (or, if prior to May 15,
2005, Accreted Value) of the then outstanding Notes may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount (or, if prior to May 15, 2005, Accreted
Value) of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the Notes. The
Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee, incorporator
or stockholder, of the Company or the Guarantor, as such, shall not have any
liability for any obligations of the Company or the Guarantor under the Notes,
the Note Guarantee or the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Notes.
A-1-6
15. Authentication. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of May 17, 2001, among the Company and the other parties named on the
signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have the rights
set forth in one or more registration rights agreements, if any, between the
Company and the other parties thereto, relating to rights given by the Company
to the purchasers of any Additional Notes (collectively, the "Registration
Rights Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
20. Submission to Jurisdiction; Service of Process; Waiver of Jury Trial.
Each party hereto hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
State Court sitting in New York City for purposes of all legal proceedings
arising out of or relating to the Notes or the transactions contemplated hereby.
Each party hereto irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the State of New York. Without
limiting the foregoing, the parties agree that service of process upon such
party at the address referred to in Section 12.02 of the Indenture, together
with written notice of such service to such party, shall be deemed effective
service of process upon such party. Each of the parties hereto irrevocably
waives any and all rights to trial by jury in any legal proceeding arising out
of or relating to the Notes or the transactions contemplated hereby.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
c/o Nexstar Broadcasting Group, L.L.C.
A-1-7
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
Attention: Shirley Green
A-1-8
Assignment Form
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: _________________________________
(Insert assignee's legal name)
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: _________________________________
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1-9
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
Section 4.10 Section 4.15
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$___________
Date: ____________
Your Signature: _______________________
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.: _______________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1-10
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
<TABLE>
<CAPTION>
Principal Amount
Amount of decrease in Amount of increase in at maturity of
Principal Amount Principal Amount this Global Note Signature of authorized
at maturity of at maturity of following such officer of Trustee or
Date of Exchange this Global Note this Global Note decrease (for increase) Note Custodian
------------------------ ------------------------- ------------------------- -------------------------- ------------------------
<S> <C> <C> <C> <C>
</TABLE>
* This schedule should be included only if the Note is issued in global form.
A-1-11
EXHIBIT A-2
[Face of Regulation S Temporary Global Note]
--------------------------------------------------------------------------------
"FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THIS SECURITY IS BEING OFFERED WITH ORIGINAL ISSUE DISCOUNT;
FOR EACH $1,000 PRINCIPAL AMOUNT AT MATURITY OF THIS SECURITY, THE ISSUE PRICE
ALLOCATED TO THE NOTE IS $506.75, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS
$493.25, THE ISSUE DATE IS MAY 17, 2001 AND THE YIELD TO MATURITY IS 16% PER
ANNUM."
CUSIP/CINS __________
16% [Series A] [Series B] Senior Discount Notes due 2009
No. ___ $__________
NEXSTAR FINANCE HOLDINGS, L.L.C.
NEXSTAR FINANCE HOLDINGS, INC.
promise, jointly and severally, to pay to ______________________________________
or registered assigns,
the principal sum of ___________________________________________________________
Dollars on May 15, 2009.
Interest Payment Dates: May 15 and November 15, commencing November 15, 2005
Record Dates: May 1 and November 1
Dated: _______________, ____
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
By: ________________________
Name:
Title:
By: ________________________
Name:
Title:
(SEAL)
This is one of the Notes referred to
in the within-mentioned Indenture:
United States Trust Company of New York,
A-2-1
as Trustee
By: _____________________________
Authorized Signatory
--------------------------------------------------------------------------------
A-2-2
[Back of Regulation S Temporary Global Note]
16% [Series A] [Series B] Senior Discount Notes due 2009
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN OF RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE.
[Insert the Unit Legend, if applicable pursuant to the provisions of the
Indenture]
A-2-3
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Nexstar Finance Holdings, Inc., a Delaware corporation, and
Nexstar Finance Holdings, L.L.C., a Delaware limited liability company
(together, the "Company"), promise, jointly and severally, to pay interest on
the principal amount of this Note at 16% per annum from May 15, 2005 until
maturity and to pay the Liquidated Damages payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company will pay interest
and Liquidated Damages semi-annually on May 15 and November 15 of each year, or
if any such day is not a Business Day, on the next succeeding Business Day (each
an "Interest Payment Date"). The Note will accrete at a rate of 16% per annum,
compounded semi-annually to an aggregate principal amount of $36,988,000 at May
15, 2005. Thereafter, interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from May
15, 2005. No cash interest will be payable on the Notes prior to November 15,
2005. The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for one or more
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon; until so exchanged in full, this Regulation
S Temporary Global Note shall in all other respects be entitled to the same
benefits as other Senior Subordinated Notes under the Indenture.
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the May 1 or November 1 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium, interest and Liquidated Damages at the
office or agency of the Company maintained for such purpose within or without
the City and State of New York, or, at the option of the Company, payment of
interest and Liquidated Damages may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds will be required with respect to
principal of and interest, premium and Liquidated Damages on, all Global Notes
and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided that Liquidated
Damages may be paid through the issuance of additional notes having an Accreted
Value at the time of issuance equal to the amount of Liquidated Damages so paid.
3. Paying Agent and Registrar. Initially, United States Trust Company of
New York, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as of May
17, 2001 ("Indenture") among the Company, Bastet Broadcasting Group, Inc., a
Delaware corporation, Mission Broadcasting of Wichita Falls, Inc., a Delaware
corporation, Nexstar Broadcasting Group, L.L.C. (the "Guarantor") and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S.
A-2-4
Code (S)(S) 77aaa-77bbbb). The Notes are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of such terms. To the
extent any provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be controlling. The
Notes are obligations of the Company limited to $36,988,000 in aggregate
principal amount at maturity, plus amounts, if any, issued to pay Liquidated
Damages on outstanding Notes as set forth in Paragraph 2 hereof.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to May 15, 2005.
Thereafter, the Company shall have the option to redeem the Notes, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on May 15
of the years indicated below:
Year Percentage
---- ----------
2005................................................... 108.000%
2006................................................... 104.000%
2007 and thereafter.................................... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5,
at any time prior to May 15, 2004, the Company may redeem all (but not less than
all) of the outstanding Notes with the net proceeds of one or more Equity
Offerings at a redemption price equal to 116% of the Accreted Value thereof;
provided such redemption occurs within 90 days of the date of the closing of
such Equity Offering.
6. Mandatory Redemption.
On November 15, 2006, the Company shall redeem a principal amount of Notes
outstanding on such date equal to the AHYDO Amount on a pro rata basis at a
redemption price of 100% of the principal amount of the Notes so redeemed. The
"AHYDO Amount" equals the amount such that the Notes will not be "applicable
high yield discount obligations" within the meaning of Section 163(i)(1) of the
Code.
7. Repurchase at Option Holder.
(a) If there is a Change of Control, the Company shall be required to make
an offer (a "Change of Control Offer") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the Accreted Value thereof or the date of purchase (if
prior to May 15, 2005) or 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (if on or after May 15, 2005) (in either case, the "Change of
Control Payment"). Within 60 days following any Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, within five
days of each date on which the aggregate amount of Excess Proceeds exceeds $10.0
million, the Company shall commence an offer to all Holders of Notes (as "Asset
Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the maximum
principal amount of Notes (including any Additional Notes) that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the Accreted Value thereof on the date fixed for the closing of such offer
(if prior to May 15, 2005) or 100% of the principal amount thereof plus accrued
and unpaid interest and Liquidated Damages thereon, if any, to the date fixed
for the closing of such offer (if on or after May 15, 2005), in accordance with
the procedures
A-2-5
set forth in the Indenture. To the extent that the aggregate amount of Notes
(including any Additional Notes) tendered pursuant to an Asset Sale Offer is
less than the Excess Proceeds, the Company (or such Subsidiary) may use such
deficiency for general corporate purposes. If the aggregate principal amount or,
if prior to May 15, 2005, Accreted Value) of Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes to be purchased on a pro rata basis. Holders of Notes that are the subject
of an offer to purchase will receive an Asset Sale Offer from the Company prior
to any related purchase date and may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Notes.
8. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture, the Note Guarantee or the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount (or, if
prior to May 15, 2005, Accreted Value) of the then outstanding Notes and
Additional Notes, if any, voting as a single class, and any existing default or
compliance with any provision of the Indenture, the Note Guarantee or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes and Additional Notes, if any, voting as a single
class. Without the consent of any Holder of a Note, the Indenture, the Note
Guarantee or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company's
or Guarantor's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the requirements
of the SEC in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act, to provide for the Issuance of Additional Notes
in accordance with the limitations set forth in the Indenture, or to allow the
Guarantor to execute a supplemental indenture to the Indenture and/or a Note
Guarantee with respect to the Notes.
12. Defaults and Remedies. Events of Default include: (i) default for 30
days in the payment when due of interest or Liquidated Damages on the Notes;
(ii) default in payment when due of principal
A-2-6
of or premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise, (iii) failure by the Company to comply with Section 4.15 of the
Indenture; (iv) failure by the Company for 30 days after notice to the Company
by the Trustee or the Holders of at least 25% in principal amount (or, if prior
to May 15, 2005, Accreted Value) of the Notes (including Additional Notes, if
any) then outstanding voting as a single class to comply with Section 4.07, 4.09
or 4.10 of the Indenture; (v) failure by the Company for 60 days after notice to
the Company by the Trustee or the Holders of at least 25% in principal amount
(or, if prior to May 15, 2005, Accreted Value) of the Notes (including
Additional Notes, if any) then outstanding voting as a single class to comply
with certain other agreements in the Indenture, the Notes; (vi) default under
certain other agreements relating to Indebtedness of the Company which default
is caused by a failure to pay principal of such Indebtedness at the final
maturity thereof or results in the acceleration of such Indebtedness prior to
its express maturity; (vii) certain final judgments for the payment of money
that remain undischarged for a period of 60 days; (viii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Material
Subsidiaries; and (ix) except as permitted by the Indenture, any Note Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or the Guarantor or any
Person acting on its behalf shall deny or disaffirm its obligations under the
Guarantor's Note Guarantee. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount (or, if prior to
May 15, 2005, Accreted Value) of the then outstanding Notes may declare all the
Notes to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount (or, if prior to May 15, 2005, Accreted Value) of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount (or, if prior
to May 15, 2005, Accreted Value) of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Company is
required upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
13. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee, incorporator
or stockholder, of the Company or the Guarantor, as such, shall not have any
liability for any obligations of the Company or the Guarantor under the Notes,
the Note Guarantee or the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Notes.
15. Authentication. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (=
A-2-7
joint tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
17. Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of May 17, 2001, among the Company and the other parties named on the
signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have the rights
set forth in one or more registration rights agreements, if any, between the
Company and the other parties thereto, relating to rights given by the Company
to the purchasers of any Additional Notes (collectively, the "Registration
Rights Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
20. Submission to Jurisdiction; Service of Process; Waiver of Jury Trial.
Each party hereto hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
State Court sitting in New York City for purposes of all legal proceedings
arising out of or relating to the Notes or the transactions contemplated hereby.
Each party hereto irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the State of New York. Without
limiting the foregoing, the parties agree that service of process upon such
party at the address referred to in Section 12.02 of the Indenture, together
with written notice of such service to such party, shall be deemed effective
service of process upon such party. Each of the parties hereto irrevocably
waives any and all rights to trial by jury in any legal proceeding arising out
of or relating to the Notes or the transactions contemplated hereby.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
c/o Nexstar Broadcasting Group, L.L.C.
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
Attention: Shirley Green
A-2-8
Assignment Form
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: __________________________________
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-2-9
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
Section 4.10 Section 4.15
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$ _______________
Date: _______________
Your Signature: __________________________________
(Sign exactly as your name appears on the face of
this Note)
Tax Identification No.: __________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-2-10
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
<TABLE>
<CAPTION>
Principal Amount
Amount of decrease in Amount of increase in at maturity of
Principal Amount Principal Amount this Global Note Signature of authorized
at maturity of at maturity of following such decrease officer of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Note Custodian
------------------------ ------------------------- ------------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C>
</TABLE>
A-2-11
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
c/o Nexstar Broadcasting Group, L.L.C.
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
United States Trust Company of New York
114 West 47/th/ Street
New York, NY 10036
Re: 16% Senior Discount Notes due 2009
----------------------------------
Reference is hereby made to the Indenture, dated as of May 17, 2001 (the
"Indenture"), between Nexstar Finance Holdings, L.L.C. and Nexstar Finance
Holdings, Inc., as issuers (together, the "Company"), Bastet Broadcasting, Inc.,
Mission Broadcasting of Wichita Falls, Inc., the Guarantor party thereto, and
United States Trust Company of New York, as Trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby
certifies that:
[CHECK ALL THAT APPLY]
1. [_] Check if Transferee will take delivery of a beneficial interest in
------------------------------------------------------------------
the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer
---------------------------------------------------------------
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [_] Check if Transferee will take delivery of a beneficial interest in
------------------------------------------------------------------
the Temporary Regulation S Global Note, the Regulation S Global Note or a
-------------------------------------------------------------------------
Definitive Note pursuant to Regulation S. The Transfer is being effected
----------------------------------------
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
B-1
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
3. [_] Check and complete if Transferee will take delivery of a beneficial
-------------------------------------------------------------------
interest in the IAI Global Note or a Definitive Note pursuant to any provision
------------------------------------------------------------------------------
of the Securities Act other than Rule 144A or Regulation S. The Transfer is
----------------------------------------------------------
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [_] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [_] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [_] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule
904, and the Transferor hereby further certifies that it has not engaged
in any general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or
Restricted Definitive Notes and the requirements of the exemption claimed,
which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) if such
Transfer is in respect of a principal amount (or, prior to May 15, 2005,
Accreted Value) of Notes at the time of transfer of less than $250,000, an
Opinion of Counsel provided by the Transferor or the Transferee (a copy of
which the Transferor has attached to this certification), to the effect
that such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the IAI Global Note and/or the Definitive
Notes and in the Indenture and the Securities Act.
B-2
4. [_] Check if Transferee will take delivery of a beneficial interest in
------------------------------------------------------------------
an Unrestricted Global Note or of an Unrestricted Definitive Note.
-----------------------------------------------------------------
(a) [_] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [_] Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(c) [_] Check if Transfer is Pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
________________________________
[Insert Name of Transferor]
By:_____________________________
Name:
Title:
Dated: _______________________
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Global Note (CUSIP _________), or
(iii) [_] IAI Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Global Note (CUSIP _________), or
(iii) [_] IAI Global Note (CUSIP _________); or
(iv) [_] Unrestricted Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note; or
(c) [_] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
c/o Nexstar Broadcasting Group, L.L.C.
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
United States Trust Company of New York
114 West 47/th/ Street
New York, NY 10036
Re: 16% Senior Discount Notes due 2009
----------------------------------
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of May 17, 2001 (the
"Indenture"), between Nexstar Finance Holdings, L.L.C., and Nexstar Finance
Holdings, Inc., as issuers (together, the "Company"), Bastet Broadcasting, Inc.,
Mission Broadcasting of Wichita Falls, Inc., the Guarantor party thereto, and
United States Trust Company of New York, as Trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in
------------------------------------------------------------------
a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
------------------------------------------------------------------------
Interests in an Unrestricted Global Note
----------------------------------------
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
C-1
(c) [_] Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [_] Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
------------------------------------------------------------------
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
-------------------------------------------------------------------------------
in Restricted Global Notes
--------------------------
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [_] Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] 144A Global Note, Regulation S Global Note, IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
C-2
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
_____________________________
[Insert Name of Transferor]
By:__________________________
Name:
Title:
Dated: ______________________
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
c/o Nexstar Broadcasting Group, L.L.C.
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
United States Trust Company of New York
114 West 47/th/ Street
New York, NY 10036
Re: 16% Senior Discount Notes due 2009
----------------------------------
Reference is hereby made to the Indenture, dated as of May 17, 2001 (the
"Indenture"), between Nexstar Finance Holdings, L.L.C. and Nexstar Finance
Holdings, Inc., as issuers (together, the "Company"), Bastet Broadcasting, Inc.,
Mission Broadcasting of Wichita Falls, Inc., the Guarantor party thereto, and
United States Trust Company of New York, as Trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount (or, if prior to May 15, 2005, Accreted Value) of:
(a) [_] a beneficial interest in a Global Note, or
(b) [_] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount (or, if prior to May 15, 2005, Accreted Value) of Notes, at
the time of transfer of less than $250,000, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act,
D-1
and we further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
______________________________________
[Insert Name of Accredited Investor]
By:___________________________________
Name:
Title:
Dated: _______________________
D-2
EXHIBIT E
[FORM OF NOTATION OF GUARANTEE]
For value received, the Guarantor (which term includes any successor Person
under the Indenture) has unconditionally guaranteed, to the extent set forth in
the Indenture and subject to the provisions in the Indenture dated as of May 17,
2001 (the "Indenture") among Nexstar Finance Holdings, L.L.C., Nexstar Finance
Holdings, Inc. (together, the "Company"), Nexstar Broadcasting Group, L.L.C.
(the "Guarantor"), Bastet Broadcasting, Inc., Mission Broadcasting of Wichita
Falls, Inc., and United States Trust Company of New York, as Trustee (the
"Trustee"), (a) the due and punctual payment of the principal of, premium, if
any, and interest on the Notes (as defined in the Indenture), whether at
maturity, by acceleration, redemption or otherwise, the due and punctual payment
of interest on overdue principal and premium, and, to the extent permitted by
law, interest, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee all in accordance with the terms of
the Indenture and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise. The
obligations of the Guarantor to the Holders of Notes and to the Trustee pursuant
to the Note Guarantee and the Indenture are expressly set forth in Article 10 of
the Indenture and reference is hereby made to the Indenture for the precise
terms of the Note Guarantee. Each Holder of a Note, by accepting the same,
agrees to and shall be bound by such provisions. As provided in the Indenture,
upon the consummation of the Reorganization (as defined in the Indenture), the
Guarantor's obligations in respect of this Note Guarantee and under the
Indenture shall be released.
Nexstar Broadcasting Group, L.L.C.
By: ___________________________
Name:
Title:
E-1
Exhibit 4.2
Execution Copy
First Supplemental Indenture (this "Supplemental Indenture"), dated August
6, 2001 among Nexstar Finance Holdings, L.L.C., a Delaware limited liability
company ("Holdings LLC"), Nexstar Finance Holdings, Inc., a Delaware corporation
("Holdings Inc." and together with Holdings LLC, the "Issuers"), NBG, L.L.C., a
Delaware limited liability company ("NBG"), and The Bank of New York as
successor trustee to United States Trust Company of New York, as trustee under
the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Issuers have heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of May 17, 2001 providing for the
issuance of an aggregate principal amount of $36,988,000 aggregate principal
amount at maturity of 16% Senior Discount Notes due 2009 (the "Notes"); and
WHEREAS, Section 4.19 of the Indenture requires the Reorganization to be
consummated by the Company and the Guarantor on or prior to November 30, 2001;
and
WHEREAS, Section 5.01 of the Indenture permits the Reorganization to
occur; and
WHEREAS, Section 10.5 permits the release of Nexstar Broadcasting Group,
L.L.C.'s guarantee of the Notes in connection with the consummation of the
Reorganization; and
WHEREAS, Section 9.01(c) of the Indenture permits Holdings LLC, Holdings
Inc., NBG and the Trustee to enter into this Supplemental Indenture;
WHEREAS, Section 5.02 of the Indenture allows for successor issuers and
provides that the former issuer shall be released from its responsibilities
under the Indenture if the transfer to the successor issuer complies with
Section 5.01 of the Indenture;
WHEREAS, Holdings LLC and NBG have entered into an assignment and
assumption agreement dated as of August 3, 2001 (the "Assignment and Assumption
Agreement"), in order to effect the Reorganization; and
WHEREAS, the Assignment and Assumption Agreement causes NBG to assume
responsibility for all obligations under the Indenture and the Notes and
relieves Holdings LLC of responsibility for all obligations under the Indenture
and the Notes.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Issuers, NBG, and the Trustee mutually covenant and agree for the equal and
ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. modification of defined terms. Section 1.01 of the Indenture is
hereby amended as follows:
a. The definition of the term "Company" is hereby amended and
restated in its entirety as follows:
"Company" means NBG, L.L.C. and Nexstar Finance Holdings, Inc. and
any and all of their respective successors.
b. The definition of the terms "Guarantor" is hereby amended and
restated in its entirety as follows:
"Guarantor" means any Subsidiary or other entity that executes a Note
Guarantee in accordance with the provisions of this Indenture, and
its respective successors and assigns.
c. The definition of the term "Nexstar" is hereby deleted from the
Indenture.
3. Release of Holdings LLC. From and following the date of this
Supplemental Indenture, Holdings LLC shall have no further
responsibilities or obligations under the Indenture.
4. Release of Nexstar. From and following the date of this Supplemental
Indenture, Nexstar Broadcasting Group, L.L.C.'s guarantee of the Notes
shall be released.
5. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
6. Counterparts. The parties to this Supplemental Indenture may sign
any number of copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement. One signed
copy is enough to prove this Supplemental Indenture.
7. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Nexstar Finance Holdings, L.L.C.
By: /s/ Perry A. Sook
---------------------------------
Name: Perry A. Sook
Title: President and Chief Executive Officer
Nexstar Finance Holdings, L.L.C.
By: /s/ Perry A. Sook
---------------------------------
Name: Perry A. Sook
Title: President and Chief Executive Officer
NBG, Inc.
By: /s/ Perry A. Sook
---------------------------------
Name: Perry A. Sook
Title: President and Chief Executive Officer
The Bank of New York as Successor Trustee to
United States Trust Company of New York
as Trustee
By: /s/ Louis P. Young
---------------------------------
Name: Louis P. Young
Title: Vice President
3
EXHIBIT 4.4
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
by and among
Nexstar Finance Holdings, L.L.C.
and
Nexstar Finance Holdings, Inc.
and
Banc of America Securities LLC
and
Barclays Capital Inc.
Dated as of May 17, 2001
Registration Rights Agreement
This Registration Rights Agreement (this "Agreement") is made and
---------
entered into as of May 17, 2001 by and among Nexstar Finance Holdings, L.L.C., a
Delaware limited liability company, and Nexstar Finance, Inc., a Delaware
corporation (together, the "Company"), and Banc of America Securities LLC and
-------
Barclays Capital Inc. (each an "Initial Purchaser" and, collectively, the
-----------------
"Initial Purchasers"), each of whom has agreed to purchase the Company's 16%
------------------
Senior Discount Notes due 2009 (the "Initial Notes") pursuant to the Purchase
-------------
Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated as of
May 1, 2001 (the "Purchase Agreement"), by and among the Company, Nexstar
------------------
Broadcasting Group, L.L.C. (the "Guarantor"), Nexstar Equity Corp. and the
---------
Initial Purchasers (i) for your benefit and for the benefit of each other
Initial Purchaser and (ii) for the benefit of the holders from time to time of
the Notes (including you and each other Initial Purchaser). In order to induce
the Initial Purchasers to purchase the Initial Notes, the Company has agreed to
provide the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in Section 5(j) of the Purchase Agreement.
The parties hereby agree as follows:
Section 1. Definitions
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Additional Interest Payment Date: With respect to the Initial Notes,
--------------------------------
each Interest Payment Date.
Broker-Dealer: Any broker or dealer registered under the Exchange
-------------
Act.
Closing Date: The date of this Agreement.
------------
Commission: The Securities and Exchange Commission.
----------
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
----------
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Securities Act of the Exchange Offer Registration
Statement relating to the Exchange Notes to be issued in the Exchange
Offer, (ii) the maintenance of such Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less
than the minimum period required pursuant to Section 3(b) hereof, and (iii)
the delivery by the Company to the Registrar under the Indenture of
Exchange Notes in the same aggregate principal amount as the aggregate
principal amount of Initial Notes that were tendered by Holders thereof
pursuant to the Exchange Offer.
Effectiveness Target Date: As defined in Section 5.
-------------------------
Exchange Act: The Securities Exchange Act of 1934, as amended.
------------
Exchange Notes: The 16% Senior Discount Notes due 2009 of the same
--------------
series under the Indenture as the Initial Notes, to be issued to Holders in
exchange for Transfer Restricted Securities pursuant to this Agreement.
Exchange Offer: The registration by the Company under the Securities
--------------
Act of the Exchange Notes pursuant to a Registration Statement pursuant to
which the Company offers the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer
Restricted Securities held by such Holders for Exchange Notes in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such
Holders.
Exchange Offer Registration Statement: The Registration Statement
-------------------------------------
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
--------------
propose to sell the Initial Notes to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Securities Act, and
to certain institutional "accredited investors," as such term is defined in
Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act
("Accredited Institutions").
-----------------------
Holders: As defined in Section 2(b) hereof.
-------
Indemnified Holder: As defined in Section 8(a) hereof.
------------------
Indenture: The Indenture, dated as of May 17, 2001, among the
---------
Company, Bastet Broadcasting, Inc., Mission Broadcasting of Wichita Falls,
Inc., the Guarantor and United States Trust Company of New York, as trustee
(the "Trustee"), pursuant to which the Notes are to be issued, as such
-------
Indenture is amended or supplemented from time to time in accordance with
the terms thereof.
Initial Purchaser: As defined in the preamble hereto.
-----------------
Initial Notes: The 16% Senior Discount Notes due 2009, of the same
-------------
series under the Indenture as the Exchange Notes, for so long as such
securities constitute Transfer Restricted Securities.
Initial Placement: The issuance and sale by the Company of the
-----------------
Initial Notes to the Initial Purchasers pursuant to the Purchase Agreement.
Interest Payment Date: As defined in the Indenture and the Notes.
---------------------
NASD: National Association of Securities Dealers, Inc.
----
Notes: The Initial Notes and the Exchange Notes.
-----
Person: An individual, partnership, corporation, trust or
------
unincorporated organization, or a government or agency or political
subdivision thereof.
Prospectus: The prospectus included in a Registration Statement, as
----------
amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
Record Holder: With respect to any Damages Payment Date relating to
-------------
the Notes, each Person who is a Holder of Notes on the record date with
respect to the Interest Payment Date on which such Damages Payment Date
shall occur.
2
Registration Default: As defined in Section 5 hereof.
--------------------
Registration Statement: Any registration statement of the Company
----------------------
relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer
or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, which is filed pursuant to
the provisions of this Agreement, in each case, including the Prospectus
included therein, all amendments and supplements thereto (including post-
effective amendments) and all exhibits and material incorporated by
reference therein.
Securities Act: The Securities Act of 1933, as amended.
--------------
Shelf Filing Deadline: As defined in Section 4 hereof.
---------------------
Shelf Registration Statement: As defined in Section 4 hereof.
----------------------------
Trust Indenture Act: The Trust Indenture Act of 1939 (15 U.S.C.
-------------------
Section 77aaa 77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to
------------------------------
occur of (a) the date on which such Note is exchanged in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without
complying with the prospectus delivery requirements of the Securities Act,
(b) the date on which such Note has been effectively registered under the
Securities Act and disposed of in accordance with a Shelf Registration
Statement and (c) the date on which such Note is distributed to the public
pursuant to Rule 144 under the Securities Act or by a Broker-Dealer
pursuant to the "Plan of Distribution" contemplated by the Exchange Offer
Registration Statement (including delivery of the Prospectus contained
therein).
Section 2. Securities Subject to This Agreement
(a) Transfer Restricted Securities. The securities entitled to the
------------------------------
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be a
-----------------------------------------
holder of Transfer Restricted Securities (each, a "Holder") whenever such
------
Person owns Transfer Restricted Securities.
Section 3. Registered Exchange Offer
(a) Unless the Exchange Offer shall not be permissible under applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), the Company shall (i) cause to be filed with the
Commission as soon as practicable after the Closing Date, but in no event later
than, the later of (x) 30 days after the consummation of the Reorganization (as
defined in the Indenture) and (y) 90 days after the Closing Date, a Registration
Statement under the Securities Act relating to the Exchange Notes and the
Exchange Offer, (ii) use their best efforts to cause such Registration Statement
to become effective at the earliest possible time, but in no event later than
135 days after the filing of the Exchange Offer Registration Statement, (iii) in
connection with the foregoing, file (A) all pre-effective amendments to such
Registration Statement as may be necessary in order to cause such Registration
Statement to become effective, (B) if applicable, a post-effective amendment to
such Registration Statement pursuant to Rule 430A under the Securities Act and
(C) cause all necessary filings in connection with the registration and
qualification of the Exchange Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the effectiveness of such Registration Statement, commence the
Exchange Offer. The
3
Exchange Offer shall be on the appropriate form permitting registration of the
Exchange Notes to be offered in exchange for the Transfer Restricted Securities
and to permit resales of Notes held by Broker-Dealers as contemplated by Section
3(c) below.
(b) The Company shall cause the Exchange Offer Registration Statement to
be effective continuously and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 30 days after the date notice of the
Exchange Offer is mailed to the Holders. The Company shall cause the Exchange
Offer to comply with all applicable federal and state securities laws. No
securities other than the Notes shall be included in the Exchange Offer
Registration Statement. The Company shall use its best efforts to cause the
Exchange Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no event
later than 45 days after the date on which the Exchange Offer Registration
Statement has been declared effective, unless required by any applicable federal
securities laws.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus forming a part of the Exchange Offer Registration
Statement that any Broker-Dealer who holds Initial Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such
Initial Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Securities Act and must,
therefore, deliver a prospectus meeting the requirements of the Securities Act
in connection with any resales of the Exchange Notes received by such Broker-
Dealer in the Exchange Offer, which prospectus delivery requirement may be
satisfied by the delivery by such Broker-Dealer of the Prospectus contained in
the Exchange Offer Registration Statement. Such "Plan of Distribution" section
shall also contain all other information with respect to such resales by Broker-
Dealers that the Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer
or disclose the amount of Notes held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy after the
date of this Agreement.
The Company shall use their best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Notes acquired by Broker-Dealers for
their own accounts as a result of market-making activities or other trading
activities, and to ensure that it conforms with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period ending on the earlier of
(i) 180 days from the date on which the Exchange Offer Registration Statement is
declared effective and (ii) the date on which a Broker-Dealer is no longer
required to deliver a prospectus in connection with market-making or other
trading activities.
The Company shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon request at any time during such
180-day (or shorter as provided in the foregoing sentence) period in order to
facilitate such resales.
Section 4. Shelf Registration
(a) Shelf Registration. If (i) the Company is not required to file an
------------------
Exchange Offer Registration Statement or to consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a) below have been complied
with) or (ii) with respect to any Holder of Transfer Restricted Securities (A)
such
4
Holder is prohibited by applicable law or Commission policy from participating
in the Exchange Offer, or (B) such Holder may not resell the Exchange Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and that the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder, or
(C) such Holder is a Broker-Dealer and holds Initial Notes acquired directly
from the Company or one of its affiliates, then, upon such Holder's request, the
Company shall
(x) cause to be filed a shelf registration statement pursuant to Rule
415 under the Securities Act, which may be an amendment to the Exchange
Offer Registration Statement (in either event, the "Shelf Registration
------------------
Statement") on or prior to the later of (A) the date on which the Company
---------
would have been required to file the Exchange Offer Registration Statement
and (B) 90 days after the earlier to occur of (1) the date on which the
Company determines that it is not required to file the Exchange Offer
Registration Statement and (2) the date on which the Company receives
notice from a Holder of Transfer Restricted Securities as contemplated by
clause (ii) above such later date being the "Shelf Filing Deadline"), which
---------------------
Shelf Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 4(b) hereof; and
(y) use their best efforts to cause such Shelf Registration Statement
to be declared effective by the Commission on or before the 135th day after
the Shelf Filing Deadline.
The Company shall use its best efforts to keep such Shelf Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for resales of Notes by the Holders of Transfer Restricted Securities
entitled to the benefit of this Section 4(a), and to ensure that it conforms
with the requirements of this Agreement, the Securities Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of at least two years following the effective date of such Shelf
Registration Statement (or shorter period that will terminate when all the Notes
covered by such Shelf Registration Statement have been sold pursuant to such
Shelf Registration Statement).
(b) Provision by Holders of Certain Information in Connection with the
------------------------------------------------------------------
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
----------------------------
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
Section 5. Liquidated Damages
If (i) any of the Registration Statements required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
-------------------------
Exchange Offer has not been Consummated within 45 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by a post-
effective amendment to such
5
Registration Statement that cures such failure and that is itself immediately
declared effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the Company hereby agrees to each Holder of Transfer
--------------------
Restricted Securities affected thereby liquidated damages in an amount equal to
$.05 per week per $1,000 in principal amount (or, if prior to May 15, 2005,
Accreted Value (as defined in the Indenture)) of Transfer Restricted Securities
held by such Holder for each week or portion thereof that the Registration
Default continues for the first 90-day period immediately following the
occurrence of such Registration Default. The amount of the liquidated damages
shall increase by an additional $.05 per week per $1,000 in principal amount
(or, if prior to May 15, 2005, Accreted Value) of Transfer Restricted Securities
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of liquidated damages of $.50 per week
per $1,000 in principal amount (or, if prior to May 15, 2005, Accreted Value) of
Transfer Restricted Securities. Following the cure of all Registration Defaults
relating to any particular Transfer Restricted Securities, liquidated damages
payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.
At any time prior to May 15, 2005, the Company may pay any such
liquidated damages in the form of additional notes, which have terms
substantially similar to the Notes, but will not be issued under the Indenture.
All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Note shall have
been satisfied in full.
Section 6. Registration Procedures
(a) Exchange Offer Registration Statement. In connection with the
-------------------------------------
Exchange Offer, the Company shall comply with all of the provisions of Section
6(c) below, shall use their best efforts to effect such exchange to permit the
sale of Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and shall comply with all of
the following provisions:
(i) If in the reasonable opinion of counsel to the Company
there is a question as to whether the Exchange Offer is permitted by applicable
law, the Company hereby agrees to seek a no-action letter or other favorable
decision from the Commission allowing the Company to Consummate an Exchange
Offer for such Initial Notes. The Company hereby agrees to pursue the issuance
of such a decision to the Commission staff level but shall not be required to
take commercially unreasonable action to effect a change of Commission policy.
The Company hereby agrees, however, to (A) participate in telephonic conferences
with the Commission, (B) deliver to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon which such
counsel has concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a favorable resolution by the Commission staff of such
submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate of the
Company, (B) it is not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, a distribution
of the Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring
the Exchange Notes in its ordinary course of business. In addition, all such
Holders of Transfer Restricted Securities shall otherwise cooperate in the
Company's preparations for the Exchange Offer. Each Holder hereby
6
acknowledges and agrees that any Broker-Dealer and any such Holder using the
Exchange Offer to participate in a distribution of the securities to be acquired
in the Exchange Offer (1) could not under Commission policy as in effect on the
date of this Agreement rely on the position of the Commission enunciated in
Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
--------------------------- ----------------------
Corporation (available May 13, 1988), as interpreted in the Commission's letter
-----------
to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which
may include any no-action letter obtained pursuant to clause (i) above), and (2)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction and that such a
secondary resale transaction should be covered by an effective registration
statement containing the selling security holder information required by Item
507 or 508, as applicable, of Regulation S-K if the resales are of Exchange
Notes obtained by such Holder in exchange for Initial Notes acquired by such
Holder directly from the Company.
(b) Shelf Registration Statement. In connection with the Shelf
----------------------------
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use their best efforts to effect such registration
to permit the sale of the Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company will as expeditiously as possible prepare and file
with the Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration Statement and
------------------
any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Notes by
Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
(including, if required by the Securities Act or any regulation thereunder,
financial statements of the Guarantor for the period specified in Section 3 or 4
of this Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period required
by this Agreement, the Company shall file promptly an appropriate amendment to
such Registration Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B), use its
best efforts to cause such amendment to be declared effective and such
Registration Statement and the related Prospectus to become usable for their
intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the Registration Statement as may be necessary to keep
the Registration Statement effective for the applicable period set forth in
Section 3 or 4 hereof, as applicable, or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration Statement
have been sold; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Securities Act in a timely manner; and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement to the
Prospectus;
7
(iii) advise the selling Holders promptly and, if requested by
such Persons, to confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to any Registration Statement or any post-effective amendment thereto,
when the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (C) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Securities Act or of the suspension by any
state securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, (D) of the existence of any fact
or the happening of any event that makes any statement of a material fact made
in the Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration Statement
or the Prospectus in order to make the statements therein not misleading. If at
any time the Commission shall issue any stop order suspending the effectiveness
of the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company shall use its best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time;
(iv) furnish without charge to each of the Initial Purchasers
and each selling Holder named in any Registration Statement, before filing with
the Commission, copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the initial
filing of such Registration Statement), which documents will be subject to the
review of such Persons in connection with such sale, if any, for a period of at
least five business days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by reference)
to which an Initial Purchaser or Holder of Transfer Restricted Securities
covered by such Registration Statement shall reasonably object in writing within
five business days after the receipt thereof (such objection to be deemed timely
made upon confirmation of telecopy transmission within such period). The
objection of any such Person shall be deemed to be reasonable if such
Registration Statement, amendment, Prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, provide
copies of such document to the Initial Purchasers and to each selling Holder
named in any Registration Statement make the Company's representatives available
for discussion of such document and other customary due diligence matters, and
include such information in such document prior to the filing thereof as such
selling Holders reasonably may request;
(vi) make available at reasonable times for inspection by the
Initial Purchasers and each Holder, and any attorney or accountant retained by
such Persons, all financial and other records, pertinent corporate documents and
properties of the Company and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Holder,
Initial Purchaser, attorney or accountant in connection with such Registration
Statement subsequent to the filing thereof and prior to its effectiveness;
(vii) if requested by any selling Holders promptly incorporate
in any Registration Statement or Prospectus, pursuant to a supplement or post-
effective amendment if necessary, such information as such selling Holders may
reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer Restricted
Securities,
8
information with respect to the principal amount of Transfer Restricted
Securities being sold, the purchase price being paid therefor and any other
terms of the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or post-
effective amendment as soon as practicable after the Company is notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(viii) cause the Transfer Restricted Securities covered by
the Registration Statement to be rated with the appropriate rating agencies, if
so requested by the Holders of a majority in aggregate principal amount of Notes
covered thereby;
(ix) furnish to each selling Holder, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including financial statements and
schedules, all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);
(x) deliver to each selling Holder, without charge, as
many copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request; the
Company hereby consents to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;
(xi) enter into such agreements and make such
representations and warranties, and take all such other actions in connection
therewith in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to any Registration Statement contemplated by
this Agreement, all to such extent as may be reasonably requested by any Initial
Purchaser or by any Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to any Registration Statement
contemplated by this Agreement; and the Company shall:
(A) furnish to each Initial Purchaser and each selling Holder,
in such substance and scope as they may request upon the date of the
Consummation of the Exchange Offer and, if applicable, the effectiveness of
the Shelf Registration Statement a certificate, dated the date of
Consummation of the Exchange Offer or the date of effectiveness of the
Shelf Registration Statement, as the case may be, signed by (y) the
President or any Vice President and (z) a principal financial or accounting
officer of the Company, confirming, as of the date thereof, the matters set
forth in paragraphs (i), (ii) and (iii) of Section 5(e) of the Purchase
Agreement and such other matters as such parties may reasonably request;
(B) set forth in full the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with clause (A)
above and with any customary conditions contained in any agreement entered
into by the Company pursuant to this clause (xi), if any.
If at any time the representations and warranties of the Company
contemplated in clause (A)(1) above cease to be true and correct, the Company
shall so advise the Initial Purchasers and each selling Holder promptly and, if
requested by such Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if any, and
their respective counsel in connection with the
9
registration and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s) may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the Shelf Registration Statement; provided,
however, that the Company shall not be required to register or qualify as a
foreign corporation where it is not then so qualified or to take any action that
would subject it to the service of process in suits or to taxation, other than
as to matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not then so subject;
(xiii) shall issue, upon the request of any Holder of Initial
Notes covered by the Shelf Registration Statement, Exchange Notes, having an
aggregate principal amount equal to the aggregate principal amount of Initial
Notes surrendered to the Company by such Holder in exchange therefor or being
sold by such Holder; such Exchange Notes to be registered in the name of such
Holder or in the name of the purchaser(s) of such Notes, as the case may be; in
return, the Initial Notes held by such Holder shall be surrendered to the
Company for cancellation;
(xiv) cooperate with the selling Holders to facilitate the
timely preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and registered in
such names as the Holders may request at least two business days prior to any
sale of Transfer Restricted Securities;
(xv) use its reasonable best efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s), if any,
to consummate the disposition of such Transfer Restricted Securities, subject to
the proviso contained in clause (xii) above;
(xvi) if any fact or event contemplated by clause (c)(iii)(D)
above shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;
(xvii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit with the
Depositary Trust Company;
(xviii) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) for the twelve-month period beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement;
(xix) cause the Indenture to be qualified under the Trust
Indenture Act not later than the effective date of the first Registration
Statement required by this Agreement, and, in connection therewith, cooperate
with the Trustee and the Holders of Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in accordance
with the terms of the Trust Indenture Act; and to execute and use its best
efforts to cause the Trustee to execute, all documents that may be
10
required to effect such changes and all other forms and documents required to be
filed with the Commission to enable such Indenture to be so qualified in a
timely manner;
(xx) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed if requested by the Holders of
a majority in aggregate principal amount of Initial Notes or the managing
underwriter(s), if any; and
(xxi) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of Section 13
and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
------
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If
so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(c)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice; however, no such extension shall be taken into
account in determining whether Additional Interest is due pursuant to Section 5
hereof or the amount of such Additional Interest, it being agreed that the
Company's option to suspend use of a Registration Statement pursuant to this
paragraph shall be treated as a Registration Default for purposes of Section 5.
Section 7. Registration Expenses
(a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i)
all registration and filing fees and expenses (including filings made by
any Initial Purchaser or Holder with the NASD (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws;
(iii) all expenses of printing (including printing certificates for the
Exchange Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees
and disbursements of counsel for the Company and, subject to Section 7(b)
below, the Holders of Transfer Restricted Securities; (v) all application
and filing fees in connection with listing the Exchange Notes on a national
securities exchange or automated quotation system pursuant to the
requirements thereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such
performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
11
(b) In connection with the Shelf Registration Statement, the Company will
reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities being registered pursuant to the Shelf Registration Statement for the
reasonable fees and disbursements of not more than one counsel, who shall be
Latham & Watkins or such other counsel as may be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit the Shelf Registration Statement is being prepared.
Section 8. Indemnification
(a) The Company agrees to indemnify and hold harmless (i) each Holder and
(ii) each person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) any Holder (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person") and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Holder or any controlling person (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an
"Indemnified Holder"), to the fullest extent lawful, from and against any and
------------------
all losses, claims, damages, liabilities, judgments, actions and expenses
(including without limitation and as incurred, reimbursement of all reasonable
costs of investigating, preparing, pursuing, settling, compromising, paying or
defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to any Indemnified Holder), joint or several,
directly or indirectly caused by, related to, based upon, arising out of or in
connection with any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or Prospectus (or any amendment or
supplement thereto), or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by an untrue statement or omission or alleged
untrue statement or omission that is made in reliance upon and in conformity
with information relating to any of the Holders furnished in writing to the
Company by any of the Holders expressly for use therein. This indemnity
agreement shall be in addition to any liability which the Company may otherwise
have.
In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
of the Indemnified Holders with respect to which indemnity may be sought against
the Company, such Indemnified Holder (or the Indemnified Holder controlled by
such controlling person) shall promptly notify the Company in writing (provided,
that the failure to give such notice shall not relieve the Company of its
obligations pursuant to this Agreement). Such Indemnified Holder shall have the
right to employ its own counsel in any such action and the fees and expenses of
such counsel shall be paid, as incurred, by the Company (regardless of whether
it is ultimately determined that an Indemnified Holder is not entitled to
indemnification hereunder). The Company shall not, in connection with any one
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for such Indemnified Holders, which firm shall be designated by the
Holders. The Company shall be liable for any settlement of any such action or
proceeding effected with the Company's prior written consent, which consent
shall not be withheld unreasonably, and the Company agrees to indemnify and hold
harmless any Indemnified Holder from and against any loss, claim, damage,
liability or expense by reason of any settlement of any action effected with the
written consent of the Company. The Company shall not, without the prior
written consent of each Indemnified Holder, settle or compromise or consent to
the entry of judgment in or otherwise seek to terminate any pending or
threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Holder is a party thereto), unless such settlement, compromise,
consent or termination includes an unconditional
12
release of each Indemnified Holder from all liability arising out of such
action, claim, litigation or proceeding.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and its directors,
officers of the Company who sign a Registration Statement, and any person
controlling (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) the Company, and the respective officers, directors,
partners, employees, representatives and agents of each such person, to the same
extent as the foregoing indemnity from the Company to each of the Indemnified
Holders, but only with respect to claims and actions based on information
relating to such Holder furnished in writing by such Holder expressly for use in
any Registration Statement. In case any action or proceeding shall be brought
against the Company or its directors or officers or any such controlling person
in respect of which indemnity may be sought against a Holder of Transfer
Restricted Securities, such Holder shall have the rights and duties given the
Company and the Company or its directors or officers or such controlling person
shall have the rights and duties given to each Holder by the preceding
paragraph. In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the proceeds received by such Holder
upon the sale of the Securities giving rise to such indemnification obligation.
(c) If the indemnification provided for in this Section 8 is unavailable
to an indemnified party under Section 8(a) or Section 8(b) hereof (other than by
reason of exceptions provided in those Sections) in respect of any losses,
claims, damages, liabilities, judgments, actions or expenses referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Holders, on the other hand,
from the Initial Placement (which in the case of the Company shall be deemed to
be equal to the total net proceeds from the Initial Placement , the amount of
Additional Interest which did not become payable as a result of the filing of
the Registration Statement resulting in such losses, claims, damages,
liabilities, judgments actions or expenses, and such Registration Statement, or
if such allocation is not permitted by applicable law, the relative fault of the
Company, on the one hand, and of the Indemnified Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of the Indemnified Holder on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Indemnified Holder and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 8(a), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company and each Holder of Transfer Restricted Securities agree
that it would not be just and equitable if contribution pursuant to this Section
8(c) were determined by pro rata allocation (even if the Holders were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, none of the
Holders (and its related Indemnified Holders) shall be required to contribute,
in the aggregate, any amount in excess of the amount by which
13
the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(c) are several in
proportion to the respective principal amount of Initial Notes held by each of
the Holders hereunder and not joint.
Section 9. Rule 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
Section 10. Participation in Underwritten Registrations
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
Section 11. Miscellaneous
(a) Remedies. The Company hereby agrees that monetary damages would not
--------
be adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agree to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the date
--------------------------
of this Agreement enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement granting any registration rights with respect to its
securities to any Person. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the date
hereof.
(c) Adjustments Affecting the Notes. The Company will not take any
-------------------------------
action, or permit any change to occur, with respect to the Notes that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
----------------------
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of
14
other Holders whose securities are not being tendered pursuant to such Exchange
Offer may be given by the Holders of a majority of the outstanding principal
amount of Transfer Restricted Securities being tendered or registered; provided
that, with respect to any matter that directly or indirectly affects the rights
of any Initial Purchaser hereunder, the Company shall obtain the written consent
of each such Initial Purchaser with respect to which such amendment,
qualification, supplement, waiver, consent or departure is to be effective.
(e) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company:
Nexstar Finance Holdings, L.L.C.
c/o Nexstar Broadcasting Group, L.L.C.
200 Abington Executive Park, Suite 201
Clarks Summit, Pennsylvania 18411
Telecopier No.: (570) 586-8745
Attention: Shirley Green
With a copy to:
Kirkland & Ellis
153 East 53/rd/ Street
New York, New York 10022-4674
Telecopier No.: (212) 446-4900
Attention: Joshua N. Korff, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
15
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the other Operative
----------------
Documents (as defined in the Purchase Agreement) is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
By: /s/ Shirley Green
---------------------------
Name:
Title:
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
Banc of America Securities LLC
Barclays Capital Inc.
By: Banc of America Securities LLC
By: /s/ Marc Birenbaum
--------------------------------
Name: Marc Birenbaum
Title: Vice President
EXHIBIT 5.1
[LETTERHEAD OF KIRKLAND & ELLIS]
To Call Writer Directly:
(212) 446-4800
September 5, 2001
Nexstar Finance, Holdings L.L.C.
Nexstar Finance Holdings, Inc.
200 Abington Executive Park
Suite 201
Clarks Summit, PA 18411
Re: Exchange Offer for $20,000,000 aggregate principal amount 16%
Senior Discount Notes due 2008 for up to $20,000,000 aggregate
principal amount 16% Series B Senior Discount Notes due 2008
----------------------------------------------------------------
Dear Ladies and Gentlemen:
We have acted as counsel to Nexstar Finance Holdings, L.L.C. and
Nexstar Finance Holdings, Inc. (together, the "Company" or the "Registrants") in
connection with the proposed offer (the "Exchange Offer") to exchange an
aggregate principle amount of up to $20,000,000 16% Senior Discount Notes due
2008 (the "Old Notes") for up to an aggregate principal amount of $20,000,000
16% Series B Senior Discount Notes due 2008 (the "Exchange Notes"), pursuant to
a Registration Statement on Form S-4 filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"). Such Registration Statement, as amended or supplemented, is
hereinafter referred to as the "Registration Statement." The Exchange Notes are
to be issued pursuant to the Indenture (the "Indenture"), dated as of May 17,
2001 by and among the Registrants, Bastet Broadcasting, Inc., Mission
Broadcasting of Wichita Falls, Inc., Nexstar Broadcasting Group, L.L.C. and
United States Trust Company of New York, as the trustee, and the First
Supplemental Indenture (the "Supplemental Indenture"), dated August 6, 2001,
among the Registrants, Nexstar Finance Holdings II, L.L.C., and the Bank of New
York, as successor trustee, in exchange for and in replacement of the Company's
outstanding Old Notes, of which $20,000,000 in aggregate principal amount are
outstanding.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary for the purposes of this
opinion, including (i) the corporate and organizational documents of each of the
Registrants, (ii) minutes and records of the corporate proceedings of each of
the Registrants with respect to the issuance of the Exchange Notes, (iii) the
Registration Statement and exhibits thereto and (iv) the Registration Rights
Agreement, dated as of May 17, 2001, by and among the Registrants, Banc of
America Securities LLC and Barclays Capital Inc.
Nexstar Finance Holdings, L.L.C. and Nexstar Finance Holdings, Inc.
September 5, 2001
Page 2
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity of the originals of all
documents submitted to us as copies. We have also assumed the genuineness of the
signatures of persons signing all documents in connection with which this
opinion is rendered, the authority of such persons signing on behalf of the
parties thereto other than the Registrants, and the due authorization, execution
and delivery of all documents by the parties thereto other than the Registrants.
As to any facts material to the opinions expressed herein which we have not
independently established or verified, we have relied upon statements and
representations of officers and other representatives of the Registrants and
others.
Based upon and subject to the foregoing qualifications, assumptions
and limitations and the further limitations set forth below, we are of the
opinion that:
(i) Each of Nexstar Finance Holdings, L.L.C. and Nexstar Finance
Holdings, Inc. is in good standing under the laws of the State of Delaware.
(ii) The sale and issuance of the Exchange Notes has been validly
authorized by the Company.
(iii) When the Exchange Notes are issued pursuant to the Exchange
Offer, the Exchange Notes will constitute valid and binding obligations of the
Registrants, and the Indenture and the Supplemental Indenture will be
enforceable in accordance with their terms.
Our opinions expressed above are subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of (i)
any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other similar law affecting the enforcement of
creditors' rights generally, (ii) general principals of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law), and
(iii) except for purposes of the opinion in paragraph (i), any laws except the
laws of the State of New York.
We hereby consent to the filing of this opinion in Exhibit 5.1 to the
Registration Statement. We also consent to the reference to our firm under the
heading "Legal Matters" in the Registration Statement. In giving this consent,
we do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of the rules and regulations of
the Commission.
We do not find it necessary for the purposes of this opinion, and
accordingly we do not purport to cover herein, the application of the securities
or "Blue Sky" laws of the various states to the issuance of the Exchange Notes.
This opinion is limited to the specific issues addressed herein, and
no opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
laws of the State of New York be changed by legislative action, judicial
decision or otherwise.
Nexstar Finance Holdings, L.L.C. and Nexstar Finance Holdings, Inc.
September 5, 2001
Page 3
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purposes.
Yours very truly,
/s/ KIRKLAND & ELLIS
EXHIBIT 8.1
[LETTERHEAD OF KIRKLAND & ELLIS]
To Call Writer Directly:
(212) 446-4800
September 5, 2001
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
200 Abington Executive Park
Suite 201
Clarks Summit, PA 18411
Re: Exchange Offer for $20,000,000 aggregate principal amount 16%
Senior Discount Notes due 2008 for up to $20,000,000 aggregate
principal amount 16% Series B Senior Discount Notes due 2008
----------------------------------------------------------------
Dear Ladies and Gentlemen:
We have acted as counsel to Nexstar Finance Holdings, L.L.C. and
Nexstar Finance Holdings, Inc. (together, the "Company" or the "Registrants") in
connection with the proposed offer (the "Exchange Offer") to exchange an
aggregate principle amount of up to $20,000,000 16% Senior Discount Notes due
2008 (the "Old Notes") for up to an aggregate principal amount of $20,000,000
16% Series B Senior Discount Notes due 2008 (the "Exchange Notes"), pursuant to
a Registration Statement on Form S-4 filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"). Such Registration Statement, as amended or supplemented, is
hereinafter referred to as the "Registration Statement."
You have requested our opinion as to certain United States federal
income tax consequences of the Exchange Offer. In preparing our opinion, we
have reviewed and relied upon the Registration Statement and such other
documents as we deemed necessary.
On the basis of the foregoing, it is our opinion that the exchange of
the Old Notes for the Exchange Notes pursuant to the Exchange Offer will not be
treated as an "exchange" for United States federal income tax purposes, because
the Exchange Notes will not be considered to differ materially in kind or extent
from the Old Notes. Rather, the Exchange Notes received by a holder will be
treated as a continuation of the Old Notes in the hands of that holder.
Accordingly, there will be no federal income tax consequences to holders solely
as a result of the exchange of the Old Notes for Exchange Notes under the
Exchange Offer.
The opinion set forth above is based upon the applicable provisions of
the Internal Revenue Code of 1986, as amended, the Treasury Regulations
promulgated or proposed thereunder, current positions of the Internal Revenue
Service (the "IRS") contained in published revenue rulings, revenue procedures,
and announcements, existing judicial decisions and other applicable authorities.
No tax ruling has been sought from the IRS with respect to any of the matters
discussed herein. Unlike a ruling from the IRS, an opinion of counsel is not
binding on
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
September 5, 2001
Page 2
the IRS. Hence, no assurance can be given that the opinion stated in this letter
will not be successfully challenged by the IRS or that a court would reach the
same conclusion. We express no opinion concerning any tax consequences of the
Exchange Offer except as expressly set forth above. Moreover, we assume no
obligation to revise or supplement this opinion should the authorities referred
to above be amended by legislative, Judicial or administrative action.
We consent to the filing of this opinion as an exhibit to the
registration statement, to the reference to this firm and the inclusion of our
opinion in the section entitled "United Stated Federal Income Tax
Considerations" in the Registration Statement. In giving this consent, we do
not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commissions promulgated
thereunder.
Yours very truly,
/s/ KIRKLAND & ELLIS
2
EXECUTION COPY
EXHIBIT 10.1
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
Nexstar Equity Corp.
as Issuers
Nexstar Broadcasting Group, L.L.C.
as Guarantor
$36,988,000
36,988 Units Consisting of
16% Senior Discount Notes due 2009 and
one share of Class B Common Stock of Nexstar Equity Corp.
Purchase Agreement
dated as of May 14, 2001
Banc of America Securities LLC
Barclays Capital Inc.
Table of Contents
<TABLE>
<S> <C>
SECTION 1. Representations and Warranties.......................................................... 2
(a) No Registration Required....................................................................... 2
(b) No Integration of Offerings or General Solicitation............................................ 3
(c) Eligibility for Resale under Rule 144A......................................................... 3
(d) The Offering Memorandum........................................................................ 3
(e) The Purchase Agreement......................................................................... 3
(f) The Registration Rights Agreement.............................................................. 3
(g) The Investor Rights Agreement.................................................................. 4
(h) The Limited Liability Company Agreement........................................................ 4
(i) Authorization of the Units..................................................................... 4
(j) Authorization of the Common Shares............................................................. 4
(k) Authorization of Class D Interests............................................................. 4
(l) Authorization of the Notes, the Guarantee and the Exchange Notes............................... 5
(m) Authorization of the Indenture................................................................. 5
(n) Authorization of the Unit Agreement............................................................ 5
(o) Description of the Securities and the Indenture................................................ 6
(p) No Material Adverse Change..................................................................... 6
(q) Independent Accountants........................................................................ 6
(r) Preparation of the Financial Statements........................................................ 6
(s) Incorporation and Good Standing of the Issuers and their Respective Subsidiaries............... 7
(t) Capitalization and Other Capital Stock Matters................................................. 7
(U) Assets, Liabilities and Business Activities of Newco........................................... 7
(v) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required..... 8
(w) No Material Actions or Proceedings............................................................. 8
(x) Intellectual Property Rights................................................................... 9
(y) All Necessary Permits, etc..................................................................... 9
(z) FCC Licenses................................................................................... 9
(aa) Condition of Stations.......................................................................... 10
(bb) Title to Properties.......................................................................... 10
(cc) Tax Law Compliance............................................................................. 10
(dd) Issuers Not an "Investment Company".......................................................... 10
(ee) Insurance...................................................................................... 11
(ff) No Price Stabilization or Manipulation......................................................... 11
(gg) Company's Accounting System.................................................................. 11
(hh) ERISA Compliance............................................................................. 12
SECTION 2. Purchase, Sale and Delivery of the Units................................................ 12
(a) The Units...................................................................................... 12
(b) The Closing Date............................................................................... 12
(c) Delivery of the Units.......................................................................... 13
(d) Delivery of Offering Memorandum to the Initial Purchasers...................................... 13
(E) Initial Purchaser as Qualified Purchaser....................................................... 13
(f) Resale of Securities........................................................................... 13
SECTION 3. Additional Covenants.................................................................... 14
(a) Initial Purchasers' Review of Proposed Amendments and Supplements.............................. 14
(b) Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters......... 14
(c) Copies of the Offering Memorandum.............................................................. 15
(d) Blue Sky Compliance............................................................................ 15
(e) Use of Proceeds................................................................................ 15
(f) The Depositary................................................................................. 15
(g) Additional Issuer Information.................................................................. 15
(h) Future Reports to the Initial Purchasers....................................................... 15
(i) No Integration................................................................................. 16
</TABLE>
i
<TABLE>
<CAPTION>
<S> <C>
(j) Legended Securities....................................................................... 16
(k) PORTAL.................................................................................... 16
SECTION 4. Payment of Expenses................................................................ 16
SECTION 5. Conditions of the Obligations of the Initial Purchasers............................ 17
(a) Accountants' Comfort Letter............................................................... 17
(b) No Material Adverse Change or Ratings Agency Change....................................... 17
(c) Financial Information..................................................................... 17
(d) Reorganization............................................................................ 18
(e) Opinion of Counsel for the Issuers........................................................ 18
(f) Opinion of Regulatory Counsel for the Company............................................. 18
(g) Opinion of Counsel for the Initial Purchasers............................................. 18
(h) Officers' Certificate..................................................................... 18
(i) PORTAL Listing............................................................................ 18
(j) Registration Rights Agreement............................................................. 18
(k) Indenture................................................................................. 19
(l) Unit Agreement............................................................................ 19
(m) Investor Rights Agreement................................................................. 19
(n) Limited Liability Company Agreement....................................................... 19
(o) Additional Documents...................................................................... 19
(p) Execution by Newco........................................................................ 19
SECTION 6. Reimbursement of Initial Purchasers' Expenses...................................... 19
SECTION 7. Offer, Sale and Resale Procedures.................................................. 20
SECTION 8. Indemnification.................................................................... 21
(a) Indemnification of the Initial Purchaser.................................................. 21
(b) Indemnification of the Issuers, their Directors and Officers.............................. 22
(c) Notifications and Other Indemnification Procedures........................................ 22
(d) Settlements............................................................................... 23
SECTION 9. Contribution....................................................................... 23
SECTION 10. Termination of this Agreement...................................................... 24
SECTION 11. Representations and Indemnities to Survive Delivery................................ 25
SECTION 12. Notices............................................................................ 25
SECTION 13. Successors......................................................................... 26
SECTION 14. Partial Unenforceability........................................................... 26
SECTION 15. Governing Law Provisions........................................................... 26
SECTION 16. Consent to Jurisdiction............................................................ 26
SECTION 17. Default of One or More of the Several Initial Purchasers........................... 26
SECTION 18. General Provisions................................................................. 27
SECTION 19. Supercedes Prior Purchase Agreement................................................ 27
</TABLE>
ii
EXHIBIT 10.1
Purchase Agreement
May 14, 2001
BANC OF AMERICA SECURITIES LLC
BARCLAYS CAPITAL INC.
c/o BANC OF AMERICA SECURITIES LLC
9 West 57/th/ Street, 31/st/ Floor
New York, New York 10019
Ladies and Gentlemen:
Nexstar Finance Holdings, L.L.C., a Delaware limited liability
company, and Nexstar Finance Holdings, Inc., a Delaware corporation (together,
the "Company"), and Nexstar Equity Corp., a Delaware corporation ("Newco"),
------- -----
propose to issue and sell to the several Initial Purchasers named in Schedule I
----------
(the "Initial Purchasers"), acting severally and not jointly, the respective
------------------
amounts of units (the "Units"), set forth in such Schedule I, each Unit
----- ----------
consisting of $1,000 in principal amount at maturity of the Company's 16% Senior
Discount Notes due 2009 (the "Notes") and one share (collectively, the "Common
----- ------
Shares") of Class B common stock of Newco, par value $0.01 per share (the
------
"Common Stock"). On the Closing Date (as defined below), the sole asset of Newco
------------
will be securities representing 1.0% of the equity interests (the "Class D
-------
Interests") in Nexstar Broadcasting Group, L.L.C. ("Nexstar"), calculated on a
--------- -------
fully-diluted basis.
The Units will be issued pursuant to a unit agreement, dated
as of May 17, 2001 (the "Unit Agreement"), among the Company, the Guarantor,
--------------
Newco and United States Trust Company of New York, as unit agent (the "Unit
----
Agent"). Units issued in book-entry form will be issued in the name of Cede &
----
Co., as nominee of the Depositary. The Notes will be issued pursuant to an
indenture, to be dated as of May 17, 2001 (the "Indenture"), among the Company,
---------
the Guarantor (as defined below), Bastet Broadcasting, Inc. ("Bastet"), Mission
------
Broadcasting of Wichita Falls, Inc. ("Mission") and United States Trust Company
-------
of New York, as trustee (the "Trustee"). Notes issued in book-entry form will be
-------
issued in the name of Cede & Co., as nominee of The Depository Trust Company
(the "Depositary").
----------
The holders of the Notes will be entitled to the benefits of a
registration rights agreement, dated as of May 17, 2001 (the "Registration
------------
Rights Agreement"), among the Company and the Initial Purchasers, pursuant to
----------------
which the Company will agree to file, within 30 days after the consummation of
the Reorganization (as defined in the Indenture), a registration statement with
the Commission registering the Exchange Notes (as defined below) under the
Securities Act. The payment of principal, premium and Liquidated Damages (as
defined in the Indenture), if any, and interest on the Notes will be fully and
unconditionally guaranteed on a senior unsecured basis by Nexstar Broadcasting
Group, L.L.C. (the "Guarantor"), pursuant to its guaranty (the "Guarantee"). The
--------- ---------
relative rights, power and duties of Newco and the other members of Nexstar
Broadcasting Group, L.L.C. ("Nexstar") will be set forth in the third amended
and restated limited liability company agreement, dated as of May 17, 2001 (the
"Limited Liability Company Agreement"). The Class D Interests will be issued to
-----------------------------------
Newco for the benefit of the holders of the Common Shares. The holders of the
Common Shares will be entitled to the benefits of the third amended and restated
investor rights agreement, dated as of May 17, 2001 (the "Investor Rights
---------------
Agreement"), among Nexstar and Newco, pursuant to which the holders will be
---------
entitled to receive certain tag-along rights and piggyback registration rights
and will be subject to certain drag-along rights with
respect to Newco's Class D Interests in Nexstar. Newco, the Company and the
Guarantor are each individually referred to herein as an "Issuer" and are
collectively referred to herein as the "Issuers". The Units, the Notes, the
-------
Guarantee and the Common Shares are collectively referred to herein as the
"Securities".
----------
The Issuers understand that the Initial Purchasers propose to
make an offering of the Units on the terms and in the manner set forth herein
and to be set forth in the Offering Memorandum (as defined below) and agree that
the Initial Purchasers may resell, subject to the conditions set forth herein,
all or a portion of the Units to purchasers (the "Subsequent Purchasers") at any
---------------------
time after the date of this Agreement. The Units are to be offered and sold to
or through the Initial Purchasers without being registered with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933 (as
----------
amended, the "Securities Act," which term, as used herein, includes the rules
--------------
and regulations of the Commission promulgated thereunder), in reliance upon
exemptions therefrom. The terms of the Units and the Unit Agreement will require
that investors that acquire Units expressly agree that Units may only be resold
or otherwise transferred, after the date hereof, if such Units are registered
for sale under the Securities Act or if an exemption from the registration
requirements of the Securities Act is available (including the exemptions
afforded by Rule 144A ("Rule 144A") thereunder and in any event only to
---------
"qualified purchasers" as such term is defined in the Investment Company Act of
1940, as amended (the "Investment Company Act")). The terms of the Notes and the
----------------------
Indenture will require that investors that acquire Notes (including the
Guarantee endorsed thereon) expressly agree that Notes (including the Guarantee
endorsed thereon), may only be resold or otherwise transferred, after the date
hereof, if such Notes are registered for sale under the Securities Act or if an
exemption from the registration requirements of the Securities Act is available
(including the exemptions afforded by Rule 144A thereunder).
The Issuers will prepare on or before May 17, 2001, and
deliver to the Initial Purchasers, copies of the Offering Memorandum describing
the terms of the Securities, each for use by such Initial Purchaser in
connection with its solicitation of offers to purchase the Units. As used
herein, the "Offering Memorandum" shall mean, with respect to any date or time
-------------------
referred to in this Agreement, the Issuers' Offering Memorandum, to be dated on
or before May 17, 2001, including amendments or supplements thereto, any
exhibits thereto, in the most recent form that will be prepared and delivered by
the Issuers to the Initial Purchasers in connection with its solicitation of
offers to purchase Units. Further, any reference to the Offering Memorandum
shall be deemed to refer to and include any Additional Issuer Information (as
defined in Section 3) furnished by the Issuers prior to the completion of the
distribution of the Units.
The Issuers hereby confirm their agreements with the Initial
Purchasers as follows:
SECTION 1. Representations and Warranties. Each of the Issuers, jointly
------------------------------
and severally, hereby represent, warrant and covenant to each Initial Purchaser
on the date hereof, on the date of delivery of the Offering Memorandum and on
the Closing Date, as follows (it being understood that Newco will be deemed to
represent, warrant and covenant only on the date of the delivery of the Offering
Memorandum and on the Closing Date):
(a) No Registration Required. Subject to compliance by the Initial Purchasers
------------------------
with the representations and warranties set forth in Section 2 hereof and with
the procedures set forth in Section 7 hereof, it is not necessary in connection
with the offer, sale and delivery of the Units to the Initial Purchasers and to
each Subsequent Purchaser in the manner contemplated by this Agreement and the
Offering Memorandum to register the Securities under the Securities Act or,
until such time as the Exchange Notes are issued pursuant to an effective
registration statement, to qualify the Indenture under the Trust Indenture Act
of 1939 (the "Trust Indenture Act," which term, as used herein, includes the
-------------------
rules and regulations of the Commission promulgated thereunder).
(b) No Integration of Offerings or General Solicitation. No Issuer has,
---------------------------------------------------
directly or indirectly, solicited any offer to buy or offered to sell, nor will,
directly or indirectly, solicit any offer to buy or offer to sell, in the United
States or to any United States citizen or resident, any security which is or
would be
2
integrated with the sale of the Units in a manner that would require any of the
Securities to be registered under the Securities Act. None of the Issuers, their
respective affiliates (as such term is defined in Rule 501 under the Securities
Act (each, an "Affiliate"), or any person acting on its or their respective
---------
behalf (other than the Initial Purchasers, as to whom the Issuers make no
representation or warranty) has engaged or will engage, in connection with the
offering of the Units, in any form of general solicitation or general
advertising within the meaning of Rule 502 under the Securities Act.
(c) Eligibility for Resale under Rule 144A. The Securities are eligible for
--------------------------------------
resale pursuant to Rule 144A and will not be, at the Closing Date, of the same
class as securities listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated interdealer
quotation system.
(d) The Offering Memorandum. The Offering Memorandum, as of its date and a
-----------------------
Closing Date, will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that this representation, warranty and agreement shall not apply to statements
in or omissions from the Offering Memorandum made in reliance upon and in
conformity with information furnished to the Issuers in writing by any Initial
Purchaser expressly for use in the Offering Memorandum. The Offering Memorandum,
as of its date, will contain all the information specified in, and meeting the
requirements of, Rule 144A. No Issuer has distributed or will distribute, prior
to the later of the Closing Date and the completion of the Initial Purchasers'
distribution of the Units, any offering material in connection with the offering
and sale of the Units other than the Offering Memorandum.
(e) The Purchase Agreement. This Agreement has been duly authorized, executed
----------------------
and delivered by, and is a valid and binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms, except as rights
to indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles and except as rights to
indemnification under the Registration Rights Agreement may be limited by
applicable law.
(f) The Registration Rights Agreement. At the Closing Date, the
---------------------------------
Registration Rights Agreement will be duly authorized, executed and delivered
by, and will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles and except as rights to indemnification under
the Registration Rights Agreement may be limited by applicable law. Pursuant to
the Registration Rights Agreement, the Company will agree to file with the
Commission, under the circumstances set forth therein, a registration statement
under the Securities Act relating to another series of debt securities of the
Company with terms substantially identical to the Notes (the "Exchange Notes")
--------------
to be offered in exchange for the Notes (the "Exchange Offer") and (ii) to the
-----------------------
extent required by the Registration Rights Agreement, a shelf registration
statement pursuant to Rule 415 of the Securities Act relating to the resale by
certain holders of the Notes, and in each case, to use its best efforts to cause
such registration statements to be declared effective.
(g) The Investor Rights Agreement. At the Closing Date, the Investor Rights
-----------------------------
Agreement will be duly authorized, executed and delivered by, and will be a
valid and binding agreement of Nexstar and Newco, enforceable against Nexstar
and Newco in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(h) The Limited Liability Company Agreement. At the Closing Date, the
---------------------------------------
Limited Liability Company Agreement will be duly authorized, executed and
delivered by, and will be a valid and binding agreement of Nexstar and Newco,
enforceable against Nexstar and Newco in accordance with its terms,
3
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(i) Authorization of the Units. Each of the Issuers has duly authorized
--------------------------
the issuance of the Notes (including the Guarantee endorsed thereon) and the
Common Shares as a Unit.
(j) Authorization of the Common Shares. The Common Shares to be purchased
----------------------------------
by the Initial Purchasers from Newco have been duly authorized for issuance and
sale pursuant to this Agreement and, when issued and delivered by Newco pursuant
to this Agreement, will be validly issued, fully paid and nonassessable.
(k) Authorization of Class D Interests. The Class D Interests of Nexstar
----------------------------------
has been duly authorized for issuance by Nexstar and, when delivered to and paid
for by Newco, will be validly issued, fully paid and non-assessable and free of
preemptive rights; the Class D Interests are in the form contemplated by the
Limited Liability Company Agreement; no holder of the Class D Interests will be
subject to personal liability with respect to the obligations of Nexstar by
reason of being such a holder.
(l) Authorization of the Notes, the Guarantee and the Exchange Notes.
----------------------------------------------------------------
(i) The Notes to be purchased by the Initial Purchasers from the
Company will be in the form contemplated by the Indenture, have been duly
authorized for issuance and sale pursuant to this Agreement and at the Closing
Date the Indenture will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor, will constitute valid and binding
agreements of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles and will be entitled to the benefits of the Indenture.
(ii) The Exchange Notes have been duly and validly authorized for
issuance by the Company, and when issued and authenticated in accordance with
the terms of the Indenture, the Registration Rights Agreement and the Exchange
Offer, will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or
similar laws relating to or affecting enforcement of the rights and remedies of
creditors or by general principles of equity and will be entitled to the
benefits of the Indenture.
(iii) The Guarantee of the Notes is in the form contemplated by the
Indenture, has been duly authorized for issuance and sale pursuant to this
Agreement and the Indenture and, at the Closing Date, will have been duly
executed by the Guarantor and, when the Notes have been authenticated in the
manner provided for in the Indenture and delivered against payment of the
purchase price therefor, will constitute a valid and binding agreement of the
Guarantor, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles and will be entitled to the benefits of the
Indenture.
(m) Authorization of the Indenture. The Indenture has been duly authorized
------------------------------
by the Company and the Guarantor, and, at the Closing Date, will have been duly
executed and delivered by the Company and the Guarantor, and will, when executed
by the Trustee, constitute a valid and binding agreement of the Company and the
Guarantor, enforceable against the Company and the Guarantor in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
4
(n) Authorization of the Unit Agreement. The Unit Agreement has been duly
-----------------------------------
authorized by the Issuers, and, at the Closing Date, will have been duly
executed and delivered by the Issuers, and will, when executed by the Unit
Agent, constitute a valid and binding agreement of the Issuers and, enforceable
against the Issuers in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
(o) Description of the Securities and the Indenture. The Notes, the
-----------------------------------------------
Exchange Notes, the Guarantee of the Notes, the Units, the Common Stock
(including the Common Shares), the equity interests in Nexstar (including the
Class D Interests), the Investor Rights Agreement, the Limited Liability Company
Agreement and the Indenture will conform in all material respects to the
respective statements relating thereto to be contained in the Offering
Memorandum.
(p) No Material Adverse Change. Except as otherwise will be disclosed in
--------------------------
the Offering Memorandum, subsequent to the respective dates as of which
information will be given in the Offering Memorandum: (i) there has been no
material adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or otherwise,
or in the earnings, business, operations or prospects, whether or not arising
from transactions in the ordinary course of business, of any Issuer or their
respective subsidiaries (any such change is called a "Material Adverse Change");
-----------------------
(ii) none of the Issuers or their respective subsidiaries have incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by any Issuer or,
except for dividends paid to such Issuer, its respective subsidiaries on any
class of capital stock or repurchase or redemption by the Issuers, or their
respective subsidiaries of any class of capital stock.
(q) Independent Accountants. PricewaterhouseCoopers LLP and Ernst & Young
-----------------------
LLP, who have expressed their opinion with respect to the financial statements
(which term as used in this Agreement includes the related notes thereto)
included in the Offering Memorandum are independent public or certified public
accountants within the meaning of Regulation S-X under the Securities Act and
the Exchange Act.
(r) Preparation of the Financial Statements. The financial statements,
---------------------------------------
together with the related schedules and notes, to be included in the Offering
Memorandum will present fairly the consolidated financial position of the
Company and its respective subsidiaries as of and at the dates indicated and the
results of their operations and cash flows for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto. The
financial data to be set forth in the Offering Memorandum under the captions
"Offering Memorandum Summary--Summary Historical and Pro Forma Condensed
Consolidated Financial Data" and "Selected Historical Consolidated Financial
Data" fairly present the information set forth therein on a basis consistent
with that of the audited financial statements contained in the Offering
Memorandum. The pro forma consolidated, condensed financial statements of the
Issuers and their respective subsidiaries and the related notes thereto included
under the caption "Offering Memorandum Summary--Summary Historical and Pro Forma
Condensed Consolidated Financial Data", "Unaudited Pro Forma Consolidated
Financial Statements" and elsewhere in the Offering Memorandum will present
fairly the information contained therein, have been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma financial
statements, except that Adjusted EBITDA and broadcast cash flow are not within
the scope of the Commission's guidelines, and have been properly presented on
the bases described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(s) Incorporation and Good Standing of the Issuers and their Respective
-------------------------------------------------------------------
Subsidiaries. Each of the Issuers and their respective subsidiaries has been
------------
duly incorporated or formed, as applicable, and is
5
validly existing as a corporation or limited liability company, as the case may
be, in good standing under the laws of the jurisdiction of its incorporation or
formation and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum
and, in the case of each Issuer, to enter into and perform their respective
obligations under each of this Agreement, the Registration Rights Agreement, the
Unit Agreement, the Investor Rights Agreement, the Securities, the Exchange
Notes and the Indenture. Each of the Issuers and their respective subsidiaries
is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except for such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material
Adverse Change. All of the issued and outstanding capital stock or LLC
interests, as applicable, of the Issuers and each subsidiary of the Issuers has
been duly authorized and validly issued, is fully paid and nonassessable and is
owned by the applicable Issuer, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance or claim. The
Issuers do not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries listed in Schedule II
-----------
hereto.
(t) Capitalization and Other Capital Stock Matters. At March 31, 2001, on a
----------------------------------------------
consolidated basis, after giving pro forma effect to the issuance and sale of
the Units pursuant hereto, the Company would have an authorized and outstanding
capitalization to be set forth in the Offering Memorandum under the caption
"Capitalization" (other than for subsequent issuances of capital stock, if any,
pursuant to employee benefit plans to be described in the Offering Memorandum or
upon exercise of outstanding options or warrants described in the Offering
Memorandum). All of the issued and outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable and have
been issued in compliance with federal and state securities laws. None of the
outstanding shares of Common Stock were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of Newco. All of the issued and outstanding equity interests
of Nexstar (including the Class D Interests) have been duly authorized and
validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the outstanding
equity interests of Nexstar (including the Class D Interests) were issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of Nexstar. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital equity of either of Newco
or Nexstar or any of their subsidiaries other than those to be accurately
described in the Offering Memorandum. The description of Nexstar's stock option,
stock bonus and other stock plans or arrangements, and the options or other
rights granted thereunder, to be set forth in the Offering Memorandum accurately
and fairly presents the information required to be shown with respect to such
plans, arrangements, options and rights.
(u) Assets, Liabilities and Business Activities of Newco. Newco's sole
----------------------------------------------------
assets are the Class D Interests, and Newco's sole permitted activity is to
hold, or to engage in activities related to or necessitated by the holding of,
such Class D Interests. Newco has no liabilities.
(v) Non-Contravention of Existing Instruments; No Further Authorizations or
-----------------------------------------------------------------------
Approvals Required. None of the Issuers, nor any of their respective
------------------
subsidiaries is in violation of its charter or by-laws or is in default (or,
with the giving of notice or lapse of time, would be in default) ("Default")
-------
under any indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument to which any Issuer or their respective
subsidiaries is a party or by which it or any of them may be bound (including,
without limitation, the Company's $72.0 million, six-year revolving credit
facility, $110.0 million, six-year term loan facility, and the Bastet Group's
$43.0 million, six-year revolving credit facility), or to which any of the
property or assets of the Issuers or any of their respective subsidiaries is
subject (each, an "Existing Instrument"), except for such Defaults as would not,
-------------------
individually or in the aggregate, result in a Material Adverse Change. The
Issuers' execution, delivery and performance, as applicable, of this Agreement,
the Registration Rights Agreement, the Investor Rights Agreement and the
Indenture, and the issuance and delivery of the Securities or the Exchange Notes
and consummation of the transactions
6
contemplated hereby and thereby and by the Offering Memorandum (i) have been
duly authorized by all necessary corporate action and will not result in any
violation of the provisions of the charter or by-laws or operation agreement, as
applicable, of any of the Issuers or any of their respective subsidiaries, (ii)
will not conflict with or constitute a breach of, or Default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of any of the Issuers or their respective subsidiaries pursuant to, or
require the consent of any other party to, any Existing Instrument, except for
such conflicts, breaches, Defaults, liens, charges or encumbrances as would not,
individually or in the aggregate, result in a Material Adverse Change and (iii)
will not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Issuers or any of their
respective subsidiaries. No consent, approval, authorization or other order of,
or registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Issuers' execution, delivery and
performance, as applicable, of this Agreement, the Registration Rights
Agreement, the Investor Rights Agreement, the Limited Liability Company
Agreement, the Unit Agreement or the Indenture, or the issuance and delivery of
the Securities or the Exchange Notes or consummation of the transactions
contemplated hereby and thereby and by the Offering Memorandum, except such as
have been obtained or made by the Issuers and are in full force and effect under
the Securities Act, applicable state securities or blue sky laws and except such
as may be required by federal and state securities laws with respect to the
obligations under the Registration Rights Agreement, or any FCC (as defined
below) approvals required in connection with the proposed Reorganization.
