Document:

SECOND AMENDED AND RESTATED AGREEMENT 

AND CONSENT TO ASSIGNMENT1

 

THIS SECOND AMENDED AND
RESTATED AGREEMENT AND CONSENT TO ASSIGNMENT (this “Agreement”) is made as of September 28, 2011, by and among
QVC, Inc. (“QVC”), a Delaware corporation, on the one hand, and IM Brands, LLC (“Company”),
a Delaware limited liability company, IM Ready Made, LLC (“Assignor”), a New York limited liability company,
XCel Brands, Inc. (“XCel”), a Delaware corporation, and Isaac Mizrahi (“Mizrahi”), an adult
individual, on the other hand. (QVC, Company, Assignor, XCel and Mizrahi hereinafter are referred to collectively as the “Parties”
and each individually as a “Party”, unless stated otherwise).

 

RECITALS

 

WHEREAS, QVC, Assignor
and, for the limited purposes set forth therein, Mizrahi are parties to that certain Amended and Restated Agreement, dated January
29, 2010, as amended by that Addendum dated January 29, 2010 and that First Amendment to Amended and Restated Agreement dated December
20, 2010 (collectively, as amended, the “Amended and Restated Agreement”);

 

WHEREAS, Company,
XCel, Assignor, Mizrahi and Marisa Gardini have entered into an Asset Purchase Agreement, dated May 19, 2011, as amended July 28,
2011 and as may be amended thereafter (the “Asset Purchase Agreement”), pursuant to which the Company, as the
wholly owned subsidiary of Xcel, has agreed to purchase substantially all of the trademarks and other intellectual property assets
of Assignor, including, without limitation, all rights in and to the Mark (as defined below);

 

WHEREAS, the Parties
desire, as of the Effective Date (as defined below) (a) to amend and restate the Amended and Restated Agreement as set forth herein,
and (b) that QVC consent to the assignment from Assignor to Company of that certain agreement dated December 1, 2009, by and between
QVC and Assignor (the “Design Services Reimbursement Agreement”);

 

WHEREAS, QVC and
its subsidiaries promote, market, sell and distribute (collectively, “Promote”) products through various means
and media, including without limitation, their televised shopping programs (the “Programs”);

 

 

 

1   NOTE: Portions of this Exhibit 10.5 have been have
been omitted pursuant to a Request for Confidential Treatment and filed separately with the Commission. Such portions are designated
“***” or “[***]”. 

 

    	 

    	 

    

 

WHEREAS, QVC desires
to have manufactured and to Promote various products bearing, marketed in connection with or otherwise associated with (i) the
trademark “IsaacMizrahiLive”; (ii) such other words as may be determined in accordance with paragraph 1(g) below; and
(iii) related logos as specified in Exhibit “A” to this Agreement (collectively, the “Mark”), including,
but not limited to, books, home furnishings, home decor, tabletop, cookware, kitchen prep items, gardening products, beauty products,
jewelry, fashion accessories, sunglasses, handbags, small leather goods, footwear and apparel that are endorsed, designed, marketed,
and/or promoted by Company (all such products bearing, marketed in connection with or otherwise associated with the Mark, including,
but not limited to, books, home furnishings, home decor, tabletop, cookware, kitchen prep items, gardening products, beauty products,
jewelry, fashion accessories, sunglasses, handbags, small leather goods, footwear and apparel that are endorsed, designed, marketed,
promoted and/or sold by Company, whether now in existence or developed hereafter, are collectively referred to hereinafter as the
“Products”). For purposes of clarification, the Products shall be of unique designs, colors, prints, patterns,
price points and/or materials (or unique in some other manner) to be sufficiently different from, so as to not directly compete
with, products sold as part of the Liz Claiborne New York line of which Mizrahi is the creative director;

 

WHEREAS, QVC desires
to Promote, and Company desires to have Promoted, certain items that are developed, manufactured and/or licensed by third parties
(“Vendors”), which items will (i) bear, be marketed in connection with or otherwise associated with the trademark(s)
and/or service mark(s) of the Vendors and (ii) bear, be marketed in connection with or otherwise associated with the Mark, and
(iii) contain a design element (a “Design Element”) provided by Company and Mizrahi or, in the event
of (A) the death of Mizrahi or (B) the disability of Mizrahi, and the election of QVC not to terminate this Agreement pursuant
to paragraph 6(c) in the event of either occurrence, a substitute designer mutually acceptable to Company and QVC (all such items
are hereinafter referred to as “Co-Branded Products”);

 

WHEREAS, Company
and QVC desire that QVC Promote the Products and Co-Branded Products through certain means and media, and that Company cause Mizrahi
or another spokesperson mutually agreeable to QVC and Company (Mizrahi and such other spokesperson as may be mutually agreeable
to QVC and Company hereinafter are referred to as “Spokesperson”, unless stated otherwise) to appear on certain
of the Programs to assist QVC in promoting the Products and Co-Branded Products; and

 

WHEREAS, Earthbound
LLC (“Earthbound”), a New York limited liability company, is the brand manager for Assignor for the period prior
to the Effective Date (as defined in paragraph 1(a) below) and is a party to that certain agreement, dated as of September 1, 2009,
as subsequently amended, by and between QVC, on the one hand, and Earthbound, on the other hand (the “Earthbound Agreement”).

 

AGREEMENT

 

NOW, THEREFORE,
in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the undersigned parties, incorporating the above Recitals, hereby agree, as of the Effective
Date, to amend and restate the Amended and Restated Agreement as follows:

 

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1.           Effectiveness
of Agreement; Grant of License and Other Rights by Company.

 

(a)          This
Agreement shall become effective simultaneously with the closing of the transactions contemplated by the Asset Purchase Agreement
and the delivery to QVC of a life insurance policy, or the absolute assignment of a life insurance policy, as required by paragraph
6(c) below (the “Effective Date”); provided, however, that in the event the Effective Date does
not occur by September 30, 2011, this Agreement shall be rendered null and void ab initio. On the Effective Date,
the Company shall provide notice to QVC (in the manner prescribed in paragraph 11(e) below) that the same has occurred. On the
Effective Date, Company shall pay, or cause one or more of its affiliates to pay, the sum of One Million Five Hundred Thousand
Dollars ($1,500,000.00), in good and immediately available funds, to QVC, via wire transfer (with
telephone notice of the Federal reference number to QVC’s Treasury Department Attn: Nicole Maganas at 484.701.1416 upon transfer)
pursuant to the following wiring instructions (unless otherwise directed in writing by QVC):

 

	 	Account Name:	QVC, Inc.
	 	Account Number:	***
	 	Bank Name:	***
	 	Bank Address:	***
	 	 	 
	 	 	 
	 	ABA #:	***
	 	SWIFT:	***
	 	 	 
	 	Bank Contact Name:	 
	 	***	 

 

On the Effective Date, Assignor shall pay,
or cause one or more of its affiliates to pay, the sum of One Million Dollars ($1,000,000.00), in good and immediately available
funds, to QVC, via wire transfer pursuant to the aforesaid wiring and notice instructions.
Time is of the essence with respect to the aforesaid payment obligations of Company and Assignor on the Effective Date and, in
the event of the failure of either Company or Assignor to make the respective payments required by this paragraph 1(a), this Agreement
shall be rendered null and void ab initio. Notwithstanding anything contained in this Agreement to the contrary,
QVC shall not be obligated to make any payments under this Agreement unless and until it receives (i) the aforesaid respective
cash payments, in good and immediately available funds, from Company and Assignor; and (ii) delivery or, in the alternative, absolute
assignment, of the insurance policy required by paragraph 6(c) below. For avoidance of doubt, the Parties agree that the Amended
and Restated Agreement shall remain in effect, unmodified hereby, until the Effective Date.

 

(b)          Company
grants to QVC and its affiliates during the License Period (as defined in paragraph 3 below): (i) the exclusive worldwide right
to Promote the Products through all means and media, now known or hereafter developed; (ii) the right to use, publish, reproduce
and transmit the trademarks, trade names, service marks, trade dress, copyrights, designs, logos and/or other intellectual property
rights owned, used, licensed and/or developed by Company solely in connection with the Products, including, without limitation,
the Mark (whether now in existence or created hereafter, collectively, the “Product IP Rights”) to Promote the
Products in accordance with the terms and conditions of this Agreement and the right to sublicense to others the aforementioned
rights; and (iii) the sub-licensable right to cause the Products to be manufactured by such manufacturer(s) (“Manufacturer(s)”),
which Manufacturers shall be as mutually agreed upon by QVC and Company. For purposes of clarification, Company shall have final
approval over any Manufacturer, which approval shall not be unreasonably withheld or delayed. Company grants to QVC and its affiliates
the nonexclusive right (subject to the provisions of paragraph 5 below) to use the rights granted in (i), (ii) and (iii) above
during the Sell-Off Period (as defined in paragraph 3 below). It is expressly understood that nothing in this paragraph shall prohibit
Company or Spokesperson from entering into a similar product development licensing agreement with any other retailer and/or wholesaler
to the extent not prohibited by, or in conflict with, the terms of this Agreement.

 

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(c)          Company
grants to QVC and its affiliates during the License Period: (i) the exclusive worldwide right to Promote the Co-Branded Products
through all means and media, now known or hereafter developed; (ii) the right to use, publish, reproduce and transmit certain of
the trademarks, trade names, service marks, trade dress, copyrights, designs, logos and/or other intellectual property rights owned,
used, licensed and/or developed by Company in connection with the Co-Branded Products, including, without limitation, the Design
Element and the Mark (whether now in existence or created hereafter, collectively, the “Co-Branded IP Rights”)
to Promote the Co-Branded Products in accordance with the terms and conditions of the Agreement and the right to sublicense to
others the aforementioned rights); and (iii) the sub-licensable right to cause the Co-Branded Products to be manufactured by Vendors
(or their licensees), which Vendors shall be as mutually agreed by the parties. Company grants to QVC and its affiliates the nonexclusive
right to use the rights granted in (i), (ii) and (iii) above during the Sell-Off Period.

 

(d)          Company
grants to QVC and its subsidiaries during the License Period the exclusive worldwide right to use the Spokesperson’s name,
likeness, image, voice and performance (the “Endorsement”) to Promote the Products and the Co-Branded Products
through all means and media, now known or hereafter developed. In addition, Company grants to QVC and its subsidiaries the non-exclusive
(subject to the provisions of paragraph 5 below) right to use the rights granted in this subparagraph (d) during the Sell-Off Period.
Hereinafter, the rights granted to QVC and its subsidiaries pursuant to this paragraph 1 are collectively referred to as the “License”.
Except as may be set forth herein to the contrary, the License grants rights to QVC and its subsidiaries with respect to the Mark
and the Endorsement only.

 

(e)          In
order to ensure the consistent quality of the Products, QVC shall arrange directly with Manufacturers of Products for such Manufacturers
of Products to provide to Company samples of Products and any packaging, or other promotional materials associated therewith for
the purpose of allowing Company to verify that such samples conform to its specifications and requirements, if any, for the Products,
provided that Company provides QVC with any such specifications and requirements at the time of delivery of the Designs (as defined
in paragraph 2(f) below) for the subject Products. Any such specifications and requirements not delivered to QVC by Company at
the time of delivery of the Designs for the subject Products shall be deemed to be waived by Company. For purposes of clarification,
as between Company and QVC, Company shall be responsible for oversight with respect to the quality of Products and the use of the
Product IP Rights in connection with the manufacture thereof.

 

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 (f)          In
order to ensure the consistent quality of the incorporation of the Design Element into Co-Branded Products, QVC shall arrange
directly with Vendors for Vendors to provide to Company samples of Co-Branded Products for the purpose of allowing Company to
verify that such samples conform to Company’s specifications and requirements, provided that Company provides QVC with such
specifications and requirements at the time of delivery of the Designs for the subject Products. Any such specifications and requirements
not delivered to QVC by Company at the time of delivery of the Designs for the subject Products shall be deemed to be waived by
Company. For purposes of clarification, as between Company and QVC, Company shall be responsible for oversight with respect to
the quality of the incorporation of the Design Element into the Co-Branded Products and the use of the Co-Branded IP Rights in
connection with the manufacture thereof.

 

(g)          In
addition to, or in lieu of, the Mark identified above, the Products and Co-Branded Products may be Promoted under a brand name
or brand names as mutually agreed upon, in writing, by QVC and Company.

 

2.           Products
and Compensation.

 

(a)          From
time to time, QVC and its subsidiaries may issue to Manufacturer(s) a purchase order (any such purchase order, as may be issued
from time to time, is hereinafter referred to as a “Purchase Order”). Hereafter, any purchases of Products by
QVC shall be made according to the terms set forth in this Agreement and in any such Purchase Order(s). The terms of each Purchase
Order, shall survive the expiration or termination of this Agreement. Notwithstanding anything to the contrary contained in this
Agreement or otherwise, QVC and its subsidiaries expressly reserve the right to promote products that are in competition with the
Products and make no representations or warranties with respect to (i) the amount of Products, if any, that may be sold through
the Programs or otherwise, (ii) the number of times, if any, the Products may be offered for sale on the Programs or otherwise,
or (iii) the amount of revenue, if any, that may be generated through any sales of Products on the Programs or otherwise. This
Agreement does not obligate QVC or its subsidiaries to purchase any Products from Manufacturer(s) or to Promote any Products.

 

(b)          From
time to time, QVC and its subsidiaries may issue to Vendor(s) a purchase order (any such purchase order, as may be issued from
time to time, is hereinafter referred to as a “Vendor Purchase Order”). Hereafter, any purchases of Co-Branded
Products by QVC shall be made according to the terms set forth in this Agreement and in any such Vendor Purchase Order(s). The
terms of each Vendor Purchase Order, shall survive the expiration or termination of the Agreement. Notwithstanding anything to
the contrary contained in the Agreement or otherwise, QVC and its subsidiaries expressly reserve the right to promote products
that are in competition with the Co-Branded Products and make no representations or warranties with respect to (i) the amount
of Co-Branded Products, if any, that may be sold through the Programs or otherwise, (ii) the number of times, if any, the Co-Branded
Products may be offered for sale on the Programs or otherwise, or (iii) the amount of revenue, if any, that may be generated through
any sales of Co-Branded Products on the Programs or otherwise. This Agreement does not obligate QVC or its subsidiaries to purchase
any Co-Branded Products from Vendor(s) or to Promote any Co-Branded Products.

 

(c)          Company
shall be responsible for all out-of-pocket costs and expenses incurred by Spokesperson and/or Company in connection with the services
performed by Spokesperson and/or Company under this Agreement, subject to any reimbursements due to the Company in accordance
with paragraph 4(a) of this Agreement.

 

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(d)          During
the License Period, QVC shall pay Company as set forth in this paragraph 2 for the rights granted and services provided hereunder
with respect to both Products and Co-Branded Products and Company shall accept the same as its sole compensation for such rights
granted and services provided hereunder.

 

(e)          During
the License Period, within thirty (30) days after the end of each calendar quarter, QVC will send to Company a statement covering
sales of Products and Co-Branded Products in such calendar quarter and any payment due pursuant to paragraphs 2(g) and 2(i) below
for such calendar quarter, and will pay to Company any such payment that is so due in accordance with the provisions of paragraphs
2(g) and 2(i) below. Each statement shall become binding on Company and Company shall, absent fraud on the part of QVC, neither
have nor make any claim against QVC with respect to such statement, unless Company shall advise QVC, in writing, of the specific
basis of such claim within one (1) year after the date Company receives such statement. Company may, not more than once during
any calendar year, but only once with respect to any statement rendered hereunder, audit QVC’s books and records related
to the Products and Co-Branded Products for the purpose of determining the accuracy of QVC’s statements to Company. If Company
wishes to perform any such audit, Company will notify QVC at least thirty (30) days before the date when Company plans to commence
such audit. Company shall not be entitled to examine any records that do not report sales of Products and/or Co-Branded Products.
All audits shall be made during regular business hours upon reasonable notice, and shall be conducted on Company’s behalf
by an independent Certified Public Accountant or other professional representative. Each examination shall be made at Company’s
own expense at QVC’s regular place of business where the books and records are maintained; provided, however,
that if any such audit reveals an underpayment of amounts owed pursuant to paragraphs 2(g) and 2(i) of greater than ten percent
(10%), QVC shall pay all such past due amounts plus reasonable expenses of Company’s audit including reasonable professional
fees.

 

(f)          Design
and Manufacturing. QVC and the Company will cooperate and work in concert to develop designs (“Designs”)
and prototypes (“Prototypes”) for the manufacture of the Products and Co-Branded Products. Company and Mizrahi
or, in the event of (A) the death of Mizrahi or (B) the disability of Mizrahi, and the election of QVC not to terminate this Agreement
pursuant to paragraph 6(c) in the event of either occurrence, a substitute designer mutually acceptable to Company and QVC, shall
provide no fewer than 200 Designs to QVC during each License Period Year (as defined in paragraph 2(g) below) of the License Period.
Prior to the manufacture of any specific Product line or Co-Branded Product line (each Product line or Co-Branded Product line,
an “Item”), QVC will provide a production quality sample (each, a “Sample”) of each Item
for the Company’s approval. Each Item produced, if any, by a Manufacturer will be an accurate reproduction in all material
respects to the Sample. Further, the Company shall notify QVC of its approval or disapproval of any Sample within five (5) Business
Days (as defined below) after Company receives such Sample. The parties will reasonably cooperate in an attempt to resolve any
disapproval of, objections to or concerns with, the Sample. If, however, the Company fails to disapprove any Sample within five
(5) Business Days of its receipt of such Sample, Company will be deemed to have approved such Sample. Company and Mizrahi acknowledge
that as between them and QVC, QVC owns the Designs. “Business Day”, as used herein, shall mean any day except Saturday,
Sunday and/or any other day on which commercial banks in Philadelphia, Pennsylvania or New York, New York are authorized by law
to close.

 

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(g)          QVC
shall pay to the Company the following *** Royalty Payments ***, subject, however, to the provisions of paragraph 2(i) below:

 

***

 

As used herein, each License Period Year shall
commence on October 1 and end on September 30 of the subsequent calendar year. The calendar quarters for each of the License Period
Years shall consist of October, November and December as the first calendar quarter; January, February and March as the second
calendar quarter; April, May and June as the third calendar quarter; and July, August and September as the fourth and final calendar
quarter. The *** Royalty Payment shall be remitted in accordance with paragraph 2(i) below.

 

(h)          The
parties acknowledge and agree that *** to Assignor, which ***. QVC acknowledges and agrees that it is accepting the following in
satisfaction of ***: (i) payment by Company of $1,500,000.00, in good and immediately available funds, to QVC pursuant to paragraph
1(a) above; (ii) payment by Assignor of $1,000,000.00, in good and immediately available funds, to QVC pursuant to paragraph 1(a)
above; (iii) *** as set forth in the Amended and Restated Agreement; (iv) receipt of the Reverse Royalty (as defined below) payments
due and owing to QVC pursuant to paragraph 2(k) below; and (v) receipt of the Third Participating Royalty Payments
(as defined below) due and owing to QVC pursuant to paragraph 2(l) below. Notwithstanding anything contained in this Agreement
to the contrary, (i) QVC shall have no recourse against Assignor for (A) ***; or (B) the payment of $1,500,000.00 due to QVC by
Company pursuant to paragraph 1(a) above; or (C) for payment of the Reverse Royalty due to QVC pursuant to paragraph 2(k) below;
and/or (D) for payment of the Third Participating Royalty Payments due to QVC pursuant to paragraph 2(l) below, provided,
however, that nothing in this paragraph 2(h) modifies, amends or novates the payment obligations of Assignor as set forth
in paragraph 1(a) above and in this paragraph 2(h)(ii); and (ii) QVC shall have no recourse against Company for (A) ***; and/or
(B) the payment of $1,000,000.00 due to QVC by Assignor pursuant to paragraph 1(a) above, provided, however, that
nothing in this paragraph 2(h) modifies, amends or novates the obligations of Company under this Agreement, including, without
limitation, the obligations of Company as set forth in subsections (i), (iv) and (v) of this paragraph 2(h) in paragraph 1(a) above
and in paragraph 2(l) below.

 

(i)          The
*** Royalty Payments set forth in paragraph 2(g) above shall be remitted pursuant to, and subject to the conditions in, this paragraph
2(i). QVC shall pay, and Company shall accept, the following as the sole compensation for the rights granted and services provided
in this Agreement:

 

(i)          In
accordance with paragraph 2(e) above, QVC shall pay to Company the *** Royalty Payment with respect to the first three consecutive
calendar quarters of each applicable License Period Year; and

 

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(ii)         In
accordance with paragraph 2(e) above, QVC shall pay to Company with respect to the fourth and final calendar quarter of each applicable
License Period Year ***. For purposes of this Agreement, “Gross Royalty” is defined to be ***. For purposes
of this Agreement, “Net Retail Sales” shall mean the aggregate amount of all revenue generated through the sale
of Products or Co-Branded Products, respectively, by QVC and its subsidiaries during the License Period Year, excluding freight,
shipping and handling charges, customer returns, and sales, use or other taxes. For further clarification, and subject only to
the provisions of paragraphs 2(g) and 2(i), QVC shall have no obligation to pay Company any royalties or other compensation hereunder
for Products and Co-Branded Products which are returned, or sought by QVC to be returned, to Manufacturers and/or Vendors, as the
case may be, by QVC. In addition, notwithstanding anything herein to the contrary, QVC shall have no obligation to pay any royalties
hereunder or other compensation to Company for Products and/or Co-Branded Products sold by QVC at or below QVC’s Landed Cost
(as defined below) for those Products and/or Co-Branded Products. “Landed Cost”, as used
herein, shall mean the cost price of the Products or Co-Branded Products, respectively, as set forth on the applicable Purchase
Orders or Vendor Purchase Orders, as the case may be, for such Products or Co-Branded Products, respectively, together with any
and all other costs incurred by QVC for freight, custom duties and miscellaneous expenses with
respect to the import of the subject Products or Co-Branded Products, respectively, into the continental United States of America
from any foreign country or port. 

 

(iii)        The
suspension or elimination of QVC’s obligation to remit *** Royalty Payments shall not relieve QVC of any obligation, to the
extent that the same otherwise exists, to remit the *** Royalty to Company as calculated in paragraph 2(i)(ii) above.  In
the event of the suspension or elimination of QVC’s obligation to remit ***, the *** Royalty shall thereafter be paid on
a quarterly calendar basis in accordance with paragraph 2(e) above.  The payment by QVC for the quarterly calendar period
in which QVC’s obligation to remit *** Royalty Payments was suspended or eliminated shall include (A) any outstanding ***
Royalty previously accrued but unpaid; and (B) the pro rata portion any *** Royalty Payments due to Company for the
calendar quarter in which Mizrahi dies or becomes Disabled (as defined in paragraph 6(d) below).  Notwithstanding anything
contained in this paragraph 2(i)(iii) above, in the event that QVC’s obligation to remit *** Royalty Payments is suspended
due to the Disability of Spokesperson, but is thereafter reinstated due to the recovery and return of Spokesperson, the payment
by QVC of *** Royalty Payments and/or the *** Royalty shall revert to the procedure and calculation set forth in paragraph 2(i)(i)
and 2(i)(ii) above.

 

In the event of a renewal
of this Agreement pursuant to paragraph 3 below, the *** Royalty shall continue to be paid on a quarterly calendar basis in accordance
with paragraph 2(e) above.  

 

(j)          QVC
and Company agree and acknowledge that time is of the essence in the delivery of the payments required by this Agreement, and further
agree that interest shall accrue on all past due payments under this Agreement from their respective due dates until paid at the
rate (except as may be expressly stated otherwise in this Agreement) of one percent (1%) per month, or if such rate exceeds the
maximum rate allowed by law, at the maximum rate allowed by law, and shall be payable on demand.

 

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(k)          Notwithstanding
the exclusive grant of license contained in paragraph 1, upon the prior written permission of an officer of QVC, which permission
may be granted or withheld for any reason or no reason at all at the sole discretion of QVC, the Company may sell any of the Products
via Prestige Retailers (as defined below). In addition, notwithstanding the exclusive grant of license contained in paragraph 1,
Company may sell any of the Products via Company Media (as defined below); provided, however, that Company must,
with respect to both sales of the Products via Prestige Retailers and/or sales of the Products via Company Media, provide QVC with
at least thirty (30) days written notice prior to Company’s issuance of any purchase order to Manufacturer(s) of the Products.
During the Term of this Agreement and thereafter, Company shall pay to QVC a royalty (“Reverse Royalty”) equal
to (i) *** of wholesale sales of all Products sold by Company (or its affiliates) to Prestige Retail (“Company Prestige
Retailer Sales”), if any, and (ii) *** of net retail sales of all Products sold by Company via Company Media, if any
(“Company Media Sales”) (such “Company Prestige Retailer Sales” and “Company Media Sales”
being collectively referred to as “Company Sales”). Reverse Royalties earned hereunder, if any, will be accrued
quarterly in the quarter in which such Company Sales, if any, are made by Company, and shall be paid within thirty (30) days after
the end of each calendar quarter. Within thirty (30) days after the end of each calendar quarter, Company shall send to QVC a statement
covering Company Sales in such quarter and Reverse Royalties for such Company Sales, and will pay QVC any Reverse Royalties that
are due. As used in this Agreement, “Prestige Retailer” shall mean the stores and the respective internet websites
of high-end Brick and Mortar Retailers (as defined below), e.g., Neiman Marcus, Bloomingdales and May Company Stores, but shall
exclude (i) discount divisions of any of the foregoing and (ii) all retail channels of distribution other than by or through a
Prestige Retailer, including without limitation, by or through “Mass Merchants” (as defined below), discount stores,
drugstores, warehouse stores, superstores and retail outlet stores. As used in this Agreement, “Mass Merchants”
shall mean general retail merchandisers, including but not limited to Sears, JC Penney, Target, Walmart and Kmart. As used herein,
“Brick and Mortar Retailer” shall mean an entity whose primary means of deriving revenue is the marketing and
sale of consumer products to end-users of such consumers products at a physical location to which such end-users come to purchase
such consumer products, provided, however, a Brick and Mortar Retailer shall not include, and shall not be deemed or construed
to include, any Direct Competitor (as defined below) or affiliate thereof.  As used in this Agreement,
“Company Media” shall mean Company’s “Isaac Mizrahi” and “Isaac Mizrahi New York”-branded
brick and mortar retail stores, if any, and its “Isaac Mizrahi”-branded and “Isaac Mizrahi New York”-branded
internet websites. Notwithstanding any other provision in this paragraph 2(k), Company shall be permitted to use the Mark as the
name or title of a television program or magazine without paying QVC a Reverse Royalty for such use; provided, however,
that any such television program or magazine (and the content or subject matter thereof) remains subject to the non-compete provisions
of paragraph 5 of this Agreement. The provisions of this paragraph 2(k) shall survive termination or expiration of this Agreement.

