Exhibit 10.40
EXECUTION VERSION
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INFORMATION TECHNOLOGY TRANSITION SERVICES AGREEMENT
by and among
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.,
THE GREAT ATLANTIC & PACIFIC TEA COMPANY
AND
METRO INC.
Dated as of August 15, 2005
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INFORMATION TECHNOLOGY TRANSITION SERVICES AGREEMENT (this
"Agreement"), dated as of August 15, 2005 (the "Effective Date"), by and among
The Great Atlantic & Pacific Tea Company, a Nova Scotia unlimited liability
company ("Service Recipient") and Metro Inc., a Quebec company, ("Metro") (as
guarantor of Service Recipient's obligations under this Agreement) on the one
hand, and The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation
("Service Provider"), on the other hand. Capitalized terms used and not
otherwise defined herein have the meanings ascribed to them in the Purchase
Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Purchase Agreement by and among
Metro, 4296711 Canada Inc., a Canadian corporation ("Purchaser"), A&P Luxembourg
S.a.r.l, a Luxembourg societe a responsabilite limitee and Service Provider
dated as of July 19, 2005 (the "Purchase Agreement"), Service Provider agreed to
provide to Service Recipient certain information technology ("IT") and other
services, as more fully set forth herein; and
WHEREAS, Service Recipient wishes to receive such IT and other services
for use in connection with its business in order to ensure a smooth transition
to such other IT systems as Purchaser may select.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth herein, the Parties, intending to be legally bound hereby,
agree as follows:
ARTICLE I
SERVICES
Section 1.01 Description of various services to be provided.
(a) IT Services. Service Provider shall provide the IT
services set forth on Exhibit A (collectively, the "IT Services"). Except as
otherwise specifically agreed by the parties, and subject to the terms of this
Agreement, the IT Services shall be substantially similar to the equivalent IT
services that Service Provider provides for its own business needs.
(b) Project Services. If Service Recipient desires to receive
any of the application development, enhancement or integration services listed
in Exhibit B (collectively, the "Project Services"), Service Recipient will
provide Service Provider with a detailed written request for such proposed
services (such request sufficiently detailed, to the extent reasonably
practicable, to enable Service Provider to assess the feasibility of such
request, and if reasonably feasible, estimate the resources and effort required
to provide such proposed services). Based on such request, Service Provider
shall evaluate such proposal, and if reasonably feasible, and not unduly
burdensome in light of Service Provider's resource constraints and obligations,
provide a draft work order (a "Work Order") for such services for Service
Recipient's approval. Such Work Order shall be accepted or rejected as set forth
in Section 1.01(e). Notwithstanding the foregoing, the Service Provider shall be
obligated to provide any and all Data Extraction Services on a commercially
reasonable timeline to be mutually agreed by the parties pursuant to Section
4.01(b). For purposes of this Agreement, "Data Extraction Services" shall mean
the following Project Services in connection with the transition of the data
related solely to the operation of the Business: (i) working with Service
Recipient as necessary to determine the format in which such data shall be
provided; (ii) extracting such data from Service Provider's systems; (iii)
providing such data to Service Recipient in such format; and (iv) working with
Service Recipient as necessary to determine the most efficient manner in which
to complete the transition. Service Provider will be obligated to consider in
accordance with the foregoing only such requested services that are directly
related to the IT Services and that could not be obtained from other commercial
service providers.
(c) Additional Services. Service Recipient may request, and
Service Provider may propose, services in addition to the IT Services and the
Project Services, or the expansion of the scope of any such service
(collectively, "Additional Services"). Additional Services shall include all
services that (i) are not primarily related to the transition of the IT aspects
of the Business to Service Recipient's systems or (ii) that could be obtained
from other commercial service providers. If Service Recipient desires to receive
any such Additional Services, Service Recipient will provide Service Provider
with a detailed written description of such proposed services. Based on such
description, Service Provider shall have the right, in its sole discretion, to
decline to provide such Additional Services. If Service Provider does not
decline such Additional Services, Service Provider shall provide a draft Work
Order for the provision of such services for Service Recipient's approval. Such
Work Order shall be accepted or rejected as set forth in Section 1.01(d).
(d) Work Orders. Any Work Order shall describe (i) the
services to be provided under such Work Order, (ii) the timeline for such
services and (iii) the cost for such services (which may be expressed as an
hourly rate). Upon delivery of a draft Work Order to Service Recipient, Service
Recipient may approve or decline such Work Order. If Service Recipient declines
such Work Order, then, within ten (10) business days or receipt of such Work
Order, Service Recipient shall so notify Service Provider and Service Provider
shall have no obligation to provide the services described therein. If Service
Recipient approves such Work Order, then Service Provider shall provide the
services in accordance therewith and subject to the terms and conditions of this
Agreement. No Work Order shall be binding unless signed by both parties.
(e) Services. The IT Services, and any Project Services and
Additional Services described in mutually agreed Work Orders, are collectively
referred to herein as the "Services."
Section 1.02 Disaster Recovery.
(a) As part of the IT Services, Service Provider will provide
to Service Recipient substantially the same disaster recovery services as
Service Provider provides to itself. In the event that Service Recipient wishes
to receive additional or different disaster recovery Services, such services
will be deemed Additional Services and be subject to the provisions of Section
1.01(d).
(b) Service Provider will consult with, and will not
unreasonably discriminate against, Service Recipient in the creation,
implementation and, if required, execution of Service Provider's disaster
recovery plan. Service Provider will minimize any such discrimination where
reasonably practicable to do so. Service Recipient acknowledges that certain
discrimination is practically unavoidable, such as with respect to any Services
that, practically speaking, must or should be restored serially among service
recipients rather than simultaneously for all service recipients.
(c) Notwithstanding Sections 1.02(a) and (b), Service Provider
shall not be required to provide disaster recovery services to the extent that
Service Recipient has materially altered the facilities, equipment, hardware or
software to which such disaster recovery services pertain. If Service Recipient
wishes to receive disaster recovery services in such circumstances, then such
services will be deemed Additional Services and be subject to the provisions of
Section 1.01(d).
Section 1.03 Service Standards.
(a) For Services not governed by SLAs (as defined below) or
other express service standards set forth herein, Service Provider will use
commercially reasonable efforts to provide the Services substantially in the
same manner, and with substantially the same functionality and performance, as
it provides such services to itself, subject to the terms and conditions of this
Agreement.
(b) As set forth in Exhibit E, certain of the IT Services will
be subject to the Service Level Agreement ("SLA") set forth on Exhibit E.
Service Provider will measure and report its performance relative to the SLAs,
and the parties shall meet periodically to review such performance. In the event
that Service Provider materially fails to meet any SLA, Service Provider will
initiate a root cause analysis for any incident that contributed to the Service
Provider missing such Service Level within a reasonable period of time after
such incident and use commercially reasonable efforts to ascertain the actual
root cause of such failure, which analysis shall include, where reasonable and
practicable, Service Provider's plan for avoiding such incidents in the future.
For the sake of clarity, there are no financial penalties associated with
Service Provider's failure to meet an SLA.
