MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (the "Agreement"), is made
and entered into on July 1, 1997 to be effective as of March 7,
1997 (the "Effective Date"), by and between Sport Supply Group, Inc.,
a Delaware corporation (the "Manager"), and Xxxxxxx Radio Corp., a
Delaware corporation (the "Company").
WHEREAS, the Company has requested that the Manager provide
various managerial services to the Company for the Company's benefit
and the Company and Manager desire to enter into this Agreement on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Manager and the Company hereby agree as follows:
ARTICLE I
Management Services
1.1 General Duties. The Company and the Manager hereby
agree that, during the term of this Agreement, the Manager will be
responsible for providing the Company with the following services:
(a) Process payroll and payroll taxes for the
Company's employees and assist Company by enrolling Company
employees in the Company's employee benefit plans, and
process the payment of insurance premiums to the Company's
benefit providers so long as the Company submits the
correct amount of the premium to the Manager on a timely
basis (subject to the Manager receiving from the Company
all of the necessary information, which is not in Manager's
possession, custody or control, required to fulfill these
functions) (collectively, "Human Resource Services"). Such
Human Resources shall be performed on a timely basis in
accordance with industry standards.
(b) Calculate daily borrowing availability with
respect to the Company's secured credit facility, prepare
daily reporting for the Company's banks, prepare forecasts
of cash availability and cash flow, wire funds and set-up
letters of credit as may be requested by an officer of the
Company, or an authorized agent of the Company (including,
without limitation, Xxx Xxxxx) for which Manager receives
notice of such authorization from an officer of the Company
from time to time (collectively, the "Banking Services");
(c) Provide space for the Company's AS 400 Computer
System and provide the system operator services set forth
below (collectively, the "Computer Services");
Daily
Monitor computer messages
Answer and respond to
user requests (EDI problems,
terminal/printer problems, etc.)
Submit nightly batch jobs
Format nightly save tapes
Load nightly save tapes
Start nightly data save to tape
Weekly
Load Payroll tapes
Submit nightly batch jobs
Format save tapes
Load weekend save tapes
Start weekly data save to tape
Manager shall use the Company's AS 400 Computer System solely to
perform the Computer Services.
(d) Process the Company's accounts payables and
process checks to be delivered, approved and signed by an
officer of the Company (collectively, the "Payable
Services");
(e) Provide warehouse storage space (subject to
availability and obtaining the Landlord's consent, and in
no event after the time the Manager ceases to occupy the
warehouse space currently occupied by the Manager at 13700
Benchmark, Farmers Branch, Texas, in which event Manager
shall provide the Company with at least thirty (30) days
prior written notice of vacating such space) for the
Company's archives and product inventory at Manager's
warehouse located at 00000 Xxxxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx 00000, or such other mutually agreeable location
(collectively, the "Warehouse Space"); and
(f) Provide office space (subject to availability and
in no event after the time the Manager ceases to occupy the
office space currently occupied by the Manager at 0000
Xxxxxxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxx, in which event
Manager shall provide the Company with at least thirty (30)
days prior written notice of vacating such space) for
certain employees of the Company at Manager's office
located at 0000 Xxxxxxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxx
00000, or such other mutually agreeable location
(collectively, the "Office Space").
(g) Prepare, design and draft publications to be
distributed by the Company, such as owner manuals, service
manuals, warranty text and any additions, modifications and
revisions thereto, relating to products sold by the
Company, all in accordance with the Company's past
practices (the "Design Services"). The Company will be
solely responsible for (and own) all information and
intellectual property included in such publications and any
and all legal requirements relating to such publications.
All reproduction costs for the Design Services will be paid
by the Company. The Design Services will not include any
of the Company's documents that are customarily filed with
the Securities and Exchange Commission, such as Annual
Reports, proxy statements, 10-Qs, 10-Ks, etc.
(h) Until the earlier of (i) the expiration or
termination of this Agreement, or (ii) the date Xxx Xxxxx
ceases to be an employee of the Manager, Xx. Xxxxx will
provide financial management services to the Company on an
as needed basis, provided that Xx. Xxxxx will not devote
more than 75% of his working time to the provision of such
services (collectively, the "Financial Management
Services".)
All of the services set forth in this Article shall be
collectively referred to in this Agreement as the "Services".
