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Exhibit 10.38
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is entered into as of
October 1, 1997 by and between WJAC, INCORPORATED, a Pennsylvania corporation
("WJAC") and STC BROADCASTING, INC., ("STC"), a Delaware corporation.
WHEREAS, STC License Company, a Delaware corporation and a sister
company to WJAC, is the licensee of WJAC-TV, Channel 6, Johnstown, Pennsylvania
(the "Station");
WHEREAS, WJAC desires to retain the services of STC in the management
of the Station; and
WHEREAS, STC desires to provide management services to WJAC for the
Station.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Engagement. WJAC, as the owner of the Station, hereby retains STC to
provide advice and consultation on the operation of the Station in
accordance with and subject to the terms of this Agreement. STC shall
devote such time and attention to the business and affairs of the
Station as reasonably and prudently necessary or proper for the
conduct of STC's duties hereunder.
2. Services. STC shall provide the following services to WJAC for a
five-year period commencing October 1, 1997 and ending September 30,
2002 as follows:
(a) assist in preparation of the Station's operating and
salary budgets and assist in cost controls of
departmental budgets;
(b) advise and consult on selection of senior management
of the Station, including general and sales managers
and department managers;
(c) advise on the purchase of film and syndicated
programming and program schedule changes for the
Station;
(d) advise on the purchase of capital assets and
development of a long-term program for capital
replacement for the Station (including the
implementation of HDTV operations);
(e) advise on negotiations with unions and talent
contracts and the development of employee procedures
and benefits for the Station and monitor the
Station's compliance with their EEOC programs;
(f) assist in the identification of replacement
employees and the training of new and present staff
at the Station;
(g) assist in the development and maintenance of
accounting systems, internal controls procedures and
management reporting systems at the Station;
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(h) assist in the daily operations and management of the
Station as reasonably requested by WJAC; provided,
however, that nothing herein shall require STC to
spend any specific amount of time on site at the
Station;
(i) advise and provide assistance regarding employee
benefits for the Station's employees;
(j) coordinate cash management system and communications
with Station's senior lenders; and
(k) assist in the completion of the audit of the Station's
financial statements and preparation of Federal and
State tax returns.
3. Payment for Services. Commencing October 1, 1997 and payable
thereafter on the 1st day of each month until the termination of
the services to be provided to WJAC pursuant to the terms of this
Agreement, WJAC shall pay to STC at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address as
requested in writing by STC, the following monthly compensation:
October 1, 1997 through September 30, 1998 $15,000
October 1, 1998 through September 30, 1999 $15,750
October 1, 1999 through September 30, 2000 $16,538
October 1, 2000 through September 30, 2001 $17,364
October 1, 2001 through September 30, 2002 $18,233
The foregoing payments shall be subject to the covenants
relating to financial performance as contained in the Credit Agreement
dated as of February 28, 1997, as amended, among STC, as Borrower, the
Lenders party thereto, NationsBank of Texas, N.A., as Documentation
Agent, and The Chase Manhattan Bank, as Administrative and Syndication
Agent, (the "Credit Agreement") or any replacement senior debt
financing. Any payments due hereunder that are not permitted to be
made by such covenants shall accrue and shall be paid to STC as soon
as they are permitted to be paid in accordance with the terms of the
Credit Agreement or any replacement senior debt financing. The
compensation set forth above is to be paid in full consideration of
all services to be rendered by STC under this Agreement.
4. Limitation of Liability. STC's liability arising out of any failure
by STC to perform the services set forth in Section 2 of this
Agreement shall be limited to an appropriate reduction in the amount
payable by WJAC to STC. STC shall not be liable to WJAC for any
damages, either direct, indirect, consequential, special, incidental,
actual, punitive, or any other damages, or for any lost profits of
any kind or nature whatsoever, due to mistakes, accidents, omissions,
interruptions, delays, or errors arising out of or relating to this
Agreement; provided, however, that STC shall be liable, without
limitation, for loss, damage or injury resulting from the gross
negligence or intentional misconduct of STC.
5. Termination. WJAC may terminate this Agreement without cause upon
the sale of the Station. WJAC may terminate this Agreement at any
time on thirty (30) days written notice based on any material failure
by STC to perform its duties hereunder.
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6. Notices. All notices and communications required by this Agreement
shall be required in writing, mailed by first-class registered or
certified mail, addressed as follows:
(i) If to STC:
STC Broadcasting, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
(ii) If to WJAC:
WJAC, Incorporated
▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
The parties shall have the right during the term of this Agreement to
change their respective addresses; however, for such notice to be valid and
effective, any such notice must be actually received (as evidenced by a
return receipt). All payments made pursuant to this Agreement shall be
made at the address at which notices are sent, unless otherwise specified
in writing.
7. Entire Agreement; Amendment. This Agreement contains the entire
agreement between the parties. No amendment, modification or
discharge of this Agreement shall be valid or binding unless set forth
in writing and executed by each party to this Agreement.
8. Choice of Law. This Agreement shall be governed by and construed
under and in accordance with the laws (but not the law of
conflicts) of the State of New York.
9. Authorization. Each party to this Agreement represents and warrants to
each other party of this Agreement that the execution, delivery and
performance of this Agreement have been validly authorized and
constitutes a valid and binding agreement by and between WJAC and STC.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or
has caused this Agreement to be duly executed and delivered in its name on its
behalf, all of as the day and year first above written.
WJAC, INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
President
STC BROADCASTING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇,
Senior Vice President, Chief Financial
Officer, Secretary
