EXHIBIT (10)(t)
AGREEMENT
This agreement dated as of this 24th day of January 1995 is
entered into by and between The TJX Companies, Inc., a Delaware
corporation ("TJX"), and Waban Inc., a Delaware corporation ("Waban").
WHEREAS, Waban has requested TJX to provide certain computer
services (the "Computing Services") to Waban during fiscal years
ending on the last Saturday of January of each of 1996, 1997 and 1998;
and
WHEREAS, TJX has agreed to provide such services.
NOW THEREFORE, in consideration of the promises contained herein,
the parties agree as follows:
1. Term. The term of this Agreement shall terminate upon the
later of (i) the last day of Fiscal 1998 (January 31, 1998) (the
"initial term") or (ii) if the parties agree to an extension hereof as
provided below (the "Extension Period"), the last day of such
Extension Period. Neither party shall have the right to terminate
this Agreement during the initial term.
If Waban wishes to extend the term of this Agreement for an
additional one year term, Waban shall so notify TJX in writing of its
planned computer usage requirements for such additional one year term
no later than July 1 of the year which is one year prior to the year
in which this Agreement (whether or not extended) would otherwise
terminate. If TJX agrees to such an extension, TJX shall, no later
than 60 days after receipt of Waban's notification, notify Waban in
writing of TJX's estimated rates for such additional one year term and
Waban shall have 30 days to indicate its acceptance of such rates.
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Additional one year extensions may be requested in the succeeding
year(s) and agreed to in the same manner as provided in this Section
1.
If TJX declines to provide Computing Services during the
Extension Period, or if Waban chooses not to accept TJX's offer for
the Extension Period, Waban shall have 30 days after the date on which
TJX declines to provide such services or notifies Waban of TJX's
estimated rates to elect an extension of services for an additional
period of four months beyond the termination of the then current term
(the "Tail") by providing TJX with its planned requirements for the
Tail. TJX shall be obligated to provide Computing Services during the
Tail at the same rates that were in effect for the one year period
prior to the beginning of the Tail.
2. Usage Requirements. Attached hereto as Attachment I are
Waban's computer usage requirements for fiscal 1996 and estimates of
its usage requirements for fiscal 1997 and fiscal 1998. Such
requirements are hereinafter sometimes referred to collectively as the
"planned amounts" or the "planned requirements." By July 1 of each
year of the term beginning July 1, 1995, Waban shall deliver to TJX a
computer usage plan for its requirements for Computing Services
through the end of the following fiscal year, and an estimate of its
requirements for the fiscal year following such fiscal year. (For
example, on or before July 1, 1995, Waban shall deliver its
requirements for fiscal 1997 and an estimate of its requirements for
fiscal 1998.) It is understood that Waban's computer usage
requirements for fiscal 1997 and fiscal 1998 may not be less than 90%
of its estimates for each such year included in Attachment I and may
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not exceed 200% of its estimates for each such year unless TJX agrees
to provide services at such increased level. Waban's computer usage
plan will be sufficiently detailed to allow TJX to provide its rates
for Computing Services for the next following fiscal year and Waban's
estimate for requirements during the additional fiscal year will be
sufficiently detailed to allow TJX to provide an estimate of its rates
for Computing Services for such additional fiscal year and to estimate
its hardware needs for such additional fiscal year.
As soon as practicable, but no later than September 1 of each
year (provided TJX has received such planned requirements by July 1),
TJX will notify Waban in writing of the rates for Computing Services
during the next following fiscal year and an estimate of the rates TJX
expects during such additional fiscal year. It is understood that the
estimate of rates for the additional fiscal year is a good faith
estimate only and that definitive initial rates for such period will
be established following July 1 of the following year in accordance
with the procedures set forth above.
