DATED 13TH OCTOBER 1995
(1) THE ELECTRONICS BOUTIQUE, INC
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(2) RHINO GROUP PLC
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SERVICES AGREEMENT
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Tel: ▇▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇▇-▇▇▇-▇▇▇▇
INDEX
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1. Definitions 1
2. Condition 3
3. Appointment 4
4. Term 4
5. Fees and Expenses 4
6. Initial Term 6
7. Calculation of Turnover and Profit 6
8. Profit and Adjustments 9
9. Managing Director 10
10. Licence Agreement 10
11. Indemnity to be given by EBI 11
12. Indemnity to be given by Rhino 11
13. Covenants 12
14. Termination 12
15. Effect of Termination 13
16. Discounts 13
17. Value Added Tax 13
18. Confidentiality 13
19. Entire Agreement 14
20. No Assignment 14
21. Waiver/Amendment 14
22. Severance 14
23. Sole Principal 14
24. Rights 15
25. Notices 15
26. Governing Law 16
SCHEDULE - THE SERVICES 17
THIS AGREEMENT is made this 13th day of October 1995 BETWEEN:
(1) THE ELECTRONICS BOUTIQUE, INC a corporation incorporated in Pennsylvania USA
whose office is at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ("EBI"); and
(2) RHINO GROUP PLC (registered number 875835) whose registered office is at
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ OAP ("Rhino").
WHEREAS:
(A) Rhino is a company incorporated in England and Wales as a public company
limited by shares and engaged inter alia in the retailing of computer and
video games and related products.
(B) EBI is a corporation incorporated in Pennsylvania, USA and engaged in a
similar business.
(C) EBI is the registered shareholder of approximately 25 per cent. of the
issued share capital of Rhino.
(D) EBI and Rhino have agreed that EBI shall provide a suitably qualified person
to act as managing director of Rhino.
(E) EBI and Rhino wish to enter into this Services Agreement in order to set out
the terms on which EBI will provide certain management and other services to
Rhino in connection with the FutureZone stores.
(F) Rhino wishes to change its name to Electronics Boutique (UK) plc and
re-brand the retail stores operated by the Rhino Group under the name
"FutureZone" under the trading style "Electronics Boutique" and EBI has
agreed to grant to Rhino a licence to use the unregistered trademark and
trading and business name "Electronics Boutique" in the United Kingdom and
Eire.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement the following words and expressions shall, unless the
context otherwise requires, have the following meanings:
"Accounts" in respect of each Year, the audited
consolidated balance sheet of the Rhino Group
as at the end of the Year and the audited
consolidated profit and loss account of the
Rhino Group in respect of the Year, in each
case prepared in accordance with applicable
laws and accounting practices in
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the United Kingdom and on a basis consistent
with the basis upon which the accounts have
been prepared in respect of the year ended
31st December 1994;
"Board" means the board of directors of Rhino;
"Business" the business of retailing computer and video
games and related products carried on by the
Rhino Group through the FutureZone stores, in
the United Kingdom and Eire;
"Downpace" Downpace Limited (No. 1552126), a wholly owned
subsidiary of Rhino, together with any other
subsidiaries of Rhino, through which the
non-Business activities alone of Rhino Group
are carried on;
"EBI Person" EBI, or any subsidiary undertaking of
EBI or any of their respective officers,
directors or employees;
"Initial Term" means the period from 1st July 1995 to and
including the accounting reference period
ending on 31st January 1996;
"Licence Agreement" an agreement between the parties as described
at Clause 9;
"Non-Business Accounts" in respect of each Year, the audited balance
sheet of Downpace as at the end of the Year
and the audited profit and loss account of
Downpace in respect of the Year, in each case
prepared in accordance with applicable laws
and accounting practices in the United Kingdom
and on a basis consistent with the basis upon
which the Accounts have been prepared in
respect of the year ended 31 December 1994;
"Prescribed Period" the period commencing on the date of
termination hereof and expiring 1 year after
the date of termination;
"Profits" the pre-tax profits of the Rhino Group
excluding Downpace in each Year as calculated
in accordance with Clause 6;
"Rhino Group" Rhino and its subsidiary undertakings;
"Services" those services described in the Schedule to
this Agreement together with any additional or
other services hereafter agreed by the parties
in writing;
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"Shares" ordinary shares of 5p each in the capital of
Rhino and any shares into which such shares
may be consolidated, subdivided or otherwise
re-organised;
"subsidiary undertaking" has the meaning set out in Section 258 of the
Companies ▇▇▇ ▇▇▇▇ as amended by the Companies
▇▇▇ ▇▇▇▇;
"Target" means the budgeted profit of the Business for
each Year as set out in the annual budget
adopted by the Rhino Group for that Year;
"Turnover" the turnover of the Business in the United
Kingdom in each month or Year as calculated in
accordance with Clause 6;
"Year" the accounting reference period of Rhino
commencing on or about 1st February 1996, or
on the expiry of that and any subsequent
accounting reference period (each, a
"Commencement Date"), or, if this Agreement is
terminated with effect from any time other
than the expiry of any accounting reference
period of Rhino, the period commencing on the
immediately preceding Commencement Date and
ending on the date of termination of this
Agreement.