 

(l)          Subject
to paragraph 2(l)(ii) below, Company shall remit the First Participating Royalty Payments (as defined below) and the Second Participating
Royalty Payments (as defined below) to Assignor and shall remit the Third Participating Royalty Payments (as defined below) to
QVC as follows:

 

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(i)          Subject
to paragraph 2(l)(ii), the Company shall pay to Assignor the first *** of Brick and Mortar Net Revenues (as defined below) earned
and received by Company (or earned by any affiliate of Company) during each twelve (12) month period commencing on October 1, 2011
and ending on September 30, 2021 (collectively, the “First Participating Royalty Payments”). As between Assignor
and QVC, on the one hand, and Company, on the other hand, and subject to paragraph 2(l)(ii), Company shall retain all of the next
*** of Brick and Mortar Net Revenues earned and received by Company during each twelve (12) month period commencing on October
1, 2011 and ending on September 30, 2021 (collectively, the “Retained Brick and Mortar Net Revenues”). Subject
to paragraph 2(l)(ii), Company shall pay to Assignor, during each of the twelve (12) calendar month periods commencing on October
1, 2011 and ending on September 30, 2021, *** of the Brick and Mortar Net Revenues earned and received by the Company (or earned
by any affiliate of Company), if any, in excess of the First Participating Royalty Payment for each such twelve (12) calendar month
period and the Retained Brick and Mortar Net Revenues in such twelve (12) calendar month period (collectively, the “Second
Participating Royalty Payments”). As used herein, “Brick and Mortar Net Revenues” shall mean all revenues
(including, without limitation, royalties of any kind), excluding the Excluded Company Royalties (as defined below), earned by
Company from (A) the sale, license, consignment or any other form of distribution of any products, including, without limitation,
the Products, bearing, marketed in connection with or otherwise associated with the Company’s trademarks and brands and/or
(B) the licensing of any and all intellectual property rights with respect to any and all products, including, without limitation,
the Products, bearing, marketed in connection with or otherwise associated with the Company’s trademarks and brands, after
deduction from such revenues for: (i) any such products sold, licensed, consigned or otherwise distributed by or through the Company
to any purchaser, consignee or licensee of such products, but thereafter returned to Company by such purchaser, consignee or licensee
of such products for refund actually paid by Company to such customer; (ii) sales, use, excise or value added taxes actually paid
by Company in connection with any such products sold, consigned, licensed or otherwise distributed by or through the Company to
the purchaser, consignee or licensee of such products; (iii) custom duties and similar import impositions or charges actually paid
by Company in connection with any such products sold, consigned, licensed or otherwise distributed by Company to the purchaser,
consignee or licensee of such products; (iv) Advertising Royalties (as defined below); and (v) shipping and handling charges actually
paid by Company in connection with the sale, consignment, license or other distribution of any such products to the purchaser,
consignee or licensee of such products. As used herein, “Excluded Company Royalties” shall mean (A) royalties
and any other amounts paid or credited by QVC to Company under this Agreement or the Design Services Reimbursement Agreement, (B)
royalties and revenues that Company receives in connection with Company Sales, provided that QVC has received all Reverse Royalties
due and payable to QVC pursuant to this Agreement in connection with respect to such Company Sales, and (C) royalties and revenues
that the Company receives from Liz Claiborne in connection with the Liz Claiborne New York brand. “Advertising
Royalties”, as used herein, shall mean cash monies actually paid to Company from licensees other than affiliated licensees
of Company to be held in trust by Company as a fiduciary to such non-affiliated licensees, which monies were received by Company
(A) as a result of “arms length” negotiation with Company’s licensees; (B) are not revenue, and are not characterized
for any purpose as revenue, of Company; and (C) are earmarked for the sole purpose of marketing and promoting Company’s trademarks
for the benefit of licensees not affiliated with Company.

 

    	10

    	 

    

 

Notwithstanding
anything contained in this Agreement to the contrary, Company (A) shall not, directly or indirectly (or otherwise cause a third
person to) sell, license, consign or otherwise distribute any products, including, without limitation, the Products, bearing, marketed
in connection with or otherwise associated with the Company’s trademarks and brands to K-Mart, Wal-Mart Stores, Inc., Sears,
Roebuck & Co. and/or any Direct Competitor (as defined below) and/or any respective affiliate thereof; and/or (B) shall not
enter into any direct-to-retail license (i.e., a license with any retailer for the manufacture of goods and products) with
any off-price retainer for apparel or footwear. As used herein, “Direct Competitor” shall mean any entity
(or affiliate thereof) other than QVC, including, but not limited to, HSN, Inc. and/or ValueVision Media, Inc., whose primary means
of deriving revenue is the transmission of Direct Response Television Programs (as defined in Paragraph 5 below), including without
limitation, Home Shopping Network, ShopNBC, America’s Store and Shop at Home Network.

 

QVC
shall be entitled to terminate this Agreement (without further obligation on the part of QVC to perform hereunder, including,
without limitation, any further obligation to remit any *** Royalty Payment otherwise due and owing to Company by QVC)
in the event that, prior to October 1, 2021, Company conveys, transfers or assigns any of Company’s trademarks, trade names,
service marks, trade dress, copyrights, designs, logos and/or other intellectual property associated with Mizrahi to any of the
following: (A) a Direct Competitor or any affiliate thereof; (B) an entity, or an affiliate of an entity, that, in the calendar
year preceding any such conveyance, transfer or assignment, has sold, consigned or distributed by any other means goods or products
to a Direct Competitor, or any affiliate thereof, in the amount of $25,000,000.00 or more; (C) a Mass Merchant or any affiliate
thereof; (D) any entity or person convicted of, or subject to pending charges for, any felony under federal or state laws; (E)
any entity or person who is the subject of any federal or state investigation for fraudulent activities or violation of federal
or state securities laws; (F) any entity or person who is the subject of any investigation, conviction or pending charge related
to the use of child labor; (G) any entity or person who is the subject of any investigation, conviction or pending charge for violation
of the Foreign Corrupt Practice Act, 15 U.S.C. § 78dd-1, et seq., the Racketeer Influenced and Corrupt Organizations
Act, 18 U.S.C. § 1961, et seq. and/or the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001, Pub.L. No. 107-56, 115 Stat. 272 (Oct. 26, 2001); and/or (H) any entity
or person who is the subject of any federal, state or local investigation by a governmental authority or agency, conviction or
pending charge for a crime involving Moral Turpitude (as defined below). “Moral Turpitude”, as used herein, shall mean
the act or commission (or the attempt or the criminal conspiracy to commit or the aiding or abetting) of any of the following
crimes under federal, state or local laws: arson, criminal homicide, speculating or wagering on official action or information
or other crime involving an abuse of public office or corrupt influence in official matters, cruelty to animals, open lewdness
or other crime of public indecency, corruption or endangering the welfare of minors, sexual abuse or exploitation of children,
unlawful communication or contact with a minor, kidnapping, burglary, robbery, theft, embezzlement or extortion of property with
a value greater than $2,000.00 or of trade secrets by whatever means, forgery, bad checks, money laundering, counterfeiting, sale
of controlled substances, deceptive business practices, commercial bribery, defrauding secured creditors, fraud, perjury or false
swearing, unsworn falsification to authorities, obscenity, obstruction of justice, aggravated assault, rape or statutory sexual
assault and/or aggravated indecent assault. 

 

    	11

    	 

    

  

QVC
shall be entitled to terminate this Agreement (without further obligation on the part of QVC to perform hereunder, including,
without limitation, any further obligation to remit any *** Royalty Payment otherwise due and owing to Company by QVC)
in the event that, prior to October 1, 2015, Company conveys, transfers or assigns any equity interest in the Company to a Direct
Competitor or any affiliate or employee thereof.

 

In the event that QVC terminates
this Agreement pursuant to the terms of this paragraph 2(l)(i), QVC shall have no obligation to remit any further *** Royalty Payments
otherwise due and owing to Company by QVC, but Company shall continue to have the obligation to remit the Third Participating Royalty
Payments to QVC in accordance with the provisions of this Agreement.

 

(ii)         At
such time as there is due to Assignor an aggregate of *** in First Participating Royalty Payments and Second Participating Royalty
Payments pursuant to this paragraph 2(l), Company shall provide notice promptly of the same to QVC and thereafter shall pay to
QVC *** of all Bricks and Mortar Net Revenues earned and received by Company (or earned by any affiliate
of Company) until September 30, 2021 (collectively, the “Third Participating Royalty Payments”) in lieu
of the First Participating Royalty Payments and the Second Participating Royalty Payments. The Third Participating Royalty Payments
shall be calculated without regard to the Retained Brick and Mortar Net Revenues, which shall not be included in any computation
of the Third Participating Royalty Payments due and payable to QVC.

 

(iii)        The
Third Participating Royalty Payments from Brick and Mortar Net Revenues earned by the Company shall be reported and paid to QVC
as follows: Within thirty (30) days after the end of each calendar quarter, Company will send to QVC a statement covering all Brick
and Mortar Net Revenues earned and received by Company (or earned
by any affiliate of Company) in such calendar quarter and any payment of Third Participating Royalty Payments due to QVC
pursuant to this paragraph 2(l) for such calendar quarter, and will pay to QVC any such payment of Third Participating Royalty
Payments that is so due in accordance with the provisions of this paragraph 2(l). Each statement shall become binding on QVC and
QVC shall, absent fraud on the part of Company, neither have nor make any claim against Company with respect to such statement,
unless QVC shall advise Company, in writing, of the specific basis of such claim within one (1) year after the date QVC receives
such statement. QVC may, not more than once during any calendar year, but only once with respect to any statement rendered hereunder,
audit Company’s books and records related to the Brick and Mortar Net Revenues for the purpose of determining the accuracy
of Company’s statements to QVC. If QVC wishes to perform any such audit, QVC will be required to notify Company at least
thirty (30) days before the date when QVC plans to commence such audit. QVC shall not be entitled to examine any records that do
not report earnings of Brick and Mortar Net Revenues. All audits shall be made during regular business hours upon reasonable notice,
and shall be conducted on QVC’s behalf by an independent Certified Public Accountant or other professional representative.
Each examination shall be made at QVC’s own expense at Company’s regular place of business where the books and records
are maintained; provided, however, that if any such audit reveals an underpayment of amounts owed pursuant to this
paragraph 2(l) of greater than ten percent (10%), Company shall pay all such past due amounts plus reasonable expenses of QVC’s
audit including reasonable professional fees.

 

    	12

    	 

    
 

Company shall use all commercially
reasonable means to collect any and all Brick and Mortar Net Revenues from any and all entities and persons from whom such Brick
and Mortar Net Revenues are due (and, in addition to, and not in lieu of, all rights of offset or recoupment by QVC under law),
the failure of Company to do so (i) shall be a breach of this Agreement with respect to Brick and Mortar Net Revenues due from
any person or entity in the amount of Ten Thousand Dollars ($10,000.00) or less and (ii) shall be a material breach of this Agreement
with respect to Brick and Mortar Net Revenues due from any person or entity in any amount greater than Ten Thousand Dollars ($10,000.00).
As used herein, “commercially reasonable means” shall be determined by reference to the dollar amount, collectability
and cost of collection of the subject Brick and Mortar Net Revenues due to Company. The provisions of this paragraph 2(l) shall
survive termination or expiration of this Agreement.

 

3.            License
Period and Term.

 

(a)          Generally.
The license period (the “License Period”) shall be deemed to have commenced as of October 1, 2010 and shall
expire, if not otherwise terminated as set forth below, at 12:00 a.m. (prevailing Eastern Time) on October 1, 2015; provided,
however, that the License Period shall automatically be extended for successive one-year terms unless either Company or
QVC notifies the other of its intent to terminate the License Period no later than sixty (60) days prior to the end of the then-current
License Period. Notwithstanding any other provision of this Agreement, Company or QVC shall have the right to terminate the Agreement
at any time if the other materially breaches this Agreement and fails to cure such breach within thirty (30) days of receipt of
written notice of such material breach delivered in the manner prescribed by paragraph 10(e) below. QVC
shall owe Company no *** Royalty Payments for any renewal term of the License Period. In the event that QVC shall elect
to terminate this Agreement as a result of a material breach of this Agreement by Company, and the failure of Company to cure such
breach within thirty (30) days of receipt of written notice of such material breach delivered in the manner prescribed by paragraph
10(e) below, QVC shall have no further obligation to remit any *** Royalty Payments otherwise due and owing to Company by QVC,
but Company shall continue to have the obligation hereunder to remit the Third Participating Royalty Payments to QVC pursuant to
paragraph 2 above. In the event that Company shall elect to terminate this Agreement as a result of a material breach of this Agreement
by QVC, and the failure of QVC to cure such breach within thirty (30) days of receipt of written notice of such material breach
delivered in the manner prescribed by paragraph 10(e) below, QVC shall not be entitled to receive any Third Participating Royalty
Payments in excess of ***. The Term of this Agreement shall be as defined in paragraph 5 of this Agreement.

  

    	13

    	 

    

 

(b)          [Omitted.] 

 

(c)          Sell-Off
Period. The exclusive rights of QVC under the License shall terminate at the conclusion of the License Period, whereupon QVC
may continue to exercise the License rights, including the Endorsement, on a non-exclusive basis (subject to the provisions of
paragraph 5 below) for as long as necessary, including, after expiration or termination, for cause or otherwise, of the License
Period, to Promote Products and Co-Branded Products through any means and media (i) to sell off any of its remaining inventory
of Products and Co-Branded Products, (ii) to place additional orders with Manufacturers and/or Vendors for Products and Co-Branded
Products, respectively, to fulfill any remaining unfilled customer orders for Products and/or Co-Branded Products, and (iii) to
have such additional orders fulfilled by Manufacturer(s) or Vendor(s) (the “Sell-Off Period”).

 

(d)          QVC
shall have no obligation to remit to Company, and Company shall not be entitled to receive, any royalty or other compensation from
QVC for sales of Products and Co-Branded Products by QVC during the Sell-Off Period.

 

4.            Appearances.

 

(a)          If
requested by QVC, Company shall cause Spokesperson to make, at minimum, the following number of monthly Appearances: (i) twelve
(12) in License Period Year 1; (ii) sixteen (16) in License Period Year 2; (iii) eighteen (18) in License Period Year 3; (iv) twenty
(20) in License Period Year 4; and (v) twenty (20) in License Period Year 5 and in each subsequent year in the event that this
Agreement is automatically extended pursuant to paragraph 3(a) above. Each “Appearance” shall mean a one hour
appearance on QVC’s Direct Response Television Programs. The schedule of Appearances shall be mutually determined by the
Company and QVC, subject to Spokesperson’s schedule; provided, however, that once dates and times for Appearances
have been agreed upon and scheduled by QVC, Company shall cause Spokesperson to make such Appearances, unless Company or Spokesperson
provides QVC with written notice of Spokesperson’s inability to make such Appearance at least sixty (60) days in advance
of the scheduled Appearance date. Company shall cause Spokesperson to appear, in promotional announcements featuring the Direct
Response Television Programs, at dates and times mutually determined by QVC and Spokesperson, subject to Spokesperson’s reasonable
availability. Unless otherwise agreed by the parties, all Appearances and promotional announcements shall take place at QVC’s
studios in West Chester, Pennsylvania or the Company’s showroom located at 475 10th Avenue, New York, NY. Any costs and expenses
of the Spokesperson that may arise in connection with all Appearances and promotional announcements, including without limitation,
travel, lodging and food, shall be borne by Company; provided, however, that any production costs associated with
the production of any program at the Company’s showroom shall be borne by QVC or its affiliates. In the event of the failure
of the Spokesperson to make an Appearance required pursuant to this Agreement for any other reason, Company shall use its best
efforts to provide an alternative Spokesperson satisfactory to QVC.

 

(b)          Upon
the request of Company, Spokesperson may promote (but not offer for sale, sell or otherwise distribute) Apparel Products (as defined
below) and/or Non-Apparel Products (as defined below) on, by or through the Programs subject to, and strictly conditioned upon,
the following terms and conditions:

 

    	14

    	 

    

(i)          Subject
to the prior written approval by an officer of QVC at the level of Vice President or higher, which discretion may be withheld by
QVC in its sole and unfettered discretion, Spokesperson may promote (but not offer for sale, sell or otherwise distribute) Apparel
Products on, by or through the Programs pursuant to the conditions set forth in paragraph 4(b)(iii) below, provided, however, after
such time as QVC receives payment in full (which payment is not disgorged from QVC by any court of competent jurisdiction) of the
Third Participating Royalty Payments in the aggregate amount of no less than ***, QVC will forfeit the right to receive any further
Third Participating Royalty Payments if it withholds consent for Spokesperson to promote Apparel Products on, by or through Programs
more than three (3) times in any given six (6) month time period where the conditions set forth in paragraph 4(b)(iii) otherwise
were met. Company agrees and acknowledges that its sole and exclusive remedy in the event that QVC so withholds its consent shall
be that it is no longer obligated to remit the Third Participating Royalty Payments QVC in excess of the aggregate amount of ***.
“Apparel Products”, as used herein, shall mean apparel, footwear, fashion accessories and home textiles (other
than the Products and the Co-Branded Products) bearing, marketed in connection with, or otherwise associated with Company’s
trademarks and brands that are being sold in Brick and Mortar Retailers.

 

(ii)         Subject
to the prior written approval by an officer of QVC at the level of Vice President or higher, which discretion may be withheld by
QVC in its sole and unfettered discretion, Spokesperson may promote (but not offer for sale, sell or otherwise distribute) Non-Apparel
Products on, by or through the Programs pursuant to the conditions set forth in paragraph 4(b)(iii) below “Non-Apparel
Products”, as used herein, shall mean any and all products, other than Apparel Products, the Products and the Co-Branded
Products, bearing, marketed in connection with, or otherwise associated with Company’s trademarks and brands that are being
sold in Brick and Mortar Retailers.

 

(iii)        All
requests by Company for the promotion of Apparel Products and Non-Apparel Products shall be made to QVC (in the manner set forth
in paragraph 11(e) below) no less than seven (7) Business Days prior to the date upon which Company seeks the promotion of such
Apparel Products and/or Non-Apparel Products by, on or through the Programs and must meet and satisfy the following requirements
and conditions:

 

(A)         Upon
the request of QVC, Company shall obtain any licenses or consents deemed required by QVC for the promotion of Apparel Products
and/or Non-Apparel Products by, on or through the Programs;

(B)         Company
shall provide QVC (in the manner set forth in paragraph 11(e) below) with a script of the requested promotion of Apparel Products
and/or Non-Apparel Products by, on or through the Programs and shall do so no less than seven (7) Business Days prior to the date
upon which Company seeks such promotion;

(C)         All
Apparel Products and Non-Apparel Products requested by Company to be promoted on, by or through the Programs are subject to QVC’s
standards and practices, including, without limitation, such standards and practices pertaining to claims substantiation and quality
assurance, and, if requested by QVC, samples of such promotion of such Apparel Products and/or Non-Apparel Products by, on or through
the Programs shall be provided to QVC in sufficient time to allow for quality assurance testing by QVC;

 

    	15

    	 

    

 

(D)         All
claims, if any, made in connection with the promotion of all Apparel Products and Non-Apparel Products shall be demonstrated by
Company and are subject to QVC’s prior and continuing approval. No promotion of any Apparel Products or Non-Apparel Products
shall include any testimonial or claim that cannot be authenticated or substantiated by QVC or any false or unwarranted claim or
any unfair disparagement of the goods or products of any Brick and Mortar Retailer and/or any competitor of Company or QVC;

(E)         The
requested promotion by Company of any and all Apparel Products and Non-Apparel Products shall comply with all federal, state and
local laws, statutes and regulations;

(F)         No
promotion of any Apparel Products and/or Non-Apparel Products shall infringe upon the trademarks, patents, trade dress or other
intellectual property rights of any third party;

(G)         QVC
shall not be required to promote any Apparel Products and/or Non-Apparel Products that would bring QVC’s reputation into
public disrepute;

(H)         Any
requested promotion of any Apparel Products and/or Non-Apparel Products is limited to live programming and shall not include any
films or video of any kind;

(I)         Company
shall be responsible for any and all licensing fees in connection with all requested promotion of any and all Apparel Products
and Non-Apparel Products on, by or through the Programs;

(J)         Company
agrees and acknowledges that QVC is not responsible for any of Company’s contractual obligations to any third party with
respect to the promotion of Apparel Products and Non-Apparel Products;

(K)         Company
agrees and acknowledges that QVC may be required to shorten or eliminate any requested promotion of Apparel Products and/or Non-Apparel
Products in order to conform to time limitations or to meet legal requirements;

(L)         Company
represents and warrants (which representation and warranty shall survive the expiration or termination of this Agreement) that
it has or will obtain any and all licenses and consents as may be required for the promotion of any and all Apparel Products and
Non-Apparel Products;

(M)         Company
shall protect, defend, hold harmless and indemnify QVC and its affiliates, employees, agents, officers and directors, from and
against any and all claims, actions, suits, costs, liabilities, damages and expenses (including, without limitation, all attorneys'
fees and court costs) arising out of or related to any and all promotions of Apparel Products and Non-Apparel Products and/or any
acts or omissions of Company or any Spokesperson in connection with any and all such promotions, which obligations shall survive
the expiration or termination of this Agreement;

 

    	16

    	 

    
  

(N)         No
single promotion by Spokesperson of Apparel Products or Non-Apparel Products shall exceed fifteen (15) seconds in duration; and

(O)         Company
may not request more than one (1) promotion by Spokesperson of Apparel Products or Non-Apparel Products for any given Appearance
by Spokesperson.

  

(c)          Company
shall protect, defend, hold harmless and indemnify QVC and its affiliates, employees, agents, officers and directors, from and
against any and all claims, actions, suits, costs, liabilities, damages and expenses (including, without limitation, all attorneys'
fees and court costs) arising out of or related to any acts or omissions of Company or any Spokesperson in connection with the
Appearances, which obligation shall survive the expiration or termination of this Agreement.

 

(d)          In
consideration of the services to be rendered by Spokesperson, Spokesperson shall be compensated by Company and not by QVC. Nothing
in the Agreement shall be deemed or construed to render any Spokesperson an employee or independent contractor of QVC, or any affiliate
thereof, or otherwise entitle any Spokesperson to any compensation or benefits from QVC or any affiliate thereof.

 

5.            Non-Compete.

 

Except as contemplated hereunder
and without the prior written consent of QVC, neither Assignor, Company nor Spokesperson shall, during the License Period of this
Agreement and the one-year period thereafter (collectively, the “Term”), promote, advertise, endorse or sell
(or otherwise cause a third party to promote, advertise, endorse or sell): (i) the Products and Co-Branded Products anywhere in
the world through any means or media; and/or (ii) any goods, services or products, including without limitation, the Products and
Co-Branded Products, anywhere in the world through Direct Response Television Programs. As used herein, “Direct Response
Television Programs” shall mean any televised program which requests a consumer to respond to any promotion of any product
or service by mail, telephone, internet or other electronic means, which program: (A) is live, contains an intermittent or continuous
call to action and devotes at least twenty percent (20%) of its programming time to the promotion of products or services; or (B)
is otherwise in the style or format of a televised retailing program, such as the Programs. Subject to the foregoing provisions
of this paragraph 5, Company may promote, advertise, endorse, sell, license or otherwise commercialize any brand or mark, other
than the Mark.

 

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6.            Representations,
Warranties and Covenants.

 

(a)          Company
represents, warrants and covenants as of the Effective Date, which representations, warranties and covenants shall continue during
the Term of this Agreement and shall survive the expiration or termination of this Agreement, that: (i) it possesses the full power
and exclusive right to grant the License and Endorsement to QVC; (ii) the execution, delivery and performance of this Agreement
by Company does not violate any agreement, instrument, judgment, order or award of any court or arbitrator or any law, rule or
regulation; (iii) the Design, Prototype and Product IP Rights of each Product, and the Design Element and Co-Branded Product IP
Rights with respect to each Co-Branded Product, shall comply with all foreign, federal, state, county, municipal or other statutes,
laws, orders and regulations of any governmental or quasi-governmental entity; (iv) QVC’s use of the License and the Endorsement,
and QVC’s Promotion of the Products and the Co-Branded Products as permitted hereunder, will not infringe or otherwise violate
the copyrights, trademarks, or other proprietary rights of third parties or constitute unfair competition; (v) all claims concerning
the Products and Co-Branded Products made by Company are, and will be, true and correct at the time such claims are made, and supported
by data which complies with applicable law; (vi) there are no amendments to the Asset Purchase Agreement as of the Effective Date
that have not been disclosed to QVC; and (vii) except as contemplated in this Agreement, there exist no agreements, or other arrangements,
for Company to endorse, promote, advertise, or sell any Products or Co-Branded Products anywhere in the world. Company shall provide
QVC with any and all documents reasonably required or requested by QVC at any time and from time to time to support the representations
and warranties herein contained.

