CONFIDENTIAL TREATMENT
Exhibit 10.17
Development Agreement
SVI, INC. CONFIDENTIAL TREATMENT
DEVELOPMENT AGREEMENT
This DEVELOPMENT AGREEMENT ("AGREEMENT") is entered into as of this 29th day of
May, 2002 ("EFFECTIVE DATE"), between SVI SOLUTIONS, INC. ("SVI"), a Delaware
corporation located at 0000 Xxxxxx Xxx, Xxxxxxxx, XX 00000, on behalf of itself
and its subsidiaries (collectively "SVI"), and Toys "R" Us, Inc. ("CUSTOMER"), a
Delaware corporation located at 000 Xxxx Xxxx, Xxxxxxx, XX, 00000.
This Agreement sets forth the terms and conditions by which SVI will license,
develop and install Software and provide other Professional Services to
Customer. Any capitalized terms in this Agreement shall have the same meaning as
defined in this Agreement, including the Exhibits attached hereto.
This Agreement consists of this document and the following exhibits that are
incorporated herein by reference (the "EXHIBITS").
Exhibits
1 Professional Services and Module Delivery Schedule
2 Allocated Resources
3 Documentation
4 SVI's Standard Professional Rates
5 Services
_______________________________________________________________________________
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1. EFFECTIVE DATE, TERM AND TERMINATION:
1.1 The effective date ("EFFECTIVE DATE") of this Agreement shall
be the date first above written.
1.2 The term of this Agreement ("TERM") commences on the Effective
Date, and unless the Agreement is terminated pursuant to
Section 1.3 or 1.4, it shall continue in force until
"Completion Date" (as defined in Section 3.2).
1.3 Each party may terminate this Agreement (effective immediately
upon written notice) if the other party materially breaches
any provision of this Agreement if such breach continues and
is not cured within [***] after written notice thereof by the
non-breaching party, including the nature of the breach upon
which such notice is based. SVI may terminate this Agreement
upon written notice to Customer if Customer fails to pay,
within [***] of a Payment Date, any amount payable hereunder.
SVI may suspend its performance of services under the terms of
this Agreement pending receipt of such payment. Any such
termination by SVI shall not affect SVI and Customer's
respective rights with respect to any Deliverables and/or
Professional Services delivered or performed and fully paid
during the Term.
1.4 Customer may terminate this Agreement during the Term (a) upon
written notice to SVI after [***] prior written notice,
provided that Customer shall remain obligated to pay to SVI
all amounts due SVI to such termination date (b) upon [***]
written notice to SVI after a change of control (as defined in
Section 13.1), or (c) on the occurrence of any of the
following: (i) an assignment by SVI for the benefit of
creditors; (ii) the appointment of a trustee or receiver for
substantially all of SVI's assets; or (iii) to the extent
termination is enforceable under the U.S. Bankruptcy Code, a
proceeding in bankruptcy is instituted against SVI which is
acquiesced in, is not dismissed within [***], or results in an
adjudication of bankruptcy.
1.5 After expiration or termination of this Agreement for any
reason, other than related to Customer's breach, SVI shall
promptly deliver any partially-created Deliverable that exists
as of the expiration or termination date; provided that
Customer pays SVI all amounts then due SVI. Upon delivery,
such Deliverable shall be considered a "Deliverable" for all
purposes hereunder.
1.6 Subject to each party's rights, remedies and defenses relating
to any breach by the other party, the provisions of Sections
1.5, 1.6, 6 (with respect to Deliverables delivered in the
Term, subject to Section 1.5), 9.1 (with respect to fees
accrued prior to expiration or termination), 9.3, 12.2(a),
12.3-12.7, 14-33 shall survive expiration or termination of
this Agreement (including the Revenue Sharing Term in Section
17.1) for any reason.
[***] = Confidential Treatment Requested
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2. DEFINITIONS:
2.1 "AFFILIATE" means any person or entity that (i) controls, or
is under common control with, or is controlled by, Customer,
or (ii) has entered into an agreement with Customer (including
without limitation a joint venture agreement) for the purpose
of conducting Licensed Toys "R" Us Operations. As used in this
definition, "control" means an equity ownership of at least
fifty (50) percent.
2.2 "ALLOCATED RESOURCES" means such qualified personnel of SVI
that are necessary to enable SVI to perform all Professional
Services hereunder in a competent and timely manner, but which
shall not be utilized exclusively to Professional Services.
The current list of Allocated Resources is set forth on
EXHIBIT 2 hereto.
2.3 "DELIVERABLES" shall mean such Software and related
Documentation that SVI is required to deliver to Customer
under this Agreement.
2.4 "DOCUMENTATION" shall mean such documentation in any form or
media that SVI reasonably determines is necessary or desirable
to enable Customer to use the Software and/or any available
Updates thereto, including without limitation the
documentation described on EXHIBIT 3 hereto.
2.5 "LICENSED TOYS "R" US OPERATIONS" means any retail operations
by a third party authorized to use the "Toys "R" Us" brand
name, or any other store name or trade name used by Customer
or an Affiliate, whether in English or a different language.
2.6 "PROFESSIONAL SERVICES" shall be the types of services offered
by SVI as described in Section 3.1 below.
2.7 "SOFTWARE" shall mean the software and related items as
described in EXHIBIT 1 and delivered to Customer under this
Agreement.
2.8 "UPDATES" shall mean modifications, debugging, fixes, updates,
upgrades, enhancements, improvements and derivative works to
the Software, which shall be included in the definition of
"Software" hereunder upon delivery of such Updates to
Customer.
3. OBLIGATIONS OF SVI:
3.1 SVI will provide Customer with the Allocated Resources which
SVI determines to be reasonably necessary based on its prior
experience for the purpose of developing the Software by the
dates specified in EXHIBIT 1 and performing SVI's customary
services for Customer or its employees concerning the use of
the Software. The customary services provided by SVI include,
but are not limited to the services listed on EXHIBIT 5
hereto, training applicable Customer's employees, answering
Customer's questions via teleconference and e-mail, and
producing work product reasonably consistent with producing
the Software and as reasonably requested by Customer to
document the results of visits, sessions or teleconferences
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within the scope and in the manner customarily provided by SVI
to comparable customers (such services to be performed
hereunder, the "PROFESSIONAL SERVICES"). SVI shall exercise
its commercially reasonable best efforts in providing such
services.