(c) If the performance of the IT Services provided to Service
Recipient as measured by the SLAs is materially inferior to the services Service
Provider provides to itself, then Service Provider shall endeavor to identify
and resolve the cause of the disparity. Service Provider shall attach greater
priority to such endeavor than it attaches to any new or ongoing enhancement
projects being performed (other than projects for emergency maintenance, to
address changes in law, other time-sensitive matters or other matters that pose
a material risk to Service Provider's or Service Recipient's respective
businesses). The foregoing obligations shall not apply if the disparity is
caused by any act or omission by Service Recipient, differences in the Services
being provided (including differences attributable to changes in law applicable
to Service Recipient), or in Service Recipient's facilities, equipment, hardware
or software, or if such disparity is excused by the service standards or other
provisions of this Agreement.
(d) Service Provider shall have the right, in its sole
discretion, to make additions, deletions and other modifications to the SLAs
from time to time, subject to the standard set forth in Section 1.03(a). Subject
to the foregoing sentence, Service Provider will provide prior written notice to
Service Recipient of such additions, deletions and modifications, and shall
consider in good faith Service Recipient's concerns regarding such additions,
deletions and modifications.
(e) It shall not be deemed to be a breach of this Agreement if
Service Provider fails to meet the service standards set forth in this Section
1.03 because of (i) the failure of Service Recipient to cooperate with or
provide information, services or decisions to Service Provider as required
hereunder, (ii) changes reasonably deemed to be required by changes in law,
technology or the availability of reasonably commercially available products and
services, (iii) changes otherwise permitted hereunder, (iv) the inability of
Service Provider to maintain such levels as a result of the demands on, or
changes to, the relevant systems, processes or personnel, provided Service
Recipient is not disproportionately affected, (v) the implementation of Work
Orders or other changes to the Services agreed by the parties, (vi) failures by
third party service providers or general Internet services, (vii) force majeure,
or (viii) any other event or circumstance beyond Service Provider's reasonable
control, provided that, with respect to (iv), (vi) and (viii) only, Service
Provider expends commercially reasonable efforts to correct the situation within
a reasonable period of time, at its cost.
(f) With respect to Services other than IT Services and Data
Extraction Services, Service Provider shall endeavor to perform such Services in
a workmanlike manner, and shall use commercially reasonable efforts to perform
such Services in accordance with any specifications and timelines set forth in
any Work Order or other mutually agreed documentation provided. Subject to the
foregoing sentence, Service Provider provides no guarantees whatsoever that it
will be able to deliver the functionality or other deliverables intended to be
created or delivered pursuant to any Work Order related to Additional Services,
that such functionality or other deliverables will meet Service Recipient's
requirements, or that it will be able to meet any timelines set forth in such a
Work Order. Subject to the previous sentence and the remedy provisions of
Section 10.04, Service Provider shall not be liable for any failure to provide
such Services.
Section 1.04 Service Recipients. Service Provider shall provide the
Services to and for the benefit of Service Recipient and the Converted Stores.
The Services may not be used by a third party, or by Service Recipient for the
benefit of third parties, without Service Provider's prior written consent. For
purposes of this Agreement, "Converted Stores" shall mean such stores owned by
Loeb Canada Inc. ("Loeb Canada") as of the Effective Date and conducted under
the "Loeb" or "Super C" banners in Ontario as Loeb Canada may elect to re-banner
to "A&P" during the Term.
Section 1.05 Means of Providing Services. Service Provider shall, in
its sole discretion, determine the means and resources used to provide the
Services in accordance with its business judgment. Service Provider shall have
sole discretion and responsibility for staffing, instructing and compensating
its personnel and third parties who perform the Services. Without limiting the
foregoing, Service Provider may elect to modify or replace at any time (a) upon
reasonable notice where practicable, the IT Services, provided that such
modifications or replacements apply to Service Provider and Service Recipient;
(b) its policies and procedures; or (c) the environment used to provide the
Services, including (i) the Affiliates of Service Provider or the third parties
that provide all or any portion of the Services; (ii) the location from which
any Service is provided; or (iii) the intellectual property, IT, products and
services used to provide the Services, provided in each case that the service
standards set forth in Section 1.03 are substantially maintained. Service
Provider shall use commercially reasonable efforts: (a) to eliminate or minimize
disruption to Service Recipient's business as a result of such modifications
(for the avoidance of doubt, subject to Section 1.06), (b) not to implement such
modifications during mutually agreed periods of time before and after cut-overs
from such systems to Service Recipient's systems.
Section 1.06 Right to Suspend Services. Notwithstanding anything set
forth herein to the contrary, Service Provider may suspend or, if Service
Provider deems necessary in its sole discretion, terminate, the provision of all
or any part of any or all Services if Service Provider reasonably believes that
(a) the performance of its obligations relating thereto would violate any
applicable law, regulation, judicial or administrative ruling, decision or
policy issued by any governmental entity, (b) the performance of its obligations
relating thereto would violate any third party patent of which Service Provider
was not and should not reasonably have been aware, and Service Provider is
unable to implement a commercially reasonable workaround; or (c) continued
provision of such Services would preclude or materially impair Service
Provider's ability to provide similar services to itself or its other service
recipients, but only in the case of clause (a), to the extent reasonably
necessary for Service Provider to ensure compliance therewith.
Section 1.07 Compliance with Law. Without limiting the provisions of
Section 1.06, if any change in law or regulation renders Service Provider's
performance of one or more of the Services burdensome or illegal, in Service
Provider's reasonable judgment, the party becoming aware of such change in law
shall provide prompt written notice thereof to the other party. The parties
shall discuss the appropriate means of addressing such change in law, provided
that (a) subject to Section 1.07(b), Service Recipient and Service Provider will
be responsible for all incremental costs arising from changes in law in
connection with their respective businesses, and (b) the Parties will share on a
pro rata basis (based on each party's usage of the affected Services) all
incremental costs arising from changes in law affecting the Services or their
provision.
Section 1.08 Modifications to IT Services by Service Provider. Service
Provider reserves the right to modify the environment used to provide the IT
Services, and the IT Services themselves, as Service Provider deems appropriate
to serve Service Provider's internal business needs, provided that Service
Provider shall not materially disrupt the Service Recipient's business as a
result of such modifications. Service Provider shall not implement such
modifications during mutually agreed periods of time before and after cut-overs
from such systems to Service Recipient's systems.
Section 1.09 Change Control. Should Service Recipient desire to make
any changes to the Services (other than requests for Project Services or
Additional Services) Service Recipient shall submit to Service Provider in
writing a full description of such proposed changes. Service Provider shall,
within a reasonable time after receipt of such description, advise as to whether
Service Provider will agree to the proposed changes and, if so, submit to
Service Recipient a Work Order setting forth a quotation for implementing such
changes and specifying any impact on pricing or other terms of this Agreement.
ARTICLE II
COOPERATION AND ACCESS
Section 2.01 Cooperation. Each party will perform all of its
obligations hereunder in good faith, and will cooperate diligently with the
other in all matters relating to provision and receipt of the Services. Without
limiting the generality of the foregoing, each party shall notify the other in
advance of any changes to such party's operating environment or personnel,
including changes with respect to employee status, and each party shall work
with the other to minimize the effect of such changes.
Section 2.02 Access to Facilities, Equipment and Personnel.
(a) Service Recipient shall grant to Service Provider's and
its Affiliates' employees, service providers and other contractors physical and
remote access to Service Recipient's facilities, systems, equipment and
personnel as necessary for Service Provider to provide the Services.
(b) In connection with Data Extraction Services, Service
Provider shall provide, at Service Recipient's request and on an as-available,
mutually agreed basis, office space and network connections for approximately
ten (10) employees of Service Recipient or its consultants at no additional
charge. All office space and network connections requested by Service Recipient
that are not related directly to Data Extraction Services shall be provided as
Project Services and subject to Section 1.01(b).
