Exhibit 10.30
THIRD AMENDMENT TO LICENSE AGREEMENT
This Third Amendment to License Agreement is entered into as of this 22nd day of
February, 2002 by and between Today's Man, Inc., a Pennsylvania corporation
("Licensor") and LFD Today, Inc., a Delaware corporation, (assignee of JBI,
Inc.), ("Licensee").
WITNESSETH
WHEREAS, Licensor and Licensee entered into that certain License
Agreement dated July 20, 1995 and that certain First Amendment to License
Agreement dated as of February 10, 2000, and that certain Second Amendment to
License Agreement dated May 18, 2001 (collectively, the "License Agreement"),
providing for the operation of licensed footwear departments (the "Shoe
Departments") in certain of Licensor's stores (the "Stores") as more
particularly described in the License Agreement; and
WHEREAS, Licensor and Licensee desire to amend and modify the terms and
provisions of the License Agreement upon the terms and conditions contained
herein.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto covenant and agree as follows:
1. The License Agreement shall be amended as follows:
A. The following shall be inserted at the end of Section 1 of the
Agreement:
On or about March 1, 2002 but no later than March 15, 2002 Licensor
shall assume operation of the Shoe Departments in the Stores listed in
Exhibit A ("Existing Stores") in a manner commensurate with the
balance of each Store. Existing Stores shall be included within the
definition of Store and Stores as used herein. Licensee shall convert
the three (3) existing full service Shoe Departments as identified on
Exhibit A to self-service Shoe Departments prior to Licensor's
assumption of operations. Licensee shall continue to operate the Shoe
Departments until such time as Licensor assumes such operations.
B. Upon such date as Licensor assumes operation of the Shoe Departments,
Section 1.1 License, shall be deleted in its entirety and replaced
with the following:
1) Licensor grants to Licensee the exclusive right and license to
use and occupy each Store on the terms and conditions contained
in the Agreement in order to make its Footwear available for sale
in Shoe Departments within the Stores and Licensee agrees to make
its Footwear so available.
2) Licensor shall give Licensee the option in Licensee's sole
discretion to make Footwear available at Licensor's six (6)
existing mall based Stores as well as any future Stores in excess
of 3,000 square feet ("Additional Stores") which are hereafter
opened by Licensor. If Licensee exercises such option to make its
Footwear available in any Additional Stores, Exhibit A shall be
modified as necessary to reflect such Additional Stores. Any Shoe
Departments located within Additional Stores shall be opened on
such date as Licensor and Licensee shall mutually agree and shall
be operated by Licensor in a manner commensurate with the balance
of each Store. Additional Stores with Shoe Departments shall be
included within the definition of Store and Stores.
3) In each Existing Store, the Shoe Department shall consist of the
selling space, storage space and aisle space currently allocated.
The selling space allocated to the Shoe Department in Additional
Stores shall be mutually agreed upon, but in no event will the
selling space be less than can accommodate the number of pairs of
shoes outlined below:
Total Store Selling Space Minimum Shoes on
Selling Floor
3,000 - 3,999 Sq. Ft. 300
4,000 - 4,999 Sq. Ft. 400
5,000 Sq. Ft. and above 500
Fixture configuration should follow the specifications in
Exhibit B, but may be changed upon mutual agreement, only in
stores which do not fit a standard store box layout.
The location of the Shoe Departments may, upon sixty (60) days
written notice to Licensee be relocated by Licensor, at
Licensor's full expense, provided however, that such
relocation is a comparable in site and location to the
existing space.
C. Section 1.2, Use, shall be deleted in its entirety and replaced with the
following:
1.2 Use. Subject to the other terms and conditions of this Agreement,
Licensee shall carry in the Shoe Departments a complete stock of
first-quality, seasonable, saleable merchandise of such quality and in such
quantity as it is necessary to meet the competitive conditions in the trade
area of the Store in which said Shoe Department is located and with a
pricing structure similar to Licensor's pricing structure. Licensee shall
exercise its reasonable efforts to meet objectives established by Licensor
with respect to the brands of Footwear carried, the depth of merchandise
assortment, the quantity of merchandise carried and the price
competitiveness of such merchandise in
2
light of local competitive conditions, provided that Licensee
shall at all times retain reasonable discretion as to the manner
in which it seeks to satisfy such objectives.
D. Section 1.3, Philadelphia Stores, shall be deleted in its entirety.
E. Section 3.1, License Fee, shall be amended by adding the following:
1) Beginning March 1, 2002 or such other date as Licensor assumes
operation of the Shoe Departments, the License Fee payable by Licensor
to Licensee shall be twelve and one-half percent (12.5%) of Net Sales.