(w) No Material Actions or Proceedings. There are no legal or governmental
----------------------------------
actions, suits or proceedings pending or, to the best of the Issuers' knowledge,
threatened against or affecting any of the Issuers or their respective
subsidiaries, which has as the subject thereof any property owned or leased by
the Issuers or their respective subsidiaries, where in any such case there is a
reasonable possibility that such action, suit or proceeding might be determined
adversely to any Issuer or any such subsidiary and any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to result
in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. No material labor dispute with the
employees of the Issuers' or their respective subsidiaries, exists or, to the
best of the Issuers' knowledge, is threatened or imminent.
(x) Intellectual Property Rights. Except as otherwise disclosed in the
----------------------------
Offering Memorandum, the Issuers and their respective subsidiaries, or Bastet or
Mission, own or possess sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") reasonably necessary to conduct
----------------------------
their businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse Change. No
Issuer or any of their respective subsidiaries, or Bastet or Mission, has
received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change.
(y) All Necessary Permits, etc. Each of the Issuers and their respective
--------------------------
subsidiaries possesses such valid and current certificates, authorizations or
permits issued by the appropriate state, federal or foreign regulatory agencies
or bodies necessary to conduct their respective businesses, and none of the
Issuers or any of their respective subsidiaries has received any notice of
proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
result in a Material Adverse Change.
(z) FCC Licenses.
------------
(i) The Company or its respective subsidiaries, or Bastet or Mission,
hold such validly issued Federal Communications Commission ("FCC") licenses and
---
authorizations as are necessary to operate their respective television stations,
which are listed on Schedule III (the "Stations"), as they are currently
------------ --------
operated (collectively, the "FCC Licenses"), and each such FCC License is in
------------
full force and
7
effect. The FCC Licenses of the Company or its subsidiaries, or Bastet or
Mission, are listed on Schedule III, and each of such FCC Licenses has the
------------
expiration date indicated on Schedule III.
------------
(ii) The Company has no knowledge of any condition imposed by the FCC
as part of any FCC License, which condition is neither set forth on the face
thereof as issued by the FCC nor contained in the rules and regulations of the
FCC applicable generally to stations of the type, nature, class or location of
the Station in question. Each Station has been and is being operated in all
material respects in accordance with the terms and conditions of the FCC
Licenses applicable to it and the rules and regulations of the FCC and the
Communications Act of 1934, as amended (the "Communications Act").
------------------
(iii) No proceedings are pending or are threatened which may result in
the revocation, modification, non-renewal or suspension of any of the FCC
Licenses, the denial of any pending applications, the issuance of any cease and
desist order or the imposition of any fines, forfeitures or other administrative
actions by the FCC with respect to any Station or its operation, other than any
matters which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Change and proceedings affecting the
television broadcasting industry in general.
(iv) All reports, applications and other documents required to be
filed by the Company and its respective subsidiaries, or Bastet or Mission, with
the FCC with respect to the Stations have been timely filed, and all such
reports, applications and documents are true, correct and complete in all
respects, except where the failure to make such timely filing or any inaccuracy
therein could not reasonably be expected to result in a Material Adverse Change,
and the Company has no knowledge of any matters that could reasonably be
expected to result in the suspension or revocation of or the refusal to renew
any of the FCC Licenses or the imposition on any Issuer or any of their
respective subsidiaries, or Bastet or Mission, of any material fines or
forfeitures by the FCC, or which could reasonably be expected to result in the
revocation, rescission, reversal or modification of any Station's authorization
to operate as currently authorized under the Communications Act and the
policies, rules and regulations of the FCC.
(v) There are no unsatisfied or otherwise outstanding citations
issued by the FCC with respect to any Station or its operations.
(aa) Condition of Stations. All of the material properties, equipment and
---------------------
systems of the Issuers or their respective subsidiaries, or Bastet or Mission,
and the Stations owned and/or operated by them are, and all material properties,
equipment and systems to be added in connection with any contemplated Station
expansion or construction will be, in condition which is sufficient for the
operation thereof in accordance with past practice of the Station in question
and are and will be in compliance with all applicable standards, rules or
requirements imposed by (a) any governmental agency or authority including
without limitation the FCC and (b) any FCC License, in each case except where
such noncompliance could not reasonably be expected to result in a Material
Adverse Change.
(bb) Title to Properties. The Issuers and each of their respective
-------------------
subsidiaries have good and marketable title to all the properties and assets
reflected as owned in the financial statements referred to in Section 1 above,
in each case free and clear of any security interests, mortgages, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by such
Issuer or such subsidiary. The real property, improvements, equipment and
personal property held under lease by the Issuers or any of their respective
subsidiaries are held under valid and enforceable leases, with such exceptions
as are not material and do not materially interfere with the use made or
proposed to be made of such real property, improvements, equipment or personal
property by such Issuer or such subsidiary.
(cc) Tax Law Compliance. The Issuers and their consolidated subsidiaries
------------------
have filed all necessary federal, state and foreign income and franchise tax
returns and have paid all taxes required to be paid by
8
any of them and, if due and payable, any related or similar assessment, fine or
penalty levied against any of them. Each Issuer has made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Section 1 above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Issuers and
any of its consolidated subsidiaries has not been finally determined.
(dd) Issuers Not an "Investment Company"
----------------------------------
(i) Each Issuer has been advised of the rules and requirements under
the Investment Company Act. No Issuer is, or after receipt of payment for the
Securities will be, an "investment company" within the meaning of Investment
Company Act, and each Issuer will conduct its business in a manner so that it
will not become subject to the Investment Company Act.
(ii) Each Issuer reasonably believes that based on the procedures it
has put in place to ensure that all purchasers and transferees of the Units are
and will be "qualified purchasers" for the purposes of the Investment Company
Act ("Qualified Purchasers") and "qualified institutional buyers" within the
meaning of Rule 144A ("Qualified Institutional Buyers"), and the sale of the
Units hereunder and the subsequent transfers of the Units will only be made to
Qualified Institutional Buyers that are Qualified Purchasers as set forth above.
(iii) No Issuer shall offer the Securities in its own or any
affiliated participant-directed Plan.
(iv) Each Issuer shall cause the CUSIP numbers associated with the
Units and all third-party vendor screens (including those maintained by
Bloomberg, L.P. and The Depository Trust Company) to include appropriate legends
regarding the purchase restrictions in respect of Rule 144A under the Securities
Act and Section 3(c)(7) of the Investment Company Act and shall provide the
relevant information vendors with information regarding the Units applicable to
such restrictions.
For the purposes hereof, (a) "Plan" means an ERISA Plan or any other
"plan" (as defined in Section 4975(e)(1) of the Code) that is subject to the
provisions of Section 4975 of the Code, or any entity whose underlying assets
include the assets of such plan and (b) "ERISA Plan" means an "employee benefit
plan" (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended, and the regulations and published interpretations
thereunder (collectively, "ERISA")) which is subject to the provisions or Title
I of ERISA, or any entity whose underlying assets include the assets of any such
plan.
(ee) Insurance. Except as set forth on Schedule 1(ee), Each of the Issuers
and their respective subsidiaries are insured by recognized, financially sound
institutions with policies in such amounts and with such deductibles and
covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal
property owned or leased by the Issuers and their respective subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes. The
Issuers have no reason to believe that it they any of their respective
subsidiaries will not be able (i) to renew their existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct their business as now
conducted and at a cost that would not result in a Material Adverse Change. None
of the Issuers or any of their respective subsidiaries has been denied any
insurance coverage that it has sought or for which it has applied.
(ff) No Price Stabilization or Manipulation. No Issuer has taken or
will take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of any security of any Issuer to facilitate the sale or resale of the
Securities.
9
(gg) Company's Accounting System. The Company maintains a system of
----------------------------
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(hh) ERISA Compliance. Except as otherwise will be disclosed in the
----------------
Offering Memorandum, the Issuers, their respective subsidiaries and any
"employee benefit plan" (as defined under ERISA) established or maintained by
the Issuers or their respective subsidiaries or their "ERISA Affiliates" (as
defined below) are in compliance in all material respects with ERISA. "ERISA
-----
Affiliate" means, with respect to the Issuers or any of their respective
---------
subsidiaries, any member of any group of organizations described in Section 414
of the Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the "Code") of which such Issuers or such
----
subsidiary is a member. No "reportable event" (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any "employee
benefit plan" established or maintained by the Issuers or their respective
subsidiaries or any of their ERISA Affiliates. No "employee benefit plan"
established or maintained by the Issuers, their respective subsidiaries or any
of their ERISA Affiliates, if such "employee benefit plan" were terminated,
would have any "amount of unfunded benefit liabilities" (as defined under
ERISA). None of the Issuers, their respective subsidiaries or any of their ERISA
Affiliates have incurred or reasonably expect to incur any liability under Title
IV of ERISA with respect to termination of, or withdrawal from, any "employee
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Issuers, their
respective subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 401 of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause the loss of
such qualification.
Any certificate signed by an officer of any of the Issuers and
delivered to the Initial Purchasers or to counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by such Issuer such Issuer
to the Initial Purchasers as to the matters set forth therein.
SECTION 2. Purchase, Sale and Delivery of the Units.
----------------------------------------
(a) The Units. The Issuers agree to issue and sell to the several Initial
---------
Purchasers, severally and not jointly, all of the Units upon the terms herein
set forth. On the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Initial Purchasers agrees, to purchase from the Issuers the number of Units
set forth opposite their names on Schedule I, at a purchase price equal to
----------
$521.80 per Unit payable on the Closing Date.
(b) The Closing Date. Delivery of certificates for the Units in definitive
----------------
form to be purchased by the Initial Purchasers and payment therefor shall be
made at the offices of Latham & Watkins, 885 Third Avenue, New York, New York
(or such other place as may be agreed to by the Issuers and the Initial
Purchaser) at 9:00 a.m. New York City time, on May 17, 2001 or such other time
and date as the Initial Purchasers shall designate by notice to the Issuers (the
time and date of such closing are called the "Closing Date"). Each Issuer hereby
------------
acknowledges that circumstances under which the Initial Purchasers may provide
notice to postpone the Closing Date as originally scheduled include, but are in
no way limited to, any determination by the Issuers or the Initial Purchasers to
recirculate to investors copies of an amended or supplemented Offering
Memorandum or a delay as contemplated by the provisions of Section 16.
(c) Delivery of the Units. The Issuers shall deliver, or cause to be
---------------------
delivered, to the Initial Purchaser certificates for the Units on the Closing
Date against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. The certificates for the
Units shall be in such denominations and registered in the name of Cede & Co.,
as nominee of the Depository,
10
and shall be made available for inspection on the business day preceding the
Closing Date at a location in New York City, as the Initial Purchaser may
designate. Time shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the obligations of the
Initial Purchaser.
(d) Delivery of Offering Memorandum to the Initial Purchasers. Not later
---------------------------------------------------------
than 12:00 noon on Thursday, May 17, 2001, the Issuers shall deliver or cause to
be delivered copies of the Offering Memorandum in such quantities and at such
places as the Initial Purchasers shall reasonably request.
(e) Initial Purchaser as Qualified Purchaser. Each Initial Purchaser,
----------------------------------------
severally and not jointly, represents and warrants to, and agrees with, the
Issuers that it is a Qualified Institutional Buyer within the meaning of Rule
144A, an "accredited investor" within the meaning of Rule 501 under the
Securities Act and a Qualified Purchaser.
(f) Resale of Securities. Each Initial Purchaser, severally and not
--------------------
jointly, represents and warrants to, and agrees with, the Issuers that: (i) it
will offer and sell the Units only to persons (A) who (x) it reasonably believes
are Qualified Institutional Buyers in transactions meeting the requirements of
Rule 144A and (y) are Qualified Purchasers, (B) who are not broker-dealers that
own and invest on a discretionary basis less than $25,000,000 in securities of
issuers that are not affiliated persons of the dealer, (C) who are purchasing
the Units for their own account or, in the case of the Units sold to Qualified
Institutional Buyers, the account of another Qualified Purchaser that is also a
Qualified Institutional Buyer as to which the purchaser exercises sole
investment discretion, (D) who are (and who represent that any such account is)
acquiring the Units as principal for its own account for investment and not for
sale in connection with any distribution thereof, (E) who were not (and who
represent that any such account was not) formed solely for the purpose of
investing in the Units (except when each beneficial owner of the purchaser and
each such account is a Qualified Purchaser), (F) who have received (and who
represent that each such account has received), to the extent the purchaser (or
any account for which it is purchasing the Units) is a private investment
company formed before April 30, 1996, the necessary consent from its beneficial
owners, (G) who are not (and who represent that any such account is not)
pension, profit sharing or other retirement trust funds or plans in which the
partners, beneficiaries or participants, as applicable, may designate the
particular investments to be made and (H) who are (and who represent that each
such account is) purchasing the Units in an initial principal amount of not less
than $250,000 for the purchaser and each such account; (ii) it will only offer
and sell the Unit in such minimum denominations; (iii) it will provide, or
cooperate to provide, its customers that purchase the Units with notice of the
Issuers' reliance on Section 3(c)(7) of the Investment Company Act; (iv) it will
cooperate and assist in the proper dissemination of notices and periodic reports
delivered by the Issuers to the Holders of the Units under the Indenture; (v) it
will notify the Issuers and the relevant information vendors if it discovers
that the legends on the third-party vendor screens relating to the Units are
missing, inaccurate or incomplete; (vi) it will take reasonable steps to cause
all "confirms" of trades of the Units to contain a CUSIP number that has a
"fixed field" attached which contains "3c7" and "144A" indicators; (vii) it will
take reasonable steps to cause its internal database and other systems to notify
all of its personnel responsible for settling transactions involving the Units
of the Issuers' reliance on Section 3(c)(7) of the Investment Company Act; and
(viii) it will cause any website relating to the Units and maintained by it to
contain a password protected system that permits access only to Persons who
certify that they are, or were at the time they acquired the Units, Qualified
Purchasers.
SECTION 3. Additional Covenants. The Issuers, jointly and severally, further
--------------------
covenant and agree with the Initial Purchasers as follows:
(a) Initial Purchasers' Review of Proposed Amendments and Supplements.
-----------------------------------------------------------------
Prior to amending or supplementing the Offering Memorandum, the Issuers shall
furnish to the Initial Purchasers for review a copy of each such proposed
amendment or supplement, and the Issuers shall not use any such proposed
amendment or supplement to which the Initial Purchasers reasonably object.
11
(b) Amendments and Supplements to the Offering Memorandum and Other
---------------------------------------------------------------
Securities Act Matters. If, prior to the completion of the placement of the
----------------------
Units by the Initial Purchasers with the Subsequent Purchasers, any event shall
occur or condition exist as a result of which it is necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when the Offering Memorandum is delivered to a
purchaser, not misleading, or if in the opinion of the Initial Purchasers or
counsel for the Initial Purchasers it is otherwise necessary to amend or
supplement the Offering Memorandum to comply with law, the Issuers jointly and
severally agree to promptly prepare (subject to Section 3 hereof), and furnish
at their own expense to the Initial Purchasers, amendments or supplements to the
Offering Memorandum so that the statements in the Offering Memorandum as so
amended or supplemented will not, in the light of the circumstances when the
Offering Memorandum is delivered to a purchaser, be misleading or so that the
Offering Memorandum, as amended or supplemented, will comply with law.
Following the consummation of the Exchange Offer or the effectiveness
of an applicable shelf registration statement and for so long as the Securities
are outstanding if, in the reasonable judgment of the Initial Purchasers, the
Initial Purchasers or any of its affiliates (as such term is defined in the
rules and regulations under the Securities Act) are required to deliver a
prospectus in connection with sales of, or market-making activities with respect
to, such securities, to periodically amend the applicable registration statement
so that the information contained therein complies with the requirements of
Section 10 of the Securities Act, to amend the applicable registration statement
or supplement the related prospectus or the documents incorporated therein when
necessary to reflect any material changes in the information provided therein so
that the registration statement and the prospectus will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances existing
as of the date the prospectus is so delivered, not misleading and to provide the
Initial Purchasers with copies of each amendment or supplement filed and the
information required to be provided to the Trustee pursuant to the Indenture.
The Issuers hereby expressly acknowledge that the indemnification and
contribution provisions of Sections 8 and 9 hereof are specifically applicable
and relate to each offering memorandum, registration statement, prospectus,
amendment or supplement referred to in this Section 3.
(c) Copies of the Offering Memorandum. The Issuers agree to furnish the
---------------------------------
Initial Purchasers, without charge, as many copies of the Offering Memorandum
and any amendments and supplements thereto as it shall have reasonably
requested.
(d) Blue Sky Compliance. The Issuers shall cooperate with the Initial
-------------------
Purchasers and counsel for the Initial Purchasers to qualify or register the
Securities for sale under (or obtain exemptions from the application of) the
Blue Sky or state securities laws of those jurisdictions designated by the
Initial Purchasers, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required for
the distribution of the Securities. None of the Issuers shall be required to
qualify as a foreign corporation or to take any action that would subject it to
general service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign corporation. The
Issuers will advise the Initial Purchasers promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the
Securities for offering, sale or trading in any jurisdiction or any initiation
or threat of any proceeding for any such purpose, and in the event of the
issuance of any order suspending such qualification, registration or exemption,
the Issuers shall use their respective best efforts to obtain the withdrawal
thereof at the earliest possible moment.
(e) Use of Proceeds. The Issuers shall apply the net proceeds from the sale
---------------
of the Units sold by it in the manner to be described under the caption "Use of
Proceeds" in the Offering Memorandum.
(f) The Depositary. The Issuers will cooperate with the Initial Purchasers
--------------
and use their respective best efforts to permit the Units to be eligible for
clearance and settlement through the facilities of the Depositary.
12
(g) Additional Issuer Information. Additionally, at any time when any
-----------------------------
Issuer is not subject to Section 13 or 15 of the Exchange Act, for the benefit
of holders and beneficial owners from time to time of Securities, the Issuers
shall furnish, at its expense, upon request, to holders and beneficial owners of
Securities and prospective purchasers of Securities information ("Additional
-----------
Issuer Information") satisfying the requirements of subsection of Rule 144A.
-------------------
(h) Future Reports to the Initial Purchasers. For so long as any Exchange
----------------------------------------
Notes remain outstanding, the Issuers will furnish to Banc of America Securities
LLC (i) as soon as practicable after the end of each fiscal year, copies of the
Annual Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, stockholders' equity (or
member's equity, as applicable) and cash flows for the year then ended and the
opinion thereon of the Company's independent public or certified public
accountants; (ii) as soon as practicable after the filing thereof, copies of
each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K or other report filed by any of the Issuers with the
Commission, the NASD or any securities exchange; and (iii) as soon as available,
copies of any report or communication any Issuer mailed generally to holders of
its capital equity or debt securities (including the holders of the Securities).
(i) No Integration. Each Issuer agrees that it will not and will cause its
--------------
Affiliates not to make any offer or sale of securities of such Issuer of any
class if, as a result of the doctrine of "integration" referred to in Rule 502
under the Securities Act, such offer or sale would render invalid (for the
purpose of the sale of the Units by the Issuers to the Initial Purchaser, (i)
the resale of the Securities by the Initial Purchasers to Subsequent Purchasers
or (ii) the resale of the Securities by such Subsequent Purchasers to others)
the exemption from the registration requirements of the Securities Act provided
by Section 4 thereof or by Rule 144A thereunder or otherwise.
(j) Legended Securities. Each certificate for a Unit, Note or Common Share
-------------------
will bear the respective legend to be contained in "Notice to Investors" in the
Offering Memorandum for the time period and upon the other terms stated in the
Offering Memorandum.
(k) PORTAL. The Issuers will use their respective best efforts to cause
------
such Securities to be eligible for the National Association of Securities
Dealers, Inc. PORTAL market (the "PORTAL market").
---------------
Banc of America Securities LLC, on behalf of the several Initial
Purchasers, may, in its sole discretion, waive in writing the performance by the
any Issuer of any one or more of the foregoing covenants or extend the time for
their performance.
SECTION 4. Payment of Expenses. The Issuers agree to pay all costs, fees and
-------------------
expenses incurred in connection with the performance of their obligations
hereunder and in connection with the transactions contemplated hereby,
including, without limitation, all expenses incident to the issuance and
delivery of the Units (including all printing and engraving costs), (ii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Units to the Initial Purchaser, (iii) all fees and expenses of
the Issuers' counsel, independent public or certified public accountants and
other advisors, (iv) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Offering
Memorandum (including financial statements and exhibits), and all amendments and
supplements thereto, this Agreement, the Registration Rights Agreement, the
Indenture, the Unit Agreement, the Investors Rights Agreement and the
Securities, all filing fees, attorneys' fees and expenses incurred by the
Issuers or the Initial Purchasers in connection with qualifying or registering
(or obtaining exemptions from the qualification or registration of) all or any
part of the Units for offer and sale under the Blue Sky laws and, if requested
by the Initial Purchasers, preparing and printing a "Blue Sky Survey" or
memorandum, and any supplements thereto, advising the Initial Purchasers of such
qualifications, registrations and exemptions, (vi) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture, the Notes and the Exchange Notes, (vii) any fees
payable in connection with the rating of the Notes or the Exchange Notes with
the ratings agencies and the listing of the Securities with the PORTAL market,
(viii) any filing fees incident to the review by the National
13
Association of Securities Dealers, Inc., if any, of the terms of the sale of the
Securities or the Exchange Notes, (ix) all fees and expenses (including
reasonable fees and expenses of counsel) of the Issuers in connection with
approval of the Securities by the Depositary for "book-entry" transfer, and the
performance by the Issuers of their respective obligations under this Agreement.
Except as provided in this Section 4, Section 6, Section 8 and Section 9 hereof,
the Initial Purchasers shall pay their own expenses, including the fees and
disbursements of their counsel.
SECTION 5. Conditions of the Obligations of the Initial Purchasers. The
-------------------------------------------------------
obligations of the Initial Purchasers to purchase and pay for the Units as
provided herein on the Closing Date shall be subject to the accuracy of the
representations and warranties on the part of the Issuers set forth in Section 1
hereof as of the date hereof and as of the Closing Date as though then made and
to the timely performance by the Issuers of their respective covenants and other
obligations hereunder, and to each of the following additional conditions:
(a) Accountants' Comfort Letter. On the Closing Date, the Initial
---------------------------
Purchasers shall have received from each of PricewaterhouseCoopers LLP,
independent public or certified public accountants for the Issuers, and Ernst &
Young LLP, independent auditors with respect to KTAL-TV, Inc., a letter dated
such date addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers, containing statements and information of
the type ordinarily included in accountant's "comfort letters" to the Initial
Purchasers, delivered according to Statement of Auditing Standards Nos. 72 and
76 (or any successor bulletins), with respect to the audited and unaudited
financial statements and certain financial information contained in the Offering
Memorandum.
(b) No Material Adverse Change or Ratings Agency Change. For the period
---------------------------------------------------
from and after the date of this Agreement and prior to the Closing Date:
(i) in the reasonable judgment of the Initial
Purchasers there shall not have occurred any Material
Adverse Change; and
(ii) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended
or potential downgrading or of any review for a
possible change that does not indicate the direction
of the possible change, in the rating accorded any
securities of any of the Issuers or their respective
subsidiaries by any "nationally recognized
statistical rating organization" as such term is
defined for purposes of Rule 436 under the Securities
Act.
(c) Financial Information. The preliminary financial statements provided by
---------------------
the Company to the Initial Purchasers on the date hereof, a copy of which are
attached hereto as Attachment A, together with the related schedules and notes,
------------
shall not be materially different, in the reasonable judgment of the Initial
Purchasers, from the financial statements, together with the related schedules
and notes, included in the Offering Memorandum, as of its date.
(d) Reorganization. On the Closing Date, the Issuers shall have covenanted
--------------
to complete the Reorganization.
(e) Opinion of Counsel for the Issuers. On the Closing Date, the Initial
----------------------------------
Purchasers shall have received the favorable opinion of Kirkland & Ellis,
counsel for the Issuers, dated as of such Closing Date, the form of which is
attached as Exhibit A.
---------
(f) Opinion of Regulatory Counsel for the Company. On the Closing Date,
---------------------------------------------
the Initial Purchasers shall have received the favorable opinions of Arter &
Hadden LLP, special regulatory counsel for the Company, dated as of such Closing
Date, the form of which is attached as Exhibit B.
---------
14
(g) Opinion of Counsel for the Initial Purchasers. On the Closing Date the
---------------------------------------------
Initial Purchasers shall have received the favorable opinion of Latham &
Watkins, counsel for the Initial Purchasers, dated as of such Closing Date, with
respect to such matters as may be reasonably requested by the Initial
Purchasers.
(h) Officers' Certificate. On the Closing Date the Initial Purchasers shall
---------------------
have received a written certificate executed by the Chairman of the Board, Chief
Executive Officer or President and the Chief Financial Officer or Chief
Accounting Officer of each Issuer, dated as of the Closing Date, to the effect
set forth in subsection (b) (ii) of this Section 5, and further to the effect
that:
(i) for the period from and after the date of this
Agreement and prior to the Closing Date there has not
occurred any Material Adverse Change;
(ii) the representations and warranties of such
Issuer set forth in Section 1 of this Agreement are
true and correct with the same force and effect as
though expressly made on and as of the Closing Date;
and
(iii) such Issuer has complied with all the
agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the
Closing Date.
(i) PORTAL Listing. At the Closing Date the Securities shall have
--------------
been designated for trading on the PORTAL market.
(j) Registration Rights Agreement. The Company shall have entered
-----------------------------
into the Registration Rights Agreement, and the Initial Purchasers shall have
received executed counterparts thereof.
(k) Indenture. The Company, the Guarantor, Bastet, Mission and
---------
the Trustee shall have entered into the Indenture, and the Initial Purchasers
shall have received an executed copy thereof.
(l) Unit Agreement. The Issuers and the Unit Agent shall have
--------------
entered into the Unit Agreement, and the Initial Purchasers shall have received
an executed copy thereof.
(m) Investor Rights Agreement. Nexstar and Newco shall have
entered into the Investor Rights Agreement, and the Initial Purchasers shall
have received an executed copy thereof.
(n) Limited Liability Company Agreement. Nexstar, Newco and the
-----------------------------------
other members of Nexstar shall have entered into the Limited Liability Company
Agreement, and the Initial Purchasers shall have received an executed copy
thereof.
(o) Reimbursement Agreement. Nexstar and Newco shall have entered
-----------------------
into a reimbursement agreement, dated as of the Closing Date, providing for the
reimbursement by Nexstar to Newco of expenses incurred in connection with
Newco's holding the Class D Interests, and the Initial Purchasers shall have
received an executed copy thereof.
(p) Additional Documents. On or before the Closing Date, the
--------------------
Initial Purchasers and counsel for the Initial Purchasers shall have received
such information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Units as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.
(q) Execution by Newco. On the Closing Date, Newco shall have
------------------
entered into this Agreement by executing a supplemental signature page hereto,
and the Initial Purchasers shall have received an executed copy thereof.
15
If any condition specified in this Section 5 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Initial Purchasers by notice to the Issuers at any time on or prior to the
Closing Date, which termination shall be without liability on the part of any
party to any other party, except that Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination.
SECTION 6. Reimbursement of Initial Purchasers' Expenses. If this Agreement is
---------------------------------------------
terminated by the Initial Purchasers pursuant to Section 5, or if the sale to
the Initial Purchasers of the Units on the Closing Date is not consummated
because of any refusal, inability or failure on the part of the Issuers to
perform any agreement herein or to comply with any provision hereof, each of the
Issuers agrees, jointly and severally, to reimburse the Initial Purchasers (or
such Initial Purchasers as have terminated this Agreement with respect to
themselves), severally, upon demand for all out-of-pocket expenses that shall
have been reasonably incurred by the Initial Purchasers in connection with the
proposed purchase and the offering and sale of the Securities, including but not
limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges.
SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial Purchasers,
---------------------------------
on the one hand, and each Issuer, on the other hand, hereby establish and agree
to observe the following procedures in connection with the offer and sale of the
Units:
(A) Offers and sales of the Units will be made only by the Initial
Purchasers or Affiliates thereof qualified to do so in the jurisdictions in
which such offers or sales are made. Each such offer or sale shall only be made
to persons whom the offeror or seller reasonably believes to be Qualified
Institutional Buyers and Qualified Purchasers.
(B) The Units will be offered by approaching prospective Subsequent
Purchasers on an individual basis. No general solicitation or general
advertising (within the meaning of Rule 502 under the Securities Act) will be
used in the United States in connection with the offering of the Units.
(C) Upon original issuance by the Issuers, and until such time as
the same is no longer required under the applicable requirements of the
Securities Act, the Units (and all securities issued in exchange therefor or in
substitution thereof, other than the Exchange Notes) shall bear the following
legend:
"THE SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY
ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT") OR THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED. THE HOLDER HEREOF, BY PURCHASING THE
SECURITIES IN RESPECT OF WHICH THIS SECURITY HAS BEEN ISSUED, AGREES FOR THE
BENEFIT OF THE ISSUER THAT THE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, IN A PRINCIPAL AMOUNT OF NOT LESS THAN $250,000 FOR
THE PURCHASER AND FOR EACH ACCOUNT FOR WHICH IT IS ACTING, TO A PURCHASER AND,
AS APPLICABLE, EACH ACCOUNT FOR WHICH SUCH PURCHASER IS ACTING, THAT (1) IS A
QUALIFIED PURCHASER WITHIN THE MEANING OF SECTION 3(C)(7) OF THE INVESTMENT
COMPANY ACT, (2) WAS NOT FORMED FOR THE PURPOSE OF INVESTING IN THE ISSUER
(EXCEPT WHEN EACH BENEFICIAL OWNER OF THE PURCHASER AND EACH SUCH ACCOUNT IS A
QUALIFIED PURCHASER), (3) HAS RECEIVED THE NECESSARY CONSENT FROM ITS BENEFICIAL
OWNERS WHEN THE PURCHASER OR SUCH ACCOUNT IS A PRIVATE INVESTMENT COMPANY FORMED
BEFORE APRIL 30, 1996, (4) IS NOT A BROKER-DEALER THAT OWNS AND INVESTS ON A
DISCRETIONARY BASIS LESS THAN $25,000,000 IN
16
SECURITIES OF UNAFFILIATED ISSUERS AND (5) IS NOT A PENSION, PROFIT SHARING OR
OTHER RETIREMENT TRUST FUND OR PLAN IN WHICH THE PARTNERS, BENEFICIARIES OR
PARTICIPANTS, AS APPLICABLE, MAY DESIGNATE THE PARTICULAR INVESTMENTS TO BE
MADE, AND IN A TRANSACTION THAT MAY BE EFFECTED WITHOUT LOSS OF ANY APPLICABLE
INVESTMENT COMPANY ACT EXEMPTION AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES. ANY TRANSFER IN VIOLATION OF
THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO AND WILL
NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY
INSTRUCTIONS TO THE CONTRARY TO THE ISSUERS, THE TRUSTEE OR ANY INTERMEDIARY.
EACH TRANSFEROR OF THIS SECURITY WILL PROVIDE NOTICE OF THE TRANSFER
RESTRICTIONS SET FORTH HEREIN, IN THE INDENTURE AND IN THE UNIT AGREEMENT TO ITS
TRANSFEREE. IN ADDITION TO THE FOREGOING, THE ISSUERS MAINTAIN THE RIGHT TO
PURCHASE OR FORCE THE RESALE OF ANY SECURITIES PREVIOUSLY TRANSFERRED TO NON-
PERMITTED HOLDERS (AS DEFINED IN THE UNIT AGREEMENT) IN ACCORDANCE WITH AND
SUBJECT TO THE TERMS OF THE UNIT AGREEMENT."
Following the sale of the Units by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to the Issuers for any losses, damages or liabilities
suffered or incurred by the Issuers, including any losses, damages or
liabilities under the Securities Act, arising from or relating to any resale or
transfer of any Security by non-Affiliates of the Initial Purchasers.
SECTION 8. Indemnification.
----------------
(a) Indemnification of the Initial Purchaser. The Issuers, jointly and
----------------------------------------
severally, agree to indemnify and hold harmless the Initial Purchaser, its
directors, officers and employees, and each person, if any, who controls each
Initial Purchaser within the meaning of the Securities Act and the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to which the
Initial Purchaser or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Issuers), insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based (i) upon any
untrue statement or alleged untrue statement of a material fact contained in the
Offering Memorandum (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; or (ii) in whole or in part upon any failure of any Issuer
to perform its obligations hereunder or under law; or (iii) any act or failure
to act or any alleged act or failure to act by such Initial Purchaser in
connection with, or relating in any manner to, the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon any matter covered by clause
above; provided that the Issuers shall not be liable under this clause (iii) to
the extent that a court of competent jurisdiction shall have determined by a
final judgment that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Initial Purchaser through its gross negligence or willful misconduct;
and to reimburse each Initial Purchaser and each such controlling person for
reasonable expenses (including the reasonable fees and disbursements of counsel
chosen by the Banc of America Securities LLC) as such expenses are reasonably
incurred by such Initial Purchaser or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Issuers by the Initial Purchasers for use in the Offering Memorandum (or any
amendment or supplement thereto). The indemnity
17
agreement set forth in this Section 8 shall be in addition to any liabilities
that the Issuers may otherwise have.
(b) Indemnification of the Issuers, their Directors and Officers. Each
------------------------------
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Issuers and each of their respective directors and each person, if
any, who controls the Issuers within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which any Issuer or any such director, or controlling person may
become subject, under the Securities Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Initial Purchaser), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Offering Memorandum
(or any amendment or supplement thereto), in reliance upon and in conformity
with written information furnished to the Issuers by the Initial Purchasers
expressly for use therein; and to reimburse any such Issuer or any such director
or controlling person for any legal and other expenses reasonably incurred by
any such Issuer or any such director or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. The Issuers hereby acknowledge that the
only information that the Initial Purchasers have furnished to the Issuers
expressly for use in the Offering Memorandum (or any amendment or supplement
thereto) are the statements referenced on Schedule IV, which Schedule IV shall
----------- -----------
be attached to this Agreement on the date of the Offering Memorandum and shall
be part of this Agreement as if attached to this Agreement on the date hereof);
and each Initial Purchaser confirms that such statements are correct. The
indemnity agreement set forth in this Section 8 shall be in addition to any
liabilities that each Initial Purchaser may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after
--------------------------------------------------
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel),
18
approved by the indemnifying party (Banc of America Securities LLC in the case
of Section 8 and Section 9), representing the indemnified parties who are
parties to such action) or (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, in each of
which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall not be
-----------
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section 8
hereof, the indemnifying party agrees that (i) it shall be liable for any
settlement of any proceeding effected without its written consent if such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
SECTION 9. Contribution.
-------------
If the indemnification provided for in Section 8 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein in such proportion as is appropriate to reflect the relative benefits
received by the Issuers, on the one hand, and the Initial Purchasers, on the
other hand, from the offering of the Units pursuant to this Agreement or (ii) if
the allocation provided by clause above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause above but also the relative fault of the Issuers, on the
one hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative benefits
received by the Issuers, on the one hand, and the Initial Purchasers, on the
other hand, in connection with the offering of the Units pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Units pursuant to this Agreement (before
deducting expenses) received by the Issuers, and the total discount received by
the Initial Purchasers bear to the aggregate initial offering price of the
Units. The relative fault of the Issuers, on the one hand, and the Initial
Purchasers, on the other hand, shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact or any such inaccurate
or alleged inaccurate representation or warranty relates to information supplied
by the Issuers, on the one hand, or the Initial Purchasers, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8 with respect to notice of commencement of any action shall apply if a
claim for contribution is to be made under this Section 9;
19
provided, however, that no additional notice shall be required with respect to
any action for which notice has been given under Section 8 for purposes of
indemnification.
The Issuers and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Initial Purchasers were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, the Initial
Purchaser shall not be required to contribute any amount in excess of the
discount received by the Initial Purchaser in connection with the Units
distributed by it. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11 of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Initial Purchasers' obligations to contribute pursuant to this Section 9 are
several, and not joint, in proportion to their respective commitments as set
forth opposite their names on Schedule I. For purposes of this Section 9, each
----------
director, officer and employee of the Initial Purchaser and each person, if any,
who controls an Initial Purchaser within the meaning of the Securities Act and
the Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each director of an Issuer, and each person, if any, who controls
an Issuer with the meaning of the Securities Act and the Exchange Act shall have
the same rights to contribution as such Issuer.
SECTION 10. Termination of this Agreement. Prior to the Closing Date, this
-----------------------------
Agreement may be terminated by the Initial Purchasers by notice given to the
Issuers if at any time (i) trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or limited
or minimum or maximum prices shall have been generally established on any such
stock exchanges by the Commission or the NASD; (ii) a general banking moratorium
shall have been declared by any of federal, New York, Delaware or California
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United
States' or international political, financial or economic conditions, as in the
reasonable judgment of the Initial Purchasers is material and adverse and makes
it impracticable to market the Units in the manner and on the terms described in
the Offering Memorandum or to enforce contracts for the sale of securities; (iv)
in the reasonable judgment of the Initial Purchasers there shall have occurred
any Material Adverse Change; or the Issuer or their respective subsidiaries
shall have sustained a loss by strike, fire, flood, earthquake, accident or
other calamity of such character as in the reasonable judgment of the Initial
Purchasers may interfere materially with the conduct of the business and
operations of the Issuers or their respective subsidiaries regardless of whether
or not such loss shall have been insured. Any termination pursuant to this
Section 10 shall be without liability on the part of (A) the Issuers to any
Initial Purchaser, except that the Issuers shall be obligated to reimburse the
expenses of the Initial Purchasers pursuant to Section 4 and, in the case of
clause (iv) above, Section 6 hereof, (B) any Initial Purchaser to the Issuers,
or (c) any party hereto to any other party except that the provisions of Section
8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 11. Representations and Indemnities to Survive Delivery. The
---------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements of the Issuers, of their respective officers and of the several
Initial Purchasers set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Initial Purchaser, any Issuer or any of their respective partners,
officers or directors or any controlling person, as the case may be, and will
survive delivery of and payment for the Units sold hereunder and any termination
of this Agreement.
SECTION 12. Notices. All communications hereunder shall be in writing and
-------
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
20
If to the Initial Purchasers:
Banc of America Securities LLC
9 West 57/th/ Street, 31/st/ Floor
New York, NY 10019
Facsimile: 212-583-8324
Attention: High Yield Capital Markets
with a copy to:
Latham & Watkins
885 Third Avenue, Suite 1000
New York, NY 10022
Facsimile: 212-751-4864
Attention: Gregory Ezring, Esq.
If to any Issuer:
Nexstar Finance, L.L.C.
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
Facsimile: 570-586-8745
Attention: Shirley Green
with a copy to:
Kirkland & Ellis
153 East 53/rd/ Street
New York, NY 10022
Facsimile: (212) 446-4900
Attention: Joshua N. Korff, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto, including any substitute Initial Purchasers
pursuant to Section 16 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Units as such from the Initial Purchasers merely by reason of such
purchase.
SECTION 14. Partial Unenforceability. The invalidity or unenforceability of
------------------------
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 15. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND
------------------------
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
SECTION 16. Consent to Jurisdiction. Any legal suit, action or proceeding
-----------------------
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in
-------------------
21
the federal courts of the United States of America located in the City and
County of New York or the courts of the State of New York in each case located
in the City and County of New York (collectively, the "Specified Courts"), and
----------------
each party irrevocably submits to the non-exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court (a "Related Judgment"), as to which such jurisdiction is non-exclusive) of
----------------
such courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail to such party's address set forth above
shall be effective service of process for any suit, action or other proceeding
brought in any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such suit, action or other proceeding
brought in any such court has been brought in an inconvenient forum.
SECTION 17. Default of One or More of the Several Initial Purchasers. If any
--------------------------------------------------------
one or more of the several Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on the Closing
Date, and the aggregate number of Units that such defaulting Initial Purchaser
or Initial Purchasers agreed but failed or refused to purchase does not exceed
10% of the aggregate number of the Units to be purchased on such date, the other
Initial Purchasers shall be obligated, severally, in the proportions that the
number of Units set forth opposite their respective names on Schedule I bears to
----------
the aggregate number of Units set forth opposite the names of all such non-
defaulting Initial Purchasers, or in such other proportions as may be specified
by the Initial Purchasers with the consent of the non-defaulting Initial
Purchasers, to purchase the Units that such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase on such date. If any
one or more of the Initial Purchasers shall fail or refuse to purchase Units and
the aggregate number of Units with respect to which such default occurs exceeds
10% of the aggregate number of Units to be purchased on the Closing Date, and
arrangements satisfactory to the Initial Purchasers and the Issuers for the
purchase of such Units are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party to any other party
except that the provisions of Section 4, Section 8 and Section 9 shall at all
times be effective and shall survive such termination. In any such case, either
the Initial Purchasers or the Issuers shall have the right to postpone the
Closing Date, as the case may be, but in no event for longer than seven days in
order that the required changes, if any, to the Offering Memorandum or any other
documents or arrangements may be effected.
As used in this Agreement, the term "Initial Purchaser" shall be
deemed to include any person substituted for a defaulting Initial Purchaser
under this Section 10. Any action taken under this Section 16 shall not relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser under this Agreement.
SECTION 18. General Provisions. This Agreement constitutes the entire
------------------
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
SECTION 19. Supercedes Prior Purchase Agreement. This Agreement supercedes in
-----------------------------------
its entirety that certain Purchase Agreement dated May 1, 2001 entered into
among the parties (the "May 1 Agreement"). No party hereunder shall have any
---------------
obligations arising under the May 1 Agreement.
22
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Issuers the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
By: /s/ Shirley Green
-------------------------------------
Name:
Title:
Nexstar Broadcasting Group, L.L.C.
By: /s/ Shirley Green
-------------------------------------
Name:
Title:
Nexstar Equity Corp.
By: /s/ Shirley Green
------------------------------------
Name:
Title:
The foregoing Purchase Agreement is hereby confirmed and accepted
by the Initial Purchasers as of the date first above written.
Banc of America Securities LLC
Barclays Capital Inc.
By: Banc of America Securities LLC
By: /s/ Marc Birenbaum
---------------------------------
Name: Marc Birenbaum
Title: Vice President
SCHEDULE I
Number of Units
Initial Purchaser to be Purchased
Banc of America Securities LLC ........................... 33,289
Barclays Capital Inc...................................... 3,699
Total............................................ 36,988
I-1
SCHEDULE II
Subsidiaries
Nexstar Finance, L.L.C.
Nexstar Finance, Inc.
Entertainment Realty Corporation
Nexstar Broadcasting Group, Inc.
Nexstar Broadcasting of Abilene, L.L.C.
Nexstar Broadcasting of Beaumont/Port Arthur, L.L.C.
Nexstar Broadcasting of Champaign, L.L.C.
Nexstar Broadcasting of Erie, L.L.C.
Nexstar Broadcasting of Joplin, L.L.C.
Nexstar Broadcasting of Louisiana, L.L.C.
Nexstar Broadcasting of Midland-Odessa, L.L.C.
Nexstar Broadcasting of the Midwest, Inc.
Nexstar Broadcasting of Northeastern Pennsylvania, L.L.C.
Nexstar Broadcasting of Peoria, L.L.C.
Nexstar Broadcasting of Rochester, L.L.C.
Nexstar Broadcasting of Wichita Falls, L.L.C.
II-1
SCHEDULE III
Port Arthur, Texas
(Nexstar Broadcasting of Beaumont-Port Arthur, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ---------
TV Broadcast Station License KBTV-TV 08/01/2006
TV Intercity Relay KB-98129 08/01/2006
TV Pickup KD-4600 08/01/2006
TV Pickup KE-5101 08/01/2006
Auxiliary Remote Pickup KKX215 08/01/2006
TV Studio Transmitter Link KLA-89 08/01/2006
TV Pickup KT-2456 08/01/2006
TV Intercity Relay WLD-443 08/01/2006
TV Intercity Relay WPNG-520 08/01/2006
Wichita Falls, Texas
(Nexstar Broadcasting of Wichita Falls, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ---------
TV Broadcast Station License KFDX-TV 08/01/2006
Auxiliary Low Power System BLP00464 08/01/2006
TV Pickup KB-55270 08/01/2006
Auxiliary Remote Pickup KLB-725 08/01/2006
TV Pickup KJ-3525 08/01/2006
Midland, Texas
(Nexstar Broadcasting of Midland-Odessa, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ---------
TV Broadcast Station License KMID 08/01/2006
TV Translator Station License K12FM 08/01/2006
TV Pickup KB-96686 08/01/2006
TV Studio Transmitter Link KKR-61 08/01/2006
TV Studio Transmitter Link KLB-45 08/01/2006
TV Studio Transmitter Link WHG-362 08/01/2006
TV Intercity Relay WLE-628 08/01/2006
TV Intercity Relay WLE-644 08/01/2006
TV Intercity Relay WLF-217 08/01/2006
Weather Radar Station WPMY-327 03/25/2004
III-1
Abilene, Texas
(Nexstar Broadcasting of Abilene, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ---------
TV Broadcast Station License KTAB-TV 08/01/2006
Receive-Only Earth Station E8009 11/16/2004
Business Radio KA-51599 04/17/2004
TV Pickup KS-5717 08/01/2006
Business Radio WGA-708 04/17/2004
TV Studio Transmitter Link WGH-906 08/01/2006
Business Radio WZJ-613 04/17/2004
Texarkana, Texas
(Nexstar Broadcasting of Louisiana, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ---------
TV Broadcast Station License KTAL-TV 08/01/2006
Transmit-Receive Earth Station E940521 12/02/2004
Auxiliary Low Power Station BLQ-74 08/01/2006
TV Pickup KA-88839 08/01/2006
Auxiliary Remote Pickup KLB-589 08/01/2006
Auxiliary Remote Pickup KLB-590 08/01/2006
Auxiliary Remote Pickup KLB-591 08/01/2006
TV Studio Transmitter Link KLS-96 08/01/2006
TV Intercity Relay WHB-602 08/01/2006
TV Studio Transmitter Link WHB-603 08/01/2006
TV Studio Transmitter Link WHB-604 08/01/2006
TV Intercity Relay WLP-781 08/01/2006
TV Intercity Relay WLP-782 08/01/2006
Rochester, New York
(Nexstar Broadcasting of Rochester, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ---------
TV Broadcast Station License WROC 06/01/2007
Receive-Only Earth Station E940506 09/15/2004
Transmit/Receive Earth Station E000660 12/12/2010
TV Pickup KA-4851 06/01/2007
TV Intercity Relay KA-6058 06/01/2007
TV Studio Transmitter Link KEA-91 06/01/2007
TV Pickup KR-4704 06/01/2007
TV Pickup KR-4705 06/01/2007
Auxiliary Remote Pickup WHE-925 06/01/2007
Auxiliary Remote Pickup WHE-926 06/01/2007
III-2
Wilkes-Barre, Pennsylvania
(Nexstar Broadcasting of Northeastern Pennsylvania, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ---------
TV Broadcast Station License WBRE-TV 08/01/2007
TV Translator Station License W24BL 07/31/2007
TV Translator Station License W30AN 07/31/2007
TV Translator Station License W51BP 07/31/2007
TV Translator Station License W64AL 07/31/2007
Transmit-Only Earth Station License E910642 11/01/2001
TV Pickup KA-35201 08/01/2007
TV Pickup KA-35425 08/01/2007
TV Pickup KA-74870 08/01/2007
Business Radio KB-88735 06/26/2004
TV Pickup KC-62824 08/01/2007
Broadcast Auxiliary KF-5726 08/01/2007
R/P Base Mobile System KGU-973 08/01/2007
TV Studio Transmitter Link KGH-66 08/01/2007
TV Pickup KK-4138 08/01/2007
TV Pickup KL-2535 08/01/2007
TV Pickup KP-4407 08/01/2007
R/P Base Mobile System KQB-618 08/01/2007
TV Pickup KR-7688 08/01/2007
TV Pickup KR-7693 08/01/2007
TV Pickup KR-7771 08/01/2007
TV Pickup KS-2001 08/01/2007
TV Pickup KY-2899 08/01/2007
R/P Mobile KY-5608 08/01/2007
TV Studio Transmitter Link KZO-21 08/01/2007
TV Intercity Relay WFW-575 08/01/2007
TV Intercity Relay WGI-290 08/01/2007
TV Intercity Relay WHB-674 08/01/2007
TV Intercity Relay WLI-324 08/01/2007
TV Intercity Relay WLI-325 08/01/2007
TV Intercity Relay WLI-337 08/01/2007
Erie, Pennsylvania
(Nexstar Broadcasting of Erie, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ---------
TV Broadcast Station License WJET-TV 08/01/2007
Auxiliary TV Broadcast Pickup KC-26079 08/01/2007
TV Intercity Relay WPJE-618 08/01/2007
Weather Radar Station WPOZ-488 09/14/2004
R/P Base Mobile System WSM-744 08/01/2007
III-3
St. Joseph, Missouri
(Nexstar Broadcasting of the Midwest, Inc.)
Facility Type Call Sign Exp. Date
------------- --------- ----------
TV Broadcast Station License KQTV 02/01/2006
TV Pickup KC-26093 02/01/2006
R/P Automatic Relay KQB-577 02/01/2006
Joplin, Missouri
(Nexstar Broadcasting of Joplin, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ----------
TV Broadcast Station License KSNF 02/01/2006
TV Pickup KW-6078 02/01/2006
Business Radio WNKN-977 01/04/2003
Weather Radar Station WPMJ-419 08/12/2003
Terre Haute, Indiana
(Nexstar Broadcasting of the Midwest, Inc.)
Facility Type Call Sign Exp. Date
------------- --------- ----------
TV Broadcast Station License WTWO 08/01/2005
TV Pickup KC-26086 08/01/2005
R/P Base Mobile System KLH-391 08/01/2005
Weather Radar Station KVB-629 03/30/2004
Broadcast Auxiliary KW-4107 08/01/2005
Tv Pickup KW-4108 08/01/2005
Tv Intercity Relay WHF-306 08/01/2005
Tv Intercity Relay WMU-968 08/01/2005
Weather Radar Station WPPH-816 01/06/2005
Springfield, Illinois
(Nexstar Broadcasting of Champaign, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ----------
Tv Broadcast Station License WCFN 12/01/2005
Tv Studio Transmitter Link WLD-973 12/01/2005
III-4
Champaign, Illinois
(Nexstar Broadcasting of Champaign, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ----------
TV Broadcast Station License WCIA 12/01/2005
Auxiliary Low Power Station BLP00192 12/01/2005
Auxiliary Low Power Station BLP00322 12/01/2005
Auxiliary Low Power Station BLP00544 12/01/2005
Auxiliary Low Power Station BLP00883 12/01/2005
Auxiliary Low Power Station BLP00919 12/01/2005
Auxiliary Low Power Station BLP01124 12/01/2005
Auxiliary Low Power Station BLP01288 12/01/2005
TV Pickup KA-95317 12/01/2005
TV Pickup KC-5875 12/01/2005
Auxiliary Remote Pickup KSD-920 12/01/2005
Auxiliary Remote Pickup KSD-921 12/01/2005
TV Studio Transmitter Link KSG-35 12/01/2005
TN Intercity Relay KSI-74 12/01/2005
TV Intercity Relay KSI-75 12/01/2005
TV Pickup KW-6073 12/01/2005
TV Pickup KW-6074 12/01/2005
TV Intercity Relay WBJ-983 12/01/2005
TV Intercity Relay WBJ-986 12/01/2005
TV Intercity Relay WBJ-987 12/01/2005
TV Intercity Relay WBJ-988 12/01/2005
TV Intercity Relay WLG-233 12/01/2005
TV Intercity Relay WPNL-408 12/01/2005
Peoria, Illinois
(Nexstar Broadcasting of Peoria, L.L.C.)
Facility Type Call Sign Exp. Date
------------- --------- ----------
TV Broadcast Station License WMBD-TV 12/01/2005
TV Pickup KA-88843 12/01/2005
TV Pickup KA-88844 12/01/2005
Remote Pickup Mobile System KS-2010 12/01/2005
TV Intercity Relay KSI-71 12/01/2005
TV Intercity Relay KSI-72 12/01/2005
TV Intercity Relay KSI-73 12/01/2005
TV Studio Transmitter Link KSK-48 12/01/2005
TV Intercity Relay WBJ-984 12/01/2005
TV Intercity Relay WBJ-985 12/01/2005
TV Intercity Relay WLG-752 12/01/2005
TV Intercity Relay WMV-276 12/01/2005
__________________________
III-5
Wichita Falls, Texas
(Mission Broadcasting of Wichita Falls, Inc.)
Facility Type Call Sign Exp. Date
------------- --------- ----------
TV Broadcast Station License KJTL 08/01/2006
LPTV Broadcast Station License KJBO-LP 08/01/2006
TV Translator License K47DK 06/01/2006
TV Translator License K53DS 06/01/2006
TV Studio Transmitter Link WLD-942 08/01/2006
TV Studio Transmitter Link WLJ-748 08/01/2006
Scranton, Pennsylvania
(Bastet Broadcasting, Inc.)
Facility Type Call Sign Exp. Date
------------- --------- ----------
TV Broadcast Station License WYOU 08/01/2007
TV Translator License W19AR 08/01/2007
TV Translator License W26AT 08/01/2007
TV Translator License W54AV 08/01/2007
TV Translator License W55AG 08/01/2007
TV Translator License W60AH 08/01/2007
TV Translator License W66AI 08/01/2007
Auxiliary Low Power BLQ-375 08/01/2007
TV Pickup KA-35173 08/01/2007
TV Pickup KA-35174 08/01/2007
TV Pickup KA-35184 08/01/2007
TV Pickup KA-35185 08/01/2007
Auxiliary Remote Pickup KB-97161 08/01/2007
TV Studio Transmitter Link KGH-69 08/01/2007
TV Intercity Relay KGI-49 08/01/2007
TV Intercity Relay KHC-88 08/01/2007
TV Pickup KO-9753 08/01/2007
Auxiliary Remote Pickup KPH-450 08/01/2007
Auxiliary Remote Pickup KPJ-719 08/01/2007
Auxiliary Remote Pickup KQB-642 08/01/2007
Auxiliary Remote Pickup KQB-643 08/01/2007
TV Intercity Relay WFD-523 08/01/2007
TV Studio Transmitter Link WLL-212 08/01/2007
TV Intercity Relay WLO-276 08/01/2007
TV Intercity Relay WLO-277 08/01/2007
TV Studio Transmitter Link WPNF-884 08/01/2007
Erie, Pennsylvania
(Bastet Broadcasting, Inc.)
Facility Type Call Sign Exp. Date
------------- --------- ----------
TV Broadcast Station License WFXP 08/01/2007
III-6
TV Studio Transmitter Link WLD-767 08/01/2007
III-7
SCHEDULE IV
Initial Purchasers Information
IV-1
SCHEDULE 1(ee)
Nexstar Equity Corp. intends in the ordinary course to obtain customary
directors' and officers' insurance coverage.
Schedule 1(ee)
EXHIBIT A
A-1
EXHIBIT B
B-1
ATTACHMENT A
Attachment-1
EXECUTION COPY
EXHIBIT 10.2
================================================================================
UNIT AGREEMENT
among
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
Nexstar Equity Corp.
and
Nexstar Broadcasting Group, L.L.C.
United States Trust Company Of New York
as Unit Agent and Transfer Agent
__________________________
May 17, 2001
__________________________
================================================================================
UNIT AGREEMENT dated as of May 17, 2001 among Nexstar Finance
Holdings, L.L.C., a Delaware corporation ("Nexstar Holdings"), Nexstar Finance
Holdings, Inc., a Delaware corporation ("Holdings Inc." and, together with
Nexstar Holdings, the "Note Issuers"), Nexstar Equity Corp., a Delaware
corporation ("Equity Corp. and, together with the Note Issuers, the "Issuers"),
Nexstar Broadcasting Group, L.L.C., a Delaware corporation (the "Note
Guarantor"), and United States Trust Company of New York, a New York banking
corporation ("U.S. Trust"), as Unit Agent and Transfer Agent.
WHEREAS, the Note Issuers propose to issue their 16% Senior Discount
Notes due 2009 (the "Notes") pursuant to an Indenture dated as of May 17, 2001
(the "Indenture") among the Note Issuers, the Note Guarantor, Bastet
Broadcasting, Inc., a Delaware corporation ("Bastet Broadcasting"), Mission
Broadcasting of Wichita Falls, Inc., a Delaware corporation ("Mission
Broadcasting"), and U.S. Trust, as Trustee (the "Trustee"), and Equity Corp.
proposes to issue 36,988 shares (each, a "Common Share" and, collectively, the
"Common Shares") of its Class B common stock, par value $0.01 per share. The
Notes and the Common Shares will initially be represented by units (the
"Units"), with each Unit consisting of $1,000 aggregate principal amount at
maturity of Notes and one Common Share. The authenticating agent and registrar
for the Common Shares shall be the Secretary of Equity Corp., except as
otherwise provided below.
WHEREAS, to induce Banc of America Securities LLC and Barclays Capital
Inc. (together, the "Initial Purchasers") to purchase the Units, the Equity
Corp. and Nexstar Broadcasting Group, L.L.C. ("Nexstar") have entered into an
Investor Rights Agreement, dated as of May 17, 2001 (the "Investor Rights
Agreement"), relating to certain rights and privileges pertaining to the Common
Shares.
WHEREAS, the Note Issuers, the Note Guarantor and Equity Corp. desire
to appoint U.S. Trust to act as their agent for the purpose of issuing
certificates ("Unit Certificates") representing the Units and for the
registration of transfers and exchanges thereof. U.S. Trust, in such capacity,
is referred to herein as the "Unit Agent."
WHEREAS, the Units will be exchanged for the Notes and the Common
Shares represented thereby upon the earliest to occur of: (i) 180 days after
the closing of the offering of the Units, (ii) in the event the Note Issuers are
required to make a Change of Control Offer pursuant to the terms of the
Indenture, the date on which notice of the offer is mailed to the holders of
Notes, (iii) the date on which a registration statement with respect to the
Notes or a registered exchange offer for the Notes is declared effective under
the Securities Act, (iv) immediately prior to the redemption of any Notes with
the proceeds of an Equity Offering (as defined in the Indenture); (v) the
consummation of an Initial Public Offering by Nexstar Broadcasting Group, L.L.C.
or any successor entity; or (vi) such earlier date as determined by Banc of
America Securities LLC in its sole discretion. The earliest date on which an
event listed in the preceding sentence occurs is referred to as the "Separation
Date."
WHEREAS, Equity Corp. desires to appoint U.S. Trust to act as their
agent for the purpose of issuing certificates ("Share Certificates")
representing the Common Shares after the Separation Date and for the
registration of transfers and exchanges thereof. U.S. Trust, in such capacity,
is referred to herein as the "Transfer Agent."
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows (all
capitalized terms not defined herein are as defined in the Indenture):
Section 1. Appointment of Unit Agent and Transfer Agent.
--------------------------------------------
(a) The Issuers and the Note Guarantor hereby appoint the Unit
Agent to act as agent for the Issuers and the Note Guarantor in accordance with
and subject to the terms and conditions set forth in this Agreement, and the
Unit Agent hereby accepts such appointment.
(b) The Note Issuers hereby appoint the Unit Agent as
Authenticating Agent and Registrar (as such terms are defined in the Indenture)
for the Notes for so long as the Notes are represented by the Units. In its
capacity as Authenticating Agent and Registrar, the Unit Agent shall have the
rights and obligations provided for such capacities in the Indenture.
(c) Equity Corp., in its capacity as issuer of the Common Shares,
hereby appoints (i) the Unit Agent as transfer agent and registrar for the
Common Shares for so long as the Common Shares are represented by the Units, and
the Unit Agent hereby accepts such appointment, and (ii) the Transfer Agent as
transfer agent and registrar for the Common Shares after the Separation Date,
and the Transfer Agent hereby accepts such appointment.
Section 2. Definitions.
-----------
"144A Global Security" means, prior to the Separation Date, the 144A
Global Unit, and on or after the Separation Date, the 144A Global Share.
"144A Global Share" means a global Common Share bearing the Global
Security Legend and the Private Placement Legend and deposited with or on behalf
of, and registered in the name of, the Depositary or its nominee that will be
issued in reliance on Rule 144A.
"144A Global Unit" means a global unit in the form of Exhibit A hereto
---------
bearing the Global Unit Legend and the Private Placement Legend and deposited
with or on behalf of, and registered in the name of, the Depositary or its
nominee that will be issued in a denomination equal to the outstanding number of
the Units sold in reliance on Rule 144A.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with") as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting stock of a person shall be
deemed to be control.
"Agent" means, prior to the Separation Date, the Unit Agent, and on or
after the Separation Date, the Transfer Agent.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Security, the rules and
procedures of the Depositary that apply to such transfer or exchange.
"Definitive Security" means, prior to the Separation Date, a
Definitive Unit and, on or after the Separation Date, a Definitive Share.
2
"Definitive Share" means a certificated Common Share registered in the
name of the Holder thereof and issued in accordance with Section 3.6 hereof;
such Common Share shall not bear the Global Security Legend and shall not have
the "Schedule of Exchanges of Interests in the Global Security" attached
thereto.
"Definitive Unit" means a certificated Unit registered in the name of
the Holder thereof and issued in accordance with Section 3.6 hereof,
substantially in the form of Exhibit A hereto except that such Unit shall not
---------
bear the Global Security Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Security" attached thereto.
"Depositary" means, with respect to the Units or Common Shares
issuable or issued in whole or in part in global form, the Person specified in
Section 3.3 hereof as the Depositary with respect to the Units or Common Shares,
as applicable, and any and all successors thereto appointed as depositary
hereunder and having become such pursuant to the applicable provision of this
Unit Agreement.
"Exchange Act" means the Securities Exchange Act of 1034, as amended.
"Global Securities" means, prior to the Separation Date, the Global
Units and, on or after the Separation Date, the Global Shares.
"Global Shares" means, individually and collectively, each of the
Restricted Global Shares issued in accordance with Section 3.1 hereof.
"Global Units" means, individually and collectively, each of the
Restricted Global Units, in the form of Exhibit A hereto issued in accordance
---------
with Section 3.1 hereof.
"Global Security Legend" means the legend set forth in Section
3.6(f)(ii), which is required to be placed on all Global Securities issued under
this Unit Agreement.
"Holder" means a Person in whose name a Security is registered.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Security through a Participant.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of an
Issuer (or, if the context requires, the Note Guarantor) by two Officers of such
Issuer (or the Note Guarantor, if applicable), one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of such Issuer (or the Note Guarantor), that meets
the requirements of Section 12.04 and Section 12.05 of the Indenture.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Unit Agent, that meets the requirements of Section
12.04 and Section 12.05 of the Indenture. When such opinion is issued in
connection with the Units, the counsel may be an employee of or counsel to the
Issuers and the Note Guarantor, or the Unit Agent. When such opinion is issued
in connection with the Common Shares, the counsel may be an employee of or
counsel to Equity Corp. or the Transfer Agent.
3
"Participant" means, with respect to the Depositary, a Person who has
an account with the Depositary.
"Private Placement Legend" means the legend set forth in Section
3.6(f)(i) to be placed on all Securities issued under this Unit Agreement except
where otherwise permitted by the provisions of this Unit Agreement.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Restricted Definitive Security" means a Definitive Security bearing
the Private Placement Legend.
"Restricted Global Security" means a Global Security bearing the
Private Placement Legend.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Security" means, prior to the Separation Date, a Unit and, on or
after the Separation Date, a Common Share.
"Share Custodian" means the Transfer Agent, as custodian with respect
to the Common Shares in global form, or any successor entity thereto.
"Transfer Agent" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Unit Agreement
and thereafter means the successor serving hereunder.
"Unit Agent" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Unit Agreement
and thereafter means the successor serving hereunder.
"Unit Custodian" means the Unit Agent, as custodian with respect to
the Units in global form, or any successor entity thereto.
Section 3. Securities.
----------
Section 3.1. Form and Dating.
---------------
(a) General.
(i) Units. The Units and the Unit Agent's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
---------
Units may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Unit shall be dated the date of its
authentication.
The terms and provisions contained in the Units shall
constitute, and are hereby expressly made, a part of this Unit Agreement,
and the Issuers, the Note Guarantor and the Unit Agent, by their execution
and delivery of this Unit Agreement, expressly agree to such terms and
4
provisions and to be bound thereby. However, to the extent any provision of
any Unit conflicts with the express provisions of this Unit Agreement, the
provisions of this Unit Agreement shall govern and be controlling.
(ii) Common Shares. The certificates evidencing the Common Shares
shall be substantially in the form prescribed by the certificate of
incorporation of Equity Corp. (the "Share Certificates"). The Share
Certificates may have notations, legends or endorsements required by law,
stock exchange rule or usage. Each Share Certificate shall be dated the
date of the countersignature.
(b) Global Units. Units issued in global form shall be substantially
in the form of Exhibit A attached hereto (including the Global Units Legend
---------
thereon and the "Schedule of Exchanges of Interests in the Global Unit" attached
thereto). Units issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Unit Legend thereon and
---------
without the "Schedule of Exchanges of Interests in the Global Unit" attached
thereto). Each Global Unit shall represent such of the outstanding Units as
shall be specified therein and each shall provide that it shall represent the
outstanding Units from time to time endorsed thereon and that the outstanding
Units represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Unit to reflect the amount of any increase or decrease in the aggregate amount
of outstanding Units represented thereby shall be made by the Unit Agent or the
Unit Custodian, at the direction of the Unit Agent, in accordance with
instructions given by the Holder thereof as required by Section 3.6 hereof.
(c) Global Shares. Common Shares issued in global form shall bear the
Global Security Legend and the Private Placement Legend; Common Shares issued in
definitive form shall bear the Private Placement Legend. Each Global Share shall
represent such of the outstanding Common Shares as shall be specified therein
and each shall provide that it shall represent the outstanding Common Shares
from time to time endorsed thereon and that the outstanding Common Shares
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges. Any endorsement of a Global Share to reflect
the amount of any increase or decrease in the aggregate amount of outstanding
Common Shares represented thereby shall be made by the Transfer Agent or the
Share Custodian, at the direction of the Transfer Agent, in accordance with
instructions given by the Holder thereof as required by Section 3.6 hereof.
Section 3.2. Execution and Authentication.
----------------------------
(a) Units. One Officer of each Issuer shall sign the Units for the
Issuers by manual or facsimile signature.
If any Officer whose signature is on a Unit no longer holds that
office at the time a Unit is authenticated, the Unit shall nevertheless be
valid.
A Unit shall not be valid until authenticated by the manual signature
of the Unit Agent and such signature shall be conclusive evidence that the Unit
has been authenticated under this Unit Agreement.
The Unit Agent shall, upon a written order of each of the Issuers
signed by one Officer of each Issuer (a "Unit Authentication Order"),
authenticate Units for original issue up to the number
5
stated in the Units. The aggregate number of Units outstanding at any time may
not exceed such amount except as provided in Section 3.7 hereof.
The Unit Agent may appoint an authenticating agent acceptable to the
Issuers to authenticate Units. An authenticating agent may authenticate Units
whenever the Unit Agent may do so. Each reference in this Unit Agreement to
authentication by the Unit Agent includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Issuers.
(b) Common Shares. An Officer of Equity Corp. shall sign the Share
Certificates for Equity Corp. by manual or facsimile signature.
If the Officer whose signature is on a Share Certificate no longer
holds that office at the time a Share Certificate is countersigned, the Share
Certificate shall nevertheless be valid.
A Share Certificate shall not be valid until countersigned by the
manual signature of the Transfer Agent, and such signature shall be conclusive
evidence that the Common Shares represented by such Share Certificate has been
properly issued under this Unit Agreement.
The Transfer Agent shall, upon a written order of Equity Corp. signed
by an Officer (a "Share Countersignature Order"), countersign Share Certificates
for original issue of Common Shares up to the number stated in the preamble
hereto.
The Transfer Agent may appoint an authenticating agent acceptable to
Equity Corp. to countersign Share Certificates. An authenticating agent may
countersign Share Certificates whenever the Transfer Agent may do so. Each
reference in this Unit Agreement to a countersignature by the Transfer Agent
includes a countersignature by such agent. An authenticating agent has the same
rights as the Transfer Agent to deal with Holders or an Affiliate of Equity
Corp.
Section 3.3. Unit Registrar and Unit Paying Agent; Share Registrar.
-----------------------------------------------------
(a) Units. The Issuers shall maintain an office or agency where Units
may be presented for registration of transfer or for exchange (the "Unit
Registrar") and an office or agency where Units may be presented for payment
(the "Unit Paying Agent"). The Unit Registrar shall keep a register of the Units
and of their transfer and exchange. The Issuers may appoint one or more co-
registrars and one or more additional paying agents. The term "Unit Registrar"
includes any co-registrar and the term "Unit Paying Agent" includes any
additional paying agent. The Issuers may change any Unit Paying Agent or Unit
Registrar without notice to any Holder. The Issuers shall notify the Unit Agent
in writing of the name and address of any agent not a party to this Unit
Agreement. If the Issuers fail to appoint or maintain another entity as Unit
Registrar or Unit Paying Agent, the Unit Agent shall act as such. The Issuers or
any of their Subsidiaries (as defined in the Indenture) may act as Unit Paying
Agent or Unit Registrar. The Issuers initially appoint The Depository Trust
Company ("DTC") to act as Depositary with respect to the Global Units.
The Issuers initially appoint the Unit Agent to act as the Unit
Registrar and Unit Paying Agent and to act as Unit Custodian with respect to the
Global Units.
(b) Common Shares. Equity Corp. shall maintain an office or agency
where Common Shares may be presented for registration of transfer or for
exchange (the "Share Registrar"). The Share Registrar shall keep a register of
the Common Shares and of their transfer and exchange.
6
Equity Corp. may appoint one or more co-registrars. The term "Share Registrar"
includes any co-registrar. Equity Corp. may change any Share Registrar without
notice to any Holder. The Issuers shall notify the Transfer Agent in writing of
the name and address of any agent not a party to this Unit Agreement. If Equity
Corp. fails to appoint or maintain another entity as Share Registrar, the
Transfer Agent shall act as such. Equity Corp. may act as Share Registrar.
Equity Corp. initially appoints DTC to act as Depositary with respect to the
Global Shares.
Equity Corp. initially appoints the Transfer Agent to act as the Share
Registrar and to act as Share Custodian with respect to the Global Shares.
(c) As used in this Unit Agreement, "Registrar" means, if prior to
the Separation Date, the Unit Registrar and, if on or after the Separation Date,
the Share Registrar.
Section 3.4. Unit Paying Agent to Hold Money in Trust. The Issuers
----------------------------------------
shall require each Unit Paying Agent other than the Unit Agent to agree in
writing that the Unit Paying Agent will hold in trust for the benefit of Holders
or the Unit Agent all money held by the Unit Paying Agent for the payment of
principal, premium or Liquidated Damages (as defined in the Registration Rights
Agreement), if any, or interest on the Notes and will notify the Unit Agent in
writing of any default by the Issuers in making any such payment. While any such
default continues, the Unit Agent may require a Unit Paying Agent to pay all
money held by it to the Unit Agent. The Issuers at any time may require a Unit
Paying Agent to pay all money held by it to the Unit Agent. Upon payment over to
the Unit Agent, the Unit Paying Agent (if other than the Issuers or a
Subsidiary) shall have no further liability for the money. If the Issuers or a
Subsidiary acts as Unit Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Unit Paying
Agent. Upon any bankruptcy or reorganization proceedings relating to the
Issuers, the Unit Agent shall serve as Unit Paying Agent for the Units.
Section 3.5. Holder Lists.
------------
(a) Units. The Unit Agent shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders of Units and shall otherwise comply with TIA (S)
312(a). If the Unit Agent is not the Unit Registrar, the Issuers shall furnish
to the Unit Agent at least seven Business Days before each interest payment date
and at such other times as the Unit Agent may request in writing, a list in such
form and as of such date as the Unit Agent may reasonably require of the names
and addresses of the Holders of Units and the Issuers shall otherwise comply
with TIA (S) 312(a).
(b) Common Shares. On and after the Separation Date, the Transfer
Agent shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of all Holders of Common
Shares. If the Transfer Agent is not the Share Registrar, Equity Corp. shall
promptly furnish to the Transfer Agent at such times as the Transfer Agent may
request in writing, a list in such form and as of such date as the Transfer
Agent may reasonably require of the names and addresses of the Holders.
Section 3.6. Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Global Securities. A Global Security may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such
7
nominee to a successor Depositary or a nominee of such successor Depositary. All
Global Securities will be exchanged by the Issuers or Equity Corp., as
applicable, for Definitive Securities if (i) the Issuers or Equity Corp.
deliver(s) to the Agent notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Issuers or Equity Corp., as applicable,
within 120 days after the date of such notice from the Depositary or (ii) the
Issuers (or Equity Corp.) in their (or its) sole discretion determines that the
Global Securities (in whole but not in part) should be exchanged for Definitive
Securities and delivers a written notice to such effect to the Agent. Upon the
occurrence of any of the preceding events in (i) or (ii) above, Definitive
Securities shall be issued in such names as the Depositary shall instruct the
Agent in writing. Global Securities also may be exchanged or replaced, in whole
or in part, as provided in Sections 3.7 and 3.10 hereof. Every Security
authenticated (or countersigned) and delivered in exchange for, or in lieu of, a
Global Security or any portion thereof, pursuant to this Section 3.6 or Section
3.7 or 3.10 hereof, shall be authenticated (or countersigned) and delivered in
the form of, and shall be, a Global Security. A Global Security may not be
exchanged for another Security other than as provided in this Section 3.6(a),
however, beneficial interests in a Global Security may be transferred and
exchanged as provided in Section 3.6(b) or (c) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Securities. The transfer and exchange of beneficial interests in the Global
Securities shall be effected through the Depositary, in accordance with the
provisions of this Unit Agreement and the Applicable Procedures. Beneficial
interests in the Restricted Global Securities shall be subject to restrictions
on transfer comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Securities also
shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) Transfer of Beneficial Interests in the Same Global
Security. Beneficial interests in any Restricted Global Security may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Security in accordance
with the transfer restrictions set forth in the Private Placement Legend.
No written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 3.6(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Securities. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 3.6(b)(i) above, the
transferor of such beneficial interest must deliver to the Registrar either
(A) (1) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing
the Depositary to credit or cause to be credited a beneficial interest in
another Global Security in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Security in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Security shall be registered to effect the
transfer or exchange referred to in (1) above. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial interests in Global
Securities contained in this Unit Agreement and the Securities or otherwise
applicable provisions under the Securities Act applicable, the
8
Agent shall adjust the number amount of the relevant Global Security or
Global Securities pursuant to Section 3.6(g) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Security. A beneficial interest in any Restricted Global Security
may be transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Security if the transfer
complies with the requirements of Section 3.6(b)(ii) above and the
Registrar receives from the transferor a certificate in the form of Exhibit
-------
B hereto, including the certifications in item (1) thereof.
-
(c) Transfer or Exchange of Beneficial Interests in Restricted Global
Securities to Restricted Definitive Securities. If any holder of a beneficial
interest in a Restricted Global Security proposes to exchange such beneficial
interest for a Restricted Definitive Security or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Restricted
Definitive Security, then, upon receipt by the Registrar of the following
documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Security proposes to exchange such beneficial
interest for a Restricted Definitive Security, a certificate from such
holder in the form of Exhibit C hereto, including the certifications
---------
in item (1)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
---------
certifications in item (1) thereof; or
(C) if such beneficial interest is being transferred to
the Issuers or any of their Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
---------
(2)(a) thereof.
the Agent shall cause the aggregate number of the applicable Global
Security to be reduced accordingly pursuant to Section 3.6(g) hereof, and
the Issuers shall execute and, upon receipt of a Unit Authentication Order,
the Unit Agent shall authenticate (or Equity Corp, shall execute and, upon
receipt of a Share Countersignature Order, the Transfer Agent shall
countersign) and deliver to the Person designated in the instructions a
Definitive Security in the appropriate number. Any Definitive Security
issued in exchange for a beneficial interest in a Restricted Global
Security pursuant to this Section 3.6(c) shall be registered in such name
or names and in such authorized denomination or denominations as the holder
of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Agent shall deliver such Definitive Securities to the
Persons in whose names such Securities are so registered. Any Definitive
Security issued in exchange for a beneficial interest in a Restricted
Global Security pursuant to this Section 3.6(c) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer
contained therein.
(d) Transfer and Exchange of Restricted Definitive Securities to
Beneficial Interests in Restricted Global Securities. If any Holder of a
Restricted Definitive Security proposes to exchange such Security for a
beneficial interest in a Restricted Global Security or to transfer such
Restricted Definitive Securities to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Security, then, upon
receipt by the Registrar of the following documentation:
9
(A) if the Holder of such Restricted Definitive Security
proposes to exchange such Security for a beneficial interest in a
Restricted Global Security, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in item (1)(b)
---------
thereof;
(B) if such Restricted Definitive Security is being
transferred to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
---------
including the certifications in item (1) thereof; or
(C) if such Restricted Definitive Security is being
transferred to the Issuers or any of its Subsidiaries, a certificate
to the effect set forth in Exhibit B hereto, including the
---------
certifications in item (2)(a) thereof.
the Agent shall cancel the Restricted Definitive Security, increase or
cause to be increased the number of the appropriate Restricted Global
Security.
(e) Transfer and Exchange of Restricted Definitive Securities to
Restricted Definitive Securities. Upon request by a Holder of Definitive
Securities and such Holder's compliance with the provisions of this Section
3.6(e), the Registrar shall register the transfer or exchange of Definitive
Securities. Prior to such registration of transfer or exchange, the requesting
Holder shall present or surrender to the Registrar the Definitive Securities
duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by his attorney,
duly authorized in writing. In addition, the requesting Holder shall provide any
additional certifications, documents and information, as applicable, required
pursuant to the following provisions of this Section 3.6(e).
Any Restricted Definitive Security may be transferred to
and registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Security if the Registrar receives from the
transferor a certificate in the form of Exhibit B hereto, including the
---------
certifications in item (1) thereof.
(f) Legends. The following legends shall appear on the face of all
Global Securities and Definitive Securities issued under this Unit Agreement
unless specifically stated otherwise in the applicable provisions of this Unit
Agreement.
