Exhibit 10.1

 

THE SYMBOL “[****]” DENOTES PLACES WHERE CERTAIN IDENTIFIED INFORMATION HAS BEEN
EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL, AND (ii) WOULD
LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED

 

BUYING AGENCY AND SOURCING SERVICES AGREEMENT

 

THIS BUYING AGENCY AND SOURCING SERVICES AGREEMENT (the “Agreement”) shall be
effective as of May 1, 2019;

 

BETWEEN:

 

(1)     CENTRIC BRANDS INC., a corporation incorporated in Delaware with its
principal office at 350 Fifth Avenue, New York, NY 10118 USA (“Principal”);

 

AND

 

(2)     LI & FUNG (TRADING) LIMITED, a company incorporated in Hong Kong and
having its registered office at 11/F LiFung Tower, 888 Cheung Sha Wan Road,
Kowloon, Hong Kong (“Agent”), (each, a “Party” and together, the “Parties”).

 

WHEREAS:

 

(A)    Principal wishes to appoint Agent as its buying agent for the purchase of
products (collectively, “Products”) in countries throughout the world;

 

(B)    Agent is willing to act as the buying agent for Principal for the purpose
of facilitating the purchase of Products for Principal, subject to the terms and
conditions set forth in this Agreement;

 

(C)    Principal wishes to obtain from Agent, and Agent desires to provide to
Principal, Services (as defined below) for purposes of having Products
manufactured as requested by Principal, subject to the terms and conditions set
forth in this Agreement;

 

(D)    The Products to be purchased in connection herewith will be purchased by
Principal or subsidiaries of Principal and the term “Principal” shall be read
accordingly;

 

(E)    The rights to purchase and sell many of the Products to be purchased in
connection herewith have been granted to Principal or Principal’s subsidiaries
under various license agreements and the licensors under such license agreements
(the “Licensors”) have various rights under their license agreements; and

 

(F)     Agent and Principal are also in discussions relating to the transfer of
certain staff and leases in the People’s Republic of China from Principal to
Agent (the “Transfer”). The Transfer is

conditional upon, among other things, Agent having completed, to its
satisfaction, its due diligence on the relevant staff and leases, and Agent and
Principal having agreed and executed a binding written agreement to effect the
Transfer.

 

NOW IT IS HEREBY AGREED as follows:

 

1.      AGREEMENT TO PROVIDE SERVICES AND APPOINTMENT AS AGENT.

 

1.1.    Agent shall perform the Services for the benefit of Principal pursuant
to the terms and conditions set forth in this Agreement.

 

1.2.    Principal hereby appoints Agent as its non­exclusive buying agent for
the purchase of the Products from manufacturers and all other sources of supply
(collectively, “Vendors”) subject to the terms and conditions and for the
duration of this Agreement. Agent hereby accepts such appointment, subject to
the terms and conditions and for the duration of this Agreement.

 

1.3.

 

(a)     Agent and Principal agree that Principal may source Products from third
parties; provided, that, subject to Clause 1.7, the Incoterm free on board
(“FOB”) price of all Products purchased through Agent and shipped to Principal
(the “Agent Sourced Amount”) shall not be less than the applicable minimum
sourcing amount stipulated in the table below per Agreement Year or, in respect
of any period of time during the term of this Agreement which is less than a
year, the pro rata proportion of the Minimum Sourcing Amount (each such amount,
for the relevant Agreement Year, the "Minimum Sourcing Amount"), to be verified
by the Sourcing Certificate as set out in Clause 1.5.  For the avoidance of
doubt, the Parties agree that the FOB price of all Products will be used to
determine the Minimum Sourcing Amount notwithstanding the Incoterm for some of
the purchases will be delivery duty paid (“DDP”). For the purposes of
calculating the Agent Sourced Amount, “Agreement Year” means (a) with respect to
the first Agreement Year, the period beginning on May 1, 2019 and ending on
April 30, 2020 (the "First Agreement Year"), (b) with respect to each subsequent
Agreement Year other than the Last Agreement Year, the one (1) year period
beginning on the day following the end of the First Agreement Year and each
succeeding one (1) year period thereafter.

 

 

 

 

Each Agreement Year

Minimum Sourcing Amount

US$[****]

Threshold Amount

US$[****]

Minimum Commission Amount

US$[****]

 

For the avoidance of doubt, the FOB price or the DDP price charged by Vendors
shall not include Agent’s Commission.

 

(b)     As it relates to the determining whether or not Principal has met the
applicable Threshold Amount, applicable Minimum Sourcing Amount, and/or
applicable Minimum Commission Amount, Agent and Principal agree that (i) the FOB
price of products ordered by the Principal (“Ordered Products”) during an
Agreement Year that are not shipped by the Vendors until the following Agreement
Year shall not be included in the calculation of the Agent Sourced Amount for
the Agreement Year in which the Ordered Products are ordered and shall be
included in the calculation of Agent Sourced Amount for the Agreement Year in
which the Ordered Products are shipped; provided, however, that if a notice of
non-renewal has been given pursuant to Clause 13.1, then the Agent Sourced
Amount for such Agreement Year shall include all Ordered Products regardless of
whether or not they have been shipped, (ii) the FOB price of Ordered Products
that are returned to the Vendor (whether as a result of defects in the Ordered
Products or late delivery) shall be included for the Agreement Year in which the
returned Ordered Products were originally shipped by the Vendor, (iii) the FOB
price of the Ordered Products that are cancelled for reasons other than defects
or late delivery shall not be included in the calculation of the Agent Sourced
Amount, (iv) the FOB price of Ordered Products that were scheduled to be shipped
in an Agreement Year but which are delayed and not shipped in such Agreement
Year shall be included for the Agreement Year in which the late Ordered Products
are shipped; and (v) to the extent the Ordered Products are not returned to
Vendor and not covered in Clause 1.3(b)(ii), Ordered Products that are subject
to Major Quality/Delivery Issues and for which Commission is not paid shall be
included.

 

1.4.      All Products ordered by Agent from Vendors pursuant to this Agreement
shall be ordered on behalf of and in the name of Principal and, for the
avoidance of doubt, Agent shall not at any time deal, or be deemed to deal, with
the Product as principal.

 

1.5.      Agent shall procure for each Agreement Year during the Term (as
defined below), as soon as practicable, but in any event within thirty (30) days
after the end of each Agreement Year, a certificate signed by an officer of
Agent (the “Sourcing Certificate”), setting forth (i) the aggregated FOB price
of all Products sourced through Agent during such Agreement Year, (ii) the total
Commission paid or due to Agent, and (iii) the total Rebate set forth in Clause
8.2 paid to Principal, for all Products sourced through Agent during such
Agreement Year. If Principal disagrees with the Sourcing Certificate delivered
to it by Agent, Principal shall notify Agent on or before the seventh (7th)
Business Day following receipt thereof by delivering a written statement
notifying Agent of its disagreement. If Principal and Agent are unable to
resolve all such disagreements on or before the seventh (7th) Business Day
following delivery of an objection notice, the parties shall retain an
independent third party to resolve such disagreements.

 

1.6.       For the duration of the Term, each Party shall (i) provide the other
Party and its authorized representatives, as well as the Licensors and their
authorized representatives, reasonable access to its books and records that are
used in connection with the obligations of the Parties under this Agreement upon
reasonable advance notice and during reasonable business hours, no more often
that once per year unless circumstances warrant and in a manner intended to
minimize interruption to the Party's operations, (ii) furnish to the other Party
and its authorized representatives, as well as the Licensors and their
authorized representatives, such financial and operating data

and other information as the other Party or the respective Licensors shall
reasonably request in order to confirm its compliance with its rights and
obligations under this Agreement, and (iii) instruct its officers, employees,
accountants, counsels and other representatives to cooperate with the other
Party and the Licensors in connection with (i) and (ii) above.

