Transition Services Agreement Borders International Services, Inc. Borders Australia Pty Ltd Borders New Zealand Limited Borders Pte. Ltd Spine Newco Pty Limited Spine Newco (NZ) Limited
Exhibit 10.42
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Transition Services Agreement
Borders International Services, Inc.
Borders Australia Pty Ltd
Borders New Zealand Limited
Borders Pte. Ltd
Spine Newco Pty Limited
Spine Newco (NZ) Limited
For the provision of transitional services in
connection with the sale of the entire issued
share capital of Borders Australia Pty Ltd,
Borders New Zealand Limited and Borders Pte. Ltd
connection with the sale of the entire issued
share capital of Borders Australia Pty Ltd,
Borders New Zealand Limited and Borders Pte. Ltd
Xxxxx & XxXxxxxx
Solicitors
Xxxxx 00, XXX Xxxxxx
00 Xxxxxx Xxxxxx
XXXXXX XXX 0000
Tel: (00) 0000-0000
Fax: (00) 0000-0000
Solicitors
Xxxxx 00, XXX Xxxxxx
00 Xxxxxx Xxxxxx
XXXXXX XXX 0000
Tel: (00) 0000-0000
Fax: (00) 0000-0000
CONTENTS
Clause | Page | |||||
1.
|
Interpretation | 3 | ||||
2.
|
Provision and duration of Transitional Services and Recipient Services | 7 | ||||
3.
|
Co-operation and Management | 7 | ||||
4.
|
Dispute Resolution | 8 | ||||
5.
|
Fees and Other Costs | 8 | ||||
6.
|
Invoicing and Late Payments | 9 | ||||
7.
|
Other Obligations | 10 | ||||
8.
|
Limitation of Liability | 10 | ||||
9.
|
Confidentiality | 12 | ||||
10.
|
Assignment and Sub-contracting | 12 | ||||
11.
|
Force Majeure | 13 | ||||
12.
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Term AND Termination | 13 | ||||
13.
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Notices | 15 | ||||
14.
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Invalid or unenforceable provisions | 16 | ||||
15.
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Waiver and exercise of rights | 16 | ||||
16.
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Amendment | 16 | ||||
17.
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Counterparts | 16 | ||||
18.
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Further assurances | 17 | ||||
19.
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Assignment | 17 | ||||
20.
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Entire agreement | 17 | ||||
21.
|
Rights cumulative | 17 | ||||
22.
|
Consents and Approvals | 17 | ||||
23.
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Jurisdiction | 17 | ||||
24.
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Service of process | 17 | ||||
25.
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Currency Conversion | 18 | ||||
26.
|
Governing Law | 18 |
SCHEDULE 1 |
||||
TERM SHEETS
|
19 | |||
A — Financial Reporting
|
19 | |||
B — Statutory Accounts Reporting
|
21 | |||
C — Property Accounting
|
22 | |||
D — Accounts Payable (A/P)
|
23 | |||
E — Bank Reconciliation
|
25 | |||
F — Treasury
|
26 | |||
G — Lease Accounting
|
27 | |||
H — Merchandise Reporting
|
28 | |||
I — Margin Accounting and Reporting
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30 | |||
J — Inventory Accounting and Control
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31 | |||
K — Tax
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32 | |||
L — IT
|
33 | |||
M — Merchandising
|
35 | |||
N — Merchandise Operations
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36 | |||
O — Transportation
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38 | |||
P— Communications
|
39 | |||
Q — Store Operations
|
40 | |||
R — Management
|
41 | |||
SCHEDULE 2 |
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RECIPIENT SERVICES
|
42 |
DATE:
PARTIES:
(1) | BORDERS INTERNATIONAL SERVICES, INC., a corporation incorporated in the State of Michigan, USA and having its principal place of business at 000 Xxxxxxx Xxxxx, Xxx Xxxxx, XX 00000 XXX (the “Provider”); |
(2) | BORDERS AUSTRALIA PTY LTD (ABN 31 082 194 287), a company incorporated under the laws of Australia and having its registered office x/x Xxxxx & XxXxxxxx, Xxxxx 00, AMP Centre, 00 Xxxxxx Xxxxxx, Xxxxxx XXX 0000 (“Borders Australia”); |
(3) | BORDERS NEW ZEALAND LIMITED, a company incorporated under the laws of New Zealand and having its registered office c/o Xxxxxx Xxxxxxx Xxxx Xxxxx, Xxxxxx Xxxxxx, 00 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxxx (“Borders NZ”); and |
(4) | BORDERS PTE. LTD., a company incorporated under the laws of Singapore with registered number 199705017Z and having its registered office at 00X Xxxxxx Xxxx, 00 00X Xxxxxxxxx Trademart 239 067, Singapore (“Borders Singapore”); |
(5) | SPINE NEWCO PTY LIMITED, a company incorporated under the laws of Australia ACN 127 667 314 and having its registered office at Xxxxx 00, 000 Xxxxxxx Xxxxxx, Xxxxxx, XXX 0000 (the “First Purchaser”); and |
(6) | SPINE NEWCO (NZ) LIMITED, a company incorporated under the laws of New Zealand NZ Company Number 2010994 and having its registered office at c/o Quigg Partners, Xxxxx 0, 00 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxxx (the “Second Purchaser”). | |
(First Purchaser and Second Purchaser being each a “Purchaser” and collectively the “Purchasers”) |
RECITALS
(A) | The Seller has agreed to sell and the Purchasers have agreed to purchase the Shares on the terms set out in the Sale and Purchase Agreement. |
(B) | In connection with the sale and purchase of the Shares, the Recipients desire the provision of certain Transitional Services and the Provider is prepared to provide certain Transitional Services to the Recipients for a limited period on the terms set out in this Agreement. |
(C) | Further, the Providers desire the provision of certain Recipient Services and the Recipients are prepared to provide certain Recipients Services to the Provider and/or the Seller for a limited period on the terms set out in this Agreement. |
IT IS AGREED as follows:
1. | INTERPRETATION |
1.1 | Defined terms | |
In this Agreement, the following words and expressions shall have the following meanings: |
“Agreement”
|
this agreement and the recitals and Schedules to it; | |
“ARW”
|
has the same meaning as in the Purchasing Agreement; |
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“Brand Licence Deed”
|
the deed entered into by Borders Properties, Inc., and the First Purchaser effecting the grant of a licence to the First Purchaser to use certain intellectual property rights of Borders Properties, Inc.; | |
“Breach of Duty”
|
the breach of any (i) obligation arising from the express or implied terms of a contract to take reasonable care or exercise reasonable skill in the performance of the contract; or (ii) common law duty to take reasonable care or exercise reasonable skill (but not any stricter duty); | |
“Business”
|
has the same meaning as in the Sale and Purchase Agreement; | |
“Business Day”
|
a day (excluding Saturday and Sunday) on which the banks are generally open for business in Ann Arbor, Michigan, Sydney, Auckland and Singapore for the transaction of normal banking business; | |
“Commencement Date”
|
has the same meaning as Completion Date in the Sale and Purchase Agreement; | |
“Completion”
|
has the same meaning as in the Sale and Purchase Agreement; | |
“Control”
|
has the same meaning as in section 50AA of the Corporations Xxx 0000 (Cth); | |
“Encumbrances”
|
means any mortgage, charge, pledge, lien, encumbrance, assignment, hypothecation, security interest, title retention, preferential right, trust arrangement, contractual right of setoff or any other security agreement or arrangement in favour of any person. | |
“GST”
|
with respect to Australia has the meaning given to it in the A New Tax System (Goods and Services Tax) Xxx 0000 (Cth) or any like tax and with respect to New Zealand or Singapore means the tax payable pursuant to the Goods and Services Tax Xxx 0000 (NZ) and the Goods and Services Tax Act, Chapter 117A of Singapore respectively and any like tax; | |
“Intra-Group Guarantees”
|
has the same meaning as in the Sale and Purchase Agreement; | |
“Liability”
|
liability in or for breach of contract, Breach of Duty, misrepresentation, restitution or any other cause of action whatsoever relating to or arising under or in connection with this Agreement, including without limitation liability expressly provided for under this Agreement or arising by reason of the invalidity or unenforceability of any term of this Agreement (and for the purposes of this definition, all references to “this Agreement” shall be deemed to include any collateral contract); | |
“Provider Competing
|
has the meaning given to that term in the Purchasing |
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Business”
|
Agreement; | |
“Purchasing Agreement”
|
has the same meaning as in the Sale and Purchase Agreement; | |
“Recipients”
|
Borders Australia, Borders NZ and Borders Singapore; | |
“Recipient Service Period”
|
the period set out in Item 5 of Schedule 2; | |
“Recipient Services”
|
the services set out in Schedule 2; | |
“Sale and Purchase
Agreement”
|
the agreement entered into between the Seller and the Purchasers effecting the sale of the Shares; | |
“Seller”
|
Borders Group, Inc, a company incorporated under the laws of Michigan, USA and having its registered office at 000 Xxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxx 00000 XXX; | |
“Seller’s Group”
|
has the same meaning as in the Sale and Purchase Agreement; | |
“Service Managers”
|
the respective parties’ representatives responsible for managing a particular Transitional Service or the Recipient Services and identified as such by the relevant party; | |
“Shares”
|
the issued share capital of the Recipients; | |
“Term Sheet”
|
a particular section of Schedule 1 (Term Sheets), identified as such, which describes particular term(s) relating to a particular Transitional Service(s); | |