3.2 SVI shall meet all deadlines and delivery dates specified on
EXHIBIT 1 hereto, and as later agreed by the parties, with
respect to all Software and Updates, except to the extent
delay is caused by Customer, its employees, agents, officers,
Affiliates or Licensed Toys "R" Us Operations or factors
beyond SVI's control constituting a Force Majeure in
accordance with the terms of Section 25. Subject to the
foregoing, SVI agrees that the following deadlines are
material, and that time and strict performance are of the
essence with respect thereto: (i) [***] for the delivery of
the Deliverables relating to Customer's operations in the
United Kingdom or Canada (as determined by Customer) ("FIRST
COUNTRY"); and (ii) [***] for the delivery of the Deliverables
relating to Customer's operations in Japan (or such other
country as agreed in writing by Customer and SVI) and live
production in such country ("SECOND COUNTRY"). The delivery
date in Clause (ii) of this Section 3.2, any mutually-agreed
extension thereof, or any later date caused by Customer, its
employees, agents, officers, Affiliates or Licensed Toys "R"
Us Operations shall be the "COMPLETION DATE" hereunder.
4. PROFESSIONAL SERVICES:
4.1 SVI will use commercially reasonable efforts to make Allocated
Resources available when Customer requests them, subject to
reasonable limitations as may be reasonably determined by SVI
(including without limitation absences due to health reasons
and vacation). SVI agrees that the Customer will always have
first priority access to available resources. SVI will use
commercially reasonable efforts to accommodate Customer's
needs as promptly as reasonably practicable if the Allocated
Resources or those qualified to provide the services are not
immediately available when Customer requests them.
4.2 Any fees for the Allocated Resources for Professional Services
described in EXHIBIT 1 are included within the fees set forth
in Section 9, except to the extent of changes authorized by
Customer under this Agreement.
5. WORK AUTHORIZATION:
5.1 Requests for visits to Customer's location or requests for
services to be performed at a SVI site must be made by
Customer in writing or by e-mail. Before an SVI representative
travels or begins Professional Services on Customer's behalf,
SVI will ask for written or e-mail confirmation of Customer's
request on a quarterly basis describing generally SVI's
estimated anticipated travel and payment requirements.
Customer will not be invoiced for out-of-pocket expenses and
travel expenses for services that Customer has not approved or
confirmed and SVI will not travel or perform any services
until Customer has given SVI such approval or confirmation.
[***] = Confidential Treatment Requested
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CONFIDENTIAL TREATMENT
5.2 Change orders or requests may be made by Customer in writing
or by e-mail. All such changes must detail the proposed
change, the reasons for the change and its perceived impact on
other services to be performed by SVI. Within 15 days
following receipt of any change pursuant to this Section, SVI
shall notify Customer in writing or by e-mail of the estimated
effect such change will have on the cost and timing of
services to be provided hereunder.
6. LICENSE:
6.1 SVI grants to Customer a perpetual, worldwide,
non-transferable, non-exclusive right and license, in all
cases for Customer's internal purposes only, to use, copy,
distribute, publish, display, perform and make Updates to the
Deliverables. Such license covers all (i) patents, copyrights,
trade secrets and other intellectual property rights, (ii)
object code and all Source Materials (as defined in Section
6.2 and subject to Section 6.2), and (iii) third-party rights
relating to the Deliverables, if any.
6.2 As soon as possible after the Effective Date, but in no event
more than [***] thereafter, SVI shall deposit with a
mutually-agreeable escrow agent a complete and accurate copy
of any then-existing software, including the source code, and
any related commentary, explanation, flow charts,
descriptions, memory, overlay maps and other documentation
required for Customer to use the Software relating to any
Deliverable not yet delivered to Customer for its intended
purpose ("SOURCE MATERIALS"). [***] SVI and the escrow agent
(and Customer, at its option) shall execute an escrow
agreement to govern the parties' escrow arrangement. [***]
During the Term, SVI shall deposit all material Updates to the
applicable Source Materials with the escrow agent promptly
after their creation. The terms of the escrow agreement shall
be agreed to in good faith by the parties and, unless
otherwise agreed by the parties, shall be substantially in the
form of the escrow agent's standard form agreement for
comparable parties. SVI shall deliver all related Source
Materials to Customer simultaneously with its delivery of any
Deliverable, at which point the escrow agreement shall
terminate with respect to such delivered Source Materials.
6.3 [***]
[***] = Confidential Treatment Requested
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CONFIDENTIAL TREATMENT
6.4 [***]
6.5 In order to protect SVI's trade secrets and copyrights in the
Deliverables and any Updates, Customer agrees to reproduce and
incorporate SVI's copyright notice below in any copies made by
Customer, including partial copies in any form: [Program
property of SVI, Inc. This work contains trade secrets deemed
valuable and proprietary to SVI. Unauthorized use is
prohibited. (C) [year of publication] SVI, Inc. All rights
reserved.]
6.6 Upon Customer's request, SVI will ship any Deliverables to
Customer's installation address(es) as specified by Customer
in writing. Customer will be responsible for paying all
delivery expenses, taxes, tariffs and duties related to the
distribution and shipment of Deliverables to its multiple
locations, but in no event shall Customer be responsible for
the payment of SVI's taxes on its income.
6.7 SVI shall deliver the Deliverables to Customer in accordance
with the Schedule set forth in EXHIBIT 1. SVI shall ensure
that Customer's project or account manager in Section 11.1 is
notified of such delivery. Customer shall evaluate the
applicable Deliverable and, if Customer accepts the
Deliverable, shall submit a written acceptance to SVI (an
"ACCEPTANCE NOTICE") within [***]after Customer's receipt of
the applicable Deliverable. If Customer does not timely
deliver an Acceptance Notice, SVI shall send a second notice
to both the above project or account manager and to the notice
recipient provided in Section 34. Customer shall
have[***]working days after receipt of such notice to send SVI
a notice specifying in detail the basis for rejection of the
applicable Deliverable (a "REJECTION NOTICE"). If such
Rejection Notice is not sent within such specified time
period, the applicable Deliverable shall be deemed accepted.