 

1.7.      If a Sourcing Certificate reveals that the total Commission paid or
due to Agent for all Products sourced through Agent during an Agreement Year
(taking into account the adjustments set forth in Clause 1.3 and the Rebate set
forth in Clause 8.2 (“Actual Commission Amount”) is less than the minimum
commission amount set forth in Clause 1.3(a), or, in respect of any period of
time during the term of this Agreement which is less than a year, the pro rata
proportion of the minimum commission amount (each such amount, the “Minimum
Commission Amount”), then Principal shall pay to Agent the difference between
the Minimum Commission Amount and the Actual Commission Amount (the “Agent
Sourcing Deficit”), payable in United States Dollars within fifteen (15) days
following the date of the Sourcing Certificate in respect of the relevant
Agreement Year to which the Agent Sourcing Deficit relates or upon resolution of
any disagreements between the parties pursuant to Clause 1.5.  Payment of the
override commission referred to in this Clause 1.7 shall mean that Principal is
not in breach of its obligation under Clause 1.3.

 

1.8.      Within two (2) weeks following the execution of this Agreement, Agent
and Principal will work in good faith to negotiate an agreement for the use by
Principal of Agent’s 3D and digital licenses related to product development,
textile capabilities, sales and sample capabilities and any other new
capabilities offered to any other customer of Agent. Notwithstanding the
foregoing, Agent and Principal agree that until such time as a new license is
entered into (and for the duration of the term of any such license), Agent or
one of its Affiliates will provide to Principal fifty (50) 3D blocks a month at
no charge.

 

1.9.      Within sixty (60) days following execution of this Agreement, Agent
and Principal will work in good faith to negotiate and execute an agreement
relating to the payment of bonus commission by Principal to Agent upon
achievement of either or both two Key Performance Indicators, being (a) opex
cost savings (to be shared 50-50 between the parties) and (b) FOB cost
improvement.

 

2.      RELATIONSHIP OF THE PARTIES AND POWERS

 

2.1.      The Parties agree that whilst Agent shall be acting as the buying
agent for Principal, Agent shall, in accordance with instructions from
Principal, place orders for the Products with Vendors for and on behalf of
Principal.

 

2.2.      Except as provided for by this Agreement, Agent shall take no action
on behalf of Principal without the prior written consent of Principal. Agent
acknowledges that it has no right, power or authority to make any contract or
incur any obligation or liability

which shall be binding upon Principal unless it has obtained the prior written
consent of Principal on a case-by-case basis.

 

3.      PURCHASE ORDER TERMS

 

3.1.      When Principal desires to purchase the Products, Principal shall
forward all necessary designs and samples to Agent and shall then notify Agent
in writing of the terms on which Principal wishes to make such purchase,
including:

 

(a)     The name and all pertinent information regarding the subsidiary for
which the purchase is being made;

(b)     the type of Products to be manufactured, including specifications as to
quality, style and standard;

(c)     Vendor's name;

(d)     the quantity to be purchased and size and color assortments;

(e)     the unit price of the Product to be offered (but excluding buying
commission};

(f)      packing terms and shipping marks, if any;

(g)     the delivery dates;

(h)     the port of destination;

(i)      (subject to Vendors’ agreement) the following liquidated damages on
Vendors for any shipment that will be delivered late (to be decided at
Principal’s election): Vendor to ship late goods by air, Vendor to provide
discount or Principal to be entitled to cancel order; and

(j)      whether such purchase is to be made FOB or DDP.

 

3.2.      Principal's written notification setting forth the foregoing terms is
hereinafter referred to as the “Purchase Order Terms”. So long as Principal has
not notified Agent of the cancellation of such Purchase Order Terms, Agent shall
be deemed to have received written instructions to place the order on behalf of
Principal on such terms.

 

4.      CONTRACT

 

4.1.      Upon receipt of Principal's Purchase Order Terms, Agent shall place
the requested order with the specified Vendor. Unless otherwise specified by
Principal in writing, Agent shall negotiate FOB or DDP prices on behalf of
Principal and, if the offered prices are as good as or better than the prices
provided in such Purchase Order Terms, Agent shall enter into a contract for and
on behalf of Principal with Vendor containing the Purchase Order Terms (to the
extent there is any change to the Purchase Order Terms, such revised Purchase
Order Term shall be approved in advance by Principal) and such other terms as
Agent may consider necessary or appropriate (the “Contract”).  If the offered
prices are not as good as or better than the prices provided in such Purchase
Order Terms, Agent shall so advise Principal and shall follow Principal’s
instructions with respect thereto.

 

5.      SERVICES

 

5.1.      Agent shall use reasonable best efforts to provide Services for
Principal. Agent agrees that it shall at all times adhere to the instructions,
requests, and policies of Principal and

its standard operating procedures regarding any activities relating to the
performance of Services under this Agreement (to the extent such policies or
operating procedures have been provided by Principal to Agent). Agent shall
conduct its activities under this Agreement in a lawful manner and in accordance
with the highest standards of fair trade, fair competition and business ethics
and shall cause all of its authorized representatives to do the same.

 

5.2.      Agent shall occupy and maintain facilities adequate to provide
Services and perform its other obligations under this Agreement.

 

5.3.      Agent shall retain and have at its disposal at all times an adequate
staff of trained and qualified personnel to perform its obligations under this
Agreement; provided, however, that Agent shall use reasonable efforts to consult
with Principal prior to any material reductions in staff. Agent shall provide,
without charge to Principal, adequate showroom and meeting room facilities at
each of Agent’s offices where the Services are being provided for use by
Principal or its authorized representatives. During the Term, if Agent
determines that it needs to replace a person serving as a main contact between
Principal and Agent, Agent shall use reasonable efforts to give Principal prior
written notice of such replacement.

 

5.4.      As consideration for the payment by Principal of the Commission
pursuant to Clause 8.1 below, Agent shall provide the following services (the
“Services”) to Principal and adhere to the following responsibilities for the
duration of the Term:

 

(a)     Familiarize itself with Principal's needs and specifications, to obtain
the best available Products and develop an understanding of the markets in which
Principal sells the Products;

 

(b)     Conduct, and relay to Principal, market research necessary to identify,
evaluate and pre-qualify potential new Vendors (e.g., for garment, raw material,
fabric, textiles, yarns and leather) by visiting Vendors to determine their
ability to manufacture and export Product of a type and quality appropriate for
Principal and conducting quality testing on the Vendors’ products where
necessary;

 

(c)     Survey the potential production countries and assist Principal in the
review and selection of Vendors;

 

(d)     Arrange for the manufacture and procure timely delivery to Principal of
all necessary or appropriate production garment samples, pre-production samples,
prototype samples, fit samples, sales samples and fabrics and other materials
(at Vendor’s sole cost) as may be reasonably necessary or appropriate with
respect to the review of such samples;

 

(e)     Provide up-to-date information on a timely basis, concerning relevant
aspects of the business in the territory in which Vendors are based, including
information relating to quotas, labor rates and political situations;

 

(f)      Arrange for the sourcing, acquisition, production and procure timely
delivery of materials, fabric, piece goods, trimmings, labels, component parts
and packaging materials to Vendors, as instructed by Principal and use its
reasonable efforts to ensure Vendors must meet the required Purchaser Order
delivery dates;

 

(g)     Obtain price quotations from Vendors in U.S. dollars which shall not
include Agent’s commission;

 

(h)     Measure garment specs, input comments in PLM and arrange for the
manufacture of Ordered Products in accordance with all applicable specifications
and requirements set forth in the Purchase Orders (including providing such
services from first fit approval to TOP approval);

 

(i)      Assist Principal in the negotiation of the most favorable prices and
other terms on which the Products can be purchased. In this connection, Agent
shall visit Vendors, obtain production garment samples, pre-production samples,
prototype samples, fit samples and sales samples of the Products (at Vendor’s
sole cost), submit such samples to Principal and quote prices at which the
Products can be purchased;

 

(j)      Enter into Contracts and place purchase orders with Vendors on behalf
of Principal in accordance with the Purchase Order Terms and make any amendments
to such purchase orders as directed by Principal;