1.2 References to any statute or statutory provision or order or regulation
made thereunder shall include that statute, provision, order or
regulation as amended, modified, re-enacted or replaced from time to
time whether before or after the date hereof.
1.3 References to persons shall include bodies corporate and unincorporated
associations, partnerships and individuals.
1.4 Headings to clauses are for information only and shall not form part of
the operative provisions of this Agreement or the Schedules and shall
be ignored in construing the same.
1.5 References to Recitals, Clauses or Schedules are, unless the context
otherwise requires, to recitals to, clauses of or schedules to this
Agreement.
2. CONDITION
2.1 The obligations of the parties hereunder are subject to the
underwriting agreement of even date herewith between, inter alia, the
parties hereto becoming or being declared unconditional in all
respects, on or before 23rd November 1995 and the provisions of this
Agreement shall be read accordingly.
2.2 Rhino shall use all reasonable endeavours to procure, insofar as it is
able, that the condition is satisfied on 7th November 1995.
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2.3 If such condition has not been fulfilled on or before 23rd November
1995, the respective obligations of the parties hereunder shall cease
and, except in relation to any breach of any provision of this
Agreement prior thereto, neither party shall have any claim against the
other party.
3. APPOINTMENT
3.1 Subject to the terms and conditions of this Agreement, Rhino hereby
appoints EBI, subject to the supervision and direction of the Board, to
provide the Services for the period and on the terms set out herein and
EBI hereby accepts such appointment and agrees to render such Services
and to assume the obligations stated to be assumed by it herein.
3.2 Subject to the terms and conditions of this Agreement, EBI shall
provide such of the Services as the Board shall reasonably request in
connection with the Business but, for the avoidance of doubt, Rhino
shall be under no obligation to utilise any of the Services.
4. TERM
This Agreement shall take effect for an initial period expiring on 31st
January 2006 and shall continue until terminated by 2 years' notice in
writing served at any time after 31st January 2004, or until terminated
in accordance with Clause 14, whichever is the earlier.
5. FEES AND EXPENSES
5.1 Rhino shall pay, in respect of each Year of this Agreement, to EBI:-
(a) a fee equal to one per cent (1%) of Turnover for that Year; and
(b) in the event that the Profits for that Year exceed the Target, a
bonus fee of twenty-five per cent (25%) of the amount by which the
Profits for that Year exceed the Target or, if the Target is a
negative number, zero.
5.2 In the event that the final Year of this Agreement is not a full year,
then, for the purposes of Clause 5.1 the actual profit and turnover of
the Rhino Group up to the date of termination (calculated, save as
expressly provided in Clause 7, in all other respects in accordance
with the Profit and the Turnover, as appropriate) shall be substituted
for the Profit and the Turnover respectively and the Target shall be
derived from the monthly target figures of the Rhino Group comprised in
the Target.
5.3 For the avoidance of doubt, save as set out in Clause 9, the fee
payable pursuant to Clause 5.1 is inclusive of any remuneration and
other emoluments payable by Rhino to any directors of any member of the
Rhino Group who are also directors or employees of EBI.
5.4 The fee payable pursuant to Clause 5.1(a), and calculated in accordance
with Clause 7.2, shall be payable in arrears monthly within 30 days of
the end of each month of the Year in question by direct credit transfer
to such bank account as EBI shall specify in writing
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from time to time. If all or any part of such fees arc not paid on the
due date Rhino shall pay interest on the overdue amount (both before
and after any judgement) at a rate of 2% per annum over the base rate
from time to time of National Westminster Bank plc such
interest to run from the date payment of the said sum fell due up to
the date on which payment is received by EBI.
