1
Exhibit 10.8
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT (this "Agreement") entered into on
_______________ ___, 1996, is made effective as of the effective date of the
initial public offering of Common Stock on Registration Statement Form S-1 (the
"Effective Date") of Kani, Inc., a California corporation ("Kani"), by and
between Skechers USA, Inc., a California corporation ("Skechers") and Kani.
For good and valuable consideration, the adequacy of which is hereby
acknowledged, the parties agree as follows:
1. Services. Skechers will perform those services (the "Services")
requested by Kani including general administrative services, data processing,
accounts payable, all as enumerated on Exhibit "A" attached hereto. This
Agreement will terminate on that date (the "Termination Date") which is the
earlier of (i) five years from the date hereof, unless extended by mutual
agreement of the parties hereto (the "Initial Term") or (ii) upon thirty (30)
days prior written notice by Kani at any time during the Initial Term.
Skechers will continue to perform the Services until the last day of the month
following the Initial Term, unless extended, or the month in which Kani
provides Skechers with a written notice of its election to terminate this
Agreement, whichever is earlier. Skechers will have no further duty to perform
the Services after the Termination Date.
In addition, Skechers will offer to continue to provide Kani with
insurance coverages and self insurance programs (collectively "Insurance
Coverage Programs") including health insurance, public liability, workers'
compensation, property damage, business interruption, fiduciary liability and
surety bonds. The charge to Kani for coverage, if requested by Kani, will be
based upon a pro rata portion of the costs to Skechers for such coverage under
the various policies. The charge for the insurance will be renegotiated
annually based upon Skechers's costs for the insurance and Kani's loss
experience.
2. Compensation. Kani will pay Skechers' on a monthly basis a
fee equal to 15% of Kani's net sales for the preceding month, as determined in
accordance with generally accepted accounting principles consistently applied.
Kani will remit the fee to Skechers by the 25th day of the month following the
month in which the Services are rendered.
3. Confidential Information. (a) The parties agree: (i) to
hold in trust and maintain confidential, (ii) not to disclose to others without
prior written approval from the disclosing party, (iii) not to xxx for any
purpose, other than such purpose as may be authorized in writing by the
disclosing party, and (iv) to prevent duplication of and disclosure to any
other party, any Information received from the disclosing party or developed,
presently held or continued to be held, or otherwise obtained, by the receiving
party under this Agreement.
(b) "Information" shall mean all results of the Services,
Information disclosed by either party orally, visually, in writing, or in other
tangible form, and includes,
1
2
but is not limited to, technical, economic plans, computer Information data
bases, and the like in connection with this Agreement.
(c) The foregoing obligations of confidentiality,
non-disclosure and non-use shall not apply to any Information to the extent
that the obligated party can show that: (i) such Information is or becomes
knowledge generally available to the public other than through the acts or
omissions of the obligated party; (ii) such Information is subsequently
received by the obligated party on a non-confidential basis from a third party
who did not receive it directly or indirectly from the disclosing party; (iii)
such Information is developed independently by the obligated party without
reference to the Information; or (iv) disclosure of such Information is
required under applicable law or regulations.
Specific elements of Information shall not be deemed to come under the
above exceptions merely because they are embraced by more general Information
which is or becomes public knowledge.
4. Standard of Care. Skechers shall perform the Services for
Kani with the same degree of care, skill and prudence customarily exercised by
it for its own operations.
5. Indemnification. Skechers shall indemnify, defend and hold
Kani, its directors, officers and employees harmless from and against all
direct damages, losses and out-of-pocket expenses (including reasonable legal
fees) caused by or arising out of any failure in the performance of any
obligation or agreement of Skechers hereunder.
6. Assignment or Transfer. Neither party shall assign or
transfer any of its rights under this Agreement without the prior written
approval of the other party, except no such approval shall be required for an
assignment to an affiliate or a successor to all or a substantial portion of
the assets or the business of either party, provided that such affiliate or
successor assumes such party's obligations hereunder with respect to the rights
assigned or transferred.
7. Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including
telegraphic or facsimile communications) and shall be mailed (return receipt
requested), telegraphed, sent by facsimile or delivered to each party at the
address set forth as follows, or at such other address as either party may
designate by notice to the other, and any such notice, request, demand or other
communication shall be effective upon receipt. All payments required in this
Agreement shall be paid to and delivered to the party as provided herein for
notice.
If to Skechers: Skechers USA, Inc.
000 Xxxxxxxxx Xxxxx Xxxx.
Xxxxx 000
Xxxxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
2
3
Attention: Xxxxxx Xxxxxxxxx
Chief Executive Officer
If to Kani: Kani, Inc.
000 Xxxxxxxxx Xxxxx Xxxx.
Xxxxx 000
Xxxxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
Chief Financial Officer
8. Severability. In the event any provision of this Agreement is
held invalid or unenforceable, such holding shall not invalidate nor render
unenforceable any other provision hereof.
9. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of California.
