Discounts, and other than credits or reimbursements for advertising, any other type of promotionsand freight expenses.1.3 “Closeouts” means Licensed Products sold in the Territory to only approved Off-PriceRetailers below LICENSEE’s cost or at a reduction of **** percent **** or more from the respectiveListed Wholesale Prices after deducting closeout discounts from the Listed Wholesale Prices.1.4 “Contract Year” means each of the First Contract Year, the Second Contract Year, theThird Contract Year, the Fourth Contract Year, and the Fifth Contract Year of the Initial Term,along with each subsequent calendar year thereafter of any additional Renewal Terms, if any, asthose terms are defined in Section 2. (a) The First Contract Year shall be from the Effective Date through December 31,2011.  (b) The Second Contract Year shall be from January 1, 2012 through December 31,2012.  (c) The Third Contract Year shall be from January 1, 2013 through December 31,2013.  (d) The Fourth Contract Year shall be from January 1, 2014 through December 31,2014.  (e) The Fifth Contract Year shall be from January 1, 2015 through December 31,2015.     If the term of this Agreement is extended in accordance with the provisions of Section 2.2,then terms “Sixth Contract Year”, “Seventh Contract Year”, “Eighth Contract Year”, etc. shall referto the corresponding calendar years of the applicable Renewal Term.1.5 “Gross Sales” means the sales of each unit of each Licensed Product sold by LICENSEEmultiplied by the respective Listed Wholesale Prices for each such unit of Licensed Product.1.6 “IP Rights” means the intellectual property rights now or hereafter owned by LICENSORother than the Trademarks and other than any rights licensed by or from third parties, which arecopyrightable or patentable. Any protectable intellectual property rights in any and all patterns,which “Connotate the Trademarks” (as hereinafter defined), and designs and styles in and to anyLicensed Products that are solely created by LICENSEE and/or jointly created by LICENSOR andLICENSEE and used in the Licensed Products, such patterns, designs and styles, if protectable,shall remain the property interests of LICENSOR. Any protectable package designs, labels,advertising and other promotional materials using or used in conjunction with the Licensed Productsor any of Trademarks (hereafter “Trade Dress and Marketing Materials”) used in regard to theLicensed Products, created by LICENSOR or LICENSEE on LICENSOR’s behalf, such Trade Dress andMarketing Materials shall remain the property interests of LICENSOR. Nothing contained in thisAgreement or this Definition shall give LICENSOR any right, title or interest in or to any ofLICENSEE’s logos, trademarks, tradenames, patents, pre-existing copyrighted material, or molds ormaterials (provided such molds or materials do not
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utilize the IP Rights) or items licensed by LICENSEE from third parties (collectively, LICENSEE’sIP Rights), where LICENSEE’s IP Rights were previously owned by LICENSEE or developed during theTerm of this Agreement for LICENSEE’s own branded products or under LICENSEE’s other third-partylicenses. For those rights fitting within the definition of LICENSEE’s IP Rights, such IP Rightsand title, interest and right to use shall remain solely with LICENSEE. All uses of the IP Rightsmust be approved in writing by LICENSOR and submitted for approval using the ***Licensed Property UseApproval Form***attached hereto as Exhibit “C.”For purposes hereof, “Connotes the Trademarks” shall mean that such prints or patterns contained onor in a Licensed Product when viewed by a consumer would be associated with the Trademark even ifsuch product did not bear the Trademarks.1.7 “Licensed Products” shall have the definition as set forth in Schedule A.1.8 “Minimum Net Sales” means the minimum amount of Net Sales of Licensed Products thatLICENSEE is required to achieve for each Contract Year as set forth in Schedule A, attached hereto.1.9 “Net Sales” means the Gross Sales of the Licensed Products by LICENSEE, including salesof Secondary Goods but excluding sales of Licensed Products to LICENSOR, less only credits tocustomers for Returns, Trade Discounts, Closeout Discounts and Allowances as specifically permittedby this Agreement.1.10 “Off-Price Goods” means sales of Licensed Products by LICENSEE to approved Off-PriceCustomers at less than full Listed Wholesale Prices, but not necessarily sold as Closeouts.1.11 “Returns” means Licensed Products actually returned to LICENSEE by its customersmultiplied by the unit price actually credited to the customer.1.12 “Royalty Quarter” means every three (3) month period, e.g. every calendar quarter,during each Contract Year from (i) January through March, (ii) April through June, (iii) Julythrough September, and (iv) October through December.1.13 “Seconds” means damaged, imperfect, non-first quality or defective goods.1.14 “Special Make-Ups” means LICENSOR-approved styles of Licensed Products that are(i)not on the final line sheets for the most recent seasonal collection; (ii) specialcuts, specifically produced for an approved Off-Price customer; or (iii) any Licensed Products thatwere previous best-selling styles from a prior season final line sheet, but are no longer sold aspart of a current season final line sheet and are thus “expired styles.”1.15 “Territory” shall have the meaning set forth in Schedule A.1.16 “Trade Discounts” means all discounts from the Listed Wholesale Price that areactually given by LICENSEE in writing and agreed upon prior to the delivery of the specificLicensed Products.
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1.17 “Trademarks” means the VINCE CAMUTO trademark, the VINCE CAMUTO Crest designtrademark, and only those trademarks that may be added from time-to-time to Schedule A as providedin Section 3.1(c) or based on LICENSEE’s first right of refusal to such additional trademarks,including new logos and protectable sub-brands, attached hereto, regardless of the font, style orlogo in which such Trademark is used or registered.1.18 “Trademark Royalty” means **** Percent **** of Net Sales of Licensed Products bearingthe Trademarks, including sales of Licensed Products as Off-Price Goods, and shall decrease to ****Percent **** of Net Sales of the Licensed Products bearing the Trademarks in each Contract Year,after annual Net Sales in such Contract Year are in excess of **** United States Dollars. TheTrademark Royalty shall decrease to **** Percent **** of Net Sales of the Licensed Products underthe Trademarks or possibly under a Derivative Trademarks, as that term is defined in Section3.1(c), as directed by LICENSOR, where such Licensed Products are manufactured as Special Make-Upsto Marmaxx, Nordstrom Rack, Bloomingdale’s outlets, Steinmart and Loehmann’s, and other accounts asapproved by LICENSOR. The Guaranteed Trademark Royalty is the minimum guaranteed payments owedunder the Agreement to LICENSOR calculated at the **** Percent **** Trademark Royalty up to andincluding **** Dollars and for any Guaranteed Minimum Net Sales amounts exceeding **** Dollars, atthe **** Percent **** rate multiplied times the Guaranteed Minimum Net Sales per Contract Year.1.19 “Trade Secrets” means information, including a formula, pattern, compilation, program,device, method, technique or process that derives independent economic value, actual or potential,from not being generally known to the public or to other persons who can obtain economic value fromits disclosure or use and is the subject of efforts that are reasonable, under the circumstances,to maintain its secrecy.1.20 “Willfully” shall mean that the act or action was intentional and did not occur as aresult of a mistake. Moreover, acts or actions by LICENSEE in connection with a Licensed Productshall not be deemed to have been done Willfully if such act violated this Agreement, but LICENSEEtook such action based on the prior consent of an employee or another authorized agent of LICENSORwhere such employee or agent of LICENSOR has an established working relationship with LICENSEE forproviding such consent.**2. TERM OF AGREEMENT****2.1 Initial Term.**This Agreement shall commence on the Effective Date and continue through December 31, 2015(hereinafter “Initial Term”), subject to LICENSEE’s right of renewal in Section 2.2 and the breachand termination provisions of Section 16.
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**2.2 Renewal Term.**LICENSEE shall have the option to renew this Agreement for an additional period of three (3) years(the “Renewal Term”) provided:     (a) LICENSEE exercises the renewal option in writing to LICENSOR at least one hundred eighty(180) calendar days prior to the expiration of the Initial Term; and     (b) LICENSEE is in compliance with the material terms of this Agreement, both at the time ofLICENSEE’s renewal request and as of the end of the Initial Term, including having achieved therequired Minimum Net Sales of **** United States Dollars **** during the Fourth Contract Year; and     (c) LICENSEE agrees to meet the new Minimum Net Sales requirements for the Licensed Productsset by LICENSOR, which shall be the greater of **** United States Dollars **** or **** percent ****of the average of the actual Net Sales of the last two Contract Years of the Initial Term or thethen current Renewal Term, if applicable.Unless otherwise agreed to by written amendment executed by LICENSOR and LICENSEE, the RenewalTerm, if any, shall be exercised at the option of the LICENSEE by written notice to such effectpursuant to this Section 2.2 and any subsequent Renewal Term shall be upon the same terms andconditions as provided for in this Agreement, except for the new Minimum Net Sales requirements.Should LICENSOR at any time exercise its right under this Agreement to terminate the rights ofLICENSEE as a result of a material default by LICENSEE in this Agreement which had not been curedwithin an applicable grace period, all options to renew the term shall likewise be terminated.**2.3 Licensed Term, Year and Quarter Defined.**The Initial Term, Renewal Term(s), if any, and anySell-Off Period (defined in Section 17.4), shall collectively be referred to as the “Licensed Term”or “Term”. The quarters of the Term shall be every three (3) month period, e.g. every calendarquarter, during each Contract Year from (i) January through March, (ii) April through June, (iii)July through September, and (iv) October through December.**3. GRANT OF LICENSE RIGHTS****3.1 Rights Granted.**Subject to the terms and conditions contained herein, LICENSOR hereby grants to LICENSEE, andLICENSEE hereby accepts, the following:     (a) an exclusive right to sell the License Products in the Territory and an exclusive right touse the Trademarks and the IP Rights in connection with the manufacture of Licensed Productsanywhere in the world, provided however, Licensee’s sale and distribution of the Licenses Productsshall be limited to the Territory or otherwise pursuant to the terms of this Agreement;
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     (b) a non-exclusive right to advertise the Licensed Products in the Territory, and to use theTrademarks and IP Rights in connection therewith, in the manner provided for in this Agreement; and     (c) the right to any derivation of the Trademarks, pursuant to the conditions stated below,where a derivation of the Trademarks is defined as any mark using the term “Vince” or ”Camuto,” in combination with any other terms, where the resulting trademark is meant to referback to Vince Camuto, the individual, in some manner (the “Derivative Trademarks”):     (i) any derivation of the Trademarks that is to be utilized for products in the sameAuthorized Distribution Channels as the Licensed Products shall be included within theexclusive grant to LICENSEE without additional payment, except for Trademark Royalties tobecome due on Net Sales; and     (ii) if the Trademarks or a derivation of the Trademarks is to be utilized by LICENSORin a totally separate channel of distribution from the Authorized Distribution Channels for products of the same type as the Licensed Products, then LICENSEE will havea first right of refusal to license the Trademarks or any such other derivation or variationof the Trademark in connection with such additional and separate channel of distribution;and     (iii) LICENSEE shall have the right to negotiate to expand the Authorized DistributionChannels to any channel in which the LICENSOR or any affiliate of LICENSOR allows otherlicensees of apparel and accessory products to market products under the Trademarks; or     (iv) if LICENSOR proposes to use the Trademarks or a derivation of the Trademarks atany point during the Initial Term in the mass-market tier channel of distribution, whichwould include the store chains K-Mart, Sears, Walmart, JC Penneys, Kohls, and Target inconnection with products of the same type as the Licensed Products, then LICENSEE shall havethe right to terminate this Agreement, with such termination date to be effective no earlierthan twelve (12) months after LICENSEE provides written notice to LICENSOR of its intent toterminate. Notwithstanding anything to the contrary contained herein, should LICENSORpropose to use the Trademarks or a derivation of the Trademarks at any point during theInitial Term in connection with products of the same type as the Licensed Products in Targetstores, LICENSEE shall not have a right to terminate this Agreement pursuant to this Section3.1(c)(iv) if such proposed use of the Trademarks or a derivation of the Trademarks atTarget is for capsule collection(s) or limited-run collection(s).**3.2 Rights Not Granted**.     This Agreement is not an assignment or grant to LICENSEE of any right, title or interest in orto the Trademarks or the IP Rights, or any of LICENSOR’s other trademarks, whether currently in useor developed hereafter, other than the grant of rights to use the Trademarks and the IP Rightssubject to the terms and conditions of this Agreement.