(i) Private Placement Legend. Each Global Security and each
Definitive Security (and all Securities issued in exchange therefor or
substitution thereof) shall bear the following legend, and, with respect to
the Units, the Issuers agree and, with respect to the Common Shares, Equity
Corp. agrees not to remove such legend while the Securities are
outstanding:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY
ACT") OR THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. THE
HOLDER HEREOF, BY PURCHASING THE SECURITIES IN RESPECT OF WHICH THIS
SECURITY HAS BEEN ISSUED, AGREES FOR THE BENEFIT OF THE ISSUER[S] THAT
THE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (A) TO A PERSON WHOM THE
10
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE
SECURITIES ACT, [IN A PRINCIPAL AMOUNT OF NOT LESS THAN $250,000]/[IN
AN AGGREGATE NUMBER OF SHARES OF AT LEAST 250 SHARES] FOR THE
PURCHASER AND FOR EACH ACCOUNT FOR WHICH IT IS ACTING, TO A PURCHASER
AND, AS APPLICABLE, EACH ACCOUNT FOR WHICH SUCH PURCHASER IS ACTING,
THAT (1) IS A QUALIFIED PURCHASER WITHIN THE MEANING OF SECTION
3(C)(7) OF THE INVESTMENT COMPANY ACT, (2) WAS NOT FORMED FOR THE
PURPOSE OF INVESTING IN [ANY]/[THE] ISSUER (EXCEPT WHEN EACH
BENEFICIAL OWNER OF THE PURCHASER AND EACH SUCH ACCOUNT IS A QUALIFIED
PURCHASER), (3) HAS RECEIVED THE NECESSARY CONSENT FROM ITS BENEFICIAL
OWNERS WHEN THE PURCHASER OR SUCH ACCOUNT IS A PRIVATE INVESTMENT
COMPANY FORMED BEFORE APRIL 30, 1996, (4) IS NOT A BROKER-DEALER THAT
OWNS AND INVESTS ON A DISCRETIONARY BASIS LESS THAN $25,000,000 IN
SECURITIES OF UNAFFILIATED ISSUERS AND (5) IS NOT A PENSION, PROFIT
SHARING OR OTHER RETIREMENT TRUST FUND OR PLAN IN WHICH THE PARTNERS,
BENEFICIARIES OR PARTICIPANTS, AS APPLICABLE, MAY DESIGNATE THE
PARTICULAR INVESTMENTS TO BE MADE, AND IN A TRANSACTION THAT MAY BE
EFFECTED WITHOUT LOSS OF ANY APPLICABLE INVESTMENT COMPANY ACT
EXEMPTION AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES. ANY TRANSFER IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO AND
WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE,
NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER[S], THE
[UNIT]/[TRANSFER] AGENT OR ANY INTERMEDIARY. EACH TRANSFEROR OF THIS
SECURITY WILL PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS SET FORTH
HEREIN AND IN THE UNIT AGREEMENT TO ITS TRANSFEREE. IN ADDITION TO THE
FOREGOING, THE ISSUER[S] MAINTAIN[S] THE RIGHT TO PURCHASE OR FORCE
THE RESALE OF ANY SECURITIES PREVIOUSLY TRANSFERRED TO NON-PERMITTED
HOLDERS (AS DEFINED IN THE UNIT AGREEMENT) IN ACCORDANCE WITH AND
SUBJECT TO THE TERMS OF THE UNIT AGREEMENT.
THIS SECURITY MAY NOT BE OFFERED OR SOLD UNLESS: (1) THE
TRANSFEREE REPRESENTS THAT IT IS A "QUALIFIED PURCHASER" (AS DEFINED
IN 2(A)(51)(A) UNDER THE INVESTMENT COMPANY ACT, AS AMENDED); (2) THE
TRANSFEROR REPRESENTS THAT PRIOR TO SUCH TRANSFER, THE TRANSFEROR HAS
PROVIDED TO THE TRANSFEREE NOTICE OF THE TRANSFER RESTRICTIONS
APPLICABLE TO THIS SECURITY; (3) BOTH THE TRANSFEROR AND THE
TRANSFEREE ACKNOWLEDGE THAT THE ISSUER[S] MAY
11
REFUSE TO HONOR THE TRANSFER OF THE SECURITY IF IT DETERMINES IN ITS
SOLE DISCRETION THAT THE TRANSFEREE IS NOT A QUALIFIED PURCHASER; AND
(4) THE TRANSFEREE ACKNOWLEDGES THAT THE ISSUER[S] [HAVE]/[HAS] THE
RIGHT TO FORCE THE REDEMPTION OR RESALE OF THE SECURITY HELD BY THE
TRANSFEREE IF IT DETERMINES IN ITS SOLE DISCRETION THAT THE TRANSFEREE
IS NOT A QUALIFIED PURCHASER."
(ii) Global Security Legend. Each Global Security shall bear a
legend in substantially the following form:
"THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN
THE UNIT AGREEMENT GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY
FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE
[UNIT]/[TRANSFER] AGENT MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 3.6 OF THE UNIT AGREEMENT, (II) THIS
GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
SECTION 3.6(A) OF THE UNIT AGREEMENT, (III) THIS GLOBAL SECURITY MAY
BE DELIVERED TO THE [UNIT]/[TRANSFER] AGENT FOR CANCELLATION PURSUANT
TO SECTION 3.11 OF THE UNIT AGREEMENT AND (IV) THIS GLOBAL SECURITY
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE ISSUER[S]."
(iii) Original Issue Discount Legend. Each Global Unit and each
Definitive Unit (and all Notes issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form:
"FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING OFFERED WITH
ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT AT MATURITY
OF THIS SECURITY, THE ISSUE PRICE ALLOCATED TO THE UNIT IS $540.73,
THE ISSUE PRICE ALLOCATED TO THE NOTE IS 506.75, THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT ALLOCATED TO THE NOTE IS $493.25, THE ISSUE
DATE IS MAY 17, 2001 AND THE YIELD TO MATURITY IS 16% PER ANNUM."
(g) Cancellation and/or Adjustment of Global Securities. At such time
as all beneficial interests in a particular Global Security have been exchanged
for Definitive Securities or a particular Global Security has been redeemed,
repurchased or canceled in whole and not in part, each such Global Security
shall be returned to or retained and canceled by the Agent in accordance with
Section 3.11 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Security or for Definitive Securities, the aggregate number of Securities
represented by such Global Security shall be reduced accordingly and an
endorsement shall be made on
12
such Global Security by the Agent, or by the Depositary at the direction of the
Agent to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Security, such other Global
Security shall be increased accordingly and an endorsement shall be made on such
Global Security by the Agent, or by the Depositary at the direction of the Agent
to reflect such increase.
(h) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Issuers shall execute and the Unit Agent shall authenticate Global Units
and/or Definitive Units upon the Issuers' order or at the Unit Registrar's
written request. On or after the Separation Date, to permit registrations
of transfers and exchanges, Equity Corp. shall execute and the Transfer
Agent shall countersign Global Shares and/or Definitive Shares upon Equity
Corp.'s order or at the Share Registrar's written request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Security or to a Holder of a Definitive
Security for any registration of transfer or exchange, but the Issuers or
Equity Corp., as the case may be, may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Section
3.10 hereof).
(iii) The Unit Registrar shall not be required to register the
transfer of or exchange any Unit selected for redemption in whole or in
part, except the unredeemed portion of any Unit being redeemed in part.
(iv) All Global Securities and/or Definitive Securities
issued upon any registration of transfer or exchange of Global Securities
or Definitive Securities shall be the valid obligations of, in the case of
Units, the Issuers and, in the case of Common Shares, Equity Corp.,
evidencing the same right or debt and entitled to the same benefits under
this Unit Agreement, as the Global Securities or Definitive Securities
surrendered upon such registration of transfer or exchange.
(v) Prior to due presentment for the registration of a
transfer of any Unit, the Unit Agent, any agent and the Issuers may deem
and treat the Person in whose name any Unit is registered as the absolute
owner of such Unit for the purpose of receiving payment of principal of and
interest and Liquidated Damages, if any, on such Units and for all other
purposes, and none of the Unit Agent, any agent or the Issuers shall be
affected by notice to the contrary.
(vi) The Unit Agent shall authenticate Global Units and/or
Definitive Units in accordance with the provisions of Section 3.2(a)
hereof. The Transfer Agent shall countersign Global Shares and/or
Definitive Shares in accordance with the provisions of Section 3.2(b)
hereof
(vii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 3.6 to
effect a registration of transfer or exchange may be submitted by
facsimile.
Section 3.7. Replacement Units and Share Certificates.
----------------------------------------
13
(a) Units. If any mutilated Unit is surrendered to the Unit Agent or
the Issuers and the Unit Agent and the Issuers receives evidence to their
satisfaction of the destruction, loss or theft of any Unit and the Issuers shall
issue and the Unit Agent, upon receipt of a written order to authenticate the
Units, shall authenticate a replacement Unit if the Unit Agent's requirements
are met. If required by the Unit Agent or the Issuers, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Unit Agent and
the Issuers to protect the Issuers, the Unit Agent, any agent and any
authenticating agent from any loss that any of them may suffer if a Unit is
replaced. The Issuers may charge the Holder for their expenses in replacing a
Unit.
Every replacement Unit is an additional obligation of the Issuers and
the Note Guarantor and shall be entitled to all of the benefits of this Unit
Agreement equally and proportionately with all other Units duly issued
hereunder.
(b) Share Certificates. If any mutilated Share Certificate is
surrendered to the Transfer Agent or Equity Corp. and the Transfer Agent and
Equity Corp. receives evidence to their satisfaction of the destruction, loss or
theft of any Share Certificate and Equity Corp. shall issue and the Transfer
Agent, upon receipt of a written order to countersign the Share Certificates,
shall countersign a replacement Share Certificate if the Transfer Agent's
requirements are met. If required by the Transfer Agent or Equity Corp., an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Transfer Agent and Equity Corp. to protect Equity Corp., the Transfer
Agent, any agent and any authenticating agent from any loss that any of them may
suffer if a Share Certificate is replaced. Equity Corp. may charge the Holder
for its expenses in replacing a Share Certificate.
Every Common Share evidenced by a replacement Share Certificate shall
be entitled to all of the benefits of this Unit Agreement equally and
proportionately with all other Common Shares duly issued hereunder.
Section 3.8. Outstanding Units. The Units outstanding at any time
-----------------
are all the Units authenticated by the Unit Agent except for those canceled by
it, those delivered to it for cancellation, those reductions in the interest in
a Global Unit effected by the Unit Agent in accordance with the provisions
hereof, and those described in this Section as not outstanding. Except as set
forth in Section 3.9 hereof, a Unit does not cease to be outstanding because the
Issuers or an Affiliate of the Issuers holds the Unit.
If a Unit is replaced pursuant to Section 3.7 hereof, it ceases to be
outstanding unless the Unit Agent receives proof satisfactory to it that the
replaced Unit is held by a bona fide purchaser.
If the principal amount at maturity (or, if prior to May 15, 2005, the
Accreted Value (as defined in the Indenture)) of any Note constituting a part of
any Unit is considered paid under Section 4.01 of the Indenture, it ceases to be
outstanding and interest on it ceases to accrue or accrete, as applicable.
If the Unit Paying Agent (other than the Issuers, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue or
accrete, as applicable, interest.
Section 3.9. Treasury Securities. In determining whether the Holders
-------------------
of the required number of Securities have concurred in any direction, waiver or
consent, Securities owned by the Issuers,
14
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuers, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Agent shall be protected in relying on any such direction, waiver or consent,
only Securities that the Agent knows are so owned shall be so disregarded.
Section 3.10. Temporary Securities. Until certificates representing
--------------------
Units are ready for delivery, the Issuers may prepare and the Unit Agent, upon
receipt of a Unit Authentication Order, shall authenticate temporary Units.
Until Share Certificates are ready for delivery, Equity Corp. may prepare and
the Transfer Agent, upon receipt of a Share Countersignature Order, shall
countersign temporary Share Certificates. Any such temporary Securities shall be
substantially in the form of certificated Securities but may have variations
that the Issuers consider appropriate for temporary Securities and as shall be
reasonably acceptable to the Agent. Without unreasonable delay, the Issuers
shall prepare and, upon receipt of a Unit Authentication Order (or Share
Countersignature Order), the Agent shall authenticate (or countersign)
Definitive Securities in exchange for temporary Securities.
Holders of temporary Securities shall be entitled to all of the
benefits of this Unit Agreement.
Section 3.11. Cancellation.
------------
(a) Units. The Issuers at any time may deliver Units to the Unit
Agent for cancellation. The Unit Registrar and Unit Paying Agent shall forward
to the Unit Agent any Units surrendered to them for registration of transfer,
exchange or payment. The Unit Agent and no one else shall cancel all Units
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy canceled Units. Certification of the destruction
of all canceled Units shall be delivered to the Issuers. The Issuers may not
issue new Units to replace Units that it has paid or that have been delivered to
the Unit Agent for cancellation.
(b) Share Certificates. Equity Corp. at any time may deliver Common
Shares to the Transfer Agent for cancellation. The Share Registrar shall forward
to the Transfer Agent any Share Certificates surrendered to them for
registration of transfer, exchange or payment. The Transfer Agent and no one
else shall cancel all Share Certificates surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Share Certificates. Certification of the destruction of all canceled
Share Certificates shall be delivered to Equity Corp. Equity Corp. may not issue
new Share Certificates to replace Share Certificates that have been delivered to
the Transfer Agent for cancellation.
Section 4. Covenants.
---------
(a) DTC Notice to Investors. The Issuers shall (a) request of the
Depository, and cooperate with the Depository to ensure, that the Depository's
security description and delivery order include a "3(c)(7) marker" and confirm
that the Depository's Reference Directory contains an accurate description of
the restrictions on the holding and transfer of the Securities due to the
Issuers' reliance on the exclusion to registration provided by Section 3(c)(7)
of the Investment Company Act, (b) request of the Depository, and cooperate with
the Depository to ensure, that the Depository send to its participants in
connection with the initial offering of the Units a notice substantially in the
form attached as Exhibit E hereto, (c) request of the Depository, and cooperate
---------
with the Depository to ensure, that the Depository's Reference Directory include
each class of Securities (and the applicable CUSIP numbers for the Securities)
in the listing of 3(c)(7) issues together with an attached description of the
limitations as to the
15
distribution, purchase, sale and holding of the Units and (d) at least [15]
Business Days prior to the date upon which the Annual Report shall be delivered
by the Issuers, the Issuers shall obtain from DTC a list (the "DTC List") of all
participants that are holding an interest in the Global Securities as of such
date.
(b) Minimum Denominations. The Units shall be issuable in minimum
denominations (the "Minimum Denominations") of $250,000 and integral multiples
of $1,000 in excess thereof. The Common Shares shall be issuable in minimum
amounts of 250 Common Shares.
(c) Deemed Representations of Holders. Each holder of Securities will
be deemed to have represented and agreed with the Issuers as follows:
(i) The holder is a qualified institutional buyer within the
meaning of Rule 144A ("QIB") and a qualified purchaser within the meaning
of Section 2(51)(A) of the Investment Company Act (a "Qualified
Purchaser"), (B) the holder is not a broker-dealer that owns and invests on
a discretionary basis less than $25,000,000 in securities of issuers that
are not affiliated persons of the dealer, (C) the holder is purchasing the
Securities for its own account or for the account of another Qualified
Purchaser that is also a QIB as to which the holder exercises sole
investment discretion, (D) the holder and any such account is acquiring the
Securities as principal for its own account for investment and not for sale
in connection with any distribution thereof, (E) the holder and any such
account was not formed solely for the purpose of investing in the
Securities (except when each beneficial owner of the holder or any such
account is a Qualified Purchaser), (F) to the extent the holder (or any
account for which it is purchasing the Securities) is a private investment
company formed before April 30, 1996, the holder and each such account has
received the necessary consent from its beneficial owners, (G) the holder
and any such account is not a pension, profit sharing or other retirement
trust fund or plan in which the partners, beneficiaries or participants, as
applicable, may designate the particular investments to be made, (H) the
holder agrees that it and each such account shall not hold such Securities
for the benefit of any other Person and shall be the sole beneficial owner
thereof for all purposes and that it shall not sell participation interests
in the Securities or enter into any other arrangement pursuant to which any
other Person shall be entitled to a beneficial interest in the
distributions on the Securities, (I) the Securities purchased directly or
indirectly by the holder or any account for which it is purchasing the
Securities constitute an investment of no more than 40% of the holder's and
each such account's assets (except when each beneficial owner of the holder
and each such account is a Qualified Purchaser), (J) the holder and each
such account is purchasing the Units in a principal amount at maturity of
not less than $250,000 (or is purchasing no fewer than 250 Common Shares,
as applicable) for the holder and each such account, (K) the holder will
provide notice of the transfer restrictions set forth in this Unit
Agreement (including the exhibits hereto) to any transferee of the
Securities and (L) the holder understands and agrees that any purported
transfer of the Securities to a holder that does not comply with the
requirements of this Unit Agreement shall be null and void ab initio.
(ii) The holder understands that the Securities have not been
and will not be registered under the Securities Act, and may be reoffered,
resold or pledged or otherwise transferred only (A) to a person whom the
purchaser reasonably believes is a QIB purchasing for its own account or
for the account of a QIB as to which the purchaser exercises sole
investment discretion in a transaction meeting the requirements of Rule
144A and (B) in accordance with all applicable securities laws of the
states of the United States. The holder also understands that the
Securities have not been registered under the Investment Company Act.
16
(d) Certain Transactions Void; Issuers' Right to Force Sale or
Redemption.
(i) Notwithstanding anything to the contrary elsewhere in this
Unit Agreement, any transfer of a beneficial interest in any Securities to
a person that is not both a Qualified Institutional Buyer and a Qualified
Purchaser shall be null and void and any such purported transfer of which
the Issuers or the Agent shall have notice may be disregarded by the
Issuers and the Agent for all purposes. The Agent shall hold any funds
conveyed by the intended transferee of such interest in such Rule 144A
Global Security in trust for the transferor and shall promptly reconvey
such funds to such Person in accordance with the written instructions
thereof delivered to the Agent at its address listed in Section 9.
(ii) If any person that is not both a Qualified Institutional
Buyer and a Qualified Purchaser (any such person, a "Non-Permitted Holder")
shall become the owner of a beneficial interest in any Global Security, or
the Issuers or the Agent on its behalf shall, promptly after discovery that
such person is a Non-Permitted Holder by the Issuers or the Agent (and
notice by the Agent to the Issuers, if the Agent makes the discovery), send
notice to such Non-Permitted Holder demanding that such Non-Permitted
Holder transfer its interest to a Person that is not a Non-Permitted Holder
within thirty (30) days of the date of such notice. If such Non-Permitted
Holder fails to so transfer its Securities, the Issuers shall have the
right, without further notice to the Non-Permitted Holder, either (i) to
redeem such Units at a redemption price equal to the principal amount or
accreted value thereof plus accrued interest thereon or (ii) to sell such
Securities or such Non-Permitted Holder's interest in such Securities to a
purchaser selected by the Issuers that is a not a Non-Permitted Holder on
such terms as the Issuers may choose. The Issuers, or the Agent acting on
behalf of the Issuers upon its instructions in writing, may select the
purchaser by soliciting one or more bids from one or more brokers or other
market professionals that regularly deal in securities similar to the
Securities, and selling such Securities to the highest such bidder.
However, the Issuers may select a purchaser by any other means determined
by the Issuers in their sole discretion. The Holder of each Security, the
Non-Permitted Holder and each other Person in the chain of title from the
Holder to the Non-Permitted Holder, by its acceptance of an interest in the
Securities, agrees to cooperate with the Issuers and the Agent to effect
such transfers. The proceeds of any such forced sale, net of any
commissions, expenses and taxes due in connection with such sale shall be
remitted to the Non-Permitted Holder. The terms and conditions of any sale
under this subsection shall be determined in the sole discretion of the
Issuers, and the Issuers shall not be liable to any Person having an
interest in the Securities sold as a result of any such sale or the
exercise of such discretion.
(e) Required Contents of Certain Reports. Each quarterly and annual
report sent to any Holder or beneficial owner of a Security shall contain, or be
accompanied by, the following notice:
The Securities may be beneficially owned only by persons that are
qualified purchasers for purposes of Section 3(c)(7) of the Investment
Company Act of 1940, as amended, and qualified institutional buyers
within the meaning of Rule 144A under the Securities Act. A
beneficial ownership interest in the Rule 144A Global Securities may
be transferred only to a Person that meets the qualifications set
forth in clause (a)(ii)(x) of the preceding sentence and that can make
the representations referred to in clause (b) of the preceding
sentence. The Issuers have the right to compel any beneficial owner
of an interest in Rule 144A Global Securities that does not meet the
qualifications set forth in such clauses to sell its interest in such
Securities, or may redeem or sell such interest on behalf of such
owner, pursuant to Section 4(d) of the Unit Agreement.
17
(f) CUSIP Numbers. The Issuers shall (i) request of Standard &
Poor's, and shall cooperate with Standard & Poor's, to ensure that all CUSIP
numbers identifying the Securities shall have a "fixed field" attached thereto
that contains "3c7" and "144A" indicators and (ii) take steps to cause the
initial purchasers to require that all "confirms" of trades of the Securities
contain CUSIP numbers with such "fixed field" identifiers.
(g) Bloomberg and other Third-Party Vendor Screens. The Issuers shall
cause the Bloomberg screen or screens containing information about the
Securities to include the following language: (i) the "Note Box" on the bottom
of "Security Display" page describing the Securities shall state: "Iss'd Under
144A/3(c)(7)", (ii) the "Security Display" page shall have the flashing red
indicator "See Other Available Information," and (iii) the indicator shall link
to the "Additional Security Information" page, which shall state that the
Securities "are being offered in reliance on the exemption from registration
under Rule 144A of the Securities Act o persons who are both (x) qualified
institutional buyers (as defined in Rule 144A under the Securities Act) and (y)
qualified purchasers (as defined under Section 3(c)(7) under the Investment
Company Act of 1940)." The Issuers shall require that any other third-party
vendor screens containing information about the Securities include substantially
similar language to clauses (i) through (iii) above.
Section 5. Rights of Holders. The registered owner of a Unit
-----------------
Certificate shall have all the rights and privileges of a registered owner of
the aggregate principal amount at maturity of Notes represented thereby and the
number of Common Shares represented thereby and shall be treated as the
registered owner thereof for all purposes. The registered owner of a Share
Certificate shall have all the rights and privileges of a registered owner of
the number of Common Shares represented thereby and shall be treated as the
registered owner thereof for all purposes.
Section 6. Unit Agent and Transfer Agent. The Agent undertakes to
-----------------------------
perform only the duties and obligations specifically set forth in this Agreement
upon the following terms and conditions, by which the Issuers and the holders of
Securities, by their acceptance thereof, shall be bound:
(a) The statements contained herein and in the Unit Certificates and
the Share Certificates shall be taken as statements of the Issuers, and the
Agent assumes no responsibility for the correctness of any of the same except
such as expressly describe the Agent. The Agent assumes no responsibility with
respect to the distribution of the Unit Certificates or the Share Certificates
except as herein otherwise specifically provided.
(b) The Agent shall not be responsible for any failure of any of the
Issuers to comply with any of the covenants in this Unit Agreement, the Unit
Certificates or the Investor Rights Agreement, as applicable.
(c) The Agent may consult at any time with counsel satisfactory to it
(who may be counsel for the Issuers), and the Agent shall incur no liability or
responsibility to the Issuers or to any holder of any Security in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with the opinion or the advice of such counsel.
(d) The Agent shall incur no liability or responsibility to the
Issuers, the Note Guarantor or to any holder of any Unit Certificate or Share
Certificate for any action taken in reliance on any Unit Certificate,
certificate of shares, notice, resolution, waiver, consent, order, certificate,
or other paper, document or instrument believed by the Agent to be genuine and
to have been signed, sent or presented by the proper party or parties.
18
(e) The Issuers, jointly and severally, agree to pay to the Agent
compensation for all services rendered by the Agent in connection with the
execution and performance of this Unit Agreement at such rates as have been
separately agreed to by the Issuers and the Agent and to reimburse the Agent for
all expenses, taxes and governmental charges and other charges of any kind and
nature incurred by the Agent in the execution and performance of this Unit
Agreement, including reasonable fees and expenses of counsel. The Issuers,
jointly and severally, indemnify the Agent and its officers, directors,
employees and agents and save each of them harmless against any and all losses,
liabilities and expenses, including judgments, costs and reasonable counsel fees
and expenses and the costs and reasonable expenses of investigating or defending
any claim of such liability, for any action taken or omitted by the Agent or its
agents in the execution of and performance of its obligations under this Unit
Agreement except as a result of its gross negligence, willful misconduct or bad
faith. The Agent shall notify the Issuers promptly of any claim for which it may
seek indemnity; provided that failure by the Agent to so notify the Issuers
shall not relieve its obligations hereunder. The Issuers shall defend the claim
and the Agent shall cooperate in the defense. The Agent may have separate
counsel, and the Issuers shall pay the reasonable fees and expenses of such
counsel. The Issuers need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld. The Issuers'
obligations under this Section 6(e) shall survive any termination of this Unit
Agreement.
(f) The Agent shall be under no obligation to consider instituting
any action, suit or legal proceeding or taking any other action likely to
involve expense unless the Issuers or one or more registered holders of Unit
Certificates or Share Certificates shall furnish the Agent with security and
indemnity reasonably satisfactory to it for any costs and expenses which may be
incurred, but this provision shall not affect the power of the Agent to take
such action as it may consider proper, whether with or without any such security
or indemnity. All rights of action under this Unit Agreement or under any of the
Securities may be enforced by the Agent without the possession of any of the
Unit Certificates or Share Certificates or the production thereof at any trial
or other proceeding relative thereto, and any such action, suit or proceeding
instituted by the Agent shall be brought in its name as Agent and any recovery
of judgment shall be for the ratable benefit of the registered holders of the
Securities, as their respective rights or interests may appear.
(g) The Agent, and any stockholder, director, officer or employee of
it, may buy, sell or deal in any of the Securities or other securities of the
Issuers or become pecuniarily interested in any transaction in which the Issuers
may be interested, or contract with or lend money to the Issuers or otherwise
act as fully and freely as though it were not the Agent under this Unit
Agreement. Nothing herein shall preclude the Agent from acting in any other
capacity for the Issuers or for any other legal entity.
(h) The Agent shall act hereunder solely as agent for the Issuers,
its duties shall be determined solely by the express provisions hereof and no
implied covenants or obligations shall be read into this Unit Agreement against
the Agent. The Agent shall not be liable for anything that it may do or refrain
from doing in connection with this Unit Agreement except for its own gross
negligence, willful misconduct or bad faith.
(i) In the absence of bad faith on its part, the Agent may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the Agent
and conforming to the requirements of this Unit Agreement. However, the Agent
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Unit Agreement.
19
(j) In absence of bad faith on its part, the Agent may conclusively
rely and shall be fully protected in relying upon any document believed by it to
be genuine and to have been signed or presented by the proper person. The Agent
need not investigate any fact or matter stated in the documents.
(k) The Agent may act through agents, attorneys, custodians or
nominees and shall not be responsible for the misconduct or negligence of any
agent, attorney, custodian or nominee appointed and monitored in good faith and
with due care.
(l) Before the Agent acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both.
(m) No provision of this Unit Agreement shall require the Agent to
expend or risk its own funds or incur any liability. The Agent shall be under no
obligation to exercise any of its rights and powers under this Unit Agreement at
the request of the Issuers, unless they shall have offered to the Agent security
and indemnity satisfactory to it against any loss, liability or expense
Section 7. Change of Agent. The Agent may resign at any time by so
---------------
notifying the Issuers. If the Agent shall resign or become incapable of acting
as Agent, the Issuers shall appoint a successor to such Agent. If the Issuers
shall fail to make such appointment within a period of 30 days after they have
been notified in writing of such incapacity or resignation by the Agent or by
the registered holder of a Unit Certificate or Share Certificate, as the case
may be, then the registered holder of any Unit Certificate or Share Certificate
may apply to any court of competent jurisdiction for the appointment of a
successor to the Agent. Pending appointment of a successor to such Agent, either
by the Issuers or by such a court, the duties of the Agent shall be carried out
by the Issuers. After appointment, the successor to the Agent shall be vested
with the same powers, rights, duties and responsibilities as it if had been
originally named as Agent without further act or deed; but the former Agent,
after the payment of all outstanding amounts owed to it hereunder, shall deliver
and transfer to the successor to the Agent any property at the time held by it
hereunder and execute and deliver any further assurance, conveyance, act or deed
necessary for such purpose. Failure to give any notice provided for in this
Section 7, however, or any defect therein, shall not affect the legality or
validity of the appointment of a successor to the Agent. The provisions of
Section 6 with respect to any Agent shall survive such Agent's resignation or
removal and the termination of this Agreement.
Section 8. Successor Agent by Merger. If the Agent consolidates with,
-------------------------
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation, the resulting, surviving or transferee
corporation without any further act shall, if such resulting, surviving or
transferee corporation is otherwise eligible hereunder, be the successor Agent.
Section 9. Notices to the Issuers and Unit Agent, Trustee and Transfer
-----------------------------------------------------------
Agent. Any notice or communications by the Issuers, the Note Guarantor, any
-----
Holder, the Trustee or the Agent to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery to the other's address. If to the Issuers and/or
the Note Guarantor:
20
Nexstar Finance Holdings, L.L.C.
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
Telecopier No.: (540) 586-5400
Attention: Shirley Green
In case the Issuers shall fail to maintain such office or shall fail
to give such notice of any change in the location thereof, presentations may be
made and notices and demands may be served at the principal office of the Agent.
If to the Holders, the Agent or Trustee:
United States Trust Company of New York
114 West 47/th/ Street
New York, NY 10036
Telecopier No.: (212) 852-1626
Attention: Corporate Trust Division
The Issuers, the Note Guarantor, the Trustee or the Agent, by notice
to the others may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Agent. Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
The Agent shall furnish the Issuers and the Trustee promptly when requested with
a list of registered holders of Securities for the purpose of mailing any notice
or communication to the registered holders of Securities, the Notes or the
Common Shares and at such other times as may be reasonably requested.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Issuers mail a notice or communication to Holders, they shall
mail a copy to the Trustee and each Agent at the same time.
Section 10. Supplements and Amendments. The Issuers and the Agent may
--------------------------
from time to time supplement or amend this Unit Agreement without the approval
of any registered holders of Securities in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Issuers, the Trustee
and the Agent may deem necessary or desirable and which shall not, as evidenced
by an opinion of counsel delivered to the Agent and the Trustee, in any way
adversely affect the interests of the registered holders of Securities. Any
amendment or supplement to this Unit Agreement that has a material adverse
effect on the interests
21
of Security holders shall require the written consent of the registered holders
of not less than a majority of the outstanding Securities. Each of the Agent and
the Trustee shall be entitled to receive and, subject to Section 6, shall be
fully protected in relying upon an Officers' Certificate and Opinion of Counsel
as conclusive evidence that any such amendment or supplement is authorized or
permitted hereunder, that it is not inconsistent herewith, and that it will be
valid and binding upon the Issuers in accordance with its terms. The Issuers may
not sign any amendment or supplement until the Issuers' boards of directors
approve it.
Section 11. Successors. All the covenants and provisions of this Unit
----------
Agreement by or for the benefit of any Issuer, the Trustee, or the Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 12. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK
-------------
SHALL GOVERN AND BE USED TO CONSTRUE THIS UNIT AGREEMENT AND THE UNITS WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13. Benefits of This Unit Agreement. Nothing in this Unit
-------------------------------
Agreement shall be construed to give to any person or corporation other than any
Issuer, the Note Guarantor, the Trustee, the Agent and the registered holders of
the Securities any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Issuers, the Note Guarantor, the Trustee, the Agent and the registered holders
of the Unit Certificates or Share Certificates, as applicable.
Section 14. Counterparts. This Unit Agreement may be executed in any
------------
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 15. Headings. The headings in this Unit Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning of any provision hereof.
Section 16. Severability. The provisions of this Unit Agreement are
------------
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Unit Agreement in any jurisdiction.
Section 17. Termination. This Unit Agreement may be terminated and be
-----------
of no further force and effect at any time following the 30/th/ day following
the Separation Date by written notice by the Issuers to the Agent; provided that
the Issuers shall have entered into a legal, valid and binding agreement
containing terms substantially similar to those contained herein with a
thirdparty, which third party shall act as "Agent" thereunder.
[Signature page(s) follow]
22
IN WITNESS WHEREOF, the parties hereto have caused this Unit Agreement
to be duly executed, as of the date first above written.
NEXSTAR FINANCE HOLDINGS, L.L.C.
By: /s/ Shirley Green
---------------------------------------------
Name:
Title:
NEXSTAR FINANCE HOLDINGS, INC.
By: /s/ Shirley Green
---------------------------------------------
Name:
Title:
NEXSTAR EQUITY CORP.
By: /s/ Shirley Green
---------------------------------------------
Name:
Title:
NEXSTAR BROADCASTING GROUP, L.L.C.
By: /s/ Shirley Green
---------------------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK, as Unit
Agent and Transfer Agent
By: /s/ Margaret M. Ciesmelewski
---------------------------------------------
Name: Margaret M. Ciesmelewski
Title: Assistant Vice President
23
EXHIBIT A
[FORM OF UNIT]
THIS UNIT HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY
ACT"). OR THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THE UNITS IN
RESPECT OF WHICH THIS UNIT HAS BEEN ISSUED, AGREES FOR THE BENEFIT OF
THE ISSUERS THAT THE UNITS MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, IN A PRINCIPAL
AMOUNT OF NOT LESS THAN $250,000 FOR THE PURCHASER AND FOR EACH
ACCOUNT FOR WHICH IT IS ACTING, TO A PURCHASER AND, AS APPLICABLE,
EACH ACCOUNT FOR WHICH SUCH PURCHASER IS ACTING, THAT (1) IS A
QUALIFIED PURCHASER WITHIN THE MEANING OF SECTION 3(C)(7) OF THE
INVESTMENT COMPANY ACT, (2) WAS NOT FORMED FOR THE PURPOSE OF
INVESTING IN ANY ISSUER (EXCEPT WHEN EACH BENEFICIAL OWNER OF THE
PURCHASER AND EACH SUCH ACCOUNT IS A QUALIFIED PURCHASER), (3) HAS
RECEIVED THE NECESSARY CONSENT FROM ITS BENEFICIAL OWNERS WHEN THE
PURCHASER OR SUCH ACCOUNT IS A PRIVATE INVESTMENT COMPANY FORMED
BEFORE APRIL 30, 1996, (4) IS NOT A BROKER-DEALER THAT OWNS AND
INVESTS ON A DISCRETIONARY BASIS LESS THAN $25,000,000 IN SECURITIES
OF UNAFFILIATED ISSUERS AND (5) IS NOT A PENSION, PROFIT SHARING OR
OTHER RETIREMENT TRUST FUND OR PLAN IN WHICH THE PARTNERS,
BENEFICIARIES OR PARTICIPANTS, AS APPLICABLE, MAY DESIGNATE THE
PARTICULAR INVESTMENTS TO BE MADE, AND IN A TRANSACTION THAT MAY BE
EFFECTED WITHOUT LOSS OF ANY APPLICABLE INVESTMENT COMPANY ACT
EXEMPTION AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES. ANY TRANSFER IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO AND
WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE,
NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUERS, THE
UNIT AGENT OR ANY INTERMEDIARY. EACH TRANSFEROR OF THIS UNIT WILL
PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS SET FORTH HEREIN AND IN
THE UNIT AGREEMENT TO ITS TRANSFEREE. IN ADDITION TO THE FOREGOING,
THE ISSUERS MAINTAIN THE RIGHT TO PURCHASE OR FORCE THE RESALE OF ANY
UNITS PREVIOUSLY TRANSFERRED TO NON-PERMITTED HOLDERS (AS DEFINED IN
THE UNIT AGREEMENT) IN ACCORDANCE WITH AND SUBJECT TO THE TERMS OF THE
UNIT AGREEMENT.
THIS UNIT MAY NOT BE OFFERED OR SOLD UNLESS: (1) THE TRANSFEREE
REPRESENTS THAT IT IS A "QUALIFIED PURCHASER" (AS DEFINED IN
2(A)(51)(A) UNDER THE INVESTMENT COMPANY ACT, AS
AMENDED); (2) THE TRANSFEROR REPRESENTS THAT PRIOR TO SUCH TRANSFER,
THE TRANSFEROR HAS PROVIDED TO THE TRANSFEREE NOTICE OF THE TRANSFER
RESTRICTIONS APPLICABLE TO THIS UNIT; (3) BOTH THE TRANSFEROR AND THE
TRANSFEREE ACKNOWLEDGE THAT THE ISSUERS MAY REFUSE TO HONOR THE
TRANSFER OF THE UNIT IF IT DETERMINES IN ITS SOLE DISCRETION THAT THE
TRANSFEREE IS NOT A QUALIFIED PURCHASER; AND (4) THE TRANSFEREE
ACKNOWLEDGES THAT THE ISSUERS HAVE THE RIGHT TO FORCE THE REDEMPTION
OR RESALE OF THE UNIT HELD BY THE TRANSFEREE IF IT DETERMINES IN ITS
SOLE DISCRETION THAT THE TRANSFEREE IS NOT A QUALIFIED PURCHASER.
[INSERT GLOBAL UNIT LEGEND, IF APPLICABLE PURSUANT TO THE UNIT
AGREEMENT]
EACH UNIT REPRESENTED BY THIS SECURITY CONSISTS OF ONE NOTE OF
$1,000 PRINCIPAL AMOUNT AT MATURITY OF 16% SENIOR DISCOUNT NOTES DUE
2009 (THE "NOTES") OF NEXSTAR FINANCE HOLDINGS, L.L.C. AND NEXSTAR
FINANCE HOLDINGS, INC. AND ONE SHARE OF CLASS B COMMON STOCK OF
NEXSTAR EQUITY CORP. (THE "COMMON SHARES") THE NOTES AND THE COMMON
SHARES WILL ONLY BE TRANSFERABLE BY A HOLDER THEREOF SEPARATELY FROM
EACH OTHER UPON THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER THE
CLOSING OF THE OFFERING OF THE UNITS, (II) IN THE EVENT THE NOTE
ISSUERS ARE REQUIRED TO MAKE A CHANGE OF CONTROL OFFER PURSUANT TO THE
TERMS OF THE INDENTURE, THE DATE ON WHICH NOTICE OF THE OFFER IS
MAILED TO THE HOLDERS OF NOTES, (III) THE DATE ON WHICH A REGISTRATION
STATEMENT WITH RESPECT TO THE NOTES OR A REGISTERED EXCHANGE OFFER FOR
THE NOTES IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (IV)
IMMEDIATELY PRIOR TO THE REDEMPTION OF ANY NOTES WITH THE PROCEEDS OF
AN EQUITY OFFERING (AS DEFINED IN THE INDENTURE); (V) THE CONSUMMATION
OF AN INITIAL PUBLIC OFFERING BY NEXSTAR BROADCASTING GROUP, L.L.C. OR
ANY SUCCESSOR ENTITY; OR (VI) SUCH EARLIER DATE AS DETERMINED BY BANC
OF AMERICA SECURITIES LLC IN ITS SOLE DISCRETION.
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING OFFERED WITH
ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT AT MATURITY
OF THIS SECURITY, THE ISSUE PRICE ALLOCATED TO THE UNIT IS $540.73,
THE ISSUE PRICE ALLOCATED TO THE NOTE IS 506.75, THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT ALLOCATED TO THE NOTE IS $493.25, THE ISSUE
DATE IS MAY 17, 2001 AND THE YIELD TO MATURITY IS 16% PER ANNUM.
A-2
NEXSTAR FINANCE HOLDINGS, L.L.C.
NEXSTAR FINANCE HOLDINGS, INC.
NEXSTAR EQUITY CORP.
36,988 Units Consisting of $36,988,000 in aggregate principal amount
at maturity of 16% Senior Discount Notes due 2009 of Nexstar Finance
Holdings, L.L.C. and Nexstar Finance Holdings, Inc. and one share of
Class B Common Stock Nexstar Equity Corp.
No. CUSIP No.
Nexstar Finance Holdings, L.L.C., a Delaware corporation ("Nexstar
Holdings"), Nexstar Finance Holdings, Inc., a Delaware corporation ("Holdings
Inc." and, together with Nexstar Holdings, the "Note Issuers"), Nexstar Equity
Corp., a Delaware corporation ("Equity Corp.," and, together with the Note
Issuers, the "Issuers"), and Nexstar Broadcasting Group, L.L.C., a Delaware
corporation (the "Note Guarantor"), hereby certify that ____________ is the
owner of ________ Units as described above, transferable only on the books of
the Issuers by the holder thereof in person or by his or her duly authorized
attorney, on surrender of the Certificate properly endorsed.
Each Unit consists of $1,000 principal amount at maturity of 16%
Senior Discount Notes due 2009 of the Note Issuers (the "Notes") and one share
of Class B common stock of Equity Corp., (collectively, the "Common Shares") par
value $0.01 per share. This Unit, comprised of the Notes attached hereto as
Part 1 and the Common Shares attached hereto as Part 2, is issued pursuant to
------ ------
the Unit Agreement (the "Unit Agreement") dated as of May 17, 2001 among the
Issuers, the Note Guarantor and United States Trust Company of New York, as unit
agent (the "Unit Agent"), and is subject to the terms and provisions contained
therein, all of which terms and provisions the holder of this Unit Certificate
consents by acceptance hereof. The terms of the Notes are governed by an
Indenture (the "Indenture") dated as of May 17, 2001 among the Note Issuers, the
Note Guarantor, Bastet Broadcasting, Inc., a Delaware corporation, Mission
Broadcasting of Wichita Falls, Inc., a Delaware corporation, and United States
Trust Company of New York, as trustee (the "Trustee"), and are subject to the
terms and provisions contained therein, all of which terms and provisions the
holder of this Unit Certificate consents by acceptance hereof. Certain rights
and privileges pertaining to the Common Shares are governed by an Investor
Rights Agreement dated as of May 17, 2001 among Equity Corp. and the Note
Guarantor (the "Investor Rights Agreement"), and the holders of the Common
Shares are subject to the terms and provisions contained therein, all of which
terms and provisions the holder of this Unit Certificate consents by acceptance
hereof.
Reference is made to the further provisions in each of the Unit
Agreement, Indenture, the Investor Rights Agreement and this Unit Certificate,
which will for all purposes have the same effect as if set forth at this place.
Copies of the Unit Agreement, the Indenture and the Investor Rights Agreement
are on file at the office of Nexstar Finance Holdings, L.L.C., 200 Abington
Executive Park, Suite 201, Clarks Summit, PA 18411, and are available to any
holder on written request and without cost.
The Notes and the Common Shares represented by this Unit Certificate
shall be non-detachable and not separately transferable until the earliest to
occur of (i) 180 days after the closing of the offering of the Units, (ii) in
the event the Note Issuers are required to make a Change of Control Offer
pursuant to the terms of the Indenture, the date on which notice of the offer is
mailed to the holders of Notes, (iii) the date on which a registration statement
with respect to the Notes or a registered exchange
A-3
offer for the Notes is declared effective under the Securities Act, (iv)
immediately prior to the redemption of any Notes with the proceeds of an Equity
Offering (as defined in the Indenture); (v) the consummation of an Initial
Public Offering by Nexstar Broadcasting Group, L.L.C. or any successor entity;
or (vi) such earlier date as determined by Banc of America Securities LLC in its
sole discretion. The earliest date on which an event listed in the previous
sentence is referred to as the "Separation Date." On the Separation Date, each
Unit shall be automatically separated and cease to exist such that from and
after the Separation Date, the Notes and Common Shares shall be separate
securities and not part of the same investment unit. On the Separation Date,
holders of fractional shares of the Common Shares existing as a result of the
separation shall promptly receive an amount in cash from Equity Corp. equal to
the fair market value (as determined pursuant to the provisions of the Investor
Rights Agreement of any such fractional share then held by them and the total
number of shares held by them shall be reduced to the next lower whole number of
shares, such that from and after the Separation Date all holders of Common
Shares shall only hold whole numbers of shares of Common Shares. The Issuers
hereby agree to use their reasonable best efforts to ensure that the Common
Shares shall be eligible for deposit with The Depository Trust Company ("DTC")
from and after the Separation Date, including, without limitation, providing DTC
with at least ten business days' prior written notice of the Separation Date;
provided that the Issuers shall not be obligated to so notify DTC unless they
shall have received 15 business days' prior written notice of the Separation
Date.
Dated: May 17, 2001.
NEXSTAR FINANCE HOLDINGS, L.L.C.
By:___________________________________
Name:
Title:
NEXSTAR FINANCE HOLDINGS, INC.
By:___________________________________
Name:
Title:
NEXSTAR EQUITY CORP.
By:___________________________________
Name:
Title:
A-4
NEXSTAR BROADCASTING GROUP, L.L.C.
By:___________________________________
Name:
Title:
Certificate of Authentication: UNITED STATES TRUST COMPANY
OF NEW YORK, as Unit Agent
This is one of the Units referred to in
the within mentioned Unit Agreement
By: ________________________________
Name:
Title:
A-5
Assignment Form
To assign this Unit, fill in the form below: (I) or (we) assign and transfer
this Unit to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Unit on the books of the Issuers. The agent may substitute
another to act for him.
________________________________________________________________________________
Date:__________________
Your Signature:___________________________________
(Sign exactly as your name appears on the face of
this Unit)
Tax Identification No:____________________________
SIGNATURE GUARANTEE:
_________________________________
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Unit Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Unit Registrar in addition to,
or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
A-6
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL UNIT
The following exchanges of a part of this Global Unit for an interest
in another Global Unit or for a Definitive Unit, or exchanges of a part of
another Global Unit or Definitive Unit for an interest in this Global Unit, have
been made:
<TABLE>
<CAPTION>
Aggregate Number
Amount of of Units in this
decrease in Amount of increase Global Unit Signature of
Aggregate Number in Aggregate following such authorized officer
of Units in this Number of Units in decrease (or of Unit Agent or
Date of Exchange Global Unit this Global Unit increase) Unit Custodian
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
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</TABLE>
A-7
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
Nexstar Equity Corp.
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
Attention: Shirley Green
United States Trust Company of New York
Attention: Corporate Trust Division
Re: Units of Nexstar Finance Holding, L.L.C.,
Nexstar Finance Holdings, Inc. and Nexstar Equity Corp.
-------------------------------------------------------
CUSIP ________
Reference is hereby made to the Unit Agreement, dated as of May 17,
2001 (the "Unit Agreement"), among Nexstar Finance Holdings, L.L.C. a Delaware
corporation, Nexstar Finance Holding, Inc., a Delaware corporation, Nexstar
Equity Corp., a Delaware corporation (collectively, the "Issuers"), and Nexstar
Broadcasting Group, L.L.C., a Delaware corporation (the "Note Guarantor") and
United States Trust Company of New York, as unit agent. Capitalized terms used
but not defined herein shall have the meanings given to them in the Unit
Agreement.
______________, (the "Transferor") owns and proposes to transfer the
Unit[s] or interest in such Unit[s] specified in Annex A hereto, in the amount
of ___________ in such Unit[s] or interests (the "Transfer"), to __________
(the "Transferee"), as further specified in Annex A hereto. In connection with
the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] Check if Transferee will take delivery of a beneficial interest in the
----------------------------------------------------------------------
144A Global Unit or a Definitive Unit Pursuant to Rule 144A. The Transfer is
-----------------------------------------------------------
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Unit is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Unit for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is both (a) a "qualified institutional buyer" within the meaning of
Rule 144A in a transaction meeting the requirements of Rule 144A and (b) a
"qualified purchaser" as defined in the Investment Company Act of 1940, as
amended, and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States, which certification is
supported by (1) a certificate executed by the Transferee in the form of Exhibit
-------
D to the Unit Agreement. Upon consummation of the proposed Transfer in
-
accordance with the terms of the Unit Agreement, the transferred beneficial
interest or Definitive Unit will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Unit
and/or the Definitive Unit and in the Unit Agreement and the Securities Act.
2. [_] Check and complete if Transferee will take delivery of a Definitive
Unit pursuant to any provision of the Securities Act other than Rule 144A, Rule
903 or Rule 904. The Transfer is being effected in compliance with the transfer
restrictions applicable to Restricted Definitive Units and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that such Transfer is being effected to the Company or a subsidiary
thereof.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers and the Note Guarantor.
B-2
______________________________
[Insert Name of Transferor]
By:___________________________
Name:
Title:
Dated: ________ __, ____
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Unit Agent).
B-3
ANNEX A
TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the 144A Global Unit (CUSIP _________), or
(b) [_] a Restricted Definitive Unit.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the 144A Global Unit (CUSIP ________), or
(b) [_] a Restricted Definitive Unit;
in accordance with the terms of the Unit Agreement.
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
Nexstar Equity Corp.
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
Attention: Shirley Green
United States Trust Company of New York
Attention: Corporate Trust Division
Re: Units of Nexstar Finance Holding, L.L.C.,
Nexstar Finance Holdings, Inc. and Nexstar Equity Corp.
-------------------------------------------------------
CUSIP ________
Reference is hereby made to the Unit Agreement, dated as of May 17,
2001 (the "Unit Agreement"), among Nexstar Finance Holdings, L.L.C. a Delaware
corporation, Nexstar Finance Holding, Inc., a Delaware corporation, Nexstar
Equity Corp., a Delaware corporation (collectively, the "Issuers"), and Nexstar
Broadcasting Group, L.L.C., a Delaware corporation, and United States Trust
Company of New York, as unit agent. Capitalized terms used but not defined
herein shall have the meanings given to them in the Unit Agreement.
____________, (the "Owner") owns and proposes to exchange the Unit[s]
or interest in such Unit[s] specified herein, in the amount of ________ in such
Unit[s] or interests (the "Exchange"). In connection with the Exchange, the
Owner hereby certifies that:
1. Exchange of Restricted Definitive Units or Beneficial Interests in
Restricted Global Units for Restricted Definitive Units or Beneficial Interests
in Restricted Global Units.
(a) [_] Check if Exchange is from beneficial interest in a Restricted
-------------------------------------------------------------
Global Unit to Restricted Definitive Unit. In connection with the Exchange of
-----------------------------------------
the Owner's beneficial interest in a Restricted Global Unit for a Restricted
Definitive Unit with an equal aggregate number, the Owner hereby certifies that
the Restricted Definitive Unit is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Unit Agreement, the Restricted Definitive Unit issued will
continue to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Unit and in the Unit
Agreement and the Securities Act.
(b) [_] Check if Exchange is from Restricted Definitive Unit to
-------------------------------------------------------
beneficial interest in a Restricted Global Unit. In connection with the Exchange
-----------------------------------------------
of the Owner's Restricted Definitive Unit for a beneficial interest in the 144A
Global Unit with an equal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
C-1
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Definitive Units and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Exchange in accordance with the terms of the Unit Agreement, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Unit and in the Unit Agreement and the Securities Act and Investment
Company Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
________________________
[Insert Name of Owner]
By:_____________________
Name:
Title:
Dated: ________ __, ____
C-2
EXHIBIT D
FORM OF CERTIFICATE FROM
RULE 144A QUALIFIED INSTITUTIONAL BUYER
AND SECTION 3(C)(7) QUALIFIED PURCHASER
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
Nexstar Equity Corp.
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
Attention: Shirley Green
United States Trust Company of New York
Attention: Corporate Trust Department
Re: Units of Nexstar Finance Holding, L.L.C.,
Nexstar Finance Holdings, Inc. and Nexstar Equity Corp.
-------------------------------------------------------
CUSIP ________
Reference is hereby made to the Unit Agreement, dated as of May 17,
2001 (the "Unit Agreement"), among Nexstar Finance Holdings, L.L.C. a Delaware
corporation, Nexstar Finance Holding, Inc., a Delaware corporation, Nexstar
Equity Corp., a Delaware corporation (collectively, the "Issuers"), and Nexstar
Broadcasting Group, L.L.C., a Delaware corporation, and United States Trust
Company of New York, as unit agent. Capitalized terms used but not defined
herein shall have the meanings given to them in the Unit Agreement.
In connection with our proposed purchase of ______ aggregate number
of:
(a) [_] a beneficial interest in a Global Unit, or
(b) [_] a Definitive Unit,
I. the undersigned certifies that it is familiar with Rule 144A under the
Securities Act of 1933, as amended, and represents and warrants that:
(i) it is a Qualified Institutional Buyer ("QIB") as described in Annex A
hereto;
(ii) as of __________________, _______, the undersigned owned or invested
on a discretionary basis $_____________/1/ in eligible "securities"
(as defined and calculated as set forth in Annex A);
____________________________
/1/ The amount must be a specific amount in excess of $100 million or such
lesser amount as contemplated by paragraph (b)(j)(k) or (o) of Annex A.
D-1
(iii) if the undersigned decides to purchase Rule 144A securities for the
accounts of others, it will only purchase Rule 144A securities for
accounts that independently qualify as QIBs as defined in Rule 144A
(unless the undersigned is an insurance company, (as described in
Annex A) and is purchasing for the account of one or more of its
"separate accounts" (as defined in Annex A));
(iv) the undersigned has listed below those of its accounts that are QIBs
and if the undersigned is an insurance company (as described in Annex
A), those of its accounts that are separate accounts (as defined in
Annex A) and for which it intends to purchase Rule 144A securities,
the undersigned has accurately provided the information requested for
each of the accounts listed below and the undersigned agrees that any
of the accounts listed below for which it purchases Rule 144A
securities will be deemed to be a part of and subject to the
representations contained in this certification; and
(v) the undersigned's current fiscal year ends on _____________,
______./2/
II. The undersigned certifies that it has read Annex B, "Restrictions on Sales
of Book-Entry Securities Designated QIB/QP or 3(c)(7)," attached hereto.
The undersigned certifies that it is a "Qualified Purchaser" as defined in
Sections 3(c)(7) and 2(a)(51)(A) of, and the related rules under, the
Investment Company Act of 1940, as amended, and the undersigned represents
and warrants that (if the undersigned certifies that it is unable to make
the representations and warranties contained in II(i), it should so
indicate on the signature line below):
(i) it is not a:
"dealer" described in (j) of Annex A that owns and invests on a
discretionary basis less than $25,000,000 in eligible "securities"
(excluding securities constituting the whole or part of an unsold
allotment to or subscription as a participant in a public offering);
"plan" described in (f) or (g) of Annex A or a "trust fund" described
in (h) of Annex A that holds assets for such a plan, the investment
decisions of which are made by the beneficiaries of the plan and not
solely by the fiduciary trustee or sponsor of the plan;
(ii) the undersigned has indicated with a check mark each of the sub-
accounts listed below which can independently make each of the
representations and warranties in this Section II. If the undersigned
decides to purchase securities designated QIB/QP or 3(c)(7) for the
accounts of others, it will only purchase for accounts which are
checked below, and those accounts will be deemed to make the
representations and warranties in I(i) and this Section II. (An
insurance company may purchase for one or more of its separate
accounts without regard to whether the account could independently
make those representations and warranties);
(iii) it is not an entity that was formed for the specific purpose of
investing in Section 3(c)(7) securities (or if it was formed for such
purpose, then each beneficial owner of its securities is a QP);
______________________________
/2/ Insert a specific date on or since the end of the undersigned's most recent
fiscal year.
D-2
(iv) it is not an entity that was formed or is operated as a device for
facilitating individual investment decisions of its participants or
security holders;
(v) if it was formed prior to April 30, 1996, and is an investment
company excepted from the Investment Company Act pursuant to Section
3(c)(1) or Section 3(c)(7) thereof, then its treatment as a Qualified
Purchaser has been consented to (in the manner required by Section
2(a)(51)(C) of the Investment Company Act and rules thereunder) by
its beneficial owners who acquired their interests on or before April
30, 1996; and
(vi) except as set forth in (ii) above, it will not hold Section 3(c)(7)
securities for the benefit of any other person, and it will not sell
participation interests in the securities to any other person or
enter into any other arrangement pursuant to which any other person
shall be entitled to a beneficial interest in the distributions on
the securities.
D-3
The undersigned agrees to promptly advise ________________________ if any of the
representations or warranties in this certificate relating to it or any of the
accounts identified below ceases to be true.
Date: ___________________, _____ ________________________________________
Name of Institution
________________________________ By:__________________________________/3/
-
Name of Contact at Above
Institution for Question and
Updates
________________________________ ________________________________________
Mailing Address Title of Executive Officer/4/
________________________________ ________________________________________
Telephone Number Account Number
___________________________
/3/ If the undersigned is unable to make the representations and warranties
contained in II(i) it should clearly to state below the signature line.
/4/ Certification must be signed by the institution's chief financial officer or
another executive officer, except that if the institution is a member of a
"family of investment companies," the certification must be signed by an
executive officer of such institution's investment advisor.
D-4
List of Accounts and Sub-Accounts
(other than Separate Accounts of an Insurance Company)
(attach separate sheet as necessary)
Check Box
if Applicable. See
Name of Entity Account Number II(ii) Above
--------------------------------------------------------------------------------
[_]
[_]
[_]
List of Separate Accounts of an Insurance Company
(attach separate sheet as necessary)
Name of Entity Account Number
---------------------------------------------------------------------
D-5
EXHIBIT E
THIS IS AN EXAMPLE OF THE "IMPORTANT NOTICE" FOR A
PROPOSED RULE 144A/SECTION 3(C)(7) ISSUE
THAT DTC WILL SEND TO ITS PARTICIPANTS
IF IT IS ASKED TO DO SO
The Depository Trust Company
IMPORTANT
B#: [number]
DATE: [date]
TO: ALL PARTICIPANTS
FROM: [name], [title], Underwriting Department
ATTENTION: [Managing Partner/Officer, Cashier, Operations, Data Processing and
Underwriting Managers]
SUBJECT: Section 3(c)(7) restrictions for the Units, consisting of 16% Senior
Discount Notes due 2009 of Nexstar Finance Holdings, L.L.C. and
Nexstar Finance Holdings, Inc. and Shares of Class B Common Stock of
Nexstar Equity Corp.
(A) CUSIP Number [CUSIP number]
(B) Security Description 36,988 Units, each consisting of $1,000 in
principal amount at maturity of 16% Senior
Discount Notes due 2009 of Nexstar Finance
Holdings, L.L.C. and Nexstar Finance Holdings,
E-1
Inc. and one Share of Class B Common Stock of
Nexstar Equity Corp.
(C) Offer Amount $36,988,000
(D) Managing Underwriter Banc of America Securities LLC
(E) Paying Agent United States Trust Company of New York
(F) Closing Date May 17, 2001
Special Instructions: See Attached Important Instructions from the Issuer.
E-2
[ISSUER LETTERHEAD]
[This is the form letter that the Issuer should send to DTC which
DTC will send to its participants in an "Important Notice"]
36,988 Units, each consisting of $1,000 in principal amount at maturity of 16%
Senior Discount Notes due 2009 of Nexstar Finance Holdings, L.L.C. and Nexstar
Finance Holdings, Inc. and one Share of Class B Common Stock of Nexstar Equity
Corp.
[CUSIP No. of Security]
The Issuers and the lead Initial Purchasers are putting Participants
on notice that they are required to follow these purchase and transfer
restrictions with regard to the above-referenced security.
In order to qualify for the exemption provided by Section 3(c)(7)
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the exemption provided by Rule 144A under the Securities Act of 1993,
as amended (the "Securities Act"), offers, sales and resales of the 36,988
Units, each consisting of $1,000 in principal amount at maturity of 16% Senior
Discount Notes due 2009 of Nexstar Finance Holdings, L.L.C. and Nexstar Finance
Holdings, Inc. and one Share of Class B Common Stock of Nexstar Equity Corp.
(the "Securities") may only be made in minimum denominations of $250,000 to
"qualified institutional buyers" ("QIBs") within the meaning of Rule 144A that
are also "qualified purchasers" ("QPs") within the meaning of Section
2(a)(51)(A) of the Investment Company Act. Each purchaser of Securities (A)
represents to and agrees with the Issuers and the Initial Purchasers that (i)
the purchaser is a QIB who is a QP (a "QIB/QP"); (ii) the purchaser is not a
broker-dealer which owns and invests on a discretionary basis less than $25
million in securities of unaffiliated issuers; (iii) the purchaser is not a
pension, profit sharing or other retirement trust fund or plan in which the
partners, beneficiaries or participants, as applicable, may designate the
particular investments to be made; (iv) the QIB/QP is acting for its own account
or the account of another QIB/QP; (v) the purchaser was not formed for the
specific purpose of investing in the Securities (except when each beneficial
owner of the purchaser and each such account is a qualified purchaser for
purposes of Section 3(c)(7) of the Investment Company Act), (vi) the purchaser
and each account for which it is purchasing will hold and transfer at least the
minimum denomination of securities, and (vii) the purchaser will provide notice
of the transfer restrictions to any subsequent transferees and (B) acknowledges
that the Issuers have not been registered under the Investment Company Act and
the Securities have not been registered under the Securities Act and represents
to and agrees with the Issuers and the Initial Purchasers that, for so long as
the Securities are outstanding, it will not offer, resell, pledge or otherwise
transfer the Securities in the United States or to a Person except to a QIB that
is also a QP in a transaction meeting the requirements of Rule 144A. Each
purchaser further understands that the Securities will bear a legend with
respect to such transfer restrictions. See "Notice to Investors" in the
Offering Memorandum, dated May [17]. 2001.
The charter, bylaws, organizational documents or securities issuance
documents of the Issuer provide that the Issuer will have the right to (i)
require any holder of Securities who is determined not to be both a QIB and a QP
to sell the Securities to a QIB that is also a QP or (ii) redeem or resell any
Securities held by such a holder on specified terms. In addition, the Issuer
has the right to refuse to register or otherwise honor a transfer of Securities
to a proposed transferee that is a Person who is not both a QIB and a QP.
E-1
The restrictions on transfer required by the Issuers (outlined above)
will be reflected under the notation "3c7" in upcoming editions of DTC's
Reference Directory.
Any questions or comments regarding this subject may be directed to Shirley
Green, Telecopier No.: (570) 586-8745.
E-2
EXECUTION COPY
EXHIBIT 10.3
REIMBURSEMENT AGREEMENT
-----------------------
THIS AGREEMENT is made as of May 17, 2001, between Nexstar Equity
Corp., a Delaware corporation ("Equity Corp."), and Nexstar Broadcasting Group,
L.L.C., a Delaware limited liability company ("Broadcasting").
Nexstar Finance Holdings, L.L.C. ("Holdings"), a subsidiary of
Broadcasting, and Equity Corp. are parties to a Purchase Agreement, dated May
14, between Holdings, Nexstar Finance Holdings, Inc., Equity Corp., Banc of
America Securities LLC and Barclays Capital (the "Purchase Agreement") and a
Unit Agreement, dated the date hereof, between Holdings, Nexstar Finance
Holdings, Inc., Equity Corp. and United States Trust Company of New York, as
Unit Agent and Depositary (the "Unit Agreement") pursuant to which Holdings
issued Senior Notes and Equity Corp. issued Common Stock. In connection with
the transactions contemplated by the Purchase Agreement and the Unit Agreement,
Broadcasting wishes to reimburse Equity Corp. for expenses incurred in
connection with the holding of limited liability company interests in
Broadcasting.
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Reimbursement of Expenses. Broadcasting shall reimburse Equity
-------------------------
Corp. for all out-of-pocket costs and expenses incurred in connection with
maintaining its corporate existence, filing federal, state and local tax
returns, maintaining directors' and officers' insurance, paying indemnification
obligations and all other activities deemed necessary by its Board of Directors
and agreed to by Broadcasting. Such costs and expenses shall be reimbursed
promptly by Broadcasting upon submission of customary expense reports.
Broadcasting shall have no obligation to pay any amounts on account of any
corporate income tax payable by Equity Corp.
2. Term. Broadcasting shall reimburse Equity Corp.'s expenses
----
pursuant to paragraph 1 for so long as Equity Corp. is in existence and
continues to hold limited liability company interests in Broadcasting.
3. Indemnification. Broadcasting shall indemnify and hold harmless
---------------
Equity Corp., each of its controlling persons and each director, officer,
manager and employee thereof from and against any and all losses, claims,
liabilities, suits, costs, damages and expenses (including attorneys' fees)
arising from their performance hereunder, except as a result of their gross
negligence or wilful misconduct.
4. Notices. Any notice provided for in this Agreement shall be in
-------
writing and shall be either personally delivered, or mailed by first class mail,
return receipt requested, to the recipient at the address that the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
5. Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
6. Complete Agreement. This Agreement embodies the complete
------------------
agreement and understanding among the parties with respect to the subject matter
hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
7. Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
8. Successors and Assigns. This Agreement is intended to bind and
----------------------
inure to the benefit of and be enforceable by Broadcasting and Equity Corp. and
their respective successors and assigns.
9. Choice of Law. This Agreement shall be governed by the internal
-------------
law, and not the laws of conflicts, of the State of Delaware.
10. Amendment and Waiver. The provisions of this Agreement may be
--------------------
amended or waived only with the prior written consent of Broadcasting and Equity
Corp., and no course of conduct or failure or delay in enforcing the provisions
of this Agreement shall affect the validity, binding effect or enforceability of
this Agreement.
* * * * * *
-2-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
NEXSTAR BROADCASTING GROUP, L.L.C.
By: /s/ Shirley Green
-------------------------------
Its: VP - Finance
-------------------------------
NEXSTAR EQUITY CORP.
By: /s/ Shirley Green
-------------------------------
Its: VP - Finance
-------------------------------
-3-
Exhibit 10.4
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
NEXSTAR FINANCE, L.L.C.,
AS BORROWER,
NEXSTAR BROADCASTING GROUP, L.L.C.
AND CERTAIN OF ITS SUBSIDIARIES
FROM TIME TO TIME PARTIES HERETO,
THE SEVERAL FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO,
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT,
BARCLAYS BANK PLC,
AS SYNDICATION AGENT,
AND
FIRST UNION NATIONAL BANK,
AS DOCUMENTATION AGENT
----------------------------------
BANK OF AMERICA SECURITIES LLC,
AS LEAD ARRANGER
AND BOOK MANAGER
----------------------------------
DATED AS OF JUNE 14, 2001
----------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
Page
----
<S> <C>
ARTICLE I. DEFINITIONS.................................................................................1
-----------
1.01 Defined Terms......................................................................1
-------------
1.02 Other Definitional Provisions.....................................................43
-----------------------------
1.03 Accounting Principles.............................................................44
---------------------
1.04 Classes and Types of Loans and Borrowings.........................................45
-----------------------------------------
ARTICLE II. THE CREDIT FACILITIES......................................................................45
---------------------
2.01 Amounts and Terms of Commitments..................................................45
--------------------------------
(a) The Term Loans.............................................................45
--------------
(b) The Revolving Loans........................................................46
-------------------
(c) The Incremental Loans......................................................46
---------------------
2.02 Loan Accounts; Notes..............................................................48
--------------------
2.03 Procedure for Borrowing...........................................................48
-----------------------
(a) Procedure for Revolving Loan Borrowings....................................48
---------------------------------------
(b) Procedure for Term Loan Borrowings.........................................49
----------------------------------
(c) No Eurodollar Loans made during an Event of Default........................50
---------------------------------------------------
(d) Limit on Eurodollar Loans..................................................50
-------------------------
2.04 Conversion and Continuation Elections for all Borrowings..........................50
--------------------------------------------------------
(a) Election for Conversion/Continuation.......................................50
------------------------------------
(b) Notice of Conversion/Continuation..........................................50
---------------------------------
(c) Failure to Elect Interest Period...........................................51
--------------------------------
(d) Notice to Banks............................................................51
---------------
(e) No Conversion/Continuation During Event of Default.........................51
--------------------------------------------------
(f) Limitation on Interest Periods.............................................51
------------------------------
2.05 Reduction and Termination of Commitments..........................................51
----------------------------------------
2.06 Voluntary Prepayments.............................................................54
---------------------
2.07 Mandatory Prepayments.............................................................54
---------------------
2.08 Maturity and Amortization of Loans................................................58
----------------------------------
(a) The Term Loans.............................................................58
--------------
(b) Application of Term Loan Payments..........................................59
---------------------------------
(c) The Revolving Loans........................................................60
-------------------
(d) Application of Revolving Loan Payments.....................................60
--------------------------------------
2.09 Fees..............................................................................60
----
(a) Commitment Fees............................................................60
---------------
(b) Other Fees.................................................................61
----------
(c) Fees under Existing Credit Agreement.......................................61
------------------------------------
2.10 Computation of Fees and Interest..................................................61
--------------------------------
2.11 Interest..........................................................................62
--------
2.12 Payments by the Borrower..........................................................62
------------------------
</TABLE>
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2.13 Payments by the Banks to the Administrative Agent.................................63
-------------------------------------------------
2.14 Sharing of Payments, etc..........................................................64
-------------------------
2.15 Security Documents and Guaranty Agreements........................................65
------------------------------------------
2.16 Procedure for Incremental Loan Requests...........................................65
---------------------------------------
ARTICLE III. LETTERS OF CREDIT..........................................................................66
-----------------
3.01 Letter of Credit Subfacility......................................................66
----------------------------
3.02 Issuance, Amendment and Renewal of Letters of Credit..............................67
----------------------------------------------------
3.03 Participations, Drawings and Reimbursements.......................................69
-------------------------------------------
3.04 Repayment of Participations.......................................................70
---------------------------
3.05 Role of the Issuing Bank..........................................................71
------------------------
3.06 Obligations Absolute..............................................................72
--------------------
3.07 Cash Collateral Pledge............................................................72
----------------------
3.08 Letter of Credit Fees.............................................................73
---------------------
3.09 Applicability of ISP98 and UCP....................................................73
------------------------------
ARTICLE IV. TAXES, YIELD PROTECTION AND ILLEGALITY.....................................................73
--------------------------------------
4.01 Taxes.............................................................................73
-----
4.02 Illegality........................................................................78
----------
4.03 Increased Costs and Reduction of Return...........................................78
---------------------------------------
4.04 Funding Losses....................................................................79
--------------
4.05 Inability to Determine Rates......................................................79
----------------------------
4.06 Reserves on Eurodollar Loans......................................................80
----------------------------
4.07 Certificates of Banks.............................................................80
---------------------
4.08 Change of Lending Office, Replacement Bank........................................80
------------------------------------------
4.09 Survival..........................................................................81
--------
ARTICLE V. CONDITIONS PRECEDENT.......................................................................81
--------------------
5.01 Conditions to the Effective Date..................................................81
--------------------------------
(a) Amended and Restated Credit Agreement......................................81
-------------------------------------
(b) Closing Certificates.......................................................81
--------------------
(c) Cancellation of Liens......................................................82
---------------------
(d) Global Assignment and Assumption...........................................82
--------------------------------
(e) Legal Opinions.............................................................82
--------------
(f) Certificates...............................................................82
------------
(g) Pro Forma Financial Statements.............................................83
------------------------------
(h) Solvency Certificate.......................................................83
--------------------
(j) Other Documents............................................................83
---------------
5.02 Additional Conditions to the Effective Date.......................................83
-------------------------------------------
(b) No Restraints..............................................................83
-------------
(c) Margin Regulations.........................................................83
------------------
(d) Material Adverse Effect....................................................84
-----------------------
(e) Fees.......................................................................84
----
(f) Repayment, Repurchase, Cancellation and/or Modification of
-----------------------------------------------------------
Certain Indebtedness.......................................................84
--------------------
(g) Governmental and Third Party Approvals.....................................84
--------------------------------------
(i) All Proceedings Satisfactory...............................................84
----------------------------
</TABLE>
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5.03 Conditions to All Borrowings and the Issuance of Any Letters of
------------------------------------------------------------------
Credit............................................................................84
------
(a) Notice of Borrowing; Letter of Credit Application..........................85
-------------------------------------------------
(b) Representations and Warranties.............................................85
------------------------------
(c) No Default.................................................................85
----------
(d) No Material Adverse Effect.................................................85
--------------------------
ARTICLE VI. REPRESENTATIONS AND WARRANTIES.............................................................85
------------------------------
6.01 Existence; Compliance with Law....................................................85
------------------------------
6.02 Corporate, Limited Liability Company or Partnership
------------------------------------------------------------------
Authorization; No Contravention...................................................86
-------------------------------
6.03 Governmental Authorization........................................................86
--------------------------
6.04 Binding Effect....................................................................86
--------------
6.05 Litigation........................................................................86
----------
6.06 No Default........................................................................87
----------
6.07 ERISA Compliance..................................................................87
----------------
6.08 Use of Proceeds; Margin Regulations...............................................88
-----------------------------------
6.09 Ownership of Property; Intellectual Property......................................88
--------------------------------------------
6.10 Taxes.............................................................................89
-----
6.11 Financial Statements..............................................................89
--------------------
6.12 Securities Law, etc.; Compliance..................................................89
--------------------------------
6.13 Governmental Regulation...........................................................89
-----------------------
6.14 Accuracy of Information...........................................................89
-----------------------
6.15 Hazardous Materials...............................................................90
-------------------
6.16 FCC Licenses......................................................................90
------------
6.17 Subsidiaries; Capital Stock of Nexstar Finance Holdings...........................91
-------------------------------------------------------
6.18 Solvency..........................................................................91
--------
6.19 Labor Controversies...............................................................92
-------------------
6.20 Security Documents................................................................92
------------------
6.21 Network Affiliation Agreements....................................................92
------------------------------
6.22 Condition of Stations.............................................................92
---------------------
6.23 Special Purpose Entities..........................................................92
------------------------
ARTICLE VII. AFFIRMATIVE COVENANTS......................................................................93
---------------------
7.01 Financial Statements..............................................................93
--------------------
7.02 Certificates; Other Information...................................................94
-------------------------------
7.03 Notices...........................................................................94
-------
7.04 FCC Information...................................................................95
---------------
7.05 FCC Licenses and Regulatory Compliance............................................95
--------------------------------------
7.06 License Lapse.....................................................................95
-------------
7.07 Maintenance of Corporate, Limited Liability Company or
------------------------------------------------------------------
Partnership Existence, etc........................................................95
---------------------------
7.08 Foreign Qualification, etc........................................................96
---------------------------
7.09 Payment of Taxes, etc.............................................................96
----------------------
7.10 Maintenance of Property; Insurance................................................96
----------------------------------
7.11 Compliance with Laws, etc.........................................................96
--------------------------
</TABLE>
iii
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7.12 Books and Records.................................................................96
-----------------
7.13 Use of Proceeds...................................................................97
---------------
7.14 End of Fiscal Years; Fiscal Quarters..............................................97
------------------------------------
7.15 Interest Rate Protection..........................................................97
------------------------
7.16 Additional Security; Further Assurances...........................................97
---------------------------------------
ARTICLE VIII. NEGATIVE COVENANTS.........................................................................98
------------------
8.01 Changes in Business...............................................................98
-------------------
8.02 Limitation on Liens...............................................................98
-------------------
8.03 Disposition of Assets............................................................100
---------------------
8.04 Consolidations, Mergers, Acquisitions, etc.......................................101
-------------------------------------------
8.05 Limitation on Indebtedness.......................................................102
--------------------------
8.06 Transactions with Affiliates.....................................................106
----------------------------
8.07 Use of Credits; Compliance with Margin Regulations...............................106
--------------------------------------------------
8.08 Environmental Liabilities........................................................106
-------------------------
8.09 Financial Covenants..............................................................107
-------------------
(a) Consolidated Total Leverage Ratio.........................................107
---------------------------------
(b) Consolidated Senior Leverage Ratio........................................107
----------------------------------
(c) Consolidated Interest Coverage Ratio......................................108
------------------------------------
(c) Pro Forma Debt Service Ratio..............................................108
----------------------------
(d) Limitation on Capital Expenditures........................................108
----------------------------------
(e) Limitation on Film Cash Payments..........................................109
--------------------------------
(g) Required Junior Capital...................................................109
-----------------------
8.10 Restricted Payments..............................................................109
-------------------
8.11 Advances, Investments and Loans..................................................114
-------------------------------
8.12 Limitation on Business Activities of the Nexstar Entities........................115
---------------------------------------------------------
8.13 Sales or Issuances of Capital Stock..............................................115
-----------------------------------
8.14 No Waivers or Amendments.........................................................115
------------------------
ARTICLE IX. EVENTS OF DEFAULT.........................................................................116
-----------------
9.01 Event of Default.................................................................116
----------------
(a) Non-Payment...............................................................116
-----------
(b) Representation or Warranty................................................116
--------------------------
(c) Specific Defaults.........................................................116
-----------------
(d) Other Defaults............................................................116
--------------
(e) Cross-Default.............................................................116
-------------
(f) Insolvency; Voluntary Proceedings.........................................117
---------------------------------
(g) Involuntary Proceedings...................................................117
-----------------------
(h) ERISA.....................................................................117
-----
(i) Judgments.................................................................118
---------
(j) Change of Control.........................................................118
-----------------
(k) Guaranty Agreements.......................................................118
-------------------
(l) Security Documents........................................................118
------------------
(m) Termination of Material Licenses..........................................118
--------------------------------
(n) Termination of Network Affiliation Agreements.............................118
---------------------------------------------
9.02 Remedies.........................................................................118
--------
</TABLE>
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9.03 Rights Not Exclusive.............................................................120
--------------------
ARTICLE X. THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LEAD ARRANGER AND BOOK
-------------------------------
MANAGER....................................................................................120
-------
10.01 Appointment and Authorization....................................................120
-----------------------------
10.02 Delegation of Duties.............................................................120
--------------------
10.03 Liability of Administrative Agent................................................121
---------------------------------
10.04 Reliance by Administrative Agent.................................................121
10.05 Notice of Default................................................................122
-----------------
10.06 Credit Decision..................................................................122
---------------
10.07 Indemnification..................................................................123
---------------
10.08 Administrative Agent in Individual Capacity......................................123
-------------------------------------------
10.09 Successor Administrative Agent...................................................124
------------------------------
10.10 The Lead Arranger and Book Manager...............................................124
----------------------------------
ARTICLE XI. MISCELLANEOUS.............................................................................124
-------------
11.01 Amendments and Waivers...........................................................124
----------------------
11.02 Notices..........................................................................126
-------
11.03 No Waiver; Cumulative Remedies...................................................127
------------------------------
11.04 Costs and Expenses...............................................................127
------------------
11.05 INDEMNITY........................................................................128
---------
11.06 Successors and Assigns...........................................................128
----------------------
11.07 Assignments, Participations, etc.................................................128
---------------------------------
11.08 Confidentiality..................................................................130
---------------
11.09 Set-off..........................................................................131
-------
11.10 Notification of Addresses, Lending Offices, etc..................................131
------------------------------------------------
11.11 Counterparts.....................................................................132
------------
11.12 Severability.....................................................................132
------------
11.13 No Third Parties Benefited.......................................................132
--------------------------
11.14 Governing Law and Jurisdiction; Waiver of Trial by Jury..........................132
-------------------------------------------------------
(a) GOVERNING LAW.............................................................132
-------------
(b) JURISDICTION..............................................................132
------------
(c) WAIVER OF JURY TRIAL......................................................132
--------------------
11.15 Effectiveness....................................................................133
-------------
</TABLE>
v
SCHEDULE 1.01(A) LENDING OFFICES/NOTICE ADDRESSES
SCHEDULE 1.01(B) PRO FORMA ADJUSTMENTS TO CONSOLIDATED OPERATING
CASH FLOW
SCHEDULE 2.01 COMMITMENTS
SCHEDULE 6.16 FCC LICENSES
SCHEDULE 6.17 SUBSIDIARIES
SCHEDULE 6.21 NETWORK AFFILIATION AGREEMENTS
SCHEDULE 8.05(a) EXISTING INDEBTEDNESS
SCHEDULE 8.11(e) INVESTMENTS
EXHIBIT A Form of Assignment and Assumption
EXHIBIT B Form of Borrower Subordinated Convertible Promissory Note
EXHIBIT C Form of Closing Certificate
EXHIBIT D Form of Compliance Certificate
EXHIBIT E-1 Form of Global Assignment and Assumption (Nexstar)
EXHIBIT E-2 Form of Global Assignment and Assumption (Bastet/Mission)
EXHIBIT F Form of Notice of Borrowing
EXHIBIT G Form of Notice of Conversion/Continuation
EXHIBIT H Form of Parent Subordinated Convertible Promissory Note
EXHIBIT I Form of Officer's Solvency Certificate
vi
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 14, 2001,
is among NEXSTAR FINANCE, L.L.C., a limited liability company organized under
the laws of the State of Delaware (the "Borrower"), NEXSTAR BROADCASTING GROUP,
--------
L.L.C., a limited liability company organized under the laws of the State of
Delaware (the "Ultimate Parent"), certain of its Subsidiaries from time to time
---------------
parties to this Agreement, the several banks and other financial institutions or
entities from time to time parties hereto (the "Banks"), BANK OF AMERICA, N.A.,
-----
as the Administrative Agent for the Banks, BARCLAYS BANK PLC, as the Syndication
Agent, and FIRST UNION NATIONAL BANK, as the Documentation Agent.
RECITALS
A. The Borrower, the Ultimate Parent, the Subsidiaries of the
Ultimate Parent parties thereto, the Administrative Agent, the Syndication
Agent, the Documentation Agent, and the several Banks parties thereto entered
into that certain Credit Agreement dated as of January 12, 2001 (as amended by
that certain First Amendment to Credit Agreement and Limited Consent dated as of
May 17, 2001, the "Existing Credit Agreement").
-------------------------
B. Pursuant to a Global Assignment and Acceptance dated as of even
date herewith, the Banks parties to the Existing Credit Agreement have assigned
certain of their rights and obligations under the Existing Credit Agreement to
the several Banks parties to such Global Assignment and Acceptance.
