EXHIBIT 10.80
AMENDMENT TO SERVICES AGREEMENT
This Amendment to the Services Agreement between The TJX Companies, Inc. ("TJX")
and Brylane, L.P. ("Brylane") is made effective as of December 8, 1996.
TJX and Brylane hereby agree that the terms of the Attachment to this Agreement
are to be substituted in their entirety for the terms of Annex A to the Services
Agreement. All other terms and conditions remain in full force and effect.
In witness;
Brylane, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
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The TJX Companies, Inc.
By: /s/ Xxx Xxxxxxxx
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ANNEX A
DATA PROCESSING SERVICES
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ANNEX A
Data Processing Annex to Services Agreement
The purpose of this Data Processing Annex ("the Annex") to the Services
Agreement is to define more precisely the data processing services that will be
provided by TJX to Brylane. In the event of any inconsistency between this Annex
and the Services Agreement, this Annex shall control. Fiscal Years referred to
herein are identified by reference to the year in which the TJX fiscal year
ends. Thus, Fiscal 1997 refers to the fiscal year ended January 25, 1997.
Brylane has requested TJX to provided certain computer services to Brylane's
Xxxxxxxx'x of Boston business as described in Attachment II attached hereto
(collectively, the "Computing Services") commencing as of December 8, 1996
through the fiscal year ended on the last Saturday of January, 2000; and TJX has
agreed to provide such services.
1. Term. The term of this Annex shall commence as of December 8, 1996
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and terminate upon the later of (i) the last day of Fiscal 2000 (January 28,
2000)(the "initial term") or (ii) if the parties agree to an extension hereof as
provided below (the "Extension Period"), the last day of such Extension Period.
Neither party shall have the right to terminate this Annex during the initial
term.
If Brylane wishes to extend the term of this Annex for an additional one
year term, Brylane shall so notify TJX in writing of its planned computer usage
requirements for such additional one year term no later than July 1 of the
fiscal year which is one year prior to the fiscal year in which this Annex
(whether or not extended) would otherwise terminate. If TJX agrees to such an
extension, TJX shall, no later than 60 days after receipt of Brylane
notification, notify Brylane in writing of TJX's estimated rates for such
additional one year term and Brylane shall
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have 30 days to indicate its acceptance of such rates. Additional one year
extensions may be requested in the succeeding year(s) and agreed to in the same
manner as provided in this Section 1.
If TJX declines to provide Computing Services during the Extension
Period, or if Brylane chooses not to accept TJX's offer for the Extension
Period, Brylane shall have 30 days after the date on which TJX declines to
provide such services or notifies Brylane of TJX's estimated rates to elect an
extension of services for an additional period of up to twelve months beyond the
termination of the then current term (the "Phase-Out Period") by providing TJX
with its planned requirements for the Phase-Out Period. TJX shall be obligated
to provide Computing Services during the Phase-Out Period as long as Brylane's
total planned requirements during such Phase-Out Period exceeds fifty percent
(50%) of the planned requirements for the same period during the prior year. By
the following July 1, in accordance with the above-described computer usage
planning process, Brylane shall provide TJX with a plan to phase out its use of
Computing Services during the Phase-Out Period, showing proposed planned
requirements on a monthly basis. TJX shall be obligated to provide Computing
Services during the Phase-Out Period at the same rates that were in effect for
the one year period prior to the beginning of the Phase-Out Period.
2. Usage Requirements. Attached hereto as Attachment I are Brylane's
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estimates of its usage requirements for December 8, 1996 through January 25,
1997 hereinafter referred to as the "Start-up Period", fiscal 1998, fiscal 1999,
and fiscal 2000. Such requirements are hereinafter sometimes referred to
collectively as the "planned requirements." By July 1 of each year of the term
beginning July 1, 1997, Brylane shall deliver to TJX a computer usage plan for
its requirements for Computing Services through the end of the following fiscal
year, and a revised
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estimate of its requirements for the fiscal year following such fiscal year.