“Transaction Document”
|
has the same meaning as in the Sale and Purchase Agreement; | |
“Transitional Period”
|
means the term of this Agreement; and | |
“Transitional Service(s)”
|
each of those services described in Schedule 1 (Term Sheets). |
1.2 | In this Agreement, unless the context otherwise requires: |
(a) | a reference: |
(i) | to the singular includes the plural and the other way round; | ||
(ii) | to a gender includes all genders; | ||
(iii) | to a document (including this Agreement) is a reference to that document (including any Schedules and Annexures,) as amended, consolidated, supplemented, novated or replaced; | ||
(iv) | to an agreement includes any deed, agreement or legally enforceable arrangement or understanding whether written or not; |
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(v) | to parties means the parties to this Agreement and to a party means a party to this Agreement; | ||
(vi) | to a notice means all notices, approvals, demands, requests, nominations or other communications given by one party to another under or in connection with this Agreement; | ||
(vii) | to a person (including a party) includes: |
(A) | an individual, company, other body corporate, association, partnership, firm, joint venture, trust or government agency; | ||
(B) | the person’s successors, permitted assigns, substitutes, executors and administrators; and | ||
(C) | a reference to the representative member of the GST group to which the person belongs to the extent that the representative member has assumed rights, entitlements, benefits, obligations and liabilities which would remain with the person if the person were not a member of a GST group; |
(viii) | to a law: |
(A) | includes a reference to any constitutional provision, subordinate legislation, treaty, decree, convention, statute, regulation, rule, ordinance, proclamation, by-law, judgment, rule of common law or equity or rule of any applicable stock exchange; and | ||
(B) | is a reference to that law as amended, consolidated, supplemented or replaced; and | ||
(C) | is a reference to any regulation, rule, ordinance, proclamation, by-law or judgment made under that law; |
(ix) | to proceedings includes litigation, arbitration, and investigation; | ||
(x) | to a judgement includes an order, injunction, decree, determination or award of any court or tribunal; | ||
(xi) | to time is a reference to Sydney time; |
(b) | headings are for convenience only and are ignored in interpreting this Agreement; | ||
(c) | a warranty, representation, covenant or obligation given or entered into by more than one person binds them jointly and severally; | ||
(d) | if a period of time is specified and dates from, after or before, a given day or the day of an act or event, it is to be calculated exclusive of that day; | ||
(e) | if a payment or other act must (but for this clause) be made or done on a day which is not a Business Day, then it must be made or done on the next Business Day; | ||
(f) | the words “including” or “includes” mean “including but not limited to” or “including without limitation”; | ||
(g) | where a word or phrase is defined, its other grammatical forms have a corresponding meaning; |
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(h) | this Agreement must not be construed adversely to a party solely because that party was responsible for preparing it; | ||
(i) | to $ of dollars are references to the lawful currency of the United States of America at the date of this Agreement. |
2. | PROVISION AND DURATION OF TRANSITIONAL SERVICES AND RECIPIENT SERVICES |
2.1 | The Provider shall supply or procure the supply of, and the Recipients shall pay for, the Transitional Services. |
2.2 | Each Transitional Service shall be provided during the Transitional Period (unless terminated earlier in accordance with clause 12) provided that the Recipients and the Purchaser shall use their reasonable endeavours to transition the Transitional Services away from the Provider as soon as possible and in any event before the end of the Transitional Period. |
2.3 | If during the term of this Agreement, the Recipients require additional services from the Provider (other than the Transitional Services described in Schedule 1), the Recipients and the Provider shall meet and discuss the Recipients’ requirements for such services. If the Provider agrees to provide such requested services and the Recipients and Provider agree on the cost of such additional services, the Recipients and the Provider shall amend this Agreement to incorporate an additional Term Sheet in Schedule 1 that sets out all relevant details of the additional services. The terms of this Agreement shall apply to the provision and receipt of such additional services. |
2.4 | In addition to the Transitional Services, the Provider, in its absolute discretion and on such terms as it may determine, may from time to time share knowledge relating to the Business (including retailing best practices, ways to exploit new channels to market (e.g. print on demand) and experience with loyalty schemes) with the Recipients. |
2.5 | Nothing in this Agreement shall prevent the Provider from providing services of a similar nature to the Transitional Services to any other person. |
2.6 | From the Commencement Date for the Recipient Service Period, the Recipients shall supply or procure the supply of, and the Provider shall pay for, the Recipient Services to the Provider and the Seller. The Provider and the relevant Recipients shall meet and discuss, as soon as reasonably practicable before the end of the Recipient Service Period, any continuing requirements of the Provider and/or the Seller’s for the Recipient Services and the services contemplated under section 2.7 below and, if the relevant Recipients agree, the terms on which such services will be provided after the Recipient Service Period ends. |
2.7 | If during the term of this Agreement, the Provider and/or the Seller requires additional services from the Recipients (other than the Recipient Services described in Schedule 2), the Recipients and the Provider shall meet and discuss the Provider’s and/or Seller’s requirements for such services. If the Recipients agree to provide such requested services and the Recipients and Provider agree on the cost of such additional services, the Recipients and the Provider shall amend this Agreement to incorporate additional wording in Schedule 2 that sets out all relevant details of the additional services. The terms of this Agreement shall apply to the provision and receipt of such additional services. |
3. | CO-OPERATION AND MANAGEMENT |
3.1 | The parties’ Service Managers shall be responsible for the parties’ respective roles and obligations, and the co-ordination of all matters, relating to the Transitional Services and the Recipient Services. All communications, documentation and materials relating to a particular |
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Transitional Service or the Recipient Services and sent by the parties shall be sent to both parties’ Service Manager for that Transitional Service or the Recipient Services. |
4. | DISPUTE RESOLUTION |
4.1 | In the event of any dispute, disagreement or difference of opinion arising out of this Agreement, its performance or its construction the Service Managers of the Provider and the Recipients shall use all reasonable efforts to negotiate an amicable resolution in good faith within twenty (20) Business Days of either party notifying the other of such a dispute, disagreement or difference of opinion. |
4.2 | If the Service Managers of the Provider and the Recipients have not met and reached a resolution or otherwise reached a resolution amicably in accordance with clause 4.1 above, then the Chief Executives of the Provider and the Recipients shall meet in order to endeavour to resolve the dispute. |
4.3 | If the Chief Executives of the Provider and the Recipients are unable to resolve the dispute within twenty (20) Business Days after meeting, or such other period agreed by the parties in writing, either party may submit the dispute to arbitration under the Rules for Conduct of Commercial Arbitration of the Institute of Arbitrators of Australia applicable at the time of submission. |
4.4 | The Parties agree that: |
(a) | everything that occurs before the arbitrator will be in confidence and in closed session; and | ||
(b) | the arbitrator’s determination will be final and binding on the parties. |
5. | FEES AND OTHER COSTS |
5.1 | In consideration for the provision of the Transitional Services, the Recipients shall pay to the Provider: |
(a) | the fees and other charges, if any, set out in Schedule 1 (Term Sheets); and | ||
(b) | any reasonable additional third-party costs incurred by the Provider in connection with the provision of the Transitional Services by the Provider to the Recipients provided that: |
(i) | the Provider must seek the approval of the Recipients prior to incurring any individual third-party cost of greater than $5,000; | ||
(ii) | the Provider must act reasonably in retaining documentary evidence (such as receipts) of third-party costs incurred; and | ||
(iii) | if the relevant Recipient does not give its approval the Provider shall immediately be released from any obligation to provide the relevant Transitional Services to the extent the Provider is not able to perform the relevant Transitional Services without incurring the third party costs. |
5.2 | In consideration for the provision of the Recipient Services, the Provider shall pay to the Recipients: |
(a) | the fees and other charges, if any, set out in Schedule 2 (Recipient Services); and |
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(b) | any additional third-party costs incurred on behalf of the Provider or by the Recipients in connection with the provision of the Recipient Services by the Recipients to the Provider provided that: |
