Document:

exv10w6

 

Exhibit 10.6

          AGREEMENT made as of the 1st day of April, 2007 by and between BILL BLASS INTERNATIONAL, LLC,
a Delaware limited liability company with offices at 550 Seventh Avenue, New York, New York 10018
(hereinafter referred to as the “Company”), and THE FASHION HOUSE, INC., a ___corporation with
offices at 6310 San Vincente Boulevard, #330, Los Angeles, California 90048-5499 (hereinafter
referred to as “Licensee”).

W I T N E S S E T H :

          WHEREAS, the Company and Licensee have agreed to enter into an arrangement pursuant to which
Licensee, under a license from and subject to the approval of the Company, shall manufacture,
distribute and sell Products (as hereinafter defined) under the Licensed Mark (as hereinafter
defined) in the Territory (as hereinafter defined); and

          WHEREAS, the Company and Licensee previously have entered into arrangements pursuant to which
Licensee, under licenses from and subject to the approval of the Company, manufacture, distribute
and sell better, prestige and luxury Products under the marks BLASS BY BILL BLASS, BILL BLASS and,
as of the date hereof, BLASSPORT, also in the Territory (such licenses, collectively, the “Other
Line Agreements”);

          WHEREAS, set forth on Annex I at the end of the Agreement is a schedule of the location, by
reference to paragraph, of the defined terms used in this Agreement;

 

 

          NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the Company
and Licensee do hereby respectively grant, covenant and agree as follows:

 

 

1. GRANT OF LICENSE

     1.1 Grant of License.

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          (a) The Company hereby grants to Licensee, during the term of this Agreement, an exclusive
license (except as to the Company’s rights under Paragraph 1.1(c) and Paragraph 19.10) to use the
mark COLLECTION — BILL BLASS, solely in forms to be agreed upon by the parties (the “Licensed
Mark”), throughout the world, other than Japan (the “Territory”), solely in connection with
Licensee’s manufacture, distribution and sale of women’s shoes, all such items of the types,
qualities and styles traditionally sold in the channels of distribution approved in Paragraph 5.7.
Items authorized for sale hereunder shall be referred to as “Products.” Items within the
definition of “Products” that are manufactured, distributed and sold by Licensee in accordance with
this Agreement shall be referred to collectively hereinafter as “Articles.” The foregoing and any
other provision to the contrary contained herein notwithstanding, Licensee acknowledges and agrees
that: (1) the Company reserves all rights to the Licensed Mark except those specifically granted
herein to Licensee, and (2) Licensee shall not use the Licensed Mark for any purpose whatsoever on
the Internet (including as a domain name or in metatags), microfilm, e-mail, electronic databases,
on-line services, CD-ROM or other similar media now existing or hereafter developed, except that,
subject to the Company’s approval of uses in accordance herewith and provided that Licensee uses
all commercially reasonable efforts to prevent solicitation of and sales to customers outside the
Territory, Licensee may utilize the Licensed Mark on the Internet (x) to advertise (but not sell)
Articles on Licensee’s website at http://___, and other sites approved by the Company,
and (y) in emails with Licensee’s customers located within the Territory (but not in unsolicited
emails).

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          (b) Notwithstanding anything to the contrary contained herein, if at any time after the first
Annual Period, (1) Licensee is not selling a commercially significant amount of Articles in any
country and (2) the Company, directly or through a licensee has the opportunity to sell shoes
valued at one million dollars ($1,000,000) or more in such country under the Licensed Mark, then,
unless Licensee agrees in writing to match that opportunity, at the Company’s request all rights in
respect of such country shall revert to the Company and such country shall be deemed excluded from
the Territory.

          (c) Notwithstanding anything to the contrary contained herein, the license granted hereunder
with respect to the manufacture, distribution and sale of Products sold under the Licensed Mark is
non-exclusive in that the Company: (i) itself may, or may grant to third parties the right to,
manufacture women’s shoes (including Products) under the Licensed Mark, including within the
Territory, provided that such items are not sold within the Territory, and (ii) may exercise or
grant rights as specified in Paragraph 19.11 hereof.

          (d) No provision contained herein is intended to grant to Licensee rights in any marks(s)
owned by the Company other than the Licensed Mark. The Company, itself and through licensees,
freely may manufacture, distribute and sell any products or services, including women’s shoes,
under mark(s) owned by the Company including, without limitation, variations of the mark BILL BLASS
(other than the Licensed Mark and any other mark licensed to Licensee under the Other Line
Agreements or any other agreements between the parties).

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     1.2 All Articles to Bear Licensed Mark. To the extent commercially practicable (or as
otherwise provided in Section 14.3 hereof), all Articles shall bear the Licensed Mark (it being
understood that the parties contemplate that the Licensed Mark shall be on the labels within
Products and the boxes therefor). No Articles (i.e., Products bearing or sold under the
Licensed Mark) shall be sold or otherwise distributed by Licensee under any mark other than the
Licensed Mark.

     1.3 No Retail Sales. Licensee acknowledges that the rights granted to it hereunder do not
include the right to operate a boutique under the Licensed Mark (or any variation or simulation
thereof) or otherwise to itself sell Articles at retail (including, without limitation, through
catalog, mail or internet orders), except that Licensee may sell Articles through a factory outlet
operated by Licensee under Licensee’s name, provided that “Net Sales” (as hereinafter defined) of
Articles through such factory outlet during any Annual Period shall not constitute more than five
percent (5%) of Net Sales for such Annual Period.

     1.4 Exploitation. Licensee shall use its best efforts, but no less than the efforts
generally employed by shoe licensees of other fashion designers, to develop and promote all
Products and otherwise exploit the rights herein granted throughout the Territory (subject to the
restrictions contained herein) and to sell the maximum quantity of Articles therein consistent with
the high standards and prestige represented by the applicable Licensed Mark and the advertising and
marketing philosophies of the Company.

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     1.5 Disputes Between Licensees. In the event of any dispute between Licensee and any other
licensee of the Company in the Territory with respect to the products covered by their respective
licenses, such dispute shall be mediated in good faith by the Company after hearing the position of
Licensee and each such other licensee. The Company’s determination shall be final and binding upon
Licensee.

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     1.6 Diversion. Licensee shall not (a) export Articles from the Territory, (b) divert (as
hereafter defined) Articles, or (c) contract for the manufacture of Articles with, or sell Articles
to, any person or entity which Licensee knows or has reason to believe (including, without
limitation, by reason of a previous history of exportation or diversion of Articles, other Products
or any other products which is known to Licensee) may export such Articles from the Territory or
divert Articles. To “divert” means, for Licensee or any other person/entity, to sell or otherwise
transfer Articles other than to appropriate retail locations (as specified in Paragraph 5.7)
located in the Territory for sale within the Territory, and, for retail locations, to resell or
otherwise transfer Articles other than to consumers from their retail premises in the Territory.
In order to monitor and control potential exportation/diversion problems, Licensee shall use
commercially reasonable efforts to ensure that the Company and Licensee be able to determine, with
respect to Articles which are found to have been exported/diverted, the entity which sold such
exported/diverted Articles or from which such Articles were exported/diverted. In addition,
Licensee shall cooperate with the Company in connection with anti-counterfeiting programs relating
to the Licensed Mark and/or Articles as well as other products sold under the Licensed Mark,
provided that Licensee shall not be required to incur any out-of-pocket expenses in connection with
such cooperation. In the event that, despite all of the foregoing or otherwise, Articles are
exported/diverted on more than one occasion, the Company on the second occasion and thereafter may
purchase the exported/diverted Articles at Licensee’s expense and, in the Company’s discretion,
destroy such Articles or return such Articles to Licensee.

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2. TERM

     2.1 Term. The initial term of this Agreement shall commence as of the date hereof and
continue through March 31, 2011. Thereafter, this Agreement automatically shall renew for an
additional term of five (5) years, provided that, with respect to such renewal, (a) Licensee
delivers to the Company a written notice of its election to renew this Agreement at least six
months prior to the end of the initial term, (b) “Net Sales” (as defined in Paragraph 9.1(c))
during the fifth “Annual Period” (as defined below in this Paragraph 2.1) of the initial term are
at least One Hundred and Sixty Five Million Dollars ($165,000) (the “Renewal Threshold”), and (c)
Licensee has performed all of its obligations under this Agreement at the time the option to renew
is exercised and at the end of the initial term. Each twelve (12) month period commencing on each
April 1st during the term of this Agreement shall constitute and shall be referred to hereinafter
as an “Annual Period.”

     2.2 Limitations on Renewal. If Licensee otherwise effectively renews this Agreement
but Net Sales during the last Annual Period of the initial term are less than the Renewal
Threshold, unless the Company waives the shortfall, the renewal shall be ineffective and this
Agreement forthwith shall terminate. If, however, at the time it is determined that there was such
a shortfall, Licensee already in good faith had commenced the development of the next collection of
Articles, termination shall be effective upon the end of the sell off of such collection in
accordance herewith, but in no event later than June 31, 2011 (unless the Agreement otherwise is
terminated in accordance herewith).

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     2.3 Termination Due To Insufficient Net Sales. Notwithstanding the provisions of
Paragraphs 2.1 and 2.2 above and in addition to the termination provisions provided in Paragraph 17
below, the Company may terminate this Agreement within thirty (30) days after its receipt of any of
the annual statements to be delivered to the Company pursuant to Paragraph 12.2 below in the event
that (i) “Net Sales” (as hereinafter defined) for the second or any subsequent Annual Period
covered by any such annual statement are less than the amount necessary to generate the “Guaranteed
Minimum Royalty” and “Guaranteed Minimum Fee” (both as hereinafter defined) for such Annual Period.
Any such termination shall be effective as of the end of the sell off of the collections then in
process, but in no event later than the June 30th following the Annual Period for which required
level of Net Sales were not reached.

3. DESIGN SERVICES

     3.1 Collections. During each Annual Period, Licensee shall manufacture, distribute
and sell Spring and Fall collections of Articles. The first collection shall be the Spring 2008
collection.

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     3.2 Development. During each Annual Period, Licensee shall submit to the Company
materials, designs, sketches, colors, tags, labels and packaging for each of its lines of Articles
from which the Company may select those, if any, which the Company approves for use in connection
with Articles. The Company shall approve or disapprove the materials, designs, sketches, colors,
tags, labels and packaging submitted as aforesaid, for the line for which it is submitted, and
shall discuss with Licensee any modifications or alterations thereof. Any such approval by the
Company shall be given prior to use of such materials, designs, sketches, colors, tags, labels or
packaging by Licensee in accordance with Section 6.1 hereof. Once any item is approved by the
Company hereunder, Licensee shall commence diligently to produce and show such item.

     3.3 Regular Meetings. The Company and Licensee shall meet regularly to discuss and agree
upon concepts for new Articles and materials relating thereto as well as marketing plans and
strategies.

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     3.4 Sketches and Other Materials are Property of Company. All sketches and other materials
(a) provided by the Company, or (b) provided by Licensee and approved by the Company, shall be, as
between the Company and Licensee, the exclusive property of the Company, and shall be used by
Licensee solely in connection with the manufacture, distribution and sale of Articles in the
Territory and pursuant to this Agreement. If Licensee chooses not to use such sketches or other
material, Licensee shall deliver them to the Company, at Licensee’s expense, and Licensee may not
use them or permit their use thereafter. Whether or not Licensee chooses to use any such sketches
and other material, the Company may use and permit others to use them in any manner it desires,
provided that, to the extent of the Company’s other shoe licensees, if any, such use does not
conflict with any rights granted to Licensee hereunder. All sketches and materials created by
Licensee but not approved by the Company shall be, as between the Company and Licensee, the
exclusive property of Licensee and the Company shall have no rights in respect thereof.

     3.5 Costs of Production. Licensee shall be responsible for making all samples as well as
for the production of Articles, and Licensee shall bear all costs in connection therewith.

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     3.6 Protection of Innovation. Neither Licensee nor its affiliates shall: (a) manufacture
(or cause to be manufactured), market, distribute or sell any Products with a distinctive or unique
design first developed for or used with Articles, or (b) distribute or sell any Products with or
using labeling, advertising or promotional material that is the same or confusingly similar to
labeling, advertising or promotional material then or ever used by Licensee in connection with
Articles, nor shall any of them authorize, assist, engage or permit any third party to do any of
the foregoing.

4. CONFIDENTIALITY

     4.1 Confidentiality.

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          (a) Each party acknowledges that all information relating to the business and operations of
the other party that such other party discloses during or prior to the term of this Agreement
(including, without limitation, all financial information related to the business and operations
and all information regarding its officers, directors and employees, including Bill Blass), as well
as all concepts, sketches, plans and designs used or proposed for use in connection with Articles
(by whomever used or proposed) (collectively “Confidential Information”), is the valuable property
of the party disclosing the same (except that all concepts, sketches, plans, features,
manufacturing specifications and designs shall be the property of the Company as and to the extent
provided in Section 3.4). Each party acknowledges the need to preserve the confidentiality and
secrecy of the Confidential Information and agrees that, both during the term of this Agreement and
after the termination hereof, it shall not use or disclose the same, except as provided below, and
it shall take all necessary steps to ensure that use by it or by its contractors, suppliers,
distributors, agents and employees (which use shall be solely as necessary for, and in connection
with, the manufacture, distribution, sale, advertising or promotion of Articles) shall preserve in
all respects such confidentiality and secrecy. Each party hereby the other and its officers,
directors and employees against any damage of any kind (including attorneys’ fees and expenses)
which may be suffered by any of them as a result of any breach by such party or its contractors,
suppliers, agents or employees of the provisions of this paragraph.

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          (b) The parties herein further acknowledge and agree that a party’s remedies at law for a
breach or threatened breach of this Paragraph 4.1 would be inadequate and, in recognition of this
fact, in the event of a breach or threatened breach by a recipient of this Paragraph 4.1, the
recipient agrees that, in addition to any remedies at law, at the other party’s option, it shall be
entitled, without posting bond, to obtain equitable relief in the form of specific performance,
restraining order, preliminary or permanent injunction or any other equitable remedy which then may
be available. Nothing contained herein shall be construed as prohibiting the parties from pursuing
any other remedies available to it for such breach or threatened breach. Pursuit of any remedy at
law or in equity shall not be deemed an election of remedies.

          (c) The provisions of this paragraph and the parties’ obligations hereunder shall survive the
expiration or termination of this Agreement.

5. MANUFACTURE OF ARTICLES; QUALITY CONTROL

     5.1 General Quality. The contents and workmanship of Articles shall be at all times
of the highest quality appropriate for the line in which it is sold. In addition, Articles shall
be distributed and sold only with packaging, presentation and sales promotion materials appropriate
for line and consistent with the Company’s standards therefor. It is anticipated that Licensee
shall set its wholesale prices of Articles at a level to encourage the development of sales of
Articles. However, it is acknowledged that Licensee will set its wholesale prices for Articles in
its discretion.

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     5.2 Quality Approval. The styles, designs, packaging, contents, workmanship and quality of
all Articles, as well as all advertising and promotional materials relating thereto, and the
specific media in which they shall be disseminated, must be approved by the Company in accordance
with Section 6.1 hereof prior to any distribution, sale or other use thereof. Any other provision
of this Agreement notwithstanding, the Company at all times shall have the right to take all
actions which it reasonably deems necessary to ensure that: (a) Articles manufactured or sold
hereunder, and the advertising and promotion of such Articles, are consistent with the reputation
and prestige of the applicable Licensed Mark and (b) Articles are manufactured, distributed, sold
and promoted by the Licensee in accordance with this Agreement, provided that, to the extent
commercially practicable, prior to taking such action, the Company shall provide Licensee with an
opportunity to take corrective action.

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     5.3 Prototypes and Samples. Before selling or distributing any Article, Licensee shall
submit to the Company, free of charge, for its approval in accordance with Section 6.1 hereof, one
(1) sketch of each such Article together with (i) samples of all materials of which such Articles
shall be comprised and (ii) the tags, labels and packaging to be used in connection therewith. In
addition, after Licensee begins selling or distributing any Article, upon the Company’s request,
Licensee shall submit to the Company then-current production samples of each Article produced
hereunder so that the Company may assure itself of the maintenance of the quality standards set
forth herein. All Articles to be sold hereunder shall be at least equal in quality to the sketches
and samples approved by the Company. The Company and its duly authorized representatives shall
have the right, upon reasonable advance notice and during normal business hours, to examine
Articles in the process of being manufactured and to inspect all facilities utilized by or on
behalf of Licensee in connection therewith.

