Document:

Exhibit
10.1

 

EMPLOYMENT AGREEMENT

 

 

THIS EMPLOYMENT
AGREEMENT (this “Agreement”) is made as of September 12, 2003 between 1-800
CONTACTS, INC., a Utah corporation (the “Company”), and Brian Bethers
(the “Executive”).  This
Agreement shall be deemed to be effective as of July 9, 2003 (the “Effective
Date”).

 

In consideration
of the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

1.             Employment.  The Company shall employ Executive, and
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement, for the period beginning on the
Effective Date and ending as provided in paragraph 4 hereof (the “Employment
Period”).

 

2.             Position and
Duties.

 

(a)           During the
Employment Period, Executive shall serve as the Chief Financial Officer of the
Company and shall have the normal duties, responsibilities and authority of
such position.

 

(b)           Executive shall
report to the Company’s Chief Executive Officer and such other persons as the
board of directors (“the Board”) may direct from time to time, and Executive
shall devote his best efforts and his full business time and attention (except
for permitted vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the Company and its Subsidiaries (as
hereinafter defined).  Executive shall
perform his duties and responsibilities to the best of his abilities in a diligent,
trustworthy, businesslike and efficient manner.

 

(c)           For purposes of this
Agreement, “Subsidiaries” shall mean any corporation of which the
securities having a majority of the voting power in electing directors are, at
the time of determination, owned by the Company, directly or through one of
more Subsidiaries.

 

3.             Base Salary and
Benefits

 

(a)           During the first
year of the Employment Period, Executive’s base salary shall be $225,000 per
annum (the “Base Salary”), which salary shall be payable in regular
installments in accordance with the Company’s general payroll practices and
shall be subject to customary withholding. 
Thereafter, the Base Salary shall be such higher rate as the Board may
designate from time to time.  As used in
this Agreement, the term “Base Salary” shall be deemed to include any such
increases as may be designated from time to time by corporate management.  During the Employment Period, Executive
shall be entitled to participate in all of the Company’s employee benefit
programs for which management employees of the Company and its Subsidiaries are
generally eligible (including the Company’s stock option program).

 

 

(b)           In addition to the
Base Salary, the Board will award an annual bonus between 25% and 75% of the
Executive’s Base Salary with a 50% target of $112,500 to Executive following
the end of each fiscal year during the Employment.  Executive’s bonus percentage shall be determined using the
following three factors: Company wide profits less advertising expenses;
personal performance (mutually agreeable goals); and the discretion of the
Chief Executive Officer and/or Board members. 
In addition to the Base Salary and any bonuses payable to Executive
pursuant to this paragraph, Executive shall be entitled to the following benefits
during the Employment Period:

 

(i)            Reimbursement for the cost of an
annual physical examination by a physician of Executive’s choice;

(ii)           A maximum of twenty days vacation
each year with salary, subject to additional vacation upon executive approval;
and

(iii)          Reimbursement for travel,
entertainment and other business expenses reasonably incurred by Executive
(including costs associated with the use of a mobile telephone); and

(iv)                              $500 per month car allowance; and

(v)                                 $400 per month house cleaning allowance;
and

(vi)                              $1000 annual tax planning allowance; and

(vii)                           401 (k) — Company will match 50% up to 6% deferral;
and

(viii)                        Paid LTD; and

(ix)                                Paid Life Insurance (Supplemental Life
Available); and

(x)                                   Paid Medical Coverage for self, spouse
and dependants; and

(xi)                                Dental and Vision coverage available; and

(xii)                             Moving expenses up to $100,000 and a relocation bonus
of $35,000 after review of 2003 total bonus earnings.

 

4.             Termination.

 

(a) The Employment Period shall continue until earlier of (i) the fourth
anniversary of the Effective Date (the “Expiration Date”) or (ii)
Executive’s resignation, death or disability or other incapacity (as determined
by the Board in its good faith judgment) or until the Board determines in its
good faith judgment that termination of Executive’s employment is in the best
interests of the Company. 
Notwithstanding the foregoing, the Employment Period shall be
automatically extended for an additional year unless either the Company or the
Executive delivers written notice to the other within 60 days of the Expiration
Date of its or his intention not to extend the Employment Period.  In the event of Executive’s resignation of
employment for any reason, (other than a breach by the Company of paragraph
2(a)) or termination for Cause (as defined herein), Executive shall not be
entitled to receive his Base Salary or any fringe benefits for any period after
the termination of the Employment Period. 
Upon any other termination of the Employment Period, Executive shall be
entitled to receive (i) his Base Salary and health benefits for a period of 12
months thereafter, and (ii) following the end of the fiscal year in which
Executive’s employment would have been entitled if he remained employed by the
Company or its Subsidiaries for the entire fiscal year (the “Bonus Amount”),
(A) 50% of the Bonus Amount if such termination occurs in the first six months
of such

 

 

fiscal year or (B)
100% of the Bonus Amount if such termination occurs in the second six months of
such fiscal year.

