Sample Business Contracts


License Agreement - Everlast Worldwide Inc. and Jacques Moret Inc.


                                LICENSE AGREEMENT

                                     BETWEEN

                             EVERLAST WORLDWIDE INC.

                                       AND

                               JACQUES MORET, INC.
                          (WOMEN'S APPAREL IN THE U.S.)










                                LACKENBACH SIEGEL
                                 One Chase Road
                               Scarsdale, NY 10583
                                 (914) 723-4300


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                                TABLE OF CONTENTS

1.0  DEFINITIONS                          . . . . . . . . . . . . . . . . . . .1

2.0  GRANT OF RIGHTS                      . . . . . . . . . . . . . . . . . . .5

3.0  TERM AND RENEWAL                     . . . . . . . . . . . . . . . . . . .7

4.0  ROYALTIES                            . . . . . . . . . . . . . . . . . . 12

5.0  REPORTS AND PAYMENTS                 . . . . . . . . . . . . . . . . . . 15

6.0  CHAIN OF DISTRIBUTION                . . . . . . . . . . . . . . . . .  .16

7.0  QUALITY CONTROL                      . . . . . . . . . . . . . . . . . . 19

8.0  PROPER USE OF TRADEMARKS             . . . . . . . . . . . . . . . . . . 23

9.0  SALES PROMOTION AND ADVERTISING      . . . . . . . . . . . . . . . . . . 25

10.0 ACCESS TO BOOKS AND RECORDS          . . . . . . . . . . . . . . . . . . 27

11.0 PROTECTION OF TRADEMARKS AND INDEMNIFICATIONS  . . . . . . . . . . . . . 28

12.0 RIGHT TO PURCHASE                    . . . . . . . . . . . . . . . . . . 30

13.0 COPYRIGHT AND TRADEMARK RIGHTS       . . . . . . . . . . . . . . . . . . 31

14.0 GOODWILL                             . . . . . . . . . . . . . . . . . . 32

15.0 EXPIRATION, DEFAULT AND TERMINATION  . . . . . . . . . . . . . . . . . . 32

16.0 POST-TERMINATION INVENTORY AND FINAL REPORTS  . . . . . . . . . . . . . .35

17.0 MISCELLANEOUS EXPENSES               . . . . . . . . . . . . . . . . . . 37

18.0 RESERVATION OF RIGHTS                . . . . . . . . . . . . . . . . . . 37

19.0 NOTICES                              . . . . . . . . . . . . . . . . . . 37

20.0 INJUNCTIVE RELIEF                    . . . . . . . . . . . . . . . . . . 38

21.0 ENFORCEMENT AND ARBITRATION          . . . . . . . . . . . . . . . . . . 38

22.0 TRANSITIONAL EXPENSES                . . . . . . . . . . . . . . . . . . 39

23.0 NO PARTNERSHIP                       . . . . . . . . . . . . . . . . . . 41

24.0 NON-ASSIGNABILITY                    . . . . . . . . . . . . . . . . . . 41

25.0 APPLICABLE LAW                       . . . . . . . . . . . . . . . . . . 42

26.0 INTEGRATION                          . . . . . . . . . . . . . . . . . . 42

27.0 MODIFICATION                         . . . . . . . . . . . . . . . . . . 42

28.0 CONFIDENTIALITY                      . . . . . . . . . . . . . . . . . . 42

29.0 ENFORCEMENT                          . . . . . . . . . . . . . . . . . . 43

30.0 FORCE MAJEURE                        . . . . . . . . . . . . . . . . . . 43

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                                LICENSE AGREEMENT

     This  Agreement  is made and  entered  as of the 1st day of  January,  2005
("Effective  Date"),  by and between  EVERLAST  WORLDWIDE  INC.,  a  corporation
organized  and  existing  under the laws of the State of  Delaware,  having  its
principal  place  of  business  at 1350  Broadway,  New  York,  New  York  10018
(hereinafter "Everlast");

                                       AND

JACQUES MORET, INC., a corporation  organized and existing under the laws of the
State of New York, having its principal place of business at 1411 Broadway,  8th
Floor, New York, New York 10018 (hereinafter "Licensee").

                              W-I-T-N-E-S-S-E-T-H:

     WHEREAS,  Everlast has the exclusive right to license  trademarks  owned by
Everlast  World's  Boxing  Headquarters  Corp,  and has the right to license the
trademarks  listed in Exhibit A hereto  (hereinafter  referred  to as  "Licensed
Marks"); and

     WHEREAS,  Licensee  wishes  to  obtain  this  license  upon the  terms  and
conditions set forth below;

     NOW  THEREFORE,  in  consideration  of the promises and covenants set forth
below,  the  adequacy  of which is hereby  acknowledged,  the  parties  agree as
follows:

1.0  DEFINITIONS

     1.1  "Licensed Products" means all women's apparel,  including  activewear,
sportswear,   underwear,  and  sleepwear,  but  specifically  excludes:  women's


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outerwear jackets and overcoats;  swimwear;  women's woven windwear sets; socks,
hosiery,  tights,  and leg  warmers;  girls'  apparel;  and any and all  apparel
products to be used for  professional  and amateur  boxing  purposes  ("amateur"
herein meaning Olympics and/or Gold Gloves). Everlast shall only be permitted to
sell women's  apparel  products to be used for  professional  and amateur boxing
purposes by and through Everlast's catalogs,  directly over the Internet, and/or
directly to consumers at boxing venues.  Licensee  acknowledges that Everlast is
currently party to one or more  third-party  licenses in the Contract  Territory
(defined  herein  below) that are valid and in effect as of the  Effective  Date
("Third-Party  Licenses") for the following goods:  swimwear;  women's outerwear
jackets and overcoats;  women's windwear sets;  girls' apparel;  and leg warmers
("Third  Party  License  Goods").  In the  event  that any  Third-Party  License
expires,  or is  terminated  during  the Term  (defined  herein  below)  of this
Agreement, Everlast shall provide Licensee written notice of such termination or
expiration  at least 30 days prior  thereto,  and upon  receipt  of such  notice
Licensee shall have a right of first refusal for a period of 30 calendar days to
enter into a license ("New  License")  with Everlast for the Third Party License
Goods  covered by such  terminated  or expired  Third  Party  License.  Such New
License  shall be at the same royalty rate as the  terminated  or expired  Third
Party License,  shall provide for an initial term and renewal  periods which are
consistent  with the Term of this  Agreement,  shall conform  substantially  and
materially to the business  terms  expressed in the  terminated or expired Third
Party  License,  shall require that Licensee pay  guaranteed  minimum  royalties
annually  in an amount  equal to the  amount  of  guaranteed  minimum  royalties
actually  paid by the  former  Third  Party  License  licensee  in the  final 12
calendar  months of such Third Party License and shall  otherwise  substantially
conform  to the terms of this  Agreement.  In the  event  Licensee  declines  to
exercise  such right of first  refusal  within 30 days of receiving  notice from
Everlast,  and  Everlast  subsequently  obtains an offer  from a third  party to
license any Third  Party  License  Goods  previously  licensed  in the  Contract
Territory  under such Third  Party  License  upon terms  acceptable  to Everlast
("Third Party Terms"), Everlast shall notify Licensee of such third party offer,
which notice shall include a disclosure  and  representation  as the accuracy of
all relevant Third Party Terms,  and Licensee shall  thereafter  have a right of
first  refusal  for a period of 30  calendar  days to license  such Third  Party
License  Goods from Everlast  pursuant to the Third Party Terms,  for an initial


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term and renewal  periods which are consistent  with the Term of this Agreement.
Such  license  shall  otherwise  substantially  conform  to the  terms  of  this
Agreement. Such right of first refusal shall apply to any subsequent offers made
by such third party on  different  Third Party Terms,  as well as to  subsequent
offers made by additional third parties.  Licensee  acknowledges and agrees that
the Third Party  Licenses  contain  provisions for automatic  renewal,  and that
Everlast  shall at no time be  obligated  to rescind  any such  renewal  rights;
provided,  however, that Everlast shall not be permitted to increase the maximum
possible term (including all possible  renewals) of any such Third Party License
calculated as of the Effective Date.  Everlast otherwise makes no representation
or covenant  whatsoever  herein that any Third Party  License  Goods will become
available and subject to the right of first refusal granted herein.

     1.2  "Licensed  Marks" shall as of the Effective Date mean and include only
those marks set forth on Exhibit A hereto,  but  thereafter  shall also mean, at
Licensee's discretion, any trademarks adopted by, or on behalf of, and owned by,
Everlast Worldwide,  Inc., Everlast World's Boxing Headquarters Corporation,  or
any subsidiary thereof ("New Mark").  Licensee  acknowledges and agrees that the
indemnity  provided by Everlast to Licensee in paragraph 11.1 shall not apply to
any New Mark until, and will apply when, but only if such New Mark is registered
for the Licensed Products in the Contract Territory, and Licensee further agrees
that  Licensee  shall  indemnify  Everlast and hold  Everlast  harmless from all
claims  or suits  arising  out of  Licensee's  use of any New Mark  prior to its
registration in accordance with this paragraph.  Everlast shall provide Licensee
with written notice of the  registration  of any such New Mark promptly upon the
issuance  of  such  registration.   Licensee  acknowledges  that  the  "Inverted
Hourglass  Shape" mark set forth on Exhibit A, which is currently the subject of
U.S. Trademark Application Serial No. 78445260,  has not been registered for the
Licensed  Products in the  Contract  Territory  (defined  below),  and  Licensee
acknowledges  and agrees that the indemnity  provided by Everlast to Licensee in
paragraph  11.1 shall not apply to  Licensee's  use of such  Inverted  Hourglass
Shape as a Licensed Mark under this Agreement and license until,  and will apply
when, but only if U.S. Trademark  Application Serial No. 78445260 matures into a
registration or the Inverted  Hourglass  Shape mark is otherwise  registered for


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the Licensed Products in the Contract Territory. Everlast shall provide Licensee
with written notice of the  registration  of the Inverted  Hourglass  Shape mark
promptly upon the issuance of such registration.

     1.3  Licensee  shall  be  permitted,  with the  prior  written  consent  of
Everlast  which shall not be  unreasonably  withheld,  to use the Licensed Marks
together, or in conjunction with, one or more additional words,  designations or
marks,  including without limitation the designation "by Everlast" in connection
with additional words or marks ("Co-brand  License Marks");  provided,  however,
that Licensee shall indemnify  Everlast and hold Everlast  harmless from any and
all claims,  actions and suits arising from, or related to Licensee's use of any
Co-brand Licensed Mark, including any and all claims of trademark  infringement,
service mark infringement and/or unfair competition.

