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EXHIBIT 10.07
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement is entered into as of March 1, 1996
by and between Airfair Publishing, Inc., a Delaware corporation ("API"), BEI
Holdings, Inc., a Texas corporation ("BEI"), and Inventory Merchandising
Services, Inc., a Texas corporation and wholly-owned subsidiary of BEI ("IMS").
RECITALS
API, formerly a wholly-owned subsidiary of BEI, continues to maintain
offices within the space leased by BEI at 0000 Xxxxxxx xx Xxxxx Xxxxxxx,
Xxxxxxxx 0, Xxxxxx, Xxxxx and desires (a) to document its right to use such
offices and use certain common areas within and outside the space leased by BEI
and (b) to procure certain management and administrative services from BEI and
IMS. BEI desires to document such use rights and BEI and IMS desire to provide
such management and administrative services.
NOW, THEREFORE, for and in consideration of the foregoing recitals,
the mutual covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of all of which is hereby
conclusively acknowledged, API, BEI and IMS do hereby agree as follows:
AGREEMENTS
1. (a) BEI hereby permits Airfair access to and use of (i)
approximately 8,000 square feet of space on the third floor of Building 3 of
the building known locally as "The Setting," located at 0000 Xxxxxxx xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000 (the "Building"), which space is indicated
as the "API Space" on Exhibit A attached hereto and (ii) all common areas
within the Building to which BEI is permitted access or is permitted to use
((i) and (ii) together are hereinafter referred to as the "Used Areas"). API
hereby assumes the obligations of BEI under that certain lease agreement dated
as of December 30, 1996 by and between BEI and Xxxxxxx Properties, Inc., as
subsequently assigned to Carramerica, Ltd., (the "Landlord") with respect to
the Used Areas, save and except any rent or expense payment obligation to the
Landlord.
(b) IMS and BEI has leased certain telephone, computer
and other equipment which is used by API, and BEI and API share use of other
equipment. BEI hereby subleases to API and API hereby subleases from BEI the
items set forth on Exhibit B attached hereto (the "Shared Equipment"). API
hereby assumes the obligations of BEI under various equipment leases set forth
on Exhibit B attached hereto with respect to the Shared Equipment, save and
except any rent or expense payment obligation to the Lessor.
2. (a) BEI and IMS hereby agrees to provide the management
services of the following individuals (the "Shared Management Members"), each
of whom has currently serves as an executive officer of BEI and/or IMS:
Xxxxxxx X'Xxxxx
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Xxxxxx X. Xxxx
Xxxxxxx Xxxxxx
API acknowledges and understands that each of the Shared Management
Members has significant management responsibilities to BEI and IMS. BEI and
IMS agree that the obligation of each of the Shared Management Members to
provide management services to BEI and IMS shall not interfere with the
obligation of each of the Shared Management Members to provide services to API
hereunder and that each of the Shared Management Members shall be available for
service to API at such times as API may reasonably require. BEI, IMS and API
estimate that Xx. X'Xxxxx will expend approximately 40% of his work effort on
the affairs of API, Xx. Xxxx will expend approximately 80% of his work effort
on the affairs of API and that Xx. Xxxxxx will expend approximately 50% of his
work effort on the affairs of API. BEI hereby agrees that it will serve as
employer of each of the Shared Management Members and assumes payroll
responsibility, including without limitation salary, FICA, SUTA and FUTA
payment and compliance, for each of the Shared Management Members without
regard to the amount of time or effort expended by the Shared Management
Members on behalf of API, IMS or BEI. API agrees to reimburse BEI for that
proportion of the total direct payroll expense incurred by BEI during any month
with respect to each of the Shared Management Members as equals the proportion
of the work effort which each such each Shared Management Member is estimated
to expend on the affairs of API. Any such reimbursement shall be due on the
fifth (5th) day after the last day of any month during the term of this
Agreement.
(b) API and BEI agree that certain individuals on the
payroll of BEI work only in the service of API (the "Current Employees") but
that transfer of the Current Employees from the payroll of BEI to API will work
an undue hardship upon the Current Employees. BEI agrees that it will (i)
serve as the employer of the Current Employees and any other employees
(together with the Current Employees, the "API Employees") which API may hire
between the date of this Agreement and the earlier of December 31, 1996 or such
date as API may request (the "Payroll Termination Date"), (ii) assume payroll
responsibility for the API Employees through the Payroll Termination Date and
(iii) not involve any of the API Employees in the affairs or business of BEI or
IMS. API agrees to reimburse BEI for the total direct payroll expense incurred
by BEI during such month with respect to the API Employees. Any such
reimbursement shall be due on the fifth (5th) day after the last day of any
month during the term of this Agreement.
