EXHIBIT 10.4
SERVICE AGREEMENT
THIS AGREEMENT made this 22nd day of February, 1997, and effective January
1, 1997, by and between RADIO MANAGEMENT CORPORATION, a Minnesota corporation
(hereinafter "RMC"), and CHILDREN'S BROADCASTING CORPORATION, a Minnesota
corporation (hereinafter "CBC").
WHEREAS, RMC engages in the business of providing general and
administrative services for radio broadcast stations and CBC is the owner of a
number of radio broadcast facilities; and
WHEREAS, CBC intends to retain RMC to provide general and administrative
services for its radio broadcast facilities according to the terms and
provisions set forth herein.
NOW, THEREFORE, based upon the mutual premises contained herein, and other
good and valuable consideration, the parties hereby agree as follows:
1. SERVICES. During the term hereof, RMC shall perform general and
administrative services for CBC, including, but not limited to,
payroll services, general accounting services, general legal services
and such other services as the parties may mutually agree to from time
to time.
2. COMPENSATION. In consideration for the services performed by RMC
hereunder, CBC shall pay RMC $75,000.00 per month payable within
thirty (30) days from the end of each calendar month. The
compensation paid to RMC hereunder shall not include any fees or
expenses for accounting, legal or other services performed for CBC by
third parties.
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3. QUARTERLY REVIEW. The parties agree that they will review the
services provided by RMC hereunder and the compensation set forth
herein at the end of each calendar quarter during the term hereof, and
at such time the services and compensation may be adjusted upon the
mutual agreement of the parties.
4. EXPENSES. In addition to the compensation set forth in Section 2
above, CBC shall pay all reasonable and necessary expenses incurred by
RMC in connection with the services performed hereunder, including,
but not limited to, travel and lodging expenses and any other expenses
directly attributable to the services performed by RMC hereunder. RMC
shall xxxx CBC on a monthly basis for such expenses and CBC shall pay
the same within thirty (30) days from the date CBC receives any such
invoice.
5. INDEPENDENT CONTRACTOR. The parties hereby acknowledge that (i) RMC,
while preforming services hereunder, at all times acting as an
independent contractor and not as an employee of CBC; (ii) the
employees of RMC shall at no time be considered employees of CBC in
connection with the services performed hereunder; and (iii) RMC shall
be solely responsible for all federal, state and local income taxes,
employment taxes, self-employment taxes, workers' compensation
insurance premiums and any and all other similar taxes or payments RMC
is required to make as a result of the services RMC performs
hereunder. CBC shall approve the engagement of any officer of RMC who
shall pursuant to such engagement also serve as an officer of CBC, and
CBC shall affirm and agree to the terms of such engagement.
6. LIMITATIONS ON LIABILITY. CBC hereby agrees that in no event shall
RMC be liable to CBC for any indirect, special or consequential
damages or lost profits arising out of or in any way related to this
Agreement or the performance of services hereunder or any breach
thereof and that RMC's liability to CBC hereunder, if any, shall in no
event exceed the total compensation paid to RMC hereunder.
7. TERM. This Agreement shall remain in effect for a period of one (1)
year from the date hereof; provided, however, the term of this
Agreement shall automatically renew for successive one (1) year
periods unless terminated by either party, by written notice delivered
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to the other party, within sixty (60) days from the end of the then
current term.
8. TERMINATION. Notwithstanding Section 7 above, this Agreement shall
terminate upon the occurrence of any of the following events:
a. by RMC if CBC is more than sixty (60) days delinquent in its
payment of compensation or expenses pursuant to the Sections 2 or
3 above;
b. by either party if the other party is in default under any
provision hereunder and such default is not cured within sixty
(60) days after notice thereof is given to the defaulting party;
c. by either party if the other party becomes insolvent or seeks
protection, voluntarily or involuntarily, under any bankruptcy
law; or
d. upon the mutual agreement of both parties.
A termination of this Agreement pursuant to this Section 8 or Section
7 above shall not relieve CBC of its obligation to pay RMC
compensation or expenses for any services rendered or expenses
incurred prior to the date of termination.
9. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
RADIO MANAGEMENT CORPORATION
BY: /S/XXXXXXXXXXX X. XXXX
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ITS: PRESIDENT
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CHILDREN'S BROADCASTING
CORPORATION
BY: /S/XXXXX X. XXXXXXXXXX
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ITS: COO
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