EXHIBIT 10.59
AMENDMENT TO AGREEMENT FOR SERVICES
This Amendment (the "AMENDMENT") to that certain Agreement for Services
dated February 7, 2000 (the "ORIGINAL AGREEMENT") by and between Xxxxx Xxxxxx
Media, LLC, a limited liability company organized under the laws of the State of
Delaware (the "COMPANY"), and VVI Fulfillment Center, Inc., a corporation
organized under the laws of the State of Minnesota ("CONTRACTOR"), is made and
entered into by and between the Company and Contractor as of January 31, 2003.
All capitalized terms used herein but not otherwise defined will have those
meanings set forth in the Original Agreement.
BACKGROUND
A. The Company and Contractor previously entered into the Original
Agreement whereby, among other things, Contractor agreed to provide certain
telemarketing and fulfillment services to the Company in consideration for the
payment by the Company to Contractor of the amounts set forth therein.
B. On January 31, 2003, the Company, ValueVision Media, Inc.
(Contractor's parent corporation), Xxxx Xxxxx Lauren Corporation and National
Broadcasting Company, Inc. entered into that certain letter agreement whereby,
among other things, they agreed to amend the terms of the Original Agreement as
provided below.
C. This Amendment has been unanimously approved by the managers of the
Company in accordance with Section 5.3(a)(ii) of that certain Second Amended and
Restated Limited Liability Company Agreement of the Company dated as of May 18,
2000.
D. In consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
AGREEMENT
1. Payments. Section 3.1(b) of the Original Agreement is hereby deleted
in its entirety and replaced and superceded by the following:
(b) For each calendar month during the Term of this Agreement,
the Payment will be an amount (computed in United States dollars) equal
to the sum of:
(i) $20 per order filled by Contractor during that
calendar month, plus
(ii) all Costs (as hereinafter defined) incurred by
Contractor during such month.
For the avoidance of doubt, the Payment covers all Services provided to the
Company under this Agreement but does not include any payments for direct
support services provided by Contractor to Xxxx Xxxxx Xxxxxx. The parties agree
and understand that the $20 per order commitment by the Contractor is based on
providing fulfillment services on a comparable basis (i.e., such as product mix,
volume, and packaging standards and materials) as the past practice between the
parties; in the event of a material change in the cost structure of the services
requested arising from the changes requested by the Company or material
reductions in the order volume, the parties will negotiate in good faith a new
per order fee.
2. Costs. Section 3.2 of the Original Agreement is hereby deleted in
its entirety and replaced and superceded by the following:
Section 3.2 Costs. For each calendar month, the "COSTS" will consist of
the sum of:
(a) all freight on returns incurred by Contractor on behalf of
the Company during such month; and
(b) all packaging costs incurred by Contractor on behalf of
the Company during such month.
3. Invoices. Section 3.3(a) of the Original Agreement is hereby deleted
in its entirety and replaced and superceded by the following:
(a) For each calendar month, Contractor will provide to the
Company an invoice showing in reasonable detail the number of orders
filled by Contractor and all Costs for such month and the Payment
required for such month. Such Payment will be due 15 days after
submission of such invoice to the Company.
4. Term. Section 4.1 of the Original Agreement is hereby deleted in its
entirety and replaced and superceded by the following:
Section 4.1 Term. The term of this Agreement will commence on the date
of this Agreement and will continue until December 31, 2003 (the
"INITIAL TERM"), and will thereafter automatically renew for successive
one-month periods (each a "RENEWAL TERM") unless either party gives the
other party notice of non-renewal not less than 90 days before the
expiration of any Renewal Term or otherwise terminates this Agreement
under Article 4 or Article 7. The "TERM" of this Agreement consists of
the Initial Term plus each Renewal Term.
5. Right of First Refusal. The following new Article 7 is hereby added
to the Original Agreement:
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ARTICLE 7
RIGHT OF FIRST REFUSAL
Section 7.1 Right of First Refusal.
