Document:

EXHIBIT 10.125

                                                                  EXECUTION COPY

                                TRADEMARK LICENSE

     This Trademark License and Operating Agreement is made and entered into
this ___ day of January, 2001 by and between, Aris Industries, Inc., a New York
corporation ("Aris"), XOXO Clothing Company, Incorporated, a Delaware
corporation ("XOXO"), BP Clothing Company, Inc., a Delaware corporation, ("BP"),
Europe Craft Imports, Inc., a New Jersey corporation ("ECI") and Marcade Realty
Corp., a New York corporation ("Marcade"), on the one hand, and Grupo Extra of
New York, Inc., a New York corporation, with an address at c/o Mark Stern, 141
West 36th Street, New York, NY ("Licensee"), on the other.

                                    RECITALS

     A. XOXO, BP, ECI and Marcade are direct or indirect wholly owned
subsidiaries of Aris.

     B. XOXO is the owner of the trademarks XOXO(R)and Fragile(R).

     C. ECI is the owner of the trademark Members Only(R).

     D. BP is the licensee of the name Baby Phat(R) under a license agreement
dated as of July 1, 1999 for the manufacture and sale of women's sportswear (the
"BP License Agreement").

     E. ECI is the licensee of the name Brooks Brothers Golf(R) under a license
agreement made as of November 10, 1999 (the "BB License Agreement").

     F. Each of XOXO, BP and ECI are referred to herein as a Licensor to the
extent it has rights in the Trademarks as listed in Recitals B through E, above.

     G. Marcade is the tenant under leases for twelve XOXO Outlet Stores
identified on Schedule B (the "Outlet Stores").

     H. Licensee is in the business of manufacturing, selling and distributing,
among other products, sportswear, outerwear, golf wear and denim bottoms.

     I. Licensee desires to obtain from Licensor an exclusive license to
manufacture, market, sell, distribute and advertise the Licensed Products using
the Trademarks in the Licensed Territory, all as set forth on Schedule "A," and
to purchase all of Licensors' inventory of Licensed Products, assume certain of
its leases and other agreements, and absorb certain of their overhead structure.

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     J. The parties desire that this Agreement be effective as of February 1,
2001 (the "Effective Date").

     K. Licensee represents that it has the ability to manufacture, market,
sell, distribute and advertise the Licensed Products in the territory set forth
on Schedule "A" hereto (the "Licensed Territory") and to use the Trademarks on
or in association with the Licensed Products.

     NOW, THEREFORE, in consideration of their respective promises and
agreements made herein, the parties agree as follows:

     1. LICENSE

     1.1 Grant of License. Subject to the terms and conditions of this
Agreement, as of the Effective Date, each Licensor hereby grants to Licensee
(either by itself or through other entities under common control with Licensee)
the exclusive right and license (the "License") to use the Trademarks in which
it has the rights described in Recitals B through E solely to manufacture,
market, advertise, promote, sell and distribute the Licensed Products in the
Territory during the Term of this Agreement. The License created hereby only
allows the Licensee to market, sell, distribute and advertise the Licensed
Products for sale at wholesale solely to retailers located in the Licensed
Territory and does not permit Licensee to engage in the retail sale and/or
retail marketing of the Licensed Products except for the Outlet Stores and such
other outlet stores as Aris may approve in writing, which approval will not be
unreasonably withheld, delayed or conditioned.

     1.2 Determination of Licensed Products; Right of First Offer.

     1.2.1 Determination of Licensed Products. Licensee agrees that it will not
manufacture, market, sell, distribute or advertise, either directly or
indirectly, any style, design or product not in effect on the date hereof which
Licensor, in its reasonable discretion, has not expressly approved.

     1.2.2 Right of First Offer. In the event a Licensor decides to grant a
license for any of the Trademarks in connection with the manufacture and sale in
the Licensed Territory of products not included in the Licensed Products or for
any products in Mexico or South America (other than pursuant to existing license
agreements), it shall first offer (the "Offer") such license to Licensee,
stating the term, royalty rate, minimum guaranteed sales and royalties and
channels of distribution for which it proposes to grant such license. For the
next 30 days, if Licensee desires to accept such license, Licensor shall
negotiate exclusively with Licensee for such license. If, after such 30 day
period, the parties have not reached agreement with respect to such license,
Licensor may enter into a license for such product, in the 180 period following
expiration of the 30 day period, on terms and conditions not materially more
favorable to the licensee than are contained in the Offer.

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     1.3 Approval Regarding Other Products Etc. Licensee acknowledges that
Licensor may grant additional licenses in the future for territories, products
and categories not presently licensed and not within the scope of this License.
Permission of Licensor for Licensee to manufacture a particular style, design or
product, or to distribute the Licensed Products within an area, which is not, in
the reasonable opinion of the Licensor, within the scope of the License, shall
not constitute a continuing approval or a waiver of the right of Licensor to
later disapprove any style, design, product, or distribution area.

     1.4 Use/Ownership of Trademarks. Other than as expressly set forth in this
License, Licensee has absolutely no right, title or interest in or to the
Trademarks or the use thereof. Licensee acknowledges that it is only acquiring
the right to use the Trademarks in connection with the manufacture, marketing,
advertising, promotion, distribution and sale of the Licensed Products in the
Licensed Territory, for the Term set forth in this Agreement and subject to the
terms hereof. Upon termination of the License, Licensee shall cease all use of
the Trademarks except as provided in Paragraph 18. Licensee shall not apply
anywhere in the world, to register any copyright, trademark or trade name that
in any way mentions or uses the Trademarks or any trademark or trade name that
is confusingly similar to the Trademarks or trade names licensed hereunder,
without the express prior written consent of Aris.

     1.5 Ownership of Trademarks. Each Licensor hereby represents and warrants
that it is the sole owner of the Owned Trademarks, free and clear of all claims,
liens and encumbrances other than an existing lien in favor of CIT Commercial
Group Services, Inc. ("CIT") to secure a term loan with a current outstanding
principal balance of $7.5 million. Licensee agrees that the Trademarks and all
rights, registrations and entitlement thereto, together with all applications,
registrations and filings are and shall remain the sole and exclusive property
of Licensor.

     1.6 Use of Names. Except as authorized pursuant to this License, and only
to that extent, Licensee shall not use the Trademarks or any confusingly similar
or substantially similar word or names in its business name or otherwise in any
other manner, without the prior written consent of Aris.

     1.7 Best Efforts. Licensee shall use its best efforts to manufacture,
market, sell, distribute and advertise the Licensed Products in order to meet
the demand for the Licensed Products in the Licensed Territory and to uphold,
protect and defend the image and reputation of the Licensed Products and the
integrity of the Trademarks. Licensee further agrees to use its best efforts to
manufacture and ship not less than 75% of all approved, confirmed orders for
Licensed Products within a reasonable time of receipt of approved orders, as
hereinafter defined, or by the delivery date specified in such orders. Licensee
shall maintain a sales organization that will sell the Licensed Products and
that will be capable of effectively soliciting orders for sales of the Licensed
Products in the Territory.

     1.8 Assignment. As of the Effective Date, ECI and BP will transfer and
assign unto Licensee all of their respective right, title and interest in the BB
License Agreement and BP

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License Agreement, respectively, subject to any and all terms and conditions set
forth therein, and Licensee hereby assumes and agrees to fully and faithfully
perform all of the obligations, duties, and responsibilities of ECI and BP under
such License Agreements from and after the Effective Date. Licensee agrees to
hold ECI and BP harmless from and against all claims, losses, liabilities and
expenses, including reasonable attorney's fees, incurred as a result of or in
connection with any failure of Licensee to adhere to the aforementioned
covenant. ECI and BP each hereby agrees to hold Licensee harmless from and
against all claims, losses, liabilities and expenses arising under such License
Agreements as a result of their activities prior to the Effective Date. BP and
ECI shall pay actual royalties to the respective licensor under the BP and BB
License Agreements for sales made between January 1, 2001 and the Effective
Date. In connection with such assignments, Licensee shall, upon execution
hereof, pay to Aris for payment to the licensors under the BP and BB License
Agreements, the Minimum Guaranteed Royalty due for the first quarter of 2001 in
the amount of $495,000 and $127,500, respectively. Each party shall cooperate
with the other to obtain the consents of the licensors under the BP and BB
License Agreements.

     2. LICENSED TERRITORY.

     2.1 The Licensed products shall only be sold, marketed, distributed or
delivered exclusively by Licensee, either directly or indirectly, in the
Licensed Territory.

     2.2 Licensee shall not, directly or indirectly, sell, market, distribute or
deliver, the Licensed Products outside of the Licensed Territory without prior
written consent of Licensor, which consent may be withheld in the sole and
absolute discretion of the Licensor. Licensee shall not, directly or indirectly,
sell, distribute or otherwise deliver or cause to be sold, distributed or
delivered, the Licensed Products to any individual or entity whom Licensee
knows, or reasonably believes might, sell the Licensed Products outside the
Licensed Territory.

     2.3 Nothing contained herein shall in any way restrict or prohibit Licensor
from licensing, marketing, manufacturing, selling or distributing the Licensed
Products outside the Licensed Territory and Licensee shall have no rights
therein.

     3. TERM.

     3.1 Term. The initial term of this License shall begin on the Effective
Date and terminate on December 31, 2005 ("Term" or "Initial Term"). The First
Annual Period shall begin on the Effective Date and end on December 31, 2001.
Each Annual Period thereafter shall commence on January 1 and end on December 31
for each year respectively.

     3.2 Renewal. Licensee has the right to extend the term of this License for
four additional five year Terms of five years (each, a "Renewal Term"). Said
right must be exercised by providing written notice to Licensor at least six (6)
months and no more than nine (9) months, prior to the end of the Initial Term
and any Renewal Term. Said right may only be exercised if Licensee is in
substantial compliance with its obligations under this Agreement as of the time
of exercise of the option and as of the date of commencement of the Option. In
the event of any extension or renewal of this Agreement as provided herein, all
terms and conditions of this

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Agreement shall remain in full force and effect, except as otherwise set forth
in this Agreement. Should Licensor, in accordance with the terms of this
Agreement, exercise its right under this Agreement to terminate the rights of
Licensee hereunder, thereafter Licensee shall not have any option to extend the
term of this Agreement.

     4. ROYALTY PAYMENTS. In consideration for the license granted pursuant to
this Agreement, the Licensee shall pay to Licensor, a royalty based on Net Sales
of the Licensed Products ("Royalty") as follows:

                  Licensed Product:                           Royalty Rate:
                  ----------------                            ------------

                  XOXO(R)                                     9%
                  Members Only(R)                             8%
                  Fragile(R)                                  9%
                  Baby Phat(R)                                7%
                  Brooks Brothers Golf(R)                     7%

The Royalty for Brooks Brothers Golf(R) and Baby Phat(R) Products shall be in
addition to the amounts payable by Licensee under the BP and BB License
Agreements. Sales to off-price channels of distribution of Licensed Products
with respect to the Owned Trademarks may not exceed twenty-five (25%) percent of
the total sales of Licensed Product during each Contract Year. Licensee may only
sell Licensed Products under the Owned Trademarks at twenty (20%) percent or
more off its normal wholesale selling price thirty days or more after such
Licensed Products have been marked down at retail unless Licensor has approved
such earlier markdown in writing. The Royalty for closeouts, seconds or
irregulars up to 25% of Annual Net Sales shall be one-half of the applicable
Royalty Rate. The Royalty on any such sales in excess of that amount shall be at
the Royalty Rates set forth in the table above. Licensee may only sell
irregulars as they develop as long as they are clearly marked "irregular."

     4.1 Advance Payment of Royalty. On execution hereof the Licensee shall pay
to Licensor an advance in the amount of $3,160,000 which payment shall be
credited against the Guaranteed Minimum Royalty Payment due for the first
quarter and a portion of the second quarter of the First Year of the Term,
pursuant to Paragraph 4.4 below.

     4.2 Net Sales. As used herein, "Net Sales" shall mean Licensee's gross
sales (as determined by the gross invoice amount billed to customers) of the
Licensed Products, whether or not actually paid for, less actual returns,
freight and bona fide trade discounts actually granted by Licensee. No costs
incurred in the manufacturing, selling, advertising and/or distribution of the
Licensed Products or in the payment by Licensee of any taxes of any nature
whatsoever shall be deducted from the gross sales amounts or from any royalty
payable to Licensor, except in the event of a withholding tax on royalties due
to Licensor, nor shall any deduction be allowed for any uncollectible accounts
or allowances. Licensee shall provide Licensor reasonable documentation
evidencing any allowances, deductions, returns, credits, etc. Net Sales shall
not include sales to or by the Outlet Stores.

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     4.3 Minimum Sales. Licensee shall achieve the Minimum Net Sales in each
Year of the Term as follows:

         Year ended December 31                        Minimum Sales
         ----------------------                        -------------
                  2001                                 $  90,000,000
                  2002                                 $ 102,600,000
                  2003                                 $ 116,964,000
                  2004                                 $ 133,338,960
                  2005                                 $ 150,000,000

     4.4 Guaranteed Minimum Royalty Payment. Licensee shall pay to Licensor a
Guaranteed Minimum Royalty Payment for each year during the term hereof, in
accordance with the terms of Schedule "A" attached hereto (the "Guaranteed
Minimum Royalty"). For each year, the Guaranteed Minimum Royalty shall be
payable in equal quarterly installments on the first day of each quarter of the
year. On April 1, 2001, Licensee shall pay Licensor that sum of $890,000,
representing the balance of the Minimum Guaranteed Royalty for the first two
quarters of 2001.