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**4. APPROVAL PROCEDURES**4.1 The approval of LICENSOR or the exercise of its discretion as to any request or proposal madeby LICENSEE under any section of this Agreement shall be at the reasonable discretion of LICENSORand under the timeline described in this Section 4.1, unless otherwise expressly provided herein.A first submission for approval shall be deemed disapproved unless LICENSOR delivers a notice ofapproval or a request for additional information within seven (7) business days from the dateLICENSOR receives the request for approval. A second submission for approval following (i) adefault disapproval where LICENSOR did not respond after the first submission for approval or (ii)receipt by LICENSEE of a notice from LICENSOR requesting additional information shall be deemedapproved if LICENSOR fails to respond to LICENSEE concerning such second submission within five (5)business days. Notwithstanding the foregoing, LICENSOR shall not unduly delay requestingadditional information and shall reasonably work with LICENSEE to expedite any approval requestsubmitted hereunder where such expedition is reasonably requested by LICENSEE. LICENSOR has noobligation to approve, review or consider any item that does not materially comply with therequired submission procedures. However, within a reasonable time from receipt of a request forapproval, LICENSOR shall notify LICENSEE of the procedure that was not followed or, if LICENSOR isdisapproving the submitted matter, LICENSOR shall notify LICENSEE of the adjustments that LICENSEEshould make to the submitted matter to prepare it for re-submission. Any submitted matter that isdisapproved can be re-submitted for approval pursuant to the Approval Procedures described in thisSection 4.4.2 Approval by LICENSOR shall not be construed as a determination that the approved mattercomplies with all applicable regulations and laws. As to any Licensed Product, Manufacturer orCustomer that is never submitted to LICENSOR for its approval, such Licensed Product, Manufactureror Customer shall be deemed disapproved for the purpose of this Agreement.**5. MANUFACTURING****5.1 Standards.**LICENSEE may employ independent subcontractors to manufacture the Licensed Products at suchreasonable quality standards as are communicated in writing by LICENSOR to LICENSEE. If LICENSEEretains manufacturing subcontractors hereunder, LICENSEE shall use commercially reasonable effortsto ensure that such subcontractors comply with any and all marketing obligations under thisAgreement that are applicable to such subcontractors. LICENSEE agrees to terminate any independentsubcontractors that it employs if such subcontractors are not complying with any and allobligations under this Agreement that are applicable to such subcontractors. In addition, LICENSEErepresents and warrants that it shall retain or use only manufacturing subcontractors that operatein conformance with all applicable laws and regulations.**5.2 Use of Subcontractors.**Subject to the provisions of Section 5.1 above, LICENSEE shall have the right to use one or moreindependent subcontractors, where such independent subcontractors are customarily used by LICENSEE,to manufacture Licensed Products, with the approval of LICENSOR, such approval not to beunreasonably withheld. In addition, LICENSEE shall supply to LICENSOR the name and address of eachsubcontractor to be used or that LICENSEE customarily uses, and
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such list shall be attached hereto as part of Exhibit I as a list of independent subcontractorsthat are pre-approved by LICENSOR pursuant to this Section 5.2. LICENSEE shall promptlynotify LICENSOR of any changes to Exhibit I, namely removal of approved independentsub-contractors or changes to contact information and addresses. If the LICENSOR reasonablyobjects to the continued engagement of any subcontractor, as not being in compliance with therequirements of this Agreement, LICENSEE shall use commercially reasonable efforts to correct theproblem, if possible, and, if the problem cannot be corrected or is not corrected within acommercially reasonable period of time, LICENSEE shall terminate its engagement of suchsubcontractor. LICENSEE agrees that it shall be responsible for third party claims against LICENSORas a result of any material failures of its subcontractor to the extent provided for in thisAgreement.The following shall apply to independent subcontractors used by LICENSEE:     (a) LICENSEE shall use commercially reasonable efforts to enter into a manufacturers agreementwith each subcontractor substantially in the form of the ***Manufacturers Agreement***attached hereto asExhibit “I” (as may reasonably be negotiated and revised between LICENSEE and thesubcontractor) and deliver an executed copy thereof to LICENSOR and LICENSEE, before suchsubcontractor may manufacture any Licensed Products; and     (b) even if such Manufacturers Agreement has not been entered into, such subcontractor shallbe required, and LICENSEE shall take all commercially reasonable efforts to require allsubcontractors, to fully perform and observe the material obligations provided in the ManufacturersAgreement and to comply with all applicable laws and with the applicable provisions of thisAgreement in all material respects even if such Manufacturers Agreement has not been entered intoby such subcontractor, provided however, a subcontractor’s failure to comply with the terms of theManufacturers Agreements shall not be deemed a breach of this Agreement by LICENSEE.**5.3 Expiration/Termination of Manufacturers Agreement.**LICENSOR shall have the right to require that LICENSEE terminate its relationship with anysubcontractor who LICENSOR can reasonably show is behaving in a manner detrimental to LICENSOR.Upon the expiration or termination of any Manufacturers Agreement, LICENSEE shall take commerciallyreasonable action to endeavor to cause the subcontractor thereunder to immediately cease themanufacture of the Licensed Products and to fully perform and observe its obligations under theManufacturers Agreement and under this Agreement with respect to such expiration or termination.**6. DESIGN STANDARDS; DESIGNER****6.1 Samples/Prior Approval.**For each collection, LICENSEE shall submit to LICENSOR for its prior written approval, sketches ofall designs of the Licensed Products proposed to be manufactured by LICENSEE pursuant to theApproval Procedures described in Section 4 and by using the ***Product Approval Form***attached heretoas Exhibit “B.” If a Licensed Product style, color and fabrication was approved byLICENSOR for a current season, LICENSOR may not require re-submission of such product style, colorand/or fabrication for approval for future seasons. Re-submissions of
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any such previously approved product style, color and/or fabrication shall be at LICENSOR’srequest.**6.2 Submission of Pre-Production Sample.**LICENSEE, at its own expense, shall submit to LICENSOR for each collection of Licensed Products tobe offered for sale, a representative selection of pre-production samples in the sample size usedfor the Licensed Products, and, as reasonably requested by LICENSOR, additional production samplesfrom each collection of Licensed Products to ensure such accuracy. The representative selection ofpre-production samples shall accurately demonstrate the colors, materials, and fabrics used forsuch Licensed Products, where such colors can be presented to LICENSOR through a palette of colorswatches to be used for the collection of Licensed Products that is being presented for approval.**6.3 Designer and/or Design Team Approval**LICENSEE shall employ a dedicated design team for the Licensed Products, subject to the approvaland satisfaction of LICENSOR prior to any hiring and/or lateral re-assignment by LICENSEE to theLicensed Products and subject as well to the on-going approval and satisfaction of LICENSOR.**7. QUALITY CONTROL AND APPROVALS****7.1 Quality Control.**LICENSEE acknowledges that the Trademarks and IP Rights represent the prestige and goodwill thatLICENSOR has earned for itself and are well recognized in the minds of the public, and that it isof great importance to each party that, in the manufacture and sale of the Licensed Products, thehigh standards, reputation and image established by LICENSOR be maintained at all times.Accordingly, the Licensed Products manufactured or caused to be manufactured by LICENSEE shall beof high quality workmanship and materials. Without limitation to the foregoing, Licensed Productsmanufactured by and for LICENSEE and sold by LICENSEE shall materially adhere to the materials,color, designs, dimensions, styling, detail and quality previously approved by LICENSOR.**7.2 Finished Licensed Products/Prior Approval.**Within four (4) weeks after each style is first manufactured as a finished Licensed Product,LICENSEE shall deliver to LICENSOR one (1) representative finished Licensed Product of each stylefor approval by LICENSOR, with all fabrics represented for each style and with the color paletterepresented amongst the sampling, with supplemental color swatches on an as needed basis, in orderto show the entire range of colors to be used for the collection of finished Licensed Products thatis being presented for approval. Such finished Licensed Product sampling shall be retained byLICENSOR for its reference and shall be the property of LICENSOR. At any time following any suchapproval, if such Licensed Product is in the judgment of LICENSOR not manufactured in materialcompliance with the materials, color, designs, dimensions, styling, detail and quality previouslyapproved in writing, LICENSOR shall give LICENSEE written notice of any such non-compliance, whichnotice shall specify the details thereof. LICENSEE shall promptly correct any problem specified byLICENSOR therein
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within twenty (20) calendar days after its receipt of such notice, provided however, that thetwenty (20) calendar day cure period shall be extended for a longer period as is reasonable underthe circumstances if the breach cannot reasonably be cured within such twenty (20) calendar dayperiod and LICENSEE is diligently proceeding to cure such breach. If such Licensed Product, ascorrected by LICENSEE, is still not approved by LICENSOR or if LICENSEE fails to correct any suchproblem, the Trademarks shall be promptly removed from such Licensed Products, at the option of andat no cost to LICENSOR in which event such Licensed Products may be sold by LICENSEE provided theyare in no way identified as a product originating from or authorized by LICENSOR or otherwiseidentified with LICENSOR or any of the Trademarks or IP Rights.**7.3 Quality Control Samples and Promotional Samples.**Upon request, LICENSEE shall provide LICENSOR with a reasonable number of samples of LicensedProducts for each season for the purpose of promotion, advertising or other reasonable businesspurposes. In addition, LICENSEE shall also deliver to LICENSOR, promptly upon LICENSOR’s requestfrom time-to-time a reasonable amount of specific Licensed Products, without charge, for qualitycontrol checking.**7.4 Right to Inspect Facilities.**LICENSEE shall use commercially reasonable efforts to ensure that LICENSOR shall have the right,upon three (3) business days advance written notice, during normal business hours, to inspect allfacilities utilized by LICENSEE and its subcontractors, sub-subcontractors and suppliers inconnection with the manufacture, storage or distribution of the Licensed Products, and to examinethe Licensed Products in the process of manufacture and all documents and records related thereto.**8. DISTRIBUTION****8.1 Manner and Scope.**The manner and scope of the distribution of the Licensed Products, their availability, variety,fabrication, colors and sizes are critical to the promotion of the Licensed Products and to theprotection of the Trademarks, the Rights and their associated goodwill. LICENSEE shall usecommercially reasonable efforts to exploit the rights granted hereunder throughout the Territory.**8.2 Customer Approval.**LICENSEE agrees not to distribute the Licensed Products to any wholesale customer, who hasnot been approved by LICENSOR, in writing, such approval shall not be unreasonably withheld.Customer Approval must be sought from LICENSOR pursuant to the Approval Procedures described inSection 4 and by using the ***Customer Approval Form***attached hereto as Exhibit “A.” LICENSEEshall not sell or transfer any Licensed Product to a customer who is not approved by LICENSOR.**8.3 LICENSEE’s Duties.**     (a) Except as otherwise provided herein, the distribution of Licensed Products in theTerritory shall be performed only by LICENSEE. If LICENSEE wishes to distribute Licensed