(i) | the Recipient must seek the approval of the Provider prior to incurring any individual third-party cost of greater than $5,000; | ||
(ii) | the Recipient must act reasonably in retaining documentary evidence (such as receipts) of third-party costs incurred; and | ||
(iii) | if the Provider does not give its approval the relevant Recipient shall immediately be released from any obligation to provide the relevant Recipient Services to the extent the relevant Recipient is not able to perform the relevant Recipient Services without incurring the third party costs. |
5.3 | Unless otherwise stated, all sums referred to in this Agreement are exclusive of GST. If GST is payable as a consequence of any supply made (or deemed to be made) by one party to the other in connection with this Agreement, the party receiving the supply must pay to the party making the supply an amount equal to the GST payable in respect of the supply (“GST Amount”), in addition to the consideration required to be paid under any other provision of this Agreement and the supplier will provide the recipient with a tax invoice for the GST Amount at the time the supplier issues the invoice for the consideration for the relevant supply. Each party must ensure that each invoice it presents to another party under this Agreement in respect of any GST Amount is a valid tax invoice. |
5.4 | Terms used in clause 5.3 (including “supply”, “consideration” and “tax invoice”) have the same meaning as defined in the A New Tax System (Goods and Services Tax) Xxx 0000 (Cth). |
5.5 | In the event that a Transitional Service or the Recipient Services terminate other than on the date in a month which, for the purposes of invoicing the Transitional Service or Recipient Services, is deemed to be the start of the month (the “Invoice Date”), the fee for the last month of the Transitional Service or Recipient Services shall be calculated and invoiced on a pro-rata basis by reference to the number of days elapsed between the Invoice Date and the date on which the Transitional Service or Recipient Services terminated. |
6. | INVOICING AND LATE PAYMENTS |
6.1 | The Provider will be entitled to invoice the Recipients on or after the Commencement Date for the fees payable under clause 5.1 (Fees and Other Costs). Invoices will be issued by the Provider on a monthly basis in advance for the Transitional Services that will be provided to the Recipients in the month following the date of the invoice. The Recipients will pay all invoices within forty (40) days of receipt. For the avoidance of doubt, unless otherwise specified in this Agreement, all invoices and payments will be in US dollars. |
6.2 | The Recipients will be entitled to invoice the Provider for the fees payable under clause 5.2 (Fees and Other Costs). Invoices will be issued by the Recipients on a monthly basis in advance for the Recipient Services that will be provided to the Provider and/or the Seller in the month following the date of the invoice. The Provider will pay all invoices within forty (40) days of receipt. |
6.3 | All payments made under this Agreement shall be so made without set-off, deduction or withholding save as required by law, other than in respect of the fees payable by the Provider in relation to the Recipient Services, which may be set off against fees owed by the Recipients to the Provider in relation to the Transitional Services. |
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6.4 | If any party which is required to pay any sum under this Agreement fails to pay any sum payable by it under this Agreement on the due date for payment (the “Defaulting Party”), it shall pay interest on such sum for the period from and including the due date up to the date of actual payment (after as well as before judgement) in accordance with clauses 6.5 and 6.6. |
6.5 | The Defaulting Party shall pay interest at the annual rate which is the aggregate of 2% per annum and the base rate from time to time of Australia and New Zealand Banking Group Limited. |
6.6 | Interest under this clause 6 shall accrue on the basis of the actual number of days elapsed and a 365-day year and shall be paid by the Defaulting Party on demand. Unpaid interest shall compound monthly. |
7. | OTHER OBLIGATIONS |
7.1 | Each party undertakes to the other that it will not alter, corrupt or damage in any way nor extract or add to in any unauthorised manner any data belonging to another and held on any computer or other system used for the purposes of supplying or receiving the Transitional Services or Recipient Services. |
7.2 | The Provider will provide the Transitional Services with reasonable skill and care. | |
7.3 | The Recipients will provide the Recipient Services with reasonable skill and care. | |
7.4 | The Recipients shall only use the Transitional Services in relation to the Business. |
7.5 | The Recipients shall be responsible for project managing the orderly transfer of responsibility for the Transitional Services at the end of the Transitional Period. |
7.6 | The Provider agrees to use all reasonable endeavours to assist the Recipient with the transfer of the Transitional Services contemplated in clause 7.5 |
8. | LIMITATION OF LIABILITY |
8.1 | This clause 8 prevails over all other clauses and Schedules in this Agreement and sets forth the entire liability of the parties, and their sole and exclusive remedies in respect of: |
(a) | the performance, non-performance, purported performance or delay in performance of this Agreement; or | ||
(b) | otherwise in relation to this Agreement or the entering into or performance of this Agreement. |
8.2 | Nothing in this Agreement shall exclude or limit any party’s Liability (i) for fraud or tort of deceit; (ii) for death or personal injury in Australia caused by its Breach of Duty; (iii) for any other Liability which cannot be excluded or limited by applicable law. |
8.3 | Subject to clause 8.2 and to the extent permitted by law, the Provider acknowledges and agrees that any Liability of the Recipients in respect of the provision of, or failure to provide, the Recipient Services howsoever arising is excluded unless and to the extent that any insurance operates to, and does, indemnify the Provider for such liability. |
8.4 | To the full extent permitted by law, the Provider and the Recipients exclude all representations, warranties, terms and conditions, whether express or implied (and including those implied by statute, custom, law or otherwise), except as expressly set out in this Agreement. Certain legislation, including the Trade Practices Xxx 0000 (Cth), may imply warranties or conditions or impose obligations upon the Provider or the Recipients which |
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cannot be excluded, restricted or modified or cannot be excluded, restricted or modified except to a limited extent. This Agreement must be read subject to these statutory provisions. If these statutory provisions apply, to the extent to which the Provider and the Recipients are entitled to do so, the Provider or the Recipient (as the case may be) limits its liability in respect of any claim under those provisions to: |
(a) | in the case of goods, at the Provider’s or the Recipients’ option (as the case may be): |
(i) | the replacement of the goods or the supply of equivalent goods; | ||
(ii) | the repair of the goods; | ||
(iii) | the payment of the cost of replacing the goods or of acquiring equivalent goods; or | ||
(iv) | the payment of the cost of having the goods repaired; and |
(b) | in the case of services, at the Provider’s or the Recipients’ option (as the case may be): |
(i) | the supplying of the services again; or | ||
(ii) | the payment of the cost of having the services supplied again. |
8.5 | Save as provided in clauses 8.2 and 8.4 above, neither the Provider nor the Recipients shall have Liability to the other for (i) loss of actual or anticipated profits; (ii) loss of contracts; (iii) loss of the use of money; (iv) loss of opportunity; (v) loss of goodwill; (vi) loss of reputation; or (vii) any indirect or consequential loss, and such Liability is excluded whether it is foreseeable, known, foreseen or otherwise. For the avoidance of doubt, clauses 8.5(i)- 8.5(vii) apply whether such losses are direct, indirect, consequential or otherwise. |
8.6 | Subject to clauses 8.2 and 8.4 above, the total aggregate Liability of the Provider in connection with the provision of, failure to provide, or delay in providing, a Transitional Service including, for the avoidance of doubt, where the liability arises as a result of the provision, failure to provide, or delay in providing a Transitional Service by a sub-contractor of the Provider (as described in clause 8.7) shall not exceed the aggregate amounts payable in respect of the relevant Transitional Service. Subject to clauses 8.2 and 8.4 above, the total aggregate Liability of the Recipients in connection with the provision of, failure to provide, or delay in providing, the Recipient Services shall not exceed the aggregate amounts payable in respect of the Recipient Services. The limitation of Liability under this clause 8.6 has effect in relation both to any Liability expressly provided for under this Agreement and to any Liability arising by reason of the invalidity or unenforceability of any term of this Agreement. This clause 8.6 shall not apply to the Provider’s or the Recipients’ liability to pay the charges pursuant to clause 5.1 (Fees and Other Costs). |
8.7 | The parties acknowledge that certain Transitional Services will be provided by sub-contractors of the Provider under existing contracts between the Provider and such sub-contractors. |
