SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
barnesandnoble.com inc.
--------------------------
(Name of Issuer)
Common Stock, $.001 par value
--------------------------
(Title of Class and Securities)
067846105
--------------------------
(CUSIP Number)
Leonard Riggio
c/o Barnes & Noble, Inc.
122 Fifth Avenue
New York, New York 10011
Tel. No.: (212) 633-3300
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 28, 1999
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Statement because of Rule
13d-1(b)(3) or (4), check the following: [ ]
Check the following box if a fee is being paid with this Statement: [ ] (A
fee is not required if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7.)
Note. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b)
for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 067846105 Page 2 of 4 Pages
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1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Leonard Riggio
- ----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
BK and AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
4,230,023
NUMBER OF --------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 60,000
EACH --------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
4,230,023
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
600,000
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,830,023
- -----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.44%
- ----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
Item 1. Security and Issuer.
This statement relates to the Class A Common Stock, par value $.001 per
share (the "Common Stock"), of barnesandnoble.com inc., a Delaware
corporation (the "Company"), with its principal executive offices at 76 Ninth
Avenue, 11th floor, New York, New York 10011.
Item 2. Identity and Background.
(a) This statement is being filed by Leonard Riggio.
(b) Mr. Riggio's business address is c/o Barnes & Noble, Inc.,122 Fifth
Avenue, New York, New York 10011.
(c) Mr. Riggio is the Chairman of the Board of the Company.
(d) and (e) During the last five years, Mr. Riggio has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to
such laws.
(f) Mr. Riggio is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
Mr. Riggio, either individually or through controlled entities, acquired
2,300,000 shares of Common Stock in the Company's initial public offering,
of which: (i) 1,100,000 shares of Common Stock were purchased for $19,800,000
by Mr. Riggio with funds obtained by Mr. Riggio pursuant to his secured line
of credit with Morgan Guaranty Trust Company of New York ("Morgan
Guaranty"); (ii) 600,000 shares of Common Stock were purchased for
$10,800,000 by Barnes & Noble College Bookstores, Inc., a New York
corporation ("B&N College"); and (iii) 600,000 shares of Common Stock were
purchased for $10,800,000 by MBS Textbook Exchange, Inc. ("MBS Exchange"), a
Delaware corporation. See Item 5.
Item 4. Purpose of Transaction.
Mr. Riggio has been the Chairman of the Board and a Director of the
Company since the Company's inception in 1999. He has acquired the Common
Stock as an investment. Mr. Riggio has no current plans or proposals with
respect to any of the items described in (a) through (j) of Item 4.
Item 5. Interest in Securities of the Issuer
(a) and (b) Mr. Riggio is the beneficial owner of an aggregate of
4,830,023 shares (15.44%) of Common Stock, of which 2,530,023 shares of
Common Stock are issuable upon exercise of options which are currently
exercisable. Of such 4,830,023 shares of Common Stock, Mr. Riggio is the
direct beneficial owner of 3,630,023 shares of Common Stock (which amount
includes his options to purchase 2,530,023 shares of Common Stock) over which
he has the sole power to vote and dispose of. Of such 4,830,023 shares of
Common Stock, Mr. Riggio is the indirect beneficial owner of 600,000 shares
of Common Stock which were purchased and are registered in the name of B&N
College, of which Mr. Riggio directly owns all of the voting securities, and
600,000 shares of Common Stock which were purchased and are registered in the
name of MBS Exchange, of which Mr. Riggio is the Chairman and Mr. Riggio's
spouse owns a majority of the voting securities. As the owner of all of the
voting securities of B&N College, Mr. Riggio has the sole power to vote and
dispose of the shares of Common Stock owned by B&N College. Mr. Riggio, as
Chairman of MBS Exchange, shares with his spouse the voting and dispositive
power over the shares of Common Stock owned by MBS Exchange. Additionally,
Mr. Riggio has been granted options to purchase 2,530,023 shares of Common
Stock which options are not exercisable until February 1, 2000.
(c) The shares of Common Stock acquired by Mr. Riggio, B&N College and
MBS Exchange were acquired on May 28, 1999 in the Company's initial public
offering. The options to purchase 5,060,046 shares of Common Stock were
granted on May 28, 1999 under the Company's 1999 Incentive Plan as
replacement options that replaced options originally granted on November 1,
1998.
(d) and (e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
1. Letter Agreement dated as of March 3, 1997 between Morgan Guaranty
and Mr. and Mrs. Riggio.
2. Demand Note dated as of March 3, 1997 from Mr. Riggio to Morgan
Guaranty.
3. Pledge Agreement dated as of March 3, 1997 between Mr. Riggio and
Morgan Guaranty.
4. Pledge Agreement dated as of March 3, 1997 between Mr. and Mrs.
Riggio and Morgan Guaranty.
5. Lock Up Agreement dated May 24, 1999 from Mr. Riggio to Goldman,
Sachs & Co., Merrill Lynch & Co., Salomon Smith Barney Inc. and Wit
Capital Corporation, as representatives of the several underwriters.
Item 7. Material to be Filed as Exhibits
1. Letter Agreement dated as of March 3, 1997 between Morgan Guaranty
and Mr. and Mrs. Riggio.
2. Demand Note dated as of March 3, 1997 from Mr. Riggio to Morgan
Guaranty.
3. Pledge Agreement dated as of March 3, 1997 between Mr. Riggio and
Morgan Guaranty.
4. Pledge Agreement dated as of March 3, 1997 between Mr. and Mrs.
Riggio and Morgan Guaranty.
5. Lock Up Agreement dated May 24, 1999 from Mr. Riggio to Goldman,
Sachs & Co., Merrill Lynch & Co., Salomon Smith Barney Inc. and Wit
Capital Corporation, as representatives of the several underwriters.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and accurate.