     4.5 Manner of Payment; Quarterly Statements. The Royalties due Licensor
shall be calculated and paid within 30 calendar days of the end of each calendar
quarter during the term hereof, for Net Sales invoiced and delivered during the
immediately preceding calendar quarter, (the "Royalty Period). Concurrently with
the payment of each Royalty Payment, Licensee shall deliver to Licensor a
written statement showing any pre-payment of royalties made by Licensee to
Licensor and all of the Licensed Products sold and delivered during the
applicable period covered by the Royalty Payment together with such
documentation including, without limitation, bills of lading and letters of
credit, requested by Licensor to demonstrate the GPP on the Net Sales covered by
the Royalty Payment. Said statement shall be in the form and shall contain the
information as Licensor may from time to time direct. If the Licensor shall
change the form of and information required on the statement, then Licensor must
give the Licensee at least ninety (90) days notice of such change. Such royalty
statement shall be certified as accurate by a duly authorized officer of
Licensee, reciting on a customer by customer basis, the stock number, item,
units sold, description, quantity shipped, gross invoice, amount billed
customers less discounts, allowances, returns and reportable sales for each
Licensed Product. Such statements shall be furnished to Licensor whether or not
any Licensed Products were sold during the Royalty Period. If payment is not
timely made, an interest charge of prime plus 3% shall be added to the unpaid
balance following a cure period of ten (10) days until said balance, plus
accrued interest is paid in full.

     4.5.1 Licensee's obligation to pay Licensor the Royalty Payment shall
accrue upon the sale of the Licensed Products regardless of the time of
collection by Licensee. For purposes of this Agreement, a Licensed Product shall
be considered "sold" upon the date when such Licensed Product is billed,
invoiced, shipped or paid for, whichever event occurs first.

     4.5.2 If Licensee sells any Licensed Products to any party affiliated with
Licensee, or in any way directly or indirectly related to or under the common
control with Licensee, at a price less that the regular price charged to other
parties, the Royalty Payment

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payable to Licensor shall be computed on the basis of the regular price charged
to the other parties.

     4.5.3 Upon five days prior written notice to Aris, Licensee may pay to CIT
on behalf of Aris any regularly scheduled principal installment then due under
the Term Loan. Such loan is payable in quarterly installments of $500,000 on the
first day of each calendar quarter. Any such payment shall be credited against
Royalties due as of such payment date.

     4.6 Liquidated Damages. In the event that this License Agreement is
terminated as a result of Licensee's default, in addition to any amounts due for
Royalties (including Guaranteed Minimum Royalties), as liquidated damages,
Licensee shall pay Aris, within 30 days of termination, an amount equal to the
Guaranteed Minimum Royalty in effect for the year in which the Agreement is
terminated.

     4.7 Books, Records and Reports. Licensee shall keep true and accurate books
of accounts and records in accordance with generally accepted accounting
principles (GAAP) with respect to all transactions involving the Licensed
Products. Should the generally accepted accounting principles applied in the
Territory differ from US GAAP, Licensee will provide, to the satisfaction of
Licensor, conversion to US GAAP requirements.

     4.8 Annual Reports of Sales. For each Annual Period during the term hereof,
Licensee shall submit to Licensor an annual statement for the period ending
December 31. The year-end statement shall be submitted by March 15th of each
year for the previous calendar year. Each statement shall include a detailed and
cumulative account of all transactions of the Licensed Products, including,
without limitation, all sales, all returns, all bona fide trade discounts, the
direct cost of goods sold for Products included in Net Sales for such Year, all
royalties paid and payable, all Licensed Products returned as substandard, and
all orders canceled for non-delivery and such other information as Licensor may
from time to time reasonably request. The Chief Executive Officer and the Chief
Financial Officer of Licensee shall jointly and severally certify this report to
be correct.

     4.9 Purchase of Inventory; Transfer of Orders. Within four months of the
Effective Date, Licensee shall purchase, and Licensor shall sell, F.O.B.
Licensor's warehouses, all inventory (the "Inventory") of the Licensed Product
on hand as of the Effective Date, at Licensor's cost, substantially as set
forth on Schedule C, less a reserve for obsolete inventory determined in
accordance with GAAP. The Inventory as of the Effective Date shall consist of
the Inventory as of December 31, 2000 plus such items purchased, and minus such
items sold in the ordinary course of business since that date. Licensor's
inventory of Licensed Products as of December 31, 2000 is set forth on Schedule
C. Licensor shall update such Schedule as of the close of business on the day
immediately preceding the Effective Date. Licensee shall pay for the Inventory
purchased hereunder within two business days of its shipment from Licensor's
warehouse. Licensee shall use its best efforts to use the Inventory to fill
existing orders and any new orders for Licensed Products. Any Inventory not
purchased within four months of the Effective Date to fill orders shall be
purchased by, and paid for, by Licensee within 5 days after

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the expiration of such four month period. The Inventory will be delivered free
and clear of any claims, liens and encumbrances.

     5. ADVERTISING. Licensee shall not implement any advertising program or
place any advertisement using the Trademark or for the License Product not
pre-approved, in writing, by Licensor, which approval shall not be unreasonably
withheld or delayed.

     6. AUDIT. Licensee shall keep complete and accurate books and records at
its principal place of business covering all transactions relating to this
Agreement. Licensor and/or its duly authorized representatives shall have the
right, at reasonable business hours and upon seven (7) business days notice, at
the place where such records are normally maintained, to inspect, audit, examine
and make copies of such books and records and all other documents and material
in Licensee's possession or control regarding any transactions relating to this
Agreement. Licensor may not audit Licensee more than once in any Contract Year
unless prior audits have uncovered Royalty underpayments of five percent (5%) or
more.

     6.1 All books and records of Licensee relating to this Agreement shall be
retained by Licensee, and made available for Licensor review, for at least three
(3) years following termination of this Agreement.

     6.2 The receipt or acceptance by Licensor of any of the statements
furnished or any payments made by Licensee pursuant to this Agreement shall not
preclude Licensor from reviewing the books and records or from questioning the
accuracy thereof. Licensor shall have the right no more than one time per annual
period to audit Licensee's books to determine the correctness of
payments/amounts due Licensor hereunder. The cost of said audit shall be borne
by Licensor. However, if any audit reveals an underpayment by Licensee of five
percent (5%) or more, Licensee shall pay forthwith (and in no event later than
five (5) days after completion of said audit), the cost of the audit, and all
payments found to be due, with interest thereon, at the rate of prime plus 3%,
computed from the date said unpaid payments/amounts would have been due had they
been properly accounted for until the date they are actually paid.

     6.3 In the event that an audit or investigation of Licensee's books and
records is made, certain confidential and proprietary information of Licensee
may necessarily be made available to the person(s) conducting such audit or
investigation. It is agreed that such confidential and proprietary information
shall be retained in confidence by Licensor and its agents, employers and
representatives, and shall not be used by Licensor and its agents, employers and
representatives or disclosed to any third party without the prior written
consent of Licensee, unless otherwise required by law. Notwithstanding the
foregoing, such information may be used in any proceeding based on Licensee's
failure to pay its actual Royalty Payments or other obligations to Licensor.

     7. QUARTERLY FINANCIAL STATEMENTS. Not later than one hundred twenty (120)
days after Licensee's fiscal year-end, Licensee shall furnish Licensor with a
balance sheet as of the end of such fiscal year of Licensee certified by the
Chief Financial Officer of Licensee as being prepared in accordance with GAAP.

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     8. PRODUCT STANDARDS. Licensee shall not sell, distribute or otherwise
market the Licensed Products unless each product has received the prior written
approval of Licensor prior to distribution thereof, subject to the terms and
conditions of this Paragraph 8.

     8.1 Omitted.

     8.2 Approval of Design Concept. As soon as Licensee has developed a design
for a Licensed Product that it desires to produce, sell and market, Licensee
shall submit one (1) design sample or drawings thereof if samples are not
available, at no cost to Licensor, of said product, along with color and fabric
samples, if applicable, to Licensor for approval, along with one (1) complete
set of all promotional and advertising material associated therewith.

     8.2.1 Within ten (10) working days following the confirmed receipt of any
design sample, Licensor shall either approve or disapprove the product or
indicate changes to be made. Failure by Licensor to so note approval,
disapproval or changes within said ten (10) working days shall be deemed
approval. In the event changes are required, Licensee shall be required to
resubmit the revised design sample or drawings thereof if samples were not
originally submitted, for approval with the recommended changes. Subsequent
re-submissions shall occur until Licensor either approves or rejects the design
in question, subject to the foregoing 10 day period. However, in the event that
a dispute arises as to the determination of same, Licensor shall have the final
decision with respect thereto. Licensee shall not produce a Licensed Product for
manufacturing, marketing, sale, distribution, advertising or otherwise, which
has not received the approval of the Licensor as set forth herein. Once the
Licensor has approved the design samples, Licensee shall not materially depart
therefrom without Licensor's prior written consent.

     8.3 Approval of Production Samples. As soon as Licensee has produced its
samples for sale of any proposed Licensed Product that has received design
approval as set forth above; Licensee shall submit one sample of each Licensed
Product in the form that Licensee plans to have produced to Licensor for
approval, ("Sample"). All submissions of Samples for approval by Licensor shall
be at the sole expense of the Licensee. Licensee shall use such sample approval
forms and supply Licensor with such information in connection therewith, as
Licensor shall from time to time reasonably direct. Within ten (10) business
days following confirmed receipt, Licensor shall either approve, disapprove or
indicate changes to be made in the Sample. Failure by Licensor to so note
approval, disapproval or changes within said ten (10) business days shall be
deemed approval. In the event changes are required, the approval form shall be
resubmitted for approval with the recommended changes. Subsequent re-submissions
shall occur until Licensor either approves or rejects the sample in question,
subject to the foregoing 10 day period. All approvals shall be at Licensor's
reasonable discretion. An approved Sample of each Licensed Product shall be
provided to Licensor for its historical sample line at Licensee's cost. The
approved Samples shall be the standard by which future production quality shall
be judged. The Licensed Products produced for sale and/or delivery to any
customer of Licensee or anyone else, shall be of at least the same or better
quality than that which was approved by Licensor as a production sample
hereunder.

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          (a) Licensee shall be responsible for making all prototypes and
     samples as well as for the production of Articles, and Licensee will bear
     all cost in connection therewith.

     8.4 Approval Prior to Delivery. Licensee shall deliver no Licensed Product
to a customer unless it has received the design and sample approvals required by
paragraphs 8.1 and 8.2 above.

     8.5 Omitted.

     8.6 "Off Priced" Goods. During the Term of this Agreement, Off-Priced Goods
shall mean any Licensed Products that are either not sold by Licensee during the
normal course of business, seconds, overruns, damaged, off-priced, discontinued
or otherwise Licensed Products that are not sold during the selling season for
same (hereinafter referred to as "off-priced goods"). (1) Any and all
disposition of Licensed Products or articles constituting close-outs, damages,
off-price goods, excess inventory, irregulars or other items constituting other
than regular full price products sold to retail customers in the Territory, must
be approved by Licensor prior to disposition, which approval shall not be
unreasonably withheld, conditioned or delayed.

     (2) All identification shall be removed from all Licensed Products sold by
Licensee as other than first-quality merchandise unless to do so would render
such goods unsalable, in which case Licensee shall mark them to clearly
indicate, in a form acceptable to Licensor, that they are "irregular"; and such
Licensed Products and all close-out products shall be sold only if there is no
advertising or promotion of the Licensed Products in connection with the
irregular articles or close-out articles.

     9. QUALITY CONTROL. Licensor has the right to make on site inspections at
any reasonable time and on reasonable notice at manufacturing and distribution
facilities of Licensee or any of its third party manufacturers to ensure the
ongoing quality of the Licensed Products. If, at any time, Licensor reasonably
determines that a Licensed Product is of lesser quality than the production
sample approved pursuant to Paragraph 8.2 hereof, Licensor shall give Licensee
written notice thereof. Licensee shall take immediate steps to restore the
quality of and cure the defects upon receipt of said notice and cease production
and distribution of that Licensed Product until its quality is improved to the
satisfaction of Licensor.

     10. LABELING. All Licensed Products and all promotional and advertising
material shall contain all appropriate notices, whether copyright, trademark or
otherwise as required by Licensor and as may be required by law. On all labels
and hang tags, and Licensed Products the circle (R) or (TM) as appropriate shall
appear denoting United States Trademark registration or pending registration,
and where applicable, and subject to the direction of Licensor, all items
subject to copyright protection shall bear a proper and complete circle (C)
copyright notice as specified by law. Licensor shall have the right from time to
time to designate the exact symbols or language to be used by Licensee to denote
ownership by Licensor of any intellectual property, be it Trademarks, copyrights
or other property. Licensee understands the importance of

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maintaining the security and integrity of all trademarked labeling used on the
Licensed Products. Licensee further agrees to take commercially reasonable
efforts to maintain a strict, accurate, and current inventory of all labels
throughout the manufacturing process of the Licensed products so as to preclude
any diversion of the labels to other than authorized licensees. No additional
labels, hang tags or identification shall appear on the Licensed Products unless
prior written approval of Licensor is obtained, however, Licensee may include a
separate label of its sole choice for care, content, size and country of origin.

     10.1 Label Inventory. In each annual or year-end statement, Licensee shall
furnish to Licensor a current inventory of all labels designated in Paragraph
10.

     11. TRADEMARKS & COPYRIGHTS. Licensor may seek, in its own name and at its
own expense, appropriate patent, trademark or copyright protection for the
Licensed Products.

     11.1 It is understood and agreed that Licensor shall retain all right,
title and interest in the Trademarks and copyrights and designs of the Licensed
Products, as well as any modifications or improvements made thereto by Licensee.
Upon termination or expiration of this Agreement, Licensor shall be permitted to
make use of same for any purpose whatsoever, and Licensee shall have no right to
any of the foregoing.

