EXHIBIT (b)(3)
EXECUTION COPY
AGREEMENT
THIS AGREEMENT (this "Agreement"), is made and entered into as of the
30th day of October, 2002, by and among XXXX NATIONAL CORPORATION, a Delaware
corporation ("Xxxx National"), XXXX VISION CORPORATION, a Delaware corporation
("Xxxx Vision"), and U.S. VISION, INC., a Delaware corporation ("USV").
RECITALS
A. USV and Kayak Acquisition Corp., a Delaware corporation ("Kayak"),
have entered into that certain Agreement and Plan of Merger, dated as of May 14,
2002, pursuant to which Kayak will merge into USV with USV surviving (the
"Merger");
B. In order to facilitate the Merger, Xxxx National has agreed to loan
USV $4,000,000 concurrently with the effectiveness of the Merger pursuant to the
terms and conditions set forth in the subordinated promissory note issued to
Xxxx National by USV and certain Affiliates (as defined below) of USV (the
"Subordinated Note"); and
C. In order to induce Xxxx National to provide the loan described
above, (i) USV has agreed to extend the term and amend certain provisions of the
Participating Provider Agreement, dated as of June 1, 1997, by and between USV
and Xxxx Vision (as amended, modified or supplemented from time to time, the
"Vision Care Agreement"); and (ii) USV has agreed to xxxxx Xxxx National a right
of first refusal with respect to all of USV's rights in the Sears Assets (as
defined herein).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1: DEFINITIONS
"Acceptance Notice" has the meaning set forth in Section 4.2(b).
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by, or under common control with, such first Person or
any officer or director of any such first Person or Affiliate thereof.
"Agreement" has the meaning set forth in the preamble.
"Bona Fide Offer" means an offer from any Person, regardless of whether
such offer was, or resulted from a direct or indirect contact, initiated or made
by such Person or resulted after such Person was first contacted directly or
indirectly by USV or any Affiliate of
USV (whether or not on USV's or any USV Affiliate's initiative) or resulted from
or arose in discussions directly or indirectly with USV or any USV Affiliate.
For purposes of this definition, any agent, broker or other Person acting on
behalf of USV or any USV Affiliate shall be deemed an Affiliate of USV.
"Xxxx National" has the meaning set forth in the preamble.
"Xxxx Vision" has the meaning set forth in the preamble.
"Disposition" has the meaning set forth in Section 4.1.
"Kayak" has the meaning set forth in the recitals.
"Merger" has the meaning set forth in the recitals.
"Offeror" has the meaning set forth in Section 4.2(a).
"Person" means any individual, sole proprietorship, partnership,
corporation, limited liability company, unincorporated society or association,
trust or other entity.
"ROFR Term" means the period beginning on the date of this Agreement
and ending on the later of (a) the termination or expiration of the Vision Care
Agreement and (b) the satisfaction in full of all obligations under the
Subordinated Note.
"Sears Assets" has the meaning set forth in Section 4.1.
"Sears Lease" has the meaning set forth in Section 4.1.
"Subordinated Note" has the meaning set forth in the recitals.
"Transfer" has the meaning set forth in Section 4.1.
"Transfer Notice" has the meaning set forth in Section 4.2(a).
"USV" has the meaning set forth in the preamble.
"Vision Care Agreement" has the meaning set forth in the recitals.
"Vision Care Amendment" has the meaning set forth in Section 3.1.
ARTICLE 2: SUBORDINATED NOTE
2.1 Issuance of Subordinated Note. Concurrently with the execution and
delivery of this Agreement and the effectiveness of the Merger, Xxxx National
shall loan USV $4,000,000 and USV and certain Affiliates of USV shall issue and
deliver to Xxxx National the Subordinated Note, in the form attached as Exhibit
A hereto, duly executed by authorized officers of USV and such Affiliates.
2
2.2 Subordination Agreement. Concurrently with the execution and
delivery of this Agreement and the effectiveness of the Merger, Xxxx National
shall deliver to USV a subordination agreement, by and among Commerce Bank N.A.,
Xxxx National, USV and certain Affiliates of USV, in the form attached as
Exhibit B hereto, duly executed by an authorized officer of Xxxx National.
ARTICLE 3: VISION CARE AND ADVERTISING CHARGES
3.1 Amendment of Vision Care Agreement. Concurrently with the execution
and delivery of this Agreement, the execution and delivery of the Subordinated
Note and the effectiveness of the Merger, each of Xxxx Vision and USV shall
execute and deliver to the other an amendment to the Vision Care Agreement, in
the form attached as Exhibit C hereto (the "Vision Care Amendment"), duly
executed by authorized officers of Xxxx Vision and USV, respectively.
3.2 Settlement of Disputed Reporting Obligations and Past Due
Advertising Charges. On the first day of each month, beginning November 1, 2002
and ending on October 1, 2003, USV shall pay, or cause to be paid, by bank wire
transfer of immediately available funds to an account designated in writing by
Xxxx Vision, an amount in cash equal to $80,000. On November 1, 2003, USV shall
pay, or cause to be paid, by bank wire transfer of immediately available funds
to an account designated in writing by Xxxx Vision, an amount in cash equal to
$40,000. Upon satisfaction in full by USV of its entire obligation under this
Section 3.2, USV shall be released from all claims by Xxxx Vision against USV
for (a) past due Sears advertising charges through the date of this Agreement,
and (b) any Transaction Fees (as defined in the Vision Care Agreement) due and
payable by USV under the Vision Care Agreement prior to the date of this
Agreement. Any amounts not paid when due pursuant to this Section 3.2 shall
accrue interest at the per annum rate of 11.75%.
3.3 Advertising Charges. For so long as USV is operating under at least
70% of the Sears Leases in effect on the date of the Agreement, USV, on the
first day of each month beginning November 1, 2002, shall pay, or cause to be
paid, by bank wire transfer of immediately available funds to an account
designated in writing by Xxxx, an amount in cash equal to $35,000. In the event
that USV is operating under less than 70% of the Sears Leases in effect on the
date of the Agreement, USV and Xxxx shall agree upon an adjusted monthly payment
for such national advertising efforts. Such amount shall be used by Xxxx Vision
as it considers appropriate for national advertising efforts for Sears Optical.
Any amounts not paid when due pursuant to this Section 3.3 shall accrue interest
at the per annum rate of 11.75%.
ARTICLE 4: RIGHT OF FIRST REFUSAL
4.1 Restriction on Transfer. During the ROFR Term, other than pursuant
to unilateral action by Sears under any Sears Lease, neither USV nor any of its
Affiliates shall sell, transfer, assign, pledge or otherwise directly or
indirectly dispose of or encumber, voluntarily or involuntarily (including,
without limitation, disposition by way of gift, bankruptcy, execution, seizure
or sale by legal process, operation of law or otherwise) (collectively, a
"Transfer") any interest in any of the License/Lease Agreements listed on Annex
I attached hereto (each, a "Sears Lease" and collectively, the "Sears Leases"),
together with all related leasehold improvements,
3
store fixtures, furniture, signage and inventory (other than frame sample
inventory and other inventory sold in the ordinary course of business) located
at any of the locations subject to the Sears Leases (collectively, the "Sears
Assets"), to any Person except pursuant to and in accordance with and subject to
the provisions of this Article 4, and any purported Transfer of any Sears Assets
in any other manner shall be null and void and of no force nor effect
whatsoever. Any such Transfer of any Sears Assets as described in this Article 4
is referred to herein as a "Disposition".
4.2 Right of First Refusal.
(a) If at any time USV or any Affiliate of USV receives a Bona
Fide Offer from any third party (an "Offeror") with respect to any
Disposition during the ROFR Term, and USV or such Affiliate wishes to
accept such Bona Fide Offer, USV shall give prompt written notice (the
"Transfer Notice") thereof to Xxxx National. The Transfer Notice shall set
forth (i) the identity of the Offeror; (ii) the purchase price (and form of
consideration) being offered; (iii) all other terms and conditions of the
Bona Fide Offer (including, without limitation, the proposed consummation
date, if any, of the proposed Transfer); and (iv) an offer to Transfer to
Xxxx National or its designee, on terms and conditions substantially
identical to those contained in the Transfer Notice (except that if any
portion of the consideration is payable other than in cash, Xxxx National
may instead pay in cash the fair value of such other consideration).
Notwithstanding the foregoing, in connection with the exercise of the right
of first refusal provided in this Article 4, Xxxx National, at its option,
may set off, against such consideration, all or any portion of (x) the
outstanding principal amount of the Subordinated Note, together with any
accrued interest thereon as of the consummation of such Disposition, (y)
amounts due and owing under Sections 3.2 and 3.3 of the Agreement as of the
consummation of such Disposition and (z) amounts due and owing under the
Vision Care Agreement as of the consummation of such Disposition, including
without limitation, any underreported amounts that give rise to a right to
terminate the Vision Care Agreement pursuant to Section 4.2 thereof;
provided, however, that the aggregate amount of any set off pursuant to
clause (z) shall not exceed $400,000. Notwithstanding the foregoing, Xxxx
Vision and its Affiliates shall have the right to use the frame sample
inventory used at the locations of the Sears Leases for a period of 30 days
after consummation of such Disposition.
(b) The right of first refusal provided in this Article 4 shall
be exercised by delivery of a written notice to USV (the "Acceptance
Notice") not later than 45 days after the date of the Transfer Notice.
(c) If Xxxx National or its designee declines to purchase any
Sears Assets within the period described above, USV shall have the right
for a period of 45 days to complete the Transfer, pursuant to the Bona Fide
Offer, to the Offeror identified in the Transfer Notice, of such Sears
Assets at a price not less than that contained in the Transfer Notice and
on terms and conditions not more favorable to the Offeror than those
contained in the Transfer Notice.
4
4.3 Sale Requirements. If Xxxx National elects to exercise its rights
under Article 4, USV shall, and cause each of its Affiliates to, (a) take such
actions as may be reasonably requested by Xxxx National in connection with
consummating such transaction on terms and conditions not more favorable than
those contained in the Transfer Notice, (b) consent to and raise no objections
against such transaction or the process pursuant to which such transaction was
arranged, and (c) execute and deliver such documents as may be reasonably
requested by Xxxx National in connection with any such transaction.
ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF XXXX NATIONAL AND XXXX VISION
Each of Xxxx National and Xxxx Vision represents and warrants to USV as
follows:
5.1 Corporate Organization and Standing. Each of Xxxx National and Xxxx
Vision is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power and
authority to own, operate and carry on its business as presently being
conducted. Each of Xxxx National and Xxxx Vision is duly qualified to do
business and is in good standing in each jurisdiction in which the nature of its
business or location of its properties requires it to so qualify, except where
the failure to be so qualified or be in good standing would not have a material
adverse effect on the business or operations of Xxxx National or Xxxx Vision,
respectively.
5.2 Corporate Power and Authority. Each of Xxxx National and Xxxx
Vision has all requisite power and authority to enter into this Agreement and,
in the case of Xxxx Vision, the Vision Care Amendment and to consummate the
transactions contemplated by this Agreement and the Vision Care Amendment, as
the case may be. The execution and delivery of this Agreement, the Vision Care
Amendment and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of each of Xxxx National and Xxxx Vision. This Agreement has been duly executed
and delivered by each of Xxxx National and Xxxx Vision and, assuming due
authorization, execution and delivery by USV, constitutes the legal, valid and
binding obligations of each of Xxxx National and Xxxx Vision enforceable against
it in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, fraudulent conveyance and other similar
laws and principles of equity affecting creditors' rights and remedies
generally. The Vision Care Amendment has been duly executed and delivered by
Xxxx Vision and, assuming due authorization, execution and delivery by USV,
constitutes the legal, valid and binding obligations of Xxxx Vision enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, fraudulent conveyance and
other similar laws and principles of equity affecting creditors' rights and
remedies generally.
5.3 Conflicts, Consents and Approval. Neither the execution and
delivery of this Agreement by Xxxx National and Xxxx Vision or the Vision Care
Amendment by Xxxx Vision nor the consummation of the transactions contemplated
hereby or thereby will:
5
(a) conflict with or result in a breach of any provision of its
organizational documents;
(b) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Xxxx National and Xxxx Vision or its properties or
assets; or
(c) require any action or consent or approval of, or review by,
or registration with any third party, court or governmental body or other
agency, instrumentality or authority, other than such action, consent or
approvals of third parties as have already been obtained.
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF USV
USV represents and warrants to Xxxx National and Xxxx Vision as
follows:
6.1 Corporate Organization and Standing. USV is a corporation duly
organized, validly existing and is in good standing under the laws of the State
of Delaware and has the corporate power and authority to own, operate and carry
on its business as presently being conducted. USV is duly qualified to do
business and in good standing in each jurisdiction in which the nature of its
business or location of its properties requires it to so qualify, except where
the failure to be so qualified or be in good standing would not have a material
adverse effect on the business or operations of USV.
6.2 Corporate Power and Authority. USV has all requisite power and
authority to enter into this Agreement, the Subordinated Note and the Vision
Care Amendment and to consummate the transactions contemplated by this
Agreement, the Subordinated Note and the Vision Care Amendment. The execution
and delivery of this Agreement, the Subordinated Note and the Vision Care
Amendment and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of USV. This Agreement, the Subordinated Note and the Vision Care Amendment have
been duly executed and delivered by USV and, assuming due authorization,
execution and delivery by Xxxx, constitutes the legal, valid and binding
obligations of USV enforceable against it in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, fraudulent conveyance and other similar laws and principles of
equity affecting creditors' rights and remedies generally.
6.3 Conflicts, Consents and Approval. Neither the execution and
delivery of this Agreement, the Subordinated Note or the Vision Care Amendment
by USV nor the consummation of the transactions contemplated hereby or thereby
will:
(a) conflict with or result in a breach of any provision of USV's
organizational documents;
(b) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the giving
of notice, the passage of time or otherwise, would constitute a default)
under, or entitle any party (with the giving of notice, the passage of time
or otherwise) to terminate, accelerate or call a default under,
6
or result in the creation of any lien, security interest, charge or
encumbrance upon any of the Sears Assets, any material note, bond,
mortgage, indenture, deed of trust, license, contract, undertaking,
agreement, lease or other instrument or obligation to which USV or any
Affiliate of USV is a party;
(c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to USV or any of the Sears Assets; or
(d) require any action or consent or approval of, or review by,
or registration with any third party, court or governmental body or other
agency, instrumentality or authority, other than such action, consent or
approvals of third parties as have already been obtained.
6.4 Sears Assets. Annex I sets forth each license or lease agreement
with Sears to which U.S. Vision or any of its Affiliates is a party. USV has
provided to Xxxx true, correct and complete copies of each such Sears Lease, as
amended to date. Each Sears Lease is a valid, binding and enforceable obligation
of the parties thereto enforceable in accordance with its terms. With respect to
each Sears Lease: (a) neither of USV nor any other party thereto is in default
under or in violation thereof; (b) no event has occurred which, with notice or
lapse of time or both, would constitute such a default or violation; and (c) USV
has not released any of its material rights thereunder. USV has good and
marketable title to, valid and enforceable licenses to, or valid and enforceable
leasehold interests in, all of the Sears Assets. All of the Sears Assets are in
good condition and repair, subject to normal wear and tear consistent with the
age of such assets.
ARTICLE 7: GENERAL
7.1 Conduct of Business. USV shall, and shall cause each of its
Affiliates to, carry on the business conducted at each of the locations subject
to the Sears Leases in the ordinary course of business consistent with past
practice, maintain the properties and other assets located at such locations in
good working condition and use their best efforts to preserve intact their
current business organization, keep the Sears Leases in full force and effect
and without default or breach by USV thereunder, keep available the services of
their employees and preserve their relationships with those Persons having
business dealings with them to the end that the goodwill, business prospects and
ongoing business dealings of such locations shall be unimpaired. At the end of
each calendar quarter, or upon request of Xxxx National or Xxxx Vision, USV
shall promptly notify Xxxx National and Xxxx Vision in the event that any of
USV's representations and warranties contained in Article 6 become untrue in any
material respect or of any breach of the covenants contained in this Section
7.1.
7.2 Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the state of Ohio, exclusive of
its choice of law provisions.
7
7.3 Notices.
(a) All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given
when delivered in person or when dispatched by electronic facsimile
transfer (if confirmed in writing by mail simultaneously dispatched) or one
business day after having been dispatched by a nationally recognized
overnight courier service to the appropriate party at the address or
facsimile number specified below:
If to Xxxx National or Xxxx Vision:
Xxxx National Corporation
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
With a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
If to USV:
U.S. Vision, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx, Lidji & Werbner
Renaissance Tower, Suite 4400
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
and
8
Xxxxxx, XxXxx & Xxxxxxxxx
Three Greentree Centre, Suite 000
Xxxxx 00 & Xxxxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
(b) Any party may change its address or facsimile number for
purposes of this Section 7.3 by giving notice ----------- as provided
herein.
7.4 Successors. This Agreement shall inure to the benefit of and be
binding upon each of the parties and their respective permitted successors and
assigns. Neither the rights nor the obligations of any party hereunder may be
voluntarily assigned, in whole or in part, without the prior written consent of
the other party; provided, however, that Xxxx National or Xxxx Vision (and their
respective successors and assigns) shall be permitted to assign its rights under
this Agreement to any Affiliate of Xxxx National or Xxxx Vision.
7.5 Waivers and Amendments; Preservation of Remedies. This Agreement
may be amended, modified, superseded, canceled, renewed or extended, and the
terms and conditions hereof may be waived only by a written instrument signed by
the parties or, in the case of a waiver, the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any right, power or privilege hereunder, nor any single or partial exercise
of any right, power or privilege hereunder, preclude any other exercise thereof
hereunder. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which any party may otherwise have at law or
in equity. The rights and remedies of any party arising out of or otherwise in
respect of any inaccuracy in or breach of any representation, warranty, covenant
or agreement contained in this Agreement shall in no way be limited by the fact
that the act, omission, occurrence or other state of facts upon which any claims
of such inaccuracy or breach is based may also be the subject matter of any
other representation, warranty, covenant or agreement contained in this
Agreement (or in any other agreement among the parties) as to which there is no
inaccuracy or breach.
7.6 Entire Agreement. This Agreement, the Subordinated Note and the
Vision Care Amendment (including any exhibits and annexes hereto or thereto)
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings and
negotiations, both oral and written, among the parties hereto with respect to
the subject matter hereof.
7.7 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless
9
the context requires otherwise. The word "including" shall mean including
without limitation. Any reference to the singular in this Agreement shall also
include the plural and vice versa.
7.8 Severability. If any provision of this Agreement or the application
of any provision hereof to any party or circumstance shall, to any extent, be
adjudged invalid or unenforceable, the application of the remainder of such
provision to such party or circumstance, the application of such provision to
other parties or circumstances, and the application of the remainder of this
Agreement shall not be affected thereby.
7.9 Specific Performance. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties will be entitled to injunctive relief,
without the posting of bond or other security, to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
7.10 Expenses. Each of the parties hereto shall bear their respective
expenses incurred or to be incurred in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
7.11 Headings. Descriptive headings in this Agreement are for
convenience only and shall not control or affect the meaning or construction of
any of the provisions of this Agreement.
7.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed original, but all of which together
shall constitute one and the same agreement.
[SIGNATURES ON FOLLOWING PAGE]
10
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its duly authorized officer or officers as of the date first above
written.
XXXX NATIONAL CORPORATION
By: /s/
-----------------------------------
Name:
Title:
XXXX VISION CORPORATION
By: /s/
-----------------------------------
Name:
Title:
U.S. VISION, INC.
By: /s/
-----------------------------------
Name:
Title:
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of
October 30, 2002, by and among U.S. VISION, INC. ("U.S. Vision"), STYL-RITE
OPTICAL MFG. CO., INC., USV OPTICAL, INC., U.S. VISION HOLDINGS, INC.,
(collectively, the "Borrowers"), COMMERCE BANK, N.A. (the "Lender"); and XXXX
NATIONAL CORPORATION, a Delaware corporation (the "Creditor").
BACKGROUND
A. The Borrowers have requested that the Lender extend credit
to the Borrowers, and the Lender has agreed to extend such credit facilities,
all upon the terms, conditions and provisions as set forth in that certain Loan
and Security Agreement of even date herewith among the Borrowers and Lender (the
"Loan Agreement"). Any capitalized term used herein without definition shall
have the meaning ascribed thereto in the Loan Agreement.
B. Pursuant to the terms and subject to the conditions set
forth in the Loan Agreement, Lender agreed to provide to Borrowers the
following: (i) a Line of Credit in an amount not to exceed at any time the
Maximum Available Credit, which Line of Credit is evidenced by that certain Line
of Credit Note of even date herewith by Borrowers in favor of Lender; and (ii) a
Term Loan (together with the Line of Credit, the "Senior Credit Facilities") in
the amount of Fifteen Million ($15,000,000) Dollars, which Term Loan is
evidenced by that certain Term Note of even date herewith by Borrowers in favor
of Lender (the "Term Note," and together with the Credit Note, the "Senior
Notes").
C. As collateral security for the Senior Obligations (as
hereinafter defined), pursuant to the terms and subject to the conditions set
forth in the Loan Agreement, and each other agreement or writing pursuant to
which the Borrowers or any of their respective subsidiaries, pledge, grant,
ratify and confirm a first lien on, and security interest in, all of the
collateral securing the Senior Obligations (collectively, the "Senior Security
Documents"), Borrowers granted to the Lender, first priority liens on, and
security interests in all assets of the Borrowers (collectively, the
"Collateral"). The agreements, documents and instruments evidencing or securing
the Senior Credit Facilities are hereinafter collectively referred to as the
"Senior Loan Documents."
D. As a condition precedent to the agreement of the Lender to
enter into and perform under the Senior Loan Documents and to extend to the
Borrowers the Senior Credit Facilities, as more particularly described therein,
the Lender has required that Creditor, with the acknowledgment of the Borrowers,
agree to subordinate the rights of Creditor under the Subordinated Note to the
rights of the Lender under the Senior Loan Documents pursuant to this Agreement.
Creditor will benefit from the financing arrangements among Lender and
Borrowers, as more particularly described in the Senior Loan Documents.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, covenant and agree as follows:
1. Certain Definitions.
1.1 "Senior Obligations" shall mean the following
obligations of the Borrowers to the Lender, whether outstanding on the date
hereof or hereafter incurred, pursuant to the Senior Loan Documents, including,
without limitation, any extensions, modifications, renewals thereof and
substitutions therefor and any refinancing of or increases to, any such
indebtedness in accordance with the terms of this Agreement: (a) all existing
and future debts, liabilities and obligations of the Borrowers in favor of
Lender pursuant to the Senior Loan Documents, including the principal amount of,
and accrued interest (including, without limitation, any interest which accrues
after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of any of the Borrowers, whether or not
allowed as an enforceable claim against any of the Borrowers pursuant to
applicable bankruptcy, insolvency or reorganization laws) on, the Senior Notes
and all indebtedness, liabilities and obligations of the Borrowers in respect
thereof; and (b) all other indebtedness, obligations and liabilities (including
fees and expenses) of Borrowers to Lender now existing or hereinafter incurred
created under or with respect to the Senior Loan Documents, including as to both
clauses (a) and (b) of this Section 1.1, without limitation, (i) any interest
thereon which accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of any of the
Borrowers, whether or not allowed as an enforceable claim against any Borrower
pursuant to applicable bankruptcy, insolvency or reorganization laws, or (ii)
any advances by the Lender which exceed the aggregate face amount of the Senior
Notes or any other instruments evidencing any of the Senior Obligations, or
which are made after the occurrence of a default, violation or event of default
under the Loan Agreement or any other agreement among Borrowers and Lender, and
any refinancing of, or increases to, any of the indebtedness described as Senior
Obligations to the extent in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the maximum principal amount of indebtedness that
constitutes "Senior Obligations" under this Agreement shall not exceed
Thirty-Two Million Five Hundred Thousand Dollars ($32,500,000), plus all costs
of collection and any expenses incurred to (i) protect or defend the Collateral
or (ii) with respect to the exercise of any remedies to enforce or collect the
Senior Obligations.
1.2. "Subordinated Note" shall mean the Subordinated
Promissory Note, dated as of October 30, 2002, in the original principal amount
of $4,000,000.00, issued by the Borrowers in favor of Creditor, as the same may
from time to time be amended, restated or otherwise modified or replaced.
1.3 "Subordinated Obligations" shall mean the principal of
and interest on the Subordinated Note.
1.4 "Termination Date" shall mean the first to occur of either
(i) November 1, 2007; (ii) the date that Lender is paid the Senior Obligations;
(iii) the date on which Creditor exercises the Option or the ROFR (as those
terms are defined in Section 5.4 below); or (iv) the date of a Bankruptcy Event.
2. Confirmation of Obligations to Creditor and Lender.
Borrowers and Creditor hereby acknowledge and conform that as of the date
hereof, no amounts are currently due and owing under the Subordinated
Obligations.
2
3. Subordination. Creditor hereby subordinates, to the extent
and in the manner provided below, in favor of Lender all Subordinated
Obligations and all claims and demands arising therefrom to all of the Senior
Obligations and agrees that Lender shall first be paid all of the Senior
Obligations, with interest as accrues thereon and any costs and expenses of
collection thereof, in accordance with the terms thereof and the requirement
that Lender make Advances to the Borrowers under the Loan Agreement shall be
terminated before Creditor shall be paid any sums due on Subordinated
Obligations of Borrowers to Creditor. Creditor further agrees that, subject to
the limitation on Senior Obligations provided for in Section 1.1, Lender may, at
any time and from time to time, renew, extend, modify, amend, substitute or
alter the time of payment or maturity of, or waive the right to enforce the
Senior Obligations, or any part thereof, or release or compromise the terms
thereof, and that Lender may make new loans, advances and extensions of credit
to or for the benefit of the Borrowers, which will be deemed to be included in
the Senior Obligations or the Senior Obligations may be refinanced by the
Lender, or otherwise, so long as such refinancing does not increase the annual
amortization of the principal of the Senior Obligations which constitute term
loans, all without in any way impairing the subordination and standstill
provisions set forth herein which shall remain in full force and effect without
any further act of Creditor. Lender shall notify Creditor in writing within 14
days of each of the events referred to in the preceding sentence; provided,
however, that the failure to do so shall not impair in any manner the
subordination of the Subordinated Obligations of Borrowers to Creditor to the
Senior Obligations, as set forth in this Section 3.
4. Creditor's Representations, Warranties and Covenants.
Creditor warrants and represents that it holds no collateral security for the
Subordinated Obligations and agrees that in the event that any collateral
security is acquired or any payment is made by any Borrower in respect of the
Subordinated Obligations prior to the Termination Date and in contravention of
the terms of this Agreement, the same shall be held in express trust by Creditor
for Lender and shall forthwith be paid, assigned, transferred and/or delivered
to Lender, and that if any such collateral security is acquired, the same will
be held by Lender as collateral security for the Senior Obligations and, if such
payment is received, the same shall be used to reduce the outstanding balance of
the Senior Obligations in such order and manner as Lender, in its sole and
absolute discretion may determine. Until the Termination Date, Creditor waives
any rights of subrogation or indemnification in regard to any payment or
collateral so paid, assigned, transferred and/or delivered to Lender.
5. Restrictions on Payments; Standstill; Exercise of Right of
Purchase.
5.1 Except as set forth in Section 5.3 and subject to the
provisions of Section 5.4, Creditor unconditionally agrees not to accept or
demand any payment or reduction of the Subordinated Obligations and that no
direct or indirect payment may be made by or on behalf of any of the Borrowers
upon or in respect of the Subordinated Obligations (including, without
limitation, all interest payments from Borrowers to Creditor) until the
repayment of the Senior Obligations in full and the termination of the
requirement that Lender make Advances to the Borrowers under the Loan Agreement.
In the event that, notwithstanding the foregoing, any payment shall be received
by the Creditor when such payment is prohibited by this Agreement, Creditor
shall promptly notify Lender of such prohibited payment and such payment shall
be held
3
in express trust for the benefit of, and shall, promptly after such Creditor's
receipt thereof, be paid over or delivered to Lender.
5.2 Subject to Creditor's rights provided below in
Section 5.4, unless and until the repayment of the Senior Obligations in full
and the termination of the requirement that Lender make Advances to the
Borrowers under the Loan Agreement, Creditor covenants and agrees that it shall
not, directly or indirectly (i) take any action to exercise any right of
foreclosure or self-help with respect to any security interest and liens on
property and assets of Borrowers which constitute Collateral or exercise any
other right or remedy with respect to such property and assets; (ii) contact any
lessees of any Collateral or otherwise seek payment from any obligor on any
Collateral; or (iii) take any other action that interferes with, is prejudicial
to, or is inconsistent with the Lender's rights and priority secured position
with respect to the Collateral including, without limitation, taking any action
that will impede, restrict or restrain the exercise by the Lender of its rights
or remedies under the Senior Loan Documents. Notwithstanding the foregoing, no
provision of this Agreement will prevent Creditor from taking any action in
filing lawsuits to prevent the running of any applicable statute of limitations
or other similar restriction on claims, but in each case only to the extent
reasonably necessary to prevent such running.
5.3 Notwithstanding anything to the contrary set forth
in this Agreement, and except as otherwise provided in this Section 5.3, on the
regularly scheduled dates for the payment of interest on the Subordinated Note,
Borrowers may make, and Creditor may accept, such payments of interest on the
Subordinated Note at a rate not to exceed 11.75% percent per annum.
5.3.1 From and after the date Creditor receives
notice from Lender of the occurrence of an Event of Default (as defined in the
Loan Agreement) in respect of the payment when due, after giving effect to any
applicable grace or cure period, of any principal of or interest or premium on,
or costs, fees or expenses owing in connection with, the Senior Obligations (a
"Payment Default"), no direct or indirect payment or distribution shall be made
by the Borrowers on account of the principal of or interest on the Subordinated
Obligations, or any other payment in respect thereof, which would otherwise be
permitted under Section 5.3, unless and until such Payment Default shall have
ceased to exist or shall have been cured or waived in writing by the Lender
5.3.2
From the date the Creditor receives notice
(a "Payment Blockage Notice") from the Lender of the occurrence and continuation
of an Event of Default (as defined in the Loan Agreement) other than a
Bankruptcy Event (as defined in Section 6.1 hereof) or a Payment Default, no
direct or indirect payment or distribution shall be made by the Borrowers on
account of the principal of or interest on the Subordinated Obligations, or any
other payment in respect thereof, which would otherwise be permitted under
Section 5.3 during any such period (a "Blockage Period"), unless and until such
Event of Default shall have been cured or waived in writing by the Lender.
In addition, any Blockage Period will cease to be effective if
at any time during such period: (i) all or substantially all of the assets of
any of the Borrowers are sold or otherwise
4
disposed of outside of the ordinary course of business, or (ii) any payment or
any distribution of any character, whether in cash, securities or other property
of any of the Borrowers is made to or received by any creditor on any
indebtedness for borrowed money that is on a parity with or subordinate in right
of payment to the Subordinated Note.
5.3.3 Borrowers agree that, promptly following their
receipt of any notice given by the Lender under Paragraph 5.3.1 hereof, or any
Payment Blockage Notice given by Lender under Paragraph 5.3.2 hereof, the
Borrowers shall send a copy of any such notice to Creditor; provided, however,
that Borrowers' failure to do so shall not impair the Lender's rights arising
under Paragraphs 5.3.1 and 5.3.2 hereof.
5.4. Lender hereby acknowledges that pursuant to the
provisions of the Subordinated Note, after the occurrence of any "Event of
Default" as defined in the Subordinated Note, Creditor will have the option (the
"Option"), which may be exercised by it or any affiliate, to purchase certain
"Sears Assets" as defined in the Subordinated Note. Lender also acknowledges
that pursuant to the terms of an agreement relating to certain other obligations
(the "Xxxx Agreement"), dated as of the date hereof, among Creditor, Xxxx Vision
Corporation and U.S. Vision, Creditor has certain rights of first refusal (the
"ROFR") with respect to the Sears Assets. Lender hereby acknowledges and agrees
that (i) notwithstanding the occurrence of any Event of Default under the Loan
Agreement, the existence of any Blockage Period or any other event, circumstance
or occurrence, Creditor and its affiliates may at any time exercise the Option
and/or the ROFR without contest or interference from Lender, (ii) all of the
provisions of Section 5.2 and 5.3 of this Agreement relating to standstills or
payment blockage are inapplicable in any instance in which Creditor or its
affiliates exercise the Option and/or the ROFR, and the exercise of such Option
or ROFR will not violate any provisions of this Agreement and (iii) this
Agreement has no application with respect to any other obligation owing by any
Borrower pursuant to the Xxxx Agreement.
6. Payment Upon Dissolution; Payments and Distributions Held
in Trust.
6.1 Until the Termination Date and subject to the
provisions of Section 5.4,upon any payment or distribution of all or
substantially all assets or securities of any of the Borrowers of any kind or
character, whether in cash, property or securities, whether upon any dissolution
or winding up or total or partial liquidation or reorganization of any of the
Borrowers, or otherwise, whether pursuant to the voluntary or involuntary
bankruptcy, insolvency, receivership or other proceedings (each such event a
"Bankruptcy Event"), all amounts due or to become due upon all Senior
Obligations shall first be paid in full, before Creditor shall be entitled to
receive any payment on account of Subordinated Obligations or any payment by the
Borrowers to acquire property or securities, or any delivery or distribution
with respect to Subordinated Obligations of any cash, property or securities, or
any distribution with respect to Subordinated Obligations of any cash, property
or securities. Before any payment may be made by or on behalf of the Borrowers
on Subordinated Obligations upon any dissolution, winding up, liquidation or
reorganization or otherwise, any payment or distribution of assets or securities
of any of the Borrowers of any kind or character, whether in cash, property or
securities, to which Creditor would be entitled, but for the provisions of this
Section 6.1, shall be made by the Borrowers or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar
5
person making such payment or distribution, or by Creditor if received by
Creditor, directly to Lender under the Senior Loan Documents.
6.2 Until the Termination Date, to the extent any payment
in respect of the Senior Obligations (whether by or on behalf of Borrowers, as
proceeds of security or enforcement of any right of setoff or otherwise) is
declared to be fraudulent or preferential, set aside or required to be paid to
any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
persons under any bankruptcy, insolvency, receivership, fraudulent conveyance or
similar law, then if such payment is recovered by, or paid over to, such
receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
person, the Senior Obligations or, part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred. To the extent the obligation to repay Senior Obligations is
declared to be fraudulent, invalid, or otherwise set aside under any bankruptcy,
insolvency, receivership, fraudulent conveyance or similar law, then the
obligations so declared fraudulent, invalid or otherwise set aside (and all
other amounts that would come due with respect thereto had such obligation not
been affected) shall be deemed to be reinstated and outstanding as Senior
Obligations for all purposes hereof as if such declaration, invalidity or
setting aside had not occurred.
6.3 Until the Termination Date, in the event that,
notwithstanding any other provision of this Agreement prohibiting payment or
distribution, any payment or distribution of assets or securities of any of the
Borrowers of any kind or character (other than as a result of the exercise of
Creditor's rights under Section 5.4 hereof), whether in cash, property or
securities, shall be received by any Creditor at a time when such payment or
distribution is prohibited by this Agreement and before all obligations in
respect of the Senior Obligations are paid in full, such payment or distribution
shall be received and held in express trust for the benefit of, and shall,
promptly after such Creditor's receipt thereof, be paid over or delivered to,
Lender for application to the payment of Senior Obligations remaining unpaid
until the Senior Obligations have been paid in full.
7. Subrogation.
7.1 Upon and following the Termination Date, Creditor
shall be subrogated to the rights of Lender to receive payments or distributions
of cash, property or securities of Borrowers made on such Senior Obligations
until the principal amount of and interest on Subordinated Obligations shall be
paid in full; and, for the purposes of which subrogation, no payments or
distributions to Lender of any cash, property or securities to which Creditor
would be entitled except for the provisions of this Agreement, and no payment
pursuant to the provisions of this Agreement to Lender by Creditor shall, as
among Borrowers, their creditors other than the Lender, and Creditor, be deemed
to be a payment by Borrowers to or on account of the Senior Obligations. It is
understood that the provisions of this Agreement are intended solely for the
purpose of defining the relative rights of Creditor, on the one hand, and
Lender, on the other hand.
7.2 If any payment or distribution to which Creditor
would otherwise have been entitled but for the provisions of this Agreement
shall have been applied, pursuant to the provisions of this Agreement, to the
payment of all amounts payable under the Senior
6
Obligations, then, and in such case, Creditor shall be entitled to receive from
Lender any payments or distributions received by Lender in excess of the amount
required to make payment in full of such Senior Obligations.
8. Subordination Right Not Impaired by Acts or Omissions of
Borrowers or Lender. No right of any present or future Lender to enforce the
subordination and standstill as provided in this Agreement will at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
Borrowers or by any act or failure to act, by Lender, or by any noncompliance by
Borrowers with the terms of the Subordinated Obligations regardless of any
knowledge thereof that Lender may have or otherwise be charged with. Creditor
acknowledges that the provisions of this Agreement are expressly intended to be
for the benefit of, and shall be enforceable directly and only by Lender.
9. No Waiver of Subordination Provisions. Without in any way
limiting the generality of Section 8 of this Agreement, Lender may, at any time
and from time to time, without the consent of Creditor, without incurring
responsibility to Creditor, and without impairing or releasing the subordination
and standstill provided in this Agreement or the obligations hereunder of
Creditor to Lender, but subject to the terms of this Agreement, do any one or
more of the following: (a) change the manner, place or terms of payment or
extend the time of payment of, increase the amount of or interest rates with
respect to, or renew the Senior Obligations or any instrument evidencing the
same or any agreement under which Senior Obligations are outstanding or secured,
(b) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Obligations; (c) release any person
liable in any manner for the collection of Senior Obligations; and (d) exercise
or refrain from exercising any rights against Borrowers and any other person.
10. No Transfer or Assignment. Creditor will not sell, assign
or transfer any of the Subordinated Obligations, or any instrument evidencing
the same, to any person, firm or entity unless such transferee(s) agrees in
writing to be bound by the terms of this Agreement. Creditor warrants and
represents that no prior subordination and postponement in payment as to any of
Subordinated Obligations has occurred.
11. No Loans or Advances. Without first obtaining the prior
written consent of Lender, which consent shall not be unreasonably withheld or
delayed, Creditor agrees not to accept any loan or advance from Borrowers,
except in the ordinary course of business consistent with past practices
pursuant to the Vision One Agreement; provided, however that any such amount
shall not exceed $400,000.
12. Consent to Senior Loan Documents. Creditor hereby consents
to all of the terms, covenants and conditions set forth in the Loan Agreement,
the Senior Notes and the other Senior Loan Documents. Creditor further agrees
that no invalidity, irregularity or unenforceability of all or any of the Senior
Obligations, or the security therefor, shall affect, impair or be a defense to
Creditor's obligations under this Agreement.
7
13. Evidence of Borrowers Obligations to Creditor. Creditor
agrees to cause Subordinated Obligations to be evidenced by the Subordinated
Notes or other instruments, which Subordinated Notes or other instruments shall
be legended with a statement to the effect that the indebtedness evidenced
thereby is subject and subordinate to the Senior Obligations in accordance with
the terms and subject to the conditions of this Agreement.
14. Borrowers' Acknowledgments, Representations and
Warranties.
14.1 Each of the Borrowers acknowledges receipt of this
Agreement, consents to its terms and conditions, and agrees, except as permitted
herein, not to pay any of Subordinated Obligations while any of the Senior
Obligations remain outstanding. Each of the Borrowers further agrees to notify
Lender of any legal proceedings against Borrowers by Creditor and, at Lender's
request, to defend such proceedings to the best of Borrowers' ability.
14.2 Each of the Borrowers agrees that, solely in order
to prevent the barring of claims, or any of them, by imposition of any
applicable statute of limitations, Borrowers shall, from time to time and at
such times as Lender and/or Creditor deems necessary, acknowledge in writing
Subordinated Obligations and/or Senior Obligations.
14.3 Each of the Borrowers warrants and represents
that each Borrower has disclosed to Lender all of Subordinated Obligations.
15. Acceleration. In the event of a violation of any term of
this Agreement by Creditor or Borrowers, all of the Senior Obligations shall,
without notice or demand, become immediately due and payable, whether or not by
its terms the Senior Obligations are then due and payable, and Lender may
immediately proceed against Borrowers for the collection thereof. In the event
of such violation, Creditor agrees, upon demand by Lender, immediately to
deliver to Lender any moneys, securities, and other property received by
Creditor in violation of this Agreement in an aggregate amount not to exceed the
amount of the Senior Obligations then outstanding.
16. No Impairment of Collateral. Except for the rights of
Creditor under the Option and the ROFR, nothing herein contained shall impair
any rights of Lender with respect to any Collateral heretofore, now or hereafter
granted, assigned, pledged or hypothecated to Lender as security for any of the
Senior Obligations, or to the proceeds thereof.
17. Notices. Any notices or consents required or permitted by
this Agreement shall be in writing and shall be deemed delivered if delivered in
person, or by commercial courier against receipt or if sent by certified mail,
postage prepaid, return receipt requested, or telegraph, as follows, unless such
address is changed by written notice hereunder:
If to Borrowers: U.S. Vision, Inc.
Attn: Xxxxxxx Xxxxxxxx, CEO
0 Xxxxxx Xxxxx
Xxxx Xxxx Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
8
With a copy to: Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
Attn: Xxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
If to Creditor: Xxxx National Corporation
Attn: General Counsel
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
With a Copy to: Xxxxx, Day, Xxxxxx & Xxxxx
Attn: Xxxxxxx X. Xxxxx, Esq.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to Lender: Commerce Bank, N.A.
Attn: Xxxxxx X. Xxxxx, Vice President
0000 Xxxxx 00 Xxxx
Xxxxxx Xxxx, XX 00000
With a copy to: Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP
Attn: Xxxxxx X. Xxxxx, Esq.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx XX 00000-0000
18. Entire Agreement. This Agreement embodies the entire
agreement of the parties hereto, and it is acknowledged that there are no
customs, representations, promises, terms, conditions, or obligations referring
to the subject matter, and no inducements or representations leading to the
execution hereof, other than mentioned herein; and there may be no modification
of this Agreement except in writing executed with the same formalities as this
Agreement. No failure by Lender to exercise any right hereunder shall be
construed as a waiver of the right to exercise the same or any other right at
any other time and from time to time thereafter.
19. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
20. Counterparts. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed an original, and such
counterparts shall together constitute but one and the same Agreement. Signature
by facsimile shall bind the parties thereto.
21. Governing Law. This Agreement and all other instruments or
documents issued hereunder or pursuant hereto shall be governed by and construed
in accordance with the laws of the State of New Jersey, without regard to its
principles of conflicts of law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
9
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed the day and year above written.
U.S. VISION, INC.
By: /s/
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
STYL-RITE OPTICAL MFG. CO., INC.
By: /s/
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
USV OPTICAL, INC.
By: /s/
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
U.S. VISION HOLDINGS, INC.
By: /s/
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
COMMERCE BANK, N.A.
By: /s/
-----------------------------------
Xxxxxx X. Xxxxx, Vice President
XXXX NATIONAL CORPORATION
By: /s/
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
10
EXECUTION COPY
October 30, 2002
U.S. Vision, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Re: Amendment to Participating Provider Agreement
Dear Xx. Xxxxxxxx:
Reference is hereby made to that certain Participating Provider
Agreement, dated as of June 1, 1997, as amended (the "Vision Care Agreement"),
by and between U.S. Vision, Inc., a Delaware corporation ("USV"), and Xxxx
Vision Corporation, a Delaware corporation ("Xxxx"). As you are aware USV and
Xxxx are entering into a certain Agreement, of even date herewith (the
"Agreement"), to facilitate USV's merger with Kayak Acquisition Corp. The
delivery of this letter agreement is required pursuant to the Agreement.
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Agreement or the Subordinated Note.
Contingent upon the execution and delivery of the Agreement, USV and
Xxxx hereby agree to amend the Vision Care Agreement as follows:
1. In the event of the exercise of the Option and effective upon the
consummation of such Option, Section 1.10 is hereby deleted and
replaced in its entirety with the following:
"'Locations' shall mean the optical outlets owned or operated by
USV as of the effective date of this provision where optical
products and services are provided to Members; provided, however,
that USV must obtain the prior consent of CVC to add any new
Locations, except that no consent is required from CVC for Sears
and XX Xxxxx Locations, or additional optical departments within
departments stores where USV had optical departments at the
effective date of this provision."
2. Section 4.1 of the Vision Care Agreement is hereby deleted and
replaced in its entirety with the following:
"The Term of this Agreement shall commence on June 1, 1997, and
shall, unless terminated earlier pursuant to the terms of this
Agreement, expire on the earlier to occur of (a) 7 years after
the date on which the Option is
Xxxxxxx X. Xxxxxxxx
October 30, 2002
Page 2 of 5
consummated or (b) the 30th day following the Option Termination
Date. As used herein, the term "Option Termination Date" shall
mean the earlier to occur of (i) Xxxxx 0, 0000, (xx) the date on
which all outstanding amounts under the terms of the Subordinated
Note are paid in full prior to the consummation of the Option or
(iii) the date on which Xxxx elects to terminate the Vision Care
Agreement following an uncured default by USV of any of its
obligations under the Agreement or the Subordinated Note."
3. Clause (e) of Section 4.2 of the Vision Care Agreement is hereby
deleted and replaced in its entirety with the following:
"(e) if more than ten (10) Location audits conducted by CVC
during any six (6) month period (after the date hereof) during
the term hereof reveal that the Transaction Fees paid by USV to
CVC at each such Location have been understated by more than five
percent (5%) and upon such determination, CVC shall notify USV of
the results of such audit;"
4. The last sentence of Section 7.1 of the Vision Care Agreement is
hereby deleted and replaced in its entirety with the following:
"In the event such audit reveals that USV has paid CVC an amount
equal to less than 98% of the total Transaction Fees due CVC at
any Location, USV shall reimburse CVC for the reasonable cost of
such audit (including travel expenses) applicable to such
Location."
5. The last sentence of Section 7.2 of the Vision Care Agreement is
hereby deleted and replaced in its entirety with the following:
"In the event such audit reveals that CVC has paid USV an amount
equal to less than 98% of the total sums due USV from Purchasers,
CVC shall reimburse USV for the reasonable cost of such audit
(including travel expenses)."
6. USV shall not be a participating provider in any managed vision
network operated or sponsored by EyeMed Vision Care LLC, Eyecare Plan
of America (aka ECPA) or any of their affiliates after January 1,
2003.
7. The reference to "ECPA" in Section 7.8 is hereby deleted. The
first and second sentences of Section 7.8 are hereby deleted and
replaced in their entirety with the following:
"Except as provided for in this Agreement, USV shall not be a
participating provider in any managed vision network after
January 1, 2002, without the prior
Xxxxxxx X. Xxxxxxxx
October 30, 2002
Page 3 of 5
written consent of CVC, other than networks that USV is in as of
October 30, 2002 as to which no further consent is required."
8. USV and Xxxx hereby agree to the HIPAA Rider attached hereto, and
such rider shall be deemed part of the Vision Care Agreement.
9. CVC may amend the Vision Care Agreement upon 30 days prior
written notice to USV to effectuate any change required pursuant to
any law or regulation imposed by any governmental or regulatory
authority.
10. USV shall indemnify and hold harmless Xxxx and its Affiliates
from and against any and all losses, liabilities, claims, damages,
penalties, fines, judgments, awards, settlements, costs, fees,
expenses (including attorneys' fees) and disbursements incurred by
such Persons relating to the use of the JC Penney Optical name and
logo by Xxxx and its Affiliates in its advertising and other
materials.
11. In the event that the Vision Care Agreement is terminated for any
reason, USV shall, and cause all of its Affiliates to, cease using
immediately all materials and copies thereof containing any Xxxx
(including its Affiliates) trade name, trademark, service xxxx or
other intellectual property or confidential information, and USV and
its Affiliates shall return all such materials to Xxxx unless it
provides reasonably satisfactory assurance to Xxxx that such materials
and copies thereof have been destroyed. Xxxx has the right to
supervise the return or destruction of all such materials.
12. The first sentence of Section 7.7 of the Vision Care Agreement is
hereby deleted and replaced in its entirety with the following:
"CVC agrees that it will not enter into an agreement with any
multi-unit retail optical chain (i.e., a retail optical chain
with more than one hundred (100) retail locations) which owns its
own manufacturing facility to participate as a provider in CVC's
Preferred Network under terms and conditions more favorable than
the terms and conditions under which USV serves as a provider
pursuant to the terms of this Agreement."
13. The second sentence of Section 7.8 of the Vision Care Agreement
is hereby deleted and replaced in its entirety with the following:
"In the event of any sale or transfer (by purchase, merger,
consolidation or otherwise (including operation of law)), of more
than forty percent (40%) of USV's issued and outstanding stock or
sale of substantially all of the assets of USV to any entity who
is, directly or indirectly, engaged in (i) the retail optical
business through the ownership of 100 or more domestic retail
optical outlets, or (ii) the ownership and operation of an
optical managed care network, USV shall promptly notify CVC and
CVC shall have the right, within thirty (30) days of receipt of
such notice, to terminate this Agreement."
Xxxxxxx X. Xxxxxxxx
October 30, 2002
Page 4 of 5
14. Notwithstanding anything in the Agreement, the Subordinated Note
or the Vision Care Agreement, as amended hereby, to the contrary, if
USV breaches any of its obligations under the Agreement or the
Subordinated Note and any such breach shall remain uncured by USV as
of the end of any applicable cure period, Xxxx may immediately
terminate the Vision Care Agreement, as amended hereby, only if Xxxx
elects not to exercise the Option; provided, however, that such
termination shall not relieve USV of any of its obligations under the
Vision Care Agreement, as amended hereby, arising prior to or as a
result of any event occurring prior to the effective date of such
termination. For the avoidance of doubt, USV's obligations under the
Agreement and the Subordinated Note shall continue notwithstanding the
termination of the Vision Care Agreement, as amended hereby.
15. Except as modified by this letter agreement, the provisions of
the Vision Care Agreement shall remain in full force and effect.
16. This letter agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the state of Ohio,
exclusive of its choice of law provisions.
Xxxxxxx X. Xxxxxxxx
October 30, 2002
Page 5 of 5
17. This letter agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
If this letter agreement is acceptable to you, please execute both
copies of this letter in the space provided below and return one fully executed
copy to the undersigned.
Very truly yours,
XXXX VISION CORPORATION
By: /s/
-----------------------------
Name:
Title:
Acknowledged and agreed to
this 30th day of October, 2002
U.S. VISION, INC.
By: /s/
----------------------------
Name:
Title:
HIPAA Rider
Business Associate. The parties acknowledge that CVC will receive and/or create
certain Protected Health Information ("PHI"), as defined by the privacy
requirements set forth in the Administrative Simplification provisions of the
Health Insurance Portability and Accountability Act of 1996 ("privacy rule"), in
conjunction with CVC's claims administration of Covered Vision Services provided
by US Vision under this Agreement. CVC may use or disclose the PHI received or
created by it: (a) to perform claims administration under this Agreement in
order to properly manage and administer its business, (b) to carry out its
contractual responsibilities to Plans, or (c) for data aggregation functions. If
pursuant to subsections (a), (b), or (c) above, CVC discloses PHI to any third
party, the CVC must obtain reasonable assurances from the person to whom the
information is disclosed that it will be held confidentially and used or further
disclosed only as required by law or for the purpose for which it is disclosed
to the person and the person notifies CVC of any instances of which it is aware
that the confidentiality of the information has been breached.
In the use or disclosure of PHI, CVC agrees as follows:
(a) CVC shall maintain and use appropriate safeguards to prevent use or
disclosure of any PHI other than as described upon;
(b) CVC shall report to US Vision any use or disclosure of any PHI of which it
becomes aware that is not permitted by this Agreement;
(c) CVC shall provide access to PHI by individuals who have a right of access
to such PHI in accordance with the privacy rule;
(d) CVC shall incorporate any amendments or corrections to the PHI if received
from US Vision, in accordance with 45 C.F.R. 164.526 of the privacy rule;
(e) CVC shall make available the information required for US Vision to provide
an accounting of disclosures, in accordance with 45 C.F.R.164.528 of the
privacy rule. Beginning April 14, 2003, CVC shall promptly make available
to US Vision any PHI or any other information required to prepare, or
assist in preparing, an accounting of disclosures in accordance with the
privacy rule. CVC agrees to document disclosures of PHI related to
disclosures as would be required for US Vision to respond to a request for
an accounting of disclosures. CVC must have this information and
documentation available for the six (6) years.
(f) CVC shall make its internal practices, books and records relating to the
use and disclosure of PHI available for review or audit by US Vision and
any legally authorized regulatory agency or its designee for purposes of
determining compliance with this section and applicable laws regarding the
PHI.
(g) CVC shall use PHI to conduct electronic transactions on behalf of US Vision
of the type covered by HIPAA Standards for Electronic Transactions and
Electronic Code Sets and shall release only the necessary PHI to comply
with the Standards.
(h) CVC shall immediately report to US Vision any information of which it
becomes aware concerning any use or disclosure of PHI that is not permitted
by this Agreement.
Upon US Vision's knowledge of a material breach of this section, US Vision shall
notify CVC of the specific violation and provide CVC with an opportunity to cure
the breach. If CVC does not cure such breach, US Vision may terminate this
Agreement in accordance with Section 4.4 of this Agreement.
This HIPAA Rider shall be deemed a part of the Preferred Provider Agreement,
dated June 1, 1997, as amended from time to time, by and between U.S. Vision,
Inc. and Xxxx Vision Corporation.
THE INDEBTEDNESS EVIDENCED BY THIS NOTE IS UNSECURED AND IS SUBORDINATED TO THE
INDEBTEDNESS OF THE MAKERS TO COMMERCE BANK, N.A. PURSUANT TO AND TO THE EXTENT
PROVIDED BY THE TERMS OF THE SUBORDINATION AGREEMENT DATED AS OF OCTOBER 30,
2002.
SUBORDINATED PROMISSORY NOTE
$4,000,000.00 Philadelphia, Pennsylvania
October 30, 2002
FOR VALUE RECEIVED, U.S. VISION, INC., a Delaware corporation ("USV"),
STYL-RITE OPTICAL MFG. CO. INC., USV OPTICAL, INC., and U.S. VISION HOLDINGS,
INC., (each a "Maker" and collectively the "Makers") hereby, jointly and
severally, promise to pay to the order of XXXX NATIONAL CORPORATION, a Delaware
corporation ("Payee"), the principal sum of FOUR MILLION AND 00/100 DOLLARS
($4,000,000.00).
1. Interest Rate. The principal balance hereof shall bear interest from
the date hereof until payment in full at the per annum rate of 8.75%; provided,
however, that after the occurrence of an Event of Default, the principal balance
hereof shall bear interest at a per annum rate of 11.75% unless and/or until
such Event of Default (as defined below) has been cured or waived in writing by
Payee. Interest shall be calculated for the actual number of days elapsed on the
basis of a 360-day year.
2. Principal and Interest Payments.
(a) The unpaid principal balance of this Note, together with all
accrued and unpaid interest, will be payable in full on December 1,
2003 (or such earlier date required by Payee pursuant to Article 5
hereof).
(b) Makers shall pay to Payee quarterly installments of interest,
commencing December 31, 2002, and continuing on the last day of each
March, June, September and December thereafter and at maturity.
(c) All payments due hereunder will be payable in lawful currency
of the United States of America by wire transfer of immediately
available funds to an account designated in writing by Payee.
3. Prepayment. All or any part of the outstanding principal balance
under this Note may be prepaid at any time or times and in any amount without
penalty or premium. Any prepayment will be applied first to accrued and unpaid
interest on this Note and second to any unpaid principal.
4. Subordination. This Note is subject to the Subordination Agreement,
dated as of October 30 2002, among Commerce Bank, N.A., Makers and Payee (as the
same may from time to time be amended, restated or otherwise modified in
accordance with the provisions thereof, the "Subordination Agreement"). Except
as provided in the Subordination Agreement, this Note
will rank pari passu in right and priority of payment with all other senior
unsecured indebtedness of Makers described on Schedule 1 attached hereto, and
senior in right and priority of payment to all other unsecured indebtedness of
Makers. If at any time any Maker makes any payment in respect of principal of,
interest on, or any other amounts due with respect to any pari passu
indebtedness at a time when any obligations are due and owing under this Note,
Makers shall make a payment, pro rata on the basis of outstanding principal
amount, on account of the amounts then owing under this Note.
5. Events of Default. If one or more of the following events occurs
(each, an "Event of Default"):
(a) Makers fail to make all or any part of any payment of
principal and/or interest on this Note when due hereunder (and without
regard to provisions in the Subordination Agreement which may prohibit
Makers from making such payments) and, solely with respect to payment
of interest, such failure to pay interest shall not be cured (or
waived in writing by Payee) within 5 days after the date due
hereunder;
(b) an Event of Default, as defined in the Loan and Security
Agreement (as defined in the Subordination Agreement);
(c) USV or any of its Affiliates fail to make all or any part of
any payment when due pursuant to Article 3 of the Agreement dated as
of October 30, 2002 among USV, Payee and Xxxx National Corporation
relating to certain other obligations (the "Agreement"), or the
occurrence of any other breach under the Agreement and such failure to
pay shall remain outstanding for a period of at least 5 days after the
date due hereunder or such other breach shall remain outstanding for a
period of at least 15 days after the date of Payee's written notice of
such breach;
(d) the Participating Provider Agreement dated as of June 7,
1997, by and between USV and Xxxx Vision Corporation (the "Vision Care
Agreement") is terminated or terminable by Payee or any of its
Affiliates under Article IV of the Vision Care Agreement;
(e) Any Maker (i) admits in writing its inability to pay its
debts as they come due, or makes a general assignment for the benefit
of creditors or (ii) commences any case, proceeding or other action
seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its property;
(f) any case, proceeding or other action against any Maker is
commenced seeking to have an order for relief entered against such
Maker as debtor, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking appointment of a receiver, trustee, custodian or
other similar official for maker or for all or any substantial part of
its property, and such case, proceeding or other action remains
undismissed for a period of 60 days; or
-2-
(g) the acquisition by any Person or group of Persons (including
Affiliates) acting in concert as a partnership or other group (other
than those Persons owning voting power of USV immediately after the
effectiveness of the Merger) of (i) the ownership or control (directly
or indirectly) of more than 50% of the voting power of USV or (ii) the
right to appoint or remove directors having a majority of the voting
rights exercisable at meetings of the board of directors of USV;
then, subject to the terms of the Subordination Agreement, Payee has the right,
upon written notice to USV and without further notice or demand, to declare the
outstanding principal amount of this Note immediately due and payable, whereupon
all obligations under this Note will immediately become due and payable, or upon
the occurrence of an Event of Default under subsection (e) and/or (f) above, the
outstanding principal amount of and all interest on this Note will automatically
become immediately due and payable, in each case, all without presentment,
protest or notice, all of which are hereby waived. Makers shall, jointly and
severally, pay on demand all costs and expenses, including attorneys' fees,
incurred or paid by Payee in enforcing or collecting any of the obligations of
Makers hereunder. Payee may enforce or cause to be enforced any or all of the
rights afforded Payee under this Note at law or in equity.
6. Option.
(a) (i) At any time the Payee and USV agree or, (ii) in addition
to the rights provided to Payee in Article 5 above, after the
occurrence of an Event of Default hereunder and at any time
thereafter, Payee will have the option (the "Option"), which may be
exercised by any one or more of its Affiliates, to purchase and
require USV to sell, or cause its Affiliates to sell, all of the Sears
Leases (as defined in the Agreement), together with all related
leasehold improvements, store fixtures, furniture and signage
(collectively, the "Sears Assets"), at a purchase price (the "Option
Purchase Price") equal to the Fair Market Value (as defined below) of
such Sears Assets. In addition, if Payee elects to exercise the Option
pursuant to clause (ii) above and the transactions contemplated by the
Option are thereafter consummated after such exercise, the then term
of the Vision Care Agreement shall be extended pursuant to the terms
of the letter agreement of even date herewith by and between USV and
Xxxx Vision (the "Letter Agreement") amending the terms of the Vision
Care Agreement. The Option Price will be payable in cash upon
consummation of such purchase; provided, however, that Payee, at its
option, may set off, against such cash purchase price, all or any
portion of (i) the outstanding principal amount of this Note, together
with any accrued interest thereon as of the consummation of the
purchase of the Sears Assets, (ii) amounts due and owing under
Sections 3.2 and 3.3 of the Agreement as of the consummation of the
purchase of the Sears Assets, and (iii) amounts due and owing under
the Vision Care Agreement, including, without limitation, any
underreported amounts that give rise to a right to terminate the
Vision Care Agreement pursuant to Article 4.2 thereof, as of the
consummation of the purchase of the Sears Assets; provided, further,
that the aggregate amount of any set off pursuant to clause (iii)
shall not exceed $400,000. The cash portion of the Option Purchase
Price will be reduced by such set-off amount. Any such set off will be
applied to this Note in the same manner as any prepayment hereunder.
Notwithstanding the foregoing, Xxxx and its Affiliates shall have the
right to use the
-3-
frame sample inventory used at the locations of the Sears Leases for a
period of 30 days after consummation of the Option.
(b) In the event that Payee desires to exercise the Option
pursuant to Article 6(a)(ii) above, Payee will provide written notice
(the "Option Notice") to USV of its determination to exercise the
Option, which Option Notice shall become irrevocable 15 days prior to
the closing of such Option subject to customary closing conditions,
including without limitation, true and correct representations and
warranties and no material adverse change. The Option Notice will
describe (i) the Event of Default, (ii) subject to the last sentence
of this Article 6(b), the approximate date on which Payee intends to
exercise the Option (which may be as soon as practicable after the
Fair Market Value is determined pursuant to Article 6(c)), (iii) the
proposed structure of the transaction and (iv) the extension of the
Vision Care Agreement pursuant to the terms of the Letter Agreement.
Payee may provide an Option Notice at any time following the
occurrence an Event of Default; provided, however, the Option may not
be consummated if Maker pays Payee the entire outstanding principal
balance under this Note and all accrued interest thereon prior to
Payee's delivery of the Option Notice and otherwise not until the
earlier of (i) 90 days from the date of the occurrence of the Event of
Default, or (ii) such earlier date as USV, on behalf of the Makers,
may agree to.
(c) For purposes of this Note, "Fair Market Value" means with
respect to the Sears Assets, the cash price in United States Dollars
that an unrelated party would pay for the Sears Assets in light of all
relevant factors, as applicable, including, without limitation,
earnings, cash flow, return on investment, the terms of any relevant
contracts, and the current market value of such assets, in an arm's
length transaction in which neither party is compelled to buy or sell.
If the Payee and USV agree to exercise the Option pursuant to Article
6(a)(i) above, then the Payee and USV shall negotiate in good faith to
determine the applicable Fair Market Value. If the Payee exercises the
Option pursuant to Article 6(a)(ii) above, then for a period of 20
days beginning on the date of the Option Notice, Payee and USV shall
negotiate in good faith to determine the applicable Fair Market Value.
If Payee and USV cannot agree on the Fair Market Value within such
20-day period, then each of Payee and USV shall jointly appoint,
within 10 days after the end of such 20-day period, an investment
banking firm, accounting firm or other firm with significant
experience in the valuation of retail businesses and retail equipment
and property, which firm shall be independent of Payee and USV and its
Affiliates and specifically excluding the auditors of Payee and USV
(each such firm, an "Appraiser"). If Payee and USV fail to agree upon
an Appraiser within such 10-day period, each of Payee and USV shall
engage its own Appraiser within 5 days thereafter to determine the
Fair Market Value. The Appraisers selected by Payee and USV shall then
select a third Appraiser within 10 days after their selection. Each
Appraiser shall determine, in good faith, the Fair Market Value,
within a period of 30 days from the date of their selection. Each
Appraiser shall consider, among other factors, the following factors
and shall describe in detail the use of each factor or the reason such
Appraiser did not use a factor, if applicable, in the report in which
such Appraiser sets forth Fair Market Value: (i) historical financial
performance of the Sears Leases, with respect to the valuation of the
leases, including earnings, cash flow and return on investment; and
(ii) the current market value of used retail equipment and other
property (including leasehold
-4-
improvements, furniture and signage) with respect to the Sears Assets.
Subject to the last sentence of this Article 6(c), the Fair Market
Value shall be the numerical average of the Fair Market Values as
determined by the three Appraisers. Payee and USV shall share the fees
of the jointly appointed Appraiser, if such Appraiser is so jointly
appointed. If Payee and USV fail to jointly appoint an Appraiser,
Payee and USV shall each pay the fees of the Appraiser each appoints,
and the cost of the third Appraiser shall be shared equally between
Payee and USV. USV shall disclose and make available to all of the
Appraisers all of the information regarding the Sears Assets as may be
reasonably requested by such Appraisers in order to conduct and
conclude their appraisals within the time periods set forth herein.
Payee and USV shall each have the right to submit written materials
and make an oral presentation to each Appraiser, subject to any
requirements and limits that may be requested by such Appraiser so
long as such requirements and limits apply equally to Payee and USV.
Notwithstanding the foregoing, in no event shall the Fair Market Value
of the Sears Assets as finally determined in accordance with this
Article 6(c) after an Option exercise pursuant to Article 6(a)(i) or
(ii) above, be less than 60% of the aggregate gross sales net of
returns of Maker's Sears Optical stores being acquired pursuant to the
Option for the most recently completed trailing twelve month period
prior to the date of the Option Notice ("LTM Sales") or greater than
80% of LTM Sales.
(d) So long as any amount of principal and interest is
outstanding under this Note, USV shall, and shall cause each of its
Affiliates to, carry on the business conducted at each of the
locations subject to the Sears Leases in the ordinary course of
business consistent with past practice, maintain the properties and
other assets located at such locations in good working condition
(ordinary wear and tear excepted) and use their best efforts to
preserve intact their current business organization, keep the Sears
Leases in full force and effect and without default or breach
thereunder by USV, keep available the services of their employees and
preserve their relationships with those persons having business
dealings with them to the end that the goodwill, business prospects
and ongoing business dealings of such locations shall be unimpaired.
Neither USV nor any of its Affiliates shall otherwise sell, transfer,
assign or otherwise dispose of any interest in any of the Sears
Assets.
(e) It is agreed and understood that monetary damages would not
adequately compensate Payee for any breach by USV or any of its
Affiliates of the provisions of this Article 6, and that the
provisions of this Article 6 are specifically enforceable, and that
any breach or threatened breach of this Article 6 will be the proper
subject of a temporary or permanent injunction or restraining order,
without the posting of bond or other security. Each Maker hereby
waives any claim or defense that there is an adequate remedy at law
for such breach or threatened breach.
7. Successors and Assigns. This Note is binding on Makers and their
successors and assigns, and the benefits hereof inure to Payee and its
successors and assigns. No Maker shall assign its rights hereunder or any
interest herein without the prior written consent of Payee, provided, however,
that Payee shall not unreasonably withhold or delay its consent regarding any
assignment by a Maker to its Affiliates (as defined in the Agreement).
-5-
8. Waiver; Modifications in Writing. Any demand or notice hereunder to
Makers may be made by delivering the same to the address last known by Payee, or
by mailing the same to such address, with the same effect as if delivered to
Payee in person. No failure or delay on the part of Payee in exercising any
right, power or remedy hereunder will operate as a waiver thereof, nor will any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to Payee at law, in equity or otherwise. Any
provision of this Note may be waived by or on behalf of Payee, and this Note may
be amended, provided such waiver or amendment is approved and signed by Makers
and Payee. Except as otherwise expressly provided for herein, each Maker waives
demand, presentment for payment, notice of intention to accelerate, notice of
acceleration, protest, notice of protest, and all other notice, filing of suit
and diligence in collecting this Note.
9. Governing Law; Venue. This Note is governed by and construed in
accordance with the laws of the State of Ohio, without regard to principles of
conflicts of law. Each Maker and Payee hereby designate all courts of record
sitting in Cleveland, Ohio, both state and federal, as forums where any action,
suit or proceeding in respect of or arising out of this Note may be prosecuted
as to all parties, their successors and assigns, and by the foregoing
designation each Maker and Payee consent to the jurisdiction and venue of such
courts.
10. Certain Definitions. As used in this Note, (a) "Affiliate" of any
Person means any Person directly or indirectly controlling, controlled by, or
under common control with, any such Person and any officer, director or
controlling Person of such Person, and (b) "Person" means any individual,
corporation, partnership, limited liability company, joint venture, trust,
governmental authority, unincorporated association or any other entity or
organization.
JURY TRIAL WAIVER. EACH MAKER WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN
MAKERS AND PAYEE, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH OR THE TRANSACTIONS RELATED THERETO.
-6-
IN WITNESS WHEREOF, each Maker has signed this Note as of the date
first written above.
U.S. VISION, INC.
By: /s/
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
STYL-RITE OPTICAL MFG. CO., INC.
By: /s/
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
USV OPTICAL, INC.
By: /s/
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
U.S. VISION HOLDINGS, INC.
By: /s/
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
-7-
