ASSET PURCHASE AGREEMENT
	 

	 
		THIS ASSET PURCHASE AGREEMENT, made as of this 24th day of May, 2007
		(this “Agreement”), by and among G-III Leather Fashions, Inc.,
		a New York corporation (“Buyer”), G-III Apparel Group, Ltd., a
		Delaware corporation (“Parent”) (solely with respect to
		Section 10(m) hereof), Starlo Fashions Inc., a New York corporation
		(“Starlo”), Jessica Howard, Ltd., a New York corporation
		(“Jessica Howard”), Industrial Cotton,
		Inc., a New York corporation (“Industrial Cotton” and
		collectively with Starlo and Jessica Howard, “Sellers”), and
		Robert Glick and Mary Williams (each solely with respect to Section 10(e)
		hereof).
	 

	 
		W I T N E S S E
		T H:
	 

	 
		WHEREAS, Sellers manufacture and market, inter alia, women’s
		dresses and sportswear under brands owned by Sellers;
	 

	 
		WHEREAS, Sellers desire to sell, and Buyer desires to purchase, with
		certain exceptions, the assets owned and the businesses and operations
		conducted by Jessica Howard and Industrial Cotton, and the assets owned or
		licensed by Starlo and used or useful in the operations conducted by Jessica
		Howard and Industrial Cotton, including, without limitation, related to
		products sold under the Prime Industrial Cotton, Crafted Industrial
		Cotton, Nine Rivets, Jessica Howard, Elizabeth Howard,
		Eliza J. Howard and Eliza J labels (collectively, the
		“Business”), upon the terms and subject to the conditions set
		forth in this Agreement; and
	 

	 
		WHEREAS, Buyer intends to create new Divisions (as defined below) in
		which to use the Assets (as defined below) in connection with its business.
	 

	 
		NOW, THEREFORE, in consideration of the mutual premises and agreements
		contained herein, the parties hereto agree as follows:
	 

	 
		1.
	 

	 
		Definitions.  As used herein, the following terms shall have
		the following meanings:
	 

	 
		1.1
	 

	 
		Affiliates means, as to the Person in question, any Person that
		controls, is controlled by, or is under common control with, the Person in
		question; and the term “control” means possession of the power to
		direct or cause the direction of the management and policies of a Person
		whether through ownership of voting securities, by contract, or otherwise.
	 

	 
		1.2
	 

	 
		Assets means the tangible and intangible assets of Sellers used or
		useful in connection with the Business, as well as certain other enumerated
		assets, except for the “Excluded Assets” (as hereinafter defined).
		 Without limiting the generality of the foregoing, the Assets shall
		include the following:
	 

	 
		(a)
	 

	 
		all registered and unregistered trademarks, trade names, service marks,
		designs, franchises, licenses, permits, privileges and other proprietary
		rights, if any, including all applications, registrations and renewals in
		connection therewith, owned or held by
	 

	 
		
 

	 

	 
		 
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		Sellers and used by or useful to Sellers in connection with the Business
		including, without limitation, those set forth in Schedule 1.2(a)
		hereto;
	 

	 
		(b)
	 

	 
		all furniture, fixtures, improvements, office materials and supplies, and
		other tangible personal property of every kind and description owned or held by
		Sellers that are used or useful in connection with the Business;
	 

	 
		(c)
	 

	 
		all rights and benefits of (i) Sellers under lease agreements entered
		into by, or for the benefit of, Sellers with respect to the Leased Premises,
		and (ii) Sellers under all other Contracts entered into by, or for the benefit
		of, Sellers in connection with the Business, all of which (including, without
		limitation, Consent Contracts) are set forth on Schedule 1.2(c);
	 

	 
		(d)
	 

	 
		all warranties, rights and other intangible assets of Sellers with
		respect to the Business that are not Excluded Assets;
	 

	 
		(e)
	 

	 
		all records and files of Sellers, including, without limitation, customer
		and supplier lists, records, files and account statements, correspondence with
		customers or suppliers and potential customers or suppliers and all related
		documents, records of purchase and invoices recording purchases, customer
		orders, stockroom records, financial accounting and credit records, personnel
		records, general correspondence and any similar document or record related to
		or useful in the Business, but specifically excluding the minute books and
		records relating solely to the incorporation of Sellers; provided,
		however, that in the case of Starlo, if any of the foregoing relate
		primarily to businesses or operations of Starlo other than the Business, the
		Assets shall include a true, correct and complete copy of such records and
		files;
	 

	 
		(f)
	 

	 
		all purchase and sales orders with respect to the Business in process on
		the Closing Date (as defined in Section 1.5) to the extent merchandise
		thereunder has not been shipped to customers of Sellers and which are not,
		therefore, accounts receivable (“Orders-in-Process”) as are
		specified on Schedule 1.2(f);
	 

	 
		(g)
	 

	 
		all samples, patterns, drawings, creative designs, ideas, sketches, plans
		and other similar matters with respect to the Business owned by Sellers,
		however evidenced (including those in the possession of third parties, but
		which are the property of Sellers);
	 

	 
		(h)
	 

	 
		all of Sellers’ goodwill and going concern value in the Business;
		and
	 

	 
		(i)
	 

	 
		all inventory of Sellers with respect to the Business, including
		inventory relating to Orders-in-Process, set forth on Schedule 1.2(i)
		(the “Purchased Inventory”).
	 

	 
		1.3
	 

	 
		Base Purchase Price means $4,285,000.
	 

	 
		1.4
	 

	 
		Closing means the consummation, on the Closing Date and at the
		Closing Place, of the purchase, assignment, conveyance and sale of the Assets
		contemplated hereunder.
	 

	 
		
 

	 

	 
		2
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		1.5
	 

	 
		Closing Date means the date on which the Closing occurs, which
		shall be the date that this Agreement is executed and delivered by all the
		parties hereto or such other date as the parties hereto may agree.
	 

	 
		1.6
	 

	 
		Closing Place means the offices of Fulbright & Jaworski
		L.L.P., 666 Fifth Avenue, New York, New York, or such other place as the
		parties hereto may agree.
	 

	 
		1.7
	 

	 
		Code means the Internal Revenue Code of 1986, as amended.
	 

	 
		1.8
	 

	 
		Consent Contracts has the meaning assigned to such term in Section
		1.22.
	 

	 
		1.9
	 

	 
		Contracts means written or oral contracts, leases, licenses,
		agreements, arrangements, commitments, instruments or understandings.
	 

	 
		1.10
	 

	 
		Customer Allowances means allowances, chargebacks, credits,
		rebates, deductions, reductions or settlements given to any customer resulting
		from alleged markdowns and/or losses claimed by such customer with respect to
		sales of products.
	 

	 
		1.11
	 

	 
		Designer Brands Division means a new division of Buyer to be
		created to operate business relating to new designer brands and related private
		label product.
	 

	 
		1.12
	 

	 
		Divisions means the Jessica Howard Division, the Designer Brands
		Division and the Positive Attitude Division.
	 

	 
		1.13
	 

	 
		EBITA means the earnings before interest and taxes and
		amortization of intangibles of the applicable Division, which shall be equal to
		the net sales of such Division less (i) cost of sales, including royalties and
		license fees and (ii) the expenses set forth on Schedule 1.13 hereto,
		all as determined in accordance with the Buyer’s accounting and allocation
		procedures utilized in preparing internal financial statements for Buyer’s
		divisions.
	 

	 
		1.14
	 

	 
		EBITA Period means the (i) the period beginning upon the Effective
		Time and ending on January 31, 2008, (ii) the period beginning on February 1,
		2008 and ending on January 31, 2009, (iii) the period beginning on February 1,
		2009 and ending on January 31, 2010 and (iv) the period beginning on February
		1, 2010 and ending on January 31, 2011.
	 

	 
		1.15
	 

	 
		Effective Time means the close of business of the Business on the
		Closing Date.
	 

	 
		1.16
	 

	 
		Encumbrances means any mortgages, pledges, preemptive purchase
		rights, security interests, claims, liens, charges, or other encumbrances of
		any kind including, without limitation, any liens arising under Title IV of
		ERISA, Section 302 of ERISA or Section 412 of the Code.
	 

	 
		1.17
	 

	 
		ERISA means the Employee Retirement Income Security Act of 1974,
		as amended, or any successor law, and regulations and rules issued pursuant to
		such act or any successor law.
	 

	 
		1.18
	 

	 
		Escrow Agent means Fulbright & Jaworski L.L.P.
	 

	 
		
 

	 

	 
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		1.19
	 

	 
		Escrow Agreement means that certain escrow agreement dated as of
		the Closing Date by and among Buyer, Sellers’ Representative and the
		Escrow Agent in the form attached hereto as Exhibit A.
	 

	 
		1.20
	 

	 
		Escrow Amount means Eight Hundred Thousand Dollars ($800,000).
	 

	 
		1.21
	 

	 
		Escrow Funds means cash held by the Escrow Agent from time to time
		pursuant to the terms of the Escrow Agreement.
	 

	 
		1.22
	 

	 
		Excluded Assets means (a) all cash and marketable securities of
		each Seller, whether on hand or in banks, held by or on behalf of or for such
		Seller and all bank accounts or accounts with other financial institutions held
		by or in the name of or on behalf of such Seller, (b) all prepaid expenses,
		accounts and notes receivable of each Seller, (c) any claims or causes of
		action of each Seller, (d) all rights and benefits of Sellers under lease
		agreements entered into by or for the benefit of Sellers with respect to room
		1401 located at 1385 Broadway, New York, New York and with respect to 2400 83rd
		Street, North Bergen, New Jersey (together, the “Excluded
		Premises”), (e) the lease agreements with respect to the Leased
		Premises, (f) all telephone systems used by Sellers at Leased Premises and/or
		the Excluded Premises, (g) all insurance policies of Sellers and all proceeds
		thereof, (h) any Contracts that cannot be assigned to Buyer without the consent
		of the counter-party or counter-parties thereto (the “Consent
		Contracts”), (i) all loan or factoring agreements and related documents by
		and between any of Sellers and their Affiliates, on the one hand, and one or
		more of The CIT Group/Commercial Services, Inc., JPMorgan Chase Bank, N.A. and
		Israel Discount Bank, on the other hand, and all amounts due thereunder to any
		Seller or its Affiliates, (j) that certain Settlement Agreement, dated as of
		August 24, 2006, by and between Levi Strauss & Co. and Industrial Cotton,
		(k) that certain Agreement dated June 13, 2006 by and between JV/China Ting,
		LLC and Jessica Howard and (l) the capital stock of Positive Attitude.
	 

	 
		1.23
	 

	 
		Glick means Robert Glick.
	 

	 
		1.24
	 

	 
		Government Entity means any United States or foreign, federal,
		state or local court or tribunal or administrative, governmental or regulatory
		body, agency, commission, division, department, board, bureau, public body,
		instrumentality or other authority.
	 

	 
		1.25
	 

	 
		Included Contracts means any and all Contracts included among the
		Assets and being assigned to Buyer hereunder.
	 

	 
		1.26
	 

	 
		Jessica Howard Division means a new division of Buyer to be
		created to operate the Business.
	 

	 
		1.27
	 

	 
		knowledge of Sellers or Sellers’ knowledge means the
		actual knowledge, after reasonable inquiry, of Glick and Jeff Elias.
	 

	 
		1.28
	 

	 
		Leased Premises means (i) the portion of the 10th floor at 1001
		Sixth Avenue, New York, New York which is the subject of the lease dated May
		18, 2005 between 1001 Sixth Associates and Alison Nicole, Inc.; (ii) the 17th
		floor at 1001 Sixth Avenue, New York, New York which is the subject of the
		lease dated April 22, 2005 between 1001 Sixth Associates and Jennifer Star,
		Inc.; and (iii) 14th floor, room 1407/1407A, located at 1385
	 

	 
		
 

	 

	 
		4
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		Broadway, New York, New York which is the subject of the lease dated
		April 10, 2006 between 1385 Broadway Company and JJ&J, Inc.
	 