 

(k)     Ensure that Principal’s policies and standards with respect to quality
control and quality assurance and social compliance (as provided by Principal to
the Agent from time to time) are implemented by Agent;

 

(l)      Perform color approval for bulk production if requested by Principal;

 

(m)    Ensure that Vendors perform fabric testing and garment test in accordance
with Principal’s standards and customer requirements;

 

(n)     Ensure that Vendors inspect and test the Ordered Products in compliance
with the procedures set forth by Principal and provide copies of all such test
results to Principal and certifications of conformity as required by law, and
enforce the quality control standards set up by Principal for the Ordered
Products, including assuring the conforming of the Ordered Product to approved
samples and as to style, size, quantity, and other specifications in the
applicable Purchase Order. Make periodic visits to the locations where Products
are being manufactured in order to inspect the quality of the Ordered Products
to the applicable AQL standard, enforce the AQL, and provide production progress
reports to Principal. Notwithstanding the foregoing, Agent shall (i) be
responsible for sampling inspection according to AQL for each purchase order and
releasing all of the Ordered Products (in accordance with the AQL, (ii) provide
timely and accurate WIP tracking and reporting form sampling through production
to Principal’s requirements directly to Principal or through Agent’s digital
platform once Principal has access to Agent’s digital platform, (iii) perform
periodic in-line inspections during the production of the Ordered Product and
maintain written

inspection reports for review by Principal, (iv)  perform a final sampling
inspection to ensure that the garments meet the AQL, the specifications of
Principal and that they are accurately priced, invoiced and labelled in
accordance with the requirements communicated by Principal and applicable law,
(v) supervise the manufacturing process, including using its reasonable best
efforts to ensure compliance with production time tables, (vi) monitor the
production of samples,  and (vii) communicate the relevant policies of Principal
and its Licensors (as provided by Principal to Agent from time to time) to
Vendors, train Vendors to use the standards set forth in the applicable manuals
and use its reasonable best efforts to ensure that Vendors are complying with
applicable law and with such policies and standards (as provided by Principal to
Agent from time to time) (the “Policies”), including following policies of
Principal:  (i) Global Supplier Principles; (ii) Anti-Bribery Policy; (iii)
Involuntary Labor Policy; (iv) Policy to Safeguard Against Undue Influence; (v)
Conflicts Minerals Policy; (vi) Cotton Statement; (vii) Fur Use and Labeling
Policy; (viii) Apparel & Accessories Restricted Substances Standards; and (ix)
Footwear Restricted Substances Guide.  For the avoidance of doubt, the Contracts
with the Vendors shall include a provision to the effect that the inspection of
Ordered Products by Agent will not be considered a waiver by Principal of any
claims it may have in respect of the Ordered Products or the delivery thereof;

 

(o)     Produce a shipment release authorisation and an inspection report, both
of which will be made available to Principal no later than 48 hours after
shipment upon Principal’s request, certifying that the Ordered Products conform
to specifications for style, size, quantity and other specifications in
accordance with AQL. In the event that Ordered Products do not conform in
quality or specifications to the Contract in question, to notify Principal
immediately and require Vendor in question to cease and desist any production
until such time as a resolution is agreed upon to bring the said Ordered
Products to conforming quality and specification standards; provided that, if
any Ordered Products do not conform in quality or specification to the Contract,
Agent shall use its reasonable best efforts to recover the amounts paid for such
defective or non-conforming Ordered Products from Vendor;

 

(p)     Submit delivery reports for shipped Ordered Products to Principal when
required, but no less often than weekly, by style and factory until such time as
delivery reports are available to Principal on the digital platform of Agent. At
such time as Principal has access to Agent’s digital platform, ensure that
delivery reports are available on the digital platform of Agent on a weekly
basis;

 

(q)     Use its reasonable best efforts to ensure that Vendor arranges all
transportation, inland freight, hauling, lighterage and storage, etc. at the
lowest cost possible in accordance with best industry practice and in accordance
with the instructions of Principal;

 

(r)      Arrange for the exportation and delivery to Principal of the Ordered
Products in accordance with the time limitations and deadlines set forth in the
Purchase Orders;

 

(s)     Help facilitate the preparation and the obtainment of the documentation
necessary for importation of Ordered Products into the relevant country;

 

(t)      Arrange for payment to Vendors on behalf of Principal as further
detailed in Clause 8.5;

 

(u)     Assist Principal in the return of all Ordered Products to Vendors as a
result of defective Ordered Products, shortages, etc. and the recovery of all
monies due to Principal from such Vendor as a result of defective Ordered
Products, shortages, etc., including the costs, shipping, handling, packaging
and the like, incurred by Principal in connection with the delivery of the
Ordered Products to it, the return of the Ordered Products to the Vendors and
the replacement of the Ordered Products;

 

(v)     Use its best efforts to ensure that Vendors that hold Ordered Products
that are cancelled by Principal, refused by Principal or are defective and/or
non-conforming take the following steps: (i) cut out/destroy all labels, (ii)
cut through the brand logo and brand name and (iii) to the extent requested by
Principal, render the garment unusable and unsellable. Agent or its
representative must be present to witness, photograph and document these steps
and must complete the Certificate of Destruction Form in the form provided by
each Licensor;

 

(w)    Use its reasonable efforts to prevent Vendor from disposing of Ordered
Products which are cancelled or refused by Principal and to inform Principal
promptly if it becomes aware of any overproduction or production of counterfeit
merchandise by Vendors;

 

(x)     Assist Principal, its Licensors and their respective representatives in
the organization of visits, inspections and meetings with Vendors and production
facilities. Agent also shall comply with all other requirements of the Licensors
(as provided by or on behalf of Licensor to Agent) in connection with the
production of the Ordered Products and cooperate with the Licensors in the
exercise of their rights under their respective license agreements with
Principal’s subsidiaries;

 

(y)     Conduct factory compliance audits of all Vendors in accordance with the
Policies or as required by the respective Licensors prior to entering into
Contracts with such Vendors that pass the audit; and manage any corrective
action plans submitted by Vendors as necessary or appropriate; at Agent’s
discretion and provided that it is permissible under Principal’s third party
license agreements or otherwise, Principal shall notify Agent of the
requirements under such third party license agreements, either conduct annual
factory compliance audits of all Vendors who have entered into Contracts to
ensure compliance with the Policies or waive the annual factory compliance
audits if a Vendor can prove to Agent to Agent’s satisfaction that they are
compliant under an equivalent program of the same or higher standard;

 

(z)     To the extent that the Ordered Products require quota and quota is not
included in Vendors' prices, to attend to the acquisition of quota in a manner
dictated by, and in the best interests of, Principal;

 

(aa)   Place Contracts in accordance with the written instructions of Principal
and Clause 4.1 and communicate with Vendors on matters arising out of or in
connection with the Contracts for and on behalf of Principal, provided that the
resolution of any issues must be approved in advance by Principal;

 

(bb)   Maintain all records in the manner required by Principal, as necessary to
comply with laws or other governmental requirements or the requirements of the
respective Licensors, for six (6) years or such other period of time, as may be
required to accomplish such compliance;

 

(cc)   Not furnish any Vendor any dies, molds, patterns, designs, art work,
printing plates or labor without the advance approval of Principal;

 

(dd)  Include in the Contracts provisions by which the Vendors assign to
Principal (or the respective Licensors, if so directed) any intellectual
property rights they may have in the Ordered Products and/or the packaging and
collateral materials associated therewith and ensure that all Vendors assign to
all such rights to Principal or the Licensors;

 

(ee)  Ensure that any invoices in connection with Ordered Products shall contain
accurate and complete descriptions of the merchandise, the names of the
appropriate Vendors, and meet all other requirements set forth by the United
States Customs and Border Protection and the United States Consumer Product
Safety Commission.  In addition, Agent shall ensure that the Vendor provides an
invoice evidencing that the merchandise was produced for the account of, or was
sold to, Principal.  Agent shall ensure that it provides to Principal the
original seller's invoice to accompany every shipment into the United States;

 

(ff)    Procure the submission of Vendor's Certification of Origin Form;

 

(gg)  Transfer information related to clauses (a) through (ff) to Principal in
an accurate and timely manner.

