CONFIDENTIAL TREATMENT
Exhibit 10.37
Services Agreement
CONFIDENTIAL TREATMENT
SERVICES AGREEMENT
between
ISLAND PACIFIC SYSTEMS CORPORATION
and
TOYS "R" US, INC.
INSTALLATION ADDRESS: ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Island Pacific Systems Corporation is hereafter called "Island Pacific"
or "we", and Toys R Us, Inc. is hereafter called "Customer" or "you". Island
Pacific agrees to provide and you agree to accept consultancy, training and
product support services associated with the implementation and use of the
Island Pacific software products (the "Software Products") and the Software
being licensed by Island Pacific to Customer pursuant to a certain License
Agreement of even date herewith (the "License Agreement"), subject to the
following terms and conditions:
1. EFFECTIVE DATE; TERM; DEFINITIONS
(a) The effective date of this Services Agreement shall be the
date this document has been executed and delivered by both Island Pacific and
Customer.
(b) This Agreement shall continue in force through [***] (the
"Initial Term") unless otherwise terminated as provided herein. Island Pacific
will provide Customer, at least sixty days prior to the expiration of this
Agreement, with a new Services Agreement [***] which shall be automatically
effective upon the expiration of this Services Agreement, except with respect to
any Software Product or Products for which Customer does not desire to continue
services, as specified by written notice to Island Pacific.
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the License Agreement.
2. STANDARD PRODUCT SUPPORT
(a) Island Pacific provides Helpdesk services, which are
included in the support fee set forth in Paragraph 13(d) hereof. The Helpdesk is
intended to address suspected program defects and requests for other types of
services covered in this Agreement. It is not intended to address user training
or technical consulting. Helpdesk support is available only for those products
you license and for which you have paid the support fee set forth in Paragraph
13(d) hereof.
(b) Time associated with problems reported to the Helpdesk
resulting from your proprietary modifications will be billed at our Consulting
rate with advance notice given prior to our performing such services.
(c) Helpdesk services will be provided to a single centralized
location of Customer only and may not be used by all of Customer's locations
unless separate support charges are paid by Customer for each location.
(d) The provisions of Paragraph 8 of the License Agreement,
entitled "Product Support and Enhancements," are incorporated herein by
reference as if fully set forth herein; provided, however, that the rates and
fees set forth in Paragraph 13(d) hereof shall be firm for the term of this
Agreement.
[***] = Confidential Treatment Requested
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CONFIDENTIAL TREATMENT
(e) Island Pacific represents and warrants that it has the
resources and capability (i) to assist and support Customer and its Sublicensees
on a timely basis and (ii) to fulfill its responsibilities under the terms of
this Services Agreement, and that any and all services rendered by it pursuant
to this Agreement will be rendered in compliance with all applicable
governmental laws, rules and regulations.
3. HELPDESK HOURS
(a) The US Helpdesk is open five days a week, 24 hours a day.
Normal service begins Sunday at 11:00pm and concludes Friday at 11:00pm PT and
is provided from our California location. Service from our office in England is
available Monday through Friday beginning at 9:00am and concluding at 5:00pm
(GMT) daily. The Helpdesks are closed weekends and holidays.
(b) US Holidays include New Year's Day (beginning at 3:00pm PT
New Year's Eve day), President's Day, Memorial Day, Fourth of July, Labor Day,
Veteran's Day, Thanksgiving Day and the day after, and Christmas Day (beginning
at 3:00pm PT Christmas Eve day). When holiday hours are in effect, the Helpdesk
reopens at 5:00am PT on the business day following the holiday.
(c) UK Holidays include New Year's Day (beginning at 3:00pm
GMT New Year's Eve day), Spring Bank Holiday, Good Friday, Easter Monday, May
Day, August Bank Holiday, Christmas Day (beginning at 3:00pm GMT Christmas Eve
day) and Boxing Day. When holiday hours are in effect, the Helpdesk reopens at
9:00am GMT on the business day following the holiday.
(d) During one week each year, the Helpdesk hours are reduced
to accommodate Island Pacific's employee trip. During this week, the Helpdesk
opens at 6:00am PT and closes at 5:00pm PT Monday through Friday. The UK
Helpdesk is closed. You will be notified well in advance of the dates the
reduced hours are in effect.