8.8 | Notwithstanding clause 15 below, in the event that the Provider or the Recipients fail to notify the other party of a breach of this Agreement within five (5) Business Days of becoming aware of the same, the Providers or the Recipients (as the case may be) shall be deemed to have waived their entitlement to claim for losses arising from the breach to the extent that the failure to notify the other party of the breach within the time specified has prejudiced the ability of the other party to rectify the breach and to minimize any loss suffered by the Provider or the Recipients (as the case may be). |
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8.9 | The Transitional Services provided to Borders NZ pursuant to this Agreement are for business purposes and that the parties exclude the application of the Consumer Xxxxxxxxxx Xxx 0000 (NZ). |
9. | CONFIDENTIALITY |
9.1 | Each party shall treat as strictly confidential and will not disclose any information received or obtained by it or its officers, employees, agents or advisers as a result of entering into or performing this Agreement which relates to: |
(a) | the provisions of this Agreement, or any document or Agreement entered into pursuant to this Agreement; | ||
(b) | the negotiations leading up to or relating to this Agreement; or | ||
(c) | the other party |
(together “Confidential Information”), | ||
provided that these restrictions shall not apply to any disclosure of information if and to the extent the disclosure is: |
(i) | required by the law of any jurisdiction; | ||
(ii) | required by any applicable securities exchange, supervisory or regulatory or governmental body to which the relevant party is subject or submits, wherever situated, whether or not the requirement for disclosure has the force of law provided that in the case of a requirement for disclosure that does not have the force of law, legal counsel deems the disclosure to be appropriate; | ||
(iii) | made to the relevant party’s shareholders, professional advisers, auditors or bankers or the professional advisers, auditors or bankers of any other member of the relevant party’s group of companies; or | ||
(iv) | of information that has already come into the public domain through no fault of the relevant party or any other member of that party’s group of companies. |
9.2 | Upon termination or expiry of this Agreement (for whatever reason), each party shall return all Confidential Information of the other parties within its possession, custody or control. |
9.3 | Notwithstanding clause 9.2, each party may retain such Confidential Information that it is required to do so by law and to the extent such Confidential Information forms part of board or investment committee papers. |
10. | ASSIGNMENT AND SUB-CONTRACTING |
10.1 | Subject to clause 10.2 and 10.3 (below), the rights, benefits and obligations of the parties under this Agreement shall not be assigned, transferred or otherwise disposed of in whole or in part without the prior written consent of the other parties, such consent not to be unreasonably withheld or delayed. |
10.2 | The Provider may sub-contract to a third party to supply the Transitional Services provided that, subject to clause 8.7 above, the Provider remains responsible to the Recipients for its obligations under this Agreement. |
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10.3 | The Recipients may sub-contract to a third party to supply the Recipient Services provided that the Recipients remain responsible to the Provider for their obligations under this Agreement. |
10.4 | Either party may grant to its financiers from time to time (or any security trustee on their behalf) Encumbrances over their respective rights under this Agreement. |
11. | FORCE MAJEURE |
11.1 | The party affected shall be excused performance of its obligations under or pursuant to this Agreement if, and to the extent that, performance of such obligations is delayed, hindered or prevented by acts, events, non-happenings, omissions or accidents (including, without limitation, acts of God, war, hostilities, riot, fire, explosion, accident, flood, sabotage, lack of adequate fuel, power, raw materials, containers, transportation or labour, strike, lock-out or injunction (provided that neither party shall be required to settle a labour dispute against its own best judgement), changes to governmental laws, regulations or orders) which affect the performance of this Agreement and which in each case are beyond the reasonable control of the party affected. |
12. | TERM AND TERMINATION |
12.1 | This Agreement shall commence on the Commencement Date and, subject to clauses 12.2 and 12.3 below, shall remain in full force and effect until twelve (12) months from Completion or, if earlier, the date on which all Transitional Services have been terminated. |
12.2 | Notwithstanding clause 12.1, the Recipient may terminate each Transitional Service in accordance with the relevant termination notice provision in Schedule 1. |
12.3 | Upon such termination contemplated in clause 12.2 the fees relating to that Transitional Service shall cease, and an appropriate adjustment to the amount payable shall be credited to the Recipients. |
12.4 | The Provider shall be entitled to terminate the Recipient Services on the notice period set out in Schedule 2, and upon such termination the fees relating to the Recipient Services shall cease, and an appropriate adjustment to the amount payable shall be credited to the Provider. |
12.5 | The Provider may terminate this Agreement forthwith by written notice to the other parties in the event that a Purchaser or a Recipient: becomes insolvent; has a liquidator, administrator, administrative receiver, receiver or any similar official appointed in respect of the whole or any part of its assets; has an order or resolution made or passed for winding-up; enters, or resolves to enter into, an arrangement, compromise or composition generally with its creditors; takes any equivalent action, or any equivalent action occurs in any other jurisdiction; or shall cease to carry on business. |
12.6 | The Purchaser and/or a Recipient may terminate this Agreement forthwith by written notice to the Provider in the event that the Provider: becomes insolvent; has a liquidator, administrator, administrative receiver, receiver or any similar official appointed in respect of the whole or any part of its assets; has an order or resolution made or passed for winding-up; enters, or resolves to enter into, an arrangement, compromise or composition generally with its creditors; takes any equivalent action, or any equivalent action occurs in any other jurisdiction; or shall cease to carry on business. |
12.7 | The Provider may terminate this Agreement immediately at any time by written notice to the Recipients if: |
13
(a) | a Recipient commits a material breach of this Agreement (including any breach of its payment obligations under this Agreement) which is not remediable, or if remediable, it has failed to remedy within thirty (30) days of receiving written notice requiring it to do so; | ||
(b) | a failure by a Recipient to pay any undisputed fee or charge under this Agreement within 30 days of the date that it falls due under the terms of this Agreement; | ||
(c) | a Recipient commits a material breach of the Purchasing Agreement or the Sale and Purchase Agreement (including any breach of its payment obligations thereunder) which is not remediable, or if remediable, it has failed to remedy within thirty (30) days of receiving written notice requiring it to do so by Borders Group, Inc; | ||
(d) | Borders Properties, Inc terminates the Brand Licence Deed pursuant to clause 9.2 of the Brand Licence Deed; | ||
(e) | an obligation arises on the part of a member of the Seller’s Group to make payment (which, for the avoidance of doubt, shall not include any payment made by a member of the Seller’s Group in connection with the granting of a release of the relevant member of the Seller’s Group from any Intra-Group Guarantee) under an Intra-Group Guarantee provided that the Provider may not terminate this Agreement pursuant to this clause 12.7(e) if the relevant member of the Seller’s Group is paid by a Purchaser under the indemnity in paragraph 2 of Schedule 3 to the Sale and Purchase Agreement; | ||
(f) | at any time there is a change in Control of any of Borders Australia, Borders NZ, Borders Singapore, ARW or any Purchaser, other than as contemplated by a Transaction Document or where: |
(i) | the relevant change of Control does not result in a Provider Competing Business acquiring Control of any of Borders Australia, Borders NZ, Borders Singapore, ARW or any Purchaser; or | ||
(ii) | where the Provider has provided its prior written consent to the change in Control; or |
(g) | a Provider Competing Business acquires (directly or indirectly) a legal or beneficial interest of 20% or more in any of Borders Australia, Borders NZ, Borders Singapore, ARW or any Purchaser without the Provider’s prior written consent. |
12.8 | Termination or expiry of this Agreement (for whatever reason) shall be without prejudice to the respective rights and liabilities of each of the parties accrued prior to such termination or expiry. |
12.9 | All rights and obligations of the parties shall cease to have effect immediately upon termination or expiry of this Agreement save that: |
(a) | clauses which are expressed to survive its termination or expiry, or which, from their nature or context, it is contemplated that they are to survive termination or expiry; and | ||
(b) | any provision of this Agreement necessary for its interpretation or enforcement, |
shall continue in force following termination or expiry of this Agreement (for whatever
reason).
