EXHIBIT 10.36


                        CONFIDENTIAL TREATMENT REQUESTED

                          VERSATILE ENTERTAINMENT, INC.
                          150 West Jefferson Boulevard
                          Los Angeles, California 90007

December 16, 2008


Charlotte Russe Merchandising, Inc.
4645 Morena Boulevard
San Diego, CA 92117
Attn: Emilia Fabricant

         RE:   LETTER AGREEMENT


Ladies and Gentlemen:

         Further to our discussions, we are pleased to set forth below the terms
of our  agreement  for the exclusive  sale by Versatile  Entertainment,  Inc., a
California  corporation,  and its parent People's  Liberation,  Inc., a Delaware
corporation  (collectively,  "VE"),  to Charlotte Russe  Merchandising,  Inc., a
California corporation, and its parent Charlotte Russe Holding, Inc., a Delaware
corporation (collectively, "CR"), of apparel and apparel accessories bearing the
trademark  PEOPLE'S  LIBERATION in all its forms and  variations  (collectively,
"MARKS"),  and the  provision of services by VE in  connection  therewith.  When
signed by VE and CR, in the manner hereinafter  provided,  this letter agreement
(this  "AGREEMENT")  shall  constitute  the binding  agreement of VE and CR with
respect to the matters described herein.

EXCLUSIVE DISTRIBUTION:          During the Term (as  defined  below),  VE shall
                                 design, source,  manufacture,  purchase, import
                                 or otherwise  acquire each season (as such term
                                 is  understood  in  the  clothing  and  apparel
                                 industries)  such  assortment  of Products  (as
                                 defined  below)  selected by VE and CR for sale
                                 to CR,  which VE  shall  offer to sell to CR at
                                 such  prices  as  determined  by VE  and  CR in
                                 accordance with this Agreement.  CR shall issue
                                 its standard  purchase  order for such Products
                                 that CR desires to purchase from VE.

                                 During the Term,  CR shall  have the  exclusive
                                 right  to  market,  distribute,  and  sell  the
                                 Products   purchased  by  CR  from  VE  in  the
                                 Territory  solely through the Approved  Stores.
                                 Neither  VE nor  any of its  Affiliates,  shall
                                 sell, distribute or otherwise make available to
                                 customers  any  Products  in  any  part  of the
                                 Territory  or   authorize,   assist,   support,
                                 directly or  indirectly,  any other party to do
                                 so.

                                 VE shall  cease  all  distribution  and sale of
                                 Products to third parties in the Territory from
                                 and after April 30, 2009,  and shall not market
                                 or authorize any third party to market Products
                                 in the Territory after April 30, 2009 except as
                                 provided herein.

EXCLUSIVE LICENSE:               VE licenses to CR on a wholly  exclusive  basis
                                 throughout  the Term,  the  right,  but not the
                                 obligation  (with the  exception of the Primary
                                 Products  as  defined  hereafter),  to use  the
                                 Marks   throughout  the  Territory  on  and  in
                                 connection with the marketing, distribution and
                                 sale (but not the sourcing or manufacturing) of
                                 the Products solely in the Approved Stores.


<PAGE>


MARKS:                           PEOPLE'S LIBERATION

                                 [GRAPHICS OMITTED]

                                 (ATTACHED  HERETO AS  EXHIBIT A IS A LISTING OF
                                 ALL  REGISTERED  AND  PENDING  U.S.   TRADEMARK
                                 REGISTRATIONS  AND  APPLICATIONS  OF  VERSATILE
                                 ENTERTAINMENT,  INC.  FOR THE MARKS,  INCLUDING
                                 THE      REGISTRATION/APPLICATION       NUMBER,
                                 REGISTRATION/APPLICATION      FILING      DATE,
                                 CLASSIFICATION AND GOODS.)

TERRITORY:                       North  America and Central  America,  including
                                 all its territories.  VE expressly reserves the
                                 right to sell, or to grant licensees  rights to
                                 sell, Products outside the Territory.

PRODUCTS:                        Finished goods for all markets (E.G.,  women's,
                                 kids, juniors,  etc.) bearing the Marks, either
                                 alone  or  in  connection  with  the  Charlotte
                                 Russe(TM)  trademarks  (subject  to VE's  prior
                                 approval),  in the following categories,  which
                                 finished  goods have been produced by or at the
                                 direction of VE for sale to CR:

                                 Clothing,   Footwear,  Headgear  (INTERNATIONAL
                                 CLASS 25) Bags, and Leather Goods in respect of
                                 which  the  Marks  are  registered  or  pending
                                 registration or are otherwise approved by VE to
                                 be marketed,  sold,  or  distributed  under the
                                 Marks   (INTERNATIONAL   CLASS  18)  Cosmetics,
                                 Fragrances   (INTERNATIONAL  CLASS  3)  Eyewear
                                 (INTERNATIONAL   CLASS  9)   Jewelry,   Watches
                                 (INTERNATIONAL CLASS 14)

                                 Products in  International  Classes  ***(1) are
                                 referred to herein as "PRIMARY  Products",  and
                                 Products  in  International   Classes  ***  are
                                 referred to herein as "SECONDARY PRODUCTS".

PRODUCT QUALITY                  VE  will   ensure   that   all   Products   are
  AND PRICING:                   commensurate   with  the  current   reputation,
                                 image,  styling and  prestige of the Marks;  of
                                 high  quality  and  design  as to  workmanship,
                                 construction,  trim,  appearance,  fabrication,
                                 design and materials used therein; and at least
                                 equal in  quality to the  samples  of  Products
                                 submitted by VE to CR. CR acknowledges that its
                                 current  intention  is  to  offer  the  Primary
                                 Products for sale at ***, and  accordingly  ***
                                 for the Primary Products may reflect ***(2).

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(1)  Terms  represented  by  this  symbol  are  considered  confidential.  These
     confidential  terms have been omitted pursuant to a Confidential  Treatment
     Request filed with the Securities and Exchange  Commission ("SEC") and have
     been filed separately with the SEC.


