**Exhibit 10.13**

 

**MOSSIMORESTATED LICENSE AGREEMENT**

 

**THISRESTATED AGREEMENT** is made and entered into as of the31st day of March, 2006 (the “Effective Date”) by and between **MOSSIMO, INC.**, a Delaware corporation (“Mossimo,Inc.”) and **TARGET BRANDS, INC.**, asubsidiary of Target Corporation, a Minnesota corporation (“Target”).

 

**RECITALS**

 

A.                                   Mossimo,Inc. and Target previously entered into an agreement dated March 28, 2000, asamended as of February 1, 2002, as assigned and amended as of February 2, 2003,as amended as of June 20, 2003, and as renewed by letter dated January 28, 2005(as amended, assigned and renewed, the “Prior Agreement”).

 

B.                                     Mossimo,Inc. is the owner of various MOSSIMO trademarks, and the goodwill associatedtherewith, and has the right, power and authority to grant licenses to othersto use such trademarks in connection with the design, manufacture, importation,distribution, marketing, advertising and sale of certain merchandise.

 

C.                                     Mossimo,Inc. also has the right, power and authority to cause Mossimo G. Giannulli (“Giannulli”),an employee and officer of Mossimo, Inc., to perform in the manner providedherein in connection with the foregoing licenses.

 

D.                                    Targetis engaged in the marketing and sale of general merchandise and services.

 

E.                                      Mossimo,Inc. and Target desire to enter into this Restated Agreement as of theEffective Date on the terms and subject to the conditions set forth herein.

 

**NOW,THEREFORE**, in consideration of the foregoing premisesand the mutual covenants and agreements contained herein, the parties heretoagree as follows:

 

1.                                       **Definitions**.   Forpurposes of this Restated Agreement, the following capitalized terms shall havethe following meanings and, unless the context otherwise requires, shallinclude the plural as well as the singular:

 

“MossimoDesign Materials” mean all designs, drawings, sketches, specifications,inventions, writings or other documentation, systems, processes, computerprograms, improvements, trade secrets, know-how or similar rights, whether ornot patentable or copyrightable, which were produced by Mossimo, Inc. in thecourse of performing services under the Prior Agreement or which are producedby Mossimo, Inc. under this Restated Agreement.

 

“Target DesignMaterials” mean all designs, drawings, sketches, specifications, inventions,writings or other documentation, systems, processes, computer programs,improvements, trade secrets, know-how or similar rights, whether or notpatentable or

 

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copyrightable,which were produced by Target or its vendors under the Prior Agreement or whichare produced by Target or its vendors under this Restated Agreement.

 

“Trademarks”mean the MOSSIMO family of trademarks listed on Exhibit A attached hereto, anyother marks incorporating the name MOSSIMO, any variations or derivationsthereof, with or without stylized designs, and all common law rights andstatutory rights with respect thereto, registrations thereof, applicationstherefor and the goodwill and other rights associated therewith, whether nowexisting or created hereafter.

 

“ExclusiveMerchandise” means products which fall within the Exclusive MerchandiseCategories and use the Trademarks or the Mossimo Design Materials.

 

“ExclusiveMerchandise Categories” means products which fall within the categories identifiedas exclusive in Exhibit B attached hereto.

 

“ExistingLicensees” means the licensees of the Trademarks in the Territory under licenseagreements outstanding as of the date hereof and identified on Exhibit Chereto.

 

“ExistingLicensee Merchandise” means products which fall within the Exclusive LicenseeMerchandise Categories.

 

“ExistingLicensee Merchandise Categories” means products which fall within thecategories licensed to Existing Licensees and identified in Exhibit B attachedhereto.

 

“Merchandise”means the Exclusive Merchandise and the Existing Licensee Merchandise,collectively.

 

“FiscalQuarter” means Target’s fiscal quarters commencing on the first business day ofFebruary, May, August and November each year.

 

“Net Sales”mean the sales price to customers on all sales of Exclusive Merchandise byTarget (whether regular, markdown, clearance or otherwise), excluding sales taxand finance charges and, less any refunds and credits for returns actuallygiven by Target to its customers.

 

“RetailOperations” means Target® Stores, Target Greatland®, Super Target®, Target.com,any other retail store operated by Target or its affiliates, and anymerchandising activities conducted by Target or its affiliates in the Territoryin connection therewith, including by way of example and not limitation, directmail, kiosk, internet and websites thereon, and other wireless and electronicactivities whether now known or hereafter developed.

 

“Territory”means the United States, its territories and possessions.

 

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2.                                       **License Grant**.

 

2.1                                 ExclusiveLicense.    On the terms and subject to the conditionscontained herein, Mossimo, Inc. hereby grants to Target, and Target herebyaccepts, the exclusive right and license to use the Trademarks, during the Term(as defined below) and in the Territory, in connection with the design,manufacture, importation, distribution, marketing, advertising, sale and offerto sell Exclusive Merchandise.  Targetwill sell and offer to sell Exclusive Merchandise only through Target’s RetailOperations.  Mossimo, Inc. acknowledgesand understands that Target’s marketing and advertising on the Internet orother transborder advertising will be accessible outside of the Territory, andagrees that such activities are permissible hereunder, provided that Targetmakes no sales to persons or entities outside of the Territory.

 

2.2                               Limitations.   Theforegoing license does not include the right to grant sublicenses to thirdparties (except as provided herein in connection with the manufacture ofExclusive Merchandise and Trademark Use Materials) or the right to use theTrademarks in connection with the design, manufacture, importation,distribution, marketing, advertising, sale of any products other than theMerchandise in the manner provided herein.

 

2.3                               ExclusiveRight.      Target shall have the exclusiveright to use the Mossimo Design Materials in connection with the design,manufacture, importation, distribution, marketing, advertising, sale and offerto sell Exclusive Merchandise in the Territory. Target will sell and offer to sell Exclusive Merchandise only throughTarget’s Retail Operations.  Mossimo,Inc. shall have the non-exclusive right to use the Mossimo Design Materials inconnection with the design, manufacture, importation, distribution, marketing,advertising, sale and offer to sell Exclusive Merchandise outside the Territoryprovided that each such use shall be subject to Target’s prior approval, whichapproval will not be unreasonably withheld.

** **

2.4                               GiannulliIdentification.

 

(a)                                  Targetshall have the right to use the name, signature, photograph, voice or othersound effects, likeness, personality, endorsement, biography and statements ofGiannulli (the “Giannulli Identification”) for advertising and promotionsrelating to the Merchandise in broadcast, print, electronic and wireless media(i.e., television, radio, magazines, newspapers and free-standing inserts),direct mail, outdoor advertising (i.e., highway and means-of-transitbillboards), in-store signing displays, public relations materials, theinternet and websites thereon, shopping bags, in-house publications and videoprograms (not for broadcast or public distribution), as well as all otherreasonable forms of advertising, whether now known and developed or developedhereafter.

