EXHIBIT 10.2
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________________________________________________________________________________
________________________________________________________________________________
SERVICES AGREEMENT
BETWEEN
BJ'S WHOLESALE CLUB, INC.
AND
WABAN INC.
Dated as of _____________, 1997
________________________________________________________________________________
SERVICES AGREEMENT
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This SERVICES AGREEMENT (the "Agreement"), dated as of June __, 1997, is
entered into by and between Waban Inc., a Delaware corporation ("Waban"), and
BJ's Wholesale Club, Inc., a Delaware corporation and, as of the date hereof, a
wholly owned subsidiary of Waban ("BJI").
WITNESSETH:
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WHEREAS, Waban and BJI have entered into a Separation and Distribution
Agreement (the "Distribution Agreement") which contemplates the separation of
Waban's "BJ's Wholesale Club" and "HomeBase" businesses into two distinct
companies by transferring the BJ's Wholesale Club business to BJI (the
"Separation") and, then, distributing all of the outstanding shares of BJI
Common Stock on a pro rata basis to the holders of Waban Common Stock (the
"Distribution"); and
WHEREAS, each of BJI and Waban wishes to provide for an orderly and
efficient separation of their businesses; and
WHEREAS, the successful operation of Waban's business will require the
performance of certain administrative services which Waban has previously
provided itself and BJI is willing to provide to Waban; and
WHEREAS, the Distribution Agreement contemplates the execution and delivery
of this Agreement, the purpose of which is to set forth certain matters
regarding the provision of administrative services by BJI to Waban.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
1. SERVICES
1.1. Services to be Made Available. In accordance with the terms and
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provisions of this Agreement, BJI agrees to perform for Waban the services
described in the Annexes hereto (collectively, the "Services") in the amounts
and to the extent specified with respect to each such Service in the applicable
Annex as follows:
Service Applicable Annex
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Tax A
Other Professional Services B
1.2. Fees for Services. Waban agrees to pay to BJI a fee for each of the
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Services as specified in the applicable Annex hereto.
Not more often than once per fiscal month, BJI shall forward to Waban
invoices for the Services listing the Services provided hereunder and listing
the fees for such Services, setting forth in reasonable detail the calculation
of the amounts charged. Invoices for Services provided for partial fiscal months
and relating to Services for which the fees are to be calculated on a monthly
basis shall be based upon (a) the number of business days during which services
were provided, divided by (b) the number of business days in such fiscal month.
Within fifteen days of receiving an invoice, Waban shall pay to BJI the amount
invoiced unless it shall in good faith dispute the types and/or amounts of
Services set forth on such invoice as having been provided during the period
covered by such invoice. In the event of such good faith dispute, Waban shall
pay the fees set forth on such invoice for all Services the amounts of which are
not in dispute and the parties hereto agree to use their respective best efforts
to resolve such dispute within ten days. If such dispute is not resolved within
ten days, either party hereto may seek binding arbitration of such dispute in
accordance with the provisions of Section 3.8 hereof. With respect to any task
that BJI agrees to perform hereunder, BJI shall, at Waban's request, inform
Waban of the person(s) who are expected to perform such tasks and such persons'
hourly rates applicable thereto.
1.3. Term of Agreement. This Agreement shall become effective as of the
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date of the Distribution (the "Distribution Date") and shall terminate with
respect to each Service on the date specified for such Service in the applicable
Annex hereto.
1.4. Timely Performance and Cooperation. BJI shall use all reasonable
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efforts in the timely performance of the Services and Waban shall use all
reasonable efforts to cooperate with BJI in connection with the provision of the
Services.
2. REPRESENTATIONS AND WARRANTIES.
As an inducement to enter into this Agreement, each party represents to and
agrees with the other that:
(a) it is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
corporate power to own, lease and operate its properties, to carry on its
business as presently conducted and to carry out the transactions
contemplated by this Agreement;
(b) it has duly and validly taken all corporate action necessary to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby;
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(c) this Agreement has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation enforceable against it
in accordance with its terms; and
(d) none of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or the compliance with
any of the provisions of this Agreement will (i) conflict with or result in
a breach of any provision of its corporate charter or by-laws, (ii) breach,
violate or result in a default under any of the terms of any agreement or
other instrument or obligation to which it is a party or by which it or any
of its properties or assets may be bound, or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to it or
affecting any of its properties or assets.
