AMENDED AND RESTATED SERVICES AGREEMENT
AMENDED AND RESTATED SERVICES AGREEMENT, dated as of October 31,
1998, by and among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., a Delaware corporation having an office
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("B&N"),
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ llc, a Delaware limited liability company having an office
located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "LLC"),
and ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ inc. (formerly known as ▇▇▇▇▇▇ & Noble Online, Inc.)
("Online"), amending and restating that certain Services Agreement dated as of
January 15, 1997 between B&N and Online (the "Prior Agreement").
W I T N E S S E T H:
WHEREAS, B&N and Online have entered into the Prior Agreement;
WHEREAS, Online is transferring substantially all of its assets and
business to the LLC for a 100% membership interest in the LLC and will
thereafter assign its interest in the LLC to an entity that will be entering
into an Amended and Restated Limited Liability Company Agreement with ▇▇▇.▇▇
Online, Inc. (the "LLC Agreement"; capitalized terms used herein without
definition shall have the meanings assigned to them in the LLC Agreement); and
WHEREAS, in connection therewith, B&N, the LLC and Online desire to
amend and restate the Prior Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Services. (a) During the term of this Agreement, B&N shall to the
extent requested by the LLC, either directly or through one or more of its
subsidiaries, provide the following services and benefits to the LLC:
(i) Personnel. B&N's personnel department shall provide the LLC
with substantially the same services that it provides to B&N, including,
without limitation, hiring, termination, personnel transfer, and benefits
administration and employee relations services.
(ii) Payroll. B&N's payroll department shall provide the LLC
with substantially the same services that it provides to B&N, including,
without limitation, processing payroll, preparing payroll tax returns,
mailing payroll checks, participating in payroll related audits and
preparing W-2 and 1099 forms.
(iii) Insurance. B&N shall obtain for the LLC property, casualty
(including general liability and workers' compensation), and crime and
fiduciary insurance on an annual basis, and surety insurance on an as
needed basis, provided that B&N shall be solely liable for workers'
compensation claims of employees or former employees of Online incurred
prior to the date hereof, and the discharge of such liability by B&N shall
be considered a service rendered by B&N under this Section 1(a).
(iv) Employee Benefits. Except as otherwise provided in the
Formation Agreement, B&N shall provide all the LLC employees with benefits
substantially similar to benefits provided by B&N to its employees,
including without limitation medical, dental, life, travel accident and
disability insurance, and pension and 401(k) benefits, provided, that B&N
shall obtain for the LLC insurance (including, without limitation,
stop-loss insurance for any benefits which are self-insured) with respect
to medical, dental and disability benefits, and with respect to such other
benefit as the LLC may request on an annual basis reasonably acceptable to
the LLC (and, with respect to actions taken prior to the Closing Date,
reasonably acceptable to USO). The actions taken by B&N pursuant to Section
5.9(b)(ii) and (iii) of the Formation Agreement, including without
limitation the valuation of pension and deferred compensation assets and
liabilities to be transferred to LLC employee benefit plans, shall not be
considered a service rendered by B&N pursuant to this Section 1(a) except
for third party costs.
(v) General Corporate. B&N's tax department, traffic department,
travel department and cash management department shall provide the LLC with
substantially the same services that it provides to B&N.
(vi) Order Fulfillment. From time to time as requested by the
LLC, B&N's Distribution Center in Jamesburg, New Jersey shall provide
fulfillment services with respect to orders placed by the LLC's customers,
and B&N shall promptly notify the LLC if any fulfillment services requested
cannot be provided for any reason. Fulfillment services consist of shipping
and handling product. The LLC is responsible for providing B&N with the
product which is to be fulfilled.
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(vii) Telecommunications. B&N shall provide the LLC with access
to B&N's telecommunications facilities.
(viii) Miscellaneous. B&N shall provide to the LLC such other
services and benefits as the parties hereto shall mutually agree from time
to time.
(b) The services and benefits referred to in Section 1(a) above shall
be provided upon the same terms and conditions as they are provided to B&N and
its employees. B&N shall not provide its employees or itself with any priority
or preference with respect to such services or benefits.
2. Payment. (a) Through June 30, 1999, in full consideration for the
services referred to in Section 1(a) above, the LLC shall pay B&N, for each
service referred to in Section 1(a) above, an amount equal to Direct Cost (as
defined below) plus Incremental Expense (as defined below). B&N shall deliver
invoices for services rendered to the LLC on a monthly basis and payment for
such services shall be made by the LLC to B&N monthly, in arrears. "Direct Cost"
means, with respect to each service provided pursuant to this Agreement, the
direct out-of-pocket expenses paid or incurred to third parties in connection
with providing such service, including, without limitation, shipping, handling,
travel expenses, payments to third parties (including, without limitation, all
professional fees), printing and postage. "Incremental Expense" means, with
respect to each service provided pursuant to this Agreement, all expenses paid
or incurred by B&N and its Affiliates in excess of the cost that would have been
incurred in the absence of the performance of the service.
(b) During the period between the date of this Agreement and June 30,
1999, B&N and the LLC shall discuss and mutually agree upon amounts to be paid
commencing on July 1, 1999 by the LLC to B&N with respect to each service being
provided by B&N to the LLC hereunder, which amounts shall include, without
limitation, appropriate allocation of B&N overhead costs. In the event that by
June 30, 1999, B&N and the LLC are unable to mutually agree on the amount to be
paid by the LLC with respect to any service being provided by B&N pursuant to
the term of this Agreement, then the obligation of B&N to perform such service
pursuant to the terms of this Agreement shall terminate as of June 30, 1999.
