Exhibit 10.133: Certain confidential information in this Exhibit 10.133 was
omitted and filed separately with the Securities and Exchange Commission (“SEC”)
with a request for confidential treatment by Inter Parfums, Inc.
 
License Agreement

License Agreement effective as of July 1, 2007, by and among The Gap, Inc.,
Banana Republic LLC, Gap (Apparel) LLC, Gap (ITM), Inc., Banana Republic
(Apparel) LLC, and Banana Republic (ITM), Inc. (collectively, the “Company”) on
the one hand and Inter Parfums, Inc. and its wholly-owned subsidiary Inter
Parfums USA, LLC. (individually or collectively, “Vendor”) on the other hand.

W i t n e s s e t h:

Whereas, Company and Vendor have entered into an agreement dated as of July 14,
2005, as amended (the “Master Agreement”); and
 
Whereas, Company and Vendor desire to enter into this License Agreement to
permit Vendor to sell and distribute Approved Company Products outside the
Territory, as such term is defined in the Master Agreement, upon the terms and
subject to the conditions contained herein;
 
Now, Therefore, in consideration of the mutual covenants, conditions and
promises contained herein, the parties hereby agree as follows:
 
ARTICLE I

 
INCORPORATION BY REFERENCE AND DEFINITIONS
 
Incorporation by Reference. Sections 1, 5, 10.1, 11, 12, 13, 14.5, 14.6 and 15
of the Master Agreement are incorporated by reference herein and made a part of
this License Agreement, with the same force and effect as if fully set forth
herein, except to the extent the provisions of this License Agreement provide
otherwise. In the event of any conflict between the two agreements regarding the
subject matter hereof, the terms of this License Agreement shall control.

Defined Terms in Master Agreement. Capitalized terms not defined in this License
Agreement shall have the meanings ascribed to them in the Master Agreement.

Advertising. “Advertising” shall have the meaning set forth in Section 3.6 of
this License Agreement.

Annual Period. The first “Annual Period” shall commence on January 1, 2008 and
continue until December 31, 2008, and thereafter, each succeeding twelve (12)
month period commencing on each January 1st during the Term of this License
Agreement shall be a new Annual Period.

Approved Country. “Approved Country” shall mean a country within the New
Territory where Licensed Products are to be sold and distributed that has been
Approved by Company.

 
 

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Approved Distributors.“Approved Distributors” shall be distributors (other than
Vendor or Vendor Affiliates) in the New Territory whose primary or core business
is distribution of upscale or designer Personal Care Products that have been
Approved by Company.
 
Approved Retailers. “Approved Retailers” shall mean those better department
stores and better specialty stores in the New Territory that have been Approved
by Company and whose location, merchandising and overall operations are
consistent with the high quality of Company Products, the reputation, image and
prestige of the Company, the Company Marks, and Company owned, franchised or
licensed retail stores. Approved Retailers shall not include any online retailer
or e-commerce site unless specifically Approved by Company.

Authorized Channels of Distribution. The term “Authorized Channels of
Distribution” shall mean (1) Company International Stores as Approved by
Company; (2) Company Franchise Stores as Approved by Company; (3) those Approved
Distributors and Approved Retailers anywhere in the New Territory; and (4) those
Approved Duty-Free Channels of Distribution and United States Military Bases.
 
Business Plan. “Business Plan” shall have the meaning set forth in Section 3.2
of this License Agreement.

Company Franchise Stores. “Company Franchise Stores” shall mean stores,
concessions, or other retail establishments in the New Territory, operated by
third parties under the names Gap, GapKids, babyGap, GapBody and Banana
Republic, under license from Company.

Company International Stores.“Company International Stores” shall mean Gap,
GapKids, babyGap, GapBody and Banana Republic stores, concessions, or other
retail establishments in the New Territory owned and/or operated by Company.
 
Duty-Free Channels of Distribution. “Duty-Free Channels of Distribution” shall
mean duty-free, in-flight and cruise ship channels of distribution within and
outside the United States.
 
Effective Date.“Effective Date” shall mean July 1, 2007. 
 
Initial Term.“Initial Term” shall have the meaning set forth in Section 9.1 of
this License Agreement.

Licensed Products.“Licensed Products” shall mean the Approved Company Products
and Approved Existing Products developed and manufactured in accordance with the
Master Agreement to be sold and distributed under the terms of this License
Agreement.
 
Minimum Annual Royalty. “Minimum Annual Royalty” shall have the meaning set
forth in Section 6.2 of this License Agreement.

 
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Minimum Net Sales. “Minimum Net Sales” shall mean for each Annual Period the
minimum Net Sales set forth in the Business Plans Approved by Company.
 
Net Sales. “Net Sales” shall mean the invoiced amount of Licensed Products
shipped or sold by Vendor or any of its Affiliates to non-Affiliate Approved
Distributors and Approved Retailers anywhere in the New Territory, less only the
following deductions: (i) Returns as specifically permitted hereunder and in
Approved Business Plans; (ii) Trade Discounts; (iii) customs, duties or taxes
(other than with respect to income) to the extent separately stated on the
invoice; and (iv) freight not to exceed actual cost thereof to the extent
separately stated on the invoice. Net Sales shall not include testers, samples
or miniatures of Licensed Products or other promotional material and non-retail
items sold to Approved Distributors or Approved Retailers.
 
New Territory. The term “New Territory” shall mean the world excluding the
Territory as defined in the Master Agreement. For purposes of this License
Agreement, United States Military Bases and Duty-Free Channels of Distribution
shall be included within the New Territory.
 
Recommended Retail Price.“Recommended Retail Price” shall mean (1) the
recommended retail price, if any, of each Licensed Product applicable in each
jurisdiction in the New Territory, or (2) where, in any particular jurisdiction,
recommended retail prices are not permissible under local law, the wholesale
price for that jurisdiction together with the mark-up customarily used in the
relevant jurisdiction to arrive at the retail price.

Returns. “Returns” shall mean Licensed Products actually returned to Vendor by
customers, multiplied by the unit price actually credited to the customer. The
total Returns shall not exceed [-----------]1  of Net Sales per Annual Period.

Sales Royalty. “Sales Royalty” shall have the meaning set forth in Section 6.1
of this License Agreement.

Term.“Term” shall mean the Initial Term plus any extended term pursuant to
Section 9.2 of this License Agreement.

Trade Discounts. “Trade Discounts” shall mean discounts from the wholesale
prices of the Licensed Products that are customary in the trade and that are
actually given by Vendor or its Affiliate.

