Exhibit 99.2
November 21, 2003
BY HAND DELIVERY
Xx. Xxx Xxxxx
Chief Executive Officer and Chairman of the Board of Directors
Bluefly, Inc.
00 Xxxx 00 Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xxx:
The purpose of this letter agreement (this "Agreement") is to outline
the terms of my separation with Bluefly, Inc. ("Bluefly" or the
"Company"). Pursuant to the terms set forth in this Agreement, I hereby
resign my employment with the Company as its Executive Vice President
and Corporate Secretary as of the date first written above. The Company
hereby acknowledges and agrees that my resignation of employment shall
be deemed a "Constructive Termination" pursuant to Section 7a(iii) of
that certain Employment Agreement (the "Employment Agreement") dated as
of July 31, 2002 by and between the Company and me, and the Company
hereby irrevocably waives its right to written notice as required under
Section 7a(iii) of the Employment Agreement.
As such, the Company agrees that I am entitled to all the rights,
powers and privileges afforded to me under Sections 4(b), 7(b) and 12
of the Employment Agreement and all stock option agreements by and
between me and the Company in the case of a Constructive Termination. I
confirm that there are no bonuses that have been earned and awarded but
not yet paid within the meaning of Section 7b of the Employment
Agreement. Pursuant to Section 7b of the Employment Agreement, I and
the Company hereby agree to the following mutual release.
Subject to the limitations set forth in immediately following sentence,
I, my attorneys, heirs, executors, administrators and assigns do hereby
fully, finally and forever release and discharge the Company, and its
related companies, successors, assigns, officers, directors, agents and
employees, of and from all claims, demands, actions, causes of actions,
suits, damages, losses, expenses, attorneys' fees and controversies of
any and every nature whatsoever arising from the beginning of time
until the date of this Agreement, including, but not limited to, any
claims arising from, or relating in any way to, my employment and the
termination of my employment from the Company. This release includes an
agreement not to xxx or otherwise pursue any claim against the Company
or the other released parties, and it covers, among others, any claims
arising under the the Fair Labor Standards Act, Title VII of the Civil
Rights Act of 1964, the Equal Pay Act, the Americans With Disabilities
Act, the Family and Medical Leave Act, and the New York State Human
Rights Law or any other federal, state or local statute, ordinance,
regulation or common law relating to employment or employment
discrimination, excepting only claims under the Workers' Compensation
and Unemployment Compensation laws. However, I do not waive any rights
or claims the basis of which is action or inaction occuring after the
date this Agreement is executed, or any rights to enforce this
Agreement or the severance provisions of Section 7(b) of the Employment
Agreement or a claim to enforce Section 4(b) or Section 12 of the
Employment Agreement or any related stock option agreement.
The Company, its successors, assigns, officers, directors, agents,
employees and affiliates do hereby fully, finally and forever release
and discharge me and my heirs, executors, administrators and assigns
from all claims, demands, actions, causes of actions, suits, damages,
losses, expenses, attorneys' fees and controversies of any and every
nature whatsoever arising from the beginning of time until the date of
this Agreement, including, but not limited to, any
claims arising from, or relating in any way to, my employment and the
termination of my employment from the Company. This release includes an
agreement not to xxx or otherwise pursue any released claim against me,
and my heirs, executors, administrators and assigns. However, the
Company does not waive any right to enforce the provisions of Section 9
of the Employment Agreement or Section 6 of the Employment Agreement.
In addition to the severance benefits due to me pursuant to the
Employment Agreement and related stock option agreements, the Company
and I agree to enter into, as soon as reasonably practicable, a
Professional Services Agreement in the form of Exhibit A attached
hereto (the "Professional Services Agreement"). The parties acknowledge
and agree that a breach by either party under the Professional Services
Agreement shall not be a breach under this Agreement.
The Company and I acknowledge and agree that the decision to sign this
Agreement is completely voluntary and uncoerced, and that each party is
entering into this Agreement with a full understanding of its terms and
effect. The Company and I represent and warrant to each other that: (i)
this Agreement has been duly authorized, executed and delivered; (ii)
this Agreement, assuming due execution and delivery by me, constitutes
the legal, valid and binding obligations of such person, enforeceable
against such person in accordance with the terms hereof; and (iii) the
execution, delivery or performance by such person of this Agreement or
the consummation of the transactions contemplated hereby do not
contravene any applicable law, rule, order or regulation to which such
person is subject nor shall it result in any breach, constitute a
default, or contravene any provision of any agreement or instrument to
which the Company is a party or by which it or he is bound.