     11.2 Licensee agrees to execute any documents reasonably requested by
Licensor to effect any of the above provisions.

     11.3 Licensee acknowledges Licensor's exclusive rights in the Trademarks
and designs and further acknowledges that the designs and/or the Trademarks are
unique and original to Licensor and that Licensor is the owner thereof. Licensee
shall not, at any time during or after the effective Term of the Agreement
dispute or contest, directly or indirectly, Licensor's exclusive right and title
to the designs and/or the Trademarks or the validity thereof. Licensor however,
makes no representation or warranty with respect to the validity of any patent,
trademark or copyright, which may issue or be granted therefrom.

     11.4 Licensee acknowledges that the Trademarks have acquired secondary
meaning.

     11.5 Licensee agrees that its use of the designs of the Licensed Products
and/or the Trademarks inures to the benefit of Licensor and that the Licensee
shall not acquire any rights in the designs of the Licensed Products and/or the
Trademarks.

     11.6 The parties acknowledge that the faithful representation of the
Trademarks, as they appear in the applications and registration of the Office of
the Patent and Trademark Office of the United States and in applications and
registration in the Licensed Territory, is mandatory on the part of Licensee
with respect to any reproduction used by Licensee, whether it appears on the
Licensed Products or in print or is otherwise displayed in the media. Licensee
further agrees that the Trademarks will always be faithfully and exactly
reproduced, unless prior written authorization for modification thereof is
received from Licensor.

                                      -11-
<PAGE>

     11.6.1 Each first use of the Trademarks by Licensee shall be submitted to
Licensor for approval as set forth in this Agreement.

     11.7 Copyright or Trademark Infringement or Misuse & Litigation. If
Licensee becomes aware of any infringement of Licensor's copyrights or
Trademarks or if Licensee becomes aware of any marks confusingly or
substantially similar to the Trademarks, Licensee shall immediately notify
Licensor thereof.

     11.7.1 Prosecution of Infringement Action. Licensor shall have the first
option in its discretion, to institute and prosecute lawsuits against third
persons for infringement of the Trademarks. Licensor shall not be required to
institute legal action if, in its sole and absolute discretion, the probability
of success therein or results of successful litigation do not justify the time
and expense thereof. In the event that Licensor determines in its sole and
absolute discretion not to prosecute any such litigation within 45 days of
receiving a written request from Licensee to commence such action, then in such
event Licensee shall have the right, in its discretion, to institute and
prosecute lawsuits against third persons for infringement of the rights licensed
in this Agreement only. Each party shall cooperate fully with each other in any
proceeding to protect the Trademarks and copyrights and other intellectual
property rights granted herein.

     11.8 Corporate Name. Licensee shall not be permitted to use any of
Licensor's trademarks or anything substantially similar thereto as part of its
corporate name.

     12. WARRANTIES & OBLIGATIONS.

     12.1 Each Licensor represents and warrants that; (a) it has the right and
power to grant the licenses herein; and (b) that it is not party to any other
agreements in conflict herewith, (c) each Licensor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to do business as a
foreign corporation in each additional jurisdiction where the failure to so
qualify would have a material adverse effect. Each Licensor has all requisite
power and authority (corporate and otherwise) to own its properties and to carry
on its business as now being conducted and to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby; (d) the execution, delivery and performance by each Licensor of this
Agreement and the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of each Licensor; (e) this Agreement
has been duly executed and delivered by each Licensor, and (assuming due
execution and delivery by Purchaser) constitutes a valid and binding obligation
of each Licensor, enforceable against each Licensor in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally or by
general equitable principles; and (f) no other person or entity has any claims
or rights in or to any interest being granted to Licensee hereunder.

     12.2 To the best of Licensor's knowledge, it has no actual knowledge that
the Trademarks infringe any valid right of any third party, and no claims have
been made or actions commenced with respect thereto.

                                      -12-
<PAGE>

     12.3 Licensee shall be solely responsible for the manufacture, production,
sale and distribution of the Licensed Products and will bear all related costs
associated therewith.

     12.4 Licensee represents and warrants that it has the right and power to
enter into this Agreement and that there are no other agreements with any other
party in conflict herewith. 12.5 Other than with respect to the amounts due for
first quarter minimum guaranteed royalties as set forth in Section 1.8, neither
ECI nor BP is in default under the BP or BB License Agreement.

     12.6 Brooks Brothers has informed ECI that it may sell excess inventory of
products covered by the BB Agreement to off-price retailers.

     12.7 Following the Effective Date, Licensors shall continue advertising the
Licensed Products covered by the Owned Trademarks to the same extent currently
advertised and to the extent reasonably necessary to support continued growth of
the sales of Licensed Products at its sole cost and expense.

     12.8 Licensee represents, warrants and agrees that, as of the Effective
Date and during the Initial Term, it has, and will have, capital of no less than
$7 million.

     13. INDEMNITY.

     13.1 Licensor shall indemnify, defend and hold Licensee, its officers,
directors, employees and agents harmless from any and all liability, reasonable
attorney's fees, costs and expenses from any claims asserted against Licensee or
Licensor with respect to Licensee's use of the Trademarks only in accordance
with the terms of this Agreement. Notwithstanding the foregoing, this indemnity
shall only be applicable in the event of a final decision by a court of
competent jurisdiction from which no appeal of right exists. This indemnity does
not cover any modifications or changes made to the Trademarks by Licensee.
Licensor shall be entitled, at its option to provide legal counsel to represent
Licensee, reasonably acceptable to Licensee, at Licensor's cost. Licensor shall
not be required to pay for Licensee's independent legal counsel, if Licensor
provides legal counsel to represent Licensee with respect to any claim. Nothing
herein is intended to nor shall it relieve Licensee from liability for its own
acts, omissions, or negligence.

     13.2 Licensee shall defend and indemnify Licensor, its officers, directors,
agents, and employees against all costs, expenses and losses (including
reasonable attorney fees and costs) incurred through claims of third parties
against Licensor or Licensee based on the manufacture, marketing, sale,
advertising (except to the extent that any claim arises out of any advertising
expressly approved in writing by Licensor), distribution of the Licensed
Products designed by Licensee including, but not limited to, actions founded on
product liability on all products manufactured by Licensee.

                                      -13-
<PAGE>

     13.3 Each party will promptly notify the other of any claims or actions to
which the foregoing indemnification may apply. Licensee shall not settle any
claim with respect to the Trademarks or the Licensed Products without the prior
written consent of Licensor, which shall not be unreasonably withheld.

     14. GOODWILL. Licensee recognizes the great value of the publicity and
goodwill associated with the Trademarks, Copyrights and designs of the Licensed
Products, and agrees that the value of the goodwill exclusively belongs to
Licensor.

     15. COPYRIGHT NOTICE. Licensee shall place a legally sufficient copyright
notice which protects the rights of Licensor on each and every design, style,
garment, creation or writing which is capable of protection pursuant to the
copyright laws of the United States of America and the Licensed Territory. Any
public distribution of goods bearing copyrightable works of Licensor by Licensee
without a copyright notice as required above, is unauthorized and a violation of
this Agreement.

     16. STOCK ISSUANCES. (a) Five days following the Effective Date and on each
of the first four anniversary dates of Effective Date. Aris shall issue to
Licensee such number of shares of its common stock determined by dividing
$1,000,000 by the average closing price of such Common Stock for the five
trading days immediately preceding the date on which such shares are to be
issued. (b) Licensee hereby represents and warrants to Aris that: (i) the Shares
to be acquired by Licensee pursuant to this Agreement are being, and will be,
acquired for its own account and with no intention of distributing or reselling
such Shares or any part thereof in any transaction that would be in violation of
the securities laws of the United States; (ii) Licensee understands that the
Shares have not been registered under the Securities Act of 1933, as amended
(the "Act"), and cannot be resold unless they are subsequently registered under
the Act or unless an exemption from such registration is available thereunder;
and (iii) Licensee is an "accredited investor" within the meaning of Rule 501(a)
under the Act, and by reason of its business and financial experience.

     17. TERMINATION. The following termination rights are in addition to the
termination rights provided elsewhere in this Agreement.

     17.1 Immediate Right of Termination. Licensor shall have the right to
immediately terminate this Agreement by giving written notice to Licensee in the
event that Licensee does any of the following:

     17.1.1 Licensee fails to pay the Royalties (whether actual or Minimum
Guaranteed) or amounts due on the Inventory Note within fifteen (15) days of
their due date upon five (5) days prior notice.

     17.1.2 Licensee, after having commenced the sale of the Licensed Products,
fails to continuously sell Licensed Products for two (2) consecutive selling
seasons;

     17.1.3 Licensee files a petition in bankruptcy or is adjudicated a bankrupt
or insolvent, or makes an assignment for the benefit of creditors, or an
arrangement pursuant any

                                      -14-
<PAGE>

bankruptcy law, or if the Licensee discontinues its business or a receiver is
appointed for the Licensee or for the Licensee's business and such receiver is
not discharged within ninety (90) days;

     17.2 Termination After Notice. Subject to the provisions contained in
Paragraph 17.7 below, Licensor shall have the right to terminate this Agreement
upon the occurrence of the following events:

     17.2.1 Omitted.

     17.2.2 Licensee breaches any provision of this Agreement, (other than those
specifically noted in Paragraph 17.1 above) including, but not limited to, the
unauthorized assertion of rights in the designs and/or the Trademarks;

     17.2.3 Licensee fails to promptly discontinue the distribution or sale of
the Licensed Products, Trademarks or Copyrights or the use of any packaging or
promotional material which does not contain the requisite notices or labels;

     17.2.4 Licensee has not taken steps to restore the quality of and cure the
defects with respect to the Licensed Products in accordance with Paragraph 9 of
this Agreement.

     17.2.5 Licensee fails to obtain the approval of Licensor for any Licensed
Products as required by Paragraph 8 above, or Licensee sells, manufactures or
distributes a Licensed Product without the prior approval of Licensor as
required by the terms of this Agreement.

     17.3 Intentionally Omitted.

     17.4 Intentionally Omitted.

     17.5 Default. Subject to the provisions of Paragraph 17.7, in addition to
the foregoing rights of Licensor, either party may terminate this Agreement and
the rights of the other party if either party is in default or has materially
breached any of the terms of this Agreement, or any additional or supplemental
agreements that may be entered into between the parties.

     17.6 Acts Detrimental to the Brand. Licensee acknowledges that it is only
one of multiple licensees of the Trademark; that its actions and omissions can
greatly impact the business of Licensor, the business of other licensees of
Licensor and the value of the Trademark(s); and that the quality of Licensee's
production, timely delivery of approved orders, and conduct of its business can
greatly impact the business of other licensees of Licensor and the value of the
Trademarks. As a result, in the event that the Licensee takes any action which
is, in the reasonable opinion of Licensor, materially harmful to the Trademarks
or the business of Licensor, Licensor's other licensees, or the Trademarks, then
Licensor shall have the right to terminate all rights of Licensee under this
Agreement.

                                      -15-
<PAGE>

     17.7 Cure Period. Before Licensor terminates the rights of Licensee under
this Agreement, (except with respect to the provisions contained in Paragraph
17.1 which are grounds for immediate termination), Licensor shall give Licensee
written notice, setting forth the basis for such termination, default or failure
to perform. Licensee shall have twenty-one (21) days from and after mailing of
such written notice to cure such default, breach or failure to perform. In the
event that such breach, default or failure to perform is not cured within said
twenty-one (21) days (or, if not capable of being cured within such period,
adequate steps to cure have not been commenced within such period, provided
Licensee diligently continues to pursue such curative steps) then Licensor may
forthwith terminate all of Licensee's rights hereunder.

     18. POST TERMINATION RIGHTS. All of the following rights and duties shall
be applicable upon any termination of Licensee's rights under this Agreement,
whether by expiration of the term hereof or by earlier termination pursuant to
the provisions hereof.

     18.1 Inventory. Not less than thirty (30) days prior to the expiration of
this Agreement or earlier termination thereof, Licensee shall provide Licensor
with a complete inventory of all inventory of the Licensed Products then on-hand
and all piece goods for same (the "Inventory").

     18.2 Deletion of Trademark. Upon expiration or earlier termination of this
Agreement, Licensee shall take all steps necessary to delete any references to
the Trademarks and similar words from any signs, business names, or any use in
advertising, print or otherwise, consistent with its liquidation rights
contained in Section 18.4. Notwithstanding the foregoing, in the event that this
Agreement is terminated for cause as provided in Paragraphs 17.1 and 17.2 above,
then Licensee shall delete any references to the Trademarks and similar words
anywhere same is used within thirty (30) days from and after the date of such
termination.

     18.3 Disposition of Samples, Patterns, Markers, Labels and Fasteners on
Termination. Any samples, patterns, markers and labels or fasteners (snaps,
buttons, etc.) on which the Trademarks appear, which are not affixed to a
finished Licensed Products or necessary for work in process at the time of
termination, shall be delivered to Licensor by Licensee within sixty (60) days
of the expiration or termination of this Agreement, except as provided in
Paragraph 18.4 below. An inventory of such items on hand upon expiration or
termination of this Agreement shall be delivered to Licensor within twenty (20)
days of the expiration or termination. All such items of inventory shall be used
in accordance with this provision and no other disposition of these items shall
occur. Licensor shall pay Licensee for all such labels and fasteners at a price
equal to Licensee's cost thereof, including freight, and at no cost other than
freight for such samples, patterns and markers; such payment to be made within
sixty (60) days after delivery.