14
13. | NOTICES |
13.1 | Any notice, demand or other communication (“Notice”) to be given by any party under, or in connection with, this Agreement shall be in writing and signed by or on behalf of the party giving it. Any Notice shall be served by sending it by fax to the number set out in clause 13.2, or delivering it by hand to the address set out in clause 13.2 and in each case marked for the attention of the relevant party set out in clause 13.2 (or as otherwise notified from time to time in accordance with the provisions of this clause 13). Any Notice so served by fax or hand shall be deemed to have been duly given or made as follows: |
(a) | if sent by fax, at the time of transmission; or | ||
(b) | in the case of delivery by hand, when delivered; |
provided that in each case where delivery by fax or by hand occurs after 6pm on a Business Day or on a day which is not a Business Day, service shall be deemed to occur at 9am on the next following Business Day. | ||
References to time in this clause are to local time in the country of the addressee. | ||
13.2 | The addresses and fax numbers of the parties for the purpose of clause 13.1 are as follows: |
(a) | Provider | |||||
Address: | 000 Xxxxxxx Xxxxx | |||||
Xxx Xxxxx XX 00000 | ||||||
Xxxxxx Xxxxxx of America | ||||||
Fax: | x0 000 000 0000 | |||||
For the attention of: | General Counsel | |||||
With a copy to: | Xxxxx &McKenzie | |||||
Address: | Xxxxx 00, 00 Xxxxxx Xxxxxx | |||||
Xxxxxx XXX 0000 | ||||||
Fax: | x00 0 0000 0000 | |||||
For the attention of: | Xxxxxx Xxxxx | |||||
(b) | Recipients | |||||
Address: | Xxxxx 00, 000 Xxxxxxx Xxxxxx | |||||
Xxxxxxxxx, Xxxxxxxx 0000 | ||||||
Xxxxxxxxx | ||||||
Fax: | x00 0 0000 0000 | |||||
For the attention of: | the Managing Director | |||||
With a copy to: | Xxxxxxx Xxx | |||||
Address: | Xxxxx 00, 0 X’Xxxxxxx Xxxxxx | |||||
Xxxxxx XXX 0000 | ||||||
Fax: | x00 0 0000 0000 | |||||
For the attention of: | Xxxxxx Xxxx |
15
13.3 | A party may notify the other party to this Agreement of a change to its name, relevant addressee, address or fax number for the purposes of this clause 13, provided that, such notice shall only be effective on: |
(a) | the date specified in the notification as the date on which the change is to take place; or | ||
(b) | if no date is specified or the date specified is less than five Business Days after the date on which notice is given, the date following five Business Days after notice of any change has been given. |
13.4 | In proving service is shall be sufficient to prove that the envelope containing such notice was properly addressed and delivered to the address shown thereon or that the facsimile transmission was made and a facsimile confirmation report was received, as the case may be. |
14. | INVALID OR UNENFORCEABLE PROVISIONS | |
14.1 | If a provision of this Agreement is invalid or unenforceable in a jurisdiction: |
(a) | it is to be read down or severed in that jurisdiction to the extent of the invalidity or unenforceability; and | ||
(b) | it does not affect the validity or enforceability of: |
(i) | that provision in another jurisdiction; or | ||
(ii) | the remaining provisions. |
15. | WAIVER AND EXERCISE OF RIGHTS |
(a) | A waiver by a party of a provision or of a right under this Agreement is binding on the party granting the waiver only if it is given in writing and is signed by the party or an officer of the party granting the waiver. | ||
(b) | A waiver is effective only in the specific instance and for the specific purpose for which it is given. | ||
(c) | A single or partial exercise of a right by a party does not preclude another or further exercise of that right or the exercise of another right. | ||
(d) | Failure by a party to exercise or delay in exercising a right does not prevent its exercise or operate as a waiver. |
16. | AMENDMENT | |
16.1 | This Agreement may be amended only by a document signed by all parties. | |
17. | COUNTERPARTS | |
17.1 | This Agreement may be signed in counterparts and all counterparts taken together constitute one document. |
16
18. | FURTHER ASSURANCES |
18.1 | Each party must, at its own expense, whenever requested by another party, promptly do or arrange for others to do everything reasonably necessary to give full effect to this Agreement and the transactions contemplated by this Agreement. |
19. | ASSIGNMENT |
19.1 | Subject to clause 19.2, a party must not transfer, assign, create an interest in or deal in any other way with any of its rights under this Agreement without the prior written consent of the other parties. |
19.2 | Either party may grant to its financiers from time to time (or any security trustee on their behalf) Encumbrances over their respective rights under this Agreement. |
20. | ENTIRE AGREEMENT |
20.1 | This Agreement represents the whole and only agreement between the parties in relation to the provision of the Transitional Services and the Recipient Services and supersede any previous agreement (whether written or oral) between all or any of the parties in relation to the subject matter of any such document save that nothing in this Agreement shall exclude any liability for, or remedy in respect of, fraudulent misrepresentation. |
21. | RIGHTS CUMULATIVE |
21.1 | The rights, remedies and powers of the parties under this Agreement are cumulative and not exclusive of any rights, remedies or powers provided to the parties by law. |
22. | CONSENTS AND APPROVALS |
22.1 | A party may give its approval or consent conditionally or unconditionally or withhold its approval or consent in its absolute discretion unless this Agreement expressly provides otherwise. |
23. | JURISDICTION |
23.1 Each party irrevocably and unconditionally:
(a) | submits to the non-exclusive jurisdiction of the courts of New South Wales; and | ||
(b) | waives any claim or objection based on absence of jurisdiction or inconvenient forum. |
24. | SERVICE OF PROCESS |
24.1 | Each party agrees that a document required to be served in proceedings about this Agreement may be served: |
(a) | if originating process or a subpoena to be served on a company or registered body by being sent by post to or left at its registered office, and in all other cases at its address for service of notices under clause 13; or | ||
(b) | in any other way permitted by law. |
17
25. | CURRENCY CONVERSION |
25.1 | For the purpose of converting amounts specified in one currency into another currency where required, the rate of exchange to be used in converting amounts specified in one currency into another currency shall be the New York closing rate for exchanges between those currencies quoted in the Wall Street Journal for the nearest Business Day for which that rate is so quoted prior to the date of the conversion. |
26. | GOVERNING LAW | |
26.1 | This Agreement is governed by the laws of New South Wales, Australia. |
The parties have shown their acceptance of the terms of this Agreement by executing it at the end
of the Schedules.
