Document:

exv10w40

Exhibit 10.40

Brand Licence Deed

Borders Properties, Inc.

Spine NewCo Pty Limited

Baker & McKenzie

Solicitors

Level 27, AMP Centre

50 Bridge Street

SYDNEY NSW 2000

Tel: (02) 9225-0200

Fax: (02) 9225-1595

 

 

DATE:

PARTIES:

	(1)	 	BORDERS PROPERTIES, INC., a company incorporated in the State of Delaware, USA and having its
principal place of business at 100 Phoenix Drive, Ann Arbor, MI 48108, USA (“Licensor”); and
	 
	(2)	 	SPINE NEWCO PTY LIMITED, a company incorporated under the laws of Australia ACN 127 667 314
and having its registered office at Level 31, 126 Phillip Street, Sydney, NSW 2000
(“Licensee”).

RECITALS:

	(A)	 	Licensor is the registered proprietor of, or has the right to license and/or sub-license, the
Trade Marks (as defined below).
	 
	(B)	 	Licensor has agreed to license Licensee to use the Trade Marks on the terms of this Deed.
	 
	(C)	 	Licensor has registered the Domain Names (as defined below) and holds all right, title and
interest in and to the registration of such Domain Names.
	 
	(D)	 	Licensor has agreed to provide a licence to Licensee to make use of the Domain Names on the
terms set out in this Deed.

TERMS AGREED:

	1.	 	DEFINITIONS AND INTERPRETATION

	1.1	 	Definitions:
	 
	 	 	In this Deed, where the context so admits, the following words and expressions shall have
the following meanings:

	 	 	 
	“ARW”

	 	has the same meaning as in the Purchasing Agreement;
	 
	 	 
	“Borders Australia”

	 	Borders Australia Pty Limited (ABN 31 082 194 287), a
company incorporated under the laws of Australia and
having its registered office c/o Baker & McKenzie, Level
27, AMP Centre, 50 Bridge Street, Sydney NSW 2000;
	 
	 	 
	“Borders NZ”

	 	Borders New Zealand Limited Company No. 944114, a company
incorporated under the laws of New Zealand and having its
registered office c/o Minter Ellison Rudd Watts, Lumley
Centre, 88 Shortland Street, Auckland, New Zealand;
	 
	 	 
	“Borders Singapore”

	 	Borders Pte. Ltd, a company incorporated under the laws
of Singapore with registered number 19970517Z and having
its registered office at 60B Martin Road, 02 08B
Singapore Trademart 239067;

 

 

	 	 	 
	“Borders Store”

	 	a distinctive retail store in the Territory which sells
Goods and Services under the Trade Marks;
	 
	 	 
	“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 Day”

	 	a day (excluding Saturday) on which the banks are
generally open for business in Ann Arbor, Michigan,
Sydney, Auckland and Singapore for the transaction of
normal banking business;
	 
	 	 
	“Competing Business”

	 	has the same meaning as in the Sale and Purchase
Agreement;
	 
	 	 
	“Confidential Information”

	 	in relation to either party, information (whether in
written, electronic or oral form) belonging or relating
to that party or, in the case of Licensor, belonging to a
member of Licensor’s Group, relating to its or their
business, affairs, activities, products or services which
is not in the public domain and which (i) either party
has marked as proprietary or confidential; (ii) either
party, orally or in writing, has advised the other party
is of a confidential nature; or (iii) due to its
character or nature, a reasonable person in a like
position to the recipient of such information under this
Deed, and under like circumstances, would treat as
confidential;
	 
	“Control”

	 	has the same meaning as in section 50AA of the
Corporations Act 2001 (Cth);
	 
	“Dispute”

	 	means a dispute, difference or question relating to this
Deed, including any dispute, difference or question
regarding the breach, termination, validity or subject
matter of this Deed or any claim whether in tort,
negligence, equity, under law or otherwise;
	 
	 	 
	“Domain Names”

	 	the domain names, short particulars of which are set out
in Schedule 4 to this Deed;
	 
	 	 
	“Effective Date”

	 	the date of this Deed;
	 
	 	 
	“Encumbrances”

	 	means any mortgage, charge, pledge, lien, encumbrance,
assignment, hypothecation, security interest, title
retention, preferential right, trust arrangement,
contractual right of set-off or any other security
agreement or arrangement in favour of any person;
	 
	“Goods ”

	 	the goods set out in Schedule 2 to this Deed for which
the Trade Marks are registered, including the provision
of these goods using the Domain Names or 

 

 

	 	 	 
	 

	 	corresponding
website address but specifically excluding the provision
of any goods via the Internet using any other domain name
or other electronic media;
	 
	 	 
	“Government Agency”

	 	means: (i) a government or government department or
other body; (ii) a governmental, semi-governmental or
judicial person; or (iii) a person (whether autonomous or
not) who is charged with the administration of a law;
	 
	 	 
	“Holding Company”

	 	has the meaning given to it in section 9 of the
Corporations Act 2001 (Cth).
	 
	 	 
	“Intra-Group Guarantees”

	 	has the same meaning as in the Sale and Purchase
Agreement;
	 
	 	 
	“Licensor’s Group”

	 	the group of companies comprising Licensor, any Holding
Company from time to time of Licensor and any Subsidiary
of Licensor or any such Holding Company and “member of
Licensor’s Group” shall be construed accordingly;
	 
	 	 
	“Provider Competing Business”

	 	means a business of selling or distributing books,
magazines, CDs, DVDs and similar products which is
controlled or operated by any of the following, one or more of their
Related Bodies Corporate or their successors or assigns:
	 
	 	 
	 

	 	(a)    Barnes & Noble, Inc;
	 
	 	 
	 

	 	(b)    Dymocks Holdings Pty Ltd;
	 
	 	 
	 

	 	(c)    Amazon.Com, Inc;
	 
	 	 
	 

	 	(d)    Books-a-Million Inc;
	 
	 	 
	 

	 	(e)    Fnac france;
	 
	 	 
	 

	 	(f)    Kinokuniya Company Ltd; and
	 
	 	 
	 

	 	(g)    Indigo Books & Music
Inc;.;
	 
	 	 
	“Purchasers”

	 	has the meaning given to it in the Sale and Purchase
Agreement;
	 
	 	 
	“Purchasing Agreement”

	 	has the same meaning as in the Sale and Purchase
Agreement;
	 
	 	 
	“Related Body Corporate”

	 	has the meaning in the Corporations Act 2001 (Cth).
	 
	 	 
	“Sale and Purchase Agreement”

	 	the agreement entered into between Borders Group, Inc.,
Borders Singapore and the Purchasers effecting the sale
of Borders Australia, Borders NZ and Borders Singapore;

 

 

	 	 	 
	“Seller’s Group”

	 	has the same meaning as in the Sale and Purchase
Agreement;
	 
	 	 
	“Services”

	 	the services set out in Schedule 2 to this Deed for which
the Trade Marks are registered, including the provision
of these services using the Domain Names or corresponding
website address but specifically excluding the provision
of any services via the Internet using any other domain
name or other electronic media;
	 
	 	 
	“Sub-Licensee”

	 	the beneficiary of any sub-license granted pursuant to
Clause 8.3;
	 
	 	 
	“Subsidiary”

	 	has the meaning given to it in section 9 of the
Corporations Act 2001 (Cth);
	 
	 	 
	“Tax”

	 	any value-added or goods and services tax, withholding
tax, charge (and associated penalty or interest), rate
duty or impost imposed by any Government Agency at any
time, but does not include any taxes on income or capital
gains;
	 
	 	 
	“Territory”

	 	Australia, New Zealand and Singapore;
	 
	 	 
	“Trade Marks”

	 	the trade marks short particulars of which are set out in
Schedule 1 to this Deed;
	 
	 	 
	“Transaction Document”

	 	has the same meaning as in the Sale and Purchase
Agreement;
	 
	 	 
	“Transition Services Agreement”

	 	the agreement entered between (amongst others) Borders International Services, Inc., Borders Australia, Borders
NZ, Borders Singapore and Licensee in relation to the
provision of certain services; and
	 
	 	 
	“Year”

	 	the period from the Effective Date to midnight on the
following 31 December, and any subsequent period of
twelve (12) months commencing the following 1 January or
any anniversary of that date while this Deed remains in
force (provided that the final Year of this Deed may be a
shorter period ending on the effective date of
termination of this Deed).

	1.2	 	In this Deed, 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 Deed) 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;
	 
	 	(v)	 	to parties means the parties to this Deed and to a party means
a party to this Deed;
	 
	 	(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 Deed;
	 
	 	(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 or Ann Arbor, Michigan time;

	 	(b)	 	headings are for convenience only and are ignored in interpreting this Deed;
	 
	 	(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;
	 
	 	  (h)	 	this Deed must not be construed adversely to a party solely because that party
was responsible for preparing it; and
	 
	 	  (i)	 	to $ or dollars are references to the lawful currency of the United States of
America at the date of this Agreement.

	2.	 	GRANT OF RIGHTS

	2.1	 	Subject to the terms and conditions of this Deed, Licensor grants to Licensee, with effect
from the Effective Date and without limit of period, an exclusive:

	 	  (a)	 	licence in the Territory to use and apply the Trade Marks on and in relation to
the sale of Goods and the provision of Services in Borders Stores, or using the Domain
Names or corresponding website address, including, without limitation, in connection
with the marketing, use, distribution, sale and disposal of the Goods and Services as
aforesaid. Such licence does not permit Licensee, and Licensee is prohibited, to use
and apply the Trade Marks on or in relation to the provision of any goods or services
via the Internet using any domain name or other electronic media save as aforesaid; and
	 
	 	  (b)	 	worldwide right to use the Domain Names in relation to the Goods and Services,
including, without limitation, in connection with the development, manufacture,
marketing, use, distribution, sale and disposal of the Goods and Services. The right
to use the Domain Names in this context means the right to use the Domain Names in any
manner whatsoever including the right to establish uniform resource locators for each
Domain Name, to display at such uniform resource locators such content relating to the
Goods and Services as Licensee shall determine in its absolute discretion and to
establish email addresses using the Domain Names.

	2.2	 	Licensee shall not actively solicit orders for the Goods and Services outside the Territory
but it shall not be prohibited from accepting any unsolicited orders for the Goods and
Services which it may receive from any other country.

	2.3	 	Licensor reserves the right itself to use and to license others to use the Trade Marks on or
in relation to goods or services (other than the Goods and Services) in the Territory without
recourse to Licensee provided that the other person does not constitute a Competing Business
(as that term is defined in the Sale and Purchase Agreement).