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                                 VE  and  CR  acknowledge  and  agree  that  the
                                 categories of Products  identified on EXHIBIT B
                                 shall have an initial  retail  price within the
                                 ranges set forth on  EXHIBIT B or as  otherwise
                                 agreed  by  the  parties.   Products  shall  be
                                 offered to CR at wholesale  pricing which shall
                                 be determined  by the retail  pricing set forth
                                 in EXHIBIT B or, to the  extent not  identified
                                 on  EXHIBIT  B,  set  by CR in  its  reasonable
                                 discretion after  consultation with VE in order
                                 to allow  for a retail  price  with an  initial
                                 mark-up of ***%.

OWNERSHIP:                       VE  acknowledges  that,  to  the  best  of  its
                                 knowledge,  (i) it is the  sole  and  exclusive
                                 owner of the Marks in the United States for the
                                 goods in the applications/registrations  listed
                                 in  EXHIBIT  A, and (ii) it is not aware of any
                                 third party obstacle,  or third party challenge
                                 or claim to VE's use and/or registration of the
                                 Marks or URL (defined  below) in the  Territory
                                 for the Products.  CR acknowledges that all use
                                 of  the  Marks  and  all  rights  and  goodwill
                                 attaching to or arising out of such use,  shall
                                 accrue  to the  benefit  of VE. VE has filed in
                                 the U.S.  the  trademark  applications  for the
                                 Marks listed on EXHIBIT A. Within fourteen (14)
                                 days of the  execution  of this  Agreement,  VE
                                 shall, at its expense and as is necessary, file
                                 applications  for the national  registration of
                                 the Marks in the  United  States (to the extent
                                 not already filed),  Canada, and Mexico for the
                                 Products,  and shall vigorously  prosecute said
                                 applications.  CR acknowledges that any refusal
                                 to  register  a Mark  by a  national  trademark
                                 office in of  itself  shall  not  constitute  a
                                 breach of this Agreement by VE.

                                 VE  acknowledges   that  it  is  the  sole  and
                                 exclusive       owner      of      the      URL
                                 WWW.PEOPLESLIBERATION.COM      (the     "URL").
                                 (ATTACHED  HERETO AS  EXHIBIT A IS A LISTING OF
                                 SUCH URL,  INCLUDING THE "WHOIS"  RECORD(S) AND
                                 EXPIRATION DATE(S).)

APPROVED DISTRIBUTION:           Charlotte  Russe(TM)  branded retail stores and
                                 related   Charlotte   Russe(TM)    distribution
                                 channels in the ordinary  course of business in
                                 effect  on the date  hereof,  including  outlet
                                 locations and  direct-to-consumer  sales (E.G.,
                                 E-COMMERCE,  MAILERS,  CATALOG SALES),  and any
                                 other  distribution  channels as agreed between
                                 the parties.

                                 VE grants to CR the  exclusive  right to solely
                                 utilize the URL for  commercial  and  marketing
                                 purposes  with  respect to the  Products in the
                                 Territory throughout the Term.

CLOSE-OUTS AND                   CR may sell  Close-Outs and Off-Price  Products
  OFF-PRICE SALES:               in the ordinary  course of  business,  provided
                                 that  Close-Outs  may not exceed  ***% of total
                                 Net Sales of Products in any Contract  Year and
                                 Off-Price  sales may not exceed ***% percent of
                                 total Net  Sales of  Products  in any  Contract
                                 Year. For the purposes  hereof,  Close-Outs are
                                 first  quality  Products that cannot be sold or
                                 are not sold to regular customers (E.G., excess
                                 inventory), and Off-Price sales are any sale at
                                 a price  that is more than ***  (***%)  percent
                                 less than the listed wholesale price.

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(2)  Terms  represented  by  this  symbol  are  considered  confidential.  These
     confidential  terms have been omitted pursuant to a Confidential  Treatment
     Request filed with the SEC and have been filed separately with the SEC


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<PAGE>


                                 ***(3),   and  any  outlet   stores  owned  by,
                                 operated  by  or  affiliated   with   Charlotte
                                 Russe(TM)    are   deemed   to   be    approved
                                 distribution  channels for such  Close-Outs and
                                 Off-Price sales.

TERM:                            Commencing  on the date  hereof and  continuing
                                 until  December 31, 2012 (the "INITIAL  TERM"),
                                 comprised  of  three  Contract  Years  with the
                                 first  Contract  Year  commencing  on the  date
                                 hereof and ending on June 30, 2010,  the second
                                 commencing July 1, 2010 and ending December 31,
                                 2011, and the third commencing  January 1, 2012
                                 and ending December 31, 2012.

EXTENSION OF TERM:               CR  shall  have  two  1-year  renewal   periods
                                 (CONTRACT  YEAR 4:  JANUARY  1, 2013 - DECEMBER
                                 31, 2013 AND CONTRACT YEAR 5: JANUARY 1, 2014 -
                                 DECEMBER  31,  2014)   provided  that:  (a)  CR
                                 notifies VE of its intent to renew  within nine
                                 (9)   months   of   the   expiration   of   the
                                 then-current  term;  and (b) CR has not been in
                                 material default during the  then-current  term
                                 of this  Agreement.  The  Initial  Term and any
                                 extension term(s) are collectively  referred to
                                 herein as the "TERM."

NO SUBLICENSE:                   CR shall not sublicense, transfer or assign its
                                 rights to the Marks  without the prior  written
                                 consent of VE, which consent may be withheld by
                                 VE in its sole discretion.  Notwithstanding the
                                 foregoing,   CR  may,   upon   notice   to  VE,
                                 sublicense,  transfer  or assign said rights to
                                 an entity under the same  direction,  ownership
                                 and control as CR, provided that ***.