(c) API and BEI agree that certain individuals on the
payroll of BEI provide or will provide services benefitting API and one or both
of BEI and IMS (the "Shared Employees"), including without limitation employees
who provide reception or accounting services. BEI agrees that it will (i)
serve as the employer of the Shared Employees and (ii) assume payroll
responsibility for the Shared Employees through the Payroll Termination Date.
(d) BEI hereby agrees to indemnify and hold API harmless
from and against any claims by any of the Shared Management Members or the API
Employees for any matters relating to their employment, save and except any
claims for damages or liabilities arising out of the employment or hiring
practices of API. API hereby agrees to
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indemnify and hold BEI harmless from and against any claims by any of the
Shared Management Members or the API Employees for any matters relating to the
employment or hiring practices of API.
3. BEI agrees to insure the Subleased Areas, the Subleased
Equipment, the Shared Management Members, the API Employees and the Shared
Employees to the same extent and against the same risks as BEI insures its own
lease area, equipment, operations, management and employees. BEI shall be
deemed to have complied with the insurance requirement set forth in this
paragraph if API is named as an additional insured on each policy of insurance
maintained by BEI.
4. As compensation for the various services to be provided
hereunder and the various agreements of BEI and IMS hereunder, API hereby
agrees to pay to BEI and IMS, collectively, a cash sum equal to one-half
percent (.5%) of API's gross cash receipts during any month in which this
Agreement remains in full force and effect. Such sums shall be due and payable
on the thirtieth (30th) day after the last day of the month with respect to
which such calculation is made. Not later than the twentieth (20th) day after
the last day of any month during which this Agreement remains in effect, API
shall deliver to BEI a certificate setting forth its gross receipts during such
month.
5. Any sums (whether reimbursement, compensation or otherwise)
not paid on or prior to the due date for payment of such sum, shall accrue
interest at the rate of ten percent (10%) per annum, compounded monthly, from
such due date through the date such sum is paid in full.
6. This Agreement may be terminated at the option of either party
by giving 30 days prior written notice to the other party. If not sooner
terminated, this Agreement shall terminate on the second anniversary of the
date hereof.
7. (a) This Agreement shall be binding upon and inure to the
benefit of the respective successors and permitted assigns of the parties
hereto; provided, however, that a party hereto may not assign any rights,
obligations, or liabilities hereunder without the prior written consent of the
other parties.
(b) All notices required or desired to be delivered under this
Agreement shall be in writing and shall be effective when delivered personally
on the day delivered or, when given by registered mail, postage prepaid, return
receipt requested, on the day of receipt, addressed as follows (or to such
other address as the party entitled to notice shall hereafter designate in
accordance with the terms hereof):
if to Airfair:
Airfair Publishing, Inc.
1120 Capital of Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxx, President
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if to BEI:
BEI Holdings, Inc.
1120 Capital of Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxx, Chief Financial Officer
if to IMS:
Inventory Merchandising Services, Inc.
1120 Capital of Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxx Xxxxxxxxx, President
(c) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas (excluding the law thereof that
requires the application of, or reference to, the law of any other
jurisdiction). This Agreement shall be performable in Xxxxxx, Xxxxxx County,
Texas.
(d) This Agreement may be executed in counterparts, each such
counterpart to be deemed an original, but which all together shall constitute
one and the same instrument.
(e) This Agreement constitutes the entire agreement between the
parties hereto with respect to the matters referred to herein, and no other
agreement, verbal or otherwise, shall be binding among the parties unless it is
in writing and signed by the party against whom enforcement is sought.
(f) This Agreement may not be amended except by the express
written consent of the parties hereto. No waiver of any provision of this
Agreement may be implied from any course of dealing between or among any of the
parties hereto or from any failure by any party hereto to assert its rights
under this Agreement on any occasion or series of occasions.
(g) The provisions of this Agreement shall survive the termination
of this Agreement with respect to any matter arising while this Agreement was
in effect.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
API:
Airfair Publishing, Inc.
By:
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Xxxxxx X. Xxxx, President
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BEI:
BEI Holdings, Inc.
By:
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Xxxxxx X. Xxxx, President
IMS:
Inventory Merchandising Services, Inc.
By:
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Xxx Xxxxxxxxx, President