3. Inspection. The LLC and its agents and representatives, at the
LLC's expense, shall have the right to examine the books and records of B&N that
relate to the costs and expenses referred to in this Agreement, provided,
however, that such examination may only be conducted during regular business
hours and upon ten (10) days' prior written notice.
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4. No Property Transferred. This Agreement solely relates to the
provision of services. No tangible personal property of any party hereto shall
be under the control or possession of, or transferred to, the other party as a
result of this Agreement, except as expressly provided herein.
5. No Agency. The parties hereto are independent contractors and
nothing in this Agreement is intended to, nor shall it, create any agency,
partnership or joint venture relationship between them. With respect to any
third party, no party hereto, or any of its officers, directors, employees or
agents, shall have the right or authority to bind or otherwise obligate the
other party hereto in any way as a consequence of this Agreement.
6. Termination. (a) The LLC may, in accordance with the provisions of
Section 4.7(a) of the LLC Agreement, terminate this Agreement on thirty (30)
days' prior written notice to B&N with respect to any or all of the services and
benefits referred to in Section 1(a), and on sixty (60) days' prior written
notice to B&N with respect to the service and benefits referred to in Section 6
above.
(b) With the exception of any rights under Section 1(a)(vi) of
this Agreement, which shall only terminate in accordance with Section 6(c)
below, B&N may terminate this Agreement: (i) on one hundred eighty (180) days'
prior written notice to the LLC, with respect to any or all of the services and
benefits referred to in Section 1(a) above; and (ii) immediately on written
notice to the LLC in the event the LLC or its property becomes the subject as
debtor of a bankruptcy or insolvency proceeding or otherwise is unable to pay
its debts when due.
(c) The services provided under Section 1(a)(vi) above shall
terminate on the date that either B&N and its Affiliates or BAG and its
Affiliates cease to own a Membership Interest of at least 10% of the outstanding
Membership Interests, but may be terminated earlier as follows:
(i) the LLC may, in accordance with the provisions of
Section 4.7(a) of the LLC Agreement, terminate this Agreement on thirty
(30) days' prior written notice to B&N.
(ii) B&N may terminate this Agreement:
(A) within the sixty (60) day period following the one
hundred and eightieth day (180) after a transfer pursuant to
Section 7.3 of the LLC Agreement;
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(B) the LLC is in default of the terms of this Agreement
and such default continues for more than thirty (30) days after
written notice thereof to the LLC and BAG (as such term is
defined in the LLC Agreement), provided that such default is not
principally as a result of the action or inaction of the BN
Managers;
(C) in the event that B&N or the LLC shall (A) apply for
or consent to the appointment of, or the taking possession by, a
receiver, custodian, trustee, examiner, liquidator or the like
of itself or of all or any substantial part of its property, (B)
make a general assignment for the benefit of its creditors, (C)
commence a voluntary case under the Federal Bankruptcy Code of
1978, as amended, or (D) file a petition as a debtor seeking to
take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of its
debts; or
(D) if a proceeding or case shall be commenced against
any of B&N or the LLC, without such party's application or
consent, seeking (A) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (B) the appointment of a receiver,
custodian, trustee, examiner or liquidator or the like of such
party or of all or any substantial part of its property, or (C)
similar relief in respect of such party under any law relating
to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more days.
7. Miscellaneous. (a) This Agreement shall be governed by the
internal laws of the State of New York without giving effect to the conflict of
law principles thereof.
(b) This Agreement sets forth the entire agreement between the
parties hereto with respect to the subject matter hereof and is intended to
supersede all prior negotiations, understandings and agreements. This Agreement
supersedes, and amends in its entirety, the Prior Agreement. No
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provision of this Agreement may be waived or amended, except by a writing signed
by B&N and the LLC.
(c) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and together which shall constitute
one and the same instrument.
(d) The failure of any party to exercise any right or remedy
provided for herein shall not be deemed a waiver of any right or remedy
hereunder.
(e) If any provision of this Agreement is determined by a court
of competent jurisdiction to be invalid or otherwise unenforceable, such
determination shall not affect the validity or enforceability of any remaining
provisions of this Agreement. If any provision of this Agreement is invalid
under any applicable statute or rule of law, it shall be enforced to the maximum
extent possible so as to effect the intent of the parties, and the remainder of
this Agreement shall continue in full force and effect.
(f) Any and all notices or other communications hereunder shall
be sufficiently given if in writing and sent by hand, telecopier, reputable
overnight courier or by certified mail, return receipt requested, postage
prepaid, addressed to the party to receive the same at its address as set forth
on page 1 hereof, or to such other address as the party to receive the same
shall have specified by written notice given in the manner provided for in this
Section 7(f). Such notices or other communications shall be deemed to have been
given on the date of such delivery. Any party may change its address for the
purpose of this Agreement by notice to the other parties given as aforesaid.
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(g) This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns, provided that the LLC may not assign any of its rights hereunder
without the prior written consent of B&N.
(h) The section headings used herein are for the convenience of
the parties only, are not substantive and shall not be used to interpret or
construe any of the provisions contained herein.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice
President of Finance
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ llc
By: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ inc.,
its managing member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice
President, Finance
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice
President, Finance
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