**Exhibit 10.8****TRADEMARK LICENSE AGREEMENT**THIS AGREEMENT (hereinafter “Agreement”) is effective as of November 27, 2002 (hereinafter“Effective Date”) by and between:          Tyler Trafficante Inc., a corporation organized and existing under the laws of the State ofCalifornia, located at 2001 Saturn Street, Monterey Park, California 91755(hereinafter“LICENSOR”), and The Fashion House, Inc., a corporation organized and existing under the laws ofthe State of Delaware, located at 489 South Robertson Boulevard, Suite 205, Beverly Hills,California 90212 (hereinafter “LICENSEE”).          WHEREAS, LICENSOR is the owner of the trademark “Tyler” by Richard Tyler, and certainsimulations and variations thereof as set forth on Schedule I annexed hereto and incorporatedherein by reference (hereinafter referred to collectively as the “Marks”);          WHEREAS, LICENSEE desires to obtain a license from LICENSOR to use the Marks on theLicensed Products (as hereinafter defined) in the Territory (as hereinafter defined);          WHEREAS, LICENSEE acknowledges that the Marks and associated goodwill are of greatsignificance and value to LICENSOR and that strict adherence to the quality control standardsprovided in this Agreement is essential to the maintenance of the significance and value of theMarks and associated goodwill; and          WHEREAS, LICENSEE pledges its active cooperation in and support of LICENSOR’S marketingprograms, the spirit and intent of which are to maintain and enhance the value and significanceof the Marks throughout the world.          NOW, THEREFORE, in consideration of their mutual covenants, undertakings and promisescontained herein, and other good and valuable consideration, the receipt and adequacy of which theparties hereby acknowledge, the parties agree as follows:**1. DEFINITIONS**In this Agreement, the following terms shall have the meanings *set forth*below:          1.1 **“Competitor”**shall mean those trademarks, trade names or other identifying words orsymbols of any third party clothing designer which are used on products which are similar to theLicensed Products in category, image, quality and price points, and which are sold throughdistribution channels of the same like and kind as the
 

 
Licensed Products.          1.2 **“Inventory”**shall be any and all remaining (i.e. on hand or in stock) Licensed Productsand tangible items bearing the Marks, including but not limited to, raw material, work in process,labels, tags, etc.          1.3 **“Licensed Product(s)”**shall be women’s shoes and boots, including fashionsports shoes but expressly not including athletic shoes.          1.4 **“Net Sales”**shall mean the gross dollar amount of all sales by LICENSEE of the LicensedProducts (hereinafter **“Gross Sales” )**less the following items insofar as they are separatelystated but included in the amounts invoiced to customers: usual trade discounts actually taken,returns and allowances. No costs incurred in the manufacture, sale, distribution, advertisement,or promotion of the Licensed Products shall be deducted from Gross Sales or from any Royalty(defined below) payable to LICENSOR, except as otherwise expressly set forth herein. Local, Stateor Federal taxes of any nature whatsoever including, without limitation, tariffs, sales tax, usetaxes, value added and inventory taxes, shall not be included in Gross Sales, or deducted fromGross Sales *for*purposes of computing Net Sales. Net Sales shall include the sale ofSecondary Goods (as defined below), but shall not include the sale of samples to LICENSEE’SLicensed Product sales force.          Except as otherwise expressly set forth herein, any sales or transfers of Licensed Productsmade by LICENSEE to any person or entity that does not deal at arm’s length with LICENSEE shall becomputed, for the purpose of determining Net Sales, at an amount equal to the price at whichLICENSEE would have invoiced or charged purchasers who deal at arm’s length with LICENSEE and allRoyalties shall be paid to LICENSOR thereon.          1.5 “Notice **Address”**shall be the addresses set forth for the parties at the beginning ofthis Agreement, or such other addresses as a party may hereafter designate to the other party inwriting from time to time. At no time shall LICENSEE have a notice address outside of the UnitedStates.          1.6 **“Territory”**shall be Worldwide. Licensee will have 24 months from the effective date ofthis License Agreement to exploit the Japanese market or Licensor shall have the right to assignanother Licensee for Japan.          1.7 **“Use” (or “Used,” “Uses” or “Using”)**shall mean (1) the placement of the Marks on theLicensed Products; and (2) the use of the Marks in the broadest sense of publication, that is anyvisual and aural form which to the average person would indicate that the Licensed Products areassociated with the Marks, including, but not limited to, print media, labels, tags, point of saleand showroom
 

 
displays, signage, packaging, stationery, business cards and forms, and electronic media nowknown or hereafter devised, and the form and content of the subject matter associated with all theaforementioned; and (3) all other uses of the Marks approved by LICENSOR in writing prior to theuse.          1.8 **“Material Term”**shall include any numbered provision within the paragraphs headed“Minimums and Payment,” “Reporting, Accounting and Auditing,” and “Quality Standards,” a breach ofany of which shall be deemed “material.”          1.9 **“Advertising”**shall include expenditures made in connection with the publicpromotion, through standard media, of the Licensed Product for sale and distribution, andshall not include coop advertising and sales promotions “Advertising” shall not include anyexpense incurred in connection with the preparation and/or construction or dismantling of a boothat any trade show, or entertainment expenses.          1.10 **“Close-Out Sales”**shall mean Sales of Licensed Merchandise for less than 50% of itsregular wholesale price made to the following approved retailers: Marshall’s, T.J.Maxx,Loehman’s, Ross Stores, Syms, Daffy’s, Century 21, Filene’s Basement, and Luggage Factory Outlet,as well as to such other discount retailers as LICENSOR shall hereafter approve in its solediscretion in writing.          1.11 **“Season”**shall mean any of four seasons. Such seasons are: February (Fall), June(Resort), August(Spring), and December (Prefall).**2. TERM**          2.1 TERM: Subject to the provisions of Article 11 (Termination) herein, this Agreement shallcontinue in force for Five (5)years from the Effective Date . LICENSEE shall have the option toextend the term of this Agreement for an additional period of Two (2) years provided: (i)LICENSEE is in full compliance with all the terms and conditions of this Agreement immediatelyprior to the exercise of the option to renew, and (ii) LICENSEE gives LICENSOR notice of itsdesire to renew at least six (6) months prior to the end of the Initial Term, and Unlessotherwise agreed to by written amendment, the Option Term, if any, shall be upon the same termsand conditions as provided for in this Agreement, excepting there shall be no further extensionof the Initial Term without mutual agreement of the parties. Should LICENSOR at any time exerciseits right under this Agreement to terminate the rights of LICENSEE, all options to extend theterm shall likewise be terminated.          2.2 LICENSED TERM, YEAR, AND QUARTER DEFINED: The Initial Term, Option Term, if any, and theWinding-Up Period (defined below), if any, shall collectively be referred to as the **“LicensedTerm”**or **“Term.”**The quarters of the Term shall be every three (3) month period.
 