	2.4	 	Licensee shall at the request of Licensor pay any fees and costs necessary in connection with
the registration, maintenance and renewal of the Trade Marks and Domain Names in the Territory
(in respect of those Trade Marks and Domain Names which are registered or the subject of an
application for registration on the date of this Deed).

	2.5	 	In the event that any Trade Mark is capable of protection by registration, and is not already
the subject of an application or applications for registration in any country within the
Territory, Licensee shall on Licensor’s written request, at its own cost, be responsible for
the filing and prosecution of such applications in the name of Licensor and the maintenance
and renewal of any resulting Trade Mark registrations in such countries within the Territory
as it shall nominate. If and to the extent that Licensee does procure such Trade Mark
registrations in the name of Licensor, the rights granted to Licensee under this Clause 2
shall be deemed to include the right to use and apply the same subject to the terms of this
Deed.

 

 

	2.6	 	Subject to receiving the Internet Protocol addresses for Licensee’s domain name servers in
writing from Licensee within five (5) days of the Effective Date, Licensor agrees to amend, or
procure the amendment of, the registration for the Domain Names within fourteen (14) days of
the Effective Date so as to associate the Domain Names with the relevant domain name server
and to make such further amendments to the registration for the Domain Names as are necessary
from time to time in order to associate the Domain Names with any further or other domain name
servers notified to Licensor by Licensee at any time. Licensor agrees that any such further
amendments to the registration for any of the Domain Names shall be effected within fourteen
(14) days of such a request being made in writing by Licensee.

	2.7	 	Except to the extent expressly granted to Licensee in this Deed, Licensee will have none of
the powers conferred on authorised users of trade marks by section 26 of the Trade Marks Act
1995 (Cth).

	2.8	 	Licensee shall only use the BORDERS EXPRESS Trade Mark specified in Schedule 1 with the prior
consent of the Licensor (which consent shall not be unreasonably withheld) provided however
that no such consent shall be required in respect of Borders Stores that are similar in size
to the Borders Express stores operated by the Seller’s Group and comply with any guidelines in
respect of the BORDERS EXPRESS Trade Mark as specified by the Licensor.

	3.	 	LICENSEE OBLIGATIONS

	3.1	 	In addition to its obligations set out elsewhere in this Deed, Licensee shall during the term
of this Deed:

	 	  (a)	 	use the Trade Marks only in the form, colour, design, style and manner directed
or approved by Licensor in writing from time to time in accordance with this Deed, and
with appropriate legends as directed or approved by Licensor in writing clearly
identifying Licensor as the owner of the Trade Marks and indicating, in the form and
manner reasonably directed by Licensor, that the Trade Marks are used under licence
from Licensor;
	 
	 	  (b)	 	ensure that:

	 	(i)	 	all manufacturing, packaging, storage, marketing and supply
operations by which the Goods are manufactured, packaged, stored, marketed or
supplied under this Deed; and
	 
	 	(ii)	 	all of the Services that are marketed or supplied under this
Deed;

	 	 	 	are conducted to a standard consistent with good manufacturing, packaging, storage,
marketing and sales practice and in accordance with all applicable standards,
specifications and procedures as specified in Schedule 3 and/or as communicated by
Licensor in writing from time to time and provided that, subject to the terms of any
Transaction Document, nothing in this clause or this Deed will oblige the Licensee
to:

	 	(iii)	 	incur further expenses other than in the nature specified in
clauses 2.4, 3.2 and 3.3;
	 
	 	(iv)	 	seek the Licensor’s consent or approval prior to developing the
business of Borders Australia, Borders NZ or Borders Singapore (including
opening new stores) provided that the Licensee complies with clauses 3.2 and
3.3;
	 
	 	(v)	 	seek the Licensor’s consent or approval prior to sourcing or
selling the Goods and Services provided the Licensee complies with clause
3.1(i);

 

 

	 	(vi)	 	seek the Licensor’s consent or approval prior to any marketing
or promotions using the Trade Marks provided that the Licensee complies with
clause 3.1(i); or
	 
	 	(vii)	 	seek the Licensor’s consent or approval in connection with any
aspect of operating the business of Borders Australia, Borders NZ or Borders
Singapore provided that the Licensee complies with clauses 3.1(i), 3.2 and 3.3;

	 	(c)	 	at Licensee’s expense, provide Licensor, at its request, with samples of the
Goods. Without limitation, samples of the Goods proposed to be marketed or sold by
Licensee or any Sub-Licensee shall be submitted to Licensor for the Licensor’s records;
	 
	 	(d)	 	at Licensee’s expense, submit all proposed (whether by Licensee or any
Sub-Licensee) advertising copy and all other proposed promotional or marketing
materials regarding the Goods and Services and other materials featuring the Trade
Marks, including, without limitation, stationery, wrappings, packaging, point of
purchase materials, product catalogues and television commercials, to Licensor, at its
request, for its records and agrees to comply with clause 3.4;
	 
	 	(e)	 	not use the Trade Marks or Domain Names on or in relation to any other goods or
services;
	 
	 	(f)	 	not use on or in relation to any goods or services any mark or name deceptively
similar to, or substantially identical to, the Trade Marks;
	 
	 	(g)	 	except with respect to the Licensee’s Related Bodies Corporate’s trademarks,
logo, domain names or other proprietary or commercial name or designation, not, without
Licensor’s prior written consent, use or apply on or in relation to the Goods and
Services (including as or as part of a corporate, business or trading name) any other
trade mark, logo, domain name or other proprietary or commercial name or designation;
	 
	 	(h)	 	not make any representation or do any act which may be taken to indicate that
it has any right, title or interest in or to the ownership or use of any of the Trade
Marks or Domain Names other than under the terms of this Deed;
	 
	 	(i)	 	not do, cause or authorise to be done anything which will or may impair, damage
or be detrimental to the reputation or goodwill associated with Licensor or the Trade
Marks or Domain Names, which will or may adversely affect the value or validity of the
Trade Marks or Domain Names, which may bring the Trade Marks or Domain Names into
disrepute or which might jeopardise or invalidate any registration or application for
registration of the Trade Marks or Domain Names or Licensor’s title to the Trade Marks
or Domain Names (save that Licensor’s remedy for any challenge by Licensee to
Licensor’s ownership of the Trade Marks or Domain Names shall be as set out in Clause
9.2(g));
	 
	 	(j)	 	not register, in the Territory or elsewhere, the Domain Names, Trade Marks,
business names or any other trade mark, domain name or business name which is in
Licensor’s reasonable opinion substantially identical with, or deceptively similar to,
the Trade Marks or Domain Names or that constitutes any translation thereof into any
language spoken in the Territory;
	 
	 	(k)	 	upon Licensor’s request, provide all information or assistance, and execute any
instrument, that may be necessary or appropriate to register, maintain or renew the

 

 

	 	 	 	registration of the Trade Marks or Domain Names in Licensor’s (or its nominee’s)
name in the Territory, and shall keep Licensor regularly informed of any costs
incurred, or likely to be incurred, in connection with the same;
	 
	 	  (l)	 	indemnify Licensor and each member of Licensor’s Group and each of their
respective directors, officers and employees from and against any and all claims,
liabilities, proceedings, costs, damages, losses and expenses (including legal
expenses) incurred by any of them as a result of or in connection with (i) Licensee’s
performance of this Deed or the breach of any term of this Deed; (ii) the performance
by any Sub-Licensee of the relevant sub-licence granted pursuant to this Deed or the
breach of any term of such sub-licence; (iii) or any other negligent or wrongful act by
Licensee or any Sub-Licensee, or any of their respective directors, officers,
employees, agents or contractors; and
	 
	 	  (m)	 	use the Trade Marks in a minimum of fifteen (15) Borders Stores.

	3.2	 	The Licensee is required to comply with any direction from the Licensor in respect of new
branding of Borders Stores that are not yet open at the date of direction provided that the
Licensor;

	 	  (a)	 	also proposes to implement or implements such new branding in respect of all
new Borders branded stores to be opened outside the Territory after the date of
direction; and
	 
	 	  (b)	 	has consulted with the Licensee prior to the proposed implementation of new
branding contemplated in clause 3.2(a).

	3.3	 	The Licensee is required to comply with any direction from the Licensor in respect of
re-branding of Borders Stores existing at the date of direction provided that the Licensor:

	 	  (a)	 	has commenced the implementation of such re-branding in respect of at least 50%
of all Borders branded stores in the United States of America;
	 
	 	  (b)	 	has consulted with the Licensee prior to the proposed implementation of the
re-branding contemplated in clause 3.3(a); and
	 
	 	  (c)	 	is only required to implement any re-branding of Borders Stores over an
equivalent period of time as the Licensor has or has undertaken to implement the
re-branding contemplated in clause 3.3(a), and

	3.4	 	If the Licensor notifies the Licensee in writing that a particular use of the Trade Marks by
the Licensee (including in connection with Products, promotional or marketing materials) is
contrary to clause 3.1(i), then the Licensee must, as soon as practicable, cease that
particular usage of the Trade Marks.

	4.	 	PAYMENTS AND RECORDS

	4.1	 	All sums payable under this Deed:

	 	  (a)	 	are quoted exclusive of any Tax which shall be paid in addition upon the
provision by Licensor of a valid tax invoice; and
	 
	 	  (b)	 	shall be made in U.S. dollars to the credit of a bank account to be designated
in writing by Licensor.

	4.2	 	If Licensee fails to pay any sum due under this Deed by the due date, Licensor shall be
entitled to charge interest on that sum at the rate of 2% above the base lending rate from
time

 

 

	 	 	to time of Australia and New Zealand Banking Group Limited. Such interest shall accrue on a
daily basis and be compounded quarterly.

	4.3	 	Following the provision of reasonable notice by the Licensor to the Licensee, Licensee shall
permit Licensor by its duly authorised representatives once a Year, on a date and time (to be
during business hours) agreed between Licensor and Licensee to enter upon any premises where
the Goods are being manufactured, packaged or stored or from which the Services are being
provided and to have access to (including the right to review and take copies of) all relevant
books, records, accounts and other information necessary or appropriate to enable Licensor to
verify that Licensee is in due compliance with its obligations under this Deed, and comply
promptly with all instructions and directions issued by Licensor (or its representatives) on
the basis of such inspection to ensure such compliance. Such records shall, for the avoidance
of doubt, constitute Confidential Information of Licensee (or any Sub-Licensee, as
appropriate).