Customer shall not unreasonably withhold its acceptance. If
Customer timely rejects a Deliverable in accordance with this
Section 6.7, then SVI shall promptly correct the applicable
Deliverable, as specified in the Rejection Notice,
within[***]following SVI's receipt of such Rejection Notice.
After the delivery of the corrected Deliverable, the same
procedures specified above shall apply for the required
Acceptance Notice or Rejection Notice relating thereto. [***]
All Deliverables delivered to Customer prior to execution of
this Agreement shall be deemed accepted by Customer, with the
Acceptance Notice deemed given as of the date of each
delivery.
[***] = Confidential Treatment Requested
6
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6.8 Customer shall be responsible for procuring, installing, and
maintaining all equipment, telephone lines, communications
interfaces, and other hardware (other than the hardware
constituting the program control center maintained at SVI's
facilities) necessary to use the Deliverables, PROVIDED THAT
SVI shall provide all reasonably necessary information and
cooperation to Customer in connection with the foregoing.
6.9 All Software, any Updates and all copies thereof are the
intellectual property of SVI. All applicable proprietary and
intellectual property rights, copyrights, trademarks, and
trade secrets in the Software are and will remain with and in
SVI. Except as contemplated in this Agreement, Customer shall
not sell, transfer, publish, disclose, display or otherwise
make available any Software, Updates or copies thereof to
others. Customer shall own all physical and tangible items
comprising the Deliverables and all information stored or
cached therein or transmitted, processed or routed thereby.
Customer agrees that the Software, Updates and copies thereof
shall be deemed "Confidential Information" in accordance with
Section 14.
6.9.1 All applicable proprietary and intellectual property
rights, copyrights, trademarks and trade secrets in
all Documentation shall remain with SVI. Customer
agrees to:
(i) secure and protect the confidentiality
of any Confidential Information in such Documentation
in accordance with Section 14;
(ii) not copy any Confidential Information
in such Documentation except in accordance with
Section 14;
(iii) use such Documentation only as
permitted by this Agreement (including Sections 6.1
and 6.2 and Section 14); and
(iv) not sell, transfer or otherwise make
such documentation available to others, except as
permitted by this Agreement (including Sections 6.1
and 6.2 and Section 14).
6.10 Customer understands that the Software may be protected by a
security program (the "SECURITY PROGRAM") that will render the
Software unusable. Customer understands that if Customer
materially breaches the conditions of this Agreement and does
not cure such breach after thirty (30) days notice (unless
Customer has applied to a court of competent jurisdiction
within such timeframe and obtained an order for injunctive
relief) or deliberately tampers with the Security Program, SVI
shall have the right to activate the Security Program upon
notice to Customer. Customer further understands that, in the
event of such activation, SVI must be contacted to restore
access to the Software. SVI will use its best efforts to send
Customer, within one full business day of notification from
7
CONFIDENTIAL TREATMENT
Customer, a new key that will provide access to the Software
in any location of Customer or any of its Sublicensees. SVI
represents and warrants that the Security Program (a) will not
inhibit, in any way, Customer or its Sublicensees' use of the
Software or their ability to modify the Software and (b) has
the sole purpose and capability of enabling SVI to prevent,
and will not be used by or on behalf of SVI except to prevent,
Customer's use of the Software in the event that Customer (i)
is in material breach of this Agreement and fails to cure such
default within the applicable cure period (unless Customer has
applied to a court of competent jurisdiction within such time
period and obtained an order for injunctive relief); or (ii)
deliberately tampers with the Security Program. SVI shall
disable the Security Program (a) with respect to any
Deliverable, once SVI has been fully paid for such
Deliverable; and (b) with respect to all Deliverables, at the
expiration or termination of the Term for any reason.
6.11 Unless the parties later agree otherwise in a separate
maintenance agreement pursuant to Section 9.2, SVI will, at no
additional charge to Customer, (i) support all applicable
Deliverables throughout the Term on SVI's Specified CPU and
(ii) provide any Updates to the Deliverables that SVI creates
throughout the Term, in accordance with SVI's customary
practices and procedures. SVI will notify Customer in writing
of any material changes to the Specified CPUs promptly upon
becoming aware of such change.
6.12 SVI will not be responsible for any Software problems
resulting directly or indirectly from (i) Customer
modifications to the Software not performed at SVI's direction
or supervision, (ii) incompatibility of any equipment not
specified as compatible or approved by SVI, or (iii) the
installation of any Software or Updates that is not by or on
behalf of SVI or its authorized agents.
6.13 SVI will not be responsible for any Software problems
resulting from (i) Customer modifications to the Software not
performed at SVI's direction or supervision, (ii)
incompatibility of any equipment not specified as compatible
or approved by SVI, or (iii) the installation of any Software
or Updates that is not by or on behalf of SVI or its
authorized agents.
7. WORK AUTHORIZATION:
7.1 Requests for visits to Customer's location or requests for
services to be performed by an SVI site must be made by
Customer in writing or by e-mail. Before an SVI Retail
representative travels or begins work on Customer's behalf,
SVI will ask for written or e-mail confirmation of Customer's
request. Unless specifically indicated otherwise in this
Agreement, Customer will not be charged for fees and expenses
for services that Customer has not approved and SVI will not
travel or perform any services until Customer has given SVI
such approval. Customer shall not delay or unreasonably
withhold its approvals.
7.2 Change orders or requests may be made by Customer in writing
or by e-mail. All such changes must detail the proposed
change, the reasons for the change and its perceived impact on
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CONFIDENTIAL TREATMENT
other services to be performed by SVI. Within fifteen (15)
days following receipt of any change pursuant to this Section,
SVI shall notify Customer in writing or by e-mail of the
estimate effect such change will have on the cost and timing
of services to be provided hereunder.
8. TRAVEL EXPENSES:
8.1 In scheduling a visit to Customer's location, SVI shall
attempt to work with Customer so that the time SVI spends is
used effectively. SVI will assign its personnel based upon the
services to be performed, upon an ongoing analysis of
Customer's needs and upon Customer's approval. There may be
one of SVI's employees at Customer's site on some occasions
and more than one at other times. For this reason, and because
of the varying lengths of stay, expenses will vary from visit
to visit.