Notwithstanding the foregoing, Manager will not be responsible for
providing any services to the Company not expressly set forth herein,
including, without limitation, any legal or tax related services;
provided, however, the Manager will provide the necessary data as
reasonably requested by ADP to enable ADP to prepare the Company's
payroll tax returns..
1.2 Company Responsibilities. During the term of this
Agreement the Company will assume the responsibilities and perform
the duties set forth below:
(a) The Company will furnish to the Manager all
information and data, not in Manager's custody or control,
reasonably necessary for Manager to provide the services
described above, including, without limitation, all payroll
files and employee payroll and other information that
Manager may advise the Company it requires to perform its
services under this Agreement. Manager shall be entitled
to rely upon the accuracy and completeness of all
information that it reasonably believes to have been
furnished to it by the Company or at the Company's
direction, and shall have no duty to inquire about such
information. Manager acknowledges no changes to the
Company's corporate payroll records will be made without
the prior written consent of the Company.
(b) During the term of this Agreement, the Company
will furnish to the Manager the AS400 that is owned by the
Company, which equipment shall remain the property of the
Company. Company shall retain complete financial
responsibility for such equipment, including depreciation,
maintenance, insurance and taxes, if any. Company hereby
appoints the Manager as its sole agent for all matters
pertaining to such equipment and shall promptly notify all
appropriate third parties of such appointment. Company has
sole responsibility for all aspects of the computer data
and its hardware, including without limitation,
uninterruptable power supply, data lines, disaster
recovery, offsite storage and tape back-up.
(c ) The Company shall be solely responsible for
resolving any dispute between the Company and any employee
of the Company and answering any inquiries relating to a
Company employee's rights and entitlements under the
Company's benefit plans. The Company is solely responsible
for the administration of its benefit plans (including,
without limitation, its 401(k) Plan ) and executing and
filing with any governmental authority or other person all
reports or other documents required in connection with such
benefit plans, and the Manager shall have no reporting
obligation in connection with any aspect of the Company's
benefit plans. In addition, the Manager shall not be
deemed a fiduciary or plan administrator of the Company or
any of the Company's benefit plans and shall not have any
responsibility to monitor compliance by the Company with
the terms and conditions of any benefit plan or any law
applicable thereto.
(d) The Company shall cooperate with the Manager by,
among other things, making available, as reasonably
requested by the Manager, management decisions, personnel
information, approvals and acceptances in order that the
work of Manager contemplated hereby may be accomplished.
1.3 Insurance. Manager will not be liable to the Company or
any of the employees or contractors of the Company for damage or loss
to person or property, including theft, burglary, assault, vandalism
or other crimes, unless such damage or loss is caused by the gross
negligence or willful misconduct of the Manager. The Manager will
not be liable to the Company or any of its employees or contractors
for personal injury or for damage to or loss of their personal
property from fire, flood, water leaks, rain, hail, ice, snow, smoke,
lightning, wind, explosions, strike, war, riot, insurrection,
interruption of utilities or other occurrences unless such injury,
loss or damage is caused by the gross negligence or willful
misconduct of the Manager. Company acknowledges that neither the
Warehouse Space nor the Office Space is fireproof. The Company is
strongly urged to secure its own insurance to protect against all of
the above.
1.4 Permissible Activities. Nothing herein shall in any
way preclude the Manager from engaging in any business activities or
from performing services for its own account or for the account of
others.
ARTICLE II
Compensation
2.1 Service Charges. The Company and the Manager hereby agree
that the Manager will be compensated at the initial rates set forth
below for the services rendered by the Manager to the Company
pursuant to this Agreement:
Services Amount in U.S. Dollars Beginning Date
Human Resource Services $1,000 per pay period March 7, 1997
Banking Services $25,000 per year June 16, 1997
Computer Services $20,000 per year May 31, 1997
Payable Services $12,000 per year June 16, 1997
Warehouse Space $4.00 per square foot May 15, 1997
Office Space $5.00 per square foot June 16, 1997
Design Services $50,000 per year July 1, 1997
Financial Management
Services See Section 2.3 below June 1, 1997
The amount of such service charges may be adjusted from time to time
by the parties' mutual written agreement. Such service charges shall
be payable within ten (10) days of the date an invoice is received.