 

(b)                                 Subjectto the limitations set forth herein and the reasonable availability ofGiannulli, Mossimo, Inc. shall cause Giannulli to attend and participate in allrehearsals, filming, taping, recording and photography sessions reasonablyrequired to meet the obligations set forth herein (dates and times to be agreedupon by the parties), and will render his services hereunder in accordance withthe scripts or other materials (including,

 

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but notlimited to, wardrobe suggestions) provided by Target.  Mossimo, Inc. shall cause Giannulli to renderhis services in a competent and professional manner, to the best of hisability.  Mossimo, Inc. shall causeGiannulli to comply with Target’s reasonable instructions and recommendationsrelated to providing such services.

 

2.5                                 PerpetualRight to Use.       Target retains theperpetual right to use, solely as an historical example of its advertising, anyadvertising and promotional materials produced by or for Target hereunder,provided that such use will be exclusively for internal and/or portfoliopurposes.

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3.                                       **Services**.

 

3.1                                 Mossimo,Inc. shall cause Giannulli to provide the services of a creative director inconnection with the Exclusive Merchandise including but not limited to, thefollowing (collectively, the “Services”): advice regarding brand concepts,positioning statements, themes, product and trend direction, recommendations asto trim, fabric, materials, color, marketing and packaging and such otherrelated services as Target may reasonably request.

 

3.2                                 Mossimo,Inc. shall cause Giannulli to attend and participate in a reasonable number ofbusiness meetings, internal Target meetings, planning sessions, strategymeetings and any other meetings related to the planning and development of theExclusive Merchandise, regardless of location, as requested by Target.  Mossimo, Inc. shall not be required to causeGiannulli to attend more than four (4)****suchmeetings each Contract Year during the Term in Minneapolis, Minnesota.

 

4.                                       **Term**.

 

4.1                                 InitialTerm.   The initial term of this Restated Agreementcommenced on the Effective Date and, unless sooner terminated as providedherein, shall continue until January 31, 2010 (the “Restated Initial Term”).

 

4.2                                 ExtendedTerms.     Provided that Target is current in itspayments of the Annual Guaranteed Minimum Fee (as defined below), Target shallbe entitled to renew this Restated Agreement thereafter, on the same terms andconditions, for additional terms of two (2) years each (each, a “RestatedExtended Term”) by giving Mossimo, Inc. written notice of its intent to renewat least one (1) year prior to the end of the then current Term.  The “Term” of this Restated Agreement shallbe deemed to include the Restated Initial Term and all Restated Extended Terms,if any.  A “Contract Year” shall bedeemed to refer to each period commencing February 1 and ending January 31during the Term of the Restated Agreement.

 

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5.                                       **Payments**.

 

5.1                                 Fee.   Duringthe Term of the Restated Agreement, in consideration of the rights granted toTarget and the representations and warranties contained herein, Target shallpay to Mossimo, Inc. as a Fee an amount equal to the greater of (a) the AnnualGuaranteed Minimum Fee applicable to such Contract Year; or (b) the applicablepercentage of Net Sales for such Contract Year based on the following schedule(the “Fee”):

 

•                  Fourpercent (4%) of Net Sales on sales of Exclusive Merchandise for such ContractYear up to $100,000,000;

 

•                  Twoand one-quarter percent (2 1/4%)****of Net sales on sales of ExclusiveMerchandise for such Contract Year greater than $100,000,000 up to$500,000,000; and

 

•                  Onepercent (1%) of Net Sales on sales of Exclusive Merchandise, for such ContractYear greater than $500,000,000.

 

5.2                                 MinimumFees.      Target guarantees Mossimo, Inc.that during the Term of the Restated Agreement, annual Net Sales shall be notless than $350,000,000 for each Contract Year (“Minimum Net Sales”).  In the event that actual annual Net Sales areless than the Minimum Net Sales, Target shall pay to Mossimo, Inc. thedifference between the Fees actually earned for such Contract Year and the Feesthat would have been earned based on the Minimum Net Sales (the “AnnualGuaranteed Minimum Fee”).  The AnnualGuaranteed Minimum Fee shall be $9,625,000 for each Contract Year during theTerm of the Restated Agreement.

 

5.3                                 OneTime Reduction In Fees.   Mossimo, Inc. will pay to Target aone-time, nonrefundable reimbursement of Fees in the amount of $6,000,000 on orbefore June 30, 2006.

 

5.4                                 Charge-BackAgainst Fees.   Beginning with the Contract Year commencingFebruary 1, 2007, Target shall charge-back and offset against the Feesotherwise due under this Agreement (including the Annual Guaranteed MinimumFee) an amount equal to 40 basis points against Net Sales (the “Charge-BackAmount”).   Beginning July 1, 2006,Mossimo, Inc. shall be entitled to invoice Target until the end of the ContractYear 2006, and Target shall reimburse Mossimo, Inc., for its documentedout-of-pocket expenses for salaries, costs of benefits and reasonable traveland related expenses actually incurred by Mossimo, Inc. after July 1, 2006 fordesigners (other than Giannulli) creating the Mossimo Design Materials.  Mossimo, Inc. shall submit expenses and suchsupporting documentation as Target may reasonably request no more often thanmonthly.  Expenses which comply with theforegoing will be paid within fifteen (15) days of receipt of such materials.

 

5.5                                 Mannerof Payment.  Twenty-Five percent (25%) of the applicable AnnualGuaranteed Minimum Fee shall accrue each Fiscal Quarter.  Within thirty (30) days of the end of thefirst Fiscal Quarter of each Contract Year during the Term of the RestatedAgreement, Target shall pay to Mossimo, Inc. an amount equal to the greater of

 

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(a) Fees onNet Sales for such Fiscal Quarter calculated pursuant to Sections 5.1 and 5.2above, or (b) 25% of the applicable Annual Guaranteed Minimum Fee.  Within thirty (30) days of the end of theremaining Fiscal Quarters for such Contract Year, Target shall pay to Mossimo,Inc. an amount equal to the greater of (a) the amount of the aggregate accruedFees payable for Net Sales from the beginning of the Contract Year to the endof such Fiscal Quarter less the total of all Fees already paid for suchContract Year less any applicable Charge-Back Amount, or (b) the aggregate accruedAnnual Guaranteed Minimum Fee as of the end of such Fiscal Quarter less thetotal of all Fees already paid for such Contract Year less any applicableCharge-Back Amount.  The foregoingprovisions shall apply separately to each Contract Year, such that any excessof accrued Fees over the Annual Guaranteed Minimum Fee for any given ContractYear shall not apply toward satisfying the Annual Guaranteed Minimum Fee forany future Contract Year and shall not apply as a credit against Fees accruingin any subsequent Contract Year.  ForContract Year 2006, the Fees payable under this Agreement shall be calculatedbased on Net Sales beginning February 1, 2006 notwithstanding the EffectiveDate of this Agreement and such Fees shall be in lieu of any amounts that wouldhave been due under the Prior Agreement. Beginning in Contract Year 2007, the Fees payable or the applicableGuaranteed Minimum Fee Payable in each Quarter shall be reduced by theapplicable Charge-Back Amount.