(For example, on or before July 1, 1997, Brylane shall deliver its usage
requirements for fiscal 1999 and an updated estimate of its requirements for
fiscal 2000.) It is understood that Brylane's computer usage requirements for
fiscal 1998, fiscal 1999, and fiscal 2000 may not be less than 90% of its
estimates for each such year included in Attachment I and may not exceed 150% of
its estimates for each such year unless TJX agrees to provide services at such
increased level. Brylane's computer usage plan will be sufficiently detailed to
allow TJX to provide its rates for Computing Services for the next following
fiscal year and Brylane's estimate for requirements during the additional fiscal
year will be sufficiently detailed to allow TJX to provide an estimate of its
rates for Computing Services for such additional fiscal year and to estimate its
hardware needs for such additional fiscal year.
As soon as practicable, but no later than September 1 of each year
(provided TJX has received such planned requirements by July 1), TJX will notify
Brylane in writing of the rates for Computing Services during the next following
fiscal year and an estimate of the rates TJX expects during such additional
fiscal year. It is understood that the estimate of rates for the additional
fiscal year is a good faith estimate only and that definitive initial rates for
such period will be established following July 1 of the following year in
accordance with the procedures set forth above.
3. Calculation of Rates. Brylane's planned requirements (as well as the
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planned requirements for all users of TJX's computing services) for each fiscal
year shall be the basis upon which TJX will set Brylane's rates for such fiscal
year. Attached hereto in Attachment II are the actual rates for the Start-up
Period, and the estimated rates applicable to Brylane (based on preliminary
estimates of usage for all users of TJX's Computing Services) for fiscal 1998,
fiscal
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1999, and fiscal 2000. Brylane acknowledges that one or more of TJX's computing
service users may be charged different rates, including discounted rates. The
charges for the Start-up Period or any succeeding fiscal year shall be subject
to adjustment as provided in Section 4. If for the Start-up Period or during any
succeeding fiscal year, TJX determines that its actual costs are significantly
different from its estimates thereof then in effect for purposes of calculating
rates hereunder, then TJX shall provide Brylane with a new estimate of rates for
such period or year and shall either (i) invoice Brylane for Computing Services
theretofore provided based on the revised estimates for sums in excess of sums
already paid since the beginning of such period or fiscal year (in the event of
increased rates estimates) or (ii) give Brylane an appropriate credit for such
period or fiscal year (in the event that the revised rates are lower). In any
event, subsequent rates shall be based upon such revised estimates.
Notwithstanding the foregoing provisions of this paragraph, in the event that
(i) the other users of TJX's computing services exceed 110% of their planned
requirements for any such fiscal year and as a result thereof TJX added to its
data processing system hardware or system software and (ii) Brylane did not
exceed 120% (130% for fiscal 1998) of its planned requirements for such fiscal
year (or, if there was an excess, such excess did not pertain to the usage of
such hardware or system software), then Brylane shall not be charged additional
fees with respect to such fiscal year for any costs with respect to such
additional hardware or system software.
TJX agrees that Brylane rates for each fiscal year shall be based on usage
of Computing Services equal to 100% of the planned requirements in Brylane's
computer usage plan for each fiscal quarter of each fiscal year. If Brylane's
computer usage plan does not provide requirements by fiscal quarter, then fiscal
year planned requirements will be divided equally to arrive at fiscal quarter
requirements. If Brylane's actual usage requirements exceed 120% (130% for
fiscal
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1998) of its planned requirements for a fiscal quarter and the requirements of
TJX's businesses do not exceed 110% of TJX's planned requirements for such
fiscal quarter (or any such excess usage does not pertain to hardware or system
software used by TJX), then TJX will be entitled to increase amounts billed to
Brylane to recover its additional costs resulting from Brylane's excess usage.
TJX shall use commercially reasonable efforts to satisfy requirements in
excess of 120% (130% for fiscal 1998) of Brylane's planned requirements
consistent with TJX's responsibilities to meet the computer services needs of
the other TJX computer services users.
In the event that Brylane's actual requirements for the first two or last
two fiscal quarters of any fiscal year with respect to the items shown on
Attachment I are less than eighty percent (80%) of its planned requirements for
such Quarters, whether during the Start-Up Period, initial term, any Extension
Period or the Phase-Out Period, with respect to such quarters, Brylane shall pay
to TJX, an amount equal to the charge for eighty percent (80%) of the planned
requirements.
