Exhibit 10.1

 

SIXTH AMENDMENT

TO

LICENSED DEPARTMENT AGREEMENT

 

This Sixth Amendment to Licensed Department Agreement (the “Amendment”) is
entered into this 8th day of January, 2007 (“Effective Date”) between U.S.
Vision, Inc., a Delaware corporation having its principal place of business at
Glen Oaks Industrial Park, PO Box 124, Glendora, New Jersey (hereinafter
“Operator"), and J.C. Penney Corporation, Inc., formerly J.C. Penney Company,
Inc. by its agent JCP Procurement L.P., ("Penney") with its principal place of
business located at 6501 Legacy Drive, Plano, Texas 75024.

 

WHEREAS, Penney and the Operator entered into that certain Licensed Department
Agreement dated February 1, 1995, as amended (collectively, "Agreement"); and

 

WHEREAS, Penney and Operator amended the original Agreement by an Amendment
dated December 18, 1996, by an Amendment No. 2 dated April 13, 1998, by a Third
Amendment dated September 30, 2002, by a Fourth Amendment dated May 22, 2003,
and by the Fifth Amendment dated September 2003; and

 

WHEREAS, Penney and Operator temporarily supplemented the Agreement by a letter
dated December 2, 1997 and that supplemental letter is no longer in effect; and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 certain terms and provisions of 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 2 of the Agreement will be deleted in its entirety and replaced with the
following:

 

2.

Grant of License. Penney hereby grants to Operator, as more specifically set
forth and limited herein, a revocable license to operate a Licensed Department
for the sale of Merchandise in the type Stores designated by Penney as Box A,
Box B (includes off mall Stores) or Box C type Store. Box sizes are defined by
net selling-floor square footage, as follows: [CONFIDENTIAL].

 

 

--------------------------------------------------------------------------------

 

 

Article II

 

Section 5(a) of the Agreement will be deleted in its entirety and replaced with
the following:

 

(a)

The Operator agrees to sell Merchandise in each Licensed Department and shall be
entitled to sell Merchandise in the Selling Space. Except as approved by the
management of Operator and Penney or as limited by applicable law requiring
licensed staff coverage (provided Operator will give Penney written notice of
such limitation), the hours of operation of the Licensed Departments shall be as
follows:

 

Penney Box A, B and C Stores opened prior to January 31, 2007

Hours

Requirements

Sunday

12:00pm to 5:00pm
Except as mutually agreed by Penney and Operator or as limited by applicable law
requiring licensed staff coverage.

Operator will provide written notice of such limitation by applicable law.

Monday & Tuesday

10:00am – 7:00pm

 

Wednesday – Friday

10:00am – 8:00pm

 

Saturday

10:00am – 6:00pm

 

Doctor Coverage

[CONFIDENTIAL]

 

 

 

 

 

Page 2 of 7

 

 

--------------------------------------------------------------------------------

 

 

 

Penney Box B Stores opened on or after January 31, 2007

Hours

Requirements

Sunday

12:00pm – 5:00pm
Except as mutually agreed by Penney and Operator or as limited by applicable law
requiring licensed staff coverage.

Operator will provide written notice of such limitation by applicable law.

Monday – Friday

10:00am – 8:00pm

 

Saturday

10:00am – 6:00pm

 

Doctor Coverage

[CONFIDENTIAL]

 

 

Section 5(b) of the Agreement will be deleted in its entirety and replaced with
the following:

 

(b)

Pursuant to the project plan developed by Penney and for which Operator may
comment on, 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.

 

 

 

Page 3 of 7

 

 

--------------------------------------------------------------------------------

 

 

In addition to the obligations in the above paragraph, and any other payment
obligations under this Agreement, Operator agrees to pay Penney [CONFIDENTIAL]
construction cost for each Licensed Department that Operator opens in a Box B
type Store after January 31, 2007. Operator shall pay Penney within 30 days
after the opening of the Box B Store. Construction shall be based on the block
plan prepared by Penney, and Operator’s blueprint approved by Penney. Operator
acknowledges and agrees that Penney has not made, and is not making, any
commitment of any kind whatsoever to open or include a Licensed Department in a
minimum number of Box B type Stores and Operator warrants that it has not relied
upon any indication, verbal or otherwise.

 

Article III

Section 6 of the Agreement will be deleted in its entirety and replaced with the
following:

 

 

6.

License Fee. 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 relating to the
amount and payment of license fees than what Penney receives hereunder, 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 comparable locations. For the purposes of this paragraph, a “Chain
Retailer” means a national chain of department stores or large chain of
discounted stores such as Kmart, Target or Sam’s Club. Notwithstanding the
foregoing, in the event that Operator or any Affiliate of Operator shall acquire
(by stock or asset purchase) without the prior consent of Penney, a then
existing chain of retail optical stores (regardless of number) or existing
licensed optical departments with more than 50 locations , then (a) for the
fiscal year of Operator during which such acquisition 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 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

 

 

 

Page 4 of 7

 

 

--------------------------------------------------------------------------------

 

company, fund or other person or entity controlled by Operator or Palisade
Concentrated Equity Partnership L.P., including without limitation Opticate
Health Systems, Inc. Operator acknowledges and agrees that Penney needs the
above right to consent or, in the alternative, the stated fee adjustments
because Operator’s acquisition could, as determined by Penney, adversely affect
how Operator operates Licensed Department(s) under the Agreement (whether
through inadequate resources or otherwise).