 

5.6                                 Expenses.     Eachparty shall be responsible for and pay its own expenses incident to performinghereunder, including without limitation, all travel and related expenses otherthan travel and related expenses of Giannulli in connection with marketing andpromotional trips requested by Target and travel and related expenses providedfor in Section 5.4.

 

5.7                                 PromptDelivery.     Target acknowledges that time is ofthe essence in the delivery of the payments required by this Section 5, andagrees that interest shall accrue on all past due payments hereunder from theirrespective due dates until paid at the rate of one percent (1%) per month, orif such rate exceeds the maximum rate allowed by law, at the maximum rateallowed by law, and shall be payable on demand.

 

6.                                       **Reports, Record Keeping and Audits**.

 

6.1                                 Maintenanceof Records.     During the Term of this RestatedAgreement, Target shall keep full and accurate books of account and records insufficient detail to show the sales of Exclusive Merchandise hereunder.  Mossimo, Inc. acknowledges and understandsthat such books of account and records shall be in the form and format Targetmaintains in the ordinary course of its business.  Such records shall be maintained for at leasttwo (2) years after the Fiscal Quarter to which such records relate.

 

6.2**                                **QuarterlyReports.    Within thirty (30) days of the end of eachFiscal Quarter during the Term of this Restated Agreement, Target shall preparefor its own use and the use of its auditors as provided in Section 6.3 writtenreports showing all sales of Exclusive Merchandise by the Retail Operationsduring such Fiscal Quarter with such detail as Target has historically providedunder the Prior Agreement (the “Target

 

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Reports”).  Within thirty (30) days of the end of eachFiscal Quarter during the Term of this Restated Agreement, Target shall provideMossimo, Inc. with written reports based on the Target Reports specifying theaggregate quarterly Net Sales, the aggregate quarterly royalty, the aggregateyear to date Net Sales and the aggregate year to date royalties (the “MossimoReports”).  Target shall provide toMossimo, Inc. no later than 15 days after the end of any month, aggregate salesinformation relating to the sale of Exclusive Merchandise during thatimmediately preceding month.

 

6.3                                 Audits.       Duringthe Term of this Restated Agreement and for a period of one (1) yearthereafter, Mossimo, Inc. shall have the right, upon written notice, to requireTarget to retain an independent third party auditor, reasonably acceptable toMossimo, Inc., to examine Target’s books of account and records as arenecessary to determine whether Fee payments have been accurately calculated andpaid hereunder. The third party auditor shall only reveal to Mossimo, Inc.whether the Fee payments have been accurately calculated and paid or, if not,the total Net Sales and the amount of the Fee payments that should have beenpaid. The cost of such audit shall be borne by Mossimo, Inc.  Mossimo, Inc. shall not have the right tohave an audit conducted more than once with respect any Contract Year, and inno event shall such audit occur during Target’s fourth Fiscal Quarter.  If the audit discloses that the Fee paymentsactually due exceed the Fee payments made, Target shall pay the unpaid Fee withinterest computed as provided above for late payments.  If the audit discloses that the Fee paymentsmade by Target exceed the Fee payments due, Mossimo, Inc. shall reimburseTarget in the amount of such excess.  Inaddition, if the audit discloses that the Fee payments actually due exceed theFee payments made by an amount greater than five percent (5%), theout-of-pocket costs incurred by Mossimo, Inc. in connection with the auditshall be paid by Target.

 

7.                                       **Standards of Quality**.

 

7.1.                              Enhancementof Trademarks;  Quality. Target acknowledges that the Trademarkshave established prestige and goodwill and are well recognized in the minds ofthe public, and that it is of great importance to each party that in themanufacture and sale of the Merchandise the high standards and reputation thatMossimo, Inc. has established be maintained. Accordingly, the Exclusive Merchandise and any expression by Target,directly or indirectly, which by its nature conveys to others the existence of arelationship between Target and the Trademarks or the Exclusive Merchandise,including, without limitation, all packaging, labeling, fixturing, advertising,point of sale and sales promotion materials and product literature (any suchexpression referred to as “Trademark Use Materials”) shall (a) meet or exceedthe quality and workmanship historically provided under the Prior Agreementand; (b) be in accordance with all of the terms and provisions of this RestatedAgreement

 

7.2.                              Manufactureof Exclusive Merchandise.     Target shall havethe right to contract the manufacture of the Exclusive Merchandise and theTrademark Use Materials bearing the Trademarks and utilizing the Mossimo DesignMaterials to third party manufacturers anywhere in the world, provided that (a)the manufacturer and any of its

 

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subcontractorssign a Manufacturer’s Trademark Agreement with Target containing comparabletrademark protections for Mossimo, Inc. to the agreements being used under thePrior Agreement; and (b) the Exclusive Merchandise and Trademark Use Materialsare of a quality that meets or exceeds the quality historically provided underthe Prior Agreement.

 

7.3                                 SamplingProcess.    Ifrequested by Mossimo, Inc., Target will make available to Giannulli or anotherrepresentative of Mossimo, Inc., acceptable to Target, at one or more of Target’sfacilities, representative samples of the Exclusive Merchandise to enableMossimo, Inc. to confirm that the quality standards are being satisfied.  If Mossimo, Inc. believes that any of theExclusive Merchandise does not meet the quality standards referenced in Section7.1, then the parties will in good faith discuss Mossimo, Inc.’s concerns andwork to put in place a plan to ensure that the Exclusive Merchandise meets suchquality standards.

 

8.                                       **Existing Licensees; Duval Endorsement Agreement; andNature of Exclusivity**.

 

8.1                                 Saleof Existing Licensee Merchandise.     Mossimo,Inc. acknowledges that Target’s Net Sales of Existing Licensee Merchandiseshall be excluded from any calculation of Fees due pursuant to Section 5 abovebut shall apply toward satisfying the Annual Guaranteed Minimum Fee for eachContract Year.

