Exhibit 16
LICENSE AND SERVICES AGREEMENT
THIS LICENSE AND SERVICES AGREEMENT dated this __________day of ___________2002.
BETWEEN:
PHOTOCHANNEL NETWORKS INC., a limited partnership
created pursuant to the laws of British Columbia
having an office at Suite 506, 425 West Pender
Street, Vancouver, British Columbia, Canada, V6B 6E3
(hereinafter called the "PhotoChannel")
- and -
GIANT EAGLE INC., a company having an office at 101
Kappa Drive, RIDC Park, Pittsburgh, PA 15238.
(hereinafter called "Giant Eagle")
WHEREAS PhotoChannel is the developer and owner of a
proprietary Internet based digital imaging network solution for the storage,
distribution and printing of photographs ("System");
AND WHEREAS PhotoChannel is entitled to license the
System and provide the Services (as hereinafter defined) to Giant Eagle as
provided herein;
AND WHEREAS Giant Eagle wishes to acquire a license for
the System and to receive the Services as provided herein; and
AND WHEREAS Giant Eagle wishes to acquire, and PhotoChannel wishes
to provide to Giant Eagle, a Giant Eagle branded System for its photo-finishing
operations (the "Branded System") on the terms and conditions set out herein;
NOW THEREFORE in consideration of the promises and the
mutual covenants contained in this Agreement, and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
1. DELIVERABLES. PhotoChannel agrees to deliver the System components
described in attached Schedule A (the "Deliverables") in reference to
PhotoChannel's proposal dated for reference November 19, 2002 and in accordance
with the roll-out schedule set out in section 2 below. PhotoChannel acknowledges
that Giant Eagle will use the system and related services for each of its
corporately owned and operated stores and any of its independently owned and
operated stores that wish to participate in this program. PhotoChannel
acknowledges that Giant Eagle has no power or right to force the independently
owned and operated Giant Eagle stores to use PhotoChannel's system or services.
PhotoChannel acknowledges and agrees that Giant Eagle's independently owned and
operated stores are not parties to hereto and will not be bound by the
provisions of this Agreement. PhotoChannel represents and warrants that the
System will perform the functions set out in, in the manner and to the standards
provided in, Schedule A. PhotoChannel shall promptly correct any errors,
malfunctions or defects in the System. PhotoChannel shall promptly make
available to Giant Eagle, at no additional charge, all updates, enhancements or
improvements made to the System during the Term (as hereinafter defined) or any
renewal term.
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2. ROLL-OUT SCHEDULE. TO BE DETERMINED AND AGREED UPON.
3. SUPPORT, MAINTENANCE AND TRAINING. PhotoChannel shall promptly and
competently provide the Services including the support, maintenance and training
provided for in Schedule A.
4. BILLING AND PAYMENTS. Giant Eagle shall make the payments set out
in, and on the terms provided in, Schedule A.
5. PROJECT CO-ORDINATORS. Each party shall designate a project
co-ordinator to deal with the day-to-day matters arising under this Agreement.
These individuals will, on behalf of their respective employers, co-ordinate the
provision of the products and services contemplated herein, including
installation, acceptance, operation, maintenance and support.
6. ACCESS TO FACILITIES. Giant Eagle shall at all reasonable times give
PhotoChannel and its employees and contractors access to all premises and assets
of Giant Eagle as is necessary to permit PhotoChannel to fulfil its obligations
under this Agreement.
7. TERM. This Agreement shall be for a term of two (2) years commencing
on the date hereof (the "Term") and shall be renewable as provided for below.
This Agreement shall be automatically renewed for one (1) year periods unless
written notice is provided by one party to the other not less than ninety (90)
days prior to the end of the Term or the then current renewal term.
8. CONFIDENTIALITY. Neither party shall disclose any confidential
information, including, without limitation, future business plans, to any third
party without the prior written approval allowing such disclosure from the other
party. Without limiting the generality of the foregoing, PhotoChannel agrees to
keep confidential, and not use for any purpose whatsoever, any information
relating to Giant Eagle's customers including, without limitation, customer
names, addresses, lists and image files (collectively, "Customer Information").
9. INTELLECTUAL PROPERTY RIGHTS. PhotoChannel hereby grants Giant Eagle
a non-exclusive license to use during the Term and any renewal term all
copyrighted material, trademarks, inventions and all other industrial or
intellectual property rights (collectively, the "Intellectual Property") forming
part of or necessary to use the System. PhotoChannel agrees to indemnify and
hold harmless Giant Eagle from any claim alleging that the System or any of the
Intellectual Property licensed hereunder infringe the rights of another.
PhotoChannel acknowledges that pursuant to this Agreement it is not acquiring
any interest in or right to use any of Giant Eagle's Intellectual Property.
10. TERMINATION. A party shall be entitled to terminate this Agreement
if:
(a) the other party makes a general assignment for the benefit of its
creditors or a proposal or arrangement under the Bankruptcy and
Insolvency Act or any successor legislation ("the Act"), if a
petition is filed against the other party under the Act, if the
other party is declared or adjudicated bankrupt, if a liquidator,
trustee in bankruptcy, custodian, receiver, receiver and manager or
any other officer with similar powers shall be appointed, either
privately or judicially, of or for the other party or if the other
party shall commit an act of bankruptcy or propose a compromise,
arrangement or otherwise have recourse to any law for the protection
of debtors; or
(b) if the other party fails to fulfil any of its obligations hereunder
and does not cure such failure within fifteen (15) days after
receiving written notice of such failure.
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Upon any termination or expiration of this Agreement, PhotoChannel shall
immediately return all customer information and customer images (the "Customer
Data"), if any, in its possession to Giant Eagle and PhotoChannel shall certify
in writing the completion of the return of all Customer Data within ten (10)
days of the expiration or termination of this Agreement.
SCHEDULES. Schedules A, attached hereto, is incorporated herein and forms
part of this Agreement.
NOTICES. All notices, demands, approvals, consents and acceptances under this
Agreement shall be in writing and shall be deemed to have been duly given if
mailed, delivered, or faxed to the parties at the following addresses
If to Photochannel:
Photochannel Networks, Inc.
Suite 506, 425 West Pender Street
Vancouver, British Columbia, Canada V6B 6E3
Attention: CFO
Facsimile: (604) 893-8966
If to Giant Eagle:
Giant Eagle, Inc.
101 Kappa Drive
Pittsburgh, PA 15238
Attn: Vice President of Merchandising
NON-ASSIGNABILITY. Neither party may assign this Agreement without
the prior written consent of the other party, such consent not to be
unreasonably withheld.
GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
PHOTOCHANNEL NETWORKS INC.
By:/s/Robert Chisholm
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Name: Robert Chisholm
Title: CFO
GIANT EAGLE INC.
By:/s/John Tedesco
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Name: John Tedesco
Title: Senior Vice President