EXHIBIT 10.1
 
LICENSE AND SUPPLY AGREEMENT
BY AND BETWEEN
 
AKKURATE LTD., with offices in Unit 1, 9 Park Hill, London SW4 9NS, United
Kingdom, acting through its Directors, Mr. John Christopher Richmond and Mr.
Saverio Moschillo, VAT No. GB788053886 (“Akkurate”)
 
AND
 
FALBER CONFEZIONI S.R.L., with offices in 47100 - Forlì (Italy), Via Gramadora
nos. 12-14, acting through its President, Mr. Saverio Moschillo, VAT No.
01498280401 (“Falber”)
 
AND
 
CPMM (Asia) Limited, with offices in Unit A, 10th Floor, Wo Kee Hong Building,
585-609 Castle Peak Road, Kwai Chung, New Territories, Hong Kong (China), acting
through its Director and duly empowered and authorized signatory, Mr. Richard
Man Fai LEE (“CPMM”)
 
WHEREAS
 
A) Akkurate has title to the distinctive signs “John Richmond”, “Richmond”,
“Richmond X” and “Richmond Denim” in their various denominations sand
specifications (the “Signs”), as evidenced by the logos attached hereto as
Schedule “A”, to be also used as signboard and/or as elements identifying and
qualifying a retail point of sale.
 
B) Akkurate and Falber have entered into an agreement under which the latter
shall manufacture, market and sell products solely and exclusively developed by
Akkurate and identified by the Signs, and in particular the products listed in
Schedule “B” attached hereto (the “Products”).
 
C) Akkurate has already entered into and it is negotiating agreements with
companies other than Falber (the “Third Companies”), on the basis of which
agreements the Third Companies shall manufacture, market and sell articles
identified by the Signs other than the Products, and in particular the articles
listed in Schedule “C” attached hereto (the “Articles”).
 
D) On March 9, 2007 Falber has entered into an agreement with China Premium
Lifestyle Enterprise, Inc. (“CPL”), a company belonging to the same group of
companies as CPMM, under which CPL shall have an exclusive right to import, sell
and distribute man’s and woman’s apparel identified by the trademarks “John
Richmond”, “Richmond X” and “Richmond Denim” (the “First Agreement”) in the
Exclusivity Area for ten (10) seasons starting from the Spring/Summer 2008: all
the foregoing as better set forth and under the terms and conditions provided
for in the First Agreement, which is hereby integrally referred to, including
its definitions. 
 
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E) Akkurate has expressed its intention to open points of sale identified by the
Signs in Italy and abroad where only the Products and the Articles shall be
retailed, with the express exclusion of any products and articles other than the
Products and the Articles: the foregoing by means of license and supply
agreements.
 
F) A uniform point-of-sale design module has been identified and implemented,
which shall be utilized for the structuring, layout and interior decoration of
the points of sale referred to in recital E) above.
 
G) Akkurate has already communicated CPMM information and data concerning, among
other things: Akkurate’s company details and financial data, the Signs, the
“John Richmond” and the “Richmond” points of sale operating in Italy and
worldwide (if any), litigation between Akkurate and its sublicensees related to
the “John Richmond” and the “Richmond” points of sale operating in Italy and
worldwide during the last three (3) years (if any), and all other information
requested by the law.
 
H) Also on the basis of the information received from Akkurate referred to in
recital G) above, CPMM has asked Akkurate for the right to use the Signs solely
to identify some points of sale to be opened and managed by CPMM in China, Hong
Kong, Macau and Taiwan, in order to retail solely the Products and the Articles
(the “Points of Sale”): each one of the Points of Sale shall be set up strictly
in accordance with the uniform design module referred to in recital F) above.
 
I) CPMM represents that a lease contract in its name is currently / shall be
timely in force for the premises in which each one of the Points of Sale shall
be located, and CPMM undertakes to keep such lease contracts in force for the
whole term hereof, save for what is provided for in art. 16.3 hereof; CPMM
further represents that it has obtained / it shall timely obtain the required
authorizations and/or licenses for the retail of the Products and of the
Articles in each one of the Points of Sale.
 
J) Akkurate has declared its willingness to grant CPMM the right to open the
Points of Sale identified by the Signs, on the conditions hereinafter specified.
 
K) Akkurate and Falber have selected CPMM because they have relied on CPMM’s
current shareholding structure and management.
 
Now, therefore,
 
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THE PARTIES COVENANT AND AGREE AS FOLLOWS
 
Art. 1 - Recital clauses and Schedules.
 
The recital clauses and the Schedules of this Agreement are an integral part
hereof, because they are in the nature of covenants.
 
Art. 2 - Scope of the Agreement.
 
By means of its signature to this Agreement, Akkurate hereby:
 

a)  
grants CPMM the right to use the Signs solely in order to identify the Points of
Sale, provided that CPMM shall use the Signs strictly in accordance with all the
provisions of this Agreement, in particular but without limitation with
reference to the provisions regarding signboard, architectural design, layout
and interior decoration of the Points of Sale;

   

b)  
authorizes CPMM to retail in the Points of Sale solely the Products and the
Articles identified by the Signs, as they are currently and shall be in the
future developed by Akkurate, and as they are manufactured and marketed by
Falber and by the Third Companies.

 
Art. 3 - Points of Sale.
 