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Products through independent distributors, LICENSEE shall submit to LICENSOR the names andaddresses of its proposed distributors for LICENSOR’s prior written approval; such approval fromLICENSOR shall not be unreasonably withheld or delayed. LICENSOR may withdraw approval of anydistributor at any time if such distributor fails to meet LICENSOR’s reasonable standards forquality, service and appearance and is acting detrimentally to the interest of LICENSOR.     LICENSEE shall submit to LICENSOR for LICENSOR’s prior written approval (which shall not beunreasonably withheld or delay), a copy of any written agreement proposed to be entered intobetween LICENSEE and any proposed distributor. Each such written agreement shall includeprovisions, unless the LICENSOR and LICENSEE agree otherwise, to the effect that:          (i) such agreement gives LICENSOR the same rights of termination that are given to LICENSEEand that the distributor will have no claims against either LICENSOR or LICENSEE for thetermination of the agreement;          (ii) the distributor may not appoint sub-distributors or agents for the sale of LicensedProducts, or assign any rights under its agreement with LICENSEE without LICENSOR’s prior writtenpermission; and          (iii) the distributor agrees to make designated minimum purchases of the Product and commitsto minimum Advertising expenditures.     (b) LICENSEE shall exercise its commercially reasonable efforts to safeguard the prestige andgoodwill represented by the Trademarks, the IP Rights and the image associated therewith at thesame level as heretofore maintained by LICENSOR.     (c) During each Royalty Quarter, LICENSEE shall, in addition to any sums expended inconnection with cooperative advertisements, meet the Minimum Marketing Commitment obligations setforth in Schedule A. LICENSEE shall provide proof of expenditure sufficient for meeting theMinimum Marketing Commitment together with the Trademark Royalty, Pooled Marketing Fee, and RoyaltyStatements for such Royalty Quarter and shall submit the ***Statement of Royalties Form***(attachedhereto as Exhibit “E”) and the ***Marketing Expenditure Form***to LICENSOR within twenty (20) calendardays of the close for each such Royalty Quarter (attached hereto as Exhibit “H”).LICENSEE’s expenditures related to and in connection with the building of shops, and the purchaseand installation of any fixtures by LICENSEE shall be attributed to LICENSEE’s spending for theMinimum Marketing Commitment. If LICENSEE shall fail to meet the Minimum Marketing Commitment forany Contract Year, the difference between what was actually spent and the Minimum MarketingCommitment for such Contract Year shall be paid to LICENSOR as additional Pooled Marketing Fees.     (d) LICENSEE will prepare and present to LICENSOR an annual marketing program with respect tothe Licensed Products for each Contract Year no later than September 1 of the preceding ContractYear. Along with this marketing program, LICENSEE shall project sales for the Contract Year forwhich the Marketing Program is being prepared. Such program will be subject to the approval ofLICENSOR. Approval will not be unreasonably withheld and will occur within twenty (20) businessdays of submission. Appropriate representatives of LICENSOR and LICENSEE will meet, at such placein the New York City metropolitan area as
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the LICENSOR designates, to confer on such marketing program, and LICENSEE will make such changestherein as are necessary to obtain LICENSOR’s reasonable approval thereof.     (e) LICENSEE shall employ, on a dedicated basis to the Trademarks and Licensed Products, aBrand Manager (who shall be Ariel Chaus), as well as other personnel as may be required tosuccessfully exploit the Trademarks and the Licensed Products. TheBrand Manager shall besubject to the on-going approval of LICENSOR.     (f) LICENSEE’s marketing program for the Licensed Products will at all times adhere to thephilosophy of LICENSOR, as from time to time expressed to LICENSEE in writing. LICENSEE will atall times maintain the prestige and goodwill of the Trademark(s) and the names of LICENSOR andVincent Camuto. Without limiting the foregoing, LICENSEE will not, without the express priorwritten consent of LICENSOR, sell or distribute any Licensed Products in combination sales, aspremiums or give-aways, or pursuant to other similar methods of merchandising (including, but notlimited to, gift-with-purchase and purchase-with-purchase programs), and will not sell ordistribute any other item or product in connection with Licensed Merchandise (any such other itemsor products being herein referred to as “Promotion Products”). In the event that LICENSOR consentsto the sale or distribution of Promotion Products, such consent may provide that for purposes ofdetermining Gross Sales (as defined below) hereunder for purposes of royalty calculations only,Promotion Products will be deemed Licensed Merchandise hereunder.     (g) LICENSEE shall only sell Seconds where the Seconds are marked “Seconds” or “Irregular” andall labels and other markings embodying the Trademarks and IP Rights are removed therefrom orcrossed off (which removal may be supervised by LICENSOR or its agent) prior to sale. LICENSEEshall be responsible for requiring that its manufacturing subcontractors comply with thisobligation.     (h) LICENSEE shall only sell **Special Make-Ups**when submitted to LICENSOR for approval pursuantto the approval procedures in Section 4 and after LICENSOR has provided its approval,expressly or if deemed approved pursuant to Section 4.1.     (i) LICENSEE shall report on its sales and retail sell-through to LICENSOR on a monthly basisusing the ***Monthly Sales Report Form***(attached hereto as Exhibit “F”) and the ***Monthly RetailReport Form***(attached hereto as Exhibit “G”). These reports must be submitted by LICENSEEto LICENSOR within five (5) calendar days of the end of each calendar month once sales of theLicensed Products commence.     (j) LICENSEE shall obtain LICENSOR’s approval, which shall not be unreasonably withheld, priorto selling or permitting its customers to sell any Licensed Products through the Internet or anyother electronic or computer-based system. The Internet retailers identified on Schedule B,attached hereto, are pre-approved by LICENSOR as customers who can conduct Internet sales. Withoutlimiting the basis for disapproval of a customer or distributor hereunder, unauthorized sale by adistributor or customer of Licensed Products through the Internet shall be immediate grounds forLICENSOR to deny or withdraw any approval of said customer or distributor hereunder.     (k) LICENSEE can sell the Licensed Products as Closeouts through any customer previouslyapproved by LICENSOR as an approved closeout-retailer, should such circumstances
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arise, but, prior to LICENSEE’s sale of any Closeouts, LICENSEE shall furnish to LICENSOR a list ofLicensed Products to be sold as Closeouts and the proposed selling price. LICENSOR shall have theoption (but not the obligation) to purchase such Closeouts from LICENSEE prior to the sale to anythird party, upon the following terms:          (i) LICENSOR shall notify LICENSEE of its intention, if any, to exercise this option withintwo (2) business days after LICENSOR’s receipt of the list of Licensed Products to be sold asCloseouts;          (ii) the purchase price for Closeouts shall be the same price LICENSEE plans to offer a thirdparty; and          (iii) LICENSEE shall deliver Closeouts purchased by LICENSOR within fifteen (15) calendar daysafter receipt of the notice of LICENSOR’s intent to purchase.**8.4 Sales to LICENSOR.**LICENSEE shall sell Licensed Products to LICENSOR at **** Percent **** off Listed Wholesale Price,subject to credit approval from LICENSEE’s lender. Any Licensed Products purchased by LICENSORfrom LICENSEE pursuant to this Section 8.4 can be re-sold by LICENSOR on its website and throughany of its stores, including, but not limited to stores that bear the storefront name VINCE CAMUTOor SHOEBOX NEW YORK. Concerning sales of Licensed Products to LICENSOR pursuant to this Section8.4, LICENSEE shall ship such Licensed Products FOB to LICENSEE’s warehouse and payment fromLICENSOR shall be ****. LICENSEE shall not be required to pay the Trademark Royalty, marketingcommitments or fees on such sales of Licensed Products to LICENSOR.**9. ADVERTISING; TRADE SHOWS AND SHOW ROOM****9.1 Prior Approval.**In regard to Advertising that is directed at consumers, LICENSEE agrees to use the Advertisingmaterials created and provided by LICENSOR, if any, or use materials that LICENSOR has had theopportunity to pre-approve in writing pursuant to the Approval Procedures described in Section 4.LICENSOR shall notify LICENSEE in writing with any corrections relating to its approval ordisapproval of the Advertising materials prepared by LICENSEE within ten (10) business days ofreceiving such materials. For press releases and other time-sensitive Advertising materials,LICENSOR will provide its written response, including any corrections, to LICENSEE within three (3)business days after receiving LICENSEE’s ***Advertising Approval Form***(Exhibit “D”). Thecosts paid by LICENSEE for such Advertising materials shall be applied toward LICENSEE’sadvertising obligations hereunder. LICENSEE further agrees that it shall maintain the highstandards and consistency of the Trademarks, the Licensed Products and image associated therewithin all Advertising, packaging and promotion of the Licensed Products.**9.2 Showroom.**     (a) LICENSEE will at all times, at its sole cost and expense, maintain, operate and staff adedicated showroom area, separate from LICENSEE’s other operations within