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     5.4 Compliance with Law and Company Requirements. All Articles shall be manufactured,
sold, labeled, packaged, distributed and advertised in accordance with all applicable laws and
regulations, whether foreign or domestic, national, regional or local, throughout the Territory,
including all child and other labor laws, customs requirements and advertising and consumer
protection laws. Licensee shall monitor the performance of its retail location purchasers and of
Contractors (as hereinafter defined) in this regard and shall (a) notify Company of any instances
of noncompliance, (b) endeavor to take any corrective action as may be reasonably requested by
Company to remedy the same and (c) terminate agreements with persons that repeatedly fail to so
comply. No proposal or approval by Company of any Articles, or portion thereof, or any other
materials, designs, tags, labeling, packaging or other advertising or promotional materials, shall
be deemed to limit or modify Licensee’s obligations under this paragraph. If Licensee determines
that any otherwise approved Articles or portion thereof, or any other materials, designs, tags,
labeling, packaging or other advertising or promotional materials, are not in compliance with any
applicable law, Licensee shall notify Company and the parties shall seek to rectify the problem.
Any proposed modification to rectify the problem shall be subject to Company’s prior approval and
the modified item also shall be subject to Company’s final approval.

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     5.5 Form and Manner of Use of Licensed Mark. Licensee shall use and display the Licensed
Mark and Other Intellectual Property (as hereinafter defined) only in such form and manner as are
specifically approved in writing by the Company in accordance with Paragraph 6.1 hereof. Licensee
shall cause to appear on all Articles produced hereunder, and on their tags, packaging and the
like, and on all advertising, promotional and publicity material used in connection therewith,
including, without limitation, point-of-sale displays and similar materials, and on any printed
matter of any kind on which the Licensed Mark and/or Other Intellectual Property appear, including
but not limited to business cards, invoices, order forms and stationery, such legends, markings and
notices as the Company may request. Before using or releasing any such material, Licensee shall
submit to the Company, for its approval, proposed advertising (including a description of the
proposed placement thereof), promotional and publicity copy, tags, labels, packaging and the like
and all printed matter of any kind on which the Licensed Mark and/or Other Intellectual Property
appear. The same shall not be used or released prior to Licensee’s receipt of such approval and
Licensee shall provide the Company with finished versions thereof, free of charge, upon the
Company’s reasonable request.

     5.6 Departure from Approved Sample. After any sample, copy, artwork or other material has
been approved, Licensee shall not depart therefrom in any respect without the prior written
approval of the Company. If the Company should disapprove any sample Article or any sample tag,
label, packaging or the like, or any advertising, promotional or publicity material, Licensee shall
neither use nor permit the same to be used in any manner.

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     5.7 Distribution.

          (a) In order to maintain the reputation, image and prestige of the Licensed Mark, Licensee’s
distribution patterns in respect of Articles shall consist solely of retail locations whose
location, merchandising and overall operations are consistent with the high quality and prestige
level of the Articles and the reputation, image and prestige of the Licensed Mark. Such retail
distribution channels shall be (1) prestige retail department and specialty stores such as Saks
Fifth Avenue. Bergdorf Goodman, Neiman Marcus, Nordstrom and other locations of equal or higher
caliber, (2) catalogues associated with the retail stores identified in (1), (3) the Internet
websites Zappos.com, Shoes.com and other Internet portals approved by the Company in writing from
time to time, (4) to the extent provided in Paragraph 1.3, a factory store operated by Licensee
under Licensee’s name, and (5) only for Articles sold by Licensee at more than twenty five percent
(25%) off the full published wholesale price of Articles (such sales, “Close-Out Sales”), Shoe
Pavilion, DSW and Lohmans, provided that sales to said three entities shall not, in the aggregate,
exceed twenty five percent (25%) of Net Sales during any Annual Period.. Without limiting the
generality of the foregoing, Licensee acknowledges and agrees that: (i) it shall not sell or
distribute, or sell to persons who may sell or distribute, Articles to K-Mart, Wal-Mart, Target,
Mervyn’s, J.C. Penney, Sears, Kohl’s, club stores or any other discounter or retail location not
meeting the standard set forth in the previous sentences of this subparagraph, and (ii) it shall
not accept production orders from any discounter without the Company’s prior written approval.

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          (b) If the Company objects in writing to the continued sale of Articles to any retail location
and provides bona fide reasons for such objection, Licensee shall use commercially
reasonable efforts to correct the problem, if possible, and, if the problem cannot be corrected or
is not corrected within a commercially reasonable period of time, Licensee shall terminate sales to
such retail location.

          (c) Licensee shall not enter into any agreement with a distributor or sublicensee related to
the Articles without the Company’s prior written consent.

     5.8 Contractors.

          (a) Licensee may use contractors for the manufacture or assembly of Articles (“Contractors”).
The Company’s prior approval of a prospective Contractor shall not be required. However, if the
Company objects to the continued engagement of any Contractor as not being in compliance with the
requirements of this Agreement, Licensee shall use commercially reasonable efforts to correct the
problem, if possible, and, if the problem cannot be corrected or is not corrected within a
commercially reasonable period of time, Licensee shall terminate its engagement of such Contractor.

          (b) Each Contractor must agree (i) not to use, except in connection with the manufacture of
Articles for Licensee, or disclose to any third party any proprietary information regarding
Articles, (ii) to permit the Company to exercise its rights hereunder to inspect the Contractor’s
facilities, (iii) not to use any child labor or violate any labor or other laws in connection with
the manufacture of Articles, and (iv) to sell Articles manufactured by it for Licensee only to
Licensee and to no other person or entity.

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          (c) Neither the engagement of a Contractor by Licensee nor the Company’s failure to object to
a Contractor shall limit Licensee’s obligations hereunder, i.e., any act or omission by a
Contractor which would constitute a material violation of this Agreement also shall constitute a
material violation of this Agreement by Licensee.

6. APPROVALS

     6.1 Subjective Approvals; Approvals in Writing. It is specifically understood and
agreed that the Company’s approval pursuant to this Agreement may be based solely on the Company’s
subjective standards and may be withheld in the Company’s sole and absolute discretion. No
approval shall be deemed given by the Company hereunder unless it is in writing signed by the
Company.

     6.2 Limitations on Approvals. Notwithstanding anything to the contrary herein, the
Company’s approval of any Articles for inclusion in, or of materials of any kind for use in
connection with the manufacture, distribution, sale, advertising and/or promotion of, any
particular collection of Articles shall constitute approval only for inclusion or for such use in
connection with such collection and shall not be deemed to constitute approval of such Articles or
of any such materials with respect to any other collection of Articles.

7. ADVERTISING; SHOWROOM

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     7.1 Advertising/General. Licensee shall exercise its best efforts to promote and
advertise Articles in the various appropriate media throughout the Territory. Any advertisements
or promotions related to Articles shall be subject to the Company’s prior approval (or deemed
approval) in accordance with Section 6.1 hereof. In addition, the specific media or publications
by or in which such advertisements and promotions shall be distributed also shall be subject to the
Company’s prior approval (or deemed approval) in accordance with Section 6.1 hereof. Without
limiting the generality of the foregoing, Licensee shall not place any material in any medium or
publication which is not compatible with the reputation, image and prestige of the Company. The
foregoing notwithstanding, subject to the Company’s approval of uses in accordance herewith and
provided that Licensee uses all commercially reasonable efforts to prevent solicitation of and
sales to customers outside the Territory, the Company agrees that Licensee may utilize the Licensed
Mark on the Internet (x) to advertise (but not sell) Articles on Licensee’s website at
http://___, and other sites approved by the Company, and (y) in emails with Licensee’s
customers located within the Territory (but not in unsolicited emails).

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     7.2 Advertising Payments. In addition to sums that may be expended by Licensee for
cooperative and other advertising of Articles, Licensee shall pay to the Company for each Annual
Period an amount equal to two percent (2%) of “Net Sales” (as hereinafter defined) of Articles for
such Annual Period (each, the “Advertising Minimum” for such Annual Period). The Company shall
spend the amount so paid by Licensee to advertise the name and/or mark “BILL BLASS” (or variations
thereof) in such manners as the Company determines are appropriate in its sole discretion. The
Advertising Minimum hereunder shall be accounted for and paid quarterly within thirty (30) days
after close of each calendar quarter during the term of this Agreement (or portion thereof in the
event of prior termination for any reason).

     7.3 Showroom. During the term of this Agreement, Licensee shall maintain a separate area
in its showroom in New York, New York, exclusively for the display of finished Articles. Said
showroom shall be staffed and maintained in a manner commensurate with the reputation and prestige
of the Licensed Mark as designations for products of the highest quality.

8. GUARANTEED MINIMUM ROYALTY

     8.1 Calculation of Guaranteed Minimum Royalty. In consideration for the use of the
Licensed Mark hereunder, Licensee shall pay to the Company a guaranteed minimum royalty for each
Annual Period (each, the “Guaranteed Minimum Royalty” for such Annual Period) as follows:

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	ANNUAL PERIOD	 	GUARANTEED MINIMUM ROYALTY
	 
	 
	First
	 	$	22,500	 
	Second
	 	$	25,000	 
	Third
	 	$	27,500	 
	Fourth through Ninth
	 	$	40,000	 (each)

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     8.2 Payment of Guaranteed Minimum Royalty. The Guaranteed Minimum Royalty payable for
each Annual Period shall be paid to the Company in four (4) equal quarterly installments on April
1, July 1, October 1 and January 1 of such Annual Period.

     8.3 Credit Against Sales Royalty. The Guaranteed Minimum Royalty for each Annual
Period shall be credited against the Sales Royalty for only the same Annual Period as provided in
Paragraph 9 below.

9. SALES ROYALTY

     9.1 Calculation of Sales Royalty. In consideration for the use of the Licensed Mark
hereunder, Licensee shall pay to the Company for each Annual Period a sales royalty equal to three
and one half percent (31/2%) of Net Sales for such Annual Period (each, the “Sales Royalty” for such
Annual Period).

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     9.2 Definition of Net Sales. For purposes of this Agreement, “Net Sales” shall be
deemed to mean the aggregate invoiced amounts of Articles (and Products to which the Licensed Mark
is not affixed and Articles from which the Licensed Mark has been removed in accordance with the
provisions of Paragraph 14.3 below) sold or shipped by Licensee or any of its affiliates, less (i)
customary trade discounts and markdown allowances actually earned and taken by customers (but
expressly excluding discounts for prompt payment, such as “anticipation” discounts, and co-op
advertising allowances) and (ii) amounts of returns or credits actually taken or granted by
Licensee in accordance with its ordinary return policy. No deduction shall be made for other
discounts or allowances of any kind or for any purpose, or for uncollectible accounts, accruals or
reserves for returns, or costs incurred by Licensee. Sales or transfers of Articles made other
than in arm’s length transactions and/or at less than the regular wholesale price shall be deemed
to have been made at the regular wholesale price thereof.

     9.3 Payment of Sales Royalty. The Sales Royalty hereunder shall be accounted for and paid
quarterly within thirty (30) days after close of each calendar quarter during the term of this
Agreement (or portion thereof in the event of prior termination for any reason). The Sales Royalty
payable for each accounting and payment period during each Annual Period shall be computed on the
basis of Net Sales during such Annual Period, with a credit for any Guaranteed Minimum Royalty and
Sales Royalty payments theretofore made to the Company for said Annual Period. Deductions for
returns or other authorized credits shall be made in the accounting and payment period in which the
exchange is given (and no adjustment shall be made in the period in which the original sale was
accounted for).

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     9.4 Credit Against Guaranteed Minimum Royalty. No payment of Sales Royalty for any Annual
Period in excess of payments of Guaranteed Minimum Royalty for the same Annual Period shall be
credited against the Guaranteed Minimum Royalty due to the Company for any other Annual Period.

10. GUARANTEED MINIMUM FEE

     10.1 Calculation of Guaranteed Minimum Fee. In consideration for services to be
performed by the Company hereunder, Licensee shall pay to the Company a guaranteed minimum fee for
each Annual Period (each, the “Guaranteed Minimum Fee” for such Annual Period), as follows:

	 	 	 	 	 
	ANNUAL PERIOD	 	GUARANTEED MINIMUM FEE
	 
	First
	 	$	22,500	 
	Second
	 	$	25,000	 
	Third
	 	$	27,500	 
	Fourth through Ninth
	 	$	40,000	 (each)

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     10.2 Payment of Guaranteed Minimum Fee. The Guaranteed Minimum Fee payable for each
Annual Period shall be paid to the Company in four (4) equal quarterly installments on April 1,
July 1, October 1 and January 1 of such Annual Period.

     10.3 Credit Against Sales Fee. The Guaranteed Minimum Fee for each Annual Period
shall be credited against the Sales Fee for only the same Annual Period as provided in Paragraph 11
below.

11. SALES FEE

     11.1 Calculation of Sales Fee. In consideration for the services to be performed by
the Company hereunder, Licensee shall pay to the Company for each Annual Period a sales fee equal
to

 three and one half percent (31/2%) of Net Sales for such Annual Period (each, the “Sales Fee”
for such Annual Period).

     11.2 Payment of Sales Fee. The Sales Fee hereunder shall be accounted for and paid
quarterly, within thirty (30) days after close of each calendar quarter during the term of this
Agreement (or portion thereof in the event of prior termination for any reason). The Sales Fee
payable for each accounting and payment period during each Annual Period shall be computed on the
basis of Net Sales during such Annual Period, with a credit for any Guaranteed Minimum Fee and
Sales Fee payments theretofore made to the Company for said Annual Period. Deductions for returns
or other authorized credits shall be made in the accounting and payment period in which the
exchange is given (and no adjustment shall be made in the period in which the original sale was
accounted for).

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     11.3 Credit Against Guaranteed Minimum Fee. No payment of Sales Fee for any Annual Period
in excess of payments of Guaranteed Minimum Fee for the same Annual Period shall be credited
against the Guaranteed Minimum Fee due to the Company for any other Annual Period.

12. SALES STATEMENT

     12.1 Statement. Licensee shall deliver to the Company, at the time each payment of a
Sales Royalty or Sales Fee is due, a statement signed by a duly authorized officer of Licensee and
certified by him or her as accurate indicating, by month and by outlet, the number and invoice
price of all Articles shipped during the period covered by such Sales Royalty and Sales Fee
payment, the amount of discounts and credits from gross sales which may be deducted therefrom and a
computation of the amount of Sales Royalty and Sales Fee payable hereunder for said period. Such
statement shall be furnished to the Company whether or not any Articles have been sold or exchanged
during the period for which such statement is due. Together with each such statement, Licensee
shall deliver to the Company a copy of Licensee’s then current customer list. In addition, at the
Company’s request, Licensee promptly shall make available a copy of each invoice for Articles
shipped during the period covered by each such statement.

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     12.2 Statement by Accountants. Licensee shall deliver to the Company, not later than
forty-five (45) days after the close of each Annual Period (or portion thereof in the event of
prior termination for any reason), a statement signed and certified by its regular certified public
accountants relating to said entire Annual Period, setting forth the same information required to
be submitted by Licensee in accordance with Paragraph 12.1 above and also setting forth, with
respect to the advertising and promotion of Articles, the total amount, if any, expended by
Licensee therefor during such Annual Period, including and stating separately those amounts paid
for cooperative, trade and national consumer media advertisements, together with media invoice
copies and tearsheets, station/network logs or other evidence of publication.

13. BOOKS AND RECORDS; AUDITS

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     13.1 Books and Records; Audits. Licensee shall prepare and maintain, in such manner
as shall allow its accountants to audit same in accordance with generally accepted accounting
principles, complete and accurate books of account and records (specifically including without
limitation the originals or copies of documents supporting entries in the books of account)
covering all transactions arising out of or relating to this Agreement. The Company and its duly
authorized representatives have the right, during regular business hours, for the duration of this
Agreement and for two (2) years thereafter, to audit said books of account and records and examine
all other documents and material in the possession or under the control of Licensee with respect to
the subject matter and the terms of this Agreement, including, without limitation, invoices,
credits and shipping documents. All such books of account, records and documents shall be kept
available by Licensee for at least two (2) years after the end of the Annual Period to which they
relate.

     13.2 Discrepancies. If, as a result of any audit of Licensee’s books and records, it
is shown that Licensee’s payments were less than the amount which should have been paid, all
payments required to be made to eliminate any discrepancy revealed by said audit shall be made
promptly upon the Company’s demand therefor, and, if the discrepancy is in an amount equal to two
percent (2%) or more of the amount actually paid with respect to sales occurring during the period
in question, Licensee promptly shall reimburse the Company for the cost of such audit.

14. THE LICENSED MARK

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     14.1 Limitations on Use. Licensee shall not use the Licensed Mark, in whole or in
part, as a corporate name or trade name or otherwise except as expressly provided herein. Licensee
shall not join any name or names with the Licensed Mark so as to form a new mark. Licensee shall
not use any name or names in connection with the Licensed Mark in any advertising, publicity,
labeling, packaging or printed matter of any kind utilized by Licensee in connection with Articles,
unless and until the Company consents thereto in writing.

     14.2 Company as Owner. Licensee acknowledges that the Company is the owner of all
right, title and interest in and to the Licensed Mark and the Other Intellectual Property (as
hereinafter defined) in any form or embodiment thereof and is also the owner of the goodwill
attached or which shall become attached to any such items in connection with the business and goods
in relation to which the same has been, is or shall be used. Sales by Licensee shall be deemed to
have been made by the Company for purposes of trademark registration and all uses of the Licensed
Mark by Licensee shall inure to the benefit of the Company. Licensee shall not, at any time, do or
suffer to be done any act or thing which may in any way adversely affect any rights of the Company
in and to the Licensed Mark, the Other Intellectual Property or any registrations therefor, or
which, directly or indirectly, may reduce the value or detract from the reputation of the Licensed
Mark or the Other Intellectual Property.