(e) The Helpdesk currently operates under a system whereby
each customer support request is given a severity status level to properly
allocate resource based upon the severity of each request. The status levels are
as follows:
---------- ---------------------------------------------- ----------------------------------------------------
Status Description Response
---------- ---------------------------------------------- ----------------------------------------------------
5 Critical issue rendering a program product Forwarded to a Programmer immediately for resolution
inoperable
---------- ---------------------------------------------- ----------------------------------------------------
4 Non-critical procedure ab-ending or hanging Forwarded to a programmer as high priority
---------- ---------------------------------------------- ----------------------------------------------------
3 Procedure giving invalid information Forwarded to a programmer as moderate priority
---------- ---------------------------------------------- ----------------------------------------------------
2 Cosmetic or operational problem Forwarded to a programmer as low priority
---------- ---------------------------------------------- ----------------------------------------------------
1 Enhancement request Forwarded to a programmer to complete
or retained for UserGroup voting
---------- ---------------------------------------------- ----------------------------------------------------
4. EMERGENCY AFTER-HOURS SUPPORT
(a) Emergency support is available only to subscribers of the
emergency support program and is provided through The Support Center.
(b) Emergency services are designed to address critical
technical issues during weekends and holidays when the Helpdesk is closed. A
critical issue is a problem that renders your Island Pacific products unable to
function in a manner permitting normal operation of your business.
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CONFIDENTIAL TREATMENT
(c) There is a [***] one-time advance fee required to become
eligible for emergency services. Services provided are billed [***] at our
Consulting rate and there is a [***] minimum charge per incident.
5. SCHEDULED AFTER-HOURS SUPPORT
(a) After-hours support for applying new Releases, system
Upgrades and other special processes is available by appointment. A three week
advance notice is required for this service. Appointments are accommodated based
upon resource availability on a first come, first served basis.
(b) Scheduled after-hours support services are billed
in[***]segments at our Consulting rate and there is a[***]minimum charge per
appointment.
(c) Before you can receive after-hours support for the
application of an Island Pacific new Release, you must first attend a Technical
Seminar for that release and have scheduled and received technical consultation
specific to your planned new Release.
6. YOUR SUPPORT RESPONSIBILITIES
(a) You are responsible for regularly and fully applying
Corrective Service Releases (CSRs) we provide to you. We provide program support
for the current, generally available Release of the Software and one prior
Release only. Application support for older Releases is available to users upon
request on a limited basis. No program changes are available for older Releases.
(b) Your proprietary modifications to our programs, if any,
must be placed in the library IPTSMOD. You must maintain an unmodified testing
environment in order to insure suspected problems are not related to your
proprietary modifications.
(c) You are responsible for providing knowledgeable and
adequately trained users who have full system access and authority should we
need your help in researching or duplicating a reported problem.
(d) You are responsible for providing a communications link
from your system to ours should you want on-line support.
7. ENHANCEMENTS
(a) All Software Product enhancements are made available to
subscribers of the product support program pursuant to this Agreement.
[***]Upgrades to the License are made available pursuant to the License
Agreement, whether or not a customer is a subscriber of the product support
program pursuant to this Agreement.
(b) Island Pacific will ship new Releases, CSR's and I3
Softhelp(TM) to Customer's Installation Address only, as indicated on page 1 of
this Agreement or as later modified by notice from Customer to Island Pacific.
Island Pacific will not be responsible for the shipment or distribution of
Software Products to Customer's multiple locations. Customer will be responsible
for paying all taxes, tariffs and duties related to the distribution and
shipment of Island Pacific program products to its multiple locations. [***]
[***] = Confidential Treatment Requested
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CONFIDENTIAL TREATMENT
8. TYPES OF CLIENT SERVICES
(a) Training time includes application training both on site
and off site which is billed at the published Application Specialist rate, which
will be the lowest rate charged to any customer for similar services. The time
will be tracked in quarter-hour segments and billed for each visit. Prior to
each training session you will approve (i) the estimated total costs of the
training session, (ii) which Island Pacific employees are to provide training
service, (iii) the subject matters covered and (iv) the duration of the
sessions. Training time also includes time spent by our Application Specialists
to answer your questions via teleconference. Training time also includes advance
preparation of materials to be used in your training sessions as well as
follow-up materials to document the results of the training sessions or
teleconferences. All of these items will be included in the estimate we provide
to you.
(b) Project Management time includes work performed on your
behalf, whether on site or off site, that goes beyond the normal use of Island
Pacific products. Examples of such services include needs assessments, your
internal documentation review or preparation, status reports, implementation
planning, business practices review, employee review, and general project
administrative duties. These services will be billed at our published Project
Manager rate, which will be the lowest rate charged to any customer for similar
services. The time will be tracked in quarter-hour segments and billed for each
visit. Prior to a visit by a Project Manager, you will approve the estimated
total cost thereof.