3.1. Akkurate, Falber and CPMM hereby agree that CPMM shall, and CPMM hereby
undertakes to, open and manage solely in China, Hong Kong, Macau and Taiwan, for
the whole term of this Agreement:
 

a)  
one (1) Point of Sale which i) shall be characterized by the Signs, and in
particular by the [“John Richmond” / “Richmond”] sign, ii) shall be located in
Hong Kong in the “Harbour City” Department Store, iii) shall have a surface of
eighty-one (81) square meters, iv) shall be set up strictly in accordance with
the concept set forth in recital F) and art. 7, v) shall be opened to the public
within the essential deadline of March 1, 2008 (the “First Point of Sale”);

   

b)  
at least another twelve (12) Points of Sale which i) shall be characterized by
the Signs (as better set forth in Schedule “3.1” attached hereto), ii) shall be
located in the cities indicated in Schedule “3.1” attached hereto, iii) shall
have a surface of no less than one hundred and twenty (120) square meters, as
regards the shops-in-shop and the boutiques, and of no less than forty (40)
square meters, as regards the corners, iv) shall be set up strictly in
accordance with the concept set forth in recital F) and art. 7, v) shall be
opened to the public in the seasons provided for in Schedule “3.1” attached
hereto (the “Further Points of Sales”); the parties hereby further agree that it
is of the essence that CPMM open in each one of the seasons governed by this
Agreement at least the number of Points of Sale provided for in Schedule “3.1”
for each relative season, and that all the Points of Sale provided for in
Schedule “3.1” are opened during the term of this Agreement: however, CPMM shall
be allowed to modify the order of the openings as provided for in Schedule
“3.1”.

 
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3.2. The parties hereby agree that the location of each one of the Further
Points of Sale to be opened by CPMM shall be subject to Akkurate’s express and
written approval, which CPMM shall timely ask for - also by submitting Akkurate
the relative plans and all the information requested by Akkurate from time to
time - and which Akkurate shall give or reasonably deny on the basis: i) of the
position of the proposed location within the relative department store and/or
road and/or street, ii) of the neighboring shops and their trademarks, iii) of
the proposed square meters, and iv) of the proposed date of opening; all the
foregoing in order to protect the prestige and image of the Signs.
 
Akkurate and Falber shall make their best efforts to reply to CPMM within ten
(10) days from receipt of CPMM’s written proposal, it being however understood
that Akkurate and Falber shall be totally free to accept or reject any of CPMM’s
proposals.
 
3.3. CPMM hereby expressly recognizes and agrees that it is of the essence that
it opens in each one of the seasons governed by this Agreement the number of
Points of Sale provided for in Schedule “3.1” attached hereto for each relative
season: (i) in case of failure by CPMM to open in either the Spring/Summer 2008
and/or the Fall/Winter 2008/2009 season at least the number of Points of Sale
provided for in Schedule “3.1”, Akkurate and Falber shall be entitled to
terminate this Agreement in compliance with the provisions of art. 1456 of the
Italian Civil Code, by sending the other party a registered letter with return
receipt, and (ii) in case of failure by CPMM to open in each season starting
from the Spring/Summer 2009 season at least the number of Points of Sale
provided for in Schedule “3.1” for each relative season for a period in excess
of six (6) months, without prejudice to the provisions of art. 3.1 CPMM hereby
expressly and irrevocably undertakes since now to pay Akkurate as liquidated
damages-penalty, within five (5) days after demand, the amount of Euro one
hundred thousand/00 (€ 100,000.00) for each one of the Points of Sale, which
CPMM should fail to timely open: the foregoing without prejudice a) to
Akkurate’s right to claim for additional damages, and b) to Akkurate’s and
Falber’s right to terminate this Agreement. CPMM hereby expressly accepts such
liquidated damages-penalty as fair, in light of Akkurate’s interest in the
timely opening of each one of the Points of Sale.
 
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3.4. CPMM represents that it has already obtained / it shall timely obtain the
required authorizations and/or licenses for the retail of the Products and of
the Articles in each one of the Points of Sale.
 
Art. 4 - Exclusivity right.
 
4.1. CPMM shall have the exclusivity right to sell the Products (for the
avoidance of any doubts, not the Articles) solely in China, Hong Kong, Macau and
Taiwan (the “Exclusivity Area”).
 
CPMM expressly recognizes, and for all purposes agrees, that its exclusivity
right provided for above regards solely the ten (10) seasonal collections
governed by this Agreement, i.e. the Spring/Summer 2008, Fall/Winter 2008/2009,
Spring/Summer 2009, Fall/Winter 2009/2010, Spring/Summer 2010, Fall/Winter
2010/2011, Spring/Summer 2011, Fall/Winter 2011/2012, Spring/Summer 2012,
Fall/Winter 2012/2013 seasonal collections: therefore, CPMM in any case shall
have no exclusivity right whatsoever as regards all the seasonal collections
subsequent to the last seasonal collection governed by this Agreement, i.e. as
regards the seasonal collections starting from the Spring/Summer 2013
collection. In light of the above, CPMM since now expressly and irrevocably
waives any and all of its claims / objections, in case Akkurate, Falber, the
Third Companies and/or other entities, at any time and also before the expiry or
termination of this Agreement, should carry out, either inside or outside the
Exclusivity Area, any activities howsoever connected to the sale, retail,
distribution, marketing, promotion, advertising of the Products and relating to
seasonal collections other than the ten (10) seasonal collections governed by
this Agreement, as listed above.
 
4.2. In case of early expiry or termination, for whatever cause, of this
Agreement, CPMM’s exclusivity right provided for in art. 4.1 shall be limited to
the seasonal collections up to the date of such early expiry or termination: as
a consequence, the provisions of art. 4.1 shall apply with the necessary
adjustments (mutatis mutandis).
 
4.3. For the avoidance of any doubts, CPMM expressly recognizes and accepts that
it shall have no exclusivity rights whatsoever outside the Exclusivity Area.
 
Art. 5 - Signboard.
 
5.1. Each one of the Points of Sale shall be identified by the signboard
featuring the Signs, and in particular the signs indicated in art. 3.1 and in
Schedule “3.1”, in accordance with the specifications that Akkurate shall
communicate to CPMM. CPMM shall not affix and/or exhibit - neither inside nor
outside each one of the Points of Sale - other names and/or signs and/or
specifications whatsoever, unless specifically and expressly authorized in
writing by Akkurate.
 
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5.2. CPMM shall not affix and/or exhibit the signboard featuring the Signs prior
to obtaining the authorizations required under the law. Such authorizations,
whenever required, shall be requested and renewed by and at the expenses of
CPMM.
 