Partial months shall be prorated accordingly. The Company will also
be responsible for paying all of the Company's out-of-pocket expenses
related to the above services (including, without limitation, copying
charges incurred in connection with the Design Services) and the
Manager's expenses related to the Manager's business, such as
postage, telephone and telecopy bills, telephone lines, office
supplies, transition services, etc. The payment of any expenses
incurred by Manager on the Company's behalf in excess of $1,000
requires the Company's written consent.
2.2 The Manager will reimburse the Company for salary payments
made by the Company to Xxxxxxxx X. Xxxxxx for the benefit of the
Manager, which payments shall be $20,833.33 per month, plus
expenses incurred by Xx. Xxxxxx on behalf of the Manager, subject to
increases approved by the Manager's Board of Directors. Such
reimbursements shall be made on a monthly basis.
2.3 The Company will reimburse the Manager for an amount equal
to 75% times Xxx Xxxxx'x salary, payroll taxes and all
benefits (including, without limitation, insurance, Manager
contributions to the Manager's 401(k) Plan, automobile
allowances, and fees and expenses relating thereto, etc.) for
the Financial Management Services. Such reimbursements shall
be made on a monthly basis, payable within ten (10) days of
the date an invoice is received.
ARTICLE III
Term and Termination
3.1 Term. This Agreement shall become effective as of the
Effective Date and shall continue in force until terminated pursuant
to the terms of this Agreement or otherwise agreed by the parties.
3.2 Termination. This Agreement may be terminated by either
party on sixty (60) days' prior written notice to the other party.
3.3 Termination for Nonpayment. Notwithstanding Section 3.2
hereof, in the event that either party defaults in the payment when
due of any amount due to the other hereunder and does not cure such
default within ten (10) days after being given written notice of such
default, then the non-defaulting party may, by giving written notice
thereof to the defaulting party, terminate this Agreement as of the
date specified in such notice of termination.
3.4 Termination for Insolvency. Notwithstanding Section 3.2
hereof, in the event that either party hereto becomes or is declared
insolvent or bankrupt, is the subject of any proceedings relating to
its liquidation, insolvency or for the appointment of a receiver or
similar office for it, makes an assignment for the benefit of all or
substantially all of its creditors, or enters into an agreement for
the composition, extension, or readjustment of all or substantially
all of its obligations, then the other party hereto may, by giving
written notice thereof to such party, terminate this Agreement as of
the date specified in such notice of termination.
3.5 Return of Records. Upon the termination of this Agreement
for any reason, the Manager shall promptly return to the Company all
books, records, documents, information and data (including data
stored in computers or on any computer media or equipment), including
all copies of the foregoing, that belong to the Company.
ARTICLE IV
General Provisions
4.1 Confidentiality. Each party agrees that all information
communicated to it by the other, whether before or after the
Effective Date, was and shall be received in strict confidence and
shall be used only for the purposes of this Agreement, and that no
such information, including, without limitation, the provisions of
this Agreement, shall be disclosed or otherwise used by a party to
this Agreement or its security holders, directors, officers,
employees, or agents, without the prior written consent of the other
party, except as may be necessary by reason of legal, accounting or
regulatory requirements. The requirements and obligations of this
Section 4.1 shall survive the termination of this Agreement.
4.2 Indemnification .
(a) The Manager agrees to indemnify, defend and
hold harmless the Company and its affiliates and their
respective directors, officers, agents, employees and
controlling persons from and against any and all losses,
claims, damages, liabilities and expenses (including the
reasonable cost of investigating and defending against any
claims therefor and reasonable counsel fees and expenses
incurred in connection therewith) that resulted solely from
the willful bad faith or gross negligence of the Manager in
the performance of the Services that are the subject of
this Agreement. No express or implied warranty is made by
Manager in respect to any Service or product provided
hereunder including, without limitation, any implied
warranty or merchantibility or fitness for a particular
purpose.
(b) The Company agrees to indemnify, defend and hold
harmless the Manager and its affiliates and their
respective directors, officers, agents, employees and
controlling persons from and against any and all losses,
claims, damages, liabilities and expenses (including the
reasonable cost of investigating and defending against any
claims therefor and reasonable counsel fees and expenses
incurred in connection therewith) related to or arising out
of the Services provided hereunder by the Manager
(including, without limitation, Manager's use of the
Company's Brand Names and Marks, as described below),
regardless if such losses, claims, damages, liabilities and
expenses are founded in whole or in part, on the alleged
negligence of the Manager, the Manager's representatives,
or its employees, agents, invitees or licensees. The
Company shall not be obligated to indemnify the Manager,
however, in respect of any losses, claims, damages,
liabilities or expenses that resulted solely from the
willful bad faith or gross negligence of the Manager in the
performance of the Services that are the subject of this
Agreement.