United States Military Bases. “United States Military Bases” shall mean
restricted-access retail locations located on or adjacent to United States
military bases, wherever located, including those owned or operated by the Army
and Air Force Exchange Service (AAFES), the Navy Exchange Service Command
(Nexcom), the Marine Corps Exchange, Coast Guard Exchange System (CGES), and the
Veterans Canteen Service.
 

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1Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.1.
 
 
3

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ARTICLE II

 
GRANTS
 
2.1 Grant of Rights. Subject to the terms and conditions of this License
Agreement and the Master Agreement, Company expands the Scope as defined in
Section 2.1 of the Master Agreement as follows: Company hereby grants to Vendor
the exclusive and non-assignable right to develop, produce, manufacture, sell
and distribute Licensed Products, including all Creative for such products, in
Authorized Channels of Distribution in the New Territory during the Term. Except
for Company’s own rights to sell the Licensed Products through Company
International Stores and Company Franchise Stores, which are expressly reserved,
the rights granted to Vendor in this License Agreement are exclusive with
respect to Personal Care Products and have not been granted to any third party.
The Company reserves all other rights not specifically granted hereunder or
under the Master Agreement.
 
2.2 Distribution. Subject to the terms and conditions of this License Agreement,
Vendor shall have the right to enter into distribution agreements with Approved
Distributors for the distribution (but not the manufacture) of the Licensed
Products in the New Territory.
 
2.3 Best Efforts. Vendor shall use its best efforts to exploit the rights
granted herein in Authorized Channels of Distribution in all Approved Countries
and to sell an amount greater than the Minimum Net Sales for every Annual
Period. For the avoidance of doubt, Vendor’s obligation to use its best efforts
does not in any way relieve Vendor of its obligations to meet the Minimum Net
Sales and to pay the Minimum Royalty.
 
2.4 Company International Stores. Notwithstanding any provision herein, nothing
in this License Agreement shall prevent Company from entering any market for the
purpose of owning, operating, franchising, or licensing Company International
Stores or Company Franchise Stores.

 
ARTICLE III
 
CONTINENTAL STRATEGY;
 
BUSINESS PLAN APPROVALS; APPROVED DISTRIBUTORS; AUTHORIZED CHANNELS OF
DISTRIBUTION; MARKETING AND ADVERTISING
 
3.1 Continental Strategy; Annual Planning. 
 
(a) The parties shall develop and agree in writing upon a Continental Strategy
Outline for the Banana Republic Brand and for the Gap Brand for each region of
the New Territory, which will serve as a guideline for the preparation and
Approval of Business Plans as set forth below in Section 3.2 of this License
Agreement. The Continental Strategy Outline shall be non-binding but will
reflect the agreed-upon business strategy of both parties for the exploration
and development of business opportunities in such region. In exploring and
developing such potential business opportunities, Vendor shall (i) inform itself
on the applicable laws concerning the appointment of agents and distributors and
shall not make any representation or take any action with respect to third
parties that in any way binds or commits Company prior to Approval of the
relevant Business Plan; and (ii) use best efforts, including without limitation
written non-disclosure agreements, to ensure that all parties with whom Vendor
discusses distribution opportunities maintain such discussions in confidence and
make no statements or take any actions to disclose to the public or to the
industry Company’s intention to begin the sale of Licensed Products in the
relevant jurisdiction. Company agrees to notify Vendor promptly in the event of
a material change to its business strategy or any Continental Strategy Outline.

 
4

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(b) Vendor will include the then-current Continental Strategy Outlines and any
proposed changes thereto in the Annual Plan pursuant to Section 4.5 of the
Master Agreement.

3.2 Approval of Business Plan.

(a) Vendor shall provide to Company for Approval a business plan for the sale
and distribution of Licensed Products in one or more countries aligned to the
applicable Continental Strategy Outline (each a “Business Plan”). Each Business
Plan shall include the following elements over a three-year period:

 
·
Country strategy (including which countries to enter and when)

 
·
Distribution strategy (including which distributor(s) and a profile of each)

 
·
Retailer strategy (including which retailer(s) and number/type of doors)

 
·
Projected and Minimum Net Sales

 
·
Marketing and promotional strategy

 
·
Product strategy (including Clearance Measures taken and recommended trademark
applications to be filed, if any, for New Marks and/or Company Marks, taking
into account any trademark information provided by Company pursuant to Section
5.1)

 
·
Staffing and training strategy (organization plan to execute country strategy
including minimum team size and store staffing plan)

 
·
Launch strategy (including calendar of events)

 
·
Brand assets required to market the assortment locally

(b) A Business Plan is not Approved unless and until Vendor receives from
Company the completed and signed Business Plan Approval Form, attached hereto as
Exhibit A. Company shall Approve or disapprove each Business Plan, including
without limitation each of the following elements: (i) Approved Country or
Countries; (ii) Approved Distributors; (iii) Approved Retailers; and (iv) the
specific Licensed Products to be distributed, including the assortment of
Licensed Products specific to each Approved Retailer. Company may Approve the
Business Plan in whole or in part. With respect to any element of the Business
Plan that is not Approved, the parties may agree to revise the non-Approved
element(s) of the Business Plan in order for Company to Approve the Business
Plan as revised, or Vendor may resubmit a new Business Plan for Approval at a
later time.

(c) Company shall not unreasonably withhold its Approval of a distributor
identified in a Business Plan that has previously been Approved by Company in
connection with a different Business Plan.

 
5

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3.3 Approved Distributors.

(a) Approved Distributors are authorized to resell Licensed Products only to
Approved Retailers in accordance with the applicable Business Plan. Vendor shall
enter a written distribution agreement with each Approved Distributor that
requires the Approved Distributor, among other things, to comply with all
relevant provisions of this License Agreement (including territorial, quality
and distribution restrictions contained herein) and with applicable law, and
shall furnish Company with copies of all distribution agreements (which may be
redacted to remove financial terms). All such agreements shall clearly provide
that the rights of the Approved Distributor are subordinate to the rights and
obligations between Company and Vendor, such that a termination or non-renewal
of this License Agreement will automatically cause termination of the agreement
between the Approved Distributor and Vendor, and the Approved Distributor will
have no claim against Company for such termination or failure to renew. Under no
circumstances may Vendor grant distribution rights in a jurisdiction that
imposes a penalty, indemnification, liquidated damages or any other form of
compensation to a distributor whose distribution rights are terminated or not
renewed in the absence of material cause therefor.