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LICENSEE’s showroom of approved Licensed Products bearing each Licensed Trademark. Thelocation and design of the showroom(s) are subject to LICENSOR’s prior written approval and will bedevoted solely to the presentation and sale of approved Licensed Products (each, a “Showroom”).LICENSOR pre-approves use of the dedicated showroom area available within LICENSEE’s currentCynthia Steffe showroom for development as the showroom for the Trademarks and Licensed Products.For each Product Category of Licensed Products, LICENSEE will display and offer for sale to thetrade in LICENSEE’s Showroom all (and not less than all) current items of approved LicensedProducts. LICENSEE will submit all design, architectural drawings and other material aspects ofthe showrooms, including but not limited to fixtures, furnishings, signage and any icons and visualmerchandising bearing the Licensed Trademark(s), to LICENSOR for its approval, which approval willnot be unreasonably withheld or delayed. LICENSEE may retain LICENSOR’s services to produce thedesign drawings for the Showroom(s), and in such event LICENSEE will pay LICENSOR’s fee for suchservices. Such Showroom(s) will be constructed by LICENSEE in accordance with the drawings andmaterials approved by LICENSOR. Thereafter, each Showroom must be maintained, operated, staffedand decorated at all times in all respects in a first class manner so as to be consistent with andthe prestige and goodwill of LICENSOR and the Licensed Trademark(s) and LICENSOR’s designaesthetic. LICENSEE will at all times maintain each Showroom in a safe, clean and attractivecondition, and shall do such lighting, painting, decorating, embellishing, repairing andrestoration as LICENSOR may from time to time reasonably require.     (b) LICENSEE must be represented at the LICENSOR’s showroom with a proper visual presentation,set up by LICENSEE each season prior to market week. LICENSEE will be responsible for anyadditional build-out costs and fixtures in the showroom, if reasonably requested by LICENSOR, andwill be charged a reasonable rent, to be negotiated by the parties, in the event that it chooses tosell its product out of LICENSOR’s showroom.**9.3 Tradeshows.**LICENSEE will not be obligated to attend tradeshows, however, if LICENSOR requests that LICENSEEattend a particular tradeshow or tradeshows with good reason, and the Parties mutually agree thatLICENSEE’s attendance at such particular tradeshow or tradeshows will be a commercially reasonablebusiness expense, then LICENSEE cannot unreasonably withhold its compliance with LICENSOR’srequest.LICENSEE shall at all times make commercially reasonable efforts to provide LICENSOR with anyLicensed Product samples that it may request to display in LICENSOR’s own booth at a national orregional tradeshow. Samples will be provided by LICENSEE in a timely fashion to LICENSOR at itspreferred receiving location in advance of such national or regional tradeshow to ensure timelybooth setup and merchandising.For any national or regional tradeshow that LICENSEE attends pursuant to this Section 9.3, LICENSEEwill arrange for a dedicated space in a booth of its own (if dedicated space in the LICENSOR’sbooth is not available), at which booth the Licensed Products will be displayed as set forth hereinwith staffing by sales personnel who shall have responsibility solely for the promotion and sale ofthose Licensed Products. Only Approved Licensed Products can be displayed at any tradeshow. Thelocation and design of any such booth is subject to LICENSOR’s prior written approval. It isagreed and understood by the Parties that when LICENSEE uses dedicated space in LICENSOR’s booth,LICENSEE shall rent such space from
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LICENSOR, and LICENSEE shall pay to LICENSOR its then prevailing rates for such space no later thanforty-five (45) calendar days after the end of such tradeshow. Rental rates shall be calculated ona per square footage basis.**9.4 Public Relations Events**Public relations events and activities shall be overseen by LICENSOR to promote the LicensedProducts and/or the Trademarks, with such events to include personal appearances made by VinceCamuto or a Camuto-family member to promote the Trademarks and all associated products in retailstores and on HSN. As LICENSEE’s contribution to such Public Relations events, LICENSEE shallremit a fee of the greater of ****. Notwithstanding the foregoing, sales of Licensed Products asSpecial Make-Ups shall be excluded from the Net Sales used to calculate the Public Relations Eventfee.**9.5 Personal Appearance**Vince Camuto agrees to reasonably cooperate with LICENSEE to make personal appearances on behalf ofthe Licensed Products in the Territory, during each Contract Year, in connection with any scheduledpersonal appearances made to promote the Trademarks. If any Personal Appearance is made by VinceCamuto expressly to benefit LICENSEE, the appearance shall be scheduled upon reasonable notice byLICENSEE to Vince Camuto and subject to his schedule. For such Personal Appearances made by VinceCamuto expressly to benefit LICENSEE, LICENSOR shall be reimbursed by LICENSEE for the reasonablecosts of LICENSOR’s travel and hotel to the extent such appearances are outside of the New Yorkmetropolitan area.**10. INSURANCE****10.1 Procurement of Insurance.**Without limiting LICENSEE’s liability under the indemnity provisions hereof, during the term ofthis Agreement LICENSEE shall maintain with reputable insurance companies reasonably satisfactoryto LICENSOR, comprehensive general liability insurance in the amount of at least **** includingdefense costs. Said policy shall cover any incidents that occur during the term of this Agreement,including any Renewal Term, regardless of whether the claim is made during the term of thisAgreement or is made after the expiration or termination of this Agreement. During the term ofthis Agreement, LICENSEE may not engage in the manufacture, sale or promotion of any LicensedProduct unless the required insurance coverage is in full force and effect.**10.2 Evidence of Insurance.**No later than thirty (30) calendar days before the first shipment of the Licensed Products, and notlater than thirty (30) calendar days before each subsequent Contract Year, including the ContractYears in the Renewal Term, if any, LICENSEE shall furnish to LICENSOR a certificate of insuranceevidencing the required insurance policy. Upon request, LICENSEE shall provide LICENSOR with acopy of the insurance policy and related endorsements evidencing the insurance coverage requiredhereunder.**11. OWNERSHIP AND PROTECTION OF TRADEMARKS AND IP RIGHTS****11.1 Ownership.**
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LICENSEE acknowledges that LICENSOR or its affiliated entities are the exclusive owner(s) ofthe Trademarks and of the IP Rights and that all of LICENSEE’s uses of the Trademarks and the IPRights shall inure to the exclusive benefit of LICENSOR and its affiliates.**11.2 Registration.**LICENSOR shall reasonably preserve its rights in and to the Trademarks and the IP Rights in regardto the Licensed Products, and LICENSEE shall cooperate in good faith with LICENSOR for the purposeof securing and preserving LICENSOR’s rights in and to the Trademarks and the IP Rights, including,without limitation, in the execution, submission and prosecution of any trademark, service mark,copyright or patent applications and similar applications for registration which LICENSOR, at itscost, may desire to submit at any time and from time to time.**11.3 Prohibited Acts.**LICENSEE shall not, directly or indirectly:     (a) claim ownership of the Trademarks or the IP Rights;     (b) permit the use of the Trademarks or the IP Rights in such a way as to give the impressionthat they are the property of LICENSEE;     (c) use the Trademarks or the IP Rights or any confusingly similar trademark or other similarintellectual or industrial property in any manner not expressly authorized by LICENSOR;     (d) engage in any activity that may contest, dispute, dilute or otherwise impair the right,title, interest or goodwill of LICENSOR in the Trademarks, including, without limitation, anyaction to prevent or cancel any registration of the Trademarks;     (e) use the Trademarks in any manner that is not necessary or beneficial for the manufactureor distribution of the Licensed Products; or     (f) use the Trademarks as part of LICENSEE’s corporate or commercial name unlessexpressly permitted by LICENSOR in writing.**11.4 Misuse.**LICENSEE shall cooperate fully and promptly with LICENSOR in the protection of LICENSOR’s rights tothe Trademarks and the IP Rights, as LICENSOR may request from time to time. LICENSEE shall takeprompt reasonable action to stop any minor infringement, counterfeiting or other misuse ofthe Trademarks or the IP Rights in connection with the Licensed Products. LICENSEE shall not beexpected to incur any costs other than its normal operating costs in taking such actions andexamples of such actions would be sending a form cease and desist letter and notifying LICENSORimmediately of the suspected infringement.LICENSEE shall notify LICENSOR immediately by telephone, electronic mail, or facsimile of any andall cases of infringement, counterfeiting or misuse of the Trademarks or IP Rights. In allcases, LICENSOR shall have the right to participate with LICENSEE in any action to stop such
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activities, or to take complete control over such action. In any case where LICENSOR takesaction to stop such activities that occur in regard to the Licensed Products, LICENSOR and LICENSEEshall negotiate in good faith for the division of the costs incurred relating to such actions.Any monetary recovery obtained in actions taken at LICENSEE’s sole expense shall be retained byLICENSEE. Any monetary recovery obtained in actions taken at the sole expense of LICENSOR shall beretained by LICENSOR. The allocation between LICENSEE and LICENSOR of any monetary recoveryobtained in actions where expenses have been shared by both parties shall be submitted to theadjudicating party for allocation, which shall either be the Court if related to the resolution ofa litigation or to a JAMS arbitrator pursuant to Section 20, and such adjudicating party shallconsider both the parties’ contribution to costs and the damages suffered by each such party inconsidering the allocation of the monetary recovery.**12. TRADE SECRETS AND CONFIDENTIALITY****12.1 Confidential Relationship.**A confidential relationship is created by this Agreement. Except in connection with theirrespective rights and obligations under this Agreement, LICENSOR, LICENSEE and their respectiveaffiliates, employees, attorneys and accountants shall keep confidential and not take or use forits or their own purpose Trade Secrets of the other party hereto, or as may be required by law, orin connection with regulatory or administrative proceedings and only then with reasonable advancenotice of such disclosure to the other party hereto. In the course of arbitration or litigation,LICENSEE shall not have any right of access to LICENSOR’s Trade Secrets and LICENSEE waives anyright to see such Trade Secrets unless such shall relate to the claims at issue.**12.2 Exclusions.**The provisions of this paragraph shall not apply to any Confidential Information that:     (a) the parties provide to those of their employees who absolutely need the ConfidentialInformation in order to exercise the rights granted hereunder provided that those employees arebound by written obligations of confidentiality contained within this Agreement.     (b) is or becomes generally available to the public other than as a result of any act oromission of the breaching party;     (c) after the date of this Agreement comes into the possession of a party and is received froma person lawfully in possession of the information and owing no obligation of confidentiality inrespect of the information; or     (d) is required to be disclosed by any court or governmental or administrative authoritycompetent to require disclosure.**12.3 Non-Solicitation.**LICENSOR and LICENSEE and their respective subsidiaries and affiliates (collectively Affiliates)each agree that during the Term and for a period of one year following the termination orexpiration thereof for any reason, neither party shall: (a) hire or solicit to hire, whether on its