(a) The Company is permitted at any time to enter into
discussions with parties other than Contractor (a "THIRD PARTY
CONTRACTOR") to provide the Services to the Company instead of
Contractor following the end of the Initial Term. In the event that the
Company receives a bona fide offer from a Third Party Contractor to
provide the Services to the Company and the Company intends to accept
such offer, the Company will first provide written notice (the "THIRD
PARTY OFFER NOTICE") of such offer to Contractor, specifying in
reasonable detail the terms and conditions of such offer. Contractor
has the right and option, exercisable by written notice to the Company
within 30 days of receiving a Third Party Offer Notice, to continue to
provide the Services to the Company on substantially similar economic,
contractual and service terms as provided in the Third Party Offer
Notice. If the Company validly exercises its option to continue to
provide the Services to the Company under this Section 7.1(a),
Contractor and the Company will promptly enter into a definitive
amendment to this Agreement reflecting any required modifications to
the provisions of this Agreement consistent with the terms and
conditions specified in Contractor's notice of exercise to the Company.
Prior to the effectiveness of any such definitive amendment, the terms
of this Agreement will be interpreted and enforced as if such Agreement
had not been amended.
(b) If Contractor elects not to exercise its option provided
in Section 7.1(a) (or if its fails to properly exercise its option
within the time specified for such exercise) in respect of any
particular Third Party Offer Notice (the date of notice from the
Contractor, or the expiration of the time period if no notice is given,
is referred to as the "Noncontinuation Notice Date"), the Company may
enter into a definitive agreement with such Third Party Contractor to
provide the Services to the Company in lieu of Contractor, but only (A)
during the 60 day period following the last day the Company was able to
exercise its option under Section 7.1 (or any earlier date on which
Contractor gives notice to the Company of its election not to exercise
such option), and (B) on economic and service terms not less favorable
to the Company than specified in the Third Party Offer Notice. Upon
execution of a definitive agreement with such Third Party Contractor
and written notice to Contractor of same, this Agreement will
terminate; provided, however, that such termination shall not occur any
earlier than ninety (90) days following the Noncontinuation Notice
Date. At the request of the Company and without further consideration,
Contractor will take such actions as the Company may reasonably request
to assist in the orderly transition of its obligations to provide the
Services to the Third Party Contractor to otherwise effectuate the
provisions set forth in this Section 7.1(b). The Company will promptly
reimburse Contractor for its reasonable expenses incurred in connection
with any such action that it may request under this Section 7.1(b).
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6. Exhibit 4. Exhibit 4 attached to the Original Agreement is hereby
deleted in its entirety.
7. Overbuild Compensation. In consideration of Contractor's fixed asset
impairment incurred by the overbuild of the fulfillment center utilized by
Contractor to provide the Services and for the changes to the Term of the
Original Agreement, within thirty (30) days of the date hereof (or such other
date as the parties may agree in writing) the Company will pay to Contractor
Eleven Million Dollars ($11,000,000) by wire transfer of immediately available
U.S. funds to such account or accounts as Contractor specifies.
8. Further Assurances. Each party hereto agrees to perform any further
acts and to execute and deliver any further documents that may be reasonably
necessary to carry out the provisions of this Amendment.
9. No Further Modification. This Amendment amends the Original
Agreement to the extent provided herein only and all other provisions of the
Original Agreement will remain in full force and effect. All references in the
Original Agreement to "this Agreement" or similar references will be understood
to refer to the Original Agreement as amended hereby. Notwithstanding anything
to the contrary stated in the Original Agreement, in the event of any conflict
between the provisions of this Amendment and the provisions of the Original
Agreement, the provisions of this Amendment will control.
10. Governing Law. This Amendment and the rights and obligations of the
parties under this Amendment will be governed by and construed in accordance
with the laws of the State of New York.
11. Negotiated Terms. The parties agree that the terms and conditions
of this Amendment are the result of negotiations between the parties and that
this Amendment may not be construed in favor of or against any party by reason
of the extent to which any party or its professional advisors participated in
the drafting or other preparation of this Amendment.
12. Counterparts. This Amendment may be executed by facsimile signature
and in any number of counterparts, each of which will be deemed an original, but
all of which taken together shall constitute one single agreement.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK -- SIGNATURE PAGES FOLLOW]
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Each party has caused this Amendment to be signed and delivered by its
duly authorized representative, effective as of the date first above written.
XXXXX LAUREN MEDIA, LLC
By: /s/ Xxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxxx
Its: President RLM
VVI FULFILLMENT CENTER, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Its: Vice President, CFO & Assistant
Secretary
VALUEVISION MEDIA, INC., AS GUARANTOR
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Executive Vice President,
CFO & COO
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