   

(b)          Spokesperson
represents, warrants and covenants as of the Effective Date, severally and not jointly as to any other Spokesperson only, which
representations, warranties and covenants shall continue during the Term of this Agreement and shall survive the expiration or
termination of this Agreement, that: (i) it has granted to Company, and possesses the full power and exclusive right to grant to
Company, the Endorsement; (ii) the execution, delivery and performance of this Agreement by such Spokesperson does not violate
any agreement, instrument, judgment, order or award of any court or arbitrator or any law, rule or regulation; (iii) QVC’s
use of the Endorsement will not infringe or otherwise violate the copyrights, trademarks, or other proprietary rights of third
parties or constitute unfair competition; (iv) all claims concerning the Products and Co-Branded Products made by such Spokesperson
are, and will be, true and correct at the time such claims are made, and supported by data which complies with applicable law;
and (v) except as contemplated in this Agreement, there exist no agreements, or other arrangements, for Spokesperson to endorse,
promote, advertise, or sell any Products or Co-Branded Products anywhere in the world. Spokesperson shall provide QVC with any
and all documents reasonably required or requested by QVC at any time and from time to time to support the representations and
warranties herein contained.

 

(c)          On
the Effective Date, but, in any event no later than September 30, 2011, Company shall obtain from an insurance company having a
A.M. Best rating of A+ and shall deliver to QVC a life insurance policy insuring the life of Mizrahi. Such life insurance policy
shall name QVC as the owner or, in the alternative, Company shall grant an absolute assignment in and to such insurance policy
to QVC such that QVC shall become the owner thereof. Such life insurance policy shall be maintained by Company for the License
Period Years set forth below. Such life insurance policy shall name QVC as the sole beneficiary and shall be maintained by Company
in the following amounts:

 

	License Period Years 2 and 3 -	 	$	4,000,000.00	 
	 	 	 	 	 
	License Period Year 4 -	 	$	3,000,000.00	 
	 	 	 	 	 
	License Period Year 5 -	 	$	2,000,000.00	 

 

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Such life insurance policy
shall provide further that QVC shall receive notice in the event of any termination of coverage under such life insurance policy.
Company shall provide QVC with any and all information and/or documentation reasonably requested by QVC (i) to demonstrate continuing
life insurance coverage for Mizrahi during the License Period as required by this paragraph; and (ii) in order to allow QVC to
remit all premium payments for the above-described life insurance policy, which premium payments shall be deducted by QVC from
any and all *** Royalty Payments otherwise due to Company under this Agreement. Company hereby agrees and acknowledges that QVC
may make such deductions from any and all *** Royalty Payments otherwise due to Company under this Agreement to the extent necessary
to remit premium payments directly by QVC to the insurance company(ies) issuing the life insurance coverage for Mizrahi as described
in this paragraph. Mizrahi shall take all actions reasonably requested by Company or QVC that are necessary for Company to obtain
and deliver (and, to the extent necessary, absolutely) assign the above described life insurance policy and to ensure continued
coverage thereunder. Notwithstanding anything contained in this Agreement to the contrary, QVC shall have no obligation to remit
any payments otherwise potentially due to Company under this Agreement unless and until Company delivers to QVC the life insurance
policy described above. Notwithstanding anything contained in this Agreement to the contrary, in the event of the death of Mizrahi,
QVC shall not be required to accept any substitute designer under this Agreement unless and until QVC receives the proceeds from
the life insurance policy required by this paragraph 6(c). In the event of the death of Mizrahi and the failure of Company to propose
a substitute designer acceptable to QVC within twenty-four (24) months from the date of Mizrahi’s death, QVC may elect to
terminate this Agreement. In the event that QVC so terminates this Agreement, QVC shall have no obligation, except as otherwise
expressly set forth in this paragraph 6(c) to the contrary, to remit any further *** Royalty Payments otherwise due and owing to
Company by QVC, but Company shall continue to have the obligation to remit the Third Participating Royalty Payments to QVC pursuant
to this Agreement up to the amount of ***.

 

Notwithstanding anything
in this Agreement to the contrary, in the event of the death of Mizrahi, QVC shall have no obligation to remit any *** Royalty
Payment otherwise due and owing to Company by QVC. QVC shall not be obligated to remit that portion of *** Royalty Payment due
for any portion of a calendar quarter following the death of Mizrahi, provided, however, QVC shall continue, during
the License Period, to remit a *** Royalty to Company in accordance with the provisions of paragraph 2(i)(ii) above.

 

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(d)          Notwithstanding
anything in this Agreement to the contrary, in the event that Mizrahi should become Disabled (as defined below), QVC shall have
no obligation to remit any *** Royalty Payment otherwise due and owing to Company by QVC during such period of Disability. “Disabled”
and “Disability”, as used herein, shall mean physical disfigurement or scarring, paralysis or loss of control of any
part of the body, inability to stand or walk for sustained periods of time, a mental illness, disorder or disease, impairment of
speech, loss of sight or hearing and/or loss of any limb. In the event that such Disability of Mizrahi should continue for a period
of eighteen (18) months, QVC shall have no further obligation to remit any further *** Royalty Payments otherwise due and owing
to Company by QVC. In the event of the failure of Company to propose a substitute designer acceptable to QVC within twenty-four
(24) months from the date upon which Mizrahi should become Disabled, QVC may elect to terminate this Agreement. In the event that
QVC so terminates this Agreement, QVC shall have no obligation, except as otherwise expressly set forth in this paragraph 6(d)
to the contrary, to remit any further *** Royalty Payments otherwise due and owing to Company by QVC, but Company shall continue
to have the obligation to remit the Third Participating Royalty Payments to QVC pursuant to this Agreement up to the amount of
***. QVC shall not be obligated to remit that portion of *** Royalty Payment due for any portion of a calendar quarter following
the disability of Mizrahi, provided, however, QVC shall continue, during the License Period, to remit a *** Royalty
to Company in accordance with the provisions of paragraph 2(i)(ii) above.

  

7.            Confidentiality.

 

(a)          Each
Party agrees to treat this Agreement and the terms and conditions hereof as confidential information (the “Confidential
Agreement Information”). Each Party shall only transmit the Confidential Agreement Information to such of its directors,
officers, employees, affiliates, attorneys, accountants, consultants, commercial banker and advisors who need to know such information
for purposes of effecting this Agreement and who shall agree to be bound by the terms and conditions of this paragraph. Subject
to paragraph 7(b) below, each Party agrees that the Confidential Agreement Information shall not be disclosed to others, except
as necessary to carry out or enforce the terms of this Agreement or as may be required by law or legal process; provided,
however, that the Party making such disclosure shall provide notice to the other Party prior to such disclosure and shall
use reasonable commercial efforts to secure confidential protection of such information and to limit such disclosure to the extent
possible.

 

    	20

    	 

    

 

(b)          Company
acknowledges and agrees that any and all information regarding QVC or its operations disclosed to it in conjunction with this Agreement,
and any information regarding the sale and promotion of Products, Co-Branded Products and/or products by QVC, will be treated as
confidential information and will not be disclosed to any third party at any time during the Term of this Agreement, and thereafter.
Company further agrees that any such information will not be used for any purposes by Company other than for purposes contemplated
by this Agreement. Confidential information for the purposes of this paragraph 7(b) shall not be deemed to include information
which: (a) is public knowledge or becomes generally available to the public other than as a result of disclosure by Company; (b)
becomes available to Company on a non-confidential basis, from a source (other than QVC or its agents) who is not bound by a confidentiality
agreement with QVC; or (c) is in the possession of Company prior to disclosure by QVC, provided that the source was not bound by
a confidentiality agreement with QVC. Except as otherwise set forth in this paragraph 7(b), Company acknowledges and agrees that
Company shall not (i) publicly disclose, publish, register or file any copy of this Agreement or any provision thereof, or any
information or data contained herein, to or with any federal, state or local governmental authority or agency (including, without
limitation, the United States Securities and Exchange Commission (the “Commission”) and/or any state securities
commission); (ii) disclose, publish, provide or transmit any copy of this Agreement or any provision thereof, or any information
or data contained herein, in any prospectus intended for the solicitation of investment in, or the sale of the equity interest
in, or assets of, Company; and/or (iii) disclose, provide or transmit any copy of this Agreement or any provision thereof, or any
information or data contained herein to any prospective investor in, or prospective purchaser of, the assets of, or equity interest
in, Company absent either (A) execution of a non-disclosure agreement (in the form attached hereto as Exhibit “B”)
by such prospective investor or purchaser of the equity interest in, or assets of, Company; (B) use of the redacted form of this
Agreement attached hereto as Exhibit “C”. Company and XCel each acknowledges and agrees that it will not solicit a
potential investor in, or potential acquirer of, any equity interest in Company who is a Direct Competitor or any affiliate or
employee thereof. Company and XCel each further acknowledges and agrees that, under no circumstances, will an unredacted copy of
this Agreement be disclosed to a potential investor in, or potential acquirer of, any equity interest in the Company who is a Direct
Competitor or any affiliate or employee thereof. Company agrees that in the event of a breach or threatened breach of the terms
of this paragraph 7(b) and/or the provisions of paragraph 5, QVC shall be entitled to seek from any court of competent jurisdiction,
preliminary and permanent injunctive relief which remedy shall be cumulative and in addition to any other rights and remedies to
which QVC may be entitled. Company acknowledges and agrees that the confidential information and other information referred to
in this paragraph 7(b) and the prohibitions provided in paragraph 5 above, are valuable and unique and that such breach of such
provisions will result in immediate irreparable injury to QVC. Notwithstanding anything in this paragraph 7(b) to the contrary,
in the event that disclosure of this Agreement by Company, XCel or any of their respective successors or assigns is required under
the Securities Act of 1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or any regulations promulgated thereunder, then Company or XCel may file a Confidential Treatment
Request (a “CT Request”) with the Commission in the form attached hereto as Exhibit “D”.  Any
such CT Request shall be filed in compliance with Rule 406 under the Securities Act and Rule 24b-2 under the Exchange Act and shall
only involve a public filing on EDGAR or otherwise of a redacted form of this Agreement in the form attached as Exhibit “C”. 
In addition, any such CT Request filed with the Commission shall list QVC as an interested party to this Agreement and shall provide
the contact information for QVC listed in Section 11(e) of this Agreement in accordance with 17 CFR 200.83 (c)(5).  Company
or XCel shall not be permitted to modify the redacted version of this Agreement set forth as Exhibit “C” without the
prior written consent of QVC, which consent shall not unreasonably be withheld, and all subsequent filings and periodic reports
filed with the Commission may only include such redacted version of this Agreement.  Company or XCel shall promptly notify
QVC and provide QVC with a copy of (i) any correspondence it receives from the Commission regarding any CT Request filed and (ii)
any Freedom Of Information Act request (each a “FOIA Request”) it receives requesting disclosure of this Agreement.
 Company shall use its best efforts to ensure that the Commission or any other relevant governmental agency honors the provisions
of this paragraph 7(b) by only allowing the redacted form of this Agreement attached hereto as Exhibit “C” to be publicly
released in any manner.  QVC and its selected legal counsel (as may be designated, from time to time, by QVC) shall be entitled
to participate in any correspondence or discussions with the Commission regarding any CT Request filed with the Commission or with
any other governmental agency regarding any FOIA Request and Company and XCel agree to consult and collaborate with QVC
and its selected legal counsel (as may be designated, from time to time, by QVC) regarding Company’s responses to any such
correspondence or discussions. In the event that the Commission or any other governmental agency mandates public disclosure of
redacted portions of this Agreement in writing or verbally (which verbal comments are verified by QVC or its selected legal counsel
through direct communications with the Commission’s examiner or the representative of the other governmental agency making
the request), then disclosure by Company or XCel of the redacted portions of this Agreement to the extent required by the Commission
or any other governmental agency shall not be deemed a breach of this agreement by Company or XCel. Company and XCel shall jointly
and severally indemnify and hold QVC harmless for all costs and expenses (including, but limited to, reasonable attorneys’
fees and costs) incurred by QVC during the License Period (i) up to an aggregate of $100,000.00 (which amount shall increase by
an additional $100,000.00 if the License Period is extended or renewed pursuant to paragraph 3(a) above) relating or referring
to, or arising from, any FOIA Requests seeking disclosure of this Agreement, including, without limitation, any costs and expenses
(including, but not limited to, reasonable attorneys’ fees) incurred by QVC with respect to any proceedings or civil actions
relating or referring to, or arising from, any such FOIA Requests and (ii) up to $25,000.00 relating or referring to, or arising
from, the drafting, review, filing and negotiation of the CT Request with the Commission. Company and XCel shall make any such
indemnification payments to QVC within ten (10) Business Days of receiving written notice from QVC of the actual costs incurred
in connection with the items listed in subparagraphs (i) or (ii) in the prior sentence. In the event that such indemnification
payments are not forthcoming within such ten (10) Business Days, QVC, in addition to, and not in lieu of, any other remedies available
to it, may offset the amount of such indemnification payments against any sums due by QVC to Company under this Agreement (subject
to the limitations set forth in the preceding sentence).

 

    	21

    	 

    

 

(c)            Spokesperson
acknowledges and agrees that any and all information regarding QVC or its operations disclosed to it in conjunction with this Agreement
and/or the Amended and Restated Agreement, and any information regarding the sale and promotion of Products, Co-Branded Products
and/or products by QVC, will be treated as confidential information and will not be disclosed to any third party at any time during
the Term of this Agreement, and thereafter. Spokesperson further agrees that any such information will not be used for any purposes
by Spokesperson other than for purposes contemplated by this Agreement. Confidential information for the purposes of this paragraph
7(c) shall not be deemed to include information which: (a) is public knowledge or becomes generally available to the public other
than as a result of disclosure by Spokesperson; (b) becomes available to Spokesperson on a non-confidential basis, from a source
(other than QVC or its agents) who is not bound by a confidentiality agreement with QVC; or (c) is in the possession of Spokesperson
prior to disclosure by QVC, provided that the source was not bound by a confidentiality agreement with QVC. Spokesperson agrees
that in the event of a breach or threatened breach of the terms of this paragraph 7(c) and/or the provisions of paragraph 5, QVC
shall be entitled to seek from any court of competent jurisdiction, preliminary and permanent injunctive relief which remedy shall
be cumulative and in addition to any other rights and remedies to which QVC may be entitled. Spokesperson acknowledges and agrees
that the confidential information and other information referred to in this paragraph 7(c) and the prohibitions provided in paragraph
5 above, are valuable and unique and that such breach of such provisions will result in immediate irreparable injury to QVC.

 

(d)          Assignor
acknowledges and agrees that any and all information regarding QVC or its operations disclosed to it in conjunction with this Agreement
and/or the Amended and Restated Agreement, and any information regarding the sale and promotion of Products, Co-Branded Products
and/or products by QVC, will be treated as confidential information and will not be disclosed to any third party at any time during
the Term of this Agreement, and thereafter. Assignor further agrees that any such information will not be used for any purposes
by Assignor other than for purposes contemplated by this Agreement. Confidential information for the purposes of this paragraph
7(d) shall not be deemed to include information which: (a) is public knowledge or becomes generally available to the public other
than as a result of disclosure by Assignor; (b) becomes available to Assignor on a non-confidential basis, from a source (other
than QVC or its agents) who is not bound by a confidentiality agreement with QVC; or (c) is in the possession of Assignor prior
to disclosure by QVC, provided that the source was not bound by a confidentiality agreement with QVC. Assignor agrees that in the
event of a breach or threatened breach of the terms of this paragraph 7(d) and/or the provisions of paragraph 5, QVC shall be entitled
to seek from any court of competent jurisdiction, preliminary and permanent injunctive relief which remedy shall be cumulative
and in addition to any other rights and remedies to which QVC may be entitled. Assignor acknowledges and agrees that the confidential
information and other information referred to in this paragraph 7(d) and the prohibitions provided in paragraph 5 above, are valuable
and unique and that such breach of such provisions will result in immediate irreparable injury to QVC.

 

    	22

    	 

    

  

(e)          The
rights and obligations of the Parties set forth in this paragraph 7 shall survive and continue after the termination or expiration
of the Agreement.

 

8.            Indemnification.

 

(a)          Company
hereby agrees to protect, defend, hold harmless and indemnify QVC, its subsidiaries and affiliates, and each of their respective
employees, agents, officers, directors, successors and assigns from and against any and all claims, actions, suits, costs, liabilities,
damages and expenses (including, but not limited to, reasonable attorneys’ fees) based upon or resulting from any breach
or alleged breach by Company or Spokesperson of any term or condition of this Agreement or any representation or warranty set forth
herein, including without limitation any claim by any third party that such party owns or has a license or other proprietary interest
in any Product IP Rights, the Design Element or the Co-Branded IP Rights, or that QVC’s use of any Product IP Rights, the
Design Element or the Co-Branded IP Rights as contemplated by this Agreement constitutes unfair competition or infringes or otherwise
violates the copyright, trademark or other proprietary rights of third parties. For purposes of clarification, the indemnification
obligations of Company with respect to the Product IP Rights, the Design Element or the Co-Branded IP Rights shall not apply with
respect to any component (e.g., a trademark or service mark) of the Products or Co-Branded Products which is owned or licensed
by QVC, if any. QVC shall give Company prompt written notice of any such action or claim, and Company shall then take such action
as it deems advisable to defend such claim or action on behalf of QVC. In the event that appropriate action is not taken by Company
within five (5) days of Company’s receipt of notice from QVC, QVC shall have the right to defend such action or claim in
its own name. In such event, Company shall be solely responsible for the payment or reimbursement, at QVC’s option, of counsel
fees and all other fees and costs incurred in defending such action, for any and all damages arising thereunder, and for any and
all amounts paid by QVC in settlement thereof.

 

(b)          Notwithstanding
anything contained herein to the contrary, Assignor shall continue to protect, defend, hold harmless and indemnify QVC, its subsidiaries
and affiliates, and each of their respective employees, agents, officers, directors, successors and assigns from and against any
and all claims, actions, suits, costs, liabilities, damages and expenses (including, but not limited to, reasonable attorneys’
fees) based upon or resulting from any breach or alleged breach prior to the Effective Date by Assignor or Spokesperson of any
term or condition of the Amended and Restated Agreement or any representation or warranty set forth therein. QVC shall give Assignor
prompt written notice of any such action or claim, and Assignor shall then take such action as it deems advisable to defend such
claim or action on behalf of QVC. In the event that appropriate action is not taken by Assignor within five (5) days of Assignor’s
receipt of notice from QVC, QVC shall have the right to defend such action or claim in its own name. In such event, Assignor shall
be solely responsible for the payment or reimbursement, at QVC’s option, of counsel fees and all other fees and costs incurred
in defending such action, for any and all damages arising thereunder, and for any and all amounts paid by QVC in settlement thereof.

 

    	23

    	 

    

  

(c)          QVC
hereby agrees to protect, defend, hold harmless and indemnify Company, its subsidiaries and affiliates, and each of their respective
employees, agents, officers, directors, successors and assigns from and against any and all claims, actions, suits, costs, liabilities,
damages and expenses (including, but not limited to, reasonable attorneys’ fees) based upon or resulting from any breach
or alleged breach by QVC of any term or condition of this Agreement or any representation or warranty set forth herein. Company
shall give QVC prompt written notice of any such action or claim, and QVC shall then take such action as it deems advisable to
defend such claim or action on behalf of Company. In the event that appropriate action is not taken by QVC within five (5) days
of QVC’s receipt of notice from Company, Company shall have the right to defend such action or claim in its own name. In
such event, QVC shall be solely responsible for the payment or reimbursement, at Company’s option, of counsel fees and all
other fees and costs incurred in defending such action, for any and all damages arising thereunder, and for any and all amounts
paid by Company in settlement thereof.

 

9.            Publicity.

 

(a)          Except
for incidental non-derogatory remarks necessitated by the services provided hereunder, neither Assignor, Company nor Spokesperson
shall issue any publicity or press release regarding its contractual relations with QVC or otherwise make any oral or written reference
to QVC regarding their activities hereunder, without obtaining QVC’s prior written consent, and approval of the contents
thereof; provided, however, that nothing herein shall prohibit Assignor or Company from making any disclosure required
by applicable law or securities regulations after giving notice to QVC as promptly as is practicable under the circumstances and/or
as otherwise required by this Agreement. Neither Assignor, Spokesperson nor Company shall utilize any trade name, service mark,
trademark, or copyright belonging to QVC without the prior written consent of QVC.

 

(b)          QVC
shall obtain Company’s prior approval with respect to any third party press releases (which shall not be construed to include
QVC program guides or the QVC Insider publication) involving Products, Co-Branded Products and/or Company.

 

10.          Consent
to Assignment; Termination of Earthbound Agreements and Obligations.

 

(a)          Subject
to satisfaction by Company and Assignor of their respective obligations under paragraph 1(a) above, QVC hereby: (i) consents to
the assignment of Design Services Reimbursement Agreement from Assignor to Company; and (ii) agrees that Company shall succeed
to all of the Assignor’s rights and obligations under the Design Services Reimbursement Agreement.

 

    	24

    	 

    
 

(b)          Subject
to satisfaction by Company and Assignor of their respective obligations under paragraph 1(a) above and further subject to the payment
of $175,000.00 due and owing to QVC by Earthbound as of September 30, 2011, QVC agrees that the Earthbound Agreement (the “Earthbound
Agreement”) is hereby terminated as of the Effective Date of this Agreement pursuant the Release Agreement attached hereto
as Exhibit “E”.

  

11.          Miscellaneous.

 

(a)          Amendment.
This Agreement may not be varied, amended, or modified unless in writing signed by the Party against whom such amendment, variance
or modification is sought to be enforced.

 

(b)          No
Assignment. This Agreement and the rights and obligations hereunder are not assignable and any such assignment shall be null
and void ab initio.

 

(c)          License
of Intellectual Property. Company acknowledges and agrees that this Agreement shall constitute an executory contract within
the meaning and scope of Section 365 of the United States Bankruptcy Code, 11 U.S.C. § 365, under which the Company is a licensor
of Intellectual Property (as defined below), and as to which QVC shall have the right to make an election under Section 365(n)
of the United States Bankruptcy Code, 11 U.S.C. § 365(n). For purposes of this Agreement, the rights granted to QVC hereunder
shall be deemed to constitute “Intellectual Property” for purposes of Section 365(n) of the United States Bankruptcy
Code, 11 U.S.C. § 365(n), and as used therein, notwithstanding any limitation or definition to the contrary in the United
States Bankruptcy Code, 11 U.S.C. § 101, et seq., including, but not limited to, provisions of Section 101(35A) of the United
States Bankruptcy Code, 11 U.S.C. § 101(35A).

 

(d)          Governing
Law. This Agreement shall be construed according to the internal laws of Commonwealth of Pennsylvania, without regard to conflict
of laws principles. The Parties each hereby consent to the exclusive jurisdiction of the state courts of the Commonwealth of Pennsylvania,
Chester County, and the United States District Court for the Eastern District of Pennsylvania, in all matters arising out of this
Agreement.

 

(e)          Notices.
All notices provided for hereunder shall be sent via certified mail, return receipt requested, or by reputable overnight carrier,
to the addresses indicated in this Section 11(e). All notices to QVC shall be addressed to:

President, U.S.
Commerce

QVC, Inc.

Studio Park

1200 Wilson Drive

West Chester, PA
19380

and

General Counsel

QVC, Inc.

Studio Park

1200 Wilson Drive

West Chester, PA
19380

 

    	25

    	 

    
 

Notice to QVC shall not be deemed effective
unless delivered to both President, U.S. Commerce and General Counsel as set forth above.

 

All notices to Company and
Spokesperson shall be addressed to:

  

IM Brands, LLC

c/o XCel Brands,
Inc.

475 Tenth Avenue,
4th Floor

New York, NY 10018

Attn: CFO

 

All notices to Assignor shall
be addressed to:

 

IM-Ready Made,
LLC

c/o XCel Brands,
Inc.

475 Tenth Avenue,
4th Floor

New York, NY 10018

Attn: Marisa Gardini

 

with a copy (which
shall not constitute notice) to:

 

Robinson & Cole LLP

885 Third Avenue, 28th Floor

New York, NY 10022

Attn: Eric J. Dale, Esq.

 

(f)          Entire
Agreement. This Agreement supersedes all prior communications between the parties regarding the subject matter hereof, whether
oral or written, including, without limitation, the Amended and Restated Agreement, and constitutes the entire understanding of
the parties. Company shall cause all future Spokespersons as may be agreed upon by QVC and Company,
in addition to Mizrahi, to agree to the provisions set forth in this Agreement. 

 

(g)          Remedies
and Waiver. No delay or failure on the part of any Party hereto in exercising any right or remedy under this Agreement, and
no partial or single exercise thereof, shall constitute a waiver of such right or remedy or of any other right or remedy. The rights
and remedies provided in this Agreement shall be in addition to, and not in lieu of, any rights and remedies provided under applicable
law.

 

(h)          Severability.
If any term or condition of this Agreement or the application thereof shall be illegal, invalid or unenforceable, all other provisions
hereof shall continue in full force and effect as if the illegal, invalid or unenforceable provision were not a part hereof. The
headings used in this Agreement are for the convenience of the Parties only and shall not be construed in the interpretation of
any provisions of' this Agreement.

 

    	26

    	 

    
  

(i)          No
Joint Venture. Nothing herein contained shall be construed to place QVC, on the one hand, and Company and/or Spokesperson,
on the other hand, in the relationship of partners or joint venturers, and, with the exception of any and all rights and licenses
that may have been, or are, granted to Company by Spokesperson, none of the Parties hereto shall have the power to obligate or
bind the others in any manner whatsoever. Company hereto agrees that in performing its duties and obligations to QVC under this
Agreement, it shall be in the position of an independent contractor to QVC.

   

(j)          Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together
shall constitute one and the same Agreement. This Agreement may be executed and delivered via electronic or telefacsimile transmission
with the same force and effect as if it were executed and delivered by the parties simultaneously in the presence of one another.

 

(k)          Interpretation
and Construction. This Agreement has been fully and freely negotiated by the Parties hereto, shall be considered as having
been drafted jointly by the Parties hereto, and shall be interpreted and construed as if so drafted, without construction in favor
of or against any Party on account of its participation in the drafting hereof.

 

(l)          Further
Assurances. Company shall cooperate with QVC from time to time as requested by QVC to effectuate the purposes of this Agreement,
including QVC's requests for information regarding the safety of any of the Products or Co-Branded Products.

 

(m)          Survival.
The provisions of paragraphs 2(k), 2(l), 5, 6, 7, 8, 10 and 11 (d), (e), (g), (l), and (m) shall survive the expiration or termination
of this Agreement.

 

IN WITNESS WHEREOF, and
intending to be legally bound hereby, the Parties hereto have executed this Agreement as of the date first written above to be
effective and in force as of the Effective Date.

 

	 	QVC, INC.
	 	 
	 	By:	/s/ Douglas Howe
	 	Name:  Douglas Howe
	 	Title: EVP
	 	 
	 	IM BRANDS, LLC
	 	 
	 	By:	 /s/ Robert D’Loren
	 	Name: Robert D’Loren
	 	Title: President

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

 

    	 

    	 

    

 

[SIGNATURES CONTINUED FROM PRECEDING PAGE]

 

	 	IM READY MADE, LLC 
	 	 
	 	By:	/s/ Marisa Gardini
	 	Name:	Marisa Gardini
	 	Title:	President, CEO
	 	 	 
	 	/s/ Isaac Mizrahi
	 	Isaac Mizrahi, individually
	 	 	 
	 	XCel Brands, Inc.
	 	 	 
	 	By:	/s/ Robert D’Loren
	 	Name:	Robert D’Loren
	 	Title:	Chairman and CEO

 

    	 

    	 

    

 

Exhibit A

Trademarks and Logos

 

	Mark	 	Country	 	Status	 	Serial No.	 	Intl.  Class
		 	United States	 	Registered	 	77781922	 	IC 25
	 	 	 	 	 	 	 	 	 
		 	United States	 	Registered	 	78875570	 	IC 18
	 	 	 	 	 	 	 	 	 
	
        "IsaacMizrahiLive" and Design

        
	 	United States	 	Registered	 	77785921	 	IC 41
	 	 	 	 	 	 	 	 	 
	
        "IsaacMizrahiLive" and Design

        
	 	United States	 	Notice of Allowance issued - Extension filed	 	77786031	 	IC 25, 18
	 	 	 	 	 	 	 	 	 
	"IsaacMizrahiLive"	 	United States	 	Registered	 	77890574	 	IC 25
	 	 	 	 	 	 	 	 	 
	"IsaacMizrahiLive"	 	United States	 	pending 1A application	 	85297090	 	IC 18
	 	 	 	 	 	 	 	 	 
	"IsaacMizrahiLive"	 	United States	 	pending 1A application	 	85207293	 	IC 24
	 	 	 	 	 	 	 	 	 
	"IsaacMizrahiLive"	 	United States	 	pending 1A application	 	85208854	 	IC 21
	 	 	 	 	 	 	 	 	 
	"IsaacMizrahiLive"	 	United States	 	pending 1A application	 	85210764	 	IC 35
	 	 	 	 	 	 	 	 	 
		 	United States	 	pending 1A application	 	85247619	 	IC 18

 

 

    	 

    	 

    

 

Exhibit B

 

NONDISCLOSURE AGREEMENT

 

THIS NONDISCLOSURE AGREEMENT (“Nondisclosure
Agreement”) is made as of this ___ day of _____, 20____ (“Effective Date”) by and between IM Brands, LLC, a Delaware
limited liability company, having a pace of business at 475 Tenth Avenue, 4th Floor, New York, NY 10018 (“Company”),
and _________________ having an address of ___________ (“Potential Investor”)

 

RECITALS

 

NOW, THEREFORE, in consideration of the above
recitals, the covenants hereinafter contained, and other good and valuable consideration (the receipt and sufficiency of which
is hereby acknowledged) the undersigned, intending to be legally bound, hereby agree as follows:

 

		A. 	Pursuant to the terms of the Second Amended and Restated Agreement and Consent to Assignment dated
as of September ___, 2011 among QVC, Inc. (“QVC”), Company, IM-Ready Made, LLC, XCel Brands, Inc. and Isaac Mizrahi
(the “Agreement”), Company has agreed, among other things, not to disclose, provide or transmit any copy of the Agreement
or any provision thereof, or any information or data contained in the Agreement to any prospective investor in, or prospective
purchaser of, the assets or stock of the Company absent either (i) the execution by such prospective investor or purchaser of a
non-disclosure agreement in the form of this Nondisclosure Agreement, or (ii) the use of a redacted form of the Agreement.

 

		B. 	For the purpose of assisting Potential Investor in determining whether to invest in Company, Potential
Investor wishes to receive a copy of the Agreement; and

 

		C. 	Company, in order to permit Potential Investor to make such a determination, wishes to provide
to Potential Investor a copy of the Agreement.

 

 

1.            Potential
Investor’s Obligations. Potential Investor agrees for the Nondisclosure Period (defined below) (i) to hold the Agreement
and the information contained therein in strict confidence and with at least the same degree of care as Potential Investor holds
Potential Investor’s confidential information, and not to disclose or provide to any person a copy of the Agreement, any
portion thereof or any of the information contained therein, (ii) not to make use of the Agreement and the information contained
therein in any manner other than for purposes of evaluating a potential investment in Company, including, but not limited to, not
using any Confidential Information to design, develop or produce products or services, and (iii) not to copy the Agreement or any
part thereof, in each instance without the prior written consent of the Company and QVC. The “Nondisclosure Period”
shall be begin on the Effective Date and continue until September 30, 2021.

 

2.           Third-Party
Beneficiary. Potential Investor acknowledges and agrees that QVC is an intended third-party
beneficiary of this Agreement and shall be entitled to enforce the provisions hereof.

 

3.            No
Adequate Remedy At Law. Potential Investor acknowledges and agrees that due to the unique
nature of the Agreement and the information contained therein, there can be no adequate remedy at law for any breach of its obligations
hereunder, that any such breach may allow Potential Investor or third parties to unfairly compete with QVC resulting in irreparable
harm to QVC, and, therefore, that upon any such breach or any threat thereof, QVC shall be entitled to (a) specific performance
and other injunctive relief without the necessity of posting a bond, in addition to whatever remedies it might have at law, and
(b) be indemnified by Potential Investor from any loss or harm, including, without limitation, attorney’s fees, in connection
with any breach or enforcement of Potential Investor’s obligations hereunder or the unauthorized use or release of the Agreement,
any portion thereof or any information contained therein. Potential Investor and Company shall notify QVC in writing immediately
upon the occurrence of any such unauthorized release or other breach of which it is aware.

 

    	 

    	 

    
  

4.           Representations.
Potential Investor represents and warrants to QVC that Potential Investor is not a person or entity, and is not an affiliate of
any person or entity, whose primary means of deriving revenue is the transmission of Direct Response Television Programs. “Direct
Response Television Programs” means any televised program which requests a consumer to respond to any promotion of any product
or service by mail, telephone, internet or other electronic means, which program (a) is live, contains an intermittent or continuous
call to action and devotes at least twenty percent (20%) of its programming time to the promotion of products or services, or (b)
is otherwise in the style or format of a televised retailing program such as the programs of QVC.

 

5.           Governing
Law. This Nondisclosure Agreement shall be governed in all respects by the laws of the Commonwealth
of Pennsylvania without regard to the conflict of law provisions of such state. This Nondisclosure Agreement shall be binding upon
the successors and assigns of the respective parties.

 

6,           Disclosure
Under Court Order. Potential Investor may make disclosures required by court order if Potential
Investor (a) uses reasonable efforts to limit disclosure and to obtain confidential treatment or a protective order and (b) promptly
provides notice to QVC of and allows QVC to participate in the proceeding.

 

7.           Notice.
All notices or requests required or contemplated by this Nondisclosure Agreement shall be in writing and shall be hand-delivered
or mailed postage prepaid, certified mail, return receipt requested (a) if to Potential Investor, to __________________________
or such other address as Potential Investor shall specify in written notice to Company and QVC, (b) if to Company, to ___________
_________________________________, or such other address as Company shall specify in written notice to Potential Investor and QVC,
or (c) if to QVC, to General Counsel, QVC, Inc., 1200 Wilson Drive, West Chester, PA 19380. Requests or notices given by personal
delivery shall be deemed given and received at the time of delivery and requests or notices given by mail shall be deemed given
and received the earlier of three days from the date of mailing or upon receipt.

 

8.           General
Provisions. In the event that any of the provisions of this Nondisclosure Agreement shall
be held by a court or other tribunal of competent jurisdiction to be illegal, invalid or unenforceable, such provisions shall be
limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect. This
Nondisclosure Agreement supersedes all prior discussions and writings and constitutes the entire agreement between the parties
with respect to the subject matter hereof. This Nondisclosure Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto and QVC. Accordingly, no course of conduct shall constitute an amendment or modification
of this Nondisclosure Agreement. No waiver of this Nondisclosure Agreement will be binding upon either party or QVC unless made
in writing and signed by a duly authorized representative of each party and QVC and no failure or delay in enforcing any right
will be deemed a waiver. All waivers shall be strictly construed.

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Nondisclosure Agreement as of the Effective Date.

 

 

	Agreed To:	IM BRANDS, LLC	 	Agreed To:	 
	 	“Company”	 	“Potential Investor”

	By:	 	 	 
	 	Authorized Signature	 	Authorized Signature

 

	Print Name:	 	 	Print Name:	 

 

	Title:	 

  

    	 

    	 

    

 

Exhibit C

 

SECOND AMENDED AND RESTATED AGREEMENT

AND CONSENT TO ASSIGNMENT

 

THIS SECOND AMENDED AND
RESTATED AGREEMENT AND CONSENT TO ASSIGNMENT (this “Agreement”) is made as of September 28, 2011, by and among
QVC, Inc. (“QVC”), a Delaware corporation, on the one hand, and IM Brands, LLC (“Company”),
a Delaware limited liability company, IM Ready Made, LLC (“Assignor”), a New York limited liability company,
XCel Brands, Inc. (“XCel”), a Delaware corporation, and Isaac Mizrahi (“Mizrahi”), an adult
individual, on the other hand. (QVC, Company, Assignor, XCel and Mizrahi hereinafter are referred to collectively as the “Parties”
and each individually as a “Party”, unless stated otherwise).

 

RECITALS

 

WHEREAS, QVC, Assignor
and, for the limited purposes set forth therein, Mizrahi are parties to that certain Amended and Restated Agreement, dated January
29, 2010, as amended by that Addendum dated January 29, 2010 and that First Amendment to Amended and Restated Agreement dated December
20, 2010 (collectively, as amended, the “Amended and Restated Agreement”);

 

WHEREAS, Company,
XCel, Assignor, Mizrahi and Marisa Gardini have entered into an Asset Purchase Agreement, dated May 19, 2011, as amended July 28,
2011 and as may be amended thereafter (the “Asset Purchase Agreement”), pursuant to which the Company, as the
wholly owned subsidiary of Xcel, has agreed to purchase substantially all of the trademarks and other intellectual property assets
of Assignor, including, without limitation, all rights in and to the Mark (as defined below);

 

WHEREAS, the Parties
desire, as of the Effective Date (as defined below) (a) to amend and restate the Amended and Restated Agreement as set forth herein,
and (b) that QVC consent to the assignment from Assignor to Company of that certain agreement dated December 1, 2009, by and between
QVC and Assignor (the “Design Services Reimbursement Agreement”);

 

WHEREAS, QVC and
its subsidiaries promote, market, sell and distribute (collectively, “Promote”) products through various means
and media, including without limitation, their televised shopping programs (the “Programs”);

 

WHEREAS, QVC desires
to have manufactured and to Promote various products bearing, marketed in connection with or otherwise associated with (i) the
trademark “IsaacMizrahiLive”; (ii) such other words as may be determined in accordance with paragraph 1(g) below; and
(iii) related logos as specified in Exhibit “A” to this Agreement (collectively, the “Mark”), including,
but not limited to, books, home furnishings, home decor, tabletop, cookware, kitchen prep items, gardening products, beauty products,
jewelry, fashion accessories, sunglasses, handbags, small leather goods, footwear and apparel that are endorsed, designed, marketed,
and/or promoted by Company (all such products bearing, marketed in connection with or otherwise associated with the Mark, including,
but not limited to, books, home furnishings, home decor, tabletop, cookware, kitchen prep items, gardening products, beauty products,
jewelry, fashion accessories, sunglasses, handbags, small leather goods, footwear and apparel that are endorsed, designed, marketed,
promoted and/or sold by Company, whether now in existence or developed hereafter, are collectively referred to hereinafter as the
“Products”). For purposes of clarification, the Products shall be of unique designs, colors, prints, patterns,
price points and/or materials (or unique in some other manner) to be sufficiently different from, so as to not directly compete
with, products sold as part of the Liz Claiborne New York line of which Mizrahi is the creative director;

 

    	 

    	 

    

 

 

 

WHEREAS, QVC desires
to Promote, and Company desires to have Promoted, certain items that are developed, manufactured and/or licensed by third parties
(“Vendors”), which items will (i) bear, be marketed in connection with or otherwise associated with the trademark(s)
and/or service mark(s) of the Vendors and (ii) bear, be marketed in connection with or otherwise associated with the Mark, and
(iii) contain a design element (a “Design Element”) provided by Company and Mizrahi or, in the event
of (A) the death of Mizrahi or (B) the disability of Mizrahi, and the election of QVC not to terminate this Agreement pursuant
to paragraph 6(c) in the event of either occurrence, a substitute designer mutually acceptable to Company and QVC (all such items
are hereinafter referred to as “Co-Branded Products”);

 

WHEREAS, Company
and QVC desire that QVC Promote the Products and Co-Branded Products through certain means and media, and that Company cause Mizrahi
or another spokesperson mutually agreeable to QVC and Company (Mizrahi and such other spokesperson as may be mutually agreeable
to QVC and Company hereinafter are referred to as “Spokesperson”, unless stated otherwise) to appear on certain
of the Programs to assist QVC in promoting the Products and Co-Branded Products; and

 

WHEREAS, Earthbound
LLC (“Earthbound”), a New York limited liability company, is the brand manager for Assignor for the period prior
to the Effective Date (as defined in paragraph 1(a) below) and is a party to that certain agreement, dated as of September 1, 2009,
as subsequently amended, by and between QVC, on the one hand, and Earthbound, on the other hand (the “Earthbound Agreement”).

 

AGREEMENT

 

NOW, THEREFORE,
in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the undersigned parties, incorporating the above Recitals, hereby agree, as of the Effective
Date, to amend and restate the Amended and Restated Agreement as follows:

 

1.           Effectiveness
of Agreement; Grant of License and Other Rights by Company.

 

(a)          This
Agreement shall become effective simultaneously with the closing of the transactions contemplated by the Asset Purchase Agreement
and the delivery to QVC of a life insurance policy, or the absolute assignment of a life insurance policy, as required by paragraph
6(c) below (the “Effective Date”); provided, however, that in the event the Effective Date does
not occur by September 30, 2011, this Agreement shall be rendered null and void ab initio. On the Effective Date,
the Company shall provide notice to QVC (in the manner prescribed in paragraph 11(e) below) that the same has occurred. On the
Effective Date, Company shall pay, or cause one or more of its affiliates to pay, the sum of One Million Five Hundred Thousand
Dollars ($1,500,000.00), in good and immediately available funds, to QVC, via wire transfer (with
telephone notice of the Federal reference number to QVC’s Treasury Department Attn: Nicole Maganas at 484.701.1416 upon transfer)
pursuant to the following wiring instructions (unless otherwise directed in writing by QVC):

 

    	2

    	 

    

 

	 	Account Name:	QVC, Inc.
	 	Account Number:	***
	 	Bank Name:	***
	 	Bank Address:	***
	 	 	 
	 	 	 
	 	ABA #:	***
	 	SWIFT:	***
	 	 	 
	 	Bank Contact Name:	 
	 	***	 

 

On the Effective Date, Assignor shall pay,
or cause one or more of its affiliates to pay, the sum of One Million Dollars ($1,000,000.00), in good and immediately available
funds, to QVC, via wire transfer pursuant to the aforesaid wiring and notice instructions.
Time is of the essence with respect to the aforesaid payment obligations of Company and Assignor on the Effective Date and, in
the event of the failure of either Company or Assignor to make the respective payments required by this paragraph 1(a), this Agreement
shall be rendered null and void ab initio. Notwithstanding anything contained in this Agreement to the contrary,
QVC shall not be obligated to make any payments under this Agreement unless and until it receives (i) the aforesaid respective
cash payments, in good and immediately available funds, from Company and Assignor; and (ii) delivery or, in the alternative, absolute
assignment, of the insurance policy required by paragraph 6(c) below. For avoidance of doubt, the Parties agree that the Amended
and Restated Agreement shall remain in effect, unmodified hereby, until the Effective Date.

 

(b)          Company
grants to QVC and its affiliates during the License Period (as defined in paragraph 3 below): (i) the exclusive worldwide right
to Promote the Products through all means and media, now known or hereafter developed; (ii) the right to use, publish, reproduce
and transmit the trademarks, trade names, service marks, trade dress, copyrights, designs, logos and/or other intellectual property
rights owned, used, licensed and/or developed by Company solely in connection with the Products, including, without limitation,
the Mark (whether now in existence or created hereafter, collectively, the “Product IP Rights”) to Promote the
Products in accordance with the terms and conditions of this Agreement and the right to sublicense to others the aforementioned
rights; and (iii) the sub-licensable right to cause the Products to be manufactured by such manufacturer(s) (“Manufacturer(s)”),
which Manufacturers shall be as mutually agreed upon by QVC and Company. For purposes of clarification, Company shall have final
approval over any Manufacturer, which approval shall not be unreasonably withheld or delayed. Company grants to QVC and its affiliates
the nonexclusive right (subject to the provisions of paragraph 5 below) to use the rights granted in (i), (ii) and (iii) above
during the Sell-Off Period (as defined in paragraph 3 below). It is expressly understood that nothing in this paragraph shall prohibit
Company or Spokesperson from entering into a similar product development licensing agreement with any other retailer and/or wholesaler
to the extent not prohibited by, or in conflict with, the terms of this Agreement.

 

    	3

    	 

    

 

(c)          Company
grants to QVC and its affiliates during the License Period: (i) the exclusive worldwide right to Promote the Co-Branded Products
through all means and media, now known or hereafter developed; (ii) the right to use, publish, reproduce and transmit certain of
the trademarks, trade names, service marks, trade dress, copyrights, designs, logos and/or other intellectual property rights owned,
used, licensed and/or developed by Company in connection with the Co-Branded Products, including, without limitation, the Design
Element and the Mark (whether now in existence or created hereafter, collectively, the “Co-Branded IP Rights”)
to Promote the Co-Branded Products in accordance with the terms and conditions of the Agreement and the right to sublicense to
others the aforementioned rights); and (iii) the sub-licensable right to cause the Co-Branded Products to be manufactured by Vendors
(or their licensees), which Vendors shall be as mutually agreed by the parties. Company grants to QVC and its affiliates the nonexclusive
right to use the rights granted in (i), (ii) and (iii) above during the Sell-Off Period.

 

(d)          Company
grants to QVC and its subsidiaries during the License Period the exclusive worldwide right to use the Spokesperson’s name,
likeness, image, voice and performance (the “Endorsement”) to Promote the Products and the Co-Branded Products
through all means and media, now known or hereafter developed. In addition, Company grants to QVC and its subsidiaries the non-exclusive
(subject to the provisions of paragraph 5 below) right to use the rights granted in this subparagraph (d) during the Sell-Off Period.
Hereinafter, the rights granted to QVC and its subsidiaries pursuant to this paragraph 1 are collectively referred to as the “License”.
Except as may be set forth herein to the contrary, the License grants rights to QVC and its subsidiaries with respect to the Mark
and the Endorsement only.

 

(e)          In
order to ensure the consistent quality of the Products, QVC shall arrange directly with Manufacturers of Products for such Manufacturers
of Products to provide to Company samples of Products and any packaging, or other promotional materials associated therewith for
the purpose of allowing Company to verify that such samples conform to its specifications and requirements, if any, for the Products,
provided that Company provides QVC with any such specifications and requirements at the time of delivery of the Designs (as defined
in paragraph 2(f) below) for the subject Products. Any such specifications and requirements not delivered to QVC by Company at
the time of delivery of the Designs for the subject Products shall be deemed to be waived by Company. For purposes of clarification,
as between Company and QVC, Company shall be responsible for oversight with respect to the quality of Products and the use of the
Product IP Rights in connection with the manufacture thereof.

 

    	4

    	 

    
 

(f)          In
order to ensure the consistent quality of the incorporation of the Design Element into Co-Branded Products, QVC shall arrange directly
with Vendors for Vendors to provide to Company samples of Co-Branded Products for the purpose of allowing Company to verify that
such samples conform to Company’s specifications and requirements, provided that Company provides QVC with such specifications
and requirements at the time of delivery of the Designs for the subject Products. Any such specifications and requirements not
delivered to QVC by Company at the time of delivery of the Designs for the subject Products shall be deemed to be waived by Company.
For purposes of clarification, as between Company and QVC, Company shall be responsible for oversight with respect to the quality
of the incorporation of the Design Element into the Co-Branded Products and the use of the Co-Branded IP Rights in connection with
the manufacture thereof.

 

(g)          In
addition to, or in lieu of, the Mark identified above, the Products and Co-Branded Products may be Promoted under a brand name
or brand names as mutually agreed upon, in writing, by QVC and Company.

 

2.           Products
and Compensation.

 

(a)          From
time to time, QVC and its subsidiaries may issue to Manufacturer(s) a purchase order (any such purchase order, as may be issued
from time to time, is hereinafter referred to as a “Purchase Order”). Hereafter, any purchases of Products by
QVC shall be made according to the terms set forth in this Agreement and in any such Purchase Order(s). The terms of each Purchase
Order, shall survive the expiration or termination of this Agreement. Notwithstanding anything to the contrary contained in this
Agreement or otherwise, QVC and its subsidiaries expressly reserve the right to promote products that are in competition with the
Products and make no representations or warranties with respect to (i) the amount of Products, if any, that may be sold through
the Programs or otherwise, (ii) the number of times, if any, the Products may be offered for sale on the Programs or otherwise,
or (iii) the amount of revenue, if any, that may be generated through any sales of Products on the Programs or otherwise. This
Agreement does not obligate QVC or its subsidiaries to purchase any Products from Manufacturer(s) or to Promote any Products.

 

(b)          From
time to time, QVC and its subsidiaries may issue to Vendor(s) a purchase order (any such purchase order, as may be issued from
time to time, is hereinafter referred to as a “Vendor Purchase Order”). Hereafter, any purchases of Co-Branded
Products by QVC shall be made according to the terms set forth in this Agreement and in any such Vendor Purchase Order(s). The
terms of each Vendor Purchase Order, shall survive the expiration or termination of the Agreement. Notwithstanding anything to
the contrary contained in the Agreement or otherwise, QVC and its subsidiaries expressly reserve the right to promote products
that are in competition with the Co-Branded Products and make no representations or warranties with respect to (i) the amount
of Co-Branded Products, if any, that may be sold through the Programs or otherwise, (ii) the number of times, if any, the Co-Branded
Products may be offered for sale on the Programs or otherwise, or (iii) the amount of revenue, if any, that may be generated through
any sales of Co-Branded Products on the Programs or otherwise. This Agreement does not obligate QVC or its subsidiaries to purchase
any Co-Branded Products from Vendor(s) or to Promote any Co-Branded Products.

 

    	5

    	 

    
 

(c)          Company
shall be responsible for all out-of-pocket costs and expenses incurred by Spokesperson and/or Company in connection with the services
performed by Spokesperson and/or Company under this Agreement, subject to any reimbursements due to the Company in accordance
with paragraph 4(a) of this Agreement.

 

(d)          During
the License Period, QVC shall pay Company as set forth in this paragraph 2 for the rights granted and services provided hereunder
with respect to both Products and Co-Branded Products and Company shall accept the same as its sole compensation for such rights
granted and services provided hereunder.

 

(e)          During
the License Period, within thirty (30) days after the end of each calendar quarter, QVC will send to Company a statement covering
sales of Products and Co-Branded Products in such calendar quarter and any payment due pursuant to paragraphs 2(g) and 2(i) below
for such calendar quarter, and will pay to Company any such payment that is so due in accordance with the provisions of paragraphs
2(g) and 2(i) below. Each statement shall become binding on Company and Company shall, absent fraud on the part of QVC, neither
have nor make any claim against QVC with respect to such statement, unless Company shall advise QVC, in writing, of the specific
basis of such claim within one (1) year after the date Company receives such statement. Company may, not more than once during
any calendar year, but only once with respect to any statement rendered hereunder, audit QVC’s books and records related
to the Products and Co-Branded Products for the purpose of determining the accuracy of QVC’s statements to Company. If Company
wishes to perform any such audit, Company will notify QVC at least thirty (30) days before the date when Company plans to commence
such audit. Company shall not be entitled to examine any records that do not report sales of Products and/or Co-Branded Products.
All audits shall be made during regular business hours upon reasonable notice, and shall be conducted on Company’s behalf
by an independent Certified Public Accountant or other professional representative. Each examination shall be made at Company’s
own expense at QVC’s regular place of business where the books and records are maintained; provided, however,
that if any such audit reveals an underpayment of amounts owed pursuant to paragraphs 2(g) and 2(i) of greater than ten percent
(10%), QVC shall pay all such past due amounts plus reasonable expenses of Company’s audit including reasonable professional
fees.

 

(f)          Design
and Manufacturing. QVC and the Company will cooperate and work in concert to develop designs (“Designs”)
and prototypes (“Prototypes”) for the manufacture of the Products and Co-Branded Products. Company and Mizrahi
or, in the event of (A) the death of Mizrahi or (B) the disability of Mizrahi, and the election of QVC not to terminate this Agreement
pursuant to paragraph 6(c) in the event of either occurrence, a substitute designer mutually acceptable to Company and QVC, shall
provide no fewer than 200 Designs to QVC during each License Period Year (as defined in paragraph 2(g) below) of the License Period.
Prior to the manufacture of any specific Product line or Co-Branded Product line (each Product line or Co-Branded Product line,
an “Item”), QVC will provide a production quality sample (each, a “Sample”) of each Item
for the Company’s approval. Each Item produced, if any, by a Manufacturer will be an accurate reproduction in all material
respects to the Sample. Further, the Company shall notify QVC of its approval or disapproval of any Sample within five (5) Business
Days (as defined below) after Company receives such Sample. The parties will reasonably cooperate in an attempt to resolve any
disapproval of, objections to or concerns with, the Sample. If, however, the Company fails to disapprove any Sample within five
(5) Business Days of its receipt of such Sample, Company will be deemed to have approved such Sample. Company and Mizrahi acknowledge
that as between them and QVC, QVC owns the Designs. “Business Day”, as used herein, shall mean any day except Saturday,
Sunday and/or any other day on which commercial banks in Philadelphia, Pennsylvania or New York, New York are authorized by law
to close.

 

    	6

    	 

    

 

(g)          QVC
shall pay to the Company the following *** Royalty Payments ***, subject, however, to the provisions of paragraph 2(i) below:

 

***

 

As used herein, each License Period Year shall
commence on October 1 and end on September 30 of the subsequent calendar year. The calendar quarters for each of the License Period
Years shall consist of October, November and December as the first calendar quarter; January, February and March as the second
calendar quarter; April, May and June as the third calendar quarter; and July, August and September as the fourth and final calendar
quarter. The *** Royalty Payment shall be remitted in accordance with paragraph 2(i) below.

 

(h)          The
parties acknowledge and agree that *** to Assignor, which ***. QVC acknowledges and agrees that it is accepting the following in
satisfaction of *** Royalty Payment: (i) payment by Company of $1,500,000.00, in good and immediately available funds, to QVC pursuant
to paragraph 1(a) above; (ii) payment by Assignor of $1,000,000.00, in good and immediately available funds, to QVC pursuant to
paragraph 1(a) above; (iii) *** as set forth in the Amended and Restated Agreement; (iv) receipt of the Reverse Royalty (as defined
below) payments due and owing to QVC pursuant to paragraph 2(k) below; and (v) receipt of the Third Participating
Royalty Payments (as defined below) due and owing to QVC pursuant to paragraph 2(l) below. Notwithstanding anything contained in
this Agreement to the contrary, (i) QVC shall have no recourse against Assignor for (A) ***; or (B) the payment of $1,500,000.00
due to QVC by Company pursuant to paragraph 1(a) above; or (C) for payment of the Reverse Royalty due to QVC pursuant to paragraph
2(k) below; and/or (D) for payment of the Third Participating Royalty Payments due to QVC pursuant to paragraph 2(l) below, provided,
however, that nothing in this paragraph 2(h) modifies, amends or novates the payment obligations of Assignor as set forth
in paragraph 1(a) above and in this paragraph 2(h)(ii); and (ii) QVC shall have no recourse against Company for (A) ***; and/or
(B) the payment of $1,000,000.00 due to QVC by Assignor pursuant to paragraph 1(a) above, provided, however, that
nothing in this paragraph 2(h) modifies, amends or novates the obligations of Company under this Agreement, including, without
limitation, the obligations of Company as set forth in subsections (i), (iv) and (v) of this paragraph 2(h) in paragraph 1(a) above
and in paragraph 2(l) below.

 

(i)          The
*** Royalty Payments set forth in paragraph 2(g) above shall be remitted pursuant to, and subject to the conditions in, this paragraph
2(i). QVC shall pay, and Company shall accept, the following as the sole compensation for the rights granted and services provided
in this Agreement:

 

    	7

    	 

    

 

(i)          In
accordance with paragraph 2(e) above, QVC shall pay to Company the *** Royalty Payment with respect to the first three consecutive
calendar quarters of each applicable License Period Year; and

 

(ii)         In
accordance with paragraph 2(e) above, QVC shall pay to Company with respect to the fourth and final calendar quarter of each applicable
License Period Year ***. For purposes of this Agreement, “Gross Royalty” is defined to be ***. For purposes
of this Agreement, “Net Retail Sales” shall mean the aggregate amount of all revenue generated through the sale
of Products or Co-Branded Products, respectively, by QVC and its subsidiaries during the License Period Year, excluding freight,
shipping and handling charges, customer returns, and sales, use or other taxes. For further clarification, and subject only to
the provisions of paragraphs 2(g) and 2(i), QVC shall have no obligation to pay Company any royalties or other compensation hereunder
for Products and Co-Branded Products which are returned, or sought by QVC to be returned, to Manufacturers and/or Vendors, as the
case may be, by QVC. In addition, notwithstanding anything herein to the contrary, QVC shall have no obligation to pay any royalties
hereunder or other compensation to Company for Products and/or Co-Branded Products sold by QVC at or below QVC’s Landed Cost
(as defined below) for those Products and/or Co-Branded Products. “Landed Cost”, as used
herein, shall mean the cost price of the Products or Co-Branded Products, respectively, as set forth on the applicable Purchase
Orders or Vendor Purchase Orders, as the case may be, for such Products or Co-Branded Products, respectively, together with any
and all other costs incurred by QVC for freight, custom duties and miscellaneous expenses with
respect to the import of the subject Products or Co-Branded Products, respectively, into the continental United States of America
from any foreign country or port. 

 

(iii)        The
suspension or elimination of QVC’s obligation to remit *** Royalty Payments shall not relieve QVC of any obligation, to the
extent that the same otherwise exists, to remit the *** Royalty to Company as calculated in paragraph 2(i)(ii) above.  In
the event of the suspension or elimination of QVC’s obligation to remit ***, the *** Royalty shall thereafter be paid on
a quarterly calendar basis in accordance with paragraph 2(e) above.  The payment by QVC for the quarterly calendar period
in which QVC’s obligation to remit *** Royalty Payments was suspended or eliminated shall include (A) any outstanding ***
Royalty previously accrued but unpaid; and (B) the pro rata portion any *** Royalty Payments due to Company for the
calendar quarter in which Mizrahi dies or becomes Disabled (as defined in paragraph 6(d) below).  Notwithstanding anything
contained in this paragraph 2(i)(iii) above, in the event that QVC’s obligation to remit *** Royalty Payments is suspended
due to the Disability of Spokesperson, but is thereafter reinstated due to the recovery and return of Spokesperson, the payment
by QVC of *** Royalty Payments and/or the *** Royalty shall revert to the procedure and calculation set forth in paragraph 2(i)(i)
and 2(i)(ii) above.

 

In the event of a renewal
of this Agreement pursuant to paragraph 3 below, the *** Royalty shall continue to be paid on a quarterly calendar basis in accordance
with paragraph 2(e) above.  

 

    	8

    	 

    

 

(j)          QVC
and Company agree and acknowledge that time is of the essence in the delivery of the payments required by this Agreement, and further
agree that interest shall accrue on all past due payments under this Agreement from their respective due dates until paid at the
rate (except as may be expressly stated otherwise in this Agreement) of one percent (1%) per month, or if such rate exceeds the
maximum rate allowed by law, at the maximum rate allowed by law, and shall be payable on demand.

 

(k)          Notwithstanding
the exclusive grant of license contained in paragraph 1, upon the prior written permission of an officer of QVC, which permission
may be granted or withheld for any reason or no reason at all at the sole discretion of QVC, the Company may sell any of the Products
via Prestige Retailers (as defined below). In addition, notwithstanding the exclusive grant of license contained in paragraph 1,
Company may sell any of the Products via Company Media (as defined below); provided, however, that Company must,
with respect to both sales of the Products via Prestige Retailers and/or sales of the Products via Company Media, provide QVC with
at least thirty (30) days written notice prior to Company’s issuance of any purchase order to Manufacturer(s) of the Products.
During the Term of this Agreement and thereafter, Company shall pay to QVC a royalty (“Reverse Royalty”) equal
to (i) *** of wholesale sales of all Products sold by Company (or its affiliates) to Prestige Retail (“Company Prestige
Retailer Sales”), if any, and (ii) *** of net retail sales of all Products sold by Company via Company Media, if any
(“Company Media Sales”) (such “Company Prestige Retailer Sales” and “Company Media Sales”
being collectively referred to as “Company Sales”). Reverse Royalties earned hereunder, if any, will be accrued
quarterly in the quarter in which such Company Sales, if any, are made by Company, and shall be paid within thirty (30) days after
the end of each calendar quarter. Within thirty (30) days after the end of each calendar quarter, Company shall send to QVC a statement
covering Company Sales in such quarter and Reverse Royalties for such Company Sales, and will pay QVC any Reverse Royalties that
are due. As used in this Agreement, “Prestige Retailer” shall mean the stores and the respective internet websites
of high-end Brick and Mortar Retailers (as defined below), e.g., Neiman Marcus, Bloomingdales and May Company Stores, but shall
exclude (i) discount divisions of any of the foregoing and (ii) all retail channels of distribution other than by or through a
Prestige Retailer, including without limitation, by or through “Mass Merchants” (as defined below), discount stores,
drugstores, warehouse stores, superstores and retail outlet stores. As used in this Agreement, “Mass Merchants”
shall mean general retail merchandisers, including but not limited to Sears, JC Penney, Target, Walmart and Kmart. As used herein,
“Brick and Mortar Retailer” shall mean an entity whose primary means of deriving revenue is the marketing and
sale of consumer products to end-users of such consumers products at a physical location to which such end-users come to purchase
such consumer products, provided, however, a Brick and Mortar Retailer shall not include, and shall not be deemed or construed
to include, any Direct Competitor (as defined below) or affiliate thereof.  As used in this Agreement,
“Company Media” shall mean Company’s “Isaac Mizrahi” and “Isaac Mizrahi New York”-branded
brick and mortar retail stores, if any, and its “Isaac Mizrahi”-branded and “Isaac Mizrahi New York”-branded
internet websites. Notwithstanding any other provision in this paragraph 2(k), Company shall be permitted to use the Mark as the
name or title of a television program or magazine without paying QVC a Reverse Royalty for such use; provided, however,
that any such television program or magazine (and the content or subject matter thereof) remains subject to the non-compete provisions
of paragraph 5 of this Agreement. The provisions of this paragraph 2(k) shall survive termination or expiration of this Agreement.

 

    	9

    	 

    

 

(l)          Subject
to paragraph 2(l)(ii) below, Company shall remit the First Participating Royalty Payments (as defined below) and the Second Participating
Royalty Payments (as defined below) to Assignor and shall remit the Third Participating Royalty Payments (as defined below) to
QVC as follows:

 

(i)          Subject
to paragraph 2(l)(ii), the Company shall pay to Assignor the first *** of Brick and Mortar Net Revenues (as defined below) earned
and received by Company (or earned by any affiliate of Company) during each twelve (12) month period commencing on October 1, 2011
and ending on September 30, 2021 (collectively, the “First Participating Royalty Payments”). As between Assignor
and QVC, on the one hand, and Company, on the other hand, and subject to paragraph 2(l)(ii), Company shall retain all of the next
*** of Brick and Mortar Net Revenues earned and received by Company during each twelve (12) month period commencing on October
1, 2011 and ending on September 30, 2021 (collectively, the “Retained Brick and Mortar Net Revenues”). Subject
to paragraph 2(l)(ii), Company shall pay to Assignor, during each of the twelve (12) calendar month periods commencing on October
1, 2011 and ending on September 30, 2021, *** of the Brick and Mortar Net Revenues earned and received by the Company (or earned
by any affiliate of Company), if any, in excess of the First Participating Royalty Payment for each such twelve (12) calendar month
period and the Retained Brick and Mortar Net Revenues in such twelve (12) calendar month period (collectively, the “Second
Participating Royalty Payments”). As used herein, “Brick and Mortar Net Revenues” shall mean all revenues
(including, without limitation, royalties of any kind), excluding the Excluded Company Royalties (as defined below), earned by
Company from (A) the sale, license, consignment or any other form of distribution of any products, including, without limitation,
the Products, bearing, marketed in connection with or otherwise associated with the Company’s trademarks and brands and/or
(B) the licensing of any and all intellectual property rights with respect to any and all products, including, without limitation,
the Products, bearing, marketed in connection with or otherwise associated with the Company’s trademarks and brands, after
deduction from such revenues for: (i) any such products sold, licensed, consigned or otherwise distributed by or through the Company
to any purchaser, consignee or licensee of such products, but thereafter returned to Company by such purchaser, consignee or licensee
of such products for refund actually paid by Company to such customer; (ii) sales, use, excise or value added taxes actually paid
by Company in connection with any such products sold, consigned, licensed or otherwise distributed by or through the Company to
the purchaser, consignee or licensee of such products; (iii) custom duties and similar import impositions or charges actually paid
by Company in connection with any such products sold, consigned, licensed or otherwise distributed by Company to the purchaser,
consignee or licensee of such products; (iv) Advertising Royalties (as defined below); and (v) shipping and handling charges actually
paid by Company in connection with the sale, consignment, license or other distribution of any such products to the purchaser,
consignee or licensee of such products. As used herein, “Excluded Company Royalties” shall mean (A) royalties
and any other amounts paid or credited by QVC to Company under this Agreement or the Design Services Reimbursement Agreement, (B)
royalties and revenues that Company receives in connection with Company Sales, provided that QVC has received all Reverse Royalties
due and payable to QVC pursuant to this Agreement in connection with respect to such Company Sales, and (C) royalties and revenues
that the Company receives from Liz Claiborne in connection with the Liz Claiborne New York brand. “Advertising
Royalties”, as used herein, shall mean cash monies actually paid to Company from licensees other than affiliated licensees
of Company to be held in trust by Company as a fiduciary to such non-affiliated licensees, which monies were received by Company
(A) as a result of “arms length” negotiation with Company’s licensees; (B) are not revenue, and are not characterized
for any purpose as revenue, of Company; and (C) are earmarked for the sole purpose of marketing and promoting Company’s trademarks
for the benefit of licensees not affiliated with Company.

 

    	10

    	 

    

 

Notwithstanding
anything contained in this Agreement to the contrary, Company (A) shall not, directly or indirectly (or otherwise cause a third
person to) sell, license, consign or otherwise distribute any products, including, without limitation, the Products, bearing, marketed
in connection with or otherwise associated with the Company’s trademarks and brands to K-Mart, Wal-Mart Stores, Inc., Sears,
Roebuck & Co. and/or any Direct Competitor (as defined below) and/or any respective affiliate thereof; and/or (B) shall not
enter into any direct-to-retail license (i.e., a license with any retailer for the manufacture of goods and products) with
any off-price retainer for apparel or footwear. As used herein, “Direct Competitor” shall mean any entity
(or affiliate thereof) other than QVC, including, but not limited to, HSN, Inc. and/or ValueVision Media, Inc., whose primary means
of deriving revenue is the transmission of Direct Response Television Programs (as defined in Paragraph 5 below), including without
limitation, Home Shopping Network, ShopNBC, America’s Store and Shop at Home Network.

 

QVC
shall be entitled to terminate this Agreement (without further obligation on the part of QVC to perform hereunder, including,
without limitation, any further obligation to remit any *** Royalty Payment otherwise due and owing to Company by QVC)
in the event that, prior to October 1, 2021, Company conveys, transfers or assigns any of Company’s trademarks, trade names,
service marks, trade dress, copyrights, designs, logos and/or other intellectual property associated with Mizrahi to any of the
following: (A) a Direct Competitor or any affiliate thereof; (B) an entity, or an affiliate of an entity, that, in the calendar
year preceding any such conveyance, transfer or assignment, has sold, consigned or distributed by any other means goods or products
to a Direct Competitor, or any affiliate thereof, in the amount of $25,000,000.00 or more; (C) a Mass Merchant or any affiliate
thereof; (D) any entity or person convicted of, or subject to pending charges for, any felony under federal or state laws; (E)
any entity or person who is the subject of any federal or state investigation for fraudulent activities or violation of federal
or state securities laws; (F) any entity or person who is the subject of any investigation, conviction or pending charge related
to the use of child labor; (G) any entity or person who is the subject of any investigation, conviction or pending charge for violation
of the Foreign Corrupt Practice Act, 15 U.S.C. § 78dd-1, et seq., the Racketeer Influenced and Corrupt Organizations
Act, 18 U.S.C. § 1961, et seq. and/or the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001, Pub.L. No. 107-56, 115 Stat. 272 (Oct. 26, 2001); and/or (H) any entity
or person who is the subject of any federal, state or local investigation by a governmental authority or agency, conviction or
pending charge for a crime involving Moral Turpitude (as defined below). “Moral Turpitude”, as used herein, shall mean
the act or commission (or the attempt or the criminal conspiracy to commit or the aiding or abetting) of any of the following
crimes under federal, state or local laws: arson, criminal homicide, speculating or wagering on official action or information
or other crime involving an abuse of public office or corrupt influence in official matters, cruelty to animals, open lewdness
or other crime of public indecency, corruption or endangering the welfare of minors, sexual abuse or exploitation of children,
unlawful communication or contact with a minor, kidnapping, burglary, robbery, theft, embezzlement or extortion of property with
a value greater than $2,000.00 or of trade secrets by whatever means, forgery, bad checks, money laundering, counterfeiting, sale
of controlled substances, deceptive business practices, commercial bribery, defrauding secured creditors, fraud, perjury or false
swearing, unsworn falsification to authorities, obscenity, obstruction of justice, aggravated assault, rape or statutory sexual
assault and/or aggravated indecent assault. 

 

    	11

    	 

    

 

QVC
shall be entitled to terminate this Agreement (without further obligation on the part of QVC to perform hereunder, including,
without limitation, any further obligation to remit any *** Royalty Payment otherwise due and owing to Company by QVC)
in the event that, prior to October 1, 2015, Company conveys, transfers or assigns any equity interest in the Company to a Direct
Competitor or any affiliate or employee thereof.

 

In the event that QVC terminates
this Agreement pursuant to the terms of this paragraph 2(l)(i), QVC shall have no obligation to remit any further *** Royalty Payments
otherwise due and owing to Company by QVC, but Company shall continue to have the obligation to remit the Third Participating Royalty
Payments to QVC in accordance with the provisions of this Agreement.

 

(ii)         At
such time as there is due to Assignor an aggregate of *** in First Participating Royalty Payments and Second Participating Royalty
Payments pursuant to this paragraph 2(l), Company shall provide notice promptly of the same to QVC and thereafter shall pay to
QVC *** of all Bricks and Mortar Net Revenues earned and received by Company (or earned by any affiliate
of Company) until September 30, 2021 (collectively, the “Third Participating Royalty Payments”) in lieu
of the First Participating Royalty Payments and the Second Participating Royalty Payments. The Third Participating Royalty Payments
shall be calculated without regard to the Retained Brick and Mortar Net Revenues, which shall not be included in any computation
of the Third Participating Royalty Payments due and payable to QVC.

 

    	12

    	 

    

 

(iii)        The
Third Participating Royalty Payments from Brick and Mortar Net Revenues earned by the Company shall be reported and paid to QVC
as follows: Within thirty (30) days after the end of each calendar quarter, Company will send to QVC a statement covering all Brick
and Mortar Net Revenues earned and received by Company (or earned
by any affiliate of Company) in such calendar quarter and any payment of Third Participating Royalty Payments due to QVC
pursuant to this paragraph 2(l) for such calendar quarter, and will pay to QVC any such payment of Third Participating Royalty
Payments that is so due in accordance with the provisions of this paragraph 2(l). Each statement shall become binding on QVC and
QVC shall, absent fraud on the part of Company, neither have nor make any claim against Company with respect to such statement,
unless QVC shall advise Company, in writing, of the specific basis of such claim within one (1) year after the date QVC receives
such statement. QVC may, not more than once during any calendar year, but only once with respect to any statement rendered hereunder,
audit Company’s books and records related to the Brick and Mortar Net Revenues for the purpose of determining the accuracy
of Company’s statements to QVC. If QVC wishes to perform any such audit, QVC will be required to notify Company at least
thirty (30) days before the date when QVC plans to commence such audit. QVC shall not be entitled to examine any records that do
not report earnings of Brick and Mortar Net Revenues. All audits shall be made during regular business hours upon reasonable notice,
and shall be conducted on QVC’s behalf by an independent Certified Public Accountant or other professional representative.
Each examination shall be made at QVC’s own expense at Company’s regular place of business where the books and records
are maintained; provided, however, that if any such audit reveals an underpayment of amounts owed pursuant to this
paragraph 2(l) of greater than ten percent (10%), Company shall pay all such past due amounts plus reasonable expenses of QVC’s
audit including reasonable professional fees.

 

Company shall use all commercially
reasonable means to collect any and all Brick and Mortar Net Revenues from any and all entities and persons from whom such Brick
and Mortar Net Revenues are due (and, in addition to, and not in lieu of, all rights of offset or recoupment by QVC under law),
the failure of Company to do so (i) shall be a breach of this Agreement with respect to Brick and Mortar Net Revenues due from
any person or entity in the amount of Ten Thousand Dollars ($10,000.00) or less and (ii) shall be a material breach of this Agreement
with respect to Brick and Mortar Net Revenues due from any person or entity in any amount greater than Ten Thousand Dollars ($10,000.00).
As used herein, “commercially reasonable means” shall be determined by reference to the dollar amount, collectability
and cost of collection of the subject Brick and Mortar Net Revenues due to Company. The provisions of this paragraph 2(l) shall
survive termination or expiration of this Agreement.

 

3.           License
Period and Term.

 

(a)          Generally.
The license period (the “License Period”) shall be deemed to have commenced as of October 1, 2010 and shall
expire, if not otherwise terminated as set forth below, at 12:00 a.m. (prevailing Eastern Time) on October 1, 2015; provided,
however, that the License Period shall automatically be extended for successive one-year terms unless either Company or
QVC notifies the other of its intent to terminate the License Period no later than sixty (60) days prior to the end of the then-current
License Period. Notwithstanding any other provision of this Agreement, Company or QVC shall have the right to terminate the Agreement
at any time if the other materially breaches this Agreement and fails to cure such breach within thirty (30) days of receipt of
written notice of such material breach delivered in the manner prescribed by paragraph 10(e) below. QVC
shall owe Company no *** Royalty Payments for any renewal term of the License Period. In the event that QVC shall elect
to terminate this Agreement as a result of a material breach of this Agreement by Company, and the failure of Company to cure such
breach within thirty (30) days of receipt of written notice of such material breach delivered in the manner prescribed by paragraph
10(e) below, QVC shall have no further obligation to remit any *** Royalty Payments otherwise due and owing to Company by QVC,
but Company shall continue to have the obligation hereunder to remit the Third Participating Royalty Payments to QVC pursuant to
paragraph 2 above. In the event that Company shall elect to terminate this Agreement as a result of a material breach of this Agreement
by QVC, and the failure of QVC to cure such breach within thirty (30) days of receipt of written notice of such material breach
delivered in the manner prescribed by paragraph 10(e) below, QVC shall not be entitled to receive any Third Participating Royalty
Payments in excess of ***. The Term of this Agreement shall be as defined in paragraph 5 of this Agreement.

 

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(b)          [Omitted.]

 

(c)          Sell-Off
Period. The exclusive rights of QVC under the License shall terminate at the conclusion of the License Period, whereupon QVC
may continue to exercise the License rights, including the Endorsement, on a non-exclusive basis (subject to the provisions of
paragraph 5 below) for as long as necessary, including, after expiration or termination, for cause or otherwise, of the License
Period, to Promote Products and Co-Branded Products through any means and media (i) to sell off any of its remaining inventory
of Products and Co-Branded Products, (ii) to place additional orders with Manufacturers and/or Vendors for Products and Co-Branded
Products, respectively, to fulfill any remaining unfilled customer orders for Products and/or Co-Branded Products, and (iii) to
have such additional orders fulfilled by Manufacturer(s) or Vendor(s) (the “Sell-Off Period”).

 

(d)          QVC
shall have no obligation to remit to Company, and Company shall not be entitled to receive, any royalty or other compensation from
QVC for sales of Products and Co-Branded Products by QVC during the Sell-Off Period.

 

4.           Appearances.

 

(a)          If
requested by QVC, Company shall cause Spokesperson to make, at minimum, the following number of monthly Appearances: (i) twelve
(12) in License Period Year 1; (ii) sixteen (16) in License Period Year 2; (iii) eighteen (18) in License Period Year 3; (iv) twenty
(20) in License Period Year 4; and (v) twenty (20) in License Period Year 5 and in each subsequent year in the event that this
Agreement is automatically extended pursuant to paragraph 3(a) above. Each “Appearance” shall mean a one hour
appearance on QVC’s Direct Response Television Programs. The schedule of Appearances shall be mutually determined by the
Company and QVC, subject to Spokesperson’s schedule; provided, however, that once dates and times for Appearances
have been agreed upon and scheduled by QVC, Company shall cause Spokesperson to make such Appearances, unless Company or Spokesperson
provides QVC with written notice of Spokesperson’s inability to make such Appearance at least sixty (60) days in advance
of the scheduled Appearance date. Company shall cause Spokesperson to appear, in promotional announcements featuring the Direct
Response Television Programs, at dates and times mutually determined by QVC and Spokesperson, subject to Spokesperson’s reasonable
availability. Unless otherwise agreed by the parties, all Appearances and promotional announcements shall take place at QVC’s
studios in West Chester, Pennsylvania or the Company’s showroom located at 475 10th Avenue, New York, NY. Any costs and expenses
of the Spokesperson that may arise in connection with all Appearances and promotional announcements, including without limitation,
travel, lodging and food, shall be borne by Company; provided, however, that any production costs associated with
the production of any program at the Company’s showroom shall be borne by QVC or its affiliates. In the event of the failure
of the Spokesperson to make an Appearance required pursuant to this Agreement for any other reason, Company shall use its best
efforts to provide an alternative Spokesperson satisfactory to QVC.

 

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(b)          Upon
the request of Company, Spokesperson may promote (but not offer for sale, sell or otherwise distribute) Apparel Products (as defined
below) and/or Non-Apparel Products (as defined below) on, by or through the Programs subject to, and strictly conditioned upon,
the following terms and conditions:

 

(i)          Subject
to the prior written approval by an officer of QVC at the level of Vice President or higher, which discretion may be withheld by
QVC in its sole and unfettered discretion, Spokesperson may promote (but not offer for sale, sell or otherwise distribute) Apparel
Products on, by or through the Programs pursuant to the conditions set forth in paragraph 4(b)(iii) below, provided, however, after
such time as QVC receives payment in full (which payment is not disgorged from QVC by any court of competent jurisdiction) of the
Third Participating Royalty Payments in the aggregate amount of no less than ***, QVC will forfeit the right to receive any further
Third Participating Royalty Payments if it withholds consent for Spokesperson to promote Apparel Products on, by or through Programs
more than three (3) times in any given six (6) month time period where the conditions set forth in paragraph 4(b)(iii) otherwise
were met. Company agrees and acknowledges that its sole and exclusive remedy in the event that QVC so withholds its consent shall
be that it is no longer obligated to remit the Third Participating Royalty Payments QVC in excess of the aggregate amount of ***.
“Apparel Products”, as used herein, shall mean apparel, footwear, fashion accessories and home textiles (other
than the Products and the Co-Branded Products) bearing, marketed in connection with, or otherwise associated with Company’s
trademarks and brands that are being sold in Brick and Mortar Retailers.

 

(ii)         Subject
to the prior written approval by an officer of QVC at the level of Vice President or higher, which discretion may be withheld by
QVC in its sole and unfettered discretion, Spokesperson may promote (but not offer for sale, sell or otherwise distribute) Non-Apparel
Products on, by or through the Programs pursuant to the conditions set forth in paragraph 4(b)(iii) below “Non-Apparel
Products”, as used herein, shall mean any and all products, other than Apparel Products, the Products and the Co-Branded
Products, bearing, marketed in connection with, or otherwise associated with Company’s trademarks and brands that are being
sold in Brick and Mortar Retailers.

 

(iv)        All
requests by Company for the promotion of Apparel Products and Non-Apparel Products shall be made to QVC (in the manner set forth
in paragraph 11(e) below) no less than seven (7) Business Days prior to the date upon which Company seeks the promotion of such
Apparel Products and/or Non-Apparel Products by, on or through the Programs and must meet and satisfy the following requirements
and conditions:

 

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	(A)	Upon the request of QVC, Company shall obtain any licenses or consents deemed required by QVC for the promotion of Apparel Products and/or Non-Apparel Products by, on or through the Programs;
	(B)	Company shall provide QVC (in the manner set forth in paragraph 11(e) below) with a script of the requested promotion of Apparel Products and/or Non-Apparel Products by, on or through the Programs and shall do so no less than seven (7) Business Days prior to the date upon which Company seeks such promotion;
	(C)	All Apparel Products and Non-Apparel Products requested by Company to be promoted on, by or through the Programs are subject to QVC’s standards and practices, including, without limitation, such standards and practices pertaining to claims substantiation and quality assurance, and, if requested by QVC, samples of such promotion of such Apparel Products and/or Non-Apparel Products by, on or through the Programs shall be provided to QVC in sufficient time to allow for quality assurance testing by QVC;
	(D)	All claims, if any, made in connection with the promotion of all Apparel Products and Non-Apparel Products shall be demonstrated by Company and are subject to QVC’s prior and continuing approval.  No promotion of any Apparel Products or Non-Apparel Products shall include any testimonial or claim that cannot be authenticated or substantiated by QVC or any false or unwarranted claim or any unfair disparagement of the goods or products of any Brick and Mortar Retailer and/or any competitor of Company or QVC;
	(E)	The requested promotion by Company of any and all Apparel Products and Non-Apparel Products shall comply with all federal, state and local laws, statutes and regulations;
	(F)	No promotion of any Apparel Products and/or Non-Apparel Products shall infringe upon the trademarks, patents, trade dress or other intellectual property rights of any third party;
	(G)	QVC shall not be required to promote any Apparel Products and/or Non-Apparel Products that would bring QVC’s reputation into public disrepute;
	(H)	Any requested promotion of any Apparel Products and/or Non-Apparel Products is limited to live programming and shall not include any films or video of any kind;
	(I)	Company shall be responsible for any and all licensing fees in connection with all requested promotion of any and all Apparel Products and Non-Apparel Products on, by or through the Programs;
	(J)	Company agrees and acknowledges that QVC is not responsible for any of Company’s contractual obligations to any third party with respect to the promotion of Apparel Products and Non-Apparel Products;

 

    	16

    	 

    
 

	(K)	Company agrees and acknowledges that QVC may be required to shorten or eliminate any requested promotion of Apparel Products and/or Non-Apparel Products in order to conform to time limitations or to meet legal requirements;
	(L)	Company represents and warrants (which representation and warranty shall survive the expiration or termination of this Agreement) that it has or will obtain any and all licenses and consents as may be required for the promotion of any and all Apparel Products and Non-Apparel Products;
	(M)	Company shall protect, defend, hold harmless and indemnify QVC and its affiliates, employees, agents, officers and directors, from and against any and all claims, actions, suits, costs, liabilities, damages and expenses (including, without limitation, all attorneys' fees and court costs) arising out of or related to any and all promotions of Apparel Products and Non-Apparel Products and/or any acts or omissions of Company or any Spokesperson in connection with any and all such promotions, which obligations shall survive the expiration or termination of this Agreement;
	(N)	No single promotion by Spokesperson of Apparel Products or Non-Apparel Products shall exceed fifteen (15) seconds in duration; and
	(O)	Company may not request more than one (1) promotion by Spokesperson of Apparel Products or Non-Apparel Products for any given Appearance by Spokesperson.

 

(c)          Company
shall protect, defend, hold harmless and indemnify QVC and its affiliates, employees, agents, officers and directors, from and
against any and all claims, actions, suits, costs, liabilities, damages and expenses (including, without limitation, all attorneys'
fees and court costs) arising out of or related to any acts or omissions of Company or any Spokesperson in connection with the
Appearances, which obligation shall survive the expiration or termination of this Agreement.

 

(d)          In
consideration of the services to be rendered by Spokesperson, Spokesperson shall be compensated by Company and not by QVC. Nothing
in the Agreement shall be deemed or construed to render any Spokesperson an employee or independent contractor of QVC, or any affiliate
thereof, or otherwise entitle any Spokesperson to any compensation or benefits from QVC or any affiliate thereof.

 

5.           Non-Compete.

 

Except as contemplated hereunder
and without the prior written consent of QVC, neither Assignor, Company nor Spokesperson shall, during the License Period of this
Agreement and the one-year period thereafter (collectively, the “Term”), promote, advertise, endorse or sell
(or otherwise cause a third party to promote, advertise, endorse or sell): (i) the Products and Co-Branded Products anywhere in
the world through any means or media; and/or (ii) any goods, services or products, including without limitation, the Products and
Co-Branded Products, anywhere in the world through Direct Response Television Programs. As used herein, “Direct Response
Television Programs” shall mean any televised program which requests a consumer to respond to any promotion of any product
or service by mail, telephone, internet or other electronic means, which program: (A) is live, contains an intermittent or continuous
call to action and devotes at least twenty percent (20%) of its programming time to the promotion of products or services; or (B)
is otherwise in the style or format of a televised retailing program, such as the Programs. Subject to the foregoing provisions
of this paragraph 5, Company may promote, advertise, endorse, sell, license or otherwise commercialize any brand or mark, other
than the Mark.

 

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6.           Representations,
Warranties and Covenants.

 

(a)          Company
represents, warrants and covenants as of the Effective Date, which representations, warranties and covenants shall continue during
the Term of this Agreement and shall survive the expiration or termination of this Agreement, that: (i) it possesses the full power
and exclusive right to grant the License and Endorsement to QVC; (ii) the execution, delivery and performance of this Agreement
by Company does not violate any agreement, instrument, judgment, order or award of any court or arbitrator or any law, rule or
regulation; (iii) the Design, Prototype and Product IP Rights of each Product, and the Design Element and Co-Branded Product IP
Rights with respect to each Co-Branded Product, shall comply with all foreign, federal, state, county, municipal or other statutes,
laws, orders and regulations of any governmental or quasi-governmental entity; (iv) QVC’s use of the License and the Endorsement,
and QVC’s Promotion of the Products and the Co-Branded Products as permitted hereunder, will not infringe or otherwise violate
the copyrights, trademarks, or other proprietary rights of third parties or constitute unfair competition; (v) all claims concerning
the Products and Co-Branded Products made by Company are, and will be, true and correct at the time such claims are made, and supported
by data which complies with applicable law; (vi) there are no amendments to the Asset Purchase Agreement as of the Effective Date
that have not been disclosed to QVC; and (vii) except as contemplated in this Agreement, there exist no agreements, or other arrangements,
for Company to endorse, promote, advertise, or sell any Products or Co-Branded Products anywhere in the world. Company shall provide
QVC with any and all documents reasonably required or requested by QVC at any time and from time to time to support the representations
and warranties herein contained.

 

(b)          Spokesperson
represents, warrants and covenants as of the Effective Date, severally and not jointly as to any other Spokesperson only, which
representations, warranties and covenants shall continue during the Term of this Agreement and shall survive the expiration or
termination of this Agreement, that: (i) it has granted to Company, and possesses the full power and exclusive right to grant to
Company, the Endorsement; (ii) the execution, delivery and performance of this Agreement by such Spokesperson does not violate
any agreement, instrument, judgment, order or award of any court or arbitrator or any law, rule or regulation; (iii) QVC’s
use of the Endorsement will not infringe or otherwise violate the copyrights, trademarks, or other proprietary rights of third
parties or constitute unfair competition; (iv) all claims concerning the Products and Co-Branded Products made by such Spokesperson
are, and will be, true and correct at the time such claims are made, and supported by data which complies with applicable law;
and (v) except as contemplated in this Agreement, there exist no agreements, or other arrangements, for Spokesperson to endorse,
promote, advertise, or sell any Products or Co-Branded Products anywhere in the world. Spokesperson shall provide QVC with any
and all documents reasonably required or requested by QVC at any time and from time to time to support the representations and
warranties herein contained.

 

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(c)          On
the Effective Date, but, in any event no later than September 30, 2011, Company shall obtain from an insurance company having a
A.M. Best rating of A+ and shall deliver to QVC a life insurance policy insuring the life of Mizrahi. Such life insurance policy
shall name QVC as the owner or, in the alternative, Company shall grant an absolute assignment in and to such insurance policy
to QVC such that QVC shall become the owner thereof. Such life insurance policy shall be maintained by Company for the License
Period Years set forth below. Such life insurance policy shall name QVC as the sole beneficiary and shall be maintained by Company
in the following amounts:

 

	License Period Years 2 and 3 -	 	$	4,000,000.00	 
	 	 	 	 	 
	License Period Year 4 -	 	$	3,000,000.00	 
	 	 	 	 	 
	License Period Year 5 -	 	$	2,000,000.00	 

 

Such life insurance policy
shall provide further that QVC shall receive notice in the event of any termination of coverage under such life insurance policy.
Company shall provide QVC with any and all information and/or documentation reasonably requested by QVC (i) to demonstrate continuing
life insurance coverage for Mizrahi during the License Period as required by this paragraph; and (ii) in order to allow QVC to
remit all premium payments for the above-described life insurance policy, which premium payments shall be deducted by QVC from
any and all *** Royalty Payments otherwise due to Company under this Agreement. Company hereby agrees and acknowledges that QVC
may make such deductions from any and all *** Royalty Payments otherwise due to Company under this Agreement to the extent necessary
to remit premium payments directly by QVC to the insurance company(ies) issuing the life insurance coverage for Mizrahi as described
in this paragraph. Mizrahi shall take all actions reasonably requested by Company or QVC that are necessary for Company to obtain
and deliver (and, to the extent necessary, absolutely) assign the above described life insurance policy and to ensure continued
coverage thereunder. Notwithstanding anything contained in this Agreement to the contrary, QVC shall have no obligation to remit
any payments otherwise potentially due to Company under this Agreement unless and until Company delivers to QVC the life insurance
policy described above. Notwithstanding anything contained in this Agreement to the contrary, in the event of the death of Mizrahi,
QVC shall not be required to accept any substitute designer under this Agreement unless and until QVC receives the proceeds from
the life insurance policy required by this paragraph 6(c). In the event of the death of Mizrahi and the failure of Company to propose
a substitute designer acceptable to QVC within twenty-four (24) months from the date of Mizrahi’s death, QVC may elect to
terminate this Agreement. In the event that QVC so terminates this Agreement, QVC shall have no obligation, except as otherwise
expressly set forth in this paragraph 6(c) to the contrary, to remit any further *** Royalty Payments otherwise due and owing to
Company by QVC, but Company shall continue to have the obligation to remit the Third Participating Royalty Payments to QVC pursuant
to this Agreement up to the amount of ***.

 

    	19

    	 

    

 

Notwithstanding anything
in this Agreement to the contrary, in the event of the death of Mizrahi, QVC shall have no obligation to remit any *** Royalty
Payment otherwise due and owing to Company by QVC. QVC shall not be obligated to remit that portion of *** Royalty Payment due
for any portion of a calendar quarter following the death of Mizrahi, provided, however, QVC shall continue, during
the License Period, to remit a *** Royalty to Company in accordance with the provisions of paragraph 2(i)(ii) above.

 

(d)          Notwithstanding
anything in this Agreement to the contrary, in the event that Mizrahi should become Disabled (as defined below), QVC shall have
no obligation to remit any *** Royalty Payment otherwise due and owing to Company by QVC during such period of Disability. “Disabled”
and “Disability”, as used herein, shall mean physical disfigurement or scarring, paralysis or loss of control of any
part of the body, inability to stand or walk for sustained periods of time, a mental illness, disorder or disease, impairment of
speech, loss of sight or hearing and/or loss of any limb. In the event that such Disability of Mizrahi should continue for a period
of eighteen (18) months, QVC shall have no further obligation to remit any further *** Royalty Payments otherwise due and owing
to Company by QVC. In the event of the failure of Company to propose a substitute designer acceptable to QVC within twenty-four
(24) months from the date upon which Mizrahi should become Disabled, QVC may elect to terminate this Agreement. In the event that
QVC so terminates this Agreement, QVC shall have no obligation, except as otherwise expressly set forth in this paragraph 6(d)
to the contrary, to remit any further *** Royalty Payments otherwise due and owing to Company by QVC, but Company shall continue
to have the obligation to remit the Third Participating Royalty Payments to QVC pursuant to this Agreement up to the amount of
***. QVC shall not be obligated to remit that portion of *** Royalty Payment due for any portion of a calendar quarter following
the disability of Mizrahi, provided, however, QVC shall continue, during the License Period, to remit a *** Royalty
to Company in accordance with the provisions of paragraph 2(i)(ii) above.

 

7.           Confidentiality.

 

(a)          Each
Party agrees to treat this Agreement and the terms and conditions hereof as confidential information (the “Confidential
Agreement Information”). Each Party shall only transmit the Confidential Agreement Information to such of its directors,
officers, employees, affiliates, attorneys, accountants, consultants, commercial banker and advisors who need to know such information
for purposes of effecting this Agreement and who shall agree to be bound by the terms and conditions of this paragraph. Subject
to paragraph 7(b) below, each Party agrees that the Confidential Agreement Information shall not be disclosed to others, except
as necessary to carry out or enforce the terms of this Agreement or as may be required by law or legal process; provided,
however, that the Party making such disclosure shall provide notice to the other Party prior to such disclosure and shall
use reasonable commercial efforts to secure confidential protection of such information and to limit such disclosure to the extent
possible.

 

    	20

    	 

    

 

(b)          Company
acknowledges and agrees that any and all information regarding QVC or its operations disclosed to it in conjunction with this Agreement,
and any information regarding the sale and promotion of Products, Co-Branded Products and/or products by QVC, will be treated as
confidential information and will not be disclosed to any third party at any time during the Term of this Agreement, and thereafter.
Company further agrees that any such information will not be used for any purposes by Company other than for purposes contemplated
by this Agreement. Confidential information for the purposes of this paragraph 7(b) shall not be deemed to include information
which: (a) is public knowledge or becomes generally available to the public other than as a result of disclosure by Company; (b)
becomes available to Company on a non-confidential basis, from a source (other than QVC or its agents) who is not bound by a confidentiality
agreement with QVC; or (c) is in the possession of Company prior to disclosure by QVC, provided that the source was not bound by
a confidentiality agreement with QVC. Except as otherwise set forth in this paragraph 7(b), Company acknowledges and agrees that
Company shall not (i) publicly disclose, publish, register or file any copy of this Agreement or any provision thereof, or any
information or data contained herein, to or with any federal, state or local governmental authority or agency (including, without
limitation, the United States Securities and Exchange Commission (the “Commission”) and/or any state securities
commission); (ii) disclose, publish, provide or transmit any copy of this Agreement or any provision thereof, or any information
or data contained herein, in any prospectus intended for the solicitation of investment in, or the sale of the equity interest
in, or assets of, Company; and/or (iii) disclose, provide or transmit any copy of this Agreement or any provision thereof, or any
information or data contained herein to any prospective investor in, or prospective purchaser of, the assets of, or equity interest
in, Company absent either (A) execution of a non-disclosure agreement (in the form attached hereto as Exhibit “B”)
by such prospective investor or purchaser of the equity interest in, or assets of, Company; (B) use of the redacted form of this
Agreement attached hereto as Exhibit “C”. Company and XCel each acknowledges and agrees that it will not solicit a
potential investor in, or potential acquirer of, any equity interest in Company who is a Direct Competitor or any affiliate or
employee thereof. Company and XCel each further acknowledges and agrees that, under no circumstances, will an unredacted copy of
this Agreement be disclosed to a potential investor in, or potential acquirer of, any equity interest in the Company who is a Direct
Competitor or any affiliate or employee thereof. Company agrees that in the event of a breach or threatened breach of the terms
of this paragraph 7(b) and/or the provisions of paragraph 5, QVC shall be entitled to seek from any court of competent jurisdiction,
preliminary and permanent injunctive relief which remedy shall be cumulative and in addition to any other rights and remedies to
which QVC may be entitled. Company acknowledges and agrees that the confidential information and other information referred to
in this paragraph 7(b) and the prohibitions provided in paragraph 5 above, are valuable and unique and that such breach of such
provisions will result in immediate irreparable injury to QVC. Notwithstanding anything in this paragraph 7(b) to the contrary,
in the event that disclosure of this Agreement by Company, XCel or any of their respective successors or assigns is required under
the Securities Act of 1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or any regulations promulgated thereunder, then Company or XCel may file a Confidential Treatment
Request (a “CT Request”) with the Commission in the form attached hereto as Exhibit “D”.  Any
such CT Request shall be filed in compliance with Rule 406 under the Securities Act and Rule 24b-2 under the Exchange Act and shall
only involve a public filing on EDGAR or otherwise of a redacted form of this Agreement in the form attached as Exhibit “C”. 
In addition, any such CT Request filed with the Commission shall list QVC as an interested party to this Agreement and shall provide
the contact information for QVC listed in Section 11(e) of this Agreement in accordance with 17 CFR 200.83 (c)(5).  Company
or XCel shall not be permitted to modify the redacted version of this Agreement set forth as Exhibit “C” without the
prior written consent of QVC, which consent shall not unreasonably be withheld, and all subsequent filings and periodic reports
filed with the Commission may only include such redacted version of this Agreement.  Company or XCel shall promptly notify
QVC and provide QVC with a copy of (i) any correspondence it receives from the Commission regarding any CT Request filed and (ii)
any Freedom Of Information Act request (each a “FOIA Request”) it receives requesting disclosure of this Agreement.
 Company shall use its best efforts to ensure that the Commission or any other relevant governmental agency honors the provisions
of this paragraph 7(b) by only allowing the redacted form of this Agreement attached hereto as Exhibit “C” to be publicly
released in any manner.  QVC and its selected legal counsel (as may be designated, from time to time, by QVC) shall be entitled
to participate in any correspondence or discussions with the Commission regarding any CT Request filed with the Commission or with
any other governmental agency regarding any FOIA Request and Company and XCel agree to consult and collaborate with QVC
and its selected legal counsel (as may be designated, from time to time, by QVC) regarding Company’s responses to any such
correspondence or discussions. In the event that the Commission or any other governmental agency mandates public disclosure of
redacted portions of this Agreement in writing or verbally (which verbal comments are verified by QVC or its selected legal counsel
through direct communications with the Commission’s examiner or the representative of the other governmental agency making
the request), then disclosure by Company or XCel of the redacted portions of this Agreement to the extent required by the Commission
or any other governmental agency shall not be deemed a breach of this agreement by Company or XCel. Company and XCel shall jointly
and severally indemnify and hold QVC harmless for all costs and expenses (including, but limited to, reasonable attorneys’
fees and costs) incurred by QVC during the License Period (i) up to an aggregate of $100,000.00 (which amount shall increase by
an additional $100,000.00 if the License Period is extended or renewed pursuant to paragraph 3(a) above) relating or referring
to, or arising from, any FOIA Requests seeking disclosure of this Agreement, including, without limitation, any costs and expenses
(including, but not limited to, reasonable attorneys’ fees) incurred by QVC with respect to any proceedings or civil actions
relating or referring to, or arising from, any such FOIA Requests and (ii) up to $25,000.00 relating or referring to, or arising
from, the drafting, review, filing and negotiation of the CT Request with the Commission. Company and XCel shall make any such
indemnification payments to QVC within ten (10) Business Days of receiving written notice from QVC of the actual costs incurred
in connection with the items listed in subparagraphs (i) or (ii) in the prior sentence. In the event that such indemnification
payments are not forthcoming within such ten (10) Business Days, QVC, in addition to, and not in lieu of, any other remedies available
to it, may offset the amount of such indemnification payments against any sums due by QVC to Company under this Agreement (subject
to the limitations set forth in the preceding sentence).

 

    	21

    	 

    

 

(c)          Spokesperson acknowledges
and agrees that any and all information regarding QVC or its operations disclosed to it in conjunction with this Agreement and/or
the Amended and Restated Agreement, and any information regarding the sale and promotion of Products, Co-Branded Products and/or
products by QVC, will be treated as confidential information and will not be disclosed to any third party at any time during the
Term of this Agreement, and thereafter. Spokesperson further agrees that any such information will not be used for any purposes
by Spokesperson other than for purposes contemplated by this Agreement. Confidential information for the purposes of this paragraph
7(c) shall not be deemed to include information which: (a) is public knowledge or becomes generally available to the public other
than as a result of disclosure by Spokesperson; (b) becomes available to Spokesperson on a non-confidential basis, from a source
(other than QVC or its agents) who is not bound by a confidentiality agreement with QVC; or (c) is in the possession of Spokesperson
prior to disclosure by QVC, provided that the source was not bound by a confidentiality agreement with QVC. Spokesperson agrees
that in the event of a breach or threatened breach of the terms of this paragraph 7(c) and/or the provisions of paragraph 5, QVC
shall be entitled to seek from any court of competent jurisdiction, preliminary and permanent injunctive relief which remedy shall
be cumulative and in addition to any other rights and remedies to which QVC may be entitled. Spokesperson acknowledges and agrees
that the confidential information and other information referred to in this paragraph 7(c) and the prohibitions provided in paragraph
5 above, are valuable and unique and that such breach of such provisions will result in immediate irreparable injury to QVC.

 

(d)          Assignor
acknowledges and agrees that any and all information regarding QVC or its operations disclosed to it in conjunction with this Agreement
and/or the Amended and Restated Agreement, and any information regarding the sale and promotion of Products, Co-Branded Products
and/or products by QVC, will be treated as confidential information and will not be disclosed to any third party at any time during
the Term of this Agreement, and thereafter. Assignor further agrees that any such information will not be used for any purposes
by Assignor other than for purposes contemplated by this Agreement. Confidential information for the purposes of this paragraph
7(d) shall not be deemed to include information which: (a) is public knowledge or becomes generally available to the public other
than as a result of disclosure by Assignor; (b) becomes available to Assignor on a non-confidential basis, from a source (other
than QVC or its agents) who is not bound by a confidentiality agreement with QVC; or (c) is in the possession of Assignor prior
to disclosure by QVC, provided that the source was not bound by a confidentiality agreement with QVC. Assignor agrees that in the
event of a breach or threatened breach of the terms of this paragraph 7(d) and/or the provisions of paragraph 5, QVC shall be entitled
to seek from any court of competent jurisdiction, preliminary and permanent injunctive relief which remedy shall be cumulative
and in addition to any other rights and remedies to which QVC may be entitled. Assignor acknowledges and agrees that the confidential
information and other information referred to in this paragraph 7(d) and the prohibitions provided in paragraph 5 above, are valuable
and unique and that such breach of such provisions will result in immediate irreparable injury to QVC.

 

(e)          The
rights and obligations of the Parties set forth in this paragraph 7 shall survive and continue after the termination or expiration
of the Agreement.

 

    	22

    	 

    

 

8.           Indemnification.

 

(a)          Company
hereby agrees to protect, defend, hold harmless and indemnify QVC, its subsidiaries and affiliates, and each of their respective
employees, agents, officers, directors, successors and assigns from and against any and all claims, actions, suits, costs, liabilities,
damages and expenses (including, but not limited to, reasonable attorneys’ fees) based upon or resulting from any breach
or alleged breach by Company or Spokesperson of any term or condition of this Agreement or any representation or warranty set forth
herein, including without limitation any claim by any third party that such party owns or has a license or other proprietary interest
in any Product IP Rights, the Design Element or the Co-Branded IP Rights, or that QVC’s use of any Product IP Rights, the
Design Element or the Co-Branded IP Rights as contemplated by this Agreement constitutes unfair competition or infringes or otherwise
violates the copyright, trademark or other proprietary rights of third parties. For purposes of clarification, the indemnification
obligations of Company with respect to the Product IP Rights, the Design Element or the Co-Branded IP Rights shall not apply with
respect to any component (e.g., a trademark or service mark) of the Products or Co-Branded Products which is owned or licensed
by QVC, if any. QVC shall give Company prompt written notice of any such action or claim, and Company shall then take such action
as it deems advisable to defend such claim or action on behalf of QVC. In the event that appropriate action is not taken by Company
within five (5) days of Company’s receipt of notice from QVC, QVC shall have the right to defend such action or claim in
its own name. In such event, Company shall be solely responsible for the payment or reimbursement, at QVC’s option, of counsel
fees and all other fees and costs incurred in defending such action, for any and all damages arising thereunder, and for any and
all amounts paid by QVC in settlement thereof.

 

(b)          Notwithstanding
anything contained herein to the contrary, Assignor shall continue to protect, defend, hold harmless and indemnify QVC, its subsidiaries
and affiliates, and each of their respective employees, agents, officers, directors, successors and assigns from and against any
and all claims, actions, suits, costs, liabilities, damages and expenses (including, but not limited to, reasonable attorneys’
fees) based upon or resulting from any breach or alleged breach prior to the Effective Date by Assignor or Spokesperson of any
term or condition of the Amended and Restated Agreement or any representation or warranty set forth therein. QVC shall give Assignor
prompt written notice of any such action or claim, and Assignor shall then take such action as it deems advisable to defend such
claim or action on behalf of QVC. In the event that appropriate action is not taken by Assignor within five (5) days of Assignor’s
receipt of notice from QVC, QVC shall have the right to defend such action or claim in its own name. In such event, Assignor shall
be solely responsible for the payment or reimbursement, at QVC’s option, of counsel fees and all other fees and costs incurred
in defending such action, for any and all damages arising thereunder, and for any and all amounts paid by QVC in settlement thereof.

 

(c)          QVC
hereby agrees to protect, defend, hold harmless and indemnify Company, its subsidiaries and affiliates, and each of their respective
employees, agents, officers, directors, successors and assigns from and against any and all claims, actions, suits, costs, liabilities,
damages and expenses (including, but not limited to, reasonable attorneys’ fees) based upon or resulting from any breach
or alleged breach by QVC of any term or condition of this Agreement or any representation or warranty set forth herein. Company
shall give QVC prompt written notice of any such action or claim, and QVC shall then take such action as it deems advisable to
defend such claim or action on behalf of Company. In the event that appropriate action is not taken by QVC within five (5) days
of QVC’s receipt of notice from Company, Company shall have the right to defend such action or claim in its own name. In
such event, QVC shall be solely responsible for the payment or reimbursement, at Company’s option, of counsel fees and all
other fees and costs incurred in defending such action, for any and all damages arising thereunder, and for any and all amounts
paid by Company in settlement thereof.

 

    	23

    	 

    

 

9.          Publicity.

 

(a)          Except
for incidental non-derogatory remarks necessitated by the services provided hereunder, neither Assignor, Company nor Spokesperson
shall issue any publicity or press release regarding its contractual relations with QVC or otherwise make any oral or written reference
to QVC regarding their activities hereunder, without obtaining QVC’s prior written consent, and approval of the contents
thereof; provided, however, that nothing herein shall prohibit Assignor or Company from making any disclosure required
by applicable law or securities regulations after giving notice to QVC as promptly as is practicable under the circumstances and/or
as otherwise required by this Agreement. Neither Assignor, Spokesperson nor Company shall utilize any trade name, service mark,
trademark, or copyright belonging to QVC without the prior written consent of QVC.

 

(b)          QVC
shall obtain Company’s prior approval with respect to any third party press releases (which shall not be construed to include
QVC program guides or the QVC Insider publication) involving Products, Co-Branded Products and/or Company.

 

10.          Consent
to Assignment; Termination of Earthbound Agreements and Obligations.

 

(a)          Subject
to satisfaction by Company and Assignor of their respective obligations under paragraph 1(a) above, QVC hereby: (i) consents to
the assignment of Design Services Reimbursement Agreement from Assignor to Company; and (ii) agrees that Company shall succeed
to all of the Assignor’s rights and obligations under the Design Services Reimbursement Agreement.

 

(b)          Subject
to satisfaction by Company and Assignor of their respective obligations under paragraph 1(a) above and further subject to the payment
of $175,000.00 due and owing to QVC by Earthbound as of September 30, 2011, QVC agrees that the Earthbound Agreement (the “Earthbound
Agreement”) is hereby terminated as of the Effective Date of this Agreement pursuant the Release Agreement attached hereto
as Exhibit “E”.

 

11.          Miscellaneous.

 

(a)          Amendment.
This Agreement may not be varied, amended, or modified unless in writing signed by the Party against whom such amendment, variance
or modification is sought to be enforced.

 

(b)          No
Assignment. This Agreement and the rights and obligations hereunder are not assignable and any such assignment shall be null
and void ab initio.

 

    	24

    	 

    

 

(c)          License
of Intellectual Property. Company acknowledges and agrees that this Agreement shall constitute an executory contract within
the meaning and scope of Section 365 of the United States Bankruptcy Code, 11 U.S.C. § 365, under which the Company is a licensor
of Intellectual Property (as defined below), and as to which QVC shall have the right to make an election under Section 365(n)
of the United States Bankruptcy Code, 11 U.S.C. § 365(n). For purposes of this Agreement, the rights granted to QVC hereunder
shall be deemed to constitute “Intellectual Property” for purposes of Section 365(n) of the United States Bankruptcy
Code, 11 U.S.C. § 365(n), and as used therein, notwithstanding any limitation or definition to the contrary in the United
States Bankruptcy Code, 11 U.S.C. § 101, et seq., including, but not limited to, provisions of Section 101(35A) of the United
States Bankruptcy Code, 11 U.S.C. § 101(35A).

 

(d)          Governing
Law. This Agreement shall be construed according to the internal laws of Commonwealth of Pennsylvania, without regard to conflict
of laws principles. The Parties each hereby consent to the exclusive jurisdiction of the state courts of the Commonwealth of Pennsylvania,
Chester County, and the United States District Court for the Eastern District of Pennsylvania, in all matters arising out of this
Agreement.

 

(e)          Notices.
All notices provided for hereunder shall be sent via certified mail, return receipt requested, or by reputable overnight carrier,
to the addresses indicated in this Section 11(e). All notices to QVC shall be addressed to:

 

President, U.S.
Commerce

QVC, Inc.

Studio Park

1200 Wilson Drive

West Chester, PA
19380

and

General Counsel

QVC, Inc.

Studio Park

1200 Wilson Drive

West Chester, PA
19380

 

Notice to QVC shall not be deemed effective
unless delivered to both President, U.S. Commerce and General Counsel as set forth above.

 

All notices to Company and
Spokesperson shall be addressed to:

 

IM Brands, LLC

c/o XCel Brands,
Inc.

475 Tenth Avenue,
4th Floor

New York, NY 10018

Attn: CFO

 

    	25

    	 

    
 

All notices to Assignor shall
be addressed to:

 

IM-Ready Made,
LLC

c/o XCel Brands,
Inc.

475 Tenth Avenue,
4th Floor

New York, NY 10018

Attn: Marisa Gardini

 

with a copy (which
shall not constitute notice) to:

 

Robinson & Cole LLP

885 Third Avenue, 28th Floor

New York, NY 10022

Attn: Eric J. Dale, Esq.

 

(f)          Entire
Agreement. This Agreement supersedes all prior communications between the parties regarding the subject matter hereof, whether
oral or written, including, without limitation, the Amended and Restated Agreement, and constitutes the entire understanding of
the parties. Company shall cause all future Spokespersons as may be agreed upon by QVC and Company,
in addition to Mizrahi, to agree to the provisions set forth in this Agreement. 

 

(g)          Remedies
and Waiver. No delay or failure on the part of any Party hereto in exercising any right or remedy under this Agreement, and
no partial or single exercise thereof, shall constitute a waiver of such right or remedy or of any other right or remedy. The rights
and remedies provided in this Agreement shall be in addition to, and not in lieu of, any rights and remedies provided under applicable
law.

 

(h)          Severability.
If any term or condition of this Agreement or the application thereof shall be illegal, invalid or unenforceable, all other provisions
hereof shall continue in full force and effect as if the illegal, invalid or unenforceable provision were not a part hereof. The
headings used in this Agreement are for the convenience of the Parties only and shall not be construed in the interpretation of
any provisions of' this Agreement.

 

(i)          No
Joint Venture. Nothing herein contained shall be construed to place QVC, on the one hand, and Company and/or Spokesperson,
on the other hand, in the relationship of partners or joint venturers, and, with the exception of any and all rights and licenses
that may have been, or are, granted to Company by Spokesperson, none of the Parties hereto shall have the power to obligate or
bind the others in any manner whatsoever. Company hereto agrees that in performing its duties and obligations to QVC under this
Agreement, it shall be in the position of an independent contractor to QVC.

 

(j)          Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together
shall constitute one and the same Agreement. This Agreement may be executed and delivered via electronic or telefacsimile transmission
with the same force and effect as if it were executed and delivered by the parties simultaneously in the presence of one another.

 

    	26

    	 

    

 

(k)          Interpretation
and Construction. This Agreement has been fully and freely negotiated by the Parties hereto, shall be considered as having
been drafted jointly by the Parties hereto, and shall be interpreted and construed as if so drafted, without construction in favor
of or against any Party on account of its participation in the drafting hereof.

 

(l)          Further
Assurances. Company shall cooperate with QVC from time to time as requested by QVC to effectuate the purposes of this Agreement,
including QVC's requests for information regarding the safety of any of the Products or Co-Branded Products.

 

(m)          Survival.
The provisions of paragraphs 2(k), 2(l), 5, 6, 7, 8, 10 and 11 (d), (e), (g), (l), and (m) shall survive the expiration or termination
of this Agreement.

 

IN WITNESS WHEREOF, and
intending to be legally bound hereby, the Parties hereto have executed this Agreement as of the date first written above to be
effective and in force as of the Effective Date.

 

	 	QVC, INC.
	 	 
	 	By:	 
	 	Name:
	 	Title:
	 	IM BRANDS, LLC
	 	 
	 	By:	 
	 	Name:
	 	Title:

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

    	27

    	 

    

 

[SIGNATURES CONTINUED FROM PRECEDING PAGE]

 

	 	IM READY MADE, LLC
	 	 
	 	By:	 
	 	Name:
	 	Title:
	 	 
	 	 
	 	Isaac Mizrahi, individually
	 	 
	 	XCel Brands, Inc.
	 	 
	 	By:	 
	 	Name:
	 	Title:

 

    	28

    	 

    

 

Exhibit D

 

[***]

 

The Company has requested confidential treatment
of certain information contained in the Agreement relating to certain business matters not material to investors and which the
Company believes would cause harm to the Company and its relationship with QVC if disclosed.

 

    	 

    	 

    

 

Exhibit E

 

RELEASE AGREEMENT

 

This RELEASE AGREEMENT
(the “Release Agreement”) is dated as of September 30, 2011 (the “Effective Date”) by
and between QVC, Inc., a Delaware corporation with offices located at Studio Park, 1200 Wilson Drive, West Chester, Pennsylvania
19380, on the one hand, and Earthbound, LLC (“Earthbound”), a New York limited liability company, with offices
located at 126 Fifth Avenue, 4th Floor, New York, New York 10011, on the other hand.

 

RECITALS

 

WHEREAS, QVC is a general
merchandise electronic retailer that markets and distributes a wide variety of products directly to consumers through various means
and media;

 

WHEREAS, on or about June 5,
2009, QVC entered into an agreement (the “Merchandising Agreement”) with IM Ready Made LLC (“IM Ready
Made”) for the promotion, marketing and sale by QVC of a line of consumer products developed or to be developed by IM
Ready Made;

 

WHEREAS, Earthbound, at
all times material, hereto and among other things, is or was the brand manager for IM Ready Made;

 

WHEREAS, on or about September
1, 2009, QVC, on the one hand, and Earthbound, on the other hand, entered into an agreement (the “Earthbound Agreement”)
providing for the reimbursement and/or payment to QVC by Earthbound of QVC’s expenses and costs incurred or to be incurred
in connection with the development and promotion of the aforementioned line of consumer products by IM Ready Made;

 

WHEREAS, on or about September
16, 2010, QVC and Earthbound agreed to a modification of the timing of payments due by Earthbound to QVC under the Earthbound Agreement;

 

WHEREAS, as of the Effective
Date, the sum of One Hundred Seventy-Five Thousand Dollars ($175,000.00) is due and payable to QVC by Earthbound under the Earthbound
Agreement;

 

WHEREAS, in connection
with an assignment by IM Ready Made of the Merchandising Agreement to IM Brands, LLC (“IM Brands”), Earthbound
seeks the termination of the Earthbound Agreement; and

 

WHEREAS, QVC is amenable
to terminating the Earthbound Agreement subject to the terms and conditions of this Release Agreement.

 

    	 

    	 

    

 

AGREEMENT

 

NOW, THEREFORE, QVC and
Earthbound each agrees as follows:

 

1.          The
above Recitals are incorporated by reference as though set forth fully at length herein.

 

2.          Strictly
conditioned upon, and subject to, (a) remittance (as set forth in paragraph 3 below) on or before the Effective Date by Earthbound
to QVC of the aforesaid sum of $175,000.00 (the “Payment”), in good and immediately available funds and free and clear
of all third party claims, that is due and payable to QVC under the Earthbound Agreement; (b) assignment of the Merchandising Agreement
by IM Ready Made to IM Brands pursuant to the terms of a certain Second Amended And Restated Agreement And Consent to Assignment,
dated as of September 28, 2011, by and among QVC, on the one hand, and IM Ready Made, IM Brands, Isaac Mizrahi and XCel Brands,
Inc, on the other hand; and (c) delivery of the release granted by Earthbound in favor of QVC as set forth in paragraph 6 below,
the Earthbound Agreement is terminated effective as of 11:59 p.m. (EDT) on September 30, 2011, without further obligation by Earthbound
or QVC thereunder. Notwithstanding anything contained in this Release Agreement to the contrary, this Release Agreement shall be
rendered null and void ab initio should any of the aforesaid three conditions precedent to termination of the Earthbound
Agreement not be satisfied in full on or before the Effective Date.

 

3.          On
or before the Effective Date, Earthbound shall pay, or cause one or more of its affiliates to pay, the Payment (in good and immediately
available funds and free of any third party claims) due and payable to QVC under the Earthbound Agreement to QVC as of the Effective
Date, via wire transfer, to QVC (with telephone notice of the Federal reference number to QVC’s Treasury Department Attn:
Nicole Maganas at 484.701.1416 upon transfer) pursuant to the following wiring instructions (unless otherwise directed in writing
by QVC):

 

Account Name:

Account Number:

Bank Name:

Bank Address:

 

ABA#:

SWIFT:

 

Bank Contact Name:

 

    	-2-

    	 

    

 

4.          Earthbound shall use its best efforts to ensure
that the Payment is remitted to QVC simultaneously with the assignment of the Merchandising Agreement by IM Ready Made to IM Brands.
Notwithstanding anything contained herein to the contrary, this Release Agreement shall be rendered null and void ab inito
in the event that the Payment is not remitted to QVC in accordance with the terms of paragraphs 2 and 3 above.

 

5.          In consideration for full satisfaction of the
conditions precedent set forth in paragraphs 2 and 3 above (including, without limitation, the remittance of the Payment to QVC
in good and immediately available funds), and strictly conditioned and subject thereto, QVC, and its successors and assigns, do
hereby forever, fully, and completely release, acquit and discharge Earthbound and its subsidiaries, and their respective directors,
officers, managers, employees, agents, representatives, servants, successors, heirs and assigns, and their respective heirs, executors,
administrators, successors-in-interest, and each and every one of them, of and from all, and all manner of, claims, actions, and
causes of action, suits, debts, obligations, promises, expenses, bills, liens, liabilities, dues, accounts, bonds, covenants, contracts,
agreements, costs, judgments, claims and demands whatsoever, in law or in equity, or otherwise, whether known or unknown, accrued
or unaccrued, which QVC, and its successors and assigns, ever had, now have, or can, shall or may in the future have against Earthbound
and its subsidiaries, and their respective directors, officers, managers, employees, agents, representatives, servants, successors,
heirs and assigns, and their respective heirs, executors, administrators, successors-in-interest, and each and every one of them,
from the beginning of the world until the Effective Date, for, or by reason of, any and all payments, other than the Payment, due
and owing, or due and owing in the future, to QVC from Earthbound under the Earthbound Agreement for expenses and costs incurred,
or to be incurred, by QVC in connection with the development and promotion of a line of consumer products by IM Ready Made.

Notwithstanding anything
to the contrary contained in this Release Agreement, in the event that any court of competent jurisdiction requires QVC to disgorge
any portion of the Payment received by QVC, the release by QVC set forth in this paragraph 5 shall be deemed null and void ab
initio and the amount of QVC’s claims under the Earthbound Agreement shall revert to its full amount due and owing to
QVC thereunder, provided, however, that in the event of any such disgorgement, Earthbound will be entitled to a
credit against QVC’s claims for any portion of the Payment that may be actually retained by QVC. Nothing contained in this
paragraph 5 shall release, or be deemed to release, Earthbound from its obligations under this Release Agreement.

It is a strict condition precedent to the validity and enforceability of the release set forth in this paragraph
5 that this Release Agreement, executed without modification by an authorized representative of Earthbound, is delivered to counsel
for QVC (Attn: Shannon M. Moyer, Esquire, Assistant General Counsel, QVC, Inc. Studio Park, 1200 Wilson Drive, West Chester, PA
19380, Tel no. 484.701.2086/Fax no. 484.701.1021, e-mail: Shannon.Moyer@qvc.com) on or before the Effective Date.

 

    	-3-

    	 

    

 

6.          In consideration for the release set forth in
paragraph 5 above, and strictly conditioned and subject thereto, Earthbound, and its successors and assigns, do hereby forever,
fully, and completely release, acquit and discharge QVC and its directors, officers, employees, agents, representatives, servants,
successors, heirs and assigns, and their respective heirs, executors, administrators and successors-in-interest, and each and every
one of them, of and from all, and all manner of, claims, actions, and causes of action, suits, debts, obligations, promises, expenses,
bills, liens, liabilities, dues, accounts, bonds, covenants, contracts, agreements, costs, judgments, claims and demands whatsoever,
in law or in equity, or otherwise, whether known or unknown, accrued or unaccrued, which Earthbound and its successors and assigns,
and each of them, ever had, now has, or can, shall or may in the future have against QVC, and its directors, officers, employees,
agents, representatives, servants, successors, heirs and assigns, and its respective heirs, executors, administrators and successors-in-interest,
and each and every one of them, from the beginning of the world until the Effective Date for, or by reason of, any obligations
due to Earthbound by QVC under the Earthbound Agreement.

It is a strict condition
precedent to the validity and enforceability of the release set forth in this paragraph that this Release Agreement, as executed
without modification by an authorized representative of QVC, is delivered to counsel for Earthbound (Attn: Hilton Soniker, Esquire,
Kamerman & Soniker P.C., 708 Third Avenue, Suite 1610, New York, NY 10017, Tel. no. 212.400.4930/Fax no. 212.832.1240, e-mail:
soniker@kamso.com) on or before the Effective Date. Nothing contained in the release set forth above shall release,
or be deemed to release, QVC from its obligations under this Release Agreement.

 

7.          The Earthbound Agreement and this Release Agreement
reflect the entire understanding and agreement of QVC and Earthbound in connection with the matters set forth herein, and supersede
and merge all prior oral and written agreements, discussions and understandings by and between QVC and Earthbound with respect
thereto. This Release Agreement may be amended only by a written agreement signed by QVC and Earthbound. This Release Agreement
shall inure to the benefit of, and be binding upon, Earthbound and QVC, and their respective successors and assigns, and there
otherwise shall be no third-party beneficiaries, intended, incidental or implied, to this Release Agreement. Nothing contained
in this Release Agreement amends, modifies, releases or novates, or shall be deemed to amend, modify, release or novate, any contract
or other agreement between QVC, on one hand, and any party other than Earthbound, on the other hand. Except as expressly set forth
herein, nothing contained in this Release Agreement amends, modifies, releases, terminates or novates, or shall be deemed to amend,
modify, release, terminate or novate, any contract or other agreement between QVC, on one hand, and Earthbound, on the other hand.

 

8.          QVC and Earthbound each represents and warrants that it is possessed of all rights and authority to execute
this Release Agreement and covenants and that it will not challenge the legitimacy, terms or enforceability of this Release Agreement
based on the identity, or authority of the signatory. QVC and Earthbound each represents and warrants that it has not transferred
and will not transfer to any person or entity any rights, causes of action, or claims released in this Release Agreement. The representations
and warranties set forth in this paragraph shall survive consummation of the transactions contemplated by this Release Agreement.

 

9.          This Release Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed one and the same
instrument. Delivery of an executed counterpart of this Release Agreement by telefacsimile or electronic transmission shall be
equally as effective as delivery of a manually executed counterpart of this Release Agreement.

 

    	-4-

    	 

    

 

10.         QVC
and Earthbound, with the assistance of its respective counsel, has each participated in the drafting of this Release Agreement.
Any ambiguities in this Release Agreement shall not be construed for or against any party hereto on account of such drafting.

 

11.         This
Release Agreement, and the releases set forth therein, shall be interpreted, governed and construed in accordance with the internal
substantive laws of the Commonwealth of Pennsylvania without regard to conflict of laws principles. QVC and Earthbound each consents
to the exclusive subject matter and personal jurisdiction and the venue of the Court of Common Pleas of Chester County (PA) or
the United States District Court for the Eastern District of Pennsylvania with regard to any and all disputes arising under, or
related to, this Release Agreement and the transactions contemplated herein. This Release Agreement shall be deemed to be a contract
accepted, made and formed in the Commonwealth of Pennsylvania.

 

IN WITNESS WHEREOF,
and intending to be legally bound hereby, QVC, Inc. and Earthbound, LLC., and each of them, execute this Release Agreement as of
the Effective Date.

 

	QVC, INC.	 	EARTHBOUND, LLC
	 	 	 
	By:	 	 	By:	 
	 	 	 	 	 
	Name:	 	 	Name:	 
	 	 	 	 	 
	Title:	 	 	Title:	 

 

    	-5-exhibit_4-4.htm

Exhibit 4.4

 

MERCED SYSTEMS, INC.

 

2001 STOCK PLAN

 

(as amended on December 17, 2001)

(as further amended on September 30, 2004)

(as further amended on December 12, 2006)

(as further amended on August 31, 2007)

(as further amended to reflect 2-for-1 stock split effected September 6, 2007)

 

1.           Purposes of the Plan.  The purposes of this 2001 Stock Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees and Consultants and to promote the success of the Company’s business.  Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of an option and subject to the applicable provisions of Section 422 of the Code and the regulations promulgated thereunder.  Stock purchase rights may also be granted under the Plan.

 

2.           Definitions.  As used herein, the following definitions shall apply:

 

(a)           “Administrator” means the Board or its Committee appointed pursuant to Section 4 of the Plan.

 

(b)           “Affiliate” means an entity other than a Subsidiary (as defined below) which, together with the Company, is under common control of a third person or entity.

 

(c)           “Applicable Laws” means the legal requirements relating to the administration of stock option and restricted stock purchase plans under applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, the Code, any Stock Exchange rules or regulations and the applicable laws of any other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan, as such laws, rules, regulations and requirements shall be in place from time to time.

 

(d)           “Board” means the Board of Directors of the Company.

 

(e)           “Cause” for termination of a Participant’s Continuous Service Status will exist if the Participant is terminated for any of the following reasons:  (i) Participant’s continued failure, after receipt of a written warning, substantially to perform his or her duties and responsibilities to the Company or deliberate violation of a Company policy; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company; (iii) unauthorized use or disclosure by Participant of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) Participant’s willful breach of any of his or her obligations under any written agreement or covenant with the Company.  The determination as to whether a Participant is being terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant.  The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting relationship at any time as provided in Section 5(d) below, and the term “Company” will be interpreted to include any Subsidiary, Parent, Affiliate or successor thereto, if appropriate.

 

  

  

  

 

(f)           “Change of Control” means a sale of all or substantially all of the Company’s assets, or any merger or consolidation of the Company with or into another corporation other than a merger or consolidation in which the holders of more than 50% of the shares of capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by their being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company, or such surviving entity, outstanding immediately after such transaction.

 

(g)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(h)           “Committee” means one or more committees or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 4 below.

 

(i)            “Common Stock” means the Common Stock of the Company.

 

(j)            “Company” means Merced Systems, Inc., a Delaware corporation.

 

(k)           “Consultant” means any person, including an advisor, who is engaged by the Company or any Parent, Subsidiary or Affiliate to render services and is compensated for such services, and any director of the Company whether compensated for such services or not.