C. The parties wish to amend and restate the Existing Credit
Agreement, which amendment and restatement is in extension and renewal, and not
in extinguishment or novation, of the indebtedness outstanding under the
Existing Credit Agreement, as herein provided, it being acknowledged and agreed
by the Borrower, the Ultimate Parent and the other Parent Guarantors that the
Indebtedness under this Agreement constitutes an extension and renewal of the
outstanding indebtedness under the Existing Credit Agreement, and that all Liens
and Guaranty Agreements that secure the repayment of outstanding indebtedness
under the Existing Credit Agreement shall continue to secure Indebtedness under
this Agreement.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties agree that the Existing Credit Agreement shall be
and hereby is amended and restated in its entirety as follows:
ARTICLE I.
DEFINITIONS
-----------
1.01 Defined Terms. All capitalized terms used and not otherwise
-------------
defined in this Agreement, including in the Preamble hereto, shall have the
meanings specified below:
"ABRY Capital" means ABRY Capital, L.P., a limited partnership
------------
organized under the laws of the State of Delaware.
"ABRY Capital Contribution Agreements" means (i) the Capital
------------------------------------
Contribution Agreement, dated effective as of January 12, 2001, executed and
delivered by ABRY L.P. III, the Ultimate Parent and the Borrower, in favor of
the Administrative Agent and the Banks, as the same may be amended or modified
pursuant to Section 14(b) thereof, and (ii) the ABRY L.P. II Agreement referred
to therein.
"ABRY Equity" means ABRY Equity Investors, L.P., a limited partnership
-----------
organized under the laws of the State of Delaware.
"ABRY Holdings" means ABRY Holdings, LLC, a limited liability company
-------------
organized under the laws of the State of Delaware.
"ABRY Holdings Co." means ABRY Holdings Co., a business trust
-----------------
organized under the laws of the Commonwealth of Massachusetts.
"ABRY Holdings III" means ABRY Holdings III, LLC, a limited liability
-----------------
company organized under the laws of the State of Delaware.
"ABRY Holdings III Co." means ABRY Holdings III Co., a business trust
---------------------
organized under the laws of the Commonwealth of Massachusetts.
"ABRY L.P. II" means ABRY Broadcast Partners II, L.P., a limited
------------
partnership organized under the laws of the State of Delaware.
"ABRY L.P. III" means ABRY Broadcast Partners III, L.P., a limited
-------------
partnership organized under the laws of the State of Delaware.
"ABRY/Nexstar, Inc." means ABRY/Nexstar, Inc., a Delaware corporation,
------------------
100% of the issued and outstanding Capital Stock of which is owned by ABRY L.P.
II and ABRY L.P. III
"Additional Security Documents" has the meaning specified in Section
----------------------------- -------
7.16(a).
-------
"Additional Term A Loan" has the meaning specified in Section
---------------------- -------
2.01(a)(i).
-----------
"Additional Term A Loan Commitment" means, as to any Bank, the
---------------------------------
obligation of such Bank, if any, to make Term A Additional Loans to the Borrower
hereunder in an aggregate principal amount not to exceed the amount set forth
under the heading "Additional Term A Loan Commitment" opposite such Bank's name
---------------------------------
on Schedule 2.01.
-------------
"Adjusted Working Capital" means for any Person, (i) the current
------------------------
assets of such Person (excluding cash and Cash Equivalents) minus (ii) the
current liabilities of such Person (excluding the current portion of any long-
term Indebtedness (including Capital Lease Obligations), and excluding deferred
income tax liabilities, of such Person), each as determined on a consolidated
basis.
"Adjustment Date" means, with respect to any calculation of the
---------------
Applicable Margin following any Fiscal Quarter of the Borrower, the earlier of
(i) the date which is 45 days
2
after the end of such Fiscal Quarter (or, in the case of the fourth Fiscal
Quarter of any Fiscal Year of the Borrower, the date which is 90 days after the
end of such Fiscal Quarter) and (ii) the date which is two Business Days after
the Borrower has delivered a Compliance Certificate to the Administrative Agent
with respect to such Fiscal Quarter.
"Administrative Agent" means Bank of America, N.A. in its capacity as
--------------------
Administrative Agent for the Banks hereunder, and any successor to such agent.
"Administrative Agent-Related Persons" has the meaning specified in
------------------------------------
Section 10.03.
-------------
"Administrative Agent's Payment Office" means the address for payments
-------------------------------------
set forth on the signature page hereto in relation to the Administrative Agent
or such other address as the Administrative Agent may from time to time specify
in accordance with Section 11.02.
-------------
"Affiliate" means, with respect to any Person, any other Person (i)
---------
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or (ii) that directly or indirectly owns more
than 5% of any class of the capital stock, of or equity interests in, such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.
"Aggregate Available Revolving Commitment" means the sum of the
----------------------------------------
Available Revolving Commitments of all Banks.
"Aggregate Combined Revolving Commitment" means the sum of the
---------------------------------------
Aggregate Revolving Commitment, plus the Aggregate Incremental Revolving
----
Commitment.
"Aggregate Commitment" means the sum of the Aggregate Revolving
--------------------
Commitment, plus the Aggregate Term A Commitment, plus the Aggregate Term B
---- ----
Commitment, plus the Aggregate Incremental Revolving Commitment, plus the
---- ----
Aggregate Incremental Term Commitment of all of the Banks.
"Aggregate Incremental Revolving Commitment" at any time, means the
------------------------------------------
sum of the amount of all Incremental Facilities consisting of Incremental
Revolving Commitments at such time, in an initial amount equal to zero, as such
amount may be increased pursuant to Section 2.01(c) to an aggregate amount
---------------
which, when combined with the Aggregate Incremental Term Commitment, may not
exceed the Maximum Incremental Amount.
"Aggregate Incremental Term Commitment" at any time, means the sum of
-------------------------------------
the amount of all Incremental Facilities consisting of Incremental Term
Commitments (whether or not terminated) at such time, in an initial amount equal
to zero, as such amount may be increased pursuant to Section 2.01(c) to an
---------------
aggregate amount which, when combined with the Aggregate Incremental Revolving
Commitment, may not exceed the Maximum Incremental Amount.
3
"Aggregate Outstanding Loan Balance" means the sum of the aggregate
----------------------------------
outstanding principal balances of all Loans.
"Aggregate Outstanding Term A Loan Balance" means the sum of the
-----------------------------------------
aggregate outstanding principal balances of all Term A Loans, as such amount may
be adjusted from time to time pursuant to this Agreement.
"Aggregate Outstanding Term B Loan Balance" means the sum of the
-----------------------------------------
aggregate outstanding principal balances of all Term B Loans.
"Aggregate Revolving Commitment" means the sum of the Revolving
------------------------------
Commitments of all of the Banks, in an initial amount of $57,000,000, as such
amount may be adjusted from time to time pursuant to this Agreement.
"Aggregate Term A Commitment" means the sum of the Term A Commitments
---------------------------
of all of the Banks, in an initial amount of $50,000,000, as such amount may be
adjusted from time to time pursuant to this Agreement.
"Aggregate Term B Commitment" means the sum of the Term B Commitments
---------------------------
of all of the Banks, in an initial amount of $75,000,000, as such amount may be
adjusted from time to time pursuant to this Agreement.
"Agreement" means this Amended and Restated Credit Agreement,
---------
including the Schedules and Exhibits hereto, as the same may be amended,
modified, restated, supplemented, renewed, extended, increased, rearranged
and/or substituted from time to time.
"Anticipated Reinvestment Amount" means, with respect to any
-------------------------------
Reinvestment Election, the amount specified in the Reinvestment Notice delivered
by the Borrower in connection therewith as the amount of the Net Cash Proceeds
from the related Disposition that the Borrower or any Subsidiary of the Borrower
intends to use to purchase, construct or otherwise acquire Reinvestment Assets.
"Applicable Margin" means (i) with respect to Term A Loans (other than
-----------------
Incremental Term Loans) and Revolving Loans (other than Incremental Revolving
Loans) which are Eurodollar Loans, the margin to be added at any date to the
Eurodollar Rate, which is equal to the applicable percentage rate per annum set
forth below, based upon the applicable Level in effect for the Borrower on such
date; (ii) with respect to Term A Loans (other than Incremental Term Loans) and
Revolving Loans (other than Incremental Revolving Loans) which are Base Rate
Loans, the margin to be added at any date to the Base Rate, which is equal to
the percentage per annum which is 1.625% less than the Applicable Margin for
----
Eurodollar Loans then in effect for the Borrower on such date, but in no event
less than zero, (iii) with respect to Term B Loans which are Eurodollar Loans,
4.000%; (iv) with respect to Term B Loans which are Base Rate Loans, 1.625% less
----
than the Applicable Margin for Term B Loans which are Eurodollar Loans then in
effect for the Borrower on such date, but in no event less than zero; and (iv)
with respect to Incremental Term Loans and Incremental Revolving Loans, the
Incremental Margin to be added to the Base Rate or Eurodollar Rate, as the case
may be, as agreed upon by the Borrower and the Bank or Banks providing the
Incremental Term Commitment and/or Incremental
4
Revolving Commitment relating thereto as provided in Section 2.16(a), or if not
agreed upon, as provided in Section 2.16(b).
Level Applicable Percentage Rate
==================================================
Level I 2.000%
--------------------------------------------------
Level II 2.250%
--------------------------------------------------
Level III 2.500%
--------------------------------------------------
Level IV 2.750%
--------------------------------------------------
Level V 3.000%
--------------------------------------------------
Level VI 3.250%
--------------------------------------------------
"Approved Fund" means any Bank that is a fund that invests in
-------------
commercial loans or invests in any other fund that invests in commercial loans
and is managed or advised by the same investment advisor as such Bank or by an
Affiliate of such investment advisor.
"Assignee" has the meaning specified in Section 11.07(a).
-------- ----------------
"Assignment and Assumption" means an Assignment and Assumption,
-------------------------
substantially in the form of Exhibit A.
---------
"Attorney Costs" means and includes all reasonable documented fees and
--------------
disbursements of any law firm or other external counsel and, without
duplication, the reasonable allocated cost of internal legal services, and all
reasonable disbursements of internal counsel.
"Authorization" means any filing, recording and registration with, and
-------------
any validation or exemption, approval, order, authorization, consent, License,
certificate, franchise and permit from, any Governmental Authority, including,
without limitation, FCC Licenses.
"Available Revolving Commitment" means, at any time as to any Bank, an
------------------------------
amount equal to the excess, if any, of (i) the amount of the Revolving
Commitment of such Bank at such time, over (ii) the sum of the outstanding
----
principal balances of all Revolving Loans of such Bank plus the sum of all
----
participations of such Bank in Letter of Credit Obligations at such time.
"Bank Affiliate" means a Person engaged primarily in the business of
--------------
commercial banking that is an Affiliate of a Bank.
"Bank of America" means Bank of America, N.A., a national banking
---------------
association.
5
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
---------------
U.S.C. (S) 101, et seq.).
-- ----
"Banks" has the meaning specified in the Preamble hereto and such term
-----
shall also include the Issuing Bank.
"Base Rate" means, for any day, the higher of (i) the Reference Rate
---------
or (ii) the Federal Funds Rate plus 1/2%, in each case as in effect for such
----
day.
"Base Rate Loan" means any Loan that bears an interest rate based on
--------------
the Base Rate.
"Bastet" means Bastet Broadcasting, Inc.
------
"Bastet/Mission Aggregate Commitment" means the "Aggregate Commitment"
-----------------------------------
as that term is defined in the Bastet/Mission Credit Agreement.
"Bastet/Mission Banks" means the "Banks" as that term is defined in
--------------------
the Bastet/Mission Credit Agreement.
"Bastet/Mission Borrowers" means the "Borrowers" as that term is
------------------------
defined in the Bastet/Mission Credit Agreement.
"Bastet/Mission Credit Agreement" means that Credit Agreement dated as
-------------------------------
of January 12, 2001, among Bastet and Mission, as borrowers, the financial
institutions from time to time parties thereto and Bank of America, N.A., as
Administrative Agent, Barclays Bank PLC, as Documentation Agent, as amended by
that certain First Amendment to Credit Agreement dated as of May 17, 2001, and
as the same may be further amended, modified, restated, supplemented, renewed,
extended, increased, rearranged and/or substituted from time to time.
"Bastet/Mission Entity" means any Person which is a direct or indirect
---------------------
Subsidiary of a Bastet/Mission Borrower or which is a Bastet/Mission Borrower.
"Bastet/Mission Facility Percentage" means the "Facility Percentage"
----------------------------------
as that term is defined in the Bastet/Mission Credit Agreement.
"Bastet/Mission Guaranty of Nexstar Obligations" means the Guaranty
----------------------------------------------
Agreement dated as of January 12, 2001, executed by the Bastet/Mission Entities
in favor of the Banks, whereby the Bastet/Mission Entities have guaranteed the
Obligations.
"Bastet/Mission Loan Documents" means the "Loan Documents" as that
-----------------------------
term is defined in the Bastet/Mission Credit Agreement.
"Bastet/Mission Loans" means any extension of credit made by any Bank
--------------------
under or pursuant to the Bastet/Mission Credit Agreement.
"Board" means the Board of Governors of the Federal Reserve System of
-----
the United States (or any successor).
6
"Board of Directors" means, as to any Person, either (a) the board of
------------------
directors of such Person (or, in the case of any Person that is a limited
liability company, the managers of such Person) or (b) any duly authorized
committee thereof.
"Board Resolution" means, as to any Person, a copy of a resolution of
----------------
such Person certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by requisite action of the Board of Directors of such
Person and to be in full force and effect on the date of such certification.
"Borrower" has the meaning specified in the Preamble hereto.
--------
"Borrower Subordinated Convertible Promissory Note" means a promissory
-------------------------------------------------
note of the Borrower, payable to the order of Nexstar Finance Holdings,
substantially the form of Exhibit B.
---------
"Borrowing" has the meaning specified in Section 1.04.
--------- ------------
"Borrowing Date" means, in relation to any Loan, the date of the
--------------
borrowing of such Loan as specified in the relevant Notice of Borrowing for a
Borrowing.
"Bridge Loan Agreement" means that certain Bridge Loan Agreement,
---------------------
dated as of January 12, 2001, among Nexstar Finance Holdings, the Ultimate
Parent, the lenders named therein, Banc of America Securities LLC, and Bank of
America Bridge LLC.
"Business Day" means any day other than a Saturday, Sunday or other
------------
day on which commercial banks in Dallas, Texas or New York City are authorized
or required by law to close and, if such term is used in relation to any
Eurodollar Loan or the Interest Period therefor, on such day dealings are
carried on by and between banks in Dollar deposits in the applicable interbank
market.
"Capital Adequacy Regulation" means any guideline, request or
---------------------------
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, regarding capital
adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means, for any period and with respect to any
--------------------
Person, the aggregate of all expenditures by such Person and its Subsidiaries
with respect to such period which should be capitalized according to GAAP on a
consolidated balance sheet of such Person and its Subsidiaries, including all
expenditures with respect to fixed or capital assets which should be so
capitalized and, without duplication, the amount of all Capital Lease
Obligations; it being understood that "Capital Expenditures" shall not include,
--------------------
without duplication, payments made or accrued in respect of Film Obligations or
Consolidation Expenses.
"Capital Lease" has the meaning specified in the definition of
-------------
"Capital Lease Obligations".
--------------------------
7
"Capital Lease Obligations" means, with respect to any Person, all
-------------------------
monetary obligations of such Person under any leasing or similar arrangement
which, in accordance with GAAP, is classified as a capital lease (a "Capital
-------
Lease").
-----
"Capital Stock" means (i) any capital stock, partnership, membership,
-------------
joint venture or other ownership or equity interest, participation or securities
(whether voting or non-voting, whether preferred, common or otherwise, and
including any stock appreciation, contingent interest or similar right) and (ii)
any option, warrant, security or other right (including debt securities or other
evidence of Indebtedness) directly or indirectly convertible into or exercisable
or exchangeable for, or otherwise to acquire directly or indirectly, any capital
stock, partnership, membership, joint venture or other ownership or equity
interest, participation or security described in clause (i) above.
"Cash Collateralize" with respect to any Person, means to pledge and
------------------
deposit with or deliver to the Administrative Agent, for the benefit of the
Administrative Agent, the Issuing Bank and the Banks, as collateral for the
Letter of Credit Obligations, cash or deposit account balances of such Person
pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the Issuing Bank (which documents are hereby consented
to by the Banks). Derivatives of such term shall have corresponding meanings.
The Borrower hereby grants to the Administrative Agent, for the benefit of the
Administrative Agent, the Issuing Bank and the Banks, a security interest in all
such cash and deposit account balances of the Borrower. Cash Collateral shall
be invested in Cash Equivalents of a tenor satisfactory to the Administrative
Agent and as instructed by the Borrower, which Cash Equivalents shall be held in
the name of the Borrower and under the control of the Administrative Agent in a
manner satisfactory to the Administrative Agent.
"Cash Equivalents" means any or all of the following: (i) obligations
----------------
of, or guaranteed as to interest and principal by, the United States government
maturing within one year after the date on which such obligations are purchased;
(ii) open market commercial paper of any corporation (other than any Nexstar
Entity or any Affiliate of any Nexstar Entity) incorporated under the laws of
the United States or any State thereof or the District of Columbia rated P-1 or
its equivalent by Moody's or A-1 or its equivalent or higher by S&P; (iii) time
deposits or certificates of deposit maturing within one year after the issuance
thereof issued by commercial banks organized under the laws of any country which
is a member of the OECD and having a combined capital and surplus in excess of
$250,000,000 or which is a Bank or Brown Brothers Harriman & Co.; (iv)
repurchase agreements with respect to securities described in clause (i) above
----------
entered into with an office of a bank or trust company meeting the criteria
specified in clause (iii); and (v) money market funds investing only in
------------
investments described in clauses (i) through (iv).
----------- ----
"Change of Control" means any of the following: (i) either (x) the
-----------------
aggregate remaining cost basis of ABRY L.P. II's and ABRY L.P. III's combined
equity interests in the Ultimate Parent shall be less than $50,000,000 or (y)
ABRY L.P. II and ABRY L.P. III, taken together, shall cease to be able to elect
a majority of the board of directors or similar governing persons of the
Ultimate Parent; (ii) ABRY L.P. II and ABRY L.P. III, taken together, shall
cease to directly or indirectly own and hold at least (x) 66 2/3% on a fully
diluted basis of the voting
8
interests in the Ultimate Parent and (y) 51% on a fully diluted basis of the
economic interests in the Ultimate Parent (excluding the Permitted Parent
Preferred Equity); (iii) ABRY L.P. II or ABRY L.P. III, taken together, shall
neither directly nor indirectly control management of the Ultimate Parent
whether by ownership of voting securities, contract or otherwise; (iv) ABRY
Capital shall cease to be the sole general partner of ABRY L.P. II or ABRY
Equity shall cease to be the sole general partner of ABRY L.P. III; (v) ABRY
Holdings shall cease to be the sole general partner of ABRY Capital or ABRY
Holdings III shall cease to be the sole general partner of ABRY Equity; (vi)
ABRY Holdings Co. shall cease to be the sole member of ABRY Holdings or ABRY
Holdings III Co. shall cease to be the sole member of ABRY Holdings III; (vii)
so long as the Permitted Holdings Preferred Equity is outstanding, ABRY L.P. II
and ABRY L.P. III, taken together, shall cease to own 100%, on a fully diluted
basis, of the economic and voting capital securities of ABRY/Nexstar, Inc.;
(viii) the Ultimate Parent shall cease to own, directly or indirectly, 100% on a
fully diluted basis of the Capital Stock of each Parent Guarantor other than
Permitted Holdings Preferred Equity and Permitted Permanent Holdings Preferred
Equity; (ix) the Parent Guarantors which are direct Subsidiaries of the Ultimate
Parent shall cease to own, directly or indirectly, 100% on a fully diluted basis
of the Capital Stock of the Holding Company other than Permitted Holdings
Preferred Equity and Permitted Permanent Holdings Preferred Equity; (x) any
Person other than ABRY/Nexstar, Inc. shall own any of the Permitted Holdings
Preferred Equity; (xi) Nexstar Finance Holdings shall cease to own 100% on a
fully diluted basis of the Capital Stock of the Borrower other than Permitted
Borrower Preferred Equity; or (xii) if the New Holding Company is the Holding
Company, then the New Holding Company shall cease to own 100% of the Capital
Stock of Nexstar Finance Holdings, other than Permitted Holdings Preferred
Equity and Permitted Permanent Holdings Preferred Equity.
"Charter Documents" means, with respect to any Person, (i) the
-----------------
articles or certificate of formation, incorporation or organization (or the
equivalent organizational documents) of such Person, (ii) the bylaws,
partnership agreement, limited liability company agreement or regulations (or
the equivalent governing documents) of such Person and (iii) each document
setting forth the designation, amount and relative rights, limitations and
preferences of any class or series of such Person's Capital Stock or of any
rights in respect of such Person's Capital Stock.
"Closing Certificate" means a Closing Certificate substantially in the
-------------------
form of Exhibit C.
---------
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time, and any regulations promulgated thereunder.
"Collateral" means the Pledged Collateral, the Security Agreement
----------
Collateral and the Mortgaged Properties.
"Collateral Agent" means the Administrative Agent acting as collateral
----------------
agent pursuant to the Security Documents.
"Commitment" means, for each Bank, the sum of its Revolving
----------
Commitment, Term A Commitment, Term B Commitment and any Incremental Revolving
Commitment and/or
9
Incremental Term Commitment of such Bank issued after the Effective Date
pursuant to Section 2.01(c) and Section 2.16.
"Communications Act" has the meaning specified in Section 6.16.
------------------ ------------
"Compliance Certificate" means, as to any Person, a certificate of the
----------------------
Chief Executive Officer, President, Chief Financial Officer or Vice President of
such Person, substantially in the form of Exhibit D.
---------
"Consolidated Amortization Expense" means, for any period, for any
---------------------------------
Person, the consolidated amortization expense (including amortization of Film
Obligations and goodwill) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Cash Interest Expense" means, for any period, for any
----------------------------------
Person, Consolidated Interest Expense for such Person for such period, but
excluding to the extent otherwise included therein, (i) interest expense to the
extent not payable in cash (e.g., interest or dividends on securities which must
----
(or may, at the election of such Person or any of its Subsidiaries) be paid in
additional securities, imputed interest, amortization of original issue discount
and/or by an addition to the accreted value thereof), (ii) amortization of
discount, (iii) deferred financing costs and (iv) Excluded Interest.
"Consolidated Depreciation Expense" means, for any period, for any
---------------------------------
Person, the depreciation expense of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means, on any date, the ratio
------------------------------------
of (i) Consolidated Operating Cash Flow of the Borrower and its Subsidiaries for
the applicable Measurement Period relating to such date to (ii) the Consolidated
--
Cash Interest Expense of the Borrower and its Subsidiaries for such Measurement
Period relating to such date, plus Consolidated Cash Interest Expense of Nexstar
----
Finance Holdings with respect to Permitted Holdings Unsecured Indebtedness, the
Nexstar Finance Holdings Bridge, Permitted Permanent Holdings Preferred Equity
and Permitted Parent Preferred Equity for such Measurement Period relating to
such date.
"Consolidated Interest Expense" means, for any period, for any Person,
-----------------------------
the interest expense of such Person and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP, including, without
duplication, total interest expense for such period (including interest
attributable to Capital Leases) with respect to all outstanding Indebtedness of
such Person and its Subsidiaries, capitalized interest and all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, as such amounts may be increased or decreased by
the net income (or loss) from Interest Rate Protection Agreements of such Person
for such period.
"Consolidated Net Income" means, for any period, for any Person, the
-----------------------
net income (or loss) of such Person and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
--------
excluded, without duplication, (i) income of any
10
Subsidiary of such Person which is not a Wholly Owned Subsidiary of such Person,
except to the extent of the amount of any dividends or other distributions
actually paid by or to such Person or any Wholly Owned Subsidiary of such Person
during such period, (ii) income of any other Person accrued prior to the date
(A) any such other Person becomes a Subsidiary of the Person whose net income is
being determined, (B) any such other Person is merged into such Person whose net
income is being determined or any Subsidiary of such Person whose net income is
being determined or (C) the assets of any such other Person are acquired by the
Person whose net income is being determined or by any Subsidiary of such Person
whose net income is being determined, (iii) the income of any Subsidiary of such
Person during such period to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of such income is not at
the time permitted by operation of the terms of its Charter Documents or any
other agreement binding on such Subsidiary or any Requirement of Law applicable
to such Subsidiary or such Person or any of its other Subsidiaries, (iv) any
after- tax gains and after-tax losses attributable to extraordinary and
non-recurring items, including Recovery Events and Dispositions outside the
ordinary course of business and any after-tax gains on pension reversions
received by such Person or its Subsidiaries, and (v) to the extent included in
calculating such Consolidated Net Income, non-cash revenue and non-cash expenses
earned or incurred by such Person or any of its Subsidiaries.
"Consolidated Operating Cash Flow" means, for any period, for any
--------------------------------
Person, (i) Consolidated Net Income of such Person for such period plus (ii) (to
----
the extent deducted in calculating such Consolidated Net Income) the sum of,
without duplication, (A) Consolidated Depreciation Expense, (B) Consolidated
Amortization Expense, (C) Consolidated Interest Expense, (D) income tax expenses
for such Person and its Subsidiaries (other than any such expense paid or
payable during such period in connection with extraordinary gains), and (E)
recurring and non-recurring non-cash losses and expenses (determined on a
consolidated basis) less (iii) the sum of (A) Film Cash Payments accrued or
----
becoming due and payable during such period (without duplication) and (B) (to
the extent included in calculating such Consolidated Net Income) non-cash
revenues, in each case calculated, if applicable, on a Pro Forma Basis (except
for purposes of calculating the Consolidated Interest Coverage Ratio) after
giving effect to (x) any sale or disposition of any Station pursuant to Section
-------
8.03(b) as if the same were consummated or became effective on the first day of
-------
such period and (y) any purchase or acquisition of any Person or Station, or the
entering into of any Local Marketing Agreement, Joint Sales Agreement and/or
Shared Services Agreement pursuant to Section 8.04(b) as if the same were
---------------
consummated or became effective on the first day of such period, each as
determined on a consolidated basis in accordance with GAAP after eliminating all
intercompany items; provided that in connection with any purchase or acquisition
--------
or the commencement of the operation of any Station pursuant to any Local
Marketing Agreement, Joint Sales Agreement and/or Shared Services Agreement
under Section 8.04(b) and as otherwise provided in this Agreement, Consolidated
---------------
Operating Cash Flow shall reflect adjustments thereto for anticipated changes in
network compensation for such period to be effected within 120 days after any
such acquisition or commencement, commissions for national representatives and
other items of revenue or expense (including as the result of a reduction in the
number of employees within 120 days after the date of any such acquisition,
purchase or commencement), in each case as may be satisfactory to the
Administrative Agent; provided
--------
11
further that, if applicable, Consolidated Operating Cash Flow shall also reflect
the adjustments thereto set forth on Schedule 1.01(B).
"Consolidated Senior Leverage Ratio" means, on any date, the ratio of
----------------------------------
(i) the Consolidated Total Debt of the Borrower and its Subsidiaries on such
date (other than Permitted Borrower Subordinated Indebtedness, Permitted Seller
Subordinated Indebtedness (including any Permitted Seller Subordinated
Indebtedness incurred by Bastet/Mission Entities in accordance with the
Bastet/Mission Credit Agreement), Permitted Borrower Preferred Equity, and
Indebtedness evidenced by Borrower Subordinated Convertible Promissory Notes),
to (ii) the Consolidated Operating Cash Flow of the Borrower and its
--
Subsidiaries for the applicable Measurement Period relating to such date.
"Consolidated Total Debt" means, for any Person on any date, the
-----------------------
excess (if any) of (i) the Indebtedness of such Person and its Subsidiaries on
such date, determined on a consolidated basis in accordance with GAAP over (ii)
----
the lesser of (x) the cash on hand of such Person and its Subsidiaries on such
date and (y) $15,000,000.
"Consolidated Total Leverage Ratio" means, on any date, the ratio of
---------------------------------
(i) the Consolidated Total Debt of the Borrower and its Subsidiaries on such
date (other than Indebtedness evidenced by Borrower Subordinated Convertible
Promissory Notes and Permitted Borrower Preferred Equity), to (ii) the
--
Consolidated Operating Cash Flow of the Borrower and its Subsidiaries for the
applicable Measurement Period relating to such date.
"Consolidation Expenses" means, for any period and with respect to any
----------------------
Person, the aggregate of all expenditures by such Person and its Subsidiaries
with respect to such period related to the consolidation of Stations.
"Continuation Date" means any date as of which the Borrower elects to
-----------------
continue a Eurodollar Loan as a Eurodollar Loan for a further Interest Period in
accordance with the provisions of Section 2.04.
------------
"Contractual Obligations" means, as to any Person, any provision of
-----------------------
any security issued by such Person or of any agreement, undertaking, contract,
lease, loan agreement, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or any of
its property is bound.
"Conversion Date" means any date as of which the Borrower elects to
---------------
convert a Base Rate Loan to a Eurodollar Loan, or a Eurodollar Loan to a Base
Rate Loan, in each case in accordance with the provisions of Section 2.04.
------------
"Credit Event" means the making of any Loan or the issuance of any
------------
Letter of Credit.
"Credit Parties" means the collective reference to the Parent
--------------
Guarantors (including but not limited to the New Holding Company, if any, and
Nexstar Finance Holdings), the Borrower, the Subsidiary Guarantors, the
Bastet/Mission Entities and any other Person hereafter executing and delivering
a Security Document or a Guarantor Agreement or any
12
equivalent document for the benefit of the Administrative Agent and/or any Bank;
provided that David Smith will not be deemed to be a Credit Party.
"Default" means any event or circumstance which, with the giving of
-------
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Disbursement Date" has the meaning specified in Section 3.03(b).
----------------- ---------------
"Disposition" means the direct or indirect sale, assignment, lease (as
-----------
lessor), transfer, conveyance or other disposition (including, without
limitation, dispositions of or pursuant to Local Marketing Agreements, Joint
Sales Agreement or Shared Services Agreements or pursuant to Sale and Leaseback
Transactions, provided that any Sale and Leaseback Transaction shall be on terms
--------
and conditions satisfactory to the Majority Banks and the Administrative Agent),
in a single transaction or a series of related transactions, by any Nexstar
Entity to any Person (other than the Borrower or any Wholly-Owned Subsidiary of
the Borrower) of any assets or property of any Nexstar Entity, excluding (i)
assets or property disposed of in the ordinary course of business of such
Nexstar Entity and (ii) inventory, Real Property or equipment no longer used or
useful in the business of such Nexstar Entity; provided that in any event the
--------
term "Disposition" shall mean and include sales, assignments, leases (as
-----------
lessor), transfers, conveyances or other dispositions (including, without
limitation, pursuant to Local Marketing Agreements, Joint Sales Agreements or
Shared Services Agreements) of principal divisions, or lines of business of, any
Nexstar Entity including, without limitation, any Station of any Nexstar Entity
or the Capital Stock of any Subsidiary of any Nexstar Entity. The terms
"Dispose" and "Disposed of" shall have correlative meanings.
-------- -----------
"Disqualified Stock" means any Capital Stock which, by its terms (or
------------------
by the terms of any security into which it is convertible or for which it is
exchangeable), at the option of the holder thereof or upon the happening of any
event, matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, or is redeemable, at the option of the holder thereof,
in whole or in part.
"Dividend" means, with respect to any Person, that such Person has
--------
authorized, declared or paid a dividend or returned any equity capital to
holders of its Capital Stock as such or made any other distribution, payment or
delivery of property or cash to holders of its Capital Stock as such.
"Documentation Agent" means First Union National Bank, in its capacity
-------------------
as Documentation Agent for the Banks hereunder, and any successor to such agent.
"Dollars" and "$" each mean lawful money of the United States.
------- -
"Domestic Lending Office" shall have the meaning specified in the
-----------------------
definition of "Lending Office".
--------------
"Effective Date" has the meaning specified in Section 11.15.
-------------- -------------
13
"Eligible Assignee" means and includes a commercial bank, financial
-----------------
institution or other "accredited investor" (as defined in Regulation D of the
Securities Act of 1933).
"Environmental Claim" means any and all administrative, regulatory or
-------------------
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any way to
any violation of, or liability under, any Environmental Law or any permit
issued, or any approval given, under any such Environmental Law (hereafter,
"Claims"), including, without limitation, (i) any and all Claims by governmental
-------
or regulatory authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law, and
(ii) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials arising from alleged injury or threat of injury to health,
safety or the environment.
"Environmental Law" means the Comprehensive Environmental Response,
-----------------
Compensation and Liability Act, any so-called "Superfund" or any other
applicable Federal, state, local or other statute, law, ordinance, code, rule,
regulation, order or decree, as now or at any time hereafter in effect,
regulating, relating to, or imposing liability concerning the environment, the
impact of the environment on human health, or any hazardous or toxic waste,
substance or material or pollutant or contaminant.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
-----
the rules and regulations promulgated thereunder as from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) under common control with any Nexstar Entity within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) for purposes of
provisions relating to Sections 412, 414(t)(2) and 4971 of the Code).
"ERISA Event" means (i) a Reportable Event with respect to a Pension
-----------
Plan or a Multiemployer Plan which could reasonably be expected to result in a
material liability to any Nexstar Entity; (ii) a withdrawal by any Nexstar
Entity or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA where such withdrawal or
cessation could reasonably be expected to result in a material liability to any
Nexstar Entity; (iii) a complete or partial withdrawal by any Nexstar Entity or
any ERISA Affiliate from a Multiemployer Plan which could reasonably be expected
to result in a material liability to any Nexstar Entity or notification that a
Multiemployer Plan is insolvent or in reorganization; (iv) the filing of a
notice of intent to terminate other than under a standard termination pursuant
to Section 4041(b) of ERISA where such standard termination or the process of
affecting such standard termination will not result in a material liability to
any Nexstar Entity or an ERISA Affiliate, the treatment of a plan amendment as a
termination under Section 4041 or 4041A of ERISA or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (v) a
failure by any Nexstar Entity or any ERISA Affiliate to make required
contributions to a Pension Plan, Multiemployer Plan or other Plan subject to
Section 412 of the Code; (vi) an event
14
or condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; (vii) the imposition of any
material liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon any Nexstar Entity or any ERISA
Affiliate; or (viii) an application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code with respect to any
Plan.
"Eurocurrency Reserve Requirements" means, for any day as applied to a
---------------------------------
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, marginal, special, supplemental, or
emergency reserves) under any regulations issued from time to time by the Board
or other Governmental Authority having jurisdiction with respect thereto dealing
with reserve requirements prescribed for Eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board)
maintained by a member bank of the Federal Reserve System. Without limiting the
effect of the foregoing, the Eurocurrency Reserve Requirements shall reflect any
other reserves required to be maintained by such member banks with respect to
(i) any category of liabilities which includes deposits by reference to which
the Eurodollar Rate is to be determined, or (ii) any category of extensions of
credit or other assets which include Eurodollar Loans. The Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any change in
the Eurocurrency Reserve Requirements.
"Eurodollar Base Rate" means, for any Eurodollar Loan for any Interest
--------------------
Period therefor to be determined on any Interest Rate Determination Date, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Eurodollar Base Rate" shall mean, for any Eurodollar Loan
--------------------
for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided that if more than
--------
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%).
"Eurodollar Lending Office" shall have the meaning specified in the
-------------------------
definition of "Lending Office".
--------------
"Eurodollar Loan" means any Loan that bears interest rate computed on
---------------
the basis of the Eurodollar Rate.
"Eurodollar Rate" means, with respect to each day during each Interest
---------------
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
15
Eurodollar Base Rate
-----------------------------------------
1.00 - Eurocurrency Reserve Requirements.
"Event of Default" means any of the events or circumstances specified
----------------
in Section 9.01.
------------
"Excess Cash Flow" means for any Person for any period,
----------------
(a) the sum for such period of (i) Net Income; plus (ii) Consolidated
----
Amortization Expense and Consolidated Depreciation Expense, in each case to the
extent deducted in determining such Net Income; plus (iii) non-cash charges, to
----
the extent deducted in determining such Net Income; less
----
(b) the sum for such period of (i) Capital Expenditures made by such
Person and its consolidated Subsidiaries and payments accrued or becoming due
and payable during such period (without duplication) by such Person and its
consolidated Subsidiaries in respect of Film Obligations; plus (ii) (A) Adjusted
----
Working Capital of such Person as determined on the last day of such period
minus (B) Adjusted Working Capital of such Person as determined on the first day
-----
of such period; plus (iii) regularly scheduled payments of principal and
----
voluntary prepayments of principal of (x) Term Loans, (y) to the extent
accompanied by a Commitment reduction, Revolving Loans and (z) other
Indebtedness, by such Person and its consolidated Subsidiaries, to the extent
not prohibited hereunder; plus (iv) all Restricted Payments paid by such Person
----
or any of its consolidated Subsidiaries (other than to such Person or any such
Subsidiary) pursuant to Section 8.10; plus (v) all non-cash revenues and gains,
------------ ----
to the extent included in determining such Net Income; plus (vi) gains realized
----
in respect of Dispositions, to the extent included in determining such Net
Income.
"Exchange Equity" has the meaning specified in the definition of
---------------
Permitted Holdings Preferred Equity.
"Excluded Interest" means (i) an amount equal to the amount of
-----------------
interest (or a specified portion of the amount of interest) accruing, or to
accrue, on Permitted Borrower Subordinated Indebtedness during the six month
period after the issuance or incurrence thereof and which the Borrower agrees in
writing with the holders of such Permitted Borrower Subordinated Indebtedness
(so long as the Borrower notifies the Administrative Agent of such agreement),
or agrees with the Administrative Agent for the benefit of the Banks, to escrow
with a third party and to use such escrowed amounts to pay accrued interest on
the Permitted Borrower Subordinated Indebtedness or (ii) any amount of such
interest paid out of any such escrowed amount.
"Existing Credit Agreement" has the meaning specified in Recital A.
-------------------------
"Existing Holdings Preferred Equity" has the meaning specified in the
----------------------------------
definition of Permitted Holdings Preferred Equity.
16
"Facility Percentage" means, as to any Bank at any time, the quotient
-------------------
(expressed as a percentage) of (i) the sum of (A) such Bank's Revolving
Commitment (as in effect at such time) or, if such Revolving Commitment has been
terminated in full, such Bank's outstanding Revolving Loans and participations
in Letter of Credit Obligations (or obligations held by the Issuing Bank in
respect of Letter of Credit Obligations, in the case of the Issuing Bank), plus
----
(B) the sum of each of such Bank's Commitments under each Incremental Facility
(as in effect at such time) or, with respect to any Incremental Facility with
respect to which such Commitments has been terminated in full, such Bank's
outstanding Incremental Loans under such Incremental Facility, plus (C) such
----
Bank's Initial Term A Loan Commitment (as in effect at such time) or, if such
Initial Term A Loan Commitment has been terminated in full, such Bank's
outstanding Initial Term A Loans, plus (D) such Bank's Additional Term A Loan
----
Commitment (as in effect at such time), or, if such Additional Term A Loan
Commitment has been terminated in full, such Bank's outstanding Additional Term
A Loans, plus (E) such Bank's Term B Commitment (as in effect at such time), or,
----
if such Term B Commitment has been terminated in full, such Bank's outstanding
Term B Loans, divided by (ii) the sum of (A) the Aggregate Revolving Commitment
----------
(as in effect at such time) or, if the Aggregate Revolving Commitment has been
terminated in full, the aggregate principal amount of outstanding Revolving
Loans and Letter of Credit Obligations, plus (B) the sum of all Banks'
----
Commitments under each Incremental Facility (as in effect at such time) or, with
respect to any Incremental Facility with respect to which such Commitments have
been terminated in full, such Banks' outstanding Incremental Loans under such
Incremental Facility, plus (C) the sum of all Banks' Initial Term A Loan
----
Commitments (as in effect at such time) or, if such Initial Term A Loan
Commitments have been terminated in full, the sum of such Banks' outstanding
Initial Term A Loans, plus (D) the sum of all Banks' Additional Term A Loan
----
Commitments (as in effect at such time) or, if such Additional Term A Loan
Commitments have been terminated in full, the sum of such Banks' outstanding
Additional Term A Loans, plus (E) the Aggregate Term B Commitment (as in effect
----
at such time) or, if such Aggregate Term B Commitment has been terminated in
full, the Aggregate Outstanding Term B Loan Balance.
"FCC" means the Federal Communications Commission.
---
"FCC License" has the meaning specified in Section 6.16.
----------- ------------
"Federal Funds Rate" means, for any day, the rate set forth in the
------------------
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
---------
(Effective)." If on any relevant day the appropriate rate for such previous day
is not yet published in H.15(519), the rate for such day will be the arithmetic
mean of the rates for the last transaction in overnight federal funds arranged
prior to 9:00 a.m. (New York City time) on that day by each of three leading
brokers of federal funds transactions in New York City selected by the
Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
---------------------
Reserve System or any successor thereto.
17
"Film Cash Payments" means, for any period for any Person, the sum
------------------
(determined on a consolidated basis and without duplication) of all payments by
such Person and its Subsidiaries accrued or becoming due and payable during such
period (without duplication) in respect of Film Obligations; provided that
--------
amounts applied to the prepayment of Film Obligations owing under Prepayable
Film Contracts shall not be deemed to be Film Cash Payments.
"Film Obligations" means obligations in respect of the purchase, use,
----------------
license or acquisition of programs, programming materials, films, and similar
assets used in connection with the business and operations of the Borrower and
its Subsidiaries.
"Fiscal Quarter" means each of the following quarterly periods: (i)
--------------
January 1 of each calendar year through and including March 31 of each calendar
year, (ii) April 1 of each calendar year through and including June 30 of each
calendar year, (iii) July 1 of each calendar year through and including
September 30 of each calendar year and (iv) October 1 through and including
December 31 of each calendar year.
"Fiscal Year" means a calendar year.
-----------
"Form W-8BEN" has the meaning specified in Section 4.01(e)(i).
----------- ------------------
"Form W-8ECI" has the meaning specified in Section 4.01(e)(i).
----------- ------------------
"Former Major Network Affiliate" at any time means any Station that,
------------------------------
at such time, is not subject to a Network Affiliation Agreement with a Major
Television Network, if either (i) such Station is subject to a Network
Affiliation Agreement with a Major Television Network on the Effective Date, or
(ii) if such Station is not a Station on the Effective Date, then such Station
was subject to a Network Affiliation Agreement with a Major Television Network
on the date it became a Station; provided that, for purposes of this definition
--------
and Section 9.01(n), two or more Stations that substantially simulcast the same
---------------
programming will be deemed to be a single Station so long as they do so.
"GAAP" means generally accepted accounting principles set forth from
----
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Global Assignment and Assumption" means Global Assignment and
--------------------------------
Assumptions to be executed by each financial institution party to the Existing
Credit Agreement, each financial institution party to the Bastet/Mission Credit
Agreement and each Bank that is a party hereto in substantially the forms
attached as Exhibits E-1 and E-2, respectively.
------------ ---
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, any
18
central bank (or similar monetary, taxing, or regulatory authority) thereof or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, any securities exchange
and any self-regulatory organization (including the National Association of
Insurance Commissioners).
"Guarantor" means each Credit Party which is a party to a Guaranty
---------
Agreement.
"Guaranty Agreements" means the collective reference to each Parent
-------------------
Guaranty Agreement, the Bastet/Mission Guaranty of Nexstar Obligations, the
Nexstar Guaranty of Bastet/Mission Obligations, the Subsidiary Guaranty
Agreement, each Guaranty Supplement to each of the foregoing and any other
agreement executed and delivered to the Administrative Agent guaranteeing any of
the Obligations, and any and all amendments, modifications, restatements,
extensions, increases, rearrangements and/or substitutions of any of the
foregoing.
"Guaranty Obligation" means, as applied to any Person, any direct or
-------------------
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
-------------------
another Person (the "primary obligor"), including any obligation of that Person,
---------------
whether or not contingent, without duplication (i) to purchase, repurchase or
otherwise acquire such primary obligations or any property constituting direct
or indirect security therefor; (ii) to advance or provide funds (x) for the
payment or discharge of any such primary obligation, or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency or any balance sheet item, level of income or financial
condition of the primary obligor; (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation; or (iv) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof; in each case, including
arrangements ("non-recourse guaranty arrangements") wherein the rights and
----------------------------------
remedies of the holder of the primary obligation are limited to repossession or
sale of certain property of such Person. The amount of any Guaranty Obligation
shall be deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made (or if less, the
stated or determinable amount of such Guaranty Obligation) or, if not stated or
if indeterminable, the maximum reasonably anticipated liability in respect
thereof; provided that the amount of any non-recourse guaranty arrangement shall
--------
not be deemed to exceed the fair value of the property which may be repossessed
or sold by the holder of the primary obligation in question.
"Guaranty Supplements" means the collective reference to each of the
--------------------
Guaranty Supplements which are attached to each of the Guaranty Agreements as
Annex A to each such Guaranty Agreement.
"Hazardous Material" means and includes (i) any asbestos, urea-
------------------
formaldehyde, PCBs or dioxins or insulation or other material composed of or
containing asbestos, PCBs or dioxins, (ii) crude oil, any fraction thereof, and
any petroleum product, (iii) any natural gas, natural gas liquids, liquefied
natural gas or other natural gas product or synthetic gas, and (iv) any
hazardous or toxic waste, substance or material or pollutant or contaminant
defined as
19
such in (or for purposes of), or that may result in the imposition of liability
under, any Environmental Law.
"Holding Company" means (i) the New Holding Company, if the New
---------------
Holding Company owns 100% of the Capital Stock of Nexstar Finance Holdings
(other than Permitted Holdings Preferred Equity and Permitted Permanent Holdings
Preferred Equity issued by Nexstar Finance Holdings), or (ii) Nexstar Finance
Holdings in any other event.
"Holdings Subordinated Convertible Promissory Note" means an
-------------------------------------------------
unsecured, subordinated promissory note of Nexstar Finance Holdings that is
convertible into common equity of Nexstar Finance Holdings on substantially the
same terms as a Borrower Subordinated Convertible Promissory Note is convertible
into common equity of the Borrower and that is otherwise in form and substance
reasonably acceptable to the Administrative Agent.
"Incremental Commitment Fee" has the meaning specified in Section
-------------------------- -------
2.16(a).
-------
"Incremental Facility" means an aggregation of Incremental Revolving
--------------------
Commitments or Incremental Term Commitments, as the case may be, of one or more
Banks which are made available to the Borrower and become effective on the same
date, pursuant to the same Incremental Loan Amendment.
"Incremental Loan" means any Incremental Revolving Loan and/or
----------------
Incremental Term Loan advanced by a Bank pursuant to Sections 2.01(c) and
----------------
Section 2.03.
------------
"Incremental Loan Amendment" has the meaning set forth in Section
-------------------------- -------
2.01(c)(i).
----------
"Incremental Margin" has the meaning specified in Section 2.16(a).
------------------ ---------------
"Incremental Revolving Bank" means each Bank that has an Incremental
--------------------------
Revolving Commitment or that is a holder of an Incremental Revolving Loan.
"Incremental Revolving Commitment" has the meaning set forth in
--------------------------------
Section 2.16(a).
---------------
"Incremental Revolving Loan" has the meaning set forth in Section
-------------------------- -------
2.01(c)(i).
----------
"Incremental Term Bank" means each Bank that has an Incremental Term
---------------------
Commitment or that is the holder of an Incremental Term Loan.
"Incremental Term Commitment" has the meaning set forth in Section
--------------------------- -------
2.16(a).
-------
"Incremental Term Loan" has the meaning set forth in Section
--------------------- -------
2.01(c)(i).
----------
"Incremental Upfront Fee" has the meaning specified in Section
----------------------- -------
2.16(a).
-------
"Indebtedness" of any Person means, without duplication, (i) all
------------
indebtedness for borrowed money; (ii) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than (x)
trade payables entered into in the ordinary course of
20
business pursuant to ordinary terms and (y) ordinary course purchase price
adjustments); (iii) all reimbursement or payment obligations with respect to
letters of credit or non- contingent reimbursement or payment obligations with
respect to bankers' acceptances, surety bonds and similar documents; (iv) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses; (v) all indebtedness created or arising under
any conditional sale or other title retention agreement or sales of accounts
receivable, in any such case with respect to property acquired by the Person
(even though the rights and remedies of the seller or bank under such agreement
in the event of default are limited to repossession or sale of such property);
(vi) all Capital Lease Obligations; (vii) all net obligations with respect to
Interest Rate Protection Agreements; (viii) Disqualified Stock; (ix) all
indebtedness referred to in clauses (i) through (viii) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness (in which event
the amount thereof shall not be deemed to exceed the fair value of such
property); and (x) all Guaranty Obligations in respect of obligations of the
kinds referred to in clauses (i) through (ix) above.
"Indemnified Liabilities" has the meaning specified in Section 11.05.
----------------------- -------------
"Indemnified Person" has the meaning specified in Section 11.05.
------------------ -------------
"Initial Borrowing Date" means the date, occurring on the Effective
----------------------
Date, on which the initial Credit Event occurs.
"Initial Term A Loan" has the meaning specified in Section 2.01(a)(i).
------------------- ------------------
"Initial Term A Loan Commitment" means, as to any Bank, the obligation
------------------------------
of such Bank, if any, to make Initial Term A Loans to the Borrower hereunder in
an aggregate principal amount not to exceed the amount set forth under the
heading "Initial Term A Loan Commitment" opposite such Bank's name on Schedule
------------------------------ --------
2.01.
----
"Insolvency Proceeding" means (i) any case, action or proceeding
---------------------
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (ii) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally; in each case undertaken under
U.S. Federal, State or foreign law, including the Bankruptcy Code.
"Intellectual Property" has the meaning specified in Section 6.09.
--------------------- ------------
"Interest Payment Date" means (i) with respect to any Base Rate Loan,
---------------------
the last Business Day of each calendar quarter and the Maturity Date, (ii) with
respect to any Eurodollar Loan, the last day of each Interest Period applicable
to such Eurodollar Loan and the date such Eurodollar Loan is repaid or prepaid;
provided, however, that if any Interest Period for any Eurodollar Loan exceeds
--------
three months, then the date which falls three months after the beginning
21
of such Interest Period or, if applicable, at the end of any three month
interval thereafter shall also be an "Interest Payment Date".
---------------------
"Interest Period" means, in relation to any Eurodollar Loan, the
---------------
period commencing on the applicable Borrowing Date or any Conversion Date or
Continuation Date with respect thereto and ending on the date one, two, three or
six months thereafter (or, nine or twelve months thereafter upon the request of
the Borrower and the consent of each Bank, which shall not be unreasonably
withheld, if loans of such duration are generally available in the London
interbank Eurodollar market), as selected or deemed selected by the Borrower in
its Notice of Borrowing or Notice of Conversion/Continuation; provided that:
--------
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month which is one, two,
three, six, nine or twelve months, as the case may be, after the calendar
month in which such Interest Period began; and
(iii) no Interest Period for any Loan shall extend beyond the
Maturity Date.
"Interest Rate Determination Date" means each date for calculating the
--------------------------------
Eurodollar Base Rate for purposes of determining the interest rate in respect of
an Interest Period. The Interest Rate Determination Date shall be the second
Business Day prior to the first day of the related Interest Period.
"Interest Rate Protection Agreement" means an interest rate swap, cap,
----------------------------------
collar or similar arrangement entered into to hedge interest rate risk (and not
for speculative purposes).
"Issuing Bank" means Bank of America or any Affiliate thereof, in its
------------
capacity as issuer of one or more Letters of Credit hereunder.
"Joinder to Pledge and Security Agreement" means a supplement to the
----------------------------------------
Pledge and Security Agreement in the form of Annex B thereto, whereby a Nexstar
Entity becomes a party to, and assumes all obligations of, a pledgor under the
Pledge and Security Agreement.
"Joinder to Security Agreement" means a supplement to the Security
-----------------------------
Agreement in the form of Annex C thereto, whereby a Nexstar Entity becomes a
party to, and assumes all obligations of, a grantor under the Security
Agreement.
"Joint Sales Agreement" means an agreement for the sale of commercial
---------------------
or advertising time or any similar arrangement pursuant to which a Person
obtains the right to
22
(i) sell at least a majority of the time for commercial spot announcements,
and/or resell to advertisers such time on, (ii) provide the sales staff for the
sale of the advertising time or the collection of accounts receivable with
respect to commercial advertisements broadcast on, (iii) set the rates for
advertising on and/or (iv) provide the advertising material for broadcast on, a
television broadcast station the FCC License of which is held by a Person other
than an Affiliate of such Person.
"Lead Arranger and Book Manager" means Bank of America Securities LLC,
------------------------------
in its capacity as Lead Arranger and Book Manager.
"Leasehold" of any Person means all of the right, title and interest
---------
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"Lending Office" means, with respect to any Bank, the office or
--------------
offices of such Bank specified as its "Lending Office", "Domestic Lending
-------------- ----------------
Office" or "Eurodollar Lending Office", as the case may be, on Schedule 1.01(a)
------------------------- ----------------
hereto, or such other office or offices of the Bank as it may from time to time
notify the Borrower and the Administrative Agent.
"Letter of Credit" means any letter of credit issued (or deemed
----------------
issued) by the Issuing Bank pursuant to Article III.
-----------
"Letter of Credit Amendment Application" means an application form for
--------------------------------------
amendment of outstanding standby or commercial documentary letters of credit as
shall at any time be in use by the Issuing Bank, as the Issuing Bank shall
request.
"Letter of Credit Application" means an application form for issuances
----------------------------
of standby or commercial documentary letters of credit as shall at any time be
in use at the Issuing Bank, as the Issuing Bank shall request.
"Letter of Credit Borrowing" means an extension of credit resulting
--------------------------
from a drawing under any Letter of Credit which shall not have been reimbursed
on the Disbursement Date of such draw.
"Letter of Credit Commitment" means the agreement of the Issuing Bank
---------------------------
to issue Letters of Credit subject and pursuant to the terms and conditions of
this Agreement; provided that the sum of all the Letter of Credit Obligations on
--------
any date outstanding may not exceed the lesser of (i) the Aggregate Revolving
Commitment on such date and (ii) $30,000,000.
"Letter of Credit Obligations" means, at any time, the sum of (i) the
----------------------------
aggregate undrawn amount of all Letters of Credit then outstanding, plus (ii)
----
the aggregate amount of all unpaid Reimbursement Obligations.
"Letter of Credit Related Documents" means all Letters of Credit,
----------------------------------
Letter of Credit Applications, Letter of Credit Amendment Applications and any
other document relating to any Letter of Credit, including the Issuing Bank's
standard form documents for letter of credit issuances, as any of the same may
be amended, modified, restated, supplemented, renewed, extended, increased,
rearranged and/or substituted from time to time.
23
"Level" means, as of any date of determination, the applicable Level
-----
set forth below which is then in effect, as determined in accordance with the
following provisions of this definition. On the Effective Date and continuing
through and including the day immediately preceding the first Adjustment Date
occurring after September 30, 2001, the Level for purposes of calculating the
Applicable Margin shall be deemed to be Level VI and for each period thereafter
beginning on an Adjustment Date and ending on the day immediately preceding the
next succeeding Adjustment Date, the Level for purposes of calculating the
Applicable Margin shall be the applicable Level set forth below opposite the
Consolidated Total Leverage Ratio determined as at the end of the last Fiscal
Quarter ended prior to the first day of such period. If by any Adjustment Date,
the Borrower has failed to deliver a Compliance Certificate for the then most
recently completed Fiscal Quarter, the Applicable Margin for the next succeeding
period commencing on such Adjustment Date and ending on the second Business Day
after such Compliance Certificate is actually delivered shall be computed as if
the Consolidated Total Leverage Ratio were at Level VI.
Level Consolidated Total Leverage Ratio
===============================================================================
I Less than or equal to 4.50 to 1.00
===============================================================================
II Greater than 4.50 to 1.00 but less than or equal to 5.00 to 1.00
-------------------------------------------------------------------------------
III Greater than 5.00 to 1.00 but less than or equal to 5.50 to 1.00
-------------------------------------------------------------------------------
IV Greater than 5.50 to 1.00 but less than or equal to 6.00 to 1.00
-------------------------------------------------------------------------------
V Greater than 6.00 to 1.00 but less than or equal to 6.50 to 1.00
-------------------------------------------------------------------------------
VI Greater than 6.50 to 1.00
-------------------------------------------------------------------------------
"Leverage Ratio Determination Date" means the last day of the most
---------------------------------
recent Fiscal Quarter for which financial statements have been or were required
to have been delivered pursuant to Section 7.01(a) or (b).
--------------- ---
"License" means any authorization, permit, consent, franchise,
-------
ordinance, registration, certificate, license, agreement or other right filed
with, granted by or entered into with a Governmental Authority or other Person
which permits or authorizes the use of an electromagnetic transmission frequency
or the construction or operation of a broadcast television station system or any
part thereof or any other authorization, permit, consent, franchise, ordinance,
registration, certificate, license, agreement or other right filed with, granted
by or entered into with a Governmental Authority or other Person which is
necessary for the lawful conduct of the business of constructing or operating a
broadcast television station.
"Lien" means, with respect to any property or asset (or any revenues,
----
income or profits therefrom) of any Person (in each case whether the same is
consensual or nonconsensual or arises by contract, operation of law, legal
process or otherwise), (i) any mortgage, lien, security interest, pledge,
attachment, levy or other charge or encumbrance of any kind thereupon or in
respect thereof or (ii) any other arrangement under which the same is
transferred, sequestered or otherwise identified with the intention of
subjecting the same to, or making the
24
same available for, the payment or performance of any liability in priority to
the payment of the ordinary, unsecured creditors of such Person. For purposes of
this Agreement, a Person shall be deemed to own subject to a Lien any asset that
it has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention agreement
relating to such asset.
"Loan" means any extension of credit made by any Bank pursuant to this
----
Agreement.
"Loan Documents" means this Agreement, all Guaranty Agreements, all
--------------
Security Documents, all Letter of Credit Related Documents, the ABRY Capital
Contribution Agreements, any notes executed and delivered pursuant to Section
-------
2.02(b), any Interest Rate Protection Agreement with any Bank or any Affiliate
-------
of any Bank, any other subordination agreement entered into with any Person with
respect to the Obligations, all agreements between any Person and any Bank
respecting fees payable in connection with this Agreement, any Incremental Loan
or any other Loan Document and all other written agreements, documents,
instruments and certificates now or hereafter executed and delivered by any
Credit Party or any other Person to or for the benefit of the Administrative
Agent, any Bank or any Affiliate of any Bank pursuant to or in connection with
any of the foregoing, and any and all amendments, increases, supplements and
other modifications thereof and all renewals, extensions, restatements,
rearrangements and/or substitutions from time to time of all or any part of the
foregoing.
"Loan Year" means, as applicable, the following periods of time (each,
---------
a "Loan Year") occurring during the term of this Agreement:
---------
Loan Year Period of Time
--------------------------------------------------------------------------------
Loan Year 1 Effective Date through and
including March 31, 2002
--------------------------------------------------------------------------------
Loan Year 2 April 1, 2002 through and
including March 31, 2003
--------------------------------------------------------------------------------
Loan Year 3 April 1, 2003 through and
including March 31, 2004
--------------------------------------------------------------------------------
Loan Year 4 April 1, 2004 through and
including March 31, 2005
--------------------------------------------------------------------------------
Loan Year 5 April 1, 2005 through and
including March 31, 2006
--------------------------------------------------------------------------------
Loan Year 6 April 1, 2006 through and
including March 31, 2007
--------------------------------------------------------------------------------
25
Loan Year Period of Time
--------------------------------------------------------------------------------
Loan Year 7 April 1, 2007 through and
including the Stated Term B
Maturity Date
--------------------------------------------------------------------------------
"Local Marketing Agreement" means a local marketing arrangement, time
-------------------------
brokerage agreement, management agreement or similar arrangement pursuant to
which a Person, subject to customary preemption rights and other limitations,
obtains the right to exhibit programming and sell advertising time during more
than fifteen percent (15%) of the air time of a television broadcast station
licensed to another Person.
"Major Television Network" means any of ABC, Inc., National
------------------------
Broadcasting Company, Inc., CBS, Inc., FOX Television Network, or any other
television network which produces and makes available more than 15 hours of
weekly prime time television programming.
"Majority Banks" means, at any time, (i) Banks whose respective
--------------
Facility Percentages aggregate more than 50% and (ii) Bastet/Mission Banks
(whether or not also Banks) whose respective Bastet/Mission Facility Percentages
aggregate more than 50%.
"Management Agreement" has the meaning specified in Section 8.06(c).
-------------------- ---------------
"Management Loan" shall mean loans, not to exceed $3,000,000 in
---------------
aggregate principal amount, made by Bank of America in its individual capacity
to Sook, the proceeds of which loans that have been made were, and loans which
may be made will be, used by Sook in part to invest in the Ultimate Parent or to
pay interest on any such loan.
"Management Loan Guaranty" has the meaning specified in Section
------------------------ -------
8.05(j).
-------
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means, relative to any occurrence of
-----------------------
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), a material adverse
effect on the operations, business, assets, properties, condition (financial or
otherwise) or prospects of (i) the Nexstar Entities taken as a whole, (ii) the
ability of any Credit Party to perform its obligations under the Loan Documents
to which it is a party or (iii) the validity or enforceability of this Agreement
or any other Loan Document or the rights and remedies of the Administrative
Agent or the Banks under this Agreement or any of the other Loan Documents.
"Maturity Date" means the earlier of (i) the Stated Maturity Date and
-------------
(ii) the date on which the Revolving Loans and/or the Term Loans become due and
payable in full pursuant to acceleration or otherwise.
"Maximum Incremental Amount" means $100,000,000.
--------------------------
26
"Measurement Period" means, with respect to any date, the most
------------------
recently ended four consecutive Fiscal Quarter period for which financial
statements have been or were required to have been delivered to the
Administrative Agent pursuant to Section 7.01(a) or (b) prior to such date.
--------------- ---
"Midwest Acquisition" means the acquisition of the FCC licenses for
-------------------
television stations WCIA, WCFN and WMBD and certain related assets pursuant to
the Midwest Acquisition Documents.
"Midwest Acquisition Documents" means Asset Purchase Agreement by and
-----------------------------
among Nexstar Broadcasting of Champaign, L.L.C., Nexstar Broadcasting of Peoria,
L.L.C., Midwest Television, Inc., MWT-N, LLC and MWT-D, LLC, dated as of July
12, 1999, and each document delivered pursuant thereto or in connection
therewith.
"Mission" means Mission Broadcasting of Wichita Falls, Inc.
-------
"Moody's" means Moody's Investors Service, Inc., and its successors.
-------
"Mortgage Policies" mean the Mortgage Policies under, and as defined
-----------------
in, the Existing Credit Agreement.
"Mortgaged Properties" mean all Real Property owned or leased by any
--------------------
Nexstar Entity listed on Schedule 6.09 and designated as "Mortgaged Properties"
------------- --------------------
therein.
"Mortgages" mean all Mortgages (as defined in the Existing Credit
---------
Agreement) granted by certain of the Nexstar Entities pursuant to the Existing
Credit Agreement (or any predecessor credit agreement which was amended and
restated by the Existing Credit Agreement) and which have not been released
prior to the Effective Date.
"Multiemployer Plan" means a "multiemployer plan" (within the meaning
------------------
of Section 4001(a)(3) of ERISA) and to which any Nexstar Entity or any ERISA
Affiliate makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
"Net Cash Proceeds" means, in connection with any Disposition
-----------------
(including any Sale and Leaseback Transaction), the cash proceeds (including any
cash payments received by way of deferred payment pursuant to a promissory note,
receivable or otherwise, but only as and when received in cash) of such
Disposition net of (i) reasonable transaction costs (including any underwriting,
brokerage or other selling commissions and reasonable legal, advisory and other
fees and expenses, including title and recording expenses, associated therewith
actually incurred and satisfactorily documented), (ii) required payments on
Indebtedness permitted under Section 8.05 and which are not Restricted Payments
------------
(other than payments due with respect to the Obligations), (iii) taxes estimated
to be paid as a result of such Disposition (including Restricted Payments
permitted under Section 8.10(d)) and (iv) any portion of such cash proceeds
---------------
which the Borrower determines in good faith should be reserved for post-closing
adjustments or liabilities (to the extent that the Borrower delivers to the
Administrative Agent a certificate signed by a Responsible Officer as to such
determination), it being understood and agreed that on the day all
27
such post- closing adjustments and liabilities have been determined, (x) the
amount (if any) by which the reserved amount of the cash proceeds of such
Disposition exceeds the actual post-closing adjustments or liabilities payable
by any Nexstar Entity shall constitute Net Cash Proceeds on such date and (y)
the amount (if any) by which the actual post-closing adjustments or other
liabilities payable by any Nexstar Entity exceeds the reserved amount of the
cash proceeds of such Disposition on such date shall be credited against any
subsequent Net Cash Proceeds that any Nexstar Entity is required to apply to
prepay the Loans pursuant to Section 2.07(b).
---------------
"Net Debt Proceeds" means, with respect to the incurrence or issuance
-----------------
of any Indebtedness by any Nexstar Entity, (i) the gross cash proceeds received
in connection with such incurrence or issuance, as and when received, minus (ii)
-----
all reasonable out-of-pocket transaction costs (including legal, investment
banking or other fees and disbursements) associated therewith actually incurred
(whether by such Nexstar Entity or an Affiliate thereof), satisfactorily
documented and paid (whether on behalf of such Nexstar Entity or an Affiliate
thereof) to any Person not an Affiliate of a Nexstar Entity.
"Net Income" means, for any Measurement Period, the net income (or net
----------
loss) of a Person and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"Net Issuance Proceeds" means, with respect to the sale or issuance of
---------------------
Capital Stock, or any capital contribution to, any Nexstar Entity from a source
other than a Nexstar Entity, (i) the gross cash proceeds received in connection
with such sale or issuance or such capital contribution, as and when received
minus (ii) all reasonable out-of-pocket transaction costs (including legal,
-----
investment banking or other fees and disbursements) associated therewith
actually incurred (whether by such Nexstar Entity or an Affiliate thereof),
satisfactorily documented and paid (whether on behalf of such Nexstar Entity or
an Affiliate thereof) to any Person not an Affiliate of a Nexstar Entity.
"Network Affiliation Agreements" means each agreement set forth on
------------------------------
Schedule 6.21 and each other agreement entered into by a Television Company with
-------------
any Major Television Network pursuant to which a Television Company and such
Major Television Network agree to be affiliated and such Major Television
Network agrees that such Television Company shall serve as that Major Television
Network's primary outlet within any defined market for television programming
provided by such Major Television Network for broadcast by its station
affiliates.
"New Holding Company" means Nexstar Finance Holdings, L.L.C., a
-------------------
Delaware limited liability company and a Nexstar Entity, at all times from and
after such time as the Indebtedness evidenced by the 16% Senior Discount Notes
issued May 17, 2001 by Nexstar Finance Holdings, L.L.C. in the aggregate
principal amount of $36,988,000 has been assumed by a new direct Wholly-Owned
Subsidiary of Nexstar Finance Holdings, L.L.C., Nexstar Finance Holdings, L.L.C.
has been fully and unconditionally released therefrom and Nexstar Finance
Holdings, L.L.C. has assigned and transferred to such new direct Wholly-Owned
Subsidiary 100% of the Capital Stock of the Borrower.
28
"Nexstar Entity" means the Ultimate Parent and any Person which is a
--------------
direct or indirect Subsidiary of the Ultimate Parent.
"Nexstar Equity" means Nexstar Equity Corp., a Delaware corporation,
--------------
100% of the issued and outstanding voting Class A Common Stock of which is owned
by ABRY L.P. III and the sole asset of which is a 1% membership interest in the
Ultimate Parent.
"Nexstar Equity Investor Rights Agreement" means the Investor Rights
----------------------------------------
Agreement dated as of May 17, 2001, between the Ultimate Parent and Nexstar
Equity, as in effect on such date.
"Nexstar Equity Reimbursement Agreement" means the Reimbursement
--------------------------------------
Agreement dated as of May 17, 2001, between the Ultimate Parent and Nexstar
Equity, as in effect on such date.
"Nexstar Equity Unit Agreement" means the Unite Agreement dated as of
-----------------------------
May 17, 2001, among Nexstar Financing Holdings, Nexstar Finance Holdings, Inc.,
Nexstar Equity, the Ultimate Parent and the initial purchasers of the units
parties thereof, as in effect on such date.
"Nexstar Finance Holdings" means: (i) Nexstar Finance Holdings,
------------------------
L.L.C., a Delaware limited liability company and a Nexstar Entity, until such
time as the Indebtedness evidenced by the 16% Senior Discount Notes issued May
17, 2001 by Nexstar Finance Holdings, L.L.C. in the aggregate principal amount
of $36,988,000 has been assumed by a new direct Wholly-Owned Subsidiary of
Nexstar Finance Holdings, L.L.C., Nexstar Finance Holdings, L.L.C. has been
fully and unconditionally released therefrom and Nexstar Finance Holdings,
L.L.C. has assigned and transferred to such new direct Wholly-Owned Subsidiary
100% of the Capital Stock of the Borrower; and (ii) such new direct Wholly-Owned
Subsidiary of Nexstar Finance Holdings, L.L.C. at all times thereafter.
"Nexstar Finance Holdings Bridge" means an unsecured bridge loan
-------------------------------
facility in the original principal amount of $40,000,000, incurred pursuant to
the Bridge Loan Agreement and repaid in full prior to the date hereof.
"Nexstar Guaranty of Bastet/Mission Obligations" means that certain
----------------------------------------------
Guaranty Agreement, dated as of January 12, 2001, executed and delivered by the
Nexstar Entities in favor of the Bastet/Mission Banks, whereby the Nexstar
Entities guaranty the obligations of the Bastet/Mission Entities under the
Bastet/Mission Loan Documents.
"Notice of Borrowing" means a notice given by the Borrower to the
-------------------
Administrative Agent pursuant to Section 2.03(a), in substantially the form of
---------------
Exhibit F.
---------
"Notice of Conversion/Continuation" means a notice given by the
---------------------------------
Borrower to the Administrative Agent pursuant to Section 2.04(b), in
---------------
substantially the form of Exhibit G.
---------
"Obligations" means the unpaid principal of and interest on
-----------
(including, without limitation, interest accruing after the maturity of the
Loans and Reimbursement Obligations and
29
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
any Credit Party, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other obligations and
liabilities of any Credit Party to the Administrative Agent or to any Bank (or,
in the case of any Interest Rate Protection Agreement, any Affiliate of any
Bank), whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, any other Loan Document, or any other document
made, delivered or given in connection with any of the foregoing, whether on
account of principal, interest, Guaranty Obligations, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all fees,
charges and disbursements of counsel to the Administrative Agent or to any Bank
that are required to be paid by any Credit Party pursuant to any Loan Document)
or otherwise.
"OECD" means the Organization for Economic Cooperation and
----
Development.
"Originating Bank" has the meaning specified in Section 11.07(d).
---------------- ----------------
"Other Taxes" has the meaning specified in Section 4.01(b).
----------- ---------------
"Parent Guarantor" means the Ultimate Parent and all Subsidiaries of
----------------
the Ultimate Parent other than the Borrower and the Subsidiary Guarantors.
"Parent Guaranty Agreements" means the collective reference to (i) the
--------------------------
Guaranty Agreement of the Ultimate Parent and Nexstar Finance Holdings dated as
of January 12, 2001, (ii) the Guaranty Agreement of the direct Subsidiaries of
the Ultimate Parent, dated as of January 12, 2001, and (iii) the Guaranty
Agreement of Nexstar Finance Holdings, Inc. dated as of January 12, 2001, as
each of the same may be amended, supplemented and/or otherwise modified from
time to time.
"Parent Subordinated Convertible Promissory Note" means a promissory
-----------------------------------------------
note of Nexstar Finance Holdings or the New Holding Company, payable to the
order of a member of, or an Affiliate of a member of, the Ultimate Parent,
substantially in the form of Exhibit H.
---------
"Participant" has the meaning specified in Section 11.07(d).
----------- ----------------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
------------
ERISA) subject to Title IV of ERISA which any Nexstar Entity or any ERISA
Affiliate sponsors or maintains, or to which it makes, is making, or is
obligated to make contributions, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years, but excluding any Multiemployer
Plan.
"Permitted Affiliate Transactions" means (i) Restricted Payments
--------------------------------
permitted by Section 8.10; (ii) payments described in clause (iii) of the
------------
definition of the term "Restricted Payment";
------------------
30
(iii) payments to ABRY Partners, LLC in respect of corporate overhead expenses
of ABRY Partners, LLC in an aggregate amount not to exceed $50,000 in any Fiscal
Year; (iv) payments of out- of-pocket expenses and transaction fees payable
pursuant to the Management Agreement and incurred in connection with any
purchase or acquisition of any Person or Station, or the entering into of any
Local Marketing Agreement, Joint Sales Agreement and/or Shared Services
Agreement, pursuant to Section 8.04(b); (v) payments of management fees made
pursuant to the Management Agreement, so long as all management fee payments
made pursuant to the Management Agreement shall be in an amount not to exceed
$75,000 per Station per Fiscal Year and $300,000 in the aggregate per Fiscal
Year, in each case as the amount of such management fee amount may be increased
annually based on the United States Department of Labor's Consumer's Price
Index, and such payments of management fees may only be paid to the extent that
no Default or Event of Default has occurred or would occur after giving effect
thereto; (vi) transactions contemplated by the ABRY Capital Contribution
Agreements; (vii) Indebtedness permitted under Section 8.05(m) and (o); (viii)
the Management Loan Guaranty; and (ix) transactions contemplated by the Nexstar
Equity Unit Agreement, the Nexstar Equity Investor Rights Agreement, and the
Nexstar Equity Reimbursement Agreement, provided in the case of the Nexstar
Equity Reimbursement Agreement that the aggregate amount of expenses reimbursed
pursuant to such agreement in any fiscal year may not exceed $40,000.
"Permitted Borrower Preferred Equity" means non-voting, preferred
-----------------------------------
membership interests issued by the Borrower which (i) have no scheduled payments
of cash Dividends due or payable thereon and no scheduled redemption or
repurchase obligations with respect thereto until at least 180 days after the
Stated Maturity Date of the latest to mature of the Term Loans, (ii) are not
convertible, exchangeable or exercisable for any Indebtedness or any other
Capital Stock (other than Capital Stock of the Ultimate Parent), (iii) are not
redeemable at the option of the holder thereof until at least 180 days after the
Stated Maturity Date of the latest to mature of the Term Loans, other than with
respect to customary redemption rights with respect to (x) a change of control
of the Borrower which constitutes a Change of Control with respect to this
Agreement or (y) an asset sale, subject in each case to the prior payment in
full of the Obligations and customary subordination provisions for securities
with substantially the same terms and conditions as the Permitted Borrower
Preferred Equity and (iv) do not have any blockage rights, covenants or default
or cross-default provisions that could accelerate the payment of dividends or
liquidation preference rights.
"Permitted Borrower Subordinated Indebtedness" means (a) subordinated
--------------------------------------------
Indebtedness of the Borrower evidenced by the Borrower's 12% Senior Subordinated
Notes due 2008, issued March 16, 2001, in an aggregate principal amount of
$160,000,000, pursuant to and upon the terms and conditions set forth in the
Indenture of even date therewith and the Guaranty Obligations of the Borrower's
Subsidiaries with respect thereto pursuant to the guaranty agreement
substantially in the form attached to such Indenture, and (b) subordinated
Indebtedness of the Borrower having the following terms and conditions: (i) no
portion of the principal of such Indebtedness shall be required to be paid,
whether by stated maturity, mandatory or scheduled prepayment or redemption or
otherwise, prior to the date that is 180 days after the Stated Maturity Date of
the latest to mature of the Term Loans, other than in the event of (x) a default
under such Indebtedness, (y) a change of control of the Borrower which
constitutes a Change of Control with respect to this Agreement or (z) an asset
sale, subject in
31
each case to the prior payment in full of the Obligations and the subordination
provisions described in clause (v) below; (ii) the documents, instruments and
other agreements pursuant to which such Indebtedness shall be issued or
outstanding shall contain no (x) financial maintenance covenants or
cross-default provisions other than cross-payment default and (y) no provisions
limiting amendments to, or consents, waivers or other modifications with respect
to, this Agreement or any other Loan Document; (iii) any other covenants,
defaults and events of default contained in the documents, instruments and other
agreements pursuant to which such Indebtedness shall be issued or outstanding
shall not be more restrictive than those contained in this Agreement or the
other Loan Documents and shall not conflict with or violate the covenants and
Defaults and Events of Default contained in this Agreement or the other Loan
Documents; (iv) no Liens or security interests on or in the assets or properties
of any Nexstar Entity are granted (or may arise at any time) to secure the
repayment such Indebtedness; and (v) such Indebtedness and any Guaranty
Obligations of any Nexstar Entities are subordinated to the Obligations on terms
customary for high yield debt securities with substantially the same terms and
conditions as the Permitted Borrower Subordinated Indebtedness.
"Permitted Borrower Unsecured Indebtedness" means unsecured
-----------------------------------------
Indebtedness of the Borrower and/or its Subsidiaries to a Person other than a
Nexstar Entity or an Affiliate of a Nexstar Entity, on terms and conditions
reasonably acceptable to the Administrative Agent and the Majority Banks, such
terms and conditions to include, but not be limited to: (i) such Indebtedness
shall have a stated maturity date after the date that is 180 days after the
Stated Maturity Date of the latest to mature of the Term Loans, and shall not
have any scheduled payments, prepayments or redemptions of principal at any time
prior to the date that is 180 days after the Stated Maturity Date of the latest
to mature of the Term Loans; (ii) the documents, instruments and other
agreements pursuant to which such Indebtedness shall be issued or outstanding
shall contain no financial maintenance covenants or cross-default provisions and
no provisions limiting amendments to, or consents, waivers or other
modifications with respect to, this Agreement or any other Loan Document; and
(iii) no Liens or security interests on or in the assets or properties of any
Nexstar Entity are granted (or may arise at any time) to secure the repayment of
such Indebtedness and no Guaranty Obligation of any other Nexstar Entity is
granted for the payment or collection of such Indebtedness.
"Permitted Holdings Preferred Equity" means (a) non-voting, preferred
-----------------------------------
membership interests issued by Nexstar Finance Holdings to ABRY Nexstar/Inc. on
the effective date of the Existing Credit Agreement (the "Existing Holdings
-----------------
Preferred Equity") or (b) non-voting preferred membership interests issued by
----------------
the Nexstar Finance Holdings at a time when it is not the Holding Company to
ABRY/Nexstar, Inc. in exchange for the Existing Holdings Preferred Equity (the
"Exchange Equity") provided that such Exchange Equity does not require any
---------------- --------
additional funds to be invested in Nexstar Finance Holdings by ABRY/Nexstar,
Inc. and that such Exchange Equity does not grant any greater dividends or other
rights than those granted by Nexstar Finance Holdings to ABRY/Nexstar, Inc. on
the effective date of the Existing Credit Agreement, including, without
limitation, that such Exchange Equity may not (i) be convertible, exchangeable
or exercisable for any Indebtedness or any other Capital Stock (other than
Capital Stock of the Ultimate Parent) (except that, if Nexstar Finance Holdings
is no longer the Holding Company, then the Permitted Holdings Preferred Equity
issued by the Holding Company may be exchanged for Permitted Holdings Preferred
Equity of like tenor issued by Nexstar Finance
32
Holdings), (ii) be redeemable at the option of the holder thereof, (iii) have
any covenants, default or cross- default provisions or blockage rights or (iv)
require the payment of any cash dividends or other cash distributions.