(c) Account Management time includes time spent during an
initial visit to your site to perform an Implementation Strategy Analysis. The
Implementation Strategy Analysis will include interviewing members of your
project team and users, identifying business processes, providing guidance in
developing new systems structures, determining system preferences and
identifying conversion approaches and interface issues. The results of the
initial visit will be thoroughly documented and provided to you within the
Executive Training Class.
Account Management time also includes time spent by the Account Manager
during follow-up visits to your site. The purpose of these visits will be to
meet with members of your management and project teams, assess the progress of
your project, identify and address potential problems or issues and provide
help, if needed, to make sure the implementation proceeds as planned.
Account Management time also includes a Post Implementation Review to
further streamline all processes and procedures and assist management in
analyzing the information available within your new system. The Account Manager
will also be available to perform consulting services at your request.
Account Management time also includes any time spent by your Account
Manager when working on your behalf away from your location. Examples of such
services include telephone consultation with members of, or consultants to, your
organization, researching implementation issues, directing the application
trainers and writing follow-up documentation.
All time spent by the Account Manager when working on your behalf will
be billed in quarter-hour segments at our published Consulting rate, which will
be the lowest rate charged to any customer for similar services.
(d) Technical Services time includes work performed on your
behalf, whether on site or off site that deals with issues or questions of a
technical nature. Such services can include telephone consultation with members
of, or consultants to, your organization, researching implementation or
interface issues and writing follow-up documentation. Technical Services also
include the design and written specification of system modifications undertaken
on your behalf as well as work performed that deals with the transfer and
reformatting of data files from an existing system to the Island Pacific system
or from one Island Pacific release to another.
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CONFIDENTIAL TREATMENT
Technical services are not available for the coding of any
modifications or interface programs you deem to be proprietary. Island Pacific
will not be responsible for any modifications or interface programs created by
members of, or consultants to, your organization nor will we warrant their use
with Island Pacific programs.
All time spent by the Technical Services representative when working on
your account will be billed in quarter-hour segments at our published Consulting
rate, which will be the lowest rate charged to any customer for similar
services. Island Pacific will provide Customers with an estimate of the total
cost of such services prior to commencement thereof.
(e) Island Pacific represents and warrants that it has the
resources and capability (i) to assist and support Customer and its Sublicensees
in a timely manner and (ii) to fulfill its responsibilities under the terms of
this Services Agreement, and that any and all services rendered by it pursuant
to this Agreement will be rendered in compliance with all applicable laws, rules
and regulations.
9. BOOKING SERVICES
(a) Island Pacific accepts service assignments under Paragraph
8 hereof on a first come, first served basis. For this reason, there might be
times when the Island Pacific employees you request or those qualified to
provide the services you require are not immediately available when you want
them. In such a case, we will make every effort to accommodate your needs as
best as reasonably possible.
(b) You will incur charges should you cancel or cut short an
on-site visit once we have received your written approval unless we receive
notice of your cancellation at least[***]business days prior to the scheduled
engagement, except to the extent Island Pacific is able to re-book its
representative, scheduled to perform such services, for another engagement or
engagements during the same period. For each Island Pacific employee that is
on-site and ready to work, for which the cancellation notice has not been
provided, to the extent re-booking does not occur, you will be charged a minimum
of
(i) [***] or any day for which you have scheduled and
approved a full day's service, or
(ii) [***] for any week in which you have scheduled
at least four days of service.
10. WORK AUTHORIZATION
Requests for visits to you by Island Pacific employees or
requests for services to be performed at our site must be made by you in
writing. Before we travel or begin work on your behalf, we will ask for written
confirmation of your request. Unless specifically indicated otherwise in this
Agreement, you will not be charged for fees and expenses for services that you
have not previously approved and we will not travel or perform any services
until you have given us such prior approval.
11. TRAVEL TIME
(a) Travel time for services originating from the US Island
Pacific office to destinations in the US, Mexico or Canada, or for service
originating from the UK Island Pacific office to destinations in Europe will not
be billed unless the total billable hours for a single trip is less than [***]
In such case, the lesser of [***]or[***]for the trip will be billed.
(b) Travel time for services originating from the US Island
Pacific office to destinations other than the United States, Mexico or Canada,
or for services originating from the UK office of Island Pacific to destinations
other than Europe will not be billed unless the total billable hours for a
single trip is less than [***] In such case, the lesser of [***] or [***] for
the trip will be billed.
[***] = Confidential Treatment Requested
5
CONFIDENTIAL TREATMENT
12. TRAVEL EXPENSES
(a) In scheduling Island Pacific visits to your location, we
attempt to work with you so that the time we spend is used effectively. We will
assign our personnel based upon the services to be performed, upon an ongoing
analysis of your needs and upon your prior approval. There may be one of our
employees at your 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.
