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EXHIBIT 10.25
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MANAGEMENT SERVICES AGREEMENT
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BY AND BETWEEN
Gadzooks Management, L.P.
AND
Gadzooks, Inc.
DATED AS OF JUNE 28, 2000
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MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT ("Agreement") is made and entered
into as of June 28, 2000 by and between Gadzooks Management, L.P. ("LP"), a
Texas limited partnership, and Gadzooks, Inc. ("Gadzooks"), a Texas corporation.
RECITALS:
1. Gadzooks is engaged in the retail business of marketing casual
apparel and related accessories for teen-aged men and women ("Operations"); and
2. LP has the management and administrative personnel available to
assist Gadzooks in the conduct of its business; and
3. Gadzooks desires to utilize the services and experience of LP in
connection with the conduct of the Operations;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE I
Appointment of Managing Agent
1.1 Appointment. Gadzooks hereby appoints LP as its managing agent, and
LP hereby accepts such appointment by Gadzooks, to manage and direct the
business of Gadzooks as specified in Article II below and subject to the general
supervision and control of the Board of Directors and officers of Gadzooks.
1.2 Term. The term of this Agreement shall begin as of the Effective
Date hereof and continue until terminated by written notice to the other party.
ARTICLE II
Powers and Duties of LP
2.1 Powers of LP. Subject to such limitations as may be imposed by law
or this Agreement, LP is hereby authorized and empowered, in the name of and on
behalf of Gadzooks without further authorization of Gadzooks to:
(a) establish corporate policies and procedures with respect to all
operations, marketing, banking, accounting and financial controls, personnel
activities, and other matters except as specifically precluded by the terms of
the Agreement;
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(b) make tax, regulatory and other filings, and to render other
periodic reports to governmental agencies or bodies having jurisdiction over the
assets or operations of Gadzooks:
(c) open and close bank accounts, reconcile all accounts of
Gadzooks, and prepare monthly, quarterly and annual financial statements of
Gadzooks;
(d) purchase and maintain insurance covering such risks in such
amounts as LP determines are, from time to time, necessary and appropriate, for
the benefit of Gadzooks;
(e) buy, lease (as lessor or lessee), sell, use, invest, mortgage,
encumber or otherwise acquire or dispose of, in the ordinary course of business,
assets of Gadzooks or property of any kind which becomes an asset of Gadzooks;
(f) enter into and perform the obligations of corporate and
management agreements for the benefit of Gadzooks;
(g) conduct litigation and incur legal expenses and, except as set
forth herein, otherwise deal with or settle claims or disputes; and
(h) perform such other management and administrative services as XX
xxxxx necessary and appropriate in the ordinary course of business or as
Gadzooks requests.
2.2 Duties of LP. LP shall perform its duties hereunder in the manner
in which XX xxxxx necessary and appropriate. Without limiting the generality of
the foregoing, the duties of LP shall include the following:
(a) to provide, from time to time, consultants (who may be
employees of LP) who will consult with management of Gadzooks concerning the
items specified in Section 2.1 above;
(b) to control and determine the day-to-day conduct of the business
activities of Gadzooks relating to matters concerning banking, payroll, credit
policies, billing procedures, collection matters and cash management policies;
(c) to render or cause to be rendered accounting, financial
controls, corporate tax compliance and legal, technical and other services and
perform or cause to be performed other accounting, logistical and administrative
functions for Gadzooks;
(d) to maintain records of the assets owned by Gadzooks and books
of account, and to make such records and books of account available for
inspection by the Board of Directors of Gadzooks during regular business hours
at the principal office of LP;
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(e) to prepare, on an annual, quarterly and monthly basis,
financial statements of Gadzooks and to furnish to the Board of Directors of
Gadzooks such other information and reports concerning the conduct of the
business and affairs of Gadzooks as the Board of Directors shall reasonably
request;
(f) to render such reports and make such periodic and other filings
as may be required under applicable federal, state and local laws, rules and
regulations;
(g) to administer, on behalf of Gadzooks, contracts, leases, and
other agreements to which Gadzooks is a party or pursuant to which Gadzooks is a
beneficiary;
(h) to perform strategic planning with respect to geographic
expansion of Gadzooks' operations; and
(i) to conduct services in compliance with all applicable laws,
rules and regulations and in accordance with the terms of this Agreement, and
any other applicable agreement, indenture or other instrument to which Gadzooks
is bound or may be subject.
2.3 Limitation on Powers. Except as expressly set forth in Sections 2.1
and 2.2 above, without the prior written authority of the Board of Directors of
Gadzooks, LP shall not have the authority or take any other action on behalf of
Gadzooks, including but not limited to:
(a) sell, lease or otherwise dispose of all or substantially all of
its assets or property;
(b) borrow money, assume, guarantee or otherwise cause Gadzooks to
become liable for indebtedness, other than indebtedness brought about in the
ordinary course of Gadzooks' business, without the prior consent of Gadzooks;
(c) form, contribute or loan cash or property to any limited or
general partnerships, joint ventures, corporations or similar arrangements,
without the prior consent of Gadzooks; or
(d) take any other extraordinary corporate action on behalf of
Gadzooks, without the prior consent of Gadzooks.
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ARTICLE III
Charges
3.1 Charges. The charge to Gadzooks for Services provided by LP
pursuant to Article II hereof shall be based on an amount equal to LP's internal
cost of providing such Services to Gadzooks plus the actual cost of any
third-party services and/or materials required, plus an amount equal to 10%
(this percentage may be changed with the written consent of both Gadzooks and
LP) of the total internal and external charges.