"Permitted Holdings Unsecured Indebtedness" means (a) unsecured
-----------------------------------------
Indebtedness of Nexstar Finance Holdings evidenced by Nexstar Finance Holding's
16% Senior Discount Notes issued May 17, 2001 in the aggregate principal amount
of $36,988,000, pursuant to and upon the terms and conditions set forth in the
Indenture of even date therewith, and (b) unsecured Indebtedness of Nexstar
Finance Holdings having the following terms and conditions: (i) no portion of
the principal of such Indebtedness shall be required to be paid, whether by
stated maturity, mandatory or scheduled prepayment or redemption or otherwise,
prior to the date that is 180 days after the Stated Maturity Date of the latest
to mature of the Term Loans, other than in the event of (x) a default under such
Indebtedness, (y) a change of control of Holdings which constitutes a Change of
Control with respect to this Agreement or (z) an asset sale, subject in each
case to the prior payment in full of the Obligations; (ii) the documents,
instruments and other agreements pursuant to which such Indebtedness shall be
issued or outstanding shall contain (x) no financial maintenance covenants, (y)
no cross-default provisions other than cross-payment default and (z) no
provisions limiting amendments to, or consents, waivers or other modifications
with respect to, this Agreement or any other Loan Document; (iii) any other
covenants and defaults or events of default contained in the documents,
instruments and other agreements pursuant to which such Indebtedness is issued
or outstanding shall not be more restrictive than those contained in this
Agreement or other Loan Documents and shall not conflict with or violate the
covenants and Defaults or Events of Default contained in this Agreement or the
other Loan Documents; (iv) no Liens or security interests on or in the assets or
properties of any Nexstar Entity shall be granted (or may arise at any time) to
secure the repayment of such Indebtedness; and (v) such Indebtedness has no
scheduled payment of interest due or payable with respect thereto until after
the fourth anniversary of the effective date of the Existing Credit Agreement.
"Permitted Liens" has the meaning specified in Section 8.02.
--------------- ------------
"Permitted Parent Preferred Equity" means non-voting, preferred
---------------------------------
membership interests issued by the Ultimate Parent which (i) have no scheduled
payments of cash dividends due or payable thereon until after the fourth
anniversary of the effective date of the Existing Credit Agreement, and no
scheduled redemption or repurchase obligations with respect thereto until after
the date that is 180 days after the Stated Maturity Date of the latest to mature
of the Term Loans, (ii) are not convertible, exchangeable or exercisable for any
Indebtedness or any other Capital Stock other than (a) Capital Stock of the
Ultimate Parent or (b) after the fourth anniversary of the effective date of the
Existing Credit Agreement, unsecured Indebtedness of the Ultimate Parent having
substantially the same terms as the Permitted Holdings Unsecured Indebtedness,
(iii) are not redeemable at the option of the holder thereof until after the
date that is 180 days after the Stated Maturity Date of the latest to mature of
the Term Loans, other than with respect to customary redemption rights with
respect to (x) a change of control of the Ultimate Parent which constitutes a
Change of Control with respect to this Agreement or (y) an asset sale, subject
in each case to the prior payment in full of the Obligations and customary
subordination provisions for securities with substantially the same terms and
conditions as the Permitted Parent
33
Preferred Equity and (iv) do not have any blockage rights, covenants or default
or cross-default provisions that could accelerate the payment of dividends or
liquidation preference rights.
"Permitted Permanent Holdings Preferred Equity" means non-voting,
---------------------------------------------
preferred membership interests issued by Nexstar Finance Holdings or the New
Holding Company which (i) have no scheduled payments of cash dividends due or
payable thereon until after the fourth anniversary of the effective date of the
Existing Credit Agreement, and no scheduled redemption or repurchase obligations
with respect thereto until after the date that is 180 days after the Stated
Maturity Date of the latest to mature of the Term Loans, (ii) are not
convertible, exchangeable or exercisable for any Indebtedness or any other
Capital Stock other than (a) Capital Stock of the Ultimate Parent and (b) after
the fourth anniversary of the effective date of the Existing Credit Agreement,
unsecured Indebtedness of the issuer of such membership interests having
substantially the same terms as the Permitted Holdings Unsecured Indebtedness,
(iii) are not redeemable at the option of the holder thereof until after the
date that is 180 days after the Stated Maturity Date of the latest to mature of
the Term Loans, other than with respect to customary redemption rights with
respect to (x) a change of control of the issuer of such membership interests
which constitutes a Change of Control with respect to this Agreement or (y) an
asset sale, subject in each case to the prior payment in full of the Obligations
and customary subordination provisions for securities with substantially the
same terms and conditions as the Permitted Permanent Holdings Preferred Equity
and (iv) do not have any blockage rights, covenants or default or cross-default
provisions that could accelerate the payment of dividends or liquidation
preference rights.
"Permitted Seller Subordinated Indebtedness" means subordinated
------------------------------------------
Indebtedness of the Borrower and/or its Subsidiaries incurred in connection with
a purchase or acquisition permitted under Section 8.04(b) and owed to a seller
---------------
thereof or other party thereto as partial or full consideration therefor, on
terms and conditions reasonably acceptable to the Administrative Agent and the
Majority Banks.
"Person" means any natural person, corporation, firm, trust,
------
partnership, business trust, association, government, governmental agency or
authority, or any other entity, whether acting in an individual, fiduciary, or
other capacity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
----
ERISA) which any Nexstar Entity or any ERISA Affiliate sponsors or maintains or
to which any Nexstar Entity or any ERISA Affiliate makes, is making, or is
obligated to make contributions and includes any Pension Plan or Multiemployer
Plan.
"Pledge and Security Agreement" means the Pledge and Security
-----------------------------
Agreement dated as of January 12, 2001, pursuant to which each Credit Party has
pledged or collaterally assigned 100% of the Capital Stock of each of its
Subsidiaries, and any intercompany notes held by it.
"Pledged Collateral" has the meaning specified in the Pledge and
------------------
Security Agreement.
34
"Pledged Entity" means each "Pledged Partnership" and each "Pledged
-------------- ------------------- -------
Limited Liability Company" as these terms are defined in the Pledge and Security
-------------------------
Agreement.
"Prepayable Film Contract" means a contract evidencing a Film
------------------------
Obligation in which the amount owed by a Person or any of its Subsidiaries under
such contract exceeds the remaining value of such contract to such Person or
such Subsidiary, as reasonably determined by such Person.
"Pro Forma Basis" means, with respect to any calculation to be made on
---------------
such basis (including calculations to be made with respect to Section 8.09) to
------------
determine compliance with any provision of this Agreement on such basis or to
prepare any financial statements or financial projections to be prepared on such
basis, such calculation being made as of a specified date and/or for the
applicable Measurement Period relating to such specified date (or other
specified period or date as required in connection with such calculation) or
such financial statements or financial projections being prepared (in accordance
with GAAP) using the financial information of the specified date and/or the
applicable Measurement Period relating to such specified date (or other
specified period or date as required in connection with such preparation), after
giving effect to the relevant transactions the effect of which is required to be
given as stated herein (and all financial statement effects arising therefrom)
as if such transaction occurred on the first day of such applicable Measurement
Period or other specified period or on the date being tested (as applicable) as
required in connection with such calculation or preparation of financial
statements or projections (the "Test Period"). Any calculation or preparation
-----------
pursuant to the foregoing shall be made in good faith by the Borrower and shall
be set forth in an officer's certificate furnished to the Banks showing such
calculation (and the methodology used) in reasonable detail (with supporting
schedules as to the results of operations of the assets acquired or Disposed
of), which calculation or preparation and methodology shall be reasonably
satisfactory to the Administrative Agent.
"Pro Forma Compliance Certificate" means, for any Person, a Compliance
--------------------------------
Certificate with respect to the Consolidated Senior Leverage Ratio and the
Consolidated Total Leverage Ratio, prepared on a Pro Forma Basis with respect to
the relevant proposed transaction for which such Pro Forma Compliance
Certificate is required to be delivered and any other transactions relating
thereto certifying and demonstrating that no Default or Event of Default exists
both before and after giving effect to such proposed transactions.
"Pro Forma Debt Service of Borrower" means, as of any date, all
----------------------------------
scheduled payments of principal of and interest and dividends on Indebtedness
for borrowed money of the Borrower and its Subsidiaries (other than Excluded
Interest and Indebtedness evidenced by Borrower Subordinated Convertible
Promissory Notes) and Capital Leases of the Borrower and its Subsidiaries that
must be paid in cash during the next four full Fiscal Quarters as of the last
day of any applicable Measurement Period, excluding payments of principal of
Revolving Loans due on the Maturity Date.
"Pro Forma Debt Service of Holdings" means, as of any date, all
----------------------------------
scheduled payments of principal of and interest on (to the extent such interest
is part of Consolidated Cash Interest Expense of Nexstar Finance Holdings at the
time it accrues or accrued) Permitted
35
Holdings Unsecured Indebtedness that must be paid in cash during the next four
full Fiscal Quarters as of the last day of any applicable Measurement Period.
"Pro Forma Debt Service Ratio" means, on any date, the ratio of (i)
----------------------------
the Consolidated Operating Cash Flow of the Borrower and its Subsidiaries for
the applicable Measurement Period relating to such date, to (ii) the Pro Forma
--
Debt Service of the Borrower, plus the Pro Forma Debt Service of Holdings as of
----
the last day of such Measurement Period.
"Real Property" means, with respect to any Person, all of the right,
-------------
title and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Recovery Event" means the receipt by any Nexstar Entity of any
--------------
insurance or other cash proceeds payable by reason of theft, loss, physical
destruction, condemnation or damage or any other similar event with respect to
any property or assets of any Nexstar Entity.
"Reference Rate" means the rate of interest publicly announced from
--------------
time to time by Bank of America in Dallas, Texas as its "reference rate". It is
--------------
a rate set by Bank of America based upon various factors, including Bank of
America's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above or below such announced rate. Any change in the Reference Rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.
"Reimbursement and Contribution Agreements" shall mean those certain
-----------------------------------------
Reimbursement and Contribution Agreements, dated as of January 12, 2001 entered
into by various Credit Parties as more fully set forth in Section 5.01(o) of the
---------------
Existing Credit Agreement with respect to certain reimbursement and contribution
rights and obligations among such Credit Parties in respect of their respective
Guaranty Obligations under the Guaranty Agreements.
"Reimbursement Obligations" means the obligation of the Borrower to
-------------------------
reimburse the Issuing Bank, pursuant to Section 3.03, for amounts drawn under
------------
Letters of Credit.
"Reinvestment Assets" means any assets owned by and to be employed in
-------------------
the business of the Borrower and its Subsidiaries as described in Section 8.01.
------------
"Reinvestment Election" has the meaning specified in Section
--------------------- -------
2.07(b)(i).
----------
"Reinvestment Notice" means a written notice signed by a Responsible
-------------------
Officer of the Borrower stating that the Borrower in good faith, intends and
expects to use, or to cause a Subsidiary of the Borrower to use, all or a
specified portion of the Net Cash Proceeds of a Disposition to purchase,
construct or otherwise acquire Reinvestment Assets.
"Reinvestment Period" means the period commencing on the date of any
-------------------
Disposition and terminating on the date which is 365 days after such
Disposition.
"Reinvestment Prepayment Amount" means, with respect to any
------------------------------
Reinvestment Election, the amount, if any, on the Reinvestment Prepayment Date
relating thereto by which
36
(i) the Anticipated Reinvestment Amount in respect of such Reinvestment Election
exceeds (ii) the aggregate amount thereof expended by the Borrower and/or any of
its Subsidiaries to acquire Reinvestment Assets (including reasonable
out-of-pocket disbursements in connection with any such acquisition).
"Reinvestment Prepayment Date" means, with respect to any Reinvestment
----------------------------
Election, the earliest of (i) the date, if any, upon which the Administrative
Agent, on behalf of the Majority Banks, shall have delivered a written
termination notice to the Borrower, provided that such notice may only be given
--------
while a Default or an Event of Default exists, (ii) the last day of the relevant
Reinvestment Period and (iii) the date on which the Borrower or any of its
Subsidiaries shall have determined not to, or shall have otherwise ceased to,
proceed with the purchase, construction or other acquisition of Reinvestment
Assets with the related Anticipated Reinvestment Amount.
"Related Fund" means, with respect to any Bank that is a fund that
------------
invests in commercial loans, any other fund that invests in commercial loans
that is managed by the same investment advisor as such Bank or by an Affiliate
of such Bank or investment advisor.
"Replaced Bank" has the meaning specified in Section 4.08(b).
------------- ---------------
"Replacement Bank" has the meaning specified in Section 4.08(b).
---------------- ---------------
"Reportable Event" means, any of the events set forth in Section
----------------
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"Required Junior Capital" means (i) Capital Stock (other than
-----------------------
Disqualified Stock) sold or issued after the Effective Date by the Ultimate
Parent, Permitted Borrower Preferred Equity, Permitted Holdings Unsecured
Indebtedness, Permitted Holdings Preferred Equity, Permitted Permanent Holdings
Preferred Equity, and/or Permitted Parent Preferred Equity in each case to the
extent that the Net Debt Proceeds or Net Issuance Proceeds, as applicable, from
the sale or issuance thereof have been contributed, directly or indirectly, as
cash equity to the Borrower (to the extent required by this Agreement) and/or
loans to the Borrower as provided in Section 8.05(m) and (ii) loans to the
---------------
Borrower permitted under Section 8.05(m).
---------------
"Requirement of Law" means, as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or determination of a court or of a
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer" means, for each Credit Party, its chief
-------------------
executive officer, its president, any vice-president, its chief financial
officer, controller, vice president-finance, treasurer or assistant treasurer,
or any other officer having substantially the same authority and responsibility,
in each case acting solely in such capacity and without personal liability.
"Restricted Payment" means, as to any Person, (i) the authorization,
------------------
declaration or payment of any Dividend by such Person or any of its
Subsidiaries, (ii) the redemption,
37
retirement, purchase or other acquisition, directly or indirectly, for
consideration by such Person of any Capital Stock of such Person, or (iii) the
making of any payment by any Nexstar Entity in respect of any principal of or
interest on any Indebtedness other than Indebtedness incurred in accordance with
Sections 8.05(a) through (d) and Sections 8.05(g) through (j).
"Revolving Bank" means each Bank that has a Revolving Commitment or
--------------
that is a holder of a Revolving Loan made under the Revolving Commitments.
"Revolving Borrowing" means a Borrowing hereunder consisting of
-------------------
Revolving Loans made to the Borrower on the same Borrowing Date and, in the case
of Eurodollar Loans, having the same Interest Periods.
"Revolving Commitment" means, as to any Bank, the obligation of such
--------------------
Bank, if any, to make Revolving Loans (other than Incremental Revolving Loans)
to, and issue or participate in Letter of Credit Obligations on behalf of, the
Borrower hereunder in an aggregate principal amount not to exceed at any one
time the amount set forth under the heading "Revolving Commitment" opposite such
--------------------
Bank's name on Schedule 2.01 or, in the case of any Bank that is an Assignee,
-------------
the amount of the Revolving Commitment of the assigning Bank which is assigned
to such Assignee in accordance with Section 11.07 and set forth in the
-------------
applicable Assignment and Assumption (in each case as the same may be adjusted
from time to time as provided herein).
"Revolving Commitment Fee" has the meaning specified in Section
------------------------ -------
2.09(a).
-------
"Revolving Commitment Percentage" means, as to any Bank at any time,
-------------------------------
(i) the percentage which the amount of such Bank's Revolving Commitment then
constitutes of the sum of the amount of all Revolving Commitments, or (ii) at
any time after the Revolving Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Bank's Revolving Loans
made under its Revolving Commitment then outstanding constitutes of the
aggregate principal amount of all Revolving Loans made under the Revolving
Commitments then outstanding; provided that in the event that the Revolving
--------
Loans made under the Revolving Commitments are paid in full prior to the
reduction to zero of the Aggregate Revolving Commitment, the Revolving
Commitment Percentages shall be determined in a manner designed to ensure that
the other outstanding Revolving Extensions of Credit shall be allocated to the
Banks which have Revolving Commitments on a comparable basis.
"Revolving Commitment Period" means the period from and including the
---------------------------
Effective Date (with respect to the Revolving Commitments) or the effective date
of the relevant Incremental Loan Amendment (with respect to each Incremental
Revolving Commitment), as applicable, to but not including the Stated Revolving
Credit Maturity Date.
"Revolving Extensions of Credit" means, as to any Bank at any time, an
------------------------------
amount equal to the sum of (i) the aggregate principal amount of all Revolving
Loans held by such Bank then outstanding plus (ii) the amount of such Bank's
----
participations in Letter of Credit Obligations.
38
"Revolving Facility" means the revolving loan facility provided for in
------------------
Section 2.01(b).
---------------
"Revolving Facility Percentage" means, as to any Bank at any time, (i)
-----------------------------
the percentage which (x) the sum of the amount of such Bank's Revolving
Commitment plus the amount of all such Bank's Incremental Revolving Commitments,
----
if any, then constitutes of (y) the sum of the amount of the Aggregate Revolving
Commitment plus the amount of the Aggregate Incremental Revolving Commitment, or
----
(ii) at any time after the Revolving Commitments and the Incremental Revolving
Commitments have expired or terminated, the percentage which the aggregate
principal amount of such Bank's Revolving Loans then outstanding constitutes of
the aggregate principal amount of all Revolving Loans then outstanding; provided
--------
that in the event that the Revolving Loans made under Revolving Commitments are
paid in full prior to the reduction to zero of the Aggregate Revolving
Commitment, the Revolving Facility Percentages shall be determined in a manner
designed to ensure that the other outstanding Revolving Extensions of Credit
shall be allocated to Banks which have Revolving Commitments on a comparable
basis.
"Revolving Loan" has the meaning set forth in Section 2.01(b), as
-------------- ---------------
modified by Section 2.01(c).
---------------
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw-
---
Hill Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means any arrangement, directly or
------------------------------
indirectly, with any Person whereby a seller or transferor shall sell or
otherwise transfer any real or personal property and then or thereafter lease,
or repurchase under an extended purchase contract, conditional sales or other
title retention agreement, the same or similar property.
"Security Agreement" means the Security Agreement dated as of January
------------------
12, 2001, pursuant to which each Nexstar Entity has granted security interests
in its assets.
"Security Agreement Collateral" has the meaning specified in the
-----------------------------
Security Agreement.
"Security Documents" means collectively the Pledge and Security
------------------
Agreement, the Security Agreement, each Mortgage and each Joinder to Pledge and
Security Agreement and Joinder to Security Agreement executed and delivered by
any Credit Party pursuant to any Loan Document or otherwise, as any of the same
may be amended, modified, restated, supplemented, renewed, extended, increased,
rearranged and/or substituted from time to time.
"Security Instrument" means any security agreement, chattel mortgage,
-------------------
assignment, pledge agreement, financing or similar statement or notice,
continuation statement, other agreement or instrument, or amendment or
supplement to any thereof, providing for, evidencing or perfecting any security
interest.
"Shared Services Agreement" means a shared services arrangement or
-------------------------
other similar arrangement pursuant to which two Persons owning separate
television broadcast stations
39
agree to share the costs of certain services and procurements which they
individually require in connection with the ownership and operation of one
television broadcast station, whether through the form of joint or cooperative
buying arrangements or the performance of certain functions relating to the
operation of one television broadcast station by employees of the owner and
operator of the other television broadcast station, including, but not limited
to, the co-location of the studio, non-managerial administrative and/or master
control and technical facilities of such television broadcast station and/or the
sharing of maintenance, security and other services relating to such facilities.
"Significant Station" on any date means any Station, if the
-------------------
Consolidated Operating Cash Flow for such Station exceeds 10% of the sum of the
Consolidated Operating Cash Flow for all Stations and the corporate overhead
expenses for all Stations, in each case determined for the Measurement Period
for such date; provided that, for purposes of this definition and Section
-------
9.01(n), two or more Stations that substantially simulcast the same programming
-------
will be deemed to be a single Station so long as they do so.
"Solvency Certificate" means a certificate, signed by the Chief
--------------------
Financial Officer of each of the Nexstar Entities, substantially in the form of
Exhibit I.
---------
"Solvent" means, when used with respect to any Person, means that, as
-------
of any date of determination, (a) the amount of the "fair value" or "present
fair saleable value" of the assets of such Person (on a going-concern basis)
will, as of such date, exceed the amount of all "liabilities of such Person,
contingent or otherwise," as of such date, as such quoted terms are determined
in accordance with applicable federal and state laws governing determinations of
the insolvency of debtors, (b) such fair value or present fair saleable value of
the assets of such Person (on a going-concern basis) will, as of such date, be
greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c) such Person
will not have, as of such date, an unreasonably small amount of capital with
which to conduct its business, and (d) such Person will be able to pay its debts
as they mature. For purposes of this definition, (i) "debt" means liability on
a "claim," (ii) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured and (iii) unliquidated, contingent,
disputed and unmatured claims shall be valued at the amount that can be
reasonably expected to be actual and matured.
"Sook" means Perry Sook, an individual residing on the Effective Date
----
in the State of Texas.
"Stated Maturity Date" means (i) with respect to Revolving Loans, the
--------------------
Stated Revolving Credit Maturity Date, (ii) with respect to Term A Loans, the
Stated Term A Maturity Date, and (iii) with respect to Term B Loans, the Stated
Term B Maturity Date.
"Stated Revolving Credit Maturity Date" means January 12, 2007.
-------------------------------------
40
"Stated Term A Maturity Date" means January 12, 2007.
---------------------------
"Stated Term B Maturity Date" means July 12, 2007.
---------------------------
"Station" means, at any time, collectively, (i) each television
-------
station listed in Schedule 6.16 hereto, (ii) any television station licensed by
-------------
the FCC to any Nexstar Entity on, or at any time after, the Effective Date and
(iii) any television station that is the subject of a purchase, acquisition,
Local Marketing Agreement, Joint Sales Agreement or Shared Services Agreement
consented to by the Majority Banks or otherwise permitted under Section
-------
8.04(b).
"Subsidiary" means, as to any Person, (i) any corporation more than
----------
50% of whose Capital Stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries, and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person,
directly or indirectly through Subsidiaries, has more than a 50% equity interest
at the time. Additionally, in calculating financial covenants or financial
performance (excluding the calculation of Excess Cash Flow), the financial
position and results of the Bastet/Mission Borrowers shall be included as if
they were Wholly-Owned Subsidiaries of the Borrower and any television station
owned by a Bastet/Mission Entity were a "Station" so long as Joint Sales
-------
Agreements, Shared Services Agreements and/or Local Marketing Agreements between
the Bastet/Mission Entities and one or more Subsidiaries of the Borrower,
covering all of the television broadcast stations of the Bastet/Mission
Entities, are in full force and effect.
"Subsidiary Guarantor" means each Subsidiary of the Borrower.
--------------------
"Subsidiary Guaranty Agreement" means the Subsidiary Guaranty
-----------------------------
Agreement of the Subsidiary Guarantors dated as of January 12, 2001, as the same
may be amended, supplemented and/or otherwise modified from time to time.
"Syndication Agent" means Barclays Bank PLC, in its capacity as
-----------------
Syndication Agent for the Banks hereunder, and any successor to such agent.
"Taxes" has the meaning specified in Section 4.01(a).
----- ---------------
"Television Broadcasting Business" means a business substantially all
--------------------------------
of which consists of the construction, ownership, operation, management,
promotion, extension or other utilization of any type of television broadcasting
system or any similar television broadcasting business, including the
syndication of television programming, the obtaining of a license or franchise
to operate such a system or business, and activities incidental thereto, such as
providing production services.
"Television Company" means any Nexstar Entity, to the extent such
------------------
Person owns or operates a Station.
41
"Term Bank" means each Bank that has a Term A Commitment or Term B
---------
Commitment or that is the holder of a Term A Loan or Term B made under any Term
Commitment.
"Term A Bank" means each Bank that has a Term A Commitment or that is
-----------
the holder of a Term A Loan made under the Term A Commitments.
"Term A Commitment" means, as to any Bank, the sum of such Bank's
-----------------
Initial Term A Commitment plus such Bank's Additional Term A Loan Commitment.
----
"Term A Commitment Fee" has the meaning specified in Section 2.09(a).
--------------------- ---------------
"Term A Facility Percentage" means, as to any Bank at any time, the
--------------------------
percentage which (i) the sum of all of such Bank's Term A Loans then outstanding
constitutes of (ii) the sum of the Aggregate Outstanding Term A Loan Balance.
"Term A Loan" has the meaning set forth in Section 2.01(a)(i), as
----------- ------------------
modified by Section 2.01(c).
---------------
"Term B Bank" means each Bank that has a Term B Commitment or that is
-----------
the holder of a Term B Loan made under the Term Commitments.
"Term B Commitment" means, as to any Bank, the obligation of such
-----------------
Bank, if any, to make Term B Loans to the Borrower hereunder in an aggregate
principal amount not to exceed the amount set forth under the heading "Term B
------
Commitment" opposite such Bank's name on Schedule 2.01.
---------- -------------
"Term B Facility Percentage" means, as to any Bank at any time, the
--------------------------
percentage which (i) the sum of all of such Bank's Term B Loans then outstanding
constitutes of (ii) the sum of the Aggregate Outstanding Term B Loan Balance.
"Term B Loan" has the meaning set forth in Section 2.01(a)(ii).
----------- -------------------
"Term Borrowing" means a Borrowing hereunder consisting of Term Loans
--------------
made to the Borrower on the same Borrowing Date.
"Term Commitment" means, as to any Bank, such Bank's Term A Commitment
---------------
and/or Term B Commitment, as applicable.
"Term Loan" means a Term A Loan or Term B Loan, as applicable.
---------
"Test Period" has the meaning specified in the definition of "Pro
----------- ---
Forma Basis".
-----------
"Tranche" means the collective reference to Eurodollar Loans made by
-------
the Banks to the Borrower, the then current Interest Periods with respect to
which begin on the same date and end on the same later date, whether or not such
Loans shall originally have been made on the same day.
42
"Transaction" means collectively, the incurrence of the Loans and
-----------
other extensions of credit to be made to the Nexstar Entities on the Effective
Date and the refinancing of the Loans under the Existing Credit Agreement.
"Transferee" has the meaning specified in Section 11.08.
---------- -------------
"Ultimate Parent" has the meaning specified in the Preamble hereto.
---------------
"Unfunded Pension Liability" means the excess of a Pension Plan's
--------------------------
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" and "U.S." each means the United States of America.
------------- ----
"Wholly-Owned Subsidiary" means, as to any Person, (i) any corporation
-----------------------
100% of whose capital stock (other than director's or other qualifying shares)
is at the time owned by such Person and/or one or more direct or indirect
Wholly-Owned Subsidiaries of such Person and (ii) any partnership, limited
liability company, association or other entity in which such Person and/or one
or more direct or indirect Wholly-Owned Subsidiaries of such Person has a 100%
equity interest at such time.
1.02 Other Definitional Provisions.
-----------------------------
(a) Unless otherwise specified herein or therein, all terms
defined in this Agreement shall have such defined meanings when used in any
Exhibit, Schedule or other Loan Document or any certificate or other
document made or delivered pursuant hereto. The meaning of defined terms
shall be equally applicable to the singular and plural forms of the defined
terms.
(b) The words "hereof", "herein", "hereunder" and words of
------ ------ ---------
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(c) The term "documents" includes any and all instruments,
---------
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(d) The terms "including" or "include" are not limiting and mean
--------- -------
"including without limitation" or "include without limitation".
(e) References in this Agreement or any other Loan Document to
knowledge by any Credit Party of events or circumstances shall be deemed to
refer to events or circumstances of which a Responsible Officer of such
Person has actual knowledge or reasonably should have knowledge.
43
(f) References in this Agreement or any other Loan Document to
financial statements shall be deemed to include all related schedules and
notes thereto.
(g) Except as otherwise specified herein, all references to any
Governmental Authority or Requirement of Law defined or referred to herein
shall be deemed references to such Governmental Authority or Requirement of
Law or any successor Governmental Authority or Requirement of Law, and any
rules or regulations promulgated thereunder from time to time, in each case
as the same may have been or may be amended or supplemented from time to
time.
(h) References herein to a certification or statement of an
officer of a Person or other individual shall mean a certification or
statement of such Person, which is executed on behalf of such Person by
such individual in his or her capacity as an officer of such Person.
(i) Subject to the definitions of the terms "Interest Period" and
"Interest Payment Date" in Section 1.01, whenever any performance
------------
obligation hereunder shall be stated to be due or required to be satisfied
on a day other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day. In the computation of
periods of time from a specified date to a later specified date, the word
"from" means "from and including"; the words "to" and "until" each mean "to
----- ------------------ -- ----- --
but excluding," and the word "through" means "to and including." If any
------------- ------- ----------------
provision of this Agreement refers to any action taken or to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be interpreted to encompass any and all means, direct or indirect, of
taking, or not taking, such action.
(j) Unless otherwise expressly provided herein, references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the
extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(k) References to any statute or regulation are to be construed
as including all statutory and regulatory provisions consolidating,
amending or replacing such statute or regulation.
1.03 Accounting Principles. Except as provided to the contrary
---------------------
herein, all accounting terms used herein shall be interpreted in accordance with
GAAP. Unless the context otherwise clearly requires, all financial computations
required under this Agreement shall be made in accordance with GAAP; provided
--------
that if the Borrower notifies the Administrative Agent that the Borrower wishes
to amend any covenant in Article VIII or the definition of any term used therein
to eliminate the effect of any change in GAAP occurring after the Effective Date
or the operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Majority Banks wish to amend Article VIII or any such
definition for such purpose), then compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant change
in GAAP became effective, until either such notice is withdrawn or such covenant
or definition is amended in a manner satisfactory to the Borrower and the
Majority Banks. Additionally, in calculating financial covenants or financial
performance
44
(excluding the calculation of Excess Cash Flow), the financial position and
results of Bastet/Mission Entities shall be included as if each was a
Wholly-Owned Subsidiary of the Borrower and any television station owned by a
Bastet/Mission Entity were a Station.
1.04 Classes and Types of Loans and Borrowings. The term
-----------------------------------------
"Borrowing" denotes the aggregation of Loans of one or more Banks to be made to
----------
the Borrower pursuant to Section 2.03 on the same date, all of which Loans are
------------
of the same Class and Type and, in the case of Eurodollar Loans, have the same
initial Interest Period. Loans made under this Agreement are distinguished by
"Class" and by "Type". The "Class" of a Loan (or of a commitment to make such a
------ ---- -----
Loan or of a Borrowing comprised of such Loans) refers to the determination of
whether such commitment or Loan is (a) a Revolving Commitment or a Revolving
Loan made under the Revolving Commitments, (b) an Incremental Revolving
Commitment relating to a specified Incremental Facility or an Incremental
Revolving Loan made under such Incremental Facility, (c) a Term A Commitment or
a Term A Loan made under the Term A Commitments, (d) a Term B Commitment or a
Term B Loan made under the Term B Commitments or (e) an Incremental Term
Commitment relating to a specified Incremental Facility or an Incremental Term
Loan made under such Incremental Facility, each of which constitutes a "Class".
-----
The "Type" of a Loan refers to the determination whether such Loan is a
----
Eurodollar Loan or a Base Rate Loan, each of which constitutes a "Type".
----
Identification of a Loan (or of a Commitment to make such a Loan or of a
Borrowing comprised of such Loans) by both Class and Type, e.g., a "Eurodollar
----------
Incremental Term Loan", indicates that such Loan is both an Incremental Term
---------------------
Loan and a Eurodollar Loan (or that such Borrowing is comprised of such Loans).
ARTICLE II.
THE CREDIT FACILITIES
---------------------
2.01 Amounts and Terms of Commitments.
--------------------------------
(a) The Term Loans.
--------------
(i) Each Term A Bank severally agrees, subject to the terms and
conditions hereinafter set forth, (A) to make a term loan (each, an
"Initial Term A Loan") to the Borrower on the Effective Date (and not
--------------------
thereafter) in an aggregate principal amount not to exceed the Initial Term
A Loan Commitment of such Term A Bank and (B) to make an additional term
loan (each, an "Additional Term A Loan" and, together with the each Initial
----------------------
Term A Loan, collectively, the "Term A Loans") to the Borrower, on any
------------
Business Day during the period from the Effective Date until the Additional
Term A Loan Commitment terminates as hereinafter provided, in an aggregate
principal amount not to exceed the Additional Term A Loan Commitment of
such Term A Bank; provided however that the aggregate principal amount of
--------
all outstanding Term A Loans made under the Term A Commitments shall not
exceed the Aggregate Term A Commitment. Within such limits, and subject to
the other terms and conditions of this Agreement, the Borrower may borrow
Term A Loans under this Section 2.01(a)(i) and under Section 2.01(c);
------------------ ---------------
provided that amounts borrowed as Term A Loans which are repaid or prepaid
--------
45
may not be reborrowed. The Initial Term A Loan Commitments shall
automatically and permanently terminate effective as of June 15, 2001, and
the Additional Term A Loan Commitments shall automatically and permanently
terminate effective as of the earliest of to occur of (x) June 15, 2001, if
the Initial Term A Loans have not been funded in full by such date, (y) the
date that the Term A Banks fund any Additional Term A Loan and (z) the date
that is eighteen months after the Effective Date.
(ii) Each Term B Bank severally agrees, subject to the terms and
conditions hereinafter set forth, to make a term loan (each, a "Term B
------
Loan") to the Borrower on the Effective Date (and not thereafter) in an
aggregate principal amount not to exceed the Term B Loan Commitment of such
Term B Bank; provided however that after giving effect to any Term B Loan
--------
made under a Term B Commitment, the aggregate principal amount of all
outstanding Term B Loans made under the Term B Commitments shall not exceed
the Aggregate Term B Commitment. Within such limits, and subject to the
other terms and conditions of this Agreement, the Borrower may borrow Term
B Loans under this Section 2.01(a)(ii); provided that amounts borrowed as
------------------- --------
Term B Loans which are repaid or prepaid may not be reborrowed. The Term B
Commitments shall automatically and permanently terminate effective as of
June 15, 2001.
(iii) Term Loans may from time to time be (i) Eurodollar Loans
or (ii) Base Rate Loans or a combination thereof, as determined by the
Borrower pursuant to Section 2.03(b) or Section 2.04.
(b) The Revolving Loans. Each Revolving Bank severally agrees,
subject to the terms and conditions hereinafter set forth, to make
revolving loans (each, a "Revolving Loan") to the Borrower from time to
time on any Business Day, during the Revolving Commitment Period, in an
aggregate principal amount not to exceed at any time outstanding the
Revolving Commitment of such Revolving Bank; provided, however that after
giving effect to any Revolving Loan made under a Revolving Commitment, the
aggregate principal amount of all outstanding Revolving Loans made under
the Revolving Commitments plus the aggregate amount of all outstanding
Letter of Credit Obligations shall not exceed the Aggregate Revolving
Commitment. Within such limits, and subject to the other terms and
conditions hereof, the Borrower may borrow Revolving Loans under this
Section 2.01(b), prepay Revolving Loans pursuant to Section 2.06 or
2.07(a)(i) and reborrow Revolving Loans pursuant to this Section 2.01(b).
Revolving Loans may from time to time be (i) Eurodollar Loans or (ii) Base
Rate Loans or a combination thereof, as determined by the Borrower pursuant
to Section 2.03(b) and Section 2.04.
(c) The Incremental Loans.
(i) So long as no Default or Event of Default has occurred
and is continuing, at any time and from time to time prior to December
31, 2002, the Borrower may request pursuant to the procedure set forth
in Section 2.16, the addition of an Incremental Facility consisting of
------------
either a new tranche of revolving loans (each, an "Incremental
-----------
Revolving Loan") or a new tranche of term loans
46
(each, an "Incremental Term Loan"); provided however that the Borrower
may not make a request for an Incremental Facility if after giving
effect thereto the sum of all then outstanding Incremental Revolving
Loans and unused Incremental Revolving Commitments, Incremental Term
Loans and unused Incremental Term Commitments would exceed the then
Maximum Incremental Amount. Each Incremental Revolving Loan and each
Incremental Term Loan shall: (A) unless otherwise specifically
provided in this Agreement, upon the effectiveness of the Incremental
Revolving Commitment or Incremental Term Commitment relating thereto
as provided in Section 2.01(c)(ii), be deemed to be a Revolving Loan
or a Term A Loan, as applicable, for all purposes under this
Agreement, including for purposes of the sharing of Collateral and
guarantees under the Guaranty Agreements all on a pari passu basis
with all other Obligations; (B) have such pricing as may be agreed by
the Borrower and the Banks agreeing to provide such Incremental
Revolving Loans and/or Incremental Term Loans pursuant to the
provisions of this Section 2.01(c) and Section 2.16; and (C) otherwise
have all of the same terms and conditions as the Revolving Loans that
are not Incremental Revolving Loans (if such Incremental Loans are
Incremental Revolving Loans) or as the Term A Loans (if such
Incremental Loans are Term Loans). In addition, unless otherwise
specifically provided in this Agreement, all references in the Loan
Documents to Revolving Loans and to Term A Loans shall be deemed, as
the context requires, to include references to Incremental Revolving
Loans and Incremental Term Loans, respectively, made pursuant to this
Agreement. No Bank shall have any obligation to make an Incremental
Loan unless and until it commits to do so. Subject to the proviso at
the end of Section 2.16(a), Commitments in respect of Incremental
Loans shall become Commitments under this Agreement pursuant to (x) an
amendment (each, an "Incremental Loan Amendment") to this Agreement
executed by the Borrower, each Bank or other approved financial
institution agreeing to provide such Commitment (and no other Bank
shall be required to execute such amendment), and the Administrative
Agent, and (y) any amendments to the other Loan Documents (executed by
the relevant Credit Party and the Administrative Agent only) as the
Administrative Agent shall reasonably deem appropriate to effect such
purpose. Notwithstanding anything to the contrary contained herein,
the effectiveness of such Incremental Loan Amendment shall be subject
to the satisfaction on the date thereof and, if different, on the date
on which the Incremental Loans are made, of each of the conditions set
forth in Section 5.03.
(ii) So long as (x) the Borrower shall have given the
Administrative Agent no less than five Business Days' prior notice of
the effectiveness thereof and (y) any financial institution not
theretofore a Bank which is providing an Incremental Revolving
Commitment and/or an Incremental Term Commitment shall have become a
Bank under this Agreement pursuant to an Incremental Loan Amendment,
the Incremental Revolving Commitment and/or Incremental Term
Commitment being requested by the Borrower shall become effective
under this Agreement upon the effectiveness of such Incremental Loan
Amendment. Upon such effectiveness, Schedule 2.01 shall be deemed
-------------
amended
47
to reflect such Commitments. In the event that an Incremental Facility
shall have become effective, the Bank or Banks providing such
Incremental Revolving Commitments or Incremental Term Commitments
shall be deemed to have agreed, severally and not jointly, upon the
terms and subject to the conditions of this Agreement, (A) with
respect to Incremental Term Commitments, to make an Incremental Term
Loan in the amount of the Incremental Term Commitment of such Bank on
the effective date of the applicable Increment Loan Amendment and (B)
with respect to Incremental Revolving Commitments, to make from time
to time during the period from the date of the effectiveness of the
applicable Incremental Loan Amendment through the Maturity Date, one
or more Incremental Revolving Loans to the Borrower pursuant to the
provisions of Section 2.03 in an aggregate principal amount not
exceeding at any time the Incremental Revolving Commitment of such
Bank at such time.
2.02 Loan Accounts; Notes.
--------------------
(a) Loan Accounts. The Loans made by each Bank shall be
-------------
evidenced by one or more loan accounts maintained by such Bank and the
Administrative Agent in the ordinary course of business. The loan accounts
maintained by the Administrative Agent shall, in the event of a discrepancy
between the entries in the Administrative Agent's books and any Bank's
books relating to such loan accounts, be controlling and, absent manifest
error, shall be conclusive as to the amount of the Loans made by the Banks
to the Borrower, the interest and payments thereon and any other amounts
owing in respect of this Agreement. Any failure to make a notation in any
such loan account or any error in doing so shall not limit or otherwise
affect the obligations of the Borrower hereunder to pay any amount owing
with respect to the Loans.
(b) Notes. If requested by any Bank, the Borrower shall execute
-----
and deliver to such Bank (and deliver a copy thereof to the Administrative
Agent) one or more promissory notes evidencing the Loans owing to such Bank
pursuant to this Agreement. Any such note shall be in a form prescribed by
the Administrative Agent and shall be entitled to all of the rights and
benefits of this Agreement and the other Loan Documents.
2.03 Procedure for Borrowing.
-----------------------
(a) Procedure for Revolving Loan Borrowings. Subject to the
terms and conditions of this Agreement, the Borrower may borrow under the
Revolving Commitments and/or under any Incremental Revolving Commitments
comprising an Incremental Facility then in effect, in each case on any
Business Day during the Revolving Commitment Period; provided that the
Borrower shall give the Administrative Agent an irrevocable Notice of
Borrowing, which Notice of Borrowing must be received by the Administrative
Agent prior to 11:00 A.M., Dallas, Texas time, (i) three Business Days
prior to the requested Borrowing Date, if all or any part of the requested
Revolving Loans are to be initially Eurodollar Loans, or (ii) one Business
Day prior to the requested Borrowing Date otherwise, specifying (A) the
aggregate amount of the Borrowing,
48
(B) the requested Borrowing Date, (C) the Type or Types of Revolving Loans
comprising such Borrowing, and (D) if the Borrowing is to be entirely or
partly of Eurodollar Loans, the respective amounts of each Tranche and the
respective lengths of the initial Interest Periods therefor (subject to the
provisions of the definition of Interest Period). Each Borrowing under the
Revolving Commitments or under any Incremental Facility consisting of
Incremental Revolving Commitments shall be in an amount equal to (x) in the
case of Base Rate Loans, $1,000,000 or a whole multiple of $500,000 in
excess thereof (or, if the Aggregate Available Revolving Commitment is less
than $1,000,000, such lesser amount) and (y) in the case of Eurodollar
Loans, each Tranche shall be $1,000,000 or a whole multiple of $500,000 in
excess thereof. Upon receipt of a Notice of Borrowing with respect to a
Borrowing under this Section 2.03(a), the Administrative Agent shall
promptly notify each relevant Bank of such Borrowing. Each Revolving Bank
will make the amount of its pro rata share of each requested Borrowing made
under the applicable Incremental Facility, as applicable, available to the
Administrative Agent for the account of the Borrower at the Administrative
Agent's Payment Office prior to 1:00 P.M., Dallas, Texas time on the
Borrowing Date requested by the Borrower in funds immediately available to
the Administrative Agent. Unless any applicable condition of Article V has
not been satisfied, the proceeds of such Borrowing or Borrowings will then
be made available to the Borrower by the Administrative Agent by wire
transfer in accordance with written instructions provided to the
Administrative Agent by the Borrower with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Banks and/or the
relevant Incremental Revolving Banks, as applicable, and in like funds as
received by the Administrative Agent.
(b) Procedure for Term Loan Borrowings. Subject to the terms and
conditions of this Agreement, the Borrower may borrow (i) under the Initial
Term A Loan Commitments on the Effective Date (ii) under the Additional
Term A Loan Commitments on any Business Day from the Effective Date until
the termination of the Additional Term A Loan Commitments, (iii) under the
Term B Commitments on the Effective Date, and (iv) under any Incremental
Facility consisting of Incremental Term Commitments on the effective date
of the relevant Incremental Loan Amendment therefor; provided in each case
that the Borrower shall give the Administrative Agent an irrevocable Notice
of Borrowing, which Notice of Borrowing must be received by the
Administrative Agent prior to 11:00 A.M., Dallas, Texas time, (i) three
Business Days prior to the requested Borrowing Date, if all or any part of
the Borrowings are to be initially Eurodollar Loans, or (ii) one Business
Day prior to the requested Borrowing Date otherwise, requesting that the
Banks participating in such Borrowing make the Term Loans on the Effective
Date or the effective date of the relevant Incremental Loan Amendment, as
applicable, and specifying (A) the aggregate amount of the Borrowing, (B)
the Class of Loans comprising such Borrowing, (C) the Type or Types of Term
Loans comprising such Borrowing, and (D) if the Borrowing is to be entirely
or partly Eurodollar Loans, the respective amounts of each Tranche (which
shall be $1,000,000 or a whole multiple of $500,000 in excess thereof) and
the respective lengths of the initial Interest Periods therefor (subject to
the provisions of the definition of Interest Period). Upon receipt of a
Notice of Borrowing with respect to a Borrowing under this Section 2.03(b),
the Administrative Agent shall promptly notify each relevant Bank of such
49
Borrowing. Each Term Bank will make the amount of its pro rata share of
each requested Borrowing made under the Term Commitments and each relevant
Incremental Term Bank will make its pro rata share of each requested
Borrowing made under the applicable Incremental Facility, as applicable,
available to the Administrative Agent for the account of the Borrower at
the Administrative Agent's Payment Office prior to 1:00 P.M., Dallas, Texas
time, on the requested Borrowing Date, in funds immediately available to
the Administrative Agent. Unless any applicable condition of Article V has
not been satisfied, the proceeds of such Borrowing or Borrowings will then
be made available to the Borrower by the Administrative Agent by wire
transfer in accordance with written instructions provided to the
Administrative Agent by the Borrower with the aggregate of the amounts made
available to the Administrative Agent by the Term Banks and/or the relevant
Incremental Term Banks, as applicable, and in like funds as received by the
Administrative Agent.
(c) No Eurodollar Loans made during an Event of Default. During the
---------------------------------------------------
existence of an Event of Default, the Borrower may not elect to have a Loan
be made as a Eurodollar Loan.
(d) Limit on Eurodollar Loans. After giving effect to any Borrowing or
-------------------------
Borrowings, there shall not be more than five different Interest Periods in
effect in respect of all Loans which are Eurodollar Loans.
2.04 Conversion and Continuation. Elections for all Borrowings.
---------------------------------------------------------
(a) Election for Conversion/Continuation. The Borrower may upon
------------------------------------
irrevocable written notice (or telephonic notice immediately confirmed in
writing) to the Administrative Agent in accordance with Section 2.04(b):
(i) elect to convert on any Business Day, any Base Rate Loans (or any part
thereof in an amount of not less than $1,000,000 or an integral multiple of
$500,000 in excess thereof) into Eurodollar Loans; (ii) elect to convert on
the last day of the Interest Period with respect thereto, any Eurodollar
Loans (or any part thereof in an amount of not less than $1,000,000 or an
integral multiple of $500,000 in excess thereof) into Base Rate Loans; or
(iii) elect to continue on the last day of the Interest Period with respect
thereto, any Eurodollar Loans (or any part thereof in an amount not less
than $1,000,000 or an integral multiple of $500,000 in excess thereof);
provided, however that if the aggregate amount of a Borrowing comprised of
Eurodollar Loans shall have been reduced, by payment, prepayment, or
conversion of part thereof to be less than $500,000, the Eurodollar Loans
comprising such Borrowing shall automatically convert into Base Rate Loans
on the last day of the then-current Interest Period therefor, and on and
after such date the right of the Borrower to continue such Loans as, and
convert such Loans into, Eurodollar Loans shall terminate.
(b) Notice of Conversion/Continuation. The Borrower shall deliver a
---------------------------------
Notice of Conversion/Continuation in accordance with Section 11.02 to be
received by the Administrative Agent not later than (i) 11:00 A.M. Dallas,
Texas time not less than three Business Days in advance of the Conversion
Date or Continuation Date if any
50
Loans are to be converted into or continued as Eurodollar Loans and (ii)
11:00 A.M. Dallas, Texas time not less than one Business Day in advance of
the Conversion Date, if any Loans are to be converted into Base Rate Loans,
specifying (A) the proposed Conversion Date or Continuation Date, which
shall be a Business Day, (B) the aggregate principal amount of Loans to be
converted or continued, (C) the nature of the proposed conversion or
continuation and (D) the duration of the requested Interest Period, if
applicable.
(c) Failure to Elect Interest Period. If upon the expiration of any
--------------------------------
Interest Period applicable to Eurodollar Loans, the Borrower has failed to
timely select a new Interest Period, such Loans shall automatically convert
into Base Rate Loans.
(d) Notice to Banks. Upon receipt of a Notice of
---------------
Conversion/Continuation, the Administrative Agent will promptly notify each
Bank thereof, or, if no timely notice is provided by the Borrower, the
Administrative Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made pro
rata according to the respective outstanding principal amounts of the Loans
with respect to which the notice was given.
(e) No Conversion/Continuation During Event of Default. During the
--------------------------------------------------
existence of an Event of Default, the Borrower may not elect to have a Loan
converted into or continued as a Eurodollar Loan.
(f) Limitation on Interest Periods. Notwithstanding any other
------------------------------
provision contained in this Agreement, after giving effect to any
conversion or continuation of any Loans, there shall not be more than five
different Interest Periods in effect in respect of all Loans which are
Eurodollar Loans.
2.05 Reduction and Termination of Commitments.
----------------------------------------
(a) The Borrower may, upon not less than five Business Days'
prior notice to the Administrative Agent, terminate or permanently reduce
the Aggregate Revolving Commitment, without premium or penalty, by an
aggregate minimum amount of $1,000,000 or any multiple of $500,000 in
excess thereof; provided, however that no such termination or reduction
--------
shall be permitted if after giving effect thereto and to any prepayment of
Revolving Loans made under the Revolving Commitments which are made on the
effective date thereof (x) the then outstanding principal amount of all
Revolving Loans made under the Revolving Commitments plus the amount of the
----
then outstanding Letter of Credit Obligations would exceed the Aggregate
Revolving Commitment then in effect or (y) the aggregate amount of all
Letter of Credit Obligations would exceed the Letter of Credit Commitment
then in effect; and provided further that once reduced in accordance with
--------
this Section 2.05(a), the Aggregate Revolving Commitment may not be
---------------
increased. Any reduction of the Aggregate Revolving Commitment pursuant to
this Section 2.05(a) shall be applied pro rata to each Bank's Revolving
---------------
Commitment. All accrued commitment and letter of credit fees to the
effective date of any reduction or termination of the Aggregate Revolving
Commitment shall be paid on the effective date of such reduction or
termination. The Administrative
51
Agent shall promptly notify the affected Banks of any such reduction or
termination of the Aggregate Revolving Commitment.
(b) The Borrower may, upon not less than five Business Days'
prior notice to the Administrative Agent, terminate or permanently reduce
the Incremental Revolving Commitments under an Incremental Facility,
without premium or penalty, by an aggregate minimum amount of $1,000,000 or
any multiple of $500,000 in excess thereof; provided, however that no such
--------
termination or reduction shall be permitted if after giving effect thereto
and to any prepayment of the Incremental Revolving Loans made under such
Incremental Facility which are made on the effective date thereof, the then
outstanding principal amount of the Incremental Revolving Loans made under
such Incremental Facility would exceed the total amount of such Incremental
Revolving Commitments then in effect with respect to such Incremental
Facility; and provided further that once reduced in accordance with this
--------
Section 2.05(b), such Incremental Revolving Commitments may not be
---------------
increased. Any reduction of Incremental Revolving Commitments under an
Incremental Facility pursuant to this Section 2.05(b) shall be applied pro
---------------
rata to each applicable Incremental Revolving Bank's Incremental Revolving
Commitment under such Incremental Facility. All accrued commitment fees to
the effective date of any such reduction or termination of Incremental
Revolving Commitments shall be paid on the effective date of such reduction
or termination. The Administrative Agent shall promptly notify the
affected Incremental Banks of any such reduction or termination of
Incremental Revolving Commitments under an Incremental Facility.
(c) The Initial Term A Loan Commitments and the Aggregate Term B
Commitment shall automatically terminate effective as of the day after the
Effective Date. The Additional Term A Loan Commitments shall automatically
terminate effective as of the day described in the final sentence of
Section 2.01(a)(i). The Incremental Term Commitments under any Incremental
------------------
Facility shall terminate effective as of the day after the effective date
of the Incremental Loan Amendment relating thereto.
(d) The Aggregate Combined Revolving Commitment shall be
automatically and permanently reduced on the last day of each Fiscal
Quarter (or, in the case of the final reduction in Loan Year 6, on the
Stated Revolving Credit Maturity Date), commencing on March 31, 2002 and
ending on the Stated Revolving Credit Maturity Date, based on the annual
percentage reductions for each Loan Year set forth below of the Aggregate
Revolving Commitment as in effect on March 31, 2002, plus the original
----
amount of each Incremental Facility consisting of Incremental Revolving
Commitments created from time to time, if any, pursuant to this Agreement
prior to the time of the reduction in question. Notwithstanding anything
to the contrary contained in this Agreement, on the Maturity Date the
Aggregate Combined Revolving Commitment shall automatically reduce to zero.
52
Loan Year Annual Percentage Reduction
--------- ---------------------------
1 00.0%
2 00.0%
3 15.0%
4 20.0%
5 30.0%
6 35.0%
The amount of each reduction of (i) the Aggregate Revolving Commitment as
in effect on March 31, 2002, and (ii) the original amount of each
Incremental Facility consisting of Incremental Revolving Commitments
created from time to time, if any, pursuant to this Agreement prior to the
time of the reduction in question, during any Loan Year, shall be an amount
equal to the applicable annual percentage reduction set forth above with
respect to such Loan Year, divided by the number of quarterly reductions to
----------
be made during such Loan Year (with the last reduction in Loan Year 6, to
be made on the Stated Revolving Credit Maturity Date, deemed a quarterly
reduction for purposes of this Section 2.05(d)). Any reduction of the
---------------
Aggregate Combined Revolving Commitment pursuant to this Section 2.05(d)
---------------
shall be applied pro rata to each Bank's Revolving Commitment and/or
Incremental Revolving Commitments in accordance with such Bank's Revolving
Facility Percentage (and, in the case of a Bank with both a Revolving
Commitment and one or more Incremental Revolving Commitments, allocated
ratably among such Bank's Revolving Commitment and Incremental Revolving
Commitment(s)). All accrued commitment and letter of credit fees to the
effective date of any such reduction of the Aggregate Combined Revolving
Commitment shall be paid on the effective date of such reduction.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 2.05, on each date after the Effective Date upon
------------
which a mandatory prepayment of Revolving Loans pursuant to Section 2.07 is
------------
required, the Aggregate Combined Revolving Commitment shall also be
automatically and permanently reduced by the principal amount, if any,
required to be paid on the Revolving Loans pursuant to said Section;
provided that notwithstanding the foregoing, the Aggregate Combined
--------
Revolving Commitment shall not be permanently reduced by the amount of
prepayments made on the Revolving Loans pursuant to Section 2.07(g). Any
---------------
reduction of the Aggregate Combined Revolving Commitment pursuant to this
Section 2.05(e) shall be applied to reduce the remaining scheduled
---------------
reductions of the Aggregate Combined Revolving Commitment pursuant to
Section 2.05(d) pro rata based on the then remaining amounts of such
---------------
remaining scheduled reductions. Any reduction of the Aggregate Combined
Revolving Commitment pursuant to this Section 2.05(e) shall be applied pro
---------------
rata to each Bank's Revolving Commitment and/or Incremental Revolving
Commitments in accordance with such Bank's Revolving Facility Percentage
(and, in the case of a Bank with both a Revolving Commitment and one or
more Incremental Revolving Commitments, allocated ratably among such Bank's
Revolving Commitment and
53
Incremental Revolving Commitment(s)). All accrued commitment and letter of
credit fees to the effective date of any such reduction of the Aggregate
Combined Revolving Commitment shall be paid on the effective date of such
reduction or termination. The Administrative Agent shall promptly notify
the affected Banks of any reduction or termination of the Aggregate
Combined Revolving Commitment.
2.06 Voluntary Prepayments.
---------------------
(a) The Borrower may, prior to 11:00 A.M. Dallas, Texas time,
upon at least three Business Days' written notice by the Borrower to the
Administrative Agent in the case of Eurodollar Loans, and prior to 9:00
A.M. Dallas, Texas time, upon two Business Days' written notice on any
Business Day in the case of Base Rate Loans, prepay Revolving Loans and/or
Term Loans, as the Borrower may elect, in whole or in part, in amounts of
$1,000,000 or an integral multiple of $500,000 in excess thereof.
(b) Any notice of prepayment delivered pursuant to this Section
-------
2.06 shall specify the date and amount of such prepayment, whether the
----
prepayment is to be made with respect to Revolving Loans and/or Term Loans
and the Type of Loans to be prepaid. The Administrative Agent will
promptly notify each affected Bank thereof and of such Bank's pro rata
portion of such prepayment. If such notice is given by the Borrower and
not withdrawn, the Borrower shall make such prepayment, and the payment
amount specified in such notice shall be due and payable, on the date
specified therein together with accrued interest to each such date on the
amount prepaid and the amounts, if any, required pursuant to Section 4.04;
------------
provided that interest to be paid in connection with any such prepayment of
--------
Base Rate Loans (other than a prepayment in full) shall instead be paid on
the next occurring Interest Payment Date.
(c) Any prepayment of Term Loans pursuant to this Section 2.06
------------
shall be applied to the remaining scheduled installments of Term Loans to
be made pursuant to Section 2.08(a) pro rata (based on the then remaining
---------------
amounts of such remaining installments).
2.07 Mandatory Prepayments.
---------------------
(a) (i) If on any date the aggregate unpaid principal amount of
outstanding Revolving Loans made under the Revolving Commitments, plus
----
the outstanding Letter of Credit Obligations (to the extent not Cash
Collateralized pursuant to clause (ii) below or as provided for in
Section 3.07) exceeds the Aggregate Revolving Commitment, then the
------------
Borrower shall immediately prepay the amount of such excess. Any
payments on Revolving Loans made under the Revolving Commitments
pursuant to this Section 2.07(a)(i) shall be applied pro rata among
------------------
the Banks with Revolving Commitments.
(ii) If on any date the aggregate amount of all Letter of
Credit Obligations shall exceed the Letter of Credit Commitment, the
Borrower shall Cash Collateralize on such date an amount equal to the
excess of the Letter of Credit Obligations over the Letter of Credit
Commitment.
54
(iii) If on any date the aggregate unpaid principal amount
of outstanding Incremental Revolving Loans made under an Incremental
Facility exceeds the aggregate amount of the Incremental Revolving
Commitments relating to such Incremental Facility, then the Borrower
shall immediately prepay the amount of such excess. Any payments on
Incremental Revolving Loans made under an Incremental Facility
pursuant to this Section 2.07(a)(iii) shall be applied pro rata among
--------------------
the applicable Incremental Banks having Incremental Revolving
Commitments with respect to such Incremental Facility.
(b) (i) If on any date any Nexstar Entity shall make any
Disposition, an amount equal to 100% of the Net Cash Proceeds from
such Disposition shall be applied on such date to prepay outstanding
principal of the Term Loans and the Revolving Loans on a pro rata
basis among such Loans, provided that with respect to no more than
--------
$1,000,000 in the aggregate of the Net Cash Proceeds received in
connection with any Disposition, the Net Cash Proceeds therefrom shall
not be required to be so applied if no Default or Event of Default
then exists and, provided further, that this requirement for mandatory
--------
prepayment will be further reduced to the extent that the Borrower
elects, as hereinafter provided, to attempt to cause some or all of
such Net Cash Proceeds to be reinvested in Reinvestment Assets. The
Borrower may elect to attempt to cause some or all of the Net Cash
Proceeds from a Disposition to be reinvested in Reinvestment Assets
during the Reinvestment Period (a "Reinvestment Election") if (x) no
---------------------
Default or Event of Default exists on the date of such Reinvestment
Election and (y) if such Reinvestment Election is made by the delivery
of a Reinvestment Notice to the Administrative Agent on or before the
date of the consummation of such Disposition, with such Reinvestment
Election being effective with respect to the Net Cash Proceeds of such
Disposition equal to the Anticipated Reinvestment Amount specified in
such Reinvestment Notice.
(ii) Nothing in this Section 2.07(b) shall be deemed to
---------------
permit any Disposition not otherwise permitted under this Agreement.
(iii) On the Reinvestment Prepayment Date with respect to a
Reinvestment Election, an amount equal to the Reinvestment Prepayment
Amount, if any, for such Reinvestment Election shall be applied to
prepay outstanding principal of the Term Loans and the Revolving Loans
on a pro rata basis among such Loans.
(c) Within 90 days after any Nexstar Entity receives any proceeds
from any Recovery Event, an amount equal to 100% of the proceeds of such
Recovery Event (net of reasonable costs including, without limitation,
legal costs and expenses and taxes incurred in connection with such
Recovery Event and the collection of the proceeds thereof) shall be applied
to prepay outstanding principal of the Term Loans and the Revolving Loans
on a pro rata basis among such Loans; provided that so long as no Default
--------
or Event of Default then exists, this requirement for mandatory prepayment
shall be reduced by (i) any amounts actually applied on or before such 90th
day or (ii)
55
committed in writing on or before such 90th day to be applied to the
replacement or restoration of the assets subject to such Recovery Events
within 365 days after such Recovery Event and; provided further that with
respect to no more than $1,000,000 in the aggregate of the proceeds
received from any Recovery Event, the proceeds therefrom shall not be
required to be so applied if no Default or Event of Default then exists.
(d) On each date which is 90 days after the last day of each
Fiscal Year commencing with the Fiscal Year ending on December 31, 2001, an
amount equal to 50% of the Excess Cash Flow of the Borrower (determined
without treating the Bastet/Mission Entities as Subsidiaries of the
Borrower) for such Fiscal Year shall be applied to prepay outstanding
principal of the Term Loans and the Revolving Loans on a pro rata basis
among such Loans; provided that if the Consolidated Total Leverage Ratio
--------
(determined as if the Bastet/Mission Entities were Subsidiaries of the
Borrower) on the last day of the last two consecutive Fiscal Quarters
during such Fiscal Year is (x) less than 5.00:1.00 but greater than or
equal to 4.00:1.00, then only an amount equal to 30% of the Excess Cash
Flow of the Borrower (determined without treating the Bastet/Mission
Entities as Subsidiaries of the Borrower) for such Fiscal Year shall be
required to be so applied, or (y) less than 4.00:1.00, then no payment in
respect of such Fiscal Year shall be required pursuant to this Section
-------
2.07(d) and, provided further that with respect to each Fiscal Year, the
------- --------
amount which would otherwise be payable pursuant to this Section 2.07(d)
---------------
may be reduced by $1,000,000 so long as no Default or Event of Default
exists on such 90th day.
(e) At any time that the Consolidated Senior Leverage Ratio is
equal to or greater than 3.00 to 1.00 prior to the sale or issuance of any
Capital Stock of, or cash capital contribution to, any Nexstar Entity, then
on the Business Day after the date of the receipt by any Nexstar Entity of
Net Issuance Proceeds from any such sale or issuance of Capital Stock
(including Indebtedness described in Section 8.05(m)) or cash capital
---------------
contribution (other than (A) proceeds from the sale or issuance of Capital
Stock of, or cash contributions to, the Ultimate Parent from ABRY L.P. II,
ABRY L.P. III or Sook (or other Persons exercising preemptive rights in
connection with an issuance of Capital Stock to one or more of them), (B)
Net Issuance Proceeds, not to exceed an aggregate of $500,000, from Capital
Stock (other than Disqualified Stock) issuances by the Ultimate Parent to
employees of the Ultimate Parent or any Nexstar Entity, except to Sook, (C)
so long as no Default or Event of Default exists both before and after the
issuance thereof, Net Issuance Proceeds of Capital Stock (other than
Disqualified Stock) issuances of the Ultimate Parent or Net Issuance
Proceeds of Permitted Parent Preferred Equity, Permitted Permanent Holdings
Preferred Equity or Permitted Borrower Preferred Equity issuances, in each
case which are used concurrently upon the receipt thereof to repurchase or
redeem the Permitted Holdings Preferred Equity, (D) payments made pursuant
to an ABRY Capital Contribution Agreement and (E) subsequent cash capital
contributions and/or intercompany loans made by any Nexstar Entity to a
Subsidiary (or to the Holding Company, in the case of those Nexstar
Entities that collectively own all of the issued and outstanding Capital
Stock of the Holding Company other than Permitted Holdings Preferred Equity
or Permitted Permanent Holdings Preferred Equity) with any of the proceeds
described in the foregoing clauses (A) through (D), upon such Nexstar
Entity's
56
receipt, directly or indirectly through other Nexstar Entities, of such
proceeds), the Borrower shall prepay outstanding principal of the Term
Loans and the Revolving Loans, on a pro rata basis among such Loans, in an
amount equal to the lesser of (x) 50% of such Net Issuance Proceeds and (y)
the amount of Net Issuance Proceeds required to repay outstanding principal
of the Term Loans and Revolving Loans so that the Consolidated Senior
Leverage Ratio determined on a Pro Forma Basis after giving effect to any
such equity issuance or sale or capital contribution and any such
prepayment, shall not be greater than 3.00 to 1.00.
(f) If on any date any Nexstar Entity shall incur or issue any
Indebtedness described in Section 8.05(k) or Section 8.05(l), then on each
--------------- ---------------
such date of incurrence or issuance an amount equal to the amount of the
Net Debt Proceeds received with respect to such Indebtedness shall be
applied to prepay outstanding principal of the Term Loans and the Revolving
Loans, on a pro rata basis among such Loans; provided that, so long as no
--------
Default or Event of Default exists both before and after giving effect
thereto, all or a portion of the Net Debt Proceeds received with respect to
Permitted Parent Preferred Equity, Permitted Holdings Unsecured
Indebtedness, Permitted Permanent Holdings Preferred Equity or Permitted
Borrower Preferred Equity may be used to repurchase or redeem the Permitted
Holdings Preferred Equity on the date of any Nexstar Entity's receipt of
such Net Debt Proceeds, and provided further that the amount of the
--------
prepayments required to be made under this Section 2.07(f) shall be reduced
---------------
to the extent (but only to the extent) Net Debt Proceeds are so used to
repurchase or redeem the Permitted Holdings Preferred Equity.
(g) If on any date the Borrower incurs or issues Permitted
Borrower Subordinated Indebtedness, then on each such date of incurrence an
amount equal to the amount of the Net Debt Proceeds received with respect
to such Permitted Borrower Subordinated Indebtedness (less any amounts used
by the Borrower as permitted in Section 8.10(f)(ii)) shall be applied to
-------------------
prepay outstanding principal amount of the Revolving Loans. In addition,
notwithstanding anything to the contrary contained in this Section 2.07, if
------------
any Default or Event of Default exists on any date when the New Holding
Company, Nexstar Finance Holdings and/or the Borrower incurs any
Indebtedness permitted under Section 8.05(m), then on each such date of
---------------
incurrence an amount equal to the amount of the Net Debt Proceeds therefrom
(without duplication) shall be applied to prepay outstanding principal of
the Revolving Loans.
(h) If on any date a payment is made pursuant to an ABRY Capital
Contribution Agreement, then on each such date that such a payment is made
an amount equal to the amount of such payment shall be applied to prepay
outstanding principal of the Term Loans.
(i) The Borrower shall pay, together with each prepayment under
this Section 2.07, accrued interest on the amount prepaid and any amounts
------------
required pursuant to Section 4.04; provided that interest to be paid in
------------ --------
connection with any such prepayment of Base Rate Loans (other than a
prepayment in full) shall instead be paid on the next occurring Interest
Payment Date.
57
(j) Any prepayments pursuant to this Section 2.07 made on a day
------------
other than an Interest Payment Date for any Loan shall be applied first to
any Base Rate Loans then outstanding and then to Eurodollar Loans with the
shortest Interest Periods remaining.
(k) Any prepayment of Term Loans pursuant to this Section 2.07
------------
shall be applied to the remaining scheduled installments of Term Loans to
be made pursuant to Section 2.08(a), pro rata (based on the then remaining
---------------
amounts of such remaining installments).
(l) Notwithstanding anything to the contrary contained in this
Section 2.07, any Term B Bank may elect, by delivering written notice to
------------
the Administrative Agent prior to the receipt thereof, not to receive its
pro rata portion of any mandatory prepayment that would otherwise be
payable to such Term B Bank pursuant to this Section 2.07, whereupon such
------------
portion shall be reallocated to prepay the outstanding principal amount of
all Term Loans and Revolving Loans other than the Term B Loans held by such
Term B Bank and any other Term B Bank that has elected not to receive its
pro rata portion of such mandatory prepayment, on a pro rata basis among
such Loans.
2.08 Maturity and Amortization of Loans.
----------------------------------
(a) The Term Loans.
--------------
(i) The Term A Loans shall mature, and the outstanding principal
amount thereof shall be due and payable in full (together with all accrued
and unpaid interest thereon), on the Maturity Date. In addition, on the
last day of each Fiscal Quarter (or, in the case of the final principal
installment to be repaid in Loan Year 6, on the Stated Term A Maturity
Date), commencing on March 31, 2002, the Borrower shall repay, and there
shall become due and payable, a principal installment on the Term A Loans
in an amount based on the following annual percentage reductions for each
Loan Year set forth below of the Aggregate Outstanding Term A Loan Balance
on March 31, 2002, plus the original amount of each Term A Loan made under
----
an Incremental Facility created from time to time, if any, pursuant to this
Agreement prior to the time of the principal payment in question:
Loan Year Annual Percentage Reduction
--------- ---------------------------
1 00.0%
2 00.0%
3 15.0%
4 20.0%
5 30.0%
6 35.0%
58
The aggregate principal amount of each installment paid during any Loan
Year on the Term A Loans shall be an amount equal to the applicable annual
percentage reduction set forth above with respect to such Loan Year,
divided by the number of quarterly installments to be made during such Loan
----------
Year (with the last installment in Loan Year 6, to be made on the Stated
Term A Maturity Date, deemed a quarterly installment for purposes of this
Section 2.08(a)(i)).
------------------
(ii) The Term B Loans shall mature, and the outstanding principal
amount thereof shall be due and payable in full (together with all accrued
and unpaid interest thereon), on the Maturity Date. In addition, on the
last day of each Fiscal Quarter (or, in the case of the final principal
installment to be repaid in Loan Year 7, on the Stated Term B Maturity
Date), commencing on March 31, 2002, the Borrower shall repay, and there
shall become due and payable, a principal installment on the Term B Loans
in an amount based on the following annual percentage reductions for each
Loan Year set forth below of the Aggregate Outstanding Term B Loan Balance
on March 31, 2002:
Loan Year Annual Percentage Reduction
--------- ---------------------------
1 00.0%
2 01.0%
3 01.0%
4 01.0%
5 01.0%
6 01.0%
7 95.0%
The aggregate principal amount of each installment paid during any Loan
Year on the Term B Loans shall be an amount equal to the applicable annual
percentage reduction set forth above with respect to such Loan Year,
divided by the number of quarterly installments to be made during such Loan
----------
Year (with the last installment in Loan Year 7, to be made on the Stated
Term B Maturity Date, deemed a quarterly installment for purposes of this
Section 2.08(a)(ii)).
-------------------
(b) Application of Term Loan Payments.
---------------------------------
(i) Subject to Section 2.07(l), any payment made on Term A Loans
---------------
pursuant to this Section 2.08, Section 2.06 or Section 2.07 shall be
------------ ------------ ------------
applied pro rata to each Bank's Term A Loans in accordance with such Bank's
Term A Facility Percentage (and, in the case of a Bank with both
Incremental Term Loans and Term Loans that are not Incremental Term Loans,
allocated ratably among such Bank's Incremental Term Loans and Term Loans
that are not Incremental Term Loans).
59
(ii) Any payment made on Term B Loans pursuant to this Section
-------
2.08, Section 2.06 or Section 2.07 shall be applied pro rata to each Bank's
---- ------------ ------------
Term B Loans in accordance with such Bank's Term B Facility Percentage.
(c) The Revolving Loans. Each Revolving Loan shall mature, and
-------------------
the outstanding principal amount thereof shall be due and payable in full
(together with all accrued and unpaid interest thereon) on the Maturity
Date.
(d) Application of Revolving Loan Payments. Any payment made on
--------------------------------------
Revolving Loans pursuant to this Section 2.08, Section 2.06, or Sections
2.07(b), (c), (d), (e), (f) or (g) shall be applied pro rata to each Bank's
Revolving Loans in accordance with such Bank's Revolving Facility
Percentage (and, in the case of a Bank with both Incremental Revolving
Loans and Revolving Loans that are not Incremental Revolving Loans,
allocated ratably among such Bank's Incremental Revolving Loans and
Revolving Loans that are not Incremental Revolving Loans).
2.09 Fees. In addition to fees described in Section 3.08:
---- ------------
(a) Commitment Fees.
---------------
(i) The Borrower shall pay to the Administrative Agent for
the ratable account of each Bank with a Revolving Commitment, on the
last Business Day of each March, June, September and December and on
the earlier of the Maturity Date and the date on which the Aggregate
Revolving Commitment shall have been terminated in full, an aggregate
commitment fee (the "Revolving Commitment Fee") on the daily average
------------------------
amount of the Aggregate Available Revolving Commitment equal to 0.500%
per annum for any period that the Consolidated Total Leverage Ratio as
of the most recent Leverage Ratio Determination Date for such period
is greater than or equal to 5.50 to 1.00 and 0.375% per annum for any
period that the Consolidated Total Leverage Ratio as of the most
recent Leverage Ratio Determination Date for such period is less than
5.50 to 1.00. The Revolving Commitment Fee shall begin to accrue on
and after the Effective Date and shall cease to accrue on the earlier
of the Maturity Date and the date on which the Aggregate Revolving
Commitments shall have been terminated in full.
(ii) The Borrower shall pay to the Administrative Agent for
the ratable account of each Bank with an Additional Term A Loan
Commitment, on the last Business Day of each March, June, September
and December and on the earlier of the Maturity Date and the date on
which the Additional Term A Commitments shall have been terminated in
full, an aggregate commitment fee (the "Term A Commitment Fee") on the
---------------------
daily average amount of the aggregate Additional Term A Loan
Commitments equal to 0.500% per annum. The Term A Commitment Fee
shall begin to accrue on and after the Effective Date and shall cease
to accrue on the earlier of the Maturity Date and the date on which
the Additional Term A Loan Commitments shall have been terminated in
full.
60
(iii) The Borrower shall pay to the Administrative Agent
for the account of each Bank with an Incremental Revolving Commitment,
on the last Business Day of each March, June, September and December
and on the earlier of the Maturity Date and the date on which each
Incremental Revolving Commitment of a Bank shall have been terminated
in full, the Incremental Commitment Fee for each Incremental Revolving
Commitment of such Bank on the daily average amount of each of such
Bank's aggregate unutilized Incremental Revolving Commitments. Each
Incremental Commitment Fee shall begin to accrue on and after the date
when the related Incremental Revolving Commitment shall have become
effective hereunder and shall cease to accrue on the earlier of the
Maturity Date and the date on which such Incremental Revolving
Commitment shall have been terminated in full.
(b) Other Fees. The Borrower shall pay such other fees as have
----------
been, or may be, agreed upon between the Borrower and the Administrative
Agent from time to time.
(c) Fees under Existing Credit Agreement. Notwithstanding
------------------------------------
anything to the contrary in this Agreement, all fees which, as of the
Effective Date, remain outstanding under the Existing Credit Agreement will
be due and payable on the first payment date scheduled for payment of such
fees under this Agreement occurring after the Effective Date.
2.10 Computation of Fees and Interest.
--------------------------------
(a) All computations of commitment fees, and of interest payable
in respect of Base Rate Loans based upon the Reference Rate, shall be made
on the basis of a year of 365 or 366 days, as the case may be, and actual
days elapsed. All other computations of fees and interest under this
Agreement shall be made on the basis of a 360-day year and actual days
elapsed. Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last
day thereof.
(b) The Administrative Agent will promptly notify the Borrower
and the Banks of each determination of the Eurodollar Rate; provided,
--------
however, that any failure to do so shall not relieve the Borrower of any
-------
liability hereunder. Any change in the interest rate on a Loan resulting
from a change in the Applicable Margin or the Incremental Margin relating
thereto shall become effective as of the opening of business on the
relevant date of such change. The Administrative Agent will promptly
notify the Borrower and the Banks of the effective date and the amount of
each such change; provided, however, that any failure to do so shall not
-------- -------
relieve the Borrower of any liability hereunder.
(c) Each determination of an interest rate by the Administrative
Agent shall be conclusive and binding on the Borrower and the Banks in the
absence of manifest error.
61
2.11 Interest.
--------
(a) Except as provided in Section 2.11(d) below, each Term Loan
---------------
and each Revolving Loan shall bear interest on the outstanding principal
amount thereof from the Borrowing Date applicable thereto until it becomes
due and payable at a rate per annum equal to the Base Rate, or the
Eurodollar Rate, as selected by the Borrower from time to time pursuant to
Sections 2.03 and 2.04, plus the Applicable Margin or Incremental Margin,
------------- ---- ----
as the case may be, with respect to the Base Rate and the Eurodollar Rate
then in effect.
(b) Any change in the Applicable Margin or the applicable
Incremental Margin due to a change in the Consolidated Total Leverage Ratio
shall be effective on the applicable Adjustment Date and shall apply to all
Loans that are outstanding at any time during the period commencing on such
Adjustment Date and ending on the date immediately preceding the next
Adjustment Date.
(c) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any
prepayment of any portion of any Loan (excluding Base Rate Loans, which
such interest shall be paid on the next occurring Interest Payment Date)
for the portion of such Loans so prepaid. During the existence of any
Event of Default, interest shall be paid on demand.
(d) If any amount of principal of or interest on any Loan, or any
other regularly scheduled amount payable hereunder or under any other Loan
Document, is not paid in full when due and payable (whether at stated
maturity, by acceleration, demand or otherwise), after giving effect to any
applicable grace periods, the Borrower shall pay interest (after as well as
before judgment) on the principal amount of all outstanding Loans at the
applicable rate per annum provided in this Section 2.11 plus 2%, and on all
------------ ----
other amounts (including interest) at a rate per annum equal to the Base
Rate plus 2%.
----
(e) Anything herein to the contrary notwithstanding, the
obligations of the Borrower hereunder shall be subject to the limitation
that payments of interest shall not be required for any period for which
interest is computed hereunder, to the extent (but only to the extent) that
contracting for or receiving such payment by the respective Bank would be
contrary to the provisions of any law applicable to such Bank limiting the
highest rate of interest which may be lawfully contracted for, charged or
received by such Bank, and in such event the Borrower shall pay such Bank
interest at the highest rate permitted by applicable law.
2.12 Payments by the Borrower.
------------------------
(a) All payments (including prepayments) to be made by the
Borrower on account of principal, interest, drawings under Letters of
Credit, fees and other amounts required hereunder shall be made without
set-off or counterclaim and shall, except as otherwise expressly provided
with respect to drawings under Letters of Credit and elsewhere herein, be
made to the Administrative Agent for the ratable account of the relevant
Banks at the Administrative Agent's Payment Office, and shall be made in
62
Dollars and in immediately available funds, no later than 12:00 noon
(Dallas, Texas time) on the date specified herein. The Administrative
Agent will promptly distribute to each relevant Bank its share, if any, of
such principal, interest, fees or other amounts, in like funds as received.
Any payment which is received by the Administrative Agent later than 12:00
noon (Dallas, Texas time) shall be deemed to have been received on the
immediately succeeding Business Day and any applicable interest or fee
shall continue to accrue until such payment is deemed to have been
received.
(b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be,
subject to the provisions set forth in the definition of the term of
"Interest Period" herein.
(c) Unless the Administrative Agent shall have received notice
from the Borrower, prior to the date on which any payment is due to the
Banks hereunder, that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent as required hereunder on such date in
immediately available funds and the Administrative Agent may (but shall not
be so required), in reliance upon such assumption, cause to be distributed
to each relevant Bank on such due date an amount equal to the amount then
due such Bank. If and to the extent the Borrower shall not have made such
payment in full to the Administrative Agent, each relevant Bank shall repay
to the Administrative Agent on demand such amount distributed to such Bank,
together with interest thereon for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Rate as in effect for each such
day.
2.13 Payments by the Banks to the Administrative Agent.
-------------------------------------------------
(a) Unless the Administrative Agent shall have received notice
from a Bank on the Effective Date or, with respect to each Borrowing after
the Effective Date, at least one Business Day prior to the date of any
proposed Borrowing, that such Bank will not make available to the
Administrative Agent for the account of the Borrower the amount of such
Bank's pro rata share of the applicable Commitments to which such Borrowing
relates, the Administrative Agent may assume that each Bank has made such
amount available to the Administrative Agent as required hereunder on the
Borrowing Date and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent any Bank shall
not have made its full amount available to the Administrative Agent in
immediately available funds and the Administrative Agent in such
circumstances has made available to the Borrower such amount, such Bank
shall immediately make such amount available to the Administrative Agent,
together with interest at the Federal Funds Rate from the date of such
Borrowing to the date on which the Administrative Agent recovers such
amount from such Bank. A notice of the Administrative Agent submitted to
any Bank with respect to amounts owing under this Section 2.13(a) shall be
---------------
63
conclusive, absent manifest error. If such amount is so made available by
the relevant Bank, such payment to the Administrative Agent shall
constitute such Bank's Loan on the Borrowing Date for all purposes of this
Agreement. If such amount is not made available to the Administrative
Agent on the next Business Day following such Borrowing Date, the
Administrative Agent shall notify the Borrower of such failure to fund and,
upon demand by the Administrative Agent, the Borrower shall pay such amount
to the Administrative Agent for the Administrative Agent's account,
together with interest thereon for each day elapsed since such Borrowing
Date, at a rate per annum equal to the interest rate applicable at the time
to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan committed to by such
Bank on any Borrowing Date shall not relieve any other Bank of any
obligation hereunder to make Loans committed to by such other Bank on such
Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make Loans committed to be made by such other Bank on any
Borrowing Date.