QUALITY STANDARDS:               CR agrees  that the nature and  quality of: (1)
                                 all  services  and  goods  rendered  by  CR  in
                                 connection  with  the  Marks;   (2)  all  goods
                                 produced,  distributed  or sold by CR under the
                                 Marks;   and  (3)  all   related   advertising,
                                 promotional,  and  other  related  uses  of the
                                 Marks by CR shall  conform to standards set by,
                                 and  be  under   the   control   of,   VE.   CR
                                 acknowledges  and agrees that the  presentation
                                 and image of the Marks  should be  uniform  and
                                 consistent   with  respect  to  all   services,
                                 activities  and  products  associated  with the
                                 Marks. Accordingly,  CR agrees to use the Marks
                                 solely  in the  manner  which VE shall  specify
                                 from time to time in VE's sole discretion. Upon
                                 VE's   request,   CR   shall   furnish   to  VE
                                 representative  samples of materials containing
                                 the Marks  that CR  currently  distributes  and
                                 agrees   to   permit    reasonable,    periodic
                                 inspection  of CR's  operations,  at reasonable
                                 times  and  with  reasonable   notice.   If  VE
                                 believes  that the Marks  are  being  used in a
                                 manner  that could  diminish  VE's rights in or
                                 protection of the Marks, or the value of any of
                                 the   Marks,   CR  agrees   to  make   whatever
                                 reasonable and commercially practicable changes
                                 and/or   corrections  VE  deems   necessary  to
                                 protect the Marks.

APPROVALS:                       Unless  otherwise set forth in this  Agreement,
                                 submissions   for   approval  by  either  party
                                 hereunder  shall be deemed  approved unless the
                                 other  party  delivers a notice of  disapproval
                                 within fifteen (15) business days after receipt
                                 of request. Approvals shall not be unreasonably
                                 withheld or delayed.

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(3)  Terms  represented  by  this  symbol  are  considered  confidential.  These
     confidential  terms have been omitted pursuant to a Confidential  Treatment
     Request filed with the SEC and have been filed separately with the SEC


                                        4
<PAGE>


INFRINGEMENT AND                 CR shall  notify VE  promptly  of any actual or
  INDEMNIFICATION:               threatened   infringements,    imitations,   or
                                 unauthorized  use of the Marks by third parties
                                 in the Territory of which CR becomes aware.  VE
                                 shall have the sole right,  at its expense,  to
                                 bring in its  discretion  any action on account
                                 of  any  such  infringements,   imitations,  or
                                 unauthorized  use, and CR shall  cooperate with
                                 VE, as VE may reasonably request, in connection
                                 with any such  action  brought  by VE. VE shall
                                 retain any and all damages,  settlement  and/or
                                 compensation  paid in connection  with any such
                                 action brought by VE.

                                 CR, at its expense, shall defend and indemnify,
                                 and save and hold VE harmless  from and against
                                 any  and all  liabilities,  claims,  causes  of
                                 action, suits, damages and expenses,  including
                                 reasonable  attorneys'  fees and expenses,  for
                                 which VE  becomes  liable,  or may  incur or be
                                 compelled  to pay by reason of CR's  activities
                                 or  breach  of the  terms  of  this  Agreement,
                                 including  but not  limited  to:  (i) claims of
                                 infringement  of any third  party  intellectual
                                 property or  proprietary  right,  except to the
                                 extent such  liability  arose  solely from CR's
                                 use of  the  Marks  as  specified  by VE;  (ii)
                                 product  liability  suits by direct or indirect
                                 customers   of  CR  with  respect  to  products
                                 designed  and  sourced by CR (if  permitted  by
                                 VE); (iii) failure to comply with any law, rule
                                 or regulation  in  connection  with CR directed
                                 export,  import,  sale, and/or  distribution of
                                 goods/services  in the Territory bearing any of
                                 the Marks;  (iv) violations of applicable labor
                                 laws and  regulations  with respect to products
                                 manufactured  or sourced by CR (if permitted by
                                 VE);  and  (v)  CR's  use of the  Marks  in any
                                 manner not expressly authorized herein.

                                 VE, at its expense, shall defend and indemnify,
                                 and save and hold CR harmless  from and against
                                 any  and all  liabilities,  claims,  causes  of
                                 action, suits, damages and expenses,  including
                                 reasonable  attorneys'  fees and expenses,  for
                                 which CR  becomes  liable,  or may  incur or be
                                 compelled  to pay by reason of VE's  activities
                                 or  breach  of the  terms  of  this  Agreement,
                                 including  but not  limited to: (i) claims that
                                 the  Marks  as  used  in  connection  with  the
                                 Products  and as  specified  by VE infringe any
                                 third    party    intellectual    property   or
                                 proprietary right in the United States, Canada,
                                 or Mexico;  (ii) product liability and suits by
                                 direct or indirect customers of VE with respect
                                 to  products  designed  and  sourced by VE; and
                                 (iii) any  violations of applicable  labor laws
                                 and   regulations   with  respect  to  products
                                 manufactured or sourced by VE.

MINIMUM PURCHASE                 In consideration for the exclusivity and rights
  REQUIREMENTS:                  granted, and the services to be provided, to CR
                                 by VE herein,  CR shall  ensure  the  following
                                 minimum  purchases  of  Products  from  VE  per
                                 Contract Year:

                   DATE                                               AMOUNT
                   ----                                               ------

                   CONTRACT YEAR 1
                     DATE OF  EXECUTION - JUNE 30, 2010                ***(4)

                   CONTRACT YEAR 2
                     JULY 1, 2010 - DECEMBER 31, 2011                  $***

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(4)  *** Terms  represented  by this symbol are considered  confidential.  These
     confidential  terms have been omitted pursuant to a Confidential  Treatment
     Request filed with the SEC and have been filed separately with the SEC.


