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Exhibit 10.1
MANAGEMENT AGREEMENT
This Agreement is made and entered into as of January 1, 1998, by and
between BISCAYNE APPAREL, INC., a Florida corporation (the "COMPANY"), and
TRIVEST, INC., a Delaware corporation or its successors (the "MANAGER").
PRELIMINARY STATEMENTS:
A. The Manager and the Company are parties to that certain Amended and
Restated Management Agreement, dated as of November 30, 1994, as amended (the
"PRIOR AGREEMENT").
B. The Prior Agreement terminated on January 1, 1998 and the Company
desires to continue to engage the services of the Manager on the terms and
subject to the conditions contained in this Agreement.
In consideration of the premises and the respective mutual agreements,
covenants, representations and warranties contained in this Agreement, the
parties agree as follows:
AGREEMENT:
1. CONTINUATION OF MANAGER. The Company continues the engagement of the
Manager and the Manager accepts such continuation on the terms and conditions
provided in this Agreement as the sole and exclusive manager and consultant of
the Company's business, including without limitation, the business of the
Company's subsidiaries, as well as any other corporations or entities now
existing or hereafter formed or acquired by the Company or any of its
subsidiaries to engage in any business. The Manager's duties hereunder shall
include, but shall not be limited to, identifying executive personnel for the
Company (including a President, a Chief Financial Officer and/or Controller and
such additional officers approved by the Board of Directors of the Company (the
"BOARD")), whose compensation shall be the responsibility of the Company.
2. BOARD OF DIRECTORS SUPERVISION. The activities of the Manager to be
performed under this Agreement shall be subject to the supervision of the Board
to the extent required by applicable law or regulation and subject to reasonable
policies not inconsistent with the terms of this Agreement adopted by the Board
and in effect from time to time. Where not required by applicable law or
regulation, the Manager shall not require the prior approval of the Board to
perform its duties under this Agreement.
3. AUTHORITY OF MANAGER. Subject to any limitations imposed by
applicable law or regulation, the Manager shall render management, consulting
and financial services to the Company and its subsidiaries which services shall
include advice and assistance concerning any and all aspects of the operations,
planning and financing of the Company and its subsidiaries as needed from time
to time. In addition, the Manager shall render advice and expertise in
connection with an acquisition
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program for the Company and shall from time to time bring to the attention of
the Company and its subsidiaries, such investment and business opportunities as
the Manager, in its sole discretion, deems appropriate.
4. REIMBURSEMENT OF EXPENSES; INDEPENDENT CONTRACTOR. All obligations
or expenses incurred by the Manager in the performance of its duties under this
Agreement shall be for the account of, on behalf of, and at the expense of the
Company and/or its subsidiaries, as the case may be. The Manager shall not be
obligated to make any advance to or for the account of the Company (or any
subsidiary) or to pay any sums, except out of funds held in accounts maintained
by the Company (or a subsidiary) nor shall the Manager be obligated to incur any
liability or obligation for the account of the Company or any subsidiary without
assurance that the necessary funds for the discharge of such liability or
obligation will be provided. The Manager shall be an independent contractor, and
nothing contained in this Agreement shall be deemed or construed (i) to create a
partnership or joint venture between the Company and/or any subsidiary of the
Company and the Manager, or (ii) to cause the Manager to be responsible in any
way for the debts, liabilities or obligations of the Company or any of its
subsidiaries, or any other party, or (iii) to constitute the Manager or any of
its employees as employees, officers, or agents of the Company or any of its
subsidiaries.
5. OTHER ACTIVITIES OF MANAGER; INVESTMENT OPPORTUNITIES. The Company
and its subsidiaries acknowledge and agree that the Manager shall not devote the
Manager's (or any employee, officer, director, affiliate or associate of the
Manager) full time and business efforts to the duties of the Manager specified
in this Agreement, but only so much of such time and efforts as the Manager
reasonably deems necessary. The Company and its subsidiaries further acknowledge
and agree that the Manager and its affiliates are engaged in the business of
investing in, acquiring and/or managing businesses for the Manager's own
account, for the account of the Manager's affiliates and associates and for the
account of other unaffiliated parties, and plans to continue to be engaged in
such business (and any other business or investment activities) during the term
of this Agreement. No aspect or element of such activities shall be deemed to be
engaged in for the benefit of the Company or any of its subsidiaries nor to
constitute a conflict of interest. The Manager shall be required to bring only
such investments and/or business opportunities to the attention of the Company
and its subsidiaries as the Manager, in its sole discretion, deems appropriate.
6. COMPENSATION OF MANAGER.
6.1 MANAGEMENT FEE. During the term of this Agreement, the
Manager will receive annually with respect to the management of the business
operations of the Company, a cash consulting and management fee in the amount of
$200,000 ("BASE COMPENSATION"). The Base Compensation will be paid to the
Manager by the Company in advance in equal quarterly installments.
6.2 ADDITIONAL BUSINESS OPERATIONS. If the Company or its
subsidiaries acquire or enter into any additional business operations after the
date of this Agreement (each an "ADDITIONAL
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BUSINESS"), the Board and the Manager will, prior to the acquisition or prior to
entering into the business operations, in good faith, determine whether and to
what extent the Base Compensation should be increased as a result thereof. Any
increase will be evidenced by a written supplement to this Agreement signed by
the Company and the Manager.