Art. 6 - Management of the Points of Sale.
 
6.1. Without prejudice to what is provided for in art. 21 hereof, each one of
the Points of Sale shall be opened by CPMM and shall be organized and managed by
CPMM at its exclusive expenses. Each one of the Points of Sale shall be attended
to by personnel in such number and with such skills as provided for in the list
attached hereto as Schedule “6.1”, in order to ensure efficient service to
customers and to maintain the international repute of the Signs. Any costs,
charges and related benefits and welfare treatments concerning the employees /
personnel hired and however utilized by CPMM shall be exclusively paid for by
CPMM.
 
6.2. On request of Akkurate, attendants at each one of the Points of Sale shall
wear, while on service, the uniform styled by Akkurate and to be purchased from
Falber.
 
6.3. Under this Agreement, Akkurate and/or Falber and/or the Third Companies
shall in no way be liable for the organization and management of any of the
Points of Sale, nor shall this Agreement give rise to any subordinate labor
relationship or any agency, supply, partnership, shareholding or other
relationship between Akkurate and/or Falber and/or the Third Companies, on the
one part, and CPMM, on the other part: as a consequence, neither Akkurate nor
Falber nor the Third Companies shall be liable to third parties now or hereafter
employed by CPMM to manage any of the Points of Sale.
 
6.4. CPMM shall hold Akkurate, Falber and the third Companies harmless from, and
indemnified against, any losses, liability and expenses (including legal costs
and fees) and any damages suffered by them, whether collectively or
individually, or any damages to be paid by them as a result of the opening
and/or management of any of the Points of Sale, or of the use of the Signs by
CPMM, or otherwise in relation to this Agreement: the foregoing also with
reference to any possible sublicensee(s) of CPMM, as provided for in art. 21 of
this Agreement. The provision of this paragraph and CPMM’s obligations deriving
therefrom shall survive expiry or termination of this Agreement.
 
6.5. CPMM shall execute a) an insurance policy covering civil liabilities toward
any third parties (CPMM’s employees, customers, delivery personnel, every person
entering the premises of any of the Points of Sale for whatever purpose), and b)
a fire insurance policy covering each one of the Points of Sale; all insurance
policies shall remain in full force and effect for the whole term of this
Agreement.
 
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Art. 7 - Design and decoration.
 
7.1. Architectural design, layout and interior decoration of each one of the
Points of Sale and any subsequent substantial change in existing architectural
or decoration features shall be subject to Akkurate’s prior express and written
approval, and shall be entrusted solely to the architects and contractors that
Akkurate shall timely communicate to CPMM, which CPMM under its sole
responsibility and liability shall enter into specific agreements with: any and
all fees and expenses howsoever related to architectural design, layout and
interior decoration of each one of the Points of Sale, as well as to possible
subsequent substantial changes of the same, shall be exclusively paid for by
CPMM. At least one hundred and twenty (120) days before the scheduled opening
date of each one of the Points of Sale, as indicated in art. 3 and in Schedule
“3.1”, CPMM shall send Akkurate, for its express and written approval, the plans
and the sections of the relative Point of Sale.
 
7.2 CPMM shall take prompt actions to always keep each one of the Points of Sale
in good conditions and in line with the Signs’ image: the foregoing also in
accordance with Akkurate’s possible requests.
 
7.3. CPMM shall not alter or change any of the Points of Sale’s location,
surface, shop-windows or layout without Akkurate’s express and written
authorization.
 
Art. 8 - Term.
 
This Agreement shall become effective upon execution hereof and starting from
the Spring/Summer 2008 season; this Agreement shall continue in full force and
effect for ten (10) seasons only, up to the Fall/Winter 2012/2013 season’s
collection: this Agreement shall therefore cover solely the parties’ activities
relating to the Spring/Summer 2008, Fall/Winter 2008/2009, Spring/Summer 2009,
Fall/Winter 2009/2010, Spring/Summer 2010, Fall/Winter 2010/2011, Spring/Summer
2011, Fall/Winter 2011/2012, Spring/Summer 2012, Fall/Winter 2012/2013 seasons.
As a consequence, this Agreement shall terminate approximately on January 31,
2013.
 
It is expressly provided that this Agreement shall not be automatically renewed;
however, the parties shall meet at least one (1) year before the aforementioned
date, in order to consider the possibility of executing a new contract.
 
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Art. 9 - No changes in CPMM and in CPMM’s business.
 
9.1. Concurrently with the execution of this Agreement, CPMM delivers Akkurate
and Falber a copy of i) its Articles of Association and Bylaws, and ii) its
Shareholders’ register; CPMM furthermore undertakes to deliver Akkurate and
Falber a copy of its annual accounts / balance sheet relating to all the years
covered by this Agreement within thirty (30) days after their publication.
 
9.2. This Agreement is of a personal nature, being entered into in reliance upon
and in light of the personal skills, qualifications and representations of CPMM,
as well as in light of the trust and confidence placed in CPMM, its current
shareholders - as evidenced in the documentation attached hereto as Schedule
“9.2” - and its current managing body who shall actively and substantially
participate in the ownership and operation of each one of the Points of Sale.
Therefore, CPMM shall cause that none of CPMM’s rights and powers under this
Agreement be assigned, transferred, shared or divided - voluntarily or
involuntarily, by operation of law or otherwise, in any manner (including
without limitation by means of transfer of shares, merger, de-merger, transfer
of business / going concern, etc.) - without Akkurate’s and Falber’s prior
express and written consent: all the foregoing without prejudice to the
provisions of art. 22. CPMM shall furthermore promptly inform Akkurate and
Falber of any modifications that should occur in CPMM’s managing body.
 
Art. 10 - Relationship between CPMM and Akkurate.
 