8.2 Expenses shall be limited as follows: (i) airfare - round trip
airfare (regular unrestricted coach for domestic flights and
for international flights other than U.S./Asia Pacific flights
and business class solely for U.S./Asia Pacific flights), (ii)
hotel accommodations (Holiday Inn, Radisson or equivalent in
the United Kingdom and Europe and Renaissance and
Intercontinental or equivalent in Asia-Pacific), and (iii)
meals and ground transportation (car rental, taxi, train,
ferry, parking, etc.). Any lost deposits or penalties that are
incurred as a result of Customer's canceling a visit after
having confirmed it will be billed to Customer, provided that
SVI shall use commercially reasonable best efforts to mitigate
any such losses.
8.3 Since SVI's employees might visit more than one user site
during a trip, it is possible that Customer will be billed for
only a portion of the related expenses. The portion paid by
Customer in such a case will be calculated by dividing the
number of hours spent at Customer's site by the total number
of hours for all users visited during the trip, and then
applying this ratio to any common expenses incurred, such as
airfare.
8.4 The amount Customer will be charged for travel expenses will
be determined by the going rates for services in Customer's
area. SVI employees will make their own arrangements and
submit expense claims to SVI. Customer will be billed for each
visit. Copies of completed, approved by SVI management travel
expense reports will accompany all travel expense invoices.
All invoices submitted to Customer will conform to Customer's
Travel Reimbursement Policy requirements.
8.5 For the avoidance of doubt, (i) all travel expenses in Section
8 are subject to Section 9.1(c) hereunder, and (ii) Customer
shall not be billed on an hourly basis for any travel time.
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9. PAYMENTS:
9.1 Except as otherwise specified herein, SVI shall invoice
Customer for all fees payable under this Agreement, and
Customer shall pay such amounts within [***] thereafter. Any
amount not paid within [***] after the invoice date shall bear
interest at the lesser of [***] percent [***] per month or the
highest rate allowed by applicable law. The fees payable to
SVI are as follows and are payable according to the following
schedule:
9.1.1 For Software and Professional Services (other than
support), payments shall be paid by Customer to SVI
[***] follows: [***] The amounts payable in
accordance with this Section 9.1.1. may be adjusted
if the description, nature, scope or extent of
Professional Services or Software changes as
necessary to comply with Customer's written
requirements as agreed to by SVI in writing. All such
amounts shall be based upon the rates indicated in
EXHIBIT 2 hereto.
9.1.2 For travel and expenses, monthly payments for
expenses actually incurred in the previous month,
[***] during the Term.
9.1.3 For support, [***] in total over the Term payable as
follows:
9.2 Customer shall have the right, at its sole option, to enter
into a maintenance agreement with SVI in accordance with SVI's
prevailing standard, terms and conditions governing the
provision of support after the [***] periods in Section 12.3.
Customer shall notify SVI of its intent to enter into such
agreement within [***]
[***] = Confidential Treatment Requested
10
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10. TIME AND COSTS:
10.1 SVI will not be responsible for any errors or omissions in
information, data or services provided by Customer or by third
parties hired by Customer to act on Customer's behalf.
11. PROJECT STAFF:
11.1 Each party to this Agreement shall appoint a project or
account manager who will be responsible for representing that
party in connection with the services under this Agreement.
SVI's account manager shall devote adequate time to the
services performed hereunder and shall have the authority and
responsibility for the planning, control and scheduling of all
effort and resources in connection with SVI's work under this
Agreement. Customer's project manager will have responsibility
for all planning, control and scheduling of effort and
resources required to be provided or made available by
Customer under this Agreement. The Chief Executive Officer of
SVI Holdings, Inc. shall confer with Customer's project
manager on a weekly basis to discuss the services provided
hereunder.
11.2 Each party will endeavor to ensure continuity of its key staff
on the project but reserves the right to make changes if
necessary including, due to circumstances beyond its control.
Should it become necessary for either party to replace any key
member of its staff involved in the performance of work under
this Agreement, the affected party shall notify the other and
will provide a suitably qualified and experienced replacement
member of staff with as similar a level of skill and
experience to the replaced member of staff as is reasonably
possible.
11.3 SVI warrants that any staff assigned to provide services to
Customer under this Agreement shall possess such skill and
experience as is necessary for the proper performance of those
services.
11.4 Customer has the right to reject any employee SVI assigns to
work on Customer's behalf with the understanding that other
employees might not be available to take their place on short
notice which may result in delays.
11.5 SVI warrants that given adequate notice, it will use
commercially reasonable best efforts to make available the
number of SVI employees Customer reasonably requests for the
time period Customer reasonably requests.
11.6 SVI may employ outside contractors to perform the Professional
Services hereunder, PROVIDED THAT SVI remains liable in all
respects under this Agreement for such third parties'
performance.
11
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12. REPRESENTATIONS/WARRANTIES/DISCLAIMERS/LIMITATION OF LIABILITY:
12.1 Each party represents, warrants and covenants that: (i) it is
a corporation duly incorporated and validly existing and in
good standing under the laws of its respective state of
incorporation; (ii) it has all necessary corporate power and
authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions
contemplated hereby; (iii) it has taken all corporate action
necessary to execute and deliver this Agreement, to consummate
the transactions contemplated hereby; and to perform its
obligations hereunder; (iv) this Agreement has been duly
executed and delivered by both parties; (v) it is aware of no
obligation, legal or otherwise, which is inconsistent with its
obligations under this Agreement; and (vi) performance of its
obligations under this Agreement will not violate any law,
rule, regulation, or any proprietary or other right of a third
party.
12.2 SVI represents, warrants and covenants that:
12.2.1 it is sole owner of, or has obtained all necessary
rights to use and for Customer to use all
intellectual property and other rights relating to
the Deliverables, the Professional Services and SVI's
performance of its obligations hereunder, and
Customer's use of the foregoing hereunder shall not
infringe or violate any rights of a third party;
12.2.2 it shall (i) be responsible in all respects for the
performance of its own personnel hereunder, including
but not limited to any liability arising out of such
performance, and for maintaining any insurance
policies relating thereto; (ii) comply with all laws,
statutes, rules, regulations and reputable business
practice in its performance of all of its obligations
hereunder; and (iii) obtain all consents, permits,
licenses and approvals (including work permits or
visa applications) that may be necessary or expedient
for performing all of its obligations hereunder;
12.2.3 [***]
12.2.4 the Deliverables will substantially conform to and
comply with their specifications, be operational and
fit for their intended purpose as identified in the
specifications and/or Documentation.