This Agreement shall be governed by and interpreted in accordance with
the internal laws of the State of New York (without regard to conflicts
of law principles). Any controversy or claim arising under this
Agreement shall be resolved in the manner described in Section 11 of
the Employment Agreement. This Agreement shall constitute the entire
and exclusive agreement between the parties with respect to the matters
addressed herein, and this Agreement may not be modified except in
writing signed by both parties.
If any terms or provisions of this Agreement shall, to any extent and
under any circumstance, be illegal, invalid or unenforceable, the
remainder of this Agreement shall not be affected thereby and shall be
valid and enforceable to the extent permitted by law.
[This page intentionally ends here.]
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Accepted and Agreed to:
/s/ Xxxxxxxx Xxxxxx
----------------------
Name: Xxxxxxxx Xxxxxx
AGREED TO:
BLUEFLY, INC.
By: /s/ E. Xxxxxxx Xxxxx
-----------------------
Name: E. Xxxxxxx Xxxxx
Title: Chief Executive Officer and Chairman of the Board of
Directors
WITTNESSED:
By: /s/ Xxxxx Xxxxxxx
--------------------
Name: Xxxxx Xxxxxxx
Title: Member of the Board of Directors of Bluefly, Inc.
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Exhibit A
PROFESSIONAL SERVICES AGREEMENT
This Agreement (the "Agreement") is entered into as of the ____ day of
____________, 2003, by and between BLUEFLY, INC. ("Bluefly"), with its principal
offices located at 00 Xxxx 00 Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Xxxxxxxx
Xxxxxx ("Consultant").
WITNESSETH
WHEREAS, Consultant desires to provide and Bluefly desires to obtain
from time to time professional consulting and advisory services;
NOW THEREFORE, in consideration of the mutual covenants and premises
contained herein and the fees paid and to be paid by Bluefly in connection with
the Services (as hereinafter defined), the parties hereto agree as follows:
1. SERVICES
1.1 Services Provided. In accordance with the terms and conditions
of this Agreement, Consultant agrees to provide to Bluefly such professional,
consulting and advisory services as the parties shall from time to time agree
(collectively, the "Services"). Consultant shall not subcontract any Services or
use any other party to provide Services without the prior written approval of
Bluefly, which approval may be withheld in Bluefly's sole discretion.
1.2 Time and Place. Consultant shall provide the Services at times
and places mutually agreed upon by Bluefly and Consultant.
1.3 Independent Contractors. Consultant agrees that he shall be
considered an independent contractor and that he shall not be deemed to be an
employee of Bluefly. Consultant shall not be entitled to any employee benefits
of Bluefly. Bluefly shall not withhold taxes or Social Security payments from
any sum paid to the Consultant under this Agreement, except as required by law.
Consultant shall have no authority to bind Bluefly, and shall not hold himself
out as having such authority.
1.4 Representations and Warranties. Each of the parties represents
and warrants to the other that: (i) this Agreement has been duly authorized,
executed and delivered; (ii) this Agreement, assuming due execution and delivery
by the other, constitutes the legal, valid and binding obligations of such
party, enforeceable against the Company in accordance with the terms hereof; and
(iii) the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby do not contravene any
applicable law, rule, order or regulation to which the Company is subject nor
shall it result in any breach, constitute a default, or contravene any provision
of any agreement or instrument to which the Company is a party or by which it is
bound.
1.5 Activities Upon Expiration or Termination. Upon expiration or
termination of this Agreement Consultant agrees to (a) cease all activities
related to such Services, and (b) deliver to Bluefly all copies of Bluefly
Confidential Information (as defined in Section 4.1 below), source code,
supporting documentation, work papers and other tangible embodiment of the
results of the Services performed to date (whether complete or partially
complete), including without limitation the Work Product (as defined in Section
4.2 below).
2. COMPENSATION AND EXPENSES
2.1 Compensation for Services. Bluefly shall pay Consultant a
weekly fee of Four Thousand Five Hundred Dollar ($4,500) during the term of this
Agreement; provided that such fee shall accrue and the accrued amount paid out
at the rate of $4,500 per week beginning six months after the commencement of
the term of this Agreement; further provided that such payments shall be
deferred and shall continue to be accrued to the extent of the amount of any
consulting fees being earned for work performed following such six month period
and such further deferred and accrued fees paid out such that the total payment
of deferred and accrued fees and fees for current services do not exceed $4,500
in any week..
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2.2 Expenses. Bluefly shall reimburse Consultant for actual,
reasonable, documented out-of-pocket expenses that are incurred by Consultant in
connection with the Services.
3. TERM AND TERMINATION
3.1 Term. Unless earlier terminated as provided below, the term of
this Agreement shall commence on _______, 2003 and shall continue until
terminated by either party .
