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EXHIBIT 10.11
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (the "Agreement") is dated as of August 25,
2000, by and among Salem Communications Holding Corporation, a Delaware
corporation ("HoldCo"), and Salem Communications Corporation ("Parent") and each
direct or indirect subsidiary of Parent (other than HoldCo) who agrees to be
bound by the terms hereof by executing the master copy of this agreement and
causes its name to be added to Schedule A hereto ("Subsidiary" or
"Subsidiaries").
RECITALS
Whereas, Salem Communications Corporation ("Parent") has historically provided
various management and other services to or on behalf of each of its direct and
indirect subsidiaries.
Whereas, as part of a restructuring of Parent's subsidiary holdings, Parent has
assigned to AcqCo the proceeds of its Bridge Credit Agreement (as defined below)
as well as its contract rights to acquire the assets of radio station KALC-FM
(Denver, CO).
Whereas, following the assignment to AcqCo described above, Parent assigned to
HoldCo, substantially all of its remaining assets, rights and liabilities,
excluding the common stock of HoldCo and AcqCo.
Whereas, HoldCo, AcqCo and Parent have approved the terms of the Second Amended
and Restated Credit Agreement dated as of August 24, 2000, by and among Salem
Communications Holding Corporation, The Bank of New York as Administrative
Agent, Bank of America, N.A. as Syndication Agent, Fleet National Bank as
Documentation Agent, Union Bank of California, N.A. and The Bank of Nova Scotia,
as Co-Agents, and the other Lenders party thereto (the "Second Amended and
Restated Credit Agreement").
Now therefore, for good and valuable consideration, including without
limitation, the covenants and conditions contained herein, the receipts and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. From and after the date first stated above, HoldCo agrees to provide
management, treasury, finance, procurement, reporting (including to the
Securities and Exchange Commission), regulatory, legal, accounting, tax,
computer and support services (the "Services") to Parent and each subsidiary of
Parent, as reasonably requested including, without limitation, AcqCo. The
parties hereto acknowledge that all officers, directors, employees, agents and
consultants employed or retained by HoldCo and that all operations conducted at
the offices of HoldCo in Camarillo, California, are employed, retained, or
conducted (as the case may be) in connection with the provision of Services,
including those to be provided pursuant to this Agreement.
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2. All direct and indirect subsidiaries of Parent that are or become
borrowers or guarantors of any obligations under (i) the Second Amended and
Restated Credit Agreement or (ii) the Credit Agreement dated as of August 24,
2000 among Parent, the lenders party thereto and ING (U.S.) Capital LLC, as
administrative agent, (the "Bridge Credit Agreement" and, together with the
Second Amended and Restated Credit Agreement, the "Credit Agreement") may join
this Agreement as Subsidiaries, in which event, the name of such subsidiary
shall be added to Schedule A hereto.
3. Parent and each Subsidiary, without duplication, shall be required to
reimburse HoldCo for Services provided hereunder as set forth on Schedule B
hereto.
4. Nothing is this Agreement shall prohibit Parent or any Subsidiary
directly, or in conjunction with other Subsidiaries, from employing or retaining
any individual or entity to provide services that are similar to the Services
provided.
5. Parent shall have the right to assess each Subsidiary its share of
the costs of Services allocated to all Subsidiaries hereunder, as determined by
Parent hereunder, at such times as Parent shall determine.
6. Any dispute or ambiguity concerning the calculation or basis of
determination of any payment provided for under this Agreement shall be resolved
by Parent. The judgment of Parent shall be conclusive and binding upon the
parties hereto.
7. The parties hereto specifically recognize that from time to time
other companies may become direct or indirect subsidiaries of Parent and hereby
agree that such new subsidiaries to the extent they become borrowers or
guarantors under the Credit Agreements on either of them, may become parties to
this Agreement by executing the master copy of this Agreement which shall be
maintained at Parent's headquarters and its name will be added to Schedule A
attached hereto. It will not be necessary, for all the other parties to
re-execute the Agreement but the new subsidiary may simply execute the existing
Agreement and it will be effective as if the old Subsidiaries had re-executed
this Agreement. This Agreement shall inure to the benefit of and be binding upon
the parties hereto (including each Subsidiary, whether or not such entity was a
Subsidiary upon the original execution of this Agreement) and their respective
successors and permitted assigns to the same extent as if such successors or
assigns (or such future members) had been original parties to this Agreement.
8. This Agreement sets forth the entire agreement and understanding of
the parties in respect of the subject matter contained in this Agreement and
supercedes all prior or contemporaneous agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any party or by any officer, employee or representative of any
party. Except as provided in Section 12, this Agreement shall not be modified,
supplemented or terminated except by a writing duly signed by each of the
parties hereto, and no waiver of any provision of this Agreement shall be
effective unless in writing duly signed by the party sought to be bound.