12.3 If at any time during the first [***]from the date of each
Acceptance Notice, Customer notifies SVI that any applicable
Deliverable covered thereby has a defect which causes data
corruption or program failures ("DEFECT"), SVI shall use
reasonable best efforts to remedy the foregoing, free of
charge, within [***](or a mutually-agreed extension of time).
[***]
[***] = Confidential Treatment Requested
12
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12.4 If at any time after the first [***] from the date of an
Acceptance Notice, Customer notifies SVI that any applicable
Deliverable has a Defect, SVI shall use reasonable best
efforts to remedy such Defect within [***](or a
mutually-agreed extension of time), at SVI's standard
professional rates (as set forth on EXHIBIT 4) for performing
such services. Notwithstanding the foregoing, if Customer and
SVI have entered into a maintenance agreement pursuant to
Section 9.3, the terms of that maintenance agreement shall
supersede this Section 12.4.[***] EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, SVI EXPRESSLY DISCLAIMS ANY AND ALL
WARRANTIES CONCERNING THE SOFTWARE AND/OR THE SERVICES TO BE
RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
12.5 Except with respect to the parties' indemnification
obligations hereunder, (i) in no event shall either party's
cumulative liability for any claim arising in connection with
this Agreement exceed the total fees and charges paid to SVI
by Customer from the preceding [***] before the Effective Date
until the expiration or termination of the Term; or (ii) in no
event shall either party be liable for any indirect,
consequential, special, exemplary, or incidental damages of
whatever kind arising out of its performance hereunder.
12.6 No action, whether based in contract, strict liability, or
tort, including any action based on negligence, arising out of
the performance of services under this Agreement, may be
brought by either party more than one year after such cause of
action accrued.
13. ASSIGNMENT:
13.1 Neither party shall assign any of its obligations under this
Agreement without the prior written consent of the other
party, including any assignment (whether actual, implied or DE
FACTO) in the event of a party's "change of control." "Change
of control" means either (i) the sale or transfer of all or
substantially all of a party's assets to any person or group
of persons; or (ii) the acquisition of a party by another
person by means of any transaction or series of related
transactions (including any reorganization, merger or
consolidation, whether of a party with or into any other
person or persons or of any other person or persons with or
into a party). The sole and exclusive remedy for a change of
control shall be as set forth in Section 1.4(b) above.
[***] = Confidential Treatment Requested
13
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13.2 The parties agree that this Agreement shall be deemed an
Agreement for the personal services of SVI and, to the fullest
extent permitted by law, shall not be assumable and/or
assignable by SVI in bankruptcy without Customer's prior
consent.
13.3 Any purported assignment by either party in violation of the
foregoing shall be null and VOID AB INITIO and of no force or
effect. In the event of a permitted assignment hereunder, this
Agreement shall be binding upon the parties and their
permitted assigns.
14. CONFIDENTIALITY:
14.1 It is anticipated that Customer and SVI, in the course of
carrying out their respective responsibilities under this
Agreement, will consult with the other party's personnel
about, or receive certain of, the other party's confidential
business and technical information ("CONFIDENTIAL
Information"). Customer and SVI agree to keep confidential
and, without the other party's prior written consent, will not
use and will not disclose to any person or entity, other than
its employees (and consultants or third-party service
providers, subject to reasonable confidentiality agreements)
who reasonably need to know same to perform such party's
obligations hereunder, any Confidential Information.
14.2 The foregoing obligations of this Section 11 will not apply to
any information or data that (1) at the time of disclosure or
use by the recipient is known or available to the general
public by publication or otherwise (other than as a result of
a breach of this Section 11); (2) is known by the recipient at
the time of receiving such information; (3) is made public by
the disclosing party; (4) is developed independently by the
recipient prior to the date of disclosure by the disclosing
party; (5) is acquired by the recipient from a third party who
independently and rightfully developed or acquired the
information or data and was under no duty to refrain from its
disclosure; or (6) is required to be disclosed by law, court
order, regulation or judicial process, PROVIDED THAT the
receiving party shall give prompt notice of any such
requirement to the disclosing party, disclose no more
information than is so required and cooperate with all efforts
by the disclosing party to receive a protective order or
similar confidential treatment.
14.3 Customer shall not, and shall not allow any other party to,
reverse assemble or reverse compile the Software for any
purpose, except as permitted by this Agreement (including
Section 6.2).
14.4 Either Customer or SVI may specifically enforce any agreement
contained in this Section 14 through an injunction or
otherwise (in accordance with Sections 22 and 26), in the
event of breach or threatened breach by the other. Such
remedies will be in addition to all others that may be
available.
14
CONFIDENTIAL TREATMENT
15. NON-SOLICITATION OF STAFF:
15.1 During the Term and for a period of [***] thereafter, neither
party shall solicit for employment any employee of the other
engaged in the performance of this Agreement unless agreed in
writing by the other party. Notwithstanding the foregoing,
Customer may immediately solicit for employment any employee
of SVI or its Affiliates if this Agreement or another
Transaction Document (as defined in the Purchase Agreement
between the parties of even date herewith) is terminated for
SVI's breach or liquidation (but not reorganization) in
bankruptcy. "Solicit" shall not include offers of employment
or recruitment to the general public or industry, to which a
party's employee may respond of his or her own volition
without violating this Section 15.1, or any receipt of
employment inquires by the other party's employee of such
employee's own initiative and volition.
15.2 Each party's estimate of the damage that a breach of the above
paragraph would have upon its business is herein quantified as
liquidated damages in the amount of prior years' total
compensation for the individual in question. Each party
accepts that these are reasonable estimates of loss and agrees
to pay the same upon demand in the event of its breach of this
clause.
16. NO WAIVER:
The waiver by either party of a particular breach of this Agreement by
the other shall not be construed or constitute a continuing waiver of
such breach or of other breaches of the same or other provisions of
this Agreement.