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<PAGE>


                   CONTRACT YEAR 3
                     JANUARY 1, 2012 - DECEMBER 31, 2012               ***(5)

                   If Applicable:

                   CONTRACT YEAR 4
                     JANUARY 1, 2013 - DECEMBER 31, 2013               $***

                   CONTRACT YEAR 5 (AND THEREAFTER, IF APPLICABLE)
                     JANUARY 1, 2014 - DECEMBER 31, 2014               $***

                                 Minimum  Purchase  payments  for each  Contract
                                 Year  shall  be made in ***,  with  adjustments
                                 made for actual  purchase  amounts already paid
                                 for Products for said ***.  Notwithstanding the
                                 foregoing, with respect to Contract Years 1 and
                                 2, Minimum  Purchase  payments shall be made as
                                 follows:


                   PAYMENT DATE                                  PAYMENT AMOUNT
                   ------------                                  --------------

                     CONTRACT YEAR 1
                     Date of  Execution (ADVANCE PAYMENT)          $1,000,000
                     ***                                              $***
                     ***                                              $***
                     ***                                              $***
                     ***                                              $***
                     ***                                              $***
                     ***                                              $***

                     CONTRACT YEAR 2
                     ***                                              $***
                     ***                                              $***
                     ***                                              $***
                     ***                                              $***
                     ***                                              $***
                     ***                                              $***


                                 Payments for Products  shall be made within ***
                                 of receipt of invoice, except as follows:

                                 o        If a Minimum  Purchase  payment is due
                                          and  paid at the  end of a ***  (i.e.,
                                          actual  payments for  Products  during
                                          the *** have not  reduced  the Minimum
                                          Purchase   payment  for  such  ***  to
                                          zero),  such Minimum  Purchase payment
                                          shall  be   applied   in   payment  of
                                          outstanding invoices.

                                 o        If the actual  payments  for  Products
                                          during a *** have  matched or exceeded
                                          the Minimum  Purchase  payment  amount
                                          for  such  ***,  no  Minimum  Purchase
                                          payment  for said *** shall be due and
                                          payable.

                                 o        If the actual  payments  for  Products
                                          during  a  ***  exceed   the   Minimum
                                          Purchase  payment amount for such ***,
                                          the  excess  amount of actual  payment
                                          shall  be  applied   to  the   Minimum
                                          Purchase  payment  in  the  subsequent
                                          ***.

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(5)  *** Terms  represented  by this symbol are considered  confidential.  These
     confidential  terms have been omitted pursuant to a Confidential  Treatment
     Request filed with the SEC and have been filed separately with the SEC.


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<PAGE>


                                 Notwithstanding  the  foregoing,  in  no  event
                                 shall the  Minimum  Payment  due and payable in
                                 one  Contract  Year be  applied  in  payment of
                                 Products  invoiced in any other  Contract Year.
                                 If CR  terminates  this  Agreement  in a manner
                                 permitted  hereunder  at any  time  before  the
                                 expiration  of  the  Term,  CR  shall  only  be
                                 obligated to make the Minimum Purchase payments
                                 that  are  scheduled,  PRO  RATA,  through  the
                                 effective termination date of this Agreement.

ADVANCE PAYMENT:                 With respect to Contract  Year 1 only, CR shall
                                 make an advance  payment  to VE to be  credited
                                 toward the  Minimum  Purchase  amount set forth
                                 above, as follows:

                                 PAYMENT DATE                    PAYMENT AMOUNT
                                 ------------                    --------------

                                 Upon execution of Agreement      $1,000,000

ROYALTIES:                       Royalties   shall  be  due  and  payable   each
                                 calendar  quarter,  no later than *** following
                                 the end of the applicable calendar quarter.

                                 CR  shall  provide  VE with a  written  royalty
                                 statement in the form  approved by VE from time
                                 to time no later than the *** following the end
                                 of  the  applicable   calendar  quarter.   Such
                                 royalty   statement   shall  be   certified  as
                                 accurate  by a duly  authorized  officer of CR.
                                 The receipt or  acceptance by VE of any royalty
                                 statement,  or the receipt or acceptance of any
                                 royalty payment made, shall not prevent VE from
                                 challenging  the  validity  or accuracy of such
                                 statement or payment.

                                 Commencing  January 1, 2013 with  Contract Year
                                 4, if  applicable,  in  addition to the Minimum
                                 Purchase  payments,  CR will  pay VE a  Royalty
                                 equal to ***(6)  percent  (***%)  of  Wholesale
                                 Sales of Primary Products to CR and *** percent
                                 (***%) of Wholesale Sales of Secondary Products
                                 to  CR  for  each  Contract  Year,  or  portion
                                 thereof,  in  excess of the  amount of  Minimum
                                 Purchase  payments for such  Contract  Year, or
                                 portion thereof.  No royalties shall be payable
                                 through   December   31,   2012  for  sales  of
                                 Products.  For example,  for the period January
                                 1, 2013 through December 31, 2013, no royalties
                                 shall be payable with respect to the first $***
                                 in  Wholesale  Sales of Products to CR, and for
                                 each   dollar   of   Wholesale   Sales   to  CR
                                 thereafter,  CR shall pay VE a royalty  of ***%
                                 for  Primary  Products  and ***% for  Secondary
                                 Products.

                                 Notwithstanding  the  foregoing,  for Secondary
                                 Products  only, no royalties  shall be due with
                                 respect  to  Wholesales  Sales of any  Products
                                 within a category of Secondary Products for the
                                 first *** months from the initial launch of the
                                 first  Product in such  category  of  Secondary
                                 Product to account for ***. For example,  if CR
                                 commences the sale of  cosmetics,  no royalties
                                 shall be due for ***  months  from the  initial
                                 sale of the first item of cosmetics.

                                 "WHOLESALE   SALES"   shall   mean  the   gross
                                 wholesale  price paid by CR for Products  less:
                                 (a) returns of Products actually credited;  and
                                 (b)  allowances  (credits  to a customer  after

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(6)  *** Terms  represented  by this symbol are considered  confidential.  These
     confidential  terms have been omitted pursuant to a Confidential  Treatment
     Request filed with the SEC and have been filed separately with the SEC.


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                                 delivery  including  credits for returns).  The
                                 foregoing  deductions  shall not exceed ***(7)%
                                 of the gross sales of  Products  shipped in any
                                 Contract Year.  Sales taxes on Wholesale Sales,
                                 if  any,   shall  be  deducted  and  separately
                                 listed. No other deductions shall be taken.

AUDIT RIGHTS:                    All  books  and   records   relative   to  CR's
                                 obligations  hereunder  shall be maintained and
                                 kept   accessible   and  available  to  VE  for
                                 inspection  for at least  two (2)  years  after
                                 termination of this Agreement.