 
**3. GRANT OF LICENSE**          3.1 LICENSE: Subject to the provisions of this Agreement, LICENSOR grants to LICENSEE, andLICENSEE accepts, an exclusive, nontransferable license to Use the Marks in the Territory only asspecifically provided for in this Agreement including, but not limited to, the right to produce,sell and distribute the Licensed Products (hereinafter **“License”).**          3.2 BEST EFFORTS: During the Licensed Term, LICENSEE shall use its best efforts to exploit theLicense granted herein throughout the Territory, including, but not limited to, offering for saleLicensed Products so that they may be sold to the consumer on a timely basis; coordinating thecharacteristics and marketing of its Licensed Products with the products of LICENSOR’S otherlicensees; cooperating with LICENSOR and its licensees’ marketing and sales programs; and offeringa collection of the Licensed Products for sale in the Territory at all times foreach and every season.          3.3 ADDITIONAL RIGHTS TO LICENSE:          (A) LICENSEE acknowledges that LICENSOR has previously licensed the use or Use of the Marksin connection with products other than the Licensed Products to third parties and that LICENSORshall grant additional licenses in the future for territories or products that are not presentlylicensedand that are not within the scope of this License.          (B) For the purpose of this Section 3.3(B), when the term “LICENSEES” or “Licensees” is used,it is intended that said terms mean the whole or part of the whole group of all of LICENSOR’Slicensees, which includes LICENSEE. LICENSEE hereby acknowledges that, due to the nature of theindustry, precise definition of the scope of goods covered as Licensed Product is sometimes notpossible. LICENSEE therefore agrees to accept at all times the sole judgment of LICENSOR withrespect to whether a particular style, design or product is a Licensed Product within the scope ofthe License. LICENSEE agrees that it will not market, either directly or indirectly, any style,design or product which LICENSOR, in its sole discretion, determines is not a Licensed Productwithin the scope of the License. LICENSEE further agrees that in the event of a dispute between anyof the Licensees arising out of or based upon a claim that a product being manufactured *orsold*as *a Licensed*Product by one “Licensee” infringes *upon*the license*granted*by LICENSOR to another “Licensee,” regardless of the legal grounds upon which thecause of action or claim is based, LICENSOR shall reasonably and consistent with the terms andspirit of this License investigate the claim and LICENSEE shall cooperate in all respects with saidinvestigation. LICENSOR shall then submit to any affected Licensee a written determination, whichmay include a procedure for mitigating any losses that might occur.
 

 
Said determination and procedure shall be conclusive as to all parties including LICENSEE, andall shall be bound thereby without legal recourse.          3.4 OPTION: In the event Licensor decides to License Men’s footwear Licensor shalladvise Licensee in writing of pending negotiations with a third party. Licensee shall comeup with an acceptable proposal. If an agreement cannot be reached within 30 days, Licensorshall have the right to enter into License for men’s shoes with a 3rdparty.**4. MINIMUMS AND PAYMENT**          4.1 MINIMUM SALES VOLUMES: If LICENSEE’S Net Sales in the Territory do not reach thefollowing dollar volume levels for each Year of the Licensed Term (hereinafter “Minimum SalesVolumes”), then LICENSOR shall have the right, but not the obligation, toterminate this Agreement:The Minimum Sales Volume shall be the greater of those figures established below or 75% of theaverage of the actual sales for the preceding two years.         Year One: (2003) $1,500,000     (Adjusted for August) $750,000     Year Two: (2004) $1,875,000     Year Three: (2005) $2,345,000     Year Four: (2006) $2,930,000     Year Five: (2007) $3,662,500  Option TermsYear Six: (2008) $4,578,000     Year Seven: (2009) $5,722,600               Notwithstanding the preceding, LICENSEE may avoid termination of this Agreement for failureto meet the Minimum Sales Volumes in a given Year by paying the GMTR due for that Year asdefined below in Sections 4.2 and 4.3.          4.2 TRADEMARK ROYALTY:          (A) As a royalty, LICENSEE shall pay to LICENSOR a sum equal to seven percent (7%) of NetSales of the Licensed Products, except, as set forth in Paragraph 4.4 herein below, theTrademark Royalty on Close-out goods shall be three percent (3%) (hereinafter **“TrademarkRoyalty”)**on a quarterly basis no later than the twentieth (20th) day of the month immediatelyfollowing the quarter in which said
 

 
Net Sales are made.(B) GUARANTEED MINIMUM TRADEMARK ROYALTY: Whether or not LICENSEE achieves the required MinimumSales Volumes, LICENSEE shall pay to LICENSOR (as set forth in 4.2(C) below) the greater ofeither the Trademark Royalty or the Guaranteed *Minimum*Trademark Royalty (hereinafter “GMTR”) asfollows:     The Minimum Trademark Royalty shall be the greater of those figures established below or75% of the average of the actual Royalty for the preceding two years.         Year One: (2003) $105,000     (Adjusted for August) $52,500  (Only two collections)Year Two: (2004) $131,250     Year Three: (2005) $164,150     Year Four: (2006) $205,100     Year Five: (2007) $256,375              Option Terms        Year Six: (2008) $320,460     Year Seven: (2009) $400,580               (C) Subject to the provisions of paragraph 4.5 below, the GMTR shall be paid in two equalpayments for each year (on Feb.1 st and July 1st), with the exception of Year One where one paymentof $26,250 shall be made on July 1, 2003, and a second payment of *$26,250*shall be paidon December 1, 2003.          (D) All royalty payments (whether Trademark Royalty. Advertising Payment, or GMTR, hereincollectively referred to as **“Royalty” or “Royalties”)**shall be sent to Licensor via overnightcourier together with the Quarterly Report, defined hereinbelow, and shall be paid automaticallyby LICENSEE without billing therefor by LICENSOR.          (E) LICENSOR shall have the right to purchase such styles and quantities of Licensed Productfor its wholly owned retail stores as it desires. LICENSOR’S cost for all such purchases shall bediscounted Twenty Percent (20%) from LICENSEE’S regular wholesale prices. No royalty shall be dueto LICENSOR on such sales such sales do not count toward minimum sales volume. Notwithstandinganything to the contrary contained herein, LICENSOR shall have no obligation to purchase or sellany Licensed Product.          4.3 ADVERTISING EXPENDITURE: LICENSEE must spend, at a minimum, three percent (3%) of NetSales on advertising and/or public relations related to the Licensed Products **(“AdvertisingFunds”).**LICENSEE shall arrange for at least one print advertisement for the Licensed Products in aprestigious magazine with national distribution such as Glamour, Cosmopolitan, Elle, WWD, orMademoiselle annually during the Term. For the first year of the Term, LICENSEE shall spend atleast Forty five
 

 
Thousand ($45,000) Dollars as Advertising Funds. All Advertising Funds shall be in addition toall other payments due LICENSOR hereunder. LICENSOR shall have the right to approve all copy,layout and artwork of all advertisements placed by LICENSEE for the Licensed Products. LICENSEEshall forward copies to LICENSOR sufficiently in advance of the date of use for LICENSOR to review.In no event will any advertising or promotional piece for the Licensed Products be disseminated orutilized by LICENSEE without LICENSOR’ S advance written approval. Any earned advertisingpercentage not spent during the year shall be paid directly to Licensor.          4.4 CLOSE-OUT SALES (Royalty): The reduced Trademark Royalty on Close-Outs shall be threepercent (3%). Licensee is only entitled to these reduced royalty rates on a maximum of twentypercent (20%) of Gross Sales per Year of the Licensed Term. On sales of Close-Outs in excess ofthis twenty percent (20%) limit, LICENSEE, shall pay the standard Trademark Royalty percentages asset forth in Section 4.2 above.          Each quarter LICENSEE shall provide LICENSOR with an accounting of the sales of Close-Outson the Quarterly Report for said quarter. If any such accounting reveals that LICENSEE has paidthe reduced royalty on more than twenty percent (20%) of Gross Sales from the beginning of thatYear through the end of the relevant quarter, LICENSEE shall immediately pay to LICENSOR theamount of the calculated underpayment of Royalty. Should any such payment result (as of the endof any Year) in an overpayment of Royalty by LICENSEE, LICENSOR shall credit the overpayment toLICENSEE against the next Royalty payment due.          4.5 ADVANCE TRADEMARK ROYALTY: In addition to all other payments required hereunder,LICENSEE, shall pay to LICENSOR, an advance Trademark Royalty (hereinafter “Advance TrademarkRoyalty”). This Advance Trademark Royalty shall be creditedagainst the GMTR due for the year of the Initial Term. The balance of the GMTR shall be paid inaccordance with the provisions of paragraph 4.2(c) above.**5. REPORTING, ACCOUNTING AND AUDITING**          5.1 QUARTERLY REPORTS: No later than the twentieth (20th) day of the month immediatelyfollowing each quarter of the Licensed Term, LICENSEE shall submit to LICENSOR a written report ona form provided by LICENSOR (see Exhibit A) from time to time which shall include a writtenstatement of LICENSEE’S inventory and Net Sales during such quarterly period showing the numberand type of Net Sales of each Licensed Product, a calculation of the Royalty due based thereon,and all other information requested by LICENSOR in this Agreement or Exhibit A (hereinafter**“Quarterly Report”).**Each Quarterly Report shall be accompanied by the remittance to LICENSOR ofthe Royalties shown to be due on the report, shall be sent via overnight courier, and shall becertified as correct by the Chief Executive Officer or Chief Financial Officer of LICENSEE or suchother officers or employees of
 