17. REVENUE SHARING:
17.1 Providing this Agreement shall not have been terminated by SVI
pursuant to Section 1.3 or by Customer pursuant to Section
1.4(a), in either case prior to the Completion Date, SVI shall
pay Customer a [***] royalty on all license fees (domestic and
international) actually received by SVI, its Affiliates and/or
designees (other than from Customer) for SVI's grant of
licenses for the Software during the[***]following the first
date that either of Customer's First Country or Second Country
operations are making full-time commercial use of all
Deliverables, in each case with third parties that did not
have agreements with SVI relating to the Software or other
software designed to accomplish substantially similar
functions prior to the Completion Date (such time period, the
"REVENUE SHARING TERM"). Such royalty payment shall be due
within[***] after SVI receives payment from any third party
hereunder. License fees shall exclude (a) credits or discounts
provided currently or subsequently to such customers with
respect to such Software, including, without limitation, for
(i) advertising allowances, promotional allowances, and/or
xxxx-down allowances, (ii) returned Software and (iii) claims
or allowances of customers allowed by SVI for any reason, (b)
sales, use, excise, value-added and similar taxes or duties
[***] imposed on the foregoing licenses of the Software, and
(c) shipping costs related to products shipped by SVI to
customers.
[***] = Confidential Treatment Requested
15
CONFIDENTIAL TREATMENT
17.2. DURING THE REVENUE SHARING TERM AND FOR [***] THEREAFTER, SVI
SHALL KEEP FULL, TRUE AND ACCURATE BOOKS AND RECORDS RELATING
TO THE PAYMENTS DUE UNDER SECTION 14.1. CUSTOMER (OR A
REASONABLE DESIGNEE) HAS THE RIGHT TO AUDIT AND INSPECT SUCH
BOOKS AND RECORDS ON SVI'S PREMISES (OR AT ANY OTHER
REASONABLE LOCATION) [***] (OR MORE OFTEN, IF REASONABLY
JUSTIFIED UNDER THE CIRCUMSTANCES), UPON REASONABLE NOTICE AND
DURING NORMAL BUSINESS HOURS. IF ANY SUCH AUDIT SHALL FIND
THAT CUSTOMER HAS OVERPAID FOR ANY TIME-BASED CHARGES, SVI
SHALL IMMEDIATELY PAY SUCH AMOUNT TO CUSTOMER.
17.3 [***]
18. INDEMNITY:
18.1 Subject to the provisions of Section 12.7 above, each party
agrees to indemnify, defend and hold harmless the other party
and its affiliates (and Sublicensees, with respect to
Customer) and their officers, directors, shareholders,
employees and agents from any third party loss, claim,
liability, award, judgment, damage, settlement, cost or
expense (including reasonable attorney's fees and costs of
suit) ("LOSS") which is directly or indirectly caused by (i)
with respect to either party, its breach of any
representation, warranty or covenant or failure to perform any
obligation under this Agreement, except to the extent covered
by the other party's indemnity obligations hereunder; or (ii)
with respect to SVI, its activities pursuant to Section 17.1.
18.2 The indemnified party agrees to notify the indemnifying party
promptly of any potential indemnified claim and to cooperate
fully with the indemnifying party, at the indemnifying party's
expense, in the defense and settlement thereof. Neither party
shall settle or compromise an indemnified claim any way that
impairs or jeopardizes the other party's rights or subjects
the other party to liability without such party's prior
written consent, which shall not be unreasonably withheld.
18.3 If Customer or its Sublicensees' use of one or more
Deliverables infringes any patent, copyright, trade secret or
other intellectual property right of a third party, SVI shall,
at its sole cost and expense, either (i) acquire for Customer
the right to continue to use such Deliverable in accordance
with the terms hereof, or (ii) provide Customer with another
software product which will perform in an equivalent manner.
If one of the foregoing does not occur within a reasonable
period of time, in no event longer than forty-five (45) days,
then Customer shall have the right to terminate this Agreement
as to the affected Deliverables (but not other Deliverables or
the entire Agreement, unless the affected Deliverable
[***] = Confidential Treatment Requested
16
CONFIDENTIAL TREATMENT
substantially impairs Customer's ability to enjoy the benefits
of this Agreement), and receive(a) for Deliverables on EXHIBIT
1, SCHEDULES A OR B, a PRO RATA portion of fees under Section
9.1.1 as indicated on such Schedules; or (b) for Deliverables
on EXHIBIT 1, SCHEDULE C, the full contract amount set forth
thereon plus all service fees relating to the delivery of such
Deliverable. This remedy is in addition to, and not in
limitation of, any other remedies Customer may have hereunder,
at law or in equity. However, SVI will not be responsible for
any infringement liability resulting directly or indirectly
from (i) Customer modifications to the Deliverables that are
not made by SVI or under its direction or with its express
approval, (ii) Customer's use with the Deliverables of any
equipment not specified by SVI, or (iii) any Deliverables not
installed by SVI or its authorized agents or with SVI's
approval.
18.4 SVI shall maintain, at all times during the Term, insurance of
the following types and in the following amounts: commercial
general liability insurance (including contractual liability)
on an occurrence form with limits (in combination with excess
liability insurance) of [***] in the aggregate and workers
compensation coverage as dictated by applicable law. Customer
will be added as an additional insured. Upon the execution of
this Agreement and annually thereafter, SVI shall furnish
Customer with an insurance certificate relating to the
commercial general liability insurance and indicating that
such insurance will not be canceled, terminated or modified
unless thirty (30) days prior written notice has been given by
the carrier to Customer and that Customer is included as an
additional insured. SVI hereby agrees to use commercially
reasonable efforts to cause its insurance company(ies) to,
waive any rights they may have to recover from Customer or any
Sublicensee any damages arising from claims falling within the
scope of the indemnities set forth herein.
19. BANKRUPTCY:
19.1 In the event of any bankruptcy of SVI, its affiliates or
subsidiaries, the parties acknowledge and agree that the
licensed rights hereunder are fundamentally in the nature of
"intellectual property" as defined in the Bankruptcy Code;
that Customer's continued enjoyment of all licensed rights is
fundamental to the basic license hereunder; and therefore all
licensed rights should be deemed intellectual property subject
to Customer's rights under Section 365(n) of the Bankruptcy
Code.