     14.3 First Quality. Licensee shall ensure that all Articles sold under the Licensed Mark
sold or otherwise distributed hereunder are of first quality only and shall remove the Licensed
Mark from any Articles to be sold as “seconds” or as “irregulars.”

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     14.4 Registration. The Licensed Mark and Other Intellectual Property shall at all times be
owned by the Company, and all registrations thereof in the United States and elsewhere shall be in
the name of the Company. Licensee shall not seek to register the Licensed Mark, Other Intellectual
Property or any variation or simulation of the foregoing in any country for any products in its
name or in any other name other than the Company’s. Any attempt by Licensee to register the
Licensed Mark, Other Intellectual Property or any variation or simulation of the foregoing shall
constitute a material and incurable default of this Agreement by Licensee.

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     14.5 Cooperation. At the Company’s request, Licensee shall execute any documents
reasonably required by the Company to confirm the Company’s ownership of all rights in and to the
Licensed Mark and/or the Other Intellectual Property and the respective rights of the Company and
Licensee pursuant to this Agreement. Licensee shall cooperate with the Company in connection with
(a) the filing and prosecution by the Company of applications in the Company’s name to register the
Licensed Mark for Products in the Territory and/or to register the Other Intellectual Property in
the Territory and (b) the maintenance and renewal of such registrations as may issue. The Company
shall bear the costs of the foregoing, except that, if the Company files, prosecutes, maintains or
renews applications or registrations in any country at Licensee’s request and Licensee does not
within six (6) months thereafter sell commercially significant amounts of Articles in such country,
Licensee shall reimburse the Company for its costs. It is agreed that Licensee shall not use the
Licensed Mark, nor may any particular Articles be marketed, advertised, promoted, publicized or
otherwise exploited or distributed, offered for sale or sold, in any country until (1) an
appropriate trademark search has been conducted, an application to register the particular Licensed
Mark for Products in the relevant trademark class(es) has been filed and/or any other legally
required or desirable document in respect thereof has been filed or executed (as appropriate), or
(2) the Company determines in good faith that it would be legally preferable not to seek to
register the Licensed Mark but that there is no material impediment to the use of the Licensed
Mark. If the Company in good faith and after consultation with trademark counsel should determine
that the use of the Licensed Mark and/or Other Intellectual Property on any or

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all Products violates or may violate the trademark or other rights of another in any area, upon
receipt of notice from the Company, Licensee shall discontinue its sale and distribution (and cause
any retail locations and approved distributors/sublicensees (if any) to discontinue the sale and
distribution) of the affected Articles sold under the Licensed Mark and/or Other Intellectual
Property to such area.

     14.6 Legal and Other Requirements. Licensee shall use the Licensed Mark and the Other
Intellectual Property in the Territory strictly in compliance with the legal requirements obtaining
therein and shall use such markings in connection therewith as may be required by any applicable
legal provisions. In addition, to the extent commercially reasonable, Licensee shall cause to
appear on all Articles and on all materials on or in connection with which the Licensed Mark and/or
Other Intellectual Property are used, such legends, markings and notices as may be reasonably
necessary in order to give appropriate notice of any trademark, trade name, copyright or other
rights therein or pertaining thereto.

     14.7 No Challenge. Licensee never shall challenge the Company’s ownership of or the
validity of the Licensed Mark or any other Other Intellectual Property, any application for
registration therefor, any registration thereof or any rights of the Company therein. Any such
challenge shall constitute an incurable default of this Agreement.

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     14.8 Infringement. In the event that Licensee learns of any infringement or imitation of
the Licensed Mark or Other Intellectual Property or of any use by any person of a trademark or
other intellectual property similar to the Licensed Mark and/or the Other Intellectual Property, it
promptly shall notify the Company thereof. The Company thereupon shall take such action as it
deems advisable for the protection of its rights in and to the Licensed Mark and/or Other
Intellectual Property and, if requested to do so by the Company, Licensee shall cooperate with the
Company in all respects including, without limitation, by (a) being a plaintiff or co-plaintiff in
an infringement action, and (b) causing its officers to execute pleadings and other necessary
documents. It is understood that, if Licensee becomes a plaintiff or co-plaintiff at the Company’s
request, the Company and its counsel shall bear primary responsibility for the action. If,
however, Licensee engages counsel in connection therewith and such counsel is required in any such
action to engage in conduct beyond the review of court documents prepared by other counsel, all
reasonable legal fees attendant upon Licensee at the Company’s behest shall be reimbursed by the
Company. All actions conducted hereunder shall be managed and controlled by the Company, with the
assistance of the Licensee as requested by the Company. In no event, however, shall the Company be
required to take any action if it deems it inadvisable to do so and Licensee shall have no right to
take any action with respect to the Licensed Mark and/or the Other Intellectual Property without
the Company’s prior written approval.

15. INTELLECTUAL PROPERTY

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     15.1 Ownership of Other Intellectual Property. Any copyright and or other
intellectual property rights, including new trademarks developed in connection herewith
(collectively, the “Other Intellectual Property”), which may be created in any sketch, design,
packaging, label, tag or the like designed or approved by the Company shall be the property of the
Company. Licensee shall not, at any time, do or suffer to be done any act or thing which may
adversely affect any rights of the Company in such sketches, designs, packaging, labels, tags and
the like, including, without limitation, filing any application in its name to record any claims to
copyrights, trademark or trade dress rights, design patents or patents in Articles or any packaging
or exploitation materials related thereto, and shall do all things reasonably required by the
Company to preserve and protect said rights, including, without limitation, placing any notices
(including the copyright notice specified by the Universal Copyright Convention and appropriate
trademark notices) on all Articles and the packaging, labels and tags therefor.

16. INDEMNITY; INSURANCE

     16.1 Indemnity.

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     (a) Licensee hereby saves and holds the Company harmless of and from and indemnifies it
against any and all losses, liability, damages and expenses (including reasonable attorneys’ fees
and expenses) which (i) the Company may incur or be obligated to pay, or (ii) for which the Company
may become liable or be compelled to pay, in either case in connection with any action, claim or
proceeding against it, or against any other party and in which Company is required to testify, for
or by reason of any acts, whether of omission or commission, that may be committed or suffered by
Licensee or any of its officers, directors, employees, agents, Contractors, distributors (if any)
or servants in connection with Licensee’s performance of or relating to this Agreement. In
addition, in the event that a court determines that Licensee breached this Agreement or Licensee so
admits in writing, Licensee shall reimburse the Company for any and all court costs and/or
attorneys’ fees incurred by the Company in connection with its enforcement of its rights hereunder
including, without limitation, its right to obtain damages in respect of such default.

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     (b) The Company hereby saves and holds Licensee harmless of and from and indemnifies it
against any and all losses, liability, damages and expenses (including reasonable attorneys’ fees
and expenses) which (i) Licensee may incur or be obligated to pay, or (ii) for which Licensee may
become liable or be compelled to pay, in either case in connection with any action, claim or
proceeding against it, or against any other party and in which Licensee is required to testify, for
or by reason of any breach by the Company of this Agreement. In addition, in the event that a
court determines that the Company breached this Agreement or the Company so admits in writing, the
Company shall reimburse Licensee for any and all court costs and/or attorneys’ fees incurred by
Licensee in connection with its enforcement of its rights hereunder including, without limitation,
its right to obtain damages in respect of such default. The provisions of this paragraph and the
Company’s obligations hereunder shall survive the expiration or termination of this Agreement.

     (c) The provisions of this paragraph and Licensee’s obligations hereunder shall survive the
expiration or termination of this Agreement.

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     16.2 Insurance. Licensee at its own expense shall procure and maintain in full force
and effect at all times during which Articles are being sold, with a responsible insurance carrier
acceptable to the Company, a public liability insurance policy including products liability
coverage with respect to Articles, as well as contractual liability coverage with respect to this
Agreement, with a limit of liability of not less than Three Million Dollars ($3,000,000). Such
insurance policy shall be written for the benefit of Licensee and the Company and shall provide for
at least thirty (30) days prior written notice to said parties of the cancellation or substantial
modification thereof. Such insurance may be obtained by Licensee in conjunction with a policy of
products liability insurance which covers products other than Articles. Licensee shall deliver a
certificate of such insurance to the Company promptly upon issuance of said insurance policy and,
from time to time upon reasonable request by the Company, promptly shall furnish to the Company
evidence of the maintenance of said insurance policy. Nothing contained in this Paragraph 16.2
shall be deemed to limit in any way the indemnification provisions of Paragraph 16.1(a) above.

17. DEFAULTS

     17.1 Defaults. In addition to the termination rights of the Company provided above,

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          (a) If Licensee fails to make any payment due hereunder, (i) Licensee shall pay interest on
the unpaid balance thereof from and including the date such payment is past due until the date the
entire amount is paid in full at a rate equal to the prime rate being charged in New York, New York
by Citibank, N.A. as of the close of business on the date the payment first becomes due plus two
percent (2%), and (ii) if such default shall continue uncured for a period of ten (10) days after
the Company notifies Licensee thereof, the Company shall have the right to terminate this Agreement
forthwith by written notice thereof to Licensee.

          (b) If, after the first Annual Period, Licensee discontinues the sale of commercially
significant quantities of Articles for a period of sixty (60) or more days, if it violates its
obligations under Paragraph 1.6, or if it defaults on any obligation which is secured by a security
interest in any Articles and the secured party takes, or reasonably may be expected to take, action
to foreclose on Articles, the Company shall have the right to terminate this Agreement forthwith by
written notice thereof to Licensee.

          (c) If there is a material adverse change in the business or financial condition of Licensee,
the Company shall have the right to terminate this Agreement forthwith by written notice thereof to
Licensee.

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          (d) If the Company fails or if Licensee otherwise fails to perform any of the terms,
conditions, agreements or covenants in this Agreement on its part to be performed and (i) such
default is not curable, (ii) such default is curable but continues uncured for a period of thirty
(30) days after notice thereof has been given to the defaulting party in writing by the other
party, or (iii) such default is curable, but not within thirty (30) days, and the defaulting party
is not diligently taking all steps necessary to cure the default as promptly as practicable, the
other party, at its sole election, may terminate this Agreement forthwith by written notice thereof
to the defaulting party.

          (e) If Licensee fails to commence the sale of Articles hereunder on or before December 31,
2006, the Company, at its sole election, may terminate this Agreement on thirty days’ written
notice thereof to Licensee.

          (f) If the Other Line Agreements or any other agreements between the parties terminate other
than as a result of the Company’s default thereunder, the Company, at its sole election, may
terminate this Agreement effective upon termination of the Other Line Agreements or such other
agreements.

     17.2 Bankruptcy.

          (a) In the event that Licensee files a petition in bankruptcy, is adjudicated a bankrupt or
files a petition or otherwise seeks relief under or pursuant to any bankruptcy, insolvency or
reorganization statute or proceeding, or if a petition in bankruptcy is filed against it or it
becomes insolvent or makes an assignment for the benefit of its creditors or a custodian, receiver
or trustee is appointed for it or a substantial portion of its business or assets, this Agreement
shall terminate automatically and forthwith.

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          (b) No assignee for the benefit of creditors, custodian, receiver, trustee in bankruptcy,
sheriff or any other officer of the court or official charged with taking over custody of
Licensee’s assets or business shall have any right to continue this Agreement or to exploit or in
any way use the Licensed Mark or Other Intellectual Property if this Agreement terminates pursuant
to Paragraph 17.2(a) above.

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          (c) Notwithstanding the provisions of Paragraph 17.2(b) above, in the event that, pursuant to
the Bankruptcy Code or any amendment or successor to the foregoing (the “Code”), a trustee in
bankruptcy of Licensee or Licensee, as debtor, is permitted to assume this Agreement and does so
and, thereafter, desires to assign this Agreement to a third party, which assignment satisfies the
requirements of the Code, the trustee or Licensee, as the case may be, shall notify the Company of
same in writing. Said notice shall set forth the name and address of the proposed assignee, the
proposed consideration for the assignment and all other relevant details thereof. The giving of
such notice shall be deemed to constitute the grant to the Company of an option to have this
Agreement assigned to it or to its designee for such consideration, or its equivalent in money, and
upon such terms as are specified in the notice. The aforesaid option may be exercised only by
written notice given to the trustee or Licensee, as the case may be, by the Company within fifteen
(15) days after the Company’s receipt of the notice from such party, or within such shorter period
as may be deemed appropriate by the court in the bankruptcy proceeding. If the Company fails to
give its notice to such party within the said exercise period, such party may complete the
assignment referred to in its notice, but only if such assignment is to the entity named in said
notice and for the consideration and upon the terms specified therein. Nothing contained herein
shall be deemed to preclude or impair any rights that the Company may have as a creditor in any
bankruptcy proceeding.

18. RIGHTS ON EXPIRATION OR TERMINATION

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     18.1 Licensee Payments. In the event of termination in accordance with Article 17
above, Licensee shall pay to the Company (a) any Sales Royalty and Sales Fee then owed to it
hereunder, (b) all Guaranteed Minimum Royalty and Guaranteed Minimum Fee due and payable and unpaid
as of the date of termination, (c) the total Guaranteed Minimum Royalty and Guarantee Minimum Fee
remaining unpaid for the balance of the term of this Agreement, and (d) an amount equal to any
other actual damages the Company may have suffered on account of such termination or the acts or
omissions from which it resulted.

     18.2 Reservation of Rights.

          (a) Notwithstanding any termination in accordance herewith, the Company shall have and hereby
reserves all rights and remedies which it has, or which are granted to it by operation of law (a)
to enjoin the unlawful or unauthorized use of the Licensed Mark or Other Intellectual Property or
any violation by Licensee of the confidentiality obligations under Article 4 above (any of which
injunctive relief may be sought prior to or in lieu of termination), (b) to collect royalties and
fees payable by Licensee pursuant to this Agreement, and (c) to be compensated for damages for
breach of this Agreement. In addition, nothing herein shall be deemed to prevent the Company from
bringing an action for damages prior to or in lieu of termination if a default in performance by
Licensee occurs and is not cured timely in accordance with the provisions of Article 17 above.

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          (b) Notwithstanding any termination in accordance herewith, Licensee shall have and hereby
reserves all rights and remedies which it has, or which are granted to it by operation of law (a)
to enjoin any violation by the Company of the confidentiality obligations under Article 4 above
(which injunctive relief may be sought prior to or in lieu of termination), and (b) to be
compensated for damages for breach of this Agreement. In addition, nothing herein shall be deemed
to prevent Licensee from bringing an action for damages prior to or in lieu of termination if a
default in performance by the Company occurs and is not cured timely in accordance with the
provisions of Article 17 above

     18.3 Inventory. Upon the expiration or termination of this Agreement, Licensee
immediately shall deliver to the Company a complete and accurate schedule of Licensee’s inventory
of Articles and of related work in process then on hand (hereinafter referred to as “Inventory”).
Such schedule shall be prepared as of the close of business on the date of such expiration or
termination and shall reflect Licensee’s cost of each such item. The Company thereupon shall have
the option, exercisable by notice in writing delivered to Licensee within ten (10) days after its
receipt of the complete Inventory schedule, to purchase any or all of the Inventory for an amount
equal to seventy-five percent (75%) of the cost of the Inventory being purchased. In the event
such notice is sent by the Company, Licensee shall deliver to the Company or its designee all of
the Inventory referred to therein with all due speed but in all events within thirty (30) days
after the Company’s said notice. The Company shall pay Licensee for such Inventory as is in
marketable condition within thirty (30) days after its receipt thereof.

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     18.4 Sale of Inventory. If this Agreement expires or is terminated other than pursuant to
Paragraph 17.2(a) above and other than by the Company pursuant to Paragraph 17.1 above, Licensee
shall be entitled, for an additional period of three (3) months only, on a non-exclusive basis, to
sell and dispose of its Inventory. Such sales shall be made subject to all of the provisions of
this Agreement and to an accounting for and the payment of Sales Royalty thereon. Such accounting
and payment shall be due within thirty (30) days after the close of the said three (3) month
period. Notwithstanding anything to the contrary herein, in the event that the Company notifies
Licensee of its desire to purchase any of the Inventory pursuant hereto, such notice shall apply
only to that portion of the Inventory remaining on the date said notice is received by Licensee.