     18.4 Liquidation of Goods. Upon the expiration or termination of Licensee's
rights under this Agreement, Licensee shall have the right to complete all work
in process, and to complete bona fide purchase orders in hand on the date of
such expiration or termination. Licensee shall have the right to use the items
of inventory listed in Paragraph 18.3 above for completion of work in process.
Licensee shall no longer have the right to use the Trademarks in any form or in
any manner, except for the purpose of selling off the existing inventory of the

                                      -16-
<PAGE>

Licensed Products. Licensee shall have one hundred eighty (180) days from the
date of termination of this Agreement to dispose of its inventory of the
Licensed Products. If any of the Licensed Products remain unsold after the
expiration of one hundred eighty (180) days, Licensee shall then remove the
Licensed Products from its inventory and return such unsold inventory to
Licensor at no cost to Licensor, other than freight. All sales of the remaining
inventory shall be sold in accordance with the terms of this Agreement, and the
accounting and payment shall be made within thirty (30) days after the close of
the one hundred eighty (180) day sell off period.

     18.5 Except as provided in Section 18.4 above, upon expiration or earlier
termination of this Agreement, all of the rights of Licensee under this
Agreement shall forthwith terminate and immediately revert to Licensor and
Licensee shall immediately discontinue all use of the property and the like, at
no cost whatsoever to Licensor.

     18.6 Licensee hereby agrees that, at the expiration or earlier termination
of this Agreement for any reason, Licensee will be deemed automatically to have
assigned, transferred and conveyed to Licensor any and all rights, goodwill or
other right, title or interest in and to the Trademarks, trade dress,
copyrights, designs or any other intellectual property rights which may have
been obtained by Licensee as a result of this License.

     19. ASSUMPTION OF CERTAIN OPERATIONS AND OBLIGATIONS.

     19.1 Assumption of Operations. Licensee shall assume and discharge in due
course all liabilities arising from and after the Effective Date with respect to
the operations of XOXO, BP and ECI (as related to Members Only(R) and Brooks
Brothers Golf(R)) as they relate to the manufacture, marketing, promotion, sale
and distribution of Licensed Products including, without limitation, all payroll
and related benefits, work in process and open letters of credit, which letters
of credit are set forth on Schedule D. In connection with the foregoing,
commencing four weeks after the Effective Date, all of the employees involved
with such operations shall become employees of Licensee except for those
persons: (x) employed at Licensor's New Bedford, Massachusetts warehouse; (y) by
the retail stores (other than at the outlet stores); and (z) by Aris in a
corporate or finance capacity. Notwithstanding the foregoing, Licensee shall
advance to Licensor, one day prior to its payment date, the full amount of all
payroll and payroll related costs incurred in connection with the operations
which become due after the Effective Date. Licensee shall have full control and
authority with respect to operations including, without limitation, decisions to
employ or terminate employment. With respect to obligation subject to
contractual commitments, Licensee may terminate the services or property subject
to such commitments without liability to Licensee, but must pay for any such
assets or services while using them. Notwithstanding the foregoing, from and
after the Effective Date, Licensee hereby agrees to assume and fully and
faithfully perform all of the obligations, duties and responsibilities of the
tenant under (A) the Lease Agreements listed on Schedule E (except that, upon
thirty days written notice to Aris given 60 days after the Effective Date, it
may elect not to continue the lease for the Brooks Brothers Golf premises); (B)
the employment agreements with Holly Fiene, Gregg Fiene, Steven Feiner, George
Gatesy and Tom Rail (but with respect to Rail for the six months following the
Effective Date unless Licensee elects to continue to employ him); and (C) the
other leases or agreements set forth on Schedule F. Notwithstanding the
foregoing, Licensee shall not be responsible for any severance payments to Holly
Fiene, Gregg

                                      -17-
<PAGE>

Fiene or Steven Feiner under their respective employment agreements. One-half of
the amount payable to Steven Feiner (up to $250,000 per year) shall be credited
against the royalties due, which shall be taken in equal quarterly installments.
Licensee shall assume the leases and other agreements identified on Schedule G
that relate to operations in California for the 90 days following the Effective
Date. In addition, for the 90 days following the Effective Date, Licensee shall
reimburse Aris, on demand, for one-half of all costs, expenses and payment due
under the agreements and leases identified on Schedule G that relate to
operations in New York. Thereafter, Licensee will be deemed to have assumed each
such lease or agreement (whether relating to California or New York) unless,
within 60 days after the Effective Date, it shall have given written notice to
Aris that it elects not to assume such lease or agreement after the 90th day, in
which case it shall deliver possession to Aris of the premises or equipment
covered by such lease or agreement. Licensee agrees to hold the respective
tenant and Aris harmless from and against all claims, losses, liabilities and
expenses, including reasonable attorney's fees, incurred as a result of or in
connection with any failure of Licensee to perform any obligation under this
Section. Aris hereby agrees to hold Licensee harmless from and against all
claims, losses, liabilities and expenses arising under such Lease as a result of
the respective tenant's activities prior to the Effective Date. Licensee has
permission to hire Joseph Puritano on an "at will" basis without assuming his
Agreement.

     19.2 Sublet of Outlet Store Leases and Business. As of the Effective Date,
Marcade shall license to Licensee all of the Outlet Stores identified on
Schedule B. Licensee agrees to hold Aris harmless from and against all claims,
losses, liabilities and expenses, including reasonable attorney's fees, incurred
as a result of or in connection with any failure of Licensee to adhere to the
aforementioned covenant. Aris hereby agrees to hold Licensee harmless from and
against all claims, losses, liabilities and expenses arising under the Leases as
a result of Marcade's activities prior to the Effective Date. On the Effective
Date, the employees of the Outlet Stores shall become Licensee's employees, and
Licensee shall have full control and authority over such employees and the
operations of such Stores and shall pay all costs associated with the operation
of such Stores.

     19.3 Reimbursement by Licensor. Licensor shall reimburse Licensee for any
"markdown money" or similar credit demanded by any of Licensor's customers with
respect to sales made by Licensor prior to the Effective Date. As a condition to
being entitled to such credit, Licensee shall provide Licensor with prompt
written notice of any such claimed credit and Licensor shall be given an
opportunity to negotiate such claimed credit with the customer. If Aris does not
cause the customer to reverse the chargeback or credit within 30 days of
Licensee's notice to Licensor of the chargeback or credit, Licensee may credit
it against the next Royalty Payment due.

     19.4 Continued Support for XOXO Licensees. Licensee shall provide such
assistance to XOXO's existing licensees as XOXO is required to provide under its
license agreements.

     19.5 Sales to XOXO Retail Stores. With respect to any XOXO Retail Stores
owned or controlled by Licensor, Licensee shall sell to Licensor any Licensed
Products manufactured by Licensee pursuant to this Agreement and ordered by
Licensor in reasonable

                                      -18-
<PAGE>

quantities and same shall be delivered to Licensor's Retail Stores in accordance
with the terms of such order(s). The price to Licensor for such Products shall
be 20% less than Licensee's regular wholesale prices. All Licensed Products so
ordered by Licensor shall be paid by Licensor to Licensee within 120 days of the
sale of same. No Royalty Payments shall be due with respect to such sales.

     19.6 Cooperation. The parties will cooperate with each other to avoid
defaults under any assumed agreement by virtue of any assignment or assumption
without obtaining any consent from the other party to such agreement.

     20. NON-ASSIGNABILITY. Neither this Agreement nor any of the Licensee's
rights hereunder are assignable by Licensee, without the prior written consent
of Licensor, which shall not be unreasonably withheld or delayed. The transfer
of more than fifty (50%) percent in the aggregate of the shares of beneficial
ownership of Licensee will be deemed an assignment. Upon notice to Licensee,
Licensor may assign its rights under this Agreement or the payments to be made
by Licensee to Licensor hereunder.

     20.1 Sublicense. Licensee may not sublicense its rights under this
Agreement without the prior written consent of Licensor, which approval or
disapproval shall be subject to the sole and absolute discretion of Licensor.
Any sublicense or attempted sublicensing by Licensee without the prior written
consent of Licensor shall constitute a breach of this Agreement. Any sublicense
consented to by Licensor must provide that the sublicensee shall be bound by all
of the terms and conditions of this Agreement. Approval by Licensor to one
sublicense shall not relieve the Licensee of any of its obligations under this
Agreement, including, without limitation, its obligations set forth on Schedule
"A".

     20.2 Manufacturing. Licensee shall have the right to subcontract the actual
manufacture of the Licensed Products, provided that all such subcontractors
agree to be bound by the terms and conditions of this Agreement in all respects
or such sub-contractor Agreement as may be provided by Licensor to Licensee
specifically for use by Licensee's sub-contractors. Prior to any third party
manufacturing any Licensed Product, it must enter into an Agreement in the Form
attached hereto as Schedule C. Licensee must provide Licensor with the
appropriate acknowledgment of the terms of this Agreement or such sub-contractor
Agreement as prepared by Licensor, from such subcontractor prior to using such
subcontractor. In the event Licensee does its own manufacturing, it must comply
with all of the terms and conditions of the Manufacturing Agreement.

     20.3 No Hypothecation. Licensee shall not pledge, hypothecate, mortgage,
grant liens in or upon, grant security interests in, or use as collateral any of
Licensee's rights with respect to the Trademarks under this Agreement.

     21. GENERAL PROVISIONS.

     21.1 Notices. Any notice required to be given hereunder shall be in writing
and delivered personally to the other designated party at the address set forth
below or mailed by certified or registered mail, return receipt requested or
delivered by a recognized national

                                      -19-
<PAGE>

overnight courier service, in a sealed envelope, with postage thereon fully paid
and addressed as follows:

         If to Licensor:   Mr. Arnold Simon                   cc: Sam Wilson
                           Aris Industries
                           1411 Broadway, 12th Floor
                           New York, New York  10018
                           Fax:  (212) 642-4597

         With copies to:   Mr. Robert Forman
                           Shapiro, Forman & Allen
                           380 Madison Avenue
                           New York, New York  10017
                           Fax:  (212) 557-1275

         If to Licensee:   Mark Stern, President
                           Eagle Apparel Group/ Groupa Xtra
                           141 West 36th Street
                           New York, NY
                           Fax: (212) 971-0877

         With copies to:   Stephen Fuerst, Esq.
                           6617 Avenue T
                           Brooklyn, NY 11234
                           Fax: (718) 972-9110

     Either party may change the address to which notice or payment is to be
sent by written notice to the other in accordance with the provisions of this
Paragraph.

     21.2 Entire Agreement. This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof and supersedes all
prior negotiations, dealings, agreements and understandings of the parties in
connection therewith and is intended as a final expression of their Agreement.

     21.3 Severability. The invalidity or unenforceability of any provision
hereof shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted.

     21.4 Amendment. No amendment, modification or alteration of this Agreement
shall be valid unless it is in writing and signed by all parties hereto.

     21.5 No Agency or Joint Venture. This Agreement does not constitute and
shall not be construed as constituting an agency, partnership or joint venture
between the parties. Licensee shall have no right to obligate or bind Licensor
in any manner whatsoever, and nothing herein contained shall give, or is
intended to give, any rights of any kind to any third persons.

                                      -20-
<PAGE>

     21.6 Consent to Injunction. Each party acknowledges that the rights and
privileges granted hereunder are of a special, unique and extraordinary nature
and character, and that a breach of any provision hereof would cause the other
party irreparable injury and damage, the measure of which could not be
adequately compensated at law. Neither this provision nor the exercise by a
party of any of its rights hereunder shall constitute a waiver by such party of
any other rights which it may have to damages or otherwise.

     21.7 Governing Law. Each party irrevocably submits to the exclusive
jurisdiction and venue of any New York State or United States Federal Court
sitting in the City and County of New York over any suit, action or proceeding
arising out of or related to this Agreement or the transactions contemplated
hereby, and waives any objection to venue of such courts.

     21.8 Service of Process. Service of process on any party hereto in any
action arising out of or relation to this Agreement shall be effective if sent
in accordance with the procedures set forth in Section 21.1.

     21.9 Attorney Fees and Costs. If either party to this Agreement shall bring
any action against the other, declaratory or otherwise, arising out of this
Agreement, the losing party shall pay to the prevailing party a reasonable sum
for attorney fees incurred in bringing or defending such suit and/or enforcing
any judgment granted therein, all of which shall be deemed to have accrued upon
the commencement of such action and shall be paid whether or not such action is
prosecuted to judgment. Any judgment or order entered in such action shall
contain a specific provision providing for the recovery of attorney fees and
costs incurred in enforcing such judgment. For the purposes of this section,
attorney fees shall include, without limitation, fees incurred in the following:
(1) post judgment motions; (2) contempt proceedings; (3) garnishment, levy, and
debtor and third party examinations; (4) discovery; and (5) bankruptcy
litigation.

     21.10 Interpretation. The parties hereto are sophisticated and have been
represented by lawyers throughout this transaction, who have carefully
negotiated the provisions hereof. As a consequence, the parties do not believe
that any presumptions relating to the interpretation of contracts against the
drafter of any particular clause should be applied in this case and therefore
waive its effects.

     21.11 Recitals. The recitals set forth on the first page of this Agreement
are incorporated herein by this reference as though fully set forth herein.

     21.12 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of Licensee and its successors and assigns and shall
also be binding upon and shall inure to the benefit of Licensor and its
successors and assigns.

     21.13 Headings. The subject headings of the Sections of this Agreement are
included for purposes of convenience only and shall not affect the construction
or interpretation of any term or provisions hereof.

                                      -21-
<PAGE>

     21.14 Parties Benefitted. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provisions give any third persons any right of
subrogation or action against any party to this Agreement.