18
SCHEDULE 1
TERM SHEETS
A — Financial Reporting
A.1. Description
|
Procuring financial reporting for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$140,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
3 months |
Department: International Finance
Department description:
|
Financial Reporting |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Daily Flash Sales |
Reporting | D | Net sales daily reporting by store | |||
Maintain FX Rates
in Xxxxxx/EAP |
Task | D | Enter FX rates into Xxxxxx | |||
Email
Collection/Cashier |
Reporting | D | ||||
Email Collection |
Reporting | D | ||||
Paperchase Sales
and Commission
Reporting |
Reporting | W | ||||
Weekly Transactions |
Task | W | ||||
Category Sales |
Reporting | W | Net sales by category | |||
Transaction/Units
Summary |
Reporting | W | Includes transaction and units counts; Gross Margin, Discounts, Net Margin per Trans and Unit | |||
Clearance (Red Dot)
Results |
Reporting | W | During the Clearance (Red Dot) Sales Timing | |||
Series Code
(Promotional)
Discounts |
Reporting | W | Sales and units sold by series code | |||
Coupon Discounts |
Reporting | W | ||||
Gift Card Sales |
Reporting | M | ||||
Corporate Sales |
Reporting | M | ||||
AP165 Reprint |
Reporting | M |
19
Item | Classification | Re/(O)ccurrence | Item comments | |||
ACME Returns |
Reporting | M | ||||
Periodical
Sales/Margin |
Reporting | M | by UPC | |||
Missed Returns |
||||||
Month End Journal Entries |
Task | M | Datacomm, legal expenses, Interest, taxes, error suspense, shrink, markdowns, etc | |||
GST Reporting |
Reporting | M | ||||
Forecasting |
Task | M/Q | Each markets send P&L submissions to be loaded into EAP system | |||
Over/Short Report |
Task | M | ||||
Provide Final P&L Statements |
Reporting | M | Send over final P&L statements after all journal entries are booked | |||
Store Contribution
Reporting |
Reporting | M | Store level P&L's for Month and YTD | |||
Account Reconciliations |
Task | M | Various accounts, are completed in the US | |||
Corporate Customer
Sales Reporting |
Reporting | W | ||||
Weekly Discount
Reconciliation
Reporting |
Reporting | W | ||||
Accounts Payable
Lag Reporting |
Reporting | M | ||||
Payroll and Sales
Management Reports |
Task | W |
20
B — Statutory Accounts Reporting
A.1. Description
|
Prepare statutory reporting for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$17,500/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
3 months |
Department: International Finance
Department description: Statutory Accounts Reporting
Item | Classification | Re/(O)ccurrence | Item comments | |||||
Provide letter of support,
letter of representation and
intercompany confirmations |
Task | Annual | ||||||
Coordinate EY requests from work
performed by IFD |
Task | |||||||
Provide supporting documents for
accounts managed by IFD |
Task | |||||||
Prepare statutory accounts |
Task | Annual |
21
C — Property Accounting
A.1. Description |
Responsible for Asset Management for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$35,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
3 months |
Department: |
Property Accounting | |
Department description: |
Responsible for Asset Management system, including Capital spending, depreciation and asset write-offs |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Yearly budgeting of
cap-ex and depreciation
expense
|
Task | Y | Cap-ex submissions from local office, all planning at H.O. | |||
Monthly forecast
updates
|
Task | M | Monthly reforecast depreciation expense and cap-ex, submit into EAP | |||
Capital Spending
administration
|
Task | Ongoing | Responsible for creation and approval, as well as subsequent tracking of CERs | |||
Tracking of
Capital Projects
|
Task | Ongoing | ||||
Fixed asset accounting
|
Task | M | Record all depreciation and asset-related activity | |||
Monthly Fixed
Asset Reporting
|
Reporting | M | Monthly variance to forecast explanations, Asset Registers | |||
Cap-ex reporting
|
Reporting | M | 1) Approved vs. Invoiced |
|||
Cap-ex reporting
|
Reporting | M | 2) Project activity reporting |
|||
Cap-ex reporting
|
Reporting | M | 3) New Store Cap-Ex |
|||
GL Account Recs
|
Task | M | All fixed asset accounts |
22
D — Accounts Payable (A/P)
A.1. Description
|
Accounts Payable and Accounts Receivable for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$210,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
Terminates in line with this Agreement |
Department:
|
Accounts Payable | |
Department description:
|
Accounts Payable and Accounts Receivable |
Item | Classification | Re/(O)ccurrence | Item comments | |||
EDI and Paper drop
ship merchandise
invoice processing
|
Task | Ongoing | ||||
Expense invoice
processing
|
Task | Ongoing | 10% done by IFD | |||
Warehouse receipt
merchandise invoice matching
|
Task | Ongoing | ||||
Vendor service representatives
|
Task | Ongoing | Primary contact is IFD | |||
Vendor account
reconciliations
|
Task | Ongoing | ||||
Vendor set-up
|
Task | Ongoing | Includes completion of vendor credit applications | |||
Debit balance recovery
|
Task | Ongoing | Substantial leveraging of Australian resources | |||
AP Audit functions
|
Task | Ongoing | Includes but not limited to duplicate payment recovery and 3rd party audit recoveries | |||
Trade check runs
|
Task | M/W | Check runs are run and signed off by IFD | |||
Wire transfers
|
Task | Ongoing | ||||
Year-end audit
|
Task | Y | Support for auditor requests | |||
General Ledger
Balance Sheet Account Reconciliations
|
Task | M | All payables accounting | |||
Reserves Analysis
|
Reporting | M | All payables accounting | |||
Aged Accrual Analysis
|
Reporting | M | All payables accounting | |||
Average Days to Pay
|
Reporting | M |
23
Item | Classification | Re/(O)ccurrence | Item comments | |||
Non Top Vendor
Activity
|
Reporting | M | ||||
Status of
Reconciliations for
Top Vendors
|
Reporting | M | ||||
Accounts Payable
Ratio Reporting
|
Reporting | M | ||||
Vendor Debit Balance
Reporting
|
Reporting | M | ||||
Claims on Invoices
Trend Reporting
|
Reporting | M | ||||
AP165 — drop ship
merchandise invoices
reporting to stores
|
Reporting | M |
24
E — Bank Reconciliation
A.1. Description
|
Bank Reconciliations for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$21,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
3 months |
Department:
|
Bank Reconciliation | |
Department description:
|
Responsible for Reconciliation of all bank/disbursement accounts |
Item | Classification | Re/(O)ccurrence | Item comments | |||
General Ledger Balance Sheet Account Reconciliations
|
Task | M | All Cash and Disbursement Accounts |
25
F — Treasury
A.1. Description
|
Treasury support services to the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$35,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
3 months |
Department:
Treasury
Treasury
Department
description:
Item | Classification | Re/(O)ccurrence | Item comments | |||
Cash Management |
Task | Ongoing | Includes forecasting, funding, borrowing, overdraft facility maintenance |
|||
Month-end close
for bank/cash accounts |
Accounting | Monthly | ID all cash activity (cash, wires, checks etc) and tie to specific General Ledger code. Monthly upload to Xxxxxx General Ledger of all activity. |
|||
Foreign
currency transactions for year end hedging |
Task | Yearly | ||||
Credit card management |
Accounting, Task, Reporting |
Ongoing | Setting up and managing relationship with credit card companies, monthly entry of credit card fees, planning for credit card fees, reporting on credit card fees. |
|||
Bank relationships
|
Task | Ongoing | Set-up and management of bank relationships, monthly entry of bank fees, planning for bank fees. |
|||
Interest |
Accounting | Ongoing | Monthly entry of interest, monthly reconciliations, forecasting and planning |
|||
Wire Transfer Activity
|
Task | Ongoing | Activation of approved wire transfers. |
26
G — Lease Accounting
A.1. Description
|
Lease Accounting for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$8,750/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
3 months |
Department: Lease Accounting
Department
description:
description:
Item | Classification | Re/(O)ccurrence | Item comments | |||
Straight Line Rent
Accounting
|
Accounting | On-going | Includes: initial calculation, maintenance, journal entries, monthly forecasting, yearly planning, and General Ledger reconciliations of Straight Line Balance Sheet accounts | |||