 
LICENSEE as shall be designated by LICENSOR. In the event of an inquiry by LICENSOR regardingany such report, LICENSEE shall comply promptly with LICENSOR’S reasonable request for informationin the manner requested. Within twenty (20) days after any expiration or termination of thisAgreement, LICENSEE shall provide LICENSOR a Quarterly Report for the last whole or partialquarterly period during the Term, and LICENSEE shall continue to submit such reports and allRoyalty payment obligations to LICENSOR within twenty (20) days following each thirty (30) dayperiod during the Winding Up Period, if any.          5.2 LATE PAYMENTS: It is specifically understood by LICENSEE that, with respect to royaltypayments and accounting statements, time is of the essence and any payment due pursuant to thisAgreement (including, but not limited to all Royalties, trade show bills, and other bills forexpenses or services agreed upon by LICENSEE, etc.), that is late shall bear interest from seven(7) days after the date that notice of payment default is received from LICENSOR, unless the sameis cured within the seven (7) day period, until remittance thereof to LICENSOR at the prime rateof interest established by EAB — European American Bank of New York, New York, from time to timeduring said period, plus two percent (2%) per annum or the highest rate allowed by law, which isgreater. The operation of this clause is without prejudice to any other right or remedy LICENSORmay have pursuant to the terms of this Agreement or the law. LICENSEE shall not set off anyamounts against any payment of its Royalties or bills due LICENSOR unless agreed in writing byLICENSOR prior thereto.          5.3 PAYMENT DEFAULT: The acceptance of late payments hereunder, or the acceptance of paymentwithout a Quarterly Report or with an incomplete or incorrect Quarterly Report, or any restrictiveendorsement (I) shall not constitute a waiver of timely payments, (2) shall not cure any defaultwhich might exist, and (3) shall be without prejudice to any of the rights or remedies LICENSOR mayhave hereunder.          In the event that a default is declared and the rights of LICENSEE under this Agreement areterminated, all payments required hereunder, including, but not limited to, Trademark Royalty andAdvertising Payments on past sales, and all GMTR for the Licensed Term, unpaid bills, etc., shallbe immediately due and payable to LICENSOR, in full, plus any interestdue thereon at the rate prescribed in 5.2 above.          5.4 PROPER BOOKS AND RECORDS: LICENSEE shall maintain separate and appropriate booksof account or computer records relating to the Licensed Products, in accordance withgenerally accepted accounting principles (including, without limitation, a sales journal,sales return journal, cash receipt book, general ledger, and to the extent reasonablyavailable, purchase orders, cutting tickets, and Inventory records) and shall makeaccurate entries concerning all transactions relevant to this Agreement. The LicensedProducts shall be assigned unique style numbers which shall be identical to the stylenumbers utilized to identify each respective Licensed Product in all Licensee’s books andrecords and computer records, and on all sales invoices
 

 
and related documents. LICENSEE’S books and records shall at all times during theLicensed Term and for three years (3) thereafter (or in the event of a dispute betweenthe parties hereto, until three (3) years after said dispute is resolved, whichever islater) be kept at LICENSEE’S Notice Address. LICENSEE shall not change the address atwhich the books and records are kept without prior written notice to LICENSOR.          5.5 ANNUAL FINANCIAL STATEMENTS: No later than one hundred and twenty (120) daysafter each December 31st during the Term, LICENSEE shall furnish LICENSOR with its auditedannual financial statements (if they are prepared in its ordinary course of business)prepared in accordance with generally accepted accounting principles consistently applied.In the event an audited statement is not prepared by LICENSEE, LICENSEE shall furnishLICENSOR within ninety (90) days after LICENSEE’S fiscal year end with its unauditedfinancial statements, reviewed by an independent certified public accountant and certifiedto be correct by the Chief Executive Officer and Chief Financial Officer of LICENSEE or bysuch other officers or employees of LICENSEE as LICENSOR shall designate.          5.6 RIGHT TO AUDIT: Upon not less than ten (10) day’s notice to LICENSEE, LICENSOR,at its expense, shall have the right during the Licensed Term and for three (3) yearsthereafter at any time during regular business hours, not more frequently than one timeannually,. to have a qualified accountant selected by LICENSOR audit the records ofLICENSEE to the extent necessary to verify LICENSEE’S statements and payments ofRoyalties, including the right to examine, photocopy and make extracts from such records.Such records shall be made available to LICENSOR’S accountant at LICENSEE’S NoticeAddress stated above. LICENSEE shall cooperate with and assist LICENSOR’S accountant forthe purpose of facilitating such audit. The provisions of this paragraph shall survivethe termination or expiration of this Agreement.          If, as a result of such audit, LICENSOR’S accountant determines that the amount ofRoyalties due was greater than the amount reported by LICENSEE in any Quarterly Reportfurnished pursuant to Section 5. 1, LICENSOR shall promptly furnish to LICENSEE a copy ofthe report of its accountant setting forth the amount of the deficiency showing, inreasonable detail, the basis upon which such deficiency was determined. LICENSEE shallpromptly remit to LICENSOR a sum equal to such deficiency, together with interest thereonat the rate prescribed in Section 5.2 from the date such Royalty was due until the dateof such remittance. In addition, if the audit reveals underpayment by more than threepercent (3%) of the Royalties in any quarterly period, LICENSEE shall pay to LICENSORthe cost of such audit.          If, as a result of such audit, LICENSOR’S accountant determines
 

 
that the amount of Royalties paid was greater than the amount actually due, suchoverpayment will be promptly refunded to LICENSEE.          5.7 PAYMENT CURRENCY: All calculations and payments required under this Agreementshall be in United States Dollars.**6. QUALITY STANDARDS**          6.1 QUALITY STANDARDS: LICENSEE acknowledges that the continued maintenance of thegreat significance and value of the Marks and their associated goodwill, the continuedmaintenance of LICENSOR’S quality standards, and the merchandising and coordination of theproducts associated with the Marks are all essential elements of the License grantedherein. LICENSEE agrees that the nature and quality of all Uses of the Marks by LICENSEEshall conform to standards set by, and be under the control of, LICENSOR. All Uses, andany later permitted use as set forth in Section 1.7 above, shall require the prior writtenconsent of LICENSOR. (See Approval Procedure Section 6.2 below).          The Marks shall be used only in the form set forth in Schedule 1. Upon writtennotice, LICENSOR may change, at its sole discretion, such approved form of the Marks.LICENSEE shall comply with said change as soon as all remaining Inventory and anyInventory contracted for prior to such notice are Used in connection with the LicensedProducts, but in no event shall they be Used beyond six (6) months from the date ofnotice. This Agreement shall automatically apply to such later developed trademarkswhich, at the sole option of LICENSOR, are specifically instructed for a Use by LICENSEE.The term “Mark” as used in this Agreement is intended to include all such later developedtrademarks which LICENSEE has been instructed to Use under the terms of this Section. The“Showing” shoes shall be provided free of charge to LICENSOR four (4) times per year asfollows: February (Fall) and August (Spring) not exceeding (80) pairs for *each*collection; June (Resort) *and*December (Prefall) not exceeding (30) pairsfor each collection. Shoes shall be in sizes 7 1/2 to 11 to fit models          6.2 APPROVAL PROCEDURE: Before offering for sale any product LICENSEE intends tooffer as a Licensed Product, and before committing to a Use of the Marks, LICENSEEshall obtain LICENSOR’S prior written approval of such product and/or Use. The LicensedProduct and Marks Use approval process is critical to the License granted herein, andmust be strictly adhered to at all times by LICENSEE. Once LICENSOR has approved anyLicensed Product or Use, the approval shall remain in effect unless LICENSOR notifiesLICENSEE to the contrary in writing. LICENSOR shall notify LICENSEE of its approval ordisapproval within five (5) business days after its receipt of a product.          6.3 MAINTENANCE OF AND CONTINUED QUALITY CONTROL:
 

