EXHIBIT 10.40
(Jones - License)
LICENSE AGREEMENT, dated as of October 18, 1995 by and between
Polo Ralph Lauren, L.P. ("Licensor"), with a place of business at
650 Madison Avenue, New York, New York 10022, and Jones Apparel
Group, Inc. ("Licensee"), a Pennsylvania corporation with a place
of business at 250 Rittenhouse Circle, Bristol, Pennsylvania 19007.
WHEREAS, Licensor is engaged in the business of manufacturing,
selling and promoting, and licensing others the right to
manufacture, sell and promote, high quality apparel and related
merchandise under certain Polo/Ralph Lauren trademarks and trade
names; and
WHEREAS, Licensee desires to obtain, and Licensor is willing
to grant, a license pursuant to which Licensee shall have the right
to use the Trademark (as hereinafter defined) on the terms set
forth herein;
1. Definitions. As used herein, the term:
1.1. "License" shall mean the exclusive, non-assignable right
to use the Trademark in connection with the manufacture and/or
importation and sale of Licensed Products in the Territory.
1.2. "Licensed Products" shall mean those items set forth on
Schedule A attached hereto and made a part hereof, and all bearing
the Trademark. From time to time Licensor may authorize Licensee
to manufacture and distribute products bearing the Trademark not
expressly listed in Schedule A hereto. Absent an agreement with
respect to such products signed by Licensor and Licensee, all such
products shall be deemed Licensed Products for all purposes
hereunder; provided, however, that Licensee's rights with respect
to such products (i) shall be non-exclusive and (ii) may be
terminated by Licensor upon 90 days written notice.
1.3. "Licensor" shall mean Polo Ralph Lauren, L.P., a limited
partnership organized under the laws of the State of Delaware.
1.4. "Licensee" shall mean Jones Apparel Group, Inc., a
corporation organized under the laws of Pennsylvania.
1.5. "Territory" the United States of America, its
territories and possessions. From time to time Licensor may
authorize Licensee to sell certain Licensed Products to specific
purchasers outside the Territory. Absent an agreement with respect
to such sales signed by Licensor and Licensee, all such sales shall
be made on all of the terms and conditions set forth in this
Agreement; provided, however, that Licensee's right to make such
sales shall be non-exclusive and may be terminated by Licensor
immediately upon written notice to Licensee. Any such termination
shall not apply to orders already taken by Licensee in accordance
with Licensor's prior authorization. In the event that Licensor
wishes to use or license a third party to use the Trademark on
Licensed Products sold in Canada during the term hereof, Licensor
shall grant to Licensee a right of first refusal to act as the
Licensee therefor. In the implementation of said first refusal
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rights, Licensor shall give Licensee notice of the Offer Terms upon
which it proposes to grant a license ("Licensor's Offer") for such
products. Licensee shall have a period of forty-five (45) days
after the date of Licensor's notice of the Offer Terms to accept or
reject Licensor's Offer in writing. If Licensee rejects Licensor's
Offer or if Licensee initially accepts Licensor's Offer but
thereafter is unable to satisfy the Offer Terms, then Licensor
shall be free to make a substantially similar Licensor's Offer to
any third party. If Licensor shall substantially (as determined in
Licensor's reasonable discretion) change the Offer Terms then,
during the term hereof, Licensee's right of first refusal as
provided hereinabove shall apply to such changed Offer Terms.
1.6. "Trademark" shall mean the trademark set forth on
Schedule B hereto, and no other trademark, regardless of whether
such trademark is or includes any reference to "Ralph Lauren" or
any other trademark owned by Licensor or its affiliates. Licensor
shall have the sole right to determine the manner and use each of
the Trademark in connection with each particular Licensed Product.
2. Grant of License.
2.1. Subject to the terms and provisions hereof, Licensor
hereby grants Licensee and Licensee hereby accepts the License.
Licensor shall neither use nor authorize third parties to use the
Trademark in connection with the manufacture, sale and/or
importation of Licensed Products in the Territory during the term
of this Agreement without Licensee's prior approval. To the extent
it is legally permissible to do so, no license is granted hereunder
for the manufacture, sale or distribution of Licensed Products to
be used for publicity purposes, other than publicity of Licensed
Products, in combination sales, as premiums or giveaways, or to be
disposed of under or in connection with similar methods of
merchandising, such license being specifically reserved for
Licensor.
2.2. It is understood and agreed that the License applies
solely to the use of the Trademark on the Licensed Products, and
that (i) no use of any other trademark of Licensor or of any of
Licensor's affiliates (including any trademark that uses the name
"Ralph Lauren"), and (ii) no use of the Trademark on any other
products, is authorized or permitted. Licensor reserves the right
to use, and to grant to any other licensee the right to use, the
Trademark, whether within or outside the Territory, in connection
with any and all products and services, other than Licensed
Products within the Territory. Licensee understands and agrees that
Licensor may itself manufacture or authorize third parties to
manufacture in the Territory, Licensed Products for ultimate sale
outside of the Territory. Subject to the terms of paragraph 17.4
hereof, Licensee may manufacture or cause to be manufactured the
Licensed Products outside of the Territory, but solely for purposes
of sale within the Territory pursuant to the terms of this
Agreement.
2.3. Licensee shall not have the right to use Licensee's name
on or in connection with the Licensed Products, except with the
prior approval by Licensor of the use and placement of Licensee's
name. Licensee shall, at the option of Licensor, include on its
business materials and/or the Licensed Products an indication of
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the relationship of the parties hereto in a form approved by
Licensor.
2.4. Licensee shall not use or permit or authorize another
person or entity in its control to use the words "Polo" or "Ralph
Lauren" as part of a corporate name or tradename without the
express written consent of Licensor and Licensee shall not permit
or authorize use of the Trademark in such a way so as to give the
impression that the name "Ralph Lauren," or the Trademark, or any
modifications thereof, are the property of Licensee.
2.5. In the event that (i) Sidney Kimmel is no longer the
Chairman of Licensee and the owner of a controlling interest in
Licensee, and (ii) Licensee, directly or indirectly, agrees to
manufacture, distribute, sell or advertise during the term of this
Agreement any items which bear the name or are associated with the
name of any person or entity listed on Schedule C hereto, Licensor
shall have the right to terminate the term of this Agreement upon
sixty (60) days written notice.
2.6. Licensor represents and warrants that it has full
right, power and authority to enter into this Agreement, to perform
all of its obligations hereunder, and to consummate all of the
transactions contemplated herein. In the event that Licensee or
Licensor is charged with infringement on account of Licensee's use
of any of the Trademark or, if in connection with the development
of Licensor's program in the Territory, Licensor determines that
the use by Licensee of the trademark should be discontinued upon
reasonable written notice to Licensee, this license under the
Trademark shall be converted to a license under other mutually
agreeable "Ralph Lauren" trademarks) or label(s); in such event
Licensee hereby accepts the exclusive license to use such "Ralph
Lauren" trademarks) in connection with the manufacture and sale of
Licensed Products in the Territory subject to all other terms of
this License Agreement. In such event, Licensee shall immediately
advise Licensor of its inventory of Licensed Products labelled with
the Trademark(s) and of its stock of business materials bearing the
Trademark(s) and Licensor shall, in its reasonable discretion and
judgment, determine whether and to what extent such inventory and
materials of Licensee may continue to be used by Licensee.