3.2 Termination.
This Agreement may be terminated at any time by either party
for any reason or no reason at all by providing written notice to the other in
its sole discretion.
4. CONFIDENTIALITY AND PROPRIETARY RIGHTS
4.1 Non-Disclosure and Non-Use of Confidential Information.
(a) Consultant agrees to keep in strictest confidence all Bluefly
Confidential Information. As used herein, "Bluefly Confidential Information"
shall mean any and all technical and non-technical information provided by
Bluefly to the other, including but not limited to (a) patent and patent
applications, (b) trade secret, and (c) proprietary information, including but
not limited to, ideas, techniques, sketches, drawings, works of authorship,
models, inventions, know-how, processes, apparatuses, equipment, algorithms,
software programs, software source documents, and formulae related to the
current, future, and proposed products and services of each of the parties, and
including, without limitation, their respective information concerning research,
experimental work, development, design details and specifications, engineering,
financial information, procurement requirements, purchasing, manufacturing,
customer lists, investors, employees, business and contractual relationships,
business forecasts, sales and merchandising, marketing plans and information
Bluefly provides regarding third parties
(b) Consultant agrees that all Bluefly Confidential Information is
very valuable, is deemed to be a trade secret (notwithstanding any public
disclosure thereof by any source), and will be protected by civil and criminal
law, and, where appropriate, by the law of copyright.
(c) Consultant further agrees not to use or permit the use of any
Bluefly Confidential Information for the benefit of anyone other than Bluefly.
(d) Consultant agrees not to copy, reprint, duplicate, or recreate
in whole or in part, alone or in combination with anything else, Bluefly
Confidential Information without the prior express written consent of Bluefly.
(e) Consultant covenants that upon demand therefor or upon the
completion of the Services, any termination or expiration of this Agreement
without demand therefor, it will deliver to Bluefly (or destroy and certify to
the destruction of) all copies of any and all Bluefly Confidential Information
and all materials related or pertaining to this Agreement, including, but not
limited to, information and materials resident in the memory of any computer,
any relevant planning data, technical and programming documentation and files,
and will not retain any Bluefly Confidential Information in any form without the
prior written consent of Bluefly.
(f) The foregoing obligations of confidentiality and non-use shall
not apply to any information (i) which is otherwise publicly available,
provided, however, that information shall not be disqualified as Confidential
Information (A) merely because it is embraced by more general or generic
information which is in the public domain or available from a third party, or
(B) if it can only be reconstructed from information taken from multiple
sources, none of which individually shows the whole combination (with matching
degree of specificity), its principle of operation and/or the relevant use or
method of use, as applicable, (ii) which the receiving party can demonstrate
through tangible evidence was in the receiving party's possession prior to
disclosure by the disclosing party, (iii) which is rightfully received from a
third party and not derived directly or indirectly from any breach of a
confidentiality obligation, or (iv) which the receiving party shall have
received from the disclosing party written permission to disclose.
(g) Consultant agrees that any breach of this Section 4.1 will
cause irreparable damage to Bluefly and that in the event of such breach Bluefly
shall have, in addition to any and all remedies of law, the right to an
injunction, specific performance or other equitable relief to prevent the
violation of Consultant's obligations hereunder.
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4.2 Assignment of Work Product.
(a) Consultant agrees that all inventions, improvements,
discoveries or developments including, but not limited to, web sites, content,
computer software, source code, specifications, designs, documentation, and
other materials developed or authored by Consultant which Consultant may make or
conceive, either solely or jointly with others, which arise out of the Services
provided hereunder or relate to the Project or exposure to Bluefly Confidential
Information (collectively, "Work Product"), are a work made for hire and are the
exclusive property of Bluefly free from any claim or retention of rights thereto
on the part of Consultant (including for the purposes of copyright). In addition
to the immediately preceding sentence and other than where the Work Product is
considered a work made for hire, Consultant agrees to and does hereby grant,
convey, and assign to Bluefly absolutely and exclusively all such Work Product
and all intellectual property rights therein (including, but not limited to, all
copyrights and patents).
(b) Consultant agrees to promptly and fully disclose, in writing,
all Work Product to Bluefly and to deliver to Bluefly, at its request, the
source code and all supporting documentation for any and all Work Product.
(c) Consultant agrees, at the request and expense of Bluefly and
without charge beyond the charges provided pursuant to this Agreement, to
execute all instruments and documents and to do all things which may be
reasonably necessary to protect the rights of Bluefly and vest in Bluefly and
its assigns all such Work Product and all intellectual property rights therein.