 

(l)           “Continuous Service Status” means the absence of any interruption or termination of service as an Employee or Consultant.  Continuous Service Status as an Employee or Consultant shall not be considered interrupted in the case of:  (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company, its Parents, Subsidiaries, Affiliates or their respective successors.  A change in status from an Employee to a Consultant or from a Consultant to an Employee will not constitute an interruption of Continuous Service Status.

 

(m)           “Corporate Transaction” means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another corporation and includes a Change of Control.

 

(n)           “Director” means a member of the Board.

 

(o)           “Employee” means any person employed by the Company or any Parent, Subsidiary or Affiliate, with the status of employment determined based upon such factors as are deemed appropriate by the Administrator in its discretion, subject to any requirements of the Code or the Applicable Laws.  The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.

 

  

- 2 -

  

 

(p)           “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(q)           “Fair Market Value” means, as of any date, the fair market value of the Common Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to Participants.  Whenever possible, the determination of Fair Market Value shall be based upon the closing price for the Shares as reported in the Wall Street Journal for the applicable date.

 

(r)           “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in the applicable Option Agreement.

 

(s)            “Listed Security” means any security of the Company that is listed or approved for listing on a national securities exchange or designated or approved for designation as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.

 

(t)            “Named Executive” means any individual who, on the last day of the Company’s fiscal year, is the chief executive officer of the Company (or is acting in such capacity) or among the four most highly compensated officers of the Company (other than the chief executive officer).  Such officer status shall be determined pursuant to the executive compensation disclosure rules under the Exchange Act.

 

(u)           “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option, as designated in the applicable Option Agreement.

 

(v)           “Option” means a stock option granted pursuant to the Plan.

 

(w)           “Option Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of an Option granted under the Plan and includes any documents attached to or incorporated into such Option Agreement, including, but not limited to, a notice of stock option grant and a form of exercise notice.

 

(x)            “Option Exchange Program” means a program approved by the Administrator whereby outstanding Options are exchanged for Options with a lower exercise price or are amended to decrease the exercise price as a result of a decline in the Fair Market Value of the Common Stock.

 

(y)           “Optioned Stock” means the Common Stock subject to an Option.

 

(z)            “Optionee” means an Employee or Consultant who receives an Option.

 

(aa)          “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code, or any successor provision.

 

  

- 3 -

  

 

(bb)          “Participant” means any holder of one or more Options or Stock Purchase Rights, or the Shares issuable or issued upon exercise of such awards, under the Plan.

 

(cc)           “Plan” means this 2001 Stock Plan.

 

(dd)          “Reporting Person” means an officer, Director, or greater than ten percent stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.

 

(ee)          “Restricted Stock” means Shares of Common Stock acquired pursuant to a grant of a Stock Purchase Right under Section 11 below.

 

(ff)           “Restricted Stock Purchase Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Stock Purchase Right granted under the Plan and includes any documents attached to such agreement.

 

(gg)          “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.

 

(hh)          “Share” means a share of the Common Stock, as adjusted in accordance with Section 14 of the Plan.

 

(ii)            “Stock Exchange” means any stock exchange or consolidated stock price reporting system on which prices for the Common Stock are quoted at any given time.

 

(jj)            “Stock Purchase Right” means the right to purchase Common Stock pursuant to Section 11 below.

 

(kk)          “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, or any successor provision.

 

(ll)            “Ten Percent Holder” means a person who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary.

 

3.             Stock Subject to the Plan.  Subject to the provisions of Section 14 of the Plan, the maximum aggregate number of Shares that may be sold under the Plan is 6935,696 Shares of Common Stock.  The Shares may be authorized, but unissued, or reacquired Common Stock.  If an award should expire or become unexercisable for any reason without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan.  In addition, any Shares of Common Stock which are retained by the Company upon exercise of an award in order to satisfy the exercise or purchase price for such award or any withholding taxes due with respect to such exercise or purchase shall be treated as not issued and shall continue to be available under the Plan.  Shares issued under the Plan and later repurchased by the Company pursuant to any repurchase right which the Company may have shall not be available for future grant under the Plan.

 

  

- 4 -

  

 

4.             Administration of the Plan.

 

(a)           General.  The Plan shall be administered by the Board or a Committee, or a combination thereof, as determined by the Board.  The Plan may be administered by different administrative bodies with respect to different classes of Participants and, if permitted by the Applicable Laws, the Board may authorize one or more officers to make awards under the Plan.

 

(b)           Committee Composition.  If a Committee has been appointed pursuant to this Section 4, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.  From time to time the Board may increase the size of any Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies (however caused) and remove all members of a Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws and, in the case of a Committee administering the Plan in accordance with the requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent permitted or required by such provisions.

 

(c)           Powers of the Administrator.  Subject to the provisions of the Plan and in the case of a Committee, the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion:

 

(i)          to determine the Fair Market Value of the Common Stock, in accordance with Section 2(q) of the Plan, provided that such determination shall be applied consistently with respect to Participants under the Plan;

 

(ii)         to select the Employees and Consultants to whom Options and Stock Purchase Rights may from time to time be granted;

 

(iii)        to determine whether and to what extent Options and Stock Purchase Rights are granted;

 

(iv)        to determine the number of Shares of Common Stock to be covered by each award granted;

 

(v)         to approve the form(s) of agreement(s) used under the Plan;

 

  

- 5 -

  

 

(vi)        to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder, which terms and conditions include but are not limited to the exercise or purchase price, the time or times when awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option, Optioned Stock, Stock Purchase Right or Restricted Stock, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

 

(vii)       to determine whether and under what circumstances an Option may be settled in cash under Section 10(c) instead of Common Stock;

 

(viii)      to implement an Option Exchange Program on such terms and conditions as the Administrator in its discretion deems appropriate, provided that no amendment or adjustment to an Option that would materially and adversely affect the rights of any Optionee shall be made without the prior written consent of the Optionee;

 

(ix)         to adjust the vesting of an Option held by an Employee or Consultant as a result of a change in the terms or conditions under which such person is providing services to the Company;

 

(x)          to construe and interpret the terms of the Plan and awards granted under the Plan, which constructions, interpretations and decisions shall be final and binding on all Participants; and

 

(xi)         in order to fulfill the purposes of the Plan and without amending the Plan, to modify grants of Options or Stock Purchase Rights to Participants who are foreign nationals or employed outside of the United States in order to recognize differences in local law, tax policies or customs.

 

5.             Eligibility.

 

(a)           Recipients of Grants.  Nonstatutory Stock Options and Stock Purchase Rights may be granted to Employees and Consultants.  Incentive Stock Options may be granted only to Employees, provided that Employees of Affiliates shall not be eligible to receive Incentive Stock Options.

 

(b)           Type of Option.  Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.

 

(c)           ISO $100,000 Limitation.  Notwithstanding any designation under Section 5(b), to the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock Options.  For purposes of this Section 5(c), Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an Incentive Stock Option shall be determined as of the date of the grant of such Option.

 

(d)           No Employment Rights.  The Plan shall not confer upon any Participant any right with respect to continuation of an employment or consulting relationship with the Company, nor shall it interfere in any way with such Participant’s right or the Company’s right to terminate his or her employment or consulting relationship at any time, with or without Cause.

 

6.            Term of Plan.  The Plan shall become effective upon its adoption by the Board of Directors.  It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 16 of the Plan.

 

7.            Term of Option.  The term of each Option shall be the term stated in the Option Agreement; provided that the term shall be no more than ten years from the date of grant thereof or such shorter term as may be provided in the Option Agreement and provided further that, in the case of an Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent Holder, the term of the Option shall be five years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

 

  

- 6 -

  

 

8.           Reserved.

 

9.           Option Exercise Price and Consideration.

 

(a)           Exercise Price.  The per Share exercise price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:

 

(i)          In the case of an Incentive Stock Option

 

(A)           granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant; or

 

(B)           granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

 

(ii)         In the case of a Nonstatutory Stock Option

 

(A)           granted prior to the date, if any, on which the Common Stock becomes a Listed Security to a person who is at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant if required by the Applicable Laws and, if not so required, shall be such price as is determined by the Administrator;

 

(B)           granted prior to the date, if any, on which the Common Stock becomes a Listed Security to any other eligible person, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of grant if required by the Applicable Laws and, if not so required, shall be such price as is determined by the Administrator; or

 

(C)           granted on or after the date, if any, on which the Common Stock becomes a Listed Security to any eligible person, the per share Exercise Price shall be such price as determined by the Administrator provided that if such eligible person is, at the time of the grant of such Option, a Named Executive of the Company, the per share Exercise Price shall be no less than 100% of the Fair Market Value on the date of grant if such Option is intended to qualify as performance-based compensation under Section 162(m) of the Code.

 

(iii)           Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction.

 

  

- 7 -

  

 

(b)           Permissible Consideration.  The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant) and may consist entirely of (1) cash; (2) check; (3) delivery of Optionee’s promissory note with such recourse, interest, security and redemption provisions as the Administrator determines to be appropriate (subject to the provisions of Section 153 of the Delaware General Corporation Law); (4) cancellation of indebtedness; (5) other Shares that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is exercised, provided that in the case of Shares acquired, directly or indirectly, from the Company, such Shares must have been owned by the Optionee for more than six months on the date of surrender (or such other period as may be required to avoid the Company’s incurring an adverse accounting charge); (6) delivery of a properly executed exercise notice together with such other documentation as the Administrator and a securities broker approved by the Company shall require to effect exercise of the Option and prompt delivery to the Company of the sale or loan proceeds required to pay the exercise price and any applicable withholding taxes; or (7) any combination of the foregoing methods of payment.  In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company and the Administrator may, in its sole discretion, refuse to accept a particular form of consideration at the time of any Option exercise.

 

10.           Exercise of Option.

 

(a)           General.

 

(i)           Exercisability.  Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator, consistent with the term of the Plan and reflected in the Option Agreement, including vesting requirements and/or performance criteria with respect to the Company and/or the Optionee; provided however that, if required by the Applicable Laws, any Option granted prior to the date, if any, upon which the Common Stock becomes a Listed Security shall become exercisable at the rate of at least 20% per year over five years from the date the Option is granted.  In the event that any of the Shares issued upon exercise of an Option (which exercise occurs prior to the date, if any, upon which the Common Stock becomes a Listed Security) should be subject to a right of repurchase in the Company’s favor, such repurchase right shall, if required by the Applicable Laws, lapse at the rate of at least 20% per year over five years from the date the Option is granted.  Notwithstanding the above, in the case of an Option granted to an officer, Director or Consultant of the Company or any Parent, Subsidiary or Affiliate of the Company, the Option may become fully exercisable, or a repurchase right, if any, in favor of the Company shall lapse, at any time or during any period established by the Administrator.  The Administrator shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any such leave.

 

(ii)          Minimum Exercise Requirements.  An Option may not be exercised for a fraction of a Share.  The Administrator may require that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from exercising the full number of Shares as to which the Option is then exercisable.

 

  

- 8 -

  

 

(iii)         Procedures for and Results of Exercise.  An Option shall be deemed exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and the Company has received full payment for the Shares with respect to which the Option is exercised.  Full payment may, as authorized by the Administrator, consist of any consideration and method of payment allowable under Section 9(b) of the Plan, provided that the Administrator may, in its sole discretion, refuse to accept any form of consideration at the time of any Option exercise.

 

Exercise of an Option in any manner shall result in a decrease in the number of Shares that thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

 

(iv)        Rights as Stockholder.  Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 14 of the Plan.

 

(b)           Termination of Employment or Consulting Relationship.  Except as otherwise set forth in this Section 10(b), the Administrator shall establish and set forth in the applicable Option Agreement the terms and conditions upon which an Option shall remain exercisable, if at all, following termination of an Optionee’s Continuous Service Status, which provisions may be waived or modified by the Administrator at any time.  To the extent that the Optionee is not entitled to exercise an Option at the date of his or her termination of Continuous Service Status, or if the Optionee (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified in the Option Agreement or below (as applicable), the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan.  In no event may any Option be exercised after the expiration of the Option term as set forth in the Option Agreement (and subject to Section 7).

 

The following provisions (1) shall apply to the extent an Option Agreement does not specify the terms and conditions upon which an Option shall terminate upon termination of an Optionee’s Continuous Service Status, and (2) establish the minimum post-termination exercise periods that may be set forth in an Option Agreement:

 

(i)           Termination other than Upon Disability or Death.  In the event of termination of an Optionee’s Continuous Service Status, such Optionee may exercise an Option for 30 days following such termination to the extent the Optionee was entitled to exercise it at the date of such termination.  No termination shall be deemed to occur and this Section 10(b)(i) shall not apply if (i) the Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is an Employee who becomes a Consultant.

 

  

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(ii)          Disability of Optionee.  In the event of termination of an Optionee’s Continuous Service Status as a result of his or her disability (including a disability within the meaning of Section 22(e)(3) of the Code), such Optionee may exercise an Option at any time within six months following such termination to the extent the Optionee was entitled to exercise it at the date of such termination.

 

(iii)         Death of Optionee.  In the event of the death of an Optionee during the period of Continuous Service Status since the date of grant of the Option, or within thirty days following termination of Optionee’s Continuous Service Status, the Option may be exercised by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance at any time within twelve months following the date of death, but only to the extent of the right to exercise that had accrued at the date of death or, if earlier, the date the Optionee’s Continuous Service Status terminated.

 

(iv)        Termination for Cause.  If the Administrator so specifies, in the event of termination of an Optionee’s Continuous Service Status for Cause, any Option (including any exercisable portion thereof) held by such Optionee shall immediately terminate in its entirety upon first notification to the Optionee of termination of the Optionee’s Continuous Service Status.  If an Optionee’s employment or consulting relationship with the Company is suspended pending an investigation of whether the Optionee shall be terminated for Cause, all the Optionee’s rights under any Option likewise shall be suspended during the investigation period and the Optionee shall have no right to exercise any Option.  This Section 10(b)(iv) shall apply with equal effect to vested Shares acquired upon exercise of an Option granted prior to the date, if any, upon which the Common Stock becomes a Listed Security to a person other than an officer, Director or Consultant, in that the Company shall have the right to repurchase such Shares from the Participant upon the following terms:  (A) the repurchase is made within 90 days of termination of the Participant’s Continuous Service Status for Cause at the Fair Market Value of the Shares as of the date of termination, (B) consideration for the repurchase consists of cash or cancellation of purchase money indebtedness, and (C) the repurchase right terminates upon the effective date of the Company’s initial public offering of its Common Stock.  With respect to vested Shares issued upon exercise of an Option granted to any officer, Director or Consultant, the Company’s right to repurchase such Shares upon termination of the Participant’s Continuous Service Status for Cause shall be made at the Participant’s original cost for the Shares and shall be effected pursuant to such terms and conditions, and at such time, as the Administrator shall determine.  Nothing in this Section 10(b)(iv) shall in any way limit the Company’s right to purchase unvested Shares issued upon exercise of an Option as set forth in the applicable Option Agreement.

 

(c)           Buyout Provisions.  The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted under the Plan based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.

 

11.           Stock Purchase Rights.

 

(a)           Rights to Purchase.  When the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer.  In the case of a Stock Purchase Right granted prior to the date, if any, on which the Common Stock becomes a Listed Security and if required by the Applicable Laws at that time, the purchase price of Shares subject to such Stock Purchase Rights shall not be less than 85% of the Fair Market Value of the Shares as of the date of the offer, or, in the case of a Ten Percent Holder, the price shall not be less than 100% of the Fair Market Value of the Shares as of the date of the offer.  If the Applicable Laws do not impose the requirements set forth in the preceding sentence and with respect to any Stock Purchase Rights granted after the date, if any, on which the Common Stock becomes a Listed Security, the purchase price of Shares subject to Stock Purchase Rights shall be as determined by the Administrator.  The offer to purchase Shares subject to Stock Purchase Rights shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

 

  

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(b)           Repurchase Option.

 

(i)          General.  Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s employment with the Company for any reason (including death or disability).  The purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original purchase price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company.  The repurchase option shall lapse at such rate as the Administrator may determine, provided that with respect to a Stock Purchase Right granted prior to the date, if any, on which the Common Stock becomes a Listed Security to a purchaser who is not an officer, Director or Consultant of the Company or of any Parent or Subsidiary of the Company, it shall lapse at a minimum rate of 20% per year if required by the Applicable Laws.

 

(ii)         Termination for Cause.  If the Administrator so specifies, in the event of termination of a Participant’s Continuous Service Status for Cause, the Company shall have the right to repurchase from the Participant Vested Shares issued upon exercise of a Stock Purchase Right granted to any person other than an officer, Director or Consultant prior to the date, if any, upon which the Common stock becomes a Listed Security upon the following terms:  (A) the repurchase must be made within 90 days of termination of the Participant’s Continuous Service Status for Cause at the Fair Market Value of the Shares as of the date of termination, (B) consideration for the repurchase consists of cash or cancellation of purchase money indebtedness, and (C) the repurchase right terminates upon the effective date of the Company’s initial public offering of its Common Stock.  With respect to vested Shares issued upon exercise of a Stock Purchase Right granted to any officer, Director or Consultant, the Company’s right to repurchase such Shares upon termination of such Participant’s Continuous Service Status for Cause shall be made at the Participant’s original cost for the Shares and shall be effected pursuant to such terms and conditions, and at such time, as the Administrator shall determine.  Nothing in this Section 11(b)(ii) shall in any way limit the Company’s right to purchase unvested Shares as set forth in the applicable Restricted Stock Purchase Agreement.

 

(c)           Other Provisions.  The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion.  In addition, the provisions of Restricted Stock Purchase Agreements need not be the same with respect to each purchaser.

 

  

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(d)           Rights as a Stockholder.  Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a stockholder, and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 14 of the Plan.

 

12.           Taxes.

 

(a)           As a condition of the exercise of an Option or Stock Purchase Right granted under the Plan, the Participant (or in the case of the Participant’s death, the person exercising the Option or Stock Purchase Right) shall make such arrangements as the Administrator may require for the satisfaction of any applicable federal, state, local or foreign withholding tax obligations that may arise in connection with the exercise of the Option or Stock Purchase Right and the issuance of Shares.  The Company shall not be required to issue any Shares under the Plan until such obligations are satisfied.  If the Administrator allows the withholding or surrender of Shares to satisfy a Participant’s tax withholding obligations under this Section 12 (whether pursuant to Section 12(c), (d) or (e), or otherwise), the Administrator shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes.

 

(b)           In the case of an Employee and in the absence of any other arrangement, the Employee shall be deemed to have directed the Company to withhold or collect from his or her compensation an amount sufficient to satisfy such tax obligations from the next payroll payment otherwise payable after the date of an exercise of the Option or Stock Purchase Right.

 

(c)           This Section 12(c) shall apply only after the date, if any, upon which the Common Stock becomes a Listed Security.  In the case of Participant other than an Employee (or in the case of an Employee where the next payroll payment is not sufficient to satisfy such tax obligations, with respect to any remaining tax obligations), in the absence of any other arrangement and to the extent permitted under the Applicable Laws, the Participant shall be deemed to have elected to have the Company withhold from the Shares to be issued upon exercise of the Option or Stock Purchase Right that number of Shares having a Fair Market Value determined as of the applicable Tax Date (as defined below) equal to the amount required to be withheld.  For purposes of this Section 12, the Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined under the Applicable Laws (the “Tax Date”).

 

(d)           If permitted by the Administrator, in its discretion, a Participant may satisfy his or her tax withholding obligations upon exercise of an Option or Stock Purchase Right by surrendering to the Company Shares that have a Fair Market Value determined as of the applicable Tax Date equal to the amount required to be withheld.  In the case of shares previously acquired from the Company that are surrendered under this Section 12(d), such Shares must have been owned by the Participant for more than six (6) months on the date of surrender (or such other period of time as is required for the Company to avoid adverse accounting charges).

 

  

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(e)           Any election or deemed election by a Participant to have Shares withheld to satisfy tax withholding obligations under Section 12(c) or (d) above shall be irrevocable as to the particular Shares as to which the election is made and shall be subject to the consent or disapproval of the Administrator.  Any election by a Participant under Section 12(d) above must be made on or prior to the applicable Tax Date.

 

(f)           In the event an election to have Shares withheld is made by a Participant and the Tax Date is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the Code, the Participant shall receive the full number of Shares with respect to which the Option or Stock Purchase Right is exercised but such Participant shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date.

 

13.           Non-Transferability of Options and Stock Purchase Rights.

 

(a)           General.  Except as set forth in this Section 13, Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution.  The designation of a beneficiary by an Optionee will not constitute a transfer.  An Option or Stock Purchase Right may be exercised, during the lifetime of the holder of an Option or Stock Purchase Right, only by such holder or a transferee permitted by this Section 13.

 

(b)           Limited Transferability Rights.  Notwithstanding anything else in this Section 13, prior to the date, if any, on which the Common Stock becomes a Listed Security, the Administrator may in its discretion grant Nonstatutory Stock Options that may be transferred by instrument to an inter vivos or testamentary trust in which the Options are to be passed to beneficiaries upon the death of the trustor (settlor) or by gift to “Immediate Family” (as defined below), on such terms and conditions as the Administrator deems appropriate.  Following the date, if any, on which the Common Stock becomes a Listed Security, the Administrator may in its discretion grant transferable Nonstatutory Stock Options pursuant to Option Agreements specifying the manner in which such Nonstatutory Stock Options are transferable.  “Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.

 

14.           Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions.

 

(a)           Changes in Capitalization.  Subject to any required action by the stockholders of the Company, the number of Shares of Common Stock covered by each outstanding Option or Stock Purchase Right, and the number of Shares of Common Stock that have been authorized for issuance under the Plan but as to which no Options or Stock Purchase Rights have yet been granted or that have been returned to the Plan upon cancellation or expiration of an Option or Stock Purchase Right, as well as the price per Share of Common Stock covered by each such outstanding Option or Stock Purchase Right, shall be proportionately adjusted for any increase or decrease in the number of issued Shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination, recapitalization or reclassification of the Common Stock, or any other increase or decrease in the number of issued Shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares of Common Stock subject to an Option or Stock Purchase Right.

 

  

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(b)           Dissolution or Liquidation.  In the event of the dissolution or liquidation of the Company, each Option and Stock Purchase Right will terminate immediately prior to the consummation of such action, unless otherwise determined by the Administrator.

 

(c)           Corporate Transaction.  In the event of a Corporate Transaction, each outstanding Option or Stock Purchase Right shall be assumed or an equivalent option or right shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation (the “Successor Corporation”), unless the Successor Corporation does not agree to assume the award or to substitute an equivalent option or right, in which case such Option or Stock Purchase Right shall terminate upon the consummation of the transaction.

 

For purposes of this Section 14(c), an Option or a Stock Purchase Right shall be considered assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction or a Change of Control, as the case may be, each holder of an Option or Stock Purchase Right would be entitled to receive upon exercise of the award the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of Shares of Common Stock covered by the award at such time (after giving effect to any adjustments in the number of Shares covered by the Option or Stock Purchase Right as provided for in this Section 14); provided that if such consideration received in the transaction is not solely common stock of the Successor Corporation, the Administrator may, with the consent of the Successor Corporation, provide for the consideration to be received upon exercise of the award to be solely common stock of the Successor Corporation equal to the Fair Market Value of the per Share consideration received by holders of Common Stock in the transaction.

 

(d)           Certain Distributions.  In the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Administrator may, in its discretion, appropriately adjust the price per Share of Common Stock covered by each outstanding Option or Stock Purchase Right to reflect the effect of such distribution.

 

15.           Time of Granting Options and Stock Purchase Rights.  The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other date as is determined by the Administrator, provided that in the case of any Incentive Stock Option, the grant date shall be the later of the date on which the Administrator makes the determination granting such Incentive Stock Option or the date of commencement of the Optionee’s employment relationship with the Company.  Notice of the determination shall be given to each Employee or Consultant to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

 

  

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16.           Amendment and Termination of the Plan.

 

(a)           Authority to Amend or Terminate.  The Board may at any time amend, alter, suspend or discontinue the Plan, but no amendment, alteration, suspension or discontinuation (other than an adjustment pursuant to Section 14 above) shall be made that would materially and adversely affect the rights of any Optionee or holder of Stock Purchase Rights under any outstanding grant, without his or her consent.  In addition, to the extent necessary and desirable to comply with the Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required.

 

(b)           Effect of Amendment or Termination.  No amendment or termination of the Plan shall materially and adversely affect Options or Stock Purchase Rights already granted, unless mutually agreed otherwise between the Optionee or holder of the Stock Purchase Rights and the Administrator, which agreement must be in writing and signed by the Optionee or holder and the Company.

 

17.           Conditions Upon Issuance of Shares.  Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel.  As a condition to the exercise of an Option or Stock Purchase Right, the Company may require the person exercising the award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by law.

 

18.           Reservation of Shares.  The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

 

19.           Agreements.  Options and Stock Purchase Rights shall be evidenced by Option Agreements and Restricted Stock Purchase Agreements, respectively, in such form(s) as the Administrator shall from time to time approve.

 

20.           Stockholder Approval.  If required by the Applicable Laws, continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted.  Such stockholder approval shall be obtained in the manner and to the degree required under the Applicable Laws.

 

21.           Information and Documents to Optionees and Purchasers.  Prior to the date, if any, upon which the Common Stock becomes a Listed Security and if required by the Applicable Laws, the Company shall provide financial statements at least annually to each Optionee and to each individual who acquired Shares pursuant to the Plan, during the period such Optionee or purchaser has one or more Options or Stock Purchase Rights outstanding, and in the case of an individual who acquired Shares pursuant to the Plan, during the period such individual owns such Shares.  The Company shall not be required to provide such information if the issuance of Options or Stock Purchase Rights under the Plan is limited to key employees whose duties in connection with the Company assure their access to equivalent information.

 

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