 
          (A) LICENSEE agrees to cooperate with LICENSOR in facilitating LICENSOR’S control ofthe nature and quality of the Licensed Products, to permit reasonable, periodic inspectionof LICENSEE’S operations, at reasonable times and with reasonable notice, and to supplyLICENSOR with specimens of all Uses of the Marks as set forth in this Agreement, andupon request of LICENSOR. LICENSEE shall provide LICENSOR, when and if requested for the purpose ofquality control or for investigating an issue involving the Marks, with the name, address,telephone number and name of principals of any plants, factories or other manufacturing facilitiesof any third party (hereinafter **“Third Party Facility”),**and any symbol or number a Third PartyFacility may use or be required to use to identify itself as a source of goods. In the event theLicensed Products or components thereof are manufactured or displayed other than by LICENSEE,LICENSEE shall at all times obtain compliance with this Article 6.          (B) In Order for LICENSOR to determine and assure itself that LICENSEE is maintaining thequality control standards set forth by LICENSOR by manufacturing the Licensed Products inaccordance with the samples approved by LICENSOR as per the approval procedure set forth in 6.2above, within ten (10) business days after the commencement of each Licensed Product’s firstproduction run, LICENSEE shall deliver to LICENSOR not less than one (1) pair of each firstproduction run of Licensed Product without charge. LICENSEE shall also deliver to LICENSOR,promptly upon LICENSOR’S request from time to time, but not more than four (4) times per year, areasonable amount of specific Licensed Products without charge for quality control checking. Ifat any time, LICENSOR reasonably determines, in its sole discretion, that a Licensed Product isof lesser quality than the sample approved pursuant to Section 6.2 above, LICENSOR shall giveLICENSEE written notice thereof, setting forth specifically the elements of variation in qualityand reasons for disapproval. LICENSEE shall immediately cease production and distribution of thatLicensed Product until its quality is improved to the sole reasonable satisfaction of LICENSOR;however, in no case shall LICENSEE have longer than thirty (30) days to cure said defect.Repeated failures by LICENSEE, after notice, to correct a recurring Licensed Product defect,shall constitute cause for immediate termination of this Agreement by LICENSOR with no right tocure by LICENSEE.          (C) In the event that the standard, style, appearance or quality of any Licensed Productceases to be acceptable to Licensor, Licensor shall have the right, exercisable in its reasonablediscretion, to withdraw its approval of such Licensed Products. Within thirty (30) days of receiptof written notice from Licensor of its determination to withdraw such approval, Licensee shalleither correct the deficiencies in the Licensed Products to the satisfaction of Licensor orimmediately cease the use of the Mark(s) in connection with the manufacture, distribution, sale,marketing, advertising, merchandising, publicity and promotion of such Licensed Products exceptthat work in process may be completed and finished inventory may be sold to customers. Uponrequest, Licensee shall provide Licensor with a list of all work in progress and all completedinventories related to such Licensed Products. Licensor’s election to withdraw approval from anyor all Licensed Products shall not relieve Licensee from its obligation
 

 
to pay royalties on any Sales of such Licensed Products theretofore or thereafter made, aspermitted herein.          6.4 SECONDARY GOODS: LICENSEE shall not market any of the Licensed Products as seconds orirregulars (“Secondary Goods”): (a) unless such Secondary Goods do not constitute, during anyfour (4) consecutive Quarterly Periods, in excess of five percent (5%) of the total volume ofLicensee’s production of the Licensed Products during such Quarterly Periods; or (b) unless theMark(s) are obliterated or rendered illegible to the reasonable satisfaction and approval ofLICENSOR, which approval must be in writing; or (c) unless LICENSOR otherwise specificallyauthorizes LICENSEE to sell such Secondary Goods with the Mark(s) thereon, strictlyin compliance with LICENSOR’S instructions. Notwithstanding LICENSEE’S sale of suchproducts, such sales shall be deemed Net Sales and entitle LICENSOR to the paymentof the Percentage Royalty related thereto.          6.5 COMPLIANCE WITH LAWS: Any and all Uses and manufacture of the Licensed Productsshall be in compliance with all necessary governmental approvals and all applicable laws,rules and regulations, including, but not limited to, Title 29, section 212 of the UnitedStates Code and the Magnuson-Moss Warranty Act as to express and implied warranties.LICENSEE shall pretest all proposed and approved Licensed Products and shall causetruthful labeling regarding care, maintenance, and use to be affixed to the LicensedProducts, along with any *other*disclosures required by law or reasonably required byLICENSOR (including, but not limited to, copyright and trademark ownership notices whichshall be included with any Use of the Marks at all times, the legend “Manufactured by[name of LICENSEE] under license from Tyler by Richard Tyler” on all Licensed Products[hangtags, labels or packaging as appropriate] to disclose the relationship established bythis Agreement, and any legally required Magnuson-Moss warranty notices clearlyidentifying LICENSEE as responsible for the warranty). LICENSEE shall immediately informLICENSOR in writing of any material complaint by any consumer or governmental bodyrelevant to the Licensed Products, and the status and resolution thereof. LICENSEE shallmove expeditiously to resolve any such complaint.          6.6 PRODUCTION/IMPORTATION:          (A) Licensed Products may only be manufactured by LICENSEE at a facility it does notown or lease if and only if it notifies LICENSOR that such third-party manufacturer shallbe retained, and further submits to LICENSOR such information, specifications and samplesas LICENSOR requests. LICENSOR reserves the right to reject, in the exercise of itsreasonable discretion, any such third-party manufacturer, and may impose reasonableinspection and supervision fees on approved manufacturers to cover
 

 
LICENSOR’S costs incurred in making such determination. Such inspection andsupervision fees shall be paid by LICENSEE.          (B) LICENSOR may demand that LICENSEE impose reasonable restrictions on suchthird-party manufacturers manufacture of products relating to the Mark(s)s and/or designsprovided by the LICENSOR, including, but not limited to, having such manufacturers andtheir key production managers execute confidentiality and anti-pirating agreements inconnection with same.          (C) Any Licensed Product caused to be manufactured by LICENSEE outside the UnitedStates shall be imported into the United States under the name of LICENSEE and onlyLICENSEE. Any and all Licensed Products imported under a name other than that of LICENSEEshall be deemed counterfeit by LICENSOR and LICENSEE, and may be so represented to U.S.Customs Service and prosecuted accordingly.          In order to prevent the importation of counterfeit merchandise, LICENSEE shall use acustoms broker for all Licensed Merchandise imported under this Agreement. LICENSEE shallpromptly notify LICENSOR of the identity of each such customs broker as LICENSEE shalluse from time to time during the Term for Licensed Merchandise imported hereunder.LICENSOR shall not be liable for any acts *of*or transactions with said *broker.*          LICENSEE agrees that it will not engage in “unlawful transshipment” of merchandise,as that term is defined by the U.S. Customs Service, or utilize manufacturers that engagein such “unlawful transshipment.” LICENSEE further agrees that all merchandisemanufactured outside the United States will have labels permanently affixed thereto thatreflect the actual “country of origin” as that term is defined by the U.S. Custom Service.          6.7 ALL APPROVALS SEASONAL: LICENSOR’S approval of any materials for use inconnection with the manufacture, distribution, sale, marketing, advertising,merchandising, publicity and promotion of any particular Season’s Licensed Products shallconstitute approval for such use in connection with such Season unless LICENSOR notifiesLICENSEE to the *contrary*in writing.          6.8 LICENSEE acknowledges and agrees that although LICENSOR may conduct reviews ofvarious items for LICENSEE, including, without limitation, Licensed Products, prototypesor samples and may make various recommendations to LICENSEE, regardless of whether suchreviews or recommendations are required or voluntary under the terms of this Agreement,LICENSOR shall have no responsibility or liability for the operation of LICENSEE’Sbusiness or its manufacturing, distribution, sales or facilities used in connectiontherewith. Nor shall LICENSOR’S approval of any Prototype, Final
 