Wire Transfers
|
Task | Monthly | Initiate wire transfers for rental payments for all APAC stores |
27
H — Merchandise Reporting
A.1. Description
|
Merchandise Reporting for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$70,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
Terminates in line with this Agreement |
Department: |
International Finance | |
Department description:
|
Reporting on Merchandise Category Performance |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Weekly Subject Range
Report
|
Reporting | W | Weekly sales, store inventory, purchase, pending order, on order, store returns, and vendor return by subject breaks | |||
Open to Buy
|
Reporting | W | Units on Order (DC and Drop ship) by PO types – Actual vs. Target by buyers | |||
Not Yet Published
|
Reporting | W | Order of Not Yet Publish Titles by Product line by month | |||
In Stock
|
Reporting | W | Weekly Top Title sales by subject break 100 and In Stock percentage | |||
Top Titles
|
Reporting | W | Weekly Top 10 sales by product lines comparison TY vs. LY | |||
Bargain Scorecard
|
Reporting | W | Bargain Sales, Shipments, Inventory by Store | |||
Calendar Scorecard
|
Reporting | W | While Calendars are in Stock (Oct-Jan) | |||
Weekly Kids Sales
|
Reporting | W | Kids Subject Code Sales by Store | |||
Vendor Scorecard
|
Reporting | M | Sales, Purchase, Return, Refused Return, and inventory by vendor level | |||
Inventory Aging by Category |
Reporting | M | Aging Inventory bucket by category by store | |||
Bargain Report
|
Reporting | W | Bargain Sales, Rolling 5 weeks Sales, Inventory by store | |||
Stock Aging
|
Reporting | M | Aging of Returnable and Non Returnable Stock by Category/Product line | |||
Stock Reserves
|
Accounting | M | Reserve Calculations and Accounting Entries for Aged Non Returnable Stock | |||
Deadwood Returns
|
Reporting | M – as needed | Manual Process |
28
Item | Classification | Re/(O)ccurrence | Item comments | |||
RPLs
|
Reporting | M – as needed | System Process | |||
Buyer Action Plan
|
Reporting | M | Sales, Margin, Inventory, Week of Supply, Stockturn, Purchase and Vendor Claims by Buyers | |||
Location Range Report
|
Reporting | M | Sales, Inventory, and On Order by Location by Store | |||
Out of Stock
|
Reporting | M | Out of Stock reporting by store by country |
29
I — Margin Accounting and Reporting
A.1. Description
|
Margin Accounting and Reporting for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$70,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
Terminates in line with this Agreement |
Department:
|
International Finance | |
Department
description:
|
Margin Accounting and Reporting |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Preliminary Period Margin Statements |
Reporting | W | Actual Sales vs. Forecast vs. Plan Analysis | |||
Final Period Margin Statements |
Reporting | M | Final reporting of sales, cost, and margin and comparison to forecast | |||
Period Cost of Sales
|
Accounting | M | Calculate cost of sales for accounting posting | |||
Period Sales
Adjustments
|
Accounting | M | Sales Audit posting | |||
Vendor Code Sales Mix
|
Reporting | M | Sales mix by vendors for the last 6 months with their average margin rate | |||
Period Margin by Vendor Code |
Reporting | M | Avg 6 months period margin sales mix by vendors | |||
Country Mix –
Purchases and Sales |
Reporting | M | Sales and Shipment Mix by country by product line | |||
New Store Discount Summary |
Reporting | NYO only | ||||
Periodicals
|
Reporting | M | Mill & Boon, US Periodical, Local Periodical, and Subscription Sales reporting by stores |
30
J — Inventory Accounting and Control
A.1. Description
|
Inventory Accounting and Control for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$70,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
Terminates in line with this Agreement |
Department:
|
Inventory Control | |
Department
description:
|
Inventory reconciliation of on hand systems to financial systems and inventory reporting |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Inventory at Retail
|
Reporting | W | Classified by Total Stores, FTC, RC | |||
Warehouse Inventory Summary |
Reporting | W | Warehouse system weekly processing flow with perpetual inventory balances. | |||
Warehouse Overstock
Aging and Fill
Rates
|
Reporting | W | Warehouse system inventory aging with weekly shipping fill rates. | |||
Return Center
Summary and Claim
Aging
|
Reporting | W | Return Center system weekly inventory flow, on hand balances, with aged vendor returns claims. | |||
Warehouse Receipts
and Shipments
|
Reporting | W | Warehouse system weekly summary processing. Details are provided upon request. | |||
Warehouse Reconciliations |
Accounting | Q | Reconcile to General Ledger | |||
Physical Inventory
|
Accounting | Per StockTake Schedule |
Includes pre-work, stock takes, post work, reconciliations, and results reporting by store and category | |||
Shrink Liabilities
|
Accounting | M | Monthly Accruals, Record Results | |||
Inventory Entries
|
Accounting | M |
31
K — Tax
A.1. Description
|
Tax Reporting and Filing for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$52,500/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
3 months |
* | Tax is fully dependent on transaction data support from the Australia/New Zealand team. |
Department:
|
Tax | |
Department description:
|
Tax Returns |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Provide all
information
necessary for the
submission of tax
returns
|
Annual | |||||
Provide GST reporting
|
Report | Periodic | ||||
Support Statutory Account Tax Calculations |
Accounting | Annual | ||||
Provide tax depreciation reporting |
Report | Annual | ||||
Maintain and
provider accurate
tax depreciation
schedules
|
Report | Annual |
32
L — IT
A.1. Description
|
Information Technology Support for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$1,340,000/ year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
Terminates in line with this Agreement |
Department: |
IT | |
Support for all Borders proprietary systems, as well as other | ||
Department description: |
Borders integrated systems for merchandising, distribution, stores, and financials. |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Transitional Support
|
Tasks provided during the term of the TSA | |||||
Provide BGIA (central
stock, supplier and
purchase order
management) system
functionality and
support
|
Task | On-going | Provides data on on-hand inventory as well as inventory transfer data |
|||
Provide BGIB
(distribution
management, inventory
control and subsidiary
financial) system
functionality and
support
|
Task | On-going | Performs AP invoice matching as well. | |||
Provide CMA (core
back-list titles as
well as EPOS daily data
poll) system
functionality and
support
|
Task | On-going | ||||
Provide IMA (in-store
inventory management –
goods receipt and
returns) system
functionality and
support
|
Task | On-going | ||||
Provide IT outage alerts
|
Task | As needed | ||||
Provide Xxxxxx (general
ledger, asset
management, accounts
payable) system
functionality and
support
|
Task | On-going | ||||
Provide Data Warehouse
(business intelligence,
the central location
for most business data)
functionality and
support
|
Task | On-going |
33
Item | Classification | Re/(O)ccurrence | Item comments | |||
Provide DW Portal (web
application to access
sales, transactions,
and discounting from
POS) system
functionality and
support
|
Task | On-going | ||||
Provide store detail
file transfers (daily
FTP of key financial
metrics) functionality
and support
|
Task | On-going | ||||
Provide Outlooksoft/EAP
systems functionality
and support
|
Task | On-going | Maintain the query tool for Xxxxxx G/L | |||
Helpdesk support
|
Task | As needed | For all IT issues that cannot be resolved via the ANZ IT technicians. | |||
Data back-ups and
storage
|
Task | On-going | ||||
New Store set-up in legacy system |
Task | As needed | ||||
TOTAL TRANSITIONAL SUPPORT |
$ 140,000.00 | |||||
Data Migration/IT
Transition to ANZ
Ownership
|
Project management and task work to migrate data and hardware to ANZ ownership | |||||
Project coordination/management |
Task | On-going | IT point of contact for coordination of transition to new owner to work with ANZ team | |||
Develop process for
transition of SCM
(product in the
