EXHIBIT 10.18.2
AMENDMENT #2 TO THE
EXCLUSIVE DISTRIBUTION AGREEMENT
THIS AMENDMENT (the
"AMENDMENT")
is entered into and
effective as of
the 7th day of March, 2005 (the "AMENDMENT DATE"), by and between Macy's
Merchandising Group, LLC ("MMG"), a Delaware limited liability company and
successor in interest to Federated Merchandising Group ("FMG"), an
unincorporated division of Federated Department Stores, Inc., a Delaware
corporation ("FEDERATED"), and Private Brands, Inc., a
California
corporation
("PB").
WHEREAS, FMG and PB entered into an Exclusive Distribution
Agreement on
the 1st day of April, 2003, and entered into an Amendment #1
to the Exclusive
Distribution Agreement on the 22nd day of June, 2004 (as amended, the
"DISTRIBUTION AGREEMENT");
WHEREAS, effective as
of December 31, 2004, Federated assigned to MMG,
all of FMG's tangible and intangible assets
relating to its domestic operations,
including the Distribution Agreement;
and
WHEREAS, MMG and PB
desire to amend certain terms of the Distribution
Agreement as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions
set forth herein, the receipt and sufficiency of
which are hereby
acknowledged
by each party, MMG and PG agree to amend
the Distribution Agreement as follows:
1. All
capitalized
terms not defined herein shall have the
meaning given to them in the Distribution Agreement. All references in the
Distribution Agreement to FMG shall,
effective from and after December 31, 2004,
refer to MMG as successor in interest.
2.
Section 1.1 of the Distribution Agreement is hereby amended to
add the following definition:
o
"NET SALES" means (A) for Ordered Merchandise ordered
by MMG, (i) the gross sales price of Ordered
Merchandise actually charged by MMG to the Authorized
Seller that
takes the Ordered Merchandise into
inventory for sale by such Authorized Seller in its
retail stores, PLUS (ii) internal load, insurance and
freight for such
Ordered Merchandise, and (B) for
Ordered Merchandise ordered directly by an Authorized
Seller, the purchase
price payable by the Authorized
Seller to PB for such Ordered Merchandise.
3.
Section 5.1 of the
Distribution Agreement
is hereby amended
and restated as of the Amendment Date to
read in its entirety as follows:
"5.1 ANNUAL
MINIMUM PURCHASES. In order to preserve its rights
under this
Agreement, including
its rights to exclusivity as set forth in Section
2.2 and its right of first refusal as set forth in Section
2.3, MMG
shall order, during
each Contract Year of the Term,
<PAGE>
Merchandise with the
minimum Net Sales amount set forth below (the
"ANNUAL MINIMUM PURCHASE REQUIREMENTS"):
CONTRACT
CONTRACT CONTRACT
CONTRACT
CONTRACT CONTRACT
YEARS
6
YEAR 1
YEAR 2
YEAR 3
YEAR 4 YEAR
5 THROUGH
10
----------- ----------- ----------- ----------- ----------- -----------
$25 million $25 million $40 million $50 million $65 million $75 million
The Annual Minimum Purchase Requirements for each Contract
Year of the
first Renewal Term shall be equal to the average of the total Net
Sales
amounts of
Ordered Merchandise during each of Contract Years six
through ten of the Initial Term, provided that in no event shall the
amount used in any
Contract Year to calculate the Annual Minimum
Purchase Requirements
for the first Renewal Term be less than $75
million. Furthermore, the Annual Minimum Purchase Requirements for
each
Contract Year of the
first Renewal Term
shall not exceed $90 million.
Similarly, the Annual Minimum Purchase Requirements for each
successive
Renewal Term
shall be equal to the
average of the total Net Sales
amounts of Ordered
Merchandise paid for by MMG during each of Contract
Years six through ten of the previous Renewal Term, provided that
in no
event shall the amount
used in any
Contract Year to calculate the
Annual Minimum Purchase Requirements for the successive Renewal
Term be
less than $75 million. Furthermore, the Annual Minimum Purchase
Requirements for each
Contract Year of the
second Renewal Term
shall
not exceed 120% of the amount for the last Renewal Term.
Any order placed by MMG and cancelled prior to the cancellation date
specified in the
applicable
purchase order shall reduce the amount
ordered by MMG for the period during which the order was placed. No
such reduction
will be effected if MMG cancels an order after the
specified cancellation date.
4.
Section 5.3 of the
Distribution Agreement
is hereby amended
and restated as of the Amendment