5.5 Rhino hereby undertakes to EBI to reimburse all reasonable travelling
and subsistence expenses of EBI and its employees which are incurred in
the performance of this Agreement by EBI or its employees in the United
Kingdom or Eire during the period from and including 1st July 1995
until termination of this Agreement. Such expenses shall be paid by
Rhino to EBI promptly upon production of supporting receipts or
invoices in respect of the sums claimed.
5.6 Rhino shall procure that, in respect of each Year, the Target is
adopted not later than 18 months prior to the commencement of the Year.
The Target shall be prepared in accordance with the accounting policies
and practices of the Rhino Group used in the preparation of the
Accounts. To the extent that such accounting policies or practices
change, the Target will be amended accordingly to reflect such change.
5.7 EBI may require, by notice in writing to Rhino served not less than 5
days prior to the first available date (as defined in sub-paragraph
(b)), that, in respect of any Year, some or all of the annual fee
payable pursuant to Clause 5.1 shall be satisfied by the issue to EBI
of Shares. If EBI does so elect then, subject to Rhino having the
necessary shareholder authority, the provisions of this Clause 5 shall
have effect save that:-
(a) on the first available date (as provided by Clause 5.7(b) below),
Rhino shall allot to EBI, or as EBI shall direct, such number of
Shares as is equal to the proportion of the fee specified by EBI
to be satisfied in Shares divided by an amount equal to the
average of the middle market quotations for a Share for the 5
business days immediately preceding the date of issue, as derived
from the London Stock Exchange Daily Official List, and shall
deliver to EBI, or as it may direct, a certificate in respect of
such Shares;
(b) for the purposes of sub-clause (a) above, the first available date
shall be:-
(i) the last due date for payment of the relevant fee in that
Year, unless either Rhino is not then permitted to allot, or
EBI is not then permitted to subscribe for, such Shares by
law or applicable regulatory requirement; or
(ii) the 6th business day after the first day following such due
date for payment on which EBI is permitted to subscribe and
Rhino is permitted to allot such Shares by law or applicable
regulatory requirement,
and for which purpose EBI shall be deemed to be subject to the London
Stock Exchange Model Code;
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(c) in the event that the first available date is after the due date
for payment, Rhino shall nevertheless pay the full fee in
accordance with this Clause 5;
(d) EBI shall, if such date is after the due date for payment, on such
date re-pay such part of the fee, if any, in cash as is equal to
the subscription price for the relevant Shares; and
(e) Rhino shall use its best endeavours to procure that such Shares
are admitted to listing on or before the due date for payment or
as soon as possible thereafter.
5.8 Rhino undertakes to use its best endeavours to procure that at all
relevant times it has all necessary shareholder authorities to enable
it to comply with the provisions of Clause 5.7.
6. INITIAL TERM
6.1 In relation to the Initial Term, Rhino shall pay to EBI a fee (the
"Initial fee") equal to one per cent. (1%) of the turnover of the
Business in respect of the Initial Term, as shown by the unaudited
consolidated management accounts of the Rhino Group in respect of the
Initial Term (to be made available at the end of the Initial Term) but
otherwise calculated in accordance with Clause 7.2.
6.2 The initial fee payable pursuant to Clause 6.1 shall be payable in
arrears by 29th February 1996 by direct credit transfer to such bank
account as EBI shall specify in writing from time to time. If all or
any part of such fees are not paid on the due date Rhino shall pay
interest on the overdue amount (both before and after any judgement) at
a rate of 2% per annum over the base rate from time to time of National
Westminster Bank plc, such interest to run from the date payment of the
said sum fell due up to the date on which payment is received by EBI.
6.3 The initial fee shall be subject to the verification procedure set out
at Clauses 7.4 and 8 below mutatis mutandis.
7. CALCULATION OF TURNOVER AND PROFIT
7.1 As soon as practicable after the end of each month, and in any event
within 30 days of such date, EBI and Rhino shall procure that the
Turnover for that month shall be calculated in accordance with this
Clause 7 and Rhino shall deliver to EBI a statement of the Turnover
together with copies of the management accounts from which it is
derived and copies of all related working papers. The Turnover for each
Year shall, initially, be the cumulative total of the Turnover in
respect of each of the months of that Year.
