EX 10.5
MANAGEMENT SERVICES AGREEMENT
Management Services Agreement dated as of October ____, 1997
("Agreement") by and between Bolle Inc., a Delaware corporation ("Bolle"), and
BEC Group, Inc., a Delaware corporation ("BEC").
W I T N E S S E T H
WHEREAS, BEC is experienced in the overall management and direction of
corporations which design, develop, manufacture and distribute products for
specialized markets throughout the world; and;
WHEREAS, Bolle, a manufacturer of sunglasses, eyeglasses and goggles,
desires to engage BEC to provide managerial and other advisory services to
Bolle and its subsidiaries, and BEC desires to accept such engagement;
NOW THEREFORE, in consideration of the premises and mutual covenants
and agreements hereinafter set forth, the parties hereto, desiring to be
legally bound, do hereby agree as follows:
1. ENGAGEMENT OF BEC. Bolle hereby engages BEC, and BEC hereby accepts
such engagement, to provide managerial and other advisory services on a
continuing basis to Bolle and its subsidiaries, upon the terms and conditions
hereinafter set forth.
2. SERVICES.
2.1 SCOPE OF SERVICES. Subject to the terms and conditions
hereof, BEC shall provide on a continuing basis to Bolle and
its subsidiaries such managerial and advisory services
relating to Bolle and its subsidiaries, as are specified in
Section 2.2 hereof and as Bolle may reasonably request from
time to time having regard to BEC's experience and expertise,
personnel and the remuneration payable to BEC under this
Agreement. Under no circumstances shall BEC be required to
provide the services of outside professionals or consultants
in fulfilling its obligations hereunder, except on such terms
and conditions as may be agreed between the parties from time
to time.
2.2 SPECIFIC SERVICES. The services BEC shall provide to
Bolle and its subsidiaries hereunder shall include, but not
be limited to, the following:
(a) advice and assistance as to the general and
corporate policies and strategic planning and
direction of Bolle and its subsidiaries and, in
connection therewith, make available the services of
Martin E. Franklin and Ian G.H. Ashken;
(b) making available personnel of BEC to serve as
directors on the boards of directors of Bolle and
its subsidiaries and on committees of such board of
directors as Bolle and its subsidiaries may
reasonably request;
(c) advice and assistance in dealing with
regulators, including, without limitation, public
hearings involving Bolle or any of its subsidiaries
before governmental and regulatory bodies;
(d) advice and assistance involving investor
relations for Bolle, including without limitation,
communication with Bolle's investors, analysts and
securities regulators and the preparation and filing
by Bolle of disclosure documents and reports
required to be filed by it in accordance with
applicable securities laws, rules and regulations;
(e) advice and assistance with respect to the
financial affairs of Bolle and its subsidiaries,
including, without limitation, the evaluation of
budgets, business plans, capital expenditure
proposals and financial projections for Bolle and
its subsidiaries, monitoring of Bolle's operational
results (including those of its subsidiaries) and
consultation with management of Bolle with respect
to those results;
(f) advice and assistance in connection with the
raising by Bolle or any of its subsidiaries of
external debt or equity capital and dealings by
Bolle and its subsidiaries with their respective
bankers and other sources of financial assistance;
(g) advice and assistance in connection with
interest rate risk management, foreign exchange
management and excess cash investment;
(h) advice and assistance in connection with the
acquisition and divestiture of related operations;
(i) advice and assistance with regard to community
relations and public relations programs;
(j) advice, assistance and coordination in pension
planning matters;
(k) advice, assistance and coordination involving
insurance matters, including, without limitations,
risk management, planning, disaster advice and
coordination of insurance programs with affiliated
companies;
(l) advice and assistance in connection with Bolle's
relationship with external auditors and internal
audits conducted to review the corporate operations
and affairs of Bolle and its subsidiaries,
(including, without limitation, assistance in
identifying areas in which operational improvements
can be made);
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(m) advice and assistance in further developing
policies and procedures for Bolle and its
subsidiaries relating to financial, accounting,
human resource and benefits matters;
(n) monitoring international developments and new
business opportunities and consulting with
management of Bolle regarding same.
3. FEES AND EXPENSES.
3.1 MANAGEMENT FEE. In consideration of the services to be
rendered by BEC hereunder, Bolle shall pay to BEC a monthly
fee of $60,000 (the "Management Fee"), together with any
relevant sales taxes during each year that this Agreement
remains in effect. The Management Fee shall be paid in
arrears within five (5) days after the end of each month
included within the term of this Agreement.
3.2 EXPENSES. If, during the term of this Agreement, BEC
incurs any identifiable, reasonable out-of-pocket expenses
(including, without limitation, travel and living expenses)
in respect of the services rendered by BEC hereunder, BEC
shall be entitled to obtain reimbursement from Bolle of such
expenses upon providing Bolle with an invoice setting forth
the particulars of the expenses for which BEC is claiming
reimbursement hereunder. Notwithstanding the foregoing, BEC
shall not be entitled to reimbursement for any known single
item of expense in excess of $10,000 unless such expense
shall have been pre-approved by the President of Bolle. Any
amount due BEC under this Section 3.2 shall be paid by Bolle
within five (5) days after the end of the month in which the
invoice covering such amount was delivered to Bolle.