6.3 ADDITIONAL COMPENSATION. As additional compensation, the
Manager will be entitled to a one-time fee with respect to the acquisition or
disposition of any business operation by the Company or its subsidiaries
introduced or negotiated by the Manager or its affiliates or with respect to any
other transaction not in the ordinary course of business, including any public
or private debt or equity financing or unusual efforts extended or results
obtained by the Manager on behalf or for the benefit of the Company or its
subsidiaries ("ADDITIONAL INCENTIVE COMPENSATION"). The Additional Incentive
Compensation will be paid at the closing of any such transaction. The amount of
any Additional Incentive Compensation will be determined through good faith
negotiations between the Board and the Manager. If the Board and the Manager are
unable to agree upon the amount of Additional Incentive Compensation, the
Additional Incentive Compensation amount will be determined by arbitration in
Miami, Florida in accordance with the rules of the American Arbitration
Association, which determination will be final. The parties will share equally
the cost of arbitration.
7. TERM. This Agreement shall commence as of the date hereof and shall
remain in effect until December 31, 1998, unless terminated earlier in
accordance with the provisions of this Agreement.
8. TERMINATION.
8.1 BY SHAREHOLDER ACTION. The Board may terminate the
Manager's engagement under this Agreement at any time upon a majority vote of
all of the then outstanding voting shares of capital stock of the Company at the
time of such vote (including capital stock held by the Manager, its officers,
directors and affiliates, each of whom shall be entitled to vote).
8.2 UPON BREACH. Either the Company or the Manager may
terminate the Manager's engagement under this Agreement in the event of the
breach of any of the material terms or provisions of this Agreement by the other
party, which breach is not cured within 10 business days after notice of the
same is given to the party alleged to be in breach by the other party. In the
event this Agreement is terminated by the Manager because of the breach of any
of the material terms or provisions hereof by the Company, the Manager shall be
entitled to recover damages from the Company and shall not be required to
mitigate or reduce damages by seeking or undertaking other management
arrangements or business opportunities.
9. STANDARD OF CARE. The Manager (including any person or entity acting
for or on behalf of the Manager) shall not be liable for any mistakes of fact,
errors of judgment, for losses sustained by the Company or any subsidiary or for
any acts or omissions of any kind, unless caused by intentional misconduct of
the Manager engaged by the Manager in bad faith.
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10. INDEMNIFICATION OF MANAGER. The Company and its present and future
subsidiaries agree to indemnify and hold harmless the Manager and its present
and future officers, directors, affiliates, employees and agents ("INDEMNIFIED
PARTIES") to the fullest extent permitted by corporate law as if any of the
Indemnified Parties were an officer or director to the Company and/or its
subsidiaries. The Company and its subsidiaries agree to reimburse the
Indemnified Parties on a monthly basis for any cost of defending any action or
investigation (including attorney's fees and expenses) subject to an undertaking
from such Indemnified Party to repay the Company or its subsidiaries if such
party is determined not to be entitled to such indemnity.
11. NO ASSIGNMENT. Without the consent of the Manager, the Company
shall not assign, transfer or convey any of its rights, duties or interest under
this Agreement, nor shall it delegate any of the obligations or duties required
to be kept or performed by it hereunder. Without the prior written consent of
the Company, the Manager shall not assign, transfer or convey any of its rights,
duties or interests under this Agreement, nor shall it delegate any of the
obligations or duties required to be kept or performed by the Manager under this
Agreement; provided, however, that the Manager may assign its rights, duties,
obligations hereunder to any affiliate of the Manager so long as George or
Powell are affiliates or executive officers of the assignee.
12. NOTICES. All notices, demands, consents, approvals and requests
given by either party to the other hereunder shall be in writing and shall be
personally delivered or sent by registered or certified mail, return receipt
requested, postage prepaid, to the parties at the following addresses:
If to the Company: Biscayne Apparel, Inc.
1373 Broad Street
3rd Floor
Clifton, New Jersey 07013
Attention: President
If to the Manager: Trivest, Inc.
2665 South Bayshore Drive
Suite 800
Miami, Florida 33133
Attention: Chief Executive Officer
Any party may at any time change its respective address by sending written
notice to the other party of the change in the manner hereinabove prescribed.
13. SEVERABILITY. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or enforceable, shall not be affected thereby, and each term
and provision of this Agreement shall be valid and be enforced to the fullest
extent permitted by law.
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14. NO WAIVER. The failure of the Company or the Manager to seek
redress for any violation of, or to insist upon the strict performance of, any
term or condition of this Agreement shall not prevent a subsequent act by the
Company or the Manager, which would have originally constituted a violation of
this Agreement by the Company or the Manager, from having all the force and
effect of any original violation. The failure by the Company or the Manager to
insist upon the strict performance of any one of the terms or conditions of the
Agreement or to exercise any right, remedy or elections herein contained or
permitted by law shall not constitute or be construed as a waiver or
relinquishment for the future of such term, condition, right, remedy or
election, but the same shall continue and remain in full force and effect.
Except as the Company's rights of termination are limited herein, all rights and
remedies that the Company or the Manager may have at law, in equity or otherwise
upon breach of any term or condition of this Agreement, shall be distinct,
separate and cumulative rights and remedies and no one of them, whether
exercised by the Company or the Manager or not, shall be deemed to be in
exclusion of any other right or remedy of the Company or the Manager.
15. ENTIRE AGREEMENT; CERTAIN TERMS. This Agreement contains the entire
agreement between the parties hereto with respect to the matters herein
contained and supersedes all prior agreements between the parties hereto with
respect to such matters. Any agreement hereafter made shall be ineffective to
effect any change or modification to this Agreement, in whole or in part, unless
such agreement is in writing and signed by the party against whom enforcement of
the change or modification is sought.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without reference to the laws
of any other state.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly exercised by their authorized representatives as of the date first above
written.
BISCAYNE APPAREL, INC.
By: /s/ Peter Vandenberg, Jr.
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Peter Vandenberg, Jr.
President
TRIVEST, INC.
By: /s/ Earl W. Powell
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Earl W. Powell
President and Chief Executive Officer
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