Dated: June 10, 1999
/s/Leonard Riggio
------------------------
Leonard Riggio
March 3, 1997
Mr. and Mrs. Leonard Riggio
733 Park Avenue
17th Floor
New York, New York 10021
Dear Mr. and Mrs. Riggio:
Reference is made to the advised line of credit (the "Line of Credit") in the
amount of $100,000,000* that Morgan Guaranty Trust Company of New York
("Morgan") has agreed to extend to you.
This is to confirm our agreement that:
- - Subject to its availability, the Line of Credit may be utilized by your
obtaining loans thereunder, each in principal amount of at least
$500,000.
- - You shall give Morgan notice not later than (i) 12:00 p.m. (New York
City time) on the date of each Domestic Loan and (ii) the third business
day (as defined in the note evidencing loans under the Line of Credit)
before each Eurodollar Loan specifying (a) the date of such Loan, (b)
the principal amount of such Loan, (c) whether the Loan is to be a
Domestic Loan or a Eurodollar Loan and (d) if a Loan is a Eurodollar
Loan, the duration of the interest period elected with regard to the
loan (one, three, six or twelve months).
- - Repayments of loans must be in the minimum amount of $500,000.
- - So long as you shall be indebted to Morgan with regard to any loans
extended under the Line of Credit or the Line of Credit shall be in
existence:
- You shall maintain on deposit in your custody account no. 89318 (the
"Custody Account") at Morgan Guaranty collateral acceptable to
Morgan having a lending value, as established by Morgan in its sole
discretion, at least equal to your outstanding obligations with
regard to the Line of Credit.
- You shall furnish to Morgan such information concerning your
financial condition as Morgan shall reasonably request, including
but not limited to financial statements on an annual basis.
- You shall not create any indebtedness to other than Morgan in
addition to that shown on your financial statement dated
December 31, 1995 that you have delivered to Morgan other than
(i) $1,000,000 in aggregate indebtedness from time to time
outstanding and (ii) indebtedness secured by a residential mortgage
not exceeding $7,000,000 in aggregate amount.
* This amount has been increased to $200,000,000.
- Shares of Barnes & Noble, Inc. purchased using the proceeds of the
initial loan under the Line of Credit shall be held in the Custody
Account and shall be registered for resale under the Securities Act
of 1933 not later than July 15, 1997.
- - Loans under the Line of Credit shall be subject to Morgan's demand and
the demand tenor thereof shall not be affected by this letter. The Line
of Credit is not a committed lending facility and its availability shall
be subject to Morgan's discretion.
Please confirm your agreement with the contents of this letter by signing the
enclosed copy of this letter in the space below and returning it to the
undersigned.
Very truly yours,
Morgan Guaranty Trust Company of New York
By: /s/ Jeffrey Westcott
-----------------------
Jeffrey Westcott,
Vice President
Agreed to:
/s/ Leonard Riggio
- -------------------------
LEONARD RIGGIO
/s/ Louise Riggio
- -------------------------
LOUISE RIGGIO
DEMAND NOTE
U.S. $100,000,000 March 3, 1997
FOR VALUE RECEIVED, LEONARD RIGGIO and LOUISE RIGGIO (collectively, the
"Borrowers") promise to pay to the order of MORGAN GUARANTY TRUST COMPANY OF
NEW YORK (the "Bank") ON DEMAND at its office at 60 Wall Street, New York,
New York 10260-0060, U.S.A., for the account of its Lending Office (as
hereinafter defined), in lawful money of the United States of America in same
day funds (or in such funds as may from time to time become customary for the
settlement of international transactions in U.S. dollars), the lesser of (i)
U.S. $100,000,000 or (ii) the then-outstanding principal amount of each loan
(the "Loan" or "Loans") made by the Bank from time to time to the Borrowers
hereunder. The Borrowers shall pay interest on the unpaid principal amount
of each Loan until maturity on the dates and at a rate per annum as
hereinafter set forth. As used herein, "Lending Office" means, (i) with
regard to Loans bearing interest based on the Base Rate (as hereinafter
defined) (collectively, "Domestic Loans"), the office of the Bank located at
60 Wall Street, New York, New York or such other office as the Bank may
designate, and (ii) with regard to Loans bearing interest based on the
Eurodollar Rate (as hereinafter defined) (collectively, "Eurodollar Loans"),
the Nassau (Bahamas) office of the Bank or such other office as the Bank may
designate.
Interest based on the Base Rate shall be computed on the basis of a year
of 365 days (or 366 days in a leap year) and paid for actual days elapsed
(including the first day but excluding the last day). Interest based on the
Eurodollar Rate shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding
the last day).
Each Eurodollar Loan shall bear interest at a rate per annum (the
"Eurodollar Rate") equal to the Adjusted Eurodollar Rate (as hereinafter
defined) plus (i) 1 and 3/4% so long as the principal amount of outstanding
Loans hereunder shall be greater than $50,000,000 and (ii) 1% at all other
times (the "Eurodollar Margin"), payable on the last day of the Interest
Period applicable thereto and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. The
"Adjusted Eurodollar Rate" applicable to any Interest Period (as hereinafter
defined) means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Eurodollar
Reserve Percentage. The "London Interbank Offered Rate" applicable to any
Interest Period means the rate per annum at which deposits in U.S. dollars
are offered to the Bank in the London interbank market at approximately 11:00
a.m. (London time) two business days prior to the first day of such Interest
Period in an amount approximately equal to the principa1 amount of the Loan
to which such Interest Period applies and for the period of time comparable
to such Interest Period. The "Eurodollar Reserve Percentage" means for any
day that percentage (expressed as a decimal) which is in effect on such day,
as prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank
of the Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of
any other category of liabilities which includes deposits by reference to
which the interest rate on the Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-United
States office of the Bank to United States residents). The Adjusted
Eurodollar Rate shall be adjusted automatically on and as of the effective
date of any change in the Eurodollar Reserve Percentage. As used herein, the
term "Interest Period" means the period beginning on the date of each
Eurodollar Loan and ending on the numerically corresponding day in the
calendar month one, three, six, or twelve months after such date; provided,
that if an Interest Period would otherwise end on a day which is not a
business day it shall be extended to the next succeeding business day unless
such business day falls in the next calendar month, in which case the
Interest Period shall end on the next preceding business day; provided,
further, that if the Bank shall not have received written notice to the
contrary from the Borrowers at least five business days prior to the end of
an Interest Period the Borrowers shall be deemed to have requested to select
an Interest Period with a duration equal to that then ending. As used
herein, the term "business day" means any day on which dealings in U.S.
dollar deposits are carried on in the London interbank market and on which
commercial banks are open for domestic and foreign exchange business in
London and New York City. Notice by the Bank to the Borrowers of the rate of
interest so determined shall be binding and conclusive upon the Borrowers in
the absence of manifest error.