4.3 Consultant's General Skill and Knowledge. Notwithstanding
anything to the contrary contained herein, it is expressly understood by and
agreed between the parties that Consultant shall be free to use and employ its
general skill, know-how, and expertise and to use and employ any generalized
ideas, concepts, know-how, methods, and techniques learned or acquired in the
creation or development of the Work Product or in the course of providing
Services hereunder, so long as it acquires and applies such information without
disclosure of any Bluefly Confidential Information and without any infringement,
misappropriation or unauthorized use or disclosure of any Work Product including
the intellectual property rights therein or any other proprietary or
intellectual property right of Bluefly.
4.4 Survival. The provisions of Sections 4.1, 4.2, and 4.4 shall
survive completion of the Services and/or termination this Agreement in
perpetuity. The representations and warranties and covenants contained in
Section 1.6 shall survive for a period of two (2) years following the earlier of
(a) completion of the Services or (b) termination of this Agreement.
5. INDEMNIFICATION
5.1 Bluefly agrees that it shall to the fullest extent permitted
by law indemnify and hold Consultant harmless and shall pay and reimburse
Consultant for any loss, cost, damage, injury or other expense (including
without limitation reasonable attorneys' fees) which Consultant incurs by reason
of being or having been a consultant or advisor to the Company or by reason of
the fact that Consultant is or was serving at the request of the Company. All
indemnification shall be paid by Bluefly in advance of the final disposition of
the matter (as incurred by Consultant) provided that Xxxxxx executes and deliver
to Bluefly an undertaking to repay any amounts so advanced in the event that it
shall be determined that Consultant is not entitled to indemnification
hereunder. This indemnification obligation is in addition to any other
indemnification provision contained in the Company's By-laws or pursuant to any
other document, instrument or agreement and shall survive the term of
Consultant's services hereunder.
5.2 In the event that Consultant asserts his right of
indemnification under Section 5.2 above, Bluefly shall have the right to select
Consultant's counsel provided that there is no material conflict of interest
between Bluefly and Consultant and provided such counsel is reasonably
acceptable to Consultant. Notwithstanding the foregoing, Bluefly shall have the
right to participate in, or fully control, any proceeding, compromise,
settlement, resolution or other disposition of the claim or proceeding so long
as Consultant is provided with a general release from Bluefly and the claimant
in form and substance reasonably satisfactory to Consultant and no restrictions
are imposed on Consultant as a result of the settlement.
6. GENERAL
6.1 Non-Solicitation of Employees. Consultant agrees that without
the prior written consent of Bluefly it will not hire or cause to be hired any
of Bluefly's employees, or induce any of Bluefly's employees to leave their
employment, from the expiration or termination of this Agreement through a date
one (1) year thereafter.
6.2 Modification. This Agreement can only be modified by a written
agreement duly signed by Consultant and the persons authorized to sign
agreements on behalf of Bluefly and variance from the terms and conditions of
this Agreement will be of no effect.
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6.3 Severability of Provisions. If any provision or provisions of
this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or be impaired thereby.
6.4 Entire Agreement. This Agreement is the complete and exclusive
statement of the agreement between the parties as to the subject matter hereof
which supersedes all proposals or agreements, oral or written, and all other
communications between the parties related to the subject matter of this
Agreement.
6.5 Assignments. This Agreement and Consultant's rights, duties,
and obligations under this Agreement are not transferable, delegable or
assignable by Consultant without the prior written consent of Bluefly. Bluefly
may assign this Agreement, or any of its rights or responsibilities hereunder to
a party who acquires a majority of the voting equity of Bluefly, merges with or
into Bluefly or a purchaser of all or substantially all of the assets of
Bluefly.
6.6 Agreement Binding. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors, and permitted assigns.
6.7 Governing Law; Venue. This Agreement shall be deemed a
contract made under, and for all purposes shall be construed in accordance with,
the laws of the State of New York, without giving effect to its conflict of law
provisions. Except as set forth below, any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, shall be resolved by
arbitration in accordance with the rules of the American Arbitration Association
(the "AAA") then pertaining in the City of New York, New York, by a single
arbitrator to be mutual agreed upon by the parties or, if they are unable to so
agree, by an arbitrator selected by the AAA. The parties shall be entitled to a
minimal level of discovery as determined by the arbitrator. Judgment upon any
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
6.8 Authority. Each party represents that it has full power and
authority to enter into and perform this Agreement, and the person signing this
Agreement on behalf of Bluefly represents that it has been properly authorized
and empowered to enter into this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Professional
Services Agreement effective the day and year first above written.
BLUEFLY, INC.
By:
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Name: E. Xxxxxxx Xxxxx
Title: Chief Executive
Officer
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Name:
Title:
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