pipeline) to ANZ
ownership
|
Task | On-going | Co-manage the plan to transition the SCM with a system implementation to ensure limited disruption to the flow of products | |||
Provide final inventory
data to ANZ ownership
|
Task | One time | ||||
Provide final title
file assortment data to
new ownership
|
Task | One time | ||||
Provide one-time historical sales/inventory data in the required format |
Task | One time | ||||
Update Outlooksoft dimensions |
Task | One time | ||||
TOTAL MIGRATION AND TRANSITION COSTS |
$ 1,200,000.00 | |||||
TOTAL IT COSTS
|
$ 1,340,000.00 |
34
M — Merchandising
A.1. Description
|
Book and Non-Book Buying for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$105,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
3 months |
Department:
|
Merchandising | |
Department description:
|
Book and Non-Book Buying |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Merchandise buying, allocation & replenishment |
Task | On-going | ||||
Weekly “big-buy”
conference calls
for information
sharing purposes
for Merchandise
|
Task & Reporting | W | Other information sharing activities to be negotiated. | |||
Merch Ops – Vendor Management – Weekly reporting |
Reporting | W | By store listing of total OH, OO, NYP title and unit counts, retail value |
35
N — Merchandise Operations
A.1. Description
|
Product Data and Analysis Support for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$70,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
Terminates in line with this Agreement |
Department: Operations |
Merchandising | |
Department description:
|
Title file, vendor management, Point Of Sale promotions, store planning, merchandise planning |
Item | Classification | Re/(O)ccurrence | Item comments | |||
New store
planning/store
space and layout
planning
|
Ongoing | |||||
Title File
Department:
|
||||||
Complete listing of
all US titles on
BGIA
|
Reporting | Weekly | ||||
Complete listing of
all non-US titles
on BGIA
|
Reporting | Weekly | ||||
Sales and OH info
for all BINCs
|
Reporting | Weekly | ||||
Xxxxxx data – master title file by country |
Reporting | Monthly | ||||
Title File Updates
|
Task | Weekly | Weekly set of macros that cleanse title file data to conform to BGI standards | |||
Title File Updates
|
Task | Ongoing | Manual maintenance based on vendor or in-country requests | |||
Title File Updates
|
Task | Ongoing | Semi-manual process for mass updates, required by in-country | |||
Changes to title
file report
|
Reporting | Weekly | Shows all changes to title file in the last week | |||
Titles changing to
OP
|
Reporting | Monthly | Reporting on titles changing to out of print status | |||
Paperchase
maintenance
|
Performed by the Paperchase(US) department |
36
Item | Classification | Re/(O)ccurrence | Item comments | |||
Marketing: POS Promotions |
||||||
Promotional set-up – CMA |
Task | Ongoing | Set-up all non BGIA promotions in CMA to be sent down to store POS system | |||
Promotional set-up – BGIA |
Task | Ongoing | This department provides support for any changes that need to be made to these promotions | |||
Bar-code creation
|
Task | Ongoing | Create all barcodes needed for promotions | |||
Training and
Consultation for
promotion creation
|
Task | Ongoing | ||||
Merch Planning
|
||||||
Reporting:
|
Weekly | Top 200 items(sales), all stores, by country by product line | ||||
Weekly | Top items(sales), by country, by product line, by binc, by store | |||||
Weekly | Sales, On Hands, TY/LY, Turn, Discounts, for Paperchase and Gifts/Stationary category |
37
O — Transportation
A.1. Description
|
Logistics/Shipping for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$49,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
Terminates in line with this Agreement |
Department:
|
Transportation | |
Department description:
|
Shipping and logistics |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Ship and ensure any
Borders US bought
product is shipped
to ANZ at
Purchasers expense
|
Task | On-going | ||||
Freight and
Distribution Center
Reporting
|
Reporting | On-going | Weekly, monthly reporting including Costs Per Unit, Output (units) Per Hour, Distribution Financials, and Freight Operating Review Meetings | |||
Freight and DC
Planning
|
Task | Yearly | Planning at the detail Output Per Hour/ Costs Per Unit Distribution and Freight Financials |
38
P — Communications
A.1. Description
|
Store/field communications for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$11,375/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
3 months |
Department:
|
Communications | |
Department description:
|
Store and store manager communications |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Store
communications –
e-mail box,
news/marketing
bulletins
(promotions) and
e-info updates.
|
Task | On-going | ||||
Store manager specific communications |
Task | Bi-weekly | ||||
URL set-up on proxy server (link created on e-info) |
Task | As needed |
39
Q — Store Operations
A.1. Description
|
Store Operational Support for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$35,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
Terminates in line with this Agreement |
Department:
|
Store Operations | |
Department
description: |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Provide store
operational support
from US.
|
Task | On-going | ||||
New store set-up in legacy systems |
Task | On-going |
40
R — Management
A.1. Description
|
Management of Support Services for the Recipients | |
A.2. Location
|
Borders US | |
A.3. Service Manager
|
TBD | |
A.4. Fees/Charges
|
$105,000/year | |
A.5. Exceptions
|
N/A | |
A.6 Termination Notice
|
Terminates in line with this Agreement |
Departments:
|
Finance, Tax, Merchandising | |
Department
description:
|
Management Oversight of Support Services |
Item | Classification | Re/(O)ccurrence | Item comments | |||
Direction and
leadership for
support services
employees
|
Task | Daily | ||||
Review of support
services employee
work
|
Task | Daily |
41
SCHEDULE 2
RECIPIENT SERVICES
1. Description | The services to be provided by the Recipients in relation to the oversight of, and assistance in relation to: | |||||||
(1 | ) | opening of new Borders Group, Inc company owned and franchise stores in Malaysia and GCC, including: | ||||||
• | Fit out | |||||||
• | Stocking of store/purchasing | |||||||
• | Promotions/marketing | |||||||
• | IT/systems | |||||||
• | HR/training | |||||||
(2 | ) | Borders Group, Inc franchise operations in Malaysia, UAE, Qatar, Bahrain, Kuwait and Oman, including the following functions: | ||||||
• | HR | |||||||
• | Finance | |||||||
• | Operations | |||||||
• | Purchasing | |||||||
• | Promotion/marketing | |||||||
• | Distribution centre oversight | |||||||
• | Merchandising | |||||||
2. Location |
||||||||
3. Service Manager |
||||||||
4. Pricing /Charges | $20,000 per month | |||||||
5. Recipient Service Period | 9 months from the Commencement Date | |||||||
6. Termination Notice | 10 Business Days |
42
Signed for and on behalf of
Borders International Services, Inc.
by its duly authorised representative
in the presence of:
Borders International Services, Inc.
by its duly authorised representative
in the presence of:
(please print) |
Signed for and on behalf of
Borders Australia Pty Ltd.
by its duly authorised representative
in the presence of:
Borders Australia Pty Ltd.
by its duly authorised representative
in the presence of:
(please print) |
Signed for and on behalf of
Borders New Zealand Limited
by its duly authorised representative
in the presence of:
Borders New Zealand Limited
by its duly authorised representative
in the presence of:
(please print) |
43
Signed for and on behalf of
Borders Pte. Ltd.
by its duly authorised representative
in the presence of:
Borders Pte. Ltd.
by its duly authorised representative
in the presence of:
(please print) |
44
Signed for and on behalf of Spine Newco Pty
Limited ACN 127 667 314 by its Attorney under a
Power of Attorney dated 4 June 2008, and the
Attorney declares that the Attorney has not
received any notice of the revocation of such
Power of Attorney, in the presence of:
Signed for and on behalf of Spine Newco (NZ)
Limited Company No. 2010994 by its Attorney under
a Power of Attorney dated 4 June 2008, and the
Attorney declares that the Attorney has not
received any notice of the revocation of such
Power of Attorney, in the presence of:
45