7.2 The Turnover in respect of any month or Year (and for the purposes of
the payment to be made pursuant to Clause 5.4) shall, subject to
adjustment in accordance with Clause 7.4, be the turnover of the
Business as shown by the unaudited consolidated management accounts of
the Rhino Group in respect of the month or Year (to be made available
at the end of the month or Year) but subject to the following:-
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(a) excluding any inter-group charges made to or from any associated
undertaking whose financial results are included in the
non-Business Accounts:
(b) including, for the avoidance of doubt:-
(i) the turnover of all 112 of the stores currently operated by
the Rhino Group in the retail of video and computer game
software;
(ii) the turnover of any future stores opened which operate in
that retail market;
(iii) the turnover of any other retail outlets which are opened
during, the period under the initiative of this Agreement
irrespective of whether or not they operate in the same
retail market; and
(c) Turnover shall be calculated in accordance with the following
provisions:-
(i) Turnover shall be net of any VAT or other government taxes
which may apply from time to time;
(ii) Turnover shall include gift voucher sales (net of
redemption);
(iii) Turnover shall include gross "preown" sales and shall not be
reduced by trade-ins purchased by the stores at source;
(iv) Turnover shall be net of any refunds; and
(v) Turnover will exclude any sales of product in bulk which is
negotiated centrally by head office which does not carry a
normal retail margin, including, for example, stock which is
sold to reduce overstocks in a particular product line.
7.3 The Profit in respect of any Year shall be the profit of the Group (i)
in respect of each Year other than the final Year as shown or derived
from the relevant Accounts but after adding or subtracting the loss or
profit of Downpace for the relevant Year as derived from the figures
shown in or derived from the non-Business Accounts for that Year or
(ii) in respect of the final Year as derived from the relevant
management accounts of the Rhino Group, and in each case:-
(a) before any provision is made for the payment of any dividend on
any share in the capital of the Rhino Group, any interim dividend
declared and paid by the Rhino Group in the Year to which such
audited consolidated profit and loss account relates or before the
payment of any other distribution or before the transfer of any
sum to capital or revenue services;
(b) before there has been deducted any corporation tax on profits or
gains (or any other tax levied upon or measured by reference to
profits or gains) as adjusted by paragraphs (a) and (b) above (or
any other tax levied upon or measured by profits or gains);
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(c) after deducting profits or adding back losses which are
attributable to shares held in any subsidiary undertaking of Rhino
the beneficial owners of which are not members of the Rhino Group;
(d) after crediting profits or deducting losses which are attributable
to shares held by the Rhino Group in any company which is not an
associated company (within the meaning of the Companies Act 1985)
of the Rhino Group;
(e) after deducting the profits or adding back the losses (to the
extent the same would other-wise be included in the Accounts) of
any member of the Rhino Group that became a member during the
relevant Year that are attributable to that portion of the Year
prior to the said member becoming a member of the Rhino Group; and
(f) after deduction or adding back, as the case may be, any
inter-group management charges changed to or from any adjustment
undertaking whose results are included in the non-Business
Account.
7.4 Forthwith Rhino of the Accounts in respect of each Year other than the
final Year Rhino shall procure that:
(a) the calculation of the Turnover detailed above at Clauses 7.1 and
7.2 shall be repeated substituting the figures shown in or derived
from the relevant Accounts for the cumulative Turnover for the
months in that Year but after subtracting the turnover of Downpace
for the relevant Year as derived from the figures shown in or
derived from the non-Business Accounts for that Year ("the
verified Turnover");
(b) the Profit shall be calculated in accordance with Clause 7.3; and
(c) the amount of the verified Turnover and the Profit shall be
certified in writing by the auditors of the Rhino Group and in so
doing such auditors shall be deemed to be acting as experts and
not as arbitrators and the amounts as so certified shall in the
absence of manifest error, be final and binding on the parties.