 

5.5.

(a)     In respect of any Major Quality/Delivery Issues, Principal shall:

 

5.5.a.1.   notify Agent about the Major Quality Issue within five Business Days
after it has become aware of such Major Quality Issue;

 

5.5.a.2.   promptly provide the relevant third-party inspection report to Agent;

 

5.5.a.3.   provide such additional documents or information as reasonably
requested by Agent; and

 

5.5.a.4.   answer such questions as Agent may have relating to the Major Quality
Issue.

 

(b)     In this Agreement, “Major Quality/Delivery Issues” means either of the
following occurrences: (i) 10% or more of the Ordered Products under a Contract
are not delivered in a timely manner in accordance with the Contract, except
where Principal has approved such late delivery or (ii) 10% or more of the
Ordered Products under a Contract do not conform in quality or specification to
such Contract, as validated and audited by an independent third-party inspection
company.

 

(c)     In the event of a Major Quality Issue, Agent will waive the Commission
on all Ordered Products delivered pursuant to the Contract under which a Major
Quality Issue is present to the extent such Major Quality Issue was a result of
Agent not performing the Services to the required standard.

 

(d)     In the event of a Major Delivery Issue, Agent will waive all or a
portion of the Commission on all Ordered Products delivered pursuant to the
Contract under which a Major Delivery Issue is present if Agent fails to notify
Principal promptly, and in any event within 5 Business Days, after it has become
aware of the Major Delivery Issue.  The parties shall discuss in good faith the
amount to be waived,  taking into account the overall impact on the Contract of
the Agent’s failure to notify in a timely manner.

 

5.6.      If Agent receives any funds on behalf of Principal, whether pursuant
to any charge back, refund or otherwise, Agent shall, within five Business Days,
remit such funds to Principal.

 

6.      REPRESENTATIONS AND COVENANTS BY AGENT

 

6.1.      Agent represents, warrants and agrees as follows:

 

(a)     Agent is a corporation duly organized and validly existing under the
laws of the Hong Kong Special Administrative Region of the People’s Republic of
China (“Hong Kong”). Agent is duly qualified to do business and (to the extent
relevant) is in good standing in each jurisdiction in which it provides the
Services or in each jurisdiction in which the nature of business conducted by it
makes such qualification necessary.

 

(b)     The execution, delivery and performance by Agent of this Agreement and
the performance by Agent of its obligations and covenants contemplated hereby
are within Agent’s powers and have been duly authorized by all necessary action
(corporate or otherwise) on the part of Agent. This Agreement has been duly and
validly executed and delivered by Agent and (assuming the due execution and
delivery by Principal) constitutes a legal, valid and binding obligation of
Agent, enforceable against Agent in accordance with its terms, except as such
enforcement may be limited by or subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’  rights generally and general equitable
principles.

 

(c)     Agent and/or Agent’s Affiliate is engaged in the business of sourcing
and has the requisite experience to provide the Services as contemplated
hereunder.

 

(d)     Agent has all authorizations, licenses, permits, certificates, approvals
and franchises of governmental entities (collectively, “Permits”) which are
necessary to provide the Services and are in material compliance with the terms
of the Permits. During the Term, Agent shall promptly notify Principal upon the
receipt of any written notification or communication from any governmental
entity or the staff thereof threatening to revoke any Permits or notifying Agent
that any Permits will not be renewed and of any actions, suits, inquiries or
proceedings to revoke or withdraw any such Permits.

 

(e)     Neither Agent nor any of its Affiliates has and shall have any ownership
or direct or indirect financial interest in, or any Control of, Vendors making
the Ordered Products in connection with the Services; neither Agent nor any of
its Affiliates, for its own account, sell or shall sell raw materials to
Vendors; and Vendors have and shall have no ownership or financial interest of
five percent (5%) or more of the capital stock of, or any Control over, Agent or
any of its Affiliates. Agent shall promptly inform Principal in the event that
any interest described in this Clause exists. For the purpose of this Agreement,
“Control” (including its correlative meaning “Controlled”) means with regard to
an entity with the legal, beneficial or equitable ownership, directly or
indirectly, of five percent (5%) or more of the capital stock (or other
ownership interest, if not a corporation) or five percent (5%) or more of the
voting rights of such entity ordinarily having voting rights, or the equivalent
right under contract to control management decisions with regard to relevant
subjects.

 

(f)      The genuine and true origin of all merchandise subject to this
Agreement will be as stated on any country of origin declaration, invoice, visa
or other document made in conjunction with the importation of the merchandise
into the importing territory and that no shipment will have been illegally
transshipped from any country. In conjunction with this responsibility, Agent
shall verify that manufacturers and pre-approved subcontractors have the
production capacity, machinery and labor force necessary to produce the
merchandise as specified in the purchase order and further verify that such
entity produced the merchandise by completing "Factory Profile" and
"Verification of Production" forms, in a form and substance acceptable to
Principal. Any purchase order issued by Agent for the account of Principal shall
bear the following legend:

 

The vendor has advised Principal that all the manufacturing operations required
for this order will be performed in [country of origin].  Vendor will
immediately notify Principal prior to any of these operations being shifted to
other countries. Production will not be shifted to other countries absent
Principal’s written approval.

 

(g)     Agent shall use its reasonable efforts to ensure the manufacturers,
vendors, and sellers with whom Agent negotiates on behalf of Principal in
furtherance of this

Agreement do not employ any forced, child or prison labor. If Agent becomes
aware of any forced, child or prison labor, it shall immediately notify
Principal.

 

6.1.g.1.   Agent acknowledges that the U.S. Foreign Corrupt Practices Act
(“FCPA”) prohibits giving, promising, or offering to give a payment or anything
of value, either directly or indirectly, to any non-U.S. government official,
non-U.S. political party or official thereof, candidate for non-U.S. office, or
officer or employee of a public international organization for the purpose of
influencing an act or decision of such official, candidate, officer, or employee
in his official capacity, inducing him to do or omit to do any act in violation
of his lawful duty, or securing an improper advantage, in order to assist in
obtaining or retaining business for or with, or directing business to, any
person subject to certain exceptions, including facilitating payments. Agent
further acknowledges that other relevant anti-corruption laws, including those
of the People's Republic of China, prohibit both commercial and government
bribery. Agent will ensure that its personnel, Affiliates, and subcontractors
who will carry out or who are carrying out duties in relation to this Agreement,
have been informed of their obligations under these prohibitions as of the date
hereof. Agent shall also ensure that any personnel, Affiliates or subcontractors
not currently working with respect to this Agreement but who may be added in the
future, as well as any personnel associated with providing new services to
Principal, shall be informed prior to their conducting any activity with respect
to this agreement of their obligations under these prohibitions.

 

6.1.g.2.   From the date hereof, Agent agrees that: (1) it will take no action
that could reasonably be expected to cause Principal to be in violation of the
FCPA (as it may from time to time be amended) or any other applicable
anti-corruption laws, including laws prohibiting either commercial or government
bribery, and including laws prohibiting either accepting or making illicit
payments; (2) in carrying out its duties under this Agreement, Agent agrees that
it shall not make or accept any payments, itself or through its employees,
representatives, or agents that would violate U.S. or other applicable
anti-corruption laws or Principal's business ethics policies and procedures (as
notified by Principal to Agent from time to time); (3) in relation to business
connected to this Agreement, it will promptly notify Principal or such other
person as Principal may designate if Agent or any of its personnel,
representatives, or agents receives any request to take any action, or takes any
action, that could reasonably be construed as a violation of the FCPA, other
applicable anti-corruption laws, or Principal's policies and procedures (as
notified by Principal to Agent from time to time).