Each Domestic Loan shall bear interest payable on the last day of each
month at a rate per annum (the "Base Rate") for each day equal to the higher
of (i) the rate of interest publicly announced by the Bank in New York City
from time to time as its Prime Rate (the "Prime Rate") and (ii) the sum of
1/2 of 1% plus the Federal Funds Rate (as defined below) for such day.
"Federal Funds Rate" means, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the business day next succeeding such
day; provided that (i) if such day is not a business day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next
preceding business day as so published on the next succeeding business day,
and (ii) if no such rate is so published on such next succeeding business
day, the Federal Funds Rate for such day shall be the average rate quoted to
the Bank on such day on such transactions as determined by the Bank.
The Borrowers shall pay interest on the unpaid principa1 amount of each
Loan after the maturity thereof and, to the extent permitted by law, on
accrued and unpaid interest until paid at a rate per annum equal to the sum
of 2% plus the Base Rate.
If after the date of this Note the adoption of, or any change in, any
applicable rule, executive order, decree, regulation or interpretation is
amended, modified, enacted or promulgated by any government or governmental
authority which (i) changes the basis of taxation of payments to the Bank or
the Lending Office of the Bank extending a Eurodollar Loan (the "Eurodollar
Lending Office") in respect to the principal of and interest on any
Eurodollar Loan (except for changes in the rate of taxation on the overall
net income of the Bank by the United States of America or the Eurodollar
Lending Office of the Bank by the jurisdiction in which such Lending Office
is located), or (ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against any of the assets of, deposits
with or for the account of, or credit extended by the Bank's Eurodollar
Lending Office, or (iii) imposes on the Bank (or its Eurodollar Lending
Office) or the London interbank market any other conditions affecting any
Loan, the Loans or this Note, and the result of any of the foregoing is to
increase the cost to the Bank (or its Eurodollar Lending Office) of agreeing
to make or making, funding or maintaining any Loan evidenced by this Note or
would have the effect of reducing the rate of return on the capital of the
Bank or any entity controlling the Bank (its "Parent") as a consequence of
agreeing to make any Loan, or to reduce the amount of any sum receivable by
the Bank (or its Eurodollar Lending Office) on this Note, then the Borrowers
shall pay to the Bank or its Parent upon demand such amount as will
compensate the Bank or its Parent for such additional cost or reduction in
return. A certificate of the Bank setting forth the basis for the
determination of any amount necessary to compensate the Bank or its Parent as
aforesaid shall be conclusive as to the determination of such amount in the
absence of manifest error.
If, after the date of this Note, the introduction of, or any change in,
any applicable law, rule or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof or compliance by the Bank (or its
Eurodollar Lending Office) with any request or directive (whether or not
having the force of law) of any such authority shall make it unlawful or
impossible for the Bank (or its Eurodollar Lending Office) to make, maintain
or fund its Eurodollar Loans, the Bank forthwith shall so notify the
Borrowers. Upon receipt of such notice, the Borrowers shall prepay in full
the then outstanding principal amount of each Eurodollar Loan, together with
accrued interest thereon, on either (a) the last day of the Interest Period
applicable thereto if the Bank may lawfully continue to maintain and fund
such Loan to such day or (b) immediately if the Bank may not lawfully
continue to fund and maintain such Loan to such day.
Eurodollar Loans may not be repaid at the Borrowers' option on a date
other than the last day of an Interest Period. If, however, the Borrowers
make any payment of principal of any Eurodollar Loan on any day other than
the last day of the Interest Period applicable thereto, the Borrowers shall
reimburse the Bank on demand for any toss or expense incurred by it as a
result of the timing of such payment, including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties,
provided that the Bank shall have delivered to the Borrowers a certificate as
to the amount of such loss, which certificate shall be conclusive in the
absence of manifest error.
Domestic Loans may be prepaid at any time without penalty or premium .
The Borrowers hereby waive diligence, presentment, demand, protest and
notice of any kind whatsoever. The non-exercise by the Bank of its rights
hereunder in any particular instance shall not constitute a waiver of any
right in any subsequent instance.
The holder of this Note shall, and is hereby authorized by the Borrowers
to, endorse on the schedule forming a part hereof appropriate notations
evidencing the date and the amount of each Loan made by the Bank, the date
and amount of each payment of principal, whether such Loan is a Domestic or
Eurodollar Loan and, in the case of Eurodollar Loans, the Eurodollar Rate
applicable thereto.
If this Note is not paid in full when due the Borrowers agree to pay all
costs and expenses of collection, including reasonable attorneys' fees.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK. The Borrowers hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State Court sitting in New York City for
purposes of all legal proceedings arising out of or relating to this Note or
any agreement received by the Bank in connection herewith. The Borrowers
irrevocably waive, to the fullest extent permitted by law, any objection
which the Borrowers may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
The Borrowers hereby irrevocably waive any and all right to trial by jury in
any legal proceeding arising out of or relating to this Note or any agreement
received by the Bank in connection herewith.
The obligations of the Borrowers hereunder shall be joint and several.