                                 VE shall have the right,  upon at least  thirty
                                 (30) calendar  days written  notice and no more
                                 than once per calendar  year,  to inspect those
                                 books and  records of CR as are  necessary  for
                                 the purpose of  confirming  the accuracy of the
                                 Royalty,  at the  place or  places  where  such
                                 records are normally retained by CR.

                                 In the event  that such  inspection  reveals an
                                 underpayment  in the amount of the Royalty owed
                                 VE  from  what  was  actually  paid,  CR  shall
                                 immediately pay such  underpayment  and, if the
                                 amount of such  underpayment  exceeds five (5%)
                                 percent, the cost of inspection.

PRODUCT MANAGEMENT               VE  shall   provide   the   following   Product
  SERVICES:                      Management   Services   described   below   for
                                 Contract  Years 1, 2 and 3,  and any  extension
                                 periods, for Primary Products only:

                                 1.   Design and Sourcing Services

                                 2.   Technical  Designs / Cost Sheets Estimates
                                      for each CMT style

                                 3.   Sample and Fit Approvals

                                 4.   Marketing and Advertising Support

                                 Product  Management  Services shall be provided
                                 by VE (i) in a timely manner in accordance with
                                 seasonal  design,  development,  production and
                                 market  calendars as determined by CR; and (ii)
                                 with consideration for the commercial needs and
                                 merchandising objectives designated by CR

DESIGN AND SOURCING              VE shall provide creative  concepts and fashion
  SERVICES:                      direction,  and  develop and source the Primary
                                 Products each Season.  The Seasons are: Summer,
                                 Fall 1, Fall 2,  Holiday,  Spring 1,  Spring 2.
                                 Design and Sourcing  Services  shall consist of
                                 the following:

                                      o    Initial  Merchandising  Review  -  In
                                           person  meetings with CR personnel to
                                           outline  SKU plan for the  applicable
                                           season
                                      o    SKU plan  Development - VE to present
                                           initial  SKU  plan  by  category  and
                                           price.  SKU count  not to exceed  ***
                                           SKU's per year
                                      o    Product designs,  based on agreed SKU
                                           plan
                                      o    Wash Development
                                      o    Fabric Sourcing
                                      o    Trim Design
                                      o    Sourcing  - assist  with  identifying
                                           domestic  and  international   fabric
                                           suppliers and  production  suppliers,
                                           and assist with  shipping/importation
                                           as necessary

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(7)  *** Terms  represented  by this symbol are considered  confidential.  These
     confidential  terms have been omitted pursuant to a Confidential  Treatment
     Request filed with the SEC and have been filed separately with the SEC.


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<PAGE>


                                 VE shall have  responsibility  for all  washes,
                                 fabric sourcing,  trim design and sourcing, and
                                 finished product  manufacturing for all Primary
                                 Products.

                                 VE shall  supervise the  manufacturing  process
                                 and otherwise monitor the production of samples
                                 and  finished  stock to ensure  the  quality of
                                 Primary  Products (i) meet the parties'  agreed
                                 specifications  and  calendar;   and  (ii)  are
                                 accurately  priced,   invoiced,   labeled,  and
                                 shipped  in   accordance   with  the  laws  and
                                 regulations of the Territory.

TECHNICAL DESIGN:                Technical  Design Services shall consist of the
                                 following:

                                      o    Technical  Specifications  - VE  will
                                           provide technical  specifications for
                                           each Primary Product fabrication

                                      o    VE  will   assisting   in   providing
                                           costing for each Primary Product

SAMPLE AND FIT                   VE will  deliver  at least one (1) full  sample
  APPROVALS:                     line of  Primary  Products  to CR in advance of
                                 each Season.  VE shall  provide and fit approve
                                 one (1) standard  fit size for each SKU,  which
                                 will  then be  marked  and  graded.  VE will be
                                 responsible  for all  product  development  and
                                 associated expenses,  including samples and any
                                 costs   associated  with  the  preparation  and
                                 submission of designs.

MARKETING SUPPORT:               VE will provide  Marketing and Branding Support
                                 for   Primary   Products   in  line  with  CR's
                                 marketing plan and calendar, as follows:

                                      o    Assist in PR campaigns, photo shoots,
                                           fixture designs, and fashion shows

                                      o    Assist in viral campaign (web)

                                      o    Assist   in   shop-in-shop    concept
                                           (signage, pop, pos)

                                      o    Assist in  development  of  marketing
                                           collateral

                                      o    Provide CR with  access to and copies
                                           of any and all marketing material and
                                           other  collateral  bearing  the Marks
                                           that  is  developed   for  the  brand
                                           outside the Territory

ORGANIZATION:                    VE will, at its sole cost and expense, employ a
                                 dedicated  division head or person with similar
                                 title and responsibility (CURRENTLY COLIN DYNE,
                                 CHIEF EXECUTIVE Officer),  and dedicated design
                                 and sourcing staff as mutually agreed upon, who
                                 will work exclusively with CR's representatives
                                 on CR's business  arising under this Agreement.
                                 VE    acknowledges     that    the    continual
                                 participation   of  Colin  Dyne  and   Marcella
                                 Lindeberg (CREATIVE DIRECTOR),  in the business
                                 arising  under this  Agreement is an inducement
                                 for  CR  to  enter  into  this  Agreement.   If
                                 Marcella  Lindeberg is employed by or providing
                                 services to VE or any its  affiliates,  then VE
                                 shall use its best  efforts  to cause her to be
                                 actively     involved    in    the     People's
                                 Liberation(TM)   apparel  business  during  the
                                 Term.   VE  further   ensures   that   Marcella
                                 Lindeberg  shall  participate  in the  People's
                                 Liberation(TM)   business   at  least   through
                                 ***(8),  and  shall  use its  best  efforts  to
                                 provide CR with at least 60 days prior  written
                                 notice should  Marcella  Lindeberg  cease to be
                                 employed   by  or   provide   services   to  VE
                                 thereafter. If either (i) Marcella Lindeberg or
                                 a designer of

----------
(8)  *** Terms  represented  by this symbol are considered  confidential.  These
     confidential  terms have been omitted pursuant to a Confidential  Treatment
     Request filed with the SEC and have been filed separately with the SEC.