3. Calculation of Rates. Waban's planned requirements (as well
as the planned requirements for all users of TJX's computing services)
for each fiscal year shall be the basis upon which TJX will set
Waban's rates for such fiscal year. Attached hereto in Attachment II
are the rates for Computing Services for fiscal 1996 and estimated
rates (based on preliminary estimates of usage for all users of TJX's
Computing Services) for fiscal 1997 and fiscal 1998. Waban
acknowledges that TJX's Chadwick's of Boston division shall receive a
discount on its rates of 30% on computing services in Fiscal 1996; a
discount of 20% in Fiscal 1997; and a discount of 10% in Fiscal 1998.
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The charges for any fiscal year shall be subject to adjustment as
provided in Section 4. If during any fiscal year, TJX realizes that
its actual costs are significantly different from its estimates
thereof then in effect for purposes of calculating rates hereunder,
then TJX shall provide Waban with a new estimate of rates for such
fiscal year and shall either (i) invoice Waban for Computing Services
theretofore provided based on the revised estimates for sums in excess
of sums already paid since the beginning of such fiscal year (in the
event of increased rates estimates) or (ii) give Waban an appropriate
credit (in the event that the revised rates are lower). In any event,
subsequent rates shall be based upon such revised estimates.
Notwithstanding the foregoing provisions of this paragraph, in the
event that (i) TJX's businesses exceed 110% of their planned
requirements for any such fiscal year and as a result thereof TJX
added to its data processing system hardware or system software and
(ii) Waban did not exceed 120% of its planned requirements for such
fiscal year (or, if there was an excess, such excess did not pertain
to the usage of such hardware or system software), then Waban shall
not be charged additional fees with respect to such fiscal year for
any costs with respect to such additional hardware or system software.
TJX agrees that Waban's rates for each fiscal year shall be based
on usage of Computing Services equal to 100% of the planned
requirements in Waban's computer usage plan for each fiscal quarter of
each fiscal year. If Waban's computer usage plan does not provide
requirements by fiscal quarter, then fiscal year planned requirements
will be divided equally to arrive at fiscal quarter requirements. If
Waban's actual usage requirements exceed 120% of its planned
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requirements for a fiscal quarter and the requirements of TJX's
businesses do not exceed 110% of TJX's planned requirements for such
fiscal quarter (or any such excess usage does not pertain to hardware
or system software used by Waban), then TJX will be entitled to
increase amounts billed to Waban to recover its additional costs
resulting from Waban's excess usage.
In the event that Waban's actual usage for any fiscal quarter is
less than 80% of its planned requirements, Waban shall pay to TJX an
amount based on the rate for 80% of such planned requirements.
TJX shall use reasonable efforts to satisfy requirements in
excess of 120% of Waban's planned requirements consistent with TJX's
responsibilities to meet the computer services needs of the TJX
divisions.
TJX agrees that it will not change the basic methodology used to
determine rates during a fiscal year except in connection with new
Computing Services arising during such fiscal year that were not
included by Waban in its computer usage plan submitted by Waban to TJX
for such fiscal year. TJX may, however, change such methodology with
respect to a following fiscal year at the time it presents Waban with
its estimate of rates (i.e., on September 1 preceding such following
fiscal year), and TJX shall inform Waban of the change at the time.
Without limiting the generality of the next preceding sentence, if
during any fiscal year TJX adds to or upgrades its data processing
system hardware or systems software based on the needs of TJX's
businesses, then the methodology used to determine rates for the
following fiscal year shall be appropriately adjusted to include
changes in Waban's rate reflecting usage of such hardware or software.
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During the initial term, TJX will discount the rates charged
Waban for CPU, Print, Microfiche, Data Entry and Payroll Processing by
15%. During the initial term TJX will discount the Host Connect rate
by 75% for all remote connections supported directly by Waban
employees. In addition, at the end of each fiscal year during the
initial term, TJX shall credit Waban with the amount of $333,334 on
the invoice applicable to the last month of the fiscal year.
4. Reconciliation. Within thirty days after the end of each
fiscal year, TJX shall reconcile the actual costs pertaining to the
provision of the Computing Services for such fiscal year and determine
the pro rata amount paid by each user. If the reconciliation shows
that the actual costs exceeded the rates charged and paid during such
fiscal year, Waban shall within 30 days of TJX's invoice therefor pay
to TJX Waban's pro rata share of the difference. If the
reconciliation shows that the actual costs were less than the rates
charged and paid, TJX shall pay Waban Waban's pro rata share of the
difference within 30 days after the completion of the reconciliation.