10.1. CPMM shall sell the Products and the Articles solely in the Points of
Sale. CPMM shall make every effort to promote and develop the sale of the
Products and of the Articles and to protect the image of the Signs. CPMM shall
refrain from carrying out any activities in any of the Points of Sale, which may
howsoever adversely affect the Signs. CPMM shall in particular, but without
limitation, refrain from selling in any of the Points of Sale any products
and/or articles other than the Products and the Articles identified by the
Signs.
 
10.2. CPMM shall strictly and timely comply with Akkurate’s and/or Falber’s
and/or the Third Companies’ instructions in regard to promotion, advertising and
distribution of the Products and of the Articles. CPMM further undertakes to use
in each one of the Points of Sale solely personalized “John Richmond” and
“Richmond” materials (including, without limitation: pens, bags, gift paper,
ribbons, tassels, merchandising goods, paperboard materials, etc.), which - at
Akkurate and Falber’s sole discretion - shall be either (i) purchased by CPMM
only from the suppliers that shall be communicated by Akkurate to CPMM from time
to time, or (ii) ordered by CPMM from third party manufacturers, provided that
(a) said third parties manufacturers shall strictly comply with Akkurate’s and
Falber’s specific instructions and that (b) Akkurate and Falber shall have
previously approved said third party manufacturers as well as the quality of the
personalized materials manufactured by them: Akkurate and Falber shall not
unreasonably deny and/or delay the above said approvals.
 
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10.3. CPMM shall not use the Signs, either directly or indirectly, for any use
other than those specifically provided for in this Agreement.
 
10.4. For the whole term hereof, CPMM shall not engage, either directly or
indirectly, in the setting up and/or management of points of sale in the
Exclusivity Area for the retail of apparel and/or accessories other than the
Points of Sale, if such points of sale should sell products and/or articles
which directly compete with the Products and/or with the Articles.
 
10.5. Akkurate warrants and represents, and CPMM hereby acknowledges, that it
has exclusive title to the names/signs “John Richmond”, “Richmond”, “Richmond X”
and “Richmond Denim”  featured by the Signs, either in the nature of griffe or
trademark, trade name, corporate name and signboard, and has legal capacity to
sue for the protection of the relevant rights.
 
CPMM furthermore acknowledges that the Signs may only be used, in whatever
manner or form, either as trade name, trademark or signboard, only subject to
the express and written consent of Akkurate and in accordance with its
indications.
Therefore, CPMM shall:
 
a)
abstain from adopting or using the Signs, or a part thereof, in its trade name
or corporate name, or in any other manner whatsoever save as expressly provided
for in this Agreement;

   

b)
abstain from registering and/or using, either directly or indirectly, any other
names and/or trademarks which are identical to, similar to or liable to be
confused with the Signs, or a part thereof;

   

c)
immediately cease, upon expiry or termination of this Agreement for whatever
cause, any use of the Signs in whatever form, except as provided for in art.
17.2 hereof.

 
10.6. As consideration for the right to use the Signs on the basis of this
Agreement, as well as for the services of general supervision of the
relationships with Falber and with the Third Companies and of image control
furnished by Akkurate, CPMM shall pay Akkurate, in each season, an amount equal
to (i) one point fifty percent (1.50%), as regards the Spring/Summer 2008 and
the Fall/Winter 2008/2009 seasons, (ii) one point twenty-five of percent
(1.25%), as regards the Spring/Summer 2009 and the Fall/Winter 2009/2010
seasons, (iii) one percent (1%), as regards the Spring/Summer 2010 and the
Fall/Winter 2010/2011 seasons and (iv) zero point seventy-five percent (0.75%),
as regards each subsequent season starting from the Spring/Summer 2011 onwards,
of the greater between the taxable amount relating to the total purchases of the
Products and of the Articles of each season, and the minimum guaranteed amounts
of purchase provided for in art. 12 for the same season. Such amount shall be
paid in one single installment, within January 31 as regards each Fall/Winter
season (for instance, within January 31, 2009, as regards the Fall/Winter
2008/2009 season) and within July 31 as regards each Spring/Summer season (for
instance, within July 31, 2008, as regards the Spring/Summer 2008 season).
 
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10.7. In each season CPMM shall invest in advertising campaigns related to the
Products and to the Articles a further amount, which shall be equal to (i) four
percent (4%) from the Spring/Summer 2008 up to the Fall/Winter 2009/2010
seasons, and to (ii) eight percent (8%) starting from the Spring/Summer 2010
season onwards of the greater between the taxable amount relating to the total
purchases of the Products and of the Articles of each season, and the minimum
guaranteed amounts of purchase provided for in art. 12 for the same season. The
advertising campaigns referred to above shall be discussed and agreed upon
between Akkurate and CPMM in advance, also as regards their creative contents,
on the basis of a specific advertising plan to be submitted by CPMM to Akkurate
within the end of March, as regards each Fall/Winter season, and within the end
of September, as regards each Spring/Summer season: within thirty (30) days
after the receipt of the advertising plan, Akkurate shall communicate CPMM its
approval or nonapproval of the above mentioned plan; in case of nonapproval,
Akkurate and CPMM shall agree in good faith and in the shortest possible time on
the advertising plan for the relevant season. At the end of each sale season,
and thus within March 15, as regards each Fall/Winter season, and within
September 15, as regards each Spring/Summer season, CPMM shall supply Akkurate
with adequate evidence, through supporting documents, that the investments
provided for by the advertising plan have been duly made.
 
10.8. In addition to what is provided for in art. 10.7 above, CPMM shall invest
no less than Euro ten thousand/00 (€ 10,000.00) for consumer advertising and
promotional activities connected to the opening of each one of the Points of
Sale; to this end, at least sixty (60) days before the opening of each one of
the Points of Sale, CPMM shall submit Akkurate, for the prior express and
written approval of the latter, a specific promotion and advertising plan for
the opening of the relative Points of Sale. Within thirty (30) days after
receipt of the promotion and advertising plan, Akkurate shall communicate CPMM
its approval or nonapproval of the above mentioned plan; in case of nonapproval,
Akkurate and CPMM shall agree in good faith and in the shortest possible time on
the promotional and advertising plan for the opening of each one of the Points
of Sale.
 