 

(b) For
purposes of this Agreement, “Cause” shall mean (i) the willful and continued
failure by Executive to perform his duties of the position set forth herein or
his continued failure to perform duties reasonably requested or reasonably
prescribed by the Board, (ii) the engaging by Executive in conduct which is
materially monetarily injurious to the Company or any of its Subsidiaries,
(iii) gross negligence or willful misconduct by Executive in the performance of
his duties which results in, or causes, material monetary harm to the Company
or any of its Subsidiaries, or (iv) Executive’s commission of a felony or other
civil or criminal offense involving moral turpitude.  In the case of (i), (ii) and (iii) above, finding of Cause for
termination shall be made only after reasonable notice to Executive and an
opportunity for Executive, together with counsel (if requested by executive),
to be heard before the Board.

 

5.             Confidential
Information.  Executive acknowledges
that the information, observations, data, strategic and development plans,
financial condition, business plans, co-developer identities, business records,
customer lists, clients and suppliers, project records, market reports,
employee lists and business manuals, policies and procedures, information relating
to processes, technologies of theory and all other information which may be
disclosed or obtained by Executive while employed by the Company and its
Subsidiaries concerning the business or affairs of the Company or any other
Subsidiary (“Confidential Information”) are the property of the Company or such
Subsidiary.  Therefore, Executive agrees
that he shall not disclose to any unauthorized person or use for his own
purposes any Confidential Information without the prior written consent of the
Board, unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a result
of Executive’s acts or omissions. 
Executive shall deliver to the Company at the termination of the
Employment Period, or at any other time the Company may request, all memoranda,
notes, plans, records, reports, computer tapes, printouts and software and
other documents and data (and copies or reproductions thereof) relating to the
Confidential Information, Work Product (as defined below) or the business of
the Company or any Subsidiary which he may then possess or have under his
control.

 

6.             Inventions
and Patents.  In accordance with UCA
§34-39-1 et. seq., Executive acknowledges that any invention or part thereof
conceived, developed, reduced to practice, or created by Executive which is:

(a) conceived, developed, reduced to practice, or
created by Executive:

(i) within the scope of
his employment;

(ii) on Company’s or its
Subsidiaries’ time; or

(iii) with the aid, assistance, or use of any of
Company’s or its Subsidiaries’ property, equipment, facilities, supplies,
resources, or intellectual property;

(b) the result of any work, services, or duties
performed by Executive for Company or its Subsidiaries;

(c) related to the industry or trade of the Company or
its Subsidiaries; or

(d) related to the current or demonstrably anticipated
business, research, or development of the Company or its Subsidiaries is (“Work
Product”) and belongs to the Company or such

 

 

Subsidiary.

(e) 
(“Intellectual property”) means any and all patents, trade secrets, know-how,
technology, confidential information, ideas, copyrights, trademarks, and
service marks and any and all rights, applications, and registrations relating
to them.

(f) Executive shall promptly disclose such Work Product to the Board
and perform all actions reasonably requested by the Board (whether during or
after the Employment Period) to establish and confirm such ownership
(including, without limitation, assignments, consents, powers of attorney and
other instruments).

 

7.             Non-Compete,
Non-Solicitation.

 

(a)           In further
consideration of the compensation to be paid to Executive hereunder, Executive
acknowledges that in the course of his employment with the Company he shall become
familiar with the Company’s trade secrets and with other Confidential
Information concerning the Company and its Subsidiaries and that his services
shall be of special, unique and extraordinary value to the Company and its
Subsidiaries.  Therefore, Executive
agrees that, during the Employment Period and for two years thereafter (the “Noncompete
Period”), he shall not, without the express written consent of the Company,
directly or indirectly own any interest in, manage, control, participate in,
consult with, render services for, or in any manner engage in any business
competing with the businesses of the Company or its Subsidiaries, as such
businesses exist or are in process on the date of the termination of
Executive’s employment, within any geographical area in which the Company or
its Subsidiaries engage or plan to engage in such businesses.  Nothing herein shall prohibit Executive from
being a passive owner of not more than 1% of the outstanding stock of any class
of a corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.