     1.4  "Contract  Territory"  means the United States,  its  territories  and
possessions, and any and all U.S. military installations and bases worldwide. In
the event  Everlast  obtains an offer during the First  Option  Period or Second
Option  Period  (defined  herein  below)  from any  third-party  to license  any
Licensed  Products in the territory of Canada upon terms  acceptable to Everlast
("Third Party Canada Terms"), Everlast shall notify Licensee of such third-party
offer,  which  notice  shall  include a  disclosure  and  representation  as the
accuracy of all relevant Third Party Canada Terms, and Licensee shall thereafter
have a right of first  refusal for a period of 30 calendar  days to license such
Licensed Products from Everlast pursuant to the Third Party Canada Terms, for an
initial  term and renewal  periods  which are  consistent  with the Term of this
Agreement.  Such license shall otherwise  substantially  conform to the terms of
this Agreement. Such right of first refusal shall apply to any subsequent offers
made by such third party on different  Third Party Canada  Terms,  as well as to
subsequent offers made by additional third parties.

     1.5  "Net Sales" shall mean Licensee's  gross dollar sales volume resulting
from bona fide, arms length  transactions at invoice price,  less deductions for


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trade discounts,  shipping charges, returns and allowances,  and sales taxes (or
any  use,  value-added  or  similar  taxes)  included  therein,  whether  or not
separately stated on the invoice.  Such deductions shall not collectively exceed
fifteen  percent (15%) of gross Net Sales during any single  Contract Year. Such
Net Sales shall be determined  without  deducting  any income  taxes,  franchise
taxes,  uncollectible  accounts,  anticipation or financial discounts.  No costs
incurred in the manufacture,  sale, distribution,  advertisement or exploitation
of Licensed  Products shall be deducted from gross sales. A sale shall be deemed
to occur when product is shipped or invoiced by Licensee.  Included in Net Sales
shall be all transactions of Licensed Products distributed by Licensee or any of
its affiliated,  associated or subsidiary  companies,  even if such transactions
are not invoiced. Such non-invoiced  transactions shall be included in Net Sales
at the usual selling prices of such Licensed Products.

2.0  GRANT OF RIGHTS

     2.1  Everlast hereby grants to Licensee,  and Licensee  hereby accepts,  an
exclusive  license and right to use the Licensed  Marks in  connection  with the
manufacture, importation,  advertisement,  distribution and sale of the Licensed
Products  (constructed,  packaged or marketed per the requirements below) during
the Term  (defined  herein  below)  hereof and only in the  Contract  Territory.
Licensee has no right to use the Licensed  Marks,  or any portions  thereof,  as
part of a trade name, and shall not use any Licensed Mark as a trademark in such
a manner as to create the  impression  that Licensee  owns such  Licensed  Mark.
Licensee  shall neither affix to, nor use in connection  with Licensed  Products
any trademark other than the Licensed Marks.  Notwithstanding  any of the above,
Licensee  shall be  permitted  to  manufacture,  or have  manufactured  Licensed
Products  anywhere in the world,  subject to all applicable  U.S. or other laws,
treaties and/or  regulations,  for sale under this Agreement within the Contract
Territory.

     2.2  Everlast  represents that it has the sole and exclusive right to grant
the within rights and license.  Everlast further  represents that the rights and
license  granted  herein do not  conflict  with or violate the rights or license
granted by Everlast to any other person or entity.

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     2.3  The parties recognize their common interest in protecting and policing
the Licensed Marks, both within the Contract  Territory and outside the Contract
Territory,  and  recognize  that the  avoidance of confusion as to the source of
goods bearing the Licensed  Marks is an important  ingredient of such  policing.
Therefore, as permitted by law, Licensee shall use all reasonable efforts during
the term hereof to assure that Licensed Products  manufactured by Licensee shall
not be introduced outside of the Contract  Territory.  Licensee shall not export
Licensed  Products from the Contract  Territory or sell Licensed Products to any
distributor whom it knows intends to export Licensed  Products from the Contract
Territory.  In  addition,  if Licensee  learns that any of its  customers or any
sub-contractor  has exported Licensed Products from the Contract  Territory,  it
shall cease  selling  Licensed  Products to such  customer,  or buying from such
sub-contractor,   unless  such  customer/sub-contractor   agrees  in  a  writing
sufficient  to Everlast  not to export  Licensed  Products  thereafter.  Nothing
herein  shall be deemed to  preclude  Licensee  from  having  Licensed  Products
manufactured for Licensee by subsidiaries, affiliates or sub-contractors located
outside of the Contract  Territory for  distribution  solely within the Contract
Territory.

     2.4  Subject to the dispute  resolution  mechanisms  set forth in paragraph
21.0,  herein below,  in the event of a dispute  between  Licensee and Everlast,
between Licensee and other Everlast licensee,  or between Licensee and any other
persons, as to what  classifications of goods are covered by the descriptions of
Licensed Products listed in this Agreement, or as to the similarity of any goods
to Licensed Products, the decision of Everlast shall be final.

     2.5  From and after the termination of this Agreement,  except as otherwise
expressly  provided  herein or agreed  between  the parties  hereto,  all of the
rights of Licensee to the use of the Licensed  Marks shall cease  absolutely and
Licensee shall not thereafter  advertise,  promote,  distribute or sell any item
whatsoever  bearing any Licensed Mark. As used in this Agreement,  "termination"
shall include  "expiration" of the Agreement.  Before termination,  licenses for
the Licensed  Marks may be granted by Everlast to others in connection  with the
advertisement,   promotion  and  sale  of  Licensed  Products  in  the  Contract


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Territory,  provided  shipment  of such  Licensed  Products  is made  after  the
termination of this Agreement.

3.0  TERM AND RENEWAL; LICENSEE'S OPTION TO CONVERT LICENSE

     3.1  The initial "Term" of this  Agreement  shall commence on the Effective
Date and end December 31, 2009, unless renewed pursuant to Paragraph 3.2 hereof.
The term "Contract Year" shall refer  initially to the period  commencing on the
Effective Date and continuing  through December 31, 2005, and thereafter to each
calendar twelve (12) month period commencing on each January 1st during the Term
of this  Agreement,  whether  the same shall occur  during the  initial  Term or
during any Option Period as defined in Paragraph 3.2 below.  The term  "Contract
Year Quarter"  shall refer  initially to the period  commencing on the Effective
Date and continuing  through March 31, 2005,  and thereafter to each  successive
calendar three (3) month period during each Contract Year,  commencing  April 1,
2005 and thereafter.

     3.2  Licensee  may renew  this  Agreement  for 2  additional  ("First"  and
"Second,"  respectively) terms of five (5) years each, one commencing January 1,
2010  and  ending  December  31,  2014  ("First  Option  Period"),  and a second
commencing  January  1,  2015 and  ending  December  31,  2019  ("Second  Option
Period"), upon Licensee giving to Everlast written notice as provided in Article
19 hereof of its  intention  to renew no later than  December  31,  2008 for the
First Option  Period,  and no later than December 31, 2013 for the Second Option
Period.  For the  First  Option  Period,  Licensee  shall be  entitled  to renew
provided  Licensee has paid  Everlast a minimum of  US$10,000,000  in cumulative
Earned Royalties and Guaranteed Minimum Royalties (defined herein as "cumulative
royalties") for the period January 1, 2005 through  December 31, 2008. If at the
time  Licensee  provides  its notice of renewal for the First  Option  Period to
Everlast  Licensee's  cumulative  royalties  paid to  Everlast  are  then  below
US$10,000,000,  and upon payment to Everlast of Licensee's  remaining cumulative
royalties  for the  period  January  1,  2005  through  December  31,  2008 such
cumulative  royalties  remain below  US$10,000,000,  then  Licensee's  notice of
renewal  shall be void and of no effect,  and this  Agreement  and License shall


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expire and terminate in accordance  with its terms as set forth herein as of end
of the initial Term hereof.  For the Second  Option  Period,  Licensee  shall be
entitled to renew provided Licensee has paid Everlast a minimum of US$10,800,000
in cumulative  royalties  during the period January 1, 2010 through December 31,
2013.  If at the time  Licensee  provides  its notice of renewal  for the Second
Option Period to Everlast Licensee's  cumulative  royalties paid to Everlast for
the  period   January  1,  2010  through   December  31,  2013  are  then  below
US$10,800,000,  and upon payment to Everlast of Licensee's  remaining cumulative
royalties  for the  period  January  1,  2010  through  December  31,  2013 such
cumulative royalties remain below  US$10,800,000,  then Licensee's renewal shall
be void and of no  effect,  and this  Agreement  and  License  shall  expire and
terminate  in  accordance  with its terms as set  forth  herein as of end of the
initial Term hereof.

     (a)  In the  event  Licensee  exercises  its  option to renew for the First
Option Period,  it shall, as of December 31, 2009, have the additional option to
convert this Agreement and license to a fully-paid  exclusive  license in and to
the Licensed  Marks in  connection  with the  Licensed  Products in the Contract
Territory,  plus the territory of Canada, for a term of 99 years, with automatic
one-year  renewals in perpetuity  thereafter at Licensee's option ("First Option
New  License"),  for the  price of  US$26,000,000  ("First  New  License  Fee").
Licensee shall execute and provide  Everlast a promissory  note in the amount of
the First New  License  Fee to secure  payment of the First New License Fee (the
"Promissory  Note"),  which shall  obligate and bind Licensee to pay to Everlast
the First New License Fee in 20 equal, quarterly installments commencing January
1, 2010, with interest  accruing on unpaid  principal at the prime lending rate.
In the event that prior to the  earlier  of (i)  Licensee's  payment of the full
First New License Fee to Everlast,  or (ii) December 31, 2014,  the First Option
New License is  terminated  by Everlast or Everlast  declares  bankruptcy  or is
adjudicated  bankrupt,  all further  obligations under the Promissory Note shall
cease and be of no further  effect.  Licensee  shall be  permitted,  at any time
during the term of the First  Option New  License,  to pay the  remainder of the
First New License Fee, together with all accrued interest  thereon,  without any
pre-payment penalty. Such First Option New License shall, if applicable,  (i) be
royalty-free  (apart from the  installments due on the First New License Fee due
Everlast  under the  Promissory  Note),  guaranteed  minimum  royalty-free,  and


