EXHIBIT 10.3
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (this "AGREEMENT") is made and
entered into effective as of July 1, 2008, by and between PEOPLE'S LIBERATION,
INC., a Delaware corporation ("MANAGER") and J. LINDEBERG USA, LLC, a California
limited liability company ("COMPANY"). Manager and the Company are collectively
referred to herein as the "PARTIES."
RECITALS
A. the Company was formed by Xxxxx Xxxx, LLC, a California limited
liability company ("BR") and a wholly-owned subsidiary of Manager, and
J Lindeberg USA Corp, a New York corporation ("JLUS") and a
wholly-owned subsidiary of J. Lindeberg AB, a Swedish company ("JL
SWEDEN"), on June 27, 2008, by the filing of the Articles of
Organization of the Company with the Office of the Secretary of State
of the State of California.
B. Concurrently herewith, the Company, BR and JLUS are entering into a
Limited Liability Company Agreement (the "OPERATING AGREEMENT") to
govern the relationship between BR and JLUS and the affairs of the
Company and the conduct of its business, including its management and
distribution of profits and losses.
C. In connection with the formation of the Company, and as contemplated by
the Operating Agreement, the Parties desire to enter into this
Agreement, pursuant to which Manager shall provide management and
general and administrative support services to the Company as provided
herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not defined
herein shall have the meanings given such terms in the Operating
Agreement.
2. MANAGEMENT SERVICES. During the term hereof, Manager, either directly
or through one or more of its Affiliates (other than the Company),
shall (i) advise and consult with the Company and its members regarding
all aspects of the Company's development, operations and expansion,
(ii) provide management expertise and services for the Company's
development and implementation of operational and financial plans and
for its strategic planning and decisions, and (iii) advise and consult
with the Company, and assist the Company in its development, management
and implementation of general and administrative procedures and record
keeping function with respect to the Company's following activities
(the services described in this SECTION 2 are collectively referred to
herein as the "SERVICES"):
2.1 Marketing, selling and contract administration services
necessary to order, sell, process and deliver J. Lindeberg(TM)
branded apparel;
2.2 Managing the administration of payroll services;
2.3 Management of inventory tracking and management services;
2.4 Management of accounting functions, including accounts payable
and accounts receivable functions, monitoring receipts,
purchase orders, income and expenditures, establishing
operating and capital budgets and forecasts, and other general
ledger and financial reporting activities;
2.5 Management of preparation of federal, state and local tax
returns and facilitating any audits or other responses or
actions required in connection with such tax returns;
2.6 Management of insurance matters, including advice on the
types, amounts and other terms of insurance the Company should
maintain and is required to maintain under any of its
contracts;
2.7 Engagement, management and supervision of outside accountants,
attorneys, financial consultants and other professional
advisors of the Company; and
2.8 Any other activities which would generally be expected from a
reasonably prudent manager and operator or which would be
necessary for the daily operations of the business of the
Company.
The services performed by the Manager for Company pursuant to the terms hereof
shall be in addition to, and shall not otherwise affect the Manager's own
responsibilities for Company's operations resulting from the Manager's indirect
ownership of 50% of Company's equity interests.
3. EXCLUDED SERVICES. NOTWITHSTANDING SECTION 2 TO THE CONTRARY, THE
SERVICES SHALL NOT INCLUDE, MANAGER SHALL HAVE NO RESPONSIBILITY TO
PROVIDE, AND THE COMPANY SHALL PROVIDE DIRECTLY UTILIZING ITS OWN
RESOURCES, THE FOLLOWING SERVICES, THE COSTS OF WHICH SHALL BE BORNE
DIRECTLY BY THE COMPANY:
3.1 The following personnel services: (i) dedicated sales
representatives, (ii) dedicated customer service
representatives, (iii) dedicated accounting representatives,
(iv) dedicated brand managers, and (v) dedicated Internet
sales managers;
3.2 Dedicated showroom space for Company products;
3.3 Any additional direct costs of the Company; and
3.4 All personnel for the operation of the Retail Store and any
other additional full-time dedicated employees of the Company.
4. PERFORMANCE AND AUTHORITY.
4.1 STANDARD OF CARE. Manager shall provide the Services in a
timely and current manner, consistent with management and
administrative practices, standards, methods and procedures
conforming with (i) all applicable laws and (ii) the degree of
care, skill, diligence and prudence which would generally be
expected from a reasonably prudent manager experienced in
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providing services of the kind required to be provided by the
Manager under this Agreement.
4.2 INDEPENDENT CONTRACTOR RELATIONSHIP. With respect to its
performance of the Services, Manager is an independent
contractor, with the authority to control, oversee and direct
the performance of the details of the Services.
4.3 NO JOINT VENTURE OR PARTNERSHIP. This Agreement is not
intended to and shall not be construed as creating a joint
venture, partnership, agency or other association within the
meaning of the common law or under the laws of any state.
5. TERM. The respective rights, duties, and obligations of the parties
hereunder shall commence on the date hereof and shall continue for an
initial term expiring August 31, 2009 (the "TERM"). Following the Term,
this Agreement may be renewed and continued as agreed to by the Company
and the Manager. This Agreement shall terminate at such time as the
Operating Agreement is terminated or at such time as BR or its
permitted transferees no longer hold Membership Units in the Company.