(c) In connection with Data Extraction Services, Service
Recipient may request and Service Provider shall provide access in a manner to
be mutually agreed by the parties to Service Provider's facilities, personnel
and equipment to Service Recipient at no additional charge. All access to
Service Provider's facilities, personnel and equipment not related directly to
Data Extraction Services shall be provided as Project Services and subject to
Section 1.01(b).
Section 2.03 Access to Information.
(a) Each party shall provide upon the written request of the
other any information within such party's possession, subject to applicable
privacy laws, that the requesting party (i) reasonably requires to comply with
requirements imposed on the requesting party by a governmental authority; (ii)
reasonably requires for use by such requesting party in any proceeding or to
satisfy audit, accounting, tax or similar requirements; or (iii) which the
requesting party reasonably determines is necessary or advisable in the
preparation of its financial statements or any reports or filings with any
governmental agency.
(b) At the request of Service Provider, Service Recipient
shall timely provide information, documentation and resources sufficient for
Service Provider to perform the Services. Service Recipient will provide Service
Provider with timely notice of decisions, approvals and acceptances in order
that Service Provider may perform its obligations hereunder in a timely and
efficient manner.
Section 2.04 Errors. Service Provider may assume all information,
documentation, decisions, approvals and acceptances provided by Service
Recipient in connection with the Services are accurate, complete and final, and
shall have no obligation to inquire as to any errors or omissions nor any
obligation or liability for relying thereon (absent actual knowledge of any
material error or omission). Service Recipient shall be responsible for the
accuracy of all information and data provided by it or on its behalf to Service
Provider.
Section 2.05 Compliance. Each party shall comply with all applicable
laws, regulations, statutes and guidelines. Without limiting the generality of
the foregoing, Service Recipient shall comply with Service Provider's policies,
standards and guidelines relating to the Services, information protection, and
information and system security as such policies, standards and guidelines may
be provided to Service Recipient from time to time. Such policies, standards,
and guidelines are subject to change by Service Provider (as deemed necessary by
Service Provider in the course of conducting its business operations); provided,
however, that such changes shall be communicated to Service Recipient in advance
in an effort to avoid or minimize any adverse impact on the business operations
of Service Provider.
Section 2.06 Security.
(a) Subject to Section 2.05, the parties shall work together
to ensure that Service Provider is able to maintain its security requirements as
new security-related issues may arise for either party.
(b) If either party, or its personnel, will be given access to
the other party's computer systems or software ("Systems") in connection with
the performance of the Services, the accessing party or its personnel, as the
case may be, shall comply with all of such other party's written system security
policies, procedures and requirements made available by each party to the other
(as amended from time to time, the "Security Regulations"), and will not tamper
with, compromise or circumvent any security or audit measures employed by such
other party.
(c) Each party shall use its reasonable endeavors to ensure
that only those of its personnel who are specifically authorized to have access
to the Systems of the other party gain such access, and to prevent unauthorized
access, use, destruction, alteration or loss of information contained therein,
including notifying its personnel regarding the restrictions set forth in this
Agreement and establishing appropriate policies designed to effectively enforce
such restrictions.
(d) If, at any time, either party determines that the other
party or its personnel has sought to circumvent, or has circumvented, its
Security Regulations, that any unauthorized personnel of the other party has
accessed its Systems or that the other party or any of its personnel has engaged
in activities that may lead to the unauthorized access, use, destruction,
alteration or loss of data, information or software, such party shall
immediately terminate any such personnel's access to the Systems and notify the
other party. Each of Service Provider and Service Recipient shall access and use
only those Systems, and within such Systems, only such data and information, to
which it has been granted the right to access and use. Notwithstanding the
foregoing, any party shall have the right to deny the personnel of the other
party access to such party's Systems, after prior written notice, in the event
the party reasonably believes that such personnel pose a security concern.
(e) A material failure to comply with the Security Regulations
shall constitute a material breach of this Agreement. All user identification
numbers and passwords of a party disclosed to the other party and any
information obtained from the use of the disclosing party's Systems shall be
deemed Confidential Information of the Disclosing Party without the need for the
Disclosing Party to specifically identify such information as such.
(f) Each party will cooperate with the other party in
investigating any apparent unauthorized access to party's Systems or any
apparent unauthorized release by a party or such party's personnel of
Confidential Information of a party. Each party will: (i) immediately notify the
other party if such party has revoked access to its own Systems to any of its
personnel if such personnel also has access to the other party's Systems; and
(ii) to the extent reasonably possible, will immediately revoke any access to
the other party's Systems once such party's Personnel no longer has a need to
access the other party's Systems.
(g) Each party will use commercially reasonable efforts to
prevent the introduction of viruses and other unauthorized software or
mechanisms into their and, to the extent of such party's access to the other
party's computer systems, the other party's computer systems. If a virus or
other unauthorized software or mechanism is found to have been introduced into
Service Recipient's systems or Service Provider's systems and affected the
Services, as Service Recipient's sole and exclusive remedy, Service Provider
shall take reasonable efforts to remove such virus, unauthorized software or
mechanism from such systems and to assist in mitigating any interruption to the
Services (subject to Article X).
Section 2.07 Services Information. Service Provider shall maintain
reasonable documentation in respect of the Services provided hereunder,
consistent with its past practice, which Service Provider will make available to
Service Recipient upon Service Recipient's request, subject to Service
Provider's confidentiality and other obligations to any third parties.
ARTICLE III
THIRD PARTY CONTRACTS
Section 3.01 Subcontractors and Suppliers. Service Provider may
subcontract some or all of the Services to another provider, including third
parties and Service Provider's Affiliates. Service Provider shall have sole
discretion with respect to the evaluation and selection of such other providers;
provided that Service Provider shall (a) consult with and consider in good faith
any recommendations or concerns raised by Service Recipient with respect to such
other providers, and (b) remain responsible for the performance of the Services
in accordance with the terms and conditions of this Agreement.
Section 3.02 Third Party Contracts. Services provided by third parties
through Service Provider or using third party intellectual property, products or
services are subject to the terms and conditions of any agreements between
Service Provider and such third parties. Each of Service Provider and Service
Recipient is responsible for its compliance with its own third party contracts
and the applicable third party contracts of the other party disclosed to such
party, provided that, Service Provider will not be obligated to comply with any
onerous or unreasonable terms under any such third party contract of Service
Recipient. In the event that Service Provider reasonably determines that any
such terms are onerous or unreasonable, Service Provider shall so notify Service
Recipient, and the parties will work together to implement either a compromise
with such third party or an alternative arrangement. Each party will pass
through to the other party any applicable rights or benefits under the
underlying contract with the third party, including any warranties or
indemnifications, to the extent permitted by the applicable contracts.
Section 3.03 Required Consents. Service Recipient will be responsible
for obtaining any necessary third party consents, additional licenses and other
rights under its third party contracts to which Service Provider requires
access to perform the Services. Service Provider shall use commercially
reasonable efforts to obtain any necessary third party consents, additional
licenses and other rights under its third party contracts in order to perform
the Services. If any consent, additional license or other right cannot be
reasonably obtained, the parties shall discuss acceptable alternative
arrangements, if possible and as necessary, to provide the Services sufficient
for the Service Recipient's purposes. In no event shall the foregoing require
Service Provider to undertake any material changes to its IT infrastructure or
to its development, operational or business processes or plans. The Service
Recipient and the Service Provider shall share equally up to CA$6,000,000 (or
up to CA$3,000,000 each) with respect to any and all costs related to obtaining
any such necessary third party consents, additional licenses and other rights
under Service Provider's third party contracts in order to perform the Services
(collectively, "Consent Costs"). Service Provider shall be solely responsible
for Consent Costs in excess of CA$6,000,000 and up to CA$20,000,000. Service
Recipient and Service Provider shall share equally Consent Costs in excess of
CA$20,000,000.