Brylane agrees to provide to TJX by the fifteenth day of each month, a
written rolling forecast of anticipated computer, disk and print resource usage
for each month of the following twelve month period. The planned requirements
will not be affected by this written forecast.
TJX agrees that it will not change the basic methodology used to determine
rates during a fiscal year except in connection with new Computing Services
arising during such fiscal year that were not included by Brylane in its
computer usage plan submitted by Brylane to TJX for such fiscal year. TJX may,
however, change such methodology with respect to a following fiscal year at the
time it presents Brylane with its estimate of rates (i.e., on September 1
preceding such following fiscal year), and TJX shall inform Brylane of the
change at the time. Without limiting the generality of the next preceding
sentence, if during any fiscal year TJX adds to or upgrades its
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data processing system hardware or systems software, then the methodology used
to determine rates for the following fiscal year shall be appropriately adjusted
to include changes in Brylane's rate refecting usage of such hardware or
software.
Payroll check processing can be terminated effective January 1 of any year
with written notification to TJX received by July 1 of the prior year. In
addition, in the event that the provision of Corporate Payroll Services set
forth in Annex C is terminated or expires prior to the termination of services
under this Annex A, Brylane will pay such reasonable additional cost to TJX as
TJX may incur in the provision of services pursuant to this Annex A.
During the Start-up Period, fiscal 1998, fiscal 1999, and fiscal 2000, TJX
will discount the rates charged to Brylane for CPU, Dedicated Disk, Print,
Microfiche and Data Entry by 20.0%, 10.0%, 7.5%, and 5.0% respectively.
4. Reconciliation. Within thirty days after the end of the Start-up Period,
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and each succeeding fiscal year, TJX shall reconcile its costs pertaining to the
provision of the Computing Services for such period or fiscal year and determine
the pro rata amount paid by each user. If the reconciliation shows that TJX's
costs exceeded the rates charged and paid during such period or fiscal year,
Brylane shall with 30 days of TJX's invoice therefor pay to TJX Brylane's pro
rata share of the difference. If the reconciliation shows that TJX's costs were
less than the rates charged and paid, TJX shall pay Brylane its pro rata share
of the difference within 30 days after the completion of the reconciliation.
5. Software Licenses. TJX shall promptly notify Brylane upon its receipt
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of any notice that a third party intends to increase its software license fees
as a result of the provision by TJX of the Computing Services to Brylane. In
such event, TJX shall appoint Brylane as its agent to negotiate the amount of
such increase and shall cooperate with Brylane to ensure that all
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additional license rights (other than those already held by TJX, which shall not
be affected) are in the name of, or freely assignable (without the payment of
additional consideration) to, Brylane. If TJX is required to incur additional
software license fees then such fees shall be charged to and must be paid by
Brylane (it being understood that such fees are not included in the rates
appearing on Schedule II hereto and will not be included in the subsequent rates
determined pursuant to Section 3 hereof).
6. Performance Levels. The performance levels for the Computing Services
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provided to Brylane shall be no less than those specified on Attachment III,
assuming Brylane's conformity with TJX's operating standards. Notwithstanding
the foregoing, TJX shall not be required to maintain the performance levels for
Computing Services to the extent that it is unable to maintain them for TJX and
other users of computer services for reasons beyond its commercially reasonable
control. In the event that TJX is unable to meet the performance levels for
Computing Services for reasons beyond its commercially reasonable control, TJX
shall provide Brylane the same levels and quality of Computing Services that it
provides to TJX and other users of Computing Services and shall use its
commercially reasonable efforts to alleviate any condition causing a diminution
in such performance levels.
7. Invoices. TJX shall render to Brylane each month, within 30 days
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after the end of the month or as soon as practicable thereafter, an invoice
based on actual usage of Computing Services during the previous month. The
monthly invoice will itemize Brylane usage by billing category. Such invoice
shall be payable within thirty days of its receipt by Brylane.
8. Ownership of Brylane Data. Brylane shall be the owner of all of its
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data to which TJX has access under the terms of this Annex. TJX shall maintain
such data in confidence and make no use of such Brylane data or allow anyone
other than Brylane access to it except for TJX
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personnel (including agents) who require access thereto in order to perform the
obligations to Brylane under this Annex.