10. Reference Provision.
(a) Each controversy, dispute or claim between the
parties arising out of or relating to this Agreement, which controversy,
dispute or claim is not settled in writing within thirty (30) days after the
"Claim Date" (defined as the date on which a party subject to the Agreement
gives written notice to all other parties that a controversy, dispute or claim
exists) , will be settled by a reference proceeding in Los Angeles County,
California, in accordance with the provisions of Section 638 et seq. of the
California Code of Civil Procedure, or their successor section ("CCP") , which
shall constitute the exclusive remedy for the settlement of any controversy,
dispute or claim concerning this Agreement, including whether such controversy,
dispute or claim is subject to the reference proceeding and the parties waive
their rights to initiate any legal proceedings against each other in any court
or jurisdiction other than the Superior court of Los Angeles County (the
"Court"). The referee shall be a retired Judge of the Court selected by mutual
agreement of the parties, and if they cannot so agree within forty-five (45)
days after the Claim Date, the referee shall be promptly selected by the
Presiding Judge of the Los Angeles County Superior Court (or his
representative). The referee shall be appointed to sit as a temporary judge,
with all of the powers for a temporary judge, as authorized by law, and upon
selection should take and subscribe to the oath of office as provided for in
Rule 244 of the California Rules of Court (or any subsequently enacted Rule).
Each party shall have one preemptory challenge pursuant to CCP 170.6. The
referee shall (a) be requested to set the matter for hearing within sixty (60)
days after the Claim Date and (b) try any and all issues of law or fact and
report a statement of decision upon them, if possible, within ninety (90) days
of the Claim Date. Any decision rendered by the referee will be final, binding
and conclusive and judgment shall be entered pursuant to CCP 644 in any court
in the State of California
3
4
having jurisdiction. Any party may apply for a reference at any time after
thirty (30) days following notice to any other party of the nature of the
controversy, dispute or claim, by filing a petition for a hearing and/or trial.
All discovery permitted by this Agreement shall be completed no later than
fifteen (15) days before the first hearing date established by the referee.
The referee may extend such period in the event of a party's refusal to provide
requested discovery for any reason whatsoever, including, without limitation,
legal objections raised to such discovery or unavailability of a witness due to
absence or illness. No party shall be entitled to "priority" in conducting
discovery. .Depositions may be taken by either party upon seven (7) days
written notice, and, request for production or inspection of documents shall be
responded to within ten (10) days after service. All disputes relating to
discovery which cannot be resolved by the parties shall be submitted to the
referee whose decision shall be final and binding upon the parties.
(b) Except as expressly set forth in this Agreement, the
referee shall determine the manner in which the reference proceeding is
conducted including the time and place of all hearings, the order of
presentation of evidence, and all other questions that arise with respect to
the course of the reference proceeding. All proceedings and hearings conducted
before the referee, except for trial, shall be conducted without a court
reporter, except that when any party so requests, a court reporter will be used
at any hearing conducted before the referee. The party making such a request
shall have the obligation to arrange for and pay for the court reporter. The
costs of the court reporter at the trial shall be borne equally by the parties.
(c) The referee shall be required to determine all issues
in accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the
State of California will be applicable to the reference proceeding. The
referee shall be empowered to enter equitable as well as legal relief, to
provide all temporary and/or provisional remedies and to enter equitable orders
that will be binding upon the parties. The referee shall issue a single
judgment at the close of the reference proceeding which shall dispose of all of
the claims of the parties that are the subject of the reference. The parties
hereto expressly reserve the right to contest or appeal from the final judgment
or any appealable order or appealable judgment entered by the referee. The
parties hereto expressly reserve the right to findings of fact, conclusions of
law, a written statement of decision, and the right to move for a new trial or
a different judgment, which new trial, if granted, is also to be a reference
proceeding under this provision.
(d) In the event that the enabling legislation which
provides for appointment of a referee is repealed (and no successor statute is
enacted), any dispute between the parties that would otherwise be determined by
the reference procedure herein described will be resolved and determined by
arbitration. The arbitration will be conducted by a retired judge of the Los
Angeles County Superior Court, in accordance with the California Arbitration
Act, Sections 1280 through 1294.2 of the CCP as amended from time to time. The
limitations with respect to discovery as set forth hereinabove shall apply to
any such arbitration proceeding.
4
5
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same instrument.
5
6
IN WITNESS WHEREOF, this Services Agreement is made as of the day and
year first above written.
KANI, INC.
A CALIFORNIA CORPORATION
By:_______________________________
Name:
Title:
SKECHERS USA, INC.
A CALIFORNIA CORPORATION
By:_______________________________
Name:
Title:
6
7
EXHIBIT A
SCHEDULE OF SERVICES
Human Resources
Payroll
401K Profit Sharing
ESOP
Employment Services
Industrial Relation Services
Compensation Consulting
Grievance Resolution
Organization, Development and Training
Operations and Accounting
General Ledger Accounts
Check Processing
Accounts Payable
Accounts Receivables and Collection
Data Processing
Accounting
Inventory Control
Finance and Accounting
Services
Services of Xxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxxx and Xxxxx Xxxxxxxx who have
each agreed to devote as much of his time to the operations of the Company as
is reasonably necessary.
Facilities
Sufficient space at 000 Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx Xxxxx,
Xxxxxxxxxx as reasonably required by Kani to conduct its operations.
7