ARTICLE IV
GOVERNANCE
Section 4.01 Relationship Managers and Committees.
(a) Relationship Managers. Each of Service Provider and
Service Recipient shall appoint a Relationship Manager to coordinate provision
of the Project Services to Service Recipient. The Relationship Managers will
meet on a monthly basis to review performance, discuss issues and address any
other relevant relationship management issues. The name and contact information
of each party's Relationship Manager is set forth on Exhibit D.
(b) Operational Steering Committee. The parties shall
establish an Operational Steering Committee consisting of an equal number of
representatives from each of Service Provider and Service Recipient. The
Operational Steering Committee shall meet as frequently as necessary, in person
or by telephone, to discuss and agree upon, subject to the other terms and
conditions of this Agreement, the Services to be provided in connection with
system transition and system integration, including Data Extraction Services,
and the schedule pursuant to which such Services will be provided.
(c) Executive Committee. The parties shall establish an
Executive Steering Committee consisting of an equal number of executives from
each of Service Provider and Service Recipient. During the twelve (12) months
immediately following the Effective Date, the Executive Steering Committee shall
meet once per month, in person or by telephone, to discuss the Strategic Plan,
and thereafter at least once annually and otherwise as mutually agreed by the
parties.
Section 4.02 Project Services. Subject to Section 4.01(b), in
connection with Project Services, the parties will use the project life cycle
and software life cycle procedures as are used by Service Provider as of the
Effective Date.(1)
Section 4.03 Strategic Plan. Service Recipient shall provide to Service
Provider by January 31, 2006 an initial strategic plan for Services for calendar
year 2006, and thereafter, for each calendar year during the Term, provide its
strategic plan for Services at least three (3) months prior to the end of the
then-current calendar year, in order to allow Service Provider to assess the
requested Services, approve, propose modifications to, or reject the strategic
plan, in whole or in part, and make appropriate resource allocations and
prioritizations for approved elements of such plan.
ARTICLE V
INTELLECTUAL PROPERTY AND DATA
Section 5.01 License Grant to Service Recipient. Service Provider
hereby grants to Service Recipient a non-exclusive, non-transferable license to
(a) copy and use the documentation provided hereunder solely for the purposes of
receiving the Services, and (b) copy and use such Service Provider software
(such as client software for receiving Services delivered using a client-server
software application) as may be required by Service Recipient to receive the
Services.
Section 5.02 License Grant to Service Recipient in connection with its
Business. Service Provider hereby grants to Service Recipient a non-exclusive,
perpetual, sublicensable, transferable, royalty-free, irrevocable license to
exercise all rights under intellectual property owned by Service Provider and
used by Service Provider as of the Closing Date in connection with such
warehouse and store systems set forth on Exhibit H as Service Recipient may
select for any and all purposes in Service Recipient's and the Converted Stores'
businesses. Service Recipient's license rights shall survive any termination of
this Agreement for the intellectual property that Service Recipient shall
continue to use following the system transition and system integration
processes.
Section 5.03 License Grant to Service Provider in connection with the
Services. Service Recipient hereby grants to Service Provider a non-exclusive,
royalty-free, fully paid-up license to all intellectual property owned or
licensed (subject to Section 3.03) by Service Recipient and necessary or
desirable for Service Provider to perform the Services, solely in connection
with provision of the Services in accordance with this Agreement.
Section 5.04 License Grant to Service Provider in connection with its
Business. Service Recipient hereby grants to Service Provider a non-exclusive,
perpetual, sublicensable, transferable, royalty-free, irrevocable license to
exercise all rights under intellectual property owned by Service Recipient and
used by Service Provider as of the Closing Date for any and all purposes in its
and its Affiliates' businesses, through any and all means, now known or
hereafter invented or discovered. Service Provider's license rights shall
survive any termination of this Agreement.
Section 5.05 Ownership of Data. Service Recipient shall own all right,
title and interest in and to all data generated for Service Recipient by Service
Provider in performing the Services ("Service Data"), provided that Service
Provider shall own all right, title and interest in and to all data of a
technical nature generated in providing the Services that relates to the
operation of Service Provider's services infrastructure. Notwithstanding the
foregoing, Service Provider may retain and use one copy of the Service Data for
regulatory purposes only.
Section 5.06 Ownership of Intellectual Property. Except as otherwise
set forth herein, each of Service Provider and Service Recipient shall retain
all right, title and interest in and to its respective intellectual property and
data, and no other license or other right, express or implied, is granted
hereunder by either party to its intellectual property or data. Except as
otherwise expressly agreed to in writing for any given project, Service Provider
shall exclusively own all right, title and interest throughout the world in and
to all intellectual property created by it in connection with the performance of
this Agreement, and Service Recipient hereby assigns any and all right, title or
interest it may have in any such intellectual property to Service Provider.
Service Recipient agrees to execute any documents and take any other actions
reasonably requested by Service Provider to effectuate the purposes of this
Section.
ARTICLE VI
FEES
Section 6.01 Implementation and Set-Up Costs. Each party shall bear all
of its own implementation and set-up costs and expenses incurred in connection
with the Services. Such implementation and set-up costs shall include, without
limitation, any costs incurred in connection with converting Service Provider's
IT environment to enable Service Provider to provide the Services, provided that
the parties shall cooperate in good faith to minimize the implementation and
set-up costs of both parties.
Section 6.02 IT Services. In consideration of the IT Services set forth
on Exhibit A, Service Recipient shall pay to Service Provider a fee of
CA$20,000,000 per year (the "Flat Fee"). For the sake of clarity, such Flat Fee
includes data archiving services, but does not include telecommunications fees,
which services may be requested as Additional Services. With respect to IT
Services provided to Converted Stores, the Flat Fee shall be subject to a pro
rata increase to be mutually agreed by the parties and based on (a) the number
of Converted Stores and (b) the number and nature of the IT Services provided to
such stores.
Section 6.03 Project Services.
(a) In consideration of the Project Services, Service
Recipient shall pay to Service Provider a blended rate of eighty dollars ($80
USD) per employee per hour (the "Blended Rate"), which rate is subject to
increases once annually, increases corresponding to increases in the Consumer
Price Index. For the purposes of this Section, "Consumer Price Index" means the
"Consumer Price Index-All Urban Consumers" published by the United States
Department of Labor, Bureau of Labor Statistics.
(b) Notwithstanding Section 6.03(a), (i) in the event that
Service Recipient requests a Project Service other than a Data Extraction
Service that requires an elevated degree of expertise, such that the third party
engaged by Service Provider to provide such service would charge a fee
substantially in excess of the Blended Rate, Service Provider shall so advise
Service Recipient in response to such request and, subject to Section 1.01(b),
Service Provider shall provide such Project Services at the rate charged by such
third party provider, and (ii) in the event that the parties elect jointly to
develop a project for their mutual benefit, the cost of such project shall be
allocated between them in a manner to be agreed by the parties and set forth in
the project plan for such project.