5. Software Licenses. TJX shall promptly notify Waban upon its
receipt of any notice that a third party intends to increase its
software license fees as a result of the provision by TJX of the
Computing Services. In such event, TJX shall appoint Waban as its
agent to negotiate the amount of such increase and shall cooperate
with Waban to ensure that all additional license rights (other than
those already held by TJX, which shall not be affected) are in the
name of, or freely assignable (without the payment of additional
consideration) to, Waban. If TJX is required to incur additional
software license fees then such fees shall be charged to Waban (it
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being understood that such fees are not included in the rates
appearing on Schedule II hereto and will not be included in the
subsequent rates determined pursuant to Section 3 hereof).
6. Performance Levels. The performance levels for the
Computing Services provided to Waban shall be no less than those
specified on Attachment III. Notwithstanding the foregoing, TJX shall
not be required to maintain the performance levels for Computing
Services to the extent that it is unable to maintain them for itself
and its operating units for reasons beyond its control. In the event
that TJX is unable to meet the performance levels for Computing
Services for reasons beyond its control, TJX shall provide Waban the
same levels and quality of Computing Services that it provides to
itself and its operating units and shall use its best efforts to
alleviate any condition causing a diminution in such performance
levels. TJX acknowledges that TJX has in place a disaster recovery
contract pursuant to which mainframe production services will be
available at a secondary site within 24 hours of declaration of a
disaster.
7. Invoices; Audit Rights. TJX shall render to Waban each
month, within 30 days after the end of the month or as soon as
practicable thereafter, an invoice for the charges for Computing
Services incurred during the previous month showing usage by billing
category. Such invoice shall be payable within thirty days of its
receipt by Waban.
Waban shall be entitled, upon request and at reasonable times and
places, to audit the books and records of TJX that relate to (i) the
Computing Services and (ii) the charges appearing on any invoice. In
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addition, Waban shall be entitled to similar audit rights with respect
to the methodology used by TJX to determine the rates established
pursuant to Section 3 hereof.
8. Ownership of Waban Data, etc. Waban shall be the owner of
all of its data. TJX shall maintain such data in confidence pursuant
to Section 10 hereof and make no use of such Waban data or allow
anyone other than Waban access to it except for TJX personnel
(including agents) who require access thereto in order to perform the
obligations to Waban under this Agreement.
9. Delivery of Software. Upon Waban's request, TJX shall
deliver to Waban within a reasonable period after such request the
following items with respect to all applications, utility routines,
utility programs and/or systems software developed by TJX and used in
connection with the Computing Services provided hereunder to Waban in
which no third party has any rights:
(a) One copy of object code or other executable code on magnetic
media.
(b) One copy of source code on magnetic media.
(c) One copy of any documentation, including source
documentation, maintenance documentation and other
documentation, for such software to the extent then
available.
Waban shall pay TJX for its reasonable additional costs relating to
such delivery of software.
10. Confidentiality of Information. TJX will not reveal to
third parties or use for its own purposes the information of Waban
stored within its computer system or accessible within its
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communications network and will use the same security precautions as
it uses to prevent disclosure to third parties of TJX proprietary
information to prevent disclosure to third parties of Waban
information stored in its computer system or accessible over its
corporate communications network. After the termination of this
Agreement, TJX will return to Waban or, at Waban's written direction,
destroy and certify destruction of all tapes and other media or
records containing any Waban data. The provisions of this Section 10
shall survive the termination of the Agreement.
11. Coordinating Committee. For the purpose of providing and
continuing the harmonious relationship between TJX and Waban, each
party shall appoint at least one individual to coordinate and review
the relationship between the two companies and their performance under
this Agreement, as well as strategic planning and technology changes.
These individuals shall meet periodically, no less frequently than
monthly, to discuss operations under this Agreement and any problems
arising hereunder.