 

6.1.g.3.   At such times as may be reasonably requested by Principal, Agent will
certify to Principal in writing that: (1) Agent and its managers,
representatives, and agents engaged in business connected to this Agreement
since the Effective Date have been informed of their

obligations under Clauses 6.1.g.1 and 6.1.g.2; (2) Agent and its managers,
representatives, and agents engaged in business connected to this Agreement
have, to Agent’s knowledge, complied with all such laws and policies and
procedures in relation to business connected to this Agreement since the
Effective Date; (3) Agent and its managers, representatives, and agents engaged
in business connected to this Agreement since the Effective Date have, to
Agent's knowledge, specifically, not taken any act prohibited by applicable
anti­corruption laws or in breach of the foregoing undertakings in connection
with Agent's carrying out its duties under this Agreement; and (4) Agent does
not know or have any reason to believe that any manager, employee, agent,
representative, or other person retained by any of them for business connected
to this Agreement has violated any of the foregoing undertakings in relation to
business connected to this Agreement since the Effective Date.

 

6.1.g.4. Any misrepresentation by Agent under this Clause 6.1(g) or any improper
payment, offer, promise or demand in contravention of the foregoing
undertakings, or acceptance or receipt of a payment in contravention of the
foregoing undertakings, by Agent or its personnel, representatives, agents, or
anyone associated with any of them shall constitute grounds for immediate
termination of this Agreement and any other agreement Agent or any of its
Affiliates has entered into with Principal or one of its Affiliates.

 

(h)     No Vendor may be used unless and until it has been inspected by Agent
and approved by Principal as being in compliance with the Principal’s Policies.
Agent will notify Principal of its recommended use of any Vendor sufficiently in
advance to enable such compliance to be verified.

 

In this Agreement, "Affiliate" means any holding company, subsidiary, affiliate
or associated company of Agent or any subsidiary of any holding company of a
Party.

 

6.2.      The representations, warranties and agreements contained in Clause 6.1
shall be true and correct and shall survive the date of this Agreement and
continue in full force and effect during the Term.

 

7.      PAYMENT

 

7.1.      Principal shall be solely responsible for paying the purchase price
for all Ordered Products shipped by and received from Vendors and for paying for
all freight, handling, insurance charges and any charges in relation thereto,
including duty, to the extent not included in such purchase price.

 

8.      PAYMENT TERMS

 

8.1.      Subject to Clause 8.2(a), Principal shall pay to Agent a commission
equal to [****] ([****]) of the FOB price for the Ordered Products shipped by
Vendors (the

 

“Commission(s)”). Notwithstanding the foregoing, no Commission shall be due or
owing on Ordered Products that are returned to Vendor (whether as a result of
defects or non-conformity of the Ordered Products or late delivery) to the
extent such Ordered Products are returned due to the Agent not performing the
Services to the required standard.

 

8.2.

 

(a)     Agent agrees to pay to Principal a rebate equal to [****] of FOB price
of the Ordered Products (collectively, the “Rebate”) by way of a set-off
included in the Weekly Shipping Invoice. In other words, any given Weekly
Shipping Invoice such invoice shall include (i) a line item showing the
Commission to be paid for Ordered Products and (ii) a line item showing the
Rebate amount that will be set-off against the Commission.

 

(b)     [Intentionally omitted]

 

(c)     If Agent does not include the Rebate in a Weekly Shipping Invoice in
accordance with this Clause 8.2(a), Agent agrees that Principal shall be
entitled to withhold such amount from its payment to Agent.

 

8.3.      Each such Commission and Rebate shall be paid in the currency of the
United States of America.

 

8.4.      Each Party to this Agreement shall, unless otherwise specified in this
Agreement, pay for its own expenses, including travel and any other expenses
and, in any event, Principal shall not be responsible for any costs of travel,
entertainment, telephone, telex, telecopies, postage, office space, personnel
(including salaries, benefits, overtime and any related taxes), legal or other
profession costs or any other costs incurred by Agent in the performance of the
Services or the other obligations set forth in this Agreement.

 

8.5.      Agent shall consolidate invoices on a weekly basis for all Ordered
Products shipped to Principal during the prior week (and all corresponding
Commissions) in a statement to be agreed by the Parties ("Weekly Shipping
Statement").  Agent will deliver to Principal the Weekly Shipping Statements,
which will be settled on an open account basis as follows: (i) as it relates to
the corresponding Commissions, within 60 days following receipt of such Weekly
Shipping Statement and (ii) as it relates to the FOB price or DDP price of
Ordered Products in accordance with the terms agreed between Vendor and
Principal. Principal shall remit by telegraphic transfer or wire transfer to
Agent’s bank account the total amount due to a Vendor for the relevant Ordered
Products at least five (5) Business Days before the relevant payment deadline
set forth in the Contract with such Vendor (“Vendor Payment Obligation”). Agent
shall make payment on behalf of Principal to Vendors (or as Vendors direct) upon
receipt of the payments described above. “Business Day” means any day that is
not a Saturday, a Sunday or any other day on which banks are required or
authorized by applicable law to be closed in Hong Kong or in New York.

 

8.6.      Agent shall maintain an account or accounts at a reputable bank that
shall be used for the purpose of receiving funds from Principal and making
payments to Agent (into its

own bank account) and Vendors (such account, the “Designated Account”).   All
funds in the Designated Account received from Principal (other than the
Commission paid) are property of Principal and Agent shall hold such funds for
the benefit of Principal. For the avoidance of doubt, in the event of a
bankruptcy filing or other insolvency of Agent, except for Commissions paid
pursuant to this Agreement, all funds in the Designated Account paid by
Principal shall not be construed to be property of Agent’s bankruptcy estate and
Agent shall not take any position to the contrary.

 

8.7.      Payments in respect of the Weekly Shipping Statement shall be remitted
to Agent by wire transfer to Agent's Designated Account pursuant to instructions
provided by Agent to Principal.

 

8.8.      Agent shall debit Principal and Principal shall pay for the courier
charges incurred by Agent in sending packages from Agent to Principal of Agent's
rendition of the Services hereunder. If applicable, Principal shall provide its
DHL or Federal Express account numbers so charges can be debited directly.

 

8.9.      Other than as set forth Clause 8.2(c), Principal shall not deduct from
the payment amount specified in the Weekly Shipping Statement any amounts for
claims or other charges.

 

8.10.    (i) If any Commission remains outstanding after 14 calendar days from
the due date, Agent shall have the right to charge interest from day to day at
the rate of one percent (1%) per month; (ii) if any Vendor Payment Obligation
remains outstanding after the later of (1) 14 calendar days from the due date
and (2) 14 calendar days from the date on which Agent receives from Principal
the total amount due to the Vendor (other than for a bona fide reason relating
to a dispute between (a) Agent and/or Principal; and (b) Vendor in connection
with the Ordered Products), Principal shall have the right to charge interest
from day to day at the rate of one percent (1%) per month and (iii) if Agent has
paid the Vendor Payment Obligation to Vendor but Principal has not paid the
applicable Vendor Payment Obligation to Agent after 14 calendar days from the
due date, Agent shall have the right to charge interest from day to day at the
rate of one percent (1%) per month.

 

8.11.    Principal acknowledges and agrees that if the invoiced amounts (except
for the disputed invoiced amounts) remain outstanding after the relevant due
date, Agent shall not be obliged to arrange for any Ordered Products to be
shipped to Principal or to place any further orders with any Vendors on
Principal’s behalf until all of the conditions in this Clause 8 have been
satisfied.  For the avoidance of doubt, Agent shall give at least seven (7)
Business Days’ prior notice to Principal before it exercises the foregoing
suspension right.