	4.4	 	If at any time an applicable law obliges Licensee to make a deduction or withholding in
respect of Taxes from a payment to Licensor under this Agreement, Licensee:

	 	  (a)	 	must notify Licensor in writing of the obligation promptly after Licensee
becomes aware of it;
	 
	 	  (b)	 	must ensure that the deduction or withholding does not exceed the minimum
amount required by law;
	 
	 	  (c)	 	must pay to the relevant Government Agency on time the full amount of the
deduction or withholding and promptly deliver to Licensor a copy of any receipt,
certificate or other proof of payment; and
	 
	 	  (d)	 	must pay to Licensor, at the time that the payment to Licensor is due, an
additional amount that ensures that, after the deduction or withholding is made,
Licensor receives a net sum equal to the sum that it would have received if the
deduction or withholding had not been made.

	5.	 	INTELLECTUAL PROPERTY RIGHTS

	5.1	 	Ownership

	 	  (a)	 	Licensor warrants that it is the registered owner of the Trade Marks and the
Domain Names listed in Schedules 1 and 4 and can, without breach of any relevant laws
or agreements to which it is a party, enter into, and perform, this Deed.
	 
	 	  (b)	 	Licensee acknowledges Licensor’s ownership of and/or right to license the Trade
Marks and the Domain Names, and acknowledges that Licensee’s use of the Trade Marks and
Domain Names pursuant to this Deed shall not give Licensee any right, title or interest
in or to the same, save the right to use the same as expressly permitted by this Deed.
Without limitation to the foregoing, Licensee acknowledges and agrees that all goodwill
in or associated with the Trade Marks and the Domain Names, including any goodwill
generated or arising by or through Licensee’s activities under this Deed, shall accrue
for the benefit of and shall belong exclusively to Licensor.

	5.2	 	Infringement of the Trade Marks and Domain Names

	 	  (a)	 	Licensee shall as soon as reasonably possible give written notice to Licensor
of any activity which amounts to an infringement of, challenge to or unauthorised use
of, any of the Trade Marks or Domain Names which shall come to its notice (including,
without limitation, any activity or proceedings commenced in which the ownership,

 

 

	 	 	 	validity or registration of any of the Trade Marks or Domain Names is called into
question) providing all details available to Licensee concerning such activity.
	 
	 	  (b)	 	Licensor shall have conduct of all legal proceedings relating to the Trade
Marks or Domain Names and shall in its sole discretion take any action as it thinks
fit, but shall not institute any action (including instituting or defending legal
proceedings) in respect of any infringement, challenge or unauthorised use of any of
the Trade Marks or Domain Names, where, in Licensor’s reasonable opinion, formed in
good faith and having regard to the interests of Licensee and all other relevant
circumstances, the infringement, challenge or unauthorised use does not materially
adversely affect Licensee’s exercise of the rights and licences granted under this
Deed. The Licensor must keep the Licensee informed of any action or, where reasonably
possible, proposed action to be taken by the Licensor as contemplated by this clause.
	 
	 	  (c)	 	Where Licensor takes any action in respect of the infringement of, challenge to
or unauthorised use of, any of the Trade Marks or Domain Names, Licensee acknowledges
that Licensor shall be solely responsible for the conduct of such action, including the
prosecution, defence or settlement of any legal proceedings, and Licensee shall make no
admission as to liability and shall not agree to any settlement or compromise of any
action or legal proceedings, and shall at Licensor’s expense (subject to Licensor’s
prior written approval of the same) give Licensor all such assistance as Licensor may
reasonably require in connection therewith. The Licensor must keep the Licensee
informed, to the extent reasonably possible or practicable, of the progress of any such
action or proceedings.
	 
	 	  (d)	 	Should Licensor, within twenty-one (21) days of becoming aware of the
infringement, decide not to take any action in respect of infringement of, challenge to
or unauthorised use of, any of the Trade Marks or Domain Names of which it is advised
by Licensee pursuant to Clause 5.2(a), it shall so notify Licensee in which event
Licensee shall be entitled, at its sole cost, to take such action (including
instituting or defending legal proceedings) as it thinks fit. Licensor shall, at
Licensee’s expense, give Licensee all such assistance as Licensee may reasonably
require in connection with such action and Licensee shall keep Licensor informed of any
progress in respect of the same and shall not make any admission as to liability or
agree to any settlement or compromise of any action or legal proceedings without
Licensor’s prior written consent not to be unreasonably withheld or delayed.

	6.	 	LIABILITY

	6.1	 	To the maximum extent permitted by law, this Clause 6 prevails over all other Clauses and
sets forth the entire liability of Licensor, and the sole and exclusive remedies of Licensee
in respect of the performance, non-performance, purported performance or delay in performance
of this Deed or otherwise in relation to this Deed or the entering into or performance of this
Deed.

	6.2	 	Nothing in this Deed shall exclude or limit either party’s liability: (i) for fraud or the
tort of deceit; (ii) for death or personal injury caused by its breach of duty; (iii) for any
other liability which cannot be excluded or limited by applicable law.

	6.3	 	Save as provided in Clause 6.2 and to the maximum extent permitted by law, Licensor shall not
have any liability for any loss of actual or anticipated profit (including loss of profits on
contracts), loss of the use of money, loss of anticipated savings, loss of opportunity, loss
of goodwill, loss of reputation or for any indirect or consequential loss or damage (whether
any such loss or damage was foreseen, foreseeable, known or otherwise) arising out of or
relating to this Deed or any collateral contract (including any liability expressly provided
for under

 

 

	 	 	this Deed or arising by reason of the invalidity or unenforceability of any term of this
Deed), whether such liability arises in contract, tort (including negligence) or otherwise.

	7.	 	CONFIDENTIALITY

	7.1	 	Each party shall maintain the confidentiality of the other party’s Confidential Information
and shall not, without the prior written consent of the other, use, disclose, copy or modify
the other party’s Confidential Information (or permit others to do so) other than as necessary
for the performance of its rights and obligations under this Deed.

	7.2	 	Each party undertakes to disclose the other party’s Confidential Information only to those of
its directors, officers, employees, agents and contractors to whom, and to the extent to
which, such disclosure is necessary for the performance of its rights and obligations under
this Deed and to procure that such persons are made aware of and agree in writing to observe
the obligations in this Clause 7.

	7.3	 	Each party shall give notice to the other of any unauthorised use or disclosure, or misuse,
theft or other loss, of the other party’s Confidential Information immediately upon becoming
aware of the same.

	7.4	 	The provisions of this Clause 7 shall not apply to information which:

	 	  (a)	 	is or comes into the public domain through no fault of the recipient, its
directors, officers, employees, agents or contractors;
	 
	 	  (b)	 	is lawfully received from a third party free of any obligation of confidence at
the time of its disclosure;
	 
	 	  (c)	 	was (demonstrably) independently developed by the recipient, its directors,
officers, employees, agents or contractors;
	 
	 	  (d)	 	is required by law, by court or governmental order to be disclosed provided
that, to the extent permitted by law, prior to any disclosure, the recipient notifies
the disclosing party and, at the disclosing party’s request and cost, assists the
disclosing party in opposing any such disclosure.

	7.5	 	The existence and terms of this Deed are confidential and may not be disclosed by either
party without the other party’s prior written consent.

	8.	 	ASSIGNMENT AND SUB-LICENSING

	8.1	 	Licensor may freely assign or otherwise transfer or deal with any or all of its rights or
obligations under this Deed without recourse to Licensee save that Licensor shall ensure that
any purchaser of the Trade Marks or Domain Names shall take an assignment of this Deed.

	8.2	 	Save as provided in clause 8.3 and 8.4, Licensee shall not assign, transfer, encumber or
otherwise deal with or transfer any of its rights or obligations under this Deed without the
prior written consent of Licensor.

	8.3	 	Licensee may sub-license to any of its Holding Companies, Subsidiaries or Subsidiaries of its
Holding Company any or all of the rights and licences granted to it under this Deed provided
that:

	 	  (a)	 	Licensee obtains prior written consent from Licensor which consent must not be
unreasonably withheld if:

 

 

	 	(i)	 	the Licensor is satisfied that the sub-licensee is a
respectable and financially responsible person; and
	 
	 	(ii)	 	the sub-licensee agrees to comply with the terms of this Deed
and agrees that the sub-licence will terminate immediately upon the
sub-licensee ceasing to be a Holding Company or Subsidiary of the Licensee;

	 	  (b)	 	the appointment of any sub-licensee is on terms which specifically afford to
Licensor no less protection of its proprietary interests than that afforded by the
terms of this Deed and which ensure that the scope of rights and licences granted to
sub-licensees does not exceed the scope of rights and licences granted to Licensee
under this Deed; and
	 
	 	  (c)	 	all such sub-licences shall include a term (i) requiring Licensee to notify
Licensor of any breach of the sub-licence by sub-licensee as soon as Licensee becomes
aware of the same; and (ii) permitting Licensee, at Licensor’s option, a right to
terminate or to assign the sub-licence to Licensor, on termination of this Deed.

	8.4	 	Notwithstanding any other provisions in this Deed, Licensee may sub-licence any or all of the
rights and licences granted to it under this Deed to Borders Australia, Borders NZ, Borders
Singapore and/or Spine Newco (NZ) Limited Company No. 2010994 as the owner of Borders NZ
without the consent of the Licensor and Licensor agrees that Spine Newco (NZ) Limited Company
No. 2010994, Borders NZ, Borders Australia and Borders Singapore shall have the benefit of the
rights and licences granted under this Deed as if they were the Licensee provided that the
Licensee procures the compliance by those parties with the terms of this Deed and agrees that
the sub-licence will terminate immediately upon any sub-licensee ceasing to be a Holding
Company or Subsidiary of the Licensee.

	8.5	 	Either party may grant to its financiers from time to time (or any security trustee on their
behalf) Encumbrances over their rights under this agreement.

	9.	 	TERM AND TERMINATION

	9.1	 	This Deed shall commence on the Effective Date and, unless earlier terminated in accordance
with this Clause 9, shall continue in full force and effect without limit of period.