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Art. 11 - Relationship between CPMM, on one part, and Akkurate, Falber and the
Third Companies, on the other.
 
11.1. All contracts relating to the purchase of Products shall be executed
solely between CPMM, on the one part, and Falber, on the other part, in
accordance with the terms of sale and payment conditions provided for in the
First Agreement.
 
All contracts relating to the purchase of Articles shall be executed solely
between CPMM, on the one part, and the Third Companies, on the other part, in
accordance with the terms of sale and payment conditions to be agreed between
CPMM and the Third Companies.
 
11.2. CPMM hereby expressly undertakes to adopt such a consumer pricing policy
as shall be suggested by Falber and by the Third Companies on the basis of
market surveys in order to rationalize the terms of sale and to ensure, to any
possible extent, consistency of image, including commercial image, among the
“John Richmond” and the “Richmond” points of sale during the term hereof: in
light of the above, CPMM shall in particular comply, for the whole term of this
Agreement, with the suggested terms and price-lists indicated by Falber and by
the Third Companies from time to time.
 
11.3. CPMM shall not proceed to clearance sales without Akkurate’s and Falber’s
express and written authorization: to this end, at least thirty (30) days before
the beginning of the clearance sales CPMM shall ask for Akkurate’s and Falber’s
authorization, specifying and justifying the chosen timing for the clearance
sales, as well as the modalities, the mark-down, etc., that CPMM intends to
apply; Akkurate and Falber shall reply to CPMM’s request within fifteen (15)
days after the receipt of CPMM’s request.
 
In any case, as regards clearance sales CPMM shall strictly comply with the
timing, the modalities, the mark-down, etc. provided for by the applicable laws
or regulations and/or applied by the major competitors.
 
11.4. CPMM shall forthwith remove from each one of the Points of Sale any
Products and Articles left after the clearance sales of each season.
 
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11.5. Akkurate shall not be liable to CPMM, nor is it giving CPMM any guarantee
whatsoever, in regard to the performance by Falber and by the Third Companies
under the contracts executed with CPMM.
 
11.6. Akkurate shall not be liable to CPMM, nor is it giving CPMM any guarantee
whatsoever, in regard to claims, actions or damages made or claimed by the
purchasers of the Products and of the Articles.
 
11.7 Akkurate warrants and represents that it is the owner of the Signs, and
that the Signs are free from any claims by third party that would interfere with
the rights granted to CPMM under this Agreement. It also warrants that the
ownership of the Signs shall be valid in the Exclusivity Area during the term of
this Agreement, and shall keep CPMM fully indemnified against and from all
claims or suits arising out of the lawful and proper use by CPMM of the Signs
and/or the sale by CPMM of the Products and the Articles in accordance with the
provisions of this Agreement.
 
11.8 Akkurate hereby declares that it will make its best efforts in order to
keep in force and effect the agreements it entered into with Falber and the
Third Party Companies in relation to, respectively, the Products and the
Articles; in any case, Akkurate hereby guarantees since now that, in the event
Akkurate should substitute one or more of its licensees with new ones, the
rights and obligations of CPMM under this Agreement shall not be in any case
suspended and/or prejudiced. 
 
Art. 12 - Minimum guaranteed amounts of purchase.
 
CPMM hereby undertakes to purchase in each season Products and Articles for
amounts not lower than the amounts provided for in the “Minimum Guaranteed
Amounts of Purchase” attached hereto as Schedule “12”, save for the possible
downward adjustment provided for in art. 4 of the First Agreement: CPMM
expressly recognizes that its obligations concerning the minimum guaranteed
amounts of purchase are of the essence.
 
Art. 13 - Liability.
 
CPMM shall be directly and exclusively liable to any third parties for any
breaches of the law of a civil, criminal, administrative or fiscal nature
committed in the course of its activity.
 
Art. 14 - Information on purchases, sales and stocks of the Point of Sale.
 
14.1. In order to supply Akkurate and Falber with updates on purchases, sales
and stocks of each one of the Points of Sale, CPMM shall deliver to Akkurate and
to Falber in each month in relation to each one of the Points of Sale, within
the thirtieth (30th) day of the following month, a report evidencing the
purchases, the sales and the stock of Products and Articles of the relative
month, with the indication of both quantities and values as well as the relative
product categories.
 
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14.2. At any time during the term of this Agreement Akkurate and Falber shall
have the right to request CPMM, which hereby accepts since now subject to its
security approvals, to integrate in each one of the Points of Sale and for the
entire term of this Agreement, its informatics system for the management of
points of sales with the one that Akkurate will communicate to CPMM: the costs
of such an integration of the informatics system, both connected to the hardware
(installation, maintenance and possible licenses) and to the software
(installation, purchase, upgrading and related possible licenses), shall be
entirely borne by CPMM.
 
14.3. CPMM undertakes, in any case, to permit Akkurate and Falber and/or
professionals or auditing firms appointed by them, by giving prior notice to
CPMM, to check, to the greatest possible extent and including by means of
inspection visits, the purchases, the sales and in general the bookkeeping of
each one of the Points of Sale.
 
Art. 15 - Coordination powers of Akkurate.
 
Akkurate shall supervise the relationships with Falber and with the Third
Companies for the supply of the Products and of the Articles to CPMM during the
term of this Agreement. CPMM declares to be aware of, and to acknowledge, that
Akkurate is the party guaranteeing the existence and lawfulness of the Signs,
the lawful continuation both of the relationship provided for in this Agreement
and of the relationships with Falber and with the Third Companies for the supply
of the Products and of the Articles, as well as the quality and image of such
Products and Articles: as a consequence, as far as the matters covered by this
Agreement are concerned, CPMM hereby undertakes for the whole term hereof to
deal only with Akkurate, since Akkurate is the sole appropriate subject legally
entitled to authorize, approve and coordinate the activities of Falber and of
the Third Companies. The foregoing notwithstanding, CPMM however hereby
expressly recognizes, and for all purposes agrees, that Falber and the Third
Companies shall be the sole and only parties responsible for the duly
fulfillment of the contracts entered into between Falber and the Third
Companies, on the one part, and CPMM, on the other part.
 