12. Independent Contractor Status. TJX shall perform services
under this Agreement as an independent contractor and not as an agent
of Waban or any other relationship.
13. Limitation of Liability. Neither TJX, nor any of its
officers, employees, agents or affiliates, shall in any event be
liable for the defense of claims, actions, causes of action, losses,
expenses or for any damages including reasonable attorneys' fees,
which are caused by, arise out of or result from TJX's (or any such
officers', employees', agents' or affiliates') performance or failure
to perform any of its obligations under this Agreement, other than
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those claims, actions, causes of action, losses, expenses and damages
caused by or arising out of or resulting from TJX's willful misconduct
or gross negligence. Waban hereby agrees to defend, indemnify, and
hold harmless TJX for all damages, losses and expenses, including
reasonable attorneys' fees, incurred by TJX as a result of the
provision by TJX pursuant to this Agreement of the Computing Services,
other than costs or damages incurred by TJX as a result of its willful
misconduct or gross negligence. TJX hereby agrees to defend,
indemnify and hold Waban harmless for all damages, losses and
expenses, including reasonable attorneys' fees, incurred by Waban as a
result of TJX's willful misconduct or gross negligence in providing
Computing Services to Waban pursuant to this Agreement.
Notwithstanding the foregoing, neither party shall be liable to the
other for indirect or consequential damages, including without
limitation, loss of profits or revenues.
Waban acknowledges that because this Agreement cannot be
terminated during the initial term, Waban agrees that in any
circumstance in which Waban terminates receiving services under the
Agreement (other than as a result of TJX's material default) Waban
shall continue to pay all charges otherwise due hereunder, as if there
had been no termination, and, that for purposes of computing charges,
Waban's usage will be deemed to be not less than 90% of its estimates
for fiscal 1997 and fiscal 1998 and 100% of its requirements for
fiscal 1996, all as set forth in Attachment I hereto.
14. Assignment. This Agreement shall not be assignable,
directly or indirectly, by either party without the prior written
consent of the other party. Notwithstanding the foregoing, this
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Agreement may be assigned by either party to a corporate affiliate or
to a related party that would result from either party entering into
any agreement which provides for the acquisition of all of its assets
or the merger of all of its assets with those of a third party,
provided that, with respect to any such assignment, the assigning
party remains fully liable for the performance of all of its
obligations under this Agreement.
15. Notices. Any notice or other communication in connection
with this Agreement shall be deemed to be delivered if in writing (or
in the form of a telecopy) addressed or transmitted as provided below
and if either (i) actually delivered at such address, (ii) in the case
of a letter, three business days shall have elapsed after the same
shall have been deposited in the United States mail, postage prepaid
and registered or certified, or (iii) if in the form of a telecopy,
when the receiving party gives telephonic notice of complete and
legible receipt to:
Waban at: One Mercer Road
Natick, MA 01760
Telecopy Number: (508) 651-6623
Attention: Chief Financial Officer
TJX at: 770 Cochituate Road
Framingham, MA 01701
Telecopy Number: (508) 390-2199
Attention: Chief Financial Officer
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic substantive laws of the
Commonwealth of Massachusetts without giving effect to any choice or
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conflict of law provision or rule that would cause the application of
the domestic substantive laws of any other jurisdiction.
17. Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
18. Entire Agreement. This Agreement represents the entire
agreement between the parties hereby and supersedes all prior
negotiations, representations or agreements either written or oral
including, but not limited to, letters of intent and correspondence
between the parties.
19. Titles and Headings. Titles and headings to sections herein
are inserted for the convenience of reference only and are not
intended to be part of or to affect the meaning of interpretation of
this Agreement.
20. Exhibits and Schedules. The Attachments shall be construed
with and as an integral part of this Agreement to the same extent as
if the same had been set forth verbatim herein.
IN WITNESS WHEREOF, TJX and Waban have caused this Agreement to
be duly executed by their respective officers, each of whom is fully
authorized, all as of the day and year first above written.
The TJX Companies, Inc.
