EXHIBIT 10.11
SERVICES AGREEMENT
AGREEMENT, dated as of June 1, 1997, between INTEREP NATIONAL RADIO
SALES, INC., a New York corporation ("Interep"), and MEDIA FINANCIAL SERVICES,
INC., a Florida corporation ("Media").
W I T N E S S E T H :
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WHEREAS, Interep wishes to retain Media to provide certain financial
and accounting services for Interep and its subsidiaries, and Media is willing
to provide such services;
NOW, THEREFORE, the parties agree as follows:
1. TERM. The term of this Agreement (the "Term") shall commence on
the date hereof and, unless earlier terminated by either party pursuant to the
provisions of Section 8, shall continue for a period of five years. The parties
may renew this Agreement for successive additional five-year periods by, in each
case, entering into a written extension of this Agreement prior to the end of
the then current period.
2. SERVICES. During the Term of this Agreement, Media shall perform
all corporate, accounting and financial functions for Interep, each of its
subsidiaries and, as requested by Interep, departments or business segments of
Interep, as were formerly provided by Interep's internal finance department,
including without limitation, the following:
(a) the preparation of monthly, quarterly and annual financial
statements and projections and operating reports as required by management;
(b) the preparation of annual budgets;
(c) the preparation and maintenance of all accounts payable, accounts
receivable and fixed asset ledgers and all other customary books and records of
account;
(d) the preparation and filing of all required federal, state and
local tax returns for Interep, each of its subsidiaries and Interep's Employee
Stock Ownership Plan (the "ESOP"), although Media may utilize the services of
Interep's independent accounting firm or other experts for such purpose;
(e) the preparation and filing of any other reports, applications and
other documents required by the federal and any applicable state and local
governments with respect to Interep, each of its subsidiaries and the ESOP;
(f) the maintenance of appropriate internal accounting controls;
(g) all accounts payable functions;
(h) all billing, accounts receivable and collections functions;
(i) all dealings with independent accountants and auditors, including
the coordination of all audits;
(j) the maintenance of all banking accounts and all relationships
between Interep and commercial lenders, investment bankers and other financial
institutions in the ordinary course and in connection with any financings;
(k) the investment of cash balances;
(l) all unwired network accounting and dealings with radio stations
and agency clients;
(m) such similar, additional services as the parties may agree from
time to time.
Media shall have no responsibility for any payroll, personnel or benefits
functions, all of which shall be performed by Interep.
3. SERVICES OF XXXXXXX. During the Term, Xxxxxxx X. XxXxxxx, Xx.,
President of Media, shall be in charge of all services rendered by Media to
Interep. Further, as requested by Interep, Media shall cause Xx. XxXxxxx to
serve as Vice President and Chief Financial Officer of Interep and in such other
offices as Interep and Media shall agree. In such capacity, Xx. XxXxxxx shall
participate on behalf of Interep with respect to such corporate mergers,
acquisitions, dispositions, mergers and similar transactions as are requested by
Interep.
4. FEES. In consideration of the above services to be provided by
Media to Interep pursuant to Sections 2 and 3, Interep shall pay annual fees to
Media as follows:
Contract Year Annual Fee
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1 $2,580,000
2 $2,580,000
3 $2,709,000
4 $2,844,450
5 $2,986,675
Schedule A illustrates how the initial annual fee was calculated. If the Term is
extended beyond five years, Media's fees shall be in such amounts as the parties
shall agree. All annual fees shall be payable, in advance, in 24 equal semi-
monthly installments (initially $107,500 per installment) on the first and 16th
days of each month. Media shall render invoices for such monthly fees to Interep
at least five days prior to the scheduled payment dates. Media shall be
responsible for the payment
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of any sales, use or similar taxes, if any, that may be payable with respect to
the services it provides pursuant to this Agreement.
Further, if pursuant to clause (m) of Section 2, Media provides
additional services to Interep, or Interep forms or acquires an additional
subsidiary, business segment or business, with the result that Media must expand
its personnel, office space or facilities, the parties shall in good faith
negotiate and agree on an appropriate increase in Media's fee to take the
reasonable, additional costs of such expansion into account.
If Media finds, initiates or otherwise arranges for financing for
Interep, or is able to reduce the charges of any firm which provides or arranges
for such financing, Interep shall pay Media a fee for its financing activities,
or an incentive for its cost savings, as the case may be, and as the parties
shall agree.
5. EXPENSES. The fees contemplated under Section 4 are intended to
compensate Media for all expenses that it may incur in the performance of its
services under this Agreement. A non-exclusive summary of such expenses,
including all auditing and tax preparation fees payable in connection with the
annual audit and tax returns of Interep and its subsidiaries (but not the ESOP),
is set forth in Schedule A. Accordingly, Media shall not be entitled to seek
any further amounts from Interep on account of expenses or otherwise, except as
provided in the next sentence. If Media anticipates that it shall be necessary
to incur any extraordinary expenses not listed in Schedule A in connection with
the performance of its services, it shall obtain Interep's prior written consent
therefor, in which case such expenses shall be paid by Interep. Media shall not
incur any such expenses without Interep's written consent.