2.14 Sharing of Payments, etc.
------------------------
(a) If, other than as expressly provided elsewhere herein, any
Bank shall obtain on account of Obligations relating to Revolving Loans
and/or Term Loans, as the case may be, owing to it any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its Revolving Facility Percentage and/or Term A
Facility Percentage and/or Term B Facility Percentage, as applicable, such
Bank shall forthwith (i) notify the Administrative Agent of such fact, and
(ii) purchase from the other relevant Banks such participations in such
Obligations relating to Revolving Loans and/or Term Loans, as applicable,
made by them as shall be necessary to cause such purchasing Bank to share
the excess payment ratably with each such other Banks; provided, however,
-------- -------
that if all or any portion of such excess payment is thereafter recovered
from the purchasing Bank, such purchase shall to that extent be rescinded
and each other relevant Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's commitment percentage (according to the proportion of (x) the amount
of such paying Bank's required repayment to (y) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased
pursuant to this Section 2.14 and will in each case notify the relevant
------------
Banks following any such purchases.
(b) The Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section 2.14 may, to the
------------
fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 11.09) with respect
-------------
to such participation as fully as if such Bank were the direct creditor of
the Borrower in the amount of such participation.
64
2.15 Security Documents and Guaranty Agreements.
------------------------------------------
(a) All Obligations under this Agreement and all other Loan
Documents shall be secured in accordance with the Security Documents.
(b) All Obligations under this Agreement and all other Loan
Documents shall be unconditionally guaranteed by the Parent Guarantors
pursuant to the Parent Guaranty Agreements and by the Subsidiary Guarantors
pursuant to the Subsidiary Guaranty Agreement.
2.16 Procedure for Incremental Loan Requests.
---------------------------------------
(a) When the Borrower wishes to request one or more Banks or
other financial institutions approved by the Administrative Agent (in each
case, such approval not to be unreasonably withheld) to provide proposals
for the providing of an Incremental Facility consisting of Incremental
Revolving Loans or Incremental Term Loans to the Borrower, the Borrower may
solicit requests from any such Banks or other financial institutions for
the providing of (i) a commitment for an Incremental Revolving Loan (each,
an "Incremental Revolving Commitment") or an Incremental Term Loan (each,
--------------------------------
an "Incremental Term Commitment"), as the case may be, and (ii) as
---------------------------
applicable to such Incremental Revolving Commitments or Incremental Term
Commitments, (x) the upfront fee to be charged by such Banks or other
financial institutions in connection with the providing of such Incremental
Revolving Commitments or Incremental Term Commitments (any such upfront
fee, each an "Incremental Upfront Fee"), (y) the commitment fee to be
-----------------------
charged by such Banks or other financial institutions with respect to such
Incremental Revolving Commitments or Incremental Term Commitments (any such
commitment fee, each an "Incremental Commitment Fee") and (z) the margins
--------------------------
to be added by such Banks or other financial institutions to the Base Rate
and the Eurodollar Rate for Loans made under such Incremental Revolving
Commitment or Incremental Term Commitments (any such margin, an
"Incremental Margin"). Upon the selection by the Borrower of Banks or
-------------------
other financial institutions, the Borrower shall promptly notify the
Administrative Agent of the Banks or other financial institutions selected
and the amount of the Incremental Revolving Commitments and/or Incremental
Term Commitments, the Incremental Upfront Fee, Incremental Commitment Fee
and the Incremental Margin as agreed upon by the Borrower and such Banks or
other financial institutions; provided, that if such Incremental Margins
--------
are greater than the margins set forth for Revolving Loans (in the case of
Incremental Revolving Loans) or Term A Loans (in the case of Incremental
Term Loans) in the definition of "Applicable Margin" contained in Section
-------
1.01, or if such Incremental Commitment Fees are greater than the Revolving
----
Commitment Fee set forth in Section 2.09(a), the Incremental Loan Amendment
---------------
pursuant to which such proposed Incremental Commitments are to be made
available shall not become effective unless the prior written consent of
the Majority Banks has been obtained.
(b) Notwithstanding anything to the contrary contained herein, it
is understood and agreed that (i) there shall be no more than (x) five
different Incremental
65
Margins in effect in respect of all Incremental Loans and (y) five
different Interest Periods in effect in respect of all Loans (including
Incremental Loans) which are Eurodollar Loans; and (ii) if no Incremental
Margin is agreed upon, with respect to any given Incremental Facility, then
the Incremental Margin shall be deemed to be (x) the Applicable Margin for
Revolving Loans (other than Incremental Revolving Loans) as in effect from
time to time if the commitment is an Incremental Revolving Commitment or
(y) the Applicable Margin for Term A Loans (other than Incremental Term
Loans) as in effect from time to time if the commitment is an Incremental
Term Commitment.
(c) From time to time, the Borrower and the Banks shall furnish
such information to the Administrative Agent as the Administrative Agent
may request relating to the providing of an Incremental Loan, including the
amounts, interest rates, and dates of Borrowings thereof, for purposes of
the allocation of amounts received from the Borrower for payment on all
amounts owing hereunder.
ARTICLE III.
LETTERS OF CREDIT
-----------------
3.01 Letter of Credit Subfacility.
----------------------------
(a) On the terms and conditions set forth herein (i) the Issuing
Bank agrees, (A) from time to time, on any Business Day during the period
from the Effective Date to the date which is 30 days prior to the Maturity
Date to issue Letters of Credit for the account of the Borrower and its
Subsidiaries, and to amend or renew Letters of Credit previously issued by
it, in accordance with Sections 3.02(b) and 3.02(d), and (B) to honor
---------------- -------
drafts under the Letters of Credit; and (ii) the Banks with Revolving
Commitments severally agree to participate in such Letters of Credit;
provided however that the Issuing Bank shall not issue any Letter of Credit
--------
if as of the date of, and after giving effect to, the issuance of such
Letter of Credit, (x) the aggregate amount of all Letter of Credit
Obligations plus the aggregate principal amount of all Revolving Loans made
----
under the Revolving Commitments shall exceed the Aggregate Revolving
Commitment or (y) the Letter of Credit Obligations shall exceed the Letter
of Credit Commitment.
(b) The Issuing Bank shall be under no obligation to issue any
Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority shall by its terms purport to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit, or any Requirement of Law
applicable to the Issuing Bank or any request or directive (whether or
not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Bank shall prohibit, or request that the
Issuing Bank refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon the
Issuing Bank with respect to such Letter of Credit any restriction,
reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated
66
hereunder) not in effect on the Effective Date or shall impose upon
the Issuing Bank any unreimbursed loss, cost or expense which was not
applicable on the Effective Date and which the Issuing Bank in good
faith deems material to it;
(ii) the Issuing Bank has received written notice from any
Bank, the Administrative Agent or the Borrower on or prior to the
Business Day prior to the requested date of issuance of such Letter of
Credit, that one or more of the applicable conditions contained in
Article V is not then satisfied;
---------
(iii) the expiry date of any requested Letter of Credit (x)
is more than one year after the date of issuance, unless the Majority
Banks and the Issuing Bank have approved such expiry date in writing
or (y) is later than the Maturity Date;
(iv) any requested Letter of Credit is not in form and
substance acceptable to the Issuing Bank, or the issuance of a Letter
of Credit shall violate any applicable policies of the Issuing Bank;
(v) any standby Letter of Credit is for the purpose of
supporting the issuance of any letter of credit by any other Person;
or
(vi) such Letter of Credit is in a face amount less than
$20,000 or to be denominated in a currency other than Dollars.
3.02 Issuance, Amendment and Renewal of Letters of Credit .
----------------------------------------------------
(a) Each Letter of Credit shall be issued upon (x) the
irrevocable written request of the Borrower received by the Issuing Bank
(with a copy sent by the Borrower to the Administrative Agent) at least
four Business Days (or such shorter time as the Issuing Bank may agree in a
particular instance in its sole discretion) prior to the proposed date of
issuance and (y) approval by the Administrative Agent of such request.
Each request by the Borrower for issuance of a Letter of Credit shall be by
facsimile, confirmed promptly in an original writing, in the form of a
Letter of Credit Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the proposed date of issuance of the
Letter of Credit (which shall be a Business Day); (ii) the face amount of
the Letter of Credit; (iii) the expiry date of the Letter of Credit; (iv)
the name and address of the beneficiary thereof; (v) the documents to be
presented by the beneficiary of the Letter of Credit in case of any drawing
thereunder; (vi) the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder; and (vii) such other matters
as the Issuing Bank may reasonably require.
(b) From time to time while a Letter of Credit is outstanding and
prior to the Maturity Date, the Issuing Bank will, upon the written request
of the Borrower received by the Issuing Bank (with a copy sent by the
Borrower to the Administrative Agent) at least five days (or such shorter
time as the Issuing Bank may agree in a particular instance in its sole
discretion) prior to the proposed date of amendment, upon approval by the
Administrative Agent of such request amend any Letter of Credit issued
67
by it. Each such request for amendment of a Letter of Credit shall be made
by facsimile, confirmed promptly in an original writing, made in the form
of a Letter of Credit Amendment Application and shall specify in form and
detail satisfactory to the Issuing Bank: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of Credit (which
shall be a Business Day); (iii) the nature of the proposed amendment; and
(iv) such other matters as the Issuing Bank may reasonably require. The
Issuing Bank shall be under no obligation to amend any Letter of Credit if:
(A) the Issuing Bank would have no obligation at such time to issue such
Letter of Credit in its amended form under the terms of this Agreement; or
(B) the beneficiary of any such Letter of Credit does not accept the
proposed amendment to the Letter of Credit.
(c) The Administrative Agent will promptly notify the Banks with
Revolving Commitments of the receipt by it of any Letter of Credit
Application or Letter of Credit Amendment Application.
(d) The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Maturity Date, at the option of the
Borrower and upon the written request of the Borrower received by the
Issuing Bank (with a copy sent by the Borrower to the Administrative Agent)
at least five days (or such shorter time as the Issuing Bank may agree in a
particular instance in its sole discretion) prior to the proposed date of
notification of renewal, the Issuing Bank shall be entitled to authorize
the automatic renewal of any Letter of Credit issued by it. Each such
request for renewal of a Letter of Credit shall be made by facsimile,
confirmed promptly in an original writing, in the form of a Letter of
Credit Amendment Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be renewed;
(ii) the proposed date of notification of renewal of the Letter of Credit
(which shall be a Business Day); (iii) the revised expiry date of the
Letter of Credit; and (iv) such other matters as the Issuing Bank may
reasonably require. The Issuing Bank shall be under no obligation to renew
any Letter of Credit if the Issuing Bank would have no obligation at such
time to issue or amend such Letter of Credit in its renewed form under the
terms of this Agreement. If any outstanding Letter of Credit shall provide
that it shall be automatically renewed unless the beneficiary thereof
receives notice from the Issuing Bank that such Letter of Credit shall not
be renewed, and if at the time of renewal the Issuing Bank would be
entitled to authorize the automatic renewal of such Letter of Credit in
accordance with this Section 3.02(d) upon the request of the Borrower, the
---------------
Issuing Bank shall not have received any Letter of Credit Amendment
Application from the Borrower with respect to such renewal or other written
direction by the Borrower with respect thereto, the Issuing Bank shall
nonetheless be permitted to allow such Letter of Credit to be renewed, and
the Borrower and the Banks hereby authorize such renewal, and, accordingly,
the Issuing Bank shall be deemed to have received a Letter of Credit
Amendment Application from the Borrower requesting such renewal.
(e) This Agreement shall control in the event of any conflict
with any Letter of Credit Related Document (other than any Letter of
Credit, the provisions of which shall control in any event).
68
(f) The Issuing Bank will also deliver to the Administrative
Agent, concurrently or promptly following its delivery of a Letter of
Credit, or amendment to or renewal of a Letter of Credit, to an advising
bank or a beneficiary, a true and complete copy of each such Letter of
Credit or amendment to or renewal of a Letter of Credit.
3.03 Participations, Drawings and Reimbursements.
-------------------------------------------
(a) Immediately upon the issuance of each Letter of Credit, each
Bank with a Revolving Commitment shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase from the Issuing Bank a
participation in such Letter of Credit and each drawing thereunder in an
amount equal to the product of (i) the Revolving Commitment Percentage of
such Bank multiplied by (ii) the maximum amount available to be drawn under
-------------
such Letter of Credit and the amount of such drawing, respectively.
(b) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Bank will
promptly notify the Borrower. The Borrower shall reimburse the Issuing
Bank on the same date that any amount is paid by the Issuing Bank under any
Letter of Credit (each such date, a "Disbursement Date"), in an amount
-----------------
equal to the amount so paid by the Issuing Bank, provided that if such
--------
drawing occurs after 11:00 A.M. (Dallas, Texas time) the Disbursement Date
shall be deemed to be the Business Day following the date of such drawing.
In the event the Borrower shall fail to reimburse the Issuing Bank for the
full amount of any drawing under any Letter of Credit by 11:00 A.M.
(Dallas, Texas time) on the Disbursement Date, the Issuing Bank will
promptly notify the Administrative Agent and the Administrative Agent will
promptly notify each Bank thereof, and the Borrower shall be deemed to have
requested that Revolving Loans consisting of Base Rate Revolving Loans be
made by the Banks with Revolving Commitments (and hereby irrevocably
consents to such deemed request) pursuant to Section 2.01(b) to be
---------------
disbursed on the Disbursement Date under such Letter of Credit, subject to
the amount of the Aggregate Available Revolving Commitment and subject to
the conditions set forth in Section 5.03. Any notice given by the Issuing
------------
Bank or the Administrative Agent pursuant to this Section 3.03(b) may be
---------------
oral if immediately confirmed in writing (including by facsimile);
provided, however, that the lack of such an immediate confirmation shall
--------
not affect the conclusiveness or binding effect of such notice.
(c) Each Bank which has a Revolving Commitment shall upon receipt
of any notice pursuant to Section 3.03(b) make available to the
---------------
Administrative Agent for the account of the Issuing Bank an amount in
Dollars and in immediately available funds equal to its Revolving
Commitment Percentage of the amount of the drawing, whereupon each
participating Bank with Revolving Commitments shall (subject to Section
-------
3.03(d)) each be deemed to have made a Revolving Loan consisting of a Base
-------
Rate Revolving Loan to the Borrower in that amount. If any Bank so
notified shall fail to make available to the Administrative Agent for the
account of the Issuing Bank the amount of such Bank's Revolving Commitment
Percentage of the amount of the drawing by no later than 1:00 P.M. (Dallas,
Texas time) on the Disbursement Date, then interest shall accrue on
69
such Bank's obligation to make such payment, from the Disbursement Date to
the date such Bank makes such payment, at a rate per annum equal to (i) the
Federal Funds Rate in effect from time to time during the period commencing
on the later of the Disbursement Date and the date such Bank receives
notice of the Disbursement Date prior to 1:00 P.M. (Dallas, Texas time) on
such date and ending on the date three Business Days thereafter and (ii)
thereafter at the Base Rate as in effect from time to time. The
Administrative Agent will promptly give notice of the occurrence of a
Disbursement Date, but failure of the Administrative Agent to give any such
notice on a Disbursement Date or in sufficient time to enable any Bank to
effect such payment on such date shall not relieve such Bank from its
obligations under this Section 3.03.
------------
(d) With respect to any unreimbursed drawing which is not
converted into Revolving Loans consisting of Base Rate Revolving Loans to
the Borrower in whole or in part because the Aggregate Available Revolving
Commitment is less than such unreimbursed drawing or because of the
Borrower's failure to satisfy the conditions set forth in Section 5.03, the
------------
Borrower shall be deemed to have incurred from the Issuing Bank a Letter of
Credit Borrowing in the amount of such drawing, which Letter of Credit
Borrowing shall be due and payable on demand (together with interest) and
shall bear interest at a rate per annum equal to the Base Rate plus the
----
Applicable Margin for Base Rate Loans plus, in the case of any Letter of
----
Credit Borrowing outstanding after the Disbursement Date, 2% per annum, and
each Bank's payment to the Issuing Bank pursuant to Section 3.03(c) shall
---------------
be deemed payment in respect of its participation in such Letter of Credit
Borrowing.
(e) The obligation of each Bank with a Revolving Commitment to
make Revolving Loans or fund its participation in any Letter of Credit
Borrowing, as contemplated by this Section 3.03, as a result of a drawing
------------
under a Letter of Credit shall be absolute and unconditional and without
recourse to the Issuing Bank and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, defense or other right which such
Bank may have against the Issuing Bank, the Borrower or any other Person
for any reason whatsoever; (ii) the occurrence or continuance of a Default,
an Event of Default or a Material Adverse Effect; or (iii) any other
circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
3.04 Repayment of Participations.
---------------------------
(a) Upon (and only upon) receipt by the Administrative Agent for
the account of the Issuing Bank of funds from the Borrower (i) in
reimbursement of any payment made by the Issuing Bank under the Letter of
Credit with respect to which any Bank has paid the Administrative Agent for
the account of the Issuing Bank for such Bank's participation in the Letter
of Credit pursuant to Section 3.03, or (ii) in payment of interest on
------------
amounts described in clause (i), the Administrative Agent will pay to each
Bank, in the same funds as those received by the Administrative Agent for
the account of the Issuing Bank, the amount of such Bank's Revolving
Commitment Percentage of such funds, and the Issuing Bank shall receive the
amount of the Revolving Commitment
70
Percentage of such funds of any Bank that did not so pay the Administrative
Agent for the account of the Issuing Bank.
(b) If the Administrative Agent or the Issuing Bank is required
at any time to return to the Borrower, or to a trustee, receiver,
liquidator, custodian, or any similar official in any Insolvency
Proceeding, any portion of the payments made by the Borrower to the
Administrative Agent for the account of the Issuing Bank pursuant to
Section 3.04(a) in reimbursement of a payment made under the Letter of
---------------
Credit or interest or fee thereon, each Bank shall, on demand of the
Administrative Agent, forthwith return to the Administrative Agent or the
Issuing Bank the amount of its Revolving Commitment Percentage of any
amounts so returned by the Administrative Agent or the Issuing Bank plus
interest thereon from the date such demand is made to the date such amounts
are returned by such Bank to the Administrative Agent or the Issuing Bank,
at a rate per annum equal to the Federal Funds Rate in effect from time to
time.
3.05 Role of the Issuing Bank.
------------------------
(a) Each Bank and the Borrower agree that, in paying any drawing
under a Letter of Credit, the Issuing Bank shall not have any
responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document.
(b) The Issuing Bank and its correspondents, participants and
assignees shall not be liable to any Bank for: (i) any action taken or
omitted in connection herewith at the request or with the approval of the
Majority Banks; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any Letter of Credit Related
Document.
(c) The Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit. The Issuing Bank and its correspondents, participants
and assignees shall not be liable or responsible for any of the matters
described in clauses (i) through (vii) of Section 3.06; provided, however
----------- ----- ------------ --------
that the Borrower may have a claim against the Issuing Bank, and the
Issuing Bank may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves was caused by the
Issuing Bank's willful misconduct or gross negligence or the Issuing Bank's
willful failure to pay under any Letter of Credit after the presentation to
it by the beneficiary of a sight draft and certificate(s) strictly
complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be
responsible for the validity or sufficiency of any instrument transferring
or assigning or purporting to
71
transfer or assign a Letter of Credit or the rights or benefits thereunder
or proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.
3.06 Obligations Absolute. The obligations of the Borrower under
--------------------
this Agreement and any Letter of Credit Related Document to reimburse the
Issuing Bank for a drawing under a Letter of Credit, and to repay any Letter of
Credit Borrowing and any drawing under a Letter of Credit converted into
Revolving Loans, shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and each such other
Letter of Credit Related Document under all circumstances, including the
following: (a) any lack of validity or enforceability of this Agreement or any
Letter of Credit Related Document; (b) any change in the time, manner or place
of payment of, or in any other term of, all or any of the obligations of the
Borrower in respect of any Letter of Credit or any other amendment or waiver of
or any consent to departure from all or any of the Letter of Credit Related
Documents; (c) the existence of any claim, set-off, defense or other right that
any Credit Party may have at any time against any beneficiary or any transferee
of any Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank, any other Bank or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby
or by the Letter of Credit Related Documents or any unrelated transaction; (d)
any draft, demand, certificate or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under any Letter of Credit; (e) any payment by the Issuing Bank
under any Letter of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of any Letter of Credit or any payment
made by the Issuing Bank under any Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of any Letter of Credit, including any arising in
connection with any Insolvency Proceeding; (f) any exchange, release or non-
perfection of any collateral, or any release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the obligations
of the Borrower in respect of any Letter of Credit; or (g) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, including any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Credit Party.
3.07 Cash Collateral Pledge . Upon (a) the request of the
----------------------
Administrative Agent, (i) if the Issuing Bank has honored any full or partial
drawing request on any Letter of Credit and such drawing has resulted in a
Letter of Credit Borrowing hereunder, or (ii) if, as of the Maturity Date, any
Letters of Credit may for any reason remain outstanding and partially or wholly
undrawn, or (b) the occurrence of a Default or Event of Default or (c) the
occurrence of the circumstances described in Section 2.07(a)(ii) requiring the
-------------------
Borrower to Cash Collateralize Letters of Credit, then the Borrower shall
immediately Cash Collateralize the Letter of Credit Obligations in an amount
equal to the Letter of Credit Obligations (or in the case of clause (c) above,
the excess amount required pursuant to Section 2.07(a)(ii)) and such cash will
-------------------
be held as security for all Obligations of the Borrower to the Banks hereunder
in a cash collateral account to be established by the Administrative Agent, and
during the existence of an Event of Default, the Administrative Agent may, upon
the request of the Majority Banks, apply such amounts so held
72
to the payment of such outstanding Obligations; provided that on a date upon
which no Default or Event of Default exists and no Letter of Credit Obligations
remain outstanding, the Administrative Agent, at the request and expense of the
Borrower, will duly release the cash held hereunder as security in any cash
collateral account and shall assign, transfer and deliver to the Borrower
(without recourse and without any representation or warranty) such cash as is
then being released and has not theretofore been released pursuant to this
Agreement.
3.08 Letter of Credit Fees.
---------------------
(a) The Borrower shall pay to the Administrative Agent (for the
account of each Bank with a Revolving Commitment) a letter of credit fee
with respect to each Letter of Credit issued and outstanding hereunder
equal to the Applicable Margin for Eurodollar Loans (as in effect from time
to time during the period of calculation thereof), computed on the average
daily maximum amount available to be drawn on each Letter of Credit
outstanding for the relevant period. Such Letter of Credit fee shall be
due and payable in arrears on each Interest Payment Date for Base Rate
Loans.
(b) The Borrower shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit issued by the Issuing Bank equal to
0.25% per annum of the entire amount available to be drawn from time to
time under each such issued Letter of Credit. Such Letter of Credit
fronting fee shall be due and payable in arrears on each Interest Payment
Date for Base Rate Loans.
(c) The Borrower shall pay to the Issuing Bank from time to time
on demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the Issuing Bank relating to
letters of credit as from time to time in effect.
3.09 Applicability of ISP98 and UCP. Unless otherwise expressly
------------------------------
agreed by the Issuing Bank and the Borrower, when a Letter of Credit is issued
(a) the rules of the "International Standby Practices 1998" published by the
Institute of International Banking Law & Practice (or such later version thereof
as may be in effect at the time of issuance) shall apply to each standby Letter
of Credit, and (b) the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce
(the "ICC") at the time of issuance (including the ICC decision published by the
---
Commission on Banking Technique and Practice on April 6, 1998 regarding the
European single currency (euro)) shall apply to each commercial Letter of
Credit.
ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
4.01 Taxes. Subject to Section 4.01(g), any and all payments by a
----- ---------------
Credit Party to any Bank or the Administrative Agent under this Agreement or any
other Loan Document shall be made free and clear of, and without deduction or
withholding for or on account of, any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all
73
liabilities with respect thereto, excluding, in the case of each Bank and the
Administrative Agent, as the case may be, such taxes (including income taxes or
franchise taxes) as are imposed on or measured by such Person's net income by
the jurisdiction under the laws of which such Person is organized or has its
principal office or maintains a Lending Office or any political subdivision
thereof (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes").
-----
(a) In addition, the Borrower shall pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other
-----
Taxes").
-----
(b) Subject to Section 4.01(g), the Borrower shall indemnify and
---------------
hold harmless each Bank and the Administrative Agent for the full amount of
Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under Section 4.01(c)) paid by such Bank or
----------------
the Administrative Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally
asserted.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Bank or the Administrative Agent, then, subject to Section
-------
4.01(g):
-------
(i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable
to additional sums payable under this Section 4.01(c)) such Bank or
---------------
the Administrative Agent, as the case may be, receives an amount equal
to the sum it would have received had no such deductions or
withholdings been made;
(ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
(d) Within 30 days after the date of any payment by the Borrower
of Taxes or Other Taxes, the Borrower shall furnish to the Administrative
Agent, at its address referred to in Section 11.02, the original or a
-------------
certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to the Administrative Agent.
(e) Each Bank which is organized under the laws of a jurisdiction
outside the United States agrees that:
(i) it shall, no later than the Effective Date (or, in the
case of a Bank which becomes a party hereto pursuant to Section 11.07
-------------
after the Effective
74
Date, the date upon which such Bank becomes a party hereto) deliver to
the Borrower through the Administrative Agent two accurate and
complete signed originals of Internal Revenue Service Form W-8BEN or
any successor thereto ("Form W-8BEN"), or two accurate and complete
-----------
signed originals of Internal Revenue Service Form W-8ECI or any
successor thereto ("Form W-8ECI"), as appropriate, in each case
-----------
indicating that such Bank is on the date of delivery thereof entitled
to receive all payments under this Agreement free from withholding of
United States Federal income tax;
(ii) if at any time such Bank makes any changes, including a
change of a Lending Office or its principal office, place of
incorporation or fiscal residence, necessitating a new Form W-8BEN or
Form W-8ECI, it shall, to the extent it is legally entitled to do so,
promptly deliver to the Borrower through the Administrative Agent in
replacement for, or in addition to, the forms previously delivered by
it hereunder, two accurate and complete signed originals of Form W-
8BEN or Form W-8ECI, as appropriate, in each case indicating that such
Bank is on the date of delivery thereof entitled to receive all
payments under this Agreement free from withholding of United States
Federal income tax;
(iii) it shall, to the extent it is legally entitled to do
so, before or promptly after the occurrence of any event, including
the passing of time but excluding any event mentioned in Section
-------
4.01(e)(ii), requiring a change in or renewal of the most recent Form
-----------
W-8BEN or Form W-8ECI previously delivered by such Bank, deliver to
the Borrower through the Administrative Agent two accurate and
complete original signed copies of Form W-8BEN or Form W-8ECI in
replacement for the forms previously delivered by such Bank indicating
that such Bank continues to be entitled to receive all payments under
this Agreement free from any withholding of any United States Federal
income tax;
(iv) it shall, to the extent it is legally entitled to do
so, promptly upon the Borrower's or the Administrative Agent's
reasonable request to that effect, deliver to the Borrower or the
Administrative Agent (as the case may be) such other forms or similar
documentation as may be required from time to time by any applicable
law, treaty, rule or regulation in order to establish such Bank's
complete exemption from withholding on all payments under this
Agreement;
(v) if such Bank claims or is entitled to claim exemption
from withholding tax under a United States tax treaty by providing a
Form W-8ECI and such Bank sells or grants a participation of all or
part of its rights under this Agreement, such Bank shall notify the
Administrative Agent of the percentage amount in which it is no longer
the beneficial owner under this Agreement. To the extent of this
percentage amount, the Administrative Agent shall treat such Bank's
Form W-8ECI as no longer in compliance with this Section 4.01(e). In
---------------
the event a Bank claiming exemption from United States withholding tax
by filing Form W-8BEN with the Administrative Agent sells or grants a
participation in its rights under this Agreement, such Bank agrees to
undertake sole responsibility for
75
complying with the withholding tax requirements imposed by Sections
1441 and 1442 of the Code; and
(vi) without limiting or restricting any Bank's right to
increased amounts under Section 4.01(c) from the Borrower upon
---------------
satisfaction of such Bank's obligations under the provisions of this
Section 4.01(e), if such Bank is entitled to a reduction in the
--------
applicable withholding tax, the Administrative Agent may (but shall
not be obligated to) withhold from any interest to such Bank an amount
equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other administrative documentation
required by Section 4.01(e)(i) are not delivered to the Administrative
------------------
Agent, then the Administrative Agent shall withhold from any interest
payment to a Bank not providing such forms or other documentation, an
amount equivalent to the applicable withholding tax and in addition,
the Administrative Agent shall also withhold against periodic payments
other than interest payments to the extent United States withholding
tax is not eliminated by obtaining Form W-8BEN or Form W-8ECI. The
Borrower shall indemnify and hold harmless the Administrative Agent
and each of its officers, directors, employees, counsel, agents and
attorney-in-fact, on an after tax basis, from and against all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including
Attorney Costs) of any kind whatsoever incurred as a result of or in
connection with the Administrative Agent's failure to withhold as
provided pursuant to the preceding sentence, unless such failure
constitutes gross negligence or willful misconduct of the
Administrative Agent itself as the same is determined by a final
judgment of a court of competent jurisdiction and the obligations in
this sentence shall survive payment of all other Obligations.
(f) The Borrower will not be required to pay any additional
amounts in respect of Taxes imposed by the United States Federal government
pursuant to Sections 4.01(a) or 4.01(c) to any Bank:
----------------- -------
(i) if and to the extent the obligation to pay such
additional amounts would not have arisen but for a failure by such
Bank to comply with its obligations under Section 4.01(e) in respect
---------------
of its Lending Office;
(ii) if such Bank shall have delivered to the Borrower a
Form W-8BEN in respect of its Lending Office pursuant to Section
-------
4.01(e)(i)-(iii) or such other forms or similar documentation pursuant
----------------
to Section 4.01(e)(iv), to the extent such Bank shall not at any time
-------------------
be entitled to exemption from all withholding of United States Federal
income tax in respect of payments by the Borrower hereunder for the
account of such Lending Office for any reason other than a change in
United States law or regulations or in the official interpretation of
such law or regulations by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the
force of law) after the date of delivery of such Form W-8BEN or such
other forms or similar documentation; or
76
(iii) if such Bank shall have delivered to the Borrower a
Form W-8ECI in respect of its Lending Office pursuant to Section
-------
4.01(e)(i)-(iii) or such other forms or similar documentation pursuant
----------------
to Section 4.01(e)(iv), to the extent such Bank shall not at any time
-------------------
be entitled to exemption from all deductions or withholding of United
States Federal income tax in respect of payments by the Borrower
hereunder for the account of such Lending Office for any reason other
than a change in United States law or regulations or any applicable
tax treaty or regulations or in the official interpretation of any
such law, treaty or regulations by any Governmental Authority charged
with the interpretation or administration thereof (whether or not
having the force of law) after the date of delivery of such Form W-
8ECI or such other forms or similar documentation.
(g) Each Bank agrees that it shall, at any time upon reasonable
advance request in writing by the Borrower or the Administrative Agent,
promptly deliver such certification or other documentation as may be
required under the law or regulation in any applicable jurisdiction and
which such Bank is entitled to submit to avoid or reduce withholding taxes
on amounts to be paid by the Borrower and received by such Bank pursuant to
this Agreement or any other Loan Document.
(h) The Borrower shall indemnify each Bank and the Administrative
Agent, to the extent required by this Section 4.01, within 30 days after
------------
receipt of written request from such Bank or the Administrative Agent
thereof accompanied by a written statement describing in reasonable detail
the Taxes or Other Taxes that are the subject of the basis for such
indemnity and the computation of the amount payable.
(i) If a Bank or the Administrative Agent shall become aware that
it is entitled to claim a refund of any withholding Taxes or Other Taxes
paid by the Borrower under this Section 4.01 from the taxing authority
------------
imposing such Taxes or Other Taxes, such Bank or the Administrative Agent,
as the case may be, shall, at the expense of the Borrower, use reasonable
efforts to obtain such refund and upon receipt thereof, shall promptly pay
to the Borrower the amount so received.
(j) If the Borrower is required to pay additional amounts to any
Bank or the Administrative Agent pursuant to Section 4.01(c), then such
---------------
Bank shall, upon the Borrower's request, use its reasonable best efforts
(consistent with policy considerations of such Bank) to change the
jurisdiction of its Lending Office so as to reduce or eliminate any such
additional payment which may thereafter accrue if such change in the
reasonable judgment of such Bank is not otherwise disadvantageous to such
Bank.
(k) Each Bank agrees that it will (i) take all reasonable actions
reasonably requested by the Borrower (consistent with policy considerations
by such Bank) to maintain all exemptions, if any, available to it from
withholding taxes (whether available by treaty or existing administrative
waiver), and (ii) to the extent reasonable, otherwise cooperate with the
Borrower to minimize any amounts payable by the Borrower under this Section
-------
4.01, in any case described in the preceding clauses (i) and
----
77
(ii), however, only if such action or cooperation is not disadvantageous
to such Bank in the reasonable judgment of such Bank.
4.02 Illegality.
----------
(a) If any Bank shall determine that (i) the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration thereof, has made it unlawful, or (ii) any
central bank or other Governmental Authority has asserted that it is
unlawful for any Bank or its Lending Office, to make a Eurodollar Loan or
to convert any Base Rate Loan to a Eurodollar Loan, then, on notice thereof
by such Bank to the Borrower through the Administrative Agent, the
obligation of such Bank to make or convert any such Loans shall be
suspended, and any such Loan to be made or continued by such Bank shall
instead be made or continued as a Base Rate Loan, until such Bank shall
have notified the Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Bank shall determine that it is unlawful to maintain any
Eurodollar Loan, all Eurodollar Loans of such Bank then outstanding shall
be automatically converted to Base Rate Loans, either on the last day of
the Interest Period thereof if such Bank may lawfully continue to maintain
such Eurodollar Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Eurodollar Loans, and the Borrower shall
pay any amounts required to be paid in connection therewith pursuant to
Section 4.04.
------------
(c) Before giving any notice to the Administrative Agent pursuant
to this Section 4.02, the affected Bank shall designate a different Lending
------------
Office with respect to its Eurodollar Loans if such designation will avoid
the need for giving such notice or making such demand and will not, in the
judgment of such Bank, be illegal, inconsistent with the policies of such
Bank or otherwise disadvantageous to such Bank.
4.03 Increased Costs and Reduction of Return.
---------------------------------------
(a) If any Bank or the Issuing Bank shall determine that, due to
either (i) the introduction of or any change in or in the interpretation or
administration of any law or regulation (other than any law or regulation
relating to taxes, including those relating to Taxes or Other Taxes) after
the Effective Date or (ii) the compliance with any guideline or request
from any central bank or other Governmental Authority (whether or not
having the force of law) made after the Effective Date, there shall be any
increase in the cost to such Bank of agreeing to make or making, funding or
maintaining any Eurodollar Loans or participating in any Letter of Credit
Obligations, or any increase in the cost to the Issuing Bank of agreeing to
issue, issuing or maintaining any Letter of Credit or of agreeing to make
or making, funding or maintaining any unpaid drawing under any Letter of
Credit, then the Borrower shall be liable for, and shall from time to time,
upon demand therefor by such Bank or the Issuing Bank, as the case may be
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for
78
the account of such Bank or the Issuing Bank, additional amounts as are
sufficient to compensate such Bank or the Issuing Bank for such increased costs.
(b) If any Bank or the Issuing Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation after the Effective Date,
(ii) any change in any Capital Adequacy Regulation after the Effective
Date, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof after
the Effective Date, or (iv) compliance by any Bank (or its Lending Office)
or the Issuing Bank, as the case may be, or any corporation controlling
such Bank or the Issuing Bank, as the case may be, with any Capital
Adequacy Regulation adopted after the Effective Date, affects or would
affect the amount of capital required or expected to be maintained by such
Bank or the Issuing Bank or any corporation controlling such Bank or the
Issuing Bank and (taking into consideration such Bank's, the Issuing Bank's
or such corporation's policies with respect to capital adequacy and such
Bank's, the Issuing Bank's or such corporation's desired return on capital)
determines that the amount of such capital is (or is required to be)
increased as a consequence of its Commitments, Loans, participations in
Letters of Credit, or obligations under this Agreement, then, upon demand
of such Bank or the Issuing Bank (with a copy to the Administrative Agent),
the Borrower shall be liable for and shall immediately pay to such Bank or
the Issuing Bank, from time to time as specified by such Bank or the
Issuing Bank, additional amounts sufficient to compensate such Bank or the
Issuing Bank for such increase.
4.04 Funding Losses. The Borrower shall reimburse each Bank and hold each
--------------
Bank harmless from any loss, cost or expense (other than loss of margin) which
such Bank may sustain or incur as a consequence of: (a) any failure by the
Borrower to make any payment of principal of any Eurodollar Loan (including
payments made after any acceleration thereof); (b) any failure by the Borrower
to borrow a Eurodollar Loan or continue a Eurodollar Loan when such Eurodollar
Loan is due and payable or convert a Base Rate Loan to a Eurodollar Loan after
the Borrower has given a Notice of Borrowing, or a Notice of
Conversion/Continuation as the case may be; (c) any failure by the Borrower to
make any prepayment of a Eurodollar Loan after the Borrower has given a notice
in accordance with Section 2.06; or (d) any payment or prepayment (including
------------
pursuant to Section 2.06 or 2.07 or after acceleration thereof) of any
------------ ----
Eurodollar Loan for any reason whatsoever on a day which is not the last day of
the Interest Period with respect thereto; including in each case any such loss
or expense arising from the liquidation or reemployment of funds obtained by it
to maintain any Eurodollar Loan hereunder or from fees payable to terminate the
deposits from which such funds were obtained.
4.05 Inability to Determine Rates. Notwithstanding anything to the
----------------------------
contrary contained in this Agreement, if, in relation to any proposed Eurodollar
Loan, (a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon all parties hereto) that by reason of
circumstances affecting the interbank markets adequate and fair means do not
exist for ascertaining the Eurodollar Rate to be applicable to such Eurodollar
Loan or (b) the Administrative Agent shall have received notice from the
Majority Banks that the Eurodollar Rate determined or to be determined for any
Interest Period will not adequately and fairly reflect the cost to such Banks
(as conclusively certified by such Banks) of
79
making or maintaining their affected Loans during such affected Interest Period,
then, the obligation of the Banks to make, continue or maintain Eurodollar Loans
or to convert Base Rate Loans into Eurodollar Loans shall be suspended until the
Administrative Agent upon the instruction of the Majority Banks, as applicable,
revokes such notice in writing. If, notwithstanding the provisions of this
Section 4.05, any Bank has made available to the Borrower its pro rata share of
------------
any such proposed Eurodollar Loan, then the Borrower shall immediately repay the
amount so made available to it by such Bank, together with accrued interest
thereon, if any, or shall convert such proposed Eurodollar Loan to a Base Rate
Loan.
4.06 Reserves on Eurodollar Loans. The Borrower shall pay to each Bank, if
----------------------------
and as long as such Bank shall be required under regulations of the Federal
Reserve Board to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional costs on the unpaid principal amount of
-------------------------
each Eurodollar Loan equal to actual costs of such reserves allocated to such
Loan by such Bank (as determined by such Bank in good faith, which determination
shall be conclusive absent manifest error), payable on each date on which
interest is payable on such Loan, provided that the Borrower shall have received
--------
at least 15 days' prior written notice (with a copy to the Administrative Agent)
of such additional interest from the Bank. If a Bank fails to give such notice
15 days prior to the relevant Interest Payment Date, such additional interest
shall be payable 15 days after receipt by the Borrower of such notice.
4.07 Certificates of Banks. Any Bank (including the Issuing Bank) claiming
---------------------
reimbursement or compensation pursuant to this Article IV shall deliver to the
----------
Borrower (with a copy to the Administrative Agent) a certificate setting forth
in reasonable detail the amount payable to such Person hereunder and such
certificate shall be conclusive and binding on the Borrower in the absence of
manifest error.
4.08 Change of Lending Office, Replacement Bank.
------------------------------------------
(a) Each Bank agrees that upon the occurrence of an event giving rise
to the operation of Section 4.02 or 4.03 with respect to such Bank, it will if
------------ ----
so requested by the Borrower, use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Lending Office for any Loans affected by such event with the object of avoiding
the consequence of the event giving rise to the operation of such section;
provided however that such designation would not, in the sole judgment of such
--------
Bank, be otherwise disadvantageous to such Bank. Nothing in this Section 4.08(a)
---------------
shall affect or postpone any of the obligations of the Borrower or the right of
any Bank provided in Section 4.02 or 4.03.
------------ ----
(b) Notwithstanding anything to the contrary contained herein or in
any other Loan Document, (i) upon the occurrence of any event that obligates the
Borrower to pay any amount under Section 4.01 or giving rise to the operation of
------------
Section 4.02 or Section 4.03 with respect to any Bank or (ii) as provided in
------------ ------------
Section 11.01(b) in the case of certain refusals by a Bank to consent to certain
----------------
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Majority Banks, the Borrower shall
have the right, if no Default or Event of Default
80
then exists or will exist immediately after giving effect to the respective
replacement, to replace such Bank (the "Replaced Bank") by designating another
-------------
Bank or an Eligible Assignee (such Bank or Eligible Assignee being herein called
a "Replacement Bank") to which such Replaced Bank shall assign, in accordance
----------------
with Section 11.07 and without recourse to or warranty by, or expense to, such
-------------
Replaced Bank, the rights and obligations of such Replaced Bank hereunder
(except for such rights as survive repayment of the Loans), and, upon such
assignment, such Replaced Bank shall no longer be a party hereto or have any
rights hereunder and such Replacement Bank shall succeed to the rights and
obligations of such Replaced Bank hereunder. The Borrower shall pay to such
Replaced Bank in same day funds on the date of replacement all interest, fees
and other amounts then due and owing such Replaced Bank by the Borrower
hereunder to and including the date of replacement, including, without
limitation, costs incurred under Sections 4.01, 4.02 and/or 4.03.
------------- ---- ----
4.09 Survival. The agreements and obligations of the Borrower set forth in
--------
this Article IV shall survive the payment of all other Obligations.
----------
ARTICLE V.
CONDITIONS PRECEDENT
--------------------
5.01 Conditions to the Effective Date. The occurrence of the Effective
--------------------------------
Date and the obligation of the Banks to make Loans and the Issuing Bank to issue
Letters of Credit on the Initial Borrowing Date are subject to the receipt by
the Administrative Agent prior to or concurrently with the occurrence of the
Effective Date and the making of Loans and the issuance of Letters of Credit on
the Initial Borrowing Date of each of the items set forth in this Section 5.01
------------
in form and substance reasonably satisfactory to the Administrative Agent and
the Banks and in sufficient copies for each Bank:
(a) Amended and Restated Credit Agreement. This Agreement duly
-------------------------------------
executed and delivered by the Parent Guarantors, the Borrower, the
Administrative Agent, the Issuing Bank, each of the other Banks and by each
of the other parties listed on the signature pages hereof (or, in the case
of any party as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form satisfactory to it of
a facsimile or other written confirmation from such party of execution of a
counterpart of this Agreement by such party).
(b) Closing Certificates. A Closing Certificate of each Credit Party,
--------------------
dated the Effective Date, duly executed by a Responsible Officer and the
Secretary or any Assistant Secretary of such Credit Party, together with:
(i) original certificates of existence and good standing, dated
not more than 10 days prior to the Effective Date, from appropriate
officials of each Credit Party's respective state of incorporation or
organization and certificates of good standing and authority to do
business, dated not more than 10 days prior to Effective Date, from
appropriate officials of any and all jurisdictions
81
where each Credit Party's property or business makes qualification to
transact business therein necessary and where the failure to be so
qualified could reasonably be expected to have a Material Adverse Effect;
(ii) copies of Board Resolutions of each Credit Party approving
the Loan Documents to which such Credit Party is a party and authorizing
the transactions contemplated herein and therein, duly adopted at a
meeting of, or by the unanimous written consent of, the Board of
Directors of such Credit Party; and
(iii) a copy of all Charter Documents of each Credit Party. The
articles/certificate of incorporation (or equivalent limited liability
company document) of each Credit Party shall be accompanied by an
original certificate issued by the Secretary of the State of
incorporation or organization of such Credit Party, dated not more than
10 days prior to the Effective Date, certifying that such copy is correct
and complete.
(c) Cancellation of Liens. Evidence that all Liens other than
---------------------
Permitted Liens have been canceled and released, including duly executed
releases and UCC-3 financing statements in recordable form and otherwise in form
and substance satisfactory to the Administrative Agent.
(d) Global Assignment and Assumptions. The Global Assignment and
---------------------------------
Assumptions duly executed and delivered by each of the parties thereto.
(e) Legal Opinions.
--------------
(i) An opinion of Kirkland & Ellis, counsel to the Credit
Parties, addressed to the Administrative Agent and the Banks, which opinion
shall cover such matters incident to the transactions contemplated herein
and in the other Loan Documents as the Administrative Agent may reasonably
request and shall be in form and substance reasonably satisfactory to the
Administrative Agent; and
(ii) an opinion of FCC counsel to the Credit Parties addressed to
the Administrative Agent and the Banks, which opinion shall cover such
matters incident to the transactions contemplated herein and in the other
Loan Documents as the Administrative Agent may reasonably request and shall
be in form and substance reasonably satisfactory to the Administrative
Agent.
(f) Certificates. Certificates signed by a Responsible Officer of
------------
each applicable Credit Party, dated as of the Effective Date, stating that:
(i) the representations and warranties of the Parent Guarantors
and the Borrower contained in Article VI and the representations and
----------
warranties of the other Credit Parties set forth in the Loan Documents to
which they are a party are true and correct on and as of such date, as
though made on and as of
82
such date (except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date);
(ii) no Default or Event of Default exists both before and after
giving effect to any Borrowing or the issuance of any Letter of Credit on
the Initial Borrowing Date; and
(iii) after giving effect to the initial Credit Event under this
Agreement, no Nexstar Entity will have any Indebtedness outstanding except
as shall be permitted under Section 8.05.
------------
(g) Pro Forma Financial Statements. A consolidated balance sheet from
------------------------------
each of the Ultimate Parent and its Subsidiaries and the Borrower and its
Subsidiaries as of March 31, 2001, calculated on a Pro Forma Basis giving effect
to the initial borrowings to be made under this Agreement, the refinancing of
the loans under the Existing Credit Agreement, and the payment or accrual of all
fees and expenses payable in connection with the foregoing.
(h) Solvency Certificate. A Solvency Certificate, duly executed by
---------------------
the Chief Financial Officer of each Nexstar Entity, certifying to the Banks that
each Nexstar Entity is Solvent both before and after giving effect to the
transactions contemplated by this Agreement.
(i) Other Documents. Such other approvals, opinions or documents,
---------------
including financing statements, as the Administrative Agent or any Bank may
reasonably request.
5.02 Additional Conditions to the Effective Date.
-------------------------------------------
The occurrence of the Effective Date and the obligation of the Banks to
make Loans and the Issuing Bank to issue Letters of Credit on the Initial
Borrowing Date are subject to the satisfaction, prior to or concurrently with
the occurrence of the Effective Date and the making of Loans and the issuance of
Letters of Credit on the Initial Borrowing Date of the other conditions
precedent set forth below, each in a manner reasonably satisfactory to the
Administrative Agent and the Banks:
(a) No Restraints. There shall exist no judgment, order, injunction
-------------
or other restraint which would prevent or delay the consummation of, or
impose materially adverse conditions upon this Agreement and the other Loan
Documents, the Bastet/Mission Credit Agreement and related documents or any
of the transactions contemplated in connection with any of the foregoing.
(b) Margin Regulations. All Loans made under this Agreement shall be
------------------
in full compliance with all applicable Requirements of Law, including,
without limitation, Regulations T, U and X of the Federal Reserve Board.
83
(c) Material Adverse Effect. Since March 31, 2001, there shall have
-----------------------
occurred no event or circumstance which has had or could reasonably be
expected to have a Material Adverse Effect.
(d) Fees. The Administrative Agent, the Issuing Bank and the other
----
Banks shall have received (i) all fees and expenses that are due and
payable on or before the Effective Date pursuant to this Agreement and any
other Loan Document and (ii) an amount equal to the estimated fees and
expenses of Baker Botts L.L.P. incurred in connection with the preparation,
examination, negotiation, execution and delivery of this Agreement, the
other Loan Documents and the consummation of the transactions contemplated
herein.
(e) Repayment, Repurchase, Cancellation and/or Modification of Certain
------------------------------------------------------------------
Indebtedness. (i) All Indebtedness and all other obligations outstanding
------------
with respect to the Existing Credit Agreement and all other Indebtedness
not permitted by Section 8.05 shall have been paid or otherwise canceled or
------------
discharged in full, and all Liens created in connection therewith shall
have been either terminated or assigned to the Administrative Agent for the
benefit of the Banks, and (ii) the Administrative Agent shall have received
satisfactory evidence that all of the foregoing has occurred.
(f) Governmental and Third Party Approvals. All material
--------------------------------------
Authorizations and third-party approvals (including, without limitation,
all FCC Licenses and consents) necessary or appropriate in connection with
this Agreement or the other Loan Documents, the Bastet/Mission Loan
Documents and the other transactions contemplated herein and in the other
Loan Documents shall have been obtained and shall be in full force and
effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose materially adverse conditions on this
Agreement, the other Loan Documents, the Bastet/Mission Loan Documents, or
any of the other transactions contemplated herein or therein.
(g) All Proceedings Satisfactory. All corporate and other proceedings
----------------------------
taken prior to or on the Effective Date in connection with this Agreement,
the other Loan Documents and the transactions contemplated herein and all
documents and evidences incident thereto shall be satisfactory in form and
substance to the Banks, and the Banks shall have received such copies
thereof and such other materials (certified, if requested) as they may have
reasonably requested in connection therewith.
5.03 Conditions to All Borrowings and the Issuance of Any Letters of
---------------------------------------------------------------
Credit.
------
The obligation of the Banks to make or convert any Loans agreed to be made
by them hereunder and the obligation of the Issuing Bank to issue, renew or
amend any Letter of Credit (including any initial Loans to be made or Letters of
Credit to be issued on the Initial Borrowing Date) are subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or date of issuance of a Letter of Credit, as applicable.
84
(a) Notice of Borrowing; Letter of Credit Application. The
-------------------------------------------------
Administrative Agent shall have received (i) a Notice of Borrowing in the
case of Loans, as required under Section 2.03(a) or Section 2.03(b), as
--------------- ---------------
applicable, or (ii) in the case of any issuance of any Letter of Credit,
the Issuing Bank and the Administrative Agent shall have received a Letter
of Credit Application, as required under Section 3.02 and/or (iii) Notice
------------
of Conversion/Continuation, as required under Section 2.04.
------------
(b) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Credit Parties in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such
Borrowing Date or date of issuance of a Letter of Credit as if made on and
as of such date, both before and after giving effect to the Credit Event
requested to be made on such date and the proposed use of the proceeds
thereof (except to the extent such representations and warranties expressly
refer to an earlier date, in which case they shall be true and correct as
of such earlier date).
(c) No Default. No Default or Event of Default shall exist both
----------
before and after giving effect to the Credit Event requested to be made on
such date and the proposed use of proceeds thereof.
(d) No Material Adverse Effect. Since the Effective Date, no events
--------------------------
shall have occurred which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
Each Notice of Borrowing or Letter of Credit Application submitted by the
Borrower hereunder shall be deemed to constitute a representation and warranty
by the Borrower hereunder, as of the date of each such Notice or Application and
as of the date of the related Borrowing or issuance of a Letter of Credit, that
the conditions set forth in Sections 5.03(b), (c) and (d) are satisfied.
---------------- --- ---
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
------------------------------
To induce the Administrative Agent and the Banks to enter into this
Agreement and to make the Loans and to issue Letters of Credit, each Parent
Guarantor and the Borrower hereby makes the following representations and
warranties to the Administrative Agent and each Bank, both as to itself and as
to its respective Subsidiaries:
6.01 Existence; Compliance with Law. Each Parent Guarantor, the
------------------------------
Borrower and each of their respective Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization; (b) has the corporate, limited liability company or partnership
power and authority, legal right and all governmental licenses, authorizations,
consents and approvals to own (or hold under lease) and operate its property or
assets and conduct the business in which it is currently engaged except, with
respect only to such legal right and governmental licenses, authorizations,
consents and approvals, where the failure to possess any such legal right or
governmental license, authorization, consent or approvals
85
could not reasonably be expected to have a Material Adverse Effect; (c) has the
corporate, limited liability company or partnership power and authority, legal
right and all governmental licenses, authorizations, consents and approvals to
execute, deliver, and perform its obligations under the Loan Documents to which
it is a party; (d) is duly qualified to do business as a foreign entity, and
licensed and in good standing, under the laws of each jurisdiction where its
ownership, lease or operation of property or the nature or conduct of its
business requires such qualification or license, except where the failure so to
qualify could not reasonably be expected to have a Material Adverse Effect; and
(e) is in compliance, in all material respects, with all Requirements of Law.
6.02 Corporate, Limited Liability Company or Partnership
---------------------------------------------------
Authorization; No Contravention. The execution, delivery and performance by each
-------------------------------
Nexstar Entity of this Agreement and any other Loan Document to which such
Nexstar Entity is a party have been duly authorized by all necessary corporate,
limited liability company or partnership action, as the case may be, of such
Nexstar Entity and do not and will not: (a) contravene any terms of the
certificate of incorporation, limited liability company agreement or partnership
agreement, or certificate of formation, as the case may be, or by-laws of such
Nexstar Entity; (b) conflict with or result in any breach or contravention of,
constitute (alone or with notice or lapse of time or both) a default under or
give rise to any right to accelerate any material Contractual Obligation of any
Nexstar Entity and will not result in, or require, the creation of any Lien on
any of their respective properties or any revenues, income or profits therefrom,
whether now owned or hereafter acquired pursuant to any Requirement of Law or
Contractual Obligation (other than pursuant to the Security Documents) to which
such Nexstar Entity is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Nexstar Entity or its property is subject;
or (c) violate any Requirement of Law.
6.03 Governmental Authorization. No approval, consent, exemption,
--------------------------
authorization, or other action by, or in respect of, or notice to, or filing
with (or approvals required under state blue sky securities laws) any
Governmental Authority or any other Person is necessary or required in
connection with the Borrowings to be made hereunder or with the execution,
delivery or performance by, or enforcement against, any Nexstar Entity of, this
Agreement or any other Loan Document, except that (i) certain of the Loan
Documents may have to be filed with the FCC after the Effective Date and (ii)
the prior approval of the FCC may be required for the Banks to exercise certain
of their rights with respect to the Stations.
6.04 Binding Effect. This Agreement and each other Loan Document
--------------
to which any Nexstar Entity is a party constitutes the legal, valid and binding
obligation of such Nexstar Entity to the extent such Nexstar Entity is a party
thereto, enforceable against such Nexstar Entity in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles of general applicability.
6.05 Litigation. There are no actions, suits, proceedings,
----------claims or disputes pending, or to the best knowledge of
each Nexstar Entity, threatened at law, in equity, in arbitration or before any
Governmental Authority, against any Nexstar Entity or any of their respective
properties or assets which: (a) purport to affect or pertain to this Agreement
or any
86
other Loan Document, or any of the transactions contemplated hereby or thereby;
or (b) as to which there is a reasonable possibility of an adverse
determination, that if adversely determined, could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that any transaction provided for herein or therein
not be consummated as herein or therein provided.
6.06 No Default. No Default or Event of Default exists or will result
----------
from the incurring of any Obligations by any Nexstar Entity. No Nexstar Entity
is in default under or with respect to any Contractual Obligation in any respect
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
6.07 ERISA Compliance.
----------------
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code (i)
has received a favorable determination letter from the Internal Revenue
Service or (ii) has been recently established and has not received such a
determination letter and such Plan complies with the requirements of
Section 401(a) of the Code; and to the best knowledge of each Nexstar
Entity nothing has occurred which would cause the loss of such
qualification or the revocation of such determination letter.
(b) There are no pending or, to the best knowledge of each
Nexstar Entity, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted, or
could reasonably be expected to result, in a Material Adverse Effect. There
has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted, or could
reasonably be expected to result, in a Material Adverse Effect.
(c) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Pension Plan or Multiemployer Plan.
(d) As of the date hereof, no Pension Plan has an Unfunded
Pension Liability.
(e) No Nexstar Entity and no ERISA Affiliate has incurred, nor
reasonably expects to incur, any material liability under Title IV of ERISA
with respect to any Pension Plan.
(f) No Nexstar Entity and no ERISA Affiliate has incurred nor
reasonably expects to incur any material liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such material liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan.
87
(g) No Nexstar Entity and no ERISA Affiliate has transferred any
Unfunded Pension Liability to any Person or otherwise engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
6.08 Use of Proceeds; Margin Regulations. No Nexstar Entity is
-----------------------------------
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock. No part
of the proceeds of any Loan have been or will be used by any Nexstar Entity,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to purchase or carry Margin Stock or to extend credit to others
for the purpose of purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose, or (ii) for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the regulations of
the Board including Regulations U and X. If requested by any Bank or the
Administrative Agent, each Credit Party will furnish to the Administrative Agent
and each Bank a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in said Regulation U.
6.09 Ownership of Property; Intellectual Property.
--------------------------------------------
(a) Each Nexstar Entity has good record and indefeasible title in
fee simple to, or a valid leasehold interest in, all its Real Property, and
good title to, a valid leasehold interest in, or a valid right to use, all
its other property and assets which are material to the operations of its
businesses, in each case subject only to Permitted Liens.
(b) (i) Each Nexstar Entity has complied with all obligations
under all leases to which it is a party and all such leases are in full
force and effect and (ii) each Nexstar Entity enjoys peaceful and
undisturbed possession under all such leases under which it is a tenant, in
each case except where the failure to comply or to enjoy such possession,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
(c) As of the date of this Agreement, (i) no Nexstar Entity has
received any notice of, nor has any knowledge of, any pending or
contemplated condemnation proceeding affecting any Real Property owned by
such Nexstar Entity or any sale or disposition thereof in lieu of
condemnation and (ii) no Nexstar Entity is obligated under any right of
first refusal, option or other contractual right to sell, assign or
otherwise dispose of any of its Real Property or any interest therein.
(d) Each Nexstar Entity owns, or otherwise has the right to use,
all trademarks, tradenames, copyrights, technology, know-how and processes
("Intellectual Property") necessary for the conduct of its business as
---------------------
currently conducted except for those which the failure to own or have the
right to use, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. Except for such claims that,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect, no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property
or the validity or effectiveness of any such Intellectual Property, nor
does any Nexstar Entity know of any valid basis for any such claim. Except
for such infringements that, individually or in the
88
aggregate, could not reasonably be expected to have a Material Adverse
Effect, to the knowledge of each Nexstar Entity, the use of such
Intellectual Property by such Nexstar Entity does not infringe on the
rights of any Person.
6.10 Taxes. Each Nexstar Entity has filed all federal and other
-----
material tax returns and reports required to be filed and paid the tax thereon
shown to be due, and has paid all federal and other material taxes, assessments,
fees and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against any Nexstar Entity which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
6.11 Financial Statements. All balance sheets, statements of
--------------------
operations and other financial data which have been or shall hereafter be
furnished to the Administrative Agent and/or the Banks for purposes of or in
connection with this Agreement or any transaction contemplated hereby
(including, without limitation, the Compliance Certificate delivered to the
Administrative Agent for the Fiscal Quarter ended March 31, 2001) do and will
present fairly, in all material respects, the financial condition of the Nexstar
Entities involved as of the dates thereof and the results of their operations
for the period(s) covered thereby, and all such balance sheets, statements of
operations and other financial statements have been prepared in accordance with
GAAP (subject, in the case of interim financial statements, to normal year-end
adjustments and the absence of complete footnote disclosure). No Nexstar Entity
has any material Guarantee Obligation, contingent liability or liability for
taxes, or any long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in its financial statements or in
the schedules or notes thereto and which would be required by GAAP to be
disclosed therein (or in the notes and schedules thereto). Since March 31, 2001,
there has been no development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
6.12 Securities Law, etc.; Compliance. All transactions contemplated
--------------------------------
by this Agreement and the other Loan Documents comply in all material respects
with (a) Regulations T, U and X of the Federal Reserve Board and (b) all other
applicable laws and any rules and regulations thereunder, except where the
failure to comply, in the case of this clause (b), could not reasonably be
expected to have a Material Adverse Effect.
6.13 Governmental Regulation. No Nexstar Entity is an "investment
-----------------------
company" within the meaning of the Investment Company Act of 1940 or a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935. No Nexstar Entity
is subject to regulation under any other federal or state statute or regulation
which limits its ability to incur Indebtedness or Guaranty Obligations under
this Agreement or any other Loan Document.
6.14 Accuracy of Information. All factual information (excluding, in
-----------------------
any event, financial projections) heretofore or contemporaneously herewith
furnished by or on behalf
89
of any Nexstar Entity in writing to the Administrative Agent or any Bank for
purposes of or in connection with this Agreement or any transaction contemplated
hereby, and all other such factual information hereafter furnished by or on
behalf of any Nexstar Entity to the Administrative Agent or any Bank will be,
true and accurate in every material respect on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information, in the light of the
circumstances existing at the time such information was delivered, not
misleading.
6.15 Hazardous Materials. No Nexstar Entity has caused or permitted
-------------------
any Hazardous Material to be disposed of or otherwise released, to its best
knowledge, either from, on or under any property currently or formerly legally
or beneficially owned or operated by, or otherwise used by such Nexstar Entity,
in any manner which has had or is reasonably likely to have, a Material Adverse
Effect. To the best knowledge of each Nexstar Entity, no such property has ever
been used as a dump site or storage site for any Hazardous Materials or
otherwise contains or contained Hazardous Materials which has had or is
reasonably likely to have, a Material Adverse Effect. The failure, if any, of
any Nexstar Entity, in connection with their current and former properties or
their businesses, to be in compliance with any Environmental Law or to obtain
any permit, certificate, license, approval and other authorization under such
Environmental Laws has not had, and is not reasonably expected to have, a
Material Adverse Effect. No Nexstar Entity has entered into, has agreed to or
is subject to any judgment, decree or order or other similar requirement of any
Governmental Authority under any Environmental Law, including without
limitation, relating to compliance or to investigation, cleanup, remediation or
removal of Hazardous Materials, which has had, or is reasonably expected to
have, a Material Adverse Effect. No Nexstar Entity has contractually assumed
any liabilities or obligations under any Environmental Law which has had, or is
reasonably expected to have, a Material Adverse Effect. There are no facts or
circumstances which exist that could give rise to liabilities with respect to
Hazardous Materials or any Environmental Law, which has had, or is reasonably
expected to have, a Material Adverse Effect.
6.16 FCC Licenses.
------------
(a) Each Nexstar Entity holds such validly issued FCC licenses
and authorizations as are necessary to operate their respective Stations as
they are currently operated (collectively, the "FCC Licenses"), and each
------------
such FCC License is in full force and effect. The FCC Licenses of each
Nexstar Entity as of the Effective Date are listed on Schedule 6.16, and
-------------
each of such FCC Licenses has the expiration date indicated on Schedule
--------
6.16.
-----
(b) No Nexstar Entity has knowledge of any condition imposed by
the FCC as part of any FCC License which is neither set forth on the face
thereof as issued by the FCC nor contained in the rules and regulations of
------
the FCC applicable generally to stations of the type, nature, class or
location of the Station in question. Each Station has been and is being
operated in all material respects in accordance with the terms and
conditions of the FCC Licenses applicable to it and the rules and
regulations of the FCC and the Communications Act of 1934, as amended (the
"Communications Act").
------------------
90
(c) No proceedings are pending or are threatened which may result
in the revocation, modification, non-renewal or suspension of any of the
FCC Licenses, the denial of any pending applications, the issuance of any
cease and desist order or the imposition of any fines, forfeitures or other
administrative actions by the FCC with respect to any Station or its
operation, other than any matters which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect and
proceedings affecting the television broadcasting industry in general.
(d) All reports, applications and other documents required to be
filed by the Nexstar Entities with the FCC with respect to the Stations
have been timely filed, and all such reports, applications and documents
are true, correct and complete in all respects, except where the failure to
make such timely filing or any inaccuracy therein could not reasonably be
expected to have a Material Adverse Effect, and no Nexstar Entity has
knowledge of any matters which could reasonably be expected to result in
the suspension or revocation of or the refusal to renew any of the FCC
Licenses or the imposition on any Nexstar Entity of any material fines or
forfeitures by the FCC, or which could reasonably be expected to result in
the revocation, rescission, reversal or modification of any Station's
authorization to operate as currently authorized under the Communications
Act and the policies, rules and regulations of the FCC.
(e) There are no unsatisfied or otherwise outstanding citations
issued by the FCC with respect to any Station or its operations. The
Borrower has delivered to the Banks true and complete copies of all FCC
Licenses (including any and all amendments and other modifications
thereto), all pending applications relating thereto and all orders and
other documents issued by the FCC authorizing the Midwest Acquisition.
6.17 Subsidiaries; Capital Stock of Nexstar Finance Holdings. No
-------------------------------------------------------
Nexstar Entity has any Subsidiaries except, on the date hereof, those
Subsidiaries which are identified in Schedule 6.17 and, thereafter, those
-------------
Subsidiaries identified as to be formed or acquired in Schedule 6.17 or in any
-------------
Guaranty Supplement and those Subsidiaries permitted to be formed or acquired in
compliance with the terms hereof. As of the date hereof, each of the Nexstar
Entities identified in Schedule 6.17 as owning Capital Stock of Nexstar Finance
-------------
Holdings owns and holds directly the Capital Stock of Nexstar Finance Holdings
indicated in Schedule 6.17. The Capital Stock of the Holding Company held by
-------------
such Nexstar Entities collectively constitutes all of the issued and outstanding
Capital Stock of the Holding Company and, if the New Holding Company is the
Holding Company, then the New Holding Company owns 100% of the Capital Stock of
Nexstar Finance Holdings, in each case other than the Permitted Holdings
Preferred Equity, the Permitted Permanent Holdings Preferred Equity and any
other Capital Stock of the Holding Company issued or transferred to any other
Wholly-Owned Subsidiary of the Ultimate Parent.
6.18 Solvency. As of the date on which this representation and
--------
warranty is made or deemed made, each Nexstar Entity is Solvent on a
consolidated and consolidating basis, both before and after giving effect to any
transaction with respect to which this representation
91
and warranty is being made and to the incurrence of all Indebtedness, Guarantee
Obligations and other obligations incurred on such date in connection herewith
and therewith.
6.19 Labor Controversies. There are no labor controversies pending
-------------------
or, to the best knowledge of each Nexstar Entity, threatened against any Nexstar
Entity which could reasonably be expected to have a Material Adverse Effect.
6.20 Security Documents.
------------------
(a) The Pledge and Security Agreement is effective to create in
favor of the Collateral Agent, for the benefit of the Banks, a legal, valid
and enforceable security interest in the Pledged Collateral and, when the
requirements of Section 4 of the Pledge and Security Agreement have been
satisfied, the Pledge and Security Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right,
title and interest of the pledgor or pledgors thereunder in such Pledged
Collateral and the proceeds thereof, in each case prior and superior in
right to any other Person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the benefit of the Banks, a legal, valid and
enforceable security interest in the Security Agreement Collateral and
proceeds thereof and, when financing statements in appropriate form are
filed in the appropriate governmental offices, the Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantor or grantors thereunder in such Collateral
and the proceeds thereof, in each case prior and superior in right to any
other Person, other than with respect to the rights of Persons pursuant to
Permitted Liens.
6.21 Network Affiliation Agreements. Set forth on Schedule 6.21
------------------------------ -------------
hereto is a list of each effective Network Affiliation Agreement and the
expiration date therefor.
6.22 Condition of Stations. All of the material properties, equipment
---------------------
and systems of each Nexstar Entity and the Stations are, and all material
properties, equipment and systems to be added in connection with any
contemplated Station expansion or construction will be, in condition which is
sufficient for the operation thereof in accordance with past practice of the
Station in question and are and will be in compliance with all applicable
standards, rules or requirements imposed by (a) any governmental agency or
authority including without limitation the FCC and (b) any FCC License, in each
case except where such noncompliance could not reasonably be expected to have a
Material Adverse Effect.
6.23 Special Purpose Entities. The Parent Guarantors engage in no
------------------------
business activities (other than as contemplated by this Agreement), and have (a)
no significant assets other than debt and equity securities of their respective
Subsidiaries or (b) liabilities other than (i) those liabilities permitted under
this Agreement and the other Loan Documents to which they are each respectively
a party, (ii) the Management Loan Guaranty, (iii) the Nexstar Guaranty of
Bastet/Mission Obligations, (iv) the Management Agreement, (v) the Holdings
Subordinated Convertible Promissory Notes (vi) the Parent Subordinated
Convertible Promissory Notes and (vii) liabilities for the payment of taxes.
92
ARTICLE VII.
AFFIRMATIVE COVENANTS
---------------------
The Borrower and each Parent Guarantor agrees with the Administrative
Agent and each Bank that, until all Commitments and Letters of Credit have
terminated and all Obligations (other than indemnities for which no request for
payment has been made) have been paid and performed in full:
7.01 Financial Statements. The Borrower shall deliver to the
--------------------
Administrative Agent, in form and detail satisfactory to the Administrative
Agent and the Majority Banks, and with sufficient copies for each Bank:
(a) as soon as available, but not later than 90 days after the
end of each Fiscal Year, a copy of the audited consolidated balance sheet
of the Ultimate Parent and its consolidated Subsidiaries and of the
Borrower and its consolidated subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income or operations,
members' equity and cash flows for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous Fiscal Year, and
accompanied by the opinion of PricewaterhouseCoopers LLP or another
nationally-recognized independent public accounting firm which report shall
state that such consolidated financial statements present fairly, in all
material respects, the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except
for changes agreed upon by the Ultimate Parent and/or the Borrower, on the
one hand, and such auditors, on the other hand, which are disclosed and
described in such statements); such opinion shall not be qualified or
limited because of a restricted or limited examination by such accountant
of any material portion of the records of the Ultimate Parent, the Borrower
or any of their respective Subsidiaries;
(b) as soon as available, but not later than 45 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year, a copy
of the unaudited consolidated balance sheet of the Ultimate Parent and its
Subsidiaries and of the Borrower and its Subsidiaries as of the end of each
such Fiscal Quarter and the related consolidated statements of income,
members' equity and cash flows for the period commencing on the first day
and ending on the last day of such Fiscal Quarter, and certified to by a
Responsible Officer of the Ultimate Parent and of the Borrower as being
complete and correct and fairly presenting in all material respects, in
accordance with GAAP (except for the absence of footnotes and subject to
normal year-end adjustments), the financial position and the results of
operations of the Ultimate Parent and its Subsidiaries and of the Borrower
and its Subsidiaries; and
(c) as soon as available, but not later than 30 days after the
end of each month, a copy of the unaudited consolidated balance sheet of
the Ultimate Parent and its consolidated Subsidiaries and the Borrower and
its consolidated Subsidiaries as of the end of such month and the related
statements of income, members' equity and cash flows for the period
commencing on the first day and ending on the last day of such month, and
93
certified by a Responsible Officer of the Ultimate Parent and the Borrower
as being complete and correct and fairly presenting in all material
respects, in accordance with GAAP (except for the absence of footnotes and
subject to normal year-end adjustments), the financial position and the
results of operations of the Ultimate Parent and its consolidated
Subsidiaries and the Borrower and its consolidated Subsidiaries.
7.02 Certificates; Other Information. The Borrower shall furnish to
-------------------------------
the Administrative Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b), a Compliance Certificate duly
---------------- ---
executed by a Responsible Officer of the Ultimate Parent and the Borrower;
(b) promptly after the same are sent, copies of all financial
statements and reports which any Nexstar Entity sends to its shareholders,
partners or members; and promptly after the same are filed, copies of all
financial statements and regular, periodical or special reports which any
Nexstar Entity may make to, or file with, the Securities and Exchange
Commission, other than filings on Form 11-K and S-8; and
(c) promptly, such additional business, financial and other
information with respect to the Ultimate Parent, the Borrower or any of
their respective Subsidiaries as the Administrative Agent, at the request
of any Bank, may from time to time reasonably request.
7.03 Notices. The Borrower shall, upon any Responsible Officer of any
-------
Nexstar Entity obtaining knowledge thereof, give notice (accompanied by a
reasonably detailed explanation with respect thereto) promptly to the
Administrative Agent, the Issuing Bank and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any litigation, arbitration, or governmental investigation or
proceeding not previously disclosed by the Borrower to the Banks which has
been instituted or, to the knowledge of any Nexstar Entity, is threatened
against any Nexstar Entity or to which any of their respective properties
is subject (i) which could reasonably be expected to have a Material
Adverse Effect or (ii) which relates to this Agreement, any other Loan
Document or any of the transactions contemplated hereby;
(c) any development which shall occur in any litigation,
arbitration, or governmental investigation or proceeding previously
disclosed by any Nexstar Entity to the Banks which could reasonably be
expected to have a Material Adverse Effect; or
(d) any of the following events affecting any Nexstar Entity or
any ERISA Affiliate (but in no event more than ten days after such event),
together with a copy of any notice with respect to such event that may be
required to be filed with a Governmental Authority and any notice delivered
by a Governmental Authority to any Nexstar Entity or any ERISA Affiliate
with respect to such event:
94
(i) an ERISA Event; or
(ii) if any of the representations and warranties in Section 6.07
------------
ceases to be true and correct.
7.04 FCC Information. As soon as possible and in any event within five
---------------
days after the receipt by any Nexstar Entity from the FCC or any other
Governmental Authority or filing or receipt thereof by any Nexstar Entity,
provide to the Banks (a) any citation, notice of violation or order to show
cause issued by the FCC or any Governmental Authority with respect to any
Nexstar Entity which is available to any Nexstar Entity, in each case which
could reasonably be expected to have a Material Adverse Effect and (b) if
applicable, a copy of any notice or application by any Nexstar Entity requesting
authority to or notifying the FCC of its intent to cease broadcasting on any
broadcast station for any period in excess of ten days.
7.05 FCC Licenses and Regulatory Compliance. The Parent Guarantors and the
--------------------------------------
Borrower shall, and shall cause each of their respective Subsidiaries to, comply
in all material respects with all terms and conditions of all FCC Licenses
covering the Stations, all Federal, state and local laws, all rules, regulations
and administrative orders of the FCC and all state and local commissions or
authorities which are applicable to the Parent Guarantors, the Borrower and/or
their respective Subsidiaries or the operation of the Stations of any Nexstar
Entity.
7.06 License Lapse. As soon as possible and in any event within five days
-------------
after the receipt thereof by any Nexstar Entity, the Borrower will give the
Banks notice of any lapse, termination or relinquishment of any material
License, permit or other authorization from the FCC or other Governmental
Authority held by any Nexstar Entity or any failure of the FCC or other
Governmental Authority to renew or extend any such License, permit or other
authorization for the usual period thereof and of any complaint or other matter
filed with or communicated to the FCC or other Governmental Authority, of which
any Nexstar Entity has knowledge and in any such case which could reasonably be
expected to have a Material Adverse Effect.
7.07 Maintenance of Corporate, Limited Liability Company or Partnership
------------------------------------------------------------------
Existence, etc. The Parent Guarantors and the Borrower shall, and shall cause
--------------
each of their respective Subsidiaries to, cause to be done at all times all
things necessary to maintain and preserve the corporate, limited liability
company or partnership existence, as the case may be, of each Nexstar Entity
except to the extent otherwise permitted pursuant to Section 8.04. Each of the
------------
Nexstar Entities will continue to own and hold directly all of the outstanding
shares of Capital Stock of their respective Subsidiaries, and each of the Parent
Guarantors that collectively own all of the issued and outstanding Capital Stock
of the Holding Company, other than Permitted Holdings Preferred Equity and
Permitted Permanent Holdings Preferred Equity, will continue to own and hold
directly all of such Capital Stock of the Holding Company, in each case as set
forth on Schedule 6.17, except as otherwise permitted pursuant to Section 8.04.
------------- ------------
If the Holding Company is the New Holding Company, then the New Holding Company
will continue to own and hold directly all of the Capital Stock of Nexstar
Finance Holdings, other than Permitted Holdings Preferred Equity and Permitted
Permanent Holdings Preferred Equity.
95
7.08 Foreign Qualification, etc. The Parent Guarantors and the Borrower
--------------------------
will, and will cause each of their respective Subsidiaries to, cause to be done
at all times all things necessary to maintain and preserve the rights and
franchises of the Parent Guarantors, the Borrower and their respective
Subsidiaries to be duly qualified to do business and be in good standing as a
foreign corporation in each jurisdiction where the nature of its business makes
such qualification necessary and where the failure to maintain and preserve or
so qualify could reasonably be expected to have a Material Adverse Effect.
7.09 Payment of Taxes, etc. The Parent Guarantors and the Borrower will,
---------------------
and will cause each of their respective Subsidiaries to, pay and discharge, as
the same may become due and payable, all federal and material state and local
taxes, assessments, and other governmental charges or levies against or on any
of the income, profits or property of a Nexstar Entity, as well as material
claims of any kind which, if unpaid, might become a Lien upon a Nexstar Entity's
properties, and will pay (before they become delinquent) all other material
obligations and liabilities; provided, however, that the foregoing shall not
--------
require the Parent, Guarantors, the Borrower or any of their respective
Subsidiaries to pay or discharge any such tax, assessment, charge, levy, lien,
obligation or liability so long as such Nexstar Entity shall contest the
validity thereof in good faith by appropriate proceedings and shall set aside on
its books adequate reserves in accordance with GAAP.
7.10 Maintenance of Property; Insurance. The Parent Guarantors and the
----------------------------------
Borrower will, and will cause each of their respective Subsidiaries to, keep all
of the material property and facilities that are useful and necessary in the
business of the Nexstar Entities in such condition as is sufficient for the
operation of such business in the ordinary course and will maintain, and cause
each of their respective Subsidiaries to maintain, such insurance as may be
required by law and such other insurance, to such extent and against such
hazards and liabilities, as is customarily maintained by companies similarly
situated to the Nexstar Entities.
7.11 Compliance with Laws, etc. The Parent Guarantors and the Borrower
-------------------------
will, and will cause each of their respective Subsidiaries to, comply with the
Requirements of Law of any Governmental Authority, the noncompliance with which
could reasonably be expected to have a Material Adverse Effect.
7.12 Books and Records. The Parent Guarantors and the Borrower will, and
-----------------
will cause each of their respective Subsidiaries to, keep proper books and
records reflecting all of their business affairs and transactions in accordance
with GAAP. Each of the Parent Guarantors and the Borrower will, and will cause
each of their respective Subsidiaries to, permit the Administrative Agent or,
after the occurrence and during the continuance of any Default or Event of
Default under Section 9.01, any Bank, or any of their respective representatives
------------
or agents, upon reasonable notice and at reasonable times and intervals during
ordinary business hours (or at any time if an Event of Default has occurred and
is continuing), to visit all of their offices, discuss their financial matters
with their officers and, subject to the right of representatives of the Nexstar
Entities to be present, independent accountants (and hereby authorizes such
independent accountants to discuss their financial matters with the
Administrative Agent, any Bank or its representatives pursuant to the foregoing)
and examine and make abstracts or photocopies from any of their books or other
corporate records, all at the
96
Borrower's expense for any charges imposed by such accountants or for making
such abstracts or photocopies, but otherwise at the Administrative Agent's or
such Bank's expense.
