[Exhibit 10.3 - Management Services Agreement]
MANAGEMENT SERVICES AGREEMENT
MANAGEMENT SERVICES AGREEMENT dated as of June 9, 2004 (the "Agreement")
between MANUFACTURERS MARKETING GROUP, INC., a New Jersey corporation (the
"Company"), and UNITED GROCERS CLEARING HOUSE, INC., a New Jersey corporation
(the "Manager").
BACKGROUND
The Manager has been providing the Company with various management
services relating to the Company's coupon redemption business pursuant to an
oral arrangement between the Manager and the Company. The parties now desire to
enter into this Agreement to codify the terms of their prior oral arrangement.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto, intending to be legally bound, agree as follows:
1. Engagement of the Manager. Subject to the terms and conditions set
forth in this Agreement, the Company hereby engages the Manager to provide, and
the Manager hereby agrees to furnish or cause to be furnished to the Company,
the services as more particularly set forth in Section 2 of this Agreement.
2. Duties of the Manager. During the Term (as hereinafter defined) of
this Agreement, the Manager shall provide, or cause to be provided, the
following services:
(a) Receive packages of coupons,
(b) Re-ship coupons to the Company's subcontractor, which is
currently located in Mexico,
(c) Receive coupon shipment data,
(d) Handle billing of manufacturers for processed coupons,
(e) Mail checks to those persons submitting coupons,
(f) Use of computer systems and software,
(g) Use of postal and shipping equipment and payment of postal
expenses,
(h) Printing of envelopes,
(i) Use of telephone, fax and other office equipment,
(j) Use of office facilities and utilities at 0 Xxxxxx Xxxx in
Springfield, New Jersey,
(k) Use of employees to provide coupon processing and
administrative services and other reasonable services requested by the Company,
(l) Provision of general administrative, operational, and
managerial services and the provision of such other management and operational
services as the Company may from time to time reasonably require.
3. Management Fee. As compensation for the services to be provided by
the Manager hereunder, the Company shall pay the Manager an annual fee in the
amount of $125,000 (the "Management Fee"). The Management Fee shall be payable
in twelve monthly payments at the beginning of each calendar month. The parties
agree that $4,700 of such Management fee is allocable to the 3,800 square feet
of office and administrative space utilized by the Company hereunder.
4. Representations and Warranties of the Company and the Manager. Each
of the parties to this Agreement represents and warrants to the other that (i)
it has the power, authority and right to enter into this Agreement and to carry
out and perform the terms, covenants and conditions of this Agreement, (ii) that
the execution, delivery and performance of this Agreement has been duly
authorized, if necessary, by all necessary corporate action and (iii) this
Agreement is a valid and binding agreement of such party.
5. Term. This Agreement shall be effective as of the date hereof and
shall remain in full force and effect for a period of twelve months from the
date hereof and thereafter shall renew for successive terms of one-year unless
either party gives to the other party 90 days prior written notice of
termination.
6. Scope. The parties hereto recognize that in performing its duties
hereunder, the Manager shall be acting as an independent contractor, and nothing
contained in this agreement shall be construed to constitute the Company and the
Manager as partners or joint venturers, any such intent being hereby expressly
disclaimed.
7. Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the Company and the Manager and their respective successors
and assigns.
8. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been given if given to the last known address of the recipient
(a) when received, if delivered in person, (b) when sent, if sent by facsimile
transmission with receipt confirmed or (c) three (3) business days following the
mailing thereof, if mailed by certified first class mail, postage prepaid,
return receipt requested.
9. Waiver. A waiver by a party hereto of a breach of any term, covenant
or condition of this Agreement by the other party hereto shall not operate or be
construed as a waiver of any other or subsequent breach by such other party of
the same or any other term, covenant or condition hereof.
10. Entire Agreement; Amendments. This Agreement is intended by the
parties hereto as a final expression of their agreement and understanding and
exclusive statement of the terms hereof and supersedes any and all prior and
contemporaneous agreements and understandings relating thereto. No waiver,
modification, change or amendment of any of the provisions of this Agreement
shall be valid unless in writing and signed by the party against whom such
claimed waiver, modification, change or amendment is sought to be enforced.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
conflict of laws principles thereby.
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12. Titles; Counterparts; Facsimile Execution. The titles of the
Sections of this Agreement are inserted merely for convenience and ease of
reference and shall not affect or modify the meaning of any of the terms,
covenants or conditions of this Agreement. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original and all of
which, together, shall constitute one and the same original instrument.
Facsimile execution and delivery of this Agreement is legal, valid and binding
for all purposes.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and the year first above written.
MANUFACTURERS MARKETING GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
UNITED GROCERS CLEARING HOUSE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
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