AMENDED AND RESTATED SERVICES AGREEMENT
AMENDED AND RESTATED SERVICES AGREEMENT, dated as of October 31,
1998, by and among Marboro Books Corp., a New York corporation having an office
located at Xxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Marboro"),
xxxxxxxxxxxxxx.xxx llc, a Delaware limited liability company having an office
located at 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "LLC"),
and xxxxxxxxxxxxxx.xxx inc. (formerly known as Xxxxxx & Xxxxx Online, Inc.)
("Online"), amending and restating that certain Services Agreement dated as of
January 15, 1997 between Marboro and Online (the "Prior Agreement").
W I T N E S S E T H:
WHEREAS, Marboro 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 XXX.XX
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, Marboro, 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, to the extent
requested by the LLC, Marboro shall provide the following services and benefits
to the LLC:
(i) Accounts Payable and General Ledger. Marboro shall, to the
fullest extent it is able, provide the LLC with the use of its existing
internal accounts payable and general ledger systems, provided that the LLC
shall be responsible for the input of all necessary information.
(ii) Order Fulfillment. From time to time as requested by the
LLC, Marboro shall provide fulfillment services with respect to orders
placed by customers of the LLC. Marboro 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 Marboro with any of the LLC's product which is to
be fulfilled by Marboro pursuant to this Section 1(a)(ii).
(iii) Office Space. Marboro shall provide the LLC with a
mutually agreeable amount of office space at Marboro's Rockleigh, New
Jersey offices. In connection therewith, the LLC employees shall be
entitled to reasonable use of all related office facilities.
(iv) Telecommunications. Marboro shall provide the LLC with
access to Marboro's telecommunications facilities.
(v) Miscellaneous. Marboro 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 Marboro
and its employees. Marboro 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 Marboro, 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). Marboro 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 Marboro 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 and handling, travel expenses, payments to third parties (including,
without limitation, all professional fees and the LLC's pro rata share of rent
with respect to Marboro's Rockleigh, New Jersey offices, as is reasonably
allocable to the LLC based on actual usage according to the respective square
footage used by the LLC in proportion to the total square footage of the
Rockleigh facility), printing and postage. "Incremental Expense" means, with
respect to each service provided pursuant to this Agreement, all expenses paid
or incurred by Marboro and its Affiliates in excess of the cost that
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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, Marboro and the LLC shall discuss and mutually agree upon amounts to be
paid commencing on July 1, 1999 by the LLC to Marboro with respect to each
service being provided by Marboro to the LLC hereunder, which amounts shall
include, without limitation, appropriate allocation of Marboro overhead costs.
In the event that by June 30, 1998, Marboro 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 Marboro pursuant to the term of this Agreement, then the obligation
of Marboro 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 Marboro
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.
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 Marboro, with respect to any or all of the
services and benefits referred to in Section 1(a) above.
(b) With the exception of any rights under Section 1(a)(ii) of
this Agreement, which shall only terminate in accordance with Section 6(c)
below, Marboro 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
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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)(ii) above shall
terminate on the date that either BN 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 Marboro.
(ii) Marboro 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;
(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 BN 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 BN 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
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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. LLC Catalogs. In addition to the services set forth above, Marboro
shall provide the LLC with certain catalog services, such as production and
distribution of catalogs for the LLC. The LLC shall pay Marboro for such
services on a monthly basis, in arrears, an amount to be mutually determined by
the parties in good faith.
8. 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 provision of
this Agreement may be waived or amended, except by a writing signed by Marboro
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
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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 8(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.
(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 Marboro.
(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.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
MARBORO BOOKS CORP.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice President,
Finance
xxxxxxxxxxxxxx.xxx llc
By: xxxxxxxxxxxxxx.xxx inc.,
its managing member
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice
President, Finance
xxxxxxxxxxxxxx.xxx inc.
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice
President, Finance
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