It is contemplated that Xx. XxXxxxx shall be required to be in New
York, New York, from time to time in order to carry out his duties. Media shall
be responsible for all travel and lodging costs incurred for up to 24 trips to
New York each year by Xx. XxXxxxx in connection with Interep business. Interep
shall pay the cost of any additional such trips. If Xx. XxXxxxx is required to
travel to visit Interep client stations or agencies, Interep shall reimburse
Media for all related travel and lodging costs.
6. CONFIDENTIALITY. During and after the Term, Media shall, and
shall cause its employees and agents to, keep secret and not divulge to any
party not employed or retained by Interep any information or documents regarding
Interep's business and affairs, whether or not marked as confidential. This
obligation shall not apply to any information or document if it is or becomes
public knowledge as a result of causes other than the acts or omissions of Media
or its employees.
7. NON-COMPETITION. During the Term and for one year following the
end of the Term, Media shall not provide any financial, accounting or other
services to Xxxx Media Corporation or any of its subsidiaries, affiliates,
successors or assigns.
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8. TERMINATION. Either party may terminate this Agreement if the
other party breaches any provision of this Agreement and such breach is not
cured within 30 days after the first party notifies the breaching party of such
breach. Further, Interep shall have the right to terminate this Agreement in
the event of Xx. XxXxxxx'x death, permanent disability or incompetence on not
less than 90 days' prior written notice.
9. INDEMNIFICATION. Xx. XxXxxxx and Interep are parties to an
Indemnification Agreement, dated as of March 3, 1997. Interep agrees to provide
the same indemnification rights to Media as it provides to Xx. XxXxxxx under
such Agreement, on and subject to the terms and conditions set forth in such
agreement.
10. INDEPENDENT CONTRACTOR. For all purposes, Media shall be an
independent contractor, and not an employee, partner or joint venturer, of
Interep. Media may employ or retain any person it believes appropriate to
assist it in carrying out its obligations under this Agreement, and no such
person shall be deemed to be an employee of Interep. Media shall be solely
responsible for (i) the compensation and benefits of all of its employees,
including workers' compensation benefits, and (ii) withholding and payment of
all taxes and contributions which an employer is required to withhold or pay in
respect of its employees.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties with respect to its subject matter, merges and
supersedes any prior or contemporaneous understandings with respect to its
subject matter, and shall not be modified or terminated except by a written
instrument executed by both of the parties. Failure of a party to enforce one
or more of the provisions of this Agreement or to require at any time
performance of any of the obligations hereunder shall not be construed to be a
waiver of such provisions by such party nor to in any way affect the validity of
this Agreement or such party's right thereafter to enforce any provision of this
Agreement, nor to preclude such party from taking any other action at any time
which it would legally be entitled to take.
12. COMMUNICATIONS. All notices, consents and other communications
given under this Agreement shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand or by Federal Express or a similar
overnight courier to, (b) seven days after being deposited in any United States
post office enclosed in an airmail postage prepaid registered or cer tified
envelope addressed to, or (c) when successfully transmitted by facsimile (with a
confirming copy of such communication to be sent as provided in (a) or (b)
above) to, the party for whom intended, at the address or facsimile number for
such party set forth below, or to such other address or facsimile number as may
be furnished by such party by notice in the manner provided herein; provided,
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however, that any notice of change of address or facsimile number shall be
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effective only on receipt.
If to Interep: If to Media:
Interep National Radio Sales, Inc. Media Financial Services, Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx 0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
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New York, New York 10017 Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Guild Attention: Xx. Xxxxxxx X. XxXxxxx, Xx.
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
13. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of, be binding on and be enforceable by, the parties and their
respective permissible successors and assigns. Neither party shall have the
right to assign this Agreement, or any rights or obligations hereunder, without
the consent of the other, which consent may be withheld for any reason.
14. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of New York applicable to agreements made and fully to be performed in
such state, without giving effect to conflicts of law principles.
15. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement shall be finally resolved by arbitration pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. Any such
arbitration shall take place in New York, New York, before three arbitrators,
one of which shall be appointed by Interep, one by Media and the third by the
arbitrators so appointed; provided, however, that the parties may by mutual
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agreement designate a single arbitrator. The parties further agree that (i) the
arbitrators shall be empowered to include arbitration costs and attorney fees in
the award to the prevailing party in such proceedings and (ii) the award in such
proceedings shall be final and binding on the parties. Judgment on the
arbitrators' award may be entered in any court having the requisite
jurisdiction. Each party irrevocably submits to the jurisdiction and venue of
the arbitration described above and to the jurisdiction and venue of the federal
and state courts sitting in New York County, New York, for the enforcement of
any judgment on the arbitrators' award, and waives any objection it may have
with respect to the jurisdiction of such arbitrations or courts or the
inconvenience of such forums or venues.
16. CONSTRUCTION; COUNTERPARTS. The headings contained in this
Agreement are for convenience only and shall in no way restrict or otherwise
affect the construction of the provisions hereof. References in this Agreement
to Sections and Schedules are to the sections and schedules of this Agreement.
This Agreement may be executed in multiple counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
INTEREP NATIONAL RADIO SALES, INC.
By /s/ Xxxxx X. Guild
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Xxxxx X. Guild
Chairman of the Board
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MEDIA FINANCIAL SERVICES, INC.
By /s/ Xxxxxxx X. XxXxxxx, Xx.
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Xxxxxxx X. XxXxxxx, Xx.
President
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