(b) Expenses can include round trip airfare (regular
unrestricted coach for domestic flights and business class for international
flights), hotel accommodations (Hilton, Hyatt, Marriott, Holiday Inn, Sheraton
or equivalent), meals and ground transportation (car rental, taxi, train, ferry,
parking, etc.). Any lost deposits or penalties that are incurred as a result of
your canceling a visit after having confirmed it will be billed to you.
(c) When our employees visit more than one user site during a
trip, you will be billed for only a portion of the related expenses. The portion
paid by you in such a case will be calculated by dividing the number of hours
spent at your 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.
(d) The amount you will be charged for travel expenses will be
determined by the going rates for services in your area. Island Pacific
employees will make their own arrangements and submit expense claims to us. In
the case of foreign travel, Island Pacific employees will coordinate with
Customer's local personnel in making lodging arrangements. You will be billed
for each visit. Copies of receipts will accompany all travel expense invoices.
13. TIME AND COST
(a) Island Pacific will use its reasonable best efforts to
ensure that our software products are installed, your staff is trained and any
conversion or modifications requested of us are delivered in the time agreed.
Island Pacific provides this assurance based upon the scope of work known at the
time. Your actual delivery time could vary based upon the discovery of
information or circumstances not known or beyond our control.
(b) Island Pacific service estimates are provided at no charge
as a guideline based upon our experience with similar requirements in similar
companies. Your actual cost could vary from that estimated due to the discovery
of information or circumstances not then known or beyond our control. Your costs
could also vary based upon your desire to use more of our services than those
normally used in similar situations. If you request, Island Pacific will provide
a written project plan, including a timeline, breakdown of expected tasks, site
visits and their associated costs before beginning work on an assignment. The
time needed to prepare the plan will be billed at our Consulting rate.
(c) Island Pacific will not be responsible for any errors or
omissions in information, data or services provided by you or by third parties
hired by you to act on your behalf, unless Island Pacific is aware of such error
or omission and does not take reasonable steps to notify Customer.
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CONFIDENTIAL TREATMENT
(d) Island Pacific's rates for all services and enhancements
to the Software and Software Products provided under this Agreement appear
below.
Fees for product support (including helpdesk support)
and enhancements are billed [***]
[***]
[***]
Client Services described in Paragraph 8 hereof are
billed per engagement at the rates below.
Application Specialist rate is[***] per hour
Project Management rate is [***] per hour.
Consulting rate is [***] per hour.
▇▇. ▇▇▇▇▇▇▇▇▇ and Mr. ▇▇▇▇▇ ▇▇▇▇ at [***] per hour.
14. PROJECT STAFF
(a) Each party to this Agreement shall appoint a project
manager who will be responsible for representing that party in connection with
the services under this Agreement. Island Pacific's project manager shall have
the authority and responsibility for the planning, control and scheduling of all
effort and resources in connection with Island Pacific's work under this
Agreement. Your project manager will have responsibility for all planning,
control and scheduling of effort and resources required to be provided or made
available by you under this Agreement.
(b) Each party will endeavor to ensure continuity of its key
staff on the project but reserves the right to make changes if necessary 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.
(c) Island Pacific warrants that (i) it will maintain
sufficient support staff to meet its obligations hereunder in a timely manner,
and (ii) any staff assigned to provide services to you under this Agreement
shall possess such skill and experience as is necessary for the proper
performance of those services.
(d) You have the right to [***]
(e) Island Pacific warrants that given reasonable notice, we
will make available the number of Island Pacific employees you request for the
time period you request.
[***] = Confidential Treatment Requested
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CONFIDENTIAL TREATMENT
15. DELIVERY AND INSTALLATION
(a) Island Pacific shall be responsible for the delivery of
our Software Products and modifications to your premises. If you so request and
subject to advance booking, we will also load them on your computer for a fee.
The time we spend will be billed at our Consulting rate.
(b) Island Pacific will not deliver or install any Software
Products or modifications until you have requested that we do so in writing.
Island Pacific will promptly notify Customer of the availability of new
Releases.
16. ASSIGNMENT
Neither party shall assign any of its obligations under this
Agreement without the prior written consent of the other party, which shall not
be unreasonably withheld; provided, however, that Customer shall have the right
to assign this Agreement to an Affiliate or to a third party in connection with
a sale of substantially all of its business, merger, consolidation or similar
transaction.