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     18.5 Reversion of Rights. Except as specifically provided above, on the expiration or
termination of this Agreement, all of the rights of Licensee under this Agreement shall terminate
forthwith and shall revert immediately to the Company, all benefits which have accrued under this
Agreement shall automatically be transferred to the Company, all Sales Royalties on sales
theretofore made shall become immediately due and payable and Licensee shall discontinue forthwith
all use of the Licensed Mark and the Other Intellectual Property, no longer shall have the right to
use the Licensed Mark or any variation or simulation thereof or to use any Other Intellectual
Property and promptly shall transfer to the Company, free of charge, all registrations, filings and
rights with regard to the Licensed Mark and the Other Intellectual Property which it may have
possessed at any time. In addition, Licensee thereupon shall deliver to the Company, free of
charge, all samples of Articles and all sketches and other material in its possession which were
designed or approved by the Company and all labels, tags and other material in its possession with
the Licensed Mark or Other Intellectual Property thereon. After the expiration or termination of
this Agreement, Licensee shall not use or permit others to use any of said sketches and other
material, or any variations or simulations thereof, in connection with Products or any other
merchandise.

19. MISCELLANEOUS

     19.1 General Representation. Each party represents and warrants that it has full
right, power and authority to enter into this Agreement and to perform all of its obligations
hereunder.

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     19.2 No Representations By The Company. No representation or warranty has been or is
being made that the Company owns the Licensed Mark for Products or any particular Product in the
Territory or any portion of the Territory, except that the Company represents and warrants that, as
of the date hereof, the Company owns the registrations and applications identified on Schedule 19.2
hereto. [TO BE PROVIDED]. If the Company reasonably should determine that the use of the Licensed
Mark on any or all of the Products in the Territory or any portion of the Territory violates the
trademark or other rights of another, Licensee shall not distribute, or authorize the sale of, such
Products in or to such area and shall require retail locations to cease such sales. It will not be
a breach of the Agreement, and the Company shall have no liability in connection with, any
inability of Licensee to sell any Articles sold under the Licensed Mark in the Territory or any
portion of the Territory, except that Licensee may terminate this Agreement if it is unable to sell
Articles sold under the Licensed Mark in any significant portion of the Territory (it being
understood that such termination shall be considered a normal termination (and not a default)
hereunder).

     19.3 Brokerage Indemnity. Each party Licensee hereby indemnifies the other against and
holds it harmless from any and all liabilities (including, without limitation, reasonable
attorneys’ fees and disbursements paid or incurred in connection with any such liabilities) for any
brokerage commissions or finders’ fees in connection with this Agreement or the transactions
contemplated hereby insofar as such arrangements or agreements were made by it or on its behalf.

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     19.4 Notice. All reports, approvals, requests, demands and notices required or permitted
by this Agreement to be given to a party shall be in writing and shall be deemed to be duly given
if personally delivered, or if sent by overnight mail or courier service, such as Express Mail or
Federal Express, which requires the addressee to acknowledge receipt thereof, to the party
concerned at its address set forth on page 1 above (or at such other address as a party may specify
by notice to the other). Copies of all notices to the Company also shall be sent to Weil, Gotshal
& Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attn: Jeffrey J. Weinberg, Esq. , and
copies of all notices to Licensee also shall be sent to Law Offices of Rafael Bernardino, Jr., 445
South Figueroa Street, Suite 2700, Los Angeles, California 90071, Attn: Rafael Bernardino, Jr.,
Esq.

     19.5 Travel Expenses. Licensee shall reimburse the Company for the travel expenses
(i.e., business class airfare, lodgings, meals and local transportation) incurred by the
Company’s personnel in connection with trips undertaken at Licensee’s request or for purposes of
meetings with Licensee.

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     19.6 Assignability. The parties recognize and acknowledge that: (i) Licensee’s performance
hereunder will require, and the Company will rely upon, the exercise of the special creative
skills, taste, personalities, industry standing and business acumen of the present management and
of those presently in control of Licensee; (ii) the Company’s positive assessment, after extensive
review, inquiry and investigation, of the creative skill, taste, personalities, industry standing
and business acumen of Licensee’s present management and those presently in control of Licensee,
specifically, John Hanna, has been a major factor in inducing the Company to enter into this
Agreement, but for which assessment the Company could not have done so; (iii) the Company’s right
to withhold approval of any and all Articles is an insufficient remedy to protect the Company from
injury in the event performance hereunder were delegated to a third party who, in the Company’s
judgment, did not possess all of the personal attributes described in subparagraphs (i) and (ii) of
this paragraph, because the extensive exercise of such right, if necessary to protect the prestige
of the Licensed Mark, would frustrate the purpose of this Agreement and adversely affect the
marketing and sale of other items of marked under the Licensed Mark; and (iii) the understanding
and intent of the parties are that, under applicable law, this Agreement constitutes a personal
service contract and that Licensee’s performance hereunder is non-delegable as a matter of law. In
light of the foregoing and of the personal nature of Licensee’s performance hereunder, this
Agreement shall not be assigned by Licensee nor shall Licensee have the right to sublicense its
rights hereunder, without, in either case, the prior written consent of the Company, except that
Licensee may assign this Agreement, in its entirety, to a company wholly owned and controlled by
John

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Hanna for such time such company is wholly owned and controlled by John Hanna. The Company agrees
to consider, in good faith, a request by Licensee for such consent; provided, however, that in
light of, inter alia, the subjective nature of Licensee’s personal attributes upon
which the Company will rely hereunder as described above, the Company shall have the sole
discretion to refuse such request. For the purpose of this Paragraph 19.6 (and in addition to any
direct assignment), any direct or indirect sale or transfer, or successive sales or transfers in
the aggregate, of that portion of the capital stock (or interests therein) of Licensee or the
voting rights of such capital stock, or any merger, consolidation or similar combination entered
into by Licensee or any parent corporation that limits or reduces the rights or abilities of
current owners of Licensee to control the business and affairs of Licensee shall constitute an
assignment of Licensee’s rights under this Agreement which requires the prior written consent of
the Company. Any purported assignment, sublicense or transfer in violation of this Paragraph 19.6
shall be void and of no effect, shall be an event of default under this Agreement and shall give
the Company the right to terminate this Agreement.

     19.7 Binding Effect. This Agreement shall inure to the benefit of and shall be binding
upon the parties, their respective successors, the Company’s transferees and assigns and Licensee’s
permitted transferees and assigns.

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     19.8 Court Actions. Any judicial proceeding relating to this Agreement shall be brought
only in the Supreme Court of the State of New York, County of New York or the United States
District Court for the Southern District of New York. Licensee hereby consents to the jurisdiction
of said courts and waives as defenses any claims of improper venue or inconvenient forum. Each of
the Company and Licensee represents and warrants that it is not entitled to immunity from judicial
proceedings and agrees that it shall not claim any immunity from such proceedings for itself or
with respect to its property.

     19.9 Promotional Items. Licensee shall not give away Articles or sell Articles in
connection with any tie-in or promotional campaign involving products other than Articles
(including products bearing the Licensed Mark), or include Articles as part of any gift sets,
gift-with-purchase or purchase-with-purchase involving products other than Articles (including
products bearing the Licensed Mark) without the prior written consent of the Company.

     19.10 Company Agreements with Third Parties. Notwithstanding anything to the contrary
contained in this Agreement, the Company shall have the right, exercisable at any time, to
negotiate and enter into agreements with third parties pursuant to which it may grant a license to
use the Licensed Mark in connection with the manufacture, distribution and sale of Products in the
Territory or provide consultation and design services with respect to Products in the Territory,
but only if, pursuant to such third party agreements, such Products are not shipped prior to the
termination of this Agreement. Nothing herein contained shall be construed to prevent the exercise
of the rights retained in Paragraph 1.1(c).

54

 

     19.11 Governing Law. This Agreement shall be construed and interpreted in accordance with
the laws of the State of New York applicable to agreements made and to be performed in said State,
contains the entire understanding and agreement between the parties hereto with respect to the
subject matter hereof, supersedes all prior oral or written understandings and agreements relating
thereto and may not be modified, discharged or terminated, nor may any of the provisions hereof be
waived, orally.

     19.12 Independence. Nothing herein contained shall be construed to constitute the parties
hereto as partners or as joint venturers, or either as agent of the other, and Licensee shall have
no power to obligate or bind the Company in any manner whatsoever.

     19.13 Waiver. No waiver by either party, whether express or implied, of any provision of
this Agreement, or of any breach or default thereof, shall constitute a continuing waiver of such
provision or of any other provision of this Agreement. Acceptance of payments by the Company shall
not be deemed a waiver by the Company of any violation of or default under any of the provisions of
this Agreement by Licensee.

     19.14 Severability. If any provision or any portion of any provision of this Agreement
shall be held to be void or unenforceable, the remaining provisions of this Agreement and the
remaining portion of any provision held void or unenforceable in part shall continue in full force
and effect.

     19.15 Captions. The captions contained in this Agreement are for convenience of reference
only and are not intended to qualify the meaning of any paragraph hereof.

55

 

     19.16 Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall constitute an original, but all of which together shall constitute one and the same
instrument.

     19.17 No Presumptions. This Agreement shall be construed without regard to any presumption
or other rule requiring construction against the party causing this Agreement to be drafted. If
any words or phrases in this Agreement shall have been stricken out or otherwise eliminated,
whether or not any other words or phrases have been added, this Agreement shall be construed as if
those stricken or eliminated words or phrases were never included in this Agreement, and no
implication or inference shall be drawn from the fact that the words or phrases were so stricken or
eliminated.

     19.18 Payments; Currency Conversions.

          (a) All references to dollar amounts contained herein are to, and all payments made by
Licensee hereunder shall be made in, United States Dollars.

          (b) For purposes of calculating the Sales Royalty and Advertising Minimum for any Annual
Period, all invoiced amounts and discount and return amounts included in Net Sales for such Annual
Period that are invoiced or credited in currencies other than United States Dollars shall be
converted to United States Dollars using, in respect of each such invoice/credit, the currency
conversion rate posted by Chase Manhattan Bank on the last day of the calendar quarter in which
such invoice/credit was issued.

          (c) On the date that any payment hereunder is due, Licensee shall wire such payments to such
account(s) as may be designated by the Company in writing from time to time.

56

 

          IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 	 	 
	 	 	BILL BLASS INTERNATIONAL, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	THE FASHION HOUSE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

57

 

Annex I

“Advertising Minimum” shall have the meaning assigned to such term in Paragraph 7.2 hereof.

“Annual Period” shall have the meaning assigned to such term in Paragraph 2.1 hereof.

“Articles” shall have the meaning assigned to such term in Paragraph 1.1(a) hereof.

“Close-Out Sales” shall have the meaning assigned to such term in Paragraph 5.7 hereof.

“Code” shall have the meaning assigned to such term in Paragraph 17.2(c) hereof.

“Company” shall have the meaning assigned to such term in the introductory paragraph hereto.

“Confidential Information” shall have the meaning assigned to such term in Paragraph 4.1 hereof.

“Contractors” shall have the meaning assigned to such term in Paragraph 5.8(a) hereof.

“Divert” shall have the meaning assigned to such term in Paragraph 1.6 hereof.

“Guaranteed Minimum Fee” shall have the meaning assigned to such term in Paragraph 10.1 hereof.

“Guaranteed Minimum Royalty” shall have the meaning assigned to such term in Paragraph 8.1 hereof.

“Inventory” shall have the meaning assigned to such term in Paragraph 18.4 hereof.

“License” shall have the meaning assigned to such term in the introductory paragraph hereto.

“Licensed Mark” shall have the meaning assigned to such term in Paragraph 1.1(a) hereof.

“Net Sales” shall have the meaning assigned to such term in Paragraph 9.2 hereof.

“Other Line Agreements” shall have the meaning assigned to such term in the second recital hereto.

58

 

“Products” shall have the meaning assigned to such term in Paragraph 1.1(a) hereof.

“Renewal Threshold” shall have the meaning assigned to such term in Paragraph 2.1 hereof.

“Sales Fee” shall have the meaning assigned to such term in Paragraph 11.1 hereof.

“Sales Royalty” shall have the meaning assigned to such term in Paragraph 9.1 hereof.

“Territory” shall have the meaning assigned to such term in Paragraph 1.1(a) hereof

59exv10w7

 

Exhibit 10.7

LICENSE

AGREEMENT

BETWEEN

OSCAR DE LA RENTA, LTD.

AND

THE FASHION HOUSE INC.

 

 

LICENSE AGREEMENT

     THIS LICENSE AGREEMENT (this “Agreement”) made and entered into as of the 24th day of
January, 2005, by and between OSCAR DE LA RENTA, LTD., a New York corporation having a place of
business at 550 Seventh Avenue, New York, New York 10018 (“LICENSOR”), and THE FASHION HOUSE INC.,
a Delaware corporation, having a place of business located at 6310 San Vicente Blvd. #330, Los
Angeles, CA 90048 (“LICENSEE”).

     WHEREAS, LICENSOR is authorized to grant licenses for the “LICENSED MARK” (as hereinafter
defined) and all variants thereof; and

     WHEREAS, LICENSOR and LICENSEE further recognize and acknowledge that LICENSOR’s authority
and discretions provided for in this Agreement are crucial to LICENSOR’s effective management of
its trademarks and brands;

     WHEREAS, the LICENSOR and LICENSEE desire to enter into an agreement to authorize LICENSEE to
use the LICENSED MARK in connection with the manufacturing, promotion, distribution and sale (in
accordance with the terms and conditions set forth in this Agreement) of the “ARTICLES” in the
“TERRITORY” as defined herein.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties do
agree as follows:

     1. Definitions.

          The following capitalized terms when used in this Agreement shall have the meaning set forth
below:

          a. ADVERTISING MATERIALS: Shall mean designs, advertising copy and layout, photographs,
texts, fixtures, image catalogues, counter cards, in-store and trade show displays, graphics,
audiovisual, logo (and LICENSED MARK) use and audio materials related to the ARTICLES.

          b. ADVERTISING PLAN: Shall mean LICENSEE’s proposed advertising budget and media plan for
consumer, co-op and/or trade advertising, including a list of planned expenditures, together with
the dates, publications, format and size of all co-op and trade advertisements proposed by
LICENSEE.

          c. ARTICLES: Shall mean the following items: women’s footwear of all kinds.

          d. CLOSE-OUT: Shall mean ARTICLES offered for sale to the trade at TWENTY FIVE (25%) PERCENT
or more off of the full published wholesale price.

          e. CONTRACT YEAR: A period of twelve calendar months
comprising the calendar year during which this Agreement is in effect, except that the FIRST
CONTRACT YEAR shall commence as of the date of this Agreement and end June 30, 2006.

 

 

          f. DESIGN SPECIFICATIONS: Shall mean the following as it relates to the ARTICLES or any
materials relating to the ARTICLES: designs, patterns, sketches, colors, materials, fabrics,
quality and packaging, and the construction/manufacturing standards embodied therein.

          g. LICENSED MARK: Shall mean the “Oscar by Oscar de la Rental’ and “0 OSCAR”
trademarks in the forms attached hereto as Exhibit A (as are currently used in the United States
for other womenswear products), used as directed or approved by LICENSOR in accordance with the
terms of this Agreement, and all goodwill associated therewith.

          h. LICENSEE: Shall mean THE FASHION HOUSE INC., a Delaware Corporation having a place of
business located at 6310 San Vicente Blvd. #330, Los Angeles, CA 90048.

          i. LICENSOR: Shall mean OSCAR DE LA RENTA, LTD., a New York Corporation having a place of
business at 550 Seventh Avenue, New York, New York 10018, the owner of the LICENSED MARK.

          j. NET SALES: Shall mean the gross invoice price of ARTICLES sold at wholesale (or, with
respect to CLOSE-OUTS, at the price at which such CLOSE-OUTS are invoiced) less sales taxes,
freight and insurance, the amounts of credit normally allowed for returns, normal trade discounts
and volume rebates actually taken by retailers and charge-backs, margin assistance and overbills.
Advertising and promotional expenditures shall not be deducted in computing NET SALES. With
respect to sales of ARTICLES to affiliated persons or entities or to persons or entities with
which LICENSEE does not deal on an arm’s length basis (other than to employees for personal use
only for which royalties shall not be payable), NET SALES shall be computed using the wholesale
price (subject to the deductions set forth above) actually charged to unaffiliated third parties
for resale. An ARTICLE shall be deemed sold when shipped.

          k. QUARTERLY DATES: Shall mean each January 1, April 1, July 1 and October 1 of a given
CONTRACT YEAR.

          I. ROYALTY SALES REPORTS: Reports showing LICENSEE NET SALES on the basis of which royalty
payments made by LICENSEE under Section 8.1 are calculated.

          m. TERM: Shall have the meaning set forth in Section 3.1 of this Agreement.

          n. TERRITORY: Shall mean the United States of America, and shall
exclude duty-free or tax-free shops, diplomatic or consular sales, airline supplies, or ship’s
stores.

     2. Grant of License.

             2.1.1 Exclusive License. Subject to the terms and conditions of this Agreement,
LICENSOR hereby grants to LICENSEE the exclusive non-assignable license to use (a) the DESIGN
SPECIFICATIONS either furnished or approved by

 

 

LICENSOR prior to use as provided in this Agreement, bearing the LICENSED MARK and (b) the
LICENSED MARK for the manufacturing, sourcing, advertising, promotion, sale and distribution of
the ARTICLES as approved by LICENSOR as provided herein, in the TERRITORY.