/s/ Leonard Riggio
LEONARD RIGGIO
/s/ Louise Riggio
LOUISE RIGGIO
<PAGE>
LOANS AND PAYMENT5 OF PRINCIPAL
Amount Type Amount of
of of PrincipalMaturity Notation
Date Loan Loan Repaid Date* Made By
- ---- -------- ---- --------- ----- --------
- ---- -------- ---- --------- ----- --------
- ---- -------- ---- --------- ----- --------
- ---- -------- ---- --------- ----- --------
- ---- -------- ---- --------- ----- --------
- ---- -------- ---- --------- ----- --------
- ---- -------- ---- --------- ----- --------
* Subject to Prior Demand
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 3, 1997 between LEONARD RIGGIO (the
"Pledgor") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK (the "Bank").
WHEREAS, the Bank may extend and has already extended loans or other
credit facilities or financial accommodations (collectively, the "Loans") to
or on behalf of the Pledgor from time to time;
NOW, THEREFORE, to induce the Bank to extend the Loans and to secure his
obligations (collectively, the "Secured Obligations") with regard thereto,
and for other good consideration, the receipt and adequacy of which are
hereby acknowledged, the Pledgor and the Bank agree as follows:
1. As collateral security for the performance of the Secured
Obligations, the Pledgor hereby pledges and assigns to the Bank, and grants
to the Bank a security interest in, those securities identified in Exhibit A
hereto, all proceeds and products thereof and distributions thereon, and all
other shares of Barnes & Noble, Inc. from time to time maintained by him in
custody with the Bank (collectively, the "Collateral.
2. The Pledgor represents and warrants that: (i) all of the Collateral
is and will be validly and duly pledged to the Bank in accordance with law,
and agrees to defend the Bank's right, title, lien and security interest in
and to the Collateral against the claims and demands of all persons
whomsoever, (ii) he has, and will have upon deposit with the Bank, title to
all of the Collateral, free and clear of all claims, mortgages, pledges,
liens, encumbrances and security interests of every nature whatsoever, and
that no consent or approval of any person, entity or governmental or
regulatory authority, or of any securities exchange was or is necessary to
the validity of this pledge, (iii) the information set forth in Exhibit A is
true and correct and (iv) no liens, security interests or adverse claims
other than in favor of the Bank exist upon any of the Collateral.
3. The Pledgor will faithfully preserve and protect the Bank's
security interest in the Collateral and will do all such acts and things and
execute and deliver all such documents and instruments, including without
limitation further pledges, assignments, financing statements and
continuation statements, as the Bank in its sole discretion may reasonably
deem necessary or advisable from time to time in order to preserve, protect
and perfect such security interest. The Pledgor hereby authorizes the Bank
to sign and file financing and continuation statements without the signature
of the Pledgor.
4. The Pledgor will not permit any liens, security interests or
adverse claims other than in favor of the Bank to exist upon any of the
Collateral and will not, without the prior express written consent of the
Bank, pledge any additional shares of the Corporation (as defined in Exhibit
A) to any person or entity other than the Bank.
5. The Pledgor will not take any action that could in any way limit or
adversely affect the ability of the Bank to realize upon its rights on the
collateral.
6. The Pledgor agrees to notify the Bank:
(a) at least 72 hours prior to donating, or committing any other act
with respect to any securities of the same class (or convertible into) shares
of the Corporation which might render the Collateral not salable: and
(b) immediately of any development or occurrence which to his knowledge
would render any of the Collateral not readily saleable under Rules 144 or
145(d) or the Securities Act of 1933, whichever is applicable.
7. If any time the Secured Obligations shall be in default the Bank
may cause all or any of the Collateral to be transferred to or registered in
its name or the name of its nominee or nominees.
8. In the event the Secured Obligations shall be in default (i) all
dividends, interest and other distributions at any time and from time to time
declared or paid upon any of the Collateral shall become part of the
Collateral and (ii) the Bank shall be entitled to exercise all voting power
with respect to the Collateral.
9. If any of the Secured Obligations shall not be performed forthwith
when due in accordance with their terms, the Bank, without obligation to
resort to other security, shall have the right at any time and from time to
time to sell, resell, assign and deliver, in its discretion, all or any of
the Collateral, in one or more parcels at the same or different times, and
all right, title and interest, claim and demand therein and right of
redemption thereof, on any securities exchange on which the Collateral or any
of it may be listed, or at public or private sale, for cash, upon credit or
for future delivery, and in connection therewith the Bank may grant options,
the Pledgor hereby waiving and releasing any and all equity or right of
redemption. If any of the Collateral is sold by the Bank upon credit or for
future delivery, the Bank shall not be liable for the failure of the
purchaser to purchase or pay for the same and, in the event of any such
failure, the Bank may resell such Collateral. In no event shall the Pledgor
be credited with any part of the proceeds of sale of any Collateral until
cash payment thereof has actually been received by the Bank. In addition,
should any portion of the Collateral consist of a time deposit or deposits
with a financial institution, the Bank may terminate such deposit or deposits
prior to the maturity thereof and any penalties payable in connection
therewith shall be for the sole account of the Pledgor.
10. No demand, advertisement or notice, all of which are hereby
expressly waived, shall be required in connection with any sale or other
disposition of any part of the Collateral which threatens to decline speedily
in value or which is of a type customarily sold on a recognized market;
otherwise the Bank shall give the Pledgor at least five business days' prior
notice of the time and place of any public sale and of the time after which
any private sale or other disposition is to be made, which notice the Pledgor
agrees is reasonable, all other demands, advertisements and notices being
hereby waived. The Bank shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given. The Bank may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and
place to which the same was so adjourned. In the case of all sales of
Collateral, public or private, the Pledgor shall pay all costs and expenses
of every kind for sale or delivery, including brokers' and attorneys' fees,
and after deducting such costs and expenses from the proceeds of sale, the
Bank shall apply any residue to the payment of principal, interest and other
amounts owed with regard to the Loans. The balance, if any, remaining after
payment in full of all such amounts shall be paid to the Pledgor, subject to
any duty of the Bank imposed by law to the holder of any subordinate security
interest in the Collateral known to the Bank
11. The Pledgor recognizes that the Bank may be unable to effect a
public sale of all or a part of the Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, as now or
hereafter in effect, or in applicable Blue Sky or other state securities
laws, as now or hereafter in effect, but may be compelled to resort to one or
more private sales to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire such Collateral for their own account,
for investment and not with a view to the distribution or resale thereof.