                                        9
<PAGE>


                                 comparable  quality  and  reputation,  or  (ii)
                                 Colin  Dyne,  is not  actively  involved in the
                                 People's Liberation(TM) apparel business at any
                                 time during the Term, and CR has not approved a
                                 replacement  for said person,  CR may terminate
                                 this  Agreement  upon 30  days'  prior  written
                                 notice  delivered  at any time  within 60 days'
                                 following the date any of the aforesaid persons
                                 are  no  longer  so  actively  involved  in the
                                 business.

TERMINATION:                     This  Agreement  may  be  terminated  prior  to
                                 expiration of the Term as follows:

                                 (a)  CR  may  terminate   this   Agreement  for
                                 convenience  by  delivering  written  notice of
                                 termination  between  January  1 and  June  30,
                                 2011. Such termination  would be effective,  at
                                 CR's election,  either: i) July 1, 2011, with a
                                 payment  from CR to VE of  $***(9)  as an early
                                 termination fee; or ii) December 31, 2011.

                                 (b)   This   Agreement   shall    automatically
                                 terminate thirty (30) days after written notice
                                 by one party to the other party of any material
                                 breach or default  by such  other  party in the
                                 performance  of  its  obligations   under  this
                                 Agreement,   which  notice   shall   include  a
                                 detailed  description of the breach or default,
                                 unless such  breach or default is cured  within
                                 such  thirty  (30)-day  period.  If a  material
                                 breach is timely  cured,  the  notice of breach
                                 shall be withdrawn and this Agreement shall not
                                 terminate.  Any  termination  of this Agreement
                                 resulting  from a breach or  default by a party
                                 shall not relieve such party of its obligations
                                 which accrued  prior to the  effective  date of
                                 termination.

                                 (c) VE shall have the right to  terminate  this
                                 Agreement immediately upon written notice to CR
                                 if: (i) CR asserts any ownership or proprietary
                                 interest in any of the Marks or  contests  VE's
                                 ownership rights therein,  or assists any third
                                 party in any of the foregoing activities;  (ii)
                                 CR (w) seeks  protection  under any bankruptcy,
                                 receivership,     trust     deed,     creditors
                                 arrangement,    composition    or    comparable
                                 proceeding,   or  if  any  such  proceeding  is
                                 instituted  against CR and not dismissed within
                                 sixty (60) days, (x) is declared insolvent, (y)
                                 makes  an   assignment   for  the   benefit  of
                                 creditors  or  (z)  dissolves,  is  liquidated,
                                 ceases to do business in the ordinary course or
                                 otherwise  terminates its business  operations;
                                 (iii)  a  custodian,  trustee  or  receiver  is
                                 appointed for CR and is not  discharged  within
                                 thirty (30) days; (iv) CR fails to commence the
                                 sale of Clothing included within Products on or
                                 before  ***; or (v) CR  intentionally  makes an
                                 unauthorized     material     disclosure     of
                                 confidential  information,  trade  secrets,  or
                                 materials provided to CR by VE.

                                 (d) Notwithstanding  the Assignment  provisions
                                 set  forth  below,  CR shall  have the right to
                                 terminate  this  Agreement   immediately   upon
                                 written notice to VE if: (i) a purchaser of all
                                 or   substantially   all   of   VE's   People's
                                 Liberation(TM)  apparel  business  is a  direct
                                 retail competitor of CR (A  REPRESENTATIVE  BUT
                                 NOT  EXHAUSTIVE  LISTING  OF  SUCH  COMPETITORS
                                 INCLUDES BUT IS NOT LIMITED TO:  ***);  (ii) VE
                                 (w)  seeks  protection  under  any  bankruptcy,

----------
(9)  *** Terms  represented  by this symbol are considered  confidential.  These
     confidential  terms have been omitted pursuant to a Confidential  Treatment
     Request filed with the SEC and have been filed separately with the SEC.


                                       10
<PAGE>


                                 receivership,     trust     deed,     creditors
                                 arrangement,    composition    or    comparable
                                 proceeding,   or  if  any  such  proceeding  is
                                 instituted  against VE and not dismissed within
                                 sixty (60) days, (x) is declared insolvent, (y)
                                 makes  an   assignment   for  the   benefit  of
                                 creditors  or  (z)  dissolves,  is  liquidated,
                                 ceases to do business in the ordinary course or
                                 otherwise  terminates its business  operations;
                                 (iii)  a  custodian,  trustee  or  receiver  is
                                 appointed for VE and is not  discharged  within
                                 thirty  (30)  days;   (iv)  VE's  ownership  or
                                 proprietary  interest  in any of the  Marks  is
                                 assigned   to  a  third   party   in  a  manner
                                 prohibited   by  this   Agreement;   (v)   VE's
                                 ownership or proprietary interest in any of the
                                 Marks  in  the  United  States  of  America  is
                                 validly  contested;  or (vi)  VE  intentionally
                                 makes an  unauthorized  material  disclosure of
                                 confidential  information,  trade  secrets,  or
                                 materials provided to VE by CR.

EFFECT OF EXPIRATION             CR  may  fill  and  ship  pending   orders  and
  OR TERMINATION:                consummate  all sales of Products to dispose of
                                 any remaining inventory for a period of six (6)
                                 months after  expiration or termination of this
                                 Agreement,   other  than  termination  of  this
                                 Agreement by VE following CR's uncured  breach.
                                 At the end of such  six (6)  month  period  (or
                                 immediately  upon  termination  by VE for  CR's
                                 uncured breach), any Products remaining in CR's
                                 possession  will,  at the request of VE, either
                                 be   destroyed   or  have  all  Marks   removed
                                 therefrom.