 
Prototype, Packaging or artwork be construed to mean the LICENSOR has determined thatthe sample or artwork conforms to the laws or regulations of any jurisdiction, or that itis not in conflict with any other licensed articles and Licensor shall not bear anyliability for such approval.7. **THE MARKS**          7.1 OWNERSHIP RIGHTS DEFINED: LICENSEE acknowledges the ownership of the Marks byLICENSOR, agrees that it will do nothing inconsistent with such ownership, and that allUse (and any other use thereof) of the Marks by LICENSEE and all good will developed therefrom shall inure to the benefit of and be on behalf of LICENSOR. LICENSEE agrees thatnothing in this Agreement shall give LICENSEE any right, title, or interest in the Marksother than the right to Use the Marks in accordance with this Agreement and LICENSEEagrees that it will not attack the title of LICENSOR to the Marks, the validity of theMarks, any rights of LICENSOR that may have arisen from this Agreement, or the validity ofthis Agreement.          LICENSOR has the right to use any Licensed Product designed and used by LICENSEEand/or LICENSOR as part of LICENSEE’S obligation under this Agreement in any mannerLICENSOR may deem beneficial to the exploitation of the Marks anywhere in the world,including, but not limited to, the production, sale and distribution of the LicensedProducts through a third party contractor or a new licensee, should this License expireor terminate for any reason (with no right to a Winding-Up Period) prior to thefulfillment of any outstanding orders or as otherwise necessary to protect the reputationand goodwill of the Marks. LICENSEE shall be entitled to reimbursement for actualout-of-pocket expenses associated with the duplication of art work, designs, patterns,etc. developed by LICENSEE (which shall be duplicated and forwarded to LICENSOR promptlyafter requested by LICENSOR) for use as set forth in this paragraph.          7.2 COPYRIGHT NOTICES: LICENSOR shall be deemed the author, with the right but not theobligation in its sole discretion, to register a claim to any copyright within an art work or awriting that is developed by LICENSEE as part of the obligations of LICENSEE toward the LicensedProducts. LICENSEE agrees that all such copyrighted artwork and writings are a work for hire, andshall be protected as the sole and exclusive property of LICENSOR. In the event any such artworkand writings are deemed to not be works for hire, LICENSEE hereby assigns all copyright rights inand to the artwork and writings to LICENSOR. LICENSEE agrees to execute such documents as may berequested by LICENSOR to give effect to this provision. LICENSEE shall place a legally sufficientcopyright notice which protects the rights of LICENSOR on each and every design, style, garment,creation or writing which is capable of protection pursuant to the copyright laws of the UnitedStates of America. Any public distribution of goods bearing copyrightable works of LICENSOR byLICENSEE without a copyright
 

 
notice as required above, if not authorized, is a violation of this Agreement.          7.3 CONFIRMATION OF OWNERSHIP: Whenever requested by LICENSOR, whether during the LicensedTerm or thereafter, LICENSEE shall execute such documents or applications as LICENSOR may deemnecessary to confirm LICENSOR’S ownership of all their rights, to maintain the validity of theMarks and the copyright(s) referred to above in Section 7.2, and to obtain, or maintain anyregistration thereof.          7.4 LABELS/PACKAGING: All Licensed Products shall contain a label, hangtag and/or packaging(hereinafter c collectively “labeling” or “label(s)”) as designated by LICENSOR from time totime. LICENSEE understands the importance of maintaining the security and integrity of alltrademarked labeling used on the Licensed Products, and LICENSEE agrees to use its best effortsto maintain, and to require any subcontractors to maintain, a strict, accurate and currentinventory of all labels throughout the manufacturing process of the Licensed Products so as topreclude any diversion of the labels, and, if any such diversion occurs, LICENSEE agrees tonotify LICENSOR in writing immediately upon discovery thereof          7.5 TRADEMARK REGISTRATION: In the event the Territory includes countries in which one ormore of the Marks has not yet been registered, LICENSOR has the right, but not the obligation, toobtain trademark registration *of any of the*Marks in such countries. LICENSOR makes norepresentation or warranty that the Marks will be registered or are registerable in theTerritory, and the failure to obtain or maintain registrations thereof shall not be deemed abreach hereof by LICENSOR.**8. MARKETING AND DISTRIBUTION**          8.1 PARTICIPATION PLEDGED: LICENSEE acknowledges that the marketing programs that may bedeveloped by or for LICENSOR are for the benefit of all licensees of the Marks, and LICENSEE’Scooperation and support thereof are an integral part of such program and this Agreement.Therefore, LICENSEE pledges its direct and active support of all licensee meetings and anymarketing program LICENSOR may develop, including, without limitation, participation in salespresentations and fashion shows, presentations and distributions to the various media, specialevents and special promotions by the timely giving of Licensed Products, direct assistance, salesand other relevant information.          8.2 MARKETING, WHOLESALE & SHIPMENT POLICY: LICENSEE acknowledges that the availability andselection of product, styles, fabrication, quality, colors and sizes of the Licensed Products (asthe case may be depending on the category of Licensed Product) are an integral part of the highreputation and value which the trade and consumers have come to associate with the Marks. Tofurther protect that reputation and value, LICENSEE agrees that its policy of sale, distribution,and exploitation shall be of the high standard established by LICENSOR from time to time in itssole discretion reasonably applied (see the Licensee Guidelines), and any variance from suchstandards
 

 
shall be only upon the prior written approval of LICENSOR or when necessary to comply with anyapplicable law, rule or regulation with prior written notice thereof to LICENSOR. LICENSEE herebyacknowledges that the timely shipment of all Licensed Products approved for shipment to a customeris a critical element of this License, and LICENSEE agrees that it will use high diligence totimely ship all such orders.          LICENSEE shall not sell the Licensed Products to any person or entity LICENSEE knows, shouldhave known, or had reason to believe would sell them outside the Territory.          8.3 DISTRIBUTION: LICENSEE’S distribution shall be solely to retail outlets to which LICENSORand other of LICENSOR’S licensees sell products bearing the Mark(s) and to such specialty shops,department stores and other retail outlets dealing in products similar in quality to the LicensedProducts and where operations are consistent with the standards of quality, taste and prestigeassociated with the Mark(s). The Licensed Merchandise shall be sold by LICENSEE only at wholesaleand at wholesale prices. LICENSEE shall not (i) subject to Section 4.4, sell or distribute anyLicensed Merchandise to discounters, wholesalers, jobbers, diverters, or any other entity whichdoes not sell at retail exclusively, or (ii) sell the Licensed Merchandise directly to the publicin retail stores, catalogs or otherwise unless LICENSEE submits a proposal to LICENSOR outliningits plans for the development of such a business and LICENSOR approves, in the exercise of itssole discretion, such proposal. Within thirty (30) days after the execution of this Agreement,LICENSEE shall provide LICENSOR with a list of its customers for the Licensed Merchandise.LICENSEE shall submit all changes in its customer list with the regular *statement*of royalties ormore frequently if needed. LICENSOR shall have the right to disapprove all or any portion of suchlist. LICENSEE shall not sell Licensed Merchandise to any customer without first obtainingcurrently effective approval from LICENSOR.          8.4 SAMPLES FOR SALES FORCE: Prior to the showing of a new line, and subsequent to Useapprovals (see Section 6.2), LICENSEE shall furnish to its Licensed Product sales forcesufficient samples of the Licensed Products for their use in selling said product and for thedisplay of said Licensed Products at trade shows and showrooms. At the same time and at no cost,LICENSEE shall give LICENSOR three complete lines of the Licensed Products for display at itsshowroom along with all other products bearing the Marks and as otherwise determined byLICENSOR, and shall provide a reasonable quantity of Licensed Product for the use of any publicrelations or advertising firm or individual hired to promote said Licensed Products and/or theMarks through editorials, advertising and the like, also at no cost to LICENSOR.          8.5 MERCHANDISER/DESIGNER: LICENSEE shall provide, at its own. expense, a full time orpart time (as is necessary) employee or independent contractor qualified toact as a designer, merchandiser and/or production/sample coordinator (or the equivalent
 