3.3 LATE PAYMENTS. Notwithstanding any provision contained
herein to the contrary, if and to the extent that payment of
any of the amounts described in Section 3.1 or 3.2 hereof
would result in Bolle or any of its subsidiaries being in
default under any agreement with a bank or similar lending
institution, Bolle may defer payment thereof until such time,
but only until such time, as the payment would not result in
Bolle being in default under such agreement, provided that if
such default continues for more than three (3) months BEC
shall not be obligated to provide any services pursuant to
this Agreement until such time as all outstanding amounts
have been paid in accordance with this Agreement. Any payment
to be made to BEC pursuant to this Agreement that is not paid
when due (including, without limitation, pursuant to the
deferment contemplated in the preceding sentence) shall bear
interest from the date such payment is due until the date
such payment is made at a rate per annum equal to the prime
rate of the New York City branch of NationsBank, N.A. during
such period, adjusted on a daily basis for changes in that
rate, plus 2% per annum.
4. LIMITATION OF LIABILITY. BEC assumes no responsibility to Bolle
hereunder other than as expressly set forth herein. BEC shall not be liable to
Bolle hereunder except for actual damages where BEC has acted in bad faith or
has been grossly negligent in the performance of
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its obligations hereunder. Bolle agrees to indemnify and hold harmless BEC from
and against any and all losses, damages, claims, liabilities, deficiencies,
costs and expenses (including reasonable attorney's fees) ("Losses") incurred
or suffered by BEC or any of its subsidiaries, arising from or in connection
with the services provided by BEC or any of its subsidiaries pursuant to this
Agreement other than Losses suffered or incurred as a result of BEC's bad faith
or gross negligence in the performance of its obligations hereunder.
5. INDEPENDENT CONTRACTOR. BEC shall act as the independent contractor
of Bolle. BEC shall not be the legal agent of Bolle for any purpose whatsoever
and therefore has no right or authority to make or underwrite any promise,
warranty or representation, to execute any contract or otherwise to assume any
obligation or responsibility in the name of or on behalf of Bolle, except to
the extent hereafter specifically authorized in writing by Bolle. BEC shall
advise all third parties with whom it deals in the performance of services
hereunder of such lack of authority. Bolle shall not be bound by or liable to
any third party for any act or for any obligation or debt incurred by BEC
toward such third party, except to the extent hereafter specifically agreed to
in writing by Bolle.
6. TERMS. The initial term of this Agreement shall commence as of the
date hereof and shall continue through and include the third anniversary of the
date hereof. Thereafter, the term of this Agreement shall automatically
continue in full force and effect for succeeding one-year periods unless either
party hereto shall give notice of termination to the other no later than ninety
(90) days prior to the expiration of the initial term, or any renewal term then
in effect, as the case may be. The respective rights and obligations of Bolle
and BEC which have accrued hereunder at the time of expiration of this
Agreement shall not be affected by such expiration.
7. MISCELLANEOUS.
7.1 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing. Notices and other
communications shall be delivered personally (including by
any reputable overnight courier) or sent by certified or
registered mail, postage prepaid, or by telecopier and shall
be deemed received, in the case of personal delivery, when
delivered, in the case of mailing, on the third day after
mailing, and in the case of telecopy transmission, upon
transmittal.
All notices and other communications given pursuant to this
Agreement shall be addressed as follows:
(a) If to Bolle, to it at:
Bolle Inc.
3890 Elm Street
Denver, CO 80207
Telecopier: (303) 321-6952
Attention: Mr. Gary Kiedaisch
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(b) If to BEC, to it at:
BEC Group, Inc.
555 Theodore Fremd Avenue
Suite B-302
Rye, New York 10580
Telecopier: (914) 967-9405
Attention: Mr. Martin E. Franklin
Either party hereto may change the person to whom or the
address or telecopier number to which notices and other
communications are to be given hereunder, but any such notice
or other communication shall be effective only when actually
received by the other party hereto.
7.2 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties hereto with respect to the
subject matter hereof and supersedes any and all prior
arrangements, agreements or understandings, whether written
or oral. During the initial term of this Agreement, no
amendment, modification or waiver of any of the terms or
provisions of Section 3 hereof shall be valid or binding
unless set forth in writing and signed by Bolle and BEC. No
other amendment, modification or waiver of any of the terms
or provisions hereof shall be valid or binding unless set
forth in writing and signed by Bolle and BEC.
7.3 NON-WAIVER. The waiver of, or failure to take action with
regard to, any breach of any term or condition of this
Agreement shall not be deemed to constitute a continuing
waiver or a waiver of any other breach of the same or any
other term or condition.
7.4 HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
7.5 COUNTERPARTS. This Agreement may be executed in more than
one counterpart and if so executed, each of such counterparts
shall be deemed to be an original, and, when executed by both
parties hereto, all such counterparts shall be read together
as one agreement.
7.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, their
successors and assigns, but may not be assigned by either
party without the prior written consent of the other.
7.7 SEVERABILITY. If any term or provision of this Agreement
shall be held or determined to be unenforceable, the balance
of this Agreement shall nevertheless be valid and enforceable
subject to an equitable revision to be negotiated by the
parties hereto with the objective of maintaining the original
balance between their respective rights and obligations.
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7.8 GOVERNING LAW. This Agreement shall be enforced, governed
and construed by and interpreted under the laws of the State
of New York applicable to contracts made and to be performed
wholly within such State without giving effect to the
principles of conflict of laws thereof.
7.9 FURTHER ASSURANCES. Each party hereto shall cooperate,
shall take such further action and shall execute and deliver
such further documents as may be reasonably requested by any
other party in order to fulfill the purposes of this
Agreement.
IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto as of the date first above written.
BOLLE INC.
By:
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Name:
Title:
BEC GROUP, INC.
By:
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Name:
Title:
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