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own behalf or on behalf of any other person, any employee or the other party or any of such party’sAffiliates or any person who had left the employ of such party or any of such party’s Affiliateswithin 12 months of the termination or expiration of the Term; or (b) directly orindirectly, encourage or induce any employee of the other party or any of such other party’sAffiliates to leave such party’s or such other party’s Affiliate’s employ.**12.4 Restrictive Covenant.**During the Term of this Agreement and for a one-year period immediately following the termination,expiration, or rescission of the Agreement, LICENSOR and Affiliates shall not directly orindirectly share any information about LICENSEE’s Manufacturers or vendors, subcontractors, anyManufacturer who executed a third-party manufacturing agreement pursuant to this Agreement or othersuch parties, that LICENSOR might have garnered during the period of this Agreement with anyprospective or new licensee, to the extent that such information relates to Licensed Products, withany new or prospective licensee. This paragraph however shall not prevent LICENSOR or any futurelicensee of LICENSOR from purchasing or benefiting from or contracting or doing business with anysuch Manufacturer if any such new licensee had or was able to glean such information independentlyand without learning of the existence of such Manufacturer from LICENSOR. Irrespective of theforegoing, if any of the information that would typically be bound by this Restrictive Covenant isor becomes publicly-known information in the industry during the Term of this Agreement or theone-year period immediately following the termination, expiration, or recision of the Agreement,such information shall no longer be subject to this Restrictive Covenant.**12.5 Equitable Relief.**The restrictions contained in this Article 12 are necessary for the protection of the business andgood will of both parties and are considered by each party to be reasonable and essential for suchpurpose. The parties understand and agree that either party will suffer irreparable harm in theevent that the other party breaches any of the obligations of this Article 12 and that monetarydamages will be inadequate to compensate for any such breach. Accordingly, the parties agree that,in the event of a breach or threatened breach by a party of any of the provisions of this Article12, the other party, in addition to and not in limitation of any other rights, remedies or damagesavailable at law or in equity, shall be entitled to a permanent injunction in order to prevent orto restrain any such breach by the first party or its partners, agents, representatives, servants,employers, employees and/or any and all persons directly or indirectly acting for, by or with them.**13. PAYMENTS AND REPORTS****13.1 Royalty Basis.**The Trademark Royalty shall be calculated on the basis of Net Sales of the Licensed Products. ALicensed Product shall be considered “sold” upon the date when such Licensed Product is invoiced,shipped or paid for, whichever event occurs first. Sales of all Licensed Products, excepting thosesold to LICENSOR, are subject to payment of the Trademark Royalty.**13.2 Deductions/Returns/Closeouts.**
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Unless otherwise agreed in writing by the parties, only the following deductions from Gross Saleswill be permitted for each Contract Year for the purpose of calculating Net Sales:     (a) The combined total of Allowances and Trade Discounts shall not exceed **** of the totalGross Sales of the Licensed Products sold;     (b) Returned units of Licensed Products shall not exceed **** of total Licensed Product unitssold;     (c) Closeouts shall not exceed **** of the total Gross Sales of Licensed Products sold;     (d) Special Make-Ups shall not exceed **** of the total Gross Sales of Licensed Products sold;     (e) The combined total of Closeouts and Special Make-Ups shall not exceed **** of the totalGross Sales of Licensed Products sold.     (f) The combined total of Allowances, Trade Discounts and Closeouts shall not exceed **** ofthe total Gross Sales of the Licensed Products sold.If (i) Allowances and Trade Discounts exceed the permitted percentage described in subsection (a)above for a Contract Year, (ii) Special Make-Ups exceed the percentage described in subsection (d)above for a Contract Year, (iii) Closeouts and Special Make-Ups exceed the permitted percentagedescribed in subsection (e) above for a Contract Year, or (iv) Allowances, Trade Discounts andCloseouts exceed the permitted percentage described in subsection (f) above for a Contract Year,LICENSOR’s sole remedy shall be the right in each case to adjust LICENSEE’s Net Sales upward by theamount of the overage both in terms of the Listed Wholesale Price and/or the units shipped.If returned units of Licensed Products exceed the permitted percentage for a Contract Year,LICENSOR’s sole remedy shall be the right to adjust LICENSEE’s Net Sales requirement upward by theamount that is the product of (i) the average of the returned Licensed Products during the ContractYear, multiplied by (ii) the number of units in excess of the maximum percentage of returnedLicensed Products permitted.If Closeouts exceed the permitted percentage for a Contract Year, LICENSOR’s sole remedy shall bethe right to adjust LICENSEE’s Net Sales requirement upward by the amount that is the product of(i) the average discount given on Closeouts during the Contract Year, multiplied by (ii) the numberof units in excess of the maximum percentage of Closeouts permitted.Notwithstanding anything contained herein, no deductions whatsoever will be permitted for reservesof any kind, including reserves for bad debts, nor for any actual write-offs of bad debts.If the information necessary for LICENSOR to determine or verify claimed Allowances, TradeDiscounts or Closeouts is not provided properly as required by this Agreement and the attachedforms, then LICENSOR shall have the right to disregard said claimed Allowances, Trade Discountsand/or Closeouts in calculating the Trademark Royalties due under this Agreement to the extent thatLICENSOR is unable to verify the same.
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**13.3 Guaranteed Minimum Trademark Royalty and Trademark Royalty.**LICENSEE shall pay to LICENSOR on a quarterly basis during the Initial Term and any Renewal Term ofthis Agreement, the Trademark Royalty no later than the twenty-fifth (25th) day of themonth immediately following the calendar quarter in which said Net Sales are made as the greater ofthe actual earned Trademark Royalty for that Royalty Quarter or one quarter (1/4th)of the Guaranteed Minimum Trademark Royalty. LICENSEE shall pay the actual earned TrademarkRoyalties on a year-to-date basis. If in any Royalty Quarter, LICENSEE has already paid actualearned royalties and Guaranteed Minimum Trademark Royalties that exceed the amount for the combinedGuaranteed Minimum Trademark Royalty payments that are due for the remainder of the Contract Year,then LICENSEE must only pay to LICENSOR the actual earned royalties for that Royalty Quarter. Theparties will true-up all Trademark Royalty Quarter payments, whether actual or Guaranteed Minimumpayments for each applicable quarter, at year’s end by evaluating the Contract Year obligations onan annualized basis. Notwithstanding anything to the contrary contained herein, all amounts due toLICENSOR during the First Contract Year on account of Guaranteed Minimum Trademark Royalty, actualearned Trademark Royalty, and Pooled Marketing Fee shall be accrued (without interest) and deferredfor payment in six (6) equal consecutive monthly payments commencing on the twenty-fifth(25th) day of the month of January in the Second Contract Year.The obligation of LICENSEE to pay the Trademark Royalty and/or the Guaranteed Minimum TrademarkRoyalty, as the case may be, is absolute, notwithstanding any claim that LICENSEE may assertagainst LICENSOR. Except as set forth herein, LICENSEE shall not have the right to set off,compensate or make any deduction from payments of the Trademark Royalty or the Guaranteed MinimumTrademark Royalty for any reason whatsoever.**13.4 Quarterly Report.**Not later than thirty (30) calendar days after the end of each Quarter, tracking all shippedLicensed Products, LICENSEE shall send to LICENSOR by overnight courier service a QuarterlyStatement of Royalties report (using the ***Statement of Royalties Form***attached hereto as Exhibit“E”) with such information as reasonably requested by LICENSOR from time to time,including, but not limited to, a listing of shipments by retail account and product style.**13.5 Intentionally Omitted.****13.6 Pooled Marketing Fee.**As partial consideration for the license granted hereunder, LICENSEE shall, together with theTrademark Royalty due for each Royalty Quarter, pay to LICENSOR the Pooled Marketing Fee specifiedin Schedule A for LICENSOR to expend in its sole discretion on advertising and promotion of theLicensed Property (the “Pooled Marketing Fee”). LICENSOR’s uses of the Pooled Marketing Fee shallinclude, but not be limited to, events and parties related to the Licensed property; publicity andeditorial exposure for the Licensed Property; catalogs and look-books containing Licensed Products;expenses related to photo shoots for brand campaigns; media placement coordination; and mailinglist acquisition costs. The obligation of LICENSEE to pay the Pooled Marketing Fee is absolute andindependent of the Trademark Royalty, notwithstanding any claim that LICENSEE may assert againstLICENSOR. LICENSEE shall
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not have the right to set off, compensate or make any deduction frompayments of the Pooled Marketing Fee for any reason whatsoever. The Pooled Marketing Fee shall bein addition to the Minimum Marketing Commitment stated in Section 8.3(c) in this Agreement. IfLICENSEE is unsatisfied with good reason about how the Pooled Marketing Fee is being used byLICENSOR, LICENSEE and LICENSOR will discuss future opportunities to re-allocate the expenditure ofthe Pooled Marketing Fee by LICENSOR.13.7 **Images.**LICENSEE shall be entitled, at no additional cost, to all lifestyle brand images that are approvedby LICENSOR for use in connection with Advertising to promote the Licensed Products. However,should LICENSEE wish to procure an image that incorporates and features the Licensed Products inthe image frame, then LICENSEE shall pay the image fee of **** prior to each photo shoot organizedand run by LICENSOR where such fee shall entitle LICENSEE to a single product-specific image. Byexample, if three (3) product-specific shots are approved by LICENSOR that feature LICENSEE’sLicensed Products from a particular photo shoot, LICENSEE shall have the option to augment theimage fee that LICENSE already paid for one (1) image by paying the image fee for each additionalapproved product-specific shot (in this example, for all three (3) images, LICENSEE would have topay a total of **** in image fees). Though LICENSEE can elect not to participate in the image feeprogram for a given photo shoot, thereby relying on use of only the lifestyle brand images that areprovided for free by LICENSOR, it will still be required to provide Samples of the LicensedProducts for use during the show room in a timely fashion. To participate in the product-specificimage request program for each photo shoot, LICENSEE will be required to complete and timely returnthe ***Photo Shoot Participation Form***to LICENSOR, an example of which is attached hereto as Exhibit“K.”**13.8 Late Payment.**If any payment of the Minimum Royalty, the Trademark Royalty or any other amounts due from LICENSEEhereunder are delayed for any reason for more than five (5) business days from when such payment isdue, interest shall accrue on the unpaid principal amount from and after the date on which the samebecame due at the rate of the Prime Interest Rate as set forth in the US edition of the Wall StreetJournal on the due date of such payment, plus one percent (1%), or the highest rate permitted bylaw in New York, U.S.A., whichever is lower.**13.9 Foreign Currency Conversion.**Net Sales made in a foreign currency shall be listed showing the foreign currency and theconversion to U.S. Dollars using the exchange rate for the fifteenth (15th) day of the relevantmonth (or the next business day if such day falls on a weekend or a holiday) as set forth in theU.S. edition of The Wall Street Journal.**14. ACCOUNTING SYSTEMS****14.1 Duty to Keep Accounts.**LICENSEE shall at all times keep and maintain an accurate account of all operations within thescope of this Agreement for a period of at least two (2) years after the date of such information,including, without limitation, separate and appropriate books of account and records sufficient to