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contain  no  advertising  requirements  or sales  reporting  requirements;  (ii)
provide for quality  control by Everlast  solely to such minimum extent as shall
be necessary so that (a)  Everlast's  consent with respect to any  submission by
Licensee of any  proposed  use of the  Licensed  Marks shall be based  solely on
whether or not Licensee's  proposed use is consistent with  previously  approved
versions of the  Licensed  Marks,  (b)  Everlast's  consent  with respect to any
submission by Licensee of any proposed  Licensed  Products shall be based solely
upon its  material  conformity  in quality to any product of like type and style
previously approved by Everlast, and (c) any disapproval in either case shall be
subject to  established  dispute-resolution  procedures;  (iii) provide that the
Agreement may be terminated by Everlast  solely (a) upon  Licensee's  filing for
bankruptcy protection under Chapter 7 (liquidation) of the U.S. Bankruptcy Code,
(b) upon Licensee  becoming  subject to involuntary  bankruptcy and liquidation,
(c) upon Licensee being adjudicated bankrupt and liquidated, (d) upon Licensee's
failure  to timely  pay any  installment  of the First New  License  Fee,  after
expiration of the applicable cure period,  or (e) upon any two material breaches
by  Licensee  of  the  First  Option  New  License  litigated  against  Licensee
successfully (either by verdict and reduction to judgment against Licensee or by
settlement  or consent  judgment  entered by the court) by  Everlast;  provided,
however, that in the event the second material breach by Licensee giving rise to
Everlast's termination right hereunder shall be unintentional,  Everlast's right
to terminate shall be subject to its obligation to compensate  Licensee for such
termination in an amount equal to the then-current value of the First Option New
License, as then determined and agreed in good faith by and between the parties;
(iv) shall  provide that Everlast  shall not be entitled to any payments,  other
than the First New License Fee and any  applicable  indemnities  owing under the
terms of the First  Option New  License,  for any reason  whatsoever;  (v) shall
eliminate  any  restrictions  on  channels of  distribution  and  eliminate  all
performance  requirements pertaining to sales, marketing,  and/or advertising of
Licensee  as may be  currently  set forth in the  Agreement,  and (vi)  shall be
freely assignable in whole or in part by Licensee without limitations,  provided
assignee  expressly  ratifies and agrees in the assignment  instrument(s) to all
covenants and obligations of Licensee set forth in the First Option New License.
The parties  agree to negotiate  and execute such  additional  and/or  ancillary


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terms and  conditions as may be necessary to  memorialize  such First Option New
License,  and to  cooperate  in the  drafting  and  execution  of all  necessary
documentation related to such First Option New License.

     (b)  In the event  Licensee  exercises  its  option to renew for the Second
Option Period,  and has not exercised the option granted above in  sub-paragraph
(a), it shall,  as of December 31, 2014,  have the additional  option to convert
this  Agreement  and license to a  fully-paid,  exclusive  license in and to the
Licensed  Marks  in  connection  with  the  Licensed  Products  in the  Contract
Territory,  plus the territory of Canada, for a term of 99 years, with automatic
one-year renewals in perpetuity  thereafter at Licensee's option ("Second Option
New License"), for a price equal to the greater of (i) US$30,000,000, or (ii) an
amount  equal  to 50% of the  sum of (a)  US$30,000,000  and  (b) the sum of all
royalties  received by Everlast in the  Contract  Year ending  December 31, 2014
from all sources other than Licensee for sales of goods that would be subject to
Licensee's  right of first refusal  option in paragraph 2.1,  herein above,  but
have been and/or are still subject to a Third Party  License,  and all royalties
paid by Licensee to Everlast  pursuant to this  Agreement in such Contract Year,
multiplied by five (x 5) ("Second New License Fee").  Licensee shall execute and
provide  Everlast a promissory  note in the amount of the Second New License Fee
to secure payment of the New License Fee (the  "Promissory  Note"),  which shall
obligate  and bind  Licensee to pay to Everlast  the First New License Fee in 20
equal, quarterly installments commencing January 1, 2015, with interest accruing
on unpaid  principal at the prime  lending  rate. In the event that prior to the
earlier  of (i)  Licensee's  payment  of the  full  Second  New  License  Fee to
Everlast, or (ii) December 31, 2019, the Second Option New License is terminated
by Everlast,  or Everlast declares  bankruptcy or is adjudicated  bankrupt,  all
further  obligations  under the Promissory Note shall cease and be of no further
effect.  Licensee shall be permitted,  at any time during the term of the Second
Option New License, to pay the remainder of the Second New License Fee, together
with all accrued interest thereon,  without any pre-payment penalty. Such Second
Option New License shall,  if applicable,  (i) be  royalty-free  (apart from the
installments due on the Second New License Fee due Everlast under the Promissory
Note), guaranteed minimum royalty-free,  and contain no advertising requirements
or sales  reporting  requirements;  (ii) provide for quality control by Everlast
solely to such  minimum  extent  as shall be  necessary  so that (a)  Everlast's


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consent  with respect to any  submission  by Licensee of any proposed use of the
Licensed Marks shall be based solely on whether or not  Licensee's  proposed use
is consistent  with  previously  approved  versions of the Licensed  Marks,  (b)
Everlast's  consent with respect to any  submission  by Licensee of any proposed
Licensed Products shall be based solely upon its material  conformity in quality
to any product of like type and style previously  approved by Everlast,  and (c)
any   disapproval   in   either   case   shall   be   subject   to   established
dispute-resolution   procedures;   (iii)  provide  that  the  Agreement  may  be
terminated  by  Everlast  solely  (a)  upon  Licensee's  filing  for  bankruptcy
protection under Chapter 7 (liquidation)  of the U.S.  Bankruptcy Code, (b) upon
Licensee  becoming subject to involuntary  bankruptcy and liquidation,  (c) upon
Licensee being adjudicated bankrupt and liquidated,  (d) upon Licensee's failure
to timely pay any installment of the Second New License Fee, after expiration of
the applicable cure period, or (e) upon any two material breaches by Licensee of
the Second Option New License litigated against Licensee successfully (either by
verdict and reduction to judgment  against  Licensee or by settlement or consent
judgment entered by the court) by Everlast; provided, however, that in the event
the second  material  breach by Licensee  giving rise to Everlast's  termination
right hereunder shall be  unintentional,  Everlast's right to terminate shall be
subject to its  obligation to  compensate  Licensee for such  termination  in an
amount equal to the then-current value of the Second Option New License, as then
determined  and  agreed in good faith by and  between  the  parties;  (iv) shall
provide  that  Everlast  shall not be entitled to any  payments,  other than the
Second New License Fee and any applicable  indemnities  owing under the terms of
the Second Option New License,  for any reason  whatsoever;  (v) shall eliminate
any  restrictions  on channels of  distribution  and eliminate  all  performance
requirements pertaining to sales,  marketing,  and/or advertising of Licensee as
may be currently set forth in the Agreement, and (vi) shall be freely assignable
in whole or in part by Licensee without limitations, provided assignee expressly
ratifies  and  agrees  in the  assignment  instrument(s)  to all  covenants  and
obligations of Licensee set forth in the Second Option New License.  The parties
agree to  negotiate  and execute  such  additional  and/or  ancillary  terms and
conditions  as may be necessary to  memorialize  such Second Option New License,
and to cooperate in the drafting and  execution of all  necessary  documentation
related to such Second Option New License.



                                       11
<PAGE>

     (c)  In the event  Licensee  exercises its option to convert this Agreement
to a First  Option New License or Second  Option New License  pursuant to and in
accordance with  subsections  (a) or (b) herein above,  Everlast shall as of the
effective  date of such  First or Second  Option New  License  assign all of its
rights,  title  and  interest  in and to all  royalties  (earned  royalties  and
guaranteed minimum  royalties)  thereafter due and payable to Everlast under the
then-existing  and valid and  enforceable  Third Party  Licenses and Third Party
Sam's  Club  Licenses   (defined   herein  below)  to  Licensee   ("Third  Party
Assignments"),  including  the right to enforce its right to such  royalties via
demand,  litigation, or otherwise.  Everlast shall take such further action upon
making such assignment,  including the preparation and delivery of any necessary
documentation,  to facilitate the payment of all such royalties to Licensee upon
the consummation of such  assignment.  Upon the termination or expiration of any
Third Party License and/or Third Party Sam's Club License which was existing and
valid as of  Licensee's  exercise of its option to enter into a First Option New
License or Second  Option New  License,  Everlast and  Licensee  shall  promptly
thereafter  amend the First Option New License or Second Option New License,  as
applicable,  to add the licensed  products from the Third Party License into the
definition  of  Licensed  Products  hereunder,  or add Sam's Club as a permitted
channel of distribution, as may be applicable.

4.0  ROYALTIES

     4.1  Licensee  shall pay  Everlast a royalty  on all Net Sales of  Licensed
Products made by Licensee, its affiliated, associated or subsidiary companies at
the rate of five percent (5%) of such Net Sales  ("Earned  Royalty");  provided,
however,  that  Earned  Royalties  shall be  calculated  at 4% of Net Sales with
respect  to any and all sales to  MarMaxx  within the  Contract  Territory.  For
purposes of this  Agreement,  for  Contract  Years  ending  December  31,  2006,
December 31, 2007,  December 31, 2008, and December 31, 2009,  Earned  Royalties
shall also include all "Earned  Royalties" earned by Licensee during those years
pursuant to Licensee's  license with  Everlast  dated as of July 1, 2004 for the
territory of Canada, as amended ("Canada Earned Royalties").  For Contract Years


                                       12
<PAGE>

ending  December 31, 2006 and December 31,  2007,  respectively,  Canada  Earned
Royalties shall be reported and/or paid hereunder solely to the extent that such
Canada Earned Royalties exceed guaranteed minimum royalties paid by Licensee for
such Contract Years, respectively, pursuant to and in accordance with Licensee's
license with Everlast  dated as of July 1, 2004 for the territory of Canada,  as
amended.  For Contract Years one, two and three, ending December 31, 2005, 2006,
and 2007, respectively, Licensee shall pay Earned Royalties collectively, in one
payment,  due no later than January 31, 2008, on all Net Sales earned during the
period  January 1, 2005 through  December 31, 2007 in excess of  US$150,000,000.
Thereafter,  subject to paragraph 4.3, herein below,  Earned  Royalties shall be
paid to Everlast  quarterly (in  accordance  with the terms of Article 5, herein
below),  in arrears  for all Net Sales in each  Contract  Year  Quarter and less
Guaranteed  Minimum  Royalties  (defined herein below) paid during such Contract
Year  Quarter,  concurrently  upon the  submission  of the Royalty and Net Sales
Report (defined herein below) specified in Article 5.