	 
		1.29
	 

	 
		Permitted Liens mean (a) statutory liens for Taxes to the extent
		that the payment thereof is not past due or to the extent the taxpayer is
		contesting such Taxes in good faith through appropriate proceedings, (b)
		statutory or common law liens to secure landlords, lessors or renters under
		real or personal property leases or rental agreements to the extent that no
		payment or performance under any such lease or rental agreement is in default,
		arrears or is otherwise past due, (c) deposits or pledges made in connection
		with, or to secure payment of, workers’ compensation, unemployment
		insurance or old age pension programs mandated under applicable laws, (d)
		statutory or common law liens in favor of carriers, warehousemen, mechanics and
		materialmen, statutory or common law liens to secure claims for labor,
		materials or supplies and other like liens, which secure obligations to the
		extent the payment thereof is not in arrears or otherwise past due, (e) for any
		Asset with respect to which any Seller is a lessee or licensee, any residual
		right, title or interest in or to such Asset held by the lessor or licensor of
		such Asset, and (f) other imperfections of title and Encumbrances that do not
		and will not, individually or in the aggregate, impair, detract from or
		interfere with the continued use and operation of such Assets or the Business.
	 

	 
		1.30
	 

	 
		Person means and includes an individual, a partnership, a joint
		venture, an association, a corporation, a trust, an unincorporated
		organization, a limited liability company and a Government Entity.
	 

	 
		1.31
	 

	 
		Positive Attitude means Positive Attitude, Inc., a New York
		corporation.
	 

	 
		1.32
	 

	 
		Positive Attitude Division means a new division of Buyer to be
		created to operate business relating to the Positive Attitude brand and
		related private label product.
	 

	 
		1.33
	 

	 
		Tax or Taxes means any federal, state, local or foreign
		income, gross receipts, license, payroll, employment, excise, severance, stamp,
		occupation, premium, windfall profits, environmental (including taxes under
		Code §59A), customs duties, capital stock, franchise, profits,
		withholding, social security (or similar), unemployment, disability, real
		property, personal property, sales, use, transfer, registration, value added,
		alternative or add-on minimum, estimated or other tax of any kind whatsoever,
		whether computed on a separate or consolidated, unitary or combined basis or in
		any other manner, including any interest, penalty, or addition thereto, whether
		disputed or not and including any obligation to indemnify or otherwise assume
		or succeed to the Tax liability of any other Person.
	 

	 
		1.34
	 

	 
		Tax Return means any return, declaration, report, claim for refund
		or information return or statement relating to Taxes, including any schedule or
		attachment thereto and any amendment thereof.
	 

	 
		1.35
	 

	 
		Transition Services Agreement means that certain Transition
		Services Agreement dated as of the Closing Date by and among Buyer and Sellers
		in the form attached hereto as Exhibit B.
	 

	 
		1.36
	 

	 
		Williams means Mary Williams.
	 

	 
		
 

	 

	 
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		2.
	 

	 
		Purchase of Assets and Purchase Price.
	 

	 
		2.1
	 

	 
		Purchase of Assets.  Subject to the terms and upon
		satisfaction of the conditions contained in this Agreement, at the Closing,
		Sellers shall sell, assign, transfer, convey and deliver to Buyer, and Buyer
		shall purchase from Sellers, all right, title and interest of Sellers in and to
		the Assets (but not the Excluded Assets), free and clear of all Encumbrances
		(except for Permitted Liens) for the consideration specified in Section 2.4.
	 

	 
		2.2
	 

	 
		Non-Assumption of Liabilities.  Except as specifically set
		forth in this Section 2.2, Buyer expressly does not, and shall not, assume or
		be deemed to have assumed under this Agreement or by reason of any transaction
		contemplated hereunder, any debts, liabilities (contingent or otherwise) or
		obligations of any Seller of any nature whatsoever.  Buyer shall and
		hereby agrees to assume and discharge as of the Effective Time, (i) the
		obligations arising subsequent to the Effective Time under the Included
		Contracts and (ii) payment for the piece goods and inventory on order listed on
		Schedule 2.2 hereto (collectively, the “Assumed
		Obligations”); provided, however, that notwithstanding any
		other provision of this Agreement, the Assumed Obligations shall not include
		(i) any debts, liabilities (contingent or otherwise) or obligations of any
		Seller (including, without limitation, trade accounts payable and liabilities
		that should be accrued on the Financial Statements (as defined herein) in
		accordance with generally accepted accounting principles up to and including
		the Closing Date) with respect to those Assumed Obligations referred to in this
		Section, arising out of any Contract (a) required to be listed but not listed
		on Schedule 1.2(c) hereto (regardless of any knowledge thereof on the
		part of Buyer) and (b) the benefits of which are not
		validly assigned to Buyer, (ii) any liability or obligation for Taxes, whether
		or not accrued, assessed or currently due and payable (a) of any Seller,
		whether or not it relates to the operation of any Seller’s business, (b)
		arising from the operation of any Seller’s business or the ownership of
		the Assets on or prior to the Effective Time, or (c) arising out of the
		consummation of the transactions contemplated hereby (for purposes of this
		Section 2.2, all real property Taxes, personal property Taxes and similar ad
		valorem obligations levied with respect to the Assets for a Tax period that
		includes (but does not end on) the Closing Date shall be apportioned between
		Sellers and Buyer based upon the number of days of such period included in the
		Tax period before (and including) the Closing Date and the number of days of
		such Tax period after the Closing Date), or (iii) any liability or obligation
		of any Seller to or with respect to employees and other personnel (their
		spouses, dependents and beneficiaries) of any Seller or any Employee Plan (as
		defined in Section 3.13), unless and except to the extent such liability or
		obligation is specifically assumed by Buyer under this Agreement.
	 

	 
		2.3
	 

	 
		Transfer and Assumption Documents.
	 

	 
		(a)
	 

	 
		At the Closing, Sellers shall deliver to Buyer such deeds, bills of sale,
		endorsements, assignments and other instruments of sale, conveyance, transfer
		and assignment, satisfactory in form and substance to Buyer and its counsel, as
		may be reasonably requested by Buyer, in order to convey to Buyer good and
		valid title to the Assets, free and clear of all Encumbrances (other than
		Permitted Liens).
	 

	 
		(b)
	 

	 
		At the Closing, Sellers shall deliver to Buyer all written consents which
		are required under any Included Contract; provided, however, that as to
		any such Included Contract the assignment of which by its terms requires prior
		consent of the parties thereto, if
	 

	 
		
 

	 

	 
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		such consent is not obtained prior to or on the Closing Date, Sellers
		shall deliver to Buyer written documentation setting forth arrangements for the
		transfer of the economic benefit of such Included Contracts to Buyer as of the
		Closing Date under terms and conditions reasonably acceptable to Buyer.
	 

	 
		(c)
	 

	 
		At the Closing, Buyer will deliver to Sellers such instruments and
		documents, satisfactory in form and substance to Sellers and their counsel, as
		may be reasonably requested by Sellers in order to effect the assumption of the
		Assumed Obligations by Buyer.
	 

	 
		2.4
	 

	 
		Purchase Price.  In consideration for the Assets, Buyer shall
		deliver to Sellers the following (which collectively comprise the
		“Consideration”) at the Closing:  (a) cash in an amount
		equal to the Base Purchase Price less the Escrow Amount and (b) cash in the
		amount set forth on Schedule 2.4 for the Purchased Inventory (subject to
		adjustment pursuant to Section 10(n)).
	 

	 
		2.5
	 

	 
		Escrow Amount.
	 

	 
		(a)
	 

	 
		A portion of the Base Purchase Price equal to the Escrow Amount shall be
		held and disbursed by the Escrow Agent in accordance with the terms of the
		Escrow Agreement and this Section 2.5.  If at any time, or from time to
		time, Buyer shall become entitled to receive one or more payments from Sellers
		under Section 9, Buyer shall, in accordance with the terms of the Escrow
		Agreement, receive a disbursement of the Escrow Funds in an amount equal to the
		lesser of (a) the full amount owed by Sellers to Buyer under Section 9 and (b)
		the full amount of the Escrow Funds then held by the
		Escrow Agent.  The obligation of Sellers to pay any amount under Section 9
		shall be reduced by the actual amount of any such disbursement received by
		Buyer.
	 

	 
		(b)
	 

	 
		On the six (6) month anniversary of the Closing Date, the Escrow Agent
		shall, in accordance with the terms of the Escrow Agreement, calculate the
		difference between (x) $200,000 and (y) the sum of any disbursements of Escrow
		Funds made to Buyer in accordance with Section 2.5(a) and the amounts of all
		outstanding claims by Buyer against Sellers under Section 9 through the close
		of business on such date.  If the difference so calculated is greater than
		$0, the Escrow Agent shall release such amount to Sellers in accordance with
		the terms of the Escrow Agreement.
	 

	 
		(c)
	 

	 
		On the first (1st) anniversary of the Closing Date, the Escrow Agent
		shall, in accordance with the terms of the Escrow Agreement, calculate the
		difference between (x) $400,000 and (y) the sum of (1) any disbursements of
		Escrow Funds made to Buyer in accordance with Section 2.5(a) and (2) the
		amounts of all outstanding claims by Buyer against Sellers under Section 9
		through the close of business on such date.  If the difference so
		calculated is greater than $0, the Escrow Agent shall release such amount to
		Sellers in accordance with the terms of the Escrow Agreement.
	 

	 
		(d)
	 

	 
		The Escrow Agent shall, in accordance with the terms of the Escrow
		Agreement, calculate the difference between the (x) the portion of the Escrow
		Amount not disbursed through the close of business on the date that is eighteen
		(18) months after the Closing Date and (y) the amount of all outstanding claims
		by Buyer against Sellers under Section
	 

	 
		
 

	 

	 
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		9 through the close of business on such date.  Upon the final
		resolution of and payment of such outstanding claims, Sellers shall be entitled
		to the balance, if any, of the Escrow Funds.  The Escrow Agent shall
		release any such balance to Sellers in accordance with the terms of the Escrow
		Agreement.
	 

	 
		(e)
	 

	 
		For purposes of this Section 2.5, a claim shall be outstanding under
		Section 9 if Buyer shall have delivered a Notice of Claim to the Sellers’
		Representative in accordance with this Agreement and the claims referred to
		therein shall not have been finally resolved or any amounts due to Buyer with
		respect thereto shall not have been paid in full.  
	 

	 
		(f)
	 

	 
		Any portion of the Escrow Amount returned to Sellers pursuant to the
		Escrow Agreement shall constitute “Consideration.”
	 

	 
		2.6
	 

	 
		Allocation of Purchase Price.  Buyer and Sellers shall work
		together in good faith to determine promptly after the Closing, but in no event
		more than sixty (60) days after the Closing Date, the allocation of the
		Consideration (and all other capitalized costs) among the Assets in accordance
		with the applicable requirements of Section 1060 of the Code and the Treasury
		regulations thereunder (and any similar provision of state, local or foreign
		law, as appropriate).  Each of the parties hereto shall not, and shall not
		permit any of its Affiliates to, take a position (except as required pursuant
		to an order of any Governmental Entity) on any Tax Return (including Internal
		Revenue Service Form 8594) or before any Governmental Entity charged with the
		collection of any Tax, or in any judicial proceeding, that is in any way
		inconsistent with the allocation determined in accordance with this Section
		2.6, unless required to do so by applicable law.  If any Governmental
		Entity makes or proposes an allocation with respect to the Assets that differs
		materially from the allocation prepared pursuant to this Section 2.6, each of
		Buyer, on the one hand, and Sellers, on the other hand, shall have the right,
		at its or their election and expense, to contest such entity’s
		determination.  In the event of such a contest, the other party or parties
		hereto shall cooperate reasonably with the contesting party but shall have the
		right to file such protective claims or returns as may be reasonably required
		to protect its or their interests.
	 

	 
		3.
	 