               2.1.2 Right of First Refusal for LICENSED MARK. Provided that LICENSEE is not in
default of any of the terms of this Agreement, LICENSOR grants to LICENSEE a right of first
refusal with regard to the LICENSED MARK as follows: If a potential licensee other than LICENSEE
desires to license the LICENSED MARK with respect to the ARTICLES in any area of the world outside
of the TERRITORY, and the proposed terms and conditions of such a proposed license are acceptable
to LICENSOR, LICENSOR shall notify LICENSEE of such proposed terms and conditions (the “Offer
Notice”). If LICENSEE does not send written notice to LICENSOR within twenty (20) days of receipt
of the Offer Notice stating that LICENSEE will match exactly the terms and conditions contained in
the Offer Notice, LICENSOR shall be free to license the LICENSED MARK to the proposed licensee. If
LICENSEE does accept the terms and conditions of the Offer Notice within such period, LICENSEE
shall be required to enter into a license agreement with LICENSOR within five (5) days of
receiving a licensing agreement containing such terms and conditions from LICENSOR. If, for any
reason, LICENSEE does not execute such license agreement in such five (5) day period, LICENESE
shall lose its right of first refusal with regard to the area(s) of the world set forth in the
Offer Notice. In addition to the above, LICENSEE at any time may submit to LICENSOR a proposal to
license the LICENSED MARK with respect to the ARTICLES in any area of the world outside of the
TERRITORY, it being understood and agreed that the decision to accept or reject any such proposal
from LICENSEE shall be left to the sole and absolute discretion of LICENSOR.

               2.1.3 Rights Concerning Licensor Signature Collection. Provided that
LICENSEE is not in default of any of the terms of this Agreement, then in the event that
LICENSOR ever determines, in its sole and absolute discretion, to seek out license agreements for
ARTICLES bearing the Oscar de la Renta signature trademark (the “Signature Collection”), LICENSOR
will provide LICENSEE with written notice of the same. LICENSEE will then have thirty (30) days
after receipt of such notice to submit a proposal to LICENSOR for the licensing of the Signature
Collection, provided, however, that LICENSOR shall be under no obligation to accept any proposal
from LICENSEE and the decision to accept or reject any proposal shall be left to the sole and
absolute discretion of LICENSOR. In the event that LICENSOR, in its sole and absolute discretion,
chooses to reject any such proposal from LICENSEE, then LICENSOR will be free to enter into any
licensing or other arrangement with respect to the ARTICLES
for the Signature Collection that LICENSOR chooses in its sole and absolute discretion
without any further obligation to LICENSEE.

          2.2 Limitations on Rights Granted.

               2.2.1 LICENSEE shall not place the LICENSED MARK on, or use the LICENSED MARK in
connection with, any merchandise or goods of any kind, nature or description other than the
ARTICLES and labels, hangtags and packaging used in connection therewith as approved
hereunder. LICENSOR may also grant to others the right or license to use the LICENSED MARK
on or in connection with goods of other types and descriptions other than

 

 

the ARTICLES in any area of the world including the TERRITORY; provided,
however, that LICENSOR shall not grant such rights to third parties that LICENSOR knows
will conduct their activities in such a way as to interfere with the rights granted to
LICENSEE under this Agreement. It is expressly understood and agreed that LICENSEE will use
its best efforts not to sell ARTICLES bearing the LICENSED MARK to customers who LICENSEE
knows or should know will conduct their activities with respect to the ARTICLES in a manner
which, if conducted by LICENSEE, would cause LICENSEE to be in violation of this Agreement,
and, except if prohibited by law, agrees to cease selling to any such customer. In the
event it is discovered that a customer of LICENSEE conducts its business in such manner, or
ships or intends to ship or market ARTICLES in violation of this Agreement, LICENSEE shall,
at LICENSEE’s expense, cause such customer to cease such shipments.

               2.2.2 LICENSEE shall not sublicense any of the rights or license herein granted.

               2.2.3 LICENSEE shall not use and is not licensed to use any variation of the LICENSED
MARK other than as (and in the manner) specifically directed in writing by LICENSOR;
provided, however, that if LICENSOR changes the manner in which the LICENSED MARK
is to be used, LICENSEE shall not be required to revise and/or recall any previously
approved ARTICLES, CLOSE-OUTS and/or ADVERTISING MATERIALS.

          2.3 Other Duties of LICENSEE. In addition to the duties of LICENSEE provided
for elsewhere in this Agreement, LICENSEE shall:

               2.3.1 Develop and accomplish a line development, marketing and distribution plan as
set forth in Exhibit B for each CONTRACT YEAR (including the first CONTRACT YEAR ) for
prior review and approval by LICENSOR which, following such approval, shall be executed by
LICENSEE; and

               2.3.2 Develop and accomplish an initial collection of ARTICLES bearing the 0 OSCAR
LICENSED MARK as set forth in Exhibit B; and

               2.3.3 Develop and accomplish an initial collection of ARTICLES bearing the Oscar by
Oscar de la Renta LICENSED MARK as set forth in Exhibit B; and

               2.3.4 Develop, subject to LICENSOR’s written approval, and execute an ADVERTISING PLAN, with
media budgets sufficient to advertise and promote in accordance with Section 7.1 the ARTICLES
bearing the LICENSED MARK throughout the TERRITORY in a manner consistent with a prestigious and
important designer branded business; and

               2.3.5 Assure that the ARTICLES and their packaging shall be subject to LICENSOR’s prior
written approval and of the highest standards and of such style, appearance, distinctiveness and
quality as to protect the prestige of LICENSOR

 

 

and of the LICENSED MARK and the goodwill pertaining thereto, that the ARTICLES will be
manufactured, packaged, sold and distributed in accordance with all applicable laws and
regulations (including but not limited to all laws relating to fair labor practices), that the
ARTICLES will be manufactured in a quality consistent with LICENSEE’s highest quality collection,
and that the policy of sale, distribution and/or exploitation by LICENSEE shall be subject to
LICENSEE’s highest standards ( which standards shall be no less than those which exist as of the
date first above written) and which will enhance and maintain the goodwill and prestigious name of
the LICENSOR; and

               2.3.6 Produce numbers of ARTICLES and make timely and coordinated delivery thereof to
customers consistent with LICENSEE’s highest standards/practices as described in the subparagraph
above ; and

               2.3.7 Place the LICENSED MARK on all ARTICLES prior to delivery, except as otherwise set
forth herein; and

               2.3.8 Promote and maximize sales of the ARTICLES throughout the TERRITORY and in accordance
with the terms of this Agreement and use best efforts to minimize trade discounts and allowances
pertaining thereto; and

               2.3.9 Establish and maintain an infrastructure necessary and adequate to establish and
maintain on a first-class basis the activities arising out of this Agreement including but not
limited to having personnel who can coordinate with, and provide vendor services to, LICENSEE’s
larger customers on a regular basis and others from time to time and who will promote and sell the
ARTICLES, and a merchandise, marketing and brand manager or managers, as appropriate. LICENSEE
shall also maintain separate sales teams, account managers and dedicated designer(s) for each of
the 0 OSCAR and Oscar by Oscar de la Renta LICENSED MARKS. LICENSEE may use its existing
facilities for accounting, order processing, production and other back office functions; and

               2.3.10 Maintain a devoted area, consisting of a separate designated selling space, dedicated
to displays of complete collections of the ARTICLES in its company owned designer show rooms
located at 6310 San Vicente Blvd. Suite 330, Los Angeles, CA 90048 by no later than September 30,
2005 and a New York showroom located in the County of New York by no later than September 30,
2006 and a representative offering of the ARTICLES in its other showroom facilities, if any; and

               2.3.11 Recognizing that excessive or indiscriminate disposals of CLOSE-OUT ARTICLES may
adversely affect the importance and prestige associated with the LICENSED MARK, LICENSEE shall use
its best efforts to minimize CLOSE-OUT sales and, without limiting the foregoing, in no event shall
the total amount of NET SALES of CLOSE-OUT ARTICLES exceed FIFTEEN (15%) PERCENT of NET SALES
(computed without including the NET SALES of CLOSE-OUT ARTICLES). CLOSE-OUT SALES shall be subject
to payment of royalties as provided in Article 8. All sales of CLOSE-OUT ARTICLES shall be fully
and separately recorded and accounted for in a manner that will enable LICENSOR to determine
LICENSEE’s compliance with the above provisions. The sale and distribution of CLOSE-OUT ARTICLES
shall be subject to Article 6 below.

 

 

               2.3.12 Provide and pay for first-class travel, food expense and hotel accommodations for
travel by Mr. Oscar de la Renta and his designee, at LICENSEE’s request, outside of New York City
for personal appearances, other promotional events in connection with the promotion of the
ARTICLES, product reviews and/or showroom reviews further to subsection 4.1.2 , and promotional
purposes where such promotional purposes are jointly determined by LICENSOR and LICENSEE, or other
purposes incidental to this Agreement. LICENSEE shall also pay for business class round trip
travel, in addition to food expense and hotel accommodations for other persons reasonably requested
by LICENSOR to travel with or on behalf of Mr. Oscar de la Renta as the case may be, in connection
with the promotion or in connection with the development of the ARTICLES.

     3. Term of License.

          3.1 Term. The TERM of this Agreement shall be for a period of FIVE (5) CONTRACT YEARS
commencing effective upon the date hereof and terminating on June 30, 2010, the last day of the
FIFTH CONTRACT YEAR.

          3.2 Renewal Term.

               3.2.1 First Renewal Term. If prior to the end of the Term, the following
conditions have been satisfied:

               a). LICENSEE is not then in default of any of the terms of this
Agreement; and

               (b). Aggregate NET SALES of the ARTICLES for the FOURTH CONTRACT YEAR shall be at least EIGHT
MILLION FIVE HUNDRED THOUSAND ($8,500,000) DOLLARS ;

               then LICENSEE shall have the option to renew this Agreement for three (3) further
 CONTRACT YEARS. Such option shall be exercisable by notice received by LICENSOR in writing no later
than December 31, 2009. In the event such option is so exercised by LICENSEE, this Agreement shall
be deemed renewed for a first renewal TERM ending June 30, 2013.

               3.2.2 Second Renewal Term. If prior to the end of the first Renewal
Term, the following conditions have been satisfied:

               (a). LICENSEE is not then in default of any of the terms of this Agreement, and

               (b). Aggregate NET SALES of the ARTICLES for the SECOND CONTRACT YEAR of the first renewal
Term shall be at least TWELVE MILLION FIVE HUNDRED THOUSAND ($12,500,00) DOLLARS ;

then LICENSEE shall have the option to renew this Agreement for three (3) further CONTRACT YEARS.
Such option shall be exercisable by notice received by LICENSOR

 

 

in writing no later than December 31, 2012. In the event such option is so exercised by LICENSEE,
this Agreement shall be deemed renewed for a second renewal TERM ending June 30, 2016.

     4. Designs/Product Development.

          4.1 Designs/Design Approval.

               4.1.1 LICENSEE will advise LICENSOR in writing of its product development calendar and, prior
to sample development, will coordinate with LICENSOR in New York to receive design direction
offered by LICENSOR. LICENSEE shall present all ideas, concepts, proposed DESIGN SPECIFICATIONS,
sketches and designs, and samples of types of fabric, materials, and colors for the ARTICLES to
LICENSOR’s styling representative at LICENSOR’s New York office for examination, comment and
approval as soon as sketches (including, as available, fabric and material samples and color
choices) are available, and as soon as final samples are available, all in a timely manner in
advance of each season. Except as expressly provided in this subsection 4.1.1 to the contrary, all
ideas, sketches, designs, fabrics, materials, models and colors will be mutually agreed upon by
LICENSOR and LICENSEE before each collection is finalized for presentation to the market and/or
production and LICENSOR reserves the right to eliminate or to modify any of the ideas, sketches,
designs, fabrics, materials, models or colors submitted by LICENSEE pursuant to subsection 4.1.2;
provided, however, that no changes can be made to any of the foregoing once LICENSEE has
finalized the collection for presentation to the market and/or production. LICENSEE will present
all of a proposed sample line to LICENSOR for review, comment, editing and further work prior to
LICENSEE commitments to production. The presentation of market samples will be in New York, New
York. LICENSEE will incorporate DESIGN SPECIFICATIONS furnished or otherwise approved by LICENSOR,
and LICENSEE understands and agrees that the showing and/or production and/or sale of ARTICLES that
are not either approved by LICENSOR or do not conform to LICENSOR direction shall hereby be
prohibited.

               4.1.2 Any material or item under this Agreement that is subject to LICENSOR approval must be
submitted to LICENSOR by LICENSEE. Approval by LICENSOR of any DESIGN SPECIFICATION with respect
to any design or item shall not be deemed an approval of the use thereof for any other design or
item or for that particular item for any other collection. DESIGN SPECIFICATIONS (including but
not limited to any copyrights related thereto) furnished or approved by LICENSOR shall be and
forever remain LICENSOR’s sole and exclusive property.

               4.1.3 At LICENSOR’s request, LICENSEE, at its expense from time to time, will submit a
reasonable number of production samples of each ARTICLE manufactured hereunder so that LICENSOR
may confirm that the ARTICLES offered for distribution conform to the DESIGN SPECIFICATIONS
approved by LICENSOR.

               4.1.4 LICENSOR’s right of approval hereunder shall include the right to determine what
ARTICLES should bear a particular LICENSED MARK (or any variation or derivative thereof).

 

 

     5. Manufacture of Articles.

          5.1 Quality of Articles. LICENSEE covenants and agrees that the materials and
construction of all ARTICLES manufactured hereunder shall be of superior quality.

          5.2 Inspection. LICENSOR will have the right, at any time during normal business
hours, with five (5) days prior notice to LICENSEE, to inspect the process of manufacturing for
any and all ARTICLES produced hereunder and LICENSEE shall at all times during the TERM (including
renewals, if any) hereof use its diligent efforts to make its manufacturing, warehouse and
distribution facilities available to LICENSOR for inspection by LICENSOR or its representatives at
LICENSOR’s cost and expense during normal working hours.

     6. Distribution.

          6.1 Authorization of Sales Points. LICENSEE recognizes that the prestige and image of
the LICENSED MARK depends upon, among several factors, the selection of top-ranked retail sales
outlets of the highest caliber and excellent reputation which project an image of high fashion and
prestige consistent with the reputation of Mr. Oscar de la Renta and that retail comparable
prestigious designer name goods. LICENSEE further recognizes that LICENSOR as the grantor of
licenses of the LICENSED MARK for the manufacture and sale of other articles under the LICENSED
MARK must participate in the designation of retail outlets to which LICENSEE may offer to sell
ARTICLES to assure a consistent quality of image of retail sales points under this and other
licenses. Except as otherwise set forth herein or required by law, the ARTICLES shall not be sold
to sales points objected to by LICENSOR as not in accordance with a plan of distribution approved
in advance by LICENSOR. Additionally,
LICENSEE shall sell ARTICLES on a wholesale basis only. If requested by LICENSOR and if permitted
by law, LICENSOR shall have the right to cause LICENSEE, immediately upon notice, to cease selling
the ARTICLES to any such retail sales outlet (including any catalog(s) and internet portals)
designated by LICENSOR and to use its best efforts to sell ARTICLES to such retail sales points as
LICENSOR may request in writing. Further, the ARTICLES bearing the LICENSED MARK shall not be sold
to mass merchandisers, or off-price, or discount stores (such as Walmart, K-mart, and Sears), or
through telemarketing, television, internet, or mail order catalogue sales (except with regard to
the catalogs and internet portals set forth on Exhibit C.) Notwithstanding the foregoing, subject
to the restrictions otherwise set forth in this Agreement, LICENSEE may sell CLOSE-OUTS to
off-price stores which do not advertise or display brand names or trademarks of the goods they
sell and further, that the selection of such stores shall be approved by LICENSOR in the manner
set forth in Section 4.1.2 above. Any arrangements between LICENSEE and any of its distributors
shall be subject to LICENSEE’S duties and LICENSOR’s rights under this Agreement the breach of
which will be deemed a breach of this License by LICENSEE. LICENSEE shall enforce LICENSOR’s
rights under this Agreement with respect to third parties with which LICENSEE does business
relating to this Agreement. Notwithstanding the foregoing, LICENSEE’s plan of distribution
consisting of those stores, catalogs and Internet portals set forth in Exhibit C attached hereto
(as may be amended from time to time in writing signed by LICENSOR and LICENSEE) is hereby
approved by LICENSOR subject to the conditions set out above.

 

 

          6.2 Plan of Distribution. LICENSEE’s plan of distribution for the sale of ARTICLES
bearing the LICENSED MARK shall be subject to LICENSOR’s prior approval. The method of approval
shall be as set forth under Section 4.1.2 above.

          6.3 Minimum Retail Pricinq. Except as provided herein, or unless otherwise required
or prohibited by law, LICENSEE shall be required to provide all approved retailers under Section
6.1 with a list of suggested minimum retail prices for the ARTICLES that contains a suggested
retail price of not less than $140 nor greater than $225 for each ARTICLE bearing the Oscar by
Oscar de la Renta LICENSED MARK and not less than $69.99 nor greater than $109.99 for each ARTICLE
bearing the 0 OSCAR LICENSED MARK.

          6.4 Sales Minimums. In the event that NET SALES of the ARTICLES do not meet the
following mimimum amounts, then LICENSOR shall have the right to terminate this Agreement
immediately upon written notice to LICENSEE: (i) for ARTICLES bearing the 0 OSCAR LICENSED MARK,
TWO MILLION ($2,000,000) DOLLARS for each CONTRACT YEAR, including each CONTRACT YEAR of any
renewal term; and (ii) for ARTICLES bearing the Oscar by Oscar de la Renta LICENSED MARK, ONE
MILLION FIVE HUNDRED THOUSAND ($1,500,000) DOLLARS for each of the SECOND, THIRD, FOURTH AND FIFTH
CONTRACT YEARS as well as each CONTRACT YEAR of any renewal term. Notwithstanding anything else
contained in this Agreement, a failure to meet the sales minimum amounts in this Section with
respect to a LICENSED MARK will be deemed a failure to meet the sales minimum amounts in this
Section for the other LICENSED MARK,

regardless of the actual sales amounts for the other LICENSED MARK, entitling LICENSOR to
terminate this Agreement with respect to both LICENSED MARKS pursuant to this Section.

     7. Advertising.

          7.1 General. Any initial advertising will be planned and accomplished as mutually
agreed between LICENSOR and LICENSEE but shall, in any event, conform with any other trade
advertising applicable to products bearing the LICENSED MARK, as may be communicated, planned
and/or coordinated by LICENSOR. During the TERM, LICENSEE shall promote the availability of the
ARTICLES throughout the TERRITORY both in print and in trade shows appropriate for the importance
of the ARTICLES bearing the LICENSED MARK in accordance with an ADVERTISING PLAN, ADVERTISING
MATERIALS, and budget approved in advance by LICENSOR.

          7.2 Advertising Plan. Within a reasonable time before the end of each CONTRACT YEAR,
LICENSEE shall submit to LICENSOR for approval LICENSEE’s proposed ADVERTISING PLAN for the
ensuing CONTRACT YEAR. The ADVERTISING PLAN approved by LICENSOR may be amended or modified by
LICENSOR and LICENSEE (subject to LICENSOR approval) from time to time during the CONTRACT YEAR
to reflect changes in strategies and promotional activities. LICENSEE will incorporate into its
ADVERTISING PLAN otherwise approved by LICENSOR materials, graphics and directions, if any,
submitted by LICENSOR. LICENSEE will cooperate with LICENSOR to coordinate LICENSEE’s advertising

 

 

program with those of LICENSOR’s other licensees so that a comprehensive and coordinated
look and approach to placement can be accomplished.

          7.3 Corporate and Image Advertisinq. In addition to all other amounts payable to
LICENSOR or otherwise payable by LICENSEE hereunder, LICENSEE will pay to LICENSOR amounts equal
to TWO (2.0%) PERCENT of NET SALES of the ARTICLES (including CLOSE-OUT ARTICLES) for LICENSOR’s
use in its sole and absolute discretion in connection with its corporate and/or image advertising
program as LICENSOR may have in effect from time to time. Such amounts shall be reported and paid
to LICENSOR within THIRTY (30) days following each QUARTERLY DATE as and when reporting under
Article 9 is accomplished.

          7.4 Advertising Materials. All ADVERTISING MATERIALS for advertising placed by the
LICENSEE will use only those designs, photographs, catalogues, in-store displays, texts,
graphics, audiovisual and audio materials in form and in content furnished or approved in writing
by LICENSOR. LICENSEE may source creative and placement services subject, however, to LICENSOR’s
prior written approval. LICENSEE shall submit to LICENSOR the ADVERTISING MATERIALS for its
written approval prior to use. Any ADVERTISING MATERIALS approved by LICENSOR shall be used by
LICENSEE only in the manner, form and presentation directed or approved by LICENSOR. Approval by
LICENSOR of any ADVERTISING PLAN or ADVERTISING MATERIALS shall not be deemed an approval of the
use thereof for any other season, use or purpose other than the one for which such approval is
sought.

 

 

          7.5 Reimbursement of Costs. In addition to the amounts required to be expended by
LICENSEE in this Agreement, LICENSEE shall reimburse LICENSOR for the out-of-pocket cost of
ADVERTISING MATERIALS furnished by LICENSOR to LICENSEE including production costs incurred by
LICENSOR. In the event LICENSOR directs the preparation of or prepares ADVERTISING MATERIALS, it
must have received prior written approval from LICENSEE (not to be delayed, conditioned or
withheld unreasonably) as to the plan LICENSOR intends to accomplish which shall include those
items reasonably requested by LICENSEE, including but not limited to, budget, objectives and
specific deliverables. Such costs include model fees (except for Mr. de la Renta who, if used by
LICENSOR in connection with ADVERTISING MATERIALS hereunder, shall be provided without additional
charge to LICENSEE except for reimbursement of travel expenses as set out in Section 2.3.12
above), photography fees and expenses and artwork.

          7.6 Accounting for Advertising. Within 30 days following the end of each CONTRACT
YEAR, LICENSEE shall present to LICENSOR a detailed substantiation (together with tear sheets and
lists of publications with dates) of all co-op, media and trade advertising performed by LICENSEE
during such calendar year specifying the amounts spent on advertising with categorical breakdown
among media, co-op, trade, and consumer.

          7.7 Samples. At LICENSOR’s request, LICENSEE will furnish a reasonable number of
samples of ARTICLES to LICENSOR for purposes of preparing photographs, designs, and illustrations
for ADVERTISING MATERIALS or for other promotional or informational purposes. ARTICLES otherwise
requested by LICENSOR for any other use or purpose will be furnished to LICENSOR at LICENSEE’s FOB
factory cost for same.

          7.8 Sales to LICENSOR. LICENSEE shall sell directly to LICENSOR, for the benefit of
LICENSOR’s employees and as may be requested by LICENSOR from time to time, ARTICLES at a price
equal to twenty-five (25%) percent below LICENSEE’s wholesale cost, it being agreed and understood
that all sales made pursuant to this Section shall be excluded from the calculation of NET SALES.

          7.9 Sales to LICENSOR-Owned Stores. LICENSEE shall sell ARTICLES to LICENSOR-owned
stores in the United States at a price equal to twenty percent (20%) below the wholesale price
being charged by LICENSEE. LICENSOR shall not sell any ARTICLES bought pursuant to the price
structure set forth in this section below the suggested retail price then in existence in the
territory in which the LICENSOR-owned store is located.

 

 

     8. Royalty Payments.

          8.1 Royalties.

               8.1.1 LICENSEE will pay royalties to LICENSOR at a rate equal to EIGHT (8.0%) PERCENT of NET
SALES of the ARTICLES. Such amounts shall be paid at the time, and on the conditions, set forth in
Section 8.3 below. LICENSEE will not pay any royalties on sales made pursuant to Sections 7.8
and/or 7.9, above.

          8.2 Minimum Payments.

               8.2.1. LICENSEE shall pay to LICENSOR TWO HUNDRED TEN ($210,000) DOLLARS for and during the
the FIRST CONTRACT YEAR (beginning effective January 1, 2005 and ending June 30, 2006) as
guaranteed, non-refundable, minimum annual royalties for such CONTRACT YEAR as an advance against
such payments due hereunder for such year. Such amount shall be payable in full as follows: ONE
HUNDRED FIFTY THOUSAND ($150,000) DOLLARS upon the execution of this Agreement; TWENTY THOUSAND
($20,000) DOLLARS on or before October 1, 2005; TWENTY THOUSAND ($20,000) DOLLARS on or before
January 1, 2006; and TWENTY THOUSAND ($20,000) DOLLARS on or before April 1, 2006.

               8.2.2. LICENSEE shall pay to LICENSOR THREE HUNDRED SIXTY THOUSAND ($360,000) DOLLARS for and
during the SECOND CONTRACT YEAR (beginning effective July 1, 2006 and ending June 30, 2007) as
guaranteed, non-refundable, minimum annual royalties for such CONTRACT YEAR as an advance against
such payments due hereunder for such year. Such amount shall be payable as follows: ONE HUNDRED
EIGHTY THOUSAND ($180,000) DOLLARS on or before the July 1, 2006 QUARTERLY DATE and SIXTY THOUSAND
($60,000) DOLLARS on or before each of the remaining three QUARTERLY DATES beginning October 1,
2006.

               8.2.3 LICENSEE shall pay to LICENSOR FOUR HUNDRED EIGHTY THOUSAND ($480,000) DOLLARS for and
during the THIRD CONTRACT YEAR (beginning effective July 1, 2007 and ending June 30, 2008) as
guaranteed, non-refundable, minimum annual royalties for such CONTRACT YEAR as an advance against
such payments due hereunder for such year. Such amount shall be payable as follows: TWO HUNDRED
FORTY THOUSAND ($240,000) DOLLARS on or before the July 1, 2007 QUARTERLY DATE and EIGHTY THOUSAND
($80,000) DOLLARS on or before each of the remaining three QUARTERLY DATES beginning October 1,
2007.

               8.2.4 LICENSEE shall pay to LICENSOR SIX HUNDRED EIGHTY THOUSAND ($680,000) DOLLARS for and
during the FOURTH CONTRACT YEAR (beginning effective July 1, 2008 and ending June 30, 2009) as
guaranteed, non-refundable minimum annual royalties for such CONTRACT YEAR as an advance against
such payments due hereunder for such year. Such amount shall be payable as follows: THREE HUNDRED
FORTY THOUSAND ($340,000) DOLLARS on or before the July 1, 2008 QUARTERLY DATE and ONE HUNDRED
THIRTEEN THOUSAND THREE HUNDRED THIRTY THREE DOLLARS AND THIRTY THREE CENTS ($113,333.33) on or
before each of the remaining three QUARTERLY DATES beginning October 1, 2008.

 

 

               8.2.5 LICENSEE shall pay to LICENSOR EIGHT HUNDRED EIGHTY THOUSAND ($880,000) DOLLARS for and
during the FIFTH CONTRACT YEAR (beginning effective July 1, 2009 and ending June 30, 2010) as
guaranteed, non-refundable minimum annual royalties for such CONTRACT YEAR as an advance against
such payments due hereunder for such year. Such amount shall be payable as follows: FOUR HUNDRED
FORTY THOUSAND ($440,000) DOLLARS on or before the July 1, 2009 QUARTERLY DATE and ONE HUNDRED
FORTY SIX THOUSAND SIX HUNDRED SIXTY SIX DOLLARS AND SIXTY SEVEN CENTS ($146,666.67) on or before
each of the QUARTERLY DATES beginning October 1, 2009.

               8.2.6 In the event this Agreement is renewed for a first renewal TERM, LICENSEE shall pay to
LICENSOR ONE MILLION ($1,000,000) DOLLARS for and during the SIXTH CONTRACT YEAR (beginning
effective July 1, 2010 and ending June 30, 2011) as guaranteed, non-refundable minimum annual
royalties for such CONTRACT YEAR as an advance against such payments due hereunder for such year.
Such amount shall be payable as follows: FIVE HUNDRED THOUSAND ($500,000) DOLLARS on or before the
July 1, 2010 QUARTERLY DATE and ONE HUNDRED SIXTY SIX THOUSAND SIX HUNDRED SIXTY SIX DOLLARS AND
SIXTY SEVEN CENTS on or before each of the QUARTERLY DATES beginning October 1, 2010.

               8.2.7 In the event this Agreement is renewed for a first renewal TERM, LICENSEE shall pay to
LICENSOR ONE MILLION ($1,000,000) DOLLARS for and during the SEVENTH CONTRACT YEAR (beginning
effective July 1, 2011 and ending June 30, 2012) as guaranteed, non-refundable minimum annual
royalties for such CONTRACT YEAR as an advance against such payments due hereunder for such year.
Such amount shall be payable as follows: FIVE HUNDRED THOUSAND ($500,000) DOLLARS on or before the
July 1, 2011 QUARTERLY DATE and ONE HUNDRED SIXTY SIX THOUSAND SIX HUNDRED SIXTY SIX DOLLARS AND
SIXTY SEVEN CENTS on or before each of the QUARTERLY DATES beginning October 1, 2011.

               8.2.8 In the event this Agreement is renewed for a first renewal TERM, LICENSEE shall pay to
LICENSOR ONE MILLION ($1,000,000) DOLLARS for and during the EIGHTH CONTRACT YEAR (beginning
effective July 1, 2012 and ending June 30, 2013) as guaranteed, non-refundable minimum annual
royalties for
such CONTRACT YEAR as an advance against such payments due hereunder for such year. Such amount
shall be payable as follows: FIVE HUNDRED THOUSAND ($500,000) DOLLARS on or before the July 1,
2012 QUARTERLY DATE and ONE HUNDRED SIXTY SIX THOUSAND SIX HUNDRED
SIXTY SIX DOLLARS AND SIXTY
SEVEN CENTS on or before each of the QUARTERLY DATES beginning October 1, 2012.

               8.2.9 In the event this Agreement is renewed for a second renewal TERM, LICENSEE shall pay to
LICENSOR ONE MILLION ($1,000,000) DOLLARS for and during the NINTH CONTRACT YEAR (beginning
effective July 1, 2013 and ending June 30, 2014) as guaranteed, non-refundable minimum annual
royalties for such CONTRACT YEAR as an advance against such payments due hereunder for such year.
Such amount shall be payable as follows: FIVE HUNDRED THOUSAND ($500,000) DOLLARS on or before the
July 1, 2013 QUARTERLY DATE and ONE HUNDRED

 

 

SIXTY SIX THOUSAND SIX HUNDRED SIXTY SIX DOLLARS AND SIXTY SEVEN CENTS on or before each of
the QUARTERLY DATES beginning October 1, 2013.

               8.2.10 In the event this Agreement is renewed for a second renewal TERM, LICENSEE shall pay
to LICENSOR ONE MILLION ($1,000,000) DOLLARS for and during the TENTH CONTRACT YEAR (beginning
effective July 1, 2014 and ending June 30, 2015) as guaranteed, non-refundable minimum annual
royalties for such CONTRACT YEAR as an advance against such payments due hereunder for such year.
Such amount shall be payable as follows: FIVE HUNDRED THOUSAND ($500,000) DOLLARS on or before the
July 1, 2014 QUARTERLY DATE and ONE HUNDRED SIXTY SIX THOUSAND SIX HUNDRED SIXTY SIX DOLLARS AND
SIXTY SEVEN CENTS on or before each of the QUARTERLY DATES beginning October 1, 2014.

               8.2.11 In the event this Agreement is renewed for a second renewal TERM, LICENSEE shall pay
to LICENSOR ONE MILLION ($1,000,000) DOLLARS for and during the ELEVENTH CONTRACT YEAR (beginning
effective July 1, 2015 and ending June 30, 2016) as guaranteed, non-refundable minimum annual
royalties for such CONTRACT YEAR as an advance against such payments due hereunder for such year.
Such amount shall be payable as follows: FIVE HUNDRED THOUSAND ($500,000) DOLLARS on or before the
July 1, 2015 QUARTERLY DATE and ONE HUNDRED SIXTY SIX THOUSAND SIX HUNDRED SIXTY SIX DOLLARS AND
SIXTY SEVEN CENTS on or before each of the QUARTERLY DATES beginning October 1, 2015.

          8.3 Timing of Payments. LICENSEE shall submit ROYALTY SALES REPORTS and royalty
adjustment payments, if any, quarterly, to LICENSOR no later than THIRTY (30) days following the
end of each quarter during each CONTRACT YEAR of this Agreement on all NET SALES.

          8.4 Late Payment. If all or any part of any payment from LICENSEE to

          LICENSOR is not made when due, in addition and without prejudice to any other remedies LICENSOR
has, LICENSEE shall pay interest on such unpaid amount at a rate per annum equal to the prime rate
of interest charged by Fleet Bank, N.A., New York (or any successor in interest thereto) in effect
at the time of such delinquency, plus one (1%) percent per annum, if allowed by applicable law,
otherwise the maximum rate of interest allowed by applicable law shall be applied.

          8.5 Currency. All payments to be made hereunder shall be made in U.S. Dollars. The
Dollar denomination throughout Section 8.2 shall refer to U.S. Dollars. All payments to be made
hereunder shall be made to LICENSOR at its place of business located at 550 Seventh Avenue, New
York, New York. Any sales of ARTICLES under the LICENSED MARK, which are denominated in a currency
other than U.S. Dollars, shall be reported to LICENSOR and converted to U.S. Dollars at the
exchange rate effective at the end of each applicable quarter. The obligation of LICENSEE to pay
royalties is absolute notwithstanding any claim that LICENSEE may assert against LICENSOR. Subject
to applicable withholding taxes required under law, LICENSEE

 

 

shall not have the right to set-off, compensate or make any deduction from such royalty
payments for any reason whatsoever.