By: /s/ Donald G. Campbell
Senior Vice President - Finance
and Chief Financial Officer
Waban Inc.
By: /s/ Herbert J. Zarkin
President and Chief
Executive Officer
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ATTACHMENT I
WABAN INC.
FYE 1996 COMPUTER USAGE REQUIREMENTS AND ESTIMATES FOR
FYE 1997 AND FYE 1998 REQUIREMENTS
CPU HOURS FY '96 FY '97 FY '98
Total CPU 8,243 10,139 12,167
Print Lines (000's)
Total Print (000's lines) 2,470 3,088 3,705
Other
Payroll Checks (000's) 538 646* 762*
Microfiche (000's) 215 258* 310*
Data Entry (000's) 1,352 1,622* 1,947*
Host Connections - H.O. 6,144 6,267 6,392
Host Connections - Clubs 5,070 6,350 7,627
* For the purposes of Section 2 of the Agreement, the following is the
expected low end range of volume for the following categories:
FY '97 FY '98
Payroll Checks (000's) 572 0
Microfiche (000's) 133 0
Data Entry (000's) 1,174 720
ATTACHMENT II
COMPUTER SERVICES and RATES:
The computer services listed below will be provided to Waban by TJX
during fiscal year 1996 at the rates indicated in the FY'96 column
below and subject to the terms and conditions of the Agreement. The
estimated rates for fiscal years 1997 and 1998 are informational only.
The rates for fiscal years 1997 and 1998 will be set in accordance
with the terms of the Agreement.
ESTIMATED ESTIMATED
RATE RATE RATE
1. Computer Processing FY '96 FY '97 FY '98
a. Per CPU Hour (3090-400E) $ 455.00 $ 425.00 $ 400.00
Per CPU Hour (3090-600S) 548.00 512.00 482.00
Per CPU Hour (3090-600J) 595.00 556.00 523.00
Per CPU Hour (9000-820) 1321.00 1234.00 1161.00
b. Per Thousand 1-up PRINT Lines .44 .43 .43
Per Thousand 2-up PRINT Lines .26 .26 .26
Per Thousand Remote PRINT Lines .02 .02 .02
c. Per MicroFiche .43 .43 .43
d. Per Data Entry record .041 .041 .041
Per D/E Floppy File 9.80 9.80 9.80
e. Per Payroll Check .35 .36 .36
NOTE: Should a Central Processing Unit (CPU) other than one of
those listed above be used to process the Waban workload,
the rate per hour will be determined based on the
proportional speed of the unlisted CPU.
2. Computer Services
a. Per Monthly Host Connect Unit-H.O. $ 48.00 $ 48.00 $ 48.00
b. Per Monthly Host Connect Unit-Club 24.00 24.00 24.00
c. Per Monthly Unplanned Disk Device 400.00 400.00 400.00
3. Computer Rate Discounts
a. Discount on Computer Processing
Rates (1a thru 1e) 15.0% 15.0% 15.0%
b. Discount on Host Connect Rate (2a&b) 75.0% 75.0% 75.0%
(Waban will handle all communication
cabling and equipment support within
each Waban building).
4. Other Available Services/Charges
Remote Comm. Usage Rate: $0.25 per Thousand records transmitted
(line charges will be paid by Waban)
Payroll Prog. Support: $50.00 per billable hour (for all hours
which exceed the Waban annual allocation)
Unplanned Projects: Support provided based on time &
materials cost
ATTACHMENT III
PERFORMANCE LEVELS FOR COMPUTING SERVICES
SERVICE LEVEL ITEM PERFORMANCE GOAL *
Hardware/Software Availability 99.5 percent
On-Line Application Availability 98.0 percent
TSO System Availability 99.5 percent
Report Delivery On Schedule 98.0 percent
RESPONSE TIME TARGETS:
IMS (95th Percentile) 4.0 seconds
CICS (95th Percentile) 4.0 seconds
TSO (95th Percentile) 3.0 seconds
* -These performance goals (which will be calculated on a monthly
basis) assume Waban's conformance with TJX's operating standards.