7.5 In respect of the final Year only:-
(a) Rhino shall procure that representatives of EBI and its
accountants are entitled to access to such financial and other
information, including access to staff, as they may reasonably
require to examine the accounts and working papers relating to the
calculation of the Turnover and the Profit;
(b) within the period of 30 days following the delivery of the
calculations of the Turnover and Profit in accordance with Clause
7.1, EBI shall deliver a notice to Rhino either confirming its
acceptance of the same or stipulating points of dispute (with
reasons attached) (and failure to deliver such notice in
accordance with this Clause 7.5(b) shall be deemed conclusive
evidence of acceptance by EBI of the statements delivered by
Rhino);
(c) if EBI should notify Rhino in accordance with Clause 7.5(b) that
there are points of dispute, then, in default of agreement with
regard to such points within 30 days
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of Rhino's receipt of the notice by EBI in accordance with Clause
7.5(b), each point remaining in dispute shall be referred for
determination by an independent firm of chartered accountants
agreed upon by EBI and Rhino or, in the absence of agreement
within 45 days after Rhino's receipt of the notice by EBI in
accordance with Clause 6.5(b), by such other firm of chartered
accountants as is nominated at the request of EBI or Rhino by the
President for the time being of the Institute of Chartered
Accountants in England and Wales (or his duly appointed deputy);
and
(d) in making any determination, any such firm of chartered
accountants shall act as experts and not as arbitrators and their
decision shall, in the absence of manifest error, be final and
binding on the parties. The costs of any referral to a firm of
chartered accountants under Clause 7.5(b) shall be borne by the
parties in such proportions as such firm may determine or, in the
absence of such determination, in equal shares.
8. PROFIT AND ADJUSTMENTS
8.1 The Profit (if any) payable pursuant to Clause 5.1(b) and calculated in
accordance with Clause 7 shall be payable in arrears within 15 days of
delivery of the certificate referred to in Clause 7.4(c) (or, in
respect of the final Year, within 15 days of completion of the
procedure set out in Clause 7.5) together with (or set off against) the
adjustment to the annual fee referred to below at Clauses 8.3 and 8.4.
8.2 If the verified Turnover for a Year is greater or less than the
Turnover for the same Year (initially calculated in accordance with
Clause 7.2) then the calculation at Clause 5.1 (a) shall be repeated
substituting the verified Turnover for the Turnover ("the verified
annual fee").
8.3 If the verified annual fee for any Year is greater than the annual fee
originally calculated for that Year in accordance with Clause 5 then
Rhino shall:-
(a) within 15 days of delivery of the certificate referred to in
Clause 7.4(c) (or, in respect of the final Year, within 15 days of
completion of the procedure set out in Clause 7.5), pay to EBI the
amount of the difference between the verified annual fee and the
annual fee already paid (not including interest paid pursuant to
Clause 5.4) in respect of that Year; and
(b) if any or part of such amount due is not paid on that date, pay
interest on the overdue amount (both before and after any
judgment) at a rate of 2% per annum over the base rate from time
to time of National Westminster Bank plc, such interest to run
from the date payment of the said sum fell due up to the date on
which payment is received by EBI.
8.4 If the verified annual fee for any Year is less than the annual fee
originally calculated for that Year in accordance with Clause 4 then
EBI shall:-
(a) within 15 days of delivery of the certificate referred to in
Clause 7.4 (or, in respect of the final Year, within 15 days of
completion of the procedure set out in Clause 7.5), pay to Rhino
the amount of the difference between the verified annual fee and
the annual fee already paid (not including interest paid pursuant
to clause 5.4) in respect of that Year; and
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(b) if any or part of such amount due is not paid on that date, pay
interest on the overdue amount (both before and after any
judgment) at a rate of 2% per annum over the base rate from time
to time of National Westminster Bank plc, such interest to run
from the date payment of the said sum fell due up to the date on
which payment is received by Rhino.
9. MANAGING DIRECTOR
9.1 Rhino hereby agrees that throughout the term of this agreement Rhino
shall procure that EBI shall have the right exercisable by notice in
writing to Rhino signed by a duly authorized signatory on behalf of EBI
to require the appointment of a director of Rhino, which director shall
act as managing director of Rhino. Each such appointment shall be for a
fixed term to be agreed by the parties prior to the date of
appointment. At the end of such term, EBI shall have the right by like
notice to require the re-appointment of such director or the removal of
any such director and the appointment of another person to act in place
of such director provided always that such person is subject to the
approval of those directors of Rhino who are not also directors or
employees of EBI, such approval not to be unreasonably withheld. The
parties agree that the first director appointed pursuant to this Clause
9 shall be ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇.