(c) IN NO EVENT WILL EITHER PARTY BE LIABLE FOR
PUNITIVE DAMAGES OR FOR INDIRECT OR CONSEQUENTIAL DAMAGES,
INCLUDING, WITHOUT LIMITATION, LOST PROFITS OF ANY PARTY,
INCLUDING THIRD PARTIES. FURTHER, NO CAUSE OF ACTION WHICH
ACCRUED MORE THAN ONE (1) YEAR PRIOR TO THE FILING OF A
SUIT ALLEGING SUCH CAUSE OF ACTION MAY BE ASSERTED AGAINST
EITHER PARTY.
4.3 Relationship of Parties. It is the express intention and
understanding of the Manager and the Company that the relationship of
the Manager to the Company shall be at all times that of an
independent contractor, with the Manager having full and complete
liberty to use its own free and uncontrolled will, judgment and
discretion as to the method and manner of performing the obligations
of the Manager hereunder. Other than the Services specifically
stated herein to be performed by Manager, Manager does not undertake
by this Agreement or otherwise to perform any regulatory or
contractual obligation of Company, or to assume any responsibility
for Company's business or operations. Nothing herein contained or
done pursuant to this Agreement shall constitute the Manager or its
agents or employees a partner or joint venturer of the Company, or a
fiduciary of (i) the Company, (ii) any benefit plan of the Company,
or (iii) any employee of the Company.
4.4 Notices. All notices that are required or may be given
pursuant to the terms of this Agreement shall be in writing and shall
be sufficient in all respects if given in writing and delivered
personally, by commercial messenger service, or by registered or
certified mail, postage prepaid, to the other party at the following
address or to such other address as either party shall provide to the
other party in writing in accordance with this Section 4.4:
If to the Manager: If to the Company:
Sport Supply Group, Inc. Xxxxxxx Radio Corp.
0000 Xxxxxxxx Xxxxx Nine Xxxxx Road
Farmers Branch, Texas 75234 Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: President Attn: Chief Executive Officer
cc: General Counsel cc: Law Department
4.5 Attorneys' Fees. In the event that attorneys' fees or
other costs are incurred to secure performance of any of the
obligations set forth in this Agreement, to establish damages for the
breach thereof, or to obtain any other appropriate relief, whether by
way or prosecution or defense, the prevailing party (as determined by
the judge in the judge's sole discretion) shall be entitled to
recover reasonable attorneys' fees and costs incurred therein.
4.6 Counterparts. This Agreement may be executed in one or
more counterparts for the convenience of the parties hereto, all of
which together shall constitute one and the same instrument.
4.7 Binding Agreement; Assignment. This Agreement shall be
binding on, and inure to the benefit of, the parties hereto and their
respective representatives, successors, and assigns, but neither this
Agreement nor any of the rights, interests, or obligations hereunder
shall be assigned or delegated by any of the parties hereto, whether
by operation of law or otherwise, without the prior written consent
of the other party (which consent shall not be unreasonably
withheld), nor is this Agreement intended to confer upon any other
person other than the parties hereto any rights or remedies
hereunder. Any assignment or delegation in violation of this
Agreement shall be null and void.
4.8 Waiver. No delay on the part of either party in exercising
any of its respective rights hereunder, nor the failure to exercise
the same, nor the acquiescence in or waiver of a breach of any term,
provision or condition of this Agreement shall be deemed or construed
to operate as a waiver of such rights or acquiescence thereto except
in the specific instance for which given.
4.9 Severability. If any provision of this Agreement is
declared or found to be illegal, unenforceable or void, then each
party will be relieved of its obligations arising under such
provision to the extent such provision is declared or found to be
illegal, unenforceable or void (it being the intent and agreement of
the parties that this Agreement shall be deemed amended by modifying
such provision to the extent necessary to make it legal and
enforceable while preserving its intent or, if that is not possible,
by substituting therefor another provision that is legal and
enforceable and achieves the same objective), and each provision not
so affected will be enforced to the full extent permitted by law.