 

Article IV

Section 20 of the Agreement is amended by deleting Section 20(a) and 20(b) in
their entirety and replacing them with the following:

 

(a)

This Agreement shall become effective as of the date first above written, and as
subsequently amended as of the dates of any amendments, and shall expire on
[CONFIDENTIAL], 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 have an option to extend the term of this
Agreement beyond the [CONFIDENTIAL] expiration date for a single additional
renewal term commencing on [CONFIDENTIAL] and expiring on [CONFIDENTIAL];
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 giving the other party at least ninety (90)
days prior written notice of its election to exercise such renewal option. 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 Department.

 

(b)

Penney may terminate this Agreement with respect to individual Licensed
Department(s) without cause upon sixty (60) days prior written notice. If
Penney, in accordance with this subparagraph, terminates this Agreement with
respect to any individual Licensed Departments without cause, Penney shall give
written notice to Operator sixty (60) days prior to such termination. Operator,
within fifteen (15) days of receiving such notice of termination, may request in
writing the reason for such termination. Penney may elect to inform Operator of
the reason; however, nothing herein shall obligate Penney to do so.
Notwithstanding the foregoing, Penney may not close more than forty (40)
Licensed Department(s) in any period of twelve (12) consecutive calendar months
pursuant to this subparagraph. Penney agrees to pay Operator for the costs of
the fixtures and equipment for each Licensed Department terminated by Penney
pursuant to this subsection 20(b), using the lesser amount of either the actual
costs of such fixtures and equipment or a cost basis of twenty thousand dollars
($20,000) less accumulated depreciation which shall be calculated on a straight
line ten (10) year basis.

 

Operator shall not be entitled to terminate the Agreement with respect to more
than twenty (20) individual Licensed Departments without cause during any Penney
fiscal year and provided further that (unless otherwise agreed in writing by
Penney) the actual closing of such 20 Licensed Departments may only occur if the
following two

 

 

 

Page 5 of 7

 

 

--------------------------------------------------------------------------------

 

conditions are met: (i) closing occurs during the last 10 days of January of
each then current Penney fiscal year; and (ii) Operator provided 180 days prior
written notice to Penney. Operator agrees to pay Penney a sum equal to the value
of Operator’s fixtures and equipment for each Licensed Department terminated by
Operator pursuant to this subsection 20(b), using the lesser amount of either
the actual value of such fixtures and equipment or a cost basis of twenty
thousand dollars ($20,000) less accumulated depreciation which shall be
calculated on a straight line ten (10) year basis.

 

Article V

Paragraph 5 of Schedule A shall be deleted in its entirety and the following
paragraph 5 shall be substituted in its place:

5. License Fees:

Category

Rent Percentage Box A, Box B, Box C Stores opened before January 31, 2007

Rent Percentage Box B (Off Mall Stores only) Opened on or after January 31, 2007

Percentage of cash Net Sales, excluding doctor’s fees received in cash by
doctors within a Licensed Department.

[CONFIDENTIAL]

[CONFIDENTIAL]

Percentage of credit and debit card Net Sales, and Net Sales, excluding doctor’s
fees received in cash by doctors within a Licensed Department.

[CONFIDENTIAL]

[CONFIDENTIAL]

Percentage of doctor’s fees received through credit and debit card sales by
doctors within a Licensed Department.

[CONFIDENTIAL]

[CONFIDENTIAL]

Percentage of Net Sales, excluding shipping, from orders placed through the
Optical Website.

[CONFIDENTIAL]

[CONFIDENTIAL]

 

 

 

 

Page 6 of 7

 

 

--------------------------------------------------------------------------------

 

 

Article VI

The Agreement is incorporated herein by reference. Capitalized terms not
otherwise defined in this Amendment are used as defined in the Agreement. By way
of clarification, the parties acknowledge and agree that advertising requiring
Penney approval under the Agreement includes, but is not limited to, press
releases and the like.

Article VII

All other terms and conditions of the Agreement (including but not limited to
Schedule A) shall remain in full force and affect as though set forth herein in
their entirety.

 

IN WITNESS THEREOF, the parties hereto have caused this Sixth Amendment to be
executed by their duly authorized agents as of the Effective Date

 

 

U.S. Vision, Inc. (“Operator”)

JCP Procurement As Agent for:
J.C. Penney Corporation, Inc. (“Penney”)

 

 

By: /s/ William A. Schwartz, Jr.

By: /s/ Gary Lundberg

Printed Name: William A. Schwartz, Jr.

Printed Name: Gary Lundberg

Title: President & Chief Executive Officer

Title: Procurement Group Manager

 

Recommended by: /s/ Tracy Vowell

 

Printed Name: Tracy Vowell

 

Title: Procurement Agent

 

 

 

 

 

Page 7 of 7