9.2 Rhino and EBI hereby agree that in relation to a director to be
appointed pursuant to this Clause 9 each shall execute, and EBI shall
procure that the person to be appointed a director shall execute, a
tripartite secondment agreement in the form now agreed and initialled
by the parties or in such other form as the parties may agree
("Secondment Agreement"). If the parties so agree, Rhino shall employ
such director and EBI shall consent to such employment in place of the
secondment envisaged and this Clause 9 shall be read accordingly.
9.3 EBI further undertakes to procure that the director appointed pursuant
to this Clause 9 shall, at all times he is a director of Rhino, act in
accordance with the terms of the Secondment Agreement.
9.4 Rhino agrees to reimburse to EBI the costs and expenses (including,
without limitation the salary and other employment benefits of such
managing director) incurred by it in providing the managing director,
such costs and expenses to be subject to the reasonable approval of
Rhino.
10. LICENCE AGREEMENT
10.1 The parties hereto agree that upon entering into this agreement they
shall each execute the License Agreement in the form agreed and
initialled by the parties, granting Rhino the right to use the name
Electronics Boutique in the United Kingdom and Eire on the terms and
conditions set out therein.
10.2 During the currency of the Licence Agreement the fee payable by Rhino
pursuant to Clause 5.1 shall be reduced by the amount of any fee paid
by Rhino to EBI under the Licence Agreement.
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11. INDEMNITY TO BE GIVEN BY EBI
11.1 No claim shall be made against any EBI Person by Rhino or any member of
the Rhino Rhino Group to recover any loss or damage which any member of
the Rhino Group or any other person may suffer by reason of or arising
out of or otherwise in connection with the provision of the Services
and the performance by EBI of this Agreement, save only to the extent
that such loss or damage results from the wilful default, fraud or
negligence of any EBI Person.
11.2 EBI agrees to indemnify Rhino in respect of any loss, damage, claims,
proceedings, charges, costs and expenses (including without limitation
all legal and professional costs, fees and expenses) which Rhino may
suffer in connection with or arising out of the wilful default, fraud
or negligence of EBI or any EBI Person.
12. INDEMNITY TO BE GIVEN BY RHINO
12.1 Subject to Clause 11.1, Rhino agrees in relation to EBI, for itself and
as trustee for each and every EBI Person, to indemnify and hold every
EBI Person harmless from and against:-
(a) any and all liability, loss, damage, claims. proceedings, charges,
costs and expenses (including without limitation all legal and
professional costs, fees and expenses) which an EBI Person may
suffer in connection with or arising out of EBI's performance of
any of the Services or in connection with this Agreement;
(b) any and all loss, injury or damage incurred by any third party
(including any liability or expense, any consequential, special,
secondary or indirect loss, any damage to goodwill or profits or
any loss of anticipated savings) as a result of or in connection
with any such act, error or omission for which EBI is either
legally liable to make any payment or give any compensation or
which EBI elects to pay or compensate for any reason, subject
always to EBI's duty to mitigate;
(c) any and all costs and expenses incurred by EBI in connection with
any proceedings of any nature, arising out of EBI's performance of
any of the Services or in connection with this Agreement, to which
EBI may be or become party, and which in any case does not arise
from the wilful default, fraud or negligence of EBI or any EBI
Person and provided that this Clause 12.1 shall not extend to any
loss or damage of an EBI Person who is a director of Rhino and
which is incurred by him acting in his capacity as such.
12.2 For the purpose of the provisions of this Clause 12, EBI is or shall be
deemed to be acting as agent or trustee on behalf of and for the
benefit of all EBI Persons from time to time and all such persons shall
to this extent be or become parties to and entitled to the benefit of
the agreement in or evidenced by this Clause 12.
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13. COVENANTS
13.1 EBI hereby undertakes that during the term of this Agreement it shall
report to Rhino any opportunity relating to the Business which it
becomes aware of in Europe which could be made available to Rhino and
shall use its reasonable endeavours to procure that each and every such
opportunity is first offered to Rhino, on the same terms including as
to cost.
13.2 The provisions of Clause 13. 1 shall not apply to any matters arising
out of or in relation to Scandinavia.