	9.2	 	Licensor may terminate this Deed immediately at any time by written notice to Licensee if:

	 	  (a)	 	Licensee commits a material breach of this Deed (including any breach of its
payment obligations under this Deed) 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)	 	the Transition Services Agreement is terminated in accordance with Clauses 12.5
or 12.7 of that agreement;
	 
	 	  (c)	 	the Purchasing Agreement is terminated in accordance with Clause 13.2 or 13.4
of that agreement;
	 
	 	  (d)	 	the Sale and Purchase Agreement is terminated due to an uncured material breach
of that agreement;
	 
	 	  (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 Licensor may not terminate this Deed pursuant
to this

 

 

	 	 	 	clause 9.2(e) if 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)	 	Licensee ceases to do business, becomes unable to pay its debts as they fall
due, becomes or is deemed insolvent, has a receiver, manager, administrator,
administrative receiver or similar officer appointed in respect of the whole or any
part of its assets or business, makes any composition or arrangement with its
creditors, takes or suffers any similar action in consequence of debt, an order or
resolution is made for its dissolution or liquidation (other than for the purpose of
solvent amalgamation or reconstruction), enters into liquidation whether compulsorily
or voluntarily or any equivalent or similar action or proceeding is taken or suffered
in any jurisdiction; or shall cease to carry on business.
	 
	 	  (g)	 	Licensee challenges or disputes the validity or ownership of, or takes any step
inconsistent with, any of the Trade Marks or Domain Names, including by taking any
action either directly or indirectly to oppose the renewal of or to cancel any
registration of the Trade Marks or Domain Names;
	 
	 	  (h)	 	Licensee ceases to use the Trade Marks or Domain Names in relation to the Goods
and Services in the Territory for a continuous period of twelve (12) months;
	 
	 	  (i)	 	Licensee acts in a manner which results in material damage to the reputation of
the Trade Marks or Domain Names;
	 
	 	  (j)	 	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 any
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 (which consent must not be unreasonably withheld to the
extent the change of Control is not to a person referred to in paragraph (i)
above); or

	 	  (k)	 	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;
	 
	 	  (l)	 	any Sub-Licensee either (i) does any act or fails to take any action where such
act or omission would constitute a material breach of this Deed if taken by, or was the
responsibility of (as appropriate), Licensee; or (ii) commits a material breach of its
sub-licence which is not remediable or, if remediable, Sub-Licensee has failed to
remedy within thirty (30) days of Licensee notifying Licensor of the relevant breach;
or
	 
	 	  (m)	 	the Trade Marks are used in less than fifteen (15) Borders Stores.

	9.3	 	Upon expiry or termination of this Deed for any reason:

	 	  (a)	 	all rights and licences granted to Licensee under this Deed shall within 90
days cease immediately, and Licensee shall, subject to the remainder of this Clause
9.3, cease all activities authorised by this Deed and Licensee shall not thereafter use
or apply any of the Domain Names or any of the Trade Marks or any marks or domain names

 

 

	 	 	 	which are, substantially identical with, or deceptively similar to, the Domain Names
or the Trade Marks and shall procure that any Sub-Licensee(s) do likewise;
	 
	 	(b)	 	Licensee shall ensure that all references to the Trade Marks or Domain Names on
its or its Sub-Licensee’s premises, vehicles, business documents or other documents or
materials of any nature are removed and shall remove any reference to the Trade Marks
in its company and/or trading name; and
	 
	 	(c)	 	Subject to clause 7.4, each party shall promptly return and procure the return
to the other party, or, at the other party’s direction, destroy, all property of the
other party (including without limitation, all Confidential Information) then in its
possession, custody or control and shall not retain any copies of the same.

	9.4	 	Termination of this Deed for any reason shall be without prejudice to any rights or remedies
available to, or any obligations or liabilities accrued to, either party at the effective date
of termination and shall not affect any sub-licences granted by Licensee pursuant to the terms
of this Deed.

	9.5	 	If any Trade Mark is not used in either New Zealand or Australia for a twelve month period,
the licence for that Trade Mark in the applicable country shall cease.

	10.	 	NOTICES

	10.1	 	Any notice, demand or other communication (“Notice”) to be given by one party to the other
party under this Deed shall be in writing and signed by or on behalf of the party giving it.
It shall be served by sending it by fax to the number set out in Clause 10.2 or delivering it
by hand, or sending it by pre-paid recorded delivery or special delivery, to the address set
out in Clause 10.2 and in each case marked for the attention of the relevant addressee set out
in Clause 10.2 (or as otherwise notified from time to time in accordance with the provisions
of this Clause 10). Any notice so served by hand, fax or post shall be deemed to have been
duly given:

	 	(a)	 	in the case of delivery by hand, when delivered;
	 
	 	(b)	 	in the case of fax, at the time of transmission;

	 	 	provided that in each case where delivery by hand or by fax 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.

	10.2	 	The address and fax numbers of the parties for the purpose of Clause 10.1 are as follows:

	 	 	 
	Licensor
	 	 
	 
	 	 
	Address:

	 	100 Phoenix Drive
	 

	 	Ann Arbor MI 48108
	 

	 	United States of America
	 
	 	 
	Fax:

	 	+1 734 477 1370
	 
	 	 
	For the attention of:

	 	General Counsel
	 
	 	 
	with a copy to:
	 	 
	Address:

	 	Baker & McKenzie
	 

	 	Level 27, 50 Bridge Street,

 

 

	 	 	 
	 
	 	Sydney NSW 2000
	Fax:
	 	+61 2 9225 1595
	 
	 	 
	For the attention of:

	 	Steven Glanz
	 
	 	 
	Licensee
	 	 
	 
	 	 
	Address:

	 	Level 14, 379 Collins Street
	 

	 	Melbourne VIC 3000
	 

	 	Australia
	 
	 	 
	Fax:

	 	+61 3 8623 1149
	 
	 	 
	For the attention of:

	 	the Managing Director
	 
	 	 
	With a copy to:

	 	Clayton Utz
	 
	 	 
	Address:

	 	Level 19, 1 O’Connell Street
	 

	 	Sydney NSW 2000
	 
	 	 
	Fax:

	 	+61 2 8220 6700
	 
	 	 
	For the attention of:

	 	Philip Kapp

	10.3	 	A party may notify the other party to this Deed of a change to its name, relevant addressee,
address or fax number for the purposes of this Clause 10 provided that, such notice shall only
be effective on:

	 	(a)	 	the date specified in the notice 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 (5) Business
Days after the date on which notice is given, the date following five (5) Business Days
after notice of any change has been given.

	10.4	 	In proving such service it shall be sufficient to prove that the envelope containing such
notice was properly addressed and delivered either to the address shown thereon or that the
facsimile transmission was made and a facsimile confirmation report was received, as the case
may be.

	11.	 	NO PARTNERSHIP OR AGENCY
	 
	 	 	No provision of this Deed creates a partnership between the parties or makes a party the
agent of the other party for any purpose. A party has no authority to bind, to contract in
the name of or to create a liability for the other party in any way or for any purpose and
neither party shall hold itself out as having authority to do the same.

	12.	 	INVALID OR UNENFORCEABLE PROVISIONS

	12.1	 	If a provision of this Deed 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.

	13.	 	WAIVER AND EXERCISE OF RIGHTS

	 	(a)	 	A waiver by a party of a provision or of a right under this Deed 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.

	14.	 	AMENDMENT

	14.1	 	This Deed may be amended only by a document signed by all parties.

	15.	 	COUNTERPARTS

	15.1	 	This Deed may be signed in counterparts and all counterparts taken together constitute one
document.

	16.	 	FURTHER ASSURANCES

	16.1	 	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 Deed and
the transactions contemplated by this Deed.

	17.	 	ASSIGNMENT

	17.1	 	Subject to clause 17.2, a party must not transfer, assign, create an interest in or deal in
any other way with any of its rights under this Deed without the prior written consent of the
other parties.

	17.2	 	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.

	18.	 	ENTIRE AGREEMENT

	18.1	 	This Deed represents the whole and only agreement between the parties in relation to the
Trade Marks and the Domain Names and supersedes 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 Deed shall exclude any liability for, or remedy in respect of,
fraudulent misrepresentation.

	19.	 	RIGHTS CUMULATIVE

	19.1	 	The rights, remedies and powers of the parties under this Deed are cumulative and not
exclusive of any rights, remedies or powers provided to the parties by law.

 

 

	20.	 	CONSENTS AND APPROVALS

	20.1	 	A party may give its approval or consent conditionally or unconditionally or withhold its
approval or consent in its absolute discretion unless this Deed expressly provides otherwise.

	21.	 	SERVICE OF PROCESS

	21.1	 	Each party agrees that a document required to be served in proceedings about this Deed 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 10; or
	 
	 	(b)	 	in any other way permitted by law.

	22.	 	CURRENCY CONVERSION

	22.1	 	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.

	23.	 	GOVERNING LAW

	23.1	 	This Deed is governed by the laws of New South Wales, Australia.

Executed as a deed.

Signed for and on behalf of

Borders Properties Inc.

by its duly authorised representative

in the presence of:

	 	 	 	 	 
	 
	 

	 	 	 	 
	Signature of witness

	 	Signature of authorised representative
	 	 
	 
	 	 	 	 
	 
	 

	 	 	 	 
	Name of witness (please print)

	 	Name of authorised representative	 	 
	 

	 	(please print)	 	 

	 	 	 	 	 
	Signed sealed and delivered 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:

	 	 
	 	 
	 

	 	 	 	 

 

 

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature of Attorney	 	 
	 
	 	 	 	 
	 
	 

	 	 	 	 
	Signature of Witness

	 	Name of Attorney in full
	 	 
	 
	 	 	 	 
	 
	 

Name of Witness in full

	 	 	 	 

 

 

SCHEDULE 1

THE TRADE MARKS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Country	 	Mark	 	Class	 	 	Reg No.	 	 	Renewal Date
	Australia

	 	BORDERS
	 	 	42	 	 	 	613578	 	 	13/10/13
	 
	Australia

	 	BORDERS
	 	 	42	 	 	 	706042	 	 	09/04/16
	 
	Australia

	 	BORDERS EXPRESS
	 	 	35	 	 	 	1094083	 	 	10/01/16
	 
	Australia

	 	BORDERS OUTLET
	 	 	35	 	 	 	1094082	 	 	10/01/16
	 
	Australia

	 	BORDERS REWARDS
	 	 	35	 	 	 	1112963	 	 	10/05/16
	 
	New Zealand

	 	BORDERS
	 	 	42	 	 	 	230795	 	 	06/10/14
	 
	New Zealand

	 	BORDERS
	 	 	38	 	 	 	260777	 	 	10/04/17
	 
	New Zealand

	 	BORDERS REWARDS
	 	 	35	 	 	 	747673	 	 	09/11/15
	 
	Singapore

	 	BORDERS
	 	 	16	 	 	 	B801593	 	 	14/10/13
	 
	Singapore

	 	BORDERS
	 	 	9	 	 	 	801493	 	 	14/10/13
	 
	Singapore

	 	BORDERS
	 	 	42	 	 	 	3960/96	 	 	20/04/16
	 
	Singapore

	 	BORDERS
	 	 	35	 	 	 	T99/00633G	 	 	25/01/09
	 
	Singapore

	 	BORDERS
	 	 	42	 	 	 	T99/01339B	 	 	13/02/09

 

 

SCHEDULE 2

GOODS AND SERVICES

	A.	 	Services:

Retail book services, including the retailing of books, magazines, calendars, stationery,
pre-recorded books and newspapers; pre-recorded music in various forms, DVDs, video cassettes,
pre-recorded video in various forms and multimedia and ancillary book search services;

Retail music services, including the retail of pre-recorded music in various forms such as audio
tapes and CDs;

Retail record store services, including the retail of pre-recorded video tape and DVDs;

Retail mail order services, including books, magazines, calendars, stationery, pre-recorded books,
CD-ROMS, pre-recorded video tapes, DVDs, pre-recorded music and records through catalogues and
newsletters;

Dine-in and carry-out restaurant services; and

Frequent patron programs.