     9. Royalty Accounting and Reporting.

          9.1 Statements. All ROYALTY SALES REPORTS shall consist of a full and accurate
statement consisting of the following: (a) The number of units of the ARTICLES shipped for the
preceding quarter of the current CONTRACT YEAR on a cumulative basis setting forth the number
(with corresponding descriptions) of each such ARTICLE sold, returns actually received, normal
trade discounts and allowances actually granted, the resulting computation of NET SALES and the
royalty due on NET SALES; and (b) the list of stores (annually) (including address and telephone
number of each if requested by LICENSOR) to which ARTICLES are sold with NET SALES presented on a
store-by-store basis. In addition, LICENSEE will provide to LICENSOR such additional information
available to LICENSEE concerning sales of the ARTICLES and ARTICLES sold as requested by LICENSOR
in writing. LICENSOR will keep confidential all ROYALTY SALES REPORTS, except that LICENSOR will
be permitted to disclose these reports to its financial, accounting, legal and other professional
advisors and if compelled to do so by a court or governmental authority.

          9.2 Certification of Reports. The ROYALTY SALES REPORTS will set forth the
information required in Section 9.1 above and will be certified to LICENSOR by the chief financial
officer of LICENSEE.

          9.3 No Waiver. Receipt or acceptance by LICENSOR of any of the statements furnished,
or of any sums paid during a CONTRACT YEAR pursuant to this Agreement, will not preclude LICENSOR
from questioning their correctness at any time within the three year period after the CONTRACT
YEAR during which such payments or reports were received.

          9.4 Other Information. LICENSEE shall furnish any and all additional
information reasonably requested by LICENSOR concerning LICENSEE pertaining to this Agreement.

          9.5 Books and Records. LICENSEE will maintain appropriate books of account in which
accurate entries will be made concerning all transactions within the scope of this Agreement.
LICENSOR will have the right during normal business hours, through any accountant or other
authorized representative of its choice, on five (5) business days advance notice to LICENSEE, to
examine and copy all or part of the books of account and all other records, documents and material
in the possession or under the control of LICENSEE which pertain to the manufacture, warehousing,
distribution, advertisement and sale of the ARTICLES and any other records necessary to verify the
information reported by LICENSEE under this Article. LICENSOR and its representatives will be free
to make copies of all or part of LICENSEE’s relevant books, records or other documents and
materials (pertaining to this Agreement). LICENSEE shall render all reasonable assistance to
LICENSOR or its representatives for the performance of an audit and shall not interfere in any
manner with the performance of their duties. The cost of the audit shall be paid by LICENSOR,
provided, however, if the audit shows a deficiency in the aggregate amount required to be paid to
LICENSOR by LICENSEE in excess of FIVE (5%) percent, LICENSEE shall bear the cost of the audit.

 

 

If the audit reveals the underpayment of any royalty payable under Section 8 of this
Agreement, LICENSEE shall immediately pay such amount to LICENSOR together with interest in an
amount calculated in accordance with Section 8.4 of this Agreement. All books of account and
records will be kept available by LICENSEE for at least three (3) years after the close of each
reporting year and shall be kept confidential by LICENSOR, except and only to the extent as may be
required by law or court order.

     10. Indemnification.

          10.1 Indemnification by Licensee. LICENSEE hereby indemnifies and agrees to hold
LICENSOR harmless from and against any claims, suits, losses, damages, demands, injuries and
expenses (including reasonable attorneys’ fees), arising out of or related to any alleged defects
in the material or workmanship of any ARTICLES produced by LICENSEE or the manufacture or sale of
ARTICLES produced by or on behalf of LICENSEE or the use of the LICENSED MARK in connection with
the labeling, distribution or advertisement of any ARTICLES by LICENSEE in violation of any
national, state or local law or regulation (excluding laws relating to intangible property or
defamation where such use is specifically approved herein or otherwise in writing by LICENSOR where
LICENSOR knew or should have reasonably known the specific use would trigger such liability)
whether or not the ARTICLES were approved by LICENSOR pursuant to this Agreement. In addition,
LICENSEE agrees to defend and hold LICENSOR harmless from and against any claims, suits, losses,
damages, demands, injuries and expenses (including reasonable attorneys’ fees), by reason of any
acts, whether by omission or commission that may be committed by LICENSEE or any of its servants,
agents, contractors or employees. LICENSOR shall give LICENSEE immediate notice of any claims or
suits, and LICENSEE shall defend the same, at its own expense, through counsel of its own choice
subject to LICENSOR’s approval which will not be unreasonably withheld. In the event there is a
conflict of
interest which makes it advisable for LICENSOR to retain separate counsel, LICENSEE will reimburse
LICENSOR for LICENSOR’s reasonable counsel fees and expenses LICENSOR incurs as a result. The
indemnities provided for in this Section shall survive the termination of this Agreement
throughout the applicable statute of

limitations.

          10.2 Indemnification by Licensor. LICENSOR hereby indemnifies and agrees to hold
LICENSEE harmless from and against any actual damages, costs and expenses (including reasonable
attorneys’ fees), paid and/or incurred and resulting from a final, non-appealable judicial
determination that any of the ARTICLES bearing the LICENSED MARK (and as based upon DESIGN
SPECIFICATIONS specifically provided by LICENSOR to LICENSEE) infringe any intellectual property
right or other property right (including trade secret right) of a third party. LICENSEE shall give
LICENSOR immediate notice of any claims or suits, and LICENSOR, at its discretion, may elect to
defend the same, at its own expense, through counsel of its own choice subject to LICENSEE’s
approval which will not be unreasonably withheld. In the event there is a conflict of interest
which makes it advisable for LICENSEE to retain separate counsel, then, upon a final,
non-appealable judicial determination of infringement as referred to above, LICENSOR will
reimburse LICENSEE for LICENSEE’s reasonable counsel fees and expenses LICENSEE incurs as a
result. The indemnity provided for in this Section shall survive the termination of this Agreement
throughout the applicable statute of limitations.

 

 

     11. Insurance.

          11.1 Insurance Policy. During the TERM and for the applicable statute of limitations
period thereafter, LICENSEE shall procure and maintain at its own expense in full force and effect
at all times during which ARTICLES are being sold, with reputable insurance carrier(s) an amount
equal to LICENSEE’s own coverage but in no event less than THREE MILLION ($3,000,000) Dollars in
the aggregate in insurance coverage in order to protect LICENSOR against any liabilities with which
it may be subject due to damage or injuries suffered by any servants, agents, contractors,
employees or customers of LICENSEE or by the general public, resulting from the use or sale of the
ARTICLES imported, manufactured, distributed, advertised, or sold by LICENSEE or by LICENSEE’s
contractors. Such insurance shall name LICENSOR as an additional insured and shall provide for at
least thirty (30) days’ prior written notice to LICENSOR and LICENSEE of the cancellation or
substantial modification thereof. Such insurance may be obtained for LICENSOR by LICENSEE in
conjunction with a policy of product liability insurance which covers products other than the
ARTICLES. LICENSEE shall use its best efforts to require its insurance carrier to agree, and to
provide for same in its insurance policy, that, in the event it takes title to any ARTICLES
produced hereunder pursuant to the terms of any policy, it only may sell such ARTICLES in a manner
consistent with the manner in which LICENSEE may sell ARTICLES, and only may sell such ARTICLES to
customers to which LICENSEE may sell ARTICLES, pursuant to the terms of this Agreement.

          11.2 Evidence of Insurance. LICENSEE shall promptly furnish or cause to be furnished
to LICENSOR evidence in form and substance reasonably satisfactory to LICENSOR of the maintenance
of the insurance required by subparagraph 11.1. above (but in no event not later than thirty (30)
days from the date of execution of this Agreement), including, but not limited to, originals or
copies of policies, certificates of insurance (with applicable riders and endorsements), and proof
of premium payments.

     12. Rights and Obligations with Respect to Trademark, other Intangible Property
Image and Likeness of Mr. Oscar de la Renta.

          12.1 Title in LICENSED MARK and Design Specifications.

               12.1.1 LICENSEE acknowledges that LICENSOR is the owner of the LICENSED MARK. All goodwill
associated with use of the LICENSED MARK by LICENSEE on or in connection with the ARTICLES
produced hereunder shall inure to the benefit of LICENSOR and LICENSEE acknowledges and agrees
that it will not, during the term of this Agreement and thereafter, attack or infringe upon
LICENSOR’s right, title or interest in and to the LICENSED MARK or attack the validity of this
license. LICENSEE shall not at any time acquire or claim any right, title or interest of any
nature whatsoever in any trademark, trade name, copyright or design owned or controlled by
LICENSOR which LICENSEE is authorized to use by virtue of this Agreement. Any right, title,
goodwill or interest in or relating to any such trademark, trade name or copyright, pattern or
design connected with the ARTICLES which comes into existence during the term of this License
shall immediately and automatically vest in LICENSOR as LICENSOR’s sole and exclusive property
(excluding any technology, business processes or weavings, the right, title, goodwill or interest
in which shall remain vested in LICENSEE.) LICENSEE agrees to execute any and all documents
reasonably requested by LICENSOR in order to evidence LICENSOR’s right, title or interest to the
same or to transfer to such persons any beneficial or legal right, title or interest which is

 

 

acquired by LICENSEE as a result of the use thereof by LICENSEE, by operation of law or
otherwise. LICENSOR and its affiliates reserve all rights to the LICENSED MARK and the DESIGN
SPECIFICATIONS for their own use and benefit which may not be transferred or assigned voluntarily
by LICENSEE or by operation of law to any other person or entity.

               12.1.2 The parties hereto represent and warrant that they have the full right, power and
authority to enter into and perform all of its obligations hereunder, that they are under no legal
impediment which would prevent their signing of this Agreement or consummating the same and the
entering into this Agreement will not create any default under any other agreement or breach of
same to which they or any of their affiliates may be a party or to an order, judgement, or decree
to which they may be subject or bound. LICENSOR further represents and warrants that (a) it owns
all right, title and interest in and to the LICENSED MARKS in the United States; (b) as of the
effective date of this Agreement there will be no licenses in effect granted by LICENSOR to any
third party permitting the use of the LICENSED MARKS on ARTICLES in the TERRITORY, and (c)
LICENSOR has no obligation to renew existing licenses.

          12.2 Use of LICENSED MARK. LICENSEE shall use the graphics, colors and layout for the
LICENSED MARK specified or approved in writing by LICENSOR. LICENSOR may, but is not required to,
prepare for LICENSEE the design and format of all labels, and other identifying material to be
used on the ARTICLES and LICENSEE shall use only the LICENSED MARK in the design, format and
layout furnished or approved in writing by LICENSOR with respect to all uses. In the event
LICENSEE requests items for use in programs exclusive to LICENSEE, then LICENSOR will develop same
at LICENSEE’s sole expense; provided, however, that LICENSEE has previously approved in
writing any such amounts. LICENSEE shall use the LICENSED MARK only, and only in the form
registered, or otherwise approved in writing by LICENSOR, and shall not use any abbreviation or
part of the LICENSED MARK. LICENSEE shall use the LICENSED MARK in such manner and in such
location on the ARTICLES as LICENSOR specifically designates or approves in writing.

          12.3 Restrictions on Use of LICENSED MARK. LICENSEE agrees that it will not use or
associate the LICENSED MARK with any other trademark, trade name, logo or designation on labels,
hang-tags, boxes, wrapping, advertising or promotional materials without LICENSOR’s written
consent, except as LICENSEE is required by law and/or does so in form, manner and content approved
by LICENSOR as set forth in Section 4.1.2. LICENSEE shall not use the LICENSED MARK or any
abbreviation or combination thereof as its corporate, divisional or trade name or otherwise except
as a trademark. LICENSEE shall not be permitted to use the LICENSED MARK on its invoices,
stationery, letterhead, business cards, telephone and directory listings or other communications
from LICENSEE unless it shall have prior to such use submitted such communications to LICENSOR,
and LICENSOR shall have approved same in writing. Any such submission, and use of the LICENSED
MARK must clearly indicate that LICENSEE is acting as a licensee only and must clearly show the
corporate name and address of LICENSEE, and a description of the ARTICLES.

          12.4 Applications and Registered User Agreements. LICENSEE agrees to cooperate with
LICENSOR in the prosecution of any trademark or copyright applications for the LICENSED MARK as
used in connection with the ARTICLES that are advisable, required or desired by LICENSOR or any of
its affiliates throughout the

 

 

TERRITORY. To this end, LICENSEE agrees to supply to LICENSOR from time to time such
reasonable number of labels and similar material as may reasonably be required in connection with
any such application, the governmental filling fees and expenses related to which shall be shared
equally between LICENSOR and LICENSEE.

          12.5 Copyrights. Any copyright which may be created in any package, design, pattern,
DESIGN SPECIFICATION (developed for the ARTICLES or otherwise unique to the market place for items
consisting of the ARTICLES), label or the like bearing the LICENSED MARK hereunder shall be the
property of LICENSOR or its affiliates (as the case may be) and LICENSEE will place appropriate
copyright notices as designated or approved in writing by LICENSOR on the ARTICLES, packages,
labels and advertising and promotional materials as may be necessary or appropriate to protect the
copyright.

          12.6 Infringements.

               LICENSEE agrees that in the event it learns of any use by any person of the LICENSED MARK
which infringes the license granted by this Agreement or of the use of a trademark similar to the
LICENSED MARK, or of an infringement of any copyright of LICENSOR, it shall promptly notify
LICENSOR of such use and, if requested by LICENSOR, it shall join with LICENSOR, at LICENSOR’s
expense, in such action as LICENSOR, in its sole discretion, may deem advisable for the protection
of its (or its affiliate’s) rights in and to the LICENSED MARK or such copyright. Nothing
contained herein, however, shall require LICENSOR to take any action if it deems it inadvisable to
do so, and LICENSEE shall have no right to take any action with respect to the LICENSED MARK or
any copyright. In the event that LICENSOR’s rights to the LICENSED MARK subject to this agreement
is canceled, defeated, or limited, notwithstanding anything in this Agreement to the contrary,
LICENSOR, and any affiliate shall not have any liability or responsibility as a result of such
cancellation, defeat or limitation. In the event of any such infringement which has a material
adverse impact on the rights being granted hereunder with respect to such trademark, LICENSEE’s
sole remedy is to terminate this Agreement without recourse to LICENSOR.

          12.7 Legends, Markings, and Notices. LICENSEE will cause to appear on the ARTICLES
produced hereunder, all legends, markings, and notices as may be required by any law or regulation
in the TERRITORY or as otherwise directed by LICENSOR. All such items shall be submitted to
LICENSOR for approval prior to use.

          12.8 Image or Likeness or Statements Regarding Mr. Oscar de la Renta. LICENSEE
shall not use the image or likeness of Mr. Oscar de la Renta or any photographic or other
reproduction thereof, without receiving LICENSOR’s written consent to such use in advance and in
writing. LICENSEE shall not refer to Mr. Oscar de la Renta or the LICENSED MARK in any press
release, publication or other communication other than by press releases, publications or other
communications furnished to LICENSEE by LICENSOR or in texts which prior to their communication
have been submitted to LICENSOR in writing and have received LICENSOR’s written consent prior to
their proposed
communication. Subject to buyout rights of third party photographers or agencies, and subject to the other provisions of this agreement, LICENSEE shall

 

 

not be responsible to LICENSOR or to Mr. de la Renta for fees in exchange for Mr. de la Renta’s
image or likeness or for personal appearances he might render further to this Agreement.

     13. Termination.

          13.1 Default/Non-Use. 13.1.2 If LICENSEE fails to make any payment due hereunder, and
if such default shall continue uncured for a period of TEN (10) business days after LICENSEE’s
receipt of written notice of such default, LICENSOR shall have the right to terminate this
Agreement effective immediately upon written notice. If LICENSEE (a) discontinues its business in
connection with the manufacture, sale and distribution of the ARTICLES for a period of thirty (30)
or more days (except for an Act of God or force majeure), or (b) for a period of twelve (12)
consecutive months fails to present for sale to the trade a broadly representative and fair
assortment of ARTICLES bearing either the 0 OSCAR or Oscar by Oscar de la Renta LICENSED MARKS, or
(c) fails to meet the sales minimums set forth in Section 6.4, supra, or (d) defaults on
any obligation which is secured by a security interest in any ARTICLE as to which default LICENSEE
has been notified in writing by the holder of the security interest (unless LICENSEE shall post a
bond with respect to such security interest in an amount sufficient to secure such default, or
unless such default is unrelated to the timely payment of such secured obligation) as to which
LICENSEE shall provide immediate notice to LICENSOR or (e) has current liabilities which exceed
current assets during any continuous thirty (30) day period (unless, after such 30-day period,
LICENSEE can demonstrate that it pays its current liabilities on a timely basis in the normal and
ordinary course of its business and that it maintains ordinary facilities to continue its ability
to do so), or (f) violates or fails to perform, in any material respect, any other of its material
obligations hereunder (for reasons other than an Act of God or force majeure) more than three (3)
times during the TERM (including renewals thereof), LICENSOR shall have the right to terminate this
Agreement effective immediately upon written notice.