 

9.      TITLE TO GOODS AND WARRANTIES

 

9.1.      It is understood and agreed by the Parties hereto that title to, and
risk of loss in, all Ordered Products shall not vest in, or be the
responsibility of, Agent on the sale of the Ordered Products by Vendors. Except
as set forth in this Agreement, Agent assumes no liability to Principal for
defects in, or delay in, shipment of any Ordered Products. Agent

 

makes no representation or warranty, express or implied, as to the
merchantability or fitness for any particular use of the Ordered Products.

 

10.    VENDOR SERVICES

 

10.1.    Principal acknowledges that Agent (and/or an Agent's Affiliate) may
provide certain advisory and ancillary business services that are primarily for
the benefit of Principal and limited in scope (each, a “Vendor Service”) to
Vendors at a cost to be borne by such Vendors. Vendor Services may include
services relating to original design development, product life cycle management,
LEAN manufacturing, manufacturing engineering support, market research and
intelligence, capacity building, environmental and sustainability advisory
services and any services relating to the manufacture or supply of any goods by
Vendors. Agent shall promptly notify Principal prior to entry into an agreement
with a Vendor to provide a Vendor Service.

 

10.2.    Principal further acknowledges Agent (and/ or an Agent's Affiliate) has
designed and developed a proprietary vendor portal system (the “Vendor Portal”),
which automates many of the previously manual processes in the supply chain
(such as placement memoranda, inspection booking, payment status checking and
shipping schedule checking) and agrees that fees may be levied on Vendors for
the use of Vendor Portal. Agent shall provide Principal with a list of those
Vendors utilized by Principal that utilize the Vendor Portal and a description
of specific Vendor Services it provides to such Vendors.

 

11.    VENDOR FINANCING

 

11.1.    Agent (and/or an Agent's Affiliate) shall use its commercially
reasonable efforts provide financial assistance to a Vendor at a cost to be
borne by such Vendor. Such financial assistance is provided to allow Vendors to
timely produce Ordered Products for Principal, for example to facilitate the
procurement of raw materials so that production can proceed to meet Principal’s
specific ship date. The financial assistance may consist of but not be limited
to Agent (and/or an Agent's Affiliate) opening letters of credit or granting
advances or financial accommodation to the specific Vendor or factoring or
purchasing Vendor's receivables payable by Principal. At the request of
Principal, Agent will provide Principal with a list of those Vendors utilized by
Principal for which Agent provides financial assistance and any fees and/or
charges levied against such Vendor for such financial assistance.

 

12.    VENDOR INSURANCE

 

12.1.    Principal hereby authorizes Agent (and/or an Agent's Affiliate) to
charge fees to, or seek reimbursement from, any Vendor for any product liability
insurance coverage purchased by Agent (and/or an Agent's Affiliate) for such
Vendor against Ordered Products shipped to Principal.

 

13.    TERMS AND TERMINATION

 

13.1.    This Agreement shall be effective on May 1, 2019 (the “Effective Date”)
and this Agreement shall have an initial term beginning May 1, 2019 to April 30,
2021 (the “Initial

 

Term”) unless terminated by either of the Parties hereto pursuant to Clause 13.2
or 13.3. At the expiration of the Initial Term, this Agreement shall be renewed
for successive one year periods unless either Party gives the other Party
written notice of termination at least one hundred twenty (120) days prior to
the expiration of the Initial Term or subsequent renewal term. Notwithstanding
expiration or termination under this Clause 13, Agent shall be required to
perform all Services in respect of all Contracts entered into as of the time of
expiration or termination of this Agreement, whether to be performed prior to or
after the delivery to Principal of the subject Ordered Products, as well as all
other Services that by their nature relate to such Contracts entered into as of
the time of expiration or termination of this Agreement, such as obligations to
cooperate with Principal or the Licensors in their dealings with the Vendors and
obligations to assure the proper conduct of the Vendors, would survive the
expiration or termination of this Agreement. Notwithstanding termination, all
Contracts entered into before a notice of termination is effective shall be
completed, and Commissions and Rebate paid thereon, in accordance with this
Agreement.

 

13.2.    Notwithstanding Clause 13.1, (i) Principal may terminate this Agreement
immediately by and upon notice to the Agent upon a material breach of any
representation or warranty set forth in Clause 6.1, (ii) if either Party fails
to perform any of the material terms, conditions, agreements or covenants in
this Agreement on its part to be performed and (a) the default is not curable,
(b) the default is curable but continues uncured for a period of 30 days or more
after receipt of notice by the defaulting Party from the non-defaulting Party,
or (c) the default is curable, but not within 30 days, and all reasonable steps
necessary to cure the default have not been taken by the defaulting Party within
the 30-day period or the defaulting Party is not diligently taking all steps
necessary to cure the default as promptly as practicable or, in any event, the
default continues to remain uncured for at least 60 days after such notice,
then, in any such case, the other Party, at its election, may terminate this
Agreement immediately by and upon notice to the defaulting Party and (iii)
following the Initial Term, either Party may terminate this Agreement on no less
than one hundred twenty (120) days’ prior written notice to the other Party.

 

13.3.    Notwithstanding Clause 13.1, this Agreement may be terminated by either
Party in any of the following events and such termination shall become effective
immediately upon written notice from the terminating Party:

 

(a)     If the other Party (i) files a petition in bankruptcy, is adjudicated a
bankrupt or files a petition or otherwise seeks relief under or pursuant to any
bankruptcy, insolvency or reorganization statute or proceeding, or (ii) has a
petition in bankruptcy filed against it, or a resolution is passed, or an order
is made for bankruptcy, winding-up or liquidation and that petition, resolution
or order is not dismissed within 30 days, or (iii) is dissolved or takes steps
to dissolve or it becomes insolvent, or (iv) makes an assignment for the benefit
of its creditors, or (v) has a custodian, receiver or trustee appointed for it
or a substantial portion of its business or assets or any steps are taken for
such appointment, or (vi) takes any step in connection with any voluntary
arrangement or any other compromise or arrangement for the benefit of any
creditors; or (vii) makes an application for an administration order or the
making of an administration order; or (viii) gives

any notice of intention to appoint an administrator, or files at court the
prescribed documents in connection with the appointment of an administrator, or
the appointment of an administrator; or (ix) appoints a receiver or manager or
an administrative receiver in relation to any property or income of that
Party.  The foregoing events and proceedings set forth above shall be deemed
also to include any similar events and proceedings under any laws applicable to
a Party.  Also, nothing herein is intended to impair any rights that a Party may
have as a creditor in any such bankruptcy or other such proceeding;

 

(b)     If there is a Change of Control of Ownership of the other Party; or

 

(c)     If the performance by the other Party of its obligations under this
Agreement becomes permanently impossible.

 

“Change of Control of Ownership” with respect to a Party means (a) a transaction
in which that Party transfers all or substantially all of its assets to a third
party, (b) a merger, acquisition or reorganization as a result of which a third
party directly or indirectly owns or controls more than 50% of the voting rights
of that Party or the surviving Party immediately following such merger,
acquisition or reorganization or (c) any time at which individuals who, as of
the Effective Date, constitute the Board of Directors of that Party (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board of Directors of that Party;  provided, however, that any individual
becoming a director subsequent to the Effective Date whose election, or
nomination for election by that Party’s stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board.

 

13.4.    In the event of an expiration or termination of this Agreement by
either Party hereto, Agent agrees to provide Principal with reasonable access to
Agent's books and records and/or Sourcing data insofar as such data relates to
the Services.

 

13.5.    If this Agreement is terminated by Principal pursuant to Clause 13.2(i)
or (ii), or 13.3, (a) there will be no Minimum Sourcing Amount or Threshold
Amount (and therefore no Agent Sourcing Deficit) for the Agreement Year in which
such termination occurred or the post-expiration/termination tail period
described in Clause 13.1; and (b) all Commissions payable shall be paid in
accordance with the terms of this Agreement.

 

13.6.    If this Agreement is terminated other than as a result of Principal’s
exercise of its termination right pursuant to Clause 13.2(i) or (ii), or 13.3,
the Minimum Sourcing Amount and the Threshold Amount for the final Agreement
Year shall be appropriately prorated based on the date of termination/expiration
and all Commissions payable shall be paid in accordance with the terms of this
Agreement.

 

14.    DELEGATION

 

14.1.    Agent shall not delegate its duties under this Agreement unless
otherwise agreed in writing.

 

14.2.    Notwithstanding Clause 14.1, Agent shall have the right, in its sole
and absolute discretion, to appoint any of Agent's subsidiaries or Affiliates to
assist Agent in discharging its duties under this Agreement.

 

15.    NO PARTNERSHIP

 

15.1.    For the avoidance of doubt, it is hereby agreed that the Parties to
this Agreement are not partners or joint venturers nor shall they be deemed to
constitute such.

 

16.    GOVERNING LAW AND JURISDICTION; DISPUTE RESOLUTION

 

16.1.    This Agreement shall be construed and enforced in accordance with, and
be governed by, the laws of the State of New York USA, without giving effect to
its conflict of laws, principles or rules to the extent that such principles or
rules would require the application of the laws of another jurisdiction, and the
Parties consent to the exclusive jurisdiction of the federal and state courts
located in the City and County of New York, New York, to resolve any dispute
related to this Agreement.

 

16.2.    Each Party acknowledges and agrees that any controversy which may arise
under this Agreement is likely to involve complicated and difficult issues and,
therefore it hereby irrevocably and unconditionally waives any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of or relating to this Agreement or the transactions contemplated hereby.
Each Party certifies and acknowledges that (i) no representative, agent or
attorney of any other Party has represented, expressly or otherwise, that such
other Party would not, in the event of litigation, seek to enforce the foregoing
waiver, (ii) it understands and has considered the implications of such waiver,
(iii) it makes such waiver voluntarily, and (iv) it has been induced to enter
into this Agreement by, among other things, the mutual waiver set out in this
Clause 16.2.

 

16.3.    Any and all disputes, controversies, claims or grievances, including
any disputes regarding the enforceability of this Agreement, including this
provision, (each, a “Dispute”) arising under or relating to this Agreement shall
be resolved in accordance with the terms of this Clause 16. Either Party may
notify the other of its intent to resolve a Dispute. The notice shall describe
the Dispute in reasonable detail, (including references to the sections of this
Agreement that are at issue in such Dispute and, if any claim involves an
allegation that the other Party has committed a material breach, reasons as to
why the Party serving notice believes such breach to be material) and designate
such Party's senior management representative with respect to such Dispute
(“Initial Notice”). No later than five (5) Business Days following its receipt
of the Initial Notice the other Party shall notify the disputing Party of its
senior management representative with respect to such Dispute and shall
supplement the Initial Notice with any other Disputes for resolution not
identified in the Initial Notice. The senior management representatives shall
then meet and confer in good faith to attempt to resolve the Dispute; if the
Dispute is not resolved within twenty (20) days following the receipt of the
Initial Notice, then either Party may, by a second notice to the other Party,
submit such Dispute to the chief executive officers of the Parties. The chief
executive officers shall then meet and confer in good faith to attempt to
resolve the Dispute. If the chief executive officers are unable to resolve the
Dispute within twenty (20) days

following referral of the Dispute to them, then the Parties shall be free to
pursue such remedies as may be available under applicable law.

 

17.    FORCE MAJEURE

 

17.1.    Neither Party shall be liable for any failure to comply with its
obligations hereunder, including the Minimum Sourcing Amount, the Threshold
Amount and the Agent Sourcing Deficit obligations, if such failure is due to any
cause beyond its reasonable control including acts of God, acts of civil or
military authority, labor disputes, failure or delay of Vendor, fire, riots,
civil commotions, sabotage, war, embargo, blockage, boycotts, floods, epidemics,
delays in transportation, governmental restrictions, or acts or omissions of
Vendor and/or Principal. The Party claiming to be prevented from complying with
its obligations hereunder by reason of force majeure must use reasonable
endeavors to bring the force majeure event to a close or to seek to try to find
a solution by which the Agreement may be performed despite the continuance of
the force majeure event.

 

18.    NOTICES

 

18.1.    Any notice required or permitted to be given by a Party hereto to the
other shall be in writing and shall be duly given, upon receipt by the
addressee, if sent by internationally-recognized overnight courier or mail
service that requires the addressee to acknowledge, in writing, the receipt
thereof, by electronic transmission or by facsimile to its address or facsimile
number given herein, as applicable, or such other address or facsimile number as
may from time to time be notified for this purpose:

 

 

 

To Principal:

Centric Brands Inc.

 

350 Fifth Avenue, 6th Floor

 

New York, NY 10118

 

USA

 

Attention: Legal Department

 

Email: legal@centricbrands.com

 

 

 

 

To Agent:

Li & Fung (Trading) Limited

 

11/F LiFung Tower

 

888 Cheung Sha Wan Road

 

Kowloon, Hong Kong

 

Attention: Legal Department

 

Email: legalnotices@lifung.com

 

Fax No.: +852 2300 4985

 

In proving service it shall be sufficient to prove that the notice was properly
addressed and delivered or posted, as the case may be. Any notice served by
electronic transmission or facsimile shall be deemed to have been served when
dispatched together with machine printed or emailed confirmation of receipt.

19.    ENTIRE AGREEMENT AND SEVERABILITY

 

19.1.    This Agreement contains the entire agreement between the Parties with
respect to the subject matter hereof and supersedes all simultaneous and
previous agreements, representations, and understandings between the Parties
with respect thereto. This Agreement may not be modified except in writing
signed by the duly authorized representatives of the Parties.

 

19.2.    Each Party acknowledges that in entering into this Agreement, it does
not do so on the basis of and does not rely on any representation, warranty or
other provision except as expressly provided herein, and all conditions,
warranties or other terms implied by statute or common law are hereby excluded
to the fullest extent permitted by law.

 

19.3.    The illegality, invalidity or unenforceability of any provision of this
Agreement under the law of any jurisdiction shall not affect its legality,
validity or enforceability under the law of any other jurisdiction nor the
legality, validity or enforceability of any other provision.   Nothing in this
provision is intended to affect in any way the provisions of Clause 19.1 above.

 

20.    INTELLECTUAL PROPERTY

 

20.1.    Agent acknowledges that all patents, trademarks, service marks, logos,
trade dress, trade names, goodwill, copyrights, copyrightable material, designs,
rights of publicity and persona, trade secrets and all other intellectual
property, in each case, relating to any of Principal’s Products (including all
Products produced or proposed to be produced in connection herewith} and
packaging and collateral materials associated therewith shall be and remain, as
between Agent and the Vendors, on the one hand, and Principal, on the other
hand, the sole and exclusive property of Principal. Agent shall not use or
permit the use of any such intellectual property (or any derivative, colorable
imitation, confusingly similar or substantially similar use thereof) other than
for the benefit of Principal as expressly set forth herein or as approved by
Principal. Agent will not, during the Term or at any time thereafter, have or
claim any right, title or property interest in such intellectual property or
take or permit any action which will have an adverse effect on Principal's
rights to such intellectual property. Should Agent become aware of any actual or
suspected infringement, dilution, misappropriation, or other violation of
Principal's intellectual property rights, Agent shall promptly notify Principal
in writing of same, and shall cooperate (at Principal's cost) with Principal to
address and prevent any such infringement, dilution, misappropriation, or other
violation, and to enforce Principal's rights in its intellectual property.

 

21.    CONFIDENTIALITY; NON-DISPARAGEMENT

 

21.1.    At all times after the date of this Agreement, each Party hereto
undertakes that it will not, and shall use its reasonable best efforts to cause
its employees, officers, directors, auditors and other agents not to, directly
or indirectly, publish, communicate or otherwise divulge to any person, except
to its professional representatives or advisers who have a legitimate business
purpose in connection with this Agreement, or to the extent as may be required
by law or any legal or regulatory authority or applicable stock

exchange, any Confidential Information (as defined below) of the other Party or
of any member of the group of companies to which the other Party belongs which
may have or may in future come to its knowledge. Each Party hereto shall use the
Confidential Information of the other Party solely for the purpose of exercising
its rights and performing its obligations under this Agreement.  Subject to
Clause 8.12 and Clause 24, nothing herein shall be deemed to prevent Principal,
directly or through other buying agent(s), from engaging the services of or
otherwise dealing with the Vendors after the end of the term of this Agreement.