	B.	 	Goods

Music-related products

Tote bags

Electronic gift cards

 

 

SCHEDULE 3

LICENSOR’S CRITERIA

 

 

SCHEDULE 4

THE DOMAIN NAMES

	 	 	 
	Country	 	Domain Name
	Australia
	 	borderstores.com.au

	 
	 	 

	Australia
	 	borders.com.au

	 
	 	 

	Australia
	 	bordersexpressaustralia.com.au

	 
	 	 

	Australia
	 	bordersaustralia.com.au

	 
	 	 

	Australia
	 	bordersgiftcentre.com.au

	 
	 	 

	Australia
	 	bordersrewards.com.au

	 
	 	 

	Australia
	 	bordersnewzealand.com.au

	 
	 	 

	New Zealand
	 	borders.co.nz

	 
	 	 

	New Zealand
	 	bordersexpress.co.au

	 
	 	 

	New Zealand
	 	bordersexpressnz.co.nz

	 
	 	 

	New Zealand
	 	giftcentre.co.nz

	 
	 	 

	New Zealand
	 	bordersrewards.co.nz

	 
	 	 

	Singapore
	 	borders.sg

	 
	 	 

	Singapore
	 	borders.com.sg

	 
	 	 

	Singapore
	 	bordersrewards.sg

	 
	 	 

	Singapore
	 	bordersrewards.com.sg

	 
	 	 

	Singapore
	 	bordersstores.com.sgexv10w41

Exhibit 10.41

Purchasing Agreement

Borders Group, Inc.

Borders Australia Pty Ltd

Borders New Zealand Limited

Borders Pte. Ltd

Spine Newco Pty Limited

Spine Newco (NZ) Limited

A&R Whitcoulls Group Holdings Pty Limited

 

For the supply of products and the provision of

purchasing 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

Baker & McKenzie

Solicitors

Level 27, AMP Centre

50 Bridge Street

SYDNEY NSW 2000

Tel: (02) 9225-0200

Fax: (02) 9225-1595

 

 

CONTENTS

	 	 	 	 	 
	Clause	 	Page	 
	1. Interpretation
	 	 	3	 
	2. SUPPLY OF PRODUCTS and PAPERCHASE PRODUCTS
	 	 	7	 
	3. Provision of Purchasing Support Services DURING Term
	 	 	8	 
	4. Co-operation and Management
	 	 	9	 
	5. Dispute Resolution
	 	 	9	 
	6. Fees and Other Costs
	 	 	9	 
	7. Invoicing and Late Payments
	 	 	10	 
	8. Other Obligations
	 	 	10	 
	9. Limitation of Liability
	 	 	10	 
	10. Confidentiality
	 	 	12	 
	11. Assignment and Sub-contracting
	 	 	13	 
	12. Force Majeure
	 	 	13	 
	13. Term and Termination
	 	 	13	 
	14. Notices
	 	 	15	 
	15. Invalid or unenforceable provisions
	 	 	16	 
	16. Waiver and exercise of rights
	 	 	16	 
	17. Amendment
	 	 	16	 
	18. Counterparts
	 	 	17	 
	19. Further assurances
	 	 	17	 
	20. Entire agreement
	 	 	17	 
	21. Rights cumulative
	 	 	17	 
	22. Consents and Approvals
	 	 	17	 
	23. Jurisdiction
	 	 	17	 
	24. Service of process
	 	 	17	 
	25. Currency Conversion
	 	 	17	 
	26. Governing Law
	 	 	18	 
	 
	 	 	 	 
	SCHEDULE 1

PRODUCTS AND PAPERCHASE PRODUCTS
	 	 	19	 
	SCHEDULE 2

PURCHASING SUPPORT SERVICES
	 	 	20	 
	SCHEDULE 3

TERMS OF SALE
	 	 	21	 
	SCHEDULE 4

FEES, REBATES AND PAYMENT TERMS
	 	 	24	 

 

 

DATE:

PARTIES:

	(1)	 	BORDERS GROUP, INC., a company incorporated under the laws of Michigan, USA and having its
registered office at 100 Phoenix Drive, Ann Arbor, Michigan 48108 USA (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 c/o Baker & McKenzie, Level 27, AMP Centre, 50
Bridge Street, Sydney NSW 2000 (“Borders Australia”);

	(3)	 	BORDERS NEW ZEALAND LIMITED, a company incorporated under the laws of New Zealand and having
its registered office c/o Minter Ellison Rudd Watts, Lumley Centre, 88 Shortland Street,
Auckland, New Zealand (“Borders NZ”);

	(4)	 	BORDERS PTE. LTD., a company incorporated under the laws of Singapore with registered number
199705017Z and having its registered office at 60B Martin Road, 02 08B Singapore Trademart 239
067, Singapore (“Borders Singapore”);

	(5)	 	A&R WHITCOULLS GROUP HOLDINGS PTY LIMITED, a company incorporated under the laws of Australia
ACN 108 801 127 and having its registered office at Level 14, 379 Collins Street, Melbourne
VIC 3000 (“ARW”);

	(6)	 	SPINE NEWCO PTY LIMITED, a company incorporated under the laws of Australia ACN 127 667 314
and having its registered office at Level 31, 126 Phillip Street, Sydney, NSW 2000 (the “First
Purchaser”); and .

	(7)	 	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, Level 7, 28 Brandon
Street, Wellington, New Zealand (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 supply of
certain products and related services and the Provider is prepared to provide certain products
and services to the Recipients 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;

3

 

	 	 	 
	“ARW-branded stores”

	 	stores operated under the branding or trade marks owned
by ARW or its Related Bodies Corporate;
	 
	 	 
	“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
and 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;
	 
	 	 
	“Competing Business”

	 	has the same meaning as in the Sale and Purchase
Agreement;
	 
	 	 
	“Completion”

	 	has the same meaning as in the Sale and Purchase
Agreement;
	 
	 	 
	“Concession”

	 	has the meaning set out in clause 2.5;
	 
	 	 
	“Control”

	 	has the same meaning as in section 50AA of the
Corporations Act 2001 (Cth);
	 
	 	 
	“GST”

	 	with respect to Australia has the meaning given to it in
the A New Tax System (Goods and Services Tax) Act 1999
(Cth) or any like tax and with respect to New Zealand or
Singapore means the tax payable pursuant to the Goods
and Services Tax Act 1985 (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

4

 

	 	 	 
	 	 	any collateral contract);
	“Paperchase”
	 	Paperchase Products Limited, having its registered
office at 12 Alfred Place, London WC1E 7EB;
	 
	 	 
	“Paperchase Products”

	 	any products which meet the descriptions set out in
Schedule 1, Part B;
	 
	 	 
	“Products”

	 	any products which meet the descriptions set out in
Schedule 1, Part A;
	 
	 	 
	“Provider Competing
Business”

	 	means a business of selling or distributing books,
magazines, CDs, DVDs and similar products which is
controlled or operated by any of the following, one or
more of their Related Bodies Corporate or their
successors or assigns:
	 
	 	 
	 

	 	     (a) Barnes & Noble, Inc;
	 
	 	 
	 

	 	     (b) Dymocks Holdings Pty Ltd;
	 
	 	 
	 

	 	     (c) Amazon.Com, Inc;
	 
	 	 
	 

	 	     (d) Books-a-Million Inc;
	 
	 	 
	 

	 	     (e) Fnac france;
	 
	 	 
	 

	 	     (f) Kinokuniya Company Ltd; and
	 
	 	 
	 

	 	     (g) Indigo Books & Music Inc.
	 
	 	 
	“Purchasing Support
Services”

	 	means the services referred to in Schedule 2;
	 
	 	 
	“Recipients”

	 	Borders Australia, Borders NZ, Borders Singapore and ARW;
	 
	 	 
	“Related Body Corporate”

	 	has the meaning given in the Corporations Act 2001 (Cth);
	 
	 	 
	“Sale and Purchase
Agreement”

	 	the agreement entered into between the Seller and the
Purchasers effecting the sale of the Shares;
	 
	 	 
	“Seller”

	 	means the Provider;
	 
	 	 
	“Seller’s Group”

	 	has the same meaning as in the Sale and Purchase
Agreement;
	 
	 	 
	“Service Managers”

	 	the respective parties’ representatives responsible for
managing the Purchasing Support Services and identified
as such by the relevant party;
	 
	 	 
	“Shares”

	 	the issued share capital of the Recipients (other than
ARW);
	 
	 	 
	“Term”

	 	the period from the Commencement Date until the
Termination Date;

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	“Termination Date”

	 	the date specified in clause 13.1, provided that if this
Agreement is terminated sooner pursuant to either clause
13.2, 13.3 or 13.4, it will be such earlier date.
	 
	 	 
	“Terms of Sale”

	 	the terms and conditions upon which consignments of
Products and Paperchase Products will be supplied by the
Provider to the Recipients as set out in Schedule 3;
	 
	 	 
	“Transaction Documents”

	 	has the same meaning as in the Sale and Purchase
Agreement; and
	 
	 	 
	“Transition Services
Agreement”

	 	has the same meaning as in the Sale and Purchase
Agreement.