19.2 The parties agree that upon any election by Customer pursuant
to Section 365(n)(1)(B) of the Bankruptcy Code, that Customer
shall be entitled to, on its own or through Sublicensees,
employees, contractors, agents or otherwise, use, copy,
distribute, make derivative works based upon, publish,
display, perform and create Updates based upon the rights
licensed hereunder.
19.3 In the event of a bankruptcy of any third party with rights in
any Deliverable, SVI shall refrain from exercising any rights
under Section 365(n) without Customer's prior written consent
[***] = Confidential Treatment Requested
17
CONFIDENTIAL TREATMENT
and shall file and prosecute such motions, applications and
pleadings and take all such actions under Section 365(n) of
the Bankruptcy Code to protect and preserve Customer's rights
hereunder as Customer may direct from time to time.
19.4 Without limiting Customer's rights under the foregoing, solely
in the event SVI fails to perform any of its obligations
described in Section 16.3, SVI hereby irrevocably constitutes
and appoints Customer and any officer or agent of Customer,
with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in
the place and stead of SVI and in the name of SVI or in its
own name, to take (in Customer's sole and absolute discretion)
any and all actions described in Section 16.3 to protect SVI
and/or Customer's rights to the intellectual property
hereunder, including without limitation (i) commencing any and
all necessary actions or suits at law or in equity in any
court of competent jurisdiction connection with SVI's rights
to the intellectual property or any election under Section
365(n) of the Bankruptcy Code, or (ii) defending or
compromising or adjusting suits at law or in equity in any
court of competent jurisdiction in connection with SVI's
rights to the intellectual property or any election under
Section 365(n) of the Bankruptcy Code.
20. LEGAL AUTHORITY:
SVI and Customer are independent entities and shall not have authority
to act for or bind the other in any way or to represent that either of
them is in any way responsible for acts of the other.
21. LAW:
All questions concerning the validity, operation, interpretation and
construction of this Agreement shall be governed by and determined in
accordance with the internal laws of the State of California
(irrespective of its choice of law principles).
22. ARBITRATION:
22.1 Except as specifically modified by this paragraph, and
excepting matters involving provisional remedies as set forth
below, any controversy or claim arising out of or relating to
this Agreement, or any breach thereof, including without
limitation, any claim that this Agreement, or any part
thereof, is invalid, illegal or otherwise voidable or void,
shall be submitted to arbitration to be held before a single
arbitrator in San Diego, California before and in accordance
with the commercial arbitration rules of the American
Arbitration Association. If the claims at issue exceed
$500,000.00, exclusive of interest and attorneys' fees, such
commercial arbitration rules shall include the supplementary
procedures for large, complex cases and the number of
arbitrators shall be three. In all cases, the arbitrators
shall be members of the State Bar of California, actively
engaged in the practice of law for at least 10 years, or a
retired member of the state or federal judiciary.
18
CONFIDENTIAL TREATMENT
22.2 This provisions of this paragraph shall be construed as
independent of any other covenant or provision of this
Agreement; provided that if a court of competent jurisdiction
determines that any such provisions are unlawful in any way,
such court shall modify or interpret such provisions to the
minimum extent necessary to have them comply with the law.
22.3 Nothing in Section 22.1 shall prevent a party from applying to
a court of competent jurisdiction for temporary or preliminary
injunctive relief pending the outcome of the arbitration in
Section 22.1. Judgment upon an arbitration award may be
entered in any court having competent jurisdiction and shall
be binding, final and non-appealable.
22.4 This arbitration provision shall be deemed to be
self-executing and shall remain in full force and effect after
expiration or termination of this Agreement.
23. PRESS RELEASES:
Subject to SVI's obligations to comply with applicable laws and
regulations, including without limitation applicable securities' laws;
provided SVI shall provide Customer with prompt written notice of any
such obligations and shall take no actions beyond the scope of such
obligations, SVI will receive Customer's approval in its reasonable
discretion before (i) releasing any press release that provides any
information regarding Customer and/or this Agreement or (ii) including
Customer's name on any published list of customers. Neither party shall
use the name, logos, service marks, trademarks and identity of the
other (and SVI shall not use those of Customer's Sublicensees) in
publicity, advertising, or any similar activity, without the prior
written consent of the other.
24. ATTORNEYS' FEES:
In the event any arbitration is initiated by any party pursuant to
Section 22, the prevailing party shall be entitled to recover from the
unsuccessful party all costs, expenses, and actual attorneys' fees
relating thereto or arising therefrom. Any judgment upon an arbitration
award pursuant to Section 22.3 shall contain a specific provision for
the recovery of the foregoing.
25. FORCE MAJEURE:
Neither of the parties shall be liable or be in breach of any provision
of this Agreement for any failure or omission on its part to perform
any obligation because of force majeure, including, but not limited to
war, riot, fire, explosion, flood, sabotage, terrorism, accident or
breakdown of machinery, or other impediments, hindrances, or cause
beyond the reasonable control of the party; and provided that such
failure or omission resulting from one of the above causes is cured as
soon as practicable after the occurrence of one or more of the
above-mentioned causes. A party claiming a right to excused performance
19
CONFIDENTIAL TREATMENT
under this Section 25 shall promptly notify the other party in writing
of the extent of its inability to perform, which notice shall specify
the occurrence beyond its reasonable control that prevents such
performance. After one hundred and twenty (120) days, unless the
parties have agreed to an alternative resolution, the right to such
excused performance shall expire.
