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Exhibit 10.14
ADMINISTRATIVE SERVICES AGREEMENT
This ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement") dated as of
July 1, 1999 by and between ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., a Delaware corporation
("▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇"), and VITAMIN SHOPPE INDUSTRIES INC., a New York
corporation ("VSI"),
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ desires to obtain certain administrative and
other services from VSI, and VSI desires to provide such services to
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, the parties agree as follows:
1. SHORT TERM. VSI shall provide employee benefits (such as
medical and dental insurance), payroll processing, 401(k) plan administration
and participation and other outsourced support services to ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
until ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ shall establish such services on its own or arrange to
be billed directly for such services by the applicable providers.
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ shall endeavor to establish such services or arrange to be
billed directly for such services at soon as practicable. VSI shall notify
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ in writing of its cost of such services and benefits on a
monthly basis in arrears, and ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ shall reimburse VSI within ten
business days after such notification for 100% of the cost thereof.
2. MEDIUM TERM. VSI shall provide human resources, management
information, cash management, finance and accounting services to
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ through June 30, 2000. In consideration for such services,
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ shall pay VSI $55,000 per month commencing July 1, 1999 and on
the first day of each calendar month thereafter until June 1, 2000. Thereafter,
VSI may continue to provide any or all of such services to ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ on
mutually agreeable terms.
3. CUSTOMER SUPPORT. (a) If ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ shall so
request in writing, VSI shall provide routine customer service to
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ customers, including without limitation order tracking, and
also shall provide dedicated e-mail based customer support services for
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and telephone-based customer service support for
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇'s toll-free telephone number (which support may be dedicated
or combined with VSI's customer support, in VSI's discretion). ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
shall pay VSI 105% of its cost to provide such services.
(b) ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ shall provide VSI with online order
tracking for customers of VSI's print catalogs.
(c) Each party shall use commercially reasonable efforts to
cause the quality of services provided to the other party under this paragraph 3
to be at least as high as the party provides when dealing with its own
customers. VSI shall provide a statement to ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ on a monthly basis
detailing its cost pursuant to paragraph 3(a). Within ten
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days after the date of each such statement, ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ shall pay to VSI
the amount set forth on such statement. Payment by ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ of any
statement shall not preclude ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ from challenging the accuracy
thereof.
4. VSI shall maintain accurate books and records with respect
to the services provided pursuant to paragraphs 1 and 3(a) which reflect the
cost to provide such services. At its own expense, ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ or its
representatives may examine and copy such books and records as provided in this
paragraph 4. ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and its representatives may make examinations
only during usual business hours and at the place at which VSI usually keeps its
books and records. ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ shall be required to notify VSI at least
ten days before the date of planned examination. If an examination has not been
completed within two months from commencement, VSI may require ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
to terminate the examination on seven days notice to ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, so long
as VSI has cooperated with ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ in full in the examination of such
books and records.
5. SYSTEM LINKS. In consideration of the mutual promises
contained herein, ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and VSI shall build and maintain, at
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇'s cost, appropriate links between their computer systems to
facilitate the performance of any agreement between the parties.
6. TERM. (a) This Agreement shall commence on the date hereof
and continue for an indefinite period in full force and effect until it is
terminated in accordance with this paragraph 6.
(b) Either party shall have the right but not the obligation
to terminate this Agreement immediately if at any time:
(i) the other party shall be in material breach of any of
its obligations hereunder, and such breach shall not be cured within 20 days
after receipt of written notice thereof;
(ii) the other party shall be the subject of a voluntary
petition in bankruptcy or any voluntary proceeding relating to insolvency,
receivership, liquidation or assignment for the benefit of creditors;
(iii) the other party shall become the subject of any
involuntary petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation or assignment for the benefit of
creditors, and such petition or proceeding shall not be dismissed within 60 days
of filing;
(iv) the business of the other party shall be liquidated or
otherwise terminated on any basis; or
(v) the other party shall become insolvent or unable to pay
its debts as they become due.
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(c) Paragraphs 1 and 2 shall terminate in accordance with
their respective terms. ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ shall have the right but not the
obligation to terminate any services provided under paragraphs 3(a) and 3(b) at
any time upon 90 days prior written notice to VSI. VSI shall have the right but
not the obligation to terminate any services provided under paragraph 3 after
June 30, 2000 on 90 days prior notice to ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
(d) A party may exercise its right to terminate pursuant to
this paragraph 6 by written notice to the other party. No exercise by a party of
its rights under this paragraph 6 shall limit its remedies by reason of the
other party's default, the party's rights to exercise any other rights under
this paragraph 5 or any other rights of that party.
7. INDEPENDENT CONTRACTOR. The parties to this Agreement are
independent contractors. Neither party shall have the power to bind the other or
to incur obligations on behalf of the other without the other's prior written
consent. When VSI or its employees act under the terms of this Agreement, they
shall at all times be under the supervision and responsibility of VSI. No
employee of VSI acting under the terms of this Agreement shall be deemed to be
an agent or employee of ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ or any customer of ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
8. MISCELLANEOUS. (a) Neither party may assign this
Agreement or its rights and obligations hereunder in whole or in part without
the other party's prior written consent. Any attempt to assign this Agreement
without such consent shall be void and of no effect. Notwithstanding the
foregoing, either party may assign this Agreement or its rights and obligations
hereunder to any entity controlled by it or to any entity by which it is
acquired by merger, purchase of capital stock, transfer of substantially all
assets or otherwise; provided that such entity shall thereafter succeed to all
obligations of such party under this Agreement.
(b) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such state, without regard
to the principles of conflicts of law of such state.
(c) Each party hereto irrevocably and unconditionally consents
to the exclusive jurisdiction of the Supreme Court of the State of New York, New
York County, or the United States District Court for the Southern District of
New York for the purposes of any suit, action or proceeding arising out of this
Agreement or any transaction contemplated hereby. Each party agrees to commence
any such action, suit or proceeding either in the United States District Court
for the Southern District of New York, or if such suit, action or other
proceeding may not be brought in such court for jurisdictional reasons, in the
Supreme Court of the State of New York, New York County. Each party further
agrees that service of any process, summons, notice or documents by United
States registered mail to such party's address set forth pursuant to paragraph
8(e) shall be effective service of process for any action, suit or proceeding in
respect to any matters to which such party has submitted to jurisdiction in this
paragraph 8(c). Each party irrevocably and unconditionally waives any objection
to the laying of venue of any action, suit or proceeding arising out of this
Agreement or any transaction contemplated hereby in the Supreme Court of the
State of New York, New York County, or the United States District Court for the
Southern District of New York. Each party irrevocably and unconditionally waives
and agrees
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not to plead or claim in any such court that any such action, suit or proceeding
brought in either such court has been brought in an inconvenient forum.
(d) If any provision of this Agreement or any portion thereof,
or the application of any such provision or portion thereof, to any person or
circumstance shall be held invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision hereof or the remaining portion thereof or
the application of such provision to any other persons or circumstances.
(e) All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or
sent, postage prepaid, by registered, certified or express mail or reputable
overnight courier service and shall be deemed given when so delivered by hand,
or if mailed, three days after mailing (or one business day in the case of
express mail or overnight courier service), as follows:
If to ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, to:
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and Chief Executive Officer
If to VSI, to:
Vitamin Shoppe Industries Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and Chief Executive Officer
(f) No failure of either party to exercise or enforce any of
its rights under this Agreement shall act as a waiver of such right.
(g) This Agreement constitutes the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. Neither party shall be liable or bound to any other party in any
manner by any representations, warranties or covenants relating to the subject
matter except as specifically set forth herein. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been executed and delivered by both parties.
h. This Agreement may be amended only by an instrument in
writing signed on behalf of each party. As long as VSI owns at least 30% of the
voting power of the capital stock of ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, no material term of this
Agreement may be amended or waived without the approval of a majority of the
directors of ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ who are not directors, officers or more than 5%
stockholders of VSI (or the designee of a more than 5% stockholder).
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(i) This Agreement is for the sole benefit of the parties
hereto. Nothing herein expressed or implied shall give or be construed to give
to any other person or entity any legal or equitable rights hereunder.
(j) The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement. When reference is made in this Agreement to a paragraph, such
reference shall be to a paragraph of this Agreement unless otherwise indicated.
(k) The provisions of this paragraph 8 shall survive any
termination of this Agreement.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
VITAMIN SHOPPE INDUSTRIES INC.
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
