Exhibit 10.28
PORTIONS OF THIS EXHIBIT MARKED BY *** HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
AMENDMENT AND AGREEMENT
This Amendment and Agreement ("Agreement") is made and entered
into as of June 5, 2003 (the "Execution Date"), by and among Calvin Klein, Inc.,
a New York corporation with a principal place of business at 205 West 39th
Street, New York, New York 10018 ("CKI"), Phillips-Van Heusen Corporation, a
Delaware corporation with a principal place of business at 200 Madison Avenue,
New York, New York 10016 ("PVH"), Warnaco Inc., a Delaware corporation with a
principal place of business at 90 Park Avenue, New York, New York 10016
("Warnaco"), Calvin Klein Jeanswear Company, a Delaware corporation with a
principal place of business at 1385 Broadway, Suite #305, New York, New York
10018 ("CKJ"), and CKJ Holdings Inc., a Delaware corporation with a principal
place of business at 1385 Broadway, New York, New York 10018 ("CKJHI").
RECITALS
WHEREAS, CKI and CKJ are parties to a certain License
Agreement dated August 4, 1994, as amended by the Settlement Agreement dated
January 22, 2001, among Warnaco, CKI and other parties (the "Settlement
Agreement"), letter agreements and other agreements (collectively referred to
herein as the "Jeanswear License").
WHEREAS, Warnaco and CKI are also parties to a certain
Administration Agreement, Trust Agreement and Quality Assurance Agreement, each
dated March 14, 1994, as amended (collectively the "Underwear Agreements"), and
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certain Men's Accessories License Agreement, dated March 14, 1994, as amended
(the "Accessories License").
WHEREAS, the parties have conferred and wish to make certain
modifications to the terms and conditions of the Jeanswear License and the
Administration Agreement and the Accessories License all to and for their mutual
benefit; and they hereby memorialize and confirm the terms and conditions of
such agreement by entering into and executing this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and described herein, the parties agree as set forth below. All
references to "Licensor", "Licensee", "Articles" and "Warnaco Products" and
other capitalized terms not otherwise amended, modified or defined herein shall
be deemed to have the same meaning ascribed to them under the Jeanswear License
and the Underwear Agreements.
I. The Parties hereby amend the Jeanswear License, as follows:
1. Definitions
(a) The definition of "Close-Out Articles", as set forth in the
Jeanswear License is deleted in its entirety and the following
definition substituted in its place, in each case, effective as
of January 1, 2004:
"Effective as of the Annual Period commencing on January 1, 2004
and for all Annual Periods thereafter, "Close-Out Articles" shall
mean all Articles sold by Licensee to that certain channel of
distribution regularly dealing in the sale of off-price products,
including by way of illustration, TJ Maxx, Marshall's and Ross
Stores and other like stores but not including warehouse clubs.
Close-Out Articles shall not include sales of Articles to retail
outlet stores owned or operated by or under the direction or
control of Licensor or any of its Affiliates unless otherwise
agreed by Licensor and Licensee, in which event such sales shall
qualify for the reduced Percentage Fee applicable to Net Sales of
Close-Out Articles."
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2. Exhibit B
Exhibit B ("Products"), to the Jeanswear License is hereby deleted in
its entirety and the new Exhibit B annexed hereto and made a part
hereof shall be substituted in its place. All references to Exhibit B
in the Jeanswear License, as amended hereby, shall be deemed to refer
to Exhibit B annexed hereto.
3. Licensor's Retention of Rights
Section 1.2(a) of the Jeanswear License is hereby amended to delete
items (iii) and (iv); and to delete the last full sentence of Section
1.2(b). The following paragraph shall be added as a new Section
1.2(c):
"(c) Licensee understands, acknowledges and agrees that nothing
herein is intended to or shall be construed as preventing or
limiting Licensor's ability itself or through others to
manufacture, market, advertise, distribute or sell sportswear
or other lines of apparel at any price (excluding only five
pocket jeans in any fabric, or apparel in denim, in each case
of a jeans-type construction that is constructed with welt
seamed double needle stitching) in accordance with the terms
and conditions set forth herein under any trademarks other
than (i) "CALVIN KLEIN JEANS", (ii) "CK/Calvin Klein Jeans",
or (iii) any trademark incorporating the name and mark "Calvin
Klein" (including any abbreviation or derivation thereof)
together with the words "jeans", "jeanswear" or any other
words or symbols evocative of or identified only with a
jeanswear collection (e.g., "Calvin Klein Denim"). Licensee
further understands, acknowledges and agrees that products so
manufactured, marketed, distributed, advertised and sold by or
on behalf of Licensor or others authorized by Licensor may be
the same as, substantially similar to or somewhat similar to
Products produced herein and such shall not in any way
constitute a breach or default of the Jeanswear License,
provided such sportswear or other apparel is not marketed,
advertised or sold as jeanswear. ***
4. "Khakis" and "Khaki Articles"
"Khaki" and "Khaki Articles" as described in the Jeanswear Agreement
shall be deleted from the definition of Articles and all rights
thereto shall revert to CKI. Warnaco's continuing right to produce
any "khaki" or "khaki related item" under the Jeanswear License shall
only be as allowed pursuant to Exhibit B. All references to "Khaki"
or "Khaki Articles" throughout the Agreement, including, without
limitation references to the use of any trademark containing the word
"Khaki", shall hereby be deleted.
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5. Close-Outs
Section 7.1 of the Jeanswear License is hereby amended effective as
of and for the Annual Period commencing January 1, 2004 and for all
Annual Periods thereafter to provide that the reduced Percentage Fee
shall be applicable to Gross Sales of Close-Out Articles up to *** of
Licensee's total Gross Sales of Articles in any Annual Period.
Percentage Fees payable on Gross Sales by Licensee of Close-Out
Articles in excess of *** of Licensee's total Gross Sales in any
Agreement Year shall be computed and paid at the rate of *** of Gross
Sales as to such incremental amounts for the first Annual Period in
which Licensee's total Gross Sales of Close-Out Articles exceed ***,
and increasing thereafter by *** for each consecutive subsequent
Agreement Year in which Licensee's total Gross Sales of Close-Out
Articles exceed ***. Solely for the purpose of calculating Licensee's
total Gross Sales of Articles for determining the Percentage Fee on
Close-Out Articles, Licensee shall exclude from total Gross Sales
***. Licensee's sales of Close-Out Articles in excess of *** of Gross
Sales in any Annual Period shall not give rise to any right of
Licensor to terminate the Jeanswear License, in whole or in part, but
shall cause Licensor and Licensee to confer in good faith to adopt a
corrective plan to address design, marketing and/or other issues
contributing to the generation of Close-Out Articles.
6. Central and South America
(a) The parties agree to amend the Jeanswear License with respect
to the manufacture, distribution and sale of Articles in
Central and South America (the "C/SA Amendment") to provide
that the parties shall negotiate in good faith a store
license (the "C/SA Store License") which shall permit
Licensee to own or operate, directly or indirectly, and to
authorize others to operate, free standing regular priced
retail stores located anywhere in Central and South America,
at sites mutually agreed upon by Licensor and Licensee,
identified by one of the Licensed Marks in its Form and
dedicated exclusively to, the sale of Articles, Warnaco
Products and Swimwear Licensed Products (as hereinafter
defined), together with any other products authorized by
Licensor, substantially in accordance with the terms and
conditions of CKI's and PVH's standard retail store licensing
provisions subject to the terms expressly set forth in this
Section 1.6. The C/SA Amendment shall provide in lieu of
Percentage Fees on Net Sales of Articles to such stores,
Licensee shall pay -- Licensor "Percentage Fees" at a rate of
*** of the "Net Sales" (as defined in the C/SA Store License)
at retail by such free standing retail stores as long as the
C/SA Store License is in effect.
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(b) The C/SA Amendment and the C/SA Store License shall also
provide that in the event Licensee sublicenses all or any
part of the Central and South American Territory under the
C/SA Amendment or under the C/SA Stare License, the parties
shall share all fees and proceeds paid to Licensee thereunder
and in connection therewith as provided in Section 14.2 of
the Jeanswear License; provided, however, that in the case of
any sublicensing of the C/SA Store License, the Percentage
Fee payable to Licensor shall be no less than *** of "Net
Sales" at retail of any such sublicensee. Licensee agrees to
use all commercially reasonable efforts to obtain the maximum
signing fee possible in connection with any sublicense
arrangement it proposes to enter into. This Agreement
provides and the C/SA Amendment shall provide (i)
confirmation that Licensor has granted a waiver of the
minimum aggregate Net Sales requirements for calendar years
2002, 2003, 2004 and 2005 and (ii) for the following minimum
aggregate Net Sales (each, the "Net Sales Threshold Amount")
for the indicated Annual Period:
2006: *** in South America and *** in Central America.
2007 and all Annual Periods thereafter: *** in South America
and *** in Central America.
All minimum aggregate Net Sales for Central and South America
shall be adjusted by COLA (as per the Exhibit hereto entitled
COLA Adjustment) beginning with the Annual Period commencing
on January 1, 2008 and for all Annual Periods thereafter.
From and after the Annual Period commencing on January 1,
2006, in the event Licensee fails to have aggregate Net Sales
of at least the applicable Net Sales Threshold Amount in
either South America or in Central America, then Licensee
shall timely pay Licensor in accordance with the terms of
Section 1.4 of the Jeanswear License, an amount equal to the
Percentage Fee payable with respect to any shortfall between
the actual aggregate Net Sales and the applicable minimum
aggregate Net Sales Threshold Amount; provided, however, that
Licensor shall still have the right to cause reversion of the
grant of the license for the applicable Territory in
accordance with the timetable set forth in Section 1.4 of the
Jeanswear License, except that for the Annual Periods
commencing January 1, 2006, January 1, 2007 and January 1,
2008, Licensee may avoid a reversion by so timely paying the
shortfall.
7. Design and Approvals
(a) Notwithstanding anything to the contrary in the Jeanswear
License, including but not limited to all portions (including
subsections) of
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Sections 3 (Design) and 4 (Quality) of the Jeanswear License,
effective as of the Spring 2004 Collection, the design and
approval processes shall be governed by the criteria and
procedures annexed hereto in the Exhibit entitled "Design
Process and Procedures" which shall be applicable to all
Articles.
8. Sale of Articles to Warehouse Clubs
(a) The provisions of the Jeanswear License set forth in Sections
2(a) and 2(b) of the Settlement Agreement are hereby deleted
and the following substituted in their place as an amendment
to the Jeanswear License:
"Effective as of and for the Annual Period commencing January
1, 2004 and for all Annual Periods thereafter, Licensee will
limit its total annual Gross Sales of Articles to warehouse
clubs in any Annual Period so that the percentage of such
sales does not exceed (in the aggregate) *** of Gross Sales
of Articles ***."
9. Supply to Licensor's Stores
Licensor operates, and Licensor, its Affiliates or designees will
hereafter operate, retail outlet stores ("Licensor's Outlet Stores")
and regular priced retail stores ("Licensor's Regular Priced Stores")
engaged in the sale of apparel and related goods and accessories, as
well as other products, bearing the CALVIN KLEIN marks (or other
derivative or formative) marks. The parties hereto amend Section 3.3
of the Administration Agreement and Section 3.7 of the Jeanswear
License by deleting the third sentence of Section 3.3 and by deleting
the third through last sentence of Section 3.7, and agree to
undertake in the Swimwear License (as defined below) as follows:
Licensee agrees that it will supply and sell Articles, Warnaco
Products and Swimwear Licensed Products (as defined below) at (i) ***
off Licensee's regular wholesale prices for Articles, Warnaco
Products or Swimwear Licensed Products *** for all of Licensor's
Outlet Stores ***, and (ii) *** off Licensee's regular wholesale
prices for such items to supply Licensor's Regular Priced Stores
***. Licensee shall fulfill all orders from Licensor in good faith
within negotiated windows or Licensor shall have a cancellation right
provided that in lieu thereof, Licensee may offer and Licensor may,
at its option, accept certain discounts and/or allowances to be
negotiated. Subject to the last full sentence of this paragraph
with respect to fashion Articles, fashion Warnaco Products and
fashion Swimwear Licensed Products, Licensee shall treat Licensor
generally as well as any and all other customers to which Licensee
sells any Articles, Warnaco Products and/or Swimwear Licensed
Products as to delivery and fulfillment. Licensee's obligation to
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supply and sell such products to Licensor is subject only to
Licensor's placement of orders within customary lead times and the
absence of any continuing force majeure event. If (i) Licensee cannot
sell or supply any Articles and/or Warnaco Products, due to a
continuing force majeure event or other event outside of Licensee's
reasonable control (i.e., more than thirty calendar days) or (ii)
Licensee fails to timely deliver for four consecutive quarters a
significant portion of the products so ordered, then during the
pendancy of such force majeure event or after such failures to
deliver, Licensor shall have the right, to manufacture, or have
manufactured for it by others, and to sell, distribute and promote
Articles and Warnaco Products through Licensor's Outlet Stores as to
"(i)" to the extent Licensee does not or cannot timely supply the
same, it being acknowledged that such right is limited to the
duration of the period of such force majeure event (or other event
outside of Licensee's reasonable control) and the satisfaction of
orders placed by Licensor during any such period; ***. Licensee shall
supply such Articles, Warnaco Products and Swimwear Licensed Products
on open account; provided, however, that in the event Licensor fails
to timely pay Licensee for Articles, Warnaco Products or Swimwear
Licensed Products in accordance with the terms set forth below
(except in connection with a bona fide dispute), then upon five (5)
business days written notice unless paid within said five (5) day
period, Licensee shall be permitted to offset any unpaid amounts
against other payments due to Licensor under the applicable agreement
(e.g., Percentage fees payable to Licensor under the Jeanswear
License with respect to sales to outlet stores of jeanswear products,
the fees payable to Licensor under the Administration Agreement with
respect to sales to outlet stores of Warnaco Products, etc.).
Licensor shall have a reciprocal right to offset unpaid amounts
against other payments due to Licensee and its Affiliates. Licensor
shall pay Licensee for such Articles, Warnaco Products and Swimwear
Licensed Products on net thirty (30) day ROG terms. Licensor agrees
that commencing with the Annual Period beginning on January 1, 2005
it shall cause the composition or mix of products in the Licensor
Outlet Stores not to be comprised of more than *** Articles and ***
Warnaco Products (underwear) sold by Licensee on an Annual Period
basis. Licensee shall be obligated to sell such Articles, Warnaco
Products and Swimwear Licensed Products only to or for resale in
those Licensor's Outlet Stores located in outlet shopping centers
which also contain stores bearing the marks of and selling products
associated with at least two of those specified competitors
identified in the Exhibit annexed hereto entitled Specified
Competitors. Licensee shall not be obligated to supply fashion
Articles, fashion Warnaco Products or fashion Swimwear Licensed
products until eight (8) weeks after Warnaco first commences shipping
such Articles, Warnaco Products or Swimwear Licensed Products.
The sale of Articles, Warnaco Products and Swimwear Licensed Products
to the Licensor and its Affiliates for resale through the Licensor's
Outlet
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Stores shall not give rise to any obligation on Licensee's part to
pay Percentage Fees or Minimum Advertising Expenditures under the
Jeanswear License or the Swimwear License or Administration Fees or
Advertising under the Underwear Agreements. However, all sales of
Articles to Licensor shall be counted in calculating Minimum Net
Sales amounts under the Jeanswear License.
***
10. Approval by Licensor of Jeanswear Sub-license for Kids
Licensee has proposed that it sub-license to Happy Kids Inc. the
rights, benefits and obligations relating to the manufacture,
sourcing, distribution, advertising and sale of Articles for children
under the Jeanswear License; and Licensee has provided the proposed
sublicense (the "Sub-license") to Licensor for its approval under the
Jeanswear License. Licensor hereby confirms that it approves the
Sub-license as amended to reflect Licensor's proposed modifications
and will deliver to Licensee all written acknowledgements and
consents as Licensor and Licensee shall deem reasonably necessary.
11. Swimwear License Agreement
Licensor and Licensee agree to negotiate in good faith, and to
conclude and execute a mutually agreed upon license agreement (the
"Swimwear License") on terms substantially similar to CKI's and/or
PVH's standard terms (subject to the terms expressly set forth in
this Section 1.11), pursuant to which Licensor will grant to Licensee
or a designated affiliate of Licensee (with a guarantee from Warnaco)
the exclusive right to manufacture, source, advertise, distribute,
promote and sell under the CK/CALVIN KLEIN name and mark (or such
other "CALVIN KLEIN" derivative mark as Licensor designates to
replace the same) women's and juniors swimsuits together with, on a
nonexclusive basis, such swimsuit cover-ups, such as pareos or wrap
skirts, shorts and pants with elasticized waistbands and tops
designed specifically to be worn with the swimsuits as seasonally
approved in writing by Licensor for inclusion in the swimwear
collection ("Swimwear Licensed Products") for sale to swimwear
specialty retailers or swimwear departments and/or swimwear buyers of
Licensee's accounts) throughout the world as of January 1, 2004, and
under the "CALVIN KLEIN" name and mark (or such other "CALVIN KLEIN"
derivative mark as Licensor designates to replace the same) as to
"Europe" only as of January 1, 2004 and as to the rest of the world
as and when the CALVIN KLEIN name and mark is made available to
Licensee upon expiration or early termination of Licensor's existing
third party license agreement. The Swimwear License will reflect that
in certain instances, Licensee may in the ordinary course of business
and without reference to the Swimwear Licensed Products, produce
certain
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basic swimwear products substantially similar to the Swimwear
Licensed Products under its own labels or those of others. The
Swimwear License shall provide for a percentage fee on Net Sales
equal to ***. The Swimwear License will also provide that when
Licensee assumes responsibility for "CALVIN KLEIN" Swimwear Licensed
Products other than in Europe, Licensee will manufacture to
Licensor's order and specifications for sale at Licensor's Regular
Priced Stores and Licensor's Outlet Stores, "CALVIN KLEIN" premium
quality swimsuits with a manufacturer's suggested retail price of
$150 or more; shall require an annual minimum advertising expenditure
to be paid by Licensee to Licensor equal to *** of Net Sales for
spending by Licensor, in its discretion, on advertising and promotion
including the Swimwear Licensed Products (which may or may not
include other products); and shall require Minimum Guaranteed
Royalties for each Annual Period as reflected in the approved
Business Plan annexed hereto; and shall require that all media and
public relations events and activities shall be only as approved by
Licensor and conducted through and, at Licensor's discretion,
overseen by Licensor's advertising division, at fees commensurate
with those being charged by Licensor to its other licensees for the
same or similar services. The Swimwear License shall have an initial
term of five years and one five year renewal term. The Swimwear
License shall provide that Licensee shall have the right, provided
that the Licensee is not then in default of any of the material
provisions of the Swimwear License and has achieved Net Sales of
Swimwear Licensed Products of *** in North America and the Caribbean
and *** in the rest of the world in calendar year 2007, to extend the
Swimwear License for the five-year renewal period. The Swimwear
License shall further provide that Licensor and Licensee shall meet
after the 2006 calendar year to negotiate in good faith, and agree by
March 31, 2007, to minimum Net Sales and minimum guaranteed fee
requirements for each trademark in each territory
(North/South/Central America; Europe; Asia) covered under the
Swimwear License for each year during the renewal period based on
Licensee's actual sales during calendar year 2006 and projected
growth, which shall in no event be less than the aggregate Net Sales
thresholds referenced above. In the event Licensor determines to
market girl's swimwear, Licensee shall be granted the first right and
opportunity to negotiate an expansion of the Swimwear License to
include girl's swimwear. The Swimwear License shall also provide for
inclusion of the mark "CK" within the definition of Licensed Marks if
Licensor decides to produce a separate swimsuit line under such mark
upon submission to and approval of an acceptable business plan and
agreement as to terms (e.g., minimum guaranteed fees, net sales
thresholds). ***
12. Men's Accessories
Notwithstanding the express terms and conditions of the Accessories
License, Licensor and Licensee hereby agree that Licensor has
reserved
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the right to use the Licensed Mark (as defined in the
Accessories License) in connection with the sale, distribution and
promotion of the Licensed Products (as defined in the Accessories
License) in Licensor Outlet Stores and, in connection therewith, to
manufacture Licensed Products (as defined in the Accessories License)
or purchase Licensed Products (as defined in the Accessories License)
from any supplier it chooses.
13. No Other Modification to Any Other Agreement
(a) Except as specifically and expressly set forth herein,
nothing herein shall be construed, in any way to modify or
amend, the Jeanswear License and Underwear Agreements, the
Accessories License or any other agreement between the
parties hereto.
(b) Except as specifically and expressly set forth herein, all
other terms and conditions of the Jeanswear License, the
Underwear Agreements and the Accessories License, shall
remain in full force and effect.
II. Arbitration. Except as specifically provided in the Underwear Agreements,
all disputes among the parties hereto, including all those arising under
this Agreement, and all disputes arising under the terms of any of the
licenses between the parties, shall be resolved through binding
arbitration pursuant to the rules of the International Chamber of Commerce
before a panel of three arbitrators, one of whom shall be appointed by
CKI, one of whom shall be appointed by Warnaco or CKJ, as applicable, and
the third of whom shall be appointed by the other two.
III. Releases. All the parties hereto each and all hereby release and discharge
the other, and the other's parents, subsidiaries and affiliates, and their
respective members, shareholders, officers, directors, employees, agents,
licensors, licensees, customers, predecessors, successors and assigns, and
all those in privity with any one or more of them from all claims,
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages,
judgments, executions, claims, costs (including reasonable attorneys
fees), and demands whatsoever, in law or in equity, which any party hereto
ever had against the other, now has or hereafter can, shall or may have,
for, upon, or by reason of any matter, cause or thing whatsoever relating
to the Jeanswear License, the Underwear Agreements or the Accessories
License from the beginning of the world to the day and execution and
exchange of this Agreement, with the exception of: (i) claims arising from
any breach of this Agreement from and after the Execution Date; (ii)
monetary claims (but not termination provided each such monetary claim is
promptly resolved to Licensor's reasonable satisfaction, with each party
acting in good faith to resolve fairly and quickly) for nonpayment or
underpayment of Percentage Fees or other amounts due under the Jeanswear
License, the Underwear Agreements or the Accessories License for periods
from
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and after February 12, 2003, and (iii) claims for indemnification
under the Jeanswear License, the Underwear Agreements or the Accessories
License.
IV. Entire Agreement. This Agreement constitutes the entire agreement by and
among the parties relating to the subject matter hereof, and except as
specifically described and set forth herein, supersedes all prior
negotiations, discussions, proposals, representations, or otherwise
relating to the matters addressed herein. This Agreement shall not be
amended, altered, supplemented, modified, superseded, terminated, or
otherwise changed, and no provision may be waived, unless in writing
executed by the parties to such further amendment and expressly stating
that it is an amendment, alteration, supplement, modification, termination
or waiver of specific provisions of this Agreement.
V. Binding Effect. This Agreement shall be binding upon the parties, their
successors and assigns, parents, subsidiaries, affiliated companies, and
all of their officers, agents, servants and employees.
VI. Equal Participation. This Agreement was drafted with full and equal
participation from the parties, and no provision herein may be construed
against or in favor of any party because of the relevant bargaining
positions, strengths or sophistication thereof or because it drafted any
such provision.
VII. Notices. All notices, requests, consents, demands, approvals and other
communications, including the service of process, hereunder shall be
deemed to have been duly given, made or served if in writing and delivered
personally or sent by overnight carrier that requires the addressee to
acknowledge receipt thereof to the respective parties to this Agreement as
set forth below or as later amended in writing. Informal communications
between the parties may be properly transmitted by facsimile.
(a) If to CKI or PVH:
Calvin Klein, Inc.
205 West 39th Street
New York, New York 10018
Attn: Tom Murry, President
Fax No.: (212) 292-9933
Phillips-Van Heusen Corporation
200 Madison Avenue
New York, New York 10016
Attn: Mark Weber, President
Fax No.: (212) 381-3970
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with a copy to:
Calvin Klein, Inc.
205 W. 39th Street
New York, New York 10018
Attn: General Counsel
Fax No.: (212) 764-6784
Phillips-Van Heusen Corporation
200 Madison Avenue
New York, New York 10016
Attn: General Counsel
Fax No.: (212) 381-3970
and:
(b) If to Warnaco, CKJ or CKJHI:
Warnaco Inc.
90 Park Avenue
New York, New York 10016
Attn: General Counsel
Fax No.: (212) 503-8536
Calvin Klein Jeanswear Corporation
90 Park Avenue
New York, New York 10016
Attn: President
Fax No.: (212) 503-8536
VIII. Enforceability of a Term. If any term or provision of this Agreement is
held invalid or unenforceable by a court or tribunal of competent
jurisdiction, such invalidity shall not affect the validity or operation
of any other term or provision and any such invalid term or provision
shall be modified to the extent necessary to make it valid and/or
enforceable or severed from this Agreement if such modification is not
possible.
IX. Execution. This Agreement may be executed in counterparts and signatures
hereon may be exchanged and transmitted by facsimile transmission, which
counterparts and signatures shall, as between the parties, be deemed to be
originals constituting a single agreement and shall be deemed valid and
binding.
X. No Third Party Beneficiaries. Except as specifically set forth and
identified herein and in the Jeanswear License and Underwear Agreements,
there are no third party beneficiaries to this Agreement.
XI. Singular and Plural Forms. The meaning assigned to each term defined
herein shall be equally applicable to both the singular and the plural
forms of such term.
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Where a word or phrase is defined herein, each of its other grammatical
forms shall have a corresponding meaning.
XII. Rights and Remedies. All rights and remedies that either party may have
hereunder or by operation of law are cumulative and the pursuit of one
right or remedy will not be deemed an election to waive or renounce any
other right or remedy.
XIII. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to its
principles of conflicts of law.
XIV. Confidentiality. The terms of this Agreement are and shall be kept
confidential. No party hereto shall make any press release or any other
disclosure of this Agreement and the terms hereof, except that each party
may disclose the same to such of its officers, directors, employees,
representatives, agents and contractors that need to know the same in
connection with such party's performance of this Agreement or of any of
the Jeanswear License, Underwear Agreements, Accessories License (or the
contemplated Swimwear License Agreement or the C/SA Store License). The
persons to whom information is disclosed shall be informed of the
confidential nature of the information prior to disclosure and must agree
to maintain its confidentiality. If any party, or any officer, director,
employee, representative, agent or contractor to whom a party discloses
information in accordance with this Section XIV becomes legally compelled
(including by deposition, interrogatory, request for documents, subpoena,
civil investigative demand or similar process) to disclose any information
regarding this Agreement, the party under compulsion will provide the
other parties with prompt written notice of such requirement so that any
of the other parties may seek a protective order or other appropriate
remedy. If such protective order or other remedy is not obtained, the
disclosing party shall disclose (or cause its applicable director,
officer, employee, representative or agent to disclose) only the specific
information that the disclosing party is advised by counsel is legally
required or compelled to be disclosed, and the disclosing party agrees to
take all reasonable steps to preserve the confidentiality of the
information disclosed, including by obtaining an appropriate protective
order or other reliable assurance that confidential treatment will be
accorded to the information so disclosed. If a party determines it is
legally necessary to make any public disclosure regarding this Agreement
through a press release, or other means, the parties shall discuss the
press release or other public disclosure in good faith, and the party who
has determined that such disclosure is necessary to comply with applicable
law or regulation, including applicable stock exchange regulations, shall
incorporate in its public disclosure all comments reasonably requested by
the other parties. Nothing herein shall been deemed to limit the
confidentiality obligation of the parties under the Jeanswear License. The
parties agree that a breach of this Section XIV or the other
confidentiality provisions of the Jeanswear License could cause
irreparable injury to a party and that payment of money damages alone may
not be sufficient. The parties further agree that if a party hereto
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breaches or threatens to breach this Section XIV or such other
confidentiality provisions, the other parties may seek injunctive and
other equitable relief, in accordance with Section II of this Agreement
and the rules of the International Chamber of Commerce.
XV. Single Restated Agreement. The parties will consider in good faith the
desirability and feasibility of commissioning a joint effort to combine
all of the operative amendments and modifications to the Jeanswear License
into a single restated agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
CALVIN KLEIN, INC.
By: /s/ Mark D. Fischer
----------------------------------------
Name: Mark D. Fischer
Title: Vice President
PHILLIPS-VAN HEUSEN CORPORATION
By: /s/ Mark D. Fischer
----------------------------------------
Name: Mark D. Fischer
Title: Vice President
WARNACO INC.
By: /s/ Stanley P. Silverstein
----------------------------------------
Name: Stanley P. Silverstein
Title: Senior Vice President
CALVIN KLEIN JEANSWEAR COMPANY
By: /s/ Stanley P. Silverstein
----------------------------------------
Name: Stanley P. Silverstein
Title: President
CKJ HOLDINGS INC.
By: /s/ Stanley P. Silverstein
----------------------------------------
Name: Stanley P. Silverstein
Title: President
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EXHIBIT: COLA Adjustment
All amounts subject to adjustment by COLA will be increased (or, in the case of
the Credit only, decreased, as applicable) on January 1, of each Annual Period
in the proportion that the CPI (as defined below) figure last published
immediately preceding such date bears to the CPI figure last published
immediately preceding January 1 of the prior Annual Period. "CPI" shall mean the
Consumer Price Index (All Urban) - Apparel Commodities (including footwear)
(1982/1984 = 1) published by the United States Government Bureau of Labor
Statistics or its successor.
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EXHIBIT: Specified Competitors ([p] 6)
***
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Exhibit B
"Products" shall mean:
***
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CK / Calvin Klein Five Year Plan
North America and Caribbean Islands
2004 2005 2006 2007 2008
---- ---- ---- ---- ----
Business Plan
- -------------
CK/Calvin Klein *** *** *** *** ***
Calvin Klein *** *** *** *** ***
----- ----- ----- ------ ------
Total *** *** *** *** ***
===== ===== ===== ====== ======
*** of Plan
- -----------
CK/Calvin Klein *** *** *** *** ***
Calvin Klein *** *** *** *** ***
----- ----- ----- ------ ------
Total *** *** *** *** ***
===== ===== ===== ====== ======
Percentage Royalty (***)
- ------------------------
CK/Calvin Klein *** *** *** *** ***
Calvin Klein *** *** *** *** ***
----- ----- ----- ------ ------
Total Minimum Royalty *** *** *** *** ***
- --------------------- ===== ===== ===== ====== ======
***
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REV1
CK / Calvin Klein Five Year Plan
Rest of World
2005 2006 2007 2008
------ ------ ------ ------
Business Plan
- -------------
CK/Calvin Klein *** *** *** ***
Calvin Klein *** *** *** ***
------ ------- ------- -------
Total *** *** *** ***
====== ======= ======= =======
*** of Plan
- -----------
CK/Calvin Klein *** *** *** ***
Calvin Klein *** *** *** ***
------ ------- ------- -------
Total *** *** *** ***
====== ======= ======= =======
Percentage Royalty (***)
- ------------------------
CK/Calvin Klein *** *** *** ***
Calvin Klein *** *** *** ***
------ ------- ------- -------
Total Minimum Royalty *** *** *** ***
- --------------------- ====== ======= ======= =======
***
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Exhibit: Design Process and Procedures ([p] 4)
***
21
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Design Staff Exhibit
***
22