     4.2  Licensee shall pay to Everlast  Guaranteed  Minimum Royalties for each
Contract Year as follows (in Option Period years* if renewed):

     CONTRACT YEAR ENDING     GUARANTEED MINIMUM ROYALTY       INSTALLMENT
     --------------------     --------------------------       -----------
     December 30, 2005                 US$2,500,000             (See below)
     December 31, 2006                 US$2,500,000             US$625,000
     December 31, 2007                 US$2,500,000             US$625,000
     December 30, 2008                 US$2,500,000             US$625,000
     December 31, 2009                 US$2,500,000             US$625,000
     December 31, 2010*                US$2,700,000             US$675,000
     December 30, 2011*                US$2,700,000             US$675,000
     December 31, 2012*                US$2,700,000             US$675,000
     December 31, 2013*                US$2,700,000             US$675,000
     December 30, 2014*                US$2,700,000             US$675,000
     December 31, 2015*                US$2,850,000             US$712,500


                                       13
<PAGE>

     December 31, 2016*                US$2,850,000             US$712,500
     December 30, 2017*                US$2,850,000             US$712,500
     December 31, 2018*                US$2,850,000             US$712,500
     December 31, 2019*                US$2,850,000             US$712,500

Licensee  shall pay  annual  Guaranteed  Minimum  Royalties  in equal  quarterly
installments, as set forth in the chart above, on or before each of January 1st,
April 1st,  July 1st, and October 1st during each  Contract  Year.  For Contract
Year 1 only (ending December 31, 2005), Licensee shall pay Everlast US$2,000,000
on or before January 1, 2005, and US$500,000 on or before September 15, 2005.

     4.3  During each  individual  Contract Year  commencing  after December 31,
2007,  excess Earned  Royalties  paid  quarterly  over the quarterly  Guaranteed
Minimum Royalty amount shall be carried forward to succeeding  quarters (whether
in the  same  or  succeeding  Contract  Years)  as a  credit  against  next  due
Guaranteed  Minimum Royalty payments.  In the event Guaranteed Minimum Royalties
are not fully earned in the Contract Years ending December 31, 2008 and December
31, 2009,  respectively,  Earned Royalty overages paid for the period January 1,
2005 through December 31, 2007 on (or before) January 31, 2008 shall be credited
against such Guaranteed  Minimum Royalty  payments,  beginning with the Contract
Year ending  December 31, 2008.  Excess Earned  Royalties  paid for the Contract
Years ending  December  31, 2008 and  December 31, 2009,  shall also be credited
against any shortfall in Earned Royalties for the period January 1, 2005 through
December  31,  2007,  such  that  in the  event  cumulative  Guaranteed  Minimum
Royalties for the initial Term are not fully earned by Licensee,  Licensee shall
not be obligated to pay Everlast in excess of the cumulative  Guaranteed Minimum
Royalty amount of US$12,500,000. In no event shall application of this paragraph
result in Licensee  paying less than  US$12,500,000  in total  royalties for the
initial Term.



                                       14
<PAGE>


5.0  REPORTS AND PAYMENTS

     5.1  Within 30 days of the end of each  Contract  Year  Quarter  during the
Term hereof,  Licensee shall furnish to Everlast a complete and accurate royalty
statement ("Royalty and Net Sales Statement") for such Contract Year Quarter, in
U.S.  dollars,  per Exhibit B hereto.  Each such Royalty and Net Sales Statement
submitted after January 1, 2008 shall be accompanied by payment in full, in U.S.
dollars,  of an amount  equal to the  Earned  Royalties  for the  Contract  Year
Quarter ending as of the month  immediately  prior to such Royalty and Net Sales
Statement,  less Guaranteed  Minimum Royalties due and paid during such Contract
Year Quarter  (subject to any applicable  adjustments made pursuant to paragraph
4.3 herein above).  Licensee shall also submit a Royalty and Net Sales Statement
in connection with its payment of Earned Royalties due for the period January 1,
2005 through  December 31, 2007, on or before January 31, 2008.  Upon Licensee's
request and in Everlast's reasonable discretion,  errors made in any Royalty and
Net Sales  Statements  during any  Contract  Year (if  reflected  in  Licensee's
payments)  may be corrected  with credits or debits to the Royalty and Net Sales
Statement  submitted  for the first  Contract  Year  Quarter of the  immediately
following  Contract  Year.  Receipt or acceptance by Everlast of any Royalty and
Net Sales  Statement  furnished,  or of any sums paid pursuant to this Agreement
shall not preclude Everlast from questioning the correctness thereof at any time
within  three (3)  years of the date such  Royalty  and Net Sales  Statement  is
received by  Everlast.  In the event that any  inconsistencies  or mistakes  are
discovered  in Royalty and Net Sales  Statements  or royalty or other  payments,
they shall be rectified promptly and the appropriate payment made by Licensee.

     5.2  Past due  payments  hereunder  shall bear  interest at the rate of one
(1%)  percent per month  commencing  fifteen (15) days after the same shall fall
due. Such interest shall also be applied to any royalty payments  understated by
Licensee in  reports/statements  to Everlast,  and to  underpayments  discovered
following an  inspection of books and records  pursuant to Article 10,  interest
being applied to all  underpayments as of the date when any such payments should
have been made under this Agreement.

    5.3   Any  withholding tax levied by any  governmental  agency in connection
with the payment of Earned Royalties or annual  Guaranteed  Minimum Royalties to


                                       15
<PAGE>

be paid to Everlast under this Agreement shall be borne by Everlast, but only if
actually paid by Licensee to the appropriate  taxing  authority.  Licensee shall
deduct any required withholding tax from the amount of such payments,  and shall
send to Everlast without delay an appropriate certificate showing the payment of
such  withholding  tax.  Failure  to make such  payment  as due and to send such
certificate  shall  require  immediate  repayment  to Everlast of any amounts so
deducted.

    5.4 All payments by Licensee to Everlast under this Agreement  shall be made
in United States dollars either by check payable to Everlast Worldwide, Inc., by
wire transfers to the order of Everlast at HSBC Bank, ABA No. 021001088, for the
account of Everlast  Worldwide  Inc.,  Account No.  007863721,  or as  otherwise
directed by Everlast in writing from time to time.

6.0  CHAIN OF DISTRIBUTION

     6.1  Licensee may sell Licensed Products to retail stores, and to merchants
for resale and distribution  directly to the public,  except that Licensee shall
be prohibited from selling any Licensed  Products,  directly or indirectly,  for
resale at any Agnes b or Sam's Club warehouse  store.  Licensee shall further be
prohibited  from  selling  Licensed  Products  to  Wal-Mart  and  Kmart  without
Everlast's  prior written  approval  which shall not be  unreasonably  withheld;
provided,  however,  that Licensee shall be permitted to sell Licensed  Products
branded  solely with,  or sold solely in connection  with any approved  Co-brand
Licensed Mark to Wal-Mart and to Kmart.  Licensee  acknowledges  and agrees that
this Agreement does not convey a license to use the Licensed Marks in connection
with retail sale services,  and nothing in this Agreement  shall be construed to
permit Licensee to sell Licensed  Products  directly to the consuming public. In
the event that Licensee  sells or  distributes  a Licensed  Product at a special
price  directly or  indirectly to itself,  including,  without  limitation,  any
subsidiary of Licensee,  or to any other person,  firm or corporation related in
any manner to Licensee or its officers, directors or major stockholders,  except
a sale by a  manufacturing  affiliate  to  Licensee,  Licensee  shall pay Earned


                                       16
<PAGE>

Royalties with respect to such sales or  distribution in accordance with Article
4 hereof, based upon the price generally charged the trade by Licensee.

     6.2  Licensee  acknowledges that Everlast is currently party to third-party
licenses in the Contract Territory that grant to third-party licensees exclusive
rights to distribute  Licensed Products to Sam's Club stores ("Third Party Sam's
Club  Licenses").  In the event that any Third Party Sam's Club License expires,
or is  terminated  during the Term of this  Agreement,  Everlast  shall  provide
Licensee written notice of such termination or expiration at least 30 days prior
thereto,  and upon receipt of such notice  Licensee  shall have a right of first
refusal  for a period of 30  calendar  days to enter into a license  ("New Sam's
Club License") with Everlast for the Licensed Products in the contract territory
and channels of trade  permitted by such terminated or expired Third Party Sam's
Club  License.  Such  New  License  shall  be at the  same  royalty  rate as the
terminated  or expired  Third Party  Sam's Club  License,  shall  provide for an
initial  term and renewal  periods  which are  consistent  with the Term of this
Agreement,  shall conform  substantially  and  materially to the business  terms
expressed in the  terminated or expired  Third Party Sam's Club  License,  shall
require that Licensee pay  guaranteed  minimum  royalties  annually in an amount
equal to the amount of guaranteed  minimum royalties actually paid by the former
Third Party Sam's Club License  licensee in the final 12 calendar months of such
Third Party Sam's Club License, and shall otherwise substantially conform to the
terms of this Agreement.  In the event Licensee  declines to exercise such right
of first refusal within 30 days of receiving notice from Everlast,  and Everlast
subsequently  obtains an offer from a third  party for such  license  upon terms
acceptable to Everlast  ("Third Party Sam's Club Terms"),  Everlast shall notify
Licensee of such third-party  offer, which notice shall include a disclosure and
representation as the accuracy of all relevant Third Party Sam's Club Terms, and
Licensee  shall  thereafter  have a right of first  refusal  for a period  of 30
calendar  days to enter into such  license with  Everlast  under the Third Party
Sam's Club Terms for an initial term and renewal  periods  which are  consistent
with the Term of this  Agreement.  Such license  shall  otherwise  substantially
conform to the terms of this Agreement.  Such right of first refusal shall apply
to any subsequent offers made by such third party on different Third Party Sam's
Club Terms,  as well as to subsequent  offers made by additional  third parties.
Licensee  acknowledges  and agrees  that the Third  Party  Sam's  Club  Licenses


                                       17
<PAGE>

contain  provisions  for automatic  renewal,  and that Everlast shall not at any
time be  obligated  to  rescind  any  such  renewal  rights.  Everlast  makes no
representation  or  covenant  whatsoever  herein that any Third Party Sam's Club
License  will  terminate  or expire  and  become  subject to the rights of first
refusal granted herein; provided,  however, that Everlast shall not be permitted
to increase the maximum  possible term (including all possible  renewals) of any
such Third Party Sam's Club License calculated as of the Effective Date.