 

(b)           During the
Noncompete Period, Executive shall not directly or indirectly through another
entity (i) hire any person who was an employee of the Company or any Subsidiary
at any time during the three-month period prior to the expiration of the
Employment Period or (ii) induce or attempt to induce any customer,
supplier, licensee, licensor, franchisee or other business relation of the
Company or any Subsidiary to cease doing business with the Company or such
Subsidiary, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any
Subsidiary (including, without limitation, making any negative statements or
communications about the Company or its Subsidiaries) which interference causes
material monetary damage to the Company or its Subsidiaries.

 

8.             Enforcement.  If, at the time of enforcement of
paragraph 5, 6, 7 or 8 of this Agreement, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area. Because Executive’s services are unique and because Executive
has access to Confidential Information and Work Product, the parties hereto
agree that money damages would not be an adequate remedy for any breach of this
Agreement.  Therefore, in the event a
breach or threatened breach of this Agreement, the Company or its successors or
assigns may, in addition to other rights and remedies

 

 

existing in their
favor, apply to any court of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce, or prevent any
violations of, the provisions hereof (without posting a bond or other
security).  In addition, in the event of
an alleged breach or violation by Executive of paragraph 7, the Noncompete
Period shall be tolled until such breach or violation has been duly cured.  Executive agrees that the restrictions
contained in paragraph 7 are reasonable.

 

9.             Other Businesses.  As long as Executive is employed by the
Company or any of its Subsidiaries, Executive agrees that he will not, except
with the express written consent of the Board, become engaged in, or render
services for, any business other than the business of the Company, any of its
Subsidiaries or any corporation or partnership in which the Company or any of
its Subsidiaries have an equity interest; provided, that Executive may devote a
de minimis portion of his time to engaging in, or rendering services for, any
such business if such activities do not in any material way interfere with the
performance by Executive of his obligations hereunder and such activities do
not  in any way materially and adversely
affect the Company.  Executive shall
notify the Company prior to engaging in any such activities.  Nothing contained in this paragraph 9
shall limit the provisions of paragraph 7 above.

 

10.           Executive’s
Representations.  Executive hereby
represents and warrants to the Company that (i) the execution, delivery and
performance of this Agreement by Executive do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which he is
bound, (ii) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms.  Executive hereby acknowledges and represents that he fully
understands the terms and conditions contained herein.

 

11.           Survival.  Paragraphs 5, 6, and 7 and
paragraphs 11 through 19 shall survive and continue in full force in
accordance with their terms notwithstanding any termination of the Employment
Period.

 

12.           Notices.  Any notice provided for in this Agreement
shall be in writing and shall be either personally delivered, or mailed by
first class mail, return receipt requested, to the recipient at the address
below indicated:

 

Notices to Executive:

 

Brian
Bethers

3
Saddle Lane

Wayland,
MA 01778

 

 

Notices to the Company:

 

1-800 CONTACTS, INC.

13751 Wadsworth Park Drive, Suite D-140

Draper, Utah 
84020

Attn:  Board of Directors

 

or such other address or
to the attention of such other person as the recipient party shall have
specified by prior written notice to the sending party.  Any notice under this Agreement shall be
deemed to have been given when so delivered or mailed.

 

13.           Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.

 

14.           Complete
Agreement.  This Agreement, those
documents expressly referred to herein and other documents of even date
herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.

 

15.           No Strict Construction.  The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.

 

16.           Counterparts.  This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

 

17.           Successors and
Assigns.  This Agreement is intended
to bind and inure to the benefit of and be enforceable by Executive, the
Company and their respective heirs, successors and assigns, except that
Executive may not assign his rights or delegate his obligations hereunder
without the prior written consent of the Company.

 

18.           Choice of Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Utah, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Utah or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of Utah.

 

 

19.           Amendment
and Waiver.  The provisions of this
Agreement may be amended or waived only with the prior written consent of the
Company and Executive, and no course of conduct or failure or delay in
enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement.

 

*              *              *              *

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the Effective
Date written above.