3. OTHER TERMS AND PROVISIONS
3.1. Independent Contractor Status. BJI shall perform all services under
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this Agreement as an "independent contractor" and not as an agent of Waban. BJI
is not authorized to assume or create any obligation or responsibility, express
or implied, on behalf of, or in the name of Waban or to bind Waban in any
manner.
3.2. Limitation of Liability and Reimbursement. Neither BJI, nor any of
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its officers, employees, agents or affiliates (including its attorneys and
accountants), shall in any event be liable for any damages, including but not
limited to loss of profits or revenue, which arise out of BJI's (or any such
officer's, employee's, agent's or affiliate's) performance or failure to perform
any of its obligations under this Agreement, other than those damages caused by
BJI's (or such person's) willful misconduct or gross negligence. Waban hereby
agrees to indemnify BJI and hold BJI harmless for all costs (including
attorneys' fees) and damages incurred by BJI to third parties as a result of the
provision by BJI pursuant to this Agreement of the Services, other than costs or
damages incurred by BJI as a result of its willful misconduct or gross
negligence.
3.3. Severability. If any term, provision, covenant or restriction of this
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Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such which may be hereafter declared invalid, void or unenforceable, and the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction.
3.4. Assignment. Except by operation of law or in connection with the sale
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of all or substantially all the business or assets of a party hereto, this
Agreement shall not
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be assignable, in whole or in part, directly or indirectly, by either party
hereto without the prior written consent of the other, and any attempt to assign
any rights or obligations arising under this Agreement without such consent
shall be void; provided, however, that the provisions of this Agreement shall be
binding upon, inure to the benefit of and be enforceable by BJI and Waban and
their respective successors and permitted assigns.
3.5. Further Assurances. Subject to the provisions hereof, each of BJI and
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Waban shall make, execute, acknowledge and deliver such other agreements,
documents or instruments and take or cause to be taken such other actions as may
be reasonably required in order to effectuate the purposes of this Agreement and
to consummate the transactions contemplated hereby. Subject to the provisions
hereof, each of BJI and Waban shall, in connection with entering into this
Agreement, performing its obligations hereunder and taking any and all actions
relating hereto, comply with all applicable laws, regulations, orders and
decrees, obtain all required consents and approvals and make all required
filings with any governmental agency, or other regulatory or administrative
agency, commission or similar authority and promptly provide the other with all
such information as the other may reasonably request in order to be able to
comply with the provisions of this sentence.
3.6. Parties in Interest. Nothing in this Agreement expressed or implied
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is intended or shall be construed to confer any right or benefit upon any person
or entity other than BJI and Waban and their respective successors and permitted
assigns.
3.7. Waivers, Etc. No failure or delay on the part of BJI or Waban in
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exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No modification or waiver of any provision of this Agreement
nor consent to any departure by BJI or Waban therefrom shall in any event be
effective unless the same shall be in writing and signed by the party against
whom such modification or waiver is asserted and then such modification or
waiver shall be effective only in the specific instance and for the purpose for
which given.
3.8. Arbitration. Each party hereto may refer any dispute arising under
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this Agreement or the matters contemplated hereby (including without limitation
the fees for Services provided hereunder) to binding arbitration in the
Commonwealth of Massachusetts under the commercial arbitration rules of the
American Arbitration Association before a panel of three arbitrators, one
selected by each party and the third selected by the other two arbitrators or,
if they are unable to agree, by the American Arbitration Association. Any award
made in such arbitration may be enforced in any court of competent jurisdiction.
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3.9. Changes of Law. If, due to any change in applicable law or
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regulations or the interpretation thereof by any court of law or other governing
body having jurisdiction subsequent to the date of this Agreement, performance
of any provision of this Agreement or any transaction contemplated thereby shall
become impracticable or impossible, the parties hereto shall use their best
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such provision.
3.10. Confidentiality. Subject to any contrary requirement of law and the
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right of each party to enforce its rights hereunder in any legal action, each
party shall keep strictly confidential and shall cause its employees and agents
to keep strictly confidential any information which it or any of its agents or
employees may acquire pursuant to, or in the course of performing its
obligations under, any provision of this Agreement; provided, however, that such
obligation to maintain confidentiality shall not apply to information which (a)
at the time of disclosure was in the public domain not as a result of acts by
the receiving party, (b) was in the possession of the receiving party at the
time of disclosure, or (c) was received by the receiving party from a third
party that does not require the receiving party to maintain the confidentiality
of such information, and that is not in violation of any contractual, legal or
fiduciary obligation to the disclosing party with respect to such information.