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reconcile the number of Licensed Product units manufactured with the number of Licensed Productunits sold. LICENSEE shall establish a separate income statement and separate books of account totrack the sales of the Licensed Products.**14.2 Composite Royalty Statement.**LICENSEE shall provide LICENSOR within thirty (30) calendar days after the end of each ContractYear a composite royalty statement showing the aggregate Gross Sales, Trade Discounts, Returns,Allowances and Closeout Discounts and any other deduction taken pursuant to Section 13.2 above toarrive at the Net Sales price of all Licensed Products sold by LICENSEE. The composite annualstatement shall be certified by the chief financial officer ofLICENSEE, or by a Certified Public Accountant. LICENSEE must also provide a cash flow statementfor 2011 and 2012, based on LICENSEE’s fiscal year calendar to LICENSOR. In the event LICENSEEde-lists from the stock exchange in the United States and is no longer a public entity, LICENSEEmust continue to provide quarterly financial statements to LICENSOR within sixty (60) days of theend of each of LICENSEE’s fiscal quarters.**14.3 Right of Inspection by LICENSOR.**At all times during this Agreement, and for a period of one hundred and twenty (120) calendar daysafter termination or expiration of the Agreement, the books of account of LICENSEE, along with anyunderlying or related accounting and licensing documentation, with respect to the sales of theLicensed Products shall be available for inspection, copying and audit by LICENSOR, its agent orrepresentative during normal business hours, upon not less than five (5) calendar days advancenotice, and shall be made by LICENSOR at its own expense, except as provided below. If theauditing party validly determines that LICENSEE’s reporting and record keeping are not in materialaccordance with the express terms of this Agreement and discloses that LICENSEE underpaid theTrademark Royalties and/or Pooled Marketing Commitment payments due or demonstrated MinimumMarketing Commitments obligated under this Agreement, then LICENSEE must pay to LICENSOR withinfive (5) calendar days all Trademark Royalties and/or Pooled Marketing Commitment payments owed anddue as discovered by any such inspection and audit. If the inspection and audit shows thatLICENSEE did not meet its Minimum Marketing Commitment through demonstrable expenses, then anyamount that was not spent by LICENSEE below the Minimum Marketing Commitment obligations shall bepaid to LICENSOR as additional Pooled Marketing Commitment payments. If the inspection and auditshows an error in favor of LICENSEE in excess of five percent (5%) of Trademark Royalties, PooledMarketing Commitment payments, and/or Minimum Marketing Commitment obligations with respect to thecomputation of such royalties, Pooled Marketing Commitment payments, and/or Minimum MarketingCommitment obligations, all costs and expenses incurred by LICENSOR in connection with suchinspection and audit shall be borne by LICENSEE and LICENSEE must pay all underpayments andreimburse LICENSOR within five (5) calendar days of being presented with a written statement ofsuch costs and expenses from LICENSOR for such inspection and audit. If the inspection and auditshows an error in favor of LICENSEE in excess of ten percent (10%) of Trademark Royalties, PooledMarketing Commitment payments, and/or Minimum Marketing Commitment obligations, LICENSOR shall havethe right to immediately terminate this Agreement without advance notice to LICENSEE in addition tocollecting all underpayments from LICENSEE within five (5) calendar days and can also obtainreimbursement for the costs and expenses of undertaking the audit within five (5) calendar daysafter presenting LICENSEE with written statement of such costs and expenses.
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**15. FORCE MAJEURE**Neither LICENSOR nor LICENSEE shall be held responsible for any loss, damage or delay suffered bythe other party owing to any cause that is beyond the reasonable control of the defaulting partyand cannot be attributed to negligence, nonperformance of its obligation. Such causes include, butare not limited to, wars, embargoes, terrorist acts, riots, civil disturbances, fires, storms,floods, typhoons, earthquakes, and other natural calamities, strikes and labor disputes, governmentacts and restrictions, and other causes that cannot be overcome or prevented by due diligence.Either party wishing to invoke this Section shall give notice to the other party stating therelevant cause. The defaulting party shall promptly resume performance of its obligations themoment such cause or causes cease to operate, provided however, that if the condition continueswith respect to LICENSEE for a period of more than ninety (90) calendardays, LICENSOR shall have the right to terminate this Agreement. In the event this Agreement isterminated pursuant to this Section 15 by LICENSOR, under conditions where a force majeure eventhas caused a significant interruption that has unduly delayed or interfered with LICENSEE’sperformance of its duties and obligations under this Agreement, LICENSEE shall be entitled to theSell-Off Period pursuant to Section 17.4 and shall have no further obligation to pay any GuaranteedMinimum Royalty payment to LICENSEE, provided that LICENSEE shall pay Trademark Royalty withrespect to Licensed Products sold during the Sell-Off Period.**16. BREACH AND TERMINATION****16.1 Termination Option for Breach/Cure Possible.**     (a) Subject to other terms in this Agreement, if LICENSEE breaches any of its materialobligations under this Agreement, LICENSOR may terminate this Agreement by giving a written noticeof breach to LICENSEE. Termination will become effective immediately unless LICENSEE completelycures the breach, if curable, within thirty (30) calendar days after the giving of such notice forany breach unrelated to monies owed by LICENSEE, provided however, that the thirty (30) calendarday cure period shall be extended for a longer period as is reasonable under the circumstances ifthe breach cannot reasonably be cured within such thirty (30) calendar day period and LICENSEE isdiligently proceeding to cure such breach.     (b) If LICENSEE breaches any of its material obligations under this Agreement relating topayments it must make under this Agreement to LICENSOR, then LICENSOR may terminate this Agreementby giving a written notice of breach to LICENSEE with the monetary demand. Termination will becomeeffective immediately unless LICENSEE completely cures the breach by remitting payment to LICENSORwithin five (5) business days after LICENSEE receives LICENSOR’s notice.**16.2 Additional Termination Rights.**Subject to any other terms in this Agreement, LICENSOR may terminate this Agreement immediatelywithout any right to cure if any of the following events occur:     (a) LICENSEE merges or consolidates with or into another entity other than a PermittedAssignee as defined in Section 23 hereof, or directly sells or otherwise transfers, sells ordisposes of all or substantially all of its business or assets to another entity other than a
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Permitted Assignee as defined in Section 23 hereof without LICENSOR’s prior written consent, whichshall not be unreasonably withheld, and such transaction has a material adverse effect on LICENSOR;     (b) Closeouts exceed **** of total Gross Sales of Licensed Products sold for any ContractYear, unless LICENSOR has granted it prior written approval;     (c) LICENSEE Willfully reports materially incorrect or materially false manufacturingsales or financial information;     (d) LICENSEE is declared bankrupt or is dissolved either compulsorily or voluntarily, or apetition is presented or an order is made or an effective resolution is passed or analogousproceedings are taken for bankruptcy, dissolution (except in the case of a sale of assets approvedby LICENSOR), composition, concordance, reorganization or winding-up of LICENSEE, or if LICENSEEconvenes a meeting for the purpose of making, or proposes orenters into, any arrangement or composition for the benefit of its creditors, or a receiver orother similar officer is appointed for, the whole or any part of the assets or undertakings ofLICENSEE, or if LICENSEE stops payment to its creditors generally, or ceases or threatens to ceaseto carry on its business or any substantial part thereof, or becomes insolvent or unable to pay ordischarge its liabilities in the ordinary course of business, or if LICENSEE assigns the whole orany substantial part of its assets or undertakings for the benefit of creditors; except that if apetition in bankruptcy is brought by a third-party or receiver or similar officer is appointed atthe request of a third-party, LICENSEE shall have a period of ninety (90) calendar days to havesuch petition or appointment dismissed;     (e) LICENSEE, on one occasion, Willfully ships Licensed Products that have not been approvedby LICENSOR, or ships Licensed Products that have been disapproved;     (f) LICENSEE, on one occasion, Willfully ships Licensed Products to any customer that is notapproved by LICENSOR, or Willfully ships Licensed Products to any customer that has beendisapproved;     (g) LICENSEE Willfully ships Licensed Products to any entity for resale outside of theTerritory except pursuant to written approval;     (h) LICENSEE fails to meet its minimum Net Sales Requirements in a given Contract Year;     (i) After LICENSEE has failed to comply with a material term of this Agreement and, hasreceived three (3) or more written notices from LICENSOR citing non-compliance with the particularterm of the Agreement which has been breached, such as use of Advertising that was not approvedprior to such use by LICENSOR;     (j) Cease to carry liability insurance in the amount and type required herein;     (k) Fail to make timely payments, or to timely deliver the statements and reports requiredpursuant to Section 5 after written notice of same more than twice in any calendar year;
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     (l) Be the subject of a product recall based upon a final order of the Consumer Product SafetyCommission for any of the Licensed Products which results in LICENSEE’s failure to be able toactively market a representative line of Licensed Products;     (m) Fail to introduce the Licensed Products by the Product Introduction Date recited inSchedule A attached hereto;     (n) Fail to commence sales of the Licensed Products in commercial quantities by the First SaleDate recited in Schedule A attached hereto;     (o) LICENSEE Willfully manufactures or Willfully sells Licensed Products or products ormaterials incorporating the Licensed Property, without the express permission of LICENSOR as hereinprovided, or Willfully manufactures or Willfully sells any disapproved products;     (p) LICENSEE defaults on its debt covenants;     (q) LICENSEE is the subject of a “going concern” opinion that has been issued by fromauditors;     (r) LICENSEE no longer benefits from the financial support of China Ting; or     (s) LICENSEE Willfully uses or authorizes the use of Ancillary Material or the LicensedProducts in an unauthorized or improper manner.Should LICENSOR provide a cure period for any of the foregoing, such action will not constitute awaiver of or bar to LICENSOR’s right to strictly enforce immediate termination in the future,without any right to cure, in the event of the same or any other applicable breach.**17. OBLIGATIONS AT TERMINATION OR EXPIRATION****17.1 Promotional Materials.**Within thirty (30) calendar days after the expiration or termination of this Agreement for anyreason, LICENSEE shall remove and deliver to LICENSOR all promotional materials, includingbrochures, tags, business cards and letterhead, bearing the Trademarks or the IP Rights.**17.2 Subcontractors.**If LICENSEE has retained manufacturing subcontractors hereunder, LICENSEE shall use commerciallyreasonable efforts to ensure their continued compliance with any and all obligations under thisAgreement that are applicable to such subcontractors following termination or expiration of thisagreement. In addition, LICENSEE shall indemnify and defend LICENSOR against all losses, damages,attorneys’ fees, judgments, settlement amounts or other costs or expenses incurred or suffered byLICENSOR as a result of third party claims against LICENSOR concerning LICENSEE’s use or retentionof any manufacturing subcontractor, where such use or retention violates LICENSEE’s obligationsunder this Agreement.**17.3 Inventory; Right to Purchase.**