The Pledgor agrees that private sales so made may be at prices and other
terms less favorable to the seller than if such Collateral were sold at
public sales, and that the Bank has no obligation to delay sale of any such
Collateral for the period of time necessary to permit the issuer of such
Collateral, even if such issuer would agree, to register such Collateral for
public sale under such applicable securities laws. The Pledgor agrees that
private sales made under the foregoing circumstances shall be deemed to have
been made in a commercially reasonable manner.
12. The remedies provided herein in favor of the Bank shall not be
deemed exclusive, but shall be cumulative, and shall be in addition to all
other remedies in favor of the Bank existing at law or in equity.
13. The Bank shall have the right, for and in the name, place and stead
of the Pledgor, to execute endorsements, assignments or other instruments of
conveyance or transfer with respect to all or any of the Collateral.
14. The Bank shall have no duty as to the collection or protection of
the Collateral or any income thereon or as to the preservation of any rights
pertaining thereto, beyond the safe custody of any thereof actually in its
possession. With respect to any maturities, calls, conversions, exchanges,
redemptions, offers, tenders or similar matters relating to any of the
Collateral (herein called "events"), the Bank's duty shall be fully satisfied
if (i) the Bank exercises reasonable care to ascertain the occurrence and to
give reasonable notice to the Pledgor of any events applicable to any
Collateral which is registered and held in the name of the Bank or its
nominee, (ii) the Bank gives the Pledgor reasonable notice of the occurrence
of any events, of which the Bank has received actual knowledge, as to any
securities which are in bearer form or are not registered and held in the
name of the Bank or its nominee (the Pledgor agreeing to give the Bank
reasonable notice of the occurrence of any events applicable to any
securities in the possession of the Bank of which the Pledgor has received
knowledge), and (iii) in the exercise of its sole discretion (a) the Bank
endeavors to take such action with respect to any of the events as the
Pledgor may reasonably and specifically request in writing in sufficient time
for such action to be evaluated and taken or (b) if the Bank determines that
the action requested might adversely affect the value of the Collateral as
collateral, the collection of the Loans, or otherwise prejudice the interests
of the Bank, the Bank gives reasonable notice to the Pledgor that any such
requested action will not be taken and if the Bank makes such determination
or if the Pledgor fails to make such timely request, the Bank takes such
other action as it deems advisable in the circumstances. Except as
hereinabove specifically set forth, the Bank shall have no further obligation
to ascertain the occurrence of, or to notify the Pledgor with respect to, any
events and shall not be deemed to assume any such further obligation as a
result of the establishment by the Bank of any internal procedures with
respect to any securities in its possession. The Pledgor releases the Bank
from any claims, causes of action and demands at any time arising out of or
with respect to this Agreement, the Collateral and/or any actions, taken or
omitted to be taken by the Bank with respect thereto, and the Pledgor hereby
agrees to hold the Bank harmless from and with respect to any and all such
claims, causes of action and demands.
15. The Pledgor hereby irrevocably appoints the Bank as the Pledgor's
attorney-in-fact for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instrument which either may
deem necessary or advisable to accomplish the purposes hereof. Without
limiting the generality of the foregoing, the Bank shall have the right and
power to receive, endorse and collect all checks and other orders for the
payment of money made payable to the Pledgor representing any interest or
dividend or other distribution payable in respect of the Collateral or any
part thereof and to give full discharge for the same.
16. No delay on the part of the Bank in exercising any of its options,
powers or rights, or partial or single exercise thereof, shall constitute a
waiver thereof. The pledge of the Collateral hereby shall not in any way
preclude or restrict any recourse by the Bank against the Borrower or any
other person or entity liable with regard to the Secured Obligations or any
other collateral therefor.
17. Upon the repayment in full of all principal, interest and other
amounts that may be payable with regard to the Loans, the Pledgor shall be
entitled to the return of all of the Collateral and of all other property and
cash which have not been used or applied toward the payment of such
principal, interest and other amounts free and clear of all liens in favor of
the Bank or any encumbrances imposed by the Bank. Except as aforesaid, the
assignment by the Bank to the Pledgor of such Collateral and other property
shall be without representation or warranty of any nature whatsoever and
wholly without recourse.
18. Any notice or demand upon the Pledgor shall be deemed to have been
sufficiently given for all purposes thereof if mailed, postage prepaid, by
registered or certified mail, return receipt requested, or if delivered, to
the Pledgor at the address specified below, or at such other address as the
Pledgor may theretofore have designated in writing and given in like manner
to the Bank.
19. Any waiver, permit, consent or approval of any kind or character on
the part of the Bank of any breach or default under this Agreement or any
such waiver of any provision or condition of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in
such writing.
20. This Agreement and the rights and obligations of the Bank and the
Pledgor hereunder shall be construed in accordance with and governed by the
laws of the State of New York, cannot be changed orally and shall bind and
inure to the benefit of the Pledgor and the Bank and their respective
successors and assigns, and all subsequent holders of the Secured
Obligations.
21. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which taken together shall
constitute but one and the same instrument.
22. This Agreement replaces all prior agreements between the Pledgor
and the Bank relating to the Collateral contained in any promissory note
delivered to the Bank by the Pledgor.
23. The Pledgor agrees to pay the Bank on demand all costs, including
legal fees, incurred by the Bank in connection with the administration and
enforcement of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the Pledgor and the Bank have caused this Agreement
to be duly executed as of the day and year first above written.
/s/ Leonard Riggio
-----------------------
LEONARD RIGGIO
Address:
733 Park Avenue, 17th Floor
New York, New York 10021
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:
-----------------------
Jeffrey Westcott,
Vice President
Address:
9 West 57th Street
New York, New York 10019
Attention: Jeffrey Westcott
<PAGE>
Exhibit A
THE COLLATERAL
Name of Issuer of
Pledged Shares
(the "Corporation") No. of Shares Class of Shares Certificate No.