9. Delivery of Software. Upon Brylane request, TJX shall deliver to
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Brylane within a reasonable period after such request the following items with
respect to all applications, utility routines, utility programs and/or systems
software developed by TJX and used solely in connection with Brylane's business
and in which no third party has any rights (the "TJX Software"):
(a) One copy of object code or other executable code on magnetic
media.
(b) One copy of source code on magnetic media.
(c) One copy of any documentation, including source documentation,
maintenance documentation and other documentation, for such
software to the extent then available.
Brylane shall pay TJX for its reasonable additional costs relating to such
delivery of software.
TJX hereby grants to Brylane the royalty free, non-exclusive, non-
assignable and non-sublicensable right, license and privilege to use the TJX
Software. Brylane agrees that all TJX Software and all copies thereof are
proprietary to TJX and title thereto remain in TJX. All applicable rights to
patents, copyrights, trademarks and trade secrets in the TJX Software are and
shall remain in TJX. Brylane shall not sell, transfer, publish, disclose,
display or otherwise make available the TJX Software or copies thereof to
others. THE TJX SOFTWARE IS BEING PROVIDED TO BRYLANE AS IS AND ALL WARRANTIES
ARE EXCLUDED, INCLUDING THE WARRANTY OF MERCHANTABILITY AND FITNESS FOR A
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PARTICULAR PURPOSE. This paragraph shall survive the termination of the
Computer Services Annex and the Services Agreement.
10. Coordinating Committee. For the purpose of providing and continuing
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the harmonious relationship between TJX and Brylane, each party shall appoint at
least one individual to coordinate and review the relationship between the two
companies and their performance under this Annex, as well as strategic planning
and technology changes. These individuals shall meet periodically, no less
frequently than quarterly, to discuss operations under this Annex and any
problems arising hereunder.
11. Non-Termination. Brylane agrees that because this Annex cannot be
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terminated during the initial term, in any circumstance in which Brylane
purports to terminate this Annex (other than as a result of TJX's material
default which is not cured by TJX after a reasonable opportunity to cure)
Brylane shall continue to pay all charges otherwise due hereunder, as if there
had been no termination, and, that for purposes of computing charges, Brylane's
usage will be deemed to be not less than 90% of its estimates for fiscal 1998,
fiscal 1999, and fiscal 2000, all as set forth in Attachment I hereto.
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ATTACHMENT I
BRYLANE, L.P.
COMPUTER USAGE REQUIREMENTS AND ESTIMATES
START-UP
USAGE CATEGORY PERIOD FY 98 FY 99 FY 00
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Total CUP (600J hours) 1,392 11,956 10,778 11,399
Print Lines (in 000's)
1-Up 6,164 31,297 34,003 36,954
2-Up 392 3,367 3,683 4,028
Remote 230,805 1,881,832 2,070,015 2,194,216
On-line View 12,000 105,246 115,770 127,347
Dedicated Disk 223 2,333 2,799 2,799
Payroll Checks (000's)* 16 120 126 132
Microfiche (000's) 11 73 81 89
Data Entry
Records (000's) 12 116 127 140
Network Connect/Use
Home Office 870 6,528 6,528 6,528
Acct. Sys. (months) 2 3 0 0
NOTE: * - Payroll check processing and the related Human Resource Services can
be terminated effective January 1 of any year with written notification to TJX
by July 1 of the prior year.
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ATTACHMENT II
BRYLANE, L.P.
COMPUTER SERVICES AND RATES:
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The computer services listed herewith will be provided to Brylane by TJX during
the fiscal years shown at the rates indicated in the appropriate column below
and subject to the terms and conditions of the Annex. The estimated rates for
fiscal years 1998, 1999, and 2000 are informational only. The rates for each
fiscal year will be set in accordance with the terms of the Annex.