(c) All hours billed to Service Provider in connection with
Project Services shall be tracked by Service Provider's time tracking system,
"OutProj."
Section 6.04 Service Provider Costs. Except as otherwise set forth in
Sections 6.01 through 6.03 above, Service Recipient shall pay any incremental
costs incurred by Service Provider as a result of its provision of the Services
to Service Recipient.
Section 6.05 Service Recipient Costs. Service Recipient shall be solely
responsible for its own costs and expenses in connection with its receipt of the
Services including the cost of all required modifications to store topography
that provides required data to the central core systems.
Section 6.06 Taxes
(a) Generally. Service Recipient shall pay all taxes imposed
on the Services or on any payments made hereunder, including sales and use
taxes, if and as applicable, but excluding any Service Provider income taxes, if
any.
(b) Sales Tax, GST, HST.
(i) All fees and other amounts payable hereunder are
exclusive of any sales or value added taxes, including retail sales,
Goods and Services Tax ("GST"), and Harmonized Sales Tax ("HST").
(ii) Service Provider is not required to be and is
not a GST or HST registrant for the purposes of Part XI of the Excise
Tax Act (Canada) and shall not charge GST or HST on any fees or other
amounts payable hereunder in respect of Services. In the event Service
Provider is required to or becomes a GST or HST registrant, Service
Provider shall charge and Service Recipient shall pay GST or HST as
required by Law.
(c) Withholding Tax.
(i) All fees and other amounts payable hereunder
shall be paid net of any withholding for tax required by applicable
law.
(ii) In the event that the Service Recipient proposes
to withhold an amount, in accordance with section 105 of the Income Tax
Regulations (Canada), in respect of the payment of any fees or other
amounts payable to Service Provider hereunder, Service Recipient shall
so inform Service Provider prior to making such payment. The parties
shall in good faith use reasonable efforts to determine and agree, in
writing, the amount of the payment allocable solely to Services
rendered in Canada, and Service Recipient shall withhold only on such
amount.
Section 6.07 Payment Terms. The Flat Fee will be paid in thirteen (13)
equal four-week installments. All other fees and expenses hereunder will be
invoiced on a monthly basis. All invoices are payable within thirty (30) days of
receipt. All fees and other amounts not paid when due are subject to an interest
rate of the lesser of twelve percent (12%) per annum, compounded monthly, and
the maximum amount permitted by law. All fees and other amounts payable
hereunder shall be paid in U.S. dollars.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01 Corporate Status. Each party represents and warrants to
the others that it is duly incorporated and validly existing under the Laws of
the jurisdiction of its incorporation and each (a) has all requisite corporate
power and authority to carry on its business as it is now being conducted and
(b) is duly qualified to do business in each of the jurisdictions in which the
ownership, operation or leasing of its properties and assets and the conduct of
its business requires it to be so qualified.
Section 7.02 Authority and Enforceability. Each party represents and
warrants to the others that the execution and delivery of this Agreement by it
and the consummation by it of the transactions contemplated hereby have been
duly authorized and no other corporate proceedings are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by each party and (assuming due
authorization, execution and delivery by each other party) this Agreement
constitutes a valid and binding obligation of such party, enforceable against
such party in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
Laws relating to or affecting creditors' rights generally or by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at Law).
Section 7.03 No Conflict. Each party represents and warrants to the
others that the execution and delivery of this Agreement by it and the
consummation by it of the transactions contemplated hereby will not (a) violate
any applicable Law to which such Party is subject; (b) except with respect to
consents that will be obtained pursuant to Section 3.03, conflict with, result
in a violation or breach of, or constitute a default under, result in the
acceleration of or create in any party the right to accelerate, terminate or
cancel any Contract or (c) violate its charter, bylaws or other organizational
documents.
ARTICLE VIII
TERM AND TERMINATION
Section 8.01 Term. This Agreement is effective on the Effective Date
and shall continue in effect until the expiration of the Term. Service Provider
will provide the Services to Service Recipient for an initial term of
twenty-four (24) months (the "Initial Term"). Service Recipient may request
renewal of this Agreement with respect to any Service hereunder for two (2)
additional six (6) months term (the Initial Term, together with any such renewal
term, the "Term") upon six (6) months' prior written notice. The terms and
conditions of the Agreement shall continue to apply during any renewal term
except that the then current Flat Fee shall be subject to an increase, such
increase corresponding to the increase in the Consumer Price Index as defined
under Section 6.03 of this Agreement.
Section 8.02 Termination.
(a) Either party may terminate this Agreement in the event of:
(i) a material breach by the other any of its
obligations under this Agreement that is not cured within thirty (30)
days after written notice thereof to the breaching party's Relationship
Manager; or
(ii) the other party (1) being proposed or filing for
bankruptcy, (2) becoming or being declared insolvent, or being the
subject of any bona fide proceedings related to its liquidation,
administration, provisional liquidation, bankruptcy or insolvency that
is not dismissed within sixty (60) days, or having a receiver, manager,
receiver-manager, trustee or similar officer appointed for it, (3)
passing a resolution for its voluntary liquidation, (4) having a
receiver, manager, receiver-manager, trustee or similar officer
appointed over all or substantially all of its assets, (5) making an
assignment for the benefit of all or substantially all of its
creditors, (6) entering into an agreement or arrangement for the
composition, extension, or readjustment of substantially all of its
obligations or any class of such obligations, or (7) experiencing an
event analogous to any of the foregoing in any jurisdiction in which
any of its assets are situated;
(b) Service Recipient may terminate a Service:
(i) in accordance with the Strategic Plan with
respect to any of the core IT Services listed in Exhibit F
(collectively, the "Core Services"), provided that, if Service
Recipient terminates a Core Service in its entirety, such termination
shall result in a pro rata reduction of the Flat Fee by the annual
amounts set forth in Exhibit F once such Service is no longer provided;
(ii) on six (6) months' prior written notice with
respect to all Services that are not Core Services, provided that such
termination shall not result in a reduction of the Flat Fee; and
(iii) if such Service is a Service subject to an SLA
Termination Event (as set forth on Exhibit G), upon twelve (12) months
prior written notice, if, subject to Section 1.03, an SLA Termination
Event occurs.
(c) Service Provider may terminate this Agreement (i) upon
twelve (12) months prior written notice, in the event Service Recipient is
acquired by a competitor of Service Provider.
(d) Any termination under this Section shall take effect upon
the completion of the Termination Transition Assistance services, as described
in Section 8.04 below.
Section 8.03 Survival. Sections 5.02, 5.04-5.06, 8.03, 10.01-10.03,
12.01, 12.03, 12.06-12.08, 12.11-12.13 and 12.15-12.19, and Articles VI and IX
shall survive any expiration or termination of this Agreement.
Section 8.04 Termination Transition Assistance.
(a) If requested by Service Recipient, prior to the
termination or expiration of this Agreement or any Service, Service Provider
shall provide termination assistance services to assist Service Recipient in
transitioning the IT Services to Service Recipient or a successor service
provider ("Termination Transition Assistance") as a Project Service pursuant to
Section 1.01(b). For the avoidance of doubt, Service Provider shall not be
obligated to provide Termination Transition Assistance following the expiration
of the Term.