- ------------------ ------------- --------------- ---------------
Barnes & Noble, Inc. (SEE ATTACHED SCHEDULE)
Date of Acquisition Nature of Acquisition Date on which Shares
of Shares of Shares fully paid for
- ------------------- ---------------------- ---------------------
NUMBER OF SHARES OF THE CORPORATION OWNED BY PLEDGOR
The Pledgor represents that:
(a) the total number of shares that he directly owns of the class of
security of the Corporation hereby being pledged is 4,486,209, and
(b) the total number of all other classes of the securities of the
Corporation directly or indirectly owned by the Pledgor is
NONE .
SALES BY PLEDGOR OF STOCK OF THE CORPORATION
The Pledgor represents to the Bank that during the last three months he, or
any person(s) who Pledgor must aggregate his sales with under Rule 144 of the
Securities Act of 1933, as amended,
(a) has sold 0 shares of the Corporation; and
(b) has sold 0 convertible securities which are convertible
into shares of the Corporation.
In addition, the Pledgor and such person(s) currently have no sale orders
open with any broker and that he and they will not place any such sale orders
to sell shares of the Corporation or such convertible securities without the
prior express written consent of the Bank.
<PAGE>
BARNES & NOBLE, INC. COMMON STOCK
ACQUISITION AND NATURE OF
CERT NO. NO. OF SHARES FULL PAYMENT DATE ACQUISITION
- ------- ------------- ----------------- -----------
4 100 12/30/86 Original Issue
7 106 12/30/86 Original Issue
12 283 12/30/86 Original Issue
90 1,194,915 12/30/86 Original Issue
243 727,800 12/30/86 Original Issue
412 630,000 12/30/86 Original Issue
485 398,769 11/16/92 Original Issue
607 491,167 12/30/86 Original Issue
758 833,669 11/16/92 Original Issue
23,300 1/17/97 Open Market Purchase
25,000 1/21/97 Open Market Purchase
10,000 1/21/97 Open Market Purchase
7,000 1/21/97 Open Market Purchase
5,000 1/21/97 Open Market Purchase
24,900 1/22/97 Open Market Purchase
22,600 1/22/97 Open Market Purchase
5,500 1/22/97 Open Market Purchase
10,000 2/25/97 Open Market Purchase
26,100 2/25/97 Open Market Purchase
50,000 2/25/97 Open Market Purchase
<PAGE>
EXISTING PLEDGES TO OTHERS OF STOCK OF THE CORPORATION
No. of Pledged
Shares Date of Pledge Pledgee
- -------------- -------------- -------
NONE
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 3, 1997 between LEONARD RIGGIO AND
LOUISE RIGGIO (the "Pledgors") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK
(the "Bank").
WHEREAS, the Bank may extend loans or other credit facilities or
financial accommodations (collectively, the "Loans") to or on behalf of
either or both of the Pledgors;
NOW, THEREFORE, to induce the Bank to extend the Loans and to secure
their obligations (collectively, the "Secured Obligations") with regard
thereto, for good consideration, the receipt and adequacy of which are hereby
acknowledged, the Pledgors and the Bank agree as follows:
1. As collateral security for the performance of the Secured
Obligations, the Pledgors hereby pledge and assign to the Bank, and grant to
the Bank a security interest in, all assets and property now and hereafter
maintained on deposit by the Pledgors in Custody Account No. 89318 at the
Bank (such assets and property being hereinafter referred to as the
"Collateral" and such account being hereinafter referred to as the
"Collateral Account"). Upon the consent of the Bank the Pledgors may from
time to time withdraw portions of the Collateral and substitute other
property acceptable to the Bank therefor, which substituted property shall
then be deemed to constitute a portion of the Collateral, provided, that the
Pledgors shall at all times maintain Collateral in the Collateral Account
having a lending value, as determined by the Bank in its sole discretion, at
least equal to the Dollar amount of the Secured Obligations.
2. A. The Pledgors represent and warrant that all of the contents of
the Collateral Account are and will be validly and duly pledged to the Bank
in accordance with law, and agree to defend the Bank's right, title, lien and
security interest in and to the Collateral against the claims and demands of
all persons whomsoever. The Pledgors also represent and warrant to the Bank
that they have, and will have upon deposit with the Bank, title to all of the
contents of the Collateral Account, free and clear of all claims, mortgages,
pledges, liens, encumbrances and security interests of every nature
whatsoever, and that no consent or approval of any governmental or regulatory
authority, or of any securities exchange, was or is necessary to the validity
of this pledge.
B. The Pledgors will faithfully preserve and protect the Bank's
security interest in the Collateral and will do all such acts and things and
execute and deliver all such documents and instruments, including without
limitation further pledges, assignments, financing statements and
continuation statements, as the Bank in its sole discretion may reasonably
deem necessary or advisable from time to time in order to preserve, protect
and perfect such security interest. The Pledgors hereby authorize the Bank
to sign and file financing and continuation statements without the signature
of the Pledgors.
C. The Pledgors represent and warrant that no liens, security
interests or adverse claims other than in favor of the Bank exist upon any of
the contents of the Collateral Account. The Pledgors will not permit any
liens, security interests or adverse claims other than in favor of the Bank
to exist upon any of the contents of the Collateral Account. The Pledgors
shall not enter into any agreement imposing any restrictions on the
transferability of the Collateral or that would otherwise lessen in any way
its value as collateral.
3. If at any time the Secured Obligations shall be in default the Bank
may cause all or any of the Collateral to be transferred to or registered in
its name or the name of its nominee or nominees.
4. In the event the Secured Obligations shall be in default (i) all
dividends, interest and other distributions at any time and from time to time
declared or paid upon any of the Collateral shall become part of the
Collateral and (ii) the Bank shall be entitled to exercise all voting power
with regard to the Collateral.
5. If any of the Secured Obligations shall not be performed forthwith
as and when due in accordance with their terms, the Bank, without obligation
to resort to other security, shall have the right at any time and from time
to time to sell, resell, assign and deliver, in its discretion, all or any of
the Collateral, in one or more parcels at the same or different times, and
all right, title and interest, claim and demand therein and right of
redemption thereof, on any securities exchange on which the Collateral or any
of it may be listed, or at public or private sale, for cash, upon credit or
for future delivery, and in connection therewith the Bank may grant options,
the Pledgors hereby waiving and releasing any and all equity or right of
redemption. If any of the Collateral is sold by the Bank upon credit or for
future delivery, the Bank shall not be liable for the failure of the
purchaser to purchase or pay for the same and, in the event of any such
failure, the Bank may resell such Collateral. In no event shall the Pledgors
be credited with any part of the proceeds of sale of any Collateral until
cash payment thereof has actually been received by the Bank. In addition,
should any portion of the Collateral consist of a time deposit or deposits
with a financial institution, the Bank may terminate such deposit or deposits
prior to the maturity thereof and any penalties payable in connection
therewith shall be for the sole account of the Pledgors.
6. No demand, advertisement or notice, all of which are hereby
expressly waived, shall be required in connection with any sale or other
disposition of any part of the Collateral which threatens to decline speedily
in value or which is of a type customarily sold on a recognized market;
otherwise the Bank shall give the Pledgors at least five business days' prior
notice of the time and place of any public sale and of the time after which
any private sale or other disposition is to be made, which notice the
Pledgors agree is reasonable, all other demands, advertisements and notices
being hereby waived. The Bank shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given. The Bank may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and
place to which the same was so adjourned. In the case of all sales of
Collateral, public or private, the Pledgors shall pay all costs and expenses
of every kind for sale or delivery, including brokers' and attorneys' fees,
and after deducting such costs and expenses from the proceeds of sale, the
Bank shall apply any residue to the payment of principal, interest and other
amounts owed with regard to the Secured Obligations. The balance, if any,
remaining after payment in full of all such amounts shall be paid to the
Pledgors, subject to any duty of the Bank imposed by law to the holder of any
subordinate security interest in the Collateral known to the Bank.
7. The Pledgors recognize that the Bank may be unable to effect a
public sale of all or a part of the Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, as now or
hereafter in effect, or in applicable Blue Sky or other state securities
laws, as now or hereafter in effect, but may be compelled to resort to one or
more private sales to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire such Collateral for their own account,
for investment and not with a view to the distribution or resale thereof.
The Pledgors agree that private sales so made may be at prices and other
terms less favorable to the seller than if such Collateral were sold at
public sales, and that the Bank has no obligation to delay sale of any such
Collateral for the period of time necessary to permit the issuer of such
Collateral, even if such issuer would agree, to register such Collateral for
public sale under such applicable securities laws. The Pledgors agree that
private sales made under the foregoing circumstances shall be deemed to have
been made in a commercially reasonable manner.
8. The remedies provided herein in favor of the Bank shall not be
deemed exclusive, but shall be cumulative, and shall be in addition to all
other remedies in favor of the Bank existing at law or in equity.
9. The Bank shall have the right, for and in the name, place and stead
of the Pledgors, to execute endorsements, assignments or other instruments of
conveyance or transfer with respect to all or any of the Collateral.
10. The Bank shall have no duty as to the collection or protection of
the Collateral or any income thereon or as to the preservation of any rights
pertaining thereto, beyond the safe custody of any thereof actually in its
possession. With respect to any maturities, calls, conversions, exchanges,
redemptions, offers, tenders or similar matters relating to any of the
Collateral (herein called "events"), the Bank's duty shall be fully satisfied
if (i) the Bank exercises reasonable care to ascertain the occurrence and to
give reasonable notice to the Pledgors of any events applicable to any
Collateral which is registered and held in the name of the Bank or its
nominee, (ii) the Bank gives the Pledgors reasonable notice of the occurrence
of any events, of which the Bank has received actual knowledge, as to any
securities which are in bearer form or are not registered and held in the
name of the Bank or its nominee (the Pledgors agreeing to give the Bank
reasonable notice of the occurrence of any events applicable to any
securities in the possession of the Bank of which the Pledgors have received
knowledge), and (iii) in the exercise of its sole discretion (a) the Bank
endeavors to take such action with respect to any of the events as the
Pledgors may reasonably and specifically request in writing in sufficient
time for such action to be evaluated and taken or (b) if the Bank determines
that the action requested might adversely affect the value of the Collateral
as collateral, the collection of the Loans, or otherwise prejudice the
interests of the Bank, the Bank gives reasonable notice to the Pledgors that
any such requested action will not be taken and if the Bank makes such
determination or if the Pledgors fail to make such timely request, the Bank
takes such other action as it deems advisable in the circumstances. Except
as hereinabove specifically set forth, the Bank shall have no further
obligation to ascertain the occurrence of, or to notify the Pledgors with
respect to, any events and shall not be deemed to assume any such further
obligation as a result of the establishment by the Bank of any internal
procedures with respect to any securities in its possession. The Pledgors
release the Bank from any claims, causes of action and demands at any time
arising out of or with respect to this Agreement, the Collateral and/or any
actions, taken or omitted to be taken by the Bank with respect thereto, and
the Pledgors hereby agree to hold the Bank harmless from and with respect to
any and all such claims, causes of action and demands.
11. The Pledgors hereby irrevocably appoint the Bank as their
attorney-in-fact for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instrument which either may
deem necessary or advisable to accomplish the purposes hereof. Without
limiting the generality of the foregoing, the Bank shall have the right and
power to receive, endorse and collect all checks and other orders for the
payment of money made payable to the Pledgors representing any interest or
dividend or other distribution payable in respect of the Collateral or any
part thereof and to give full discharge for the same.
12. No delay on the part of the Bank in exercising any of its options,
powers or rights, or partial or single exercise thereof, shall constitute a
waiver thereof.
13. Upon the repayment in full of all principal, interest and other
amounts that may be payable with regard to the Loans and the Bank's having
determined that no contingent obligations of either Pledgors that it wishes
to remain secured hereunder shall exist, the Pledgors shall be entitled to
the return of all of the Collateral and of all other property and cash which
have not been used or applied toward the payment of such principal, interest
and other amounts free and clear of all liens in favor of the Bank or any
encumbrances imposed by the Bank. Except as aforesaid, the assignment by the
Bank to the Pledgors of such Collateral and other property shall be without
representation or warranty of any nature whatsoever and wholly without
recourse.
14. Any notice, demand or service of process upon the Pledgors shall be
deemed to have been sufficiently given for all purposes thereof if mailed,
postage prepaid, by registered or certified mail, return receipt requested,
or if delivered, to the Pledgors at the address specified below, or at such
other address as the Pledgors may theretofore have designated in writing and
given in like manner to the Bank.
15. Any waiver, permit, consent or approval of any kind or character on
the part of the Bank of any breach or default under this Agreement or any
such waiver of any provision or condition of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in
such writing.
16. This Agreement and the rights and obligations of the Bank and the
Pledgors hereunder shall be construed in accordance with and governed by the
laws of the State of New York, cannot be changed orally and shall bind and
inure to the benefit of the Pledgors and the Bank and their respective
successors and assigns, all subsequent holders of the Secured Obligations and
to the Pledgors' heirs, executors and legal representatives. The Pledgors
hereby submit to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New York State Court
sitting in New York City for purposes of all legal proceedings arising out of
or relating to this Agreement or any agreement received by the Bank in
connection herewith. The Pledgors irrevocably waive, to the fullest extent
permitted by law, any objection which they may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum. The Pledgors hereby irrevocably waive any and all right
to trial by jury in any legal proceeding arising out of or relating to this
Agreement or any agreement received by the Bank in connection herewith.
17. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which taken together shall
constitute but one and the same instrument.
18. This Agreement replaces all prior agreements between the Pledgors
and the Bank relating to the Collateral contained in any promissory note
delivered to the Bank by the Pledgors.
19. The Pledgors agree to pay the Bank on demand all costs, including
legal fees, incurred by the Bank in connection with the administration and
enforcement of this Agreement.
20. The Pledgors shall be jointly and severally liable.
<PAGE>
IN WITNESS WHEREOF, the Pledgors and the Bank have caused this Agreement
to be duly executed as of the day and year first above written.
/s/ Leonard Riggio
---------------------------------
Leonard Riggio
/s/ Louise Riggio
---------------------------------
Louise Riggio
Address:
733 Park Avenue, 17th Floor
New York, New York 10021
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ Jeffrey B. Westcott
---------------------------------
Jeffrey B. Westcott,
Vice President
Address:
9 West 57th Street
New York, New York 10019
Attention: Jeffrey B. Westcott
LOCK-UP AGREEMENT
May 24,1999
barnesandnoble.com inc.
76 Ninth Avenue, 11th Floor
New York, New York 10011
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Merrill Lynch & Co.
World Financial Center, North Tower
250 Vesey Street
New York, New York 10281
Salomon Smith Barney Inc.
7 World Trade Center
New York, New York 10048
Wit Capital Corporation
826 Broadway, 6th Floor
New York, New York 10003
RE: barnesandnoble.com inc. - Lock-Up Agreement
-------------------------------------------
Dear Sirs:
The undersigned has been informed that barnesandnoble.com inc. (the
"Company") has filed with the Securities and Exchange Commission a
Registration Statement on Form S-1 (Registration No. 333-64211) (the
"Registration Statement") including a prospectus (the "Prospectus") in
connection with the proposed initial public offering (the "Offering") of up
to 28,750,000 shares (the "Shares") of the Company's Class A Common Stock,
par value $.001 per share (the "Common Stock").
In connection with such Offering, the undersigned understands that the
Company will enter into an underwriting agreement (the "Underwriting
Agreement") with Goldman, Sachs & Co., Merrill Lynch & Co., Salomon Smith
Barney Inc. and Wit Capital Corporation as representatives of the several
underwriters named therein (the "Underwriters").
The undersigned, to facilitate the marketing of Shares to be sold in the
Offering and in consideration of the Underwriters entering into the
Underwriting Agreement, hereby irrevocably confirms, covenants and agrees for
the benefit of the Company and the Underwriters as follows:
(i) The undersigned will not offer, sell, contract to sell, pledge or
otherwise dispose of, except as provided hereunder, any Common Stock
acquired by the undersigned in the Offering (the "Shares") pursuant to
any agreement entered into on or prior to the date hereof, or at any
time hereafter, during the period beginning from the date hereof and
continuing to and including the date 180 days from the date of the final
Prospectus, except with the prior written consent of the Underwriters;
provided, however, that notwithstanding the foregoing, the undersigned
may: transfer such securities (1) as a bona fide gift or gifts to the
undersigned's spouse, parents, siblings or lineal descendants, or any
trust for the benefit of such persons, provided that any such transfer
shall not involve a disposition for value, or (2) to any distributee,
legatee or devisee of the undersigned who acquires its shares by will or
operation of law upon death of the undersigned, if, in the case of
clauses (1) and (2), such transferee agrees in writing to be bound by
the terms of this agreement to the same extent as the undersigned; and
(ii) The undersigned has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares, or which has otherwise constituted or will
constitute any prohibited bid for or purchase of the Shares or any related
securities.
The undersigned acknowledges and agrees that the covenants and
agreements set forth herein supersede, to the extent of the subject matter
thereof, the provisions of any agreements or instruments defining the rights
of the undersigned with respect to the shares of Common Stock or other
securities of the Company beneficially owned or controlled by the
undersigned, except for the provisions of that certain Lock Up Agreement
executed by the undersigned on May ,1999 for the benefit of the
Underwriters in connection with the Offering.
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of Common
Stock if such transfer would constitute a violation or breach of this
Agreement.
This Agreement shall be binding on the undersigned and the respective
heirs, personal representatives and assigns of the undersigned.
Very truly yours,
/s/ Leonard Riggio
---------------------------
Name:Leonard Riggio