 

8.2                                 Rightof First Refusal.       At such time asthe license agreements with the Existing Licensees, as they relate to theTerritory, expire or terminate for any reason whatsoever or Mossimo, Inc. hasthe unilateral right to terminate or not renew or extend such agreements,Target shall have a right of first refusal to add all or some of the affectedExisting Licensee Merchandise Categories to the Exclusive MerchandiseCategories hereunder.

 

8.3                                 DuvalEndorsement Agreement.     Mossimo, Inc.represents to Target that it has entered into an exclusive endorsementagreement dated January 1, 2000 (the “Endorsement Agreement”) with David Duval,a highly skilled professional golfer. Mossimo, Inc. agrees that, during the Term, it shall use its rightsunder the Endorsement Agreement to use the Duval Identification (as such termis defined in the Endorsement Agreement) in connection with the advertisementand promotion of the Exclusive Merchandise as reasonably requested byTarget.  Mossimo, Inc. further agreesthat if Target desires to utilize the services of David Duval as a model or forpersonal appearances in connection with Target’s advertising to promote theExclusive Merchandise, Mossimo, Inc. shall use its best efforts to cause Duvalto provide such services under the Endorsement Agreement at no additionalcharge to Target.  Mossimo, Inc.acknowledges and agrees that Target has no responsibility, liability orobligations, whether for payment or otherwise, under the Endorsement Agreement.

 

8.4                                 Natureof Exclusivity.      Mossimo, Inc. agreesthat, during the Term and in the Territory, it will not, and it will causeGiannulli to not, directly or indirectly, authorize the use of the Trademarks,the Mossimo Design Materials or the Giannulli

 

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Identificationor provide design services to or enter into a design agreement or relationshipwith any other retailer, manufacturer or distributor relating to the ExclusiveMerchandise Categories without the prior written consent of Target, except (a)as may be necessary to enable Mossimo, Inc. to meet its obligations underlicense agreements with Existing Licensees outstanding as of the date hereof,(b) for the design, manufacture, distribution and sale of merchandise to golfpro shops located on the premises of golf courses or country clubs and commonlyreferred to as “green grass” shops (c) Giannulli may provide design services toModern Amusements, Inc. or its successors, or to third parties not described inthe next succeeding sentence provided any designs or products produced fromsuch efforts are not directly or indirectly marketed or publicized as being theresult of Giannulli’s efforts or as associated with Giannulli .  Notwithstanding the foregoing, in no eventshall Mossimo, Inc. or Giannulli, directly or indirectly, authorize the use of theTrademarks, the Mossimo Design Materials or the Giannulli Identification orprovide design services to or enter into a design agreement or relationship,with any entities in the following channels of trade: mass merchandisingdiscount stores or super centers (e.g., Wal-Mart and K-Mart (including anyentity resulting from the merger of K-Mart and Sears), warehouse clubs (e.g.,Costco and Sam’s Club), mid-tier department stores (e.g., J.C. Penney, Sears(including any entity resulting from the merger of K-Mart and Sears), Kohl’sand Mervyn’s), national apparel chains (e.g., The Limited and The Gap family ofstores), any department stores operated by Federated, Inc. or any affiliates,successors or assigns of the foregoing.

 

9.                                       **Representations and Warranties; Protection ofTrademarks**.

 

9.1                                 Mossimo,Inc. hereby represents and warrants that:

 

(a)                                  Mossimo,Inc. is free to enter into this Restated Agreement to grant the rights hereingranted, and to provide services herein described without violating the rights ofany third party, and is not subject to any obligation or disability which willor might hinder or prevent the full completion and performance by Mossimo, Inc.of all of the covenants and conditions to be kept and performed by Mossimo,Inc. hereunder;

 

(b)                                 Mossimo,Inc. will comply with all laws, regulations, orders and ordinances applicableto the provision of Services as set forth herein;

 

(c)                                  Atno time during the Term will Mossimo, Inc. or Giannulli disparage theirassociation with Target, any Retail Operation or Target product; and

 

(d)                                 Giannullihas irrevocably granted to Mossimo, Inc. the rights to use the GiannulliIdentification consistent with the rights granted to Target hereunder andMossimo, Inc. will not alter those rights in a manner that would be adverse toTarget.

 

9.2                                 Targethereby represents and warrants that:

 

(a)                                  Targetis free to enter into this Restated Agreement and to grant the rights hereingranted without violating the rights of any third party, is not subject to anyobligation which will or might hinder or prevent the full completion andperformance

 

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by Target ofall of the covenants and conditions to be kept and performed by Targethereunder;

 

(b)                                 Targetwill comply with all laws, regulations, orders and ordinances applicable to theperformance of its obligations as set forth herein; and

 

(c)                                  Atno time during the Term, will Target disparage its association with Mossimo,Inc., Giannulli or their affiliates.

 

9.3                                 Acknowledgementsand Agreements Regarding the Trademarks.     As amaterial inducement for each party to enter into this Restated Agreement, andas a material part of the consideration to each party hereunder, each partyhereby acknowledges and agrees, solely for the benefit of the other party, asfollows :

 

(a)                                  Mossimo,Inc. owns the Trademarks and all rights, registrations, applications andfilings with respect to the Trademarks and all renewals and extensions of anysuch registrations, applications and filings.

 

(b)                                 Mossimo,Inc. has the right to license the Trademarks to Target in the manner set forthherein.

 

(c)                                  Targetis acquiring hereby only the right to use the Trademarks for the purpose statedin and pursuant to the terms and conditions of this Restated Agreement.

 

(d)                                 Greatvalue is placed on the Trademarks, and the goodwill associated therewith; theTrademarks and all rights therein and goodwill pertaining thereto belongexclusively to Mossimo, Inc.; and all use of the Trademarks by Target, whetherauthorized or unauthorized, shall inure to the benefit of Mossimo, Inc..

 

(e)                                  Exceptfor the Trademarks and Giannulli Identification, Target shall own all right,title and interest in and to the Trademark Use Materials produced by or for ithereunder, including, but not limited to, any artwork developed in connectiontherewith (and copyrights therein), to the extent that such rights can beseparated from the Trademarks and/or Giannulli Identification and are notconfusingly similar thereto.

 

(f)                                    Theconditions, terms, restrictions, covenants and limitations of this RestatedAgreement are necessary, equitable, reasonable and essential to assure theconsuming public that all goods sold under the Trademarks are of the sameconsistently high quality.

 

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9.4                                 Protectionof Trademark Rights.

 

(a)                                  Mossimo,Inc. shall take all reasonable steps necessary to prosecute and maintainfederal registrations for the Trademarks.

 

(b)                                 Targetshall not use or permit the use of the Trademarks for any purpose or use otherthan as expressly licensed under this Restated Agreement.