7.13 Use of Proceeds. The Borrower shall use, or cause its
---------------
Subsidiaries to use, the proceeds of the Loans (a) to refinance the Indebtedness
outstanding under the Existing Credit Agreement and to pay related transaction
costs, (b) to finance acquisitions permitted under this Agreement, and (c) for
capital expenditures, working capital and other general corporate requirements
of the Borrower and its Subsidiaries.
7.14 End of Fiscal Years; Fiscal Quarters. The Parent Guarantors and
------------------------------------
the Borrower will, for financial reporting purposes, cause (a) its and each of
their respective Subsidiaries' Fiscal Years to end on December 31 of each year
and (b) its and each of their respective Subsidiaries' Fiscal Quarters to end on
March 31, June 31, September 30 and December 31 of each year.
7.15 Interest Rate Protection. The Borrower shall maintain such
------------------------
Interest Rate Protection Agreements as are necessary so as to provide, through
and including December 7, 2002, that at least 50% of the principal amount of the
sum of all Indebtedness for borrowed money of the Borrower and its Subsidiaries
plus all outstanding Bastet/Mission Loans is subject to either a fixed interest
----
rate or interest rate protection.
7.16 Additional Security; Further Assurances.
---------------------------------------
(a) The Parent Guarantors and the Borrower will, and will cause each
of their respective Subsidiaries to, grant to the Collateral Agent, for the
benefit of the Banks, security interests and mortgages in such assets and
properties of the Nexstar Entities as are not covered by the Security
Documents, and as may be requested from time to time by the Administrative
Agent or the Majority Banks (collectively, the "Additional Security
-------------------
Documents"). All such security interests and mortgages shall be granted
---------
pursuant to documentation reasonably satisfactory in form and substance to
the Administrative Agent and the Borrower and shall constitute valid and
enforceable perfected security interests and mortgages superior to and
prior to the rights of all third Persons and shall be subject to no Liens
except for Permitted Liens. The Additional Security Documents or
instruments related thereto shall be duly recorded or filed in such manner
and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Collateral Agent required to be
granted pursuant to the Additional Security Documents and all taxes, fees
and other charges payable in connection therewith shall be paid in full.
(b) The Parent Guarantors and the Borrower will, and will cause
each of their respective Subsidiaries to, at the expense of the Borrower,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral
Agent from time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements,
powers of attorney, certificates, real property surveys, reports and other
assurances or instruments and take such further steps relating to the
collateral covered by any of the Security Documents or any Additional
Security Documents as the Collateral Agent may reasonably require and as
are reasonably
97
satisfactory to the Borrower. Furthermore, the Borrower shall cause to be
delivered to the Collateral Agent such opinions of counsel, title insurance
and other related documents as may be reasonably requested by the
Collateral Agent to assure itself that this Section 7.16 has been complied
------------
with.
(c) If at any time any Parent Guarantor or the Borrower acquires
any additional Subsidiary (including by reason of the formation of the New
Holding Company), such Parent Guarantor and/or the Borrower, as applicable,
will promptly notify the Administrative Agent thereof and cause such
Subsidiary to execute and deliver appropriate Guaranty Supplements, a
Joinder to Security Agreement and a Joinder to Pledge and Security
Agreement.
(d) If the Administrative Agent or the Majority Banks determine
that they or any of them are required by law or regulation to have
appraisals prepared in respect of any Real Property of the Nexstar Entities
constituting Collateral, the Borrower shall provide to the Administrative
Agent appraisals which satisfy the applicable requirements of the Real
Estate Appraisal Reform Amendments of the Financial Institution Reform,
Recovery and Enforcement Act of 1989 and which shall be in form and
substance reasonably satisfactory to the Administrative Agent.
(e) The Parent Guarantors and the Borrower agree that each action
required above by this Section 7.16 shall be completed as soon as possible,
------------
but in no event later than 90 days after such action is either requested to
be taken by the Administrative Agent or the Majority Banks or required to
be taken by the applicable Nexstar Entity pursuant to the terms of this
Section 7.16; provided that in no event shall any Nexstar Entity be
------------ --------
required to take any action, other than using its reasonable efforts, to
obtain consents from third parties with respect to its compliance with this
Section 7.16.
------------
ARTICLE VIII.
NEGATIVE COVENANTS
------------------
The Borrower and each Parent Guarantor agrees with the Administrative
Agent and each Bank that, until all Commitments and Letters of Credit have
terminated and all Obligations (other than indemnities for which no request for
payment has been made) have been paid and performed in full:
8.01 Changes in Business. The Parent Guarantors and the Borrower will
-------------------
not, and will not cause or permit any of their respective Subsidiaries to,
directly or indirectly, alter in a fundamental and substantial manner the
character of the Television Broadcasting Business of the Nexstar Entities, taken
as a whole, from that conducted immediately following the Effective Date.
8.02 Limitation on Liens. The Parent Guarantors and the Borrower will
-------------------
not, and will not permit any of their respective Subsidiaries to, create, incur,
assume, or suffer to exist any Lien upon any of their respective revenues,
property (including fixed assets, inventory, Real
98
Property, intangible rights and Capital Stock) or other assets, whether now
owned or hereafter acquired, other than the following ("Permitted Liens"):
---------------
(a) Liens which were granted prior to the Effective Date securing
Indebtedness or other obligations in an aggregate principal (or face amount) for
all Nexstar Entities not to exceed $2,500,000, and refinancings, renewals and
extensions thereof to the extent not encumbering additional property;
(b) Liens for taxes, assessments or other governmental charges or
levies to the extent that payment thereof shall not at the time be required to
be made in accordance with the provisions of Section 7.09;
------------
(c) Liens encumbering property of any Nexstar Entity consisting of
carriers, warehousemen, mechanics, materialmen, repairmen and landlords and
other Liens arising by operation of law and incurred in the ordinary course of
business for sums which are not overdue or which are being contested in good
faith by appropriate proceedings and (if so contested) for which appropriate
reserves with respect thereto have been established and maintained on the books
of such Nexstar Entity in accordance with GAAP;
(d) Liens encumbering property of any Nexstar Entity incurred in the
ordinary course of business (i) in connection with workers' compensation,
unemployment insurance, or other forms of governmental insurance or benefits, or
to secure performance of bids, tenders, statutory obligations, leases, and
contracts (other than for Indebtedness) entered into in the ordinary course of
business of such Nexstar Entity or (ii) to secure obligations on surety,
performance or appeal bonds so long as the obligations secured by Liens under
this clause (ii) do not exceed $2,500,000 in the aggregate at any time
outstanding for all Nexstar Entities;
(e) easements, rights-of-way, reservations, permits, servitudes,
zoning and similar restrictions and other similar encumbrances or title defects
(i) described in the Mortgage Policies or (ii) which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the business of any Nexstar Entity;
(f) judgment Liens securing amounts not in excess of (i) $2,500,000
and (x) in existence less than 30 days after the entry thereof, (y) with respect
to which execution has been stayed or (z) with respect to which the appropriate
insurance carrier has agreed in writing that there is coverage by insurance or
(ii) $2,500,000 in the aggregate at any time outstanding for all Nexstar
Entities;
(g) Liens securing documentary letters of credit; provided such Liens
--------
attach only to the property or goods to which such letter of credit relates;
(h) purchase money security interests encumbering, or Liens otherwise
encumbering at the time of the acquisition thereof by the Borrower or its
Subsidiaries, (i) Real Property, provided that such security interests and Liens
--------
do not secure amounts
99
in excess of $2,500,000 in the aggregate at any time outstanding for the
Borrower and its Subsidiaries and (ii) equipment, furniture, machinery or other
assets hereafter acquired by the Borrower or its Subsidiaries for normal
business purposes, and refinancings, renewals and extensions of such security
interests and Liens, provided that such security interests and Liens do not
--------
secure amounts in excess of $3,500,000 in the aggregate at any time
outstanding for the Borrower and its Subsidiaries;
(i) interests in Leaseholds under which a Nexstar Entity is a lessor,
provided such Leaseholds are otherwise not prohibited by the terms of this
--------
Agreement;
(j) bankers' Liens in respect of deposit accounts;
(k) Liens created by the Security Documents;
(l) Liens represented by the escrow of cash or Cash Equivalents, and
the earnings thereon, securing the obligations of the Borrower or any of its
Subsidiaries under any agreement to acquire, or pursuant to which it acquired,
Reinvestment Assets in accordance with this Agreement or other assets which it
is permitted to acquire pursuant to Section 8.04 or securing the obligations of
------------
the Borrower or any of its Subsidiaries to the seller of the property under any
agreement pursuant to which the Borrower or any of its Subsidiaries may acquire
Reinvestment Assets in accordance with this Agreement or other assets which the
Borrower or its Subsidiaries are permitted to acquire pursuant to Section 8.04;
------------
and
(m) other Liens, so long as the obligations secured thereby do not
exceed $1,000,000 in the aggregate (for all Nexstar Entities) at any time
outstandin g.
8.03 Disposition of Assets. The Parent Guarantors and the Borrower
---------------------
will not, and will not suffer or permit any of their respective Subsidiaries to,
directly or indirectly, make any Disposition or enter into any agreement to make
any Disposition, except:
(a) any Nexstar Entity may make and agree to make Dispositions to
Wholly-Owned Subsidiaries of the Borrower or the Borrower after prior written
notice to the Administrative Agent describing the Disposition and compliance by
the transferee with the applicable terms of the Security Documents;
(b) so long as no Default or Event of Default exists both before
and after giving effect thereto, the Borrower or any Subsidiary of the Borrower
may agree to and make Dispositions of Stations or the Capital Stock of any
Subsidiary of the Borrower so long as (i) the aggregate amount received for all
such Dispositions does not exceed $20,000,000 in any Fiscal Year or $40,000,000
in the aggregate occurring on or after the Effective Date until the date the
Obligations have been paid in full and the Commitments have been terminated, and
(ii) at least 10 Business Days prior to the consummation of any proposed
Disposition, the Borrower shall have delivered to the Administrative Agent (A) a
certificate signed by a Responsible Officer of the Borrower, which certificate
shall contain (x) financial projections of the Borrower and its Subsidiaries
attached to such certificate which have been prepared on a Pro Forma Basis
(giving effect to the
100
consummation of such Disposition) for the period from the proposed date of the
consummation of any proposed Disposition to the Stated Maturity Date of the
latest to mature of the Term Loans demonstrating compliance for such period with
the covenants set forth in Section 8.09, (y) a certification to the
------------
Administrative Agent and the Banks that all representations and warranties set
forth in this Agreement and the other Loan Documents are true and correct as of
such date and will be true and correct both before and after giving effect to
such Disposition and (z) a certification that no Default or Event of Default
exists both before and after giving effect to such Disposition and (B) a Pro
Forma Compliance Certificate of the Borrower for the then applicable Measurement
Period giving effect to the consummation of such Disposition;
(c) Dispositions permitted by Section 8.04(c) and (d);
--------------- ---
(d) Dispositions of cash or Cash Equivalents, unless otherwise
prohibited under this Agreement or the other Loan Documents;
(e) Dispositions permitted under Section 8.13; and
------------
(f) Dispositions consisting of Sale and Leaseback Transactions
effected with the prior written consent of the Administrative Agent and the
Majority Banks.
8.04 Consolidations, Mergers, Acquisitions, etc. The Parent
------------------------------------------
Guarantors and the Borrower will not, and will not suffer or permit any of their
respective Subsidiaries to, wind up, liquidate or dissolve themselves,
consolidate or amalgamate with or merge into or with any other Person, or
purchase or otherwise acquire (or enter into any agreement to purchase or
otherwise acquire) any television broadcasting station or any Person, or all or
substantially all of the assets of any Person (or of any principal line of
business or division thereof) or convey, sell, transfer, lease or otherwise
dispose of all or substantially all of their respective assets, either in one
transaction or a series of related transactions, to any other Person or Persons,
except: (a) so long as no Default or Event of Default exists both before and
after giving effect thereto, the Parent Guarantors, the Borrower and their
respective Subsidiaries may make Dispositions permitted under Section 8.03;
------------
(b) so long as no Default or Event of Default exists both before and
after giving effect thereto, the purchase or acquisition (by merger,
consolidation, acquisition of Capital Stock or assets or otherwise) by the
Borrower or any Wholly-Owned Subsidiary of the Borrower, after the Effective
Date of (i) 100% of the Capital Stock of any Person primarily engaged in the
Television Broadcasting Business, (ii) a television broadcast station and all
related assets necessary to operate such television broadcast station, or (iii)
the entering into by the Borrower or any of its Wholly-Owned Subsidiaries, after
the Effective Date, of any Local Marketing Agreement, Joint Sales Agreement
and/or Shared Services Agreement with respect to a television broadcasting
station (other than in connection with a Disposition); provided that (A) the
--------
consideration paid in connection with each such transaction or series of related
transactions may not exceed $20,000,000, (B) either (x) immediately after giving
101
effect to such transaction or series of related transactions, the Consolidated
Total Leverage Ratio is less than or equal to 5.00:1.00 or (y) if the
Consolidated Total Leverage Ratio is greater than 5.00:1.00, the Majority Banks
have consented in writing to such transaction or series of related transactions
prior to the consummation thereof, and (C) at least 10 Business Days prior to
the consummation of any such proposed transaction or series of related
transactions, the Borrower shall have delivered to the Administrative Agent (1)
a certificate signed by a Responsible Officer of the Borrower, certifying (x)
compliance with clause (B) of this proviso and with the other financial
covenants contained in Section 8.09, based on financial projections of the
------------
Borrower and its Subsidiaries attached to such certificate which have been
prepared on a Pro Forma Basis for the period from the date of the consummation
of the proposed purchase or acquisition to the Stated Maturity Date for the
latest to mature of the Term Loans and (y) that no Default or Event of Default
exists or will exist both before and after giving effect to the consummation of
such transaction and (2) a Pro Forma Compliance Certificate of the Borrower for
the then applicable Measurement Period giving effect to the consummation of such
transaction;
(c) any Subsidiary of the Borrower may merge with and into, or be
dissolved or liquidated into, the Borrower so long as (i) the Borrower is the
surviving Person of any such merger, dissolution or liquidation and (ii) the
Borrower complies with the relevant provisions of the Security Documents to
which it is a party so that the security interests granted to the Collateral
Agent pursuant to such Security Documents in the assets of such merged,
dissolved or liquidated Subsidiary so merged shall remain in full force and
effect and perfected (to at least the same extent as in effect immediately prior
to such merger, dissolution or liquidation);
(d) any Subsidiary of the Borrower may merge with and into, or be
dissolved or liquidated into, any Wholly-Owned Subsidiary of the Borrower so
long as (i) such Wholly-Owned Subsidiary of the Borrower is the surviving
corporation of such merger, dissolution or liquidation and (ii) the acquiring
Wholly-Owned Subsidiary complies with the relevant provisions of the Security
Documents to which it is a party so that the security interests granted to the
Collateral Agent pursuant to such Security Documents in the assets of such
merged, dissolved or liquidated Subsidiary shall remain in full force and effect
and perfected (to at least the same extent as in effect immediately prior to
such merger, dissolution or liquidation); and
(e) the formation or creation of new Subsidiaries of the Nexstar
Entities in accordance with Section 8.11(f).
---------------
8.05 Limitation on Indebtedness. The Parent Guarantors and the
--------------------------
Borrower will not, and will not suffer or permit any of their respective
Subsidiaries to, create, incur, issue, assume, suffer to exist, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness existing on the Effective Date and described on
Schedule 8.05(a) and any refinancings, refundings, renewals or extensions
----------------
thereof
102
(without increasing, or shortening the maturity of, the principal amount of
such Indebtedness);
(b) Indebtedness incurred pursuant to any Loan Document;
(c) Indebtedness of any Credit Party owing to the Borrower or any
Wholly-Owned Subsidiary of the Borrower, provided that any such
--------
Indebtedness (i) is permitted to be advanced by the Borrower or such
Wholly-Owned Subsidiary pursuant to the provisions of Section 8.11 and (ii)
------------
is not subordinated to any other Indebtedness of the obligor (other than
the Obligations);
(d) Indebtedness of the Borrower and/or its Subsidiaries secured
by Liens permitted by Section 8.02(h);
---------------
(e) so long as no Default or Event of Default exists both before
and after giving effect to the incurrence thereof, (i) Permitted Borrower
Unsecured Indebtedness in an aggregate principal amount not to exceed
$5,000,000 outstanding at any time, and (ii) Permitted Seller Subordinated
Indebtedness, in an aggregate principal amount not to exceed $15,000,000
outstanding at any time, such maximum permitted amount to be reduced by the
aggregate principal amount of "Permitted Seller Subordinated Indebtedness"
(as such term is defined in the Bastet/Mission Credit Agreement) of any
Bastet/Mission Entity outstanding at such time, provided that prior to the
--------
incurrence of any such Indebtedness, the Borrower shall have delivered to
the Administrative Agent (x) a certificate signed by a Responsible Officer
of the Borrower certifying (A) compliance with each of the financial
covenants contained in Section 8.09, based on financial
------------
projections of the Borrower and its Subsidiaries attached to such
certificate which have been prepared on a Pro Forma Basis for the period
from the proposed date of the incurrence of such Indebtedness to the Stated
Maturity Date of the latest to mature of the Term Loans and (B) that no
Default or Event of Default exists or will exist both before and after
giving effect to the incurrence of such Indebtedness and (y) a Pro Forma
Compliance Certificate of the Borrower prepared as of the date of the
incurrence of such Indebtedness, giving effect to the incurrence of such
Indebtedness;
(f) the Existing Holdings Preferred Equity or the Exchange Equity
until the Existing Holdings Preferred Equity or the Exchange Equity is
repurchased or redeemed (and only to the extent the same is not so
repurchased or redeemed) in accordance with Section 8.10(g) or (h);
--------------- ----
(g) Interest Rate Protection Agreements required hereunder or in
respect of Indebtedness otherwise permitted hereby so long as such
agreements are not entered into for speculative purposes and the Borrower
is in compliance with Section 7.15 after giving effect thereto;
------------
(h) Capital Lease Obligations and other Indebtedness (other than
Indebtedness for borrowed money) of the Borrower and/or its Subsidiaries in
an amount not to exceed $3,500,000 in the aggregate for the Borrower and
its Subsidiaries at any time outstanding;
103
(i) Guaranty Obligations of the Nexstar Entities under the
Nexstar Guaranty of Bastet/Mission Obligations and with respect to
Permitted Seller Subordinated Indebtedness incurred by Bastet/Mission
Entities in accordance with the Bastet/Mission Credit Agreement;
(j) Guaranty Obligations of the Nexstar Entities with respect to
the Management Loan not to exceed an aggregate principal amount of
$3,000,000 (the "Management Loan Guaranty");
------------------------
(k) so long as no Default or Event of Default exists both before
and after the incurrence thereof, Nexstar Finance Holdings may incur
Permitted Holdings Unsecured Indebtedness and/or sell or issue Permitted
Permanent Holdings Preferred Equity, the New Holding Company may sell or
issue Permitted Permanent Holdings Preferred Equity, and the Borrower may
sell or issue Permitted Borrower Preferred Equity, provided that
--------
concurrently upon receipt thereof, the Net Debt Proceeds and/or Net
Issuance Proceeds, as applicable, therefrom are, first, used to
-----
repurchase or redeem the Permitted Holdings Preferred Equity until the
Permitted Holdings Preferred Equity has been repurchased or redeemed in
full (including the payment by the Borrower of such Dividends out of such
proceeds of Permitted Borrower Preferred Equity, in accordance with Section
-------
8.10(g), as may be required to effect such repurchase or redemption) and,
-------
thereafter (to the extent any such Net Debt Proceeds and/or Net Issuance
----------
Proceeds remain available), applied in accordance with Section 2.07(f);
---------------
(l) so long as no Default or Event of Default exists both before
and after the sale or issuance thereof, the Ultimate Parent may sell or
issue Permitted Parent Preferred Equity, provided that, concurrently upon
--------
receipt thereof, the Net Issuance Proceeds therefrom are, first, used to
-----
repurchase or redeem the Permitted Holdings Preferred Equity until the
Permitted Holdings Preferred Equity has been repurchased or redeemed in
full and, thereafter (to the extent any such Net Issuance Proceeds remain
----------
available), applied in accordance with Section 2.07(f);
---------------
(m) after all of the Permitted Holdings Preferred Equity has been
repurchased or redeemed in full or at any time in connection with a payment
being made pursuant to an ABRY Capital Contribution Agreement, the New
Holding Company and/or Nexstar Finance Holdings may borrow up to an
aggregate principal amount not to exceed $30,000,000 in the aggregate at
any time outstanding from ABRY L.P. II, ABRY L.P. III and/or Sook (or other
Persons exercising preemptive rights in connection with an issuance of
Capital Stock to one or more of them) pursuant to the terms and conditions
of, and as evidenced by, a Parent Subordinated Convertible Promissory Note
(an "Initial Loan"), provided that, concurrently upon receipt thereof by
------------ --------
the New Holding Company, the Net Debt Proceeds from any Initial Loan are
used to make a loan in equal amount to Nexstar Finance Holdings pursuant to
the terms and conditions of, and as evidenced by, a Holdings Subordinated
Convertible Promissory Note; provided further that, concurrently upon
-------- -------
receipt thereof by Nexstar Finance Holdings, the Net Debt Proceeds from any
Initial Loan made to the New Holding Company or any loan pursuant to the
preceding proviso are used to make a loan in equal amount to the Borrower
pursuant to the terms and
104
conditions of, and as evidenced by, a Borrower Subordinated Convertible
Promissory Note, provided further that each such loan made pursuant to a
--------
Parent Subordinated Convertible Promissory Note, a Holdings Subordinated
Convertible Promissory Note or a Borrower Subordinated Convertible
Promissory Note shall remain outstanding only until the earlier to occur of
(x) the occurrence of a Default or an Event of Default or (y) the date
which is eighteen months after such loan is made, at which time (i) the
principal amount of (and all accrued and unpaid interest on) each such
Initial Loan to Nexstar Finance Holdings or the New Holding Company will
convert into Capital Stock (that is not Disqualified Stock) of the Ultimate
Parent in accordance with the terms and provisions of the applicable Parent
Subordinated Convertible Promissory Note, the principal amount of (and all
accrued and unpaid interest on) each such loan by the New Holding Company
to Nexstar Finance Holdings will convert into common equity of Nexstar
Finance Holdings in accordance with the terms and provisions of the
applicable Holdings Subordinated Convertible Promissory Note, and the
principal amount of (and all accrued and unpaid interest on) each such loan
by Nexstar Finance Holdings to the Borrower will convert into common equity
of the Borrower in accordance with the terms and provisions of the
applicable Borrower Subordinated Convertible Promissory Note;
(n) Permitted Borrower Subordinated Indebtedness incurred prior
to the Effective Date;
(o) so long as no Default or Event of Default exists both before
and after giving effect to the incurrence thereof, the Borrower may incur
Permitted Borrower Subordinated Indebtedness, provided that (i) immediately
--------
after giving effect to the incurrence of such Permitted Borrower
Subordinated Indebtedness, the Consolidated Senior Leverage Ratio is less
than or equal to 4.00 to 1.00 and (ii) prior to the date of the incurrence
thereof, the Borrower shall have delivered to the Administrative Agent (A)
a certificate signed by a Responsible Officer of the Borrower, certifying
(x) compliance with clause (i) of this proviso and with each of the other
financial covenants contained in Section 8.09, based on financial
------------
projections of the Borrower and its Subsidiaries attached to such
certificate which have been prepared on a Pro Forma Basis for the period
from the date of the proposed date of the incurrence of such Permitted
Borrower Subordinated Indebtedness (as determined pursuant to the
definition of Pro Forma Basis) to the Stated Maturity Date of the latest to
mature of the Term Loans and (y) that no Default or Event of Default exists
or will exist both before and after giving effect to the incurrence of such
Indebtedness, (B) a Pro Forma Compliance Certificate of the Borrower
prepared as of the date of the incurrence of such Indebtedness giving
effect to the incurrence of such Indebtedness and (C) concurrently upon
receipt thereof, the Net Debt Proceeds therefrom are applied in accordance
with Section 2.07(g);
---------------
(p) Intercompany loans from the Ultimate Parent to the Holding
Company which are pledged as security for the Loans and the proceeds of
which (unless to repurchase or redeem Permitted Holdings Preferred Equity
as permitted in this Agreement) are concurrently, upon receipt thereof,
contributed as common equity to the Borrower; and
105
(q) Guaranty Obligations of the Ultimate Parent with respect to
the 16% Senior Discount Notes issued May 17, 2001, by Nexstar Finance
Holding in the aggregate principal amount of $36,988,000, pursuant to a
guaranty in the form of contained in the Indenture of even date therewith,
until the earlier of (x) November 30, 2001, and (y) the date the
Indebtedness evidenced by those certain two promissory notes in the
respective face principal amounts of $20,531,402 and $11,355,000, each
dated December 31, 2000 and issued by Nexstar Finance Holdings to the
Ultimate Parent, no longer ranks equal in right of payment to the
Indebtedness evidenced by such 16% Senior Discount Notes.
8.06 Transactions with Affiliates. Other Transaction, the Parent
----------------------------
Guarantors and the Borrower will not, and will not permit any of than any
Permitted Affiliate their respective Subsidiaries to, enter into, or cause,
suffer, or permit to exist:
(a) any arrangement or contract with any of its Affiliates, of a
nature customarily entered into by Persons which are Affiliates of each
other (including arrangements relating to the allocation of revenues,
taxes, and expenses or otherwise) requiring any payments to be made by any
Nexstar Entity to any such Affiliate unless such arrangement or contract is
specifically permitted by this Agreement, is in the ordinary course of such
Person's business and is fair and equitable to such Nexstar Entity;
(b) any other transaction, arrangement, or contract with any of
its Affiliates unless such transaction, arrangement or contract is on terms
which are specifically permitted by this Agreement, is in the ordinary
course of such Person's business and is on terms not less favorable than
are obtainable from any Person which is not one of its Affiliates; or
(c) any management services agreement other than the Second
Amended and Restated Management Consulting Services Agreement, dated
January 5, 1998, originally entered into between ABRY Partners, Inc. and
Nexstar Broadcasting Group, Inc., as in effect on the Effective Date (the
"Management Agreement").
--------------------
8.07 Use of Credits; Compliance with Margin Regulations. The Parent
--------------------------------------------------
Guarantors and the Borrower will not, and will not suffer or permit any of their
respective Subsidiaries to, use any portion of the proceeds of the Loans or any
Letter of Credit, directly or indirectly, to purchase or carry Margin Stock
other than in compliance with Regulations T, U and X of the Federal Reserve
Board. At no time shall the value of the Margin Stock owned by any Nexstar
Entity (as determined in accordance with Regulation U of the Federal Reserve
Board) exceed 25% of the value (as determined in accordance with Section
221.2(g)(2) of Regulation U of the Federal Reserve Board) of the assets of such
Nexstar Entity.
8.08 Environmental Liabilities. The Parent Guarantors and the
-------------------------
Borrower will not and will not permit any of their respective Subsidiaries to
violate any Environmental Law to an extent sufficient to give rise to a Material
Adverse Effect; and, without limiting the foregoing, the Parent Guarantors and
the Borrower will not, and will not permit any of their respective Subsidiaries
or any other Person to, dispose of any Hazardous Material into or onto, or
(except in
106
accordance with applicable law) from, any Real Property owned, operated or
otherwise used by any Nexstar Entity, or allow any Lien imposed pursuant to any
Environmental Law to be imposed or to remain on such Real Property, in each case
to the extent the same are reasonably likely to have a Material Adverse Effect,
except as contested in reasonable good faith by appropriate proceedings and the
pendency of such proceedings will not have a Material Adverse Effect and except
and unless adequate reserves have been established and are being maintained on
its books in accordance with GAAP.
8.09 Financial Covenants.
-------------------
(a) Consolidated Total Leverage Ratio. The Consolidated Total
---------------------------------
Leverage Ratio shall not at any time during any period set forth below
exceed the ratio set forth opposite such period below:
Period Ratio
------------------------------------- ------------
Effective Date through and including
June 29, 2002 6.75 to 1.00
June 30, 2002 through and including
September 29, 2002 6.50 to 1.00
September 30, 2002 through and including
March 30, 2003 6.00 to 1.00
March 31, 2003 through and including
June 29, 2003 5.50 to 1.00
June 30, 2003 through and including
December 30, 2003 5.25 to 1.00
December 31, 2003 through and including
March 30, 2004 5.00 to 1.00
March 31, 2004 through and including
September 29, 2004 4.50 to 1.00
September 30, 2004 and thereafter 4.00 to 1.00
(b) Consolidated Senior Leverage Ratio. The Consolidated
----------------------------------
Senior Leverage Ratio shall not at any time during any period set forth
below exceed the ratio set forth opposite such period below:
107
Period Ratio
------------------------------------- ------------
Effective Date through and including
June 29, 2002 4.00 to 1.00
June 30, 2002 through and including
September 29, 2002 3.75 to 1.00
September 30, 2002 through and including
March 30, 2003 3.50 to 1.00
March 31, 2003 through and including
June 29, 2003 3.00 to 1.00
June 30, 2003 through and including
December 30, 2003 2.75 to 1.00
December 31, 2003 through and including
June 30, 2004 2.50 to 1.00
(c) Consolidated Interest Coverage Ratio. The Consolidated
------------------------------------
Interest Coverage Ratio shall not at any time during any period set forth
below be less than the ratio set forth opposite such period below:
Period Ratio
------------------------------------- ------------
Effective Date through and including
March 30, 2003 1.50 to 1.00
March 31, 2003 through and including
June 29, 2004 1.75 to 1.00
June 30, 2004 through and including
December 30, 2004 2.00 to 1.00
December 31, 2004 and thereafter 2.25 to 1.00
(d) Pro Forma Debt Service Ratio. The Pro Forma Debt Service
----------------------------
Ratio shall not at any time be less than 1.10:1.00.
(e) Limitation on Capital Expenditures.
----------------------------------
The Parent Guarantors and the Borrower will not, and will not permit
any of their respective Subsidiaries to, make any Capital Expenditures during
any Fiscal Year which exceed, in the aggregate for the Ultimate Parent and its
Subsidiaries, $8,000,000. Notwithstanding anything to the contrary contained in
the preceding
108
sentence, (x) in the event the amount of Capital Expenditures permitted to be
made by the Ultimate Parent and its Subsidiaries pursuant to this Section
-------
8.09(e) in any Fiscal Year (before giving effect to any increase in such
-------
permitted expenditure amount pursuant to this sentence) is greater than the
amount of such Capital Expenditures made by the Ultimate Parent and its
Subsidiaries during such Fiscal Year, such excess may be carried forward and
utilized to make Capital Expenditures in the succeeding Fiscal Year, and (y) the
amount of Capital Expenditures permitted to be made by the Ultimate Parent and
its Subsidiaries during any Fiscal Year shall be increased by an amount equal to
that portion of the proceeds of any Recovery Event not required to be applied to
prepay Loans pursuant to Section 2.07(c).
---------------
(f) Limitation on Film Cash Payments. The Parent Guarantors and
--------------------------------
the Borrower will not, and will not permit any of their respective
Subsidiaries to, make any Film Cash Payments during any Fiscal Year which
exceed, in the aggregate for the Ultimate Parent and its Subsidiaries an
amount equal to $10,000,000; provided that such amount shall be increased
--------
by $750,000 for each Station purchased or acquired or with respect to which
a Local Marketing Agreement, Joint Sales Agreement and/or Shared Services
Agreement is consummated pursuant to Section 8.04(b) during the Fiscal Year
---------------
in which such acquisition, purchase or consummation occurs and for each
such Station for each Fiscal Year thereafter.
(g) Required Junior Capital. The Parent Guarantors and the
-----------------------
Borrowers will not permit the aggregate total amount of Required Junior
Capital (determined in each case with reference to the Net Issuance
Proceeds or Net Debt Proceeds, as applicable, obtained from the sale or
issuance thereof) outstanding at any time to be less than $50,000,000;
provided that, for purposes of this Section 8.09(g), the Net Issuance
-------- ---------------
Proceeds of Capital Stock (that is not Disqualified Stock) of the Ultimate
Parent that is issued in exchange for any Indebtedness of the type
described in Section 8.05(m) will be deemed to be equal to the Net Debt
---------------
Proceeds of such Indebtedness.
8.10 Restricted Payments. The Parent Guarantors and the Borrower
-------------------
shall not, and shall not permit any of their respective Subsidiaries to, make
any Restricted Payment, except:
(a) so long as no Default or Event of Default exists both before
and after giving effect to such repurchases, the Ultimate Parent may
repurchase equity interests in the Ultimate Parent from former employees of
the Nexstar Entities in an aggregate amount for all such repurchases
pursuant to this Section 8.10(a) combined not to exceed $500,000 during any
---------------
Fiscal Year, and the Subsidiaries of the Ultimate Parent may authorize,
declare and/or pay Dividends to their respective shareholders, partners or
members in the amount necessary to provide the funds necessary to permit
the Ultimate Parent to make such repurchases;
(b) the Ultimate Parent may repurchase equity interests in the
Ultimate Parent from former members of management of any Nexstar Entity so
long as such repurchases are made from, and are equal to or less than the
amount of, any proceeds
109
received from any key-man life insurance policy or from capital
contributions made by ABRY L.P. II, ABRY L.P. III and/or Sook (or other
Persons exercising preemptive rights in connection with an issuance of
Capital Stock to any of them) which are not required to be used to prepay
the Loans under Section 2.07(e);
---------------
(c) the Subsidiaries of the Borrower may make Restricted Payments
to the Borrower or any Wholly-Owned Subsidiary of the Borrower;
(d) so long as no Default or Event of Default exists both before
and after giving effect to such Dividends and the Borrower and Nexstar
Finance Holdings are each properly treated as a partnership or a
disregarded entity for federal and state income tax purposes for the
relevant taxable year, (i) the Borrower may authorize, declare and pay
Dividends to Nexstar Finance Holdings and Nexstar Finance Holdings and the
other Parent Guarantors may authorize, declare and pay corresponding
Dividends to their respective shareholders, partners or members for the
annual income tax payments of such shareholders, partners or members, not
to exceed $1,450,000 in the aggregate for all tax payments in respect of
Fiscal Year 2000 (and up to 110% of the maximum permitted amount for the
preceding Fiscal Year, during any Fiscal Year thereafter) and (ii) the
Borrower and each Parent Guarantor may authorize, declare and pay Dividends
to their respective shareholders, partners or members, as applicable, in an
amount equal to the taxes, if any, due in connection with any Disposition
made by such distributing Person but in no event in excess of the amounts
received and retained by such distributing Person (in accordance with this
Agreement) in connection with such Disposition;
(e) so long as no Default or Event of Default exists both before
and after giving effect to such Dividends, the Borrower and each Parent
Guarantor may authorize, declare and pay Dividends to their respective
shareholders, partners or members, as applicable, for the purpose of (i)
paying such distributing Person's share of the corporate overhead expenses
of ABRY Partners, LLC or its Affiliates in an aggregate amount for all such
overhead expenses not to exceed $50,000 in any Fiscal Year, and (ii) the
payment of management fees to ABRY Partners, LLC or its Affiliates, so long
as the aggregate amount of all such management fee payments does not to
exceed $75,000 per Station per Fiscal Year and $300,000 in the aggregate
for all Stations per Fiscal Year, in each case as the amount of such
corporate overhead expenses and management fees may be increased annually
based on the consumer price index;
(f) so long as no Default or Event of Default exists both before
and after giving effect to such Dividends, the Borrower may authorize,
declare and pay Dividends to Nexstar Finance Holdings (and Nexstar Finance
Holdings may, in turn, authorize, declare and pay corresponding Dividends
to the New Holding Company, if the New Holding Company is the issuer of the
Permitted Holdings Preferred Equity) concurrently upon the issuance of
Permitted Borrower Subordinated Indebtedness or on any date which occurs
prior to the 90th day after the occurrence of such issuance, provided that
--------
(i) immediately after giving effect to such Dividends, the Consolidated
Senior Leverage Ratio is less than or equal to 4.00 to 1.00, (ii) the
proceeds of such Dividends are concurrently used by the issuer of the
Permitted Holdings Preferred Equity
110
to repurchase or redeem the Permitted Holdings Preferred Equity and (iii)
prior to the date of the making of any such Dividends, the Borrower shall
have delivered to the Administrative Agent (A) a certificate signed by a
Responsible Officer of the Borrower, certifying (x) compliance with clause
(i) of this proviso and with each of the other financial covenants
contained in Section 8.09, based on financial projections of the
------------
Borrower and its Subsidiaries attached to such certificate which have been
prepared on a Pro Forma Basis for the period from the proposed date of the
making of such Dividends to the Stated Maturity Date of the latest to
mature of the Term Loans and (y) that no Default or Event of Default exists
or will exist both before and after giving effect to such Dividends and (B)
a Pro Forma Compliance Certificate of the Borrower prepared as of the date
of the making of such Dividends, giving effect to the making of such
Dividends and the repurchase or redemption of the Permitted Holdings
Preferred Equity effected thereby as though such Dividends and repurchase
or redemption had been made on the first day of the applicable Measurement
Period relating to the date such Dividends are to be made;
(g) so long as no Default or Event of Default exists both before
and after the making thereof, (i) the Borrower may authorize, declare and
pay Dividends to Nexstar Finance Holdings out of the Net Issuance Proceeds
of Permitted Borrower Preferred Equity, and Nexstar Finance Holdings may
authorize, declare and pay corresponding Dividends to the New Holding
Company, to the extent necessary to permit the issuer of the Permitted
Holdings Preferred Equity to effect the payments, repurchase and/or
redemption of the Permitted Holdings Preferred Equity described in clause
(ii) below and (ii) the issuer of the Permitted Holdings Preferred Equity
may repurchase or redeem the Permitted Holdings Preferred Equity, in each
case using the proceeds of Permitted Holdings Unsecured Indebtedness
incurred in compliance with Section 8.05(k), Permitted Permanent Holdings
---------------
Preferred Equity issued in compliance with Section 8.05(k), equity
---------------
contributions or intercompany loans made to Nexstar Finance Holdings from
the other Parent Guarantors from the proceeds of any Capital Stock (other
than Disqualified Stock) of the Ultimate Parent or any Permitted Parent
Preferred Equity issued in compliance with Section 8.05(l) and/or Dividends
---------------
received from the Borrower in compliance with clause (i) above and/or
Section 8.10(f), as applicable;
---------------
(h) the issuer of the Permitted Holdings Preferred Equity may
repurchase or redeem the Permitted Holdings Preferred Equity using the
proceeds of equity contributions or intercompany loans made to Nexstar
Finance Holdings or the New Holding Company by the other Parent Guarantors
using the proceeds of equity contributions received by such other Parent
Guarantors, directly or indirectly, from ABRY L.P. II, ABRY L.P. III and/or
Sook (and/or other Persons exercising preemptive rights in connection with
such equity contributions by one or more of them);
(i) so long as no Default or Event of Default exists both before
and after the making thereof, after the fourth anniversary of the effective
date of the Existing Credit Agreement, (i) the Borrower may authorize,
declare and pay Dividends to Nexstar Finance Holdings in the amount
necessary to permit Nexstar Finance Holdings to make payments of cash
interest and/or accreted value which becomes due and payable with
111
respect to Permitted Holdings Unsecured Indebtedness and (ii) Nexstar
Finance Holdings may make such cash interest and/or accreted value payments
if, prior to the making of such payments of cash interest and/or accreted
value by Nexstar Finance Holdings, the Borrower shall have delivered to the
Administrative Agent a Pro Forma Compliance Certificate of the Borrower
prepared as of the date of the making of each such Dividend of the
Borrower, giving effect to each such Dividend of the Borrower and the
related payments of cash interest and/or accreted value to be made by
Nexstar Finance Holdings as though each such Dividend of the Borrower and
the related payments of cash interest and/or accreted value to be made by
Nexstar Finance Holdings had been made on the first day of the applicable
Measurement Period relating to the date each such Dividend by the Borrower
is to be made, and otherwise demonstrating that no Default or Event of
Default exists both before and after giving effect to each such Dividend
and related payments of cash interest and/or accreted value;
(j) so long as no Default or Event of Default exists both before
and after the making thereof, after the fourth anniversary of the effective
date of the Existing Credit Agreement, (i) the Borrower may authorize,
declare and pay Dividends to Nexstar Finance Holdings (and Nexstar Finance
Holdings may, in turn, authorize, declare and pay corresponding Dividends
to the New Holding Company, if the New Holding Company is the issuer of the
Permanent Holdings Preferred Equity) in the amount necessary to permit the
issuer of the Permitted Permanent Holdings Preferred Equity to make
payments of cash Dividends which become due and payable with respect to
Permitted Permanent Holdings Preferred Equity and (ii) the issuer of the
Permitted Permanent Holdings Preferred Equity may make such cash Dividends
if, prior to the making of such payments of cash Dividends by the issuer of
the Permitted Permanent Holdings Preferred Equity, the Borrower shall have
delivered to the Administrative Agent a Pro Forma Compliance Certificate of
the Borrower prepared as of the date of the making of each such Dividend of
the Borrower, giving effect to each such Dividend of the Borrower and the
related payments of cash Dividends to be made by Nexstar Finance Holdings
(and the New Holding Company, if applicable) as though each such Dividend
of the Borrower and the related payments of cash Dividends to be made by
Nexstar Finance Holdings (and the New Holding Company, if applicable) had
been made on the first day of the applicable Measurement Period relating to
the date each such Dividend by the Borrower is to be made, and otherwise
demonstrating that no Default or Event of Default exists both before and
after giving effect to each such Dividend and related payments of cash
Dividends;
(k) so long as no Default or Event of Default exists both before
and after the making thereof, after the fourth anniversary of the effective
date of the Existing Credit Agreement, (i) the Borrower may authorize,
declare and pay Dividends to Nexstar Finance Holdings and Nexstar Finance
Holdings may in turn make corresponding Dividends to one or more of the
Ultimate Parent's direct Subsidiaries, and such direct Subsidiaries of the
Ultimate Parent may in turn make corresponding Dividends to the Ultimate
Parent, in each case in the amount necessary to permit the Ultimate Parent
to make payments of cash Dividends which become due and payable with
respect to Permitted Parent Preferred Equity and (ii) the Ultimate Parent
may make such cash Dividends if, prior to the making of such payments of
cash Dividends by the Ultimate
112
Parent, the Borrower shall have delivered to the Administrative Agent a Pro
Forma Compliance Certificate of the Borrower prepared as of the date of the
making of each such Dividend, giving effect to each such Dividend of the
Borrower, Nexstar Finance Holdings and such direct Subsidiaries of the
Ultimate Parent and the related payments of cash Dividends to be made by
Nexstar Finance Holdings, the direct Subsidiaries of the Ultimate Parent
and the Ultimate Parent as though each such Dividend and the related
payments of cash Dividends had been made on the first day of the applicable
Measurement Period relating to the date each such Dividend is to be made,
and otherwise demonstrating that no Default or Event of Default exists both
before and after giving effect to each such Dividend and related payments
of cash Dividends;
(l) so long as no Default or Event of Default exists both before
and after the making thereof, the Borrower may make payments with respect
to Permitted Seller Subordinated Indebtedness if, prior to the making of
each such payment, the Borrower has delivered to the Administrative Agent a
Pro Forma Compliance Certificate of the Borrower prepared as of the date of
the making of each such payment, giving effect to each such payment as
though such payment had been made on the first day of the applicable
Measurement Period relating to the date such payment is to be made, and
otherwise demonstrating that no Default or Event of Default exists both
before and after giving effect to such payment;
(m) so long as no Default or Event of Default exists both before
and after the making thereof, the Borrower may make payments of cash
interest due and payable with respect to Permitted Borrower Unsecured
Indebtedness and Permitted Borrower Subordinated Indebtedness if, prior to
the making of such payments of cash interest, the Borrower has delivered to
the Administrative Agent a Pro Forma Compliance Certificate of the Borrower
prepared as of the date of the making of each such payment of cash
interest, giving effect to each such payment as though such payment had
been made on the first day of the applicable Measurement Period relating to
the date such payment is to be made, and otherwise demonstrating that no
Default or Event of Default exists both before and after giving effect to
such payment of cash interest; and
(n) so long as no Default or Event of Default exists both before
and after the making thereof, (i) the Borrower may authorize, declare and
pay Dividends to Nexstar Finance Holdings and Nexstar Finance Holdings may
in turn make corresponding Dividends to one or more of the Ultimate
Parent's direct Subsidiaries, and such direct Subsidiaries of the Ultimate
Parent may in turn make corresponding Dividends to the Ultimate Parent, in
each case in the amount necessary to permit the Ultimate Parent to make
payments to Nexstar Equity pursuant to the Nexstar Equity Reimbursement
Agreement to reimburse such entity for expenses in connection with
maintaining its corporate existence, filing tax returns, maintaining
directors' and officers' insurance and such other activities as are deemed
necessary by Nexstar Equity's board of directors and agreed to by the
Ultimate Parent, provided, that the aggregate amount of such Dividends
--------
and expenses to be reimbursed by the Ultimate Parent in any fiscal year
113
shall not exceed $40,000, and (ii) the Ultimate Parent may make such
payments to Nexstar Equity.
8.11 Advances, Investments and Loans. The Parent Guarantors and the
-------------------------------
Borrower will not, and will not permit their respective Subsidiaries to, lend
money or credit or make advances to any Person, or purchase or acquire any
Capital Stock, obligations or securities of, or any other interest in, or make
any capital contribution to, any Person, or purchase or own a futures contract
or otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents, except:
(a) the Nexstar Entities may invest in cash and Cash Equivalents;
(b) the Borrower may enter into Interest Rate Protection
Agreements in compliance with Section 8.05(g);
---------------
(c) the Credit Parties may make equity contributions to the
capital of their respective Subsidiaries that are Credit Parties (or to the
Holding Company, in the case of those Parent Guarantors that collectively
own all of the issued and outstanding Capital Stock of the Holding Company
other than Permitted Holdings Preferred Equity and Permitted Permanent
Holdings Preferred Equity);
(d) as permitted pursuant to Section 8.04(b);
---------------
(e) advances, loans and investments in existence on the Effective
Date and listed on Schedule 8.11(e) shall be permitted, without giving
----------------
effect to any additions thereto or replacements thereof (except those
additions or replacements which are existing obligations as of the
Effective Date);
(f) any Nexstar Entity may establish or create new Wholly-Owned
Subsidiaries (including the New Holding Company, in the case of the
Ultimate Parent) so long as (i) at least 30 days' prior written notice
thereof (or such lesser notice as is acceptable to the Administrative
Agent) is given to the Administrative Agent, (ii) the Capital Stock of such
new Subsidiary is pledged pursuant to, and to the extent required by, this
Agreement and the Pledge and Security Agreement and the certificates, if
any, representing Capital Stock, together with stock powers duly executed
in blank, are delivered to the Collateral Agent, (iii) such new Subsidiary
executes Guaranty Supplements, a Joinder to Security Agreement and a
Joinder to Pledge and Security Agreement, and (iv) such new Subsidiary, to
the extent requested by the Administrative Agent or the Majority Banks,
takes all actions required pursuant to Section 7.16. In addition, each
------------
new Wholly-Owned Subsidiary that is required to execute any Loan Document
shall execute and deliver, or cause to be executed and delivered, all other
relevant documentation of the type described in Section 5.01 as such new
------------
Subsidiary would have had to deliver if such new Subsidiary were a Credit
Party on the Effective Date;
114
(g) the Nexstar Entities may make loans and advances to their
respective employees in an aggregate principal amount for all Nexstar
Entities not to exceed $500,000 at any time outstanding plus amounts paid
----
pursuant to the Management Loan Guaranty;
(h) the Borrower may make intercompany loans and advances to any
Subsidiary of the Borrower which is a Credit Party, the New Holding Company
may make loans to Nexstar Finance Holdings as permitted under Section
-------
8.05(m) and Nexstar Finance Holdings may make loans to the Borrower as
-------
permitted under Section 8.05(m); and
---------------
(i) Indebtedness permitted under Section 8.05(o).
---------------
8.12 Limitation on Business Activities of the Nexstar Entities.
---------------------------------------------------------
(a) The Parent Guarantors shall not engage in any business
activities other than the ownership of Capital Stock of other Parent
Guarantors or the Borrower and shall have no significant assets other than
such Capital Stock or liabilities other than the Indebtedness permitted to
be incurred by them pursuant to Section 8.05 and liabilities for the
------------
payment of taxes.
(b) The Borrower and its Subsidiaries shall not engage in any
business other than the Television Broadcasting Business.
8.13 Sales or Issuances of Capital Stock. The Parent Guarantors and
-----------------------------------
the Borrower will not, and will not permit any of their respective Subsidiaries
to, sell or issue any of their Capital Stock to any Person; provided that (a)
--------
the Ultimate Parent may sell or issue (i) Permitted Parent Preferred Equity in
accordance with Section 8.05(l) and (ii) other Capital Stock other than
---------------
Disqualified Stock, in each case so long as the Net Issuance Proceeds therefrom
are applied as may be required by Section 2.07, (b) any Subsidiary of the
------------
Borrower may sell or issue Capital Stock to the Borrower or a Wholly-Owned
Subsidiary of the Borrower so long as relevant provisions of the Security
Documents and Section 7.16 are complied with in full, (c) any Parent Guarantor
------------
may sell or issue Capital Stock to any Wholly-Owned Subsidiary of the Ultimate
Parent so long as relevant provisions of the Security Documents and Section 7.16
------------
are complied with in full, (d) Nexstar Finance Holdings or the New Holding
Company may sell or issue Permitted Holdings Preferred Equity so long as the Net
Issuance Proceeds therefrom are applied in accordance with Section 8.05(f), and
---------------
(e) Nexstar Finance Holdings and the New Holding Company may sell or issue
Permitted Permanent Holdings Preferred Equity, and/or the Borrower may sell or
issue Permitted Borrower Preferred Equity, in each case as permitted by Section
-------
8.05(k), so long as the Net Issuance Proceeds thereof are applied as may be
-------
required by Section 2.07.
------------
8.14 No Waivers or Amendments. The Parent Guarantors and the Borrower
------------------------
will not, and will not permit any of their respective Subsidiaries to, (i)
permit any waiver, supplement, modification or amendment of the documentation
relating to any Indebtedness of any Credit Party having a principal balance (or
a Guaranty Obligation with respect to Indebtedness having a principal balance)
of more than $500,000 or any indenture or other
115
agreement evidencing, creating or governing any of the foregoing Indebtedness,
in each case other than any such amendment, modification or change which (A)
would extend the maturity or reduce the amount of any payment of principal
thereof or which would reduce the rate or extend the date for payment of
interest thereon or (B) is not adverse to the interests of the Banks in any
material respect, so long as, in each case, no consent fee is payable in
connection therewith, or (ii) modify their respective Charter Documents, to the
extent that any such modification of such Charter Documents would be adverse to
the Banks in any material respect.
ARTICLE IX.
EVENTS OF DEFAULT
-----------------
9.01 Event of Default. Any of the following shall constitute an
----------------
"Event of Default":
----------------
(a) Non-Payment. The Borrower fails to pay, (i) when and as
-----------
required to be paid herein, any amount of principal of any Loan or any
amount of any Letter of Credit Obligation, or (ii) within five days after
the same shall become due and payable, any interest, fee or any other
amount payable hereunder; or
(b) Representation or Warranty. Any representation or warranty
--------------------------
by any Credit Party made or deemed made herein or in any other Loan
Document, or which is contained in any certificate, document or financial
or other statement by a Credit Party, or any of their respective
Responsible Officers, furnished at any time under this Agreement or in or
under any other Loan Document, shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) Specific Defaults. Any Borrower or any Parent Guarantor
-----------------
fails to perform or observe any term, covenant or agreement contained in
Sections 7.03(a), 7.05, 7.06, 7.07, 7.14 or Article VIII; or
---------------- ---- ---- ---- ---- ------------
(d) Other Defaults. Any Credit Party fails to perform or
--------------
observe any other term or covenant contained in this Agreement or any other
Loan Document, and such default shall continue unremedied for a period of
30 days after the date upon which written notice thereof is given to the
Borrower by the Administrative Agent or any Bank; or
(e) Cross-Default. Any Credit Party (i) fails to make any
-------------
payment or dividend, as applicable, in respect of Permitted Borrower
Preferred Equity, Permitted Borrower Unsecured Indebtedness, Permitted
Permanent Holdings Preferred Equity, Permitted Holdings Unsecured
Indebtedness or Permitted Parent Preferred Equity or any other Indebtedness
having an aggregate principal amount of $3,500,000 or more when due
(whether by scheduled maturity, required prepayment, required redemption or
repurchase, acceleration, demand, or otherwise) and such failure continues
after the applicable grace or notice period, if any, specified in the
document relating thereto on the date of such failure; or (ii) fails to
perform or observe any other condition or covenant, or
116
any other event shall occur or condition exist, under any agreement or
instrument relating to Permitted Borrower Preferred Equity, Permitted Borrower
Unsecured Indebtedness, Permitted Permanent Holdings Preferred Equity, Permitted
Holdings Unsecured Indebtedness or Permitted Parent Preferred Equity or any
other such Indebtedness, and such failure continues after the applicable grace
or notice period, if any, specified in the document relating thereto on the date
of such failure if the effect of such failure, event or condition is to cause,
or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, such Indebtedness
to be declared to be redeemed, repurchased or due and payable prior to its
stated maturity; or an Event of Default (as defined in the Bastet/Mission Credit
Agreement) shall occur and be continuing under the Bastet/Mission Credit
Agreement; or
(f) Insolvency; Voluntary Proceedings. Any Credit Party (i)
---------------------------------
commences any Insolvency Proceeding with respect to itself; or (ii) takes
any action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
-----------------------
Proceeding is commenced or filed against any Credit Party or any writ,
judgment, warrant of attachment, execution or similar process, is issued or
levied against a substantial part of any Credit Party's properties, and any
such proceeding or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be released,
vacated or fully bonded, within 60 days after commencement, filing or levy;
(ii) any Credit Party admits the material allegations of a petition against
it in any Insolvency Proceeding, or an order for relief (or similar order
under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) any
Credit Party acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of
its property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to
-----
a Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of any Credit Party or an ERISA
Affiliate under Title IV of ERISA to the Pension Plan, Multiemployer Plan
or the PBGC in an aggregate amount in excess of $1,000,000; (ii) the
commencement or increase of contributions to, or the adoption of or the
amendment of a Pension Plan by any Credit Party or an ERISA Affiliate which
has resulted or could reasonably be expected to result in an increase in
Unfunded Pension Liability among all Pension Plans with Unfunded Pension
Liabilities in an aggregate amount in excess of $1,000,000; (iii) any of
the representations and warranties contained in Section 6.07 shall cease to
------------
be true and correct in any material respect and which cessation has
resulted or could reasonably be expected to result in a Material Adverse
Effect; or (iv) any Credit Party or an ERISA Affiliate shall fail to pay
when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan, which has resulted or could
reasonably be expected to result in a Material Adverse Effect; or
117
(i) Judgments. One or more non-interlocutory judgments, orders
---------
or decrees shall be entered against any Credit Party involving in the
aggregate a liability (not covered by independent third-party insurance) as
to any single or related series of transactions, incidents or conditions,
of $3,500,000 or more, and the same shall remain unsatisfied, unvacated and
unstayed pending appeal for a period of 30 days after the entry thereof; or
(j) Change of Control. Any Change of Control shall occur; or
-----------------
(k) Guaranty Agreements. Any Guaranty Agreement or any provision
-------------------
thereof shall for any reason cease to be in full force and effect or valid
and binding on or enforceable against any Credit Party or a Credit Party
shall so state in writing or bring an action to limit its obligations or
liabilities thereunder; or any Credit Party shall fail to perform any of
its obligations thereunder; or
(l) Security Documents. Any provision of any Security Document
------------------
other than the Mortgages shall (other than in accordance with the terms
thereof) cease to be in full force and effect or cease to create a valid,
security interest in the Collateral (other than an immaterial portion of
the Collateral) purported to be covered thereby or such security interest
shall cease to be a valid and first priority security interest (subject
only to Permitted Liens), or any party thereto shall default in the
performance of its obligations thereunder beyond applicable periods of
grace, in each case other than as a result of any action or inaction by the
Collateral Agent, the Administrative Agent or any Bank; or
(m) Termination of Material Licenses. Any Credit Party shall
--------------------------------
fail to have all required authorizations and licenses (including FCC
Licenses), the failure of which would have a Material Adverse Effect
individually or in the aggregate; or
(n) Termination of Network Affiliation Agreements. A Network
---------------------------------------------
Affiliation Agreement with a Major Television Network (other than a Network
Affiliation Agreement that is not in respect of the primary affiliation of
a Station or a Network Affiliation Agreement which is replaced by another
network affiliation agreement with a Major Television Network before it
ceases to be effective) ceases to be in full force and effect, if either
(i) after giving effect to such cessation, three or more Stations are
Former Major Network Affiliates, or (ii) the Station that is subject to
such Network Affiliation Agreement is a Significant Station at the time of
such cessation.
9.02 Remedies. If any Event of Default occurs and is continuing, the
--------
Administrative Agent shall, at the request of, or may, with the consent of, the
Majority Banks:
(a) declare the Commitment of each Bank to make Loans and any
obligation of the Issuing Bank to issue Letters of Credit to be terminated,
whereupon such Commitments and obligation shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or
118
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by each Credit Party;
(c) demand that the Borrower Cash Collateralize Letter of Credit
Obligations to the extent of outstanding and wholly or partially undrawn
Letters of Credit, whereupon the Borrower shall so Cash Collateralize such
Letters of Credit to that extent;
(d) exercise on behalf of itself, the Issuing Bank and the Banks
all rights and remedies available to it, the Issuing Bank and the Banks
under the Loan Documents or applicable laws;
(e) apply any cash collateral as provided in Section 3.07 to the
------------
payment of outstanding Obligations; and/or
(f) take all actions to enforce the rights and remedies of the
Collateral Agent under the Security Documents;
provided, however, that upon the occurrence of any event specified above in
--------
Section 9.01(f) or (g) with respect to any Credit Party (in the case of clause
--------------- --- ------
(i) of paragraph (g) upon the expiration of the 60-day period mentioned
--- -------------
therein), the obligation of each Bank to make Loans and any obligation of the
Issuing Bank to issue Letters of Credit shall automatically terminate, and all
reimbursement obligations under Letters of Credit and the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable without further act or notice by the
Administrative Agent, the Issuing Bank or any other Bank, which are hereby
expressly waived by the Borrower and each Parent Guarantor.
If at the end of any Fiscal Quarter there exists an Event of Default
with respect to one or more of Sections 8.09(a), (b), (c) and/or (d), the
---------------- --- --- ---
Borrower may, prior to the date upon which financial statements for such Fiscal
Quarter are required to be delivered pursuant to Section 7.01, (i) cure such
------------
Events of Default under Sections 8.09(a) and/or (b) by receiving equity
---------------- ---
contributions from ABRY L.P. II, ABRY L.P. III and/or Sook (and/or other Persons
exercising preemptive rights in connection with an equity issuance to one or
more of them), or a payment pursuant to an ABRY Contribution Agreement, and
applying the proceeds therefrom to repay Loans and/or to reduce Commitments so
that the Consolidated Total Leverage Ratio and the Consolidated Senior Leverage
Ratio, calculated on a Pro Forma Basis after giving effect to any such equity
contributions and repayments, as of the last day of the Fiscal Quarter for which
such Event of Default occurred, do not exceed the relevant ratios set forth in
Sections 8.09(a) and (b); and (ii) cure such Event or Events of Default under
---------------- ---
Sections 8.09(c) and/or (d) by receiving equity contributions from ABRY L.P. II,
---------------- ---
ABRY L.P. III and/or Sook (and/or other Persons exercising preemptive rights in
connection with an issuance to one or more of them), and applying the proceeds
therefrom to repay Loans, the amount of which shall be added on a non-annualized
basis to increase Consolidated Operating Cash Flow for the Borrower and its
Subsidiaries for the Fiscal Quarter during which such Event of Default occurred
so that each of the Consolidated Interest Coverage Ratio and the Pro Forma Debt
Service Ratio, in each case calculated on a Pro Forma Basis after giving effect
to any such addition and application of
119
proceeds, as of the last day of the Fiscal Quarter for which such Event of
Default occurred, shall not be less than the relevant ratios set forth in
Section 8.09(c) and (d). Other than with respect to payments required to be
--------------- ---
made under an ABRY Capital Contribution Agreement, the provisions of this
paragraph may not be utilized in consecutive quarters, nor more than four times
prior to the Maturity Date.
9.03 Rights Not Exclusive. The rights provided for in this
--------------------
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
ARTICLE X.
THE ADMINISTRATIVE AGENT, THE ISSUING BANK
AND THE LEAD ARRANGER AND BOOK MANAGER
--------------------------------------
10.01 Appointment and Authorization.
-----------------------------
(a) Each of the Banks and the Issuing Bank hereby irrevocably
appoint, designate and authorize the Administrative Agent to take such
action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth
herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Bank or the Issuing Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise
exist against the Administrative Agent.
(b) The Issuing Bank shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Article X with
---------
respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit issued by it or proposed to be issued by
it and the Letter of Credit Applications pertaining to the Letters of
Credit as fully as if the term "Administrative Agent," as used in this
--------------------
Article X, included the Issuing Bank with respect to such acts or
---------
omissions, and (ii) as additionally provided in this Agreement with respect
to the Issuing Bank.
10.02 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
120
10.03 Liability of Administrative Agent. None of the
---------------------------------
Administrative Agent, its Affiliates or any of their officers, directors,
employees, agents or attorneys-in-fact (collectively, the "Administrative Agent-
---------------------
Related Persons") shall (a) be liable for any action taken or omitted to be
---------------
taken by any of them under or in connection with this Agreement or any other
Loan Document (except for their own gross negligence or willful misconduct), or
(b) be responsible in any manner to any of the Banks for any recital, statement,
representation or warranty made by any Credit Party or any Affiliate thereof, or
any officer thereof, contained in this Agreement or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Administrative Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Credit Party or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Administrative
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of any Credit Party or any Affiliate of
any Credit Party.
10.04 Reliance by Administrative Agent.
--------------------------------
(a) The Banks agree that the Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel to the Nexstar
Entities), independent accountants and other experts selected by the
Administrative Agent. The Banks agree that the Administrative Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Majority Banks or, as required by Section
-------
11.01, all the Banks as it deems appropriate and, if it so requests, it
-----
shall first be indemnified to its satisfaction by the Banks against any and
all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Majority Banks or, as required by Section 11.01, all the
-------------
Banks, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Sections 5.01 and 5.02 as they relate to the occurrence of the
------------- ----
Effective Date and the obligation of each Bank to make Loans hereunder and
the obligation of the Issuing Bank to issue Letters of Credit on the
Initial Borrowing Date, each Bank that has signed a counterpart hereof and
delivered the same to the Administrative Agent shall be deemed to have
consented to, approved or accepted or to be satisfied with each document or
other matter either sent by the Administrative Agent to such Bank for
consent, approval, acceptance or satisfaction, or required hereunder to be
consented to or approved by or acceptable or satisfactory to such Bank,
unless an officer of the Administrative
121
Agent responsible for the transactions contemplated by the Loan Documents
shall have received notice from such Bank prior to the Effective Date
specifying in reasonable detail its objection thereto and such objection
shall not have been withdrawn by notice to the Administrative Agent to that
effect.
(c) Neither the Syndication Agent, in its capacity as such, nor
the Documentation Agent, in its capacity as such, shall have any rights,
duties or obligations hereunder or under any of the Loan Documents.
10.05 Notice of Default. The Administrative Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Banks or the Issuing Bank, unless the Administrative Agent shall have received
written notice from a Bank or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give notice thereof to the Banks and the
Issuing Bank. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be requested by the Majority Banks in
accordance with Article IX; provided, however that unless and until the
---------- --------
Administrative Agent shall have received any such request, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Banks.
10.06 Credit Decision. Each Bank expressly acknowledges that none of
---------------
the Administrative Agent-Related Persons have made any representation or
warranty to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of any Nexstar Entity or any Affiliate of
any Nexstar Entity, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Bank. Each Bank represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Nexstar Entities and their Affiliates, and all
applicable bank regulatory laws relating to the transactions contemplated
thereby, and made its own decision to enter into this Agreement and extend
credit to the Borrower hereunder. Each Bank also represents that it will,
independently and without reliance upon the Administrative Agent and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Nexstar Entities and their Affiliates. Except for
notices, reports and other documents expressly herein required to be furnished
to the Banks by the Administrative Agent, the Administrative Agent shall not
have any duty or responsibility to provide any Bank with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Nexstar Entities and their
Affiliates which may come into the possession of any of the Administrative
Agent-Related Persons.
122
10.07 Indemnification. Whether or not the transactions contemplated
---------------
hereby shall be consummated, the Banks shall indemnify, upon demand, each of the
Administrative Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to do
so), ratably from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and disbursements
of any kind whatsoever which may at any time (including at any time following
the expiration of the Letters of Credit and the repayment of the Loans and the
termination or resignation of the Administrative Agent) be imposed on, incurred
by or asserted against any such Person in any way relating to or arising out of
this Agreement, any other Loan Document or any document contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by any such Person under or in connection with
any of the foregoing; provided, however that no Bank shall be liable for the
--------
payment to any of the Administrative Agent-Related Persons of any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent arising from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein to the extent that the Administrative Agent is not reimbursed
for such expenses by or on behalf of the Borrower. Without limiting the
generality of the foregoing, if the Internal Revenue Service or any other
Governmental Authority of the United States or other jurisdiction asserts a
claim that the Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Bank (because the appropriate form was not
delivered, was not properly executed, or because such Bank failed to notify the
Administrative Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Bank shall indemnify the Administrative Agent fully for all amounts paid as
a result thereof, directly or indirectly, by the Administrative Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Administrative Agent under this
Section 10.07, together with all costs and expenses (including Attorney Costs).
-------------
The obligation of the Banks in this Section 10.07 shall survive the payment of
-------------
all Obligations hereunder.
10.08 Administrative Agent in Individual Capacity. Bank of America
-------------------------------------------
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory or other business with, the
Nexstar Entities and their respective Affiliates as though Bank of America were
not the Administrative Agent or the Issuing Bank hereunder and without notice to
or consent of the Banks. With respect to its Loans and participation in Letters
of Credit, Bank of America shall have the same rights and powers under this
Agreement and the other Loan Documents as any other Bank and may exercise the
same as though it were not the Administrative Agent or an Issuing Bank, and the
terms "Bank" and "Banks" shall include Bank of America in its individual
---- -----
capacity.
123
10.09 Successor Administrative Agent. The Administrative Agent may
------------------------------
resign as Administrative Agent upon 30 days' notice to the Banks and the
Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement, the Majority Banks shall appoint from among the Banks a
successor agent for the Banks which successor agent shall be subject to the
approval of the Borrower if no Event of Default has occurred and is continuing,
such approval not to be unreasonably withheld or delayed. If no successor agent
is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Banks, and subject to the approval of the Borrower if no Event of
Default has occurred and is continuing, such approval not to be unreasonably
withheld or delayed, a successor agent from among the Banks or any Bank
Affiliate. Any successor Administrative Agent appointed under this Section
-------
10.09 shall be a commercial bank organized under the laws of the United States
-----
or any State thereof, and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
--------------------
means such successor agent and the retiring Administrative Agent's appointment,
powers and duties as Administrative Agent shall be terminated. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article X and Sections 11.04 and 11.05 shall inure to its
--------- -------------- -----
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor agent has accepted
appointment as Administrative Agent by the date which is 30 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Majority Banks appoint a successor
agent as provided for above.
10.10 The Lead Arranger and Book Manager. The Lead Arranger and Book
----------------------------------
Manager, in such capacity, shall have no duties or responsibilities, and shall
incur no obligations or liabilities, under this Agreement. Each Bank
acknowledges that it has not relied, and will not rely, on the Lead Arranger and
Book Manager in deciding to enter into this Agreement.
ARTICLE XI.
MISCELLANEOUS
-------------
11.01 Amendments and Waivers.
----------------------
(a) Subject to the terms and provisions of Sections 2.01(c) and
----------------
2.16, no amendment or waiver of any provision of this Agreement or any
----
other Loan Document and no consent with respect to any departure by the
Borrower or any other Credit Party therefrom, shall be effective unless the
same shall be in writing and signed by the Borrower, each Credit Party
affected thereby and the Majority Banks and acknowledged by the
Administrative Agent, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given; provided that no such waiver, amendment, or consent shall,
--------
unless in writing and signed by all the Banks and
acknowledged by the Administrative Agent, extend the date
124
for or change the amount of any mandatory reduction of the Aggregate
Combined Revolving Commitment under Section 2.05(d), extend the date for or
---------------
change the amount of any principal installment due on the Term Loans under
Section 2.08(a), or postpone or delay any date for any payment of interest
---------------
or fees due to the Banks (or any of them) under any other Loan Document;
and provided further that no such waiver, amendment or consent shall,
--------
unless in writing and signed by all the Banks affected thereby and
acknowledged by the Administrative Agent, do any of the following:
(i) increase (except as provided in Sections 2.01(c) and 2.16) or
---------------- ----
extend the Commitment of such Bank, or reinstate any Commitment
terminated pursuant to Section 9.02(a), except as provided in Section
---------------- -------
11.07;
-----
(ii) increase (except as provided in Sections 2.01(c) and 2.16)
---------------- ----
or extend the Aggregate Commitment;
(iii) extend the Maturity Date; (iv) reduce the principal of, or
the rate of interest specified herein on any Loan or Letter of Credit
Borrowing (other than with respect to post-default rates), or of any
fees or other amounts payable hereunder (including, without
limitation, any mandatory prepayments pursuant to Section 2.07 and any
------------
amendments to the definitions related thereto) or under any other Loan
Document or reduce the Applicable Margin provided for herein;
(v) reduce the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which shall be required for the
Banks or any of them to take any action hereunder;
(vi) amend this Section 11.01, change the percentage set forth in
-------------
definition of the term "Majority Banks" or amend any provision of
--------------
this Agreement expressly requiring the consent of all the Banks in
order to take or refrain from taking any action;
(vii) release the guaranty of any Guarantor under its Guaranty
Agreement, except in accordance with the express provisions hereof or
thereof, or release all or substantially all of the Collateral except,
in all such cases in accordance with the express provisions of this
Agreement or the Security Documents;
and, provided further that (x) no amendment, waiver or consent shall, unless in
--------
writing and signed by the Issuing Bank in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Issuing Bank
under this Agreement or any Letter of Credit Related Document, (y) no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent in addition to the Majority Banks or all the Banks, as the case may be,
affect the rights or duties of the Administrative Agent under this Agreement or
any other Loan Document and (z) no amendment, waiver or consent shall, unless in
writing and signed by the Collateral Agent in addition to the
125
Majority Banks or all the Banks, as the case may be, affect the rights or duties
of the Collateral Agent under the Security Documents or any other Loan Document.
Notwithstanding anything to the contrary contained in this Agreement, Interest
Rate Protection Agreements shall not be deemed to be Loan Documents for purposes
of this Section 11.01(a).
----------------
(b) If, in connection with any proposed change, waiver, discharge
or any termination to any of the provisions of this Agreement as
contemplated by clauses (ii) through (vii), inclusive, of the second
------------ -----
proviso to Section 11.01(a), the consent of the Majority Banks is obtained
----------------
but the consent of one or more other Banks whose consent is required is not
obtained, then the Borrower shall have the right, so long as all non-
consenting Banks whose individual consent is required are treated the same,
to replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 4.08(b) so long as at such time of
---------------
such replacement, each such Replacement Bank consents to the proposed
change, waiver, discharge or termination.
11.02 Notices.
-------
(a) All notices, requests and other communications provided for
hereunder shall be in writing (including, unless the context expressly
otherwise provides, facsimile transmission) and mailed, transmitted by
facsimile or delivered, (i) if to the Borrower and/or the Parent
Guarantors, to the address or facsimile number specified for notices on the
applicable signature page hereof; (ii) if to the Administrative Agent, the
Issuing Bank or any Bank, to the notice address set forth on Schedule
--------
1.01(A); or (iii) as directed to the Parent Guarantors, the Borrower or the
-------
Administrative Agent, to such other address as shall be designated by such
party in a written notice to the other parties, and as directed to each
other party, at such other address as shall be designated by such other
party in a written notice to the Parent Guarantors, the Borrower and the
Administrative Agent.
(b) All such notices, requests and communications shall be
effective when delivered or transmitted by facsimile machine, respectively,
provided that any matter transmitted by facsimile (i) shall be immediately
--------
confirmed by a telephone call to the recipient at the number specified on
the applicable signature page hereof or on Schedule 1.01(A), and (ii) shall
----------------
be followed promptly by a hard copy original thereof; except that notices
to the Administrative Agent shall not be effective until actually received
by the Administrative Agent, and notices pursuant to Article III to the
-----------
Issuing Bank shall not be effective until actually received by the Issuing
Bank.
(c) The Parent Guarantors and the Borrower acknowledge and agree
that any agreement of the Administrative Agent, the Issuing Bank and the
Banks set forth in Articles II and III herein to receive certain notices by
----------- ---
telephone and facsimile is solely for the convenience and at the request of
the Parent Guarantors and the Borrower. The Administrative Agent, the
Issuing Bank and the Banks shall be entitled to rely on the authority of
any Person purporting to be a Person authorized by any Parent Guarantor or
the Borrower to give such notice and the Administrative Agent, the Issuing
Bank and the
126
Banks shall not have any liability to the Parent Guarantors or the Borrower
or any other Person on account of any action taken or not taken by the
Administrative Agent, the Issuing Bank or the Banks in reliance upon such
telephonic or facsimile notice. The obligation of the Borrower to repay the
Loans and drawings under Letters of Credit shall not be affected in any way
or to any extent by any failure by the Administrative Agent, the Issuing
Bank and the Banks to receive written confirmation of any telephonic or
facsimile notice or the receipt by the Administrative Agent, the Issuing
Bank and the Banks of a confirmation which is at variance with the terms
understood by the Administrative Agent, the Issuing Bank or the Banks to be
contained in the telephonic or facsimile notice.
11.03 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Administrative Agent, the Issuing Bank
or any Bank, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any other rights, remedies, powers and/or privileges available at law or in
equity.
11.04 Costs and Expenses. The Borrower shall, whether or not the
------------------
transactions contemplated hereby shall be consummated:
(a) pay or reimburse on demand all reasonable costs and expenses
incurred by the Administrative Agent, in connection with the development,
preparation, delivery, administration, syndication of the Commitments under
and execution of, and any amendment, supplement, waiver or modification to
(in each case, whether or not consummated), this Agreement, any other Loan
Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including the Attorney Costs incurred by the Administrative Agent
with respect thereto;
(b) pay or reimburse each Bank, the Issuing Bank and the
Administrative Agent on demand for all reasonable costs and expenses
incurred by them in connection with the enforcement, attempted enforcement,
or preservation of any rights or remedies (including in connection with any
"workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding) under this Agreement, any other Loan Document, and
any such other documents, including Attorney Costs or the cost of any
consultants incurred by the Administrative Agent and any Bank; and
(c) pay or reimburse the Administrative Agent and the Issuing
Bank on demand for all appraisal (including, without duplication, the
allocated cost of internal appraisal services), audit, environmental
inspection and review (including, without duplication, the allocated cost
of such internal services), search and filing costs, fees and expenses,
incurred or sustained by the Administrative Agent in connection with the
matters referred to under paragraphs (a) and (b) of this Section 11.04.
---------- --- --- -------------
127
11.05 INDEMNITY. WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY
---------
SHALL BE CONSUMMATED, THE BORROWER SHALL PAY, INDEMNIFY, AND HOLD EACH BANK, THE
ISSUING BANK, THE ADMINISTRATIVE AGENT AND OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, OTHER AFFILIATES, EMPLOYEES, COUNSEL, AGENTS AND ATTORNEYS-IN-FACT
(EACH, AN "INDEMNIFIED PERSON") HARMLESS FROM AND AGAINST ANY AND ALL
------------------
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, CHARGES, EXPENSES OR DISBURSEMENTS (INCLUDING ATTORNEY COSTS) OF ANY KIND
OR NATURE WHATSOEVER WITH RESPECT TO (A) ANY INVESTIGATION, LITIGATION OR
PROCEEDING (INCLUDING ANY INSOLVENCY PROCEEDING) RELATED TO THIS AGREEMENT OR
THE LOAN DOCUMENTS OR THE LOANS OR THE LETTERS OF CREDIT, OR THE USE OF THE
PROCEEDS THEREOF, WHETHER OR NOT ANY INDEMNIFIED PERSON IS A PARTY THERETO AND
(B) THE ACTUAL OR ALLEGED PRESENCE OF HAZARDOUS MATERIALS IN THE AIR, SURFACE
WATER OR GROUNDWATER OR ON THE SURFACE OR SUBSURFACE OF ANY PROPERTY OWNED OR AT
ANY TIME OPERATED BY ANY CREDIT PARTY, THE GENERATION, STORAGE, TRANSPORTATION,
HANDLING OR DISPOSAL OF HAZARDOUS MATERIALS AT ANY LOCATION BY ANY CREDIT PARTY,
WHETHER OR NOT OWNED OR OPERATED BY ANY CREDIT PARTY, THE NONCOMPLIANCE OF ANY
PROPERTY WITH ENVIRONMENTAL LAWS (INCLUDING APPLICABLE PERMITS THEREUNDER)
APPLICABLE TO ANY PROPERTY, OR ANY ENVIRONMENTAL CLAIM ASSERTED AGAINST ANY
CREDIT PARTY OR ANY PROPERTY OWNED OR AT ANY TIME OPERATED BY ANY CREDIT PARTY
(ALL THE FOREGOING DESCRIBED IN (A) AND (B) ABOVE, COLLECTIVELY, THE
"INDEMNIFIED LIABILITIES") INCLUDING INDEMNIFIED LIABILITIES ARISING FROM THE
------------------------
NEGLIGENCE OF SUCH INDEMNIFIED PERSON; PROVIDED THAT THE BORROWER SHALL HAVE NO
--------
OBLIGATION HEREUNDER TO ANY INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED
LIABILITIES ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY
INDEMNIFIED PERSON AS THE SAME IS DETERMINED BY A FINAL JUDGMENT OF A COURT OF
COMPETENT JURISDICTION. THE OBLIGATIONS IN THIS SECTION 11.05 SHALL SURVIVE
-------------
PAYMENT OF ALL OTHER OBLIGATIONS.
11.06 Successors and Assigns. The provisions of this Agreement shall
----------------------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent and each Bank.
11.07 Assignments, Participations, etc.
--------------------------------
(a) Any Bank may, with the written consent of the Administrative
Agent and, so long as no Default or Event of Default shall then exist, the
Borrower, in each case which consent shall not be unreasonably withheld, at
any time assign and delegate to one or more Eligible Assignees (each an
"Assignee") all, or any part of the Loans, the Commitments and the other
--------
rights and obligations of such Bank hereunder;
128
provided, however, that (i) any such assignment to an Eligible Assignee
--------
shall be in a minimum amount equal to $1,000,000 or the then remaining
Commitment of such Bank and (ii) provided further, that the Borrower, the
--------
Issuing Bank and the Administrative Agent may continue to deal solely and
directly with such Bank in connection with the interest so assigned to an
Assignee until (x) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Administrative
Agent by such Bank and the Assignee; (y) such Bank and its Assignee shall
have delivered to the Borrower and the Administrative Agent an Assignment
and Assumption; and (z) in the case of any assignment to an Assignee which
is not already a Bank or its Affiliate, the assignor Bank or Assignee has
paid to the Administrative Agent a processing fee in the amount of $3,500;
provided that with respect to any Bank, Bank Affiliate or Related Fund,
--------
such processing fee shall be in the amount of $1,500. The Borrower and the
Administrative Agent hereby grant the consent required by the immediately
preceding sentence with respect to any assignment that any Bank may from
time to time make to any Affiliate of such Bank or Related Fund provided
--------
that the Borrower and the Administrative Agent are each given at least
three (3) Business Days' written notice prior to the effective date of such
assignment.
(b) From and after the date that the Administrative Agent
notifies the assignor Bank that the requirements of Section 11.07(a)
----------------
above are satisfied, (i) the Assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned
to it pursuant to such Assignment and Assumption, shall have the rights and
obligations of a Bank under the Loan Documents, and (ii) the assignor Bank
shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment
and Assumption, relinquish its rights and be released from its obligations
under the Loan Documents. Anything herein to the contrary notwithstanding,
any Bank assigning all of its Loans, Commitments and other rights and
obligations hereunder to an Assignee shall continue to have the benefit of
all indemnities hereunder following such assignment.