	 
		Representations and Warranties of Sellers.  Sellers, jointly
		and severally, hereby represent, warrant and covenant to Buyer that:
	 

	 
		3.1
	 

	 
		Organization and Good Standing.  Each Seller is a corporation
		duly organized, validly existing and in good standing under the laws of the
		State of New York and has all requisite corporate power and authority to enter
		into and perform and do all things contemplated under this Agreement and all
		documents and agreements necessary to give effect to the provisions of this
		Agreement, to own and lease its assets and to carry on and operate its business
		and operations as now being conducted and as proposed to be conducted by it
		under existing agreements.  Each Seller is duly qualified to do business
		and is in good standing as a foreign corporation in every jurisdiction in which
		the nature of the business conducted by it requires such qualification, except
		for such failures to qualify and be authorized as would not, individually or in
		the aggregate, adversely affect the Assets or the Business in any material
		respect.  Schedule 3.1 sets forth, with respect to each Seller, a
		complete and accurate list of each jurisdiction in which such Seller is
		qualified to do business.  Except as set forth in Schedule 3.1,
	 

	 
		
 

	 

	 
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		no Seller has any ownership interest in any other limited liability
		company, corporation, partnership or other entity.
	 

	 
		3.2
	 

	 
		Organizational Documents.  A copy of the articles of
		incorporation as amended to the date hereof (certified by the Secretary of
		State of the State of New York) of each Seller and the bylaws of each Seller
		have been delivered to Buyer and such documents are complete and correct and
		represent the presently effective articles of incorporation and bylaws of each
		Seller.  The minutes of the meetings of the board of directors of each
		Seller authorizing the execution and delivery of this Agreement and the
		consummation of the transactions contemplated hereby (certified by the
		respective corporate secretaries of Sellers), copies of which have been
		delivered to Buyer, are true, accurate and complete as of the Closing Date.
	 

	 
		3.3
	 

	 
		Ownership of Sellers.  Schedule 3.3 lists the
		percentage equity ownership of each Seller and the names of the owners thereof,
		in each case as of the date hereof.
	 

	 
		3.4
	 

	 
		Authorization and Binding Obligations.  The execution,
		delivery and performance by each Seller of this Agreement have been duly and
		validly authorized by all necessary action, including approval of the entire
		transaction by the unanimous vote of the board of directors and shareholders of
		such Seller.  This Agreement has been duly executed and delivered by each
		Seller and constitutes a legal, valid and binding agreement of such Seller,
		enforceable in accordance with its terms, except as its enforceability may be
		limited by bankruptcy, insolvency, moratorium or other laws relating to or
		affecting creditors’ rights generally and the exercise of judicial
		discretion in accordance with general equitable principles.
	 

	 
		3.5
	 

	 
		No Contravention.  Except as set forth on Schedule
		3.5, the execution, delivery and performance of this Agreement, the
		consummation of the transactions contemplated hereby and the compliance with
		the provisions hereof by each Seller does not, and as of the Closing Date will
		not, (a) violate any provisions of the articles of incorporation or bylaws of
		such Seller, (b) conflict with, result in the breach of, or constitute (or
		with notice or lapse of time or both constitute) a default under, or result in
		the creation of any Encumbrances upon any of the Assets, or require any
		authorization, consent, approval, exemption or other action by or notice to any
		third party or Governmental Entity, under or with respect to any Contract to
		which such Seller is a party or by which any of the Assets is bound or affected
		or (c) violate any laws, regulations, orders or judgments writs, injunctions,
		awards, decrees or licenses applicable to such Seller with respect to any of
		the Assets.
	 

	 
		3.6
	 

	 
		Title to Assets.  Except as set forth on Schedule 3.6
		hereto, each Seller has good and valid title to all of the Assets to be
		transferred by it to Buyer hereunder, free and clear of any Encumbrances (other
		than Permitted Liens).  The bills of sale, assignments of leases,
		agreements, contracts and other arrangements, and other instruments delivered
		to Buyer by Sellers on the Closing Date will be in form and substance
		sufficient to vest in Buyer, and the transfer to Buyer by Sellers of the Assets
		on the Closing Date will convey to Buyer, good and valid title to the Assets,
		free and clear of any Encumbrances (other than Permitted Liens).  The
		Assets (i) are owned, licensed or leased by Sellers, as the case may be, and
		are in Sellers’ possession, (ii) constitute all assets currently used to
		conduct the Business as presently conducted, (iii) are in good operating
		condition and repair (taking into account the age of such
	 

	 
		
 

	 

	 
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		Assets) and (iv) are adequate for the uses and purposes for which they
		are being used.  No Person other than Sellers owns any asset used in the
		Business.
	 

	 
		3.7
	 

	 
		Financial Statements and Material Adverse Changes.
	 

	 
		(a)
	 

	 
		Schedule 3.7(a) contains true, correct and complete copies of the
		unaudited pro forma financial statements, including balance sheets and
		statements of income, retained earnings and cash flows of the Business as of,
		and for the year ended, December 31, 2006 (collectively, the “Financial
		Statements”).  Except as set forth on Schedule 3.7(a),
		each of the Financial Statements is true, complete and correct in all material
		respects, fairly presents results of operations, financial condition, assets,
		liabilities and cash flows of the Business for the periods specified.
		 Except as set forth on Schedule 3.7(a), all material liabilities
		and obligations of the Business, whether accrued, absolute, contingent, direct
		or indirect, perfected, inchoate, unliquidated or otherwise and whether due or
		to become due, have been disclosed in the Financial Statements or in any notes
		or narrative introduction thereto.  The statements of income included in
		the Financial Statements do not contain any material items of special or
		non-recurring income or other income not earned in the ordinary course of
		business except as expressly specified on Schedule 3.7(a).  All
		amounts billed to customers of the Business reflected on the Financial
		Statements and Schedule 3.7(a) are for the Business and not for any
		other business.  Sellers acknowledge and agree that Buyer is relying on
		the accuracy and completeness of the Financial Statements in making its
		determination as to whether it must file the Financial Statements, or any
		portion thereof, with the Securities and Exchange Commission.
	 

	 
		(b)
	 

	 
		Except as set forth on Schedule 3.7(b), there have been no
		material adverse changes, individually or in the aggregate, in the Assets,
		liabilities, business, prospects, revenues, expenses, results of operations or
		condition, financial or otherwise, of the Business since December 31, 2006.
	 

	 
		3.8
	 

	 
		Inventories.  Except as set forth on Schedule 3.8
		hereto, Purchased Inventory does not include in any material amount any items
		below standard quality, damaged or spoiled, obsolete or of a quality or
		quantity not usable or saleable in the normal course of the Business as
		currently conducted within normal inventory “turn” experience.
	 

	 
		3.9
	 

	 
		Leases.  No Seller owns any real property used for the
		conduct of the Business.  The Leased Premises and the Excluded Premises
		(collectively, the “Real Property”) constitute all of the real
		property leased by or for the benefit of Sellers in connection with the
		Business.  All operations of the Business as presently conducted are
		located on the Real Property.  None of Sellers or their Affiliates has
		received any written notice of default under any lease to which it is a party.
	 

	 
		3.10
	 

	 
		Licenses and Authorizations.  Schedule 1.2(a) contains
		a true and complete list of all licenses and authorizations of Sellers used by
		them in the operation of the Business.  Such licenses and authorizations
		are in full force and effect.  Each Seller has complied in all material
		respects with, and is now in compliance in all material respects with, all
		laws, rules, regulations, orders and decrees applicable to such Seller as they
		relate to the Business.
	 

	 
		
 

	 

	 
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		3.11
	 

	 
		Contracts.  Schedule 1.2(c) contains a true and
		complete list of all Contracts of every nature to which Jessica Howard or
		Industrial Cotton is a party or which relate to the Business (except for
		Contracts that are Excluded Assets other than Consent Contracts).  Each
		Seller has complied in all material respects (in accordance with their terms)
		with all of the provisions of such Contracts and with all of the provisions of
		the Orders-in-Process.  Except as set forth on Schedule 3.11, no
		default by any Seller or, to the knowledge of Sellers, by any other party
		thereto, has occurred and is continuing with respect to any of such Contracts
		or Orders-in-Process.  All such Contracts and Orders-in-Process are valid
		and binding in accordance with their terms.
	 

	 
		3.12
	 

	 
		Franchises, Trademarks and Trade Names.  Except as set forth
		on Schedule 3.12, all franchises, trademarks, trade names, service
		marks, copyrights, licenses, privileges and other proprietary rights held by
		any Seller that are used or useful in the Business, as described in Section
		1.2(a), are owned by such Seller or licensed for its use and are valid and in
		good standing, free and clear of any Encumbrances (other than Permitted Liens).
		 Each Seller has taken all necessary action to protect such proprietary
		rights.  Among the other trademarks set forth on Schedule 3.12,
		Prime Industrial Cotton, Crafted Industrial Cotton, Nine
		Rivets, Jessica Howard, Elizabeth Howard, Eliza J.
		Howard, Eliza J and Heavenly Jeans are either valid and/or
		enforceable trademarks, applications or registrations of Sellers and are
		transferable or otherwise licensable to Buyer.  The Business as conducted
		by Sellers does not infringe upon or conflict with any patent, trademark, trade
		name, service mark, copyright, license or other proprietary right of any third
		party, and, except as set forth on Schedule 3.12, no Seller has received
		any notice of infringement upon or conflict with the asserted rights of others.

	 

	 
		3.13
	 

	 
		Employees.  Except as set forth in Schedule 3.13,
		there are no collective bargaining agreements, professional or personal service
		contracts, incentive plans for salespeople, bonus plans and other compensatory
		agreements, plans, arrangements and practices including employee benefit plans
		within the meaning of 3(3) of ERISA (whether or not subject to ERISA), or
		employment agreements, incentive plans or arrangements or any other material
		plan, agreement or arrangement covering present or former employees or other
		personnel of any Seller who are engaged in the Business or with respect to
		which any Seller has any direct or indirect liability relating to the Business,
		whether in connection with the transactions contemplated by this Agreement or
		otherwise (the “Employee Plans”).  Schedule 3.13
		sets forth, with respect to the employees of the Business whose names are set
		forth therein (i) the compensation received by them in each of 2005 and 2006,
		their current annual salary and all other compensation and fringe benefits to
		which they are or may be entitled; and (ii) the amount of accrued bonuses,
		vacation, sick leave, family leave and other leave for such personnel.  No
		Seller is in default in any material respect with respect to any of the
		foregoing obligations (whether such obligations relate to the employees set
		forth on Schedule 3.13 or otherwise), and Sellers will bear full
		responsibility for any such obligation outstanding, or due, owing or accrued
		prior to the Effective Time.  No Seller is in default in any material
		respect with respect to any (a) contributions or material obligations under any
		Employee Plan or (b) withholding or other employment taxes or payments on
		behalf of any current or former employee for which it is obligated on the date
		hereof.  There are no labor controversies pending or, to Sellers’
		knowledge, threatened with respect to the employees of either Seller.  The
		employees of each Seller are not represented by any labor union and, to
		Sellers’ knowledge, no union organizational campaign is in progress with
		respect to such employees.
	 

	 
		
 

	 

	 
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		3.14
	 

	 
		Employee Plans.  Except as specifically set forth on
		Schedule 3.14, (i) no Seller maintains, contributes to (or has an
		obligation to contribute to) or has maintained, adopted or contributed to a
		pension plan (within the meaning of Section 3(2) of ERISA) which is subject to
		Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code, (ii)
		there has been no accumulated funding deficiency within the meaning of
		302(a)(2) of ERISA or Section 412 of the Code with respect to any funded
		pension plan which has resulted or could result in the imposition of an
		Encumbrance upon any of the Assets, and (iii) no Seller has incurred or will
		incur any liability, direct or indirect, contingent or otherwise under Title IV
		of ERISA.
	 

	 
		3.15
	 

	 
		Litigation.  Except as set forth in Schedule 3.15,
		there are no actions, suits, proceedings or investigations of any nature at law
		or in equity, pending or, to Sellers’ knowledge, threatened against or
		relating to any Seller or any of the Assets, which might reasonably result in
		an adverse effect upon the business or operations or condition, financial or
		otherwise, of the Business or the Assets, which seeks to enjoin, prohibit or
		otherwise challenge the transactions contemplated hereby or which might
		reasonably result in an adverse effect on the enjoyment and use by Buyer of any
		of the Assets to be acquired hereunder.  No unsatisfied judgment, award,
		order or decree has been rendered against or affecting Sellers or the Assets
		which might reasonably result in an adverse effect upon the business or
		operations or condition, financial or otherwise, of the Business or any of the
		Assets or which adversely affects the validity or enforceability of any of the
		Contracts or Orders-in-Process listed in the Schedules hereto.
	 