     6.3  Licensee agrees that it will not, without the prior written consent of
Everlast,  manufacture or sell products either directly or through third parties
during  the  Term  (including  any  Option  Periods)  of  this  Agreement  which
substantially   duplicate   the  style  and  color  of  any  Licensed   Products
manufactured,  promoted,  advertised,  sold or distributed hereunder ("Competing
Styles"),  except that this  paragraph  shall not apply to any style of Licensed
Products  known in the trade as "basic" or "generic"  styles,  to any  Competing
Styles as of six calendar months after such Competing Style is first  introduced
by Licensee at retail,  or to Competing  Styles in existence as of the Effective
Date.  Licensee  acknowledges  that the  duplication  and  distribution  of such
similar product could severely damage the  long-standing  quality  reputation of
Everlast by creating a likelihood of confusion in the marketplace.

     6.4  Licensee  shall not use, or knowingly  permit the use of, the Licensed
Products  as a premium,  except  with the prior  written  consent  of  Everlast,
including the specific  negotiation of a higher royalty  payment  therefor.  For
purposes of this Paragraph, the term "premium" shall include, but not be limited
to, free or self-liquidated  items offered to the public in conjunction with the
sale or  promotion  of a product  or  service,  including  traffic  building  or
continuity visits by the consumer/customer, or any similar scheme or device, the
prime  intent  of  which  is to use the  Licensed  Products  in such a way as to
promote,  publicize and/or sell the products,  services or business image of the
user of such item.  Licensee shall exercise due care that its customers likewise
shall refrain from making such use of Licensed Products.  Licensee hereby agrees
and acknowledges  that Everlast reserves all rights to use the Licensed Products
in connection with any premium,  giveaway or promotional arrangement;  provided,


                                       18
<PAGE>

however,  that  Everlast  shall  not be  permitted  to use more than 50 units of
Licensed  Products  as  premiums  pursuant  to any  single  give-away  or  other
promotion without Licensee's prior written consent.

     6.5  Licensee may not sell seconds, irregulars or defectives bearing, or in
connection  with the Licensed  Marks in excess of five percent (5%) of Net Sales
in any Contract Year without  Everlast's prior written approval,  which approval
Everlast may grant or withhold in its sole  discretion.  Licensee  shall cut the
Everlast  label  of,  and  mark  accordingly  all  seconds,   irregulars  and/or
defectives  offered  for sale and/or sold  pursuant  to this  Agreement.  To the
extent a label of any second,  irregular  or defective  cannot be cut,  Licensee
shall clearly mark such second, irregular or defective as such.

     6.6  Licensee may, with the prior written  consent of Everlast,  enter into
sublicense or agency  agreements  for the sale or  distribution  of the Licensed
Products.  Everlast  shall not  unreasonably  withhold  its  consent  under this
paragraph.  With respect to any material breach of this Agreement and/or Default
(defined  herein  below)  occasioned  by the acts or omissions of any  permitted
sub-licensee of Licensee,  Licensee shall be first required to make all diligent
attempts to effect a cure of such breach and/or  Default.  In the event Licensee
shall not be able to effect a cure pursuant to such diligent attempts,  Licensee
shall be permitted to cure solely by terminating such sub-licensee and providing
Everlast with  satisfactory  proof of such  termination.  Such a termination and
proof thereof shall effect a cure of the breach and/or Default.

7.0  QUALITY CONTROL

     7.1  The nature and quality of the Licensed  Products  bearing the Licensed
Marks shall at all times be subject to the control of Everlast, and the Licensed
Products  shall  always be of  consistent  and  merchantable  quality.  Licensee
recognizes  that  Everlast has a reputation  for high quality and that  Licensee
must,  therefore,  maintain  such high  quality,  commensurate  with  applicable
channels of distribution,  with respect to all Licensed  Products  manufactured,


                                       19
<PAGE>

sold and distributed hereunder.

     7.2  Licensee  shall not  sell,  manufacture  or  distribute  any  Licensed
Products before first obtaining  Everlast's  prior written  approval and consent
therefor, pursuant to and in accordance with this Article 7. Such approval shall
be  made  within  10  business  days  after  submittal.  Approvals  will  not be
unreasonably withheld.  Prior to the shipment of any Licensed Product,  Licensee
shall upon request  submit to Everlast,  at no cost to Everlast,  one production
sample of the Licensed  Products  from each  production  run,  unless  otherwise
individually  requested.  If Everlast has not previously approved representative
samples of Licensed Products,  then immediately  following the execution of this
Agreement, or as soon as reasonably possible thereafter,  Licensee shall submit,
for the inspection and approval of Everlast,  samples, or comprehensive drawings
or  prototypes  or production  models of each style  representative  of Licensed
Products covered by this Agreement to be manufactured by Licensee. In any event,
such  drawings or samples  shall be submitted  for approval at least 10 business
days before any such  Licensed  Products  are  shipped or sold by the  Licensee.
Thereafter, upon Everlast's reasonable request, but no more than once during any
six (6) months upon Everlast's  reasonable request, and also two (2) weeks prior
to any change in the  materials,  method of  manufacture  or design of  Licensed
Products,  Licensee  shall  submit,  for  inspections  and approval of Everlast,
samples  representative of Licensed Products  manufactured,  shipped and sold by
Licensee.  Additional  samples shall also be submitted at Everlast's  reasonable
request.  Everlast shall determine whether such samples shall materially conform
to the quality control provisions set forth in this Agreement,  and shall inform
the Licensee of its approval or of any  deficiencies.  Licensed  Products may be
manufactured  and sold only after  Everlast  shall  have  approved  drawings  or
samples representative of such Licensed Products in writing or shall have failed
to disapprove  them within 10 business days after  receipt.  All 10 business day
periods  specified in this Article shall run from the receipt by Everlast of the
material referred to.

     7.3  Licensee shall comply with all applicable  laws,  rules,  treaties and
regulations,  including labor laws, rules,  treaties and regulations,  and laws,


                                       20
<PAGE>

rules,    treaties   and   regulations    pertaining   to   human   rights   and
non-discrimination, in connection with the manufacture, sale, advertising or use
of the Licensed Products. Licensee shall comply with the regulations, orders and
directives of all  regulatory  agencies  having  jurisdiction  over the Licensed
Products.  Everlast  does not,  and will not  tolerate  the use of child  labor,
prison labor,  or any other unfair labor practices as defined under the laws and
regulations  of the  United  States  or the  Contract  Territory,  and any  such
practices  by  Licensee,   its  agents,   assigns,   sub-licensees  or  contract
manufacturers  in  connection  with the  manufacture,  sale or  distribution  of
Licensed  Products,  subject to paragraph 7.6, herein below,  shall constitute a
material  breach of this  Agreement.  Everlast  does not,  and will not tolerate
discrimination  on  the  basis  of  race,   religion,   gender,  age  or  sexual
orientation,   and  any  such  practices  by  Licensee,  its  agents,   assigns,
sublicensees or contract manufacturers in connection with the manufacture,  sale
or distribution of Licensed Products, subject to paragraph 7.6, herein below, in
connection with the manufacture, sale or distribution of Licensed Products shall
constitute  a material  breach of this  Agreement.  With respect to any material
breach by Licensee  under this  paragraph,  Everlast shall not have the right to
terminate  this  Agreement in its discretion in the event Licensee has commenced
in good  faith to cure such  material  breach  within  the  30-day  cure  period
provided  herein below in Article 15, and as of the  termination  of such 30-day
period is using its best efforts to diligently  prosecute  such cure. So long as
Licensee  continues  thereafter  to use its best efforts to effect a cure of the
material breach,  Everlast's  right to terminate  hereunder shall be, and remain
suspended.

     7.4  Duly authorized  representatives  of Everlast shall have the right, at
any and all reasonable  times, to inspect all facilities or premises  maintained
by  Licensee,  including,  without  limitation,  the plants,  factories or other
manufacturing or producing facilities of Licensee or third parties, at which the
Licensed Products intended to bear the Licensed Marks are being  manufactured or
produced.  Said  representatives  shall have the right to  inspect  and test any
Licensed  Products and to take any other reasonable  action which in the opinion
of  Everlast  is  necessary  or proper to assure  Everlast  that the  nature and
quality of the Licensed Products are in accordance with the requirements of this
Agreement,   and  that  Licensee  is  otherwise  operating  in  compliance  with
Everlast's policies and standards as set forth herein.

                                       21
<PAGE>


     7.5  Licensee  shall  have the right to enter into  contract  manufacturing
and/or contract packing arrangements to have Licensed Products  manufactured and
packaged   anywhere  in  the  world  for  Licensee's   account  only.  All  such
arrangements  (i) shall be in writing,  and (ii) shall  ensure that the Licensed
Products will be manufactured and packaged in full accordance with the terms and
conditions  hereof  and in  full  accordance  with  Everlast's  quality  control
standards. In this regard Licensee shall provide to Everlast, prior to execution
of any such  written  arrangement,  a formal  statement of  compliance  with the
policies  set forth in this  Article 7 from any such  contract  manufacturer  or
packer. Licensee shall remain primarily responsible to Everlast for the acts and
omissions of its  contract  manufacturers  and contract  packers and others with
whom  Licensee is in  contractual  or other privity with respect to the Licensed
Products and the  Licensed  Marks,  as if same had been  committed or omitted by
Licensee.

     7.6  Licensee shall,  upon written demand by Everlast,  terminate within 30
days any third party  manufacturer,  supplier,  packer or other contractor whose
use of child labor,  prison labor  and/or any  demonstrable  pattern of corporal
punishment  and/or physical abuse violates the policies of Everlast as set forth
herein, the laws,  regulations,  rules or governing principles of any applicable
United States governmental  authority having jurisdiction in this regard, or any
law or  regulation in effect in the Contract  Territory  during the Term of this
Agreement  (including  Option  Periods) and thus causes a breach and/or  Default
under this Agreement.  Licensee shall provide Everlast with written proof of any
such termination as soon as commercially  practicable  thereafter.  In the event
any third party manufacturer,  supplier,  packer or other contractor commits any
other  unfair  or  discriminatory  labor  or  other  practice  or  human  rights
violations that violate the policies of Everlast as set forth herein,  the laws,
regulations,  rules or governing  principles  of any  applicable  United  States
governmental  authority  having  jurisdiction  in  this  regard,  or any  law or
regulation in effect in the Contract Territory during the Term of this Agreement
(including  Option  Periods) and thus causes a breach and/or  Default under this
Agreement,  Licensee  shall make all  diligent  efforts to effect a cure of such
breach and/or Default.  In the event Licensee shall not be able to effect a cure
pursuant to such diligent  attempts,  Licensee shall be permitted to cure solely
by  terminating  such  third  party  manufacturer,  supplier,  packer  or  other


                                       22
<PAGE>

contractor and providing  Everlast with satisfactory  proof of such termination.
Such a  termination  and proof  thereof shall effect a cure of the breach and/or
Default.