(c) Immediately upon each Assignee's making its payment under the
Assignment and Assumption, this Agreement shall be deemed to be amended to
the extent, but only to the extent, necessary to reflect the addition of
the Assignee and the resulting adjustment of the Aggregate Commitment
arising therefrom. The Commitment allocated to an Assignee shall reduce the
Commitment of the assigning Bank pro tanto.
--- -----
(d) Any Bank may at any time sell to one or more banks or other
Persons not Affiliates of any Credit Party (a "Participant") participating
-----------
interests in any Loans, Term Commitment, Revolving Commitment or
Incremental Commitment of such Bank and the other interests of such Bank
(the "Originating Bank") hereunder and under the other Loan Documents;
----------------
provided, however, that (i) the Originating Bank's obligations under this
--------
Agreement shall remain unchanged, (ii) the Originating Bank shall remain
solely responsible for the performance of such obligations, (iii) the
Borrower, the Issuing Bank and the Administrative Agent shall continue to
deal solely and directly with the Originating Bank in connection with the
Originating Bank's rights and obligations under
129
this Agreement and the other Loan Documents, and (iv) no Bank shall
transfer or grant any participating interest under which the Participant
shall have rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, provided that
--------
such Participant shall have the right to approve any amendment, consent or
waiver described in clauses (i), (iii) and (iv) of the second proviso to
------------------ ----
Section 11.01. In the case of any such participation, the Participant
-------------
shall be entitled to the benefit of Sections 4.01, 4.03 and 11.05, subject
------------- ---- -----
to the same limitations, as though it were also a Bank hereunder, subject
to paragraph (f) below, and if amounts outstanding under this Agreement are
-------------
due and payable and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the extent permitted under applicable law, be deemed
to have the right of set-off in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as a Bank under this
Agreement.
(e) Notwithstanding any other provision contained in this
Agreement or any other Loan Document to the contrary, any Bank may assign
all or any portion of the Loans held by it to any Federal Reserve Bank or
the United States Treasury as collateral security pursuant to Regulation A
of the Federal Reserve Board and any operating circular issued by such
Federal Reserve Bank, provided that any payment in respect of such
--------
assigned Loans made by the Borrower or for the account of the assigning or
pledging Bank in accordance with the terms of this Agreement shall satisfy
the Borrower's obligations hereunder in respect to such assigned Loans to
the extent of such payment. No such assignment shall release the assigning
Bank from its obligations hereunder.
(f) No Participant shall be entitled to receive any greater
payment under any provision of this Agreement than such Originating Bank
would have been entitled to receive with respect to the rights transferred
unless such transfer is made with the Borrower's prior written consent.
(g) Any Bank that is an Approved Fund may pledge all or any
portion of its rights in connection with this Agreement to the trustee for
holders of obligations owed, or securities issued, by such Approved Fund as
security for such obligations or securities provided that any foreclosure
--------
or other exercise of remedies by such trustee shall be subject to the
provisions of this Section 11.07 regarding assignments in all respects. No
-------------
pledge described in the immediately preceding clause shall release any
Approved Fund from its obligations hereunder.
11.08 Confidentiality. The Administrative Agent, the Collateral
---------------
Agent, the Issuing Bank and each Bank agree to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" by any Credit Party and provided to it
by any Credit Party or any Subsidiary of any Credit Party, or by the
Administrative Agent on any Credit Party's or such Subsidiary's behalf, in
connection with this Agreement or any other Loan Document, and neither it nor
any of its Affiliates shall use any such information for any purpose or in any
manner other than pursuant to the terms contemplated
130
by this Agreement; except to the extent such information (a) was or becomes
generally available to the public other than as a result of a disclosure by such
Person or any of its Affiliates, or (b) was or becomes available on a non-
confidential basis from a source other than any Credit Party, provided that such
--------
source is not bound by a confidentiality agreement with any Credit Party, known
to such Person; provided further, however, that the Administrative Agent, the
--------
Collateral Agent, the Issuing Bank and each Bank may disclose such information
(i) at the request or pursuant to any requirement of any Governmental Authority
to which the Bank is subject or in connection with an examination of such Bank
by any such authority; (ii) pursuant to subpoena or other court process; (iii)
when required to do so in accordance with the provisions of any applicable
Requirement of Law; (iv) to the extent reasonably required in connection with
any litigation or proceeding to which such Person or its Affiliates may be
party; (v) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; and (vi) to such Person's
independent auditors, other professional advisors and employees of such Person's
Bank Affiliates (or any Affiliate of such Person engaged in capital market
transactions generally) retained by such Person in connection with this
Agreement. Notwithstanding the foregoing, the Borrower authorizes the
Administrative Agent, the Collateral Agent, the Issuing Bank and each Bank to
disclose to any Participant, any Assignee or any direct or indirect counter-
party in any Interest Rate Protection Agreement to which the disclosing Bank is
a party (each, a "Transferee") and to any prospective Transferee, such
----------
financial and other information in such Person's possession concerning the
Credit Parties or their respective Subsidiaries which has been delivered to
Administrative Agent or the Banks pursuant to this Agreement or which has been
delivered to the Administrative Agent or the Banks by the Credit Parties in
connection with such Person's credit evaluation of the Credit Parties prior to
entering into this Agreement; provided that, unless otherwise agreed by the
--------
Borrower, such Transferee agrees in writing to the Borrower to keep such
information confidential to the same extent required of the Banks hereunder.
11.09 Set-off. In addition to any rights and remedies of the Banks
-------
provided by law, if an Event of Default occurs and is continuing, each Bank is
authorized at any time and from time to time, without prior notice to any Credit
Party, any such notice being hereby waived to the fullest extent permitted by
law, to set off and apply, to the extent permitted by applicable law, any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing to, such Bank to or for
the credit or the account of any Credit Party against any and all Obligations
owing to such Bank, now or hereafter existing, irrespective of whether or not
the Administrative Agent or such Bank shall have made demand under this
Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured. Each Bank agrees promptly to notify the Borrower and
the Administrative Agent after any such set-off and application made by such
Bank; provided, however, that the failure to give such notice shall not affect
--------
the validity of such set-off and application. The rights of each Bank under
this Section 11.09 are in addition to the other rights and remedies (including
-------------
other rights of set-off) which the Bank may have.
11.10 Notification of Addresses, Lending Offices, etc. Each Bank
-----------------------------------------------
shall notify the Administrative Agent in writing of any changes in the address
to which notices to the Bank should be directed, of addresses of its Lending
Office, of payment instructions in respect of all
131
payments to be made to it hereunder and of such other administrative information
as the Administrative Agent shall reasonably request.
11.11 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.
11.12 Severability. The illegality or unenforceability of any
------------
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
11.13 No Third Parties Benefited. This Agreement is made and
--------------------------
entered into for the sole protection and legal benefit of the parties hereto and
their permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
None of the Administrative Agent, the Issuing Bank or any Bank shall have any
obligation to any Person not a party to this Agreement or any other Loan
Document.
11.14 Governing Law and Jurisdiction; Waiver of Trial by Jury.
-------------------------------------------------------
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
------------
TO THIS AGREEMENT AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
--------------------
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE PARTIES HERETO EACH
WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
(c) WAIVER OF JURY TRIAL. THE PARTIES HERETO EACH WAIVE THEIR
--------------------
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS
132
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY
TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION 11.14 AS TO ANY ACTION, COUNTERCLAIM OR
-------------
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE
VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS.
11.15 Effectiveness.
-------------
(a) This Agreement shall become effective on the date (the "Effective
---------
Date") on which (i) each Parent Guarantor, the Borrower, the Administrative
Agent, the Issuing Bank, the Syndication Agent, the Documentation Agent and each
Bank shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile device)
the same to the Administrative Agent at its Notice Office and (ii) the
conditions contained in Sections 5.01 and 5.02 shall have been satisfied or
------------- ----
deemed satisfied pursuant to Section 10.04(b) (or waived by the Majority Banks,
----------------
or to the extent required by Section 11.01, all the Banks). Unless the
-------------
Administrative Agent has received actual notice from any Bank that the
conditions contained in Sections 5.01 and 5.02 have not been met to its
------------- ----
satisfaction in accordance with Section 10.04(b), upon the satisfaction of the
----------------
condition described in clause (i) of the immediately preceding sentence and upon
the Administrative Agent's good faith determination that the conditions
described in clause (ii) of the immediately preceding sentence have been met,
then the Effective Date shall have been deemed to have occurred, regardless of
any subsequent determination that one or more of the conditions thereto had not
been met (although the occurrence of the Effective Date shall not release any
Parent Guarantor or the Borrower from any liability for failure to satisfy one
or more of the applicable conditions contained in Sections 5.01 and 5.02).
------------- ----
(b) On the Effective Date, each Bank shall deliver to the
Administrative Agent for the account of the Borrower an amount equal to the
amount by which the principal amount of Loans to be made by such Bank on the
Effective Date exceeds the amount of the Loans of such Bank outstanding under
the Existing Credit Agreement on the Effective Date, plus any accrued but unpaid
interest with respect thereto. Notwithstanding anything to the contrary
contained in this Section 11.15(b), in satisfying the foregoing condition,
----------------
unless the Administrative Agent shall have been notified by any Bank prior to
the occurrence of the Effective Date that such Bank does not intend to make
available to the Administrative Agent such Bank's Term Loans and Revolving Loans
required to be made by it on such date, then the
133
Administrative Agent may, in reliance on such assumption, make available to the
Borrower the corresponding amounts and the making available by the
Administrative Agent of such amounts shall satisfy the condition contained in
this Section 11.15.
-------------
(c) This Agreement constitutes an amendment and restatement of the
Existing Credit Agreement and as such supersedes the Existing Credit Agreement
in its entirety; provided, however, that in no event shall the Liens or Guaranty
--------
Agreements securing the Existing Credit Agreement or the obligations thereunder
be deemed affected hereby, it being the intent and agreement of the Ultimate
Parent, the Borrower and the Subsidiaries of the Ultimate Parent parties hereto
that the Guaranty Agreements and the Liens on the Collateral granted to secure
the obligations of the Ultimate Parent, the Borrower and the Subsidiaries of the
Ultimate Parent in connection with the Existing Credit Agreement and/or the
Guaranty Agreements, shall not be extinguished and shall remain valid, binding
and enforceable securing the obligations under the Existing Credit Agreement as
amended and restated hereby.
[Remainder of page is intentionally left blank; signature pages follow]
134
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above written.
BORROWER:
NEXSTAR FINANCE, L.L.C.
By:
----------------------------
Name:
Title:
Address:
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
Attention: Perry Sook
Telephone: (570) 586-5400
Facsimile: (570) 586-8745
PARENT GUARANTORS:
NEXSTAR BROADCASTING GROUP, L.L.C.
NEXSTAR BROADCASTING OF NORTHEASTERN
PENNSYLVANIA, INC.
NEXSTAR BROADCASTING OF JOPLIN, INC.
NEXSTAR BROADCASTING OF ERIE, INC.
NEXSTAR BROADCASTING OF BEAUMONT/PORT
ARTHUR, INC.
NEXSTAR BROADCASTING OF WICHITA FALLS, INC.
NEXSTAR BROADCASTING OF ROCHESTER, INC.
NEXSTAR BROADCASTING OF ABILENE, INC.
ERC HOLDINGS, INC.
NEXSTAR MIDWEST HOLDINGS, INC.
NEXSTAR BROADCASTING OF CHAMPAIGN, INC.
NEXSTAR BROADCASTING OF PEORIA, INC.
NEXSTAR BROADCASTING OF MIDLAND-ODESSA,
INC.
NEXSTAR BROADCASTING OF LOUISIANA, INC.
NEXSTAR FINANCE HOLDINGS, L.L.C.
NEXSTAR FINANCE HOLDINGS, INC.
By:
----------------------------
Name:
Title:
Address:
200 Abington Executive Park, Suite 201
Clarks Summit, PA 18411
Attention: Perry Sook
Telephone: (570) 586-5400
Facsimile: (570) 586-8745
ADMINISTRATIVE AGENT, SYNDICATION
AGENT, DOCUMENTATION AGENT,
ISSUING BANK AND BANKS:
BANK OF AMERICA, N.A.,
as Administrative Agent, as Issuing Bank
and as a Bank
By: /s/ Steven P. Renwick
----------------------------
Name: Steven P. Renwick
Title: Vice President
BARCLAYS BANK PLC,
as Syndication Agent and as a Bank
By: /s/ Daniele Iacovone
----------------------------
Name: Daniele Iacovone
Title: Director
FIRST UNION NATIONAL BANK,
as Documentation Agent and as a Bank
By: /s/ Lawrence P. Sullivan
----------------------------
Name: Lawrence P. Sullivan
Title: Vice President
FIRSTAR BANK, N.A., as a Bank
By: /s/ Michael J. Homeyer
----------------------------
Name: Michael J. Homeyer
Title: Vice President
CIBC INC., as a Bank
By: /s/ Harold Birk
----------------------------
Name: Harold Birk
Title: Executive Director
CIBC World Markets Corp., as agent
By their execution hereinbelow, each of the undersigned hereby (i) consents to
the execution and delivery of this Agreement; (ii) reaffirms and consents to the
pledge of their Capital Securities and Indebtedness, if any, pledged to the
Administrative Agent pursuant to the Pledge and Security Agreement to secure the
Obligations; (iii) reaffirms their obligations under each the Loan Documents to
which any of the undersigned are a party and agrees that all references to the
Existing Credit Agreement made in such Loan Documents shall include the Existing
Credit Agreement as amended and restated by this Agreement; and (iv) agrees
that, notwithstanding anything to the contrary contained in this Agreement and
the other Loan Documents executed in connection herewith, and notwithstanding
any prior course of conduct, the undersigned's consent shall not be required for
any future amendment, modification, supplement, restatement, increase, renewal,
extension, rearrangement or substitution of this Agreement or any of the other
Loan Documents.
Consented to, Acknowledged and Agreed as of the
day and year first above written
NEXSTAR BROADCASTING OF ABILENE, L.L.C.
NEXSTAR BROADCASTING OF BEAUMONT/
PORT ARTHUR, L.L.C.
NEXSTAR BROADCASTING OF CHAMPAIGN,
L.L.C.
ENTERTAINMENT REALTY CORPORATION
NEXSTAR BROADCASTING OF ERIE, L.L.C.
NEXSTAR BROADCASTING OF JOPLIN, L.L.C.
NEXSTAR BROADCASTING OF LOUISIANA,
L.L.C.
NEXSTAR BROADCASTING OF MIDLAND-
ODESSA, L.L.C.
NEXSTAR BROADCASTING OF THE MIDWEST,
INC.
NEXSTAR BROADCASTING GROUP, INC.
NEXSTAR BROADCASTING OF NORTHEASTERN PENNSYLVANIA, L.L.C.
NEXSTAR FINANCE, INC.
NEXSTAR BROADCASTING OF PEORIA, L.L.C.
NEXSTAR BROADCASTING OF ROCHESTER,
L.L.C.
NEXSTAR BROADCASTING OF WICHITA FALLS,
L.L.C.
By: /s/ Shirley Green
-------------------------------
Title:
-------------------------------
of each of the above-named entities
By their execution hereinbelow, each of the undersigned hereby (i) consents to
the execution and delivery of this Agreement; (ii) reaffirms and consents to the
pledge of their Capital Securities and Indebtedness, if any, pledged to the
Administrative Agent pursuant to the Pledge and Security Agreement (as defined
in the Bastet/Mission Credit Agreement) to secure the Obligations; (iii)
reaffirms their obligations under each the Loan Documents to which any of the
undersigned are a party and agrees that all references to the Existing Credit
Agreement made in such Loan Documents shall include the Existing Credit
Agreement as amended and restated by this Agreement; and (iv) agrees that,
notwithstanding anything to the contrary contained in this Agreement and the
other Loan Documents executed in connection herewith, and notwithstanding any
prior course of conduct, the undersigned's consent shall not be required for any
future amendment, modification, supplement, restatement, increase, renewal,
extension, rearrangement or substitution of this Agreement or any of the other
Loan Documents.
Consented to, Acknowledged and Agreed as of the
day and year first above written
BASTET BROADCASTING, INC.
By: /s/ Nancie J. Smith
------------------------------
Name: Nancie J. Smith
Title: Vice-President
MISSION BROADCASTING OF WICHITA FALLS, INC.
By: /s/ Nancie J. Smith
------------------------------
Name: Nancie J. Smith
Title: Vice-President
By their execution hereinbelow, each of the undersigned hereby (i) consents to
the execution and delivery of this Agreement; (ii) reaffirms their obligations
under each the Loan Documents to which any of the undersigned are a party and
agrees that all references to the Existing Credit Agreement made in such Loan
Documents shall include the Existing Credit Agreement as amended and restated by
this Agreement; and (iii) agrees that, notwithstanding anything to the contrary
contained in this Agreement and the other Loan Documents executed in connection
herewith, and notwithstanding any prior course of conduct, the undersigned's
consent shall not be required for any future amendment, modification,
supplement, restatement, increase, renewal, extension, rearrangement or
substitution of this Agreement or any of the other Loan Documents.
Consented to, Acknowledged and Agreed as of the
day and year first above written
ABRY BROADCAST PARTNERS, III, L.P.
By: ABRY Equity Investors, L.P.
Its: General Partner
By: ABRY Holdings III, LLC
Its: General Partner
By: ABRY Holdings III Co.
Its: Sole Member
By: /s/ Jay Grossman
-------------------------
Name: Jay Grossman
Title: Vice President
ABRY EQUITY INVESTORS, L.P.
By: ABRY Holdings III, LLC
Its: General Partner
By: ABRY Holdings III Co.
Its: Sole Member
By: /s/ Jay Grossman
---------------------------
Name: Jay Grossman
Title: Vice President
Schedule 1.01(A)
NOTICE ADDRESSES/LENDING OFFICES
--------------------------------
<TABLE>
<S> <C> <C>
Administrative Agent: Bank of America, N.A.
901 Main Street, 64th Floor
Dallas, Texas 75202
Attention: Steven P. Renwick
Telephone: 214-209-1867
Facsimile: 214-209-9390
Issuing Bank: Bank of America, N.A.
901 Main Street, 64th Floor
Dallas, Texas 75202
Attention: Steven P. Renwick
Telephone: 214-209-1867
Facsimile: 214-209-9390
Notices Domestic Lending Office (if
------- different)
---------------------------
Banks: Bank of America, N.A.
901 Main Street, 64th Floor
Dallas, Texas 75202
Attention: Steven P. Renwick
Telephone: 214-209-1867
Facsimile: 214-209-9390
CIBC Inc.
425 Lexington Avenue, 8th Floor
New York, New York 10017
Attention: Harold Birk
Telephone: 212-856-3554
Facsimile: 212-856-3558
First Union National Bank First Union National Bank
One First Union Center Charlotte Plaza
301 S. Charlotte St., DC-S 201 S. College Street, CP-17
Charlotte, North Carolina 28288-0760 Charlotte, North Carolina 28288-
1183
Attention: Larry Sullivan Attention: Deanna Shirlen
Telephone: 704-715-1794 Telephone: 704-383-0522
Facsimile: 704-383-4793 Facsimile: 704-383-7201
</TABLE>
Schedule 1.01(A)
Notices Domestic Lending Office (if different)
------- --------------------------------------
Barclays Bank PLC Barclays Bank PLC
101 California Street 222 Broadway
Suite 1800 New York, New York 10038
San Francisco, California 94111 Attention: Jan Becker
Attention: Daniele Iacovone Telephone: 212-412-3795
Telephone: 415-765-4737 Facsimile: 212-412-5306
Facsimile: 415-765-4760
Firstar Bank, N.A. Firstar Bank, N.A.
Firstar Plaza Firstar Corporate Loan Services
7th & Washington, 12th Floor P.O. Box 2188
St. Louis, Missouri 63101 Oshkosh, Wisconsin 54903
Attention: Michael Homeyer Attention: Connie Sweeney
Telephone: 314-418-8129 Telephone: 920-426-7604
Facsimile: 314-418-8292 Facsimile: 920-426-8419
Schedule 1.01(A)
PRO FORMA CONSOLIDATED
OPERATING CASH FLOW ADJUSTMENTS
-------------------------------
Schedule 2.01
COMMITMENTS
-----------
<TABLE>
<CAPTION>
Bank Revolving Term A Loan Term B Commitment
---- Commitment Commitment/1/ -----------------
---------- --------------
<S> <C> <C> <C>
Bank of America, N.A. $17,618,181.81 $15,454,545.46 $64,090,909.09
Barclays Bank PLC $11,400,000.00 $10,000,000.00 $10,909,090.91
CIBC Inc. $ 9,327,272.73 $ 8,181,818.18 $ 0
Firstar Bank, N.A. $ 9,327,272.73 $ 8,181,818.18 $ 0
First Union National $ 9,327,272.73 $ 8,181,818.18 $ 0
Bank -------------- -------------- ---
TOTAL: $57,000,000.00 $50,000,000.00 $75,000,000.00
------
</TABLE>
------------------------
/1/ The Term A Commitment of each Bank is allocated between the Initial Term A
Commitment and the Additional Term A Commitment. The Initial Term A Commitment
of a Bank is equal to the product of such Bank's Term A Commitment reflected
above multiplied by 0.70 and the Additional Term A Commitment is equal to the
product of such Bank's Term A Commitment reflected above multiplied by 0.30.
Schedule 6.16
FCC LICENSES
------------
I. Owner License Description Expiration Date
Schedule 6.17
SUBSIDIARIES
------------
Schedule 6.21
NETWORK AFFILIATION AGREEMENTS
------------------------------
Schedule 8.05(a)
EXISTING INDEBTEDNESS
---------------------
Schedule 8.11(e)
INVESTMENTS
-----------
EXHIBIT 10.5
FIRST AMENDMENT TO CREDIT AGREEMENT AND LIMITED CONSENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND LIMITED CONSENT (this
"Amendment"), dated as of May 17, 2001, among NEXSTAR FINANCE, L.L.C., a
----------
Delaware limited liability company (the "Borrower"), NEXSTAR BROADCASTING GROUP,
--------
L.L.C., a Delaware limited liability company (the "Ultimate Parent"), the other
---------------
Parent Guarantors (as such term is defined in the hereinafter described Credit
Agreement) parties to this Amendment, the several Banks (as such term is defined
in the hereinafter described Credit Agreement) parties to this Amendment, and
BANK OF AMERICA, N.A., as Administrative Agent for the Banks (in such capacity,
the "Administrative Agent").
--------------------
R E C I T A L S:
A. The Borrower, the Ultimate Parent, the other Parent Guarantors, the
Administrative Agent, Barclays Bank PLC, as Syndication Agent, First Union
National Bank, as Documentation Agent, and the several Banks parties thereto
entered into that certain Credit Agreement dated as of January 12, 2001 (as the
same may be amended, modified, restated, supplemented, renewed, extended,
increased, rearranged and/or substituted from time to time, the "Credit
------
Agreement"). Capitalized terms used and not otherwise defined herein shall have
---------
the meanings ascribed to them in the Credit Agreement.
B. Nexstar Finance Holdings proposes to issue $36,988,000 aggregate
principal amount of its 16% Senior Discount Notes due 2009 (the "Holdings Senior
---------------
Discount Notes") pursuant to an Indenture (the "Holdings Senior Discount Notes
-------------- ------------------------------
Indenture") having such covenants and other terms and provisions as are
---------
described in that certain Offering Memorandum dated as of May 17, 2001. The
Holdings Senior Discount Notes are to be issued in units (the "Units") linked to
-----
shares of non-voting Class B Common Stock of Nexstar Equity Corp., a Delaware
corporation ("Nexstar Equity"), 100% of the issued and outstanding voting Class
--------------
A Common Stock of which is owned directly by ABRY L.P. III, and the sole asset
of which is a 1% membership interest in the Ultimate Parent. In connection with
such joint issuance as Units of the Holdings Senior Discount Notes and the
shares of Nexstar Equity Class B Common Stock, Nexstar Equity and certain
Nexstar Entities intend to enter into certain agreements and arrangements, as
more fully described herein.
C. As a condition to the issuance of the Holdings Senior Discount Notes,
the Ultimate Parent is required to guarantee the payment of the Holdings Senior
Discount Notes and the performance and observance of the covenants and other
terms and provisions of the Holdings Senior Discount Notes Indenture (the
"Holdings Senior Discount Notes Guarantee") until such time as certain
-----------------------------------------
promissory notes issued by Nexstar Finance Holdings to the Ultimate Parent no
longer rank equal in right of payment with the Holdings Senior Discount Notes,
which Nexstar Finance Holdings proposes to accomplish by (i) creating, on or
before November 30, 2001, a new Wholly-Owned Subsidiary, (ii) causing such new
Wholly-Owned Subsidiary to assume the Holdings Senior Discount Notes and all of
Nexstar Finance Holdings' obligations with respect thereto and (iii) obtaining
from the holders of the Holdings Senior Discount Notes the full and
unconditional release therefrom of Nexstar Finance Holdings.
D. The issuance by Nexstar Finance Holdings of the Holdings Senior
Discount Notes may presently be prohibited by Section 8.05 of the Credit
Agreement inasmuch as the Indebtedness evidenced thereby may not fall within the
definition of "Permitted Holdings Unsecured Indebtedness" set forth in Section
1.01 of the Credit Agreement.
E. The agreements and arrangements among Nexstar Equity and certain
Nexstar Entities referred to in Recital B above are presently prohibited by
Section 8.06 of the Credit Agreement, and the authorization, declaration and
payment by the Borrower and the Parent Guarantors of Dividends required in order
to enable the Ultimate Parent to reimburse certain expenses of Nexstar Equity
pursuant to one of such agreements is presently prohibited by Section 8.10 of
the Credit Agreement.
F. The providing by the Ultimate Parent of the Holdings Senior Discount
Notes Guarantee is also presently prohibited by Section 8.05 of the Credit
Agreement.
G. The Borrower and the Ultimate Parent have requested that the Banks: (i)
consent to the entering into by certain Nexstar Entities of the agreements and
arrangements referred to in Recital B above, the reimbursement by the Ultimate
Parent of certain expenses of Nexstar Equity pursuant to one of such agreements,
and the authorization, declaration and payment of Dividends by the Borrower and
each Parent Guarantor for the purpose of providing sufficient funds to the
Ultimate Parent to enable it to reimburse such expenses; (ii) consent to the
providing by the Ultimate Parent of the Holdings Senior Discount Notes Guarantee
and its existence as an outstanding obligation of the Ultimate Parent for a
limited period of time; (iii) agree to amend the definitions of "Nexstar Finance
Holdings" and "New Holding Company" to accommodate and reflect the
organizational restructuring described in Recital C above; and (iv) agree to
amend the definition of "Permitted Holdings Unsecured Indebtedness" set forth in
Section 1.01 of the Credit Agreement in order to permit the issuance by Nexstar
Finance Holdings of the Holdings Senior Discount Notes, each as more fully
described hereinbelow.
H. The several Banks parties to this Amendment (which Banks constitute the
Majority Banks required under the Credit Agreement to grant the consents and
effect the amendments intended hereby) are willing to grant the above-described
consents and agree to the above-described amendments, subject in each case to
the performance and observance in full of each of the covenants, terms and
conditions, and in reliance upon all of the representations and warranties of
the Borrower and the Parent Guarantors, set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants, terms,
conditions, representations and warranties herein contained, the parties hereto
agree hereby as follows:
Section 1. AMENDMENTS TO CREDIT AGREEMENT. Subject to the covenants, terms
and conditions set forth herein and in reliance upon the representations and
warranties of the Borrower and the Parent Guarantors herein contained, the
Borrower, the Parent Guarantors and the several Banks parties to this Amendment
(which Banks constitute the Majority Banks required under the Credit Agreement
to effect the following amendments) hereby agree to amend the Credit Agreement,
effective as of the Amendment Effective Date (as hereinafter defined), as
follows:
2
(a) The definition of "Nexstar Finance Holdings" set forth in Section
1.01 of the Credit Agreement is amended by deleting it in its entirety and
replacing it with the following:
" "Nexstar Finance Holdings" means: (i) Nexstar Finance Holdings,
------------------------
L.L.C., a Delaware limited liability company and a Nexstar Entity, until
such time as the Indebtedness evidenced by the 16% Senior Discount Notes
issued May 17, 2001 by Nexstar Finance Holdings, L.L.C. in the aggregate
principal amount of $36,988,000 has been assumed by a new direct Wholly-
Owned Subsidiary of Nexstar Finance Holdings, L.L.C., Nexstar Finance
Holdings, L.L.C. has been fully and unconditionally released therefrom and
Nexstar Finance Holdings, L.L.C. has assigned and transferred to such new
direct Wholly-Owned Subsidiary 100% of the Capital Stock of the Borrower;
and (ii) such new direct Wholly-Owned Subsidiary of Nexstar Finance
Holdings, L.L.C. at all times thereafter."
(b) The definition of "New Holding Company" set forth in Section 1.01 of
the Credit Agreement is amended by deleting it in its entirety and replacing it
with the following:
" "New Holding Company" means Nexstar Finance Holdings, L.L.C., a
-------------------
Delaware limited liability company and a Nexstar Entity, at all times from
and after such time as the Indebtedness evidenced by the 16% Senior
Discount Notes issued May 17, 2001 by Nexstar Finance Holdings, L.L.C. in
the aggregate principal amount of $36,988,000 has been assumed by a new
direct Wholly-Owned Subsidiary of Nexstar Finance Holdings, L.L.C., Nexstar
Finance Holdings, L.L.C. has been fully and unconditionally released
therefrom and Nexstar Finance Holdings, L.L.C. has assigned and transferred
to such new direct Wholly-Owned Subsidiary 100% of the Capital Stock of the
Borrower."
(c) The definition of "Permitted Holdings Unsecured Indebtedness" set
forth in Section 1.01 of the Credit Agreement is amended by deleting in its
entirety clause (v) thereof and renumbering clause (vi) thereof as new clause
(v).
Section 2. LIMITED CONSENTS. Subject to the covenants, terms and
conditions set forth in this Amendment, and in reliance upon the representations
and warranties of the Borrower and the Parent Guarantors herein contained, the
several Banks parties to this Amendment (which Banks constitute the Majority
Banks required under the Credit Agreement to effect the following consents)
hereby consent to the following:
(a) The providing by the Ultimate Parent of the Holdings Senior
Discount Notes Guarantee in substantially the form contained in the draft
Holdings Senior Discount Notes Indenture provided to the Administrative Agent
and its counsel on May 16, 2001, and the existence of the Holdings Senior
Discount Notes Guarantee as an obligation of the Ultimate Parent until the
earlier of (i) November 30, 2001 and (ii) the date the Indebtedness evidenced by
those certain two promissory notes in the respective face principal amounts of
$20,531,402 and $11,355,000, each dated December 31, 2000 and issued by Nexstar
Finance Holdings to the Ultimate Parent no longer ranks equal in right of
payment to the Indebtedness evidenced by the Holdings Senior Discount Notes.
3
(b) The entering into and performance by the Nexstar Entities indicated
below of the following agreements and arrangements in connection with the joint
issuance as Units of the Holdings Senior Discount Notes and the shares of
Nexstar Equity Class B Common Stock, each in substantially the form provided to
the Administrative Agent and its counsel on or about May 16, 2001:
(i) Purchase Agreement by and among Nexstar Finance Holdings,
Nexstar Finance Holdings, Inc., Nexstar Equity, the Ultimate Parent and the
initial purchasers of Units party thereto, relating to the issuance and
sale of the Units;
(ii) Unit Agreement by and among Nexstar Finance Holdings, Nexstar
Finance Holdings, Inc., Nexstar Equity, the Ultimate Parent and United
States Trust Company of New York, as the Unit Agent, governing the Units;
(iii) Units issued and sold to the initial purchasers thereof;
(iv) Investor Rights Agreement by and between the Ultimate Parent
and Nexstar Equity;
(v) Amended and Restated Limited Liability Company Agreement of the
Ultimate Parent by and among the Ultimate Parent, Nexstar Equity and the
other members of the Ultimate Parent party thereto; and
(vi) Reimbursement Agreement by and between the Ultimate Parent and
Nexstar Equity, providing for the reimbursement by the Ultimate Parent of
out-of-pocket expenses incurred by Nexstar Equity in connection with
maintaining its corporate existence, filing tax returns, maintaining
directors' and officers' insurance and such other activities deemed
necessary by Nexstar Equity's board of directors and agreed to by the
Ultimate Parent, provided, that the aggregate amount of such expenses
--------
reimbursed by the Ultimate Parent in any fiscal year may not exceed
$40,000.
(c) The authorization, declaration and payment by the Borrower and each
Parent Guarantor to their respective shareholders, partners or members, as
applicable, for the purpose of providing sufficient funds to the Ultimate Parent
to enable it to reimburse such expenses of Nexstar Entity pursuant to the above-
described Reimbursement Agreement, subject to the dollar limitation set forth
hereinabove, and so long as no Default or Event of Default exists both before
and after giving effect to such Dividends.
The consents set forth in this Section 2 are limited to the extent specifically
---------
set forth above and no other terms, covenants or provisions of the Credit
Agreement are intended to be affected hereby.
Section 3. CONDITIONS PRECEDENT. The parties hereto agree that this
Amendment and the consents and amendments to the Credit Agreement contained
herein shall not be effective until the satisfaction of each of the following
conditions precedent:
4
(a) Execution and Delivery of this Amendment. The Administrative Agent
shall have received a copy of this Amendment executed and delivered by each of
the applicable Credit Parties and by Banks constituting Majority Banks.
(b) Representations and Warranties. Each of the representations and
warranties made in this Amendment shall be true and correct on and as of the
Amendment Effective Date as if made on and as of such date, both before and
after giving effect to this Amendment.
Section 4. REPRESENTATIONS AND WARRANTIES. To induce the Administrative
Agent and the several Banks parties hereto to enter into this Amendment and to
grant the consents and amendments contained herein, each of the Borrower and the
Parent Guarantors represents and warrants to the Administrative Agent and the
Banks as follows:
(a) Authorization; No Contravention. The execution, delivery and
performance by the applicable Credit Parties of this Amendment have been duly
authorized by all necessary partnership, corporate or limited liability company
action, as applicable, and do not and will not (i) contravene the terms of any
Charter Documents of any Credit Party, (ii) conflict with or result in any
breach or contravention of, or the creation of any Lien under, any document
evidencing any Contractual Obligation to which any Credit Party is a party or
any order, injunction, writ or decree of any Governmental Authority to which any
Credit Party is a party or its property is subject, or (iii) violate any
Requirement of Law.
(b) Governmental Authorization. No approval, consent, exemption,
authorization or other action by, or notice to, or filing with or approvals
required under state blue sky securities laws or by any Governmental Authority
is necessary or required in connection with the execution, delivery, performance
or enforcement of this Amendment.
(c) No Default. No Default or Event of Default exists under any of the
Loan Documents. No Credit Party is in default under or with respect to (i) its
Charter Documents or (ii) any material Contractual Obligation of such Person.
The execution, delivery and performance of this Amendment shall not result in
any default under any Contractual Obligation of any Credit Party in any respect.
(d) Binding Effect. This Amendment and the Credit Agreement as amended
hereby constitute the legal, valid and binding obligations of the Credit Parties
that are parties thereto, enforceable against such Credit Parties in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles of general applicability.
(e) Representations and Warranties. The representations and warranties
set forth in the Credit Agreement and the other Loan Documents are true and
correct in all material respects on and as of the Amendment Effective Date, both
before and after giving effect to the amendments contemplated in this Amendment,
as if such representations and warranties were being made on and as of the
Amendment Effective Date.
5
Section 5. MISCELLANEOUS
(a) Ratification and Confirmation of Loan Documents. Except for the
specific consents and amendments expressly set forth in this Amendment, the
terms, provisions, conditions and covenants of the Credit Agreement and the
other Loan Documents remain in full force and effect and are hereby ratified and
confirmed, and the execution, delivery and performance of this Amendment shall
not in any manner operate as a waiver of, consent to or amendment of any other
term, provision, condition or covenant of the Credit Agreement or any other Loan
Document. Without limiting the generality of the foregoing, the consents set
forth in Section 2 of this Amendment shall be limited precisely as set forth
---------
above, and nothing in this Amendment shall be deemed (i) to constitute a waiver
of compliance or consent to noncompliance by any of the Credit Parties with
respect to any other term provision, condition or covenant of the Credit
Agreement or other Loan Documents; (ii) to prejudice any right or remedy that
the Administrative Agent or the Banks may now have or may have in the future
under or in connection with the Credit Agreement or any other Loan Document; or
(iii) to constitute a waiver of compliance or consent to noncompliance by any of
the Credit Parties with respect to the terms, provisions, conditions and
covenants of the Credit Agreement made the subject hereof, other than as
specifically set forth herein and for the time periods specifically set forth
herein.
(b) Fees and Expenses. The Borrower and the Parent Guarantors jointly
and severally agree to pay on demand all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, reproduction,
execution, and delivery of this Amendment and any other documents prepared in
connection herewith, including, without limitation, the reasonable fees and out-
of-pocket expenses of counsel for the Administrative Agent.
(c) Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
(d) APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
(e) Counterparts and Amendment Effective Date. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective when (i) each of the conditions precedent set forth in Section 3 of
---------
this Amendment have been satisfied and (ii) the Administrative Agent has
received counterparts of this Amendment executed by the Borrower, the Parent
Guarantors, each of the other Guarantors and the Banks constituting Majority
Banks (the "Amendment Effective Date").
------------------------
6
(f) Affirmation of Guarantees. Notwithstanding that such consent is not
required thereunder, each of the Parent Guarantors and the other Guarantors
hereby consent to the execution and delivery of this Amendment by the parties
hereto and reaffirm their respective obligations under each of their respective
Guaranty Agreements.
(g) FINAL AGREEMENT. THIS AMENDMENT, TOGETHER WITH THE CREDIT AGREEMENT
AND OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
7
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers
effective as of the Amendment Effective Date.
BORROWER:
NEXSTAR FINANCE, L.L.C.
By:______________________________________________
Name:
Title:
PARENT GUARANTORS:
NEXSTAR BROADCASTING GROUP, L.L.C.
NEXSTAR BROADCASTING OF
NORTHEASTERN PENNSYLVANIA, INC.
NEXSTAR BROADCASTING OF JOPLIN, INC.
NEXSTAR BROADCASTING OF ERIE, INC.
NEXSTAR BROADCASTING OF
BEAUMONT/PORT ARTHUR,INC.
NEXSTAR BROADCASTING OF WICHITA
FALLS, INC.
NEXSTAR BROADCASTING OF ROCHESTER,
INC.
NEXSTAR BROADCASTING OF ABILENE, INC.
ERC HOLDINGS, INC.
NEXSTAR MIDWEST HOLDINGS, INC.
NEXSTAR BROADCASTING OF
CHAMPAIGN, INC.
NEXSTAR BROADCASTING OF PEORIA, INC.
NEXSTAR BROADCASTING OF MIDLAND-
ODESSA, INC.
NEXSTAR BROADCASTING OF LOUISIANA,
INC.
NEXSTAR FINANCE HOLDINGS, L.L.C.
NEXSTAR FINANCE HOLDINGS, INC.
By: _____________________________________________
Name:
Title:
8
ADMINISTRATIVE AGENT AND BANKS:
BANK OF AMERICA, N.A.,
as Administrative Agent and as a Bank
/s/ Steven P. Renwick
By: _______________________________________
Name: Steven P. Renwick
Title: Vice President
BARCLAYS BANK PLC,
as a Bank
/s/ Daniele Iacovone
By: _______________________________________
Name: Daniele Iacovone
Title: Director
FIRST UNION NATIONAL BANK,
as a Bank
By: _______________________________________
Name:
Title:
FIRSTAR BANK, N.A.,
as a Bank
By: _______________________________________
Name:
Title:
CIBC INC.,
as a Bank
By: _______________________________________
Name:
Title:
9
OTHER GUARANTORS (for purposes of Section 5(f) hereof):
NEXSTAR BROADCASTING OF ABILENE, L.L.C.
NEXSTAR BROADCASTING OF BEAUMONT/ PORT ARTHUR, L.L.C.
NEXSTAR BROADCASTING OF CHAMPAIGN, L.L.C.
ENTERTAINMENT REALTY CORPORATION
NEXSTAR BROADCASTING OF ERIE, L.L.C.
NEXSTAR BROADCASTING OF JOPLIN, L.L.C.
NEXSTAR BROADCASTING OF LOUISIANA, L.L.C.
NEXSTAR BROADCASTING OF MIDLAND-ODESSA, L.L.C.
NEXSTAR BROADCASTING OF THE MIDWEST, INC.
NEXSTAR BROADCASTING GROUP, INC.
NEXSTAR BROADCASTING OF NORTHEASTERN PENNSYLVANIA, L.L.C.
NEXSTAR FINANCE, INC.
NEXSTAR BROADCASTING OF PEORIA, L.L.C.
NEXSTAR BROADCASTING OF ROCHESTER, L.L.C.
NEXSTAR BROADCASTING OF WICHITA FALLS, L.L.C.
By: ____________________________________
Title: __________________ of each of the
above-named entities
BASTET BROADCASTING, INC.
By: _____________________________________
Name:
Title:
MISSION BROADCASTING OF WICHITA FALLS, INC.
By: _____________________________________
Name:
Title:
10
Exhibit 10.20
Execution Copy
--------------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
This ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of this [ ] day of
August, 2001, is made, executed and delivered by Nexstar Finance Holdings,
L.L.C., a Delaware limited company ("Assignor"), and NBG, L.L.C., a Delaware
limited liability company ("Assignee").
W I T N E S S E T H:
WHEREAS, Assignor is a party to that certain Indenture by and among Nexstar
Finance Holdings, L.L.C., Nexstar Finance Holdings, Inc. and The United States
Trust Company of New York, as trustee, dated as of the 17/th/ day of May, 2001
(the "Indenture");
WHEREAS, the Indenture requires Assignor to assign its equity interests and
its obligations under the Indenture to a wholly-owned subsidiary of Assignor;
and
WHEREAS, pursuant to Section 4.19 of the Indenture, Assignor is assigning
to Assignee all of Assignor's right, title and interest in and to those equity
interests listed on Attachment A hereto (the "Equity Interests"); and
WHEREAS, Assignor desires to transfer and assign to Assignee all of
Assignor's rights, title and interest in and to the Equity Interests and
Assignee desires to assume Assignor's obligations under the Indenture;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Assignor and Assignee,
intending to be legally bound, hereby agree as follows:
1. Capitalized terms used herein but not defined herein shall have the
meanings assigned such terms in the Indenture.
2. Assignor does hereby assign, convey and deliver to Assignee all of
Assignor's right, title and interest in and to the Equity Interests.
3. Assignee hereby assumes all of Assignor's liabilities under and
obligations arising from and after the date hereof under the Indenture. Assignee
shall not assume any other obligations or liabilities of the Assignor.
4. Assignor and Assignee shall each execute and deliver such other
documents and take such actions as the other may reasonably request to confirm
the assignment executed hereby and to vest title in and to the Equity Interests
in Assignee.
5. This Assignment and Assumption Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
6. This Assignment and Assumption Agreement shall be governed, construed
and enforced in accordance with the laws of the State of New York (without
regard to the choice of law provisions thereof).
7. This Assignment and Assumption Agreement cannot be amended,
supplemented, or changed except by an agreement in writing that is signed by the
parties hereto.
8. This Assignment and Assumption Agreement may be executed in any number
of counterparts and by facsimile, each of which will be deemed an original, but
all of which together will constitute one and the same instrument.
2
IN WITNESS WHEREOF, Assignee and Assignor have executed this Assignment and
Assumption Agreement as of the date first above written.
ASSIGNOR:
NEXSTAR FINANCE HOLDINGS, L.L.C.
By: /s/ Shirley Green
-------------------------------
Name:
Title:
ASSIGNEE:
NBG, L.L.C.
By: /s/ Shirley Green
-------------------------------
Name:
Title:
ATTACHMENT A
Equity Interests
----------------
1. 1,000 shares of common stock issued by Nexstar Finance Holdings, Inc.,
representing all of the issued and outstanding capital stock of Nexstar
Finance Holdings, Inc.
2. Membership Interests of Nexstar Finance, L.L.C., representing 100% of the
ownership interests of Nexstar Finance, L.L.C.
Attachment A - Page 1
EXHIBIT 12.1
Nexstar Finance, L.L.C.
Computation of Ratio of Earnings to Fixed Charges
(dollars in thousands)
<TABLE>
<CAPTION>
December 31, 1996 December 31, 1997 December 31, 1998 December 31, 1999
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Pre-tax income (loss) from continuing operations (1,255) (1,579) (89) 5,508
------- ------- -------
Fixed Charges:
Interest expense and amortization of debt discount 893 2,632 11,452 16,020
Rent expense: 27 50 103 166
------- ------- ------- -------
Total fixed charges 920 2,682 11,555 16,186
------- ------- ------- -------
Pre-tax income (loss) from continuting
operations plus fixed charges (335) 1,103 11,466 21,694
Ratio of earnings to fixed charges -- -- -- 1.3
Deficiency to cover fixed charges 1,255 1,579 89 --
</TABLE>
<TABLE>
<CAPTION>
December 31, 2000 June 30, 2000 June 30, 2001
----------------- ------------- -------------
<S> <C> <C> <C>
Pre-tax income (loss) from continuing operations 18,570 4,961 (300)
------- ------- -------
Fixed Charges:
Interest expense and amortization of debt discount 19,736 11,167 19,187
Rent expense: 212 106 125
------- ------- -------
Total fixed charges 19,948 11,273 19,312
------- ------- -------
Pre-tax income (loss) from continuting
operations plus fixed charges 38,518 16,234 19,012
Ratio of earnings to fixed charges 1.9 1.4 --
Deficiency to cover fixed charges -- -- 300
</TABLE>
Exhibit 21.1
Subsidiaries of Nexstar Finance Holdings, L.L.C.
1. Nexstar Finance, L.L.C.
2. Nexstar Finance, Inc.
3. Nexstar Broadcasting of Northeastern Pennsylvania, L.L.C.
4. Nexstar Broadcasting of Joplin, L.L.C.
5. Nexstar Broadcasting of Erie, L.L.C.
6. Nexstar Broadcasting of Beaumont/Port Arthur, L.L.C.
7. Nexstar Broadcasting of Wichita Falls, L.L.C.
8. Nexstar Broadcasting of Rochester, L.L.C.
9. Nexstar Broadcasting of Abilene, L.L.C.
10. Entertainment Realty Corporation
11. Nexstar Broadcasting of the Midwest, Inc.
12. Nexstar Broadcasting of Champaign, L.L.C.
13. Nexstar Broadcasting of Peoria, L.L.C.
14. Nexstar Broadcasting of Midland-Odessa, L.L.C.
15. Nexstar Broadcasting of Louisiana, L.L.C.
Nexstar Finance Holdings, Inc. has no subsidiaries.
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the use in this Registration Statement on Form S-4 of
Nexstar Finance Holdings, L.L.C. of our report dated February 21, 2001 relating
to the financial statements and financial statement schedules of Nexstar Finance
Holdings, L.L.C. as of December 31, 1999 and 2000 and for each of the three
years in the period ended December 31, 2000 which appears in such Registration
Statement. We also consent to the references to us under the headings "Experts"
and "Selected Historical Consolidated Financial Data" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
September 4, 2001
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the use in this Registration Statement on Form S-4 of
Nexstar Finance Holdings, L.L.C. of our report dated February 21, 2001 relating
to the financial statements and financial statement schedules of WCIA-TV/WCFN-TV
and WMBD-TV (a Division of Midwest Television, Inc.) as of May 31, 1999 and 2000
and for each of the three years in the period ended May 31, 2000 which appears
in such Registration Statement. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
September 4, 2001
2
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the use in this Registration Statement on Form S-4 of
Nexstar Finance Holdings, L.L.C. of our report dated February 21, 2001 relating
to the financial statements and financial statement schedules of Shooting Star
Broadcasting/KTAB-TV, LP as of December 31, 1998 and April 30, 1999 and for the
year ended December 31, 1998 and the four months ended April 30, 1999 which
appears in such Registration Statement. We also consent to the reference to us
under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
September 4, 2001
3
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the use in this Registration Statement on Form S-4 of
Nexstar Finance Holdings, L.L.C. of our report dated February 21, 2001 relating
to the financial statements and financial statement schedules of WROC-TV (a
Division of STC Broadcasting, Inc.) as of March 31, 1999 and for the three
months then ended which appears in such Registration Statement. We also consent
to the reference to us under the heading "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
September 4, 2001
4
EXHIBIT 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated December 1, 2000 with respect to the financial
statements of KTAL-TV, Inc. included in the Registration Statement (Form S-4)
and related Prospectus of Nexstar Finance Holdings, L.L.C. and Nexstar Finance
Holdings, Inc. for the registration of $20,000,000 of 16% Series B Senior
Discount Exchange Notes due 2009.
Little Rock, Arkansas
August 31, 2001
Exhibit 25.1
FORM T-1
==============================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
__________________
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _______
__________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip Code)
__________________
NEXSTAR FINANCE HOLDINGS, L.L.C.
(Exact name of each obligor as specified in its charter)
Delaware 23-3063155
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
__________________
NEXSTAR FINANCE HOLDINGS, INC.
(Exact name of each obligor as specified in its charter)
Delaware 23-3063152
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Abington Executive Park, Suite 201
Clarks Summit, Pennsylvania 18411
(570) 586-5400
(Address and telephone number of obligor's principal executive offices)
__________________
16% Series B Senior Discount Exchange Notes due 2009
(Title of the indenture securities)
============================================
- 2-
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
_______________________________________________________________________________
Name Address
_______________________________________________________________________________
Superintendent of Banks of the 2 Rector Street,
State of New York New York, N.Y. 10006,
and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 and rule 24 of the Commission's
Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1,
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
- 3 -
4. A copy of the existing By-Laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019).
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
The Bank of New York, a corporation organized and existing under the laws of the
State of New York, has duly caused this statement of eligibility to be signed on
its behalf by the undersigned, thereunto duly authorized, all in the City of New
York, and State of New York, on the 30th day of August, 2001.
THE BANK OF NEW YORK
/s/ Margaret Ciesmelewski
By: __________________________
Margaret Ciesmelewski
Assistant Vice President
Attorney-in-Fact
EXHIBIT 99.1
Letter of Transmittal
To Tender for Exchange
16% Senior Discount Notes Due 2009
of
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
Pursuant to the Prospectus Dated , 2001
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,NEW YORK CITY
TIME, ON , 2001 UNLESS EXTENDED(THE "EXPIRATION DATE").
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed, and submitted to the Exchange Agent:
<TABLE>
<S> <C> <C>
By Registered or Certified Mail By Hand Delivery (before 4:30 p.m.) By Overnight Courier and By Hand after
4:30 p.m. on the Expiration Date
United States Trust Company of New United States Trust Company United States Trust Company
York of New York of New York
P.O. Box 112 Bowling Green Station 30 Broad Street, B-Level 30 Broad Street 14th Floor
New York, New York 10274-0084 New York, New York 10004-2304 New York, New York 10004-2304
</TABLE>
By Facsimile:
(646) 458-8111
Attn: Customer Service
Confirm by telephone:
(800) 548-6565
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY ADDITIONAL
INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT 800-548-6565 OR
BY FACSIMILE AT 646-458-8111.
The undersigned hereby acknowledges receipt of the Prospectus dated , 2001
(the "Prospectus") of Nexstar Finance Holdings, L.L.C., a Delaware limited
liability corporation, and of Nexstar Finance Holdings, Inc., a Delaware
corporation (collectively, the "Issuer"), and this Letter of Transmittal (the
"Letter of Transmittal"), that together constitute the Issuer's offer (the
"Exchange Offer") to exchange $1,000 in principal amount of its 16% Series B
Senior Discount Notes due 2009 (the "Exchange Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement, for each $1,000 in principal amount of
its outstanding 16% Senior Discount Notes due 2009 (the "Notes"), of which
$20,000,000 aggregate principal amount is outstanding. Capitalized terms used
but not defined herein have the meanings ascribed to them in the Prospectus.
The undersigned hereby tenders the Notes described in Box 1 below (the
"Tendered Notes") pursuant to the terms and conditions described in the
Prospectus and this Letter of Transmittal. The undersigned is the registered
owner of all the Tendered Notes and the undersigned represents that it has
received from each beneficial owner of the Tendered Notes ("Beneficial
Owners") a duly completed and executed form of "Instruction to Registered
Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner"
accompanying this Letter of Transmittal, instructing the undersigned to take
the action described in this Letter of Transmittal.
Subject to, and effective upon, the acceptance for exchange of the Tendered
Notes, the undersigned hereby exchanges, assigns, and transfers to, or upon
the order of, the Issuer, all right, title, and interest in, to, and under the
Tendered Notes.
Please issue the Exchange Notes exchanged for Tendered Notes in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions" below (Box 3), please send or cause to be sent the
certificates for the Exchange Notes (and accompanying documents, as
appropriate) to the undersigned at the address shown below in Box 1.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact of the undersigned
with respect to the Tendered Notes, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (i) deliver the Tendered Notes to the Issuer or cause ownership
of the Tendered Notes to be transferred to, or upon the order of, the Issuer,
on the books of the registrar for the Notes and deliver all accompanying
evidences of transfer and authenticity to, or upon the order of, the Issuer
upon receipt by the Exchange Agent, as the undersigned's agent, of the
Exchange Notes to which the undersigned is entitled upon acceptance by the
Issuer of the Tendered Notes pursuant to the Exchange Offer, and (ii) receive
all benefits and otherwise exercise all rights of beneficial ownership of the
Tendered Notes, all in accordance with the terms of the Exchange Offer.
The undersigned understands that tenders of Notes pursuant to the
procedures described under the caption "The Exchange Offer" in the Prospectus
and in the instructions hereto will constitute a binding agreement between the
undersigned and the Issuer upon the terms and subject to the conditions of the
Exchange Offer, subject only to withdrawal of such tenders on the terms set
forth in the Prospectus under the caption "The Exchange Offer-Withdrawal
Rights." All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of the undersigned and any Beneficial
Owner(s), and every obligation of the undersigned or any Beneficial Owners
hereunder shall be binding upon the heirs, representatives, successors, and
assigns of the undersigned and such Beneficial Owner(s).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign, and transfer the
Tendered Notes and that the Issuer will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges, encumbrances, and
adverse claims when the Tendered Notes are acquired by the Issuer as
contemplated herein. The undersigned and each Beneficial Owner will, upon
request, execute and deliver any additional documents reasonably requested by
the Issuer or the Exchange Agent as necessary or desirable to complete and
give effect to the transactions contemplated hereby.
The undersigned hereby represents and warrants that the information set
forth in Box 2 is true and correct.
By accepting the Exchange Offer, the undersigned hereby represents and
warrants that (i) the Exchange Notes to be acquired by the undersigned and any
Beneficial Owner(s) in connection with the Exchange Offer are being acquired
by the undersigned and any Beneficial Owner(s) in the ordinary course of
business of the undersigned and any Beneficial Owner(s), (ii) the undersigned
and each Beneficial Owner are not participating, do not intend to participate,
and have no arrangement or understanding with any person to participate, in
the distribution of the Exchange Notes, (iii) except as otherwise disclosed in
writing herewith, neither the undersigned nor any Beneficial Owner is an
"affiliate," as defined in Rule 405 under the Securities Act, of the
2
Issuer, and (iv) the undersigned and each Beneficial Owner acknowledge and
agree that any person participating in the Exchange Offer with the intention or
for the purpose of distributing the Exchange Notes must comply with the
registration and prospectus delivery requirements of the Securities Act of
1933, as amended (together with the rules and regulations promulgated
thereunder, the "Securities Act"), in connection with a secondary resale of the
Exchange Notes acquired by such person and cannot rely on the position of the
Staff of the Securities and Exchange Commission (the "Commission") set forth in
the no-action letters that are discussed in the section of the Prospectus
entitled "The Exchange Offer." In addition, by accepting the Exchange Offer,
the undersigned hereby (i) represents and warrants that, if the undersigned or
any Beneficial Owner of the Notes is a Participating Broker-Dealer, such
Participating Broker-Dealer acquired the Notes for its own account as a result
of market-making activities or other trading activities and has not entered
into any arrangement or understanding with the Issuer or any affiliate of the
Issuer (within the meaning of Rule 405 under the Securities Act) to distribute
the New Notes to be received in the Exchange Offer, and (ii) acknowledges that,
by receiving New Notes for its own account in exchange for Notes, where such
Notes were acquired as a result of market-making activities or other trading
activities, such Participating Broker-Dealer will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
New Notes.
[_]CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED HEREWITH.
[_]CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE
"USE OF GUARANTEED DELIVERY" BELOW (BOX 4).
[_]CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE "USE OF BOOK-ENTRY TRANSFER" BELOW (BOX 5).
3
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
BOX 1
DESCRIPTION OF NOTES TENDERED
(attach additional signed pages, if necessary)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) and address(es) of Aggregate
registered note holder(s), exactly principal Aggregate
as name(s) appear(s) on note amount principal Aggregate
certificate(s) (please fill in, if Certificate number(s) represented by amount certificate(s)
blank) of notes* certificates tendered tendered**
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Total
-------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by persons tendering by book-entry transfer.
** The minimum permitted tender is $1,000 in principal amount of Notes. All
other tenders must be in integral multiples of $1,000 of principal amount.
Unless otherwise indicated in this column, the principal amount of all
Note Certificates identified in this Box 1 or delivered to the Exchange
Agent herewith shall be deemed tendered. See Instruction 4.
BOX 2
BENEFICIAL OWNER(S)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
State of principal residence of each Principal amount of tendered notes held
beneficial owner of tendered notes for account of beneficial owner
-----------------------------------------------------------------------------------
<S> <C>
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
</TABLE>
4
BOX 3
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 5, 6 and 7)
TO BE COMPLETED ONLY IF EXCHANGE NOTES EXCHANGED FOR NOTES AND UNTENDERED
NOTES ARE TO BE SENT TO SOMEONE OTHER THAN THE UNDERSIGNED, OR TO THE
UNDERSIGNED AT AN ADDRESS OTHER THAN THAT SHOWN ABOVE.
Mail Exchange Note(s) and any untendered Notes to:
Name(s):
--------------------------------------------------------------------------
(please print)
Address:
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(include zip code)
Tax Identification or
Social Security No.:
--------------------------------------------------------------------------
BOX 4
USE OF GUARANTEED DELIVERY
(See Instruction 2)
TO BE COMPLETED ONLY IF NOTES ARE BEING TENDERED BY MEANS OF A NOTICE OF
GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
--------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
5
BOX 5
USE OF BOOK-ENTRY TRANSFER
(See Instruction 1)
TO BE COMPLETED ONLY IF DELIVERY OF TENDERED NOTES IS TO BE MADE BY BOOK-
ENTRY TRANSFER.
Name of Tendering Institution:
Account Number:
Transaction Code Number:
BOX 6
TENDERING HOLDER SIGNATURE
(See Instructions 1 and 5)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
X
----------------------------------------------------
X
----------------------------------------------------
(SIGNATURE OF REGISTERED HOLDER(S) OR AUTHORIZED SIGNATORY)
Note: The above lines must be signed by the registered holder(s) of Notes
as their name(s) appear(s) on the Notes or by persons(s) authorized to
become registered holder(s) (evidence of which authorization must be
transmitted with this Letter of Transmittal). If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer, or other
person acting in a fiduciary or representative capacity, such person must
set forth his or her full title below. See Instruction 5.
Name(s): _____________________________________________
------------------------------------------------------
Capacity: ____________________________________________
------------------------------------------------------
Street Address: ______________________________________
------------------------------------------------------
------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number _______________________
Tax Identification or Social Security Number: ________
6
Signature Guarantee
(If required by Instruction 5)
Authorized Signature
X
------------------------------------------------------
Name: ________________________________________________
(PLEASE PRINT)
Title: _______________________________________________
Name of Firm: ________________________________________
(must be an Eligible Institution as defined in Instruction 2)
Address:
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number _______________________
Dated: _______________________________________________
BOX 7
BROKER-DEALER STATUS
[_]Check this box if the Beneficial Owner of the Notes is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Notes for
its own account as a result of market-making activities or other trading
activities.
7
PAYOR'S NAME: NEXSTAR FINANCE, L.L.C.
Part 1--PLEASE PROVIDE YOUR
TAXPAYER IDENTIFICATION ----------------------
TREASURY NUMBER ("TIN") IN Social Security Number
THE BOX AT RIGHT AND
CERTIFY BY SIGNING AND
DATING BELOW.
SUBSTITUTE
OR
----------------------
Form W-9 TIN
Department of the
Treasury --------------------------------------------------------
Internal Revenue Name (if joint names, list first and
Service circle the name of the person or
entity whose number you enter in Part
1 below. See instructions if your name
has changed.)
---------------------------------------
Address _______________________________
City, State and ZIP Code ______________
List account number(s) here
(optional) ____________________________
--------------------------------------------------------
Part 2--Check the box if you are NOT Part 3--
subject to backup withholding under Awaiting
the provisions of section TIN [_]
3406(a)(1)(C) of the Internal Revenue
Code because (1) you have not been
notified that you are subject to
backup withholding as a result of
failure to report all interest or
dividends or (2) the Internal Revenue
Service has notified you that you are
no longer subject to backup
withholding. [_]
--------------------------------------------------------
Certification--UNDER THE PENALTIES OF PERJURY,
I CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM
IS TRUE, CORRECT AND COMPLETE.
SIGNATURE ___________________ DATE ___________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
8
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this letter of transmittal and notes. A properly completed
and duly executed copy of this Letter of Transmittal, including Substitute Form
W-9, and any other documents required by this Letter of Transmittal must be
received by the Exchange Agent at its address set forth herein, and either
certificates for Tendered Notes must be received by the Exchange Agent at its
address set forth herein or such Tendered Notes must be transferred pursuant to
the procedures for book-entry transfer described in the Prospectus under the
caption "Exchange Offer --Book-Entry Transfer" (and a confirmation of such
transfer received by the Exchange Agent), in each case prior to 5:00 p.m., New
York City time, on the Expiration Date. The method of delivery of certificates
for Tendered Notes, this Letter of Transmittal and all other required documents
to the Exchange Agent is at the election and risk of the tendering holder and
the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. Instead of delivery by mail, it is
recommended that the Holder use an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. No Letter
of Transmittal or Notes should be sent to the Company. Neither the Issuer nor
the registrar is under any obligation to notify any tendering holder of the
Issuer's acceptance of Tendered Notes prior to the closing of the Exchange
Offer.
2. Guaranteed delivery procedures. Holders who wish to tender their Notes
but whose Notes are not immediately available, and who cannot deliver their
Notes, this Letter of Transmittal or any other documents required hereby to the
Exchange Agent prior to the Expiration Date must tender their Notes according
to the guaranteed delivery procedures set forth below, including completion of
Box 4. Pursuant to such procedures: (i) such tender must be made by or through
a firm which is a member of a recognized Medallion Program approved by the
Securities Transfer Association Inc. (an "Eligible Institution") and the Notice
of Guaranteed Delivery must be signed by the holder; (ii) prior to the
Expiration Date, the Exchange Agent must have received from the holder and the
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by mail or hand delivery) setting forth the name and
address of the holder, the certificate number(s) of the Tendered Notes and the
principal amount of Tendered Notes, stating that the tender is being made
thereby and guaranteeing that, within five New York Stock Exchange trading days
after the Expiration Date, this Letter of Transmittal together with the
certificate(s) representing the Notes and any other required documents will be
deposited by the Eligible Institution with the Exchange Agent; and (iii) such
properly completed and executed Letter of Transmittal, as well as all other
documents required by this Letter of Transmittal and the certificate(s)
representing all Tendered Notes in proper form for transfer, must be received
by the Exchange Agent within five New York Stock Exchange trading days after
the Expiration Date. Any holder who wishes to tender Notes pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery relating to such Notes prior
to 5:00 p.m., New York City time, on the Expiration Date. Failure to complete
the guaranteed delivery procedures outlined above will not, of itself, affect
the validity or effect a revocation of any Letter of Transmittal form properly
completed and executed by an Eligible Holder who attempted to use the
guaranteed delivery process.
3. Beneficial owner instructions to registered holders. Only a holder in
whose name Tendered Notes are registered on the books of the registrar (or the
legal representative or attorney-in-fact of such registered holder) may execute
and deliver this Letter of Transmittal. Any Beneficial Owner of Tendered Notes
who is not the registered holder must arrange promptly with the registered
holder to execute and deliver this Letter of Transmittal on his or her behalf
through the execution and delivery to the registered holder of the Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner form accompanying this Letter of Transmittal.
4. Partial tenders. Tenders of Notes will be accepted only in integral
multiples of $1,000 in principal amount. If less than the entire principal
amount of Notes held by the holder is tendered, the tendering holder should
fill in the principal amount tendered in the column labeled "Aggregate
Principal Amount Tendered" of the box entitled "Description of Notes Tendered"
(Box 1) above. The entire principal amount of Notes delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated. If the
entire principal amount of all Notes held by the holder is not tendered, then
Notes for the principal amount of Notes not tendered and Exchange Notes
9
issued in exchange for any Notes tendered and accepted will be sent to the
Holder at his or her registered address, unless a different address is provided
in the appropriate box on this Letter of Transmittal, as soon as practicable
following the Expiration Date.
5. Signatures on the letter of transmittal; bond powers and endorsements;
guarantee of signatures. If this Letter of Transmittal is signed by the
registered holder(s) of the Tendered Notes, the signature must correspond with
the name(s) as written on the face of the Tendered Notes without alteration,
enlargement or any change whatsoever. If any of the Tendered Notes are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any Tendered Notes are held in different names, it will be necessary to
complete, sign and submit as many separate copies of the Letter of Transmittal
as there are different names in which Tendered Notes are held.
If this Letter of Transmittal is signed by the registered holder(s) of
Tendered Notes, and Exchange Notes issued in exchange therefor are to be issued
(and any untendered principal amount of Notes is to be reissued) in the name of
the registered holder(s), then such registered holder(s) need not and should
not endorse any Tendered Notes, nor provide a separate bond power. In any other
case, such registered holder(s) must either properly endorse the Tendered Notes
or transmit a properly completed separate bond power with this Letter of
Transmittal, with the signature(s) on the endorsement or bond power guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any Tendered Notes, such Tendered Notes must be
endorsed or accompanied by appropriate bond powers, in each case, signed as the
name(s) of the registered holder(s) appear(s) on the Tendered Notes, with the
signature(s) on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Tendered Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by
the Issuer, evidence satisfactory to the Issuer of their authority to so act
must be submitted with this Letter of Transmittal.
Endorsements on Tendered Notes or signatures on bond powers required by this
Instruction 5 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution unless the Tendered Notes are tendered (i) by a registered holder
who has not completed the box set forth herein entitled "Special Delivery
Instructions" (Box 3) or (ii) by an Eligible Institution.
6. Special delivery instructions. Tendering holders should indicate, in the
applicable box (Box 3), the name and address to which the Exchange Notes and/or
substitute Notes for principal amounts not tendered or not accepted for
exchange are to be sent, if different from the name and address of the person
signing this Letter of Transmittal. In the case of issuance in a different
name, the taxpayer identification or social security number of the person named
must also be indicated.
7. Transfer taxes. The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Tendered Notes pursuant to the Exchange Offer.
If, however, a transfer tax is imposed for any reason other than the transfer
and exchange of Tendered Notes pursuant to the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or on any
other person) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with this
Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering holder.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Tendered Notes listed in this Letter
of Transmittal.
10
8. Tax identification number. Federal income tax law requires that the
holder(s) of any Tendered Notes which are accepted for exchange must provide
the Issuer (as payor) with its correct taxpayer identification number ("TIN"),
which, in the case of a holder who is an individual, is his or her social
security number. If the Issuer is not provided with the correct TIN, the Holder
may be subject to backup withholding and a $50 penalty imposed by the Internal
Revenue Service. (If withholding results in an over-payment of taxes, a refund
may be obtained.) Certain holders (including, among others, all corporations
and certain foreign individuals) are not subject to these backup withholding
and reporting requirements. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional
instructions.
To prevent backup withholding, each holder of Tendered Notes must provide
such holder's correct TIN by completing the Substitute Form W-9 set forth
herein, certifying that the TIN provided is correct (or that such holder is
awaiting a TIN), and that (i) the holder has not been notified by the Internal
Revenue Service that such holder is subject to backup withholding as a result
of failure to report all interest or dividends or (ii) the Internal Revenue
Service has notified the holder that such holder is no longer subject to backup
withholding. If the Tendered Notes are registered in more than one name or are
not in the name of the actual owner, consult the "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for information on
which TIN to report.
The Issuer reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Issuer's obligation regarding backup
withholding.
9. Validity of tenders. All questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of Tendered Notes will
be determined by the Issuer in its sole discretion, which determination will be
final and binding. The Issuer reserves the right to reject any and all Notes
not validly tendered or any Notes the Issuer's acceptance of which would, in
the opinion of the Issuer or their counsel, be unlawful. The Issuer also
reserves the right to waive any conditions of the Exchange Offer or defects or
irregularities in tenders of Notes as to any ineligibility of any holder who
seeks to tender Notes in the Exchange Offer. The interpretation of the terms
and conditions of the Exchange Offer (including this Letter of Transmittal and
the instructions hereto) by the Issuer shall be final and binding on all
parties. Unless waived, any defects or irregularities in connection with
tenders of Notes must be cured within such time as the Issuer shall determine.
Neither the Issuer, the Exchange Agent nor any other person shall be under any
duty to give notification of defects or irregularities with respect to tenders
of Notes, nor shall any of them incur any liability for failure to give such
notification. Tenders of Notes will not be deemed to have been made until such
defects or irregularities have been cured or waived. Any Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders, unless otherwise provided in this Letter of
Transmittal, as soon as practicable following the Expiration Date.
10. Waiver of conditions. The Company reserves the absolute right to amend,
waive or modify any of the conditions in the Exchange Offer in the case of any
Tendered Notes.
11. No conditional tender. No alternative, conditional, irregular, or
contingent tender of Notes or transmittal of this Letter of Transmittal will be
accepted.
12. Mutilated, lost, stolen or destroyed notes. Any tendering Holder whose
Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated herein for further instructions.
13. Requests for assistance or additional copies. Questions and requests for
assistance and requests for additional copies of the Prospectus or this Letter
of Transmittal may be directed to the Exchange Agent at the address indicated
herein. Holders may also contact their broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Exchange Offer.
14. Acceptance of tendered notes and issuance of notes; return of
notes. Subject to the terms and conditions of the Exchange Offer, the Issuer
will accept for exchange all validly tendered Notes as soon as practicable
after the Expiration Date and will issue Exchange Notes therefor as soon as
practicable thereafter. For purposes of the
11
Exchange Offer, the Issuer shall be deemed to have accepted tendered Notes
when, as and if the Issuer has given written or oral notice (immediately
followed in writing) thereof to the Exchange Agent. If any Tendered Notes are
not exchanged pursuant to the Exchange Offer for any reason, such unexchanged
Notes will be returned, without expense, to the undersigned at the address
shown in Box 1 or at a different address as may be indicated herein under
"Special Delivery Instructions" (Box 3).
15. Withdrawal. Tenders may be withdrawn only pursuant to the procedures set
forth in the Prospectus under the caption "The Exchange Offer."
12
EXHIBIT 99.2
Notice of Guaranteed Delivery
With Respect to
16% Senior Discount Notes Due 2009
of
Nexstar Finance Holdings, L.L.C.
Nexstar Finance Holdings, Inc.
Pursuant to the Prospectus Dated , 2001
This form must be used by a holder of 16% Senior Discount Notes due 2009
(the "Notes") of Nexstar Finance Holdings, L.L.C., a Delaware limited liability
corporation, and of Nexstar Finance Holdings, Inc., a Delaware corporation (the
"Company"), who wishes to tender Notes to the Exchange Agent pursuant to the
guaranteed delivery procedures described in "The Exchange Offer--Guaranteed
Delivery Procedures" of the Company's Prospectus, dated , 2001 (the
"Prospectus") and in Instruction 2 to the related Letter of Transmittal. Any
holder who wishes to tender Notes pursuant to such guaranteed delivery
procedures must ensure that the Exchange Agent receives this Notice of
Guaranteed Delivery prior to the Expiration Date of the Exchange Offer.
Capitalized terms used but not defined herein have the meanings ascribed to
them in the Prospectus or the Letter of Transmittal.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON , 2001 UNLESS EXTENDED (THE "EXPIRATION DATE").
United States Trust Company of New York
(the "Exchange Agent")
<TABLE>
<CAPTION>
By Registered or Certified Mail By Hand Delivery (before 4:30 By Overnight Courier and By Hand
p.m.) after 4:30 p.m. on the Expiration
Date
<S> <C> <C>
United States Trust Company of United States Trust Company of United States Trust Company of
New York New York New York
P.O. Box 112 Bowling Green
Station 30 Broad Street, B-Level 30 Broad Street 14th Floor
New York, New York 10274-0084 New York, New York 10004-2304 New York, New York 10004-2304
</TABLE>
By Facsimile:
(646) 458-8111
Attn: Customer Service
Confirm by telephone:
(800) 548-6565
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS NOTICE OF GUARANTEED DELIVERY OR FOR ANY
ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT
800-548-6565, OR BY FACSIMILE AT (646) 458-8111.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and subject to
the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Notes set forth below pursuant to the guaranteed delivery procedures set forth
in the Prospectus and in Instruction 2 of the Letter of Transmittal.
The undersigned hereby tenders the Notes listed below:
<TABLE>
<CAPTION>
Certificate Number(s) (if known) of Notes or Aggregate Principal Aggregate Principal
Account Number at the Book-Entry Facility Amount Represented Amount Tendered
---------------------------------------------------------------------------------------
<S> <C> <C>
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
</TABLE>
PLEASE SIGN AND COMPLETE
--------------------------------------------------------------------------------
Signatures of Registered Holder(s) Date:
or Authorized Signatory:
_______________________________, 2001
_____________________________________
Address:
_____________________________________
_____________________________________
_____________________________________
_____________________________________
Name(s) of Registered Holder(s):
_____________________________________
_____________________________________
Area Code and Telephone No.:
_____________________________________
_____________________________________
_____________________________________
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear on certificates for Notes or on a security position
listing as the owner of Notes, or by person(s) authorized to become Holder(s)
by endorsements and documents transmitted with this Notice of Guaranteed
Delivery. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
______________________________________________________________________________
______________________________________________________________________________
Capacity:
______________________________________________________________________________
Address(es):
______________________________________________________________________________
______________________________________________________________________________
________________________________________________________________________________
2
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., or is a commercial bank or trust company having an office or
correspondent in the United States, or is otherwise an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Securities Exchange
Act of 1934, as amended, guarantees deposit with the Exchange Agent of the
Letter of Transmittal (or facsimile thereof), together with the Notes
tendered hereby in proper form for transfer (or confirmation of the book-
entry transfer of such Notes into the Exchange Agent's account at the Book-
Entry Transfer Facility described in the prospectus under the caption "The
Exchange Offer--Guaranteed Delivery Procedures" and in the Letter of
Transmittal) and any other required documents, all by 5:00 p.m., New York
City time, on the fifth New York Stock Exchange trading day following the
Expiration Date.
Name of firm:
_____________________________________ _____________________________________
(AUTHORIZED SIGNATURE)
Address:
Name:
_____________________________________
_____________________________________
_____________________________________ (PLEASE PRINT)
(INCLUDE ZIP CODE)
Title:
Area Code and Tel. No.:
_____________________________________
_____________________________________
Dated: . 2001
DO NOT SEND SECURITIES WITH THIS FORM. ACTUAL SURRENDER OF SECURITIES MUST
BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF
TRANSMITTAL.
3
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed and
duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by
the Exchange Agent at its address set forth herein prior to the Expiration
Date. The method of delivery of this Notice of Guaranteed Delivery and any
other required documents to the Exchange Agent is at the election and sole risk
of the holder, and the delivery will be deemed made only when actually received
by the Exchange Agent. If delivery is by mail, registered mail with return
receipt requested, properly insured, is recommended. As an alternative to
delivery by mail, the holders may wish to consider using an overnight or hand
delivery service. In all cases, sufficient time should be allowed to assure
timely delivery. For a description of the guaranteed delivery procedures, see
Instruction 2 of the Letter of Transmittal.
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Notes referred
to herein, the signature must correspond with the name(s) written on the face
of the Notes without alteration, enlargement, or any change whatsoever. If this
Notice of Guaranteed Delivery is signed by a participant of the Book-Entry
Transfer Facility whose name appears on a security position listing as the
owner of the Notes, the signature must correspond with the name shown on the
security position listing as the owner of the Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Notes listed or a participant of the Book-Entry
Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by
appropriate bond powers, signed as the name of the registered holder(s) appears
on the Notes or signed as the name of the participant shown on the Book-Entry
Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Company of such person's authority to so act.
3. Requests for Assistance or Additional Copies. Questions and requests for
assistance and requests for additional copies of the Prospectus may be directed
to the Exchange Agent at the address specified in the Prospectus. Holders may
also contact their broker, dealer, commercial bank, trust company, or other
nominee for assistance concerning the Exchange Offer.
4
EXHIBIT 99.3
INSTRUCTIONS TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
OF
NEXSTAR FINANCE HOLDINGS, L.L.C.
NEXSTAR FINANCE HOLDINGS, INC.
16% SERIES B SENIOR DISCOUNT NOTES DUE 2009
To Registered Holder and/or Participant of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Prospectus, dated ,
2001 (the "Prospectus") of Nexstar Finance Holdings, L.L.C., a Delaware limited
liability corporation, and of Nexstar Finance Holdings, Inc., a Delaware
corporation (the "Company"), and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), that together constitute the Company's offer (the
"Exchange Offer"). Capitalized terms used but not defined herein have the
meanings ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to action to be taken by you relating to the Exchange
Offer with respect to the 16% Senior Discount Notes due 2009 (the "Notes") held
by you for the account of the undersigned.
The aggregate face amount of the Notes held by you for the account of the
undersigned is (FILL IN AMOUNT):
$ of the 16% Senior Discount Notes due 2009
With respect to the Exchange Offer, the undersigned hereby instructs you
(CHECK APPROPRIATE BOX):
[_]TO TENDER the following Notes held by you for the account of the undersigned
(INSERT PRINCIPAL AMOUNT OF NOTES TO BE TENDERED, IF ANY):
$
[_]NOT TO TENDER any Notes held by you for the account of the undersigned.
If the undersigned instruct you to tender the Notes held by you for the
account of the undersigned, it is understood that you are authorized (a) to
make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representation and warranties contained in the
Letter of Transmittal that are to be made with respect to the undersigned as a
beneficial owner, including but not limited to the representations that (i) the
undersigned's principal residence is in the state of (FILL IN STATE) ,
(ii) the undersigned is acquiring the Exchange Notes in the ordinary course of
business of the undersigned, (iii) the undersigned is not participating, does
not participate, and has no arrangement or understanding with any person to
participate in the distribution of the Exchange Notes, (iv) the undersigned
acknowledges that any person participating in the Exchange Offer for the
purpose of distributing the Exchange Notes must comply with the registration
and prospectus delivery requirements of the Securities Act of 1933, as amended
(the "Act"), in connection with a secondary resale transaction of the Exchange
Notes acquired by such person and cannot rely on the position of the Staff of
the Securities and Exchange Commission set forth in no-action letters that are
discussed in the section of the Prospectus entitled "The Exchange Offer--
Resales of the Exchange Notes," and (v) the undersigned is not an "affiliate,"
as defined in Rule 405 under the Act, of the Company; (b) to agree, on behalf
of the undersigned, as set forth in the Letter of Transmittal; and (c) to take
such other action as necessary under the Prospectus or the Letter of
Transmittal to effect the valid tender of such Notes.
SIGN HERE
Name of beneficial owner(s):
________________________________________________________________________________
Signature(s):
________________________________________________________________________________
Name (please print):
________________________________________________________________________________
Address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Telephone number:
________________________________________________________________________________
Taxpayer Identification or Social Security Number:
________________________________________________________________________________
Date:
________________________________________________________________________________
2