EXHIBIT 10.16
SUPPLY AGREEMENT
SUPPLY AGREEMENT, dated as of October 31, 1998, between Xxxxxx
& Xxxxx, Inc., Delaware corporation having an office located at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("B&N"), and 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"). Capitalized terms used herein
without definition shall have the meanings assigned to such terms in the Amended
and Restated Limited Liability Company Agreement effective as of October 31,
1998 of the LLC, as the same may be amended or modified from time to time (the
"LLC Agreement").
WHEREAS, to enable the LLC to obtain the benefits of any
purchasing discounts available to B&N, the parties desire that B&N shall from
time to time order Products (as defined below) on behalf of the LLC, on the
terms and conditions set forth herein.
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. Orders. (a) During the term of this Agreement, the LLC may
from time to time, in its sole discretion, place orders for Products with B&N
(each an "Order"). "Products" shall mean books, magazines and other products
generally sold by B&N in its retail stores. Nothing in this Agreement is
intended to limit the LLC from placing orders for Products with any other
entity.
(b) Once an Order is placed by the LLC, B&N shall use its
commercially reasonable efforts to fill such Order as promptly as practical in
accordance with the terms of such Order. Products ordered hereunder by the LLC
shall be delivered to the LLC's warehouse at 000X Xxxxxx Xxxx., Xxxxxx, Xxx
Xxxxxx 00000, unless otherwise mutually agreed upon by the parties hereto. B&N
shall give Orders placed by the LLC equal priority with Orders placed by any
other entity, including, without limitation, B&N. B&N shall not be responsible
for any delays by third-party suppliers in the filling of any Order.
2. Price. For all Products ordered by the LLC under this
Agreement, B&N shall charge the LLC B&N's cost for such Products plus
Incremental Overhead (as defined below). Payment for Orders shall be due 30 days
from the date of such Order, provided that B&N shall refund any payments made
for Orders which B&N is unable to fill within 30 days of such determination by
B&N. "Incremental Overhead" shall mean the cost incurred by B&N and its
Affiliates to third parties, including, without limitation, costs for shipping
and handling, and any direct labor costs incurred by B&N and its Affiliates in
excess of the cost that would have been incurred in the absence of the
performance by B&N and its Affiliates of B&N's obligations
hereunder.
3. 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.
4. Termination. This Agreement 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:
(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.
(b) B&N may terminate this Agreement:
(i) 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;
(ii) 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;
(iii) 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
(iv) 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,
-2-
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.
5. 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) Neither party shall be liable to fulfill its
obligations hereunder, or for delays in performance, due to causes beyond its
reasonable control, including, but not limited to, acts of God, acts or
omissions of civil or military authority, fires, strikes, floods, epidemics,
riots or acts of war.
(c) 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. No
provision of this Agreement may be waived or amended, except by a writing signed
by the parties hereto.
(d) 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.
(e) The failure of either party to exercise any right or
remedy provided for herein shall not be deemed a waiver of any right or remedy
hereunder.
(f) 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.
(g) 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 5(g). Such notices or other communications shall be deemed to have
been given on the date of such delivery. Either party may change its address for
the purpose of this Agreement by notice to the other party given as aforesaid.
(h) 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
-3-
not assign any of its rights hereunder without the prior written consent of B&N.
(i) 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 parties hereto have executed this
Agreement on the date first set forth above.
XXXXXX & XXXXX, INC.
By:
---------------------------------
Name:
Title:
xxxxxxxxxxxxxx.xxx llc
By: xxxxxxxxxxxxxx.xxx inc., its
managing member
By:___________________________
Name:
Title:
-4-