Art. 16 - Specific obligations of CPMM.
 
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16.1. The provisions of art. 20 notwithstanding, CPMM hereby expressly
undertakes not to transfer, let or lend in commodatum any of the Points of Sale
to third parties, nor assign the lease contract for any of the Points of Sale or
transfer to any third parties, for any reason and in any manner whatsoever, the
enjoyment of the premises of any of the Points of Sale, for the whole term of
this Agreement and for a period of one (1) month after expiry or termination
hereof, for whatever cause.
 
16.2. Save for what is provided for in the following art.16.3, CPMM further
expressly undertakes not to withdraw from, or terminate, the lease contract for
any of the Points of Sale, or consent to or cause the withdrawal, expiry or
termination of such lease contract for the whole term of this Agreement and for
a period of one (1) month after expiry or termination hereof, for whatever
cause, and CPMM shall immediately inform Akkurate and Falber of any action
undertaken by the landlord aimed at obtaining the withdrawal, expiry or
termination of the lease contract for any of the Points of Sale.
 
16.3. In the event of termination by the landlord of the lease contract for any
of the Points of Sale for causes that CPMM clearly demonstrates are not
attributable to CPMM, the latter shall timely propose to Akkurate and Falber a
suitable alternative location where to move, at CPMM’s costs and expenses, the
relevant Point(s) of Sale: it is in any case hereby since now agreed that the
opening to the public of the Point(s) of Sale within the new location(s), shall
occur not later than the date of closing to the public of the premises where the
Point(s) of Sale was (were) previously located.
 
Art. 17 - Termination
 
17.1. A) Each party shall be entitled to terminate this Agreement in compliance
with the provisions of art. 1456 of the Italian Civil Code, by sending the other
party a registered letter with return receipt, if such other party becomes
subjected to bankruptcy or to any proceedings for the relief of creditors.
 
B) In addition to the specific provisions contained elsewhere in this Agreement,
this Agreement may be terminated by Akkurate and by Falber upon giving CPMM a
sixty-(60)-day notice to cure the breach by registered letter with return
receipt jointly signed by Akkurate and Falber, if CPMM should breach, in whole
or in part, one or more of its obligations undertaken under arts. 2; 3.1 and
3.2; 5.1 and 5.2; 6.1, 6.4 and 6.5; 7.1, 7.2 and 7.3; 9.1 and 9.2; 10.1, 10.2,
10.3, 10.4, 10.5, 10.6, 10.7 and 10.8; 11.1, 11.2, 11.3 and 11.4; 12; 14.1, 14.2
and 14.3; 15; 16.1, 16.2 and 16.3; 20; 21.1, 21.2, 21.3 and 21.4; 22; 23.1; 25
of this Agreement.
 
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17.2. If this Agreement is terminated pursuant to art. 17.1 B) above, CPMM shall
sell the stock of the Products and of the Articles, unless prevented from doing
so by objective and material causes, which have not been voluntarily created by
CPMM: such stock-selling activity shall continue for a maximum period of six (6)
month from the date of termination and at the market prices for the Products and
the Articles usually applied by CPMM, unless otherwise agreed in writing with
Akkurate.
 
Art. 18 - Consequences of expiry or termination.
 
18.1. Upon expiry or termination of this Agreement, for whatever cause, CPMM
shall immediately:
 
a)
remove the signboard from each one of the Points of Sale and destroy it by
giving satisfactory evidence to Akkurate;

   

b)
remove from each one of the Points of Sale the typical architectural design,
layout, furnishing and interior decoration, as specified in art. 7 above;

   

c)
destroy all advertising material bearing the Signs, which is held by CPMM or
which is in its control;

   

d)
discontinue any further use of the Signs, for whatever reason, save as provided
for in the preceding art. 17.2.

 
18.2. Upon expiry or termination of this Agreement, for whatever cause, Akkurate
shall pay CPMM no goodwill and/or indemnity and/or consideration and/or
compensation whatsoever in connection with said expiry or termination, and CPMM
for any purposes hereby expressly and irrevocably waives any such goodwill /
indemnity / consideration / compensation.
 
18.3. Upon expiry or, in case of termination, upon the end of the sellout period
provided for in the preceding art. 17.2, CPMM shall transmit Akkurate and Falber
a detailed report of the stock of unsold Products and Articles for each one of
the Points of Sale: within forty five (45) days after the receipt of CPMM’s
report, Akkurate (or, as regards only the Products, also Falber) may purchase
back - either directly or indirectly, in whole or in part - such stock of unsold
Products and Articles at a price equal to fifty percent (50%) of the purchase
price originally applied to CPMM; in case Akkurate and/or Falber should decide
not to purchase back, in whole or in part, the stock of unsold Products and
Articles, such stock shall be sold by CPMM only after removing all labels, tags
and whatever else bearing the Signs: satisfactory evidence of the removal shall
be given to Akkurate and to Falber (which shall be entitled to carry out
inspections by means of their nominees) prior to selling the stock.
 
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Art. 19 - CPMM’s shareholders.
 
19.1. CPMM’s sole shareholder holding the entire capital, i.e. CPL, who signs
this Agreement for its acceptance of the provisions of this art. 19.1, hereby
undertakes, also on the basis of what is set forth in recital K) and in art. 9.2
hereof:
 

a)  
not to assign its interest (shares) in CPMM to third parties for whatever reason
without Akkurate’s express and written approval - which shall not be
unreasonably denied - for the whole term of this Agreement including any
possible renewals hereof;

   

b)  
not to consent, in any case, to third parties to enter into CPMM’s shareholding
structure through capital increases, mergers or any other means, without
Akkurate’s express and written approval, which shall not be unreasonably denied;

 
all the foregoing without prejudice to the provisions of art. 22 hereof.
 