 
as the case may be depending on the Licensed Product category) with respect to the LicensedProducts. This employee shall devote the necessary amount of his/her working time on thedevelopment and coordination of the line in conjunction with the merchandising staff of LICENSOR.          8.6 APPEARANCE OF ONE PRODUCT LINE: LICENSEE acknowledges that to the extent reasonablypossible and prudent LICENSOR and its merchandiser/designers/production coordinators will attemptto make the product lines of all licensees of the Marks coherent and consistent and appear to bethe product of one company. LICENSEE agrees to reasonably cooperate with LICENSOR in thisendeavor.**9. INFRINGEMENT**          LICENSEE shall notify LICENSOR promptly of any actual or threatened infringements, imitations,or unauthorized use of the Marks by third parties of which LICENSEE becomes aware. LICENSOR shallhave the sole right, at its expense, to bring any action on account of any such infringements,imitations or unauthorized use, and LICENSEE shall cooperate with LICENSOR, at LICENSOR’S expense,as LICENSOR may reasonably request, in connection with any such action brought by LICENSOR.LICENSOR shall retain any and all damages, settlement and/or compensation paid in connection withany such action brought by LICENSOR. In no event shall LICENSOR be responsible to LICENSEE for anydamages that may result from said infringement(s), subject to Section 10. 1 hereof(Indemnification). Notwithstanding anything to the contrary contained herein, in the event LICENSORfails or refuses to commence an action on account of any infringements, imitations or unauthorizeduse of the Marks, LICENSEE shall have the right to do so after advance written notice of its intentto LICENSOR. In such event, LICENSEE shall pay all costs and expenses incurred by it in connectionwith such action, and shall retain any and all damages, settlement and/or compensation paid inconnection with any such action brought by LICENSEE. Notwithstanding the preceding, in no eventwill LICENSEE enter into any settlement without the express prior written approval of LICENSOR,which approval it may grant or withhold in its sole discretion. No costs or expenses incurred byLICENSEE in any such action shall be deducted from or offset against the Royalties otherwise doLICENSOR. In the event LICENSEE requests that LICENSOR cooperate in any such action, LICENSOR willdo so at the sole cost and expense, including counsel of LICENSOR’S own choosing, of LICENSEE. Inno event shall LICENSOR be responsible to LICENSEE for any damages that may result from saidinfringement(s),**10.** **INSURANCE AND INDEMNIFICATION**          10.1 INDEMNIFICATION :
 

 
          (A) LICENSEE hereby indemnifies and holds LICENSOR, its successors and assigns, and anyentity owning or controlling LICENSOR and its owners, officers, directors, employees, agents andrepresentatives (hereinafter individually or collectively referred to as “Licensor Corporate”)harmless from and against any and all liabilities, claims, causes of action, suits, damages,including without limitation, suits for personal injury or death of third parties, and expenses,including reasonable attorneys’ fees and expenses, for which LICENSOR or Licensor Corporate may become liable or may incur or be compelled to pay as a result of (i) LICENSEE’Sperformance of (or its failure to perform) its obligations or responsibilities hereunder, or (ii)LICENSEE’S breach of any of its covenants, representations and warranties under this Agreement, or(iii) any claim based upon allegations of negligence or strict liability which are attributable toany act of LICENSEE, or (iv) claims of infringement of any intellectual property right that wouldnot be included under Section 10. 1 (B) below. In the event there is a claim against LICENSOR forwhich indemnification from LICENSEE is sought hereunder, LICENSEE shall have the right to defend,settle or contest said claim, at LICENSEE’S sole discretion, so long as the exercise ofsuch discretion does not adversely affect LICENSOR in a substantial manner and does not affect theMarks in any way. This paragraph shall survive expiration or termination of the Licensed Term.          (B) LICENSOR hereby indemnifies and holds LICENSEE, its successors and assigns, and anyentity owning or controlling LICENSEE and its officers, directors, employees, agents andrepresentatives (hereinafter individually or collectively referred to as “Licensee Corporate”)harmless from and against liabilities, claims, causes of action, suits, damages, includingwithout limitation, suits for bodily injury or death of third parties, and expenses, includingreasonable attorneys’ fees and expenses, for which LICENSEE or Licensee Corporate may becomeliable or may incur or be compelled to pay as a result of an infringement of any third party’sregistered trademark in the Territory resulting from LICENSEE’S Use of the Marks in compliance*with*all *the*terms and conditions of this Agreement (including, but not limited to, the ApprovalProcess set forth in 6.2). In the event there is a claim against LICENSEE for whichindemnification from LICENSOR is sought hereunder, LICENSOR shall have the sole right to elect todefend, settle or contest said claim, at LICENSOR’S sole discretion, except as otherwise providedherein. This paragraph shall survive expiration or termination of the Licensed Term.          10.2 EFFECT OF APPROVAL: The approval by LICENSOR of any Licensed Product, Use ordistribution channel shall not be construed as a consent by LICENSOR to any infringement orviolation of the law or rights of third parties occasioned by the approved License Product, Useor distribution channel, nor as an indemnification by LICENSOR or assumption of anyresponsibility for any such claim beyond the indemnification set forth in Section 10. 1 (B)above.          10.3 INSURANCE: LICENSEE shall promptly procure and maintain in
 

 
full force and effect at all times during the Licensed Term, with a responsible insurancecarrier or carriers reasonably acceptable to LICENSOR, at least Two Million Dollars ($2,000,000)coverage through a commercial general liability policy, including products liability, and a TwoMillion Dollar ($2,000,000) umbrella general liability policy that specifically includes any andall risks related to the sale or Use of the Licensed Products, and that identifies the LICENSOR,owners, their officers, directors, employees, subcontractors, agents and managers.          LICENSEE shall automatically furnish or cause to be furnished to *LICENSOR*withinthirty (30) days of the Effective Date (and on the anniversary date thereof for every Yearthereafter) evidence, in form and substance reasonably satisfactory to LICENSOR, of themaintenance and renewal of the insurance required herein, including, but not limited to, copiesof policies with applicable riders and endorsements, Certificates of Insurance, and ContinuingCertificates of Insurance.**11. TERMINATION**          TERMINATION: Subject to the continuing obligations arising from a breach hereof andthose terms and obligations that survive cessation of this Agreement by the clear importof their language (including, but not limited to, Articles 4 [Payment], 5 [Accounting], 7[Marks] and 10 [Insurance & Indemnification]), this Agreement and all rights relevantthereto shall cease upon the earlier of termination, for whatever reason, or expiration,except that the exercise of any right of termination under this Article II shall notaffect any rights which have accrued prior to termination and shall be without prejudiceto any other legal or equitable remedies to which LICENSOR may be entitled by reason ofsuch rights.          (A) WITHOUT CURE: LICENSOR shall have the right to terminate this Agreementeffective immediately (without right to cure by LICENSEE) (1) upon LICENSEE’S receipt ofwritten notice from LICENSOR in the event of any affirmative act of insolvency byLICENSEE; or (2) upon the appointment of any receiver or trustee to take possession ofthe properties of LICENSEE; or (3) upon the winding-up, sale, consolidation, merger, orany sequestration by governmental authority of LICENSEE; or (4) upon the breach byLICENSEE of any Material Term herein, except as expressly set forth in paragraph II (B)hereof, or (5) upon the decision of a court of first impression having competentjurisdiction to permanently enjoin LICENSEE’S unlawful use of the Marks or use of theMarks in a manner specifically denied in this Agreement, or adjudges such use to beviolative of the trademark or other rights of any third party; or (6) upon performanceby LICENSEE of any act specifically set forth in this Agreement as a non-curable breach.          If this License is terminated as set forth above with no right to cure byLICENSEE, then LICENSEE shall have no right to a Winding-Up Period (as defined here andbelow) and shall promptly transfer all remaining Inventory to LICENSOR at LICENSEE’Sdirect and actual cost of goods to LICENSOR.
 