(b) At Company’s request, Vendor shall cease supplying Licensed Products to any
Approved Distributor that violates the terms of this License Agreement or of the
distribution agreement, and shall take all actions necessary to enforce this
License Agreement vis-a-vis the Approved Distributor, up to and including
termination of the distribution agreement. Moreover, if Company in good faith
and with reasonable cause requests that Vendor cease utilizing any Approved
Distributor for the Licensed Products, Vendor shall do so, subject only to legal
and contractual restrictions.

3.4 Authorized Channels of Distribution; Termination.

(a) Vendor and Vendor’s Affiliates shall distribute the Licensed Products only
through the Authorized Channels of Distribution. Vendor shall use best efforts
to ensure that Approved Distributors distribute the Licensed Products only
through the Authorized Channels of Distribution by, inter alia, monitoring the
sales activities of Approved Distributors and by making Approved Distributors
aware of the fact that sales outside of the Authorized Channels of Distribution
will result in the termination of their distributorship agreements.

(b) Vendor recognizes that the reputation, image and prestige of the Company,
the Company Marks, and the Licensed Products (the “Image”) depend upon the
selection of Authorized Channels of Distribution consistent with the Image and
the high quality of the Licensed Products. If Vendor (or any Vendor Affiliate)
discovers that an Approved Distributor or Retailer conducts its business in
violation of this License Agreement or in a manner that does or is likely to
damage the Image or that otherwise is inconsistent with the Image, Vendor shall
cease selling the Licensed Products, or take steps to ensure the Licensed
Products are not sold, to such Approved Distributor or Retailer, except if
prohibited by law, in which case Vendor shall inform Company of the relevant
provision of law that prohibits such action.

 
6

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3.5 Vendor Funding of Two Trips. Vendor shall, at its sole cost and expense,
make flight and hotel arrangements and pay for or reimburse Company for all
travel expenses (including business class airfare, agreed-upon hotel
accommodations, meals and incidental expenses) for one Company representative of
each Brand to (i) the Cannes international trade show for perfumes and cosmetics
or (ii) one other venue for purposes of viewing current or potential markets.
 
3.6 Marketing, Advertising and Promotion.

(a) Company shall provide for each of the Gap Brand and Banana Republic Brand
one (1) media-ready advertisement (including usage rights) annually to support
Advertising, as hereinafter defined, and in-store marketing by Approved
Retailers in any and all Approved Countries. Vendor or its Approved Distributors
shall at their sole expense produce marketing, advertising and promotion for the
Licensed Products in Approved Retailers based upon the media-ready advertisement
provided by Company (collectively “Advertising”). All Advertising shall be
subject to Approval of Company.

(b) Subject to the provisions of Section 3.6(c) of this License Agreement,
Vendor together with its Approved Distributors shall in the aggregate spend on
Advertising of Licensed Products during each Annual Period fifteen
[--------------]2  of the greater of (i) Minimum Net Sales and (ii) Net Sales of
Licensed Products during such Annual Period.
 
(c) Company shall have the right to Approve the form and content of all aspects
of Advertising. Company shall have [------------]3 from the date of Company’s
receipt of the submission by Vendor of a matter for Approval required in this
Section 3.6 to either Approve or reject such matter, and Company agrees to use
its best efforts to Approve or reject the matter within that time. Company
acknowledges that in connection with the marketing of the Licensed Products,
time deadlines are extremely important at each stage of a marketing program. If
Company fails to respond within the aforementioned Approval period, then such
submission for approval will be deemed not to be Approved, and Vendor shall
resubmit such submission to Company. Once the form and content of Advertising
and the media vehicle for such Advertising has been Approved, the actual
placement of such Approved Advertising within the media vehicle shall not
require Approval.
 
3.7 Gifts With Purchase Promotions. In connection with its marketing of the
Products, Vendor may develop gift with purchase promotions, wherein the items
used as the gift components of the promotions shall be other Licensed
Product(s). If Vendor seeks to use as the gift component any item other than a
Licensed Product, such item shall be subject to Gap Inc.’s vendor compliance,
product integrity, and/or social responsibility requirements in addition to
being subject to Company’s Approval. All gift with purchase promotions shall be
subject to the Approval of Company. Vendor shall be solely responsible for all
legal requirements and clearances in connection with the gift with purchase
promotions in accordance with Section 4.9 of the Master Agreement.
 

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2 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.2.
3 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.4.
 

 
7

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3.8 Post-Launch Reports. For each Approved Country in an Approved Business Plan,
Vendor shall use its best efforts to provide a report within [----------]4 
following launch and shall in any event provide such report no later than
[------------]5  following launch, of sample pictures of all creative elements
(including in-store displays and media placements), editorial coverage, and an
overall launch summary.

3.9 Recommended Retail Price.

(a) By no later than the commencement of the sale of Licensed Products to
Approved Distributors for each Annual Period by Vendor, Vendor shall provide
details of and discuss in good faith with Company the Recommended Retail Price
for each Licensed Product in each Annual Period in each Approved Country and/or
Authorized Channel of Distribution.

(b) Vendor shall at all times ensure that all Approved Retailers that are
supplied with any Licensed Products are aware at all times of the Recommended
Retail Price in respect thereof.

(c) For the avoidance of doubt, nothing in this Section 3.9 shall prohibit
Vendor from selling any Licensed Products at any price as Vendor freely
determines, or prohibit any Approved Retailer or Approved Distributor from
selling any Licensed Products at any price as that Approved Retailer or Approved
Distributor freely determines.

ARTICLE IV
 
SALES TO COMPANY INTERNATIONAL STORES
AND COMPANY FRANCHISE STORES

4.1 Sales to Company International Stores and Company Franchise Stores. Vendor
and Approved Distributors shall sell Licensed Products to Company International
Stores and Company Franchise Stores at a price to be negotiated by the parties
but which shall not exceed the most favorable price that Vendor sells to
Approved Retailers and Approved Distributors (including any Trade Discount(s) or
other discounts or gross margin percentage equivalent benefit).

4.2 Company Resales. Company shall only purchase Licensed Products directly from
Vendor. Company may purchase Licensed Products for resale through any and all
Company International Stores and Company Franchise Stores. With respect to
Company Franchise Stores, Company agrees not to resell Licensed Products to any
Company Franchise Store located within a territory or geographic location
allocated to an Approved Distributor under an Approved Business Plan unless the
Approved Distributor is unable or unwilling to sell to such Company Franchise
Store. Notwithstanding the foregoing, Company may provide any and all Company
Franchise Stores with non-saleable Licensed Products for promotional purposes,
promotional testers, samples, and miniatures of Licensed Products.
 

