Exhibit 10.3
INSURANCE AGREEMENT
INSURANCE AGREEMENT, dated as of January 1, 2002, by and
between XXXXXX & XXXXX, INC., a Delaware corporation having an office located at
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("B&N") and GAMESTOP CORP., a
Delaware corporation having an office located at 0000 Xxxxxxx X. Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxx 00000 ("GameStop").
W I T N E S S E T H:
WHEREAS, B&N and GameStop desire to enter into this Insurance
Agreement pursuant to which B&N shall allow GameStop to participate in certain
insurance coverage with B&N on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Services.
(a) During the term of this Agreement, B&N shall obtain for
GameStop property, casualty (including, without limitation, automobile, general
liability and workers' compensation), and crime, fiduciary, ocean cargo and
directors' and officers' liability and multimedia liability insurance on an
annual basis, and surety insurance on an as needed basis. This Agreement shall
become effective upon the consummation of the initial public offering of shares
of the Class A Common Stock, $.001 par value per share, of GameStop.
(b) The services referred to in Section 1(a) above shall be
provided upon the same terms and conditions as they are provided to B&N, its
subsidiaries and their respective employees. B&N shall not provide itself, its
subsidiaries or their respective employees with any priority or preference with
respect to such services.
2. Payment.
(a) In full consideration for the services referred to in
Section 1(a) above, GameStop shall pay B&N GameStop's pro rata share of all
costs related to obtaining and maintaining property, casualty (including,
without limitation, automobile, general liability and workers' compensation),
and crime, ocean cargo, directors' and officers' liability and multimedia
liability insurance during the applicable period, including, without limitation,
the cost of insurance premiums, brokers' commissions, "paid losses", claim
processing fees, letters of credit fees, monopolistic state premiums and
GameStop's pro rata share of all costs incurred by B&N in the operation of its
risk management department. Unless otherwise agreed to by GameStop and B&N,
GameStop's pro rata share shall be determined as follows:
(i) GameStop's pro rata cost of property insurance
premiums shall be based upon the aggregate value of all GameStop's property
covered by such insurance divided by the aggregate value of all property covered
by such insurance.
(ii) GameStop's pro rata cost of general liability,
automobile liability and workers' compensation insurance premiums shall be
calculated annually based upon the aggregate amount of payroll expenses
attributable to GameStop and its subsidiaries during the applicable fiscal year
divided by the aggregate amount of payroll expenses attributable to B&N and all
of its subsidiaries, determined on a consolidated basis, for such fiscal year.
(iii) GameStop's pro rata cost of crime, ocean cargo,
directors' and officers' liability and multimedia liability insurance premiums
shall be calculated annually based upon the aggregate amount of sales
attributable to GameStop and its subsidiaries during the applicable fiscal years
divided by the aggregate amount of sales attributable to B&N and all of its
subsidiaries, determined on a consolidated basis, for such fiscal years.
(iv) In addition, GameStop shall pay B&N for the cost
of obtaining any surety bonds needed by GameStop.
(b) GameStop shall pay the amount due to B&N for GameStop's
proportionate share of the above-described costs on a monthly basis, or on such
other basis as the parties shall mutually agree.
(c) If any of the payments referred to in this Section 2 are
not made when due, GameStop shall pay interest on such overdue amount at the
annual rate of 2% over the prime rate publicly announced from time to time by
the bank serving as the administrative agent on B&N's principal credit facility.
3. Termination. This Agreement shall continue in full force and effect
until terminated as provided in this Section 3.
(a) By B&N. B&N may terminate this Agreement in whole, or in
part with respect to any of the services referred to in Section 1(a) above, upon
180 days' prior written notice to GameStop.
(b) By GameStop. GameStop may terminate this Agreement in
whole, or in part with respect to any of the services referred to in Section
1(a) above, upon [180] days' prior written notice to B&N.
(c) Termination for Default. In the event that either party
defaults in its obligations hereunder, and such default continues for more than
thirty (30) days after notice thereof from the non-defaulting party, then the
non-defaulting party may terminate this Agreement upon written notice to the
defaulting party.
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(d) Termination upon Bankruptcy or Change of Control. This
Agreement shall terminate automatically upon the occurrence of any of the
following events, unless the parties shall agree in writing otherwise and, in
the case of an event described in Section 3(d)(iii)(A) below, the insurance
carriers agree to continue to provide such insurance:
(i) Either B&N or GameStop shall (A) apply for or
consent to the appointment of, or the taking possession by, a receiver,
custodian, trustee, examiner, liquidator or the like of itself or of all or any
substantial part of its property, (B) make a general assignment for the benefit
of its creditors, (C) commence a voluntary case under the Federal Bankruptcy
Code of 1978, as amended (the "Bankruptcy Code"), or (D) file a petition as a
debtor seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding-up,
or composition or readjustment of its debts.
(ii) A proceeding or case shall be commenced against
either B&N or GameStop without such party's application or consent, seeking (A)
its reorganization, liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (B) the appointment of a receiver,
custodian, trustee, examiner or liquidator or the like of such party or of all
or any substantial part of its property, or (C) similar relief in respect of
such party under any law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement or winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of sixty (60) or more
days. (iii) Any "Unrelated Person" (as hereinafter defined) or any Unrelated
Persons acting as a "group" (as such term is defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), together with
any affiliates thereof which are Unrelated Persons, (A) acquires or acquire
(whether through legal or "beneficial ownership" (as such term is defined in
Rule 13d-3 under the Exchange Act), by contract or otherwise), directly or
indirectly, the right to vote more than 50% of the total voting power of all
classes of voting stock of GameStop then outstanding, or (B) shall have elected,
or caused to be elected, a sufficient number of its or their nominees to the
Board of Directors of GameStop such that the nominees so elected (regardless of
when elected) shall collectively constitute a majority of such Board of
Directors. "Unrelated Person" shall mean any person or entity other B&N and any
of its subsidiaries.
(e) Effect of Termination. In the event this Agreement is
terminated in whole or in part, as provided in this Section 3, GameStop shall
have no obligation to pay for those services as to which such termination is
effective, provided, however, that GameStop shall be obligated to pay a pro rata
portion of the amount that it would have been obligated to pay for such
terminated services based upon the number of days during the applicable month or
period that GameStop actually received such services; and, provided, further
that in the event that B&N is unable to receive reimbursement of any portion of
insurance premiums already paid to an insurance carrier that are attributable to
GameStop, then GameStop shall continue to be liable for such premiums through
the end of the applicable period in which such insurance coverage is
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provided. The pro rata payment shall be made at the time set forth in Section 2
above, together with any other payments then due pursuant to said Section 2. In
addition, with respect to the "paid losses" referred to in Section 2(a)(i)
above, GameStop shall be responsible for any "paid losses" that result from
insurance claims based on events occurring prior to the date of termination of
this Agreement, even if such claims are made and/or paid by B&N and/or the
applicable insurance carrier on or after such date of termination.
4. Inspection. GameStop and its agents and representatives, at GameStop
expense, shall have the right to examine the books and records of B&N that
relate to the costs and expenses referred to in this Agreement, provided,
however, that such examination may only be conducted during regular business
hours and upon five (5) business days' prior written notice.
5. Notices. All notices required or permitted to be given hereunder
shall be given in writing and shall be delivered by hand, by nationally
recognized overnight courier, or by certified or registered first class United
States mail, return receipt requested, postage prepaid, addressed as follows:
If to B&N, to:
Xxxxxx & Xxxxx, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
If to GameStop to:
GameStop Corp.
0000 Xxxxxxx X. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Any party may change its address for notices in the manner set
forth in this Section 5.
6. Assignment; Binding Effect. No party to this Agreement may assign
any of its rights or obligations hereunder without the prior written consent of
the other parties hereto, except that either party may assign its rights and
obligations hereunder to one or more of its subsidiaries. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
permitted successors and assigns.
7. Further Assurances. Each party shall cooperate, take such further
action and execute such further documents as may be reasonably requested by the
other parties in order to carry out the terms of this Agreement and the
transactions contemplated hereby.
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8. Independent Contractors. The parties to this Agreement are
independent contractors, and nothing in this Agreement is intended to make any
party hereto an agent or partner of, or joint venturer with, any other party.
Neither party shall have any authority whatsoever, whether express or implied,
to bind any other party.
9. Entire Agreement; Amendments; Waivers. This Agreement constitutes
the entire Agreement of the parties hereto with respect to the subject matter
hereof and shall not be modified, amended or terminated, nor shall any
provisions hereof be waived, except by a writing signed by the parties hereto.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be wholly performed in the State of New York.
11. Headings. The Section headings used in this Agreement are for the
convenience of the parties only, are not substantive, and shall not be used to
interpret or construe any of the provisions of this Agreement.
12. Invalidity. If any provision of this Agreement is held to be
unenforceable by a court of competent jurisdiction, then such provision shall be
deemed modified so that such provision is enforceable to the maximum extent
possible, and any such invalidity shall not affect any of the other provisions
of this Agreement.
13. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Insurance Agreement as of the date first above written.
XXXXXX & XXXXX, INC.
By: /s/ Xxxxxxx X'Xxxxxxx
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Name: Xxxxxxx X'Xxxxxxx
Title: Chief Financial Officer
GAMESTOP CORP.
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By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