 

21.2.    For purposes of this Agreement, "Confidential Information" means all
(a) trade secrets, confidential information, know-how, inventions, proprietary
processes, designs, formulae, models, and methodologies, including designs,
drawings and graphics and information about colors, fabrics and other materials,
new and modified products, financial and business data and plans and related
reports of each of the Parties and their respective Affiliates; and (b) other
information, regardless of the form or medium in which obtained or delivered,
which is proprietary to the disclosing Party. Notwithstanding the foregoing, (i)
Confidential Information shall not include information that (w) is publicly
known at the time it is disclosed to, or obtained by, the receiving Party, (x)
becomes publicly known through no fault of the receiving Party; (y) is in the
receiving Party's possession before being disclosed by the disclosing Party as
evidenced by proper business records; or (z) is obtained by the receiving Party
from a third party who is not under an obligation of confidentiality and has a
lawful right to make such disclosure; and (ii) each Party may use certain
Confidential Information for the purpose of data analytics on the condition that
such data shall be reproduced in aggregated and anonymized form and without
disclosing the name or identity of the other Party or any of the other Party’s
directors, officers or employees.

 

21.3.    Each Party hereto hereby agrees that monetary damages may not be a
sufficient remedy in the event that the provisions of this Clause 21 were not
performed in accordance with their specific terms. Accordingly, it is hereby
agreed that the Parties hereto shall be entitled to seek an injunction or
injunctions to enforce specifically the terms and provisions hereof in any court
of New York or any place having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.

 

21.4.    During the Term and thereafter, Principal shall not, and shall cause
its directors, officers, agents, members, employees, affiliates or other
representatives not to, criticize or disparage Agent and Agent shall not, and
shall cause its directors, officers, agents, members, employees, affiliates or
other representatives not to, criticize or disparage Principal, any director,
officer, agent, member, employee affiliate or other representative of Principal,
or Principal’s Products, including the Ordered Products.

 

22.    INDEMNIFICATION

 

22.1.    Agent shall indemnify Principal and its respective officers, agents,
employees, directors, shareholders and representatives, and their respective
successors and assigns (collectively, the “Principal Indemnified Parties”), and
hold them harmless, from and against any and all losses, damages, liabilities,
payments, liens, judgments, orders and decrees of every description, recoveries,
reasonable costs and expense (including

reasonable attorneys' fees and expenses) that any of the Principal Indemnified
Parties may incur or become obligated to pay, or for which any of them may
become liable or be compelled to pay, in any action, claim or proceeding against
any of them arising out of or relating to (i) Agent’s breach of its obligations
of confidentiality, and (ii) Agent’s willful misconduct, gross negligence, fraud
or criminal damage.

 

22.2.    Principal shall indemnify Agent and its respective officers, agents,
employees, directors, shareholders and representatives, and their respective
successors and assigns (collectively, the “Agent Indemnified Parties”), and hold
them harmless, from and against any and all losses, damages, liabilities,
payments, liens, judgements, orders and decrees of every description,
recoveries, reasonable costs and expense (including reasonable attorneys' fees
and expenses) that any of the Agent Indemnified Parties may incur or become
obligated to pay, or for which any of them may become liable or be compelled to
pay, in any action, claim or proceeding against any of them arising out of or
relating to (i) Principal’s breach of its obligations of confidentiality, and
(ii) Principal’s willful misconduct, gross negligence or fraud.

 

22.3.    An indemnitee shall give its indemnitor prompt notice of any action,
claim or proceeding subject to indemnification and the indemnitor, in its sole
discretion, then may take such action as it deems advisable to defend the
action, claim or proceeding on behalf of the indemnitee.  If appropriate action
is not taken by the indemnitor timely after its receipt of notice from the
indemnitee, the indemnitee may defend the action, claim or proceeding, but with
only one counsel reasonably acceptable to the indemnitor and at standard rates,
and no compromise or settlement may be made without the approval of the
indemnitor, which shall not be withheld unreasonably.  In either case, the
indemnitee and the indemnitor shall keep each other fully advised of all
developments and shall cooperate fully with each other in connection with the
defense thereof.  Also, no compromise or settlement of any such action, claim or
proceeding may be made unless full releases as to the subject matter are
obtained for the indemnitor and its affiliates and for the indemnitee.

 

22.4.    The respective rights and obligations of the Parties under this Clause
22 shall survive the expiration or termination of this Agreement.

 

23.    LIMITATION OF LIABILITY

 

23.1.    The liability of Agent whether for breach of contract or negligence or
otherwise in connection with this Agreement shall be limited to the lesser of
(i) the amount of the direct loss suffered by Principal as a consequence and
(ii) the amount of Commission paid or due to Agent on the specific Ordered
Products in respect of which Agent breached its contract, was negligent or
otherwise liable. This clause shall survive the expiration or termination of
this Agreement.  For the avoidance of doubt, the foregoing does not apply to the
liability of Agent under its indemnification obligation hereunder.

 

23.2.    TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE LAW, (A) PRINCIPAL
SHALL NOT BE LIABLE TO AGENT OR ANY THIRD PARTY FOR ANY CONSEQUENTIAL,
INCIDENTAL, PUNITIVE, EXEMPLARY, OR SPECIAL DAMAGES, OR FOR LOSS OF GOODWILL OR
BUSINESS PROFITS, REGARDLESS OF THE FORM OR ACTION, WHETHER

IN CONTRACT OR IN TORT, EVEN IF PRINCIPAL HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES OR LOSSES, AND (B) AGENT SHALL NOT BE LIABLE TO PRINCIPAL OR ANY
THIRD PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR SPECIAL
DAMAGES, OR FOR LOSS OF GOODWILL OR BUSINESS PROFITS, REGARDLESS OF THE FORM OR
ACTION, WHETHER IN CONTRACT OR IN TORT, EVEN IF AGENT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES OR LOSSES.

 

24.    WAIVER

 

24.1.    Any waiver by either Party of a breach of any provision of this
Agreement shall not be considered as a waiver of any subsequent breach of the
same or any other provision thereof.

 

25.    SURVIVAL

 

25.1.    For the avoidance of doubt, in addition to those provisions that by the
terms of this Agreement survive the expiration or termination hereof, all
provisions that by their nature would survive expiration or termination, such as
dispute resolution provisions, shall survive the expiration or termination
hereof.

 

26.    CONSTRUCTION

 

26.1.    This Agreement shall be construed without regard to any presumption or
other rule requiring construction against the party causing this Agreement to be
drafted.  Also, as used in this Agreement, the term "including" means
"including, but not limited to" unless otherwise specifically provided.

 

27.    EXECUTION

 

27.1.    This Agreement may be executed in counterparts, each of which shall
constitute an original, but together shall be considered one and the same
document.  Facsimile transmission or scanned .pdf image delivered by electronic
means of any signed original counterpart and/or retransmission of any signed
facsimile or electronic transmission shall be deemed the same as the delivery of
an original.

 

[This space intentionally blank. Signature page follows.]

 

IN WITNESS WHEREOF this Agreement has been executed by the parties as follows.

 

 

 

For and on behalf of

 

 

 

CENTRIC BRANDS INC.

 

 

 

 

 

/s/ Anurup Pruthi

 

 

 

Name: Anurup Pruthi

 

 

 

Title: CFO

 

 

 

 

 

For and on behalf of

 

 

 

LI &  FUNG (TRADING) LIMITED

 

 

 

 

 

/s/ Spencer Fung

 

 

 

Name: Spencer Fung

 

 

 

Title: Director