26. SCOPE OF AGREEMENT/AMENDMENT:
The parties hereto acknowledge that each has read this Agreement,
understands it, and agrees to be bound by its terms. The parties
further agree that this Agreement is the complete and exclusive
statement of agreement and supersedes all proposals (oral or written),
understandings, representations, conditions, warranties, covenants, and
other communications between the parties (and their predecessors and
affiliates) relating hereto including (i) the Professional Services
Agreement and related Schedules dated July 10, 2001 between SVI Retail,
Inc. and Customer provided that the Software, Documentation and other
deliverables provided and services performed under such agreement
(including without limitation any of the foregoing on EXHIBIT 1,
SCHEDULE A) shall be deemed and treated as if they are accepted by
Customer and fully-paid Deliverables and Professional Services in this
Agreement for all applicable purposes hereunder, including without
limitation Sections 6, 12, 18 and 19, and (ii) any other Superseded
Documents (as defined in Section 12 of the Purchase Agreement between
the parties of even date herewith). For the avoidance of doubt, the
foregoing shall not be deemed to supersede the License Agreement
between Island Pacific Systems Corp. and Customer, including all
attachments thereto, dated May 20, 1999. This Agreement may be amended
only by a subsequent writing that specifically refers to this Agreement
and is signed by both parties, and no other act, document, usage, or
custom shall be deemed to amend this Agreement.
27. VENUE AND JURISDICTION:
For purposes of venue and jurisdiction, this Agreement shall be deemed
made and to be performed in the City of San Diego, California.
28. COUNTERPARTS:
This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which together shall constitute one
document.
29. TIME OF ESSENCE:
Time and strict and punctual performance are of the essence with
respect to each provision of this Agreement.
20
CONFIDENTIAL TREATMENT
30. [INTENTIONALLY OMITTED]:
31. HEADINGS:
The headings of the Paragraphs of this Agreement have been included
only for convenience, and shall not be deemed in any manner to modify
or limit any of the provisions of this Agreement, or be used in any
manner in the interpretation of this Agreement.
32. PARTIAL INVALIDITY:
Each provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. If any provision of this Agreement or
the application of such provision to any person or circumstance shall,
to any extent, be invalid or unenforceable, the remainder of this
Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected by such invalidity or
unenforceability, unless such provision or such application of such
provision is essential to this Agreement.
33. DRAFTING AMBIGUITIES:
Each party to this Agreement and its legal counsel have reviewed and
revised this Agreement. The rule of construction that any ambiguities
are to be resolved against the drafting party shall not be employed in
the interpretation of this Agreement or of any amendments or exhibits
to this Agreement.
34. NOTICES:
Any notice, consent, authorization or other communication to be given
hereunder shall be in writing and shall be deemed duly given and
received when delivered personally or transmitted by facsimile
transmission with receipt acknowledged by the addresses or three days
after being mailed by first class mail, or the next business day after
being deposited for next-day delivery with a nationally recognized
overnight delivery service, charges and postage prepaid, properly
addressed to the party to receive such notice at the address(es)
specified below, or at such other address as shell be specified by like
notice:
If to SVI:
SVI, Inc.
0000 Xxxxxx Xxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Chief Executive Officer
Facsimile: (000) 000-0000
21
CONFIDENTIAL TREATMENT
with a copy to:
Xxxxxxx Xxxx Seidenwurm & Xxxxx, LLP
000 X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
If to Customer:
Toys "R" Xx
000 Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
IN WITNESS WHEREOF, SVI and Customer have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
SVI SOLUTIONS, INC. TOYS "R" US, INC.
By By
------------------------------- -----------------------------
Name Name
----------------------------- ---------------------------
Title Title
----------------------------- ---------------------------
Date Date
----------------------------- ---------------------------
22
CONFIDENTIAL TREATMENT
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[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] = Confidential Treatment Requested
25
[***]
[***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] = Confidential Treatment Requested
26
[***]
[***]
[***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] = Confidential Treatment Requested
27
[***]
[***]
[***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] = Confidential Treatment Requested
28
[***]
[***]
[***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***][***] [***] [***] [***][***] [***] [***] [***][***] [***] [***] [***][***] [***]
[***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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[***] [***][***] [***] [***] [***][***] [***] [***] [***][***] [***] [***] [***][***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***]
[***]
[***]
[***]
[***] = Confidential Treatment Requested
29
[***]
[***]
[***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***]
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[***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***][***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***][***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
------------------------------------------------------------------------------------------------------------------------------------
[***]
[***]
[***]
[***]
[***] = Confidential Treatment Requested
30
[***]
-------------------------------------------------------------------------------
[***] [***] [***] [***]
-------------------------------------------------------------------------------
[***] [***] [***] [***]
-------------------------------------------------------------------------------
[***] [***] [***] [***]
-------------------------------------------------------------------------------
[***] [***] [***] [***]
-------------------------------------------------------------------------------
[***] [***] [***] [***]
-------------------------------------------------------------------------------
[***] [***] [***] [***]
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[***] [***] [***] [***]
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[***] [***] [***] [***]
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[***] [***] [***] [***]
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[***] [***] [***] [***]
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[***] [***] [***] [***]
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[***] [***] [***] [***]
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[***] [***] [***] [***]
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[***] [***] [***] [***]
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[***] [***] [***] [***]
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[***] [***] [***] [***]
-------------------------------------------------------------------------------
[***] [***] [***] [***]
-------------------------------------------------------------------------------
[***] = Confidential Treatment Requested
31
EXHIBIT 3 - DOCUMENTATION
Documentation includes without limitation the following:
1. a reference manual for each Software product containing:
(a) system introduction and overview of applications
including, without limitation, a reasonably detailed description of all
of the functions performed by the applicable product, broken down by
module;
(b) samples of all menus used for application access;
(c) step by step instruction in the operation of each
application and all enhancements thereto;
(d) explanations and examples of the retail merchandising
terms and theory used in the system, including the formulas used by the
system to calculate the values presented on reports and screen
inquiries;
(e) instructions allowing Customer and its Sublicensees to
personalize options allowed by the system; and
(f) instructions allowing Customer and its Sublicensees to
develop and implement a plan of secured access to menus and
applications.
32
EXHIBIT 4 - SVI'S STANDARD PROFESSIONAL RATES
33
EXHIBIT 5 - PROFESSIONAL SERVICES
Design Services - providing Functional Design Specifications.
Development Services - providing Technical Design Reviews and ad hoc technical
consultancy.
Professional Services - providing account management, project management, system
knowledge and system application to business process support.
Technical Consulting Services - providing system knowledge, supporting TRUI
system integration, supporting the TRUI lab environment as requested by TRUI and
managing the development of specific custom software requested by TRUI.
Programming Services - developing the specific custom software requested by
TRUI.
34