 

(c)                                  Targetshall cooperate fully and in good faith with Mossimo, Inc. for the purpose ofsecuring and preserving Mossimo, Inc.’s (or any grantee of Mossimo, Inc.’s)rights in and to the Trademarks.  Targetshall cause to appear on and in connection with the Exclusive Merchandise andTrademarks Use Materials such statutory trademark notices as Mossimo, Inc. mayreasonably request.

 

(d)                                 Mossimo,Inc. shall take such action as it deems necessary or appropriate, in itsreasonable judgment, in respect of any possible infringements, claims oractions in derogation of any Trademark by any third parties and shall informTarget promptly after it has knowledge or becomes aware of any suchinfringement, claim or action.  IfMossimo, Inc. initiates legal proceedings on account of any such infringementclaim or action, Target shall cooperate with and assist Mossimo, Inc., atMossimo, Inc.’s expense, to the extent reasonably necessary to protect theTrademarks, including without limitation, being joined as a necessary ordesirable party to such proceedings.

 

(e)                                  Targetshall promptly inform Mossimo, Inc. of any possible infringements, claims oractions in derogation of any Trademark by any third parties of which it hasknowledge or becomes aware, and shall cooperate with Mossimo, Inc. in themanner provided above in subsection (c).

 

(f)                                    Targetshall, upon request, supply to Mossimo, Inc. enough specimens ofadvertisements, tags, labels and other use of the Trademarks as may be requiredin connection with any of Mossimo, Inc.’s applications or registrations for theTrademarks.  Target shall execute anyinstrument Mossimo, Inc. shall reasonably deem necessary or desirable to recordor cancel Target as a registered user of the Trademarks.

 

(g)                                 Targetshall give prompt attention and take such actions as it deems necessary toresolve legitimate customer complaints relating to the Merchandise which arebrought to Target’s attention.  Targetshall give Mossimo, Inc. written notice of all complaints that in Target’sopinion are likely to result in litigation.

 

9.5                                 Acknowledgementsand Agreements Regarding Design Materials. As a material inducement foreach party to enter into this Restated Agreement, and as a material part of theconsideration to each party hereunder, each party hereby acknowledges andagrees, solely for the benefit of the other party, as follows:

 

(a)                                  Mossimo,Inc. owns the Mossimo Design Materials, including, but not limited to, any artworkdeveloped in connection therewith and copyrights therein and

 

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has the right to license the Mossimo DesignMaterials to Target in the manner set forth herein.

 

(b)                                 Targetis acquiring hereby only the right to use the Mossimo Design Materials for thepurposes stated in and pursuant to the terms and conditions of this RestatedAgreement.

 

(c)                                  Excludingthe Trademarks and Giannulli Identification used therein, Target owns allright, title and interest to the Target Design Materials, including, but notlimited to, any artwork developed in connection therewith and copyrightstherein.

 

(d)                                 Mossimo,Inc. will not use the Target Design Materials or claim any rights or title in,or otherwise attack Target’s ownership of the Target Design Materials(excluding therefrom, for the avoidance of doubt, the Trademarks and GiannulliIdentification).

 

10.                                 **Defaults and Remedies**.

 

10.1                           Defaultsby Target.    The occurrence of any one or more of thefollowing shall constitute a default by Target under this Restated Agreement:

 

(a)                                  Targetshall fail to make any payment or submit any report required under thisRestated Agreement when due and such failure continues for more than thirty(30) days after written notice thereof, unless such failure cannot be curedwithin such thirty (30) day period and Target shall have commenced to cure thefailure within such period and proceeds diligently thereafter to cure suchfailure, provided that, with respect to payments due hereunder, such failure iscured in any event within sixty (60) days after such written notice.

 

(b)                                 Targetuses the Trademarks in any manner likely to deceive or mislead the public, toendanger the validity of the Trademarks or to damage or impair the reputationor value of the Trademarks and such use continues for more than thirty (30)days after written notice thereof, unless such use cannot be cured within suchthirty (30) day period and Target shall have commenced to cure the use andproceeds diligently thereafter to stop such use, provided that such use isdiscontinued in any event within sixty (60) days after such written notice.

 

(c)                                  Thefailure of Target to perform any of its other material obligations under thisRestated Agreement and such failure continues for more than thirty (30) daysafter written notice thereof, unless such failure cannot be cured within suchthirty (30) day period and Target shall have commenced to cure the failure andproceeds diligently thereafter to cure such failure; provided that such failureis cured in any event within sixty (60) days after such written notice.

 

10.2                           Defaultsby Mossimo, Inc.    If Mossimo, Inc. fails to performany of its material obligations under this Restated Agreement and such failurecontinues for more than thirty (30) days after written notice thereof, unlesssuch failure cannot be cured

 

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within suchthirty (30) day period and Mossimo, Inc. shall have commenced to cure thefailure and proceeds diligently thereafter to cure such failure; provided thatsuch failure is cured in any event within sixty (60) days after such writtennotice.

 

10.3                           Remedies.

 

(a)                                  IfTarget has not cured any such breach or nonperformance in accordance withSection 10.1 above, in addition to all of the other rights and remediesavailable to Mossimo, Inc., whether pursuant to the terms of this RestatedAgreement, at law, in equity, or otherwise, Mossimo, Inc. shall have the rightto terminate this Restated Agreement without further notice to Target;provided, however, that the decision to terminate this Restated Agreement mustbe exercised in writing, if at all, within thirty (30) days after the cureperiod expires.

 

(b)                                 IfMossimo, Inc. has not cured any such breach or nonperformance in accordancewith Section 10.2 above, in addition to all of the other rights and remediesavailable to Target, whether pursuant to the terms of this Restated Agreement,at law, in equity, or otherwise, Target shall have the right to terminate thisRestated Agreement without further notice to Mossimo, Inc.; provided, however,that the decision to terminate this Restated Agreement must be exercised inwriting, if at all, within thirty (30) days after the cure period expires.

 

10.4                           Effectof Expiration or Termination.

 

(a)                                  Exceptas specifically provided herein to the contrary, upon expiration or terminationof this Restated Agreement, the rights and licenses granted herein shallterminate and Target shall have no further right to use the Trademarks orTrademark Use Materials in connection with the Merchandise, the RetailOperations or otherwise.  Upon therequest of Mossimo, Inc., Target shall immediately execute without furtherconsideration such assignments and other instruments which may be required tobe recorded to effect the termination of the licenses and rights granted herein(and the assignments of Target’s rights to Mossimo, Inc.).  Within thirty (30) days of the expiration ortermination of this Restated Agreement, Target shall deliver to Mossimo, Inc.all unpaid Fees together with a final quarterly Mossimo Report covering allsales of Merchandise from the end of the period covered by the precedingquarterly Mossimo Report through the date of expiration or termination of thisRestated Agreement.