 

 

	
   

  	
   

  	
   

  	
  1-800 CONTACTS,
  INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Jonathan C. Coon

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Jonathan C. Coon

  
	
   

  	
   

  	
   

  	
  Its: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Brian Bethers

  	
   

  
	
   

  	
   

  	
   

  	
  Brian BethersExhibit 10.2

 

EIGHTH AMENDMENT TO
LEASE

 

THIS EIGHTH AMENDMENT TO LEASE (“Eighth
Amendment”) is made and entered into by and between Draper Land Limited
Partnership No. 2, a Utah limited partnership (“Landlord”) and 1-800 CONTACTS,
INC., a Delaware corporation (“Tenant”).

 

Recitals:

 

A.                                   Landlord
and Tenant (formerly known as 1-800-Lens-Now, Inc., a Utah corporation, d/b/a
1-800-Contacts) are parties to a Commercial Lease dated November 3,
1997.  Said Commercial Lease has been
amended by the following instruments: (i) First Amendment to Lease dated
May 25, 1998; (ii) Second Amendment to Lease dated August 6, 1998;
(iii) Third Amendment to Lease dated January 17, 2001; (iv) Fourth
Amendment to Lease dated January 17, 2001; (v) Fifth Amendment to Lease
dated January 17, 2001; (vi) Sixth Amendment to Lease dated
January 17, 2001; and (vii) Seventh Amendment to Lease dated
March 31, 2003.  The Commercial
Lease and the seven amendments referred to above are hereinafter collectively
referred to as the “Lease”.

 

B.                                     The
Lease provides for the lease of the Original Premises, the Additional Space,
the Expansion Space, the 2nd Expansion Space, the 3rd
Expansion Space, the 4th Expansion Space, and the 5th
Expansion Space (as such terms are defined in the Lease) (collectively, the
“Premises”) in the building located at 66 East Wadsworth Park Drive, Building
B, Suite #101, Draper, Utah 84020 (the “Building”).

 

C.                                     Landlord and
Tenant now desire to further amend the Lease in certain respects, including
leasing additional space in the Building to Tenant, all in accordance with and
subject to the terms and conditions set forth herein.

 

Terms and Conditions
of Agreement:

 

NOW, THEREFORE, in consideration of the
mutual promises contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

 

1.                                       Contingent
on Approval by Landlord’s Mortgage Lender. 
This Eighth Amendment is contingent upon Landlord receiving approval
from Landlord’s mortgage lender. 
Landlord will use its best efforts to obtain such approval promptly.

 

2.                                       Effective
Date.  This Eighth Amendment shall
become effective as of September 1, 2003 (the “Effective Date”) unless
Landlord has not received approval from its lender by that date, in which event
this Amendment will become effective on the date Landlord receives such
approval.

 

3.                                       Lease
of Suite 200.  Landlord will lease
to Tenant, and Tenant will accept and lease from Landlord, those certain
premises (“Suite 200”) known as Suite 200 of the Building, as depicted on
Exhibit A-1 attached hereto and incorporated by reference herein, which Suite
200

 

 

consists of 9,910
rentable square feet of office space on the 2nd floor of the Building.  Suite 200 is now occupied by Glyphics Communications,
Inc.  Glyphic’s lease for Suite 200
expires on November 30, 2003, but Glyphics has stated that it intends to
vacate Suite 200 on September 15, 2003. 
Landlord will deliver possession of Suite 200 to Tenant immediately upon
vacation by Glyphics.  Upon vacation by
Glyphics, Suite 200 shall be deemed to be part of the “Premises” as defined in
the Lease and Tenant’s use and occupancy of Suite 200 will be subject to all of
the terms and conditions of the Lease applicable to the Premises.  Tenant shall bear the entire cost of any
alterations or improvements made to Suite 200 to suit Tenant’s needs.

 

4.                                       Lease
of Suite 100.  Landlord will lease
to Tenant, and Tenant will accept and lease from Landlord, those certain
premises (“Suite 100”) known as Suite 100 of the Building, as depicted on
Exhibit A-2 attached hereto and incorporated by reference herein, which Suite
100 consists of 4,149 rentable square feet of office space on the 1st floor of
the Building.  Suite 100 is now occupied
by Employee Benefit Management Services (“EBMS”), whose lease for Suite 200
expires on September 30, 2003. 
Landlord will deliver possession of Suite 100 to Tenant immediately upon
vacation by EBMS.  Upon vacation by
EBMS, Suite 100 shall be deemed to be part of the “Premises” as defined in the
Lease and Tenant’s use and occupancy of Suite 100 will be subject to all of the
terms and conditions of the Lease applicable to the Premises.  Tenant shall bear the entire cost of any
alterations or improvements made to Suite 100 to suit Tenant’s needs.

 

5.                                       Lease
of Suite 204.  Another tenant of the
Building, Bright Trading, currently occupies those certain premises (“Suite
204”) known as Suite 204 of the Building, as depicted on Exhibit A-3 attached
hereto and incorporated by reference herein, which Suite 204 consists of 1,812
rentable square feet of office space on the second floor of the Building.  Landlord will reach an agreement with Bright
Trading (acceptable to Landlord) in which Bright Trading agrees to vacate Suite
204 and to relocate to another building in Landlord’s business park.  Tenant agrees to pay all expenses required
to induce Bright Trading to relocate including, without limitation, incentives
such as moving expenses or free rent, so long as such expenses do not exceed $20,000.00.
After Bright Trading vacates Suite 204 Landlord will lease to Tenant, and
Tenant will accept and lease from Landlord, all of Suite 204.  In that event, upon vacation by Bright
Trading, Suite 204 shall be deemed to be part of the “Premises” as defined in
the Lease and Tenant’s use and occupancy of Suite 204 will be subject to all of
the terms and conditions of the Lease applicable to the Premises.  Possession of Suite 204 will be delivered to
Tenant immediately upon vacation by Bright Trading.  Tenant shall bear the entire cost of any alterations or
improvements made to Suite 204 to suit Tenant’s needs.

 

6.                                       Term.  The lease term for all of the Premises
leased in the Building, including the Original Premises, the Additional and
Expansion Spaces mentioned in Recital B above, Suites 200 and 100, and, if
applicable, Suite 204, shall expire at 11:59 p.m. on December 31,
2009.  Except as provided in paragraph
16 of this Amendment, there will be no option to extend the term as to any of
said Premises and paragraph 2(b) of the original Commercial Lease is hereby
deleted.

 

7.                                       Rent.  Commencing as of September 1, 2003, the
rent payable to Landlord shall be $11.50 per rentable square foot in the
Premises, which shall be triple net rent to Landlord.

 

2

 

Said rent shall be
increased by two percent (2%) per year, with the first rental increase taking
effect on September 1, 2004, and subsequent annual increases on the same
date each subsequent year.  Rent shall be
due on or before the 1st day of each month during the term.  All rent and other sums due under the Lease
(collectively “Rents”) shall be paid in cash, without deduction or offset, to
Draper Land Limited Partnership No. 2, 71 East Wadsworth Park Drive, Draper,
Utah 84020, Attn: Kip Wadsworth.  The
rents for Suites 200, 100, and 204, respectively, shall begin to accrue from
the date that each of said Suites is delivered by Landlord to Tenant.  Subparagraph 4(a) of the original Commercial
Lease is hereby deleted.

 

8.                                       Expenses
to Be Paid by Tenant.  From and
after the Effective Date, Tenant shall be solely responsible to pay all
expenses related to the Premises, the Building, and associated parking,
including, without limitation, all property taxes and assessments, insurance,
utilities, maintenance and repairs, capital expenditures, and any improvements
(capital or other) desired by Tenant or required by the Lease.  Landlord will assume full responsibility for
roof expenditures (capital or other). Capital Expenditures shall mean capital
expenditures incurred either (i) to reduce Operating Expenses, or (ii) to
comply with any law, order or regulation of any governmental,
quasi-governmental, public or other authority enacted (or which otherwise first
becomes effective) after the Commencement Date.  Costs of capital expenditures shall be amortized over their
useful life based on contractors or manufacturer’s reasonable information.  Tenant shall be charged the prorata amount
of said capital costs based on then remaining term of the lease.  The amount of said costs Tenant shall be
responsible for shall be the percentage derived by dividing the then remaining
term by the useful life of the improvement (ie. 5 years remaining term / a 15
year useful life = 33% cost to Tenant).Property taxes, assessments and
insurance will be paid by Landlord in the first instance, and Tenant will
reimburse Landlord as provided herein below. 
All other expenses will be paid directly by Tenant.  Tenant agrees, at its expense, to maintain
the Premises and the Building in good, clean and attractive condition and in
compliance with all applicable laws and codes, including without limitation
compliance with the Americans with Disabilities Act (“ADA”).  The Landlord will maintain the roof of the
building in good, clean and functional condition and in compliance with all
applicable laws and codes.  Landlord
warrants the building and Premises are in compliance with all applicable laws
and codes, including without limitation compliance with the Americans with
Disabilities Act (“ADA”).  Tenant shall
also maintain the parking area, sidewalks, and landscaping adjacent to the
Building in good, clean and attractive condition and in compliance with all
applicable laws and codes, compliance with the ADA and including repairing
asphalt and restriping the parking areas as necessary from time to time.  Tenant shall keep the Building, Premises,
parking and landscaped areas in as good condition as they have been kept by
Landlord prior to the date of this Amendment. 
In the event of any failure by Tenant to so maintain the Building,
Premises, parking and landscaped areas, and if Tenant fails to cure such
failure within a reasonable period of time required to cure such failure after
written notice from Landlord, Landlord shall have the right (but not the
obligation) to cure such failure and Tenant will reimburse Landlord all sums
expended by Landlord to effect such cure within ten (10) days after invoicing,
together with an administrative fee equal to 15% of said sums.  Subparagraph 6(a) of the original Commercial
Lease is hereby deleted.