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Within thirty (30) calendar days after the termination of LICENSEE’s rights under this Agreement orthe expiration of this Agreement, LICENSEE shall furnish to LICENSOR a certificate listing itsinventory of Licensed Products on hand and work in progress together with the location thereof.LICENSOR shall have the right to conduct a physical inventory of such Licensed Products fromLICENSEE and shall have the right to purchase the Licensed Products upon the following terms:     (a) LICENSOR shall notify LICENSEE of its intention, if any, to exercise this option withinten (10) business days after LICENSOR’s receipt of such certificate and shall specify which of theLicensed Products are to be purchased;     (b) the price for such Licensed Products shall be the LICENSEE’s cost of the Licensed Productsin regard to current season Licensed Products, and in regard to non-current season LicensedProducts the price shall be the lower of LICENSEE’s cost or market value;     (c) LICENSEE shall deliver Licensed Products purchased by LICENSOR within fifteen (15)calendar days after receipt of the notice of LICENSOR’s intention to purchase the inventory and;     (d) payment shall be due upon delivery; provided, however, that LICENSOR may deduct from thepurchase price for such Licensed Products any amounts owed it by LICENSEE.**17.4 Remaining Licensed Products.**In the event LICENSOR elects not to purchase remaining Licensed Products pursuant to the provisionabove, then LICENSEE shall have one hundred eighty (180) calendar days to sell the LicensedProducts if the Agreement is expiring or is being terminated by the parties for reasons other thanfor LICENSEE’s material breach of the terms of the Agreement (the “Sell-Off Period”). Such salesshall be made in full conformance with the requirements of this Agreement. After the one hundredeighty (180) calendar day selling period, LICENSEE shall have the right to sell the LicensedProducts only after the Trademarks and features embodying the IP Rights have been removed therefromprior to sale, unless the parties agree otherwise in writing. In the event LICENSOR elects not topurchase remaining Licensed Products pursuant to the provision above, following LICENSOR’stermination of the Agreement due to LICENSEE’s material breach of a term of the Agreement, thenLICENSEE shall have three (3) months to sell the Licensed Products (the “Breach Sell-Off Period”).Such sales shall be made in full conformance with the requirements of this Agreement. After thethree (3) month selling period following termination of the Agreement due to material breach byLICENSEE, LICENSEE shall have the right to sell the Licensed Products only after the Trademarks andfeatures embodying the IP Rights have been removed therefrom prior to sale, unless the partiesagree otherwise in writing.**17.5 LICENSEE’s Obligation Regarding Sale of Licensed Products.**In the event that LICENSEE sells any Licensed Products in accordance with this Section, LICENSEEshall still report to LICENSOR the information required in the Quarterly Statement of Royaltiesreport and shall pay to LICENSOR, within twenty (20) calendar days after the expiration of suchpermitted selling period, the appropriate amount of Trademark Royalty due with respect to sales ofLicensed Products by LICENSEE during such period.
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**17.6 Additional Sell-Off Provision.**Notwithstanding any breach of this Agreement or any provisions of this Section 17, LICENSOR shallpermit, subject to its reasonable right of approval, the sale of Licensed Products by any partythat finances or factors LICENSEE’s business provided that the substitution of any such financingor factoring party for LICENSEE does not alter LICENSOR’s rights under this Agreement and that thesales of the Licensed Products are within the Territory, to Approved Authorized DistributionChannels and that such financing source or factor pays earned Trademark Royalty payments toLICENSOR, solely on its sales of the Licensed Products, pursuant to the terms herein. LICENSORmust have the opportunity to review any legal documents in favor of such financing or factoringsource before providing its approval, which shall not be unreasonably withheld. If LICENSORprovides its approval, it will execute such legal documents in favor of any such financing sourceor factor as LICENSEE shall from time to time reasonably request to evidence the foregoing.
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**18. EFFECT OF TERMINATION OR EXPIRATION****18.1 Termination of Rights.**Except as specifically provided in Section 17 above, upon the termination of the rights grantedhereunder to LICENSEE under this Agreement or upon the expiration of this Agreement, all rights ofLICENSEE to use the Trademarks and the IP Rights, including without limitation, rights tomanufacture, distribute, offer to sell, sell and advertise Licensed Products, shall terminate or,as appropriate, be assigned to LICENSOR. Any such assignment, transfer or conveyance shall bewithout consideration other than the mutual covenants contained in this Agreement. LICENSOR maythereafter license the right to use the Trademarks and/or the IP Rights in connection with themanufacture, wholesale, offer for sale at wholesale, distribution and advertising of the LicensedProducts in the Territory without any restriction or obligation to LICENSEE.**18.2 No Use of Trademarks and IP Rights.**Except as permitted by LICENSOR, after the termination of the rights granted to LICENSEE or uponthe expiration of this Agreement, LICENSEE shall not use the Trademarks, the IP Rights and/or anyother trademark, trade name or other industrial or intellectual property that is:     (a) confusingly similar to the Trademarks;     (b) substantially similar to the IP Rights; or     (c) associated with, or suggests an association with, the Trademarks and the IP Rights in anyway.**18.3 Acceleration; Other Rights Unaffected by Termination.**Except as otherwise stated herein, in the event of a termination of this Agreement by LICENSOR asprovided for in this Agreement, LICENSEE shall pay to LICENSOR an amount equal to the GuaranteedMinimum Trademark Royalty and the Pooled Marketing Fee for the eighteen (18) month period followingthe termination date of this Agreement payable within 10 days after the date of termination.Termination by LICENSOR shall be without prejudice to any other rights or remedies that LICENSORmay have.**19. INDEMNIFICATION, REPRESENTATIONS AND WARRANTIES****19.1 Indemnification.**     (a) LICENSEE shall, except for the indemnities from LICENSOR pursuant to Section 19.1(b),indemnify, defend and hold harmless LICENSOR, its directors, officers, employees, relatedcompanies, affiliates, members, managers, and agents (the “LICENSOR Indemnities”), of and from anyloss, liability, claim, damage (excluding incidental and consequential damage) or expense,including reasonable legal expenses, involving a third-party claim, suffered by, imposed upon orasserted against LICENSOR as a result of, in respect of, connected with, or arising out of, under,or pursuant to any failure of the LICENSEE to perform or fulfill any
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covenant or obligation it hasunder this Agreement, or any breach or inaccuracy of any representation given by LICENSEE andcontained in this Agreement. Compliance byLICENSEE with the insurance provisions of this Agreement shall not relieve LICENSEE of itsduty to indemnify and defend LICENSOR under this Section. The duty to indemnify and defendsurvives the termination or expiration of this Agreement.     (b) LICENSOR shall, except for the indemnities from LICENSEE pursuant to Section 19.1(a),indemnify, defend and hold harmless LICENSEE, its directors, officers, employees, relatedcompanies, affiliates, members, managers and agents (the “LICENSEE Indemnities”) of and from anyloss, liability, claim, damage involving a third-party claim suffered by, imposed upon or assertedagainst the LICENSEE Indemnities as a result of and respect of, connected with, or arising out ofany claim which could constitute a breach or violation of LICENSOR’s Representations andWarranties as contained in Section 19.5 and Trademarks Warranties as contained in Exhibit J.**19.2 Defense Counsel.**     (a) LICENSEE shall defend LICENSOR as required hereunder, with counsel acceptable to LICENSOR,whose acceptance of such counsel shall not be unreasonably withheld or delayed, with respect toeach and every claim for which LICENSOR is indemnified by LICENSEE under this Agreement, so long asLICENSOR provides prompt written notice of any claim giving rise to such indemnity obligations toLICENSEE. LICENSEE shall pay for the services of such counsel upon counsel’s presentation ofreasonable legal bills. LICENSOR agrees that counsel designated by LICENSEE’s insurance companyshall be satisfactory for purposes of handling any product liability claims. Any compromise orsettlement of any claim or action which is subject to indemnification by LICENSEE or LICENSOR shallrequire the written consent of both parties, which consent shall not be unreasonably withheld,except that no consent shall be required if the settlement is for a monetary amount and theindemnified parties receive an unconditional general release from the claimants.     (b) LICENSOR shall defend LICENSEE as required hereunder, with counsel acceptable to LICENSEE,whose acceptance of such counsel shall not be unreasonably withheld or delayed, with respect toeach and every claim for which LICENSEE is indemnified by LICENSOR under this Agreement, so long asLICENSEE provides prompt written notice of any claim giving rise to such indemnity obligations toLICENSOR. LICENSOR shall pay for the services of such counsel upon counsel’s presentation ofreasonable legal bills. LICENSEE agrees that counsel designated by LICENSOR’s insurance companyshall be satisfactory for purposes of handling any product liability claims. Any compromise orsettlement of any claim or action which is subject to indemnification by LICENSOR or LICENSEE shallrequire the written consent of both parties, which consent shall not be unreasonably withheld,except that no consent shall be required if the settlement is for a monetary amount and theindemnified parties receive an unconditional general release from the claimants.**19.3 Authority.**Each of the parties represents and warrants that it has the full right, power and authority toenter into this Agreement and to perform all of its respective obligations, that it is under nolegal impediment which would prevent its entering into and performing fully its obligations underthis Agreement, and that it is financially capable of performing such obligations.
