AMENDMENT NO. 2
TO
MANAGEMENT INFORMATION REIMBURSEMENT
AGREEMENT
This Amendment No. 2 dated as of August 11, 1996,
to Management Information Reimbursement Agreement, as amended by
Amendment No. 1, dated as of October 31, 1994 and a letter
agreement, dated March 28, 1995 (the "Agreement"), dated as of
June 23, 1992, is by and among The Stop & Shop Supermarket
Company, a Delaware Corporation ("Supermarkets"), The Stop &
Shop Companies, Inc., a Delaware corporation ("Stop & Shop"), S
& S Credit Co., Inc., a Delaware corporation ("S & S Credit
Co."), Bradlees Administrative Co., Inc., a Massachusetts
corporation ("Buyer"), and Bradlees, Inc., a Massachusetts
corporation ("Parent" and, together with Buyer, "Payors"). All
capitalized terms herein shall have the same meaning as set
forth in the Agreement.
RECITALS
WHEREAS, Supermarkets, Stop & Shop, S & S Credit
Co., Buyer and Parent are parties to the Agreement;
WHEREAS, on June 23, 1995, (the "Petition Date"),
the Payors each filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code, and the Payors continue to
operate their respective businesses and manage their respective
properties as debtors-in-possession;
WHEREAS, Stop & Shop has continued to provide
data processing services to the Payors in accordance with the
terms of the Agreement;
WHEREAS, the Payors desire to implement, in an
orderly fashion and cost efficient manner, their own information
and telecommunications system, independent of Stop & Shop;
WHEREAS, the Payors desire, among other things, to
off-load from Stop & Shop's computer system a certain portion of
the BI minor application codes and associated processing
("BIMIS") as defined in Section 3(a) hereof pertaining to the
Payors by February 2, 1997, and;
WHEREAS, the Payors and Stop & Shop desire to
terminate the Agreement on June 30, 1997 but no later than July
5, 1997;
WHEREAS, in exchange for the modifications and
amendments contained herein, subject to Bankruptcy Court
approval, the Payors desire to assume, pursuant to Bankruptcy
Code 365, the Agreement.
NOW THEREFORE, in consideration of the premises and
the mutual undertakings set forth herein, Stop & Shop,
Supermarkets, S & S Credit Co. and Payors hereby agree as
follows:
1. Anything contained in Section 2(a) of the
Agreement to the contrary notwithstanding , during the period
(such period, the "Final MIRA Period") from August 11, 1996
through June 30, 1997 but no later than July 5, 1997 (the
"Termination Date"), the Payors shall pay Stop & Shop in lieu of
reimbursing Stop & Shop for the Aggregate Buyer Expenses and
Annual Expense Adjustments for such period, the amounts set
forth on Schedule 1 hereto on the dates specified therein;
provided that this does not change Payors' additional
obligations to pay for Exclusive Use Expenses set forth in the
Agreement.
2. During the Final MIRA Period, Stop & Shop shall
continue to provide data processing and related services
pursuant to the terms of the Agreement; provided however, that,
anything contained in the Agreement to the contrary
notwithstanding, during the Final MIRA Period, the Payors shall
not permit or cause utilization levels to exceed, to any extent,
current utilization levels so as to cause Stop & Shop to acquire
or make any changes in hardware, software, telecommunications or
business applications systems to support either capacity or
processing requirements.
3. (a) On or before February 2, 1997, the Payors
shall off-load from Stop & Shop's computer system no less than
80% of each aspect of BIMIS (mainframe usage, disk drive usage
and print usage -- BI minor application codes and associated
processing including CICS usage) pertaining to the Payors.
(b) In the event that Payors fail to complete
off-loading of no less than 80% of BIMIS by February 2, 1997,
then, through the Termination Date, the Payors shall pay to Stop
& Shop the sum of $500,000 per fiscal period in lieu of the
amount set forth on Schedule 1 for such fiscal period until the
off-loading of no less than 80% of BIMIS is completed, at which
time the Payors shall pay to Stop & Shop the amount set forth on
Schedule 1 per fiscal period through the Termination Date.
4. During the period from August 11, 1996 through
February 1, 1997, the Payors shall not permit or cause
input/output or stored data to exceed current levels so as to
cause Stop & Shop to acquire or make any changes in hardware,
software, telecommunications or business application systems,
unless Payors obtain the prior approval in writing by Stop &
Shop and that any associated costs thereto are paid in advance
by the Payors.
5. Payors and Stop & Shop shall cooperate fully
with each other in all respects so as to reduce costs and
expenses through the Termination Date, including costs and
expenses arising in connection with the off-loading of no less
than 80% of BIMIS.
6. Payors and Stop & Shop shall coordinate and
cooperate with each other with respect to the off-loading of no
less than 80% of BIMIS and the exit or conversion of any and all
workload or processing so as to reduce any possible adverse
effect or disruption to both parties' data processing operations
or processing deadlines.