	 
		3.16
	 

	 
		Taxes.
	 

	 
		
	 

	 
		(a)
	 

	 
		Each Seller has timely filed all Tax Returns that it was required to
		file.  All such Tax Returns were correct and complete in all material
		respects and were prepared in substantial compliance with all applicable laws
		and regulations.  Each Seller has made available to Buyer copies of all
		Tax Returns with respect to the conduct of the Business and the ownership of
		the Assets filed by it during the three (3) year period prior hereto.
		 None of such Tax Returns has been audited or is currently the subject of
		audit.  No Seller currently is the beneficiary of any extension of time
		within which to file any Tax Return.  Each Seller has paid, or made
		provisions in accordance with generally accepted accounting principles for the
		payment of, all Taxes due (whether or not shown or required to be shown on any
		Tax Return) through and including the Closing Date, including, but not limited
		to, with respect to 2006.  Sufficient reserves have been established to
		cover any unpaid Taxes of any Seller.  There are no Encumbrances on any of
		the assets of Sellers that arose in connection with any failure (or alleged
		failure) to pay any Tax, other than Permitted Liens.  There is not
		currently pending any dispute or claim concerning any Tax liability with
		respect to the income, business, operations or property of any Seller either
		claimed or raised by any Taxing authority.  No claim has been made by a
		Taxing authority in a jurisdiction where a Seller does not file Tax Returns
		that it is or may be subject to Tax in that jurisdiction.
	 

	 
		
	 

	 
		(b)
	 

	 
		All Taxes which each Seller was required by law to withhold, deposit or
		collect in connection with any amount paid or owing to any employee,
		independent contractor, creditor, partner or other third party have been duly
		withheld, deposited and collected and, to the extent required, have been paid
		to the relevant Taxing authority, and all Forms W-2 and 1099 required with
		respect thereto have been properly completed and timely filed.
	 

	 
		
	 

	 
		
 

	 

	 
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		(c)
	 

	 
		No Seller expects any authority to assess any additional Taxes for any
		period for which Tax Returns have been filed. There is no dispute or claim
		concerning any Tax liability of any Seller either (A) claimed or raised by any
		authority in writing or (B) as to which any director or officer (or other
		Person responsible for Taxes) of any Seller has knowledge based upon personal
		contact with any agent of such authority. Sellers have delivered to Buyer
		correct and complete copies of all Tax examination reports and statements of
		deficiencies assessed against or agreed to by any Seller since January 1, 2001.

	 

	 
		(d)
	 

	 
		None of the Assets is (i) “tax-exempt use property” within the
		meaning of Section 168(h)(1) of the Code or (ii) “tax-exempt bond financed
		property” within the meaning of Section 168(g) of the Code.
	 

	 
		
	 

	 
		(e)
	 

	 
		No Seller has waived any statute of limitations in respect of the
		assessment and collection of Taxes or agreed to any extension of time with
		respect to a Tax assessment or deficiency relating to the ownership of the
		Assets or the operation of the Business on or prior to the Closing Date.
		 No Seller is a party to any Tax allocation or sharing agreement.
	 

	 
		(f)
	 

	 
		None of the Assets is an interest in any Person that is treated as a
		partnership for U.S. federal income Tax purposes or would be treated as a
		pass-through or disregarded entity for any Tax purpose.
	 

	 
		(g)
	 

	 
		None of the Assets is a “United States real property interest”
		within the meaning of Section 897(c) of the Code.
	 

	 
		(h)
	 

	 
		None of the Assumed Obligations is an obligation to make a payment that
		is not deductible under Section 280G of the Code.  Each Seller has
		disclosed on its federal income Tax Returns all positions taken therein that
		could give rise to a substantial understatement of federal income Tax within
		the meaning of Section §6662 of the Code.  No Seller has any
		liability for the Taxes of any Person under Treas. Reg. §1.1502-6 (or any
		similar provision of state, local or foreign law), as a transferee or
		successor, by contract or otherwise.
	 

	 
		3.17
	 

	 
		Books of Account.  The books of account and other records of
		Sellers relating to their respective businesses and operations are complete and
		correct, and accurately present and reflect in all material respects all of the
		transactions relating to such businesses and operations to which they are
		parties or by which they are bound.  Schedule 3.17 includes, for
		each Seller, an accounts receivable trial balance as of the Closing Date for
		such Seller.
	 

	 
		3.18
	 

	 
		Suppliers and Customers.
	 

	 
		(a)
	 

	 
		Except as set forth therein, Schedule 3.18(a) sets forth, for the
		years ended December 31, 2005 and 2006 and for the period of three (3) months
		ended March 31, 2007, the names of (i) the top twenty (20) customers, as
		determined by revenue, of the Business, and the amount of revenues generated by
		each such customer in each such period and (ii) each supplier that accounted
		for more than $100,000 of the operating expenses of the Business during any
		such period.
	 

	 
		(b)
	 

	 
		No Seller has received any written or oral notice that any customer or
		supplier identified on Schedule 3.18(a) has canceled or otherwise
		terminated, or to Sellers’
	 

	 
		
 

	 

	 
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		knowledge threatened to cancel or terminate, its relationship with any
		Seller, or to Sellers’ knowledge threatened to decrease or limit
		materially, its business done with any Seller, and, except as set forth on
		Schedule 3.18(b), no Seller has any reason to believe that any such
		customer, supplier or other Person would not continue its business relationship
		with Buyer following the Closing on substantially the same terms as such
		customer, supplier or other Person has heretofore done business with such
		Seller.
	 

	 
		3.19
	 

	 
		Conduct of the Business.  Each Seller has conducted its
		business and operations in the ordinary course consistent with past practices
		since December 31, 2006.
	 

	 
		3.20
	 

	 
		Insurance.  Each Seller has maintained valid and enforceable
		insurance policies on the Assets and its business and operations, including the
		Business during the period of three (3) consecutive years ending on the date
		hereof.  Schedule 3.20 contains a correct and complete description,
		including policy numbers, of such insurance policies.  Such policies are
		in full force and effect, and Sellers are not in default under any of them.
		 Such insurance is of the kind and in the amount not less than customarily
		obtained by companies engaged in the same or similar businesses and similarly
		situated.  No Seller has received any notice of non-renewal, cancellation
		or intent to cancel, not renew or increase premiums or deductibles with respect
		to such insurance policies nor, to the knowledge of Sellers, is there any basis
		for such action.  Schedule 3.20 also contains a list of all pending
		claims with any insurance company (other than health, medical and dental
		insurance claims of employees).
	 

	 
		3.21
	 

	 
		Related Transactions.  Since December 31, 2005, no current or
		former officer, director, partner, employee, shareholder, member or manager of
		any Seller (including their respective family members), (i) has engaged in any
		transaction with such Seller, or (ii) has been the direct or indirect owner of
		an interest in any Person which is a present competitor, supplier or customer
		of the Business, nor does any such officer, director, partner, employee,
		shareholder, manager or member receive income from any source other then the
		Business which relates to, or should properly accrue, to the Business.
	 

	 
		3.22
	 

	 
		Disclosure.  All disclosure provided herein to Buyer
		regarding the Business, the Assets, the Assumed Obligations and the
		transactions contemplated by this Agreement, including the Schedules to this
		Agreement, is true and correct in all material respects and does not contain
		any untrue statement of a material fact or omit to state a material fact
		necessary in order to make such disclosure, in light of the circumstances under
		which it was made, not misleading.
	 

	 
		4.
	 

	 
		Representations and Warranties of Buyer.  Buyer represents,
		warrants and covenants to Sellers that:
	 

	 
		4.1
	 

	 
		Organization and Standing.  Buyer is a corporation duly
		organized, validly existing and in good standing under the laws of the State of
		New York, with full corporate right, power and authority to enter into and
		perform and do all things contemplated under this Agreement and all documents
		and agreements necessary to give effect to the provisions of this Agreement.
	 

	 
		
 

	 

	 
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		4.2
	 

	 
		Authorization and Binding Obligations.  The execution,
		delivery and performance of this Agreement have been duly and validly
		authorized by all necessary corporate action, including approval of the entire
		transaction by the requisite vote of the board of directors of Buyer.
		 This Agreement has been duly executed and delivered by Buyer and
		constitutes a valid and binding agreement of Buyer, enforceable in accordance
		with its terms, except as its enforceability may be limited by bankruptcy,
		insolvency, moratorium or other laws relating to or affecting creditors’
		rights generally and the exercise of judicial discretion in accordance with
		general equitable principles.
	 

	 
		4.3
	 

	 
		No Contravention.  The execution, delivery and performance of
		this Agreement, the consummation of the transactions contemplated hereby and
		the compliance with the provisions hereof by Buyer do not (i) violate any
		provisions of the articles of incorporation or by-laws of Buyer, (ii) conflict
		with, result in the breach of, or constitute a default under, or require any
		authorization, consent, approval, exemption or other action by or notice to any
		third party, court or other governmental or administrative body, under the
		provisions of any agreement or other instrument to which Buyer is a party or by
		which the property of Buyer is bound or affected that has not been obtained or
		(iii) violate any laws, regulations, orders or judgments applicable to Buyer.
	 

	 
		5.
	 

	 
		Conditions Precedent to the Obligations of the Parties.  The
		obligations of the parties hereto under this Agreement are subject to the
		satisfaction on or prior to the Closing Date of each of the following express
		conditions precedent, except such conditions as may be waived by the party
		hereto to which the obligation is owed.
	 

	 
		5.1
	 

	 
		Delivery of Instruments of Conveyance and Transfer.  Buyer
		shall have received the instruments and other documents required to be
		delivered to it pursuant to Sections 2.3(a) and (b) hereof.
	 

	 
		5.2
	 

	 
		Delivery of Instruments of Assumption.  Buyer shall have
		delivered to Sellers, in accordance with Section 2.3(c) hereof, instruments
		whereby Buyer assumes and agrees to perform the Assumed Obligations.
	 

	 
		5.3
	 

	 
		Accuracy of Representations and Warranties.  The
		representations and warranties made herein (and in any document, including any
		Schedules hereto, delivered in connection herewith) by each party shall be true
		and correct as of the Closing Date.
	 

	 
		5.4
	 

	 
		Compliance with Agreement.  All of the terms, covenants and
		conditions of this Agreement to be performed or complied with by Buyer and
		Sellers on or prior to the Closing Date shall have been duly performed or
		complied with.
	 

	 
		5.5
	 

	 
		No Obstructive Proceeding.  (i)  No action or proceeding
		shall have been instituted against any of the parties hereto before any
		Governmental Entity to restrain or prohibit, or to obtain substantial damages
		in respect of, this Agreement or the consummation of the transactions
		contemplated hereby; and (ii) no action or proceeding shall have been
		instituted against, and no order, decree or judgment of any Governmental Entity
		shall be existing against, any of the parties hereto which would render it
		unlawful, as of the Closing Date, to effect the
	 

	 
		
 

	 

	 
		15
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		transactions contemplated hereunder in accordance with the terms hereof
		or would affect, as of the Closing Date, the validity of this Agreement.
	 

	 
		5.6
	 

	 
		Consents.  Sellers shall have obtained and delivered to Buyer
		any necessary consents to the assignment to Buyer of all Included Contracts and
		Orders-in-Process listed on any schedule hereto, without change or modification
		of the terms thereof.  Sellers shall have also delivered to Buyer copies
		of any other third party consents or approvals which Sellers have obtained.
	 

	 
		5.7
	 

	 
		Authorization.  Each party hereto shall have received
		certified copies of all the respective actions taken by the other parties
		hereto authorizing and approving the execution and delivery of this Agreement,
		and the consummation of the transactions contemplated thereunder.
	 

	 
		5.8
	 

	 
		Opinion of Sellers’ Counsel.  Buyer shall have received
		the written opinion of Feder, Kaszovitz, Isaacson, Weber, Skala, Bass &
		Rhine LLP, counsel for Sellers, dated the Closing Date, in form and substance
		reasonably acceptable to Buyer.
	 

	 
		5.9
	 

	 
		Opinion of Buyer’s Counsel.  Seller shall have received
		the written opinion of Fulbright & Jaworski L.L.P., counsel for Buyer,
		dated the Closing Date, in form and substance reasonably acceptable to Sellers.

	 

	 
		5.10
	 

	 
		Employment Agreement.  Glick and Williams shall each have
		entered into an employment agreement with Buyer, substantially in the form of
		Exhibit C hereto (the “Employment Agreement”).
	 

	 
		5.11
	 

	 
		Lease Premises Agreements.  Buyer shall have entered into
		agreements in the form of Exhibit D-1, D-2 and D-3 hereto
		with respect to the Leased Premises (the “Leased Premises
		Agreements”).
	 

	 
		5.12
	 

	 
		Consent Contracts Agreement.  Buyer and Sellers shall have
		entered into the agreement in the form of Exhibit E hereto with respect
		to the Consent Contracts (the “Consent Contracts Agreement”).
	 

	 
		5.13
	 

	 
		License.  Buyer shall have entered into a license agreement,
		substantially in the form of Exhibit F hereto, with Positive Attitude
		(the “Positive Attitude License Agreement”).
	 

	 
		
 

	 

	 
		16
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		6.
	 

	 
		Customer Returns; Right of Buyer.  In the event that
		subsequent to the Effective Time, any customer of the Business returns any
		defective goods sold by any Seller related to the Business prior to the
		Effective Time, such Seller shall, within ten (10) days of receiving such
		returned defective goods, notify Buyer of such return including the amounts and
		style numbers of the returned defective goods.  Within ten (10) days of
		receiving such notice, Buyer shall have the right to submit an offer to
		purchase the returned defective goods from such Seller, which shall not be
		unreasonably rejected by such Seller.  If the parties hereto are unable to
		reach mutually agreeable terms with respect to Buyer’s offer to purchase
		the returned defective goods, such Seller shall have the right to sell the
		returned defective goods to a third party.
	 

	 
		7.
	 

	 
		Customer Allowances.  a) Buyer and Sellers shall be
		responsible for Customer Allowances with respect to specific product shipments
		as follows:  (i) terms discounts given to customers upon shipment,
		deductions for returned merchandise or deductions for shipping violations that
		are charged back from the retailer shall be the responsibility of the party
		that shipped the applicable goods, and (ii) price allowances granted after
		shipment of goods relating to specific styles will be deemed to be reductions
		made in connection with the initial shipment and shall be the responsibility of
		the party that shipped the applicable goods.  Customer Allowances with
		respect to specific product shipments made prior to the Effective Time shall be
		the responsibility of Sellers, and Customer Allowances with respect to specific
		product shipments made from and after the Effective Time shall be the
		responsibility of Buyer.
	 

	 
		(b)
	 

	 
		Any Customer Allowance requested by a customer with respect to a period
		specified by such customer that does not relate to, or cannot be attributed to,
		a specific product shipment shall be aggregated with other such Customer
		Allowances requested by such customer with respect to such period.  The
		aggregate of such Customer Allowances shall be allocated as between Buyer and
		Sellers on a pro rata basis after the Effective Time using a
		“settlement percentage” of sales for the time period specified by the
		customer as the adjustment period.  The settlement percentage of Buyer or
		Sellers, as the case may be, shall be calculated by aggregating the sales of
		Buyer or Sellers, as the case may be, during such period for such customer as
		the numerator and the total sales by Buyer and Sellers to such customer for the
		period in question as the denominator.  For the avoidance of doubt:
		 (i) settlements under this Section 7(b) that relate to any period ending
		on or prior to April 30, 2007 will all be the responsibility of Sellers,
		regardless of when the actual chargeback is issued by the retailer, but (ii)
		settlements under this Section 7(b) that relate to any period ending after
		April 30, 2007 will be aggregated for such period and the same settlement
		percentage shall be applied to sales prior to the Effective Time and after the
		Effective Time with respect to such period to determine the extent to which
		Sellers and Buyer are responsible for the settlement amount.
	 

	 
		
	 

	 
		(c)
	 

	 
		Buyer and Sellers acknowledge that Sellers are not permitted to agree to
		any Customer Allowance in excess of $250,000 for any customer without first
		obtaining the written consent of Sellers’ secured lenders.
	 

	 
		(d)
	 

	 
		Sellers will maintain their current Customer Allowance tracking system to
		document any authorized Customer Allowances.  At the time of any
		settlement of Customer Allowances, Buyer and Sellers will exchange cumulative
		sales data applicable to the Fiscal Quarter, and a calculation will be
		performed to determine the amount of settlement that applies to each respective
		party.  With respect to any settlement or other Customer Allowance for
	 

	 
		
 

	 

	 
		17
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		which Buyer and Sellers would share responsibility, Sellers’
		Representative shall have the right to determine the terms of the settlement,
		subject to Buyer’s approval, which approval shall not unreasonably be
		withheld.
	 

	 
		8.
	 

	 
		Brokers.  Each of Buyer on the one hand and Sellers on the
		other, represents and warrants to the other that it has not engaged a broker or
		finder in connection with this Agreement and the transactions contemplated
		herein or any aspect thereof.  Notwithstanding any other provision of this
		Agreement, the representations, warranties and covenants contained in this
		Section 8 shall survive the Closing Date without limitation.
	 

	 
		9.
	 

	 
		Survival and Indemnification.
	 

	 
		(a)
	 

	 
		Except as otherwise provided herein, the several representations,
		warranties, covenants, and agreements of the parties hereto contained in this
		Agreement (or in any document delivered pursuant to the terms hereof) shall be
		deemed to have been made on the Closing Date, shall be deemed to be material
		and to have been relied upon by Buyer and Sellers notwithstanding any
		investigation made by Buyer or Sellers, shall survive the Closing Date and
		shall remain operative and in full force and effect for a period of eighteen
		(18) months following the Closing Date, except as to any matters with respect
		to which a bona fide written claim has been made or an action at law or in
		equity shall have commenced before such date, in which event survival of the
		applicable representations and warranties shall continue (but only with respect
		to, and the extent of, such claim) until the final resolution of such claim or
		action including all applicable periods for appeal, provided, however,
		that the representations and warranties of Sellers contained in the first
		sentence of Section 3.6 and Sections 3.14 and 3.16 hereof shall survive until
		ninety (90) days following the expiration of all applicable statutes of
		limitations (including periods of extension, whether automatic or permissive)
		applicable to claims arising from such representations and warranties, and
		provided, further, that the respective covenants and agreements of Buyer
		and Sellers contained in Sections 7, 8 and 9 shall continue without any time
		limitation.
	 

	 
		(b)
	 

	 
		Sellers shall, jointly and severally, indemnify and hold Buyer and its
		Affiliates and their respective officers, directors, managers, members,
		stockholders, employees, agents and successors and assigns harmless from and
		against (i) any and all loss, cost, liability, damage and expense (including
		reasonable legal fees, expert costs and other expenses incident thereto) (each
		a “Loss” and, collectively, “Losses”) arising
		out of or resulting from any inaccuracy, misrepresentation or breach or
		non-fulfillment of any representation, warranty, covenant or agreement of any
		Seller under this Agreement or any document delivered pursuant to the terms
		hereof; (ii) other than Assumed Obligations, any and all liabilities and
		obligations of Sellers of any nature whatsoever, whether accrued, absolute,
		fixed, contingent, or otherwise known or unknown to Sellers, whether arising
		before or after the Closing, including, without limitation, any liability of
		Sellers deemed to have been assumed by Buyer by virtue of common law, statute
		or regulation or failure to comply therewith, which liability Buyer has not
		expressly agreed to assume hereunder, including without limitation, bulk
		transfer laws in effect in the State of New York; (iii) any liability or
		obligation for Taxes, whether or not accrued, assessed or currently due and
		payable (a) of Sellers, whether or not such Taxes relate to the operation of
		the Business, (b) arising from the operation of the Business or the ownership
		of the Assets on or prior to the Closing Date or (c) arising out of the
		consummation of the transactions
	 

	 
		
 

	 

	 
		18
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		contemplated hereby (for purposes of this Section 9(b), all real property
		Taxes, personal property Taxes and similar ad valorem obligations levied with
		respect to the Assets for a Tax period that includes (but does not end on) the
		Closing Date shall be apportioned between Sellers, on one hand, and Buyer, on
		the other hand, based upon the number of days of such period included in the
		Tax period before (and including) the Closing Date and the number of days of
		such Tax period after the Closing Date), (iv) Losses with respect to any
		Seller’s failure to obtain any third party consents required to effect the
		transactions contemplated by this Agreement, (v) any and all Losses
		arising out of workers compensation claims relating to periods on or prior to
		the Effective Time or any liabilities or obligations arising under any Employee
		Plan (as defined in Section 3.13), ERISA, or Section 4980B of the Code relating
		to periods on or prior to the Effective Time, (vi) Losses arising from claims
		by one or more shareholders of a Seller against Buyer or its Affiliates, Seller
		or other shareholders of any Seller; and (v) all claims, actions, suits,
		proceedings, demands, assessments, judgments, costs and expenses, including,
		without limitation, any legal fees and expenses, incident to any of the
		foregoing.
	 

	 
		
	 

	 
		(c)
	 

	 
		Buyer shall indemnify and hold Sellers, and each of their respective
		Affiliates, officers, directors, stockholders, members, managers, employees,
		agents and successors and assigns, harmless from and against (i) any and all
		Losses arising out of or resulting from any inaccuracy, misrepresentation or
		breach or non-fulfillment of any representation, warranty, covenant or
		agreement of Buyer under this Agreement or any document delivered by Buyer to
		Sellers in connection herewith, (ii) any and all Losses arising out of or in
		connection with the ownership or operation of the Assets with respect to
		periods after the Effective Time, (iii) the Assumed Obligations, (iv) any and
		all Losses of any Seller or any of its Affiliates arising out of or otherwise
		relating to, the Lease Premises Agreements (other than Losses arising out of
		any failure or defect in performance or breach by any Seller or any of its
		Affiliates of its obligations under any Leased Premises Agreement or Section
		10(o) of this Agreement), (v) any and all Losses of any Seller or any of its
		Affiliates arising out of or otherwise relating to, the Consent Contracts
		Agreement (other than Losses arising out of any failure or defect in
		performance or breach by any Seller or any of its Affiliates of its obligations
		under the Consent Contracts Agreement) and (vi) all claims, actions, suits,
		proceedings, demands, assessments, judgments, costs and expenses, including,
		without limitation, any legal fees and expenses, incident to any of the
		foregoing.
	 

	 
		
	 

	 
		(d)
	 

	 
		In the event of any breach of any representation or warranty contained in
		this Agreement, the Schedules and Exhibits hereto or in the documents delivered
		in accordance with the terms of this Agreement, the sole and exclusive right
		and remedy of the parties hereto for money damages shall be a claim for
		indemnification pursuant to this Section 9; provided, however, that this
		Section 9(d) shall not restrict the right of a party hereto to bring an action
		for fraud or to seek recovery with respect to Losses arising other than from
		the breach of a representation or warranty.
	 

	 
		
	 

	 
		(e)
	 

	 
		The following indemnification procedure shall apply to the foregoing
		agreements:
	 

	 
		
	 

	 
		(i)
	 

	 
		The party who is seeking indemnification (the
		“Claimant”) for a Loss shall give written notice (a
		“Notice of Claim”) to the party from whom indemnification is
		sought (the “Indemnitor”) promptly after the Claimant learns
		of the claim or
	 

	 
		
 

	 

	 
		19
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		proceeding, provided, that the failure to give such notice shall
		not relieve the Indemnitor of its obligations hereunder except to the extent it
		is actually damaged thereby.
	 