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**19.4 Compliance With Laws.**The parties shall take all actions required by any local, provincial, national, state or regionalagency, government or commission to carry out the purposes of the rights licensed hereunder incompliance with applicable law. The parties shall immediately provide the other party with copiesof any communication to or from any such agency, government or commission that related to oraffects this Agreement or the Trademarks or the IP Rights. Without limitation to the foregoing,the parties shall not engage in any unfair or illegal trade practices or commit any acts or engagein any transactions that would reflect adversely upon the goodwill associated with LICENSOR, theTrademarks, the IP Rights, or the Licensed Products.**19.5 LICENSEE Representations and Warranties.**LICENSEE represents and warrants to LICENSOR that:     (a) LICENSEE is, and shall remain at all times during the Term of this Agreement, acorporation or limited liability company duly organized, validly existing and in good standingunder the laws of the State of New York;     (b) LICENSEE has, and shall have at all times during the Term of this Agreement, the abilityand capacity to perform its obligations hereunder or to cause such obligations to be performed; and     (c) to its best knowledge, any designs submitted by LICENSEE to LICENSOR for approval do notinfringe the rights of any other person or entity.**19.6 LICENSOR’s Representations and Warranties.**LICENSOR represents and warrants to LICENSEE that:     (a) LICENSOR is, and shall remain at all times during the Term of this Agreement, a limitedliability company duly organized, validly existing and in good standing under the laws of the Stateof Delaware;     (b) LICENSOR has the right to enter this Agreement, and shall have at all times during theTerm of this Agreement, the ability and capacity to perform its obligations hereunder or to causesuch obligations to be performed;     (c) the use of the Trademarks as set forth herein will not infringe or violate any rights ofany third party;     (d) throughout the Term of this Agreement, LICENSOR shall not abandon, and shall reasonablyprotect and enforce its rights in the Property;     (e) LICENSOR is not, and will not be throughout the Term of this Agreement, a party to orbound by any contract or other obligation whatsoever that limits or impairs its ability and rightto enter into this Agreement or perform its obligations hereunder; and
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     (f) Exhibit “J” hereto and incorporated into this Agreement, is a Trademark Warranty, thecontents of which LICENSOR represents and warrants to be accurate.**19.7 No Warranty or Representation by LICENSOR Except as Provided Herein.**Except as expressly provided herein or in the Trademark Warranty attached hereto as Exhibit “J,”LICENSOR makes no representation or warranty, either express or implied, as to any matterwhatsoever, including, without limitation, the design, merchantability, durability, suitability ofany product or other item or the fitness of any product or other item for a particular purpose.Notwithstanding the foregoing, LICENSOR warrants and represents that, as of the date of executionof this Agreement, it has the right to enter and perform under this Agreement.**20. ARBITRATION****20.1 Parties’ Consent to Arbitration.**Except as otherwise provided in this Agreement, LICENSOR and LICENSEE consent and submit to theexclusive jurisdiction and venue of the State of New York, U.S.A., for the adjudication of anydispute between LICENSOR and LICENSEE pertaining to this Agreement or the alleged breach of anyprovision hereof. Except as provided in this Agreement, any dispute, controversy or claim arisingout of or relating to this Agreement or breach thereof shall be settled by binding arbitrationheard by an arbitrator, in accordance with the Commercial Arbitration Rules (“Rules”) of JAMS. Thearbitrator shall be appointed in accordance with the Rules. The parties hereto agree that thevenue of such arbitration shall be New York, New York.**20.2 Powers.**The arbitrator shall be bound by the terms and conditions of this Agreement and shall have nopower, in rendering the award, to alter or depart from any express provision of this Agreement, andtheir failure to observe this limitation shall constitute grounds for vacating his or her award.Except as otherwise provided in this Agreement, the arbitrator shall apply the law specified inSection 20 below. Any award of the arbitrator shall be final and binding upon the parties andjudgment may be entered in any court of competent jurisdiction, including, without limitation, thecourts of the State of New York or any federal court in New York, or any court of competentjurisdiction within the Territory. The award and judgment thereon shall include interest at thelegal rate from the date that the sum awarded to the prevailing party was originally due andpayable, and attorneys’ fees and other arbitration costs, including, without limitation, costsassociated with expert witnesses.**20.3 Entitlement to Costs.**If any legal action or dispute arises under this Agreement, arises by reason of any asserted breachof it, or arises between the parties and is related in any way to the subject matter of theAgreement, the prevailing party shall be entitled to recover all costs and expenses, includingreasonable attorneys’ fees, investigative costs, reasonable accounting fees and charges forexperts. The “prevailing party” shall be the party who obtains a provisional remedy such as apreliminary injunction or who is entitled to recover its reasonable costs of suit, whether or notthe suit proceeds to final judgment; if there is no court action, the prevailing party shall be the
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party who wins any dispute. A party need not be awarded money damages or all relief sought inorder to be considered the “prevailing party” by the arbitrator(s) or a court.**21. GOVERNING LAW**All questions concerning this Agreement, the rights and obligations of the parties, enforcement andvalidity, effect, interpretation and construction which are governed by state law shall bedetermined under the laws of the State of New York. United States federal law shall apply to allother issues; however, if a provisional remedy is sought, the law of the place where such remedy issought shall apply.**22. RELATIONSHIP OF PARTIES**This Agreement shall not be construed to place the parties in the relationship of legalrepresentatives, partners, joint venturers or agents of or with each other. Under this Agreement,LICENSEE is an independent contractor and shall be solely responsible for the payment of all incometax withholding, payroll taxes, contributions and other obligations relating to LICENSEE’semployment and compensation of its employees and consultants. No party shall have any power toobligate or bind any other party in any manner whatsoever, except as specifically provided herein.**23. ASSIGNABILITY**This Agreement shall be binding upon and inure to the benefit of the successors and permittedassigns of the parties. This Agreement is personal in nature and neither party may assign,transfer, or pledge their rights to this Agreement to anyone other than an affiliated entity or arelated party (collectively, a “Permitted Assignee”) without the other party’s prior writtenapproval, which approval shall not be unreasonably withheld. Any attempt by either party totransfer any of its rights or obligations under this Agreement to anyone other than a PermittedAssignee, whether by assignment, sublicense or otherwise, without having received the prior writtenapproval of the other party, shall constitute a default hereunder, but shall otherwise be null andvoid.**24. WAIVER AND INTEGRATION**The failure of a party to insist upon strict adherence to any term or provision of this Agreement,or to object of any failure to comply with any term or provision of this Agreement, shall not be awaiver of that term or provision, stop that party from enforcing that term or provision, orpreclude that party from enforcing that term or provision by estoppel or by laches. The receipt bya party of any benefit from this Agreement shall neither constitute such party’s waiver nor affectan estoppel on the right of that party to enforce any provision hereof. None of the terms of thisAgreement shall be deemed to be waived or modified, except by an express agreement in writing,signed by an authorized officer of the party against whom enforcement of the waiver or modificationis sought, supported by new consideration.**25. NOTICES AND COMMUNICATIONS**All notices under this Agreement shall be properly given only if made in writing and either mailedby certified mail, return receipt requested, postage prepaid, or delivered by hand
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(including messenger or recognized delivery, courier or air express service) to the party at the address setforth in this paragraph or such other address as such party may designate by notice to the otherparties. Irrespective of the foregoing, all Reports and Approval requests can besubmitted by LICENSEE to LICENSOR via electronic mail and LICENSOR can respond accordingly byelectronic mail. Such notices shall be effective on the date of receipt (evidenced by thecertified mail receipt) if mailed or on the date of delivery if hand delivered. If any such noticeis not received or cannot be delivered because the receiving party changed its address and did notgive notice of such change to the sending party or due to a refusal to accept such notice by thereceiving party, such notice shall be effective on the date delivery is attempted.   TO LICENSOR: CAMUTO CONSULTING, INC.  c/o Camuto Group  411 West Putnam Avenue  Greenwich, Connecticut 06830  Attention: President  Facsimile: 866-735-1544   With a copy to: Vice President, General Counsel  c/o Camuto Group  411 West Putnam Avenue  Greenwich, CT 06830  Facsimile: (866) 708-9589   With a copy to: President, International and Licensing  c/o Camuto Group  1073 Glendon Avenue  Los Angeles, CA 90024  Facsimile: (866) 831-8166   All royalty statements/ payments/should be sent to:     CAMUTO CONSULTING, INC.  411 West Putnam Avenue  Greenwich, Connecticut 06830  Attention: Kevin McNamara  Facsimile: (203) 661-8982   TO LICENSEE: BERNARD CHAUS, INC.  530 7th Avenue  New York, New York, 10018  Attn: Josephine Chaus  Facsimile: (212) 869-2626   With a copy to: SILLS CUMMIS & GROSS P.C.  One Rockefeller Plaza  25th Floor  New York, New York 10020  Attn: Michael B. Goldsmith, Esq.  Facsimile: (212) 643-6500
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**26. SEVERABILITY**The provisions of this Agreement are severable, and if any provision shall be held invalid orunenforceable, in whole or in part, in any jurisdiction, then such invalidity or unenforceabilityshall affect only such provision, and shall not affect such provision in any other jurisdiction.To the extent legally permissible, a provision which reflects the original intent of the partiesshall be substituted for such invalid or unenforceable provision.**27. SURVIVAL**All obligations of the parties of a continuing nature, including without limitation thoseconcerning trademark rights, indemnities and trade secrets, shall survive the termination orexpiration of this Agreement.**28. EXHIBITS AND FORMS**The Exhibits and Forms attached hereto and as revised and/or replaced by LICENSOR from time to timeare hereby incorporated by reference and form integral parts hereof.**29. ENTIRE AGREEMENT**This Agreement, including all Exhibits, constitutes the entire agreement between the parties withrespect to, and supersedes and replaces all prior negotiations and agreements, whether written,oral or implied, between the parties or their affiliates, principals or agents, concerning thesubject matter hereof. This writing is intended as the final, complete and exclusive statement ofthe terms of the agreement between the parties with respect to the subject matter hereof and mayonly be amended in writing.
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     IN WITNESS WHEREOF, the parties hereto have caused their duly-authorized representatives toexecute this consolidated and amended Agreement as of the date first-above written.   CAMUTO CONSULTING, INC. BERNARD CHAUS, INC.    /s/ Bob Galvin /s/ Josephine Chaus   Bob Galvin, President Josephine Chaus, Chief Executive Officer       Date: November 18, 2010 Date: November 18, 2010       
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**SCHEDULE A****1.****Licensed Trademarks**The following are the Licensed Trademarks:**VINCE CAMUTO WORD MARK****VINCE CAMUTO CREST DESIGN MARK**