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Exhibit 10.36
MATERIAL IN THIS DOCUMENT
HAS BEEN OMITTED PURSUANT
TO A CONFIDENTIAL TREATMENT REQUEST
THIRD AMENDMENT
TO
LICENSED DEPARTMENT AGREEMENT
This
Third Amendment To Licensed Department Agreement (the "Amendment"),
is
entered into by and between J. C. Penney Corporation, Inc., a
Delaware
corporation having its principal place of business at 6501 Legacy
Drive, Plano,
Texas 75024-3698 (hereinafter "Penney"), and U. S. Vision, Inc., a
Delaware
corporation, having its principal place of business at Glen Oaks
Industrial
Park, P. O. Box 124, Glendora, New Jersey (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
and by an Amendment No. 2 ("Amendment Number 2") to License
Department Agreement
dated April 13, 1998;
WHEREAS, Penney and Operator temporarily supplemented the Agreement
by a
letter dated in December 1997 and that supplemental letter is no
longer in
effect; and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 5 of the Agreement
shall be deleted in its entirety and the
following Section 5 shall be substituted in its place:
5. Hours of Operation; Relocation; Opening Costs. (a) The
Operator
agrees to sell the Merchandise in each Licensed Department and
shall be
entitled to sell the Merchandise in the Selling Space. Except as
approved
by
the management of Operator and Penney, the hours of operation of
the
Licensed Departments shall be as follows (the "Standard Operating
Hours"):
1
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Sunday:
12:00 p.m. to 5:00 p.m., except as mutually agreed
by Penney and Operator or as limited by applicable
law requiring licensed staff coverage (provided
that Operator will provide Penney with written
notice of such limitation)
Monday & Tuesday: 10:00 a.m. to 7:00 p.m.
Wednesday - Friday: 10:00 a.m. to 8:00 p.m.
Saturday:
10:00 a.m. to 6:00 p.m.
Operator agrees to conspicuously post the Standard Operating Hours
at the
Licensed Department locations, subject to Penney's approval in
writing
(including by email) of the signage wording, design and location.
Seasonal
and
permanent increases to the Standard Operating Hours will not
require
the
approval of Penney, provided that such increases are consistent in
all
Licensed Departments, but the parties must agree in writing to a
reduction
in
the Standard Operating Hours.
(b) In each of Penney's fiscal years during the term of this
Agreement, Operator agrees to spend at least $[CONFIDENTIAL] (or a
pro rata
portion of such amount in the event the term of this Agreement
includes
only
a portion of such fiscal years) on opening new Licensed Departments
or
in
relocating or refurbishing existing Licensed Departments,.
Operator
agrees that its expenditure of such funds is not conditioned on
the
expenditure by Penney of funds for construction or other costs
related to
the
opening, relocating or refurbishing of Licensed Departments. For
the
avoidance of doubt, it is understood that, notwithstanding past
practice or
anything in this Agreement to the contrary, there may be instances
where
Operator is responsible for all costs associated with the
opening,
relocation or refurbishment of individual Licensed Departments,
including,
without limitation, construction costs, paint, wallcoverings,
carpet,
partitions, light fixtures, electrical wiring, plumbing work and
fixtures,
and
heating, ventilation and air conditioning. Operator and Penney
agree to
establish an annual spending plan for new openings, relocations
and
refurbishments prior to the beginning of each of Penney's fiscal
years,
subject to such modifications as the parties agree upon, in
writing, from
time
to time during each such fiscal year.
(c) Penney may, upon not less than 60 days prior written notice to
the
Operator, relocate a Licensed Department to a different space in a
Store;
provided, however, that the Operator may terminate this Agreement
as to an
individual Licensed Department effective as of the date specified
for its
relocation by giving to Penney written notice of its election to
terminate
as
to that individual Licensed Department, which notice shall be
2
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given within 14 days
from Operator's receipt of Penney's notice of
relocation.
ARTICLE II
Section 6 of the Agreement shall be amended by the addition of
the
following provision at the end of the current section 6:
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 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.
ARTICLE III
Section 8 of the Agreement is hereby amended to provide that
the
amount that Operator shall expend on advertising shall increase
from an amount
not less than [CONFIDENTIAL] to an amount not less than
[CONFIDENTIAL] of Net
Sales.
ARTICLE IV
Section 20 of the Agreement is amended to provide that the term of
the
license shall expire on December 1, 2007. Section 20 also may grant
Penney the
right to approve or disapprove of the consummation of the Kayak
Transaction
(defined below) and in connection with any such right, Penney
hereby consents to
the Kayak Transaction. The consent provided in this paragraph is
subject to (a)
Penney not having delivered the Refusal Notice (defined below), (b)
the Kayak
Transaction not changing substantially from the transaction
described in the
preliminary proxy statement filed with the U. S. Securities &
Exchange
Commission, and (c) consummation of the Kayak Transaction on or
before October
31, 2002.
ARTICLE V
Schedule A to the Agreement is hereby amended as follows:
(a)
Paragraph 2 of Schedule A to the Agreement shall be deleted in
its
entirety and the following Para