	 
		
	 

	 
		(ii)
	 

	 
		With respect to any third-party claims or proceedings as to which the
		Claimant is entitled to indemnification, the Indemnitor shall have the right to
		select and employ counsel of its own choosing to defend against any such claim
		or proceeding, to assume control of the defense of such claim or proceeding,
		and (subject to the last sentence of this Section 9(e)(ii)) to compromise,
		settle or otherwise dispose of the same, if the Indemnitor deems it advisable
		to do so, all at the expense of the Indemnitor.  The parties will fully
		cooperate in any such action, and shall make available to each other any books
		or records useful for the defense of any such claim or proceeding.  The
		Claimant may elect to participate in the defense of any such third party claim,
		and may, at its sole expense, retain separate counsel in connection therewith.
		 Notwithstanding the foregoing, (i) the Claimant shall not settle or
		compromise any such third party claim without the prior written consent of the
		Indemnitor and (ii) the Indemnitor shall not settle or compromise any such
		third party claim without the prior written consent of the Claimant,
		provided, that, in each case, consent shall not be unreasonably
		withheld.
	 

	 
		(f)
	 

	 
		The joint and several obligations of Sellers pursuant to the provisions
		of this Section 9 are subject to the following limitations:
	 

	 
		(i)
	 

	 
		Sellers shall not be liable to Buyer under this Section 9 until
		liabilities incurred exceed $25,000 in the aggregate and then only to the
		extent of such excess;
	 

	 
		(ii)
	 

	 
		Buyer shall not be entitled to recover from Sellers under this Section 9
		in excess of $800,000 in the aggregate, and any payment due to Buyer under this
		Section 9 shall be payable solely out of the Escrow Funds (if and to the extent
		they are available) in accordance with Section 2.5 and the Escrow Agreement;
		and
	 

	 
		(iii)
	 

	 
		the limitations of the liability of Sellers and restriction on source of
		recovery by Buyer set forth in clauses (i) and (ii) above shall not be
		applicable to (A) liabilities arising by reason of a breach of Sellers’
		representations, warranties and agreements contained in the first sentence
		Section 3.6, Section 3.14, Section 3.16 or Section 8 hereof, (B) any claims
		determined by a court of competent jurisdiction to arise from fraud by any
		Seller or (C) Losses arising other than from the breach of a representation or
		warranty.
	 

	 
		(g)
	 

	 
		Buyer’s obligations pursuant to the provisions of this Section 9 are
		subject to the following limitations:
	 

	 
		(i)
	 

	 
		Buyer shall not be liable to Sellers under this Section 9 until
		liabilities incurred exceed $25,000 in the aggregate and then only to the
		extent of such excess;
	 

	 
		(ii)
	 

	 
		Sellers shall not be entitled to recover from Buyer under this Section 9
		in excess of $800,000 in the aggregate; and
	 

	 
		(iii)
	 

	 
		The limitations of Buyer’s liability set forth in clauses (i) and
		(ii) above shall not be applicable to (A) any claims determined by a court of
		competent
	 

	 
		
 

	 

	 
		20
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		jurisdiction to arise from fraud by Buyer or (B) Losses arising other
		than from the breach of a representation or warranty.
	 

	 
		(h)
	 

	 
		Each Claimant shall take commercially reasonable actions to mitigate the
		amount of any claim for indemnification, including pursuing insurance claims
		and claims against third parties, and shall reasonably consult and cooperate
		with each Indemnitor with a view towards mitigating such amounts in connection
		with claims for which a Claimant seeks indemnification hereunder; provided,
		however, that any costs and expenses incurred by a Claimant in pursuing
		insurance claims and claims against third parties or otherwise pursuant to this
		Section 9(h) shall constitute indemnifiable Losses.
	 

	 
		10.
	 

	 
		Post-Closing Agreements.
	 

	 
		(a)
	 

	 
		Delivery of Property Received by Sellers or Buyer After Closing.
		 Sellers agree that they will transfer or deliver to Buyer, promptly after
		the receipt thereof, any property which Sellers receive after the Closing Date
		in respect of the Assets transferred or intended to be transferred to Buyer
		under this Agreement.  Buyer agrees that it will transfer or deliver to
		Sellers, promptly after the receipt thereof, any property which Buyer receives
		after the Closing Date in respect of the Excluded Assets.
	 

	 
		(b)
	 

	 
		Cooperation After the Closing.  The parties hereto shall, at
		any time, and from time to time, after the Closing Date, execute and deliver
		such further instruments of conveyance and transfer and take such additional
		action or may be reasonably necessary to effect, consummate, confirm or
		evidence the transactions contemplated by this Agreement including using their
		commercially reasonable efforts to obtain any third party consents not obtained
		as of the Closing Date.
	 

	 
		(c)
	 

	 
		Removal of Encumbrances.  Sellers agree to assist Buyer and
		shall act in good faith in assisting Buyer, all to the extent requested by
		Buyer, in the removal of any and all Encumbrances whatsoever on any Asset,
		including without limitation on any Orders-in-Process.
	 

	 
		(d)
	 

	 
		Insurance.  Sellers shall maintain general liability and
		product liability insurance policies with respect to their respective business
		and operations of a kind and in an amount existing prior to the Closing Date
		for a period of one (1) year after the Closing Date.
	 

	 
		(e)
	 

	 
		Covenant Not to Compete; No Solicitation.
	 

	 
		(i)
	 

	 
		Each of Glick and Williams (each, a “Restricted Person”)
		acknowledges that he or she has extensive knowledge and a unique understanding
		of the Business, has been directly involved with the establishment and
		continued development of the customer relations of the Business and has had
		access to all of the proprietary and confidential information used in the
		Business.  Each Restricted Person further acknowledges that if he or she
		were to compete with Buyer or its subsidiaries, including the Divisions (the
		“Buyer Group”) following the Closing, great harm would come to
		the Buyer Group, thereby destroying any value associated with the purchase of
		the Assets and the goodwill of the Business.  In furtherance of the sale
		of the Assets to Buyer hereunder by virtue of the transactions contemplated
		hereby and
	 

	 
		
 

	 

	 
		21
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		to more effectively protect the value of the Business so sold, each
		Restricted Person covenants and agrees that, for a period commencing on the
		Closing Date and continuing through January 31, 2011 (the “Restricted
		Period”), he or she shall not, whether for compensation or without
		compensation, directly or indirectly, as an owner, principal, partner, member,
		shareholder, independent contractor, consultant, joint venturer, investor,
		licensor, lender or in any other capacity whatsoever, alone, or in association
		with any other Person, carry on, be engaged or take part in, or render services
		(other than services which are generally offered to third parties) or advice
		to, own, share in the earnings of, invest in the stocks, bonds or other
		securities of, or otherwise become financially interested in, any Person
		engaged in the business of designing or manufacturing women’s dresses
		anywhere in the United States; provided, however, if any
		Restricted Person’s employment under his or her Employment Agreement is
		terminated by Buyer without “justifiable cause”, or by such
		Restricted Person for “good reason” (as such terms are defined in the
		Employment Agreements), the Restricted Period for such Restricted Person shall
		end on the date through which Buyer pays such Restricted Person the payments
		described in Section 7(g) of his or her Employment Agreement.  The record
		or beneficial ownership by any Restricted Person of less than one percent (1%)
		of the shares of any Person whose shares or interests are publicly traded on a
		national securities exchange or the OTC Bulletin Board shall not of itself
		constitute a breach hereunder.
	 

	 
		(ii)
	 

	 
		During the Restricted Period, no Restricted Person shall, whether for his
		or her own account or for the account of any Person, directly or indirectly,
		solicit to terminate the relationship, or otherwise interfere with the
		relationship of the Buyer Group with, any Person that (A) is employed by or
		otherwise engaged to perform services for the Buyer Group or (B) is a customer
		or client of, or subcontractor for, the Business.
	 

	 
		(iii)
	 

	 
		The restrictive covenants set forth in this Section 10(e) (the
		“Restrictive Covenants”) have been separately bargained for to
		protect the business or interest therein, including goodwill, of the Assets and
		Business being acquired by Buyer hereunder and to ensure that Buyer shall have
		the full benefit of the value thereof.  Each Restricted Person recognizes
		and acknowledges that the business and markets of the Buyer Group are national
		in scope, and that Buyer is investing substantial sums in purchasing the Assets
		and Business and in consideration for the Restrictive Covenants, that such
		Restrictive Covenants are necessary in order to protect and maintain the
		legitimate business interests of the Buyer Group and are reasonable in all
		respects, and that Buyer would not consummate the transactions contemplated
		hereby but for such Restrictive Covenants.  Each Restricted Person hereby
		waives any and all right to contest the validity of the Restrictive Covenants
		on the ground of the breadth of their geographic or product coverage or the
		length of their term.
	 

	 
		(iv)
	 

	 
		If any Restricted Person breaches, or threatens to commit a breach of,
		any of the Restrictive Covenants, Buyer shall have, in addition to, and not in
		lieu of, any other rights and remedies available to it under law or in equity,
		the right to seek to have the Restrictive Covenants specifically enforced by
		any court of competent jurisdiction, it being agreed that any breach or
		threatened breach of the Restrictive Covenants would cause irreparable injury
		to Buyer and that money damages would not provide an adequate remedy.
		 Each Restricted Person covenants and agrees not to oppose any demand for
		specific performance and injunctive and other equitable relief in case of any
		such breach or attempted breach.
	 

	 
		
 

	 

	 
		22
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		(v)
	 

	 
		The existence of any claim or cause of action by any Restricted Person
		against Buyer shall not constitute a defense to the enforcement by Buyer of the
		Restrictive Covenants, and any such claim or cause of action shall be litigated
		separately.
	 

	 
		(vi)
	 

	 
		In addition to the remedies Buyer may seek and obtain pursuant to Section
		10(e)(ii) hereof, the Restricted Period shall be extended by any and all
		periods during which a Restricted Person shall be found by a final
		non-appealable judgment of a court possessing personal jurisdiction over him or
		her to have been in violation of any Restrictive Covenant.
	 

	 
		(vii)
	 

	 
		Whenever possible, each provision of this Section 10(e) shall be
		interpreted in such manner as to be effective and valid under applicable law
		but if any provision of this Section 10(e) shall be prohibited by or invalid
		under applicable law, such provision shall be ineffective to the extent of such
		prohibition or invalidity, without invalidating the remainder of such provision
		or the remaining provisions of this Section 10(e).  If any provision of
		this Section 10(e) shall, for any reason, be judged by any court of competent
		jurisdiction to be invalid or unenforceable, such judgment shall not affect,
		impair or invalidate the remainder of this Section 10(e) but shall be confined
		in its operation to the provision of this Section 10(e) directly involved in
		the controversy in which such judgment shall have been rendered.  In the
		event that the provisions of this Section 10(e) should ever be deemed to exceed
		the time or geographic limitations permitted by applicable law, then such
		provision shall be reformed to the maximum time or geographic limitations
		permitted by applicable law.
	 

	 
		(f)
	 

	 
		Additional Financial Statements.  Sellers agree to prepare
		and deliver to Buyer no later than thirty (30) days from the Closing Date a pro
		forma unaudited balance sheet of the Business as of the Closing Date and a pro
		forma unaudited income statement of the Business for the period from January 1,
		2007 through March 31, 2007 and for the period from April 1, 2007 to the
		Closing Date.
	 

	 
		(g)
	 

	 
		Tax Matters.  Buyer and Sellers shall utilize the standard
		procedure set forth in Revenue Procedure 2004-53 with respect to wage
		reporting.
	 

	 
		(h)
	 

	 
		Change of Names.  Jessica Howard and Industrial Cotton agree,
		and Glick and Williams agree to cause Eliza J Limited, a New York corporation
		(“Eliza J”), to file a Certificate of Amendment to its
		Articles of Incorporation (to be filed with the Secretary of State of the State
		of New York immediately following the Closing) changing their respective
		corporation names to “JH-X”, “IC-X” and “EJ-X,”
		respectively.  Following the filing of such Certificate of Amendment with
		the Secretary of State of the State of New York, none of the Sellers will use
		the names Jessica Howard or Industrial Cotton or any derivative thereof; and
		Glick and Williams shall cause Eliza J not to do so; provided, however,
		that Buyer shall permit Sellers for a period of six (6) months from the Closing
		Date to use the names “Jessica Howard”, “Industrial
		Cotton”, and “Eliza J” to collect their accounts receivable,
		liquidate inventory that is not Purchased Inventory and liquidate all other
		Excluded Assets.
	 

	 
		(i)
	 

	 
		Sellers’ Representative.  Glick shall act, and Sellers
		hereby make, constitute and appoint Glick, as the representative of Sellers
		under this Agreement (in such capacity, the “Sellers’
		Representative”).  By its execution of this Agreement, each
		Seller hereby
	 

	 
		
 

	 

	 
		23
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		makes, constitutes and appoints the Sellers’ Representative as its
		attorney-in-fact and authorizes and empowers the Sellers’ Representative
		to act as such Seller’s representative with full authority, in the sole
		discretion of the Sellers’ Representative, to (a) cause to be prepared all
		Tax Returns with respect to all Tax periods ending on or before the Closing
		Date, and (b) take any other action that may be necessary or desirable on
		behalf of Sellers in connection with this Agreement.  Sellers shall have
		the right at any time to appoint a new Sellers’ Representative for such
		purposes by giving at least ten (10) business days’ written notice thereof
		and simultaneously furnishing a copy of a written instrument executed by
		Sellers and appointing a new Sellers’ Representative to Buyer and the
		Sellers’ Representative then so acting.  The Sellers’
		Representative shall have no duties or obligations other than those set forth
		above and will incur no liability with respect to any action or inaction taken
		by the Sellers’ Representative except with respect to his own gross
		negligence, bad faith or willful misconduct.  Each Seller shall reimburse
		the Sellers’ Representative for its proportionate share, determined in
		accordance with the allocation of Consideration among Sellers, of the
		reasonable and documented expenses of the Sellers’ Representative in
		carrying out his duties or obligations hereunder.
	 

	 
		
	 

	 
		(j)
	 

	 
		Cooperation of Independent Accountants.  From and after the
		Closing, Sellers shall use commercially reasonable efforts to cause Citrin
		Cooperman & Company, LLP, independent accountants for Sellers (the
		“Accountants”), to cooperate with Buyer and Buyer’s
		accountants in the preparation of such financial statements and schedules with
		respect to periods prior to the Closing Date as Buyer may reasonably require in
		connection with the satisfaction of its disclosure requirements under the U.S.
		securities laws.  Buyer shall pay all of the fees and expenses of the
		Accountants incurred pursuant to this Section 10(f).
	 

	 
		
	 

	 
		(k)
	 

	 
		Bonus Plans for the Divisions.  (i) As soon as practicable
		after the Closing, Buyer shall adopt employee bonus plans for employees of the
		Jessica Howard Division (the “Jessica Howard Division Bonus
		Plan”), the Designer Brands Division (the “Designer Brands
		Division Bonus Plan”) and the Positive Attitude Division (the
		“Positive Attitude Division Bonus Plan”).
	 

	 
		(ii)
	 

	 
		The Jessica Howard Division Bonus Plan shall provide for aggregate
		payments to the employees of the Jessica Howard Division in an amount equal to
		seven and one-half percent (7.5%) of the EBITA of the Jessica Howard Division
		(the “JHD Bonus Plan EBITA”) for each EBITA Period;
		provided, however, that no bonus will be payable with respect to the
		EBITA Period ending on January 31, 2008, 2009, 2010 or 2011 if the EBITA of the
		Jessica Howard Division does not exceed $0, $1.0 million, $1.75 million and
		$2.5 million, respectively, in such EBITA Period.  In no event shall
		bonuses awarded under the Jessica Howard Division Bonus Plan and payable
		pursuant to Section 3(b)(i) of the Employment Agreements of Glick and Williams
		collectively exceed an aggregate of $5,000,000 with respect to any EBITA
		Period.  To the extent that bonuses are payable under the Jessica Howard
		Division Bonus Plan as provided in this Section 10(k)(ii), 2.5% of JHD Bonus
		Plan EBITDA shall be allocated to each of David Nachman, Robert Metz and
		Mitchell Rodbell (each, a “Jessica Howard Division
		Employee”); provided, however, that if any of such Jessica
		Howard Division Employee ceases to be employed in the Jessica Howard Division
		during any EBITA Period, Glick and Williams shall determine, in their
		discretion, the extent to which such Jessica Howard Division Employee will be
		entitled to a pro rata portion of the applicable bonus for such EBITA
		Period and the extent to which any residual bonus amount, and bonus amounts for
		any
	 

	 
		
 

	 

	 
		24
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		subsequent EBITA Periods, are paid to other Jessica Howard Division
		Employees or other employees.  Notwithstanding the foregoing, if Glick and
		Williams determine, in their discretion and on the basis of the portion of the
		EBITA of the Jessica Howard Division for any EBITA Period derived from the
		Industrial Cotton business, to pay a bonus to Rory Nichols and Angela Da
		Francesa, each of Rory Nichols and Angela Da Francesca shall receive a bonus
		equal to 3% of the EBITA of the Jessica Howard Division derived from the
		Industrial Cotton business, and the amount of such bonuses shall be deducted on
		a pro rata basis from the bonuses of Glick and Williams payable pursuant
		to their Employment Agreements and the Jessica Howard Division Employees
		payable pursuant to this Section 10(k)(ii).
	 

	 
		(iii)
	 

	 
		The Designer Brands Division Bonus Plan shall provide for aggregate
		payments to the employees of the Designer Brands Division in an amount equal to
		fifteen percent (15%) of the EBITA of the Designer Brands Division (the
		“DBD Bonus Plan EBITA”) for each EBITA Period; provided,
		however, that no bonus will be payable with respect to the EBITA Period
		ending on January 31, 2008, 2009, 2010 or 2011 if the EBITA of the Designer
		Brands Division does not exceed $0, $0.5 million, $1.0 million and $1.5
		million, respectively, in such EBITA Period.  In no event shall bonuses
		awarded under the Designer Brands Division Bonus Plan and payable pursuant to
		Section 3(b)(ii) of the Employment Agreements of Glick and Williams
		collectively exceed an aggregate of $5,000,000 with respect to any EBITA
		Period.  To the extent that bonuses are payable under the Designer Brands
		Division Bonus Plan as provided in this Section 10(k)(iii), 9.0%, 1.5%, 1.5%
		and 3.0% of the DBD Bonus Plan EBITA shall be allocated to each of David
		Nachman, Robert Metz, Mitchell Rodbell and Gerry Corrigan, respectively (each,
		a “Designer Brands Division Employee”); provided,
		however, that if any of such Designer Brands Division Employee ceases to be
		employed in the Designer Brands Division during any EBITA Period, Glick and
		Williams shall determine, in their discretion, the extent to which such
		Designer Brands Division Employee will be entitled to a pro rata portion
		of the applicable bonus for such EBITA Period and the extent to which any
		residual bonus amount, and bonus amounts for any subsequent EBITA Periods, are
		paid to other Designer Brands Division Employees or other employees.
	 

	 
		(iv)
	 

	 
		The Positive Attitude Division Bonus Plan shall provide for aggregate
		payments to the employees of the Positive Attitude Division in an amount equal
		to twelve and one-half percent (12.5%) of the EBITA of the Positive Attitude
		Division (the “PAD Bonus Plan EBITA”) for each EBITA Period;
		provided, however, that no bonus will be payable with respect to the
		EBITA Period ending on January 31, 2008, 2009, 2010 or 2011 if the EBITA of the
		Positive Attitude Division does not exceed $0, $0.5 million, $0.75 million and
		$1.0 million, respectively, in such EBITA Period.  In no event shall
		bonuses awarded under the Positive Attitude Division Bonus Plan and payable
		pursuant to Section 3(b)(iii) of the Employment Agreements of Glick and
		Williams collectively exceed an aggregate of $5,000,000 with respect to any
		EBITA Period.  To the extent that bonuses are payable under the Positive
		Attitude Division Bonus Plan as provided in this Section 10(k)(iv), 6.25%,
		3.125% and 3.125% of the PAD Bonus Plan EBITDA shall be allocated to each of
		David Nachman, Robert Metz and Mitchell Rodbell, respectively (each, a
		“Positive Attitude Division Employee”); provided,
		however, that if any of such Positive Attitude Division Employee ceases to
		be employed in the Positive Attitude Division during any EBITA Period, Glick
		and Williams shall determine, in their discretion, the extent to which such
		Positive Attitude Division Employee will be entitled to a pro rata
		portion of the applicable bonus for such EBITA Period and the extent to which
		any
	 

	 
		
 

	 

	 
		25
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		residual bonus amount, and bonus amounts for any subsequent EBITA
		Periods, are paid to other Positive Attitude Division Employees or other
		employees.
	 

	 
		(l)
	 

	 
		Offers of Employment.  Contingent upon the Closing, Buyer
		shall, within five business days after the Closing, offer at-will employment to
		all of the employees of the Business listed on Schedule 10(l) who are in
		good standing on the Closing Date (each, a “Closing Date
		Employee”), for at least the same rate of base salary, wages and/or
		commissions and the same job position in effect immediately prior to the
		Closing.  Sellers shall cooperate with Buyer in connection with the
		foregoing.  A Closing Date Employee will become an employee of Buyer, if
		at all, on the later of the Effective Time or the first date on which such
		Closing Date Employee is actively at work.  Notwithstanding the foregoing,
		Buyer shall not be obligated to hire any Closing Date Employee who fails to
		provide Buyer documentation as required by applicable federal or state laws in
		connection with the commencement of such employment or who fails to pass any
		pre-employment background check required by Buyer, and Buyer may rescind an
		offer of employment before a Closing Date Employee accepts such offer and
		commences active employment with Buyer.  Sellers shall be responsible for
		the payment of all vacation pay of their employees that accrued prior to
		Closing, and acknowledge that the Base Purchase Price includes $126,000 with
		respect to such accrued vacation pay.  Within ten (10) days after repaying
		in full all indebtedness owed to their lenders after the sale of the Assets
		hereunder, Sellers shall reimburse Buyer the aggregate amount of all accrued
		vacation pay with respect to Closing Date Employees that accept offers of
		employment from Buyer.  Sellers agree that they shall not pay any dividend
		or otherwise make any distribution to any of their shareholders until their
		obligation to repay Buyer for such accrued vacation amounts has been satisfied.
		 Buyer shall continue to maintain a group health plan following the
		Closing and will be solely responsible for satisfying any COBRA obligations
		with respect to covered individuals who have a qualifying event before or as a
		result of the transactions contemplated by this Agreement, it being understood
		that Buyer will be responsible for providing COBRA coverage required with
		respect to Closing Date Employees who become employees of Buyer and who
		participate as active employees in Buyer’s group health plan.
	 

	 
		(m)
	 

	 
		Parent Guaranty.  Parent hereby guaranties the payment and
		performance of Buyer’s obligations under Sections 9 and 10(k) of this
		Agreement (the “Parent Guaranty”).  The Parent Guaranty
		is a guaranty of payment and performance and is not a guaranty of collection.
		 Parent hereby waives any requirement of law that Sellers must exhaust any
		remedy against Buyer before proceeding against Parent.
	 

	 
		(n)
	 

	 
		Purchased Inventory.  Buyer and Sellers acknowledge that the
		Consideration for the Purchased Inventory set forth in Section 2.4 is based
		upon a preliminary count of such Purchased Inventory taken prior to the
		execution of this Agreement, and that the actual cost of the items of Purchased
		Inventory set forth on Schedule 10(n) was estimated at the time such
		count was performed.  Within forty-five (45) days after the Closing, Buyer
		and Sellers shall cooperate in (i) performing a final inventory count of the
		Purchased Inventory and (ii) determining the actual cost of all items of
		Purchased Inventory, and shall calculate the actual Consideration payable with
		respect to such final count of Purchased Inventory.  In the event that the
		actual Consideration payable with respect to the Purchased Inventory exceeds
		the amount paid therefor at Closing, Buyer shall promptly pay to the
		Sellers’ Representative, on behalf of Sellers, such additional amount.
		 In the event that the actual Consideration payable with respect
	 

	 
		
 

	 

	 
		26
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		to the Purchased Inventory is less than the amount paid therefor at
		Closing, the Sellers’ Representative shall cause Sellers to promptly repay
		to Buyer the amount of such overpayment.
	 

	 
		(o)
	 

	 
		Leased Premises Agreements.  Sellers shall cause their
		Affiliates that are parties to the Leased Premises Agreements to comply with
		their obligations under the Leased Premises Agreements and to use commercially
		reasonable efforts to maintain the leases to which the Leased Premises
		Agreements relate in full force and effect.  If the landlord under any
		such lease gives notice to an Affiliate of Seller that is the tenant under any
		such lease that the activities conducted at the applicable leased premises
		under the applicable Leased Premises Agreement constitute a breach of such
		tenant’s obligations under the lease, Sellers shall cause such Affiliate
		to cooperate in good faith with Buyer and the landlord to resolve the
		landlord’s complaint, through a sublease, assignment of the applicable
		lease, or otherwise.
	 

	 
		(p)
	 

	 
		Security Deposits.  Any security deposits relating to the
		Included Contracts and/or the Consent Contracts which were paid prior to the
		Closing Date shall remain in place until the applicable Included Contract
		and/or Consent Contract is assigned to Buyer, whereupon Buyer shall reimburse
		the amount of such security deposit to the applicable Seller.
	 

	 
		11.
	 

	 
		Costs, Expenses, etc.  Each of the parties
		hereto shall bear all costs and expenses incurred by it in connection with this
		Agreement and in the preparation for and consummation of the transactions
		provided for herein, and shall not be entitled to any reimbursement therefor
		from any other party hereto; provided, however, all transfer,
		documentary, sales, use, stamp, registration and other such Taxes and fees
		(including any penalties and interest) incurred in connection with this
		Agreement shall be paid by Sellers when due, and Sellers shall, at their
		expense, file all necessary Tax Returns and other documentation with respect to
		all such transfer, documentary, sales, use, stamp, registration and other Taxes
		and fees, and, if required by applicable law, Buyer shall join in the execution
		of any such Tax Returns and other documentation.
	 

	 
		12.
	 

	 
		Notice of Proceedings.  Buyer or Sellers, as the case may be,
		will promptly notify the other in writing upon becoming aware of any order or
		decree or any complaint praying for an order or decree restraining or enjoining
		the consummation of this Agreement or the transactions contemplated hereunder,
		or upon receiving any notice from any Governmental Entity of its intention to
		institute an investigation into, or institute a suit or proceeding to restrain
		or enjoin the consummation of this Agreement or the transactions contemplated
		hereby, or to nullify or render ineffective this Agreement or such transactions
		if consummated.
	 

	 
		13.
	 

	 
		Notices.  All notices, claims, demands and other
		communications hereunder shall be in writing and shall be deemed given:
		 (i) in the case of a facsimile transmission, upon confirmation of
		transmission, (ii) in the case of delivery by an overnight carrier of national
		reputation, upon the date of delivery indicated in the records of such carrier,
		(iii) in the case of delivery by hand, when delivered by hand, or (iv) in the
		case of delivery by first class mail, upon the expiration of five (5) business
		days after the date mailed by registered or certified mail (return receipt
		requested), or, if earlier, the date of delivery reflected in such return
		receipt, in any case addressed to the respective parties hereto at the
		addresses shown below.
	 

	 
		
 

	 

	 
		27
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		(a)
	 

	 
		If to Buyer or Parent to:
	 

	 
		G-III Apparel Group, Ltd.
	 

	 
		512 Seventh Avenue
	 

	 
		New York, New York  10018
	 

	 
		Fax:
	 

	 
		(212) 719-0921
	 

	 
		Attn: Wayne Miller
	 

	 
		with a copy to:
	 

	 
		Neil Gold, Esq.
	 

	 
		Fulbright & Jaworski L.L.P.
	 

	 
		666 Fifth Avenue
	 

	 
		New York, New York  10103
	 

	 
		Fax:  (212) 318-3400
	 

	 
		(b)
	 

	 
		If to the Sellers’ Representative (or to any Seller, in care of the
		Sellers’ Representative):
	 

	 
		Mr. Robert Glick
	 

	 
		367 Pleasant Hill Road
	 

	 
		New City, New York 10956
	 

	 
		Fax:  (212) 575-2405
	 

	 
		with a copy to:
	 

	 
		Geoffrey A. Bass, Esq.
	 

	 
		Feder, Kaszovitz, Isaacson, Weber, Skala,
	 

	 
		    Bass & Rhine LLP
	 

	 
		750 Lexington Avenue
	 

	 
		New York, New York 10022
	 

	 
		Fax:  (212) 888-7776
	 

	 
		or at such other address as any party hereto shall specify by notice
		(delivered in accordance with this Section) to the other parties hereto.
	 

	 
		14.
	 

	 
		Headings and Entire Agreement.  The section and subsection
		headings do not constitute any part of this Agreement and are inserted herein
		for convenience of reference only.  This Agreement embodies the entire
		agreement between the parties hereto with respect to the subject matter hereof
		and supersedes and preempts all prior and contemporaneous oral and written
		understandings and agreements with respect to the subject matter hereof.
	 

	 
		15.
	 

	 
		Amendment.  No amendment of any provision of this Agreement
		shall be valid unless the same shall be in writing and signed by all parties
		hereto.
	 

	 
		16.
	 

	 
		Public Announcements.  None of the parties hereto shall make
		any press release or other public statement concerning the matters covered by
		this Agreement without the approval of the other parties hereto; provided,
		however, that if in the opinion of counsel to the party
	 

	 
		
 

	 

	 
		28
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		making any such release or statement, such release or statement is
		required by law or applicable regulation, such party may make such release or
		statement without the prior consent of the other parties hereto; provided,
		further that such party provides the other parties hereto with a reasonable
		opportunity to review and comment on such release or statement prior to its
		dissemination.  Notwithstanding the foregoing, Parent shall have no
		obligation to furnish the other parties hereto an opportunity to review and
		comment on any filing to be made with the Securities and Exchange Commission by
		Parent.
	 

	 
		17.
	 

	 
		Extension; Waiver.  No waiver by any party hereto of any
		default, misrepresentation or breach of warranty or covenant hereunder, whether
		intentional or not, shall be deemed to extend to any prior or subsequent
		default, misrepresentation or breach of warranty or covenant hereunder or
		affect in any way any rights rising by virtue of any prior or subsequent such
		occurrence.
	 

	 
		18.
	 

	 
		Binding Effect and Assignment.  This Agreement shall be
		binding upon and shall inure to the benefit of the parties hereto and their
		successors and assigns.  No party hereto may assign this Agreement and/or
		its rights and obligations hereunder without the prior written consent of the
		other parties hereto, other than any collateral assignment of the Sellers’
		rights under this Agreement and the other transaction documents described in
		this Agreement to Sellers’ secured lenders.
	 

	 
		19.
	 

	 
		Severability.  In the event that any provision of this
		Agreement, or the application thereof, becomes or is declared by a court of
		competent jurisdiction to be illegal, void or unenforceable, the remainder of
		this Agreement will continue in full force and effect and the application of
		such provision to other Persons or circumstances will be interpreted so as
		reasonably to effect the intent of the parties hereto.  The parties hereto
		further agree to use their best efforts to replace such void or unenforceable
		provision of this Agreement with a valid and enforceable provision that will
		achieve, to the extent possible, the economic, business and other purposes of
		such void or unenforceable provision.
	 

	 
		20.
	 

	 
		Specific Performance.  Each of the parties hereto
		acknowledges and agrees that the other parties hereto would be damaged
		irreparably in the event that the transactions contemplated by this Agreement
		are not consummated in accordance with the terms hereof.  Accordingly,
		each of the parties hereto agrees that the other parties hereto shall be
		entitled to seek to enforce specifically this Agreement and each other
		party’s obligation to consummate the transactions contemplated by this
		Agreement in accordance with the terms and provisions hereof in any action
		instituted in any court of the United States or any state thereof having
		jurisdiction over the parties hereto and the matter in addition to any other
		remedy to which they may be entitled at law or in equity.
	 

	 
		21.
	 

	 
		Remedies Cumulative.  Except as otherwise provided herein,
		any and all remedies herein expressly conferred upon any party hereto will be
		deemed cumulative with and not exclusive of any other remedy conferred hereby,
		or by law or equity upon such party, and the exercise by any party hereto of
		any one remedy will not preclude the exercise of any other remedy.
	 

	 
		
 

	 

	 
		29
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		22.
	 

	 
		Governing Law.  This Agreement shall be governed by and
		construed in accordance with the internal laws of the State of New York without
		regard to applicable principles of conflicts of law.
	 

	 
		23.
	 

	 
		Jurisdiction.  Any suit, action or proceeding seeking to
		enforce any provision of, or based on any matter arising out of or in
		connection with, this Agreement or the transactions contemplated hereby shall
		be brought exclusively in a New York State or United States Federal court
		sitting in New York County, and each of the parties hereto hereby expressly
		submits to such jurisdiction and venue of such court (and of the appropriate
		appellate courts therefrom) in any such suit, action or proceeding and
		irrevocably waives, to the fullest extent permitted by law, any objection that
		it may now or hereafter have to the laying of the venue of any such suit,
		action or proceeding in any such court or that any such suit, action or
		proceeding brought in any such court has been brought in an inconvenient forum.

	 

	 
		
	 

	 
		24.
	 

	 
		Effect of Due Diligence.  No investigation by or on behalf of
		Buyer into the business, operations, prospects, assets or condition (financial
		or otherwise) of the Business, the Assets or of Sellers shall diminish in any
		way the effect of any representations or warranties made by Sellers in this
		Agreement or shall relieve Sellers of any of their respective obligations under
		this Agreement.
	 

	 
		
	 

	 
		25.
	 

	 
		Counterparts.  This Agreement may be executed in one or more
		counterparts (including, without limitation, by facsimile), all of which shall
		be considered the same agreement and shall become effective when one or more
		counterparts have been signed by each of the parties hereto and delivered to
		the other parties hereto, it being understood that all parties hereto need not
		sign the same counterpart.
	 

	 
		
 

	 

	 
		30
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
		duly executed and delivered in its name and on its behalf, all as of the date
		and year first above written.
	 

	 
		G-III LEATHER FASHIONS, INC.
	 

	 
		

	 

	 
		

	 

	 
		By: /s/ Wayne S. Miller_______
	 

	 
		Name:  Wayne S. Miller
 Title:  Senior Vice President
	 

	 
		

	 

	 
		

	 

	 
		CONSENTED AND AGREED WITH RESPECT TO SECTION 10(m) ONLY:
	 

	 
		

	 

	 
		G-III APPAREL GROUP, LTD.
	 

	 
		

	 

	 
		

	 

	 
		By: /s/ Wayne S. Miller_______
	 

	 
		Name:  Wayne S. Miller
 Title:  Chief Operating Officer
	 

	 
		

	 

	 
		

	 

	 
		STARLO FASHIONS INC.
	 

	 
		

	 

	 
		

	 

	 
		By: /s/ Robert Glick__________
	 

	 
		       Name: Robert Glick
	 

	 
		       Title: President
	 

	 
		

	 

	 
		

	 

	 
		JESSICA HOWARD, LTD.
	 

	 
		

	 

	 
		

	 

	 
		By: /s/ Robert Glick__________
	 

	 
		       Name: Robert Glick
	 

	 
		       Title: President
	 

	 
		

	 

	 
		

	 

	 
		INDUSTRIAL COTTON, INC.
	 

	 
		

	 

	 
		

	 

	 
		By: /s/ Robert Glick__________
	 

	 
		       Name: Robert Glick
	 

	 
		       Title:  President
	 

	 
		

	 

	 
		

	 

	 
		
 

	 

	 
		 
	 

	 
		

	 

	 
 
	 
		

	 

	 
		

	 

	 
		CONSENTED AND AGREED WITH RESPECT TO SECTION 10(e) ONLY:
	 

	 
		

	 

	 
		

	 

	 
		/s/ Robert Glick________
	 

	 
		Robert Glick
	 

	 
		

	 

	 
		

	 

	 
		/s/ Mary Williams_______
	 

	 
		Mary Williams
	 

	 
		

	 

	 
		

	 

	 
		AS SELLERS’ REPRESENTATIVE:
	 

	 
		

	 

	 
		

	 

	 
		/s/ Robert Glick________
	 

	 
		Robert Glick
	 

	 
		

	 

	 
		

	 

	 
		
 

	 

	 
		2