	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;
	 
	 	(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

6

 

	 	(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;
	 
	 	  (h)	 	this Agreement must not be construed adversely to a party solely because that
party was responsible for preparing it; and
	 
	 	  (i)	 	to $ or dollars are references to the lawful currency of the United States of
America at the date of this Agreement.

	2.	 	SUPPLY OF PRODUCTS AND PAPERCHASE PRODUCTS
	 
	2.1	 	During the Term, the Provider shall supply Products in accordance with this Agreement.
	 
	2.2	 	The Provider will supply the Products pursuant to the Terms of Sale.
	 
	2.3	 	For the period of 12 months from the Commencement Date, the Provider shall supply Paperchase
Products in accordance with this Agreement.
	 
	2.4	 	The Provider will supply the Paperchase Products pursuant to the Terms of Sale.
	 
	2.5	 	For the period of 12 months from the Commencement Date, the Provider grants to the relevant
Recipients an exclusive, non-transferable right in Australia, New Zealand and Singapore only
to display Paperchase-branded merchandising and promotional materials as supplied by or on
behalf of the Provider, solely in relation to the sale of Paperchase Products in
Paperchase-branded concessions within Borders-branded stores (each, a “Concession”). The
Provider will supply such materials as it reasonably requires to be placed in the Concessions.
The Provider will supply the materials at cost and the relevant Recipients will pay for the
materials within 60 days from the date of invoice. Except as otherwise set out in this clause
2.5, supply arrangements in relation to the materials, including shipping and insurance, will
be on the same basis as the supply of Products as set out in the Terms of Sale.

7

 

	2.6	 	Each relevant Recipient will:

	 	  (a)	 	endeavour to maximise the sales of Paperchase Products from Concessions;
	 
	 	  (b)	 	co-operate with, and comply with all reasonable requests of Paperchase and the
Provider in relation to the layout of, Concessions, the decoration of Concessions, the
installation of shopfittings and the placing of Paperchase Products;
	 
	 	  (c)	 	comply with all reasonable requests of Paperchase and the Provider relating to
the use by the relevant Recipients of the name “Paperchase”, and take whatever action
Paperchase or the Provider may reasonably require (at the Provider’s cost) in the event
of the unauthorised use of the name “Paperchase” by any other person;
	 
	 	  (d)	 	not do anything or omit to do anything which would detrimentally affect the
goodwill in the name “Paperchase”;
	 
	 	  (e)	 	employ sufficient and appropriately qualified persons to work in relation to
the Concessions;
	 
	 	  (f)	 	unless Paperchase and the Provider otherwise agree, only use advertising and
promotional material in relation to the Paperchase Products and the Concession which is
consistent with the Paperchase brand, promotional and merchandising guidelines and
manuals;
	 
	 	  (g)	 	only source Paperchase Products directly from the Provider or Paperchase; and
	 
	 	  (h)	 	operate the Concessions to at least the same high standards as Paperchase
operates its shops and concessions in England.

	2.7	 	The Recipients acknowledge and agree that they are only entitled to sell:

	 	  (a)	 	the Products directly to consumers from Borders-branded stores and ARW-branded
stores; and
	 
	 	  (b)	 	Paperchase Products directly to consumers from Borders-branded stores;

	 	 	during the relevant Term in Australia, New Zealand and Singapore and that they will not,
whether directly or indirectly, sell the Products or Paperchase Products, or permit or
authorise any third party to sell the Products or Paperchase Products, from stores which are
not:

	 	  (c)	 	in respect of the Products — either Borders-branded or ARW-branded stores;
	 
	 	  (d)	 	in respect of the Paperchase Products — Borders branded stores.

	2.8	 	Nothing in this Agreement shall prevent the Provider from supplying Products or items similar
in nature to the Products to any other person provided that the other person does not
constitute a Competing Business.

	2.9	 	After the expiry of the exclusivity period set out in clause 2.5, nothing in this Agreement
shall prevent the Provider from supplying Paperchase Products or similar items in nature to the
Paperchase Products to any other person provided the other person does not constitute a Competing
Business.
	 
	3.	 	PROVISION OF PURCHASING SUPPORT SERVICES DURING TERM
	 
	3.1	 	During the Term, the Provider shall supply or procure the supply of, and the Recipients shall
pay for, the Purchasing Support Services.

8

 

	3.2	 	During the exclusivity period set out in clause 2.5, the parties will use reasonable
commercial endeavours to transition the supply of Paperchase Products to a direct ongoing
relationship between the Recipients and Paperchase on mutually satisfactory terms of supply.
	 
	3.3	 	Nothing in this Agreement shall prevent the Provider from providing services of a similar
nature to the Purchasing Support Services to any other person, provided that the other person
does not constitute a Competing Business.
	 
	4.	 	CO-OPERATION AND MANAGEMENT
	 
	4.1	 	Each party’s Service Manager shall be responsible for that party’s respective role and
obligations, and the co-ordination of all matters, relating to the Purchasing Support
Services. All communications, documentation and materials relating to the Purchasing Support
Services and sent by the parties shall be sent to both parties’ Service Manager.
	 
	4.2	 	The parties’ respective Service Managers as at the Commencement Date are as set out in
Schedule 2. A party may change its Service Manager upon the provision of notice in writing to
the other parties, such notice to specify the replacement Service Manager.
	 
	5.	 	DISPUTE RESOLUTION
	 
	5.1	 	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.
	 
	5.2	 	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 5.1 above,
then the Chief Executives of the Provider and the Recipients shall meet in order to endeavour
to resolve the dispute. If, within twenty (20) Business Days of such meeting, the parties
have failed to reach a settlement, the provisions of clause 5.3 and 5.4 shall apply.
	 
	5.3	 	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.
	 
	5.4	 	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.

	6.	 	FEES AND OTHER COSTS
	 
	6.1	 	In consideration for the supply of the Products and Paperchase Products during the Term, the
Recipients shall pay to the Provider the fees and other charges set out in Part A of Schedule
4.
	 
	6.2	 	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

9

 

	 	 	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.
	 
	6.3	 	Terms used in clause 6.2 (including “supply”, “consideration” and “tax invoice”) have the
same meaning as defined in the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
	 
	7.	 	INVOICING AND LATE PAYMENTS
	 
	7.1	 	The Provider will be entitled to invoice the Recipients on or after the Commencement Date for
the fees payable under clause 7 (Fees and Other Costs). Invoices will be issued by the
Provider in accordance with the Terms of Sale for the supply of Products and Paperchase
Products.
	 
	7.2	 	The Recipients will pay all invoices within the period set out in Schedule 4, or, if no such
period is specified, within sixty (60) days of receipt. For the avoidance of doubt, unless
otherwise specified in this Agreement, all invoices and payments will be in US dollars.
	 
	7.3	 	All payments made under this Agreement shall be so made without set-off, deduction or
withholding save as required by law.
	 
	7.4	 	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 7.5 and 7.6.
	 
	7.5	 	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.
	 
	7.6	 	Interest under this clause 7 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.
	 
	7.7	 	ARW may, no more than on an annual basis, at its own cost, cause its auditor to review the
trade terms that the Provider is receiving from its top 20 suppliers. The Provider must
ensure that ARW’s auditor is given access at all reasonable times to all books, records and
documents reasonably necessary to conduct the review.
	 
	8.	 	OTHER OBLIGATIONS
	 
	8.1	 	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 Purchasing
Support Services.
	 
	8.2	 	The Provider will provide the Purchasing Support Services with reasonable skill and care.
	 
	8.3	 	The Recipients shall only use the Purchasing Support Services in relation to the Business.
	 
	9.	 	LIMITATION OF LIABILITY
	 
	9.1	 	This clause 9 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:

10

 

	 	  (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.

	9.2	 	Nothing in this Agreement shall exclude or limit either party’s Liability (i) for fraud or
the 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.

	9.3	 	To the full extent permitted by law, the Provider excludes 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 Act 1974 (Cth), may imply warranties or conditions
or impose obligations upon the Provider which 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 is entitled to do so, the Provider limits its liability in
respect of any claim under those provisions to:

	 	  (a)	 	in the case of goods, at the Provider’s option:

	 	(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 option:

	 	(i)	 	the supplying of the services again; or
	 
	 	(ii)	 	the payment of the cost of having the services supplied again.

	9.4	 	Save as provided in clauses 9.2 and 9.3 above, the Provider shall not 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 9.4(i)-
9.4(vii) apply whether such losses are direct, indirect, consequential or otherwise.

	9.5	 	Subject to clauses 9.2 and 9.3 above,

	 	  (a)	 	the total aggregate Liability of the Provider in connection with the provision
of, failure to provide, or delay in providing, the Purchasing Support Services
including, for the avoidance of doubt, where the liability arises as a result of the
provision, failure to provide, or delay in providing the Purchasing Support Services by
a sub-contractor of the Provider (as described in clause 9.6) shall not exceed the
aggregate amounts payable in respect of the Purchasing Support Services; and
	 
	 	  (b)	 	the total aggregate Liability of the Provider in connection with the supply of,
failure to supply, or delay in supplying, any order of Products or Paperchase Products
including, for the avoidance of doubt, where the liability arises as a result of the
supply, failure to supply, or delay in supplying any order of Products or Paperchase

11

 

	 	 	 	Products by a sub-contractor of the Provider (as described in clause 9.6) shall not
exceed the aggregate amounts payable in respect of that order of Products or
Paperchase Products.

	 	 	The limitations of Liability under this clause 9.5 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 9.5 shall
not apply to the Recipients’ liability to pay the charges pursuant to clause 6 (Fees and
Other Costs).
	 
	9.6	 	The parties acknowledge that certain Purchasing Support Services will be provided by
sub-contractors of the Provider under existing contracts between the Provider and such
sub-contractors.
	 
	9.7	 	Notwithstanding clause 16 below, in the event that the Recipients fail to notify the Provider
of a breach of this Agreement within ten (10) Business Days of becoming aware of the same, the
Recipients 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 Provider of the breach within the time
specified has prejudiced the ability of the Provider to rectify the breach and to minimize any
loss suffered by the Recipients.
	 
	9.8	 	The services provided to Borders NZ pursuant to this Agreement are for business purposes and
that the parties exclude the application of the Consumer Guarantees Act 1993 (NZ).
	 
	10.	 	CONFIDENTIALITY
	 
	10.1	 	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;
	 
	 	(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.

	10.2	 	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.