     21.15 Confidentiality. The parties hereto agree that the terms of this
Agreement shall be kept confidential and not disclosed to any third party except
in the ordinary course of business or if required by law, without the prior
written consent of the other party hereto. The parties acknowledge that prior to
and/or during the term of this Agreement that they may be given access to or
become acquainted with "Confidential Information" (as such term is defined
below), which is of great value to the other party. The parties further
acknowledge that maintaining the confidentiality of all such Confidential
Information is critically important to each party. As a result of the foregoing
the parties shall not either during or after the term of this Agreement, use or
disclose, directly or indirectly, to anyone other than representatives of the
other or other persons designated by such party, any information, data,
documents, customer list(s), designs and styles, manufacturing procedures,
company policies, or other materials of any kind or nature in any way related to
each party, their business affairs or operations, even if acquired by either
party in the course of the performance of their obligations hereunder and even
if provided to such party by the other ("Confidential Information"). The parties
acknowledge that a breach of the provisions of this paragraph will cause the
non-breaching party irreparable harm for which there is no adequate remedy at
law, and therefore, in addition to any and all other rights or remedies
available to the non-breaching party, the non-breaching party shall be entitled
to injunctive relief and all other remedies provided by law or equity. Such
remedies shall include, without limitation, the right to prevent dissemination
of any Confidential Information.

     21.16 Further Action. Each party hereto agrees to perform any further acts
and to execute and deliver any documents, which may be reasonably necessary to
carry out the provisions hereof.

     21.17 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, which shall be deemed
to constitute one and the same instrument.

     21.18 No Implied Waivers. The failure of either party at any time to
require performance by the other party of any provision hereof shall not affect
in any way the full right to require such performance at any time thereafter.
The waiver by either party of a breach of any provision hereof shall not be
construed or held to be a waiver of the provision itself.

     22. SHOWROOM FOR LICENSED PRODUCTS AND TRADE SHOWS. Licensee acknowledges
the importance of providing customers with the ability to view all of the
Licensee's Licensed Products in one location, and will provide a segregated
portion of its showroom exclusively for the display of Licensed Products. With
respect to Licensee's showroom, Licensee shall provide, display and maintain
complete current sample lines of all its Licensed Products.

                                      -22-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto, have entered into this Agreement
effective on the day and year set forth above.

     LICENSOR:

       EUROPE CRAFT IMPORTS, INC.

       ---------------------------------
       By: Arnold Simon, Chief Executive Officer       Dated: January ___, 2001
       BP CLOTHING COMPANY, INC.

       ---------------------------------
       By: Arnold Simon, Chief Executive Officer       Dated: January ___, 2001
       ARIS INDUSTRIES, INC.

       ---------------------------------
       By: Arnold Simon, Chief Executive Officer       Dated: January ___, 2001
       XOXO CLOTHING COMPANY, INCORPORATED

       ---------------------------------
       By: Arnold Simon, Chief Executive Officer       Dated: January ___, 2001
       MARCADE REALTY CORP.

       ---------------------------------
       By: Arnold Simon, Chief Executive Officer       Dated: January ___, 2001

     LICENSEE:

       GRUPO EXTRA OF NEW YORK, INC.

       ---------------------------------
       By: Mark Stern                                  Dated: January ___, 2001

                                      -23-
<PAGE>

                                   SCHEDULE"A"

     1. TRADEMARKS:

          Members Only(R), XOXO(R), Fragile(R), Brooks Brothers Golf(R) and Baby
     Phat(R)

     2. LICENSED TERRITORY:

          United States of America, Puerto Rico, the Caribbean Islands and
     Israel

     3. LICENSED PRODUCTS:

          Under the XOXO trademark: women's clothing, jeanswear and sportswear

          Under the Fragile trademark: jeanswear and sportswear

          Under the Members Only trademark: sportswear and outerwear

          Under the Brooks Brothers Golf trademark: only as permitted in the BB
     License Agreement.

          Under the Baby Phat trademark: only as permitted in the BP License
     Agreement.

XOXO(R), Fragile(R) and Members Only(R) are sometimes referred to as the "Owned
Trademarks."

     4. GUARANTEED MINIMUM ROYALTY:

                  Annual Period Ending               Minimum Royalty
                  --------------------               ---------------

                  December 31, 2001                  $   8,100,000

                  December 31, 2002                  $   9,234,000

                  December 31, 2003                  $  10,526,000

                  December 31, 2004                  $  12,000,500

                  December 31, 2005                  $  13,500,000

     For each year thereafter, the Guaranteed Annual Minimum Royalty shall be
the greater of $13,500,000 or the Royalties due based on sales in the
immediately preceding year.

                                      -24-EXHIBIT 10.126

                                                                  EXECUTION COPY

                          SECURITIES PURCHASE AGREEMENT

                         dated as of February ____, 2001

                                  by and among

                              ARIS INDUSTRIES, INC.

                                       and

                       XOXO CLOTHING COMPANY, INCORPORATED

                                       and

                              KC ARIS FUND I, L.P.

<PAGE>

     SECURITIES PURCHASE AGREEMENT, dated as of February ___, 2001 (the
"Agreement"), between Aris Industries, Inc., a New York corporation (the
"Company"), and its indirect wholly-owned subsidiary, XOXO Clothing Company,
Incorporated, a Delaware corporation ("XOXO"), on the one hand, and KC Aris Fund
I, L.P., a California limited partnership ("Purchaser"), on the other.

     WHEREAS, XOXO is a wholly-owned subsidiary of ECI, which is a wholly-owned
subsidiary of the Company;

     WHEREAS, XOXO's business generates a majority of the Company's revenues;

     WHEREAS, the Company and XOXO are in need of capital; and

     WHEREAS, the Purchaser is willing to provide such capital on the terms and
conditions set forth herein;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     1.1  Definitions. As used in this Agreement, and unless the context clearly
requires a different meaning, the following terms have the meanings respectively
indicated:

          "Act" means the Securities Act of 1933, as amended, or any successor
act or statute regulating the transactions contemplated hereby that were
formerly regulated under said Act that may be enacted after the date hereof, and
the rules and regulations promulgated thereunder.

          "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

          "Agreement" means this Agreement, as the same may be amended,
supplemented or modified in accordance with the terms hereof.

                                      -1-

<PAGE>

          "Business Day" means any day which is not a Saturday or Sunday, or a
day on which banking institutions are authorized or required to close in the
city of Los Angeles, California.

          "Closing" has the meaning provided therefor in Section 2.1 of this
Agreement.

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

          "Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Act.

          "Common Stock" means the Common Stock, $.01 par value, of the Company.

          "Company" means Aris Industries, Inc., a New York corporation.

          "ECI" shall mean Europe Craft Imports, Inc., a New Jersey corporation.

          "GAAP" shall mean United States Generally Accepted Accounting
Principles.

          "Governmental Authority" shall have the meaning provided therefor in
Section 3.6 of this Agreement.

          "Note" means the Convertible Debenture to be issued by XOXO hereunder
in the form attached hereto as Exhibit A.

          "Person" shall mean any individual, corporation, company, partnership,
limited liability company, joint venture, association, joint stock company,
unincorporated organization or government or other agency or political
subdivision thereof.

          "Purchaser" shall have the meaning set forth in the preamble to this
Agreement.

          "Security Agreement" shall mean a Security Agreement in the form
attached hereto as Exhibit B.

          "Shares" shall mean the shares of Common Stock into which the Note may
be converted.

          "Significant Subsidiaries" shall mean ECI, and its wholly-owned
subsidiary, ECI Sportswear, Inc., a New York corporation, and XOXO.

          "Subsidiary" shall mean any corporation or other entity of which at
least a majority of the outstanding capital stock or equity interest having
voting power in ordinary circumstances to elect directors (or persons having
similar responsibilities) of such corporation or

                                      -2-

<PAGE>

other entity shall at the time be held, directly or indirectly, by the Company,
by the Company and any one or more Subsidiaries, or by one or more Subsidiaries.

          "Taxes" shall mean all taxes, charges, fees, duties, levies, or other
similar assessments imposed by any taxing Governmental Authority, including, but
not limited to, income, gross receipts, excise, property, sales, gain, use,
license, capital stock, transfer, franchise, payroll, withholding, social
security or other taxes, including any interest or penalties attributable
thereto.

          "Tax Return" shall mean any return, report or information return
(including any related or supporting information) required to be filed with any
taxing Governmental Authority with respect to Taxes.

          "XOXO" shall have the meaning set forth in the preamble to this
Agreement.

          The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.

                                   ARTICLE II

                              PURCHASE OF THE NOTE

      2.1 Purchase of Securities; the Closing. Subject to the terms and
conditions herein set forth:

          (a) Note Purchase. The Purchaser agrees to purchase, XOXO agrees to
issue, and the Company agrees to cause XOXO to issue, a Convertible Debenture
(the "Note"), in the principal amount of $10,000,000 (the "Purchase Price"), in
the form attached hereto as Exhibit A. The Note will be issued at the closing of
the transactions contemplated by this Agreement (the "Closing").

          (b) Closing. The Closing will take place at the offices of Shapiro
Forman & Allen, LLP, 380 Madison Avenue, New York, New York 10017, within three
(3) Business Days after the satisfaction of all closing conditions applicable
thereto set forth in Article V below. The date on which the Closing occurs is
referred to herein as the "Closing Date". On the Closing Date, Purchaser shall
wire transfer an amount in cash equal to the Purchase Price to an account or
accounts specified by the Company. Delivery of the Note to be purchased by
Purchaser pursuant to this Agreement shall be made at the Closing by the
Company.

          (c) Legends. Purchaser acknowledges and agrees that the Note and any
certificate evidencing the Shares shall be imprinted with customary legends to
reflect the applicability of Federal and state securities laws limitations on
the transfer of the Shares.

                                      -3-

<PAGE>

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          The Company hereby represents and warrants to Purchaser, as of the
date hereof except where otherwise specified, that:

      3.1 Corporate Existence and Power; Subsidiaries. Each of the Company
and the Significant Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to do business as a foreign corporation in
each additional jurisdiction where the failure to so qualify would have a
material adverse effect on (i) the assets, liabilities, cash flows, financial
condition, results of operations, or business of the Company and the Significant
Subsidiaries taken as a whole or (ii) the ability of the Company to consummate
the transactions contemplated hereby (each, a "Material Adverse Effect"). The
jurisdiction of incorporation of the Company and the Subsidiaries are set forth
on Schedule 3.1 hereto. Except as set forth on Schedule 3.1 hereto, the Company
has no Subsidiaries, nor are there any other businesses in which the Company has
an equity stake, other than the Significant Subsidiaries and inactive
Subsidiaries. Each of the Company and the Significant Subsidiaries has all
requisite power and authority (corporate and otherwise) to own its properties
and to carry on its business as now being conducted and, in the case of the
Company and XOXO, to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. All of the
issued and outstanding securities of XOXO are owned by ECI, and all of the
issued and outstanding securities of ECI are owned by the Company.

      3.2 Corporate Authority. The execution, delivery and performance by the
Company and XOXO of this Agreement and the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of,
respectively, the Company and XOXO.

      3.3 Binding Effect. This Agreement has been duly executed and delivered by
the Company and XOXO, and (assuming due execution and delivery by Purchaser)
constitutes a valid and binding obligation of, respectively, the Company and
XOXO, enforceable against, respectively, the Company and XOXO in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
or by general equitable principles.

      3.4 No Required Consents, etc. Other than in connection with
satisfaction of conditions precedent to the Closing, and as set forth in
Schedule 3.4 hereto, no consent, approval or authorization of or declaration,
registration or filing with any Governmental Authority (as defined in Section
3.6 hereof) or any non-governmental Person is required to be obtained or made by
the Company or the Significant Subsidiaries in connection with the execution,
delivery

                                      -4-

<PAGE>

and performance of this Agreement or the transactions contemplated hereby other
than those which, if not obtained or made, would not have a Material Adverse
Effect.

      3.5 No Conflicting Agreements, etc. Except as set forth on Schedule
3.5 hereto, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby, will conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute (or
with notice or lapse of time would constitute) a default under, or result in any
violation of, or give rise to any right of termination, cancellation or
acceleration under, the certificate of incorporation or by-laws (or similar
organizational documents) of the Company or any of the Significant Subsidiaries,
any contract, agreement, mortgage, bond, note, credit agreement, indenture,
license, lease, instrument, order, statute, law, rule or regulation to which the
Company or any of the Significant Subsidiaries is party or subject or by which
any of their respective businesses, properties or assets may be bound, or result
in the creation of any lien, claim, charge or encumbrance (collectively,
"Liens") on any properties or assets of the Company or the Significant
Subsidiaries other than such Liens the existence of which would not have a
Material Adverse Effect.

      3.6 Litigation; No Violation of Government Orders or Laws. No actions,
suits or proceedings are pending or, to the knowledge of the Company,
threatened, nor is there any investigation pending or, to the knowledge of the
Company, threatened, against or affecting the Company or any Significant
Subsidiary which seeks to enjoin, or otherwise prevent the consummation of, any
of the transactions contemplated by this Agreement or to recover any damages or
obtain any relief as a result of any of the transactions contemplated hereby in
any court or before any arbitrator of any kind or before or by any Governmental
Authority (as defined below), other than those which would not have a Material
Adverse Effect. Except as set forth in Schedule 3.6, there are no pending or, to
the knowledge of the Company, threatened, investigations, by any Federal, state,
local, foreign or other governmental department, commission, board, bureau,
agency or instrumentality (each, a "Governmental Authority") with respect to the
Company or any of the Significant Subsidiaries (an "Investigation"), other than
Investigations which, if the resolution thereof were adverse, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as set forth in Schedule 3.6, (i) there are no actions or
proceedings pending or, to the knowledge of the Company, threatened, against the
Company or any of the Significant Subsidiaries before any court or before any
administrative agency, whether Federal, state, local or foreign, which, if
adversely determined, would reasonably be expected to have a Material Adverse
Effect, and (ii) there are no outstanding domestic or foreign judgments, decrees
or orders against the Company or any of the Significant Subsidiaries.

      3.7 Capitalization. The Company's entire authorized capital stock
consists of 200,000,000 shares of Common Stock and 10,000,000 shares of
preferred stock. There are (a) 79,506,735 shares of Common Stock issued and
outstanding, (b) approximately 13,000,000 shares of Common Stock reserved for
issuance upon exercise of outstanding stock options granted under the 1993 Stock
Incentive Plan (as defined infra), (c) 584,345 shares of Common

                                      -5-

<PAGE>

Stock reserved for issuance upon exercise of the Heller Warrant (as defined
infra), and (d) no shares of preferred stock issued or outstanding. All of the
outstanding shares of Common Stock are duly authorized and validly issued, fully
paid, nonassessable and were not issued in violation of any preemptive rights.
Except for (i) the conversion rights under the Note, (ii) the Warrant granted by
the Company to Heller Financial, Inc. on September 30, 1996 (the "Heller
Warrant"), and (iii) stock options granted prior to the date hereof pursuant to
and in accordance with the terms and conditions of the Aris Industries, Inc.
1993 Stock Incentive Plan (the "1993 Stock Incentive Plan"), there will, on the
Closing Date, be no outstanding options or warrants exercisable into, rights to
subscribe to, calls or commitments relating to, or securities or rights
convertible into, or exercisable for, shares of capital stock of the Company, or
contracts, commitments or arrangements obligating the Company to issue
additional shares of its capital stock or options, warrants or rights to
purchase or acquire any shares of its capital stock.

     3.8  Intentionally Omitted.

     3.9  Status of Shares upon Issuance. Upon conversion of the Note, the
Shares will be duly authorized, validly issued and outstanding, fully paid and
non-assessable, and not subject to preemptive or any other similar rights of the
Company, its shareholders or others.

     3.10 SEC Documents. (a) The Company has delivered to the Purchaser true and
complete copies of its Annual Reports on Form 10-K for the fiscal years ended
December 31, 1998 and December 31, 1999 (the "Annual Reports"); and its
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2000,
June 30, 2000 and September 30, 2000 (collectively, "SEC Documents"). Each of
the SEC Documents has been duly filed, and when filed was in substantial
compliance with the requirements of the applicable form of the Commission.

          (b) Each of the SEC Documents was complete and correct in all material
respects as of its date and each of the SEC Documents did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances in which made, not misleading. The financial
statements of the Company included in the SEC Documents fairly present the
consolidated financial position of the Company and the Significant Subsidiaries
as at the respective dates thereof and the consolidated results of their
operations and cash flows for the respective periods then ended, in each case in
accordance with GAAP consistently applied with prior periods.

    3.10A Inventory. All inventory of the Company as of January 31, 2001
consisted (as of that date) of current and marketable products or raw material
usable in the ordinary course of business of the Company. As of that date, such
inventory was valued on the Company's internal balance sheet at the lower of
cost or market in accordance with GAAP, in an aggregate amount, net of the
reserve therefor, of $21,422,686.

                                      -6-

<PAGE>

    3.10B Accounts Receivable. The accounts receivable of the Company as of
January 31, 2001 as summarized on Schedule 3.10B attached hereto, in an
aggregate principal amount of $28,610,855, (i) arose from bona fide sales
transactions in the ordinary course of business and are payable on ordinary
trade terms, (ii) are (to the extent not fully collected by the Company prior to
the date hereof), and will be, legal, valid and binding obligations of the
respective account debtors enforceable in accordance with their terms, (iii) are
not, to the best knowledge of the Company, subject to any valid set-off or
counterclaim, and (iv) do not represent obligations for goods sold on
consignment, on approval or on a sale-or-return basis or subject to any other
repurchase or return arrangement.

    3.10C Projections. Attached hereto as Schedule 3.10C are statements of
projected results of operations of the Company for the fiscal years ending
December 31, 2001, 2002 and 2003 (the "Projected Financial Statements"). The
Projected Financial Statements are reasonable, taken as a whole, and
mathematically accurate, and the assumptions underlying the Projected Financial
Statements provide a reasonable basis for the projections set forth therein. The
factual data used to prepare the Projected Financial Statements are true and
correct in all material respects. The Projected Financial Statements reflect the
Company's projection that the worldwide licensing rights attached to the
Company's "XOXO" trademark will generate an aggregate minimum of $50 million in
licensing fees and royalties for the Company during the three year period
covered by the Projected Financial Statements.

     3.11 Material Agreements. Neither the Company nor the Significant
Subsidiaries, except as set forth on Schedule 3.11 hereto, are a party to or
bound by any written, oral or implied contact, agreement, license, lease or
other commitment material to the businesses, properties, assets, results of
operations or financial condition of the Company and the Significant
Subsidiaries, taken as a whole (each a "Material Agreement"), including, without
limitation: (i) loan agreements, credit lines, promissory notes, mortgages,
pledges, guarantees, security agreements, factoring agreements and other
agreements relating to indebtedness of such Persons for borrowed money; (ii)
real property leases; (iii) personal property leases involving annual payments
in excess of $250,000; (iv) trademark or other intellectual property licenses;
(v) employment, management, or severance agreements; (vi) contracts or other
agreements to undertake capital expenditures or to acquire any property (other
then in the ordinary course of business) in an aggregate amount exceeding
$250,000; (vii) pledges, guarantees, contracts or other agreements of such
Persons to loan money or to extend credit, other than (a) vendor deposits, (b)
unfactored accounts receivable and (c) any extension of credit in the ordinary
course of business in an amount not greater than $250,000 to any Person or group
of related Persons; (viii) contracts or other agreements which would restrict
the Company or the Significant Subsidiaries from carrying on any business or
which would restrict the products or services which the Company or the
Significant Subsidiaries may sell or the customers to whom they may sell; (ix)
contracts or other agreements involving any consultant in which the per annum
compensation payable thereunder exceeds $250,000; (x) contracts or other
agreements involving the sale of any of the assets or properties of the Company
or the Significant Subsidiaries, other

                                      -7-

<PAGE>

than in the ordinary course of business consistent with past practices, or the
grant to any Person of any preferential right to purchase any of the assets or
properties of the Company or the Significant Subsidiaries; (xi) contracts or
other agreements pursuant to which the Company or the Significant Subsidiaries
agree to share or otherwise indemnify the tax liability of any party; (xii)
contracts or other agreements or arrangements between the Company or the
Significant Subsidiaries and any of their respective officers, directors or
affiliates; (xiii) contracts or agreements (other than purchase orders for
inventory and supplies in the ordinary course of business) pursuant to which
there is either a current or future obligation of the Company or the Significant
Subsidiaries to make payments in excess of $250,000 in the aggregate to any
party or related group of parties; and (xiv) insurance policies. Neither the
Company nor the Significant Subsidiaries own any real property. Except as set
forth in Schedule 3.11, all of the Company's and the Significant Subsidiaries'
Material Agreements are valid, binding and enforceable by or against the Company
and the Significant Subsidiaries, as applicable, which are parties thereto in
accordance with their respective terms. Except as set forth in Schedule 3.11,
there is no breach or violation of, or default under, any such Material
Agreement on the part of the Company or the Significant Subsidiaries, and no
event has occurred which, with notice or lapse of time or both, would constitute
a breach, violation or default on the part of the Company or the Significant
Subsidiaries of, or give rise to a right of termination, modification,
cancellation, prepayment or acceleration under, any such Material Agreement,
other than such breaches, violations or defaults which would not have a Material
Adverse Effect.

     3.12 Tax Matters. Except as set forth in the SEC Documents:

          (i) Each of the Company and the Significant Subsidiaries has (x) duly
and timely filed (or there has been filed on its behalf) with the appropriate
Governmental Authorities all Tax Returns required to be filed by it, and all
such Tax Returns are true, correct and complete and (y) timely paid (or there
has been paid on its behalf) all Taxes due or claimed to be due from it by any
taxing authority;

          (ii) Each of the Company and the Significant Subsidiaries has complied
in all respects with all applicable laws relating to the payment and withholding
of Taxes (including withholding of Taxes pursuant to Sections 1441 and 1442 of
the Code) and has, within the time and manner prescribed by law, withheld and
paid over to the proper Governmental Authorities all amounts required to be
withheld and paid over under all applicable laws;

          (iii) There are no Liens for Taxes upon the assets or properties of
any of the Company or the Significant Subsidiaries except for statutory liens
for Taxes not yet due;

          (iv) Neither the Company nor any of the Significant Subsidiaries has
requested an extension of time within which to file any Tax Return in respect of
any taxable year, which Tax Return has not since been filed;

                                      -8-

<PAGE>

          (v) No federal, state, local or foreign audits or other administrative
proceedings have formally commenced or are presently pending with regard to any
Taxes or Tax Returns of or including the Company or any Significant Subsidiary,
and no notification has been received by either the Company or any Significant
Subsidiary that such an audit or other proceeding is pending or threatened with
respect to any Taxes due from or with respect to the Company or any Significant
Subsidiary or any Tax Return filed by or with respect to the Company or any
Significant Subsidiary;

          (vi) Neither the Company nor any of the Significant Subsidiaries has
changed any method of accounting, received a ruling from any taxing authority or
signed an agreement with any taxing authority which would have an adverse effect
on the Company or any Significant Subsidiary;

          (vii) No deficiency for any Tax has been assessed with respect to the
Company or any Significant Subsidiary which has not been paid in full;

          (viii) Neither the Company nor any of the Significant Subsidiaries is
a party to, has an obligation under, or is bound by, any Tax sharing or
indemnification agreement or similar contract or arrangement or has a potential
liability or obligation to any Person as a result of, or pursuant to, any such
agreement, contract or arrangement;

          (ix) No jurisdiction where either the Company or any of the
Significant Subsidiaries does not file a Tax Return has made a claim that the
Company or any of the Significant Subsidiaries is required to file a Tax Return
for such jurisdiction; and

          (x) No power of attorney which is currently in force has been granted
by or with respect to the Company or any Significant Subsidiary with respect to
any matter relating to Taxes.

     3.13 Compliance. Except as set forth on Schedule 3.13 hereto, each of the
Company and the Significant Subsidiaries (i) is in material compliance with all
federal, state, local and foreign laws, ordinances, regulations and orders
applicable to it, or its business or the ownership of its assets, and (ii) has
all federal, state, local and foreign governmental licenses and permits material
to and necessary in the conduct of its business as currently being conducted.

     3.14 Offering Exemption. Subject to the accuracy of the representations and
warranties of Purchaser set forth under Article IV of this Agreement, the
offering and sale of the Note to be issued hereunder are exempt from
registration under the Act, pursuant to Section 4(2) thereof.

     3.15 Intentionally Omitted.

                                      -9-

<PAGE>

     3.16 Intellectual Property and Related Contracts. Except as set forth on
Schedule 3.16 hereto, the Company and each of the Significant Subsidiaries (x)
own, free and clear of all Liens, the trademarks, service marks (including
common law names and marks and federally registered names and marks), trade
names, service names, copyrights, patents, technology, know-how and processes
(collectively, "Intellectual Property") as respectively set forth on Schedule
3.16 under the heading "Owned Intellectual Property," and (y) is licensed to use
all of the Intellectual Property as respectively set forth on Schedule 3.16
under the heading "Licensed Intellectual Property." The Intellectual Property as
respectively described in clauses (x) and (y) is all of the Intellectual
Property used in or necessary for the conduct of the Company's and the
Significant Subsidiaries' business as currently conducted or material to the
condition (financial and other), business, or operations of the Company and the
Significant Subsidiaries taken as a whole. Except as set forth on Schedule 3.16,
(i) the use of such Intellectual Property by the Company, the Significant
Subsidiaries and their respective agents or licensees does not infringe on the
rights of any Person, and (ii) , to the knowledge of the Company no person is
infringing on any right of the Company, any of the Significant Subsidiaries or
their respective agents or licensees with respect to any such Intellectual
Property. There are no agreements, written or oral, except as set forth on
Schedule 3.16, which in any material respect limit or otherwise relate to any
rights by the Company to use any of its Intellectual Property.

     3.17 Absence of Undisclosed Liabilities. Neither the Company nor any of the
Significant Subsidiaries has any liabilities (whether absolute, accrued,
contingent or otherwise), except: (a) liabilities, obligations or contingencies
that are accrued and reserved against in the consolidated balance sheet of the
Company and the Significant Subsidiaries, or reflected in the notes thereto,
included in the Company's Form 10-Q filed for the quarter ended September 30,
2000, (b) liabilities incurred since September 30, 2000 in the ordinary course
of business, (c) liabilities disclosed in Schedule 3.17 hereto, (d) liabilities
otherwise disclosed in the SEC Documents, (e) liabilities under executory
contracts entered into in the ordinary course of business or (f) liabilities
otherwise disclosed on the Schedules to this Agreement.

     3.18 Changes. Since September 30, 2000, except (i) as set forth in the SEC
Documents, (ii) as otherwise disclosed in Schedule 3.18 hereto or (iii) as
otherwise provided by this Agreement:

          (a) there has been no event or events giving rise to, or reasonably
likely to give rise to, a Material Adverse Effect on the financial condition,
business or prospects of the Company;

          (b) there has been no direct or indirect redemption, purchase or other
acquisition of any shares of Company capital stock, or any declaration, setting
aside or payment of any dividend or other distribution by the Company in respect
of any Company capital stock, or any issuance of any shares of capital stock of
the Company (other than pursuant to the exercise of options and warrants
pursuant to their terms), or, except in the ordinary course of business, any

                                      -10-

<PAGE>

grant to any person of any option to purchase or other right to acquire shares
of capital stock of the Company or any stock split or other change in the
Company's capitalization;

          (c) neither the Company nor any of the Significant Subsidiaries has
entered into or agreed to enter into any new or amended contract with any of the
officers thereof or, except in the ordinary course of business, otherwise
increased the compensation payable to the officers or directors of any such
entity; and

          (d) neither the Company nor any of the Significant Subsidiaries has
(i) entered into or amended any bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance or other
employee benefit plan (including, without limitation, the 1993 Stock Incentive
Plan) except as required by law or regulations or (ii) made any contribution to
any such plan except for contributions specifically required by law or pursuant
to the terms of such plans.

     3.19 Labor Matters. Except as set forth on Schedule 3.19 hereto, (i) none
of the Company and the Significant Subsidiaries is a party to, or bound by, any
collective bargaining agreement, contract or other understanding with a labor
union or labor organization, (ii) there are no material controversies, strikes,
slowdowns or work stoppages pending or, to the knowledge of the Company,
threatened, between the Company or any of the Significant Subsidiaries and any
of their respective employees, and (iii) to the knowledge of the Company, there
are no organizational efforts presently being made involving any of the
employees of the Company or the Significant Subsidiaries.

                                   ARTICLE IV

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser hereby represents and warrants to the Company, as of the date
hereof, that:

     4.1  Organization, Existence, Qualification and Authority of Purchaser.
Purchaser is a limited partnership, duly organized, validly existing and, if
applicable, in good standing under the laws of the State of California, and has
the power and authority to enter into this Agreement and perform its obligations
hereunder. The execution, delivery and performance of this Agreement by
Purchaser has been duly and validly authorized by all requisite limited
partnership action and this Agreement has been duly executed and delivered by
Purchaser. This Agreement is legal, valid and binding upon Purchaser and is
(assuming due execution and delivery by the Company and XOXO ) enforceable
against Purchaser in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally or by general equitable principles.

     4.2  No Breach or Default. The execution, delivery and performance of this
Agreement by Purchaser and the consummation by Purchaser of the transactions
contemplated by

                                      -11-

<PAGE>

this Agreement do not and will not: (i) violate Purchaser's charter documents;
(ii) violate any law or regulation applicable to Purchaser; (iii) result in the
breach of, or constitute a default under, any indenture, mortgage, deed of
trust, lease or sublease, contract or other agreement or instrument to which
Purchaser is a party or by which Purchaser or any of its properties is bound;
(iv) result in the creation or imposition of any Lien upon any of the property
of Purchaser; or (v) except as set forth on Schedule 4.2 hereto, require the
Purchaser to procure or obtain the consent or approval of, or make any filing
with, any Governmental Authority.

     4.3  Purchase for Own Account.

          (a) The Note to be acquired by Purchaser pursuant to this Agreement
and the Shares, are being, and will be, acquired for its own account and with no
intention of distributing or reselling such Note or Shares or any part thereof
in any transaction that would be in violation of the securities laws of the
United States, without prejudice, however, to Purchaser's rights at all times to
sell or otherwise dispose of all or any part of such Note or Shares under a
registration statement under the Act or under an applicable exemption from the
registration requirements of the Act.

          (b) Purchaser understands that neither the Note nor the Shares have
been registered under the Act, and cannot be resold unless they are subsequently
registered under the Act or unless an exemption from such registration is
available thereunder.

     4.4  Investor Sophistication. Purchaser is an "accredited investor" within
the meaning of Rule 501(a) under the Act, and by reason of its business and
financial experience, or the business and financial experience of those Persons
retained by it to advise it with respect to its investment in the Note being
acquired pursuant to this Agreement, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment therein, is able to bear the
economic risk of such investment, and, at the present time, is able to afford a
complete loss of such investment.

     4.5  Brokers. No broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based on arrangements made by or on behalf of Purchaser.

                                    ARTICLE V

                         CONDITIONS PRECEDENT TO CLOSING

     5.1  Conditions Precedent to Obligations of Purchaser. The obligations of
Purchaser to purchase the Note hereunder are subject to the satisfaction of each
of the following conditions at the Closing Date:

                                      -12-

<PAGE>

          (a) The representations and warranties made by the Company herein
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been made
on and as of the Closing Date (except where the specific representation or
warranty by its terms applies to an earlier date);

          (b) The Company shall have performed and complied in all material
respects with all covenants, agreements and conditions set forth herein which
are required to be performed or complied with by it on or prior to the Closing
Date;

          (c) The purchase of and payment for the Note to be purchased hereunder
shall not (i) be prohibited by any applicable law or governmental regulation,
(ii) subject Purchaser to any penalty or other onerous condition pursuant to any
applicable law or governmental regulation, or (iii) be enjoined;

          (d) All authorizations, consents, approvals, permits and licenses and
filings with, by or in respect of any Governmental Authority, court or other
body required to be taken, given or obtained that are necessary in connection
with the transactions contemplated hereby and in the other documents related
hereto, shall have been taken, given or obtained, be in full force and effect
and not be subject to any pending proceedings or appeals, administrative,
judicial or otherwise, other than those the pendency of which would not have a
Material Adverse Effect;

          (e) All consents and approvals to be obtained by the Company from
third parties (including licensors, lessors and others), including without
limitation those set forth on Schedule 3.4 hereto, that are required in
connection with the transactions contemplated hereby and in the other documents
related hereto, shall have been given or obtained and be in full force and
effect, and in form and substance satisfactory to the Purchaser;

          (f) The Certificate of Amendment to the Company's certificate of
incorporation increasing to 200,000,000 the authorized number of shares of the
Common Stock the Company may issue (the "Certificate of Amendment") shall have
been accepted for filing by the Department of State of the State of New York;

          (g) There shall not have occurred any material adverse change in the
financial condition or business of the Company and the Significant Subsidiaries
taken as a whole since the date of this Agreement; and

          (h) Purchaser shall have received duly executed originals or copies,
as applicable, of the documents set forth in Section 8.1 hereof.

     5.2  Conditions Precedent to Obligations of the Company and XOXO. The
obligations of XOXO to issue and sell the Note pursuant to this Agreement, and
the obligations of the Company to cause XOXO to take such action, are subject,
at the Closing Date, to the satisfaction of each of the following conditions:

                                      -13-

<PAGE>

          (a) The representations and warranties made by Purchaser herein shall
be true and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made on
and as of the Closing Date (except where the specific representation or warranty
by its terms applies to an earlier date);

          (b) Purchaser shall have performed and complied in all material
respects with all covenants, agreements and conditions set forth herein which
are required to be performed or complied with by it on or prior to the Closing
Date;

          (c) All authorizations, consents, approvals, permits and licenses and
filings with, by or in respect of any Governmental Authority, court or other
body required to be taken, given or obtained that are necessary in connection
with the transactions contemplated hereby and in the other documents related
hereto, shall have been taken, given or obtained, be in full force and effect
and not be subject to any pending proceedings or appeals, administrative,
judicial or otherwise, other than those the pendency of which would not have a
Material Adverse Effect; and

          (d) All consents and approvals to be obtained by the Company from
third parties (including licensors, lessors and others), including without
limitation those set forth on Schedule 3.4 hereto, that are required in
connection with the transactions contemplated hereby and in the other documents
related hereto, shall have been given or obtained and be in full force and
effect, and in form and substance satisfactory to the Company.

                                   ARTICLE VI

                    COVENANTS RELATING TO CONDUCT OF BUSINESS

     6.1  Conduct of Businesses Prior to the Closing Date. Except as expressly
contemplated or permitted by this Agreement, or as required by applicable law,
rule or regulation, or with the consent of Purchaser, during the period from the
date of this Agreement to the Closing Date, each of the Company and the
Significant Subsidiaries shall (i) conduct its business in the usual, regular
and ordinary course consistent with past practice, and (ii) use reasonable good
faith efforts to maintain and preserve intact its business organization,
employees and advantageous business relationships and retain the services of its
officers and key employees.

     6.2  Forbearance. Without limiting Section 6.1 hereof, except as expressly
contemplated or permitted by this Agreement, or as required by applicable law,
rule or regulation, during the period from the date of this Agreement to the
Closing Date, neither the Company nor any of the Significant Subsidiaries shall,
without the prior written consent of Purchaser:

          (a) adjust, split, combine or reclassify any of its capital stock;
make, declare or pay any dividend or make any other distribution on, or directly
or indirectly redeem, purchase

                                      -14-

<PAGE>

or otherwise acquire, any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of its capital
stock; issue, deliver or sell any shares of its capital stock or any securities
convertible into or exercisable for, or any rights, options or warrants to
acquire, any such shares or securities (whether for cash or property), except
for (i) the issuance of shares of Common Stock issuable on the exercise of stock
options granted prior to the date hereof pursuant to the 1993 Stock Incentive
Plan, which options become vested and exercisable on or prior to the Closing
Date, (ii) the issuance of shares of Common Stock issuable upon the exercise of
the Heller Warrant; or (iii) the issuance of shares of Common Stock in exchange
for the extinguishment of any obligation of the Company;

          (b) sell, lease, transfer, or otherwise dispose of any of its
properties or assets, or cancel, release or assign any material indebtedness
owed to it or any material claim held by it, except (i) in the ordinary course
of business consistent with past practice, (ii) as required under any agreement
relating to indebtedness for borrowed money to which the Company or the
Significant Subsidiaries are party or (iii) pursuant to contracts or agreements
in force as of the date of this Agreement;

          (c) make any material acquisition or investment either by purchase of
stock or securities, merger or consolidation, contributions to capital, property
transfers, or purchases of any property or assets of any other individual,
corporation or other entity other than a wholly- owned Subsidiary;

          (d) increase in any material respect the compensation or fringe
benefits of any of its employees or pay any bonus, pension or retirement
allowance not required by any existing plan, program or agreement to any such
employees or become a party to, amend or commit itself to any pension,
retirement, profit-sharing or welfare benefit plan or agreement or employment
agreement with or for the benefit of any employee or accelerate the vesting of
any stock options or other stock-based compensation;

          (e) except for the filing on behalf of the Company of the Certificate
of Amendment, amend its certificate of incorporation, bylaws or similar
governing documents, as the case may be;

          (f) enter into any line of business other than the importation,
manufacturing, distribution, and merchandising of apparel, the licensing (as
licensee) of trademarks relating thereto, and the licensing (as licensor) of the
Company's and Significant Subsidiaries' owned trademarks;

          (g) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect at any time prior to the
Closing Date, or in any of the conditions to the transactions contemplated
hereby set forth in Article V not being satisfied, or in a violation of any
provision of this Agreement; or

                                      -15-

<PAGE>

          (h) agree to, or make any commitment to, take any of the actions
prohibited by this Section 6.2.

                                  ARTICLE VI A

                             POST-CLOSING COVENANTS

     6A.1 Board Representation. From and after the Closing, for so long as
either (i) any indebtedness is outstanding under the Note, or (ii) the Purchaser
(alone or in conjunction with one or more of its Affiliates) owns not less than
50% of the Shares issuable upon conversion of the Note, the Company and Arnold
H. Simon, in his individual capacity, on behalf of himself and his Affiliates
that he controls that are shareholders of the Company, hereby agree to exert
their respective best efforts to cause and maintain the election to the Board of
Directors of the Company of two designees of the Purchaser, who shall initially
be Ryan Kavanaugh and Brian Sullivan.

     6A.2 Implementation of Security Agreement. The Company hereby agrees to
take all actions necessary or desirable to cause XOXO to comply with all of its
duties and obligations under the Security Agreement and to take all other
actions, whether or not expressly requested by Purchaser, reasonably in
furtherance of Purchaser's effectuation of its rights thereunder.

                                   ARTICLE VII

                              ADDITIONAL AGREEMENTS

     7.1 Access to Information.

          (a) Upon reasonable notice, the Company shall, and shall cause the
Significant Subsidiaries to, afford to the representatives of Purchaser during
normal business hours during the period prior to the Closing Date, access to all
its properties, books, contracts, commitments and records, and to its officers,
employees, accountants, counsel and other representatives and, during such
period, the Company shall, and shall cause the Significant Subsidiaries to, make
available to the Purchaser all information concerning their business, properties
and personnel as the Purchaser may reasonably request. Neither the Company nor
the Significant Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would, in the opinion of
its counsel, waive the attorney-client privilege of the Person in possession or
control of such information or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or binding agreement entered into prior to the
date of this Agreement. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.

                                      -16-

<PAGE>

          (b) All information furnished by the Company or the Significant
Subsidiaries to Purchaser pursuant to this Agreement (the "Confidential
Information") shall be treated as the sole property of the Company and, if this
Agreement shall be terminated, the Purchaser shall upon request promptly return
to the Company all of such written information and all documents, notes,
summaries or other materials containing, reflecting or referring to, or derived
from, such information. The Purchaser shall keep confidential all such
information, will use such information solely for the purpose of evaluating the
transactions contemplated by this Agreement and shall not directly or indirectly
use such information for any competitive or other commercial purpose.