17. CONFIDENTIALITY
(a) Both parties shall keep strictly confidential and ensure
that none of its respective employees, agents or sub-contractors disclose
confidential information relating to the other party's business, finances,
customers and other interests. This obligation will not apply to any information
or data which
(i) is in or comes into the public domain other than
by reason of a breach of the obligations imposed in this Paragraph 17, or
(ii) the party seeking to disclose can prove it was
independently developed by that party without the use of the other party's
confidential information or,
(iii) is obtained from a third party who the
receiving party reasonably believes is lawfully authorized to disclose it, or
(iv) is required to be disclosed by law.
(b) Both parties shall divulge confidential information only
to those employees who are directly involved in the performance of services or
other obligations under this Agreement and shall use reasonable efforts to
ensure that such employees are aware of and comply with these obligations.
(c) Upon the expiration or earlier termination of this
Agreement, or sooner if the disclosing party so requests, the recipient shall,
as the disclosing party specifies, either return or destroy all confidential
information, including all copies, summaries, excerpts or recreations thereof,
regardless of the media on which the same is maintained.
(d) Each party (a "receiving party") acknowledges that the
confidential information it may obtain of from the other party (the "disclosing
party") is of extremely high value to the disclosing party and any action or
omission on the receiving party's part or those of its employees or agents which
may lead to the disclosure or misuse of any such confidential information would
be of extreme detriment to the disclosing party, and would cause irreparable
harm to the disclosing party, for which the disclosing party would not have any
adequate remedy at law. In the event of any breach of the receiving party's
confidentiality obligations set forth in this Agreement, the disclosing party
shall, in addition to such other remedies as may be available to it hereunder,
at law or in equity, be entitled to enforce its rights set forth in this
Paragraph 17 by obtaining injunctive relief against the receiving party or any
recipient of such confidential information and/or any related parties of any of
them without the need to post a bond or to prove damages. if the disclosing
party must bring any legal proceeding to enforce the foregoing obligations, the
receiving party shall also be liable to the disclosing party for all costs and
expenses, including without limitation attorneys' fees, so incurred.
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CONFIDENTIAL TREATMENT
(e) The provisions of this clause shall continue in force
notwithstanding the termination of this Agreement.
18. NON-SOLICITATION OF STAFF
(a) For the duration of this Agreement 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. "Employ" means the engagement of such person as an employee,
director, sub-contractor or independent contractor.
(b) 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 [***]for the individual in question. Each party accepts
that these are reasonable estimates of loss and agree to pay the same upon
demand in the event of its breach of this clause.[***]
19. WAIVER
If any party commits any breach of any term of this Agreement,
a waiver may be granted to the appropriate party. The granting of a waiver in
any given instance of a breach shall not, in any event, be deemed to be a waiver
of any subsequent breach. No waiver shall be effective unless it is expressed in
writing, signed by a person properly authorized, and communicated to the other
party.
20. PAYMENT
Fees for services and related expenses provided under this
Agreement are due and payable within [***] after your receipt of our undisputed
invoice for same. If Customer disputes all or any portion of an invoice, it
shall notify Island Pacific within such [***] period.
21. INDEMNITY
Each party agrees to indemnify, defend and hold the other and
its shareholders, directors, employees, Affiliates and representatives harmless
from any third party loss, claim, liability or damage to person or property
arising out of this Agreement and services provided which is caused by the
negligence or intentional misconduct of the party causing such loss, claim,
liability or damage. This indemnity will survive the termination of this
Agreement.
22. TERMINATION
(a) You may terminate this Agreement [***] Island Pacific may
terminate this Agreement if you fail to pay, within [***] of receiving our
invoice, for any services which have been requested by you and have been duly
performed by us, and such failure continues for a period of [***] after you
receive a written default notice from Island Pacific with respect thereto.
(b) The fees you pay for annual product support are not
refundable except in the case of a breach by Island Pacific of its obligations
hereunder.
(c) The representations and warranties contained herein shall
indefinitely survive the termination or expiration of this Agreement.
[***] = Confidential Treatment Requested
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CONFIDENTIAL TREATMENT
23. LEGAL AUTHORITY
Island Pacific and Company are independent entities and shall not have
authority to act for or bind the other in any way or to represent that the other
is in any way responsible for acts of the other.
24. LAW
This Agreement shall be subject to, construed and interpreted
in accordance with the laws of New Jersey without reference to its conflicts of
laws provisions.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date set forth below.
DATED: _________________
TOYS "R" US, INC
BY: _________________________________________________
BRUNO ROQUEPLO, SENIOR VICE PRESIDENT OF FINANCE
AND ADMINISTRATION (CFO)
ISLAND PACIFIC SYSTEMS CORPORATION
BY: _________________________________________________
▇▇▇▇ ▇▇▇▇▇▇▇
CHIEF FINANCIAL OFFICER
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