EXHIBIT 99.1
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.
December 21, 2007
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").
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 agreements that the parties have made with respect to a temporary
amendment to the terms of the Existing Agreement, to be effective during the
period of December 1, 2007 through and including February 29, 2008 (the
"Effective Period"). This Letter Agreement shall not be deemed to be an
amendment or waiver of either party's rights or obligations under the Existing
Agreement for any period of time prior to or after the Effective Period, all of
which rights and obligations are expressly reserved and shall remain in full
force and effect in accordance with the terms of the Existing Agreement. The
parties will meet in early February 2008, for the purpose of negotiating new
terms and conditions of either the Existing Agreement, this Agreement or a new
agreement. Each party shall conduct such negotiations in good faith, provided
that no failure to reach agreement as a result of such good faith negotiations
shall relieve either party of its obligations under the Existing Agreement or
this Agreement.
Accordingly, the parties agree that, during the Effective Period,
notwithstanding anything to the contrary contained in the Existing Agreement:
1. In lieu of any per order amounts otherwise due under the
Agreement, Bluefly will pay FillTek a flat fee of $[***] per order
for each order shipped during the Effective Period, subject to
adjustment as set forth in Paragraph 2 (the "Flat Fee"). 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 during the Effective Period
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
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.
the Flat Fee (in which case FillTek will be responsible for the
difference).
2. 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
Agreement, 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 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 and after the
Effective Period, and neither party waives any rights, or is
released from any obligations, arising thereunder.
3. FillTek will charge Bluefly for Services performed in connection
with the January 2008 physical inventory on a time and materials
basis in accordance with the rates set forth on Exhibit B, and
such Services shall not be included in the Fixed Fee. In addition,
Bluefly and FillTek will continue to equally share the costs
associated with the inventory control specialist hired by FillTek
at Bluefly's request, provided that any increase in such costs
shall be subject to Bluefly's prior written approval.
4. In the event that during the Effective Period, the number of pick
locations used by Bluefly exceeds [***], Bluefly will pay FillTek
a monthly space fee (the "Additional Space Fee") of $[***] per
square foot for all pallet locations in excess of [***].
5. Except as set forth in Paragraph 3, the Flat Fee and any
Additional Space 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. 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: General Counsel
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
FILLTEK SERVICE LEVEL COMMITMENTS
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SERVICE DESCRIPTION SLA MEASURED BY MEASURED
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Order fulfillment Time order sent to [***] Bluefly report to measure order sent Monthly
cycle time Filltek to time order file time/date stamp to corresponding
shipped order back in Filltek shipment file
([***]% of orders with no orders >
[***]hrs)
Order Fill Rate Units ordered vs. units [***]% Number of Canceled units/number of Monthly
filled ordered units
Order accuracy percentage of orders [***]% Number of Bfly return reason codes Monthly
shipped with all ordered (wrong item sent) + Number of Bfly
units and all correct credit requests for short shipments
items divided by number of orders shipped
Returns Processing Duration of time from [***]
cycle time date return carton Business
arrived at Filltek dock Days
to date return credit
processed
Returns processing Percentage of return [***]% Number of Bfly credit request for Monthly
accuracy credits accurately incorrect item credited vs. number of
processed (correct processed returns
customer, item(s)
New Receiving Minimum of [***] units [***] Units Nightly receipt file from Filltek Monthly
processing cycle received based upon received Availability for Sale as Locations are
time availability each available (Received is defined as put
Business Day in a pickable location ready for sale
with [***]% of samples sent to New York)
Customer Service Duration of time from Within date of email to Filltek to date of Monthly
Cycle time customer service request [***] response
to response to Bfly or Business
customer Days
EXHIBIT B
TIME AND MATERIALS RATES
PLEASE REFER TO EXISTING AGREEMENT DATED APRIL 11, 2007