               13.1.3 If, in addition to the foregoing (and not by way of limitation), either party shall
violate or fail to perform any of its material obligations hereunder, the non-breaching party shall
have the right to terminate this Agreement upon thirty (30) days after receipt of written notice,
and such notice of termination shall become effective unless the breaching party shall completely
remedy the default in all material respects within such thirty (30) day period (or unless such
default was due to an Act of God or force majeure).

          13.2 Bankruptcy/Insolvency.

               13.2.1 In the event that LICENSEE files a petition in
bankruptcy, is adjudicated a bankrupt or files a petition or otherwise seeks relief under or
pursuant to any bankruptcy, insolvency or reorganization statute or proceeding, or if

 

 

a petition in bankruptcy is filed against it (which is not stayed or dismissed within THIRTY (30)
days of the filing date) or it becomes insolvent or makes a general assignment for the benefit of
its creditors or a custodian, receiver or trustee is appointed for it or substantial portion of
its business or assets, this Agreement shall terminate automatically and forthwith.

               13.2.2 No assignee for the benefit of creditors, custodian, receiver, trustee in bankruptcy,
sheriff or any other officer of the court or official charged with taking over custody of
LICENSEE’s assets or business shall have any right to continue this Agreement or to exploit it in
any way to use the LICENSED MARK if this agreement terminates pursuant to Section 13.2.1 above.

               13.2.3 If LICENSEE dissolves, liquidates, winds-up, sells or otherwise disposes of
substantially all of its business or assets to a third party or otherwise or ceases normal
business operations for a period of fifteen (15) days or more (except for an Act of God, force
majeure or scheduled periods of furlough), LICENSOR shall have the right, without prejudice to any
other rights it may have, to terminate this Agreement by giving notice to LICENSEE effective
immediately.

          13.3 Change of Business.

               This Agreement may not be assigned, sold or transferred voluntarily or by operation of law by
LICENSEE, or its shareholder(s). In the event of an assignment of this Agreement, LICENSOR shall
have the option to terminate this Agreement effective upon notice. A sale or other transfer of
more than fifty (50%) percent of the common voting shares of LICENSEE by its current shareholders
shall be deemed to be an assignment of this Agreement prohibited hereby. Notwithstanding the
foregoing, the following transfers of the common voting shares of LICENSEE shall be allowed: (a)
Transfers to existing shareholders of LICENSEE or to a corporation which is owned or controlled by
LICENSEE or by shareholders who own or control 50% or more of LICENSEE just prior to the
transaction; and (b) where such transfers are to family members of shareholders of LICENSEE or
trusts for the benefit of such family member.

     14. Effect of Termination.

          14.1 Reversion of Rights. Upon the expiration or termination of this Agreement for
any reason whatsoever (including, without limitation, any sell-off period), except as expressly
set out in Article 12 above, all rights in the LICENSED MARK, copyrights created as a result of or
further to this Agreement,
any of the DESIGN SPECIFICATIONS, patterns and/or designs developed by LICENSOR or LICENSEE,
whether or not with LICENSOR, or for use with the ARTICLES, and any samples will automatically
revert to LICENSOR. LICENSEE immediately will cease and thereafter refrain from all use of the
LICENSED MARK, any trademarks which are similar to the LICENSED MARK and all such DESIGN
SPECIFICATIONS, patterns and/or designs, and samples. LICENSEE shall remove

 

 

all tags and labels bearing the LICENSED MARK from ARTICLES in inventory and otherwise. LICENSEE
shall destroy, or if requested by LICENSOR, shall immediately deliver to LICENSOR all DESIGN
SPECIFICATIONS, patterns and/or designs, samples and ADVERTISING MATERIALS of all kinds and other
items or materials in its possession, custody or control with LICENSOR’s tradename or LICENSED

MARK thereon. In addition to the foregoing, at LICENSOR’S request, LICENSEE shall provide LICENSOR
or the successor to the licenses granted hereunder information with respect to the sourcing of
ARTICLES. A termination under this Agreement shall result in a termination under any other license
agreement between LICENSOR and LICENSEE (or an affiliate of LICENSEE).

          14.2 Minimum Royalty/Advertising Deficiencies.

               In the event this Agreement is terminated by LICENSOR pursuant to Article 13 prior to the
expiration of the TERM by reason of LICENSEE’s default hereunder, or in the event LICENSEE
abandons this Agreement, LICENSOR shall be entitled to retain all minimum royalties previously
paid, to collect and retain all minimum royalties due as of the date of such termination, and to
receive immediately all minimum royalty installments set forth in Section 8.2 due and payable for
the remaining Term of this Agreement (excluding any Renewal Term(s) that, as of the date of
termination, have not yet been exercised) notwithstanding the fact that the termination occurred
prior to the end of any CONTRACT YEAR or the TERM (in addition to amounts otherwise payable under
Articles 7 and 8). The parties agree that the amounts so payable are as unmitigable liquidated
damages, not as a penalty. Notwithstanding any other provision to the contrary herein, the
preceding shall be non-exclusive and cumulative with all other remedies and/or claims to which
LICENSOR would otherwise be entitled to assert including but not limited to percentage royalties
otherwise due and/or owing.

          14.3 Inventory. Within TEN (10) business days from the termination of this Agreement,
LICENSEE shall deliver to LICENSOR a schedule of LICENSEE’s inventory of ARTICLES and ARTICLES in
the process of manufacture then on hand to be prepared as of the close of business on the date of
such termination. LICENSEE will have NINETY (90) days from the effective date of termination to
sell out its then existing inventory of ARTICLES bearing the LICENSED MARK (on a non-exclusive
basis) subject to all other terms and
conditions hereof provided such termination is not effected under Article 13 of this Agreement due
to a breach by LICENSEE. In no event shall LICENSEE be permitted to sell any ARTICLES pursuant to
this section that were produced more than NINE (9) months prior to the termination of the
Agreement. All sales of ARTICLES bearing the LICENSED MARK shall be subject to the payment of the
royalty rates set forth in Section 8.1, above. No sell-off period will be allowed in the event the
termination hereunder is due to the default of LICENSEE. LICENSEE will account for, and pay
royalties on, all such sales not later than THIRTY (30) days after the close of the applicable
sell-off period, if any. LICENSOR shall have the sole and exclusive option

 

 

to purchase any of LICENSEE’s remaining inventory as of the date of termination if LICENSOR
notifies in writing LICENSEE of its intent to so purchase no later than TEN (10) days following the
receipt by LICENSOR of the reporting required under the first sentence of this section with the
purchase price as determined below. In the event LICENSOR chooses to exercise this option, the
purchase price LICENSOR shall pay for all of LICENSEE’s remaining inventory of ARTICLES will be
equal to LICENSEE’s cost. LICENSOR will have SIXTY (60) days following its notice to collect the
inventory referred to therein in which event LICENSOR will pay for such inventory upon collection.
In the event such notice is not sent, LICENSEE may dispose of the inventory during and subject to
this section and no royalty shall be payable on such sales to LICENSOR in the event LICENSOR’s
right to purchase is exercised. Nothing herein shall prevent or preclude LICENSOR from licensing
the LICENSED MARK on or in connection with the ARTICLES in the TERRITORY during such sell-off
period following the termination of this Agreement. Upon the termination of this Agreement for any
reason, LICENSEE shall, upon written request by LICENSOR deliver to LICENSOR all patterns, designs,
samples, and other DESIGN SPECIFICATIONS relating to the ARTICLES designed, produced and sold under
this Agreement to which LICENSOR has rights under Section 12.1.1 above). LICENSOR has no rights to
the tools, heads, dies and other tangible manufacturing assets nor to any manufacturing software
data developed for the ARTICLES. In addition, nothing herein shall prevent or preclude LICENSOR at
any time from entering into a licensing agreement or similar arrangement for the LICENSED MARK on
or in connection with the ARTICLES in the TERRITORY that is to take effect upon the termination of
this Agreement. Any such new licensee shall be permitted to commence marketing efforts with respect
to the ARTICLES or items similar to the ARTICLES up to THREE (3) months prior to the termination of
this Agreement.

          14.4 No Rights for Others. No assignee for the benefit of creditors, custodian,
receiver, trustee, sheriff, any officer of the court or official charged with taking over custody
of LICENSEE’S assets or business shall have any right to continue this Agreement or to exploit or
in any way use the LICENSED MARK if this Agreement is terminated.

     15. Competitive Licenses and Non-Disclosure.

          15.1 Proprietary Materials. Except as otherwise expressly set out in Article 12
above, all advertising, and promotional materials, DESIGN SPECIFICATIONS associated with the
ARTICLES, and/or such samples approved by LICENSOR hereunder shall be proprietary to LICENSOR and
shall be used by LICENSEE only in accordance with this Agreement and shall not be used for, in
connection with or as the source for the manufacture, distribution, or sale of any other article
or product of any kind unless otherwise authorized and approved in writing by LICENSOR..

     16. Relationship of Parties.

 

 

          Nothing contained herein shall be construed to place the parties in the relationship of legal
representative, partners, joint venturers, or agency, and LICENSEE shall have no power to obligate
or bind LICENSOR and LICENSOR shall have no power to obligate or bind LICENSEE in any manner.

     17. Payment of Taxes and Duties.

          LICENSEE shall pay or cause to be paid all taxes and customs duties payable by reason of the
manufacture, importation, distribution, marketing and sale of the ARTICLES by LICENSEE.

     18. Notices.

          Any notice or other communication under this Agreement shall be in writing and shall be
considered given when delivered personally (including by overnight courier service) or sent by
telecopier or mailed by registered or courier mail, return receipt requested, to the parties at
the following addresses (or at such other address as a party may specify by notice to the other):

          TO LICENSOR: OSCAR DE LA RENTA, LTD.

550 Seventh Avenue

New York, NY 10018

Telecopier (212) 382-0864

Attn: Alexander L. Bolen, Chief Executive Officer

          TO LICENSEE: THE FASHION HOUSE INC.

6310 San Vicente Blvd., #330

Los Angeles, CA 90048

Telecopier: (310) 274-7863 Attn: 
Tom
Anzures, VP — Sales

     19. Waiver.

          The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver or deprive or limit that party of
the right thereafter to insist upon strict adherence to that term or any other term of this
Agreement. Any waiver must be in writing.

     20. Complete Agreement.

          This Agreement contains a complete statement of all arrangements between the parties with
respect to the subject matter hereof, and cannot be changed or amended except in writing signed by
both parties. This Agreement shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns. In the event this agreement is to appear in
any language other than the English language, the English language version shall control.

     21. Headings.

 

 

          The headings of each of the provisions contained herein are solely for reference and shall
not affect in any manner the meaning or interpretation of such provisions or of this Agreement.

     22. Copies and Interpretation.

          This Agreement may be signed in one or more copies, each of which shall be deemed to be an
original but which, collectively, shall constitute one single instrument. The parties to this
Agreement acknowledge that it is a product of their negotiation and that, as a result, authorship
does not attach to one party and that the terms of this Agreement are not to be construed against
either party.

     23. Divisibility.

          As and whenever possible, each of the provisions of this Agreement shall be interpreted in
order to be valid and effective pursuant to the law applicable hereto. The aforesaid
notwithstanding, in the event that any of the provisions hereof are deemed to be prohibited or
invalid pursuant to any applicable law, said provisions shall automatically cease to have effect
solely insofar as any such prohibition or invalidity is concerned.

     24. Brokerage Fees.

          LICENSEE agrees that in the event a broker or finder was retained in connection with the
transactions contemplated in and by this Agreement, LICENSEE shall be responsible for paying such
broker or finder any brokerage or finder’s commission, fee or similar compensation (collectively,
the “FEE”) that may be due or owed. LICENSEE agrees that LICENSOR shall have no
responsibility whatsoever for the payment of the FEE, and LICENSEE shall indemnify and hold
LICENSOR harmless from any loss, damages or claim arising from or with respect to the FEE or any
other aspect of LICENSEE’s relationship with such broker or finder.

     25. Jurisdiction.

          For the construction and compliance hereunder, the parties hereby agree that this Agreement
shall be governed by and construed in accordance with the laws of the United States of America, and
the State of New York applicable to agreements made and to be performed in New York. The parties
hereto consent to. the exclusive jurisdiction of the courts, State and Federal, located
in the County of New York, State of New York. In no event shall LICENSEE be entitled to subpoena or
notice for testimony Mr. Oscar de la Renta in any case, controversy, suit, action or proceeding
arising out of or in connection with or related to this Agreement or any agreement made pursuant to
this Agreement. LICENSOR and LICENSEE agree, therefore, that to whatever extent the presentation or
discovery of testimony is sought by LICENSEE from Mr. Oscar de la Renta it only shall be in the
form of written interrogatories.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first above written.

 

 

	 	 	 	 	 	 	 	 	 
	 	 	OSCAR DE LA RENTA, LTD.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

Approved:

                                                            

Oscar de la Renta, as Chairman

	 	 	 	 	 	 	 	 	 
	 	 	THE FASHION HOUSE INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

 

 

     The following is the time line for successful implementation of the “0 Oscar” and “Oscar by
Oscar de la Renta” product launches during the first license year.

Fall I: Begin showing December with delivery May in-store.

Fall II: Begin showing in February with delivery July/August in-store

Holiday/Cruise: Begin showing in June with delivery Nov/Dec in-store

Spring/Summer: Begin showing in August with delivery February/March in-store

January, 2005.

     Execute License Agreement.

     Present initial designs to Licensor of product to be presented to the target retail customers
for July 2005, to be delivered in November, 2005.

February, 2005 (last week)

     Present final line plan, and materials, including hardware and embellishments to
Licensor.

     Present preliminary sketches for August Collection to be delivered in-store in February,
2006 to Licensor.

March, 2005 (first week)

     Present final line plan, and material including hardware for August
Collection.
March, 2005 (last week)

     Prepare prototypes of packaging and sock linings.

April, 2005

     Present prototypes of each construction and “pull-overs” of the proposed collection.
April, 2005 (last week) to May (first week)

 

 

May, 2005 (first week)

     Preset prototypes for each construction and “pull-overs” of each style (August
Collection).

June, 2005

     Meet with management from targeted retailers to present the 0 Oscar footwear concept with
story boards and a limited sample offering one month prior to showing the complete offering to
the buyers/DMM’s/GMM’s

June, 2005 (last week)

     Present to Licensor final assortment prior to debuting to the target retail merchants (July
Collection).

June, 2005

     Present the July Collection to retail buyers.

July, 2005

     Present the August Collection to retail buyers.

July, 2005

     Present Fourth Quarter delivery to targeted retailers and collect orders.

July, 2005

     Present Fall I line plan to Licensor to include sketches, materials and embellishments.
July, 2005 (first week)

     Present the August Collection to Licensor.

July, 2005 (last week)

     Place orders for merchandise to be delivered in-store November 1, 2005.
September 2005

 

 

     Present to Licensor preliminary line plan for Fall II 06 collection to include materials,
hardware, and embellishments (both 0 Oscar and Oscar by Oscar de la Renta).

October, 2005

     Prototype review of the Fall I collection of each construction and “pull-overs” of each
style ( 0 Oscar only).

November, 2005

     Present Fall I assortment to Licensor ( 0 Oscar only).

     First delivery of Holiday/Cruise 0 Oscar merchandise to retail stores, territory managers and
customers service staff to conduct in-store seminars and events to start a “grass roots” marketing
effort and stimulate sales at retail.

     Present final Fall II assortment plan to Licensor ( 0 Oscar and Oscar by Oscar de la
Renta).

December, 2005

     Prototype review of each construction and “pull-overs” of the Fall II collection (0 Oscar and
Oscar by Oscar de la Renta).

     Present Fall Ito retail buyers (0 Oscar only).

January, 2006

     Present Fall II collection to Licensor (0 Oscar and Oscar by Oscar de la Renta).
February, 2006

     Present Fall II collections to retail buyers (Premiere offering for Oscar by Oscar de la
Renta).

     From this point forward all time lines will pertain to both 0 Oscar and Oscar by Oscar de la
Renta and will follow a similar cadence to previous year.

 

 

EXHIBIT C

Distribution for ARTICLES bearing the “0 Oscar” LICENSED MARK

Belk Stores

Federated Department Stores

Dillard’s

Marshall Field’s

Lord & Taylor

Saks Inc.

Distribution for ARTICLES bearing the “Oscar by Oscar de la Renta” LICENSED MARK

Federated Department Stores

Dillard’s

Saks, Inc.

Bloomingdale’s (operated separately from Macy’s)

Marshall Fields

Lord & Taylor

Saks Fifth Avenue

Neiman-Marcus specialty stores

Nordstrom

Catalog Distribution for ARTICLES bearing the LICENSED MARK

Bloomingdales

Nordstroms

Neiman-Marcus

Victoria’s Secret

Internet Portals for ARTICLES bearing the LICENSED MARK

zappos.com shoe.com

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