13.3 EBI undertakes to Rhino that, during the currency of this Agreement and
during the Prescribed Period thereafter, it will not carry on be engage
or concerned or interested, directly or indirectly within the United
Kingdom or Eire in any business which:-
(a) during the currency of this Agreement, is of the type carried on
by the Business at such time; or
(b) during the Prescribed Period, is of the type carried on by the
Business at the date of termination.
13.4 Rhino undertakes to EBI to procure that at all times during the
currency of this Agreement its accounting reference date will be 31st
January in each year.
14. TERMINATION
This Agreement may be terminated:-
14.1 at any time by EBI by written notice if:-
(a) Rhino whilst insolvent compounds or proposes or enters into any
re-organisation or other special arrangement with its creditors or
is unable to pay its debts within the meaning of s.123 Insolvency
▇▇▇ ▇▇▇▇;
(b) an encumbrancer lawfully takes possession (and does not relinquish
possession within 30 days) or an administrative receiver or
receiver is validly appointed of the whole or a substantial part
of the undertaking, property or assets of Rhino or an
administration order is made in respect of Rhino;
(c) an order is made or an effective resolution is passed or any
analogous proceedings are taken for the winding up of Rhino;
(d) control of Rhino passes from the persons who at the date hereof
exercise such control provided that for the purposes of this
Clause control shall mean either ownership of more than fifty per
cent of the issued share capital of Rhino or any holding company
of Rhino or the right to direct the policies and affairs of Rhino
whether by statute, contract, governmental decree or regulation,
ownership of voting capital or otherwise; or
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(e) at any time Rhino is in default for a period of 30 days or
more in complying with the payment obligations under Clause 5
or any other of its obligations under Clause 5 or any other of
its obligations hereunder;
14.2 at any time by Rhino by written notice if:-
(a) EBI persistently fails to perform its material obligations under
this Agreement if such failure is incapable of remedy or, if
capable of remedy, such failure continues unremedied for a period
of thirty days after notice thereof has been given by Rhino to
EBI; or
(b) any analogous events to those described at 14.1 above occur under
the law of the United States of America or any relevant State
thereof in relation to EBI; or
14.3 by mutual written agreement of Rhino and EBI.
15. EFFECT OF TERMINATION
15.1 Termination of this Agreement for whatever reason shall be without
prejudice to the rights, obligations and liabilities of either party
accruing up to such termination.
15.2 Without prejudice to Clause 15.1 upon termination of the Agreement all
fees and expenses which have accrued to EBI pursuant to Clause 4 shall
become payable to EBI on the date of termination and if all or part of
the accrued sums are not paid on the due date Rhino shall pay interest
on the overdue amount (both before and after any judgement) at a rate
of 2% per annum over the base rate of National Westminster Bank plc,
interest to run from the date payment of the said sum fell due up to
the date on which payment is received.
16. DISCOUNTS
Where a supplier gives a discount or an advertising allowance on goods
or raw materials or services in relation to the Business which are
supplied in response to a bulk purchase by EBI and Rhino together, EBI
and Rhino agree that the discount shall be apportioned between them so
that each benefits from an equal percentage reduction in the relevant
cost per unit.
17. VALUE ADDED TAX
All fees and any other sums due to EBI under this Agreement arc
expressed exclusive of Value Added Tax which (if due) shall be paid in
addition at the applicable rate(s) therefor from time to time.
18. CONFIDENTIALITY
Each of the parties undertakes to the other to procure that no member
of its group shall after the date hereof (save as required by law or
the rules of any governmental or regulatory organisation or save as
reasonably required in connection with its ongoing business) use or
reveal to any person any confidential information of the other until
such
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time as the same falls into the public domain otherwise than by
reason of a breach of this undertaking.
19. ENTIRE AGREEMENT
This Agreement (together with any documents referred to herein)
constitutes the entire agreement between the parties hereto in
connection with the subject matter of this Agreement.
20. NO ASSIGNMENT
Save as otherwise expressly provided under this Agreement, all rights
and transfers hereunder are personal to the parties hereto and may not
be assigned at law or in equity without the prior written consent of
the other party hereto.
21. WAIVER/AMENDMENT
21.1 There shall be no waiver of any term, provision or condition of this
Agreement unless such waiver is evidenced in writing and signed by the
waiving party.