 

(b)                                 Inthe event this Restated Agreement is terminated pursuant to Section 10.3(a),then Target shall pay to Mossimo, Inc., within thirty (30) days of thetermination date, such Annual Guaranteed Minimum Fee as would be due for suchContract Year, calculated in accordance with Section 5 above.  In the event this Restated Agreement isterminated pursuant to Section 10.3(b), then Target shall have no obligation topay any Annual Guaranteed Minimum Fee accruing or due after the date ofexpiration or termination of this Restated Agreement.

 

(c)                                  Uponthe termination or expiration of this Restated Agreement by Mossimo, Inc. orTarget, for any reason whatsoever, Target shall have six (6) months

 

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from the dateof termination or expiration of this Restated Agreement (the “Termination Date”)in which to use the Trademarks to dispose of any Merchandise manufactured, orordered and in production, and any piece goods in the possession of Target, itsagents, manufacturers or subcontractors, on the Termination Date (the “Sell-OffPeriod”).  Such disposition must bethrough the same channels used by Target prior to the Termination Date.  In addition, Target shall destroy or deliverto Mossimo, Inc. all Trademark Use Materials within thirty (30) days of theexpiration of the Sell-Off Period other than such materials as Target desiresto keep for the purposes set forth in Section 2.5 above.

 

11.                                                                                 **Morals**.       IfGiannulli is (a) charged with, convicted of or admits to the commission of anyfelony, (b) charged with or convicted of any offense involving substance abuse,or (c) publicly admits that he is addicted to any illegal controlled substance,or (d) commits any act which brings Giannulli into public disrepute, scandal,contempt or ridicule, or which shocks, insults or offends a substantial portionor identifiable group of the community, and such event or behavior has, inTarget’s reasonable judgment, a negative impact on its reputation, then Target,in addition to and without prejudice to any other remedy of any kind or natureset forth herein, shall have the right to terminate this Restated Agreement andneither party shall have any obligation to perform hereunder after theeffective date of such termination, including, without limitation, the paymentby Target of any portion of the Annual Guaranteed Minimum Fee coming due afterthe effective date of such termination. Target’s reasonable decision based upon relevant facts and circumstanceson all matters arising under this Section 11 shall be conclusive, provided thatTarget’s intent to terminate this Restated Agreement must be exercised inwriting, if at all, within thirty (30) days after the facts giving rise to suchright to terminate are brought to Target’s attention.

 

12.                                 **Services Unique**.     Mossimo,Inc. and Target agree that the services to be performed by Giannulli hereunderare special, unique, unusual, extraordinary, and of an intellectual charactergiving them a peculiar value, the loss of which cannot be reasonably or adequatelycompensated in damages in an action at law. Accordingly, the parties agree that Target shall be entitled, in theevent of a material failure by Giannulli to perform such services or tootherwise permit Target to use the Giannulli Identification in the mannerrequired hereunder, to seek equitable relief by injunction or otherwise inaddition to whatever other remedies Target may have.  Mossimo, Inc. further agrees that in theevent of the unavailability of Giannulli’s services to Mossimo, Inc. or the deathor permanent disability of Giannulli, Target shall have the right to terminatethis Restated Agreement by written notice to Mossimo, Inc.

 

13.                                 **No Assignment**.     Theparties acknowledge and agree that the rights granted herein are personal innature and may not, in whole or in part, be transferred, delegated or assignedby either party without the prior written consent of the other party; provided,however, that Mossimo, Inc. may assign its right to receive payment(s)hereunder.  Any purported transfer,delegation or assignment, whether voluntary or involuntarily, by operation oflaw or otherwise, in violation of this Section shall be null and void andconstitute a default hereunder by the party attempting to so transfer, delegateor assign.

 

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Targetacknowledges and agrees that a change in control of Mossimo, Inc. (including achange of control resulting from a merger in which Mossimo Inc. merges withanother entity). shall not constitute an assignment.  Notwithstanding the foregoing or theprovisions of Section 5.2, in the event that Mossimo, Inc. becomes directly orindirectly controlled by any of the entities identified in the last sentence ofSection 8.4, the Minimum Net Sales and the Annual Guaranteed Minimum Feethereafter shall be zero dollars and Target shall have no obligation, impliedor otherwise, to generate Net Sales during the Term of this Agreement(including any renewal thereof).

 

14.                                 **Indemnification and Insurance**.

 

14.1                           Indemnificationof Mossimo, Inc.    Target shall indemnify and holdMossimo, Inc. and its affiliates, directors, officers, employees and agents(the “Mossimo, Inc. Parties”) harmless from and against any and allliabilities, losses, claims, suits, damages, costs and expenses (including,without limitation, reasonable attorneys’ fees and expenses) arising out of orotherwise relating to any claims of third parties against any of the Mossimo,Inc. Parties relating to a breach by Target of any warranty, representation,term or condition made or agreed to by Target hereunder or involving themanufacture, packaging, distribution, promotion, sale, marketing, advertisingor other use of the Trademarks, the Target Design Materials, the ExclusiveMerchandise or the Trademark Use Materials, provided that (a) prompt writtennotice is given to Target upon Mossimo, Inc. becoming aware of any such actualor threatened claims or suits; (b) Target shall have the option to exclusivelyundertake and conduct the defense and/or settlement of any such claims orsuits; and (c) no settlement or attempt at settlement of any such claims orsuits is made without the prior written consent of Target; and providedfurther, that in no event shall Target’s liability hereunder exceed the amountof Fees actually paid by Target hereunder for the previous twelve (12)months.  Mossimo, Inc. acknowledges thatthis indemnity does not include those items for which Mossimo, Inc. isindemnifying Target in Section 14.2 below.

 

14.2                           Indemnificationof Target.    Mossimo, Inc. shall defend, indemnify andhold Target and its affiliates, directors, officers, employees, and agents (the“Target Parties”) harmless from and against any liabilities, losses, claims,suits, damages, costs and expenses (including without limitation, reasonableattorneys’ fees and expenses), arising out of or otherwise relating to anyclaims of third parties against any of the Target Parties relating to a breachby Mossimo, Inc. of any warranty, representation, term or condition made oragreed to by Mossimo, Inc. hereunder or alleging trademark infringement, unfaircompetition or infringement of other similar proprietary rights, arising out ofthe use by Target and/or its contractors of the Trademarks or the MossimoDesign Materials as authorized in the Prior Agreement or this RestatedAgreement, provided that (a) prompt written notice is given to Mossimo,Inc. of any such actual or threatened claims or suits; (b) Mossimo, Inc.shall have the option to exclusively undertake and conduct the defense and/orsettlement of any such claims or suits; and (c) no settlement or attemptat settlement of any such claims or suits is made without the prior writtenconsent of Mossimo, Inc., and provided further, that in no event shall MossimoInc.’s liability hereunder exceed the amount of Fees actually received byMossimo Inc. hereunder for the previous twelve (12) months.  Target acknowledges that

 

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this indemnitydoes not include those items for which Target is indemnifying Mossimo, Inc. inSection 14.1 above.

 

14.3                           Insurance.

 

(a)                                  Targetshall maintain throughout the Term, at its own expense, general liabilityinsurance and product liability insurance, with a responsible insurance carrieror carriers providing adequate protection (at least in the amount of $5,000,000single limits for personal injury or property damage, with no deductible) andcovering Mossimo, Inc. as an additional insured.  Upon request, Target shall provide Mossimo,Inc. with evidence of such insurance.

 

(b)                                 Mossimo,Inc. shall obtain and maintain throughout the Term, at its own expense,insurance providing adequate protection for any infringement claims (at leastin the amount of $1,000,000 single limits with customary deductibles) andnaming the Target Parties as additional insureds.  Upon request, Mossimo, Inc. shall deliver toTarget a fully paid certificate or certificates of insurance, naming the TargetParties as additional insureds, and providing that such policy or policies arecancelable only after thirty (30) days prior written notice to Target.

 

15.                                 **Confidentiality**.      Theparties acknowledge and agree that any and all reports and financialinformation disclosed by a party pursuant to this Restated Agreement areconfidential information commercially valuable to such party (the “ConfidentialInformation”).  The parties acknowledgethat Confidential Information is disclosed hereunder on a confidential basis tobe used only as expressly permitted by the disclosing party.  Each receiving party, its officers,directors, employees, and agents, shall protect the Confidential Informationbelonging to the other party and shall not disclose it to any other person,firm, organization, or employee unless authorized, in writing, by thedisclosing party or required by governmental or judicial law regulation orruling, including pursuant to subpoena or other court or administrativeprocess.  Except as expressly permittedhereunder, the Confidential Information may not be copied, reprinted,duplicated, or recreated in whole or in part without the express writtenconsent of the disclosing party.  Eachreceiving party shall take responsibility for action by instruction, agreementor otherwise with respect to its employees or other persons permitted access tothe Confidential Information to comply fully with the obligations hereunderwith respect thereto.  The parties eachagree to return the Confidential Information belonging to the other party, andall copies thereof, to the disclosing party, upon request.  Each party hereby consents to the disclosureof its Confidential Information to any of the other party’s attorneys,accountants and similar third parties who have a business “need to know” suchinformation.

 

16.                                 **Public Announcements and Press Releases.**      Thetiming and content of all public announcements and press releases relating tothis Agreement and the transactions contemplated herein shall be subject to themutual approval of Mossimo, Inc. and Target, except to the extent disclosuremay be required under applicable regulations of the Securities and ExchangeCommission or any applicable exchange. In the event of any such required disclosure, the party required to makesuch disclosure will to the extent

 

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practicableconsult with the other party prior to making such disclosure.  If this Agreement is required to be filed byeither party with the Securities and Exchange Commission, the party required tomake such filing will, if requested by the other party, request confidentialtreatment for such portions of this Agreement as reasonably requested by theother party and undertake reasonable efforts to obtain such confidentialtreatment.

 

17.                                 **General Provisions**.

 

17.1                           Notices.      Allnotices and other communications required or permitted to be given under thisRestated Agreement shall be in writing and shall be delivered either bypersonal service, facsimile or prepaid overnight courier service and addressedas follows:

 
| **If to  Mossimo, Inc.:** | ** ** | **Mossimo,  Inc.**2016 Broadway  Santa Monica, CA 90404  Attn.: Chief Executive Officer               |
|---------------------------|------------|-------------------------------------------------------------------------------------------------------|
|                      |       |                                                                                                  |
| **If to  Target:**        | ** ** | **Target  Corporation**

 

1000 Nicollet Mall  Minneapolis, MN 55403  Attn: SVP, Softlines      |
|                      |       |                                                                                                  |
| **With a  copy to:**      | ** ** | **Target  Law Department**1000 Nicollet Mall,  TPS-3255  Minneapolis, MN 55403  Attn: General Counsel |

 

If deliveredpersonally, such notices or other communications shall be deemed delivered upondelivery.  If sent by fax, such notice orother communications shall be deemed delivered when received provided that thesender has confirmation of receipt.  Ifsent by prepaid overnight courier service, such notices or other communicationsshall be deemed delivered upon delivery or refusal to accept delivery asindicated on the return receipt.  Eitherparty may change its address at any time by written notice to the other partyas set forth above.

 

17.2                           EntireAgreement.    This Restated Agreement and the exhibitsattached hereto set forth the entire agreement and understanding between theparties with respect to the subject matter hereof and supersedes any and allprior negotiations, discussions and agreements relating to the subject matterhereof.  No representations, express orimplied, other than those specifically set forth herein have been made by anyparty hereto.  This Restated Agreementmay not be orally changed, altered, modified or amended in any respect.  Notwithstanding the foregoing, this RestatedAgreement shall not affect any rights or obligations under the Prior Agreementto the extent attributable to actions or

 

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omissionsprior to the Effective Date of this Agreement (other than the payment of Feesfor Contract Year 2006 which are exclusively governed by this RestatedAgreement).

 

17.3                           Successorsand Assigns.     Without limiting anything hereinto the contrary, this Restated Agreement shall be binding upon and shall inureto the benefit of the successors and permitted assigns of the parties.

 

17.4                           Choiceof Law.     The validity, construction andenforcement of this Restated Agreement shall be governed by the laws of theState of Minnesota, without regard to its choice of law principles.

 

17.5                           NoWaiver.    No waiver by any party hereto, whetherexpress or implied, of any provision of this Restated Agreement or of anybreach or default of any party, shall constitute a continuing waiver of suchprovision or any other provisions of this Restated Agreement, and no suchwaiver by any party shall prevent such party from acting upon the same or anysubsequent breach or default of the other party of the same or any otherprovision of this Restated Agreement.

 

17.6                           Disclaimerof Agency.      Nothing in this RestatedAgreement shall create a partnership or joint venture or establish therelationship of principal and agent or any other relationship of a similarnature between the parties hereto, and neither Target nor Mossimo, Inc. shallhave the power to obligate or bind the other in any manner whatsoever nor shallGiannulli have the power to obligate or bind Target in any manner whatsoever.