7. Payors acknowledge that any expenses or
liability arising from any transfer of existing software,
existing documentation and existing data relating to the
conversion shall be included in Exit Expenditures payable by
Payors. Exit Expenditures shall be reasonable, calculated by
the Stop & Shop Entities in good faith and discussed with the
Payors.
8. Anything contained in Section 3 of the
Agreement to the contrary notwithstanding, the Agreement shall
terminate on June 30, 1997, but at the option of Payors may be
extended to, but no later than, July 5, 1997 and all services
provided by Stop & Shop under the Agreement to Payors shall
cease on such date.
9. To the extent that any provisions of this
Amendment No. 2 are inconsistent with the terms and conditions
of the Agreement, the provisions of this Amendment No. 2 shall
prevail.
10. This Amendment No. 2 shall become effective
upon the entry by the Bankruptcy Court of an order approving the
assumption of the Agreement, as amended by this Amendment No. 2,
pursuant to Section 365 of the Bankruptcy Code, and upon receipt
by Stop & Shop of the amounts set forth below. Payors shall use
their reasonable efforts to seek as expeditiously as possible
the approval of the Bankruptcy Court of the Amendment No. 2 and
the assumption of the Agreement pursuant to Section 365 of the
Bankruptcy Code. Stop & Shop shall provide such information and
cooperation to the Payors as they shall reasonably require in
seeking approval of Amendment No. 2 and assumption of the
Agreement. Stop & Shop shall consent to any motion to assume
the Agreement in form and substance reasonably satisfactory to
Stop & Shop. As of the date hereof, Stop & Shop acknowledges
that there are no defaults and further acknowledges and agrees
that no amounts pertaining to this Agreement are owed by Payors
to Stop & Shop for any pre-petition and post-petition periods
except as set forth below. Notwithstanding the foregoing, Stop
& Shop agrees that Payors may seek approval and assumption of
the Agreement and of this Amendment No. 2 to the Agreement nunc
pro tunc to August 11, 1996, and that pending approval by the
Bankruptcy Court, Payors will be deemed to have fully performed
all of their obligations under the Agreement by performing all
of their obligations under the Agreement as amended by Amendment
No. 2 to the Agreement; provided that Payors pay Stop & Shop an
amount equal to $126,316.60, which includes all amounts owed to
Stop & Shop by Payors and all amounts owed to Payors by Stop &
Shop, regarding their pre-petition obligations under the
Agreement, promptly after the entry by the Bankruptcy Court of
an order approving the assumption of this Agreement.
11. Prior to the Termination Date, Buyer shall
consider, at its sole discretion, whether to purchase the assets
(or a portion of such assets) used by the Stop & Shop Entities
exclusively in connection with the Bradlees Entities and all
assets used by the Stop & Shop Entities and not needed by such
entities after the Termination Date (collectively, "Excess
Assets") (or, if such equipment is leased by the Stop & Shop
Entities, whether such lease shall be assigned to Buyer if such
assignment can be effected without breaching such lease) for a
price equal to the value of such equipment on the books of the
Stop & Shop Entities at such time (or, in the case of the
leases, Buyer shall assume, and the Stop & Shop Entities shall
be released from, all obligations under such leases). Prior to
the Termination Date, the Stop & Shop Entities shall provide to
the Buyer a list of Excess Assets including the book value of
such Excess Assets or the remaining lease payments for such
Excess Assets. The parties hereto will cooperate with one
another to minimize the adverse effects to both parties of
compliance with this Section 11.
12. The agents of the Bradlees Entities shall
include without limitation any third party which shall provide
outsourcing services to the Bradlees Entities. Prior to and
through the Termination Date, the Stop & Shop Entities shall
provide to the Payors or their designee all information and
assistance necessary to ensure the smooth transition of
responsibility for the services provided under the Agreement to
either the Payors or their designee.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment No. 2 to be duly executed as of the date first
above written.
THE STOP & SHOP SUPERMARKET COMPANY
By:
--------------------------------
Name:
Title:
Date:
THE STOP & SHOP COMPANIES, INC.
By: --------------------------------
Name:
Title:
Date:
Normal
S & S CREDIT CO., INC.
By:
--------------------------------
Name:
Title:
Date:
BRADLEES, INC.
By:
--------------------------------
Name:
Title:
Date:
BRADLEES ADMINISTRATIVE CO., INC.
By:
--------------------------------
Name:
Title:
Date:
SHEET 1
BRADLEES PERIOD EXPENSES
Period 8, 1996 - Period 6, 1997
(BIMIS offload completion targeted for
Period 1, 1997)
Fiscal 1996
Period 8 9/7/96
$500,000
Period 9 10/5/96
$500,000
Period 10 11/2/96
$500,000
Period 11 11/30/96
$500,000
Period 12 12/28/96
$500,000
Period 13 2/1/97
$500,000
Fiscal 1997
Period 1 3/1/97
$370,000
Period 2 3/29/97
$370,000
Period 3 4/26/97
$370,000
Period 4 5/24/97
$370,000
Period 5 6/21/97
$370,000
Period 6 7/19/97
$200,000
