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EXHIBIT 10.9
MONITORING AND OVERSIGHT AGREEMENT
THIS MONITORING AND OVERSIGHT AGREEMENT (this "Agreement") is made and
entered into effective as of February 28, 1997, among Sunrise Television Corp.,
a Delaware corporation ("Holdings"), STC Broadcasting, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇, Muse & Co. Partners, L.P., a Texas
limited partnership (together with its successors, "HMCo").
1. Retention. Holdings and the Company hereby acknowledge that
they have retained HMCo, and HMCo acknowledges that, subject to reasonable
advance notice in order to accommodate scheduling, HMCo will provide financial
oversight and monitoring services to Holdings and the Company as requested by
the board of directors of Holdings during the term of this Agreement.
2. Term. The term of this Agreement shall continue until the
earlier of (i) the tenth anniversary of the date hereof, or (ii) the date on
which Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Equity Fund III, L.P. and its affiliates cease
to own beneficially, directly or indirectly, any securities of Holdings or its
successors.
3. Compensation.
(a) As compensation for HMCo's services to Holdings and
the Company under this Agreement, Holdings and the Company hereby irrevocably
agrees to pay to HMCo, and Holdings agrees to cause the Company to pay, an
annual fee (the "Monitoring Fee") of $75,000 (the "Base Fee"), subject to
adjustment pursuant to paragraphs (b) and (c) below and prorated on a daily
basis for any partial calendar year during the term of this Agreement. The
Monitoring Fee shall be payable in equal quarterly installments on each January
1, April 1, July 1 and October 1 during the term of this Agreement (each a
"Payment Date"), beginning with the first Payment Date following the date
hereof. All payments shall be made by wire transfer of immediately available
funds to the account described on Exhibit A hereto (or such other account as
HMCo may hereafter designate in writing).
(b) On January 1 of each calendar year during the term of
this Agreement, the Monitoring Fee shall be adjusted to an annual amount equal
to (i) the budgeted consolidated annual net sales of the Company and its
subsidiaries for the then-current fiscal year, multiplied by (ii) 0.2% (the
"Percentage"); provided, however, that in no event shall the annual Monitoring
Fee be less than the Base Fee.
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(c) On each occasion that the Company or any of its
subsidiaries shall acquire another entity or business during the term of this
Agreement, the annual Monitoring Fee for the calendar year in which such
acquisition occurs shall be adjusted prospectively (i.e., for periods
subsequent to such acquisition until the next adjustment pursuant to clause (b)
above), as of the closing of such acquisition, to an annual amount equal to (i)
the proforma combined budgeted consolidated annual net sales of the Company and
its subsidiaries for the entire then-current fiscal year of the Company
(including the sales of the acquired entity or business for such entire fiscal
year, on a pro forma basis), multiplied by (ii) the Percentage; provided,
however, that in no event shall the annual Monitoring Fee be less than the Base
Fee.
(d) All past due payments in respect of the Monitoring
Fee shall bear interest at the lesser of the highest rate of interest which may
be charged under applicable law or the prime commercial lending rate per annum
of Chemical Bank, N.A. or its successors (which rate is a reference rate and is
not necessarily its lowest or best rate of interest actually charged to any
customer) (the "Prime Rate") as in effect from time to time, plus five percent
(5%), from the due date of such payment to and including the date on which
payment is made to HMCo in full, including such interest accrued thereon.
4. Reimbursement of Expenses. In addition to the compensation to
be paid pursuant to Section 3 hereof, Holdings and the Company agree to pay or
reimburse HMCo for all "Reimbursable Expenses," which shall consist of (i) all
reasonable disbursement and out-of-pocket expenses (including without
limitation, costs of travel, postage, deliveries, communications, etc.)
incurred by HMCo or its affiliates for the account of Holdings or the Company
or in connection with the performance by HMCo of the services contemplated by
Section 1 hereof and (ii) Holdings' Pro Rata Share of Allocable Expenditures as
defined in Exhibit B hereto. Promptly (but not more than 10 days) after
request by or notice from HMCo, Holdings and the Company shall, and Holdings
shall cause the Company to, pay HMCo, by wire transfer of immediately available
funds to the account described on Exhibit A hereto (or such other account as
HMCo may hereafter designate in writing), the Reimbursable Expenses for which
HMCo has provided Holdings and the Company invoices or reasonably detailed
descriptions. All past due payments in respect of the Reimbursable Expenses
shall bear interest at the lesser of the highest rate of interest which may be
charged under applicable law or the Prime Rate plus 5% from the Payment Date to
and including the date on which such Reimbursable Expenses plus accrued
interest thereon are fully paid to HMCo.