2) In addition to the License Fee payable by Licensee to Licensor
hereunder, beginning March 1, 2002 or such other date as Licensor
assumes operation of the Shoe Departments, Licensee shall pay Licensor
the following fees which may be deducted from Licensee's weekly sales
remittance:
(a) Operation Fee: Licensee shall pay Licensor a fee equal to eight
percent (8%) of Net Sales to cover costs associated with
Licensor's operation of the Shoe Departments; and
(b) Advertising Fee: Licensee shall pay Licensor a fee equal to four
percent (4%) of Net Sales to cover costs associated with
Licensor's advertising of Licensee's Footwear as set forth
herein.
3) Delivery and Ticketing Fee: Upon such date as Licensee begins delivery
and ticketing of Footwear through Licensor's warehouse and
distribution facilities, Licensee shall pay Licensor a fee equal to
one-half of one percent (.5%) of Net Sales to cover costs associated
with such delivery and ticketing of Licensee's merchandise.
F. Section 3.2, Handling of Cash and Payment, shall be deleted in its entirety
and replaced with the following:
3.2 Handling of Cash and Payment:
(a) All monies from sales in or emanating from the Shoe Departments
shall initially be paid directly to and handled directly by
Licensor's cashiers (which shall include point-of-sale (POS) and
price look-up (PLU) capability) on behalf of Licensee and shall
in no event be handled by any representative or employee of
Licensee. Licensor shall maintain at no additional cost to
Licensee all cash registers and terminals necessary to conform to
the Licensor's methods of day to day business and shall
accurately record all transactions pertaining to Licensee's
merchandise under a separate department number assigned only to
Licensee. By Store, through Licensor's central bar code,
electronic data capture systems, or by other comparable means,
Licensor shall accurately capture and record each of Licensee's
sales transactions including SKU number and size
3
(b) (provided, that Licensee encodes all such information on bar
codes contained on the sales ticket) and Net Sales amount in each
Store and shall make such captured and recorded sales data
available on a daily basis to Licensee.
(c) Licensor shall collect on behalf of Licensee, the purchase price
from customers for sales of Licensee's Footwear merchandise at
the Store. Licensee's sales receipts shall include cash sales,
sales by check, sales by credit card, sales by debit card and the
amount of the purchase price from sales purchased on credit at
the time of sale or deferred payment terms at the time of
payment. Licensor shall remit via wire transfer of immediately
available funds, one hundred percent (100%) of Licensee's Net
Sales collected during each week to the Licensee on or before
Tuesday of the following week, by 5:00 p.m. Eastern Standard
Time. Licensor shall deduct from such remittance the License Fee,
Advertising Fee, Operation Fee and Delivery and Ticketing Fee
with respect to the Net Sales for the week to which such
remittance of Licensee's Net Sales relates and any other amount
then due and payable from Licensee under this Agreement. Each
remittance shall be accompanied by a detailed statement showing
total receipts collected by Store, amounts deducted, amounts
credited and amounts remitted to Licensee.
(d) Within ten (10) business days after the end of each fiscal month
of Licensor during the Term, Licensor shall send to Licensee (i)
a written reconciliation signed by a duly authorized officer of
Licensor, indicating the total of all of Licensee's gross sales
for the previous fiscal month, the amount of discounts and
credits from gross sales which may be deducted therefrom and a
computation of Net Sales, the amount of the License Fee,
Advertising Fee, Operations Fee and Delivery and Ticketing Fee
paid to date for such fiscal month and the balance of the Net
Sales payable, if any, for such fiscal month and (ii) the balance
of the Net Sales, if any, due Licensee or Licensor for such
fiscal month as shown in such written reconciliation.
(e) All proceeds from the operation of the Shoe Departments shall not
be treated by Licensor as available for working capital purposes
and shall at all times be separately accounted for so as to be
traceable, and shall be retained by Licensor in trust for
Licensee as the exclusive property of Licensee, subject to
payment as provided. It is further confirmed and agreed that all
Net Sales from the sale of Footwear of Licensee to customers,
less applicable License Fees, Advertising Fees, Operation Fees
and Delivery and Ticketing Fees shall be the property of Licensee
from the time of such sale. A separate and distinct accounting
shall be kept by Licensor of all sales of Footwear of Licensee.