LP's internal costs of providing Services shall be computed at the
beginning of each fiscal year based on appropriate methods agreeable to the
parties and assessed monthly, along with the actual cost of any third-party
services and/or materials required, in a predetermined manner that is agreeable
to both parties in accordance with Article V hereof.
ARTICLE IV
Liability of LP; Indemnification
4.1 Judgments in Good Faith Proper. Notwithstanding any other
provisions contained herein to the contrary, in no event shall Gadzooks, or any
director, officer, employee or stockholder of Gadzooks make any claim against
LP, on account of any alleged errors of judgment made in good faith in
connection with the conduct of Gadzooks' operations hereunder by LP nor shall
Gadzooks object to any expenditure made by LP in good faith in the course of its
management of Gadzooks, or in the settlement of any claim arising out of the
conduct of Gadzooks by LP.
4.2 Indemnification. Except to the extent required by applicable law,
neither LP, nor any of its employees, officers, directors, partners, agents or
stockholders (collectively, "Indemnities") shall be liable to Gadzooks, and
Gadzooks agrees to indemnify and hold harmless the Indemnities from and against
any and all liabilities, losses, damages, costs and expenses (including, without
limitation, reasonable attorneys' and accountants' fees), deficiencies,
judgments, actions, causes of action, proceedings, demands or claims of whatever
nature (collectively, "Damages") arising from or in any way related to (i)
services provided by LP pursuant to this Agreement, or (ii) any accident, injury
or damage whatsoever during the conduct of the Operations caused to any person
or to the property of any person, occurring on or after the Effective Date
hereof and prior to the termination of this Agreement, except to the extent such
Damages are caused by or result from the gross negligence of, or any willful
misconduct or reckless act by LP or its employees, officers, directors, agents
or stockholders. The termination of a proceeding by judgment, order, settlement
or conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of itself, create a presumption that an action or inaction involves bad faith or
willful misconduct or a reckless act.
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ARTICLE V
Accounting
5.1 Accounting Periods. Accounting periods under this Agreement shall
be coterminous with the fiscal periods of Gadzooks. Within 60 days after the end
of the first fiscal quarter or part thereof, and within 60 days of each
succeeding fiscal quarter, during the term of this agreement, LP shall present
an itemized accounting to Gadzooks with respect to such fiscal quarter.
5.2 Settlement Dates. Settlement between Gadzooks and LP shall be made
within 30 days after the delivery of such accounting.
5.3 Books and Records. Gadzooks shall have the right to audit the books
and records of LP upon reasonable prior notice during normal business hours with
respect to LP's performance and charges under this Agreement.
ARTICLE VI
Miscellaneous
6.1 Notices. Any notice, request, consent or communication
(collectively a "Notice") under this Agreement shall be effective only if it is
in writing and (a) personally delivered, (b) sent by certified or registered
mail, return receipt requested, postage prepaid, (c) sent by a nationally
recognized overnight delivery service, with delivery confirmed, or (d) telexed
or telecopied, with receipt confirmed, address as follows:
Gadzooks, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Gadzooks Management, L.P.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Registered Agent
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address or addresses as shall be furnished in writing by any
party to the other party. A Notice shall be deemed to have been given as of the
date when (i) personally delivered, (ii) five business days after when deposited
with the United States mail properly addressed, (iii) the next business day when
delivered during business hours to said overnight delivery service, properly
addressed and prior to such delivery service's
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cut off time for next day delivery, or (iv) when receipt of the telex or
telecopy is confirmed, as the case may be, unless the sending party has actual
knowledge that a Notice was not received by the intended recipient.
6.2 Assignment. Either party hereto shall have the right to assign this
Agreement only to (i) any successor assignee of such party that may result from
any merger, consolidation or reorganization; (ii) another corporation that
acquires all or substantially all of such party's assets, business and
liabilities; or (iii) any successor assignee of such party with the express
written consent of both parties hereto.
6.3 Headings. Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.4 Entire Agreement; Modification. This Agreement contains the
complete expression of the agreement between the parties with respect to the
matters addressed herein and there are no promises, representations, or
inducements except as herein provided. The terms and provisions of this
Agreement may not be modified, supplemented or amended except in writing agreed
to by both parties hereto. All terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and permitted assigns of the parties hereto.
6.5 No Waiver. Failure by either party hereto to enforce at any time or
for any period of time any provision or right hereunder shall not constitute
waiver of such provision or the right of such party thereafter to enforce each
and every such provision.
6.6 Governing Law. This Agreement shall be governed and construed and
enforced in accordance with the laws of the State of Texas. The prevailing party
in any litigation concerning this Agreement shall be entitled to reimbursement
of its reasonable costs, including legal and accounting fees, incurred in
connection with any such matter.
6.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
6.8 Effective Date. The parties hereto have executed this Agreement as
of the 28th day of June 2000 ("Effective Date").
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the above referenced Effective Date.
Gadzooks, Inc.
By: /s/ XXXXXX X. XXXXXXXXXXX
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Title: President/Chief Executive Officer
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Date: June 28, 2000
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Gadzooks Management, L.P.
By: /s/ XXXXX X. XXXXXX
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Title: Vice President/Chief Financial Officer
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Date: June 28, 2000
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