          (c) The obligation to keep confidential the Confidential Information
as such shall not apply to (i) any information which (A) was already in the
Purchaser's possession on a non-confidential basis prior to the disclosure
thereof by the furnishing party, (B) was then publicly available or generally
known to the public other than as a result of disclosure by the Purchaser in
violation of the provisions hereof, or (C) was disclosed to the Purchaser by a
third party not bound by any obligation of confidentiality or (ii) disclosures
made as required by law. If the Purchaser is requested or required (by oral
question or request for information or documents in legal proceedings,
interrogatories, subpoena, civil investigative demand or similar process) to
disclose any Confidential Information concerning the Company or any Significant
Subsidiary, the Purchaser will promptly notify the furnishing party of such
request or requirement so that the furnishing party may seek an appropriate
protective order and/or waive the Purchaser's compliance with the provisions of
this Agreement. It is further agreed that, if in the absence of a protective
order or the receipt of a waiver hereunder the Purchaser is nonetheless, in the
opinion of its counsel, compelled to disclose information concerning the
furnishing party to any tribunal or governmental body or agency or else stand
liable for contempt or suffer other censure or penalty, the Purchaser may
disclose such information to such tribunal or governmental body or agency to the
extent necessary to comply with such order as advised by counsel without
liability hereunder.

          (d) The Purchaser understands and agrees that the applicable
furnishing party will suffer immediate, irreparable harm in the event the
Purchaser fails to comply with any of its obligations of confidentiality under
this Agreement, that monetary damages will be inadequate to compensate the
furnishing party for such breach and that such furnishing party shall be
entitled to specific performance as a remedy for any such breach without the
necessity of posting a bond or proving special damages. Such remedy shall not be
deemed to be the exclusive remedy in the event of any such breach by the
Purchaser, but shall be in addition to all other remedies available to the
furnishing party at law or in equity.

          (e) No representations or warranties are made by the Company, the
Significant Subsidiaries, or any Affiliate thereof except as expressly set forth
in this Agreement.

     7.2  Further Assurances. In case at any time after the Closing Date any
further action, or the execution and delivery of any additional documents or
instruments, is necessary or

                                      -17-

<PAGE>

desirable to carry out the purposes of this Agreement, the parties hereto shall
take such actions and execute and deliver such additional documents and
instruments as may be reasonably requested by the Company or the Purchaser.

     7.3  Advice of Changes. Each of the parties hereto shall promptly advise
each other party hereto of any change or event which, individually or in the
aggregate with other such changes or events, would, or would be reasonably
likely to, cause or constitute a material breach of any of its representations,
warranties or covenants contained herein. From time to time prior to the
Closing, each party hereto shall promptly supplement or amend the disclosure
schedules attached hereto relating to such party, to reflect any matter which,
if existing, occurring or known at the date of this Agreement, would have been
required to be set forth or described in such disclosure schedules or which is
necessary to correct any information in such disclosure schedules which has been
rendered inaccurate thereby. No supplement or amendment to such disclosure
schedules shall have any effect for the purpose of determining the accuracy of
any party's representations and warranties contained herein, the satisfaction of
any of the conditions in Article V hereof, or the compliance by any party with
its covenants or agreements contained herein.

     7.4  Public Announcements. Purchaser shall not make any announcement or
disclosure of the transactions contemplated hereby without the prior consent of
the Company. Any such announcement or disclosure made by the Company shall be
subject to the prior review and reasonable approval of the Purchaser.

     7.5  Closing Covenant. The parties hereto agree to act in good faith in
taking any and all commercially reasonable actions necessary to facilitate the
Closing and the other transactions contemplated by this Agreement, including,
without limitation, the satisfaction of the respective closing conditions of the
parties set forth herein. Each party hereto further agrees not to take any
action that is intended or may reasonably be expected to result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time prior to the Closing Date, or in any
of the conditions to the transactions contemplated hereby not being satisfied,
or in a violation of any provision of this Agreement.

                                  ARTICLE VIII

                                CLOSING DOCUMENTS

     8.1 The Company's Obligations. At the Closing, the Company shall deliver to
the Purchaser the following:

          (a) Resolutions. Copies of resolutions of the Company's and of XOXO's
Boards of Directors certified by the Secretary or Assistant Secretary of the
Company and XOXO, as the case may be, authorizing the execution, delivery and
performance of this Agreement and

                                      -18-

<PAGE>

the transactions contemplated hereby, and in form and substance reasonably
satisfactory to the Purchaser;

          (b) Note. An original of the Note, duly executed by XOXO and the
Company and registered in the name of Purchaser;

          (c) Compliance Certificate. A duly executed original of a certificate
of an officer of the Company certifying that all representations and warranties
of the Company contained in this Agreement are true and correct in all material
respects as of the Closing Date, and that the Company has fully performed in all
material respects all obligations, agreements, conditions and commitments
required to be fulfilled by the Company pursuant to the terms hereof on or prior
to the Closing Date;

          (d) Opinion of Counsel. A duly executed original of an opinion of
counsel for the Company and XOXO in the form attached hereto as Exhibit 8.1(d);
and

          (e) Security Agreement. An original of the Security Agreement duly
executed by XOXO.

     8.2 The Purchaser's Obligations. At the Closing, the Purchaser shall
deliver to the Company the following:

          (a) Payment. Funds in the amount and payable as set forth in Section
2.1 hereof and all other payments required to be made by the Purchaser on or
prior to the Closing Date pursuant to the provisions of this Agreement; and

          (b) Compliance Certificate. A duly executed original of a certificate
of an officer of Purchaser certifying that all representations and warranties of
the Purchaser contained in this Agreement are true and correct in all material
respects as of the Closing Date, and that Purchaser has fully performed in all
material respects all obligations, agreements, conditions and commitments
required to be fulfilled by the Purchaser on or prior to the Closing Date.

                                   ARTICLE IX

                                  MISCELLANEOUS

     9.1 Indemnification and Related Provisions.

          (a) Indemnification. Each of the Company and the Purchaser (each, as
such, an "Indemnifying Party") agrees and covenants to hold harmless and
indemnify the other party (including any Affiliate, director, officer, employee,
agent or controlling Person of such party) (each of the foregoing Persons being
an "Indemnified Person"), from and against any losses, claims, damages,
liabilities and expenses (including reasonable attorneys' fees and expenses of

                                      -19-

<PAGE>

investigation) incurred by such Indemnified Person after the Closing Date
(collectively, "Indemnifiable Costs and Expenses") arising out of or based upon
any breach by the Indemnifying Party of any of its representations, warranties
or covenants contained herein.

          (b) Adjustment of Indemnity. The amount by which an Indemnified Person
shall be indemnified for any Indemnifiable Costs and Expenses shall be reduced
by (i) any insurance proceeds or indemnity, contribution, warranty or other
similar payments recoverable by such Indemnified Person and (ii) any right to
income tax or other Tax savings that reduce or will reduce the impact to such
Indemnified Person of such Indemnifiable Costs and Expenses (provided, however,
that in the event that any Indemnified Person seeking indemnification hereunder
is unable to collect a payment with respect to such right to such insurance
proceeds, indemnity, contribution, warranty or other similar payments (other
than as a result of a waiver, settlement or failure to use commercially
reasonable efforts to diligently prosecute such right by such party), then, at
the time such right under clause (i) or (ii) hereof is unenforceable or it
becomes evident that such right is unenforceable (regardless of when such time
occurs), the amount of Indemnifiable Costs and Expenses will be increased by the
amount such Indemnifiable Costs and Expenses were previously reduced on account
of such right).

          (c) Period of Survival of Representations and Warranties of the
Company. All representations and warranties of the Company contained in this
Agreement shall terminate and expire eighteen (18) months after the Closing
Date.

          (d) Limitations. Notwithstanding any provision to the contrary
contained in this Agreement, neither the Purchaser nor the Company (including
its related Indemnified Persons) shall be entitled to indemnification from the
other for breaches, inaccuracy or nonfulfillment or nonperformance of
representations, warranties, covenants or agreements under this Agreement, until
the dollar amount of all such claims shall exceed $200,000 (Two Hundred Thousand
Dollars) (the "Basket Amount"). If such claims exceed the Basket Amount, the
Indemnifying Party shall be liable only for the portion of such claims which
exceed the Basket Amount.

     9.2  Termination; Amendment; Extension; Waiver.

          (a) Termination. This Agreement may be terminated at any time prior to
the Closing Date:

               (i) by mutual consent of Purchaser, the Company and XOXO in a
written instrument;

               (ii) by Purchaser or the Company if the transactions contemplated
hereby shall not have been consummated on or before March 15, 2001, unless the
failure of such consummation to occur by such date shall be due to the failure
of the party seeking to terminate

                                      -20-

<PAGE>

this Agreement to perform or observe the covenants and agreements of such party
set forth herein; and

               (iii) by Purchaser or the Company, provided that the terminating
party is not then in material breach of any representation, warranty, covenant
or other agreement contained herein, if the other party shall have breached in
any material respect (i) any of the covenants or agreements made by such other
party herein or (ii) any of the representations or warranties made by such other
party herein; provided, however, that neither party shall have the right to
terminate this Agreement pursuant to this Section 9.2 (iii) unless the breach of
any representation or warranty, together with all other such breaches, would
involve a claim in excess of $200,000 and such breach is not cured within
fifteen (15) days following written notice to the party committing such breach,
or, by its nature, cannot be cured prior to the Closing.

          (b) Effect of Termination. In the event of termination of this
Agreement by Purchaser or the Company in accordance with the terms hereof,
neither Purchaser nor the Company shall have any further liability of any nature
whatsoever hereunder, or in connection with the transactions contemplated
hereby, provided however, that neither party shall be relieved or released from
any liabilities or damages arising out of its prior breach of any provision of
this Agreement.

          (c) Amendment; Extension; Waiver. The parties hereto may (i) amend any
provision of this Agreement, (ii) extend the time for the performance of any of
the obligations or other acts of another party hereto, (iii) waive any
inaccuracies in the representations and warranties of another party contained
herein or in any document delivered pursuant hereto, and (iv) waive compliance
by another party with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such amendment, extension or
waiver shall be valid only if set forth in a written instrument signed on behalf
of such party, but any extension or waiver or failure to insist on strict
compliance with an obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. No failure or delay by a party in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.

         9.3 Entire Agreement. This Agreement constitutes the entire agreement
of the parties with respect to the transactions contemplated hereby and
supersedes all prior agreements and understandings with respect thereto. No
representations or warranties are made by any party hereto except as expressly
set forth in this Agreement, and no party hereto is entitled to rely on any
statement, oral or written, or document or instrument delivered outside of this
Agreement or the schedules or exhibits hereto.

         9.4 Communications. All notices, demands and other communications
provided for hereunder shall be in writing, and, if to Purchaser, c/o Kavanaugh
Consulting, Inc., 100 Wilshire

                                      -21-

<PAGE>

Boulevard, Suite 940, Santa Monica, CA 90401, telecopier No. (310) 917-2881,
Attn: Ryan Kavanaugh, and shall be given by telecopy, courier service or
personal delivery, so addressed to Purchaser, or to such other address as
Purchaser may designate to the Company in writing and, if to the Company or
XOXO, shall be given by similar means at 1411 Broadway, New York, New York
10017, telecopier No. (212) 642-4265, and 6000 Sheila St., Commerce City, CA
90040, telecopier No. (323) 838-7873, Attention: Arnold H. Simon, or to such
other address as the Company may designate in writing, with a copy to Robert W.
Forman, Shapiro Forman & Allen LLP, 380 Madison Avenue, New York, New York
10017, telecopier No. (212) 557-1275, and shall be deemed given when received.

     9.5 Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.

     9.6  Assignment. The rights and obligations of Purchaser under this
Agreement may not be assigned to any other Person, other than an Affiliate of
Purchaser, except with the consent of the Company. The rights and obligations of
the Company and XOXO under this Agreement may not be assigned to any other
Person, except with the consent of Purchaser.

     9.7  Governing Law. This Agreement shall be deemed to be a contract made
under the laws of the State of California, and for all purposes shall be
construed in accordance with the laws of said State, without regard to
principles of conflict of laws. Each of the parties hereto agrees to submit to
the jurisdiction of the federal or state courts located in the City of Los
Angeles in any action or proceeding arising out of or relating to this
Agreement.

     9.8 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

     9.9 Headings. The Article and Section headings used or contained in this
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.

     9.10 Waiver of Jury Trial. The parties hereto hereby irrevocably waive all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement or the transactions contemplated hereby.

     9.11 Absence of Third Party Beneficiary Rights. Except as expressly
provided in this Article IX with respect to Indemnified Persons, the provisions
of this Agreement are solely for the benefit of the parties hereto and no
provision of this Agreement is intended, nor will any provision be interpreted,
to provide or create any third party beneficiary rights or any other rights of
any kind in any shareholder, creditor, customer, lessor, lessee, licensor,
licensee, employee or any other person or entity not a party hereto.

                                      -22-

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be executed by their respective officers hereunto duly
authorized, as of the date first above written.

                                        ARIS INDUSTRIES, INC.

                                        By:
                                           ------------------------------------
                                            Name:  Arnold H. Simon
                                            Title: Chairman and Chief Executive
                                                   Officer

                                        XOXO CLOTHING COMPANY, INCORPORATED

                                        By:
                                           ------------------------------------
                                            Name:  Arnold H. Simon
                                            Title: Chief Executive Officer

                                        KC ARIS FUND I, L.P.

                                        By: KC Aris Group I, Inc.,
                                            its general partner

                                        By:
                                           ------------------------------------
                                            Name:  Ryan Kavanaugh
                                            Title: Chief Executive Officer

AGREED AND ACKNOWLEDGED
AS TO SECTION VI A ONLY:

By:
   -------------------------------------
          Arnold H. Simon

                                      -23-

<PAGE>

                                    Schedules

3.1       All Subsidiaries

3.4       Required Consents, etc.

3.5       Conflicting Agreements

3.6       Litigation, etc.

3.10(B)   Accounts Recievable

3.10(C)   Projected Financial Statements

3.11      Material Agreements

3.13      Compliance With Laws

3.16      Intellectual Property

3.17      Undisclosed Liabilities

3.18      Changes Since September 30, 2000

3.19      Labor Matters

                                      -24-

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