G. Section 5, Fixtures, shall be amended by inserting the following:
(1) Licensee, at its sole expense, shall obtain and install all fixtures
and equipment required in order to convert existing full service Shoe
Departments to self-service Shoe Departments.
4
(2) Licensee, at its sole expense, shall obtain and install all fixtures
and equipment necessary for the creation and operation of the Shoe
Departments at each Additional Store in which Licensee, in its sole
discretion chooses to make its Footwear available.
(3) Such fixtures and equipment should be installed at such times as
Licensor and Licensee should mutually agree.
H. Section 6, Advertising shall be deleted in its entirety and replaced with
the following:
SECTION 6: Advertising. Except as set forth herein, any and all advertising
in all of its usual places incidental to the operation of the Stores,
including the choice of media, location of Footwear advertising and all
other matters shall be solely and exclusively within the Licensor's
discretion, determination, sole expense and control. During the Term of
this Agreement, Licensor agrees that it will spend for the advertising and
promotion of the Shoe Department and the Footwear specifically an amount
equal to four percent (4%) of Net Sales during each Annual Period. Licensor
and Licensee shall work together to produce and develop specific
advertising and/or marketing which shall include specific references to
Licensee's Footwear merchandise and/or the Shoe Department. Licensee and
Licensor shall meet regularly to plan monthly and quarterly advertising in
accordance with Licensor's sales promotion calendar. Monthly reports
documenting advertising cost allocations to Licensee and to the Stores will
be provided by Licensor to Licensee. Such monthly reports shall set forth
the total amount of Net Sales, the total amount spent on advertising as
well as the actual percentage of Net Sales spent on advertising during the
applicable month along with reasonably detailed back up documentation
including but not limited to any advertising copy used during the
applicable month. In the event the aforementioned advertising does not meet
or exceed at least two percent (2%) of Net Sales during each Annual Period,
Licensor shall refund Licensee the difference between the actual
advertising costs and two percent (2%) of Net Sales for the applicable
Annual Period, within thirty (30) days of the close of the applicable
Annual Period. Licensee shall retain any co-op or other advertising
allowances, promotional allowances, refunds, rebates or other allowances
paid or provided by any vendor to Licensee with respect to or on account
of, wholly or partially the Footwear offered in the Stores (collectively
"Advertising Allowances") so that Licensee may reduce the net cost of its
Footwear and offer quality Footwear at retail prices which represent a
value to the consumer similar to the quality and value offered by Licensor
with respect to the general stock of Licensor's merchandise carried in the
Stores.
I. Employees:
1) [RESERVED: Transition of Employees]
5
2) Upon such date as Licensor assumes operation of the Shoe Departments,
Section 8 Licensee's Employee's, shall be deleted in its entirety and
replaced with the following:
SECTION 8: Shoe Department Employees
8.1 Staffing of Shoe Departments.
All employees in Licensee's Shoe Departments in the Stores shall be
employed, furnished and paid by Licensor. Licensor shall provide
sufficient fully trained personnel for hours as shall be necessary to
efficiently operate each Shoe Department as determined in consultation
with Licensee. Licensee shall provide reasonable assistance in the
training of Licensor's employees. The responsibilities of such
employees shall include shipping, receiving, storage, customer service
and similar matters. Such employees shall be and shall be deemed to be
employees of Licensor. Licensor's employees who staff the Shoe
Department may have other responsibilities in the store consistent
with Licensor's store policies. Licensee shall give Licensor written
notice regarding any employee of Licensor deemed by Licensee to be
detrimental to the operation of the Shoe Department. Licensor shall
consider Licensee's request to transfer or otherwise remove from the
Shoe Department any employee subject to such written notice. Licensor
agrees to comply with and assume full responsibility under all laws
and regulations governing its employees responsible for Licensee's
Shoe Departments in the Stores. Licensor shall be responsible for all
payments to be made to its employees in such Shoe Departments and for
the provision of Workers Compensation insurance, payroll taxes and
other obligations incurred in hiring and use of such employees.
Licensor shall defend, indemnify and hold harmless Licensee for any
loss, liability or expense to Licensee resulting from any failure by
Licensor to comply with the foregoing or to provide such insurance.
8.2 District Managers. Licensee shall provide that number of district
managers reasonably necessary in Licensee's judgment to advise
Licensor's employees with respect to the operation of Licensee's Shoe
Departments.
Anything in this Amendment to the contrary notwithstanding, Licensee
shall continue to be responsible, as provided in the Agreement as in
effect prior to this Amendment, for its employees who were based in
the Shoe Departments prior to the assumption of the Shoe Departments
by Licensor, including, without limitation, responsibility for
payments of wages, termination payments and severance, applicable
Federal, state and local withholdings, worker's compensation insurance
and other obligations incurred in the hiring, transfer and/or
termination of such with all of the foregoing employees relating to
the employment or termination of employment of such employees by
Licensee.
6
J. Section 10.1, Payment of Employees; Worker's Compensation Insurance;
Certificates of Insurance, shall be deleted in its entirety.
K. Section 12.1, Merchandise, General, shall be modified by deleting the first
sentence thereof in its entirety.
L. The following shall be inserted following Section 12 of the Agreement:
Section 12.3, Delivery. Licensee, upon written notice to Licensor and at
Licensee's sole expense, shall deliver Footwear to Licensor's distribution
centers serving the Shoe Departments. Licensor at its expense, shall ticket
all Footwear and shall distribute such Footwear to the appropriate Shoe
Department as designated by Licensee within seven (7) days of receipt of
such Footwear by Licensor.
M. Section 14, Theft or Damage of Goods, shall be deleted and replaced with
the following:
14. Theft or Damage of Goods. Except for Licensor's obligation with respect
to payment for shrink as set forth herein, Licensor shall not be liable for
any damage to or loss of merchandise or other property of Licensee by
reason of theft, fire, water, power failure, accident, plumbing, heating
apparatus, gas or steam pipes of any kind or nature, bursting, leaking or
running of any pipe in the Store or Distribution Center or from any other
cause whatsoever to merchandise and other property which may at any time be
in the Store or Distribution Center and for all losses or injury to or loss
of its stock from any cause whatsoever.
N. The following shall be inserted at the end of Section 14 of the Agreement:
Shrink. Following Licensor's assumption of operation of the Shoe
Departments, if in any fiscal year of Licensor (or fraction thereof if such
year is at the beginning or end of the term of this License), the shortage,
loss or shrinkage of Licensee's inventory (determined at current retail
price at time of inventory) exceeds two percent (2%) of Net Sales for that
year (or fraction thereof), then Licensor shall pay to Licensee one-half
(1/2) of the amount of Licensee's cost, as computed in accordance with
Licensee's current accounting practices and GAAP consistently applied, as
reflected in Licensee's books and records, of the inventory associated with
such excess shortage, loss or shrinkage in excess of two percent (2%) of
Net Sales. Licensor shall make any payments due pursuant to this Paragraph
within thirty (30) days after the end of the year in which such shortage,
loss or shrinkage occurs.
7
O. Section 19, Ownership of Goods and Fixtures, shall be deleted in its
entirety and replaced with the following:
19. OWNERSHIP OF GOODS, FIXTURES AND PROCEEDS
a) Notwithstanding anything to the contrary in this Agreement, it is
hereby confirmed and agreed that the relationship of Licensor and
Licensee under this Agreement shall be that of licensor and licensee,
and not that of buyer and seller or consignee and consignor. Licensee
shall be the owner, and shall bear the risk of loss of all goods held
by it for sale in the Shoe Departments with all rights of possession
at all times until such time as title passes to the customer
purchasing such goods. Licensee shall also be the owner, and shall
bear all the risk of loss, of all fixtures maintained by it in the
Shoe Departments with all rights of possession at all times. Licensee
shall be deemed for all purposes to be in possession of all such goods
and fixtures located in the Shoe Departments. No consignment, sale or
return, or similar arrangement is created hereby with respect to any
goods held by Licensee for sale in the Shoe Departments or any
fixtures maintained by Licensee therein, whether such goods or
fixtures are located in the Shoe Departments, in stockroom space
maintained by Licensor or elsewhere.
b) Licensor further acknowledges that all Footwear inventory provided by
Licensee and all proceeds thereof, less applicable fees payable to
Licensor pursuant to this Agreement are the property of Licensee only.
Licensor agrees that, at the request of Licensee or Licensee's
inventory lender, Licensor shall execute financing statements
delivered by Licensee reflecting the ownership by Licensee of the
Footwear inventory and such net proceeds (together, the "Licensee
Property"). In addition, Licensor shall request its lenders to
acknowledge Licensee's ownership of Footwear and net proceeds from the
sale of such Footwear in the form set forth in Exhibit C attached and
receipt thereof shall be a condition to the effectiveness of
this Agreement. Licensor, at Licensee's expense shall do, make,
execute and deliver all such additional and further acts, things,
deeds, assurances and instruments that Licensee may reasonably request
to more completely vest in and assure to Licensee its rights hereunder
and to the Licensee Property. Licensee may exercise any and all rights
and remedies afforded to Licensee by the Uniform Commercial Code and
any other applicable law as to such Licensee Property.
