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 Bella Rose, 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;
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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
ex