12

 

	10.3	 	Notwithstanding clause 10.2, 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.
	 
	11.	 	ASSIGNMENT AND SUB-CONTRACTING
	 
	11.1	 	Subject to clause 11.2 and 11.3 (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.
	 
	11.2	 	The Provider may sub-contract to a third party to supply the Purchasing Support Services
provided that, subject to clause 9.6 above, the Provider remains responsible to the Recipients
for its obligations under this Agreement.
	 
	11.3	 	The benefits of a party arising under this Agreement may be assigned, in whole or in part
(provided that the liability of any party is in no way increased as a result of such
assignment), by that party to any financier by way of security for any borrowing incurred by
that party or any Related Body Corporate.
	 
	12.	 	FORCE MAJEURE
	 
	12.1	 	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.
	 
	13.	 	TERM AND TERMINATION
	 
	13.1	 	This Agreement shall commence on the Commencement Date and, subject to clauses 13.2, 13.3 and
13.4, shall remain in full force and effect until the tenth anniversary of the Commencement
Date.
	 
	13.2	 	The Provider may terminate this Agreement forthwith by written notice to the other parties in
the event that the 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.
	 
	13.3	 	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.
	 
	13.4	 	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)	 	the Transition Services Agreement is terminated in accordance with clauses 12.5
or 12.7 of that agreement;
	 
	 	(d)	 	the Sale and Purchase Agreement is terminated due to an uncured material
breach;
	 
	 	(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 13.4(e) if 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)	 	Borders Properties, Inc terminates the Brand Licence Deed pursuant to clause
9.2 of the Brand Licence Deed; or
	 
	 	(g)	 	at any time there is a change in Control of any of Borders Australia, Borders
NZ, Borders Singapore, ARW or any Purchaser:

	 	(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

	 	(h)	 	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.

	13.5	 	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.

	13.6	 	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

 

	14.	 	NOTICES
	 
	14.1	 	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 14.2, or delivering it by hand to the address set out in clause 14.2 and in each case
marked for the attention of the relevant party set out in clause 14.2 (or as otherwise
notified from time to time in accordance with the provisions of this clause 14). 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.
	 
	14.2	 	The addresses and fax numbers of the parties for the purpose of clause 14.1 are as follows:

          (a) Provider

	 	 	 	 	 
	 
	 	Address:	 	100 Phoenix Drive
	 

	 	 	 	Ann Arbor MI 48108
	 

	 	 	 	United States of America
	 
	 	 	 	 
	 

	 	Fax:
	 	+1 734 477 1370
	 
	 	 	 	 
	 
	 	For the attention of:	 	General Counsel
	 
	 	 	 	 
	 
	 	With a copy to:	 	 
	 

	 	Address:
	 	Baker & McKenzie
	 

	 	 	 	Level 27, 50 Bridge Street
	 

	 	 	 	Sydney NSW 2000
	 
	 	 	 	 
	 

	 	Fax:
	 	+61 2 9225 1595
	 
	 

	 	For the attention of:
	 	Steven Glanz

          (b) Recipients, Purchasers and ARW

	 	 	 	 	 
	 

	 	Address:
	 	Level 14, 379 Collins Street

Melbourne VIC 3000

Australia
	 
	 	 	 	 
	 

	 	Fax:
	 	+61 3 8623 1149
	 
	 	 	 	 
	 

	 	For the attention of:
	 	Managing Director

15

 

	 	 	 	 	 
	 

	 	With a copy to
Address:	 	Clayton Utz

Level 19, 1 O’Connell Street 

Sydney NSW 2000
	 
	 	 	 	 
	 

	 	Fax:
	 	+61 2 8220 6700
	 
	 	 	 	 
	 

	 	For the attention of:
	 	Philip Kapp

	14.3	 	A party may notify the other parties to this Agreement of a change to its name, relevant
addressee, address or fax number for the purposes of this clause 14, 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.

	14.4	 	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.
	 
	15.	 	INVALID OR UNENFORCEABLE PROVISIONS
	 
	15.1	 	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.

	16.	 	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.

	17.	 	AMENDMENT

	17.1	 	This Agreement may be amended only by a document signed by all parties.

16

 

	18.	 	COUNTERPARTS
	 
	18.1	 	This Agreement may be signed in counterparts and all counterparts taken together constitute
one document.
	 
	19.	 	FURTHER ASSURANCES
	 
	19.1	 	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.
	 
	20.	 	ENTIRE AGREEMENT
	 
	20.1	 	This Agreement represents the whole and only agreement between the parties in relation to the
supply of Products and Paperchase Products and the provision of Purchasing Support 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 14; or
	 
	 	(b)	 	in any other way permitted by law.

	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

17

 

	 	 	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

PRODUCTS AND PAPERCHASE PRODUCTS

Part A: PRODUCTS

The categories of products currently being supplied via the Provider, which would continue under
this arrangement include:

	•	 	books (including bargain books), magazines, calendars, stationery, pre-recorded books,
music CDs, DVDs and games sourced from third party vendors in the US;

	•	 	electronic gift cards (EGCs) sourced from third party vendors in the US;

	•	 	proprietary books, CDs, DVDs and calendars from the Provider; and

	•	 	fixtures and fittings for the fit-out of new stores.

Products do not include Paperchase Products.

Part B: PAPERCHASE PRODUCTS

The categories of Paperchase Products currently being supplied, which would continue under this
arrangement include:

	•	 	blank books and day books;

	•	 	diaries and calendars;

	•	 	stationery, pens and stationer’s sundries;

	•	 	greeting cards;

	•	 	posters;

	•	 	picture frames;

	•	 	artists’ materials;

	•	 	leather goods, luggage and home storage products;

	•	 	furniture;

	•	 	toys and games;

	•	 	paper products;

	•	 	Christmas decorations;

	•	 	partyware;

	•	 	general giftware; and

	•	 	any items ancillary to or ordinarily sold with any of the foregoing.

Paperchase Products do not include Products.

19

 

SCHEDULE 2

PURCHASING SUPPORT SERVICES

	 	 	 
	1. Description

	 	The services to be provided will include:
	 
	 	 
	 

	 	•   in relation to the Products:

	 

	 	o    product ordering and support;

	 
	 	

o    access
to key product group information to ensure
merchandise standards are in line with Borders global
positioning;

	 

	 	o    freight arrangements; and

	 

	 	

o    market
intelligence including category trends and
key range decisions; and

	 

	 	•    in relation to the Paperchase Products:

	 

	 	
o    product ordering and support;

	 

	 	

o    access
to key product group information to ensure
merchandise standards are in line with Borders global
positioning; and

	 

	 	
o    freight arrangements.

	 
	 	 
	2. Location
	 	 
	3. Service Managers

	 	Provider:
	 

	 	Recipients:
	 
	 	 
	4. Exceptions
	 	 

20

 

SCHEDULE 3

TERMS OF SALE

	1.	 	Products and Paperchase Products supplied to the Recipients by the Provider pursuant to these
Terms of Sale shall be invoiced to the Recipients and paid for by the Recipients pursuant to
Schedule 4 of this Agreement.

	2.	 	Invoices for Products and Paperchase Products supplied to the Recipients by the Provider are
due and shall be paid within the period set forth in Schedule 4 of this Agreement.

	3.	 	Other than as set out in this Agreement, Products and Paperchase Products are to be supplied
as follows:

	 	(a)	 	Products that are magazines or calendars — the Provider must supply these
Products on the same basis as they are currently supplied as at the date of this
Agreement, being that the Recipients agree to accept the types and quantities of these
Products supplied to the Recipients as determined by the Provider (acting reasonably)
to be in the best interests of the Recipients (and such quantities and types to be
subject to discussion with the Recipients on a regular (no less than quarterly) basis)
and that the Recipients have the ability to return these Products to the original
suppliers of the Products or otherwise obtain reimbursement in respect of such Products
from the supplier, but only to the extent:

(i) the return of the Products or reimbursement in respect of such Products is
permitted under the terms on which the Products were supplied by the supplier to the
Provider; and

(ii) the Recipients comply with the terms on which the return of the Products or
reimbursement in respect of the Products is permitted,
in which case the Provider will allow an appropriate credit for the Products
returned or the reimbursement received to the relevant Recipient’s account following
receipt of same from the supplier;

	 	(b)	 	Products that are remainder products — the Provider must supply these Products
on the same basis as they are currently supplied as at the date of this Agreement,
being that the Recipients are to place orders by category and the Provider will supply
the relevant titles within each category that the Provider determines (acting
reasonably) to be in the best interests of the Recipients;
	 
	 	(c)	 	Paperchase Products or Products that are not books, music CDs or DVDs
(“sidelines”) — the relevant Recipients will place the orders by reference to design
and relevant product and the Provider agrees to supply, to the extent available, such
Paperchase Products or sidelines ordered by the Recipients provided that if an ordered
product is not available then the Provider may supply an alternative product with the
prior written approval of the Recipients;
	 
	 	(d)	 	Specific ordering of Paperchase Products or Products — the Recipients may place
orders for specific Paperchase Products or Products from time to time and the Provider
agrees to supply such Paperchase Product or Product, provided that if an ordered
product is not available then the Provider may supply an alternative product with the
prior written approval of the Recipients.

The Recipients agree to accept the types and quantities of Products and Paperchase Products
supplied to the Recipients as determined by the Provider to be in the best interests of the
Recipients. The Recipients also agree to follow the procedures outlined by the Provider for

21

 

maintaining inventory control systems, as such procedures may change from time to time as
determined by the Provider. The Recipients may request the Provider to supply Products or
Paperchase Products, which are not available through the Provider and not listed on the
Provider’s inventory control systems. The Provider may at its discretion decide whether or
not to add the requested Products or Paperchase Products to the Provider’s inventory control
systems.

	4.	 	Title to and risk of loss relating to the Product and Paperchase Products shall pass to the
Recipients upon dispatch by the Provider from its distribution centre in the United States.
	 