21.2 No omission or delay on the part of any party thereto in exercising any
right, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or of any
other right, power or privilege. The rights and remedies herein
provided are cumulative with and not exclusive of any rights or
remedies provided by law.
21.3 No variation to this Agreement shall be effective unless made in
writing and signed by all the parties.
22. SEVERANCE
If in the opinion of any government department, court or any body in
authority any of the provisions herein contained become or becomes at
any time unenforceable or unlawful in whole or in part under any
applicable law including without limitation Articles 85 and 86 of the
EC Treaty and Articles 53 and 54 of the European Economic Area Treaty
or otherwise, such provision or provisions or part or parts thereof
shall be deemed to be deleted from this Agreement and the remainder of
this Agreement shall continue in full force and effect.
23. SOLE PRINCIPAL
This Agreement shall not be construed as constituting either party
hereto an agent or employee or partner of the other party hereto for
any purpose whatsoever and each party hereby contracts as a principal.
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24. RIGHTS
The rights, powers and remedies provided in this Agreement are (save as
otherwise provided herein and subject to the limitations of liability
expressed herein) cumulative with and not exclusive of the rights,
powers and remedies provided by law independently of this Agreement.
25. NOTICES
25.1 Save as specifically otherwise provided in this Agreement any notice,
demand or other communication to be served under this Agreement may be
served upon any party hereto only by posting by first class post (or
airmail if overseas) or delivering the same or sending the same by
facsimile transmission to the party to be served at its addresses given
below, or facsimile number given below, or at such other address or
number as it may from time to time notify in writing to the other party
hereto.
EBI- Address: the residential address from time to time of
the managing director appointed pursuant to Clause 9,
being at the date hereof:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Dresden Lodge
St. George's Road
Weybridge
Surrey KT13 OEP
and copied to: The Electronics Boutique Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ P.A. 19380 Facsimile Number 001 610
430 6574
Rhino- Address: Rhino Group plc
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile Number 01932 355804
and copied to its registered office from time to time.
25.2 A notice or demand served by first class post shall be deemed duly
served forty-eight hours after posting (or 5 business days after
posting where sent by air mail overseas) and a notice or demand sent by
facsimile transmission shall be deemed to have been served at the time
of transmission and in proving service of the same it will be
sufficient to prove, in the case of a letter, that such letter was
properly stamped or franked first class (or airmail, as appropriate)
addressed and placed in the post and, in the case of a facsimile
transmission, that such facsimile wits duly transmitted to a current
facsimile number of the addressee at the address referred to above.
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26. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law. The parties hereto irrevocably submit to the non-exclusive
jurisdiction of the High Court of Justice in London for the purpose of
hearing and determining any dispute arising out of this Agreement and
for the purpose of enforcement of any judgment against their respective
assets.
IN WITNESS whereof the parties hereto have duly executed this Agreement the day
and year first above written.
SIGNED by
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
for and on behalf of
THE ELECTRONICS BOUTIQUE INC.
a Director and duly authorised in that behalf:-
SIGNED by
/s/ ▇▇▇▇▇▇ ▇▇▇▇
for and on behalf of
RHINO GROUP PLC
a Director and duly authorised
in that behalf:-
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SCHEDULE
THE SERVICES
The provisions of all services, know-how, information (but not including
financial information) and other assistance which are used by EBI and its
subsidiary undertakings in order to carry on its business in the USA and Canada
(but, for the avoidance of doubt, not including any assistance whatsoever of a
financial nature) including but not limited to:
1. advice and assistance in the ordering, negotiating and purchase of
inventory and supplies to be purchased by Rhino in connection with the
Business;
2. advice and assistance on the design, decor and physical layout of each
of Rhino's retail outlets situated in the United Kingdom and Eire
including advice and assistance on the refurbishment of Rhino's
existing stores and on the construction or acquisition (including
negotiating terms) of new premises;
3. advice and assistance with the training of staff and the recruitment of
staff and administration of staff matters;
4. assistance with advertising, promotion and publicity for Rhino;
5. assistance with the provision of protection for Rhino's trade marks and
other intellectual property;
6. support in relation to the training of personnel for, and the
development and installation of, information systems;
7. services to assist with preparing the accounts of Rhino and such books
and records as are required by law or otherwise for the proper conduct
of the affairs of Rhino (including monthly accounts showing the
cumulative turnover for the period).
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