Current Report — Form 8-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 8-K Current Report 3± 16K
2: EX-2 Asset Purchase Agreement 17± 60K
3: EX-3.(I) Amended and Restated Operating Agreement 27± 95K
4: EX-4 Agreement 6± 25K
5: EX-5 Servicemark License Agreement 7± 29K
6: EX-6 Credit Card Agreement Correspondence 2± 10K
7: EX-7 Amended and Restated Warrant Agreement 10± 43K
8: EX-8 Amended and Restated Registration Rights Agreement 15± 63K
EX-4 — Agreement
EXHIBIT 4
AGREEMENT
THIS AGREEMENT is made as of July 27, 1996 between Signature
Financial/Marketing, Inc., a Delaware corporation ("Signature") and ValueVision
International, Inc., a Minnesota corporation ("VVI"), which term shall include
VVI's Affiliates.
R E C I T A L S
A. Signature and its subsidiaries are subsidiaries of Montgomery Ward &
Co., Incorporated, an Illinois corporation ("MW"). Signature and its
subsidiaries are referred to herein collectively as the "Signature Companies".
B. Pursuant to an Asset Purchase Agreement of even date herewith,
Montgomery Ward Direct, L.P., a Delaware limited partnership which is a wholly
owned subsidiary of MW ("MWD") is selling, and ValueVision Direct Marketing
Company, Inc., a Minnesota corporation which is a wholly owned subsidiary of VVI
is purchasing, substantially all of the assets of MWD. Following the purchase of
such assets, VVI will engage in a direct-mail and catalog business using certain
service marks of MW and offering MW's private label credit card, pursuant to an
Amended and Restated Operating Agreement of even date herewith between MW and
VVI (the "Amended and Restated Operating Agreement"). Capitalized terms which
are not otherwise defined herein shall have the meanings ascribed to them in the
Amended and Restated Operating Agreement.
C. VVI desires that the Signature Companies provide certain services to
VVI in connection with the VVI Catalog Business, and Signature desires to cause
the Signature Companies to provide such services.
D. Signature desires that, in connection with both Television Home
Shopping and the VVI Catalog Business, VVI promote both the use of the Card and
credit protection programs offered from time to time by the Signature Companies,
and VVI is willing to do so.
A G R E E M E N T S
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. List Support Services. For a period of three years, commencing on
the date hereof, Signature shall cause the Signature Companies to provide the
following list support services to VVI for the benefit of the VVI Catalog
Business (collectively, "Services"):
(a) the Signature Companies will provide list selection
support for the VVI Catalog Business, consisting of the following:
(i) prospecting for new buyers from the marketing
activity file;
(ii) selections of existing catalog buyers to
stimulate repeat purchasing, from the catalog buyer file which
presently is maintained for MWD by Fingerhut Companies, Inc.;
(iii) assistance in selection of potential catalog
buyers from customer lists rented or otherwise obtained
by VVI;
(iv) supplying marketing activity file and Cardholder
extract file data to VVI for its own research, modeling and
analysis, including the merge/purge of the data with VVI's
data file; and
(v) consulting with VVI employees related to any
modeling or research that VVI may conduct on its own.
List selection support shall include selection of promotable accounts,
elimination of do not solicits, merge/purge across lists, application
of scoring systems, and creation of final output files. VVI will
provide criteria to the Signature Companies from time to time in order
for the Signature Companies to generate mailing lists meeting VVI's
criteria. Signature will provide a magnetic tape or disc, on a monthly
basis, in machine readable form, for use by VVI in mailing catalogs to
customers and prospective customers in accordance with the rights
granted under the Operating Agreement and the Related Agreements. Such
list selection support shall be of a nature comparable to that which
Signature provides itself in the conduct of its own businesses;
(b) the Signature Companies will provide such research support
for the VVI Catalog Business as VVI shall reasonably require, including
creation of scoring systems, back-end analysis of mailings, and
recommendations of file depth for scored mailings. Research will also
include special analyses such as merchandise cross shopping habits or
frequency of purchase across cardholders. Such research support shall
be in the form of written reports or analyses of data in a form
comparable to that used by Signature in the conduct of its own
businesses;
(c) in providing Services for VVI, Signature shall use the
same standard of care as it uses with respect to the processing of its
own data of similar kinds. Signature shall use its existing data
processing systems for the provision of Services and shall not be
required to acquire any additional computer hardware or software.