5. Indemnification. Holdings and the Company jointly and
severally shall indemnify and hold harmless each of HMCo, its affiliates, and
their respective directors, officers, controlling persons (within the meaning
of Section 15 of the Securities Act of 1933 or Section 20(a) of the Securities
Exchange Act of 1934), if any, agents and employees
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(HMCo, its affiliates, and such other specified persons being collectively
referred to as "Indemnified Persons", and individually as an "Indemnified
Person") from and against any and all claims, liabilities, losses, damages and
expenses incurred by any Indemnified Person (including those arising out of an
Indemnified Person's negligence and fees and disbursements of the respective
Indemnified Person's counsel) which (A) are related to or arise out of (i)
actions taken or omitted to be taken (including any untrue statements made or
any statements omitted to be made) by Holdings and/or the Company or (ii)
actions taken or omitted to be taken by an Indemnified Person with Holdings' or
the Company's consent or in conformity with Holdings' or the Company's
instructions or Holdings' or the Company's actions or omissions or (B) are
otherwise related to or arise out of HMCo's engagement, and will reimburse each
Indemnified Person for all costs and expenses, including fees and disbursements
of any Indemnified Person's counsel, as they are incurred, in connection with
investigating, preparing for, defending, or appealing any action, formal or
informal claim, investigation, inquiry or other proceeding, whether or not in
connection with pending or threatened litigation, caused by or arising out of
or in connection with HMCo's acting pursuant to HMCo's engagement, whether or
not any Indemnified Person is named as a party thereto and whether or not any
liability results therefrom. Neither Holdings nor the Company will, however,
be responsible for any claims, liabilities, losses, damages or expenses
pursuant to clause (B) of the preceding sentence that have resulted primarily
from HMCo's bad faith, gross negligence or willful misconduct. Holdings and
the Company also agree that neither HMCo nor any other Indemnified Person shall
have any liability to Holdings or the Company for or in connection with such
engagement except for any such liability for claims, liabilities, losses,
damages or expenses incurred by Holdings and/or the Company that have resulted
primarily from HMCo's bad faith, gross negligence or willful misconduct.
Holdings and the Company further agree that neither of them will, without the
prior written consent of HMCo, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of HMCo and each other Indemnified Person hereunder from
all liability arising out of such claim, action, suit or proceeding. HOLDINGS
AND THE COMPANY HEREBY ACKNOWLEDGE THAT THE FOREGOING INDEMNITY SHALL BE
APPLICABLE TO ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT HAVE
RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE
SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF HMCO OR ANY OTHER INDEMNIFIED
PERSON.
The foregoing right to indemnity shall be in addition to any rights
that HMCo and/or any other Indemnified Person may have at common law or
otherwise and shall remain in full force and effect following the completion or
any termination of the engagement. Holdings and the Company hereby consent to
personal jurisdiction and to service and venue in any
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court in which any claim which is subject to this Agreement is brought against
HMCo or any other Indemnified Person.
It is understood that, in connection with HMCo's engagement, HMCo may
also be engaged to act for Holdings and/or the Company in one or more
additional capacities, and that the terms of this engagement or any such
additional engagement(s) may be embodied in one or more separate written
agreements. This indemnification shall apply to the engagement specified in
the first paragraph hereof as well as to any such additional engagement(s)
(whether written or oral) and any modification of said engagement or such
additional engagement(s) and shall remain in full force and effect following
the completion or termination of said engagement or such additional
engagements.
Holdings and the Company further understand and agree that if HMCo is
asked to furnish Holdings and/or the Company a financial opinion letter or act
for Holdings and/or the Company in any other formal capacity, such further
action may be subject to a separate agreement containing provisions and terms
to be mutually agreed upon.
6. Confidential Information. In connection with the performance
of the services hereunder, HMCo agrees not to divulge any confidential
information, secret processes or trade secrets disclosed by Holdings or the
Company to it solely in its capacity as a financial advisor, unless Holdings
and the Company consent to the divulging thereof or such information, secret
processes or trade secrets are publicly available or otherwise available to
HMCo without restriction or breach of any confidentiality agreement or unless
required by any governmental authority or in response to any valid legal
process.
7. Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of Texas, excluding any
choice-of-law provisions thereof.
8. Assignment. This Agreement and all provisions contained
herein shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned (other than with respect to the rights and obligations of HMCo, which
may be assigned to any one or more of its principals or affiliates) by any of
the parties without the prior written consent of the other parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended
to, any other counterpart.
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10. Other Understandings. All discussions, understandings and
agreements heretofore made between any of the parties hereto with respect to
the subject matter hereof are merged in this Agreement, which alone fully and
completely expresses the Agreement of the parties hereto. All calculations of
the Monitoring Fee and Reimbursable Expenses shall be made by HMCo and, in the
absence of mathematical error, shall be final and conclusive.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date and year first above written.
▇▇▇▇▇, MUSE & CO. PARTNERS, L.P.
By: HM PARTNERS INC.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President
SUNRISE TELEVISION CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
President and
Chief Executive Officer
STC BROADCASTING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
President and
Chief Executive Officer