2.7. Licensee shall not purport to grant any right,
permission or license hereunder to any third party, whether at
common law or otherwise. Licensee shall not without Licensor's
prior written approval sell any Licensed Products bearing the Mark
to any third party which, directly or indirectly, sells or proposes
to sell such Licensed Products outside the Territory. Licensee
shall use its best efforts to prevent any such resale outside the
Territory and shall, immediately upon learning or receiving notice
from Licensor that a customer is selling Licensed Products outside
the Territory, cease all sales and deliveries to such customer.
2.8. Licensee recognizes that there are many uncertainties in
the business contemplated by this Agreement. Licensee agrees and
acknowledges that other than those representations explicitly
contained in this Agreement, if any, no representations, warranties
or guarantees of any kind have been made to Licensee, either by
Licensor or its affiliates, or by anyone acting on their behalf.
Without limitation, no representations concerning the value of the
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Licensed Products or the prospects for the level of their sales or
profits have been made and Licensee has made its own independent
business evaluation in deciding to manufacture and distribute the
Licensed Products on the terms set forth herein.
3. Design Standards and Prestige of Licensed Products.
3.1. Licensee acknowledges that it has entered into a design
services agreement ("Design Agreement"), of even date herewith,
with Polo Ralph Lauren Enterprises, L.P. (the "Design
Partnership"), which provides for the furnishing to Licensee by the
Design Partnership of design concepts and other professional
services so as to enable Licensee to manufacture or cause to be
manufactured the Licensed Products in conformity with the
established prestige and goodwill of the Trademark. Licensee shall
manufacture, or cause to be manufactured, and sell only such
Licensed Products as are made in accordance with the design and
other information approved under, and in all other respects in
strict conformity with the terms of, the Design Agreement.
3.2. Licensee acknowledges that the Trademark has established
prestige and goodwill and are well recognized in the minds of the
public, and that it is of great importance to each party that in
the manufacture and sale of various lines of Licensor's products,
including the Licensed Products, the high standards and reputation
that Licensor and Ralph Lauren have established be maintained.
Accordingly, all items of Licensed Products manufactured or caused
to be manufactured by Licensee hereunder shall be of high quality
workmanship with strict adherence to all details and
characteristics embodied in the designs furnished pursuant to the
Design Agreement. Licensee shall supply Licensor with samples of
the Licensed Products (including, if Licensor so requests, samples
of labeling and packaging used in connection therewith) prior to
production and from time to time during production, and shall, at
all times during the term hereof, upon Licensor's request, make its
manufacturing facilities available to Licensor, and shall use its
best efforts to make available each subcontractor's manufacturing
facilities for inspection by Licensor's representatives during
usual working hours. No sales of miscuts or damaged merchandise
shall contain any labels or other identification bearing the
Trademark without Licensor's prior written approval, but sales of
all products of Licensor or the Design Partnership's design shall
nonetheless be subject to royalty payments pursuant to paragraph 6
hereof.
3.3. In the event that any Licensed Product is, in the
judgment of Licensor, not being manufactured, distributed or sold
with first quality workmanship or in strict adherence to all
details and characteristics furnished pursuant to the Design
Agreement, Licensor shall notify Licensee thereof in writing and
Licensee shall promptly repair or change such Licensed Product to
conform thereto. If a Licensed Product as repaired or changed does
not strictly conform after Licensor's request and such strict
conformity cannot be obtained after at least one (1) resubmission,
the Trademark shall be promptly removed from the item, at the
option of Licensor, in which event the item may be sold by Licensee
without payment of any royalty hereunder, provided such miscut or
damaged item does not contain any labels or other identification
bearing the Trademark. Notwithstanding anything in this paragraph
3.3 to the contrary, sales of all products of Licensor's or the
Design Partnership's design, whether or not bearing the Trademark,
shall nonetheless be subject to royalty payments pursuant to
paragraph 6 hereof. Licensor hereby approves Licensee's sale of
excess inventory, cutups and clearly marked seconds or irregular
merchandise, on all the terms set forth herein: (i) first, upon
request to Licensor's factory outlet stores to the extent of their
requirements (subject to a reasonable assortment being purchased),
at a price equal to [Omitted; Material Filed Separately With The
Securities And Exchange Commission] off the regular
wholesale price of such products (but Licensee shall not be
responsible for any royalty payments hereunder or for any
compensation payments under the Design Agreement with respect to
such sales) and (ii) second, at factory outlet stores owned by
Licensee or its affiliates ("Licensee Outlet Stores") and (iii) at
such other locations as Licensor may hereafter approve. Licensor
and Licensee shall separately agree to the terms of license
agreements for Licensee Outlet Stores, which shall bear the
Trademark as a service mark, ("Store License Agreements") , it being
understood that such Store License Agreements shall (i) not require
Licensee to pay Licensor any separate royalty or other compensation
for the right to use such service mark herein and in the Design
Agreement; (ii) Licensor shall have a right to approve each
location for each Licensee Outlet Store in its reasonable business
judgment, it being understood that Licensor does not presently
intend to approve more than one Licensee Outlet Store in each
center and (iii) such Store License Agreements shall be consistent
with other similar agreements Licensor has entered into with third
parties and shall provide for Licensor's right to approve various
aspects of the design, decoration, accessorization and operation of
all Licensee outlet Stores.
3.4. At the request of Licensor, Licensee shall cause to be
placed on all Licensed Products appropriate notice designating
Licensor or the Design Partnership as the copyright or design
patent owner thereof, as the case may be. The manner of
presentation of said notices shall be determined by Licensor.
4. Marketing.
4.1. The distribution of the Licensed Products in the
Territory shall be performed by Licensee exclusively. The Licensed
Products shall be sold by Licensee only to those specialty shops,
department stores and other retail outlets which deal in products
similar in quality and prestige to Licensed Products, and whose
operations will enhance the quality and prestige of the Trademark,
and only to those customers listed on Schedule D hereto and other
customers of similar quality and prestige. Licensor shall have the
right to object by notice to Licensee to any customer not listed on
Schedule D hereto, and Licensee shall not thereafter accept orders
from such customer, (but Licensee may fulfill orders accepted prior
to Licensee's receipt of such notice). In the event Licensor
reasonably determines that the unauthorized resale of Licensed
Products through unauthorized distribution channels is causing a
negative impact on the reputation and desirability of Licensor's
products, Licensee shall consult with Licensor in good faith
regarding what steps, including the possibility of implementing an
inventory marking system, may be taken to remedy such negative
impact. Licensee shall not market or promote or seek customers for
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the Licensed Products outside of the Territory and Licensee shall
not establish a branch, wholly owned subsidiary, distribution or
warehouse with inventories of Licensed Products outside of the
Territory.
4.2. Licensee acknowledges that in order to preserve the good
will attached to the Ralph Lauren trademarks, the Licensed Products
are to be sold at prices and terms reflecting the prestigious
nature of such trademarks, it being understood, however, that
Licensor is not empowered to fix or regulate the prices at which
the Licensed Products are to be sold, either at the wholesale or
retail level.
4.3. Licensee shall maintain the high standards of the
Trademark and the Licensed Products, in all advertising, packaging
and promotion of the Licensed Products. Licensee shall not employ
or otherwise release any of such advertising or packaging or other
business materials relating to any Licensed Products or bearing the
Trademark, unless and until Licensee shall have made a request, in
writing, for approval by Licensor. Licensor may, with respect to
any advertising, packaging or business materials submitted by
Licensee, make such suggestions as Licensor deems necessary or
appropriate, or disapprove, in either event by notice to Licensee.
Any approval granted hereunder shall be limited to use during the
seasonal collection of Licensed Products to which such advertising
relates and shall be further limited to the use (e.g. TV or print)
for which approval by Licensor was granted. Licensee shall, at the
option of Licensor, include on its business materials an indication
of the relationship of the parties hereto in a form approved by
Licensor.
4.4. Licensee shall use its best efforts to assure that all
cooperative advertising, whereby Licensee provides a customer with
a contribution toward the cost of an advertisement for Licensed
Products, whether Licensee's contribution be in the form of an
actual monetary contribution, a credit or otherwise, shall be
subject to prior approval of Licensor under the same terms and
conditions as apply to advertising and promotional materials
prepared by or to be used by Licensee pursuant to paragraph 4.5
hereof; provided, however, that in the event that Licensee is not
as a matter of practice given an opportunity to review the
cooperative advertising due to time constraints, then Licensee
shall notify Licensor, in advance, of those customers with whom it
does cooperative Licensed Product advertising and/or promotion, and
Licensee at Licensor's request shall notify the named customer of
the terms of this Agreement which pertain to the said advertising
or promotional materials.
4.5. Licensee shall exercise its best efforts to safeguard
the established prestige and goodwill of the name "Ralph Lauren"
and the trademarks associated therewith at the same level of
prestige and goodwill as heretofore maintained. "Image" as used
herein refers primarily to quality and style of packaging,
advertising and promotion, creation and introduction of new
products, type of outlets with reference to quality of service
provided by retail outlets and quality of presentation of Licensed
Products in retail outlets. Licensee shall take all necessary
steps, and all steps reasonably requested by Licensor, to prevent
or avoid any misuse of the Trademark by any of its customers,
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contractors or other resources.
4.6. During each year of this Agreement, Licensee shall
expend for the advertising of Licensed Products, which advertising
may consist of cooperative advertising, an amount that is not less
than the "Annual Advertising Obligation", as hereinafter defined,
for such year. Licensor and Licensee shall consult with each other
regarding the creation, production and placement of all advertising
of Licensed Products, but all final decisions with respect thereto
shall be made by Licensor in its sole discretion. The "Annual
Advertising obligation" for each year during the term hereof shall
be [Omitted; Material Filed Separately With The Securities And
Exchange Commission] percent of the aggregate net sales price (as
defined in paragraph 6.2 hereof) of Licensed Products sold during
such year. Licensee shall deliver to Licensor within sixty (60)
days after the end of each year hereof an accounting statement in
respect of amounts expended by Licensee on advertising for the prior
year. Each such accounting statement shall be signed, and certified
as correct, by a duly authorized officer of Licensee. Prior to each
year hereof, Licensee shall submit Licensee's advertising budget
for the upcoming year, based on the aggregate net sales price of
Licensed Products during the year then ending and on sales
projected for the upcoming year. The Annual Advertising Obligation
for such upcoming year will initially be calculated and expended
based upon such budget. If in any year during the term hereof an
amount less than the Annual Advertising obligation is expended on
advertising for any reason whatsoever (including an underestimate
of the actual net sales for such year or because the actual cost of
Institutional Advertising, if any, produced and placed during such
year is less than the Annual Advertising Obligation) , the entire
amount not expended shall be added to the Annual Advertising
Obligation for the following year.
4.7. During the term of this Agreement, Licensee shall, in
consultation with Licensor, provide a budget for the design,
construction, re-fits and seasonal changeovers of in-store shops
and fixtures to be used exclusively for the presentation of
Licensed Products, the design of which shall be subject to
Licensor's prior approval. Licensee's budget for such purposes
shall be adequate to present Licensed Products in a manner
consistent with the high quality and prestige associated with
Licensor's trademarks and the price structure of the Licensed
Products.
4.8. To the extent permitted by applicable law Licensor may
from time to time, and in writing, promulgate reasonable rules and
regulations to Licensee relating to the manner of use of the
Trademark. Licensee shall comply with such rules and regulations.
Any such rules or regulations shall not be inconsistent with or
derogate from the terms of this Agreement.
4.9. Licensee agrees to make available for purchase and to
sell on its customary price, credit and payment terms all lines and
styles of Licensed Products to retail stores in the Territory
bearing a trademark of Licensor or its affiliates and to any stores
or facilities operated or owned by Licensor and its affiliates,,
which are authorized to sell the Licensed Products within such
retail stores.
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4.10. In consideration of the License granted herein, in the
event Licensor elects to offer Licensed Products for sale in mail-
order catalogs, Licensee shall sell and timely ship Licensed
Products to Licensor or its affiliate for such purposes at a price
equal to [Omitted; Material Filed Separately With The Securities
And Exchange Commission] less than the regular wholesale price
therefor. All such sales shall be separately reported by Licensee
in its accounting statements pursuant to paragraph 6.2 hereof, and
such sales shall not be subject to the royalty or advertising
obligations set forth herein, or to the compensation obligations
set forth in the Design Agreement.
4.11. Licensor shall respond to any requests for approvals or
consents from Licensee hereunder as promptly as reasonably
practicable consistent with the level of review required.
5. Trademark Protection.
5.1. All uses of the Trademark by Licensee, including,
without limitation, use in any business documents, invoices,
stationery, advertising, promotions, labels, packaging and
otherwise shall require Licensor's prior written consent in
accordance with paragraph 4 hereof.
5.2. All uses of the Trademark by Licensee in advertising,
promotions, labels and packaging shall bear the notation "Ralph
(Polo Player Design) Lauren" or the representation of the Polo
Player, as the case may be, and shall include at Licensor's option,
a notice to the effect that each Trademark is used by Licensee for
the account and benefit of Licensor or that Licensee is a
registered user thereof or both such statements. The use of the
Trademark pursuant to this Agreement shall be for the benefit of
Polo and shall not vest in Licensee any title to or right or
presumptive right to continue such use. For the purposes of
trademark registration, sales by Licensee shall be deemed to have
been made by Licensor.
5.3. Licensee shall cooperate fully and in good faith with
Licensor for the purpose of securing and preserving Licensor's
rights in and to the Trademark. Nothing contained in this Agreement
shall be construed as an assignment or grant to Licensee of any
right, title or interest in or to the Trademark, or any of
Licensor's other trademarks, it being understood that all rights
relating thereto are reserved by Licensor, except for the License
hereunder to Licensee of - the right to use the Trademark only as
specifically and expressly provided herein. Licensee shall not file
or prosecute a trademark or service mark application or
applications to register the Trademark, for Licensed Products or
otherwise.
5.4. Licensee shall not, during the term of this Agreement or
thereafter, (a) attack Licensor's title or rights in and to
Licensor's trademarks in any jurisdiction or attack the validity of
this License or Licensor's trademarks or (b) contest the fact that
Licensee's rights under this Agreement (i) are solely those of a
licensee, manufacturer and distributor and (ii) subject to the
provisions of paragraph 10 hereof, cease upon termination of this
Agreement. The provisions of this paragraph 5.4 shall survive the
termination of this Agreement.
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5.5. All right, title and interest in and to all samples,
patterns, sketches, designs, artwork, logos and other materials
furnished by Licensor or the Design Partnership, whether created by
Licensor or the Design Partnership, and any logo or crest
associated with the Trademark, even if such logo or crest was
designed or furnished by Licensee, shall be the sole property of
Licensor and/or the Design Partnership, as the case may be.
Licensee shall assist Licensor to the extent necessary in the
protection of or the procurement of any protection of Licensor's
rights to the Trademark, designs, design patents and copyrights
hereunder and Licensor, if Licensor so desires, may commence or
prosecute any claims or suits in Licensor's own name or in the name
of Licensee or join Licensee as a party thereto. Licensee shall
promptly notify Licensor in writing of any uses which may be
infringements or imitations by others of the Trademark on articles
similar to those covered by this Agreement which may come to
Licensee's attention. Licensor shall have the sole right to
determine whether or not any action shall be taken on account of
any such infringements or imitations. Licensor shall bear one
hundred percent (100%) of the costs of all actions or proceedings
it undertakes, and shall be entitled to all recoveries in such
actions. If Licensor declines to take action with respect to a
particular infringer Licensee is not obligated to but may, with
Licensor's prior written consent, undertake such action at
Licensee's expense, in which case Licensee shall be entitled to all
recoveries in such action.
6. Royalties.
6.1 Licensee shall pay to Licensor minimum royalties for
each year during the term of this Agreement as compensation for the
License granted hereunder for the use of the Trademark in the
manufacture and sale, and/or importation and sale, of Licensed
Products in the Territory. The minimum royalty for each year during
the term hereof shall be as follows:
Year 1 (1997) $0
Year 2 $0
Year 3 $0
Year 4 $1,400,000
Year 5 $1,400,000
Minimum royalties for each year shall be paid on a quarterly basis,
beginning with the minimum royalty payment to be made for the first
calendar quarter of 2000, in the manner set forth in paragraph 6.2
below. No credit shall be permitted against minimum royalties payable
in any year on account of actual or minimum royalties paid
in any other year, and minimum royalties shall not be returnable.
Minimum royalties for each year of the "Renewal Term" (as defined
in paragraph 8 hereof) shall be an amount equal to ninety percent
(90%) of the actual earned royalty due to Licensor for sales of
Licensed Products in 2001. For the purposes of this Agreement, the
term "year" shall mean a period of twelve (12) months commencing on
each January 1 during the term of this Agreement; provided,
however, that the "first year", or "Year 1" shall mean the period
commencing on the date hereof and expiring on December 31, 1997
(although minimum royalties shall not be due until calendar year
2000).
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6.2. Licensee shall pay to Licensor earned royalties based on
the net sales price of all Licensed Products manufactured or
imported and sold by Licensee hereunder. Earned royalties shall
equal [Omitted; Material Filed Separately With The Securities And
Exchange Commission] of the net sales price of all Licensed Products
sold under this Agreement, including, without limitation, any sales
made pursuant to the terms of paragraph 10.2 hereof; provided,
however,[Omitted; Material Filed Separately With The Securities
And Exchange Commission]. Licensee shall prepare or cause to be
prepared statements of operations for the first month in which
Licensed Products are offered for sale to the trade, and for each
month thereafter for so long as Licensee is offering Licensed Products
for sale hereunder, which statements shall be furnished to Licensor
together with the earned royalties due for each such month on the last
day of the following month. The statement and royalty payment
provided on the last day of each April (for the month of March),
July (for the month of June), October (for the month of September) and
January (for the month of December) during the term shall also include
Licensee's minimum royalty obligation for the preceding calendar
quarter, less the aggregate earned royalties paid for such calendar
quarter. The term "net sales price" shall mean the gross sales
price to retailers of all Licensed Products sold under this
Agreement or, with respect to Licensed Products that are not sold
directly or indirectly to retailers, other ultimate consumers (as
in the case of accommodation sales by Licensee to its employees or
sales by Licensee in its own shops), less trade discounts,
merchandise returns, sales tax (if separately identified and
charged) and markdowns and/or chargebacks which, in accordance with
generally accepted accounting principles, would normally be treated
as deductions from gross sales, and which, in any event, do not
include any chargebacks or the like for advertising, fixture or
retail shop costs or contributions, or contributions for in-store
personnel. No other deductions shall be taken. Any merchandise
returns shall be credited in the month in which the returns are
actually made. For purposes of this Agreement, affiliates of
Licensee shall mean all persons and business entities, whether
corporations, partnerships, joint ventures or otherwise, which now
or hereafter control, or are owned or controlled, directly or
indirectly by Licensee, or are under common control with Licensee.
It is the intention of the parties that royalties will be based on
the bona fide wholesale prices at which Licensee sells Licensed
Products to independent retailers in arms' length transactions. In
the event Licensee shall sell Licensed Products to its affiliates,
royalties shall be calculated on the basis of such a bona fide
wholesale price irrespective of Licensee's internal accounting
treatment of such sale; provided, however, that royalties on sales
to Licensee Outlet Stores (as defined in paragraph 3.3 hereof)
shall be calculated on the basis of the actual invoice price to
such Licensee Outlet Stores, but in no event less than an amount
equal to [Omitted; Material Filed Separately With The Securities
And Exchange Commission] less than the regular wholesale
price of such Licensed Products. Licensee shall identify
separately in the statements of operations provided to Licensor
pursuant to paragraph 7 hereof, all sales to affiliates and through
Licensee Outlet Stores. Notwithstanding anything to the contrary
contained herein or in the Design Agreement, Licensee may sell to
its own employees involved in the business contemplated hereunder,
for their personal use, Licensed Products at a discount of thirty-
five (35%) percent or more off the regular wholesale price thereof,
without payment of royalties or compensation to Licensor; provided
that such sales do not exceed $1,000,000 in any year.
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6.3. If the payment of any installment of royalties is
delayed for any reason, interest shall accrue on the unpaid
principal amount of such installment from and after the date which
is 10 days after the date the same became due pursuant to
paragraphs 6.1 or 6.2 hereof at the lower of the highest rate
permitted by law in New York and 2% per annum above the prime rate
of interest in effect from time to time at Chemical Bank, New York,
New York or any successor bank.
6.4. The obligation of Licensee to pay royalties hereunder
shall be absolute notwithstanding any claim which Licensee may
assert against Licensor or the Design Partnership. Licensee shall
not have the right to set-off, compensate or make any deduction
from such royalty payments for any reason whatsoever.
7. Accounting.
7.1. Licensee shall at all times keep an accurate account of
all operations within the scope of this Agreement and shall render
a full statement of such operations in writing to Licensor in
accordance with paragraph 6.2 hereof. Such statements shall account
separately for each different product category and shall include
all aggregate gross sales, trade discounts, merchandise returns,
sales of miscuts and damaged merchandise and net sales price of all
sales for the previous month. Such statements shall be in
sufficient detail to be audited from the books of Licensee. Once
annually, which may be in connection with the regular annual audit
of Licensee's books, Licensee shall furnish an annual statement of
the aggregate gross sales, trade discounts, merchandise returns and
net sales price of all Licensed Products made or sold by Licensee
certified by Licensee's independent accountant. Each monthly
financial statement furnished by Licensee shall be certified by the
chief financial officer or controller of Licensee.
7.2 Licensor and its duly authorized representatives, on
reasonable notice, shall have the right, no more than once in each
year during regular business hours, for the duration of the term of
this Agreement and for three (3) years thereafter, to examine the
books of account and records and all other documents, materials and
inventory in the possession or under the control of Licensee and
its successors with respect to the subject matter of this
Agreement. All such books of account, records and documents shall
be maintained and kept available by Licensee for at least the
duration of this Agreement and for three (3) years thereafter.
Licensor shall have free and full access thereto in the manner set
forth above and shall have the right to make copies and/or extracts
therefrom. If as a result of any examination of Licensee's books
and records it is shown that Licensee's payments to Licensor
hereunder with respect to any twelve (12) month period were less
than or greater than the amount which should have been paid to
Licensor by an amount equal to three and one-half percent (3-1/2%) of
the amount which should have been paid during such twelve (12)
month period, Licensee will, in addition to reimbursement of any
underpayment, with interest from the date on which each payment was
due at the rate set forth in paragraph 6.3 hereof, promptly
reimburse Licensor for the cost of such examination. Licensee
shall provide Licensor each year with a copy of its annual report,
as soon as it is made available to Licensee's Shareholders.
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11
8. Term.
8.1 The term of this Agreement shall commence as of the date
hereof and shall terminate on December 31, 2001; provided,, however,
that if no Event of Default shall have occurred and not been cured
or waived, and Licensee has achieved the Minimum Renewal Volume (as
such term is hereinafter defined) for the period January 1, 2000
through December 31, 2000, Licensee shall have the option, upon
providing notice to Licensor on or before April 1, 2001, to renew
this Agreement for an additional three (3) year period (the
"Renewal Term") so as to expire on December 31, 2004, on the terms
and conditions herein except that there will be no further right to
renewal. The minimum aggregate net sales price which Licensee must
achieve in connection with sales of Licensed Products during the
period from January 1, 2000 to December 31, 2000 to (the "Minimum
Renewal Volume") in order to be entitled to renew this Agreement
for a second term as hereinabove provided shall be [Omitted; Material
Filed Separately With The Securities And Exchange Commission](the
"Renewal Volume") . In the event Licensee exercises its option
for a Renewal Term, each of Licensor and Licensee shall give the
other notice, on or before January 1, 2004, of its desire to extend
the term hereof beyond December 31, 2004. In the event Licensee
does not achieve the Renewal Volume as hereinabove provided,
Licensee may nevertheless request an extension of the term beyond
December 31, 2001, and Licensor shall respond to such request
(which response shall be in Licensor's sole discretion) within
thirty (30) days after its receipt thereof. It is expressly
understood that only the company (which may be Licensee) whose
licensed term covers the period subsequent to the expiration of
this Agreement shall be entitled to receive designs for Licensed
Products intended to be sold after the expiration of this
Agreement, and to make presentations of such Licensed Products
during the market presentation weeks that relate to such subsequent
period, even if such market presentation occurs prior to the
termination of this Agreement. Without limiting the generality of
the foregoing, in the event the term hereof is not renewed or
extended at the end of the initial or any renewal term, the last
season for which Licensee shall be entitled to receive designs and,
during the term hereof, to manufacture and sell Licensed Products
shall be the Cruise/Holiday season for the last year of the
relevant period, and Licensor shall be entitled to undertake,
directly or through a successor licensee, all activities associated
with the design, manufacture and sale Licensed Products commencing
with the immediately following Spring season.
8.2 Notwithstanding the terms of paragraph 8.1 hereof or
anything to the contrary contained herein or in the Design
Agreement, in the event that the aggregate net sales price of
Licensed Products sold during the period January 1, 1999 through
December 31, 1999 is less than [Omitted; Material Filed Separately
With The Securities And Exchange Commission], Licensee shall so
notify Licensor immediately upon becoming aware of such event and
in no event later than February 1, 2000 and, in such event, each of
Licensor and Licensee shall have the right, in its sole discretion,
by notice to the other on or before March 1, 2000, to terminate the
term of this Agreement and the Design Services Agreement effective
as of December 31, 2000. In the event either party gives notice of
such termination, the effect for all purposes shall be the same as
if the term of this Agreement and the Design Services Agreement
expired on December 31, 2000; provided, however, that Licensee
shall not be responsible for the minimum royalties which would
otherwise be due pursuant to paragraph 6.1 hereof or for the
minimum compensation payments which would otherwise be due pursuant
to paragraph 4.1 of the Design Agreement, but shall be responsible
for all earned royalty and other payments due hereunder and for all
earned compensation and other payments due under the Design
Agreement.
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9. Default; Change of Control.
9.1. Each of the following shall constitute an event of
default ("Event of Default") hereunder:
(i) Any installment of royalty payments is not paid when
due and such default continues for more than fifteen (15) days
after written notice thereof to Licensee;
(ii) Licensee shall fail to timely present for sale to
the trade a broadly representative and fair collection of each
seasonal collection of Licensed Products designed by the
Design Partnership under the Design Agreement or Licensee
shall fail to timely ship to its customers a material portion
of the orders of Licensed Products it has accepted;
(iii) Licensee defaults in performing any of the other
terms of this Agreement and continues in such default for a
period of thirty (30) days after notice thereof (unless the
default cannot be cured within such thirty (30) day period and
Licensee shall have commenced to cure the default and proceeds
diligently thereafter to cure within an additional fifteen
(15) day period);
(iv) Licensee fails within fifteen (15) days after
written notice that payment is overdue to pay for any Licensed
Products or materials, trim, fabrics, packaging or services
relating to Licensed Products purchased by Licensee from
Licensor or, unless Licensee is contesting in good faith the
amount due, any agent or licensee of Licensor or any other
supplier of such items;
(v) If Licensee shall use the Trademark in an
unauthorized or improper manner and/or if Licensee shall make
an unauthorized disclosure of confidential information or
materials given or loaned to Licensee by Licensor and/or the
Design Partnership;
(vi) Licensee institutes proceedings seeking relief under
a bankruptcy act or any similar law, or consents to entry of
any order for relief against it in any bankruptcy or
insolvency proceeding or similar proceeding, or files a
petition for or consent or answer consenting to reorganization
or other relief under any bankruptcy act or other similar law,
or consents to the filing against it of any petition for the
appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of it or
of any substantial part of its property, or a proceeding
seeking such an appointment shall have been commenced without
Licensee's consent and shall continue undismissed for sixty
(60) days or an order providing for such an appointment shall
have been entered, or makes an assignment for the benefit of
creditors, or admits in writing its inability to pay its debts
as they become due or fails to pay its debts as they become
due, or takes any action in furtherance of the foregoing;
(vii) Licensee transfers or agrees to transfer
substantially all of its property in a transaction which
results in ownership inconsistent with the terms of paragraph
9.3 hereof;
(viii) The calling of a meeting of creditors, appointment
of a committee of creditors or liquidating agents, or offering
a composition or extension to creditors by, for or of
Licensee;
(ix) There shall be a direct or indirect change in
control of the company which results in ownership inconsistent
with the terms of paragraph 9.3 hereof;
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13
(x) An event of default occurs under the Design, or any
other license agreement entered into between Licensor (or its
predecessor-in-interest) and Licensee or design agreement
between Licensee and the Design Partnership (or its
predecessor-in-interest);
(xi) Licensee shall have failed to perform any
material term, covenant or agreement on its part to be
performed under any agreement or instrument (other than
this Agreement) evidencing or securing or relating to any
indebtedness owing by Licensee, if the effect of such
failure is to accelerate the maturity of such
indebtedness, or to permit the holder or holders of such
indebtedness to cause such indebtedness to become due
prior to the stated maturity thereof.
9.2. If any Event of Default described in paragraphs 9.1 (i),
(ii), (iii), (iv), (v), (ix), (x) or (xi) shall occur, Licensor
shall have the right, exercisable in its sole discretion, to
terminate this Agreement and the License upon ten (10) days'
written notice to Licensee of its intention to do so, and upon the
expiration of such ten (10) day period, this Agreement and the
License shall terminate and come to an end. If the Event of Default
described in paragraphs 9.1 (vi), (vii) or (viii) shall occur, this
Agreement and the License shall thereupon forthwith terminate and
come to an end without any need for notice to Licensee. This
Agreement will terminate automatically upon the expiration or
termination for any reason whatsoever of the Design Agreement. Any
termination of this Agreement shall be without prejudice to any
remedy of Licensor for the recovery of any monies then due it under
this Agreement or in respect to any antecedent breach of this
Agreement, and without prejudice to any other right of Licensor
including, without limitation, damages for breach to the extent
that the same may be recoverable and Licensee agrees to reimburse
Licensor for any costs and expenses (including attorneys' fees)
incurred by Licensor in enforcing its rights hereunder. No assignee
for the benefit of creditors, receiver, liquidator, sequestrator,
trustee in bankruptcy, sheriff or any other officer of the court or
official charged with taking over custody of Licensee's assets or
business shall have any right to continue the performance of this
Agreement.
9.3. During the term of this Agreement, Licensee shall not
dissolve, liquidate or wind-up its business. In addition, in the
event Licensee sells or transfers, or suffers a sale or a transfer
of, by operation of law or otherwise, directly or indirectly, a
controlling interest in Licensee (including, without limitation, in
any direct or indirect parent of Licensee), Licensee shall promptly
advise Licensor thereof in writing. If such sale or transfer
results in such controlling interest being owned by an entity
which, directly or indirectly, owns any trademark or tradename
listed on Schedule C hereto, or the exclusive right to use any of
such trademarks or tradenames, in connection with products similar
to or competitive with Licensed Products, Licensee shall so notify
Licensor, and within sixty (60) days of its receipt of notice,
Licensor shall have the right to terminate this Agreement, such
termination to become effective thirty (30) days after the date
notice of termination is received by the Licensee.
10. Disposal of Stock Upon Termination or Expiration.
10.1. Within ten (10) days following the termination of this
Agreement for any reason whatsoever including the expiration of the
term hereof, and on the last day of each month during the disposal
period set forth in paragraph 10.2 hereof, Licensee shall furnish
to Licensor a certificate of Licensee listing its inventories of
Licensed Products (which defined term for purposes of this
paragraph 10.1 shall include, but shall not be limited to, all
fabrics, trim and packaging which are used in the manufacture and
marketing of Licensed Products) on hand or in process wherever
situated. Licensor shall have the right to conduct a physical
inventory of Licensed Products in Licensee's possession or under
Licensee's control. Licensor or Licensor's designee shall have the
option (but not the obligation) to purchase from Licensee all or
any part of Licensee's then existing inventory of Licensed Products
upon the following terms and conditions:
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(i) Licensor shall notify Licensee of its or its
designees intention to exercise the foregoing option within
fifteen (15) days of delivery of the certificate referred to
above and shall specify the items of Licensed Products to be
purchased.
(ii) The price for Licensed Products manufactured by or
on behalf of Licensee on hand or in process shall be
Licensee's standard cost (the actual manufacturing cost) for
each such Licensed Product. The price for all other Licensed
Products which are not manufactured by Licensee shall be
Licensee's landed costs therefor. Landed costs for the
purposes hereof means the F.O.B. price of the Licensed
Products together with customs, duties, and brokerage, freight
and insurance.
(iii) Licensee shall deliver the Licensed Products
purchased within fifteen (15) days of receipt of the notice
referred to in clause (i) above. Payment of the purchase price
for the Licensed Products so purchased by Licensor or its
designee shall be payable upon delivery thereof, provided that
Licensor shall be entitled to deduct from such purchase price
any amounts owed it by Licensee (and/or to direct payment of
any part of such merchandise to any supplier of Licensed
Products in order to reduce an outstanding balance due to such
supplier from Licensee).
10.2. In the event Licensee that, pursuant to paragraph 10.1
hereof, Licensee timely provides the certificate of inventory and
Licensor chooses not to exercise its option with respect to all or
any portion of Licensed Products, for a period of ninety (90) days
after termination of this Agreement for any reason whatsoever,
except on account of breach of the provisions of paragraph 3, 4 or
6 hereof, Licensee may dispose of Licensed Products which are on
hand or in the process of being manufactured at the time of
termination of this Agreement, provided that (i) Licensee fully
complies with the provisions of this Agreement, including
specifically those contained in paragraphs 3, 4 and 6 hereof in
connection with such disposal, and (ii) said disposal takes place
within ninety (90) days after notice of termination is given or the
expiration of the term of this Agreement, as the case may be.
10.3. Notwithstanding anything to the contrary contained
herein, in the event that upon the expiration or termination of the
term hereof for any reason Licensee has not rendered to Licensor
all accounting statements then due, and paid (i) all royalties and
other amounts then due to Licensor, (ii) all compensation then due
to Lauren under the Design Agreement and (iii) all amounts then due
to any affiliate of or supplier to Licensor or its affiliates
(collectively, "Payments"), Licensee shall have no right whatsoever
to dispose of any inventory of Licensed Products in any manner. In
addition, if during any disposal period Licensee fails timely to
render any accounting statements, or certificates of inventory
required pursuant to paragraph 10.1 hereof, or to make all Payments
when due, Licensee's disposal rights hereunder shall immediately
terminate without notice.
11. Effect of Termination.
11. 1. It is understood and agreed that except for the License
to use the Trademark only as specifically provided for in this
Agreement, Licensee shall have no right, title or interest in or to
the Trademark. Upon and after the termination of this License, all
rights granted to Licensee hereunder, together with any interest in
and to the Trademark which Licensee may acquire, shall forthwith
and without further act or instrument be assigned to and revert to
Licensor. In addition, Licensee will execute any instruments
requested by Licensor which are necessary to accomplish or confirm
the foregoing. Any such assignment, transfer or conveyance shall be
without consideration other than the mutual agreements contained
herein. Licensor shall thereafter be free to license to others the
right to use the Trademark in connection with the manufacture and
sale of the Licensed Products covered hereby, and Licensee will
refrain from further use of the Trademark or any further reference
to them, direct or indirect, or any other trademark, trade name or
logo that is confusingly similar to the Trademark, or associated
with the Trademark in any way, in connection with the manufacture,
sale or distribution of Licensee's products, except as specifically
provided in paragraph 10 hereof. It is expressly understood that
under no circumstances shall Licensee be entitled, directly or
indirectly, to any form of compensation or indemnity from Licensor,
the Design Partnership or their affiliates, as a consequence to the
termination of this Agreement, whether as a result of the passage
of time, or as the result of any other cause of termination
referred to in this Agreement. Without limiting the generality of
the foregoing, by its execution of the present Agreement, Licensee
hereby waives any claim which it has or which it may have in the
future against Licensor, the Design Partnership or their
affiliates, arising from any alleged goodwill created by Licensee
for the benefit of any or all of the said parties or from the
alleged creation or increase of a market for Licensed Products.
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15
11.2. Licensee acknowledges and admits that there would be no
adequate remedy at law for its failure (except as otherwise
provided in paragraph 10 hereof) to cease the manufacture or sale
of the Licensed Products covered by this Agreement at the
termination of the License, and Licensee agrees that in the event
of such failure Licensor shall be entitled to equitable relief by
the way of temporary and permanent injunction and such other and
further relief as any court with jurisdiction may deem just and
proper.
12. Showroom.
Licensee represents that a separate showroom for the
presentation and sale of the Licensed Products will be established
and staffed and Licensee agrees to maintain, operate, decorate and
staff the showroom in a manner consistent with that of the
showrooms established for the presentation and sale of Licensor's
other products. Licensor shall have a right of approval with
respect to the design, layout, decoration and staffing of the
showroom and all expenses incurred with respect to the design,
construction, operation and maintenance of such showroom shall be
borne by Licensee. Licensee shall admit Licensor's employees to
its showroom and shall sell to such employees for their personal
use (and not for resale) such Licensed Products as any such
employee may reasonably request, at prices equal to the regular
wholesale price less a discount equal to not less than thirty
percent (30%) of such regular wholesale price. Licensee and
Licensor shall mutually agree upon a policy in respect of such
sales that will address reciprocity and avoid interference with
Licensee's normal operations.
13. Indemnity.
13.1. Licensor shall indemnify and hold harmless Licensee
from and against any and all liability, claims, causes of action,
suits, damages and expenses (including reasonable attorneys' fees
and expenses in actions involving third parties or between the
parties hereto) which Licensee is or becomes liable for, or may
incur solely by reason of its use within the Territory, in strict
accordance with the terms and conditions of this Agreement and the
Design Agreement, of the Licensed Mark or the designs furnished to
Licensee by Licensor or Lauren, to the extent that such liability
arises through infringement of another's design patent, trademark,
copyright or other proprietary rights; provided, however, that
Licensee gives Licensor prompt notice of, and full cooperation in
the defense against, such claim. If any action or proceeding shall
be brought or asserted against Licensee in respect of which
indemnity may be sought from Licensor under this paragraph 13.1,
Licensee shall promptly notify Licensor thereof in writing, and
Licensor shall assume and direct the defense thereof. Licensee may
thereafter, at its own expense, be represented by its own counsel
in such action or proceeding.
13.2. To the extent not inconsistent with paragraph 13.1
hereof, Licensee shall indemnify and save and hold Licensor, the
Design Partnership, Polo Ralph Lauren corporation and Ralph Lauren,
individually, and their assignees, directors, officers, servants,
agents and employees, harmless from and against any and all
liability, claims, causes of action, suits, damages and expenses
(including reasonable attorneys' fees and expenses in actions
involving third parties or between the parties hereto) , which they,
or any of them, are or become liable for, or may incur, or be
compelled to pay by reason of any acts, whether of omission or
commission, that may be committed or suffered by Licensee or any of
its servants, agents or employees in connection with Licensee's
performance of this Agreement, including Licensee's use of
Licensee's own designs, in connection with Licensed Products
manufactured by or on behalf of Licensee or otherwise in connection
with Licensee's business.
14. Insurance.
Licensee shall carry product liability insurance with limits
of liability in the minimum amount, in addition to defense costs,
of $3,000,000 per occurrence and $3,000,000 per person and
Licensor, the Design Partnership, Polo Ralph Lauren Corporation and
Ralph Lauren, individually, shall be named therein as insureds, as
their interests may appear. The maximum deductible with respect to
such insurance shall be $100,000. Licensee shall, promptly after
the signing of this Agreement, deliver to Licensor a certificate of
such insurance from the insurance carrier, setting forth the scope
of coverage and the limits of liability and providing that the
policy may not be canceled or amended without at least thirty (30)
days prior written notice to Licensor, the Design Partnership, Polo
Ralph Lauren Corporation and Ralph Lauren, individually.
- 15 -
16
15. Disclosure.
15.1. Licensor and Licensee, and their affiliates, employees,
attorneys, accountants and bankers shall hold in confidence and not
use or disclose, except as permitted by this Agreement, (i)
confidential information of the other or (ii) the terms of this
Agreement, except upon consent of the other or pursuant to, or as
may be required by law, or in connection with regulatory or
administrative proceedings and only then with reasonable advance
notice of such disclosure to the other. Licensee shall take all
reasonable precautions to protect the secrecy of the material used
pursuant to this Agreement prior to the commercial distribution or
the showing of samples for sale, and shall not sell any merchandise
employing or adapted from any of said designs sketches, artwork,
logos, and other materials or their use except under the Trademark.
15.2. Licensee agrees that all press releases and other
public announcements related to Licensor's operations hereunder,
shall be subject to approval by Licensor, and that each request for
a statement, release or other inquiry shall be sent in writing to
the advertising/publicity director of Licensor for response.
16. Key Personnel.
16.1. At all times during the term hereof, Licensee shall
employ a senior executive, approved in advance by Licensor (such
approval not to be unreasonably withheld), whose primary
responsibility shall be to manage all of Licensee's operations
pursuant to this Agreement.
16.2. At all times during the term hereof, Licensee shall
employ a Design Director, approved in advance by Licensor (such
approval not to be unreasonably withheld), whose primary
responsibility shall be to work with Licensor and the Design
Partnership on the creation and implementation of designs for the
Licensed Products and related activities under this Agreement.
17. Miscellaneous.
17.1. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to
have been properly given or sent (i) on the date when such notice,,
request, consent or communication is personally delivered or (ii)
five (5) days after the same was sent, if sent by certified or
registered mail or (iii) two (2) days after the same was sent, if
sent by overnight courier delivery or confirmed telecopier, as
follows:
(a) if to Licensee, addressed as follows:
Jones Apparel Group, Inc.
250 Rittenhouse Circle
Bristol, Pennsylvania 19007
Attention: Mr. Sidney Kimmel
Telecopier: (215) 785-1795
with a copy to:
Jones Apparel Group, Inc.
1411 Broadway
New York, New York 10018
Attention: Mr. Herbert Goodfriend
Telecopier: (212) 921-5370
(b) if to Licensor, addressed as follows:
Polo Ralph Lauren, L.P.
650 Madison Avenue
New York, New York 10022
Attention: President
Telecopier: 212.318.7186
with a copy to:
Victor Cohen, Esq.
Eighth Floor
650 Madison Avenue
New York, New York 10022
Telecopier: 212.318.7183
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Anyone entitled to notice hereunder may change the address to which
notices or other communications are to be sent to it by notice
given in the manner contemplated hereby.
17.2. Nothing herein contained shall be construed to place
the parties in the relationship of partners or joint venturers, and
no party hereto shall have any power to obligate or bind any other
party hereto in any manner whatsoever, except as otherwise provided
for herein.
17.3. None of the terms hereof can be waived or modified
except by an express agreement in writing signed by the party to be
charged. The failure of any party hereto to enforce, or the delay
by any party in enforcing, any of its rights hereunder shall not be
deemed a continuing waiver or a modification thereof and any party
may, within the time provided by applicable law, commence
appropriate legal proceedings to enforce any and all of such
rights. All rights and remedies provided for herein shall be
cumulative and in addition to any other rights or remedies such
parties may have at law or in equity. Any party hereto may employ
any of the remedies available to it with respect to any of its
rights hereunder without prejudice to the use by it in the future
of any other remedy with respect to any of such rights. No person,
firm or corporation, other than the parties hereto and the Design
Partnership (and, to the extent set forth in paragraphs 13.1 and
13.2 hereof, Polo Ralph Lauren Corporation and Ralph Lauren,
individually), shall be deemed to have acquired any rights by
reason of anything contained in this Agreement.
17.4. This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the parties
hereto. Licensor may assign all or any portion of the royalties
payable to Licensor hereunder, as designated by Licensor, and in
addition, Licensor may assign all of its rights, duties and
obligations hereunder to any entity to which the Trademark, or the
right to use the Trademark, has been transferred, or to an
affiliate of any such entity. The rights granted to Licensee
hereunder are unique and personal in nature, and neither this
Agreement nor the License may be assigned by Licensee without
Licensor's prior written consent, which may be withheld in
Licensor's sole discretion. Any attempt by Licensee to transfer
any of its rights or obligations under this Agreement, whether by
assignment, sublicense or otherwise, without having received the
prior written consent of Licensor shall constitute an Event of
Default, but shall otherwise be null and void. Licensee may employ
subcontractors subject to the prior written approval of Licensor
for the manufacture of the Licensed Products; provided, however,
that in any event, (i) the supervision of production of Licensed
Products shall remain under the control of Licensee, (ii) Licensee
shall maintain appropriate quality controls, (iii) such
subcontractors shall comply with the quality and (iv) such
subcontractors shall comply with other requirements of Licensor
consistent with the terms of this Agreement, including, but not
limited to, the execution by subcontractor of the Trademark and
Design Protection Agreement attached hereto and made a part hereof.
17.5. Licensee shall comply with all laws, rules, regulations
and requirements of any governmental body which may be applicable
to the operations of Licensee contemplated hereby, including,
without limitation, as they relate to the manufacture,
distribution, sale or promotion of Licensed Products,
notwithstanding the fact that Licensor may have approved such item
or conduct. Licensee shall advise Licensor in the event any Final
Prototype does not comply with any such law, rule, regulation or
requirement.
17.6. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York, applicable to
contracts made and to be wholly performed therein without regard to
its conflicts of law rules.
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17.7. The parties hereby consent to the jurisdiction of the
United States District Court for the Southern District of New York
and of any of the courts of the Southern District of New York and
of any of the courts of the State of New York located within the
Southern District in any dispute arising under this Agreement and
agree further that service of process or notice in any such action,
suit or proceeding shall be effective if in writing and delivered
as provided in paragraph 17.1 hereof. Notwithstanding anything to
the contrary set forth herein, neither Polo Ralph Lauren
Corporation nor any other general or limited partner of Licensor
shall be liable for any claim based on, arising out of, or
otherwise in respect of, this Agreement, and Licensee shall not
have nor claim to have any recourse for any such claim against any
general or limited partner of Licensor.
17.8. The provisions hereof are severable, and if any
provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability
shall affect only such provision, or part thereof in such
jurisdiction and shall not in any manner affect such provision in
any other jurisdiction, or any other provision in this Agreement in
any jurisdiction. To the extent legally permissible, an
arrangement which reflects the original intent of the parties shall
be substituted for such invalid or unenforceable provision.
17.9. The paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
17.10. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused the same to be executed by a duly authorized
officer as of the day and year first above written.
POLO RALPH LAUREN, L.P.
By: Polo Ralph Lauren Corporation,
General Partner
By:
JONES APPAREL GROUP, INC.
By: /s/ Sidney Kimmel
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Schedule A
LICENSED PRODUCTS
Licensed Products shall mean the following women's "better" apparel
products bearing the Trademark: shirts, blouses, skirts, jackets,
suits, sweaters, pants, vests, coats, outerwear, hats. Licensed
Products shall also include such other articles of women's apparel
as Licensor shall, from time to time, designate in its sole
discretion.
Licensed products shall not include denim pants or shorts, and
Licensee's rights hereunder shall not be violated by virtue of the
manufacture or sale by Licensor or any of its affiliates or
licensees of any jeanswear apparel sold as part of a jeanswear
line, notwithstanding the similarity of any such products to
Licensed Products.
Except as provided below, this Agreement does not cover any other
trademark of Licensor or in any way limit Licensor's right to
engage in business with such trademarks as it deems appropriate in
its sole discretion. However, Licensor agrees not to sell or
license another complete line of women's apparel with a "Ralph
Lauren" trademark intended to be sold in the "better" area of
women's departments in direct competition with Licensed Products (a
"Competing Line") . The foregoing restriction is intended to limit
Licensor's ability to market an equivalent line of "better" womens
apparel under another name, and the parties agree that any
womenswear sold as part of any other line (and not individually to
be sold with "better" products) bearing any other trademark owned
by Licensor or its affiliates, so long as such line is not a
Competing Line, shall not violate the foregoing restriction,
notwithstanding the similarity of particular products and/or their
price points to Licensed Products.
Licensee shall not sell or market Licensed Products in "bridge" or
"collection" areas.
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Schedule B
TRADEMARK
LAUREN/RALPH LAUREN
and/or
LAUREN BY RALPH LAUREN
Schedule C
Restricted Individuals and Entities
[Omitted; Material Filed Separately With The Securities And Exchange
Commission]
Schedule D
Approved Customers
[To be provided and approved]
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