6. COMPENSATION FOR SERVICES. During the Term, Manager shall not receive
any fees or other compensation for providing the Services hereunder.
The Company and the Manager shall negotiate in good faith with respect
to any fees payable if this Agreement is renewed and continued.
7. COVENANTS RELATING TO THE COMPANY & PERFORMANCE. Manager agrees to
cause the Services to be performed as and when required by this
Agreement and to provide all funds, personnel and assistance necessary
or appropriate to cause such performance.
8. MISCELLANEOUS.
8.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
exhibits and schedules attached hereto, represents the entire
agreement among all the parties hereto concerning the subject
matter hereof and supersedes all prior understandings,
agreements, and representations by or among the Parties and
their respective Affiliates, written or oral, to the extent
they relate in any way to the subject matter hereof, including
the Term Sheet, dated June 10, 2008, between Manager and JL
Sweden. This Agreement may only be amended by a writing signed
by all of the parties hereto.
8.2 GOVERNING LAW. This Agreement, the application and
interpretation hereof shall be governed exclusively by its
terms and the laws of the State of California without regard
to its conflict of laws provisions.
8.3 CONSENT TO JURISDICTION AND VENUE. Any action, suit or
proceeding in connection with this Agreement must be brought
against any Party in a court of record of the State of
California, County of Los Angeles, or of the United States
District Court for the Central District of California or in
any state or federal court in the State of California, County
of Los Angeles, each Party hereby consenting and submitting to
the exclusive jurisdiction thereof; and to the fullest extent
permitted by law, service of process may be made upon any
Party, by certified or registered mail, at the address to be
used for the giving of notice to such Party under SECTION
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7.10. Nothing herein shall affect the right of any Party to
serve process in any manner permitted by applicable law. In
any action, suit or proceeding in connection with this
Agreement, each Party hereby waives any claim that Los Angeles
County or the Central District of California or the State of
California is an inconvenient forum.
8.4 CONSTRUCTION. This Agreement and any documents or instruments
delivered pursuant hereto shall be construed without regard to
the identity of the Person who drafted the various provisions
of the same. Further, each Party has been or has declined to
be represented by legal counsel in connection with the
drafting and negotiation of this Agreement and the other
agreements referred to herein. Consequently, each Party
acknowledges and agrees that any rule of construction that a
document is to be construed against the drafting party shall
not be applicable either to this Agreement or such other
documents and instruments.
8.5 HEADINGS. The headings in this Agreement are inserted for
convenience only and are in no way intended to describe,
interpret, define, or limit the scope, extent or intent of the
Agreement or any provision hereof.
8.6 WAIVERS. The failure of any party to seek redress for
violation of or to insist upon the strict performance of any
covenant or condition of this Agreement shall not prevent a
subsequent act, which would have originally constituted a
violation, from having the effect of an original violation.
8.7 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided by this Agreement are cumulative and the use of any
one right or remedy by any party shall not preclude or waive
the right to use any or all other remedies. Such rights and
remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
8.8 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which
shall constitute one and the same instrument. Any signature
page of any such counterpart, or any electronic facsimile
thereof, may be attached or appended to any other counterpart
to complete a fully executed counterpart of this Agreement,
and any telecopy or other facsimile transmission of any
signature shall be deemed an original and shall bind such
party.
8.9 FURTHER ASSURANCES. The Parties each agree to cooperate, and
to execute and deliver in a timely fashion any and all
additional documents necessary to effectuate the purposes of
this Agreement.
8.10 NOTICES. All notices, consents, requests and other
communications hereunder shall be in writing and shall be sent
by hand delivery, by certified or registered mail
(return-receipt requested) or by a recognized national
overnight courier service to the addresses set forth on
EXHIBIT A to the Operating Agreement (Manager's address is the
same as BR's address). Notices delivered pursuant to this
Section shall be deemed given: at the time delivered, if
personally delivered; three (3) business days after being
deposited in the mail, if mailed; and one (1) business day
after timely delivery to the courier, if by overnight courier
service. Any party may change the address to which notice is
to be sent by written notice to the Manager in accordance with
Section 16.13 of the Operating Agreement.
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8.11 INTERPRETATION. Whenever the singular form is used in this
Agreement, and when required by the context, the same shall
include the plural and vice versa, and the masculine gender
shall include the feminine and neuter genders and vice versa.
The words "herein" "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision. The
words "including" and "include" and other words of similar
import shall be deemed to be followed by the phrase "without
limitation."
8.12 ASSIGNMENT. Neither party shall be permitted to assign this
Agreement, or the rights and obligations existing hereunder,
without the prior written consent of the Company and the
Manager.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, each of the parties hereto has executed or has
caused this Agreement to be executed by its duly authorized representative to be
effective as of the Effective Date.
J. LINDEBERG USA, LLC, a
California limited liability company
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Manager
PEOPLE'S LIBERATION, INC.,
a Delaware corporation
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Chief Executive Officer
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