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9. Any payment, notice, communication or approval required or permitted
to be given under this Agreement shall be deemed to have been duly given if
delivered by hand or deposited in the United States mail, postage prepaid and
sent by certified or registered mail, addressed to Parent or any Subsidiary at:
4880 Santa Rosa Road, Suite 300
Camarillo, CA 93012
Attention: Corporate Secretary
10. Except as specifically set forth or referred to in this Agreement,
nothing expressed or implied in this Agreement is intended or shall be construed
to confer upon or give to any person or corporation other than the parties
hereto (and, in accordance with Section 7, their successor or assigns) any
rights or remedies under or by reason of this Agreement.
11. This Agreement and the legal relations among the parties hereto
shall be governed by and construed in accordance with the laws of California.
12. The term of this Agreement shall be one (1) year. This Agreement
shall automatically renew for successive one (1) year terms unless any party
(the "Terminating Party") hereto shall give written notice in advance of such
date indicating it does not intend this Agreement to, as to such party, renew.
In which event, at the expiration of the existing term, this Agreement shall
continue as to such other parties, but the Terminating Party shall have no
further obligations hereunder.
13. If any provision of this Agreement or the application thereof to any
party is held invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other parties or circumstances will not be
affected thereby, the provisions of this Agreement being severable in any such
instance.
14. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(Signatures to follow on the next page)
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The parties hereto have caused this Agreement to be duly executed as of the date
first written above.
Salem Communications Corporation
By: /s/ Jonathan L. Block
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Name: Jonathan L. Block
Title: Vice President
(More signatures to follow on the next page)
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Salem Communications Holding Corporation
By: /s/ Jonathan L. Block
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Name: Jonathan L. Block
Title: Vice President
(More signatures to follow on the next page)
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ATEP RADIO, INC.
BISON MEDIA, INC.
CARON BROADCASTING, INC.
CCM COMMUNICATIONS, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY, INC.
INLAND RADIO, INC.
INSPIRATION MEDIA OF PENNSYLVANIA, LP
INSPIRATION MEDIA OF TEXAS, LLC.
INSPIRATION MEDIA, INC.
KINGDOM DIRECT, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING COMPANY, INC.
OASIS RADIO, INC.
ONEPLACE, LLC.
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
REACH SATELLITE NETWORK, INC.
SALEM MEDIA CORPORATION
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF GEORGIA, INC.
SALEM MEDIA OF HAWAII, INC.
SALEM MEDIA OF ILLINOIS, LLC.
SALEM MEDIA OF KENTUCKY, INC.
SALEM MEDIA OF NEW YORK, LLC.
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO OPERATIONS, LLC.
SALEM RADIO OPERATIONS - PENNSYLVANIA, INC.
SALEM RADIO PROPERTIES, INC.
SALEM RADIO REPRESENTATIVES, INC.
SCA LICENSE CORPORATION
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.
By: /s/ Jonathan L. Block
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Name: Jonathan L. Block
Title: Vice President
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SCHEDULE A
ATEP RADIO, INC.
BISON MEDIA, INC.
CARON BROADCASTING, INC.
CCM COMMUNICATIONS, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY, INC.
INLAND RADIO, INC.
INSPIRATION MEDIA OF PENNSYLVANIA, LP
INSPIRATION MEDIA OF TEXAS, LLC.
INSPIRATION MEDIA, INC.
KINGDOM DIRECT, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING COMPANY, INC.
OASIS RADIO, INC.
ONEPLACE, LLC.
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
REACH SATELLITE NETWORK, INC.
SALEM MEDIA CORPORATION
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF GEORGIA, INC.
SALEM MEDIA OF HAWAII, INC.
SALEM MEDIA OF ILLINOIS, LLC.
SALEM MEDIA OF KENTUCKY, INC.
SALEM MEDIA OF NEW YORK, LLC.
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO OPERATIONS, LLC.
SALEM RADIO OPERATIONS - PENNSYLVANIA, INC.
SALEM RADIO PROPERTIES, INC.
SALEM RADIO REPRESENTATIVES, INC.
SCA LICENSE CORPORATION
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.
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SCHEDULE B
(1) In each fiscal year Parent and each subsidiary other than HoldCo
(without duplication) shall pay a fee to HoldCo in an aggregate amount
as mutually determined in advance by HoldCo and Parent, in their sole
and absolute discretion, not to exceed 11% of the net revenue of Parent
or such Subsidiary, as applicable for the immediately preceding fiscal
year. For purposes of this Agreement, net revenues shall mean total
revenues less cost of services sold. Parent or its subsidiaries, as
applicable, shall remit said amount to HoldCo from time to time not
later than thirty (30) days from its receipt of an invoice from HoldCo.
(2) AcqCo shall pay HoldCo a one time fee of Four Hundred Thousand
Dollars ($400,000) for special charges and services incurred by HoldCo
for the benefit of AcqCo.
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