3.11. Entire Agreement. Except as provided in the Separation and
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Distribution Agreement of even date herewith between Waban and BJI, this
Agreement contains the entire understanding of the parties with respect to the
provisions of Services from BJI to Waban.
3.12. Titles and Headings. Titles and headings to sections herein are
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inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
3.13. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
3.14. Notices. Any notice, request, demand, claim, or other communication
hereunder shall be in writing and shall be delivered by registered or certified
mail, return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below, and shall be deemed duly given on the date which
is three days after the date such notice, request, demand, claim, or other
communication is sent:
BJI at: Xxx Xxxxxx Xxxx
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Xxxxxx, XX 00000
Attn: Treasurer
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Waban at: 0000 Xxxxxxxxx Xxxxx
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Xxxxxx, XX 00000
Attn: Treasurer
Notwithstanding the foregoing, any party may send any notice, request, demand,
claim, or other communication hereunder to the intended recipient at the address
set forth above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic mail),
but no such notice, request, demand, claim, or other communication shall be
deemed to have been duly given unless and until it is actually received by the
intended recipient. Any party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other party notice in the manner herein set forth.
3.15. Governing Law. This Agreement shall be governed by and construed
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in accordance with the domestic substantive laws of The Commonwealth of
Massachusetts without regard to any choice or conflict of law rule or provision
that would result in the application of the domestic substantive laws of any
other jurisdiction.
IN WITNESS WHEREOF, BJI and Waban have caused this Agreement to be duly
executed by their respective officers, each of whom is fully authorized, all as
of the day and year first above written.
BJ'S WHOLESALE CLUB, INC.
By:______________________________________
President
WABAN INC.
By:_______________________________________
President
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ANNEX A TO SERVICES AGREEMENT
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MEMORANDUM
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To: X. Xxxxxxxxx
From: X. Xxxx
Subject: SERVICES PROVIDED BY BJI TO WABAN/HOMEBASE
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Below is a description of the services the BJI Tax Department will
provide Waban/HomeBase.
Federal & State Tax Returns
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The BJI Tax Department will prepare and file, after review by
Waban/HomeBase, all federal and state income, net worth and franchise
tax returns for all filings through the taxable year ending January
31, 1998. The BJI Tax Department will maintain or prepare all tax
ledgers, tax credit programs, service fee calculations, accounting tax
provisions and timely file all tax extensions as needed for the above
period, and prepare all estimated tax payments required to be made
through October 31, 1998.
Annual Reports to the Secretaries of State
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The BJI Tax Department will prepare and file, after review by
Waban/HomeBase, all annual reports to the Secretaries of State
required to be filed through October 31, 1998.
Employee Benefit Plan Filings
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The BJI Tax Department will prepare and file, after review by
Waban/HomeBase, all employee benefit plan filings which include the
Forms 5500, Form 990 and the PBGC filing for plan years ending on or
before January 31, 1998.
Audits
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The BJI Tax Department will handle the federal and state income tax
audits through any post-audit conference or protest for all audits of
returns related to taxable years in which BJI was part of the Waban
Inc. consolidated federal return.
Miscellaneous
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The BJI Tax Department will prepare and file all payroll tax filings
related to the third quarter of 1997 and periods prior thereto.
The BJI Tax Department will provide tax research through
October 31, 1998.
COST TO WABAN INC.
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The FYE 1/31/98 charge to Waban/HomeBase will be $_______. This
amount will be charged monthly as follows:
August $
September
October
November
December
January
_________
$
ANNEX B TO SERVICES AGREEMENT
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Other Professional Services
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The following professional advisory services, as reasonably requested by
Waban and as may be agreed to by BJI from time to time, shall be provided by BJI
to Waban for a period of up to twelve months after the Distribution Date. This
Annex describes the terms on which any such services may be provided by BJI and
does not require BJI to provide such services.
Risk Management
Legal
Investor Relations
Treasury
Such services shall be billed to Waban on an hourly basis at 2.5 times the
providing employee's hourly rate (calculated as such person's annualized base
salary divided by 2,000).
In addition, Waban shall reimburse BJI for the out-of-pocket expenses
incurred by the providing employee in the performance of such services.