 

9.                                       Insurance
and Taxes.  Landlord will continue
to maintain fire and hazard insurance covering the Premises and Building, with
such coverages and in such amounts as may

 

3

 

be required by
Landlord’s lender, or as Landlord may deem commercially reasonable.  Landlord will also pay, in the first
instance, all real property taxes and assessments for the Premises, Building
and associated parking.  In addition to
the triple net rent described in paragraph 5 above, Tenant will reimburse
Landlord for the cost of all such insurance and for said taxes and assessments,
together with a management fee in the amount of two percent (2%) of the
premiums, taxes and assessments. 
Landlord will send invoices to Tenant for all insurance premiums, taxes
and assessments paid by Landlord with respect to the Premises, Building, and
associated parking, and the applicable management fee, and Tenant will pay all
such amounts within ten (10) days after invoicing.

 

10.                                 Additional
Security Deposit.  None is required.

 

11.                                 Parking.  From and after the Effective Date, Tenant
will have the use of five and one-half (5.5) non-reserved stalls for each 1,000
usable square feet included in the leased Premises.  The Tenant will have the use of all stalls in the existing
parking lot surrounding the Building, not to be less than 316 stalls, with an
additional minimum of 52 stalls to be located elsewhere in the business park,
as designated by Landlord, and within a reasonable walking distance to the
Building.

 

12.                                 Acceptance
of Additional Suites.  Tenant’s
taking possession of Suites 100, 200, and 204, shall be deemed conclusive
evidence that said premises are in good order and satisfactory condition.  Landlord is under no obligation to alter,
remodel, repair or improve any of said premises, the Building or the grounds,
and Landlord has made no representations, express or implied, respecting any matter
or thing relating to said premises, Building, or the grounds except as may be
expressly stated in the Lease or this Amendment. Any alterations,
modifications, or tenant improvements made to Suites 100, 200, and 204, shall
be made at Tenant’s sole cost and expense, and in accordance with the
requirements of paragraph 14 below.

 

13.                                 Landlord’s
Right to Continue Leases for Antennas and Billboard Sign.  The parties acknowledge that when Tenant
takes possession of Suites 100, 200 and 204, Tenant will be the sole occupant
of the Building.  However,
notwithstanding any other provisions of the Lease or this Amendment, Landlord
will continue to have the exclusive right to place and maintain antennas on the
roof of the Building, and the exclusive right to lease the billboard sign on
the grounds near the Building.  Landlord
will maintain the billboard sign in good, clean and attractive condition and
will fund any and all charges related to this maintenance.

 

14.                                 Design
and Construction of Tenant Improvements. 
Tenant shall have the right, at Tenant’s sole cost and expense, to
modify the Premises and Building in order to integrate Suites 100, 200 and 204
into the rest of the Premises, and in order to make the Building and Premises
more suitable for use by a single Tenant, subject to the following terms
and conditions:

 

A.                                   Tenant
agrees to have Wadsworth Design Group and Ralph L. Wadsworth Construction
Company, Inc. (“Landlord’s Affiliates”) perform the design services and general
construction contract for the design and construction of the modifications and
improvements to the Premises and Building.

 

4

 

B.                                     No
alterations, modifications or improvements to the Building or Premises will be
performed without the prior written consent of Landlord (and, if required,
Landlord’s lender).  Prior to
commencement of any alterations, modifications or tenant improvements to the
Building or Premises, Tenant shall submit to Landlord complete plans and
specifications showing the work to be done. 
Landlord consents to Tenant’s proposal to build out the space on the
second floor above the existing lobby.

 

C.                                     All
work performed on behalf of Tenant will be performed by licensed
contractors.  Tenant agrees that all
alterations modifications and improvements that it contracts to have performed
in the Building must comply with all applicable building codes and all
requirements of state, local or federal laws and agencies having jurisdiction
of the Building, Premises or work, including, without limitation, the ADA.

 

D.                                    Tenant
will promptly pay for all work performed and materials supplied, and will keep
the Building and Premises free and clear of any mechanic’s or materialmen’s
liens for work that it contracts to have performed.  During the course of construction, Landlord shall have the right
to post notices of non-responsibility on or about the Building or Premises.

 

15.                                 Build-to-Suit
Option.  At Tenant’s option,
Landlord will allow Tenant to terminate this Lease after April 30, 2006
if, but only if, Tenant enters into a Build-to-Suit Lease for a new building to
be constructed by Landlord, subject to the following terms and
conditions:

 

A.                                   No such option shall
exist while there is any uncured default by Tenant under the terms of the
Lease.

 

B.                                     At the time that
Tenant exercises the option, Tenant’s credit rating must be satisfactory to
Landlord (in Landlord’s reasonable discretion) and to the lenders Landlord
intends to use for its construction and permanent loans for the new
building.  If Tenant’s credit is not
satisfactory, the option may not be exercised. 
On the other hand, if Tenant’s credit is satisfactory but Landlord is
unable to provide 25% equity to satisfy Landlord’s lender within sixty (60)
days after the Build –to-Suit lease has been signed, Tenant may immediately
terminate both the Build-to-Suit Lease and this Lease without any penalty or
further obligation to Landlord.

 

C.                                     If Tenant desires
to exercise this option and the conditions described in subparagraphs A and B
above are met, Tenant shall give written notice of exercise to Landlord.

 

D.                                    If Tenant exercises
its option hereunder, Landlord and Tenant will enter into a “Build-to-suit
Lease Agreement” based upon and incorporating the following provisions:  

 

(i)                                                             The
new building to be constructed by Landlord (the “New Building”) will be located
on the property known as the “Van Otten Property” which consists of
approximately 12.87 acres located at approximately 14000 South 200 East in
Draper, Utah.  The New Building will be
placed on said

 

5

 

property in such a manner as to allow Landlord to construct other
buildings on other portions of said property. 
Site planning must be acceptable to both Landlord and Tenant.

 

(ii)                                                          The
New Building must contain a minimum of 80,000 square feet of space.

 

(iii)                                                       The
design of the New Building must be acceptable to both Tenant and Landlord.  

 

(iv)                                                      The
term of the Build-to-Suit Lease must be at least 10 years.

 

(v)                                                         Tenant
may become a part-owner of the New Building and the land (hereinafter the “Adjacent
Land”) which is required as part of the approved site plan for the New
Building.  If Tenant desires to be a
part-owner, Tenant may purchase  up to a
40% undivided interest in the New Building and Adjacent Land at a price equal
to (a) the fair market value of the Adjacent Land, plus (b) Landlord’s cost of
improving the land and constructing the New Building (including, without
limitation, costs of improving land, engineering, zoning, permits, design, and
construction costs, and including a customary Developer’s fee and General
Contractor’s fee) (collectively, the “New Building Costs”), multiplied by (c)
the percentage interest which Tenant is buying.  If Landlord and Tenant are unable to agree on fair market value
of the Adjacent Land, then Landlord will choose a qualified MAI appraiser to
appraise said land, and Tenant will choose a qualified MAI appraiser to
appraise said land, and the fair market value agreed to by said appraisers will
control.  If said appraisers do not
agree on the fair market value, then the two appraisers will choose a third
qualified MAI appraiser, and the fair market value of the Adjacent Land shall
be conclusively deemed to be the average of the closest two of the three
appraisals.

 

(vi)                                                      The
rent under the Build-to-Suit Lease must provide a fair market value based
annual rate of return  to the Landlord
based on Landlord’s share of the fair market value of the Adjacent Land plus
Landlord’s share of the New Building Costs. 
The fair market value annual rate of return shall be negotiated in good
faith and in accordance with paragraph 5(D)(v) above; this rate shall be
negotiated and resolved prior to Tenant occupying the New Building.  The fair market value annual rate of return
will be comparable to the annual rate of return to landlords for comparable
Class A buildings and premises within a reasonable radius to the New Building
and Adjacent Land.

 

(vii)                                                   In
order to become a part-owner of the New Building, Tenant must take on the same
obligations assumed by Landlord, including (without limitation) signing
construction loan documents and permanent loan documents as a

 

6

 

borrower.

 

(viii)                                                If
Tenant becomes part-owner of the New Building, Landlord and Tenant will enter
into a cotenancy agreement, property management agreement, and/or similar
documentation appointing Landlord as the controlling manager during the
continuation of the cotenancy and providing for a management fee to be paid to
Landlord for its management of the New Building.  The amount of the management fee will be determined by soliciting
proposals from three separate management companies and averaging the three fees
to determine the amount of the management fee Landlord will charge.  Said fee will be waived should the Tenant
agree to fund and provide said management services at the inception of the
Build-to-Suit Lease.

 

(ix)                                                        If
Tenant exercises its Build-to-Suit option hereunder, rent will continue to
accrue under the Lease and will be paid by Tenant until the date that Tenant
moves into the New Building and begins paying rent under the Build-to-Suit
Lease.

 

16. Extension of Lease. Tenant has a one (1) time right to
extend this lease, provided Tenant is not in default (either at the time Tenant
gives notice of extension or at the time the extension commences), for one (1)
additional five (5) year term.  Tenant
must provide Landlord with a written notification of extension no less than
twelve (12) months prior to the expiration date of this lease.  The lease rate during the lease extension
period will be at ninety percent (90%) of the then current market rate for
similar premises in similar Class “A” buildings within a 5 mile radius of the
Premises.  No lease concessions or
tenant improvement allowance will be provided by Landlord as part of the terms
of the lease extension. Other terms and conditions of the Lease will remain
unchanged.

 

17. Termination of Lease. Tenant shall have the right to
terminate this lease, provided tenant is not in default, after issuing a
written Termination Notice.  The
Termination Date shall be effective nine (9) months after Landlord’s receipt of
Termination Notice.  In no event shall
the Termination Date occur before 10/1/2007. 
In exchange for early termination Tenant shall pay Landlord a lump sum Termination
Fee of five hundred thousand dollars ($500,000.00).  The Termination Fee shall be due and payable six (6) months after
Landlords receipt of Termination Notice.

 

18. Brokers and Commissions.  Landlord and Tenant acknowledge that Prime
Commercial, Inc. has acted as broker for Landlord, and NAI Utah Commercial has
acted as broker for Tenant in connection with this Amendment.  Each party will compensate its own broker
pursuant to separate agreements between the parties and their respective
brokers.  Each party represents and
warrants to the other that, other than Prime Commercial, Inc. and NAI Utah
Commercial (the “Known Brokers”), the warranting party knows of no real estate
broker or agent who is or might be entitled to compensation in connection with
this Amendment.  Each party, as
indemnifying party, agrees to indemnify, defend and hold the other party
harmless from and against any and all liabilities or expenses, including
reasonable attorneys’ fees and costs,

 

7

 

arising out of any claim for
brokerage commissions, finders fees, or similar compensation by anyone other
than the Known Brokers, which claim is based on any alleged act or agreement of
the indemnifying party.  This
indemnification shall survive the termination of the Lease, as amended hereby.

 

19.                                 Miscellaneous.  The Lease, as amended, and this Eighth
Amendment contain all of the representations, understandings, and agreements of
the parties with respect to matters contained herein.  The recitals are hereby incorporated into this Amendment.  All capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the
Lease.  Each of the individuals who have
executed this Amendment represents and warrants that he or she is duly
authorized to execute this Amendment on behalf of Landlord or Tenant as the
case may be; that all corporate, partnership, trust or other action necessary
for such party to execute and perform the terms of this Amendment have been duly
taken by such party, and that no other signature and/or authorization is
necessary for such party to enter into and perform the terms of this
Amendment.  Except as provided herein,
the terms and conditions of the Lease shall remain the same and in full force
and effect.

 

DATED this
             day of
                                      ,
2003.

 

	
  Landlord:

  	
  Tenant:

  
	
   

  	
   

  
	
  Draper Land Limited Partnership No. 2,

  a Utah limited partnership

  	
  1-800-Contacts, Inc.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  

 

8

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