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4 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.4.
5 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.5.
 

 
8

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4.3 No Royalties on Sales to Company International Stores. Notwithstanding
anything contained in this License Agreement, Vendor shall not pay Sales Royalty
on Licensed Products sold or shipped directly by Vendor from the United States
to Company International Stores. Vendor shall pay Sales Royalty on Licensed
Products sold or shipped directly by Vendor from the United States to Company
Franchise Stores.

4.4 Inventory.

(a) Without limitation to its obligation to comply with VMI Service Levels under
the Master Agreement, Vendor shall use commercially reasonable efforts in order
to maintain sufficient inventory in order to support the Approved Business Plan
in each Approved Country.

(b) In the event Vendor is unable to fulfill all inventory requirements of
Company Stores, Company International Stores, Company Franchise Stores and
Approved Distributors, then Vendor shall give priority first to Company Stores
to the extent provided in Article 8 of the Master Agreement, then to Company
International Stores, then to Company Franchise Stores, and finally to Approved
Distributors. Vendor may not use inventory supporting the Target Weeks of Supply
at Company Stores to fill orders placed by Approved Distributors without the
prior Approval of the Authorized Representative of the brand associated with the
relevant Licensed Product. Notwithstanding anything to the contrary contained
herein, Vendor shall not be obligated to provide promotional goods to Company
that have previously been allocated to Company International Stores, Company
Franchise Stores, Approved Distributors or Approved Retailers.

(c) Except as may be required under Section 4.4(b) above, Vendor shall maintain
inventory for Company International Stores separate and apart from inventory for
Company Stores.

(d) Vendor shall make available to Company upon request information regarding
inventory levels of Licensed Products by product and SKU.

4.5 Quality; Legal Clearances. Except as otherwise Approved by the Company, each
Licensed Product shall be identical in quality, appearance and formulation
(except where changes are required to comply with applicable law), and the
subject of identical representations and warranties, to the comparable Company
Product sold to the Company under the Master Agreement so as to protect and
enhance, and in no manner reflect adversely upon, the prestige of the Company
and the Company Marks. For the avoidance of doubt, (i) all such Licensed
Products shall be developed and manufactured in accordance with the procedures
of the Master Agreement and using only Approved Contractors; and (ii) Vendor is
responsible at Vendor’s sole expense for all legal compliance and Clearance
Measures pursuant to Section 4.9 of the Master Agreement for all Licensed
Products for all Approved Countries, United States Military Bases, Duty-Free
Channels of Distribution, and any other jurisdictions in the New Territory where
Vendor is Approved to distribute the Licensed Products.

 
9

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4.6 Compliance with Law. Each Licensed Product shall be manufactured, packaged,
labeled, sold and distributed in accordance with all applicable national, state,
provincial, local or other laws and in accordance with Vendor’s obligations
under the Master Agreement.
 
4.7 Additional Foreign Compliance Expense. Vendor agrees to make an independent
contractor available to Company on a full-time basis during the first Annual
Period at Vendor’s sole expense to assist with oversight of international
operations in connection with this License Agreement. For each Annual Period
thereafter, Vendor agrees to reimburse Company for Company’s incurred expenses
for oversight of international operations in connection with this License
Agreement in a minimum amount of [----------]6  up to a maximum of
[---------------]7  per Annual Period. Such reimbursement shall be provided to
Company in the form of a credit memorandum against purchases of Licensed
Products.
 
ARTICLE V

 
INTELLECTUAL PROPERTY
 
5.1 Ownership of Company Intellectual Property. In connection with Vendor’s
Clearance Measures for each country or territory, upon the request of Vendor,
Company shall promptly provide Vendor with an exhibit summarizing all
registrations and applications of the Company Marks, if any, for such countries
and territories, including for each application or registration the mark,
classes and goods, application or registration number, and status (registered,
pending, or opposed). Vendor acknowledges that all rights, titles and interests
in and to the Company Intellectual Property, including the Company Marks and
Creative, shall be vested solely in Company. Vendor shall provide reasonable
assistance and cooperation to Company to acquire, transfer, maintain, perfect
and enforce Company’s rights, titles and interests in the Company Intellectual
Property, including providing retail sales documentation (which may include
sales reports, photographs, etc.) sufficient to show use for trademark purposes
with respect to Licensed Products for each country or territory at least
annually or as requested by Company. At Company’s request, Vendor shall execute
any documents, including registered user agreements, required by Company to
confirm Company’s ownership of all rights in and to the Company Marks and the
Creative in each jurisdiction in the New Territory. Vendor shall not at any time
do or cause to be done, or fail to do or fail to cause to be done, any act or
thing, directly or indirectly, contesting or in any way impairing those rights,
titles or interests of Company. If such reasonable assistance and cooperation
involves more than administrative acts, then the cost and expense of such
reasonable assistance and cooperation shall be borne by Company.
 

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6 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.6.
7 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.7.
 
 
10

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5.2 Grant of License to Distribute. During the Term, Company hereby grants to
Vendor, subject to the terms and conditions of this License Agreement, a
personal, non-transferable, non-sublicensable and non-exclusive license to use,
reproduce, have reproduced and display Company Intellectual Property to the
extent necessary for Vendor to sell and distribute Approved Company Products in
Authorized Channels of Distribution in the New Territory. Nothing in this
license is meant to preclude Company from using Company Intellectual Property in
connection with its Gap Brand and Banana Republic Brand businesses, or any of
its other brands or channels of distribution, or otherwise. Vendor acknowledges
and agrees that (a) its use of the Company Intellectual Property shall inure
exclusively to benefit Company; (b) use of the Company Intellectual Property by
Vendor does not convey to Vendor any right, title or interest in or to any of
the Company Intellectual Property or related goodwill; (c) Vendor shall not
contest, oppose, challenge or do anything to impair the validity, ownership or
enforceability of any of the Company Intellectual Property or the exclusive
ownership of Company in, or the exclusive right of Company to control the use
of, the Company Intellectual Property, or attempt to register any Company Mark
or any confusingly similar trademark, service mark, trade name or domain name;
(d) Vendor will not directly or indirectly depreciate or attempt to depreciate
the value of the goodwill or reputation of any of the Company Intellectual
Property, or use any of the Company Intellectual Property in any manner that is
inconsistent with the terms of this Agreement; and (e) Vendor agrees not to
copy, use, imitate or employ any of Company’s trademarks, service marks or
names, trade dress, copyrights or properties of Company or any formulae,
fragrances, scents or colors developed for use or used in Company products.
 
5.3 Intellectual Property Protection. Vendor shall have the right, for purposes
of selling and distributing Licensed Products in Authorized Channels of
Distribution in the New Territory, , at Vendor’s sole expense, to file and
prosecute trademark applications in Company’s name for the New Marks
(“Applications”), subject to the following:
 
(i) All right, title and interest in and to Applications shall be owned
exclusively by Company;
 
(ii) Applications shall be filed on behalf of and in the name of Company (or in
the name of any of Company’s current or future divisions, subsidiaries or
affiliated companies, as directed by Company);
 
(iii) Vendor shall use Company’s designated local counsel to file and prosecute
such Applications;
 
(iv) Vendor shall provide Company with prior notice of its intention to file or
not file Applications, together with Vendor’s justification therefor, and shall
provide Company a reasonable opportunity to comment or object before such
Applications are filed or not filed. Vendor shall consider in good faith any
comment or objection raised by Company;

(v) Vendor shall provide Company with regular reports on the status of all
Applications and shall immediately inform Company of any circumstance that could
affect the ability to distribute Licensed Products within a particular country
or jurisdiction;

(vi) Vendor shall not file any Application for any Company Mark or for any mark
containing any Company Mark or for any mark that is confusingly similar to any
Company Mark without prior written approval by Company’s Legal Department;

 
11

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(vii) In the event of an opposition, cancellation, or other legal proceeding
that blocks or otherwise prevents, or seeks to block or otherwise prevent,
registration of an Application, Company shall have the option, but not the
obligation, to take control of the defense of such proceeding at its own
expense, and Vendor shall provide full cooperation to Company in defending such
proceeding; and

(viii) Company may, at any time and in its sole discretion, revoke its
authorization hereunder and assume responsibility and control for filing and
prosecuting Applications at Company’s sole expense. In such event, Vendor shall
provide full cooperation to Company in transitioning all pending Applications to
Company’s direction, and Company agrees to consider any request by Vendor to
file an Application that Vendor reasonably believes is necessary in order to
distribute Licensed Products in a particular country.

Nothing in this section shall be deemed to limit or alter (i) Company’s rights
in and to the New Marks and Creative or (ii) Company’s rights to file and
prosecute Applications at its own expense.
 
(b) Company reserves the sole and exclusive right at its discretion to assert
claims against third parties for infringement or misuse of Company Intellectual
Property. Company shall fund the costs of prosecuting such claims against third
parties for infringement or misuse of Company Intellectual Property. Vendor
shall promptly notify Company of any such infringement or misuse of which it
becomes aware and provide full cooperation to Company in any such claims
asserted by Company.
 
5.4 Legal Clearance. With respect to each Licensed Product, Vendor shall be
solely responsible for and shall perform all Clearance Measures, at its sole
expense, in each Approved Country and in any other country in the New Territory
in which distribution of Licensed Products is anticipated to occur or that
Company reasonably requests, for all aspects of the proposed Licensed Products,
including any and all Creative (but excluding media-ready advertisements
provided by Company under Section 3.6(a) of this License Agreement), to ensure
that: (a) Company, Company International Stores, Company Franchise Stores,
Approved Distributors, and Approved Retailers can market, use, reuse, publish
and republish, sell and distribute, and authorize others to market, use, reuse,
publish, republish, sell and distribute, the Approved Company Product and
Creative, including Third-Party Materials, and (b) Company may own all rights
and interests in such Creative (except for any Third-Party Materials Approved by
Company) including, without limitation, the New Marks. Vendor shall complete all
necessary Clearance Measures before presenting a Business Plan to Company for
Approval under Section 3.2 of this License Agreement and will advise Company of
any recommended Applications pursuant to Section 5.3. Notwithstanding anything
to the contrary, Vendor shall have no obligation to apply for or to prosecute
any Applications. Vendor warrants that it uses an outside law firm with
expertise in trademark clearance to perform the Clearance Measures and that it
maintains documentation, including written opinions from counsel, regarding
those searches for eleven (11) years. Vendor shall notify Company of any change
in its clearance process.
 
 
12

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ARTICLE VI

 
ROYALTIES AND TAX MATTERS
 
6.1 Sales Royalty. Vendor shall pay to Company royalties equal to [---------]8 
on all Net Sales (the “Sales Royalty”).
 
6.2 Minimum Annual Royalty. Vendor shall pay to Company for each Annual Period a
Minimum Annual Royalty as follows:
 
(a) For the first Annual Period, the Minimum Annual Royalty shall be
[-----------]9 , consisting of [----------]10  for the Gap Brand and
[----------]11  for the Banana Republic Brand.

(b) For each Annual Period after the first, Vendor and Company shall use
reasonable commercial efforts to negotiate and agree upon the Minimum Annual
Royalty for each such Annual Period, based upon Minimum Net Sales as set forth
in the Business Plan(s) Approved by Company; provided, however, that the parties
agree that any future Minimum Annual Royalty shall be no less than the Minimum
Annual Royalty for the first Annual Period.

6.3 Payment of Royalties. 
 
(a) All royalty payments hereunder shall be made to the trademark owner as
follows: (i) For Gap Brand, to Gap (ITM) Inc. (unless otherwise directed by
Company); and (ii) for Banana Republic Brand, to Banana Republic (ITM) Inc.
 
(b) Payments required of Vendor hereunder shall be made to Company in United
States Dollars. The Sales Royalty payable with respect to Net Sales in
currencies other than United States Dollars during any quarterly accounting
period shall be computed on the basis of the conversion rate of the applicable
currencies into United States Dollars quoted in The Wall Street Journal as of
the close of business on the last business day of the applicable quarter.
 
(c) (i) With respect to each Annual Period, the Sales Royalty hereunder shall be
accounted for, and the Sales Royalty and/or Minimum Annual Royalty hereunder
shall be paid, quarterly, within [----------]12  after the close of each
calendar quarter of each Annual Period. The Minimum Annual Royalty shall be
payable in four (4) equal installments.
 

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8 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.8.
9 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.9.
10 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.10.
11 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.11.
12 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.12.

 
13

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(ii) The Sales Royalty payable for each quarter during each Annual Period shall
be computed on the basis of Net Sales during the elapsed portion of the Annual
Period, and credited against the Minimum Annual Royalties due.
 
(d) No Sales Royalty paid for any Annual Period in excess of the Minimum Annual
Royalty for any such Annual Period shall be credited against the Minimum Annual
Royalty due any other Annual Period.
 
6.4 Withholding. In the event that any payments are subject to withholding or
other taxes, after applying the relevant tax treaty, that Vendor is required to
deduct from such payments, Vendor shall remit the tax to the appropriate
governmental agency and shall provide Company a copy of each withholding tax
remittance notice that it files with such agency, together with original
receipts of applicable governmental authorities or other tax forms for all such
taxes withheld or paid within [----------]13  of Vendor’s filing or receipt of
such notices, receipts or related tax forms. Vendor shall be responsible for and
shall indemnify and hold Company harmless against any penalties, interest and
expenses incurred by or assessed against Company as a result of Vendor’s failure
to withhold such taxes or to remit them to the appropriate taxing authority.
Vendor shall fully and promptly cooperate with Company and provide to Company,
within [----------]14  of Company’s request, such information and records as
Company may request in connection with any application by Company to any taxing
authority for tax credits, exemptions or refunds available for any withholding
or other taxes paid or payable by Vendor. In the event Company is required to
refund to Vendor any amounts paid hereunder pursuant to the terms and conditions
of this License Agreement, Company shall not be required to refund that portion
of those amounts that were withheld by Vendor in order to comply with any
applicable tax law unless and until Company receives a refund of such amounts
from the applicable government and/or agency thereof or utilizes a foreign tax
credit that is directly attributable to such amounts on its United States
federal income tax return that is accepted by the United States Treasury or with
respect to which the period within which such credit may be reduced or is
allowed has expired.
 
6.5 Value Added, Sales, Use and Similar Taxes. All amounts set forth in this
License Agreement are exclusive of any applicable sales, use, goods and
services, transfer, excise, utility, gross receipts, services, consumption,
value added, and other analogous taxes. Company and Vendor will cooperate with
each other to minimize taxes, tax assessments and tax back-billing to the extent
legally permissible and administratively reasonable. Each party will make
available to the other party any existing resale certificates, exemption
certificates, or other existing information reasonably requested by the other
party provided, however, that neither party shall be required to create
information that does not already exist at the time of the request. If a party
requests the other party to challenge the imposition of any tax and the other
party agrees to do so, the party making such request shall reimburse the other
party for the reasonable expenses it incurs. The other party shall not
unreasonably withhold agreement to challenge the imposition of a tax. Under
these circumstances, the party so requesting the challenge shall be entitled to
any tax refunds or rebates granted to the extent that the refunds or rebates are
of taxes that were paid by such party.
 

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

13 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.13.
14 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.14.
 
 
14

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ARTICLE VII

 
BOOKS, RECORDS AND REPORTS
 
7.1 Statements.
 
(a) Vendor shall deliver to Company at the time each Sales Royalty payment is
due, a statement signed by Vendor (“Royalty Statement”). The Royalty Statement
shall indicate by quarter Annual Period: (i) the invoice price of Licensed
Products shipped or sold during the period itemized by style number covered by
such Sales Royalty payment; (ii) the Returns and Trade Discounts which properly
may be deducted from gross sales; (iii) Net Sales; and (iv) a computation of the
amount of Sales Royalty payable hereunder for the quarter Annual Period. The
Royalty Statement shall be furnished to Company irrespective of the quantity of
Licensed Products that have been sold during the period for which such statement
is due.
 
(b) Vendor shall deliver to Company, not later than [----------]15  after the
close of each Annual Period during the Term of this Agreement (or portion
thereof in the event of prior termination for any reason), a statement signed
and certified as accurate in all material respects by its chief financial
officer relating to such Annual Period, setting forth the information required
to be submitted by Vendor in accordance with Section 7.1(a) above, in such form
and including any additional information as may reasonably be requested by
Company, and the aggregate amount expended by Vendor and its Approved
Distributors for Advertising during such Annual Period.
 
(c) Vendor shall also deliver to Company within [----------]16  after the end of
each of the [----------]17  of each quarter Annual Period, a monthly sales
report by Brand and by plan in such form as reasonably requested by Company.
 
7.2 Books and Records. Vendor shall prepare and maintain complete and accurate
books of account and records covering all transactions arising out of or
relating to this Agreement. Company and its duly authorized representatives
shall have the right, exercisable not more than once every Annual Period during
regular business hours, for the duration of this Agreement and for
[----------]18  thereafter, to audit said books of account and records and
examine and make copies of all documents and material in the possession or under
the control of Vendor with respect to the subject matter and the terms of this
Agreement, including, without limitation, invoices, credits and shipping
documents, provided that, such auditing, examining and copying shall not unduly
interfere with the normal business operations of Vendor. All such books of
account, records and documents shall be kept available by Vendor for
[----------]19  after the end of the Annual Period to which they relate. 
 

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

15 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.15.
16 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.16.
17 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.17.
18 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.18.
19 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.19.
 
 
15

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7.3 Audits. If Vendor's payment or aggregate of payments for any period covered
by an audit of Vendor's books and records was less than the amount which should
have been paid by a sum equal to [----------]20  or more of the amount of
payment(s) actually made with respect to such period, or in the event that the
books and records referred to herein have not been maintained or retained by
Vendor and made available to Company in accordance with Section 7.2, then Vendor
shall within [----------]21  after Company's demand therefor (a) reimburse
Company for the cost of such audit and (b) make all payments required to be made
to eliminate any discrepancy revealed by said audit, together with interest in
an amount calculated from the date the delinquency arose at a rate per annum
equal to the prime rate quoted in The Wall Street Journal at the time of such
delinquency, [----------]22  per annum, if allowed by applicable law, otherwise
the maximum rate of interest allowed by applicable law shall be applied.
 

ARTICLE VIII

UNITED STATES MILITARY BASES,
DUTY-FREE CHANNELS, AND UK SALES

8.1 Sales to United States Military Bases.

(a) Notwithstanding anything to the contrary contained in this License
Agreement, and solely with respect to sales of Licensed Products to United
States Military Bases, (i) the Sales Royalty shall be [----------]23  in lieu of
the [----------]24  set forth in Section 6.1 and (ii) Vendor and Approved
Distributors shall not be under any obligation for Advertising expenditures as
set forth in Section 3.6.

(b) Vendor may sell and distribute those Licensed Products that have been
Approved in writing by the Authorized Representative of each Brand for sale and
distribution to United States Military Bases for the period from July 1, 2007
through (i) termination or expiration of this License Agreement or (ii)
withdrawal of Company’s Approval, whichever occurs first.
 

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

20 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.20.
21 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.21.
22 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.22.
23 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.23.
24 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.24.
 
 
16

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8.2 Duty-Free Sales.

(a) Notwithstanding anything to the contrary contained in this License
Agreement, Vendor and Approved Distributors shall not be under any obligation
for Advertising expenditures as set forth in Section 3.6 for sales of Licensed
Products in Duty-Free Channels of Distribution.

(b) The following Duty-Free Channels of Distribution are Approved by Company:
(i) Dallas-Fort Worth Airport Duty-Free Shops; (ii) in-flight magazines for
Delta and American Airlines; and (iii) Montego Bay, Jamaica Duty-Free Shops.

(c) Vendor may sell and distribute those Licensed Products that have been
Approved in writing by the Authorized Representative of each Brand for sale and
distribution to Approved Duty-Free Channels of Distribution for the period from
September 1, 2007 through (i) termination or expiration of this License
Agreement or (ii) withdrawal of Company’s Approval, whichever occurs first.

8.3 Sales in the United Kingdom.

(a) Notwithstanding anything to the contrary contained in this License
Agreement, and solely with respect to sales of Licensed Products to the Approved
Distributor for the United Kingdom (“UK”), Fragrance Factory Ltd. (“Fragrance
Factory”), during the period from July 1, 2007 through and including December
31, 2007, the Sales Royalty shall be [----------]25  in lieu of the
[----------]26  set forth in Section 6.1; for sales after December 31, 2007, the
Sales Royalty shall be [----------]27 .

(b) Fragrance Factory has been Approved by Company as an Approved Distributor
for sales in the UK. Vendor may authorize Fragrance Factory to sell and
distribute through the following Approved Retailers: (i) Harrods, (ii) John
Lewis, and (iii) House of Fraser, provided that Approved Retailers shall carry
Licensed Products only in their retail locations in the top 23 UK metropolitan
areas. Requests by an Approved Retailer to carry Licensed Products in its shops
located outside of the top 23 UK metropolitan areas shall be subject to
Company’s Approval.

(c) Vendor may sell and distribute those Licensed Products that have been
Approved in writing by the Authorized Representative of each Brand for sale and
distribution through Fragrance Factory to Approved Retailers in the UK for the
period from July 1, 2007 through (i) termination or expiration of this License
Agreement or (ii) withdrawal of Company’s Approval, whichever occurs first.
 

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

25 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.25.
26 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.26.
27 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.27.
 
 
17

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ARTICLE IX
 
TERM AND TERMINATION
 
9.1 Initial Term. The initial term hereof (the “Initial Term”) shall commence on
the Effective Date and, unless sooner terminated as hereinafter provided, shall
continue until December 31, 2011.
 
9.2 Extended Term. If the term of the Master Agreement is extended pursuant to
Section 14.2(b), then the Term of this License Agreement shall also be extended
to run coterminous with the term of the Master Agreement.
 
9.3 Termination. 
 
(a) Termination or expiration of the Master Agreement shall result in
termination of this License Agreement. Notwithstanding the foregoing, this
License Agreement shall not terminate in the event the Master Agreement expires
on August 31, 2009 after its Initial Term as set forth in Section 14.1 of the
Master Agreement.
 
(b) Vendor agrees that a material breach of this License Agreement shall
constitute a material breach of the Master Agreement and an Event of Default
under Section 14.5 of the Master Agreement.
 
(c) If (i) Vendor or a Vendor Affiliate knowingly sells Licensed Products
outside of the Authorized Channels of Distribution, or (ii) Vendor fails to use
best efforts to ensure that Approved Distributors sell only through the
Authorized Channels of Distribution and fails to fully cure such failure within
[----------]28  after notice thereof, Company may elect, at its discretion, to
terminate this License Agreement immediately upon notice to Vendor.
 
(d) If (i) Vendor intentionally underreports its Net Sales figures, or (ii)
Vendor engages directly or indirectly in any misuse of Company Intellectual
Property and fails to fully cure such failure within [----------]29  after
notice thereof, or (iii) Vendor otherwise engages in conduct that impairs the
Image, Company may elect, at its discretion, to terminate this License Agreement
immediately upon notice to Vendor.
 
(e) If Net Sales for any [----------]30  Annual Periods do not meet or exceed
the Minimum Net Sales for such Annual Periods, then Company may elect, at its
discretion, to terminate this License Agreement upon [----------]31  notice to
Vendor.
 

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28 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.28.
29 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.29.
30 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.30.
31 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.31.
 

 
18

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9.4 Rights on Expiration or Termination.
 
(a) Vendor shall, within [----------]32  from the last day of the month of
termination or expiration of this License Agreement, deliver to Company a
schedule of Vendor’s inventory of Licensed Products, including work-in-progress
at hand and a good-faith estimate of a commercially reasonable run-out of
components to complete finished goods within a commercially reasonable time
thereafter (“Finished Goods”) in the possession of, or in transit to, Vendor and
its Affiliates and shall also use reasonable commercial efforts to obtain a
schedule of inventory of Licensed Products from its Approved Distributors or
Contractors (collectively the “Final Inventory”).

(b) Upon expiration or termination of this License Agreement, Vendor shall offer
the Final Inventory to Company at a price to be negotiated, taking into account
the discounted prices offered by Authorized Channels of Distribution and in no
event to exceed the purchase price set forth in Section 9.1 of the Master
Agreement. Company shall have the option for [----------]33 after Company’s
receipt of the Final Inventory from Vendor to purchase all or a portion of the
Final Inventory. If [----------]34  or more of the Finished Goods are to be
purchased by Company, then Company shall purchase such Finished Goods within
[----------]35  following the expiration of such [----------]36  period. If less
than [----------]37  but [----------]38 or more of the Finished Goods are to be
purchased by Company, then Company shall purchase such Finished Goods within
[----------]39  following the expiration of such [----------]40  period. If less
than [----------]41  of the Finished Goods are to be purchased by Company, then
Company shall purchase such Final Inventory within [----------]42  following the
expiration of such [----------]43  period. Company shall have [----------]44 in
which to purchase all or a portion of the components that are not used to
complete Finished Goods within a commercially reasonable time.
 

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32 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.32.
33 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.33.
34 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.34.
35 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.35.
36 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.36.
37 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.37.
38 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.38.
39 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.39.
40 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.40.
41 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.41.
42 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.42.
43 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.43.
44 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.44.
 
 
19

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(c) For a period of [----------]45  following the expiration of such
[----------]46  period, Vendor shall have right to sell the Final Inventory not
purchased or to be purchased by Company only in accordance with the following:

(i) First, Vendor shall use best efforts to sell such Final Inventory to one or
more purchasers in the category of mass discounters outside of the United
States, provided that the specific purchasers, assortment of Licensed Products,
number of units, markets, and timing for all such sales must be Approved in
advance by the Authorized Representative of the relevant Brand, which Approval
shall not be unreasonably withheld, delayed, or denied but may take into account
the effect that sales of Final Inventory through such mass discounters will or
are likely to have on the Image;

(ii) Second, if after using best efforts to do so Vendor is unable to sell any
portion of the Final Inventory in accordance with Section 9.4(c)(i) above,
Vendor may sell the remaining Final Inventory, if any, to one or more purchasers
in the category of mass discounters within the United States (for example only,
and not for purposes of approval hereunder, TJ Maxx, Marshalls, and Perfumania),
provided that the specific purchasers, assortment of Licensed Products, number
of units, markets, and timing for all such sales must be Approved in advance by
the Authorized Representative of the relevant Brand, which Approval shall not be
unreasonably withheld, delayed, or denied but may take into account the effect
that sales of Final Inventory through such mass discounters will or are likely
to have on the Image; and

(iii) All Final Inventory remaining after compliance with Section 9.4(c)(i) and
(ii), if any, shall be destroyed at Vendor’s sole expense and in compliance with
applicable law.

(d) Upon expiration or termination of, or election not to renew, this License
Agreement, all rights granted to Vendor pursuant to this Agreement shall cease
to exist, and Company shall be free to contract with third parties for the
development, production, manufacture and distribution of Company Products in all
territories and all channels of distribution or to conduct such activities
directly.

(e) Notwithstanding expiration or termination of this License Agreement,
Approved Distributors may continue to sell Licensed Products (a) on hand or
(b) which Approved Distributors are contractually obligated to purchase under
the terms of their contracts with Approved Retailers or Vendor as of the date of
expiration or termination of this License Agreement, under the same terms and
conditions the Approved Distributors are allowed to do so herein, but in no
event to exceed [----------]47  after the date of expiration or termination of
the License Agreement.
 

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45 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.45.
46 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.46.
47 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.47.
 
 
20

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(f) The volume of the Final Inventory shall not exceed the equivalent dollar
value of net sales of Licensed Products by Brand for the [----------]48  as of
the date of expiration or termination of the License Agreement (“Final Inventory
Cap”). All Final Inventory in excess of the Final Inventory Cap shall be
destroyed at Vendor’s sole expense.

ARTICLE X
 
INDEMNIFICATION
 
10.1 Indemnification by Vendor. In addition to its indemnification obligations
under Section 13.2 of the Master Agreement, Vendor agrees to defend, indemnify
and hold Company, its officers, directors, agents and employees free and
harmless from and against any and all liabilities, losses, demands, causes of
action, costs, injuries, damages and expenses, including attorneys’ fees, which
Company may suffer or incur as a result of any claims made in connection with or
arising from (a) Vendor’s manufacture, promotion, sale or distribution of
Licensed Products; (b) Vendor’s failure to comply with any applicable domestic
or foreign law, statute or regulation with respect to distribution and sale of
the Licensed Products; (c) the negligent acts or omissions of Vendor or any of
its representatives, agents, Contractors, Distributors or assigns; (d) the
breach of or failure to perform under any term, obligation, requirement or
provision of this License Agreement; (e) any unauthorized use of any Company
Intellectual Property; (f) any infringement or alleged infringement of the
rights of any third party relating to the Creative, the New Marks, or any
Company Product; (g) Clearance Measures; and/or (h) the breach of any
representation or warranty set forth herein. If Vendor does not promptly assume
the defense of any claim tendered for indemnification hereunder or if Company
otherwise elects to do so at any time in Company’s sole discretion, Company may
defend the claim itself, with counsel of the Company’s choosing, at the expense
of Vendor.
 
10.2 Indemnification by Company. In addition to its indemnification obligations
under Section 13.3 of the Master Agreement, Company agrees to defend, indemnify
and hold Vendor, Vendor’s Affiliates, and their several officers, directors,
agents and employees free and harmless from and against any and all liabilities,
losses, demands, causes of action, costs, injuries, damages and expenses,
including attorneys’ fees, which Vendor or Vendor’s Affiliates may suffer or
incur as a result of any claims made in connection with or arising from (a)
Company’s gross negligence, or willful or intentional misconduct, or (b) any
trademark infringement claims made by third parties against Vendor for use of
the Company Marks strictly in accordance with this License Agreement. If Company
does not promptly assume the defense of any claim tendered for indemnification
hereunder, then Vendor or Vendor’s Affiliates may defend the claim itself or
themselves, with counsel of their choosing, at the expense of Company.
 
10.3 Consent to Settlement. With respect to each party’s indemnification
obligations hereunder, neither party may enter into any settlement or compromise
that imposes ongoing obligations or restrictions on the indemnified party or
adversely affects any right or interest of the indemnified party without the
indemnified party’s prior written consent.
 

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48 Confidential information omitted and filed separately with the SEC with a
request for confidential treatment by Inter Parfums, Inc. No. 10.133.48.
 
 
21

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In Witness Whereof, the parties hereto have executed this License Agreement by
signing below:

The Gap, Inc.   Inter Parfums, Inc.             By:   /s/ Marka Hansan   By:  
/s/ Jean Madar     Name: Marka Hansan       Name: Jean Madar     Title:
President, Gap Brand       Title: Chief Executive Officer     Date: April 28,
2008       Date: April 25, 2008

Banana Republic, LLC  
Inter Parfums USA, LLC
Inter Parfums, Inc., Sole Member
            By:   /s/ Jack Calhoun   By:   /s/ Jean Madar     Name: Jack Calhoun
      Name: Jean Madar     Title: President Banana Republic       Title: Chief
Executive Officer     Date: April 29, 2008       Date: April 25, 2008

Gap (ITM) Inc.                 By:   /s/ Marka Hansan   By:   /s/ Julie Gruber  
  Name: Marka Hansan       Name: Julie Gruber     Title: President, Gap Brand  
    Title: President     Date: April 28, 2008       Date: April 29, 2008

Banana Republic (ITM) Inc.                 By:   /s/ Julie Gruber            
Name: Julie Gruber             Title: President             Date: April 29, 2008
       

 
22

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EXHIBIT A
 
[exapg1.jpg]
 
 
 

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[exapg2.jpg]
 
 
 

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