Signature shall provide the services of trained associates, who shall
devote substantially all of their business time and attention to the
performance of Services pursuant to this Agreement. Signature presently
estimates that the services of four associates shall be required for
the performance of Services, but staffing levels shall be in
Signature's sole discretion;
(c) as compensation for the Services to be rendered pursuant
to this paragraph 1, VVI shall reimburse Signature for its out of
pocket costs for performing such Services, including (i) salaries or
wages, fringe benefits and employment taxes with respect to associates
dedicated to the performance of Services, (ii) any necessary travel or
other out of pocket expenses, (iii) costs of media and postage, and
(iv) cost of data overlays. Signature shall provide monthly invoices to
VVI, setting forth the amounts of such costs in reasonable detail with
respect to the previous month. Terms of payment of such invoices shall
be net 30 days from the invoice dates. In the event VVI shall fail to
pay any invoice when due, and such failure shall continue for a period
of 30 days after Signature shall have delivered written notice to VVI,
Signature shall have the right to suspend the furnishing of Services
until such delinquency has been cured.
2. Credit Insurance Products. In connection with the VVI Catalog
Business and Television Home Shopping, Signature shall make available for sale
by VVI from time to time those credit insurance products which Signature deems
appropriate, and shall provide to VVI, without charge, a reasonable number of
copies of all literature used generally by Signature in connection with the
promotion of such insurance products for use by VVI in catalog mailings to its
customers. Signature shall have the sole right to approve any application for a
credit insurance product procured by VVI. VVI shall refer all such customers who
express an interest in purchasing credit insurance to a licensed insurance agent
(who may be an employee of one of the Signature Companies) for the sale of such
credit insurance product. For each approved application for such a credit
insurance product, Signature shall cause one of the Signature Companies to pay
to VVI the sum of $25. Such payments shall be made monthly with respect to
applications accepted during the preceding month.
3. Card Solicitations. Pursuant to the Restated Receivables Sale and
Purchase Agreement, VVI shall have the right to offer the use of the Card to
prospective purchasers of Product through Television Home Shopping or the VVI
Catalog Business. For each approved application for a Card which VVI shall
procure, Signature shall cause one of the Signature Companies to pay to VVI the
sum of $5. Such payments shall be made monthly with respect to applications
approved during the preceding month.
4. Term. Subject to the remainder of this paragraph 4, the provisions
of paragraphs 2 and 3 shall continue in effect for the duration of the Term. In
the event the Operating Agreement shall be terminated for any reason prior to
the end of the Term, this Agreement shall terminate concurrently with the
termination of the Operating Agreement. No termination of this Agreement shall
affect any rights which arose prior to termination.
5. Notices. All notices, demands, requests or other communications
which may be or are required to be given pursuant to this Agreement or any of
the Related Agreements shall be in writing and shall be personally delivered,
mailed by first-class,registered or certified mail, postage prepaid, or sent by
electronic or facsimile transmission, addressed as follows:
If to VVI:
ValueVision International, Inc.
6740 Shady Oak Road
Minneapolis, Minnesota 55344
Attention: Chief Executive Officer
with a copy to:
Maslon, Edelman, Borman & Brand, a
professional limited liability partnership
3300 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-4140
Attention: William M. Mower
If to Signature:
Signature Financial/Marketing, Inc.
200 N. Martingale Road
Schaumburg, Illinois 60173-2096
Attention: General Counsel
with a copy to:
Altheimer & Gray
Suite 4000
10 South Wacker Drive
Chicago, Illinois 60606
Attention: Myron Lieberman
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request or communication which shall be delivered, mailed
or transmitted in the manner described above shall be deemed sufficiently given,
served, sent or received for all purposes at such time as it is delivered to the
addressee or at such time as delivery is refused by the addressee upon
presentation.
6. Severability. Whenever possible, each provision of this Agreement
and the Related Agreements shall be interpreted in such a manner as to be
effective and valid under applicable law, but if one or more of the provisions
of any of such documents are subsequently declared invalid or unenforceable,
such invalidity or unenforceability shall not in any way affect the validity or
enforceability of the remaining provisions of such documents, which shall be
applied and construed so as to reflect substantially the intent of the parties
and achieve the same economic effect as originally intended by the terms hereof,
unless those provisions which are invalidated or unenforceable are material to
the performance of either party's affirmative or negative obligations under the
relevant agreement, in which case the entire such agreement shall be terminable,
at the option of the party whose rights thereunder have been adversely affected
thereby, provided that such party must exercise its option to terminate such
agreement within ninety (90) days following the date on which such provision is
declared or determined to be invalid, voidable or unenforceable and the other
party must be given sixty (60) days in which to agree to a valid modification of
such agreement which would substantially eliminate such adverse effects.
7. Force Majeure. No party shall be liable for any failure of or delay
in the performance of this Agreement or the Related Agreements for the period
that such failure or delay is due to acts of God, public enemy, war, strikes or
labor disputes, or any other cause beyond the parties' reasonable control, it
being understood that lack of financial resources is not to be deemed a cause
beyond a party's control. If the delay or failure caused by such force majeure
condition shall continue for more than ninety (90) days, the party which did not
suffer the event shall have the right, in its sole discretion, to terminate this
Agreement, by giving notice to the other party of its election to terminate.
Each party shall notify the other party promptly of the occurrence of any such
cause and carry out this Agreement as promptly as practicable after such cause
is terminated; provided, however, that the existence of any such cause shall not
extend the term of any agreement.
8. Waivers. Neither the waiver by any party hereto of a breach of or a
default under any of the provisions of this Agreement , nor the failure of any
party hereto, on one or more occasions, to enforce any of the provisions of any
of said documents or to exercise any right, remedy or privilege hereunder shall
thereafter be construed as a waiver of any such provisions, rights, remedies or
privileges hereunder. Any of the terms, covenants, representations, warranties,
or conditions hereof and thereof may be waived only by a written instrument
executed by the party waiving compliance.
9. Exercise of Rights. No failure or delay on the part of any party
hereto in exercising any right, power or privilege under this Agreement, and no
course of dealing between the parties hereto shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege under
any of such documents preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
10. Binding Effect. Subject to the provisions hereof and thereof
restricting assignment, this Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective successors and permitted
assigns.
11. Entire Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the matters contained herein and
therein, and supersede all prior oral or written agreements, commitments or
understandings with respect to the matters provided for herein.
12. Pronouns. All pronouns and any variations thereof used in this
Agreement and the Related Agreements shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as the identity of the Person or the
context may require.
13. Headings. Section headings contained in this Agreement and the
Related Agreements are inserted for convenience of reference only, shall not be
deemed to be a part of such Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.
14. Governing Law. This Agreement, the rights and obligations of the
parties hereto and thereto, and any claim or disputes relating to any thereof,
shall be governed by and construed in accordance with the internal laws of the
State of Illinois, without giving effect to the principles of conflicts of laws
thereof.
15. Execution in Counterparts. To facilitate execution, this Agreement
may each be executed in as many counterparts as may be required, and it shall
not be necessary that the signatures of, or on behalf of, each party, or that
the signatures of all Persons required to bind any party, appear on each
counterpart; but it shall be sufficient that the signature of, or on behalf of,
each party, or that the signatures of the Persons required to bind any party,
appear on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making proof of this
Agreement to produce or account for more than the number of counterparts
containing the respective signatures of, or on behalf of, all of the parties
hereto.
16. Assignment. Neither party may assign its rights under this
Agreement without the consent of the other party, which consent may be granted
or withheld in the sole discretion of such other party. No permitted assignment
shall relieve the assignor of its obligations (which shall be primary and which
may be discharged in whole or in part by the assignee) under this Agreement. Any
unauthorized assignment and any assignment made in contravention of this Section
16 shall be null and void.
17. Time. Time is to be considered of the essence for the purposes of
this Agreement.
18. Amendments and Modification. This Agreement may only be amended or
modified by a subsequent written agreement by the parties hereto.
19. Construction. This Agreement shall not be construed more strictly
against one party than against the other merely by virtue of the fact that such
document may have been prepared primarily by counsel for one of the parties, it
being recognized that both parties have contributed substantially and materially
to the preparation of such documents.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the date first set forth above.
SIGNATURE FINANCIAL/MARKETING, INC. VALUEVISION
INTERNATIONAL, INC.
BY: /s/ John Workman BY: /s/ Robert L. Johander
----------------------------- --------------------------------------
TITLE: Assistant Secretary TITLE: Chairman and Chief Executive Officer
--------------------------- ------------------------------------
Dates Referenced Herein and Documents Incorporated by Reference
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