Start-up Estimated Estimated Estimated
1. COMPUTER Period FY '98 FY '99 FY '00
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(a) CUP/Model 952 (per hour) $1,431.00 $1,273.00 $1,199.00 $1,171.00
CUP/Model 600J (per hour) 517.00 460.00 433.00 423.00
(b) PRINT, 1-up (per 1K lines) .43 .43 .41 .40
PRINT, 2-UP (per 1K lines) .26 .26 .25 .24
PRINT, REMOTE (per 1K lines) .022 .022 .022 .022
PRINT, SARVIEW (per 1K lines) .022 .022 .022 .022
(c) XXXXXXXXXX (xxx xxxxx) .00 .00 .00 .00
(x) DATA ENTRY (per record) .041 .041 .041 .041
(e) DEDICATED DISK (per GB/mo.) 260.00 255.00 255.00 255.00
2. Non-CPU
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(a) NETWORK CONNECT Fee 43.00 43.00 45.00 45.00
(per unit/mo.)
(b) PAYROLL (per check) .36 .37 .38 .38
(c) DCOMM Rate (per hour) 35.00 35.00 35.00 35.00
(d) SOFTWARE Rate (per hour) 50.00 50.00 50.00 50.00
3. Payroll and Financial Systems Support.
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(a) Payroll Support - rate shown for item 2(b) above includes 50 staff days
of Direct Support. Service requests exceeding this annual level, if
agreed to by TJX, will be billed at the Software Rate per hour.
(b) Financial Systems Support - usage as incurred in item 1(a) above, plus
an application support fee of $4,500 per month for General Ledger,
Fixed Asset, E/P, and related software plus any license fees (at cost)
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if additional charges are incurred. This service can be canceled by
providing 30 day written notice to TJX any time after April 1, 1997.
Notwithstanding Section 1 of the Annex, production of W-2 Forms shall, at
Brylane's option, extend through the calendar year ending on December 31 in the
year in which the termination of the other Computing Services occurs.
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4. Maintenance and operation of the TJX Data Communication Network
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(a) Communication lines & hardware - provided at TJX's cost
(b) Routine support - 50 staff days are included in item 2(c) above;
support exceeding this annual level, if agreed to by TJX, will be billed
at the DCOMM Rate per hour
(c) Unplanned projects, if agreed to by TJX, will be billed at the DCOMM
Rate per hour plus materials at cost
(d) Remote Comm. Usage Rate will be $0.25 per Thousand records transmitted
(line charges will be paid by Brylane)
5. Technical System Support
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(a) Unplanned software - acquired, installed and billed at cost
(b) Routine support - Up to 200 staff days are included in Item 1(a) above.
Support exceeding this annual level must be agreed to by TJX will be
billed at the Software Rate per hour
(c) Unplanned projects - billed at the Software Rate per hour plus materials
at cost
6. New Technology Support
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Support for Xxxxxx Technologies Project including the Pilot shall not exceed
10 staff days and neither TJX nor any of its subsidiaries or any of their
respective directors, officers, employees, agents or affiliates shall in any
event be liable for any damage or expenses of any kind whatsoever that may
arise out of the Xxxxxx Technology Project or any new technology project for
which support is provided. This paragraph shall survive the termination of
the Computer Services Annex and that of the Services Agreement.
7. Discounts
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A discount on the rates listed in section 1 above will be applied using the
following schedule:
Period of Discount Discount Percent
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During Start-up Period - Twenty (20.0%)
During FY '98 - Ten (10.0%)
During FY '99 - Seven and Half (7.5%)
During FY '00 - Five (5.0%)
8. Technical Training Classes
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Computer-related training classes which are offered to TJX associates will
be made available to Brylane associates on a space available basis. The
classes will be billed to Brylane by TJX.
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ATTACHMENT III
PERFORMANCE LEVELS FOR COMPUTING SERVICES
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SERVICE LEVEL ITEM PERFORMANCE GOAL*
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Hardware/Software Availability 99.5 percent
On-Line Application Availability 98.0 percent
TSO System Availability 99.5 percent
Report Delivery on Schedule 98.0 percent
RESPONSE TIME TARGETS:
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IMS (95th Percentile) 4.0 seconds
CICS (95th Percentile) 4.0 seconds
TSO (95th Percentile) 3.0 seconds
* - These performance goals (which will be calculated on a monthly basis)
assume Brylane's conformance with TJX's operating standards. Conformance
will be measured as part of the technical design document review which is
scheduled to be completed prior to the construction phase of each
development project
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