 

17.7                           Counterparts. ThisRestated Agreement may be executed in any number of counterparts, each of whichshall be deemed an original, but all of which together shall constitute one andthe same instrument.

 

17.8                           Survival.      Theprovisions of Sections 2.5, 5, 6, 9.1, 9.2, 9.3, 9.5, 10.4, 14, 15, 16 and thisSection 17 shall survive the expiration or termination of this RestatedAgreement.

 

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**INWITNESS WHEREOF**, the parties hereto have executed thisRestated Agreement, in the manner appropriate to each, as of the day and yearfirst above written.

 
| ** ** | **TARGET CORPORATION** |
|------------|------------------------|
|       |                   |   |
|       |                   |   |
|       |                   | By: |   |   |
|       |                   |   | Patricia  Adams |   |
|       |                   |   | SVP,  Softlines |   |
|       |                   |   |
|       |                   |   |
|       |                   | **TARGET BRANDS, INC.** |
| ** ** | ** **             | ** ** |
|       |                   | By: |   |   |
|       |                   | Name: |   |   |
|       |                   | Title: |   |   |
|       |                   |   |   |   |
|       |                   |   |
|       |                   | **MOSSIMO, INC.** |
| ** ** | ** **             | ** ** |
|       |                   | By: |   |   |
|       |                   | Name: |   |   |
|       |                   | Title: |   |   |
|            |                        |  |  |  |  |  |

 

Theundersigned confirms that he has read, understands and agrees to the terms andprovisions of the foregoing Restated Agreement, including without limitation,the provision of his services and the rights granted hereunder to Target to usethe Giannulli Identification and acknowledges and agrees that the terms andprovisions hereof are binding upon his heirs, personal representatives,successors and assigns.

 
| ** ** | ** ** | ** **            |
|------------|------------|-----------------------|
|       | ** ** | **Mossimo Giannulli** | ** ** |
|            |            |                       |  |

 

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**EXHIBIT A**

 

**Trademarks**

 

**Registrations**

 
| **Trademark**      | ** ** | **Class**  | ** ** | **Registration Number** | ** ** | **Registration Date** | ** ** |
|--------------------|------------|------------|------------|-------------------------|------------|-----------------------|------------|
| ** **         | ** ** | ** ** | ** ** | ** **              | ** ** | ** **            | ** ** |
| M IN A BOX DESIGN  |       | 25         |       | 1611314                 |       | 28 Aug 1990           |       |
| MOSS               |       | 9          |       | 2155830                 |       | 05 May 1998           |       |
| MOSS               |       | 25         |       | 2157797                 |       | 12 May 1998           |       |
| MOSSIMO (Block)    |       | 3          |       | 2491176                 |       | 18 Sep 2001           |       |
| MOSSIMO (Block)    |       | 9          |       | 1746343                 |       | 12 Jan 1993           |       |
| MOSSIMO (Block)    |       | 14         |       | 2051272                 |       | 08 Apr 1997           |       |
| MOSSIMO (Block)    |       | 25         |       | 1551068                 |       | 08 Aug 1989           |       |
| MOSSIMO (Stylized) |       | 3          |       | 2591646                 |       | 9 Jul 2002            |       |
| MOSSIMO (Stylized) |       | 9          |       | 2329496                 |       | 14 Mar 2000           |       |
| MOSSIMO (Stylized) |       | 14         |       | 2053214                 |       | 15 Apr 1997           |       |
| MOSSIMO (Stylized) |       | 18         |       | 2341551                 |       | 11 Apr 2000           |       |
| MOSSIMO (Stylized) |       | 25         |       | 2201308                 |       | 03 Nov 1998           |       |
| MOSSIMO (Stylized) |       | 42         |       | 1970116                 |       | 23 Apr 1996           |       |
| MOSSIMO (Stylized) |       | 42         |       | 1984437                 |       | 02 Jul 1996           |       |
| MOSSIMO GIANNULLI  |       | 9          |       | 2157796                 |       | 12 May 1998           |       |
| MOSSIMO GIANNULLI  |       | 25         |       | 2155829                 |       | 05 May 1998           |       |

 

**Applications**

 
| **Trademark**       | ** ** | **Class** | ** ** | **Application Number** | ** ** | **Filing Date** | ** ** |
|---------------------|------------|-----------|------------|------------------------|------------|-----------------|------------|
|                |       |      |       |                   |       |            |       |
| BABY MOSS           |       | 25        |       | 76/034442              |       | 12 Apr 2000     |       |
| MOSS                |       | 4, 18     |       | 76/056284              |       | 24 May 2000     |       |
| MOSS  (divided out) |       | 3         |       | 75/981026              |       | 24 May 2000     |       |

 

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**EXHIBIT B**

 

**Exclusive Merchandise Categories**

 

Women’s:   CasualDenim & Sportswear; Dresses; Activewear; Skiwear; Golfwear; Tenniswear;Intimate Apparel (sleepwear, robes, loungewear, daywear, panties &foundations).

 

FashionAccessories:   Jewelry; Watches;Luggage; Handbags; Small Leather Goods; Belts; Neckwear; Hair Goods; Hats;Rainwear; Cold Weather; Gloves; Slippers.

 

Men’s:    CasualDenim & Sportswear; T-shirts; Swimwear; Activewear; Skiwear; Golfwear;Tenniswear; Furnishings; Accessories (hats, belts, small leather goods).

 

Girls 0-14:  Casual& Denim Sportswear; Dresses; Activewear; Swimwear; Furnishings; Underwear;Fashion Accessories (cold weather accessories, slippers, accessories, handbags,backpacks, hosiery).

 

Boys 0-20:  Casual& Denim Sportswear; T-shirts; Activewear; Swimwear; Furnishings (sleepwear,cold weather accessories, slippers,); Underwear.

 

Newborn &Layette:  Boy and Girl.

 

Footwear:  Womens;Mens; Boys; Girls.

 

Cosmetics:  Treatment;Fragrance; Bath & Body; Lip & Nail; Cosmetic Accessories.

 

Home Textiles:  Bedding; Bath; Table Linens; Rugs. 

 

Recreation:  Luggage, Backpacks.

 

FashionAccessories:  Sunglasses, sport glasses and optical frames for men,women and children, and eyeglass cases.

 

**Existing Licensee Merchandise Categories**

 

Women’s:  Swimand Bodywear.

 

Men’s:  Hosiery;Ties; Tailored clothing, including suits, sport coats, dress shirts, dresstrousers, tuxedos, tailored overcoats and casual trousers.

 

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**EXHIBIT C**

 

**Existing Licensees in the Territory**

 

Lunada Bay Corporation

 

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