 
          (B) WITH CURE: LICENSOR shall have the right to terminate this Agreement, afternotice to LICENSEE and expiration of a ten (10) day cure period for payment and orreporting defaults and expiration of a thirty (30) day cure period for all otherdefaults (but excluding any non-curable default as set forth in Section II (A) abovewhich shall not be subject to this Section 11 (13)) if said defaults are capable ofbeing cured, (1) upon the breach of any of the terms or conditions of this Agreement byLICENSEE, or (2) if LICENSEE takes any act or fails to act, and such action or omissionis, in the reasonable opinion of LICENSOR, materially harmful to the Marks or thebusiness of LICENSOR, or LICENSOR’S other licensees, or the brand. If a breach is notcapable of being cured, then termination shall become effective as of the date ofnotice.**12. EFFECTS OF AND PROCEDURE ON TERMINATION**          12.1 DISCONTINUE USE OF THE MARKS: Upon the expiration or termination of thisAgreement and any Winding-Up Period (as defined below), LICENSEE agrees (1) immediatelyto discontinue all Use of the Marks and copyrights of LICENSOR and any term, trademarkor trade dress confusingly similar thereto; and (2) at no costto LICENSOR, to transfer promptly to LICENSOR or destroy all printed materials bearing any of the Marks orcopyrights of LICENSOR, and all tapes, heat stamps, dyes and the like used by LICENSEE(and any third party subcontractor) for reproduction of the Marks or copyrights ofLICENSOR. In the event LICENSEE destroys such items, it shall provide a sworn statementto that effect detailing what was destroyed, the manner of destruction, and the date ofdestruction which is signed by an officer of LICENSEE. LICENSEE further agrees as setforth in Article 7 hereof that in the event of expiration or termination of thisAgreement, that all rights in and to the Marks, the copyrights of LICENSOR and the goodwill connected therewith shall remain the property of LICENSOR. LICENSEE acknowledgesthat any Use or use of the Marks or copyrights of LICENSOR by LICENSEE after the datethat termination or expiration is effective, which shall be effective upon the date setforth in any notice of Termination *or*upon the expiration *of any*Winding UpPeriod, *whichever is*later, shall constitute an infringement of the Marks and/orcopyrights of LICENSOR.          12.2 WINDING-UP PERIOD: Upon the expiration or termination of this Agreement andsubject to LICENSOR’S right to purchase the Inventory as set forth in Section 12.3 below,LICENSEE shall have a reasonable time (as determined by LICENSOR upon receipt and reviewof the Inventory Statement and verification of the Inventory size), not to exceed nine(9) months from the Commencement Date (defined below) of the Winding-Up Period, on anon-exclusive basis, in which to dispose of its Inventory, if any, according to all theterms and conditions of this Agreement (hereinafter **“Winding Up Period”).**LICENSEE shallhave no right to dispose of or otherwise deal in any Licensed
 

 
Products or use tangible items bearing the Marks if it refuses to allow LICENSOR toexercise its rights under this Section 12.2 or if it fails to allow LICENSOR to resolveany objections to the Inventory Statement to the satisfaction of LICENSOR.          (A) WINDING-UP PROCEDURE: No later than sixty (60) days prior to expiration of thisAgreement or within fifteen (15) days after termination, as the case may be, LICENSEEshall deliver to LICENSOR a complete and detailed statement setting forth the number anddescription of the then remaining Inventory, advertising (only if said advertising haspreviously been purchased and set for publication), copies of orders LICENSEE intends tofill, and the like (hereinafter **“Inventory Statement” ).**LICENSEE shall permit LICENSORto be present at the time (with at least ten (10) day’s notice of the time and date ofthe compilation of data in preparation for the Inventory Statement) and at all reasonabletimes thereafter during the Winding-Up Period to have sufficient access to verify theaccuracy of the Inventory Statement. If LICENSOR does not make a written objection to anypart of the Inventory Statement within fourteen (14) days of receipt thereof, saidstatement shall be deemed accurate. The Winding-Up Period shall commence upon the earlierof the expiration of said fourteen (14) day period or the date of written notice toproceed with winding-up from LICENSOR (hereinafter **“Commencement Date”).**          (B) EXPIRATION OF THE WINDING-UP PERIOD: Within twenty (20) business days following(i) expiration of the Winding-Up Period, or (ii) the actual liquidation of all remainingLicensed Products, or (iii) upon expiration of the fifteen (15) day or sixty (60) daydeadline (depending on whether termination or expiration has occurred) for submission ofthe Inventory Statement by LICENSEE if none is received by LICENSOR within said timeperiod, or (iv) the termination or expiration of this Agreement without right to aWinding-Up period, or (v) the exercise of LICENSOR’S right to purchase the Inventory asset forth in Section 12.3 below (unless LICENSOR does not purchase all remaining Inventory in which case LICENSEEshall have a right to a Winding-Up Period to sell-off the Inventory not so purchased),whichever is earlier, LICENSEE shall remit the last requisite Royalty payments andreports on the sale thereof (as required in Section 5. 1)[Paymentj, and shall, at thesame time, remove and send to LICENSOR, at no cost to LICENSOR, any and all thenremaining Inventory, and shall cease to Use the Marks or otherwise act in any waywhich may lead another to believe the LICENSEE still has the right to Use the Marks.          12.3 LICENSOR’S RIGHT TO PURCHASE INVENTORY: Upon expiration or termination of thisAgreement for any reason, LICENSOR shall have the right and option superior to any rightof LICENSEE to a Winding-Up Period to be *exercised in*writing and mailed or delivered toLICENSEE no later than fourteen (14) days after receipt of the Inventory Statement, topurchase any or all remaining Inventory at LICENSEE’S actual
 

 
and direct cost of the goods. No general overhead or indirect costs shall beincluded in computing LICENSEE’S actual cost of the goods.**13. RELATIONSHIP OF THE PARTIES**          The relationship of LICENSEE to LICENSOR is that of an independent contractor andneither LICENSEE nor its agents or employees shall be considered employees or agentsof LICENSOR. This Agreement does not constitute and shall not be construed asconsisting of a partnership or joint venture or grant of a franchise between LICENSORand LICENSEE. LICENSEE shall not have the right, nor shall it represent that it hasthe right, to bind LICENSOR to any obligations to third parties.**14. ASSIGNMENT**          14.1 ASSIGNMENT: This Agreement may be assigned by LICENSOR but shall not beassignable or transferable by LICENSEE without the prior written consent of LICENSORreasonably applied, and any attempted assignment, sublicense or pledge thereof byLICENSEE without such prior written consent shall be void and shall constitute anon-curable breach of the obligations of LICENSEE hereunder and shall be subject totermination by the LICENSOR at LICENSOR’S sole discretion.          14.2 DEFINITION OF ASSIGNMENT: Assignment for purposes of this Agreement shall bethe sale, transfer or assignment of fifty percent (50%) or more of the shares ofLICENSEE, including by way of transfer, or assignment of any amount of authorized butunissued shares, a merger or consolidation; (or, if a partnership, then any change in atleast fifty percent (50%) or more of the partners’ interest) in which LICENSEE is not thesurviving entity; or, a sale of a substantial part of LICENSEE’S assets.**15. NOTICES**          15.1 NOTICES: Any notice, demand, waiver, consent, approval or disapproval(collectively referred to as “notice”) required or permitted herein shall be inwriting and shall be given personally, by messenger, by air courier, or by prepaid registered or certified mail,with return receipt requested, addressed to the parties at their respective Notice Address.          15.2 A notice shall be deemed received on the date of receipt.
 