P. Section 25.2(a) under the heading, Default, shall be deleted in its
entirety and replaced with the following:
(a) Licensor fails to make any payment due hereunder and if such default
shall continue uncured for a period of two (2) days after written
notice thereof is given by Licensee.
8
Q. Section 25.6 Option to Purchase Inventory, shall be deleted in its
entirety.
R. A new Section 25.6 shall be added as follows:
25.6 This Agreement may be terminated by Licensee, with or without cause,
upon six (6) months prior written notice to the Licensor at any time
after the expiration of eighteen (18) months following the date of
this Amendment.
S. A new Section 25.7 shall be added as follows
25.7 Upon termination of this Agreement by either party for any reason,
Licensee shall be entitled to immediately remove all Footwear from the
Stores during normal business hours.
T. Section 26, Rights on Expiration or Termination, shall be modified by
deleting all references to Section 25.6.
U. Section 28.1 Notices, shall be amended by adding the following: "All
written notices and requests required or permitted under this Agreement may
be sent via facsimile to the facsimile number set forth below. A valid
facsimile confirmation shall be deemed sufficient proof of receipt.
Licensor facsimile number: 000-000-0000
Licensee facsimile number: (000) 000-0000
2. Successors and Assigns. This Amendment shall be binding upon the successors
and assigns of each of the parties hereto.
3. Counterparts. This Amendment may be executed in one or more counterparts
which, taken together, shall constitute one and the same agreement.
4. Entire Agreement. This Amendment constitutes the entire understanding of the
parties with respect to the subject matter hereof. All terms not defined herein
shall have the same meaning as set forth in the License Agreement. Except as
modified herein, all terms of the License Agreement shall remain in full force
and effect. Should any terms of this Amendment conflict with any terms of the
Agreement, the terms of this Amendment shall control. This Amendment may only be
modified by an agreement in writing, signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
9
LICENSEE
LFD Today, Inc., a Delaware Corporation
By: /s/Xxxxxx X. Xxxxxxx, Xx.
-----------------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Sr. VP, Footstar Retailing Services
LICENSOR
Today's Man, Inc., a Pennsylvania Corporation
By: /s/Xxxxx X. Xxxxxxx.
-----------------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President & CFO
10
EXHIBIT A
1. 000 XX 00 & XXXXXXXXX XXX XXXXXXX XX 00000
2. 00 XXXXXXXXXXX XXXX XXXXX XX 00000
3. 000 XXXXX 00 XXXX XXXXXXX XX 00000
4. 0000 XX XXXXXXX #0 XXXXXXXXXX XX 00000
5. 000 XXXX XXXX XXXX XXXXX XXXXX XX 00000
6. 0000 XXXXXXXXX XXXXXXX XXXXXXXXXX XX 00000
7. 000 XXXXX 000 XXXXX XXXXXXXXXX XX 00000
8. 000 XXX XX XXX XXXXXXXX XXX XXXX XX 00000
9. 000 XXXXX XXXXXXX XXX XXXXXXXXX XX 00000
10. 000 XXXXX XXXXXX XXX XXXX XX 00000
11. 000 X XXXXXX XXXXXX XXXX XXXXXXXXX XX 00000
12. 000 X XXXXXX XXXX XXXX XX XXXXXXX XX 00000
13. 0000 XXXXXXXXX XXXX XXXXXXXXXXXX XX 00000
14. 0000 XXXXXXXXX XX XXXXXXXXX XX 00000
15. 000 XXXXXXXXX XXXX XXXXXXXXXXXXXXX XX 00000
16. XXXXXX XX & XXXXXXXX XX XXXXXXXX XX 00000
17. 0000 XXXXX XXXXXXX #00 XXXXXX XXXX XX 00000
18. 0000 XXXXXXXXXX XXXX XXXXXXXX XX 00000
19. 00000 XXXXXXXXXXX XXXX XXXXXXXX XX 00000
20. 0000 XXXXXXXXXXX XXXX XXXXXXXXXXX XX 00000
21. 0000 XXXXXXXX XXXX XXXXXXX XXXXXXXXXX XX 00000
22. 0000 XXXXXXXX XXXX XXXXXXXXX XX 00000
23. 00000 XXXXX XXXXX XXXXXX XXXXXXX XX 00000
24. 0000 XXXXXXXXX XXXX XXXXXXXXX XX 00000
11