ASSIGNMENT:                      This  Agreement  is  personal  to the  parties.
                                 Neither party may assign its rights or delegate
                                 its performance hereunder, in whole or in part,
                                 without the prior written  consent of the other
                                 party, and any attempted assignment by VE or CR
                                 without  such prior  written  consent  shall be
                                 void and  shall  constitute  a  breach  by such
                                 party of its obligations hereunder.  Any change
                                 of  control  of VE or CR  shall  be  deemed  an
                                 assignment   by  VE  or  CR,   as   applicable,
                                 requiring  prior  written  consent   hereunder.
                                 Notwithstanding  the  foregoing,   (i)  VE  may
                                 assign this  Agreement to any  purchaser of all
                                 or   substantially   all   of   VE's   People's
                                 Liberation(TM)  apparel  business,  and (ii) CR
                                 may assign this  Agreement to any  purchaser of
                                 all  or  substantially  all of  CR's  Charlotte
                                 Russe(TM) retail store business. Subject to the
                                 foregoing, this Agreement shall be binding upon
                                 and inure to the benefit of the parties  hereto
                                 and  their  respective  legal  representatives,
                                 successors and assigns.

RIGHT OF FIRST REFUSAL:          During  the  Term,   VE  shall  permit  CR  the
                                 opportunity  to offer to acquire the Marks from
                                 VE prior to VE  offering  to assign  either the
                                 Marks or VE's People's  Liberation(TM)  apparel
                                 business or both (collectively,  "ASSETS") to a
                                 third party. VE shall provide written notice to
                                 CR of its willingness to divest the Assets,  or
                                 of a third party's offer to purchase the Assets
                                 from VE and the terms of said  offer.  CR shall
                                 then have  fourteen  (14) days from  receipt of
                                 said notice to submit a written  purchase offer
                                 to VE to  acquire  the  Assets  or to match the
                                 third party offer, if applicable. Thereafter VE
                                 and  CR  shall   negotiate  in  good  faith  to
                                 finalize the  acquisition  by CR of the Assets.
                                 If the  parties  are unable to reach  agreement
                                 within 60 days from VE's receipt of CR's offer,
                                 VE may entertain  third party offers to acquire
                                 the Assets.

DISCLOSURE AND PRESS             Neither  party shall issue  either  formally or
  RELEASE:                       informally a press release or public  statement
                                 regarding   this   Agreement    without   first
                                 receiving  the  approval  of the  other  party,
                                 which  approval   shall  not  be   unreasonably
                                 withheld or delayed. The parties shall use good
                                 faith efforts to issue joint public  statements


                                       11
<PAGE>


                                 when  possible.  The parties agree to keep this
                                 Agreement and its contents  confidential,  and,
                                 except as may be required by applicable  law or
                                 any  listing   agreement   with  any   national
                                 securities  exchange or quotation system,  will
                                 not issue any press release or public statement
                                 with   respect   to  this   Agreement   or  the
                                 transactions  contemplated  hereby  without the
                                 consent of the other party.  The parties  shall
                                 mutually  agree upon the  redaction  of any and
                                 all sensitive or  confidential  information  as
                                 permitted  by  law  in  the  event  that  it is
                                 necessary  to  disclose  the terms of (or file)
                                 this   Agreement,   or   substantial   portions
                                 thereof,   in  a  party's   filings   with  the
                                 Securities  and Exchange  Commission  or to any
                                 national   securities   exchange  or  quotation
                                 system.

ENTIRE AGREEMENT:                This Agreement constitutes the entire agreement
                                 between the parties with respect to the subject
                                 matter  hereof  and   supersedes  all  previous
                                 agreements,     promises,      representations,
                                 understandings,   and   negotiations,   whether
                                 written or oral.  No  modification,  amendment,
                                 supplement  to or waiver of this  Agreement  or
                                 any of its provisions shall be binding upon the
                                 parties  hereto unless made in writing and duly
                                 signed   by  both  of  the   parties   to  this
                                 Agreement.  A waiver by either  party of any of
                                 the terms or  conditions  of this  Agreement in
                                 any one  instance  shall not be deemed a waiver
                                 of such  terms  or  conditions  in the  future.

APPLICABLE LAW:                  This   Agreement   shall  be  governed  by  and
                                 construed  in  accordance  with the laws of the
                                 State of California,  United States of America,
                                 without  regard to  principles  of conflicts of
                                 laws. Any case,  controversy,  suit, action, or
                                 proceeding  arising out of, in connection with,
                                 or related to, this Agreement  shall be brought
                                 in any  Federal or State  court  located in Los
                                 Angeles County and the State of California.

BINDING AGREEMENT:               This  Agreement  shall be binding on, and shall
                                 inure to the benefit of, the parties hereto and
                                 their respective  heirs,  devisees,  successors
                                 and assigns.

FORCE MAJEURE:                   If any party to this  Agreement  is  delayed in
                                 the performance of any of its obligations under
                                 this Agreement or is prevented from  performing
                                 any such  obligations  due to  causes or events
                                 beyond   its   control,   including,    without
                                 limitation, acts of God, fire, flood, strike or
                                 other labor problem,  injunction or other legal
                                 restraint,  present or future law, governmental
                                 order,  rule or regulation,  then such delay or
                                 nonperformance  shall be  excused  and the time
                                 for  performance  thereof  shall be extended to
                                 include   the   period   of   such   delay   or
                                 non-performance.   In  any  such   event,   the
                                 non-performing  party shall be excused from any
                                 further   performance   or  observance  of  the
                                 obligation so affected only for so long as such
                                 circumstances  prevail and such party continues
                                 to  use  commercially   reasonable  efforts  to
                                 recommence performance or observance as soon as
                                 reasonably practicable.  Should non-performance
                                 continue for beyond 30  consecutive  days,  the
                                 affected  party may  terminate  this  Agreement
                                 upon 30 days' prior written notice.

MISCELLANEOUS:                   This  Agreement  may be executed in one or more
                                 counterparts,  each of which shall be deemed an
                                 original  and all  such  counterparts  together
                                 shall  constitute  one and the same  Agreement.
                                 Scanned or faxed signatures shall have the same
                                 force and effect as if in original ink.


                                       12
<PAGE>


                                 The  invalidity  or   unenforceability  of  any
                                 provision of this Agreement,  or the invalidity
                                 or  unenforceability  of any  provision of this
                                 Agreement as applied to a particular occurrence
                                 or circumstance,  shall not affect the validity
                                 or   enforceability   of  any   of  the   other
                                 provisions  of  this  Agreement  or  any  other
                                 applications  of such  provisions,  as the case
                                 may be.

                                 The  parties  hereby   covenant  and  agree  to
                                 execute and deliver  all such  documents,  make
                                 such governmental  filings,  and do or cause to
                                 be  done  all  such   acts  or  things  as  may
                                 reasonably  be necessary to complete and effect
                                 the transactions contemplated hereby.

                                 The language  used in this  Agreement  shall be
                                 deemed  to  be  the  language  chosen  by  both
                                 parties to express their mutual intent,  and no
                                 rule of strict  construction  shall be  applied
                                 against either party as drafter.

                                 The  headings  used in this  Agreement  will be
                                 used  only for the  purpose  of  reference  and
                                 shall not be deemed to govern, limit, modify or
                                 in any other manner  affect the scope,  meaning
                                 or intent of the  provisions of this  Agreement
                                 or be given any legal effect whatsoever.

                                 Any deadline in this Agreement that should fall
                                 on a Saturday,  Sunday, or U.S. federal holiday
                                 shall be deemed to be the earliest business day
                                 thereafter.

                                 This  Agreement  does not  constitute and shall
                                 not be construed as  constituting a partnership
                                 or joint venture  between VE and CR. Neither CR
                                 nor VE shall have any right to obligate or bind
                                 the other party in any manner  whatsoever,  and
                                 nothing  herein  contained  shall  give  or  is
                                 intended  to give any rights of any kind to any
                                 third persons.

                         (SIGNATURES ON FOLLOWING PAGE)


                                       13
<PAGE>


         If this letter meets with your  approval,  we request that you indicate
such  approval by  returning  the enclosed  copy of this  letter,  appropriately
signed,  whereupon it shall become our binding and enforceable  agreement.  Each
party shall be  responsible  for payment of its own expenses in connection  with
these transactions.

                                  Sincerely,

                                  VERSATILE ENTERTAINMENT, INC.



                                  By:
                                           -----------------------------------
                                           Colin Dyne
                                           Title: Chief Executive Officer



                                  PEOPLE'S LIBERATION, INC.



                                  By:
                                           -----------------------------------
                                           Colin Dyne
                                           Chief Executive Officer

AGREED TO AND ACCEPTED AS OF
THE DATE FIRST SET FORTH ABOVE:

CHARLOTTE RUSSE MERCHANDISING, INC.



By:
         -----------------------------------
         Name:
         Title:


CHARLOTTE RUSSE HOLDING, INC.



By:
         -----------------------------------
         Name:
         Title:


                                       14
<PAGE>


                                     EXHIBIT A

<TABLE>
                                     THE MARKS

<CAPTION>
============================= ====================== ======================== ==========
              MARK                 U.S. APP. NO.        APP. FILING DATE         CLASS
----------------------------- ---------------------- ------------------------ ----------
<S>                                 <C>                <C>                       <C>
Miscellaneous Design                77/619,060          November 20, 2008        14
[GRAPHIC OMITTED]
----------------------------- ---------------------- ------------------------ ----------
Miscellaneous Design                77/619,068          November 20, 2008        18
[GRAPHIC OMITTED]
----------------------------- ---------------------- ------------------------ ----------
Miscellaneous Design                77/520,632            July 11, 2008          25
[GRAPHIC OMITTED]
----------------------------- ---------------------- ------------------------ ----------
PEOPLE'S LIBERATION & Design        77/619,080          November 20, 2008        14
[GRAPHIC OMITTED]
----------------------------- ---------------------- ------------------------ ----------
PEOPLE'S LIBERATION & Design        77/619,095          November 20, 2008        18
[GRAPHIC OMITTED]
----------------------------- ---------------------- ------------------------ ----------
PEOPLE'S LIBERATION & Design        77/520,628            July 11, 2008          25
[GRAPHIC OMITTED]
----------------------------- ---------------------- ------------------------ ----------
PEOPLE'S LIBERATION                  78/786043           January 5, 2006         18
----------------------------- ---------------------- ------------------------ ----------
PEOPLE'S LIBERATION                  78/428261            June 1, 2004           25

                                [Reg. No. 3083655]     Reg. April 18, 2006]
============================= ====================== ======================== ==========
</TABLE>


<PAGE>


                              EXHIBIT A - CONTINUED


                                       URL



         REGISTRANT:
         Peoples Liberation
         150 W. Jefferson Blvd.
         Los Angeles, California 90007
         United States

         REGISTERED THROUGH:
         GoDaddy.com, Inc. (http://www.godaddy.com)

         DOMAIN NAME:
         PEOPLESLIBERATION.COM
         Created on: 01-Jun-04
         Expires on: 01-Jun-13
         Last Updated on: 13-Mar-08

         ADMINISTRATIVE CONTACT:
         Barber, Darryn - ahenderson@peopleslib.com
         Peoples Liberation
         150 W. Jefferson Blvd.
         Los Angeles, California 90007
         United States
         213.745.2123

         TECHNICAL CONTACT:
         Pandey, Samir samir.pandey@visionaire-us.com
         Visionaire
         3900 Kilroy Airport Way
         Suite 350
         Long Beach, California 90806
         United States
         562.216.7160


<PAGE>


                                    EXHIBIT B

                                 PRICING MATRIX



                                                    RETAIL
PRODUCT CATEGORY                                 PRICE RANGE
-------------------------------------            -----------

Denim................................                ***(10)
Knit Tops............................                ***
Thermal and Zip Up Hoodies...........                ***
Sweat Bottoms........................                ***
Graphic Tees.........................                ***


----------
(10) *** Terms  represented  by this symbol are considered  confidential.  These
     confidential  terms have been omitted pursuant to a Confidential  Treatment
     Request filed with the SEC and have been filed separately with the SEC.