 
**16. ARBITRATION AND APPLICABLE LAW**          16.1 ARBITRATION & APPLICABLE LAW: Any controversy or claim arising under or in relation tothis Agreement, or the breach thereof, or the relations between LICENSEE and LICENSOR or LICENSEEand OWNER (excluding disputes falling within paragraph 3.4(B), supra , or 16.2 below) shall besettled by arbitration by a panel of three arbitrators (unless the amount in dispute is less *than*Twenty-Five Thousand Dollars ($25,000) in which case there shall be only one arbitrator) in theCity of Los Angeles, California, administered by the American Arbitration Association under thethen applicable General Arbitration Rules of the Council of the Textiles and Apparel Industries (orif said Rules no longer exist, then the equivalent applicable arbitration rules generally acceptedby the apparel industry), and judgment on the award rendered by the arbitrator(s) may be entered inany court having jurisdiction thereof, provided however, that the arbitrator(s) shall be bound bythe laws of the State of California and, regarding any questions related thereto, the trademarkstatutes of the United States of America, and shall have no power to extend this Agreement beyondits termination date, nor to award punitive, consequential, multiple, incidental or any otherdamages in excess of the economic damages actually sustained by the claimant. If, and only if, thearbitrator(s) shall determine that either party’s position in arbitration was not maintained ingood faith, then the arbitrators shall have the power to order reinstatement or other continuationof the parties’ relationship after termination, and to award the other party a reasonableattorney’s fee.          The choice of law governing any and all questions and issues in any way related to thisAgreement, except as set forth in the above paragraph) shall be the laws of the State of NewYork and the trademark statutes of the United States of America.          16.2 EQUITABLE RELIEF: LICENSEE recognizes that the Marks possess a special, unique andextraordinary character which makes difficult the assessment of monetary damages which LICENSORmight sustain by an unauthorized use. LICENSEE agrees that irreparable injury would be caused byLICENSEE by such unauthorized use, and that injunctive relief, including specific performance asapplicable, would be appropriate in the event of breach of this Agreement. The loser of saidaction shall pay any and all reasonable costs, expenses, attorney’s fees and disbursementsincurred by the other party with respect thereto.          This Section 16.2 shall be an exception to the mandatory arbitration provision set forthin Section 16.1 above.**17. CONFIDENTIALITY OF INFORMATION**          17.1 CONFIDENTIAL INFORMATION: LICENSEE and LICENSOR shall regard and preserve asconfidential all Confidential Information (defined below) related to the business of theother party, except that information which is public knowledge, which may be obtained by it from any source as a result of this Agreement, or otherwise. The parties
 

 
agree that they shall not and they shall cause their employees, representatives, agents andlicensees not to divulge, furnish or make accessible to anyone such Confidential Information,except as may be necessary from time to time in performance of their duties hereunder on alimited “need to know” basis. This provision shall survive the termination of this Agreement.          LICENSEE shall confine and limit the use of all Confidential Information obtained fromLICENSOR, its designees, its licensees or its agents exclusively to the development and sale of theLicensed Products, and shall not use or adopt such Confidential Information obtained from LICENSOR,including, but not limited to customer lists, pricing methods, marketing programs, in connectionwith any product which is not a Licensed Product. Upon expiration or termination of the Agreementfor any reason, LICENSEE shall forthwith deliver to LICENSOR any such Confidential Information andthereafter cease using the same.          LICENSOR shall confine and limit the use of all Confidential Information obtained fromLICENSEE, its designees, or agents exclusively to the development, marketing and sale of the Marks.          17.2 DEFINITION: “Confidential Information” shall be written information marked confidentialand oral information designated confidential and confirmed as such in writing delivered not laterthan ten (10) days after such disclosure, and shall include this Agreement, customer/accountlists, and marketing plans of LICENSOR or LICENSEE whether or not marked as confidential orconfirmed as such in writing.**18. MISCELLANEOUS**          18.1 LIMITATION ON USE OF OTHER TRADEMARKS: LICENSEE does hereby acknowledge that any attemptby it, or by any other corporation, partnership, or business organization in which any officers,directors, stockholders, partners of LICENSEE are owners thereof, to manufacture, sell ordistribute the Licensed Products under any trademark, trade name, or other identifying word orsymbol of any Competitor other than the Marks, excluding those used by LICENSEE as of the date ofthis Agreement as set forth on Schedule 2 attached hereto, constitutes a violation of itsobligation to use its best efforts to exploit the License granted herein and is a breach of thisAgreement. LICENSEE does hereby assume the liability for its officers, directors, and shareholders(or partners) for such conduct and agrees that any such conduct shall constitute a breach of thisAgreement. For purposes of clarification, LICENSEE may license, manufacture and sell productswhich are similar to the Licensed Products in category, image, quality and price points, and whichare sold through distribution channels of the same like and kind as the Licensed Products underthe mark of any third party, so long as it does not use the same designs or styles as are used forthe Licensed Products hereunder in connection with any third party mark.          18.2 HEADINGS: The headings contained in this Agreement are for
 

 
convenience and reference purposes only. They do not form a part hereof and shall not affectthe meaning or interpretation of this Agreement.          18.3 LICENSOR’S RIGHT TO APPOINT REPRESENTATIVES: LICENSOR shall have the right atany time to appoint in writing an authorized representative or representatives who shallbe empowered to act on behalf of the LICENSOR with regard to any matter pertaining tothis Agreement. It is understood that such appointment shall be strictly limited to theprovisions of the written appointment, that the representative shall have no authoritybeyond the scope of such appointment, and that LICENSEE shall act only in accordance withsuch written appointment.          18.4 WAIVER OF RIGHTS: The failure of a party to insist upon strict adherence to anyprovision of this Agreement on any occasion shall not be considered or deemed to be awaiver nor considered or deemed to deprive that party of the right thereafter to insistupon strict adherence to that provision or any other provision of this Agreement. Anywaiver must be in writing.          18.5 COMPLETE AGREEMENT & NO ORAL MODIFICATION: This Agreement is a completestatement of all agreements among the parties with respect to the subject matter hereofAny amendment, modification, alteration, change or waiver must be in writing. LICENSEEacknowledges that LICENSOR has made no warranties or representations except thoseexpressly stated herein, if any.          18.6 SEVERABILITY: If any provisions of this Agreement is for any reasondeclared to be invalid or unenforceable, the validity of the remaining provisionsshall not be affected thereby.          18.7 INCORPORATION BY REFERENCE: The recitals, Schedules and Exhibits are herebyincorporated in this Agreement. Paragraph headings are used solely for convenience andshould not be given any weight in the interpretation of this Agreement.          18.8 WARRANTIES OF CORPORATE FITNESS: The parties each warrant the following: (1)that the delivery of this Agreement has been duly authorized by all requisite corporateaction of its company; (2) that the execution and delivery of this Agreement does notviolate its Articles of Incorporation or By-laws, or any contract or commitment to whichit is a party or by which it is bound; and (3) that it is not a party to any suit,action, administrative proceeding, or investigation which, if successful, would have amaterial, adverse effect on its properties, financial conditions or business.          18.9 CONSTRUCTION: This Agreement’s terms and conditions were freely negotiated.LICENSOR drafted the Agreement for the convenience of the parties only. As such, thelanguage shall be interpreted without regard to
 

 
any rule, law or presumption requiring the language to be construed, interpreted orapplied against LICENSOR.          18.10 RESERVATION OF RIGHTS: LICENSOR reserves all rights notspecifically granted to LICENSEE hereunder.          18.11 USE OF COUNSEL: The parties hereto represent that they have each consultedwith counsel of their own choosing in connection with the negotiation and execution ofthis agreement or have knowingly chosen not to do so.          IN WITNESS WHEREOF, the parties have first caused this Agreement to be executed asof the Effective Date.       TYLER TRAFFICANTE         By:             Name:             Title:             THE FASHION HOUSE, INC.         By:             Name:             Title: