EXHIBIT 10.1
Portions of this exhibit have beeen omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.
November 19, 2008
Fulfillment Technologies, LLC
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Gentlemen:
Reference is made to that certain Fulfillment Services Agreement (the
"Existing Agreement"), dated on or about April 11, 2007, by and between
Fulfillment Technologies, LLC ("FillTek") and Bluefly, Inc. ("Bluefly"), as the
same may have been amended through and including the date hereof. Capitalized
terms used and not defined herein shall have the meanings ascribed to such terms
in the Agreement.
This letter agreement (this "Agreement") is intended to memorialize certain
amendments to the terms of the Existing Agreement, to be effective as of [***]
and to remain in effect for the remainder of the term of the Agreement (the
"Effective Period"):
1. In lieu of any per order amounts otherwise due under the Agreement,
Bluefly will pay FillTek a flat fee as set forth in the table below
for each order shipped during the Effective Period, subject to
adjustment as set forth in Paragraphs 2,3, and 4 (the "Flat Fee"):
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Effective Dates Flat Fee Per Order
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Orders shipped from [***] through and $[***] (provided that, until such time as Bluefly
including [***] completes the Returns Processing IT Work (as
hereinafter defined), the Flat Fee during this
period shall be $[***])
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Orders shipped from [***] through and $[***]
including [***]
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Orders shipped on or after [***] $[***]
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For purposes of the above, the "Returns Processing IT Work" shall mean
the performance of the following by Bluefy [***]. If Bluefly fails to
complete the
Portions of this exhibit have beeen omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.
Returns Processing IT Work by [***], $[***] per order will be added to
the current Flat Fee per Order until such work is completed.
To the extent that any order is split into two or more shipments, only
one Flat Fee will be due for all shipments under that order. This Flat
Fee will remain in effect regardless of whether FillTek's actual costs
per order are less than the Flat Fee (in which case FillTek will be
entitled to retain the difference) or exceed the Flat Fee (in which
case FillTek will be responsible for the difference).
2. The parties accept and acknowledge that pricing is based solely on the
assumptions set forth in the table below. The parties agree that the
provisions of this Section 2 shall replace Note 1 to Exhibit C of the
Existing Agreement and the Assumed Order Fulfillment Assumptions
referred to therein.
The parties will review the previous twelve (12) months' activity on
December 31, 2009 and December 31, 2010 (each, a "Measurement Date").
If, as of a Measurement Date, the actual activity for one or more of
the factors described in the table below falls outside the
corresponding minimum and maximum assumptions by more than [***] for
the calendar year then ended, then, during the next calendar year, (a)
there will be no reduction in the Flat Fee, (b) Bluefly and FillTek
agree to an increase of $[***] per order and (c) Bluefly will pay an
additional amount per order equal to the Per Order Catch Up Fees (as
hereinafter defined) until such time as the aggregate Per Order Catch
Up Fees paid pursuant to this clause (c) equals the Catch Up Amount
(as hereinafter defined).
For purposes of this Section 2:
"Catch Up Amount" means, for a calendar year in which one or more
of the factors described in the table below falls outside the
corresponding minimum and maximum assumptions by more than [***],
the product obtained by multiplying (i) $[***] by (ii) the total
number of orders processed from [***] to [***]of such calendar
year.
"Per Order Catch Up Fees" means, for a calendar year, the
quotient obtained by dividing (i) the Catch Up Amount for the
previous calendar year, if any, by (ii) the total number of
orders processed during the previous calendar year.
Portions of this exhibit have beeen omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.
Description 2009 2010 2011
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[***] [***] [***] [***]
[***] [***] [***] [***]
[***] [***] [***] [***]
3. In lieu of the Service Levels contained in the Existing Agreement
(other than Service Levels related to inventory shrink, which shall
remain in full force and effect), during the Effective Period, FillTek
will perform the Services in accordance with the service levels
described in Exhibit A hereto (the "Adjusted Service Levels"). In the
event that, during the Effective Period, FillTek fails to perform the
Services in accordance with any Adjusted Service Level during any
applicable measurement period, the Flat Fee for all orders outside the
Adjusted Service Level shipped during that measurement period will be
reduced by $[***] per order. Notwithstanding anything in this
Agreement to the contrary, the provisions of the Existing Agreement
relating to inventory shrink (including, without limitation, Sections
3.7 and 5 of Exhibit A of the Existing Agreement) shall remain in full
force and effect during the Effective Period and all periods of time
prior to Effective Period, and neither party waives any rights, or is
released from any obligations, arising thereunder.
4. From time to time, during the Effective Time, the parties may mutually
agree on capital expenditures to be funded by Bluefly in order to
improve FillTek's ability to perform the Services ("Additional Bluefly
Capital Investments"). Additional Bluefly Capital Investments will
only be made to the extent agreed to by the parties. In the event that
Additional Bluefly Capital Investments are made, the following terms
shall apply unless otherwise agreed by the parties: (a) the parties
shall agree upon reductions to the Flat Fee ("Fee Reductions") in
order to allow Bluefly to recoup the amounts funded by it; (b) FillTek
will provide security for the recoupment of such amounts through Fee
Reductions by providing either a personal guaranty from its
principals, a letter of credit or other security acceptable to
Bluefly; and (c) subject to clause (b), FillTek shall own all
equipment and fixtures purchased as a result of an Additional Bluefly
Capital Investment.
5. The Flat Fee will be FillTek's full and complete consideration for all
Services performed during the Effective Period (and costs incurred in
connection therewith), other than Services outside the scope of those
described in the Existing Agreement.
In furtherance, and not in limitation, of the foregoing, FillTek
agrees that there shall be no additional charge for any systems
modifications or capital investments required to perform the Services
in accordance with the Adjusted Service Levels or any IT support
required for data feeds, audits or other systems modifications,
provided that the parties may agree to Additional Bluefly Capital
Investments pursuant to Paragraph 3 above. In the event that FillTek
believes, in good faith, that any Services requested by Bluefly are
outside the scope of those described in the Existing Agreement, it
will notify Bluefly of such in writing, and obtain Bluefly's prior
written approval before incurring any costs to be charged to Bluefly
in connection therewith.
Except as expressly agreed above, the Existing Agreement shall remain in full
force and effect, and nothing contained herein, shall be construed as a waiver
of any parties' rights or obligations thereunder, or any agreement or promise to
waive any such rights in the future.
Please sign below to indicate your agreement with the foregoing.
Very truly yours,
BLUEFLY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and COO
ACCEPTED AND AGREED
AS OF THE DATE FIRST
WRITTEN ABOVE:
FULFILLMENT
TECHNOLOGIES, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: CEO
Portions of this exhibit have beeen omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.
EXHIBIT A
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FillTek Service Level Commitments
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Service Description SLA Measured by Measured
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Order Time order sent to [***] Bluefly report to measure order
fulfillment cycle Filltek to time order sent file time/date stamp to
time shipped corresponding order back in Filltek Monthly
shipment file [***].
Next Day and 2Day air sent in
[***] feed ship same day. Air
orders after [***] ship following
business day.
[***]
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Order Fill Rate Units ordered vs. [***]% Number of Canceled units/number Monthly
units filled of ordered units
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Order accuracy percentage of orders [***]% Number of Bfly return Monthly
shipped with all reason codes (wrong item
ordered units and all sent) + Number of Bfly
correct items credit requests for short
shipments divided by
number of orders shipped
(excludes cancelled line
items)
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Returns Duration of time from [***] Daily capacity of [***] returns per Monthly
Processing date return carton Business day
cycle time arrived at Filltek dock Days
to date return credit
processed and item
returned to stock
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Returns Percentage of return [***]% Number of Bluefly credit request for Monthly
processing credits accurately incorrect item credited vs. number
accuracy processed (correct of processed returns
customer, item(s)
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Data File Percentage of files [***]% Number of files sent to Bluefly's Monthly
Transfer sent to Bluefly's FTP FTP Site vs. number of files
Site scheduled to be sent to Bluefly's
FTP Site
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New Receiving Minimum of [***] [***] Nightly receipt file from Filltek Monthly
processing units received based Units Availability for Sale as Locations
cycle time upon availability for received are available (Received is defined
non-peak months. each as put in a pickable location ready
Business for sale with 100% of samples sent
Day to New York).
Minimum of [***]
units received based
upon availability for [***] Non peak months are [***].
peak months Units
received
each
Business Peak months are [***].
Day
(during
peak
months)
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Customer Duration of time from Within date of email to Filltek to date of Monthly
Service Cycle customer service [***] response
time request to response Business
to Bluefly or customer Days
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