8.0  PROPER USE OF TRADEMARKS

     8.1  Except as otherwise  permitted by this Agreement,  or otherwise to the
minimum  extent  required by law, no trademarks,  service marks,  trade names or
corporate  names,  other  than those  shown in  Exhibit A or added  subsequently
pursuant  to  paragraph  1.2,  herein  above,  shall be used by  Licensee  on or
otherwise in connection with any Licensed Products. [add back in agreed]

     8.2  Licensee may use its corporate  name in connection  with  transactions
with its trade  customers.  The signature or designation of origin in Licensee's
consumer advertising,  labeling and packaging,  in respect of Licensed Products,
shall be "A Licensee of Everlast Worldwide Inc.," or equivalent, followed by the
address of Licensee.  If  applicable  law shall  require the  identification  of
Licensee on packaging or labeling,  this identification shall be accomplished by
RN, or similar number, if permitted,  and in any such event, such identification
shall have the minimum prominence permitted by such applicable law.

     8.3  Unless otherwise agreed in writing by Everlast,  Licensee's use of the
Licensed  Marks, or any other Everlast  trademark,  shall conform to each of the
following standards:

    (a)   None of said  trademarks  may be used in the  generic  or  descriptive
sense;
    (b)   Each  of  said  trademarks  shall  always  be  clearly  set  off  from
surrounding text by color, underlining,  quotation marks, or by distinctive type
faces, in a manner satisfactory to Everlast; and
    (c)   The  first  time  any of  said  trademarks  are  used  in any  item of
packaging or labeling, or in any advertisement, it must be followed, in the case


                                       23
<PAGE>

of registered  trademarks,  by the registration  symbol, (R), and in the case of
all other trademarks by the symbol TM, or other appropriate symbol acceptable to
Everlast.

     8.4  Every Licensed Product shall be neatly labeled with a Licensed Mark in
a manner approved by Everlast. Upon the termination of this Agreement,  Licensee
will either  promptly  ship to  Everlast  or destroy  all labels in  Licensee'?s
possession or control  bearing any of Everlast'?s  trademarks or trade names. In
the event labels are  destroyed,  Licensee  shall  certify such  destruction  to
Everlast in writing.

     8.5  Licensee  acknowledges  Everlast's exclusive right, title and interest
in and to the Licensed Marks, and to all other trademarks, trade dress and trade
names as the  parties  agree,  in writing,  from time to time,  shall be used in
connection with Licensed Products  ("Marks" herein).  Licensee shall not, in any
way, during the term of this Agreement, or thereafter, directly or indirectly do
or cause to be done any act or thing contesting or in any way impairing any such
Marks. Licensee shall not, in any manner, represent that it has any ownership in
said Marks. Licensee acknowledges that its use of said Marks shall not create in
Licensee  any right,  title and interest in or to any of said Marks and that all
use of said Marks by Licensee  shall inure to the benefit of Everlast.  Licensee
covenants and agrees that it shall at no time adopt or use any word or corporate
name or mark  which  is  similar  to,  or  likely  to cause  confusion  with any
trademark or trade name  licensed  hereunder  or used by Licensee in  connection
with Licensed Products and that, after the termination hereof, Licensee will not
use any of  Everlast'?s  trademarks,  trade names or its  corporate  name in any
manner whatsoever.

     8.6  Licensee shall, at the request and cost of Everlast,  execute, deliver
or file any and all documents  which Everlast deems  necessary or appropriate to
make fully  effective or to implement  the  provisions of this Article 8, or any
other  provisions of this Agreement  relating to the ownership,  registration or
use of  trademarks  or trade  names,  or to otherwise  conform the  undertakings
contained or required herein.

                                       24
<PAGE>

     8.7  Licensee  agrees  that,  in  addition to  fulfilling  all of its other
obligations  hereunder,  Licensee shall, at Everlast's  commercially  reasonable
request and expense,  or as may be required by law or court order,  do all other
acts and things  necessary  (subject  to, and not  otherwise  inconsistent  with
Article 11 of the  Agreement) to protect and preserve the validity of Everlast's
trademarks and trade names.

9.0  SALES PROMOTION AND ADVERTISING

     9.1  Licensee  agrees that it will,  during the Term and any Option Period:
(i)  use  commercially  reasonable  efforts  to  promote,  develop,   advertise,
manufacture,  sell and ship the Licensed Products; (ii) diligently fill accepted
purchase orders for Licensed Products  (Licensee not being required to fill such
orders received from customers lacking financial capacity  therefor);  and (iii)
procure and maintain facilities and trained personnel sufficient and adequate to
accomplish the  foregoing.  In fulfilling its  obligations  hereunder,  Licensee
shall engage such sales  representatives  and other  personnel and shall display
the  Licensed  Products at  merchandise  markets and trade shows (which can take
place at Licensee'?s  showroom) as is  commercially  reasonable.  Licensee shall
attend tradeshows in its reasonable commercial discretion.

     9.2  Licensee will cause to appear on all packaging, labeling, advertising,
promotional  and  marketing  materials  and trade  communications  such legends,
markings and notices as Everlast may reasonably request before use, and Licensee
shall submit copies thereof to Everlast for its approval and to permit  Everlast
to edit,  alter or amend  such  material  and the form and  manner  in which the
Licensed  Marks  are  displayed.  No  packaging,   labeling,   advertising,   or
promotional  and marketing  program or materials may be used in connection  with
the sale, or offering for sale, of Licensed  Products,  nor may any other use be
made of Everlast's  trademarks  without the prior written approval of Everlast,
which  may  not  be  withheld  unreasonably.  Initial  samples  of  advertising,
packaging,   promotional  and  marketing  materials  and  labeling,  and/or  any
revisions, changes,  modifications or substitutions therefor, shall be submitted
sufficiently  far in advance to permit Everlast to examine such material for ten
(10) days and  permit  Licensee  to make such  changes  as  Everlast  shall deem


                                       25
<PAGE>

necessary.  Such approval shall not  unreasonably  be denied and if Everlast has
not approved an item of packaging,  labeling or advertising within ten (10) days
after receipt of its  submission  in writing,  such item shall be deemed to have
been approved.

     9.3  Licensee shall expend on advertising in each Contract Year, during the
initial Term and any Option Period hereof,  an amount equal to not less than one
(1%) percent of Net Sales.  Notwithstanding any exclusive rights granted by this
Agreement,  Everlast  shall also have the right to spend up to 1% of  Licensee's
Net Sales,  during each and any  Contract  Year,  on  advertising  in respect of
Licensed Products in the Contract Territory. Licensee's advertising expenditures
may include,  without limitation,  cooperative (retail) advertising,  trade show
expenses,  catalog  expenses,  and the cost of hang tags,  and point of purchase
materials, packaging,  compensation to Licensee's employees, or travel expenses.
Together  with each fourth (4th)  Contract  Year  Quarter  Royalty and Net Sales
Statement submitted to Everlast during each Contract Year, Licensee shall submit
to Everlast a written  summary of such  expenditures  made during said  quarter.
Licensee shall certify the amount actually expended for the above advertising in
each  Contract  Year,  and the  accuracy  of its written  summary,  by a written
statement certified to be correct by the President,  Chief Operating Officer, or
Chief Financial Officer of Licensee.  This expenditure shall in no way affect or
be credited to the required amount to be spent for any subsequent Contract Year.
Licensee's  failure  to spend one (1%)  percent of Net Sales on  advertising  in
accordance with this paragraph shall not, by itself, be deemed a material breach
of this  Agreement,  but the covenant of good faith and fair dealing shall apply
to Licensee's performance under this paragraph.

     9.4  At least  once in each  advertisement  by  Licensee  using  any of the
Licensed Marks, other than style designations,  each such Licensed Mark shall be
keyed by asterisks, or other appropriate symbol, to a legend stating: "Trademark
Used Under Authority of Everlast Worldwide Inc.," or equivalent language.

                                       26
<PAGE>

     9.5  All  necessary or permitted  requests by Licensee for consents must be
in writing. In the case of requests for the approval of advertising,  packaging,
marketing,  labeling or other objects used in connection with Licensed Products,
such request shall be  accompanied  by at least two (2) samples of the object to
be approved.  All such  consents may be withdrawn by Everlast upon the giving of
written notice to Licensee,  without  prejudice to the right of Licensee to use,
for a reasonable  time during the term hereof,  such  reasonable  quantities  of
previously  approved  objects as had been  manufactured or ordered prior to such
withdrawal  of  consent.  All  consents,  except  those  herein  expressly  made
effective  upon the passage of a stated  time,  shall be given in writing and no
oral consent or approval shall be binding.

     9.6  Licensee agrees that it shall utilize only approved display  materials
designed by Everlast or such materials approved by Everlast.

10.0 ACCESS TO BOOKS AND RECORDS

     10.1 Licensee  shall keep,  maintain  and preserve in  Licensee's  place of
business, or at any facility under Licensee's control or otherwise accessible to
third-parties,  for not less  than  three  (3) years  following  termination  or
expiration  of each  Contract  Year,  including  Option  Periods,  complete  and
accurate records for such Contract Year of accounts including without limitation
all invoices, correspondence, banking, financial and other records pertaining to
the information required to be shown on the reports to be submitted by Licensee.
Everlast  shall  have the right  during  the Term  hereof  and for  three  years
thereafter  to examine and take  extracts  from such  records of account  during
usual business hours and on reasonable  notice to Licensee.  Licensee agrees not
to  cause  or  permit  any  interference  with  Everlast  or its  agents  in the
performance of their duties of inspection and/or audit.

     10.2 Everlast  may make one (1) audit  during any twelve  (12)  consecutive
months. If any such audit shows that the amount of royalties paid by Licensee to
Everlast  during  the time  period  covered by the audit is less than the actual


                                       27
<PAGE>

royalties  that should have been paid by Licensee by more than five percent (5%)
of the amount  actually  paid to Everlast,  then the cost of such audit shall be
paid for by  Licensee.  Licensee  may  dispute  audit  findings,  subject to the
dispute resolution provisions set forth herein below; provided, however, that in
the event Licensee  disputes the results of any audit  conducted by or on behalf
of Everlast  hereunder,  and such dispute is adjudicated,  settled, or otherwise
resolved in Everlast's  favor,  Licensee shall indemnify and reimburse  Everlast
for all of Everlast's costs and attorney's fees in connection with such dispute,
including costs and fees associated with obtaining  and/or  litigating  judicial
confirmation of any arbitral award.