19.2. Akkurate and Falber shall be entitled to terminate this Agreement in
compliance with the provisions of art. 1456 of the Italian Civil Code, by
sending CPMM a registered letter with return receipt jointly signed by Akkurate
and Falber, if CPMM and/or its shareholders should not fulfill, in whole or in
part, their obligations under art. 19.1.
 
Art. 20 - Preemption right.
 
The provisions of art. 16 being hereby expressly confirmed, if during the whole
term of this Agreement and for a period of one (1) year after termination hereof
CPMM intends to transfer one or more of the Points of Sale - in any manner,
formally or informally, directly or indirectly, including through assignment of
shareholdings or novation of the lease contract, or in any other manner
whatsoever - CPMM shall first offer to transfer such Point(s) of Sale to
Akkurate on the same terms granted to third parties, and Akkurate shall have the
preemption right on the transfer.
 
CPMM shall notify the proposed transfer to Akkurate by registered letter with
return receipt, specifying the requested price. Akkurate may exercise its
preemption right by notifying its acceptance of the transfer offer and of the
relevant price, by registered letter with return receipt to be delivered to the
post office within one (1) month after the receipt of CPMM’s notification.
 
If CPMM fails to give Akkurate the preemption right provided for in this art.
20, CPMM shall pay Akkurate as liquidated damages-penalty, within five (5) days
after demand, the amount of Euro one hundred thousand (€ 100,000.00) for each
one of the Points of Sale whose premises CPMM should have offered to transfer to
Akkurate: the foregoing, without prejudice to Akkurate’s right to claim for
additional damages. CPMM hereby expressly accepts such liquidated
damages-penalty as fair, in light of Akkurate’s interest in the possible
transfer to Akkurate of the premises where each one of the Points of Sale are
located.
 
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Art. 21 - Right to sublicense.
 
21.1. The parties hereby expressly agree that CPMM shall have the right to
sublicense its rights and obligations under this Agreement as regards the
opening and management of one or more of the Points of Sale to a third party,
provided (i) that such sublicensee(s) shall operate only in the Exclusivity
Area, (ii) that CPMM shall communicate Akkurate in writing and in advance any
useful details of and information on such sublicensee(s) (company name,
headquarters, affiliate companies, etc.), and (iii) that such sublicensee(s)
shall in any case operate under CPMM’s control and supervision.
 
It is however understood that Akkurate and Falber shall have no direct
relationship with said sublicensee(s): as a consequence, among other things, i)
Akkurate and Falber shall always deal only with CPMM as far as this Agreement is
concerned, ii) the Products and the Articles shall be sold and delivered only to
CPMM, which shall pay for them, iii) CPMM shall pay Akkurate the consideration
provided for in art. 10.6 and shall make the advertising investments provided
for in arts. 10.7 and 10.8, iv) the sublicensee(s) shall have no direct contact
with Akkurate and/or Falber, and v) CPMM shall be anyway fully responsible and
liable toward Akkurate and Falber for the sublicensee(s)’s actions, omissions
and behavior, as well as for of all of CPMM’s sublicensed obligations, also in
relation to Akkurate’s and Falber’s right to terminate this Agreement for
breach; the foregoing in addition to such licensee(s)’s liability toward
Akkurate and Falber.
 
21.2. Akkurate shall be entitled to control to the widest possible extent the
duly management of the Point(s) of Sale by the sublicensee(s) and the sale of
the Products and of the Articles in the Point(s) of Sale: the foregoing
including, for example but without limitation, by means of direct inspections
and checks by Akkurate, and/or persons authorized by it, at the premises of the
Point(s) of Sale.
 
21.3. In the event any of CPMM’s sublicensee(s) do(es) not meet the high quality
standard characterizing the “John Richmond” and the “Richmond” Points of Sale
worldwide, the Products, the Articles and the Signs and/or do(es) not comply
with any of the requirements/obligations provided for in this Agreement (the
“Default Sublicensee(s)”), Akkurate shall be entitled to serve a notice on CPMM
requiring CPMM to cease utilizing any Default Sublicensee(s) (the “Default
Notice”). CPMM shall give to the Default Sublicensee(s), within and not later
than five (5) days after the receipt of the Default Notice from Akkurate, a
thirty-(30)-day written notice to cure the breaches indicated by Akkurate in the
Default Notice, failing which the sub-license relationship/agreement shall
immediately be terminated by CPMM.
 
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21.4. The foregoing notwithstanding, in case of gross breach by any
sublicensee(s) of any of the requirements/obligations provided for in this
Agreement, CPMM shall cease utilizing such Default Sublicensee(s) immediately
after receiving Akkurate’s Default Notice.
 
Art. 22 - Assignment prohibited.
 
CPMM shall not - for any reason, in any manner, formally or informally, directly
or indirectly, in whole or in part - assign and/or transfer howsoever to third
parties this Agreement, or the rights which have been granted to it, or the
things it has been authorized to do under this Agreement.
 
Without prejudice to the foregoing, CPMM shall however be entitled to assign
and/or transfer howsoever this Agreement, or the rights which have been granted
to it, or the things it has been authorized to do under this Agreement, or the
interests/shares in CPMM, to companies belonging to the same group of companies
as CPMM, provided that before any such assignments/transfers CPMM shall give
evidence to Akkurate and Falber (i) of the structure CPMM’s group of companies
and (ii) of the skills, qualifications and representations, as well as of the
shareholding structure and the managing body, of the assignee/transferee
company.
 
Art. 23 - No registration.
 
23.1. CPMM hereby expressly and irrevocably undertakes not to register this
Agreement in any kind of register in any country in the world other than Italy,
if and where such registration would modify the mutual rights and obligations of
the parties, or grant additional rights or impose additional obligations on
either party, without the Akkurate prior written approval. Without prejudice to
the foregoing, Akkurate hereby expressly authorizes CPMM to file this Agreement
only on the Over-The-Counter Bulletin Board of the U.S.A. (the “OTCBB”) and only
for the purposes provided by the Regulation no. 13A of the U.S.A. Securities
Exchange Act of 1934.
 
23.2. The provisions of art. 23.1 being hereby expressly confirmed, the parties
agree that all the costs related to the possible registration in Italy of this
Agreement shall be borne by CPMM.
 
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Art. 24 - Nonwaiver.
 
Failure by Akkurate and/or Falber to enforce at any time strict compliance by
CPMM with any provisions of this Agreement and/or waiver of any rights provided
for herein, shall not be deemed as waiver by Akkurate and/or Falber thereafter
to require compliance by CPMM and/or to enforce such rights.
 
Art. 25 - Confidentiality.
 
Unless otherwise required by mandatory provisions of any applicable laws, rules
or regulations, each party shall treat as secret and strictly confidential any
administrative, accounting, statistical or other documentation received from the
other party on the basis or during the performance of this Agreement.
Furthermore, each party shall not disclose, nor use to its own benefit or to the
benefit of third parties, even after expiry or termination of this Agreement,
any commercial or business secrets or any confidential information howsoever
related to the business or affairs of the other party, of which it has become
aware on the basis or during the performance of this Agreement.
 
Art. 26 - Different product lines and different signs. 
 
Akkurate, Falber and CPMM recognize, and for all purposes agree, that CPMM is
aware of the possibility of launching other product lines of various products
conceived and created by Akkurate, such other product lines bearing signs which
shall be different from the Signs, even if they may contain the signs “John
Richmond”, “Richmond”, “Richmond X” and “Richmond Denim”. As a consequence, CPMM
irrevocably waives any and all of its rights to raise any claims in this regard,
such a waiver to take effect immediately.
 
Art. 27 - Force majeure.
 
Should one of the parties fail to perform any of its obligations under this
Agreement for causes of force majeure, such a nonperformance shall not give rise
to any liability of the nonperforming party toward the other party which, as a
consequence, shall not be entitled to terminate this Agreement, nor to claim for
any possible damages.
 
Force majeure shall mean any events of any nature and kind, which i) are
completely beyond the control of the parties, and ii) have not been directly or
indirectly caused and/or induced, in whole or in part, by the nonperforming
party, such as for example, but without limitation: wars, uprisings, general
strikes, lockouts, earthquakes, epidemics, etc.
 
The party which intends to avail itself of this force majeure clause shall give
a written notice to the other party.
 
Each party shall be entitled to withdraw from this Agreement, by giving a
written notice to the other party, should the cause of force majeure last for a
continuous period of time in excess of one (1) month: for this purpose, Akkurate
and Falber shall be considered as a sole party.
 
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Art. 28 - Applicable law.
 
This Agreement shall be governed by the Italian law, with the express exclusion
of its provisions on the conflict of laws.
 
Art. 29 - Exclusive jurisdiction and venue.
 
The Court of Milan shall be the only and exclusive Court having jurisdiction for
any disputes which may arise in connection with, or any disputes which may be
originated or derived from, this Agreement and/or the obligations provided for
in this Agreement, with the express exclusion of any other venues.
 
Art. 30 - Domicile.
 
30.1. For the purpose of any notices to be given under this Agreement, the
parties hereby declare to be domiciled as follows:
 
- Akkurate
  Unit 1, 9 Park Hill,
  London SW, SW4 9NS,
  United Kingdom
  Phone: +44 207 622 0298
  Fax: +44 207 498 0265
  Email: Admin@JohnRichmond.com 
  copy to: John Richmond Showroom
  Via S. Andrea no. 18
  20121 Milan (Italy)
  Phone: +39-02-76018374
  Fax: +39-02-76011904
  Email: s.moschillo@moschillo.com 
 
- Falber
  Via Gramadora 12/14
  47100 Forlì (Italy)
 
- CPMM
  Unit A, 10th Floor, Wo Kee Hong Building,
  585-609 Castle Peak Road, Kwai Chung, New Territories,
 
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  Hong Kong (China)
  Contact Person: Mr. Waison Hui
  Phone: (852) 2869 1190 
  Fax: (852) 2537 1121
 
30.2. Akkurate, Falber and CPMM furthermore hereby designate their respective
addresses, as indicated in the preceding art. 30.1, as their respective
domiciles at which service of process may be made in any legal actions or
proceedings arising hereunder.
London, __________

________________       
Akkurate Ltd.        

__________________
Falber Confezioni S.r.l.

__________________
CPMM (Asia) Limited
Authorized Signatory: Richard Man Fai LEE (Director)

CPMM’s sole shareholder (in relation to art. 19.1):

________________________________
China Premium LifeStyle Enterprise Inc.

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The clauses hereinafter specified, which have been selected after negotiations
between the parties and which the parties declare to have read and accepted, are
hereby specifically approved in writing under and to the effects of the
provisions of art. 1341 of the Italian Civil Code: 2; 3.1, 3.2 and 3.3; 4.1, 4.2
and 4.3; 5.1 and 5.2; 6.1, 6.2, 6.3, 6.4 and 6.5; 7.1, 7.2 and 7.3; 9.1 and 9.2;
10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7 and 10.8; 11.1, 11.2, 11.3, 11.4, 11.5
and 11.6; 12; 13; 14.1, 14.2 and 14.3; 15; 16.1 and 16.2; 17.1 and 17.2; 18.1,
18.2 and 18.3; 19.1 and 19.2; 20; 21.1 and 21.2; 22; 23.1 and 23.2; 24; 25; 26;
27; 28; 29; 30.2.
London, __________

________________       
Akkurate Ltd.        

__________________
Falber Confezioni S.r.l.

__________________
CPMM (Asia) Limited
Authorized Signatory: Richard Man Fai LEE (Director)

CPMM’s shareholders (in relation to art. 19.1):

_______________________________
China Premium LifeStyle Enterprise Inc.

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