	5.	 	The Provider will use reasonable commercial endeavours to assist the Recipients to make
appropriate direct arrangements for shipment (including insurance cover) of the Products and
Paperchase Products from the Provider’s distribution centre in the United States. However,
the Recipients will:

	 	(a)	 	remain fully responsible for all arrangements in relation to the shipping and
insurance of the Products and Paperchase Products from the Provider’s distribution
centre in the United States, including without limitation the entry into and payment
for all appropriate arrangements with third party shipping carriers and insurance
providers;
	 
	 	(b)	 	ensure that its shipping provider cooperates, coordinates and liaises as
appropriate with the Provider in relation to all logistics in relation to the shipment
of Products and Paperchase Products;
	 
	 	(c)	 	obtain all licences required to import the Products and Paperchase Products
into Australia, New Zealand or Singapore (as applicable);
	 
	 	(d)	 	clear the Products and Paperchase Products through local customs promptly
upon their arrival into Australia, New Zealand or Singapore;
	 
	 	(e)	 	pay all customs duties, value added or other consumption taxes (including any
GST) and other charges assessed upon the arrival of the Products and Paperchase
Products into Australia, New Zealand or Singapore; and
	 
	 	(f)	 	pay all storage costs related to the Products or the Paperchase Products in
Australia, New Zealand and Singapore.

	6.	 	The Recipients shall advise the Provider of any censorship or other content rules under
Australian, New Zealand or Singaporean law.

	7.	 	While the Provider shall use reasonable endeavours to make Products and Paperchase Products
available at its US distribution centre in a timely manner, any dates quoted for the supply of
Products and Paperchase Products are only estimates and the Recipients acknowledge and agree
that the time of supply of the Products and Paperchase Products shall not be of the essence of
these Terms of Sale and any failure by the Provider to supply the Products or Paperchase
Products within the time stipulated shall not constitute a material breach of its obligations
under these Terms of Sale or this Agreement. The Provider agrees to use reasonable endeavours
to keep the Recipients informed of any potential delays.

	8.	 	Subject to, and without limitation to, clause 9 of this Agreement, the parties agree that
neither the Provider nor Paperchase is making any warranty in respect of the Products or the
Paperchase Products and that all warranties, conditions or other items implied by statute or
common law in respect of the Products or Paperchase Products or any matter pertaining to the
Products or Paperchase Products are excluded and disclaimed to the fullest extent permitted by
law. Without limiting the foregoing, the Provider and Paperchase expressly disclaim all

22

 

	 	 	warranties of merchantability or fitness for a particular purpose. The provisions of this
clause 8 shall survive the termination of this Agreement for any reason.
	 
	9.	 	Unless otherwise required by applicable law, the Provider will not be obliged to accept any
return of Products or Paperchase Products from the Recipients. Any Products or Paperchase
Products returned to the Provider (for whatever reason) will be refused by the Provider and
returned to the Recipients at the Recipients’ sole risk and expense. The Provider will not
issue any refunds or credits of any kind in respect of any returned Products or Paperchase
Products.

	10.	 	If any event occurs which, pursuant to clause 13.4 of this Agreement, would entitle the
Provider to terminate this Agreement, the Provider may, in addition to any other remedies that
it may have under this Agreement or at law or in equity and without regard to any remedial
period applicable to such default, immediately discontinue shipment of Products or Paperchase
Products until any relevant default is cured.

	11.	 	If this Agreement is terminated by the Provider for any reason, then the Provider shall
immediately cease ordering Products and Paperchase Products for and on behalf of the
Recipients. All Products and Paperchase Products on order for the Recipients at the time of
termination may, at the option of the Provider, either be cancelled or shipped to the
Recipients COD.

	12.	 	Upon termination of these Terms of Sale for any reason, the Recipients shall return to the
Provider all written material relating to inventory control systems that have been provided to
the Recipients by the Provider.

	13.	 	Any typographical, clerical or other error or omission in any quotation, price list, invoice
or any other document or information issued by the Provider shall be subject to correction
without any liability on the part of the Provider.

	14.	 	The Provider is under no obligation to supply the Recipients with the volume of Products and
Paperchase Products requested by the Recipients but will use all reasonable endeavours to meet
the orders placed by the Recipients. Provided that the Provider will not be under any
obligation to supply the Recipients where the supply would require the Provider to incur any
additional costs, renegotiate existing supply arrangements, redirect orders from any other
party or otherwise alter its operations.

23

 

SCHEDULE 4

FEES, REBATES AND PAYMENT TERMS

Part A: Supply of Products and Paperchase Products during the Term

Fees

The purchase price to be paid by the Recipients to the Provider for the Products and the Paperchase
Products shall be based on the Provider’s Cost (as defined below) and the applicable markup under
the following structure:

	 	 	 	 	 
	 	 	Year	 	Mark Up
	Products and Paperchase
Products to be offered in
Borders branded stores

	 	1 – 3 years from the
Commencement Date
	 	3%*
	 
	 	 	 	 
	Products and Paperchase
Products (if any) to be
offered in Borders branded
stores

	 	4 – 7 years from the
Commencement Date
	 	8%*
	 
	 	 	 	 
	Products and Paperchase
Products (if any) to be
offered in ARW branded stores

	 	1 – 7 years from the ARW
Completion Date
	 	8%*
	 
	 	 	 	 
	Products and Paperchase
Products (if any) to be
offered in Borders or ARW
branded stores

	 	8 – 10 years from the
Commencement Date
	 	8%*

 

* In relation to the Paperchase Products, the mark up stated is applicable only to Paperchase
Product sourced through the Provider.

* In relation to all Paperchase Products (whether sourced through the Provider or otherwise), the
Recipients will also be required to reimburse the Provider additional fees payable by the Provider
to Paperchase in relation to monthly sales of Paperchase Products. As at the Commencement Date
until the second anniversary of the Commencement Date, such fees are set at an amount of 15% of
monthly sales of all Paperchase Products by Borders Australia and Borders NZ and 30% of monthly
sales of all Paperchase Products by Borders Singapore, after which time the parties will negotiate
and agree such fees in good faith. The relevant Recipients will provide to the Provider a monthly
sales report in relation to Paperchase Products for the purposes of calculation of such fees, and
must permit the Provider or its representatives to inspect and/or audit the Recipients’ records for
the purposes of the verification of such report. Following receipt of such monthly sales reports,
the Provider will issue an invoice to the relevant Recipients in relation to such fees. Borders
Singapore will also be invoiced for freight costs and will be responsible for clearing the
Paperchase Products through customs. These fees must be paid by the Recipients within 60 days from
the end of the month in which the sales of the Paperchase Products are generated.

Provider’s Cost shall mean (a) the price of an item as identified on the Provider’s purchase order;
or (b) at the Provider’s option, with respect to certain Products identified by the Provider from
time to time, the rolling average price of an item for the prior five (5) month period. The
calculation of the Provider’s Cost will also take into account any discounts received by the
Provider in relation to such Products as incentives for NYO purchases.

24

 

Rebates and Co-op Allocation for Products

On a yearly basis as set out below, the Provider will credit to the Recipients a portion of any
rebates or marketing or other co-op payments it receives from its suppliers in respect of Products,
calculated on the following basis:

	 	 	 
	1. Co-op Allocation:

	 	The Provider will allocate to the Recipients a percentage of the co-op
allocation received by it from its vendors in relation to Products. The percentage allocated
to the Recipients will be calculated as the total purchases of Products by the Recipients as a
percentage of the Provider’s total purchases from its participating vendors.
	 
	 	 
	2. Calendar rebates:

	 	The Recipient must provide the Provider with detailed information and data
on title level sales and markdowns in relation to Products. The Provider will allocate to the
Recipients a percentage of the calendar rebates received by it from its participating vendors,
calculated on the basis of qualifying titles.

Rebates and co-op allocation will be calculated and credited to the Recipients on an annual basis,
depending on the timing of the calculation of such rebates and co-op allocation by the Provider’s
vendors. The Provider will supply to the Recipients an annual report setting out the relevant
detail relating to the calculation and payment of such rebates and co-op allocation in relation to
Products.

The Recipients must permit the Provider or its representatives to inspect and/or audit the
Recipients’ records for the purposes of the verification of the calculations related to rebates as
set out above.

Payment Terms

	 	 	 	 	 
	 

	 	Products
	 	60 days from date of invoice
	 

	 	Paperchase Products
	 	60 days from date of invoice
	 

	 	Products (NYO purchases)*
	 	60 days from date of invoice
	 

	 	Paperchase Products (NYO purchases)*
	 	60 days from date of invoice

 

*  Payment terms will be 90 days for NYO purchases in the event the Provider obtains
such terms from its suppliers.

25

 

Signed for and on behalf of

Borders Group, Inc.

by its duly authorised representative

in the presence of:

	 	 	 
	 
	 

	 	 
	Signature of witness

	 	Signature of authorised representative
	 
	 	 
	 
	 

	 	 
	Name of witness (please print)
	 	Name of authorised representative
(please print)
	 
	 	 
	Signed for and on behalf of
	 	 
	Borders Australia Pty Ltd.
	 	 
	by its duly authorised representative
	 	 
	in the presence of:
	 	 
	 
	 	 
	 
	 

	 	 
	Signature of witness

	 	Signature of authorised representative
	 
	 	 
	 
	 

	 	 
	Name of witness (please print)
	 	Name of authorised representative
(please print)
	 
	 	 
	Signed for and on behalf of
	 	 
	Borders New Zealand Limited
	 	 
	by its duly authorised representative 

in the presence of:
	 	 
	 
	 	 
	 
	 

	 	 
	Signature of witness

	 	Signature of authorised representative
	 
	 	 
	 
	 

	 	 
	Name of witness (please print)
	 	Name of authorised representative
(please print)

26

 

Signed for and on behalf of

Borders Pte. Ltd.

by its duly authorised representative

in the presence of:

	 	 	 
	 
	 

	 	 
	Signature of witness

	 	Signature of authorised representative
	 
	 	 
	 
	 

	 	 
	Name of witness (please print)
	 	Name of authorised representative
(please print)

27

 

	 	 	 
	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:
	 	 
	 

	 	 
	 

	 	Signature of Attorney
	 
	 	 
	 
	 

	 	 
	Signature of Witness

	 	Name of Attorney in full
	 
	 	 
	 
	 

Name of Witness in full

	 	  
	 
	 	 
	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:
	 	 
	 

	 	 
	 

	 	Signature of Attorney
	 
	 	 
	 
	 

	 	 
	Signature of Witness

	 	Name of Attorney in full
	 
	 	 
	 
	 

Name of Witness in full

	 	  
	 
	 	 
	Signed for and on behalf of A&R Whitcoulls Group
Holdings Pty Limited ACN 108 801 127 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:
	 	 
	 

	 	 
	 

	 	Signature of Attorney
	 
	 	 
	 
	 

	 	 
	Signature of Witness

	 	Name of Attorney in full
	 
	 	 
	 
	 

Name of Witness in full

	 	  

28

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