ARTICLE IX
CONFIDENTIALITY
Section 9.01 Confidentiality. In the course of the provision or receipt
of Services, each party may disclose or make accessible to the other (for
purposes of this Article IX, the Party disclosing or making accessible such
information shall hereinafter be referred to as the "Disclosing Party," and the
party receiving such information shall hereinafter be referred to as the
"Recipient") certain information which is material and non-public, confidential
or proprietary in nature. Such information may include, without limitation, (a)
personnel data, business plans and strategies and marketing ideas and concepts,
including with respect to unannounced products and services, present and future
product plans, pricing, volume estimates, financial data, product enhancement
information, sales strategies, customer information, market testing information,
development plans, specifications, customer requirements, configurations,
designs, plans, apparatus, software, hardware, data, prototypes, or other
technical and business information, and (b) the specific terms, conditions and
information contained in this Agreement and the Exhibits hereto (collectively,
the "Confidential Information").
Section 9.02 Duty to Maintain Confidentiality. The Recipient shall use
commercially reasonable efforts to disclose Confidential Information only to
those of its employees, Affiliates, agents and contractors on a reasonable
need-to-know basis in connection with this Agreement and the Recipient's rights
and obligations hereunder, and the Recipient shall use commercially reasonable
efforts to:
(a) protect the confidentiality of Confidential Information in
accordance with the policies and procedures which the Recipient has in effect at
any such time with respect to its own comparable Confidential Information but in
no event less than in accordance with industry standards; and
(b) use, and cause its employees, Affiliates, agents and
contractors (during their employment or association with the Recipient) to use
and maintain the confidentiality of, all Information received by it from the
Disclosing Party solely in connection with the provision, receipt or pricing of
the Services or performance of other obligations under this Agreement, and for
no other purpose whatsoever except to the extent necessary to exercise, enforce
or protect any rights of the Recipient under this Agreement, whether in any
dispute arising pursuant to this Agreement or otherwise.
Section 9.03 Limitations. For the purposes of this Agreement, the
Confidential Information shall not be deemed non-public, confidential or
proprietary in nature and the Recipient shall have no obligation with respect to
any information that:
(a) is or becomes part of the public domain through
publication or otherwise, and through no breach of this Agreement, negligence or
other fault of the Recipient;
(b) is reasonably documented as developed by the Recipient
independent of any Confidential Information that it receives from the Disclosing
Party;
(c) is or becomes available to the Recipient from a source
other than the Disclosing Party, provided that the Recipient has no reason to
believe that such source has an obligation of confidentiality to the Disclosing
Party in respect of such Confidential Information;
(d) is, subject to paragraph (f) of this Section 9.03,
required to be disclosed by law, governmental order, judicial process or the
rules of an applicable securities exchange; or
(e) the disclosure of which is mutually agreed to by the
parties.
Section 9.04 Required Disclosure. If the Recipient is required by oral
questions, interrogatories, examinations for discovery, cross-examinations,
requests for information or documents, subpoena, civil investigative demand or
similar process to disclose any Information, the Recipient shall promptly notify
the Disclosing Party of such request or requirement and shall reasonably
cooperate with the Disclosing Party such that the Disclosing Party may seek an
appropriate protective order or other appropriate remedy. If, in the absence of
a protective order or the receipt of a waiver hereunder, the Recipient is
compelled to disclose the Confidential Information, the Recipient may disclose
only so much of the Information to the party compelling disclosure as is
required by law, and shall exercise commercially reasonable efforts to ensure
that such Information receives confidential treatment. The Disclosing Party
shall reimburse the Recipient for all reasonable out-of-pocket costs it incurs
in complying with this Section.
Section 9.05 Care and Inadvertent Disclosure. With respect to any
Confidential Information, the Recipient agrees that, upon discovery of any
inadvertent disclosure or unauthorized use of said Information, or upon
obtaining written notice of such a disclosure or use from the Disclosing Party,
it shall take commercially reasonable actions to seek to prevent any further
inadvertent disclosure or unauthorized use.
Section 9.06 Effectiveness. The confidentiality obligations contained
in this Article IX shall survive for a period of five (5) years after the
termination or expiration of this Agreement.
ARTICLE X
DISCLAIMER AND LIMITATION OF LIABILITY
Section 10.01 Disclaimer of Representations and Warranties. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH HEREIN, EACH OF THE PARTIES HEREBY SPECIFICALLY
DISCLAIMS ANY AND ALL CONDITIONS, REPRESENTATIONS AND WARRANTIES WHATSOEVER,
WHETHER EXPRESS, IMPLIED COLLATERAL OR STATUTORY, IN CONNECTION WITH THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING REGARDING ANY OF THE SOFTWARE LICENSED
HEREUNDER. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SERVICE RECIPIENT
ACKNOWLEDGES THAT THE LICENSES GRANTED IN THIS AGREEMENT AND THE SERVICES
PROVIDED HEREUNDER ARE PROVIDED "AS IS." SERVICE RECIPIENT ASSUMES ALL RISKS IN
CONNECTION WITH ITS USE OF SUCH SOFTWARE AND SERVICES. NOTHING IN THIS AGREEMENT
IS INTENDED TO LIMIT ANY RIGHTS OR REMEDIES OF EITHER PARTY UNDER THE PURCHASE
AGREEMENT.
Section 10.02 Limitation of Service Provider's Liability. EXCEPT IN
CONNECTION WITH SERVICE PROVIDER'S INDEMNIFICATION OBLIGATIONS HEREUNDER TO THE
MAXIMUM EXTENT PERMITTED BY LAW, IN NO EVENT SHALL SERVICE PROVIDER BE LIABLE TO
ANY OTHER PARTY FOR ANY DAMAGES UNDER THIS AGREEMENT OTHER THAN DIRECT DAMAGES.
IN NO EVENT SHALL SERVICE PROVIDER'S AGGREGATE LIABILITY HEREUNDER EXCEED
CA$5,000,000.
Section 10.03 Limitation of Consequential Damages. EXCEPT IN CONNECTION
WITH EACH PARTY'S INDEMNIFICATION OBLIGATIONS HEREUNDER, NO PARTY SHALL UNDER
ANY CIRCUMSTANCES BE LIABLE TO ANY OTHER PARTY FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF
PROFITS OR REVENUE) RESULTING OR ARISING FROM THIS AGREEMENT, EVEN IF ADVISED OF
THE POSSIBILITY THEREOF. THIS LIMITATION APPLIES REGARDLESS OF WHETHER SUCH
DAMAGES OR OTHER RELIEF ARE SOUGHT BASED ON BREACH OF CONDITION, WARRANTY,
BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY IN TORT, OR ANY OTHER LEGAL OR
EQUITABLE THEORY.
Section 10.04 Limited Remedies.
(a) Notwithstanding anything to the contrary contained herein,
in the event that Service Provider commits an error with respect to, or
incorrectly performs or fails to perform, any Service, and Service Provider, in
the ordinary course of its business, would have corrected such error or
performed or re-performed a similar service for itself, then at Service
Recipient's request, to the extent practicable to do so, Service Provider shall
use commercially reasonable efforts to correct such error, re-perform or perform
such Service. In providing such correction, re-performance or performance,
Service Provider shall act with the same degree of care used in correcting such
error, re-performing or performing a similar service for itself, and with
priority equal to that provided for similar services to itself, at no cost to
Service Recipient. Notwithstanding the foregoing, Service Provider shall have no
obligation to recreate any lost or destroyed data, but will provide such data to
Service Recipient to the extent the same is re-created through such error
correction, performance or re-performance of Services.
(b) In addition to the limited remedies set forth in Section
10.4(a), Service Recipient may propose that additional efforts be undertaken, as
Additional Services, to cure the effects of errors or other failures regarding
the Services, or to recreate lost or damaged data, provided that such request is
not unduly burdensome and does not present any material adverse risks to Service
Provider. Service Provider will not unreasonably withhold its approval of any
Work Order to provide such Additional Services.
(c) Except as set forth above or in Section 11.01, Service
Provider will not be liable in connection with the Services, except to the
extent arising from its gross negligence or willful misconduct.
ARTICLE XI
INDEMNIFICATION
Section 11.01 By Service Provider. Service Provider shall indemnify and
hold harmless Service Recipient and its Affiliates, directors and officers
(collectively, "Service Recipient Indemnified Parties") from and against all
actual out-of-pocket losses, damages, liabilities, claims, costs and expenses
(including reasonable attorney's fees and expenses), interest, penalties, taxes,
judgments and settlements (collectively, "Losses") incurred by any Service
Recipient Indemnified Party by reason of (a) third party claims arising from
Service Provider's gross negligence or willful misconduct, or (b) except with
respect to the systems licensed pursuant to Section 5.02, infringement of a
third party's copyright, trademark or trade secret rights.
Section 11.02 By Service Recipient. Service Recipient shall indemnify
and hold harmless Service Provider and its Affiliates, directors and officers
(collectively, "Service Provider Indemnified Parties") from and against all
Losses incurred by any Service Provider Indemnified Parties by reason of third
party claims arising from (a) Service Recipient's breach of this Agreement or
(b) Service Recipient's receipt or use of the Services, except to the extent
that such claims are caused by Service Provider's gross negligence or willful
misconduct.
Section 11.03 Indemnification Procedures.
(a) In the event that any action is commenced by a third party
involving a claim for which a party required to provide indemnification
hereunder (an "Indemnifying Party") may be liable to a party entitled to
indemnification (an "Indemnified Party") hereunder (an "Asserted Liability"),
the Indemnified Party shall promptly notify the Indemnifying Party in writing of
such Asserted Liability (the "Claim Notice"); provided that no delay on the part
of the Indemnified Party in giving any such Claim Notice shall relieve the
Indemnifying Party of any indemnification obligation hereunder except to the
extent that the Indemnifying Party is prejudiced by such delay. The Indemnifying
Party shall have sixty (60) days from its receipt of the Claim Notice (the
"Notice Period") to notify the Indemnified Party whether or not the Indemnifying
Party desires, at the Indemnifying Party's sole cost and expense and by counsel
of its own choosing, to defend against such Asserted Liability. If the
Indemnifying Party undertakes to defend against such Asserted Liability, (i) the
Indemnifying Party shall use its reasonable best efforts to defend and protect
the interests of the Indemnified Party with respect to such Asserted Liability
and (ii) the Indemnifying Party shall not, without the prior written consent of
the Indemnified Party, consent to any settlement which does not contain an
unconditional release of the Indemnified Party from the subject matter of the
settlement. Notwithstanding the foregoing, in any event, the Indemnified Party
shall have the right to control, pay or settle any Asserted Liability which the
Indemnifying Party shall have undertaken to defend so long as the Indemnified
Party shall also waive any right to indemnification therefor by the Indemnifying
Party. If the Indemnifying Party undertakes to defend against such Asserted
Liability, the Indemnified Party shall fully cooperate with the Indemnifying
Party and its counsel in the investigation, defense and settlement thereof.
(b) If the Indemnifying Party does not undertake within the
Notice Period to defend against such Asserted Liability, then the Indemnified
Party shall have the right to participate in any such defense at its sole cost
and expense, but, in such case, the Indemnified Party shall control the
investigation and defense and may settle or take any other actions the
Indemnified Party deems reasonably advisable without in any way waiving or
otherwise affecting the Indemnified Party's rights to indemnification pursuant
to this Agreement. The Indemnified Party and the Indemnifying Party agree to
make available to each other, their counsel and other representatives, all
information and documents available to them which relate to such claim or
demand. The Indemnified Party and the Indemnifying Party also agree to render to
each other such assistance and cooperation as may reasonably be required to
ensure the proper and adequate defense of such claim or demand.
(c) In calculating amounts payable to an Indemnified Party,
the amount of any indemnified Losses shall be determined without duplication of
any other Loss for which an indemnification claim has been made or could be made
under any other representation, warranty, covenant, or agreement and shall be
computed net of (i) payments recoverable by the Indemnified Party under any
insurance policy with respect to such Losses, (ii) any prior or subsequent
recovery by the Indemnified Party from any Person with respect to such Losses
and (iii) any tax benefit receivable by the Indemnified Party with respect to
such Losses.
(d) Notwithstanding any other provision of this Agreement, in
no event shall any Indemnified Party be entitled to indemnification pursuant to
this Article XI to the extent any Losses were attributable to such Indemnified
Party's own gross negligence or willful misconduct.
(e) To the extent that Seller makes any payment pursuant to
this Article XI in respect of Losses for which Service Recipient or any of its
Affiliates have a right to recover against a third party (including an insurance
company), Service Provider shall be subrogated to the right of Service Recipient
or any of its Affiliates to seek and obtain recovery from such third party;
provided, however, that if Service Provider shall be prohibited from such
subrogation, Service Recipient or its Affiliates, as applicable, shall seek
recovery from such third party on Service Provider's behalf and pay any such
recovery to Service Provider.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Audit Rights. Throughout the Term and for seven (7) years
thereafter, Service Provider shall maintain accurate and complete financial and
operational records related to the Services in accordance with generally
accepted accounting principles and any Canadian fiscal laws and shall make such
records available for reasonable inspection and audit by Service Recipient or
its designees and governmental or regulatory authorities. Service Recipient
shall conduct such inspection and audit: (a) no more than once every six (6)
month period, during Service Provider's regular business hours, at Service
Provider's office where such materials are maintained (if applicable) and upon
thirty (30) days' prior written notice from Service Recipient, or (b) more
frequently as may required in order to comply with applicable laws. Service
Provider shall provide to Service Recipient any assistance it may reasonably
require in connection with such audits and inspections. Service Provider may
require non-employees of Service Recipient who are directed by Service Recipient
to perform any inspection and/or audit to agree, in writing, not to disclose to
a third party information reasonably determined by Service Provider to be
proprietary or confidential to Service Provider's business.
Section 12.02 Assignment.
(a) Service Provider may assign this Agreement to any
Affiliate of Service Provider, or in connection with a merger, amalgamation,
reorganization, sale or other change of control of Service Provider or all or a
substantial portion of its IT services organization if the assignee agrees in
writing to be subject to the terms and conditions of this Agreement. Service
Recipient may assign this Agreement in connection with a merger, amalgamation,
reorganization, a sale of all or substantially all of Service Recipient's
business or assets, or other change of control, if the assignee agrees in
writing to be subject to the terms and conditions of this Agreement. Except as
set forth in this Section, neither party may assign this Agreement without the
prior, written consent of the other party.
(b) Any assignment or transfer in violation of Section
12.02(a) shall be void. Subject to the foregoing, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the Parties and their
respective successors and assigns.
Section 12.03 Metro Undertaking. Metro expressly undertakes that it
shall cause Service Recipient to comply with its obligations under this
Agreement.
Section 12.04 Relationship of the Parties. Nothing in this Agreement
shall be deemed to render any party an agent of any other party and or grant any
party any authority to bind any other party, transact any business in the other
party's name or on its behalf, or make any promises or representations on behalf
of the other party. Each party will perform all of its respective obligations
under this Agreement as an independent contractor, and no joint venture,
partnership or other relationship shall be created or implied by this Agreement.
Section 12.05 Force Majeure.
(a) Any failure or omission by either party in the performance
of the Services under this Agreement shall not be deemed a breach of this
Agreement or create any liability, if the same arises from any cause or causes
beyond the reasonable control of such party, including the following, which, for
purposes of this Agreement shall be regarded as beyond the control of each of
the parties hereto: acts of God, fire, storm, flood, earthquake, governmental
regulation or direction, acts of the public enemy, war, terrorism, rebellion,
insurrection, riot, invasion, strike or lockout (each a "Force Majeure").
(b) Each party will promptly notify the other, either orally
or in writing, upon learning of the occurrence of a Force Majeure, and the
parties will use reasonable efforts to identify alternative providers for any
impacted Services during the continuance of the Force Majeure. Upon the
cessation of the Force Majeure, unless otherwise agreed, the party affected by
the Force Majeure will resume its performance with the least practicable delay.
Notwithstanding the foregoing, if a party cannot perform any Service under this
Agreement for a period of sixty (60) days due to a Force Majeure, either party
may terminate its obligations regarding such Service by providing written notice
to the other Party.
Section 12.06 Governing Law. This Agreement shall be governed by and
interpreted and enforced in accordance with the Laws of the State of New York
without regard to the conflicts of laws rules thereof (other than Sections
5-1401 and 5-1402 of the New York General Obligations Law).
Section 12.07 Entire Agreement. This Agreement, including the Exhibits
to this Agreement, as such Exhibits may be amended from time to time,
constitutes the entire agreement among the parties relating to the Services and
there are no further agreements or understandings, written or oral, among the
parties with respect thereto.
Section 12.08 Notices. All notices, requests, claims, consents, demands
and other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally, by facsimile (that is confirmed) or sent
by overnight courier (providing proof of delivery) to the Parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to Service Recipient:
The Great Atlantic & Pacific Tea Company
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx X0X 0X0
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxxx
If to Metro or the Purchaser, to:
Metro Inc.
00000 Xxxxxxxxx Xxxxxxx-Xxxxxxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Attn: L.G. Xxxxx Xxxxxxx
Fax: (000) 000-0000
with copies, in the case of notice to Service Recipient, Metro
or the Purchaser, to:
Metro Inc.
Place Carillon
7151, Xxxx-Talon Street East
4th Floor
Anjou, Quebec H1M 3N8
Attn: Xxxxx Xxxxx
Fax: (000) 000-0000
- and to -
Xxxxxx Xxxxxxx LLP
0000 XxXxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx X0X 0X0
Attn: Xxxx Xxxxxxx
Xxxx Xxxxxxx-Xxxxx
Fax: (000) 000-0000
If to the Service Provider:
The Great Atlantic & Pacific Tea Company, Inc.
0 Xxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
with copies, in the case of notice to Service Provider, to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxx, Esq.
Fax: (000) 000-0000
All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof if received
prior to 5:00 p.m., New York City time, and such day is a Business Day in the
place of receipt. Otherwise, any such notice, request or communication shall be
deemed not to have been received until the next succeeding Business Day in the
place of receipt.
Section 12.09 Dispute Resolution. Any dispute, difference,
disagreement, controversy or claim arising out of or in connection with this
Agreement shall be subject to Section 9.3 of the Purchase Agreement.
Section 12.10 Equitable Relief. The parties hereby expressly recognize
and acknowledge that irreparable damage would result, no adequate remedy at law
would exist and damages would be difficult to determine in the event that any
provision of this Agreement is not performed in accordance with its specific
terms or otherwise breached. Therefore, in addition to, and not in limitation
of, any other remedy available to any party, an aggrieved party under this
Agreement shall be entitled to immediate injunctive relief to prevent
irreparable harm, without the necessity of proving the inadequacy of money
damages as a remedy or the necessity of posting a bond or other security. Such
remedies, and any and all other remedies provided for in this Agreement, shall
be cumulative in nature and not exclusive and shall be in addition to any other
remedies whatsoever which any party may otherwise have.
Section 12.11 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to a party. Upon such determination that any term or other
provisions are invalid, illegal or incapable of being enforced, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions be consummated as originally contemplated
to the fullest extent possible.
Section 12.12 Interpretation.
(a) When a reference is made in this Agreement to an Article,
Section or Exhibit, such reference shall be to an Article or Section of, or an
Exhibit to, this Agreement unless otherwise indicated. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders of
such term. Any agreement, instrument or statute defined or referred to herein or
in any agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
(b) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
Section 12.13 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when executed, shall be deemed to be an
original and all of which together shall be deemed to be one and the same
instrument binding upon all of the parties hereto notwithstanding the fact that
all parties are not signatory to the original or the same counterpart. For
purposes of this Agreement, facsimile signatures shall be deemed originals, and
the parties agree to exchange original signatures as promptly as possible.
Section 12.14 Further Cooperation. Each party agrees to cooperate with
the others, at any other party's request, to execute any and all documents or
instruments, or to obtain any consents, in order to assign, transfer, perfect,
record, maintain, enforce or otherwise carry out the intent of the terms of this
Agreement.
Section 12.15 Amendment and Waiver. This Agreement (including the
Exhibits hereto) may not be amended or modified except by a writing signed by an
authorized signatory of each party. No waiver by any party or any breach or
default hereunder shall be deemed to be a waiver of any preceding or subsequent
breach or default.
Section 12.16 Duly Authorized Signatories. Each party represents and
warrants that its signatory whose signature appears below has been and is on the
date of this Agreement duly authorized by all necessary corporate or other
appropriate action to execute this Agreement.
Section 12.17 Submission to Jurisdiction. Subject to Section 12.09
herein (Dispute Resolution) the parties hereby submit to the exclusive
jurisdiction of the federal and provincial courts located in Toronto, Ontario
(the "Ontario Courts") for the purpose of an order to compel arbitration, for
preliminary relief in aid of arbitration or for a preliminary injunction to
maintain the status quo or prevent irreparable harm prior to the appointment of
the arbitrators, and to the non-exclusive jurisdiction of the Ontario Courts for
the enforcement of any arbitral award issued hereunder.
Section 12.18 Descriptive Headings. The descriptive headings of the
several articles and sections of this Agreement are inserted for reference only
and shall not limit or otherwise affect the meaning hereof.
Section 12.19 No Third Party Beneficiaries. Nothing in this Agreement
shall convey any rights upon any person or entity, which is not a party or a
permitted assignee of a party to this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf on the day and year first above written.
THE GREAT ATLANTIC & PACIFIC TEA
COMPANY, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Executive Vice President,
Chief Financial Officer
and Secretary
THE GREAT ATLANTIC & PACIFIC TEA
COMPANY
By: /s/ Xxxxxxxxxxx Xxxxxxxx
-----------------------------
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Secretary
METRO INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
By: /s/ Xxxx Xxxxxx La Fleche
-----------------------------
Name: Xxxx Xxxxxx La Fleche
Title: Executive Vice-President
and Chief Operating Officer
----------------------
(1) Note: These procedures will be substantially similar to what has been
made available in the data room.