4.1 0 Entire Agreement. This Agreement contains the entire
understanding of the parties relating to the subject matter of this
Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements and understandings relating to such
subject matter. This Agreement cannot be modified, amended or
terminated except in writing signed by the party against whom
enforcement is sought.
4.11 Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the substantive laws of
the State of Texas without giving effect to any conflict of laws
principle or rule that might require the application of the laws of
another jurisdiction. Each party agrees that this Agreement is fully
performable in Dallas County, Texas, and that any action, dispute or
proceeding arising out of or related in any way to the subject matter
of this Agreement shall be brought solely in a court of competent
jurisdiction sitting in Dallas, Dallas County, Texas. Each party
hereby irrevocably and unconditionally consents to the jurisdiction
of any such court and hereby irrevocably and unconditionally waives
any defense of an inconvenient forum to the maintenance of any action
or proceeding and any right of jurisdiction on account of the place
of residence or domicile of any party thereto.
4.12 Other Documents. Each party hereto agrees to execute any and
all documents, and to perform such other acts, that may be necessary
or expedient to further the purposes of this Agreement.
4.13 Force Majeure. Each party hereto shall be excused from
performance hereunder for any period and to the extent that it is
prevented from performing any services pursuant hereto, in whole or
in part, as a result of delays caused by the other party or by an act
of God, war, civil disturbance, court order, labor dispute, third
party nonperformance, or other cause beyond its reasonable control,
including without limitation failures or fluctuations in electrical
power, heat, light, air conditioning or telecommunications equipment,
and such nonperformance shall not be a default hereunder or a ground
for termination hereof. Notwithstanding the foregoing, in the event
such condition exists greater than thirty (30) days, either party may
terminate this Agreement by giving the other party written notice of
termination, which termination shall be effective as of the date set
forth in such notice.
4.14 Headings. The section headings used herein are for
reference and convenience only, and shall not enter into the
interpretation hereof.
4.15 Trademarks. Manager shall use its own name or trademarks
in all dealings. It may not use any trademarks or tradenames or
rights to use same belonging to the Company and/or its subsidiaries
or affiliates (other than the Manager's) without the Company's prior
written consent in each instance. To the extent the Company gives
such consent, Manager may use such trademarks and "XXXXXXX" brand and
product names and such other brand name(s) under which the products
may hereinafter be marketed in the United States by the Company
and/or its subsidiaries or affiliates (other than the Manager's)
(collectively, the "Brand Names and Marks") only in connection with
the performance of its Services. The Company may withdraw such
consent at any time. Thereafter, except as provided below, no
advertising or other use of the Brand Names and Marks may be made by
Manager without the Company's prior written approval in each
instance. All use of the Brand Names and Marks and all goodwill
associated therewith shall inure to the benefit of the Company.
Manager shall have no interest in or rights to the Brand Names or
Marks or any of them nor shall Manager have or accrue any interest in
or to the goodwill associated therewith. Upon expiration or earlier
termination of this Agreement, Manager shall discontinue all use of
the Brand Names or Marks in advertising or otherwise, and shall
remove all signs and displays relating thereto and shall return to
the Company at Company's expense, all signs, displays and other
writings and materials relating thereto; provided, however, the
foregoing does not apply to any advertising in the process of being
printed or in inventory that also includes the Manager's products
(including, without limitation, catalogs). Manager is not and this
Agreement does not constitute Manager as being a holder of a license
or permitted to use the Brand Names or Marks nor shall this Agreement
be deemed to make Manager a franchisee.
Company shall use its own name or trademarks in all dealings.
It may not use any trademarks or tradenames or rights to use same
belonging to the Manager and/or its subsidiaries or affiliates (other
than the Company's) without the Manager's prior written consent in
each instance.
4.16 No Third Party Beneficiaries. This Agreement and the
rights and obligations hereunder do not and shall not confer any
rights to any third parties and no third parties shall have any
rights under this Agreement.
4.17 Survival. Paragraphs 2.1, 3.5, 4.1, 4.2, 4.4, 4.5, 4.11,
4.15, and 4.16 shall survive the expiration or earlier termination of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
THE MANAGER:
SPORT SUPPLY GROUP, INC.
/s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx, President
THE COMPANY:
XXXXXXX RADIO CORP.
/s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Executive Vice President and
Chief Financial Officer