     10.3 The exercise by Everlast in whole or in part, or at any time or times,
of the right to inspect or audit  records  and  accounts  or of any other  right
herein  granted,  or the  acceptance by Everlast of any report or the receipt or
deposit by Everlast of any payment from Licensee  shall be without  prejudice to
any other rights or remedies of Everlast and shall not stop or prevent  Everlast
from thereafter disputing the accuracy of any such report or payment.

11.0 PROTECTION OF TRADEMARKS AND INDEMNIFICATIONS

     11.1 Subject to the terms of paragraph 1.2,  herein above,  Everlast hereby
indemnifies  Licensee  and  shall  hold it  harmless  against  any claim or suit
arising  solely out of use by Licensee  of the  Licensed  Marks as  specifically
authorized in this Agreement,  on the express condition that Licensee shall give
to  Everlast  (i)  written  notice of any such  claim or suit  within 15 days of
assertion  against  Licensee  of such claim or suit,  and (ii)  cooperation  and
assistance  relative  to the  defense  of such  claim  or  suit,  at  Everlast's
reasonable  expense.  Provided that all conditions referred to in this Paragraph
are met, Everlast shall, subject to Paragraph 11.4, below, undertake and conduct
at its own  expense  the defense of any claim or suit within the purview of this
Paragraph 11.1; provided further,  however, that Everlast shall not be permitted
to  withhold  its  indemnity  and  defense  under  this  paragraph  in the event
Licensee's  failure  to  provide  timely  notice  of a claim  or suit  does  not
prejudice,  impact or otherwise affect, in any material way, Everlast's defense,
settlement, negotiation, discretion, analysis, decision making, or any necessary


                                       28
<PAGE>

actions or conduct relative to such claim or suit. Everlast hereby represents to
Licensee that as of the Effective Date hereof,  Everlast has no knowledge of any
infringement  of the  Licensed  Marks  by any  third  party,  of any  threatened
infringement  thereof  by any third  party,  or of any use  thereof by any other
party that may adversely affect Licensee's use of the Licensed Marks pursuant to
this Agreement.

     11.2 Everlast may, but shall not be required to, commence and/or  prosecute
any claims or suits in its own name to  protect  any of its rights in and to the
Licensed Marks against the infringement,  imitation or misappropriation  thereof
by  others  not a party  to this  Agreement.  Everlast  shall  use  commercially
reasonable  discretion  in making any such  determination.  Such claims or suits
shall be at Everlast's  expense.  However,  Licensee  shall  cooperate  with and
assist Everlast in the  commencement  and prosecution of such claims or suits to
the extent  deemed  necessary by Everlast,  at  Everlast's  request and expense.
Licensee  shall notify  Everlast in writing  within 15 days of the  discovery by
Licensee of any infringement,  imitation or misappropriation by any non-party to
this  Agreement  of the Licensed  Marks on any articles or goods  similar to the
Licensed  Products,  and  Everlast  shall  thereafter  have  the  sole  right to
determine whether or not any action shall be taken on account thereof.  Licensee
shall  not  institute  any  suit or take any  action  with  respect  to any such
infringement,  imitation or misappropriation without first obtaining the written
consent of Everlast, which consent Everlast shall, in its judgment, determine to
grant or withhold based on the interests of both parties  hereto.  Such judgment
shall be final and binding on Licensee.  In the event that Everlast  consents to
any such action by Licensee, Licensee may pursue such action at its own expense.
In any such action  brought by Licensee  under this paragraph at its own expense
in which  Licensee  obtains a damage award or monetary  settlement  award,  such
award shall be treated as Net Sales under this  Agreement  (after  deducting all
provable  litigation  expenses).  Licensee  shall  report  any such award in the
Royalty and Net Sales Report for the  Contract  Year Quarter in which such award
is  received,  and pay  Everlast a royalty of 5%  thereon.  Everlast  shall not,
without the  consent of  Licensee,  voluntarily  settle any claim or suit of the
kind  referred to in this Article 11 in a manner which  prevents  Licensee  from
using the Licensed Marks.



                                       29
<PAGE>

     11.3 Licensee hereby  indemnifies and agrees to hold Everlast harmless from
any claim or suit arising out of any  unauthorized  sale,  acts, or omissions by
Licensee,  or any other  conduct  constituting  a breach of this  Agreement,  in
connection with the Licensed Marks and/or in connection  with Licensed  Products
covered by this Agreement,  and indemnifies and agrees to hold Everlast harmless
from any and all claims or suits arising out of or related to alleged defects in
the design, material or workmanship of the Licensed Products or the use thereof.
Licensee  agrees  to  obtain,  at its own cost and  expense,  product  liability
insurance  providing  adequate  protection for Everlast and Licensee against any
such claims or suits in amounts not less than three million (U.S.) dollars (U.S.
$3,000,000)  per occurrence.  Such insurance  coverage may be provided by one or
more  product  liability  insurance  policies,  provided  that all  primary  and
umbrella  coverage  shall  aggregate not less than three million  (U.S.) dollars
(U.S.  $3,000,000).  Upon execution hereof, Licensee will submit to Everlast (a)
fully paid policy(ies) or certificate(s) of insurance, at Licensee's discretion,
naming Everlast as an insured party, (each) requiring that the insurer shall not
terminate  or  materially  modify  such  without  written  notice  to  Everlast,
specifying  the  nature of the  proposed  modification,  or the  reason for such
termination at least 15 days in advance thereof.

     11.4 Licensee shall, at its own cost,  defend against any claims brought or
actions  filed  against  Everlast on a product  liability  theory,  whether such
claims or actions are  rightfully or wrongfully  brought or filed,  and Everlast
shall  execute  all  papers  necessary  in  connection  with such suit and shall
testify in any such suit whenever required to do so by Licensee all, however, at
the  expense  of  Licensee  with  respect to travel  and  similar  out-of-pocket
disbursements.

12.0 RIGHTS TO PURCHASE AND PURCHASE OF INVENTORY

     12.1 Everlast  shall  have the right to  purchase  Licensed  Products  from
Licensee,  subject to  availability,  at a price  equal to the lowest  wholesale
price at which Licensee offers such Licensed  Products,  less ten percent (10%),
and no  royalty  shall be due  Everlast.  Everlast  shall  not have the right to


                                       30
<PAGE>

re-sell the Licensed  Products in the Contract  Territory without the permission
of Licensee.

     12.2 Licensee shall  purchase from Everlast all of Everlast's  inventory of
Licensed  Products existing as of December 31, 2004, plus all of Everlast's Open
to Buy purchase  orders for  Licensed  Products on order as of December 31, 2004
and expected to be received  between  January 1, 2005 and April 30,  2005,  at a
price equal to Everlast's  landed cost of all such Licensed  Products plus a fee
for  merchandising  and design  equal to 3.5% of such  landed  cost  ("Inventory
Purchase  Price").  The  Inventory  Purchase  Price  shall not  include the 3.5%
marketing and design fee for any and all Licensed Product fashion inventory that
is older than Spring, 2005, and any such inventory shall be valued at a price to
be negotiated in good faith between  Everlast and Licensee.  Licensee  shall pay
the Inventory Purchase Price to Everlast in installments upon, and in accordance
with  Licensee's sale within the Contract  Territory of the inventory  purchased
from Everlast hereunder; provided, however, that in no event shall Licensee have
paid less than the following  percentages of the total Inventory  Purchase Price
as of the following  dates: 20% by January 1, 2005; 40% by February 1, 2005; 60%
by March 1, 2005;  80% by March 31, 2005; 90% by April 30, 2005; and 100% by May
30,  2005.  Licensee  shall,  in all cases,  make up payments to equal or exceed
these percentages by the dates set forth above. The Inventory Purchase Price is,
and shall be separate from, and in addition to any and all Earned  Royalties and
Guaranteed  Minimum Royalties payable to Everlast  hereunder,  and no portion of
the Inventory Purchase Price shall be applied as a credit against,  or otherwise
reduce the amount of, such due royalties.

     12.3 Licensee shall assume,  and take over all of Everlast's  open customer
orders for Licensed Products not fulfilled by December 31, 2004.

13.0 COPYRIGHT AND TRADEMARK RIGHTS

     13.1 All use of the Licensed  Marks by Licensee  shall inure to the benefit
of  Everlast.  All rights in the  Licensed  Marks other than those  specifically
granted herein are reserved to Everlast.

                                       31
<PAGE>

     13.2 Licensee  shall,  at any  time,  whether  during  the Term  hereof  or
thereafter,  at Everlast'?s expense,  cooperate with Everlast or its designee in
the  prosecution  of any trademark or copyright  applications  that Everlast may
reasonably determine to file.

     13.3 Any design or  copyright  which may exist,  arise or be acquired by or
for Licensee  specifically  for Licensed  Products,  including for labels,  hang
tags,  advertising  or promotional  materials  used pursuant to this  Agreement,
shall be the property of Everlast,  but  Licensee  shall have the right,  to the
extent  necessary,  to use  such  material  during  the  Term  hereof.  However,
notwithstanding  the  foregoing,  exclusive  designs  and the  like  (and  their
respective  copyrights)  created by and for  Licensee,  which do not  include or
refer to the Licensed Marks, or otherwise can be utilized  without  inclusion or
reference to the  Licensed  Marks are and shall remain the property of Licensee.
Licensee  shall furnish  Everlast  with copies of all copyright  filings made by
Licensee during the Term (including Option Periods).  Licensee shall execute any
papers  necessary or desirable in  connection  with the filing of any  copyright
applications  filed  or to be  filed  by  Everlast,  including  preparation  and
execution of assignments of copyrights,  whenever required to do so by Everlast,
all, however, at the expense of Everlast.

14.0 GOODWILL

     Licensee   recognizes  the  great  value  of  the  publicity  and  goodwill
associated with the Licensed Marks, and accordingly  acknowledges  that all such
goodwill exclusively belongs to Everlast and that none is transferred hereunder.

15.0 EXPIRATION, DEFAULT AND TERMINATION

     15.1 Upon the  expiration or  termination  of this Agreement for any reason
whatsoever,  all rights granted to Licensee under this Agreement shall cease and
forthwith  revert,  subject  to any  "sell-off"  rights  under  Article  16,  to
Everlast.

                                       32
<PAGE>

     15.2 If  Licensee  shall  at any time be in  default  of  payment  of sales
royalties,  any  guaranteed  minimum  royalty  payments,  or any other  payments
required  hereunder  and such  default  is not cured  within ten (10) days after
receipt of a written notice of such default from  Everlast,  Everlast shall have
the right to terminate this Agreement by written notice  effective upon receipt.
If  Licensee  shall  otherwise  fail to  materially  perform any of the terms or
conditions of this Agreement,  and such failure or breach is not cured within 30
days of receipt of a written  notice of such  default  from  Everlast,  Everlast
shall have the right to terminate  this  Agreement by written  notice  effective
upon receipt.  Specifically,  and without limitation or prejudice, the following
events and/or  occurrences shall be deemed and considered  material breaches of,
and shall  constitute  defaults under the Agreement  giving rise to the cure and
termination  provisions  set forth herein  and/or  elsewhere  in this  Agreement
("Defaults"). With respect to Defaults under sub-paragraphs (d), (f) and/or (g),
set forth below,  Everlast  shall not have the right to terminate this Agreement
in its  discretion in the event Licensee has commenced in good faith to cure any
such  Default  within the 30-day  cure  period  provided  herein,  and as of the
termination  of such  30-day  period is using  its best  efforts  to  diligently
prosecute such cure. Provided that Licensee continues thereafter to use its best
efforts to effect a cure of the Default, Everlast's right to terminate hereunder
shall be, and remain suspended.

     a)   If Licensee  fails to deliver to Everlast or to maintain in full force
and effect the insurance required by this Agreement; or
     b)   If  Licensee  fails to make any  royalty  or other  required  payment,
including payment of any minimum guaranteed royalty due hereunder,  on or before
the date due; or
     c)   If Licensee fails to deliver any of the reports referred to in Article
5 or to grant  Everlast's  authorized  representative(s)  access  to  Licensee's
records  pursuant to the  provisions  of Article 10 for the  purposes  permitted
hereunder; or
     d)   If any governmental  agency  determines that the Licensed Products may
not be sold, or that such Licensed Products as manufactured, sold or distributed


                                       33
<PAGE>

by Licensee are banned or hazardous,  in any way, subject to right to cure under
Paragraph 15.3 below; or
     e)   If during the  initial  Term or any  Option  Period  hereof,  Licensee
becomes  unable to pay its  debts  when due,  or makes  any  assignment  for the
benefit of creditors,  or files any petition  under the bankruptcy or insolvency
laws  of any  jurisdiction,  county  or  place,  or has a  receiver  or  trustee
appointed  for its  business  or  property  or be  adjudicated  a bankrupt or an
insolvent; or
     f)   If Licensee  fails to place proper  copyright or trademark  notices on
all Licensed Products as required by Article 12 hereof; or
     g)   If  Licensee  offers  for  sale,  manufactures,  distributes  or sells
Licensed Products that do not conform to the quality control standards set forth
herein above, or are otherwise of inferior or unacceptable  quality  contrary to
the provisions of this Agreement.

     15.3 In the event of any Default  under this  Agreement by Licensee that is
not cured pursuant to any applicable  provisions of this Agreement,  and subject
to  applicable  provisions of paragraph  15.2 and Article 7, herein above,  this
Agreement  shall  terminate  upon  receipt by  Licensee  of a written  notice of
termination  from Everlast,  and thereafter any and all Earned Royalty and other
payments  then due or due at the end of the  then-current  Contract Year Quarter
from Licensee  hereunder shall be promptly due and payable.  Guaranteed  Minimum
Royalties  then owing,  and  Guaranteed  Minimum  Royalties due for the 12-month
period immediately  following the date on which termination occurs shall also be
promptly  due and payable,  but  Guaranteed  Minimum  Royalties  for  subsequent
periods shall be waived. Any defaults resulting in termination  occurring in the
Contract Year ending December 31, 2009 shall be deemed to occur during the First
Option Period,  and unpaid (and [insert:  2010?]next  year's) Guaranteed Minimum
Royalties  due on such  termination  shall be paid in the amounts due during the
First Option Period.

     15.4 The list of Defaults in Paragraph 15.2 above shall not be deemed to be
a complete  listing of material  events or  occurrences  that may  constitute  a
material default, thereby entitling Everlast to terminate this Agreement or seek


                                       34
<PAGE>

any other remedy to which it is or may be entitled. Violations of the provisions
of Article 7 of this Agreement by Licensee shall be deemed material breaches of,
and  Defaults  under,  this  Agreement,  and shall be subject  to any  specific,
applicable cure provisions and remedies set forth in Article 7.

     15.5 This  Agreement  and license  hereby  granted may be terminated at any
time by Everlast on five (5) days written  notice to Licensee in the event there
is a change  equal to or in excess of fifty  percent  (50%) in the  ownership or
control of Licensee;  provided,  however,  that the issuance or  dispostions  of
shares  of  the  Licensee  to  the  employees  of  Licensee,  including  without
limitation,  pursuant to an Employee Stock  Ownership Plan, as well as transfers
between and among the current  shareholders or employees of Licensee and between
such  shareholders  or  employees  and  members  of their  respective  immediate
families  directly or in connection with any estate planning  vehicles (by means
of  example  only,  a trust)  shall be  exempt  from  the  restrictions  of this
provision. Consistent with the terms of this paragraph, Licensee may engage in a
transaction or a series of transactions,  including without limitation a merger,
with any third party entity, whereby the cumulative total of forty-nine and 9/10
percent  (49.9%) or less of the voting stock or beneficial  interest of Licensee
is purchased by or transferred to such third party, but in the event of any such
transaction  in which greater than a cumulative  total of  twenty-four  and 9/10
percent  (24.9%) of the voting  stock or  beneficial  interest  of  Licensee  is
purchased  by or  transferred  to such  third  party,  and such  third  party is
determined  by  Everlast  in  its  commercially  reasonable  discretion  to be a
competitor  of  Everlast,  Everlast  may,  in its  reasonable  discretion,  deny
Licensee the right to renew this Agreement for a term beyond the Term, or Option
Period, in which such transaction takes place.

16.0 POST-TERMINATION INVENTORY AND FINAL REPORTS

     16.1 Within  ten (10) days  after the  expiration  or  termination  of this
Agreement,  Licensee shall meet with a representative  of Everlast to work out a
full payment  schedule of royalties  payable to the date of termination  that is
acceptable  to  Everlast.  Licensee  shall  deliver  to  Everlast,  as  soon  as


                                       35
<PAGE>

practicable  but within thirty (30) days  following  expiration or termination a
report  ("Final  Report")  indicating  the number,  location and  description of
Licensed Products on hand, including in-process inventory.  Provided Licensee is
not in default of any material provision of this Agreement  regarding payment of
Earned  Royalties  or  Guaranteed  Minimum  Royalties,   and/or  maintenance  of
applicable   insurance,   Licensee  may  complete  the  production  of  approved
in-process  inventory  (provided such  in-process  inventory does not exceed the
total volume of goods sold by Licensee  during the preceding  six-month  period)
and may deliver such approved inventory on order to customers.  Licensee may not
manufacture,  have  manufactured  or place  orders for any  additional  Licensed
Products  following  expiration or termination.  Subject to Licensee's  right to
fill orders existing on the date of  termination,  Everlast shall have the right
to  purchase  any  remaining  inventory  of  Licensed  Products,  or any portion
thereof,  within thirty (30) days of termination of this  Agreement,  at a price
equal to Licensee's  manufactured cost, landed duty paid, plus 10% including all
overhead (with no royalty due on any such sale); provided,  however, that in the
event Everlast desires to purchase less than 100% of any style that is more than
one year old,  such  purchase  shall be subject to  Licensee's  prior  approval.
Should  Everlast  decline  to  purchase,  or  purchase  only a  portion  of this
inventory,  Licensee may continue to distribute  its  remaining  inventory for a
period not to exceed one hundred  eighty  (180) days,  on the express  condition
that applicable  royalties are paid and all required  monthly  reports  relative
thereto are  submitted.  In no event shall  Licensee be  permitted  hereunder to
sell-off  any  items  of  inventory  not  approved  for sale by  Everlast  under
applicable  provisions of this  Agreement.  Everlast  shall have the  continuing
right to conduct a physical  inventory in order to ascertain or verify the Final
Report.

     16.2 Upon the termination or expiration of this  Agreement,  Licensee shall
inform  Everlast,  by written notice,  of the nature and quantity of any and all
packaging material,  business supplies and advertising and promotional  material
and/or devices  bearing any of Everlast's  trademarks or trade names and, except
as  necessary in  connection  with any  permitted  sell-off in  accordance  with
paragraph 16.1, shall make no further use of such objects unless, and until said
trademarks  and trade names  shall have been  removed or  obliterated  from such
objects, in a manner satisfactory to Everlast.

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<PAGE>

17.0 MISCELLANEOUS EXPENSES

     Neither  party shall create any expenses  chargeable  to the other  without
prior written consent.

18.0 RESERVATION OF RIGHTS

     Everlast retains all rights not expressly and exclusively  conveyed herein,
and subject to any rights of first refusal granted by this  Agreement,  Everlast
may license  firms,  individuals,  co-partnerships  or  corporations  to use the
Licensed Marks on or in connection with (i) the Licensed Products in any area of
the world other than the Contract Territory; and (ii) merchandise of any and all
types and  descriptions,  other than the  Licensed  Products  in any area of the
world including the Contract Territory.

19.0 NOTICES

     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 on the date: (i) personally delivered; (ii) mailed by certified
or registered mail, return receipt requested; or (iii) delivered by Express Mail
or courier  service (such as Federal  Express)  which  requires the addressee to
acknowledge, in writing, the receipt thereof:

     IF TO EVERLAST:
     --------------
     Mr. Hal G. Worsham
     Sr. Vice President Licensing
     EVERLAST WORLDWIDE INC.
     1350 Broadway
     New York, New York 10018

     WITH A COPY TO:
     --------------
     Myron Greenspan, Esq.
     LACKENBACH SIEGEL


                                       37
<PAGE>

     One Chase Road
     Scarsdale, New York 10583

     IF TO LICENSEE:
     Mr. Joe Harary
     Jacques Moret, Inc.
     1411 Broadway, 8th Floor
     New York, New York 10018

     WITH A COPY TO:
     --------------
     Mike Hassan, Esq.
     Wachtel & Masyr
     110 East 59th St.
     New York, New York 10022

20.0 INJUNCTIