Exhibit 10.37
MATERIAL IN THIS DOCUMENT
HAS BEEN OMITTED PURSUANT
TO A CONFIDENTIAL TREATMENT REQUEST
FOURTH AMENDMENT
TO
LICENSED DEPARTMENT AGREEMENT
This Fourth Amendment To Licensed Department Agreement (the "Amendment"),
is entered into by and between X. X. Xxxxxx Corporation, Inc., a Delaware
corporation having its principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx,
Xxxxx 00000-0000 (hereinafter "Penney"), and U. S. Vision, Inc., a Delaware
corporation, having its principal place of business at Xxxx Xxxx Xxxxxxxxxx
Xxxx, X. X. Xxx 000, Xxxxxxxx, Xxx Xxxxxx (hereinafter "Operator").
WHEREAS, Penney and Operator have entered into a Licensed Department
Agreement, dated February 1, 1995 (the "Agreement");
WHEREAS, Penney and Operator amended the Agreement by an Amendment
("Amendment Number 1") to Licensed Department Agreement, dated December 18,
1996, by an Amendment No. 2 ("Amendment Number 2") to License Department
Agreement, dated April 13, 1998, and by a Third Amendment to License Agreement
("Amendment Number 3"), dated as of September 30, 2002;
WHEREAS, Penney and Operator temporarily supplemented the Agreement by a
letter, dated December 18, 1997, and that supplemental letter is no longer in
effect; and
WHEREAS, in accordance with the terms of the Agreement, the parties desire
to amend the following terms and provisions of the Agreement to reflect the
current agreement of the parties;
WHEREAS, capitalized terms not otherwise defined in this Amendment are used
as defined in the Agreement; and
NOW THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Penney and Operator hereby agree as follows:
ARTICLE I
Section 6 of the Agreement, as amended, shall be amended by deleting
the text of Section 6 in its entirety and replacing it with the following:
The Operator shall pay to Penney a license fee for each Licensed
Department to be determined by applying to Net Sales on a cash and
credit basis, respectively, the percentages for cash Net Sales and for
credit Net Sales set forth in the attached Schedule A. If Operator
enters into a licensed department agreement or an arrangement similar
to this Agreement with another Chain Retailer (as defined below) for
the operation of optical departments and such arrangement provides for
more favorable terms and conditions
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relating to the amount and payment of license fees, then Operator
agrees to notify Penney of such terms and conditions and agrees to
promptly amend this Agreement, if Penney so requests, to include the
more favorable terms and conditions relating to the amount and payment
of license fees. For the purposes of this paragraph, a "Chain
Retailer" means a national chain of department stores or large chain
of discount stores such as Kmart, Target or Sam's Club.
Notwithstanding the foregoing, in the event that Operator or any
Affiliate of Operator acquires (by stock or asset purchase) a then
existing chain of retail optical stores or then existing licensed
optical departments with more than 50 locations, then (a) for the
fiscal year of Operator during which such acquisitions occurs, the
total aggregate license fees payable by Operator under this Agreement
for such fiscal year shall in no event be less than the sum of (i) the
actual license fees paid for the period prior to the acquisition; and
(ii) a prorated portion of the Adjusted Minimum License Fee based upon
the period remaining in such fiscal year after the acquisition; and
(b) for each full fiscal year of Operator ending on January 31st
thereafter the total aggregate license fee payable by Operator under
this Agreement for each such fiscal year shall in no event be less
than the Adjusted Minimum License Fee. For the purpose of this
Agreement, "Adjusted Minimum License Fee" shall mean [CONFIDENTIAL],
provided that such amount shall be reduced by the amount of any
license fees allocable to a Closed Licensed Department for the period
of 12 months immediately prior to the closure of such department. A
"Closed Licensed Department" is an optical department, which Penney
elects to close after the date of this Amendment. "Affiliate" of
Operator means Palisade Concentrated Equity Partnership L.P. or
Operator, and each corporation, partnership, joint venture, limited
liability company, fund or other person or entity that is controlled
by Operator or Palisade Concentrated Equity Partnership L.P.,
including without limitation Opticare Health Systems, Inc.
ARTICLE II
Section 20(a) of the Agreement, as amended, shall be amended by
deleting the text of Section 20(a) in its entirety and replacing it with the
following:
This Agreement shall become effective as of the date first above
written, and as subsequently amended as of the dates of any
amendments, including the Fourth Amendment to License Department
Agreement, and shall expire on December 1, 2007, unless sooner
terminated as provided in this Agreement; provided, however, that
Penney and Operator (if such party is not then in default under this
Agreement) shall each have an option to extend the term of this
Agreement beyond the December 1, 2007 expiration date for a single
additional renewal term commencing on December 1, 2007 and expiring on
December 1, 2010; provided, further, that this Agreement, unless
otherwise amended in accordance with the terms of this Agreement,
shall contain the same terms and conditions as are in effect prior to
such renewal. Either party may exercise its renewal option right as
provided herein by
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giving the other party written notice of its election to exercise such
renewal option at any time prior to September 1, 2007. For the
avoidance of doubt, nothing in the foregoing provision affects any
right either party may possess under this Agreement to terminate the
Agreement as to all or any Licensed Departments.
ARTICLE III
The last sentence of Section 20(c) of the Agreement, as amended, is
modified and amended only by the addition of the following underlined language,
such that the last sentence of Section 20(c) of the Agreement, as amended, now
reads as follows:
At Penney's option, this Agreement will terminate automatically thirty
(30) days after a transfer or sale of a majority of the stock or
assets of Operator unless (i) such [transfer or sale of stock or
assets is to Palisade Concentrated Equity Partnership, L.P., or any of
its affiliated funds, provided that transfer or sale of stock or
assets is consummated not later than 60 days from the effective date
of this Amendment,]* or such sale of stock is by the Operator for cash
in connection with a public stock offering registered with the U. S.
Securities & Exchange Commission, or (ii) Operator obtains the advance
written consent of Penney for such sale of stock or assets, which
consent may be withheld or granted in Penney's sole discretion.
ARTICLE IV
Except as expressly modified by this Amendment, all terms and conditions of
the Agreement, as previously amended by Amendment Number 1, Amendment Number 2,
and Amendment Number 3, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Fourth Amendment to
Licensed Department Agreement to be executed as of the 22nd day of May 2003.
U. S. VISION, INC. X. X. XXXXXX CORPORATION, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- ------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer Title: Vice President, Director of Store
and Chairman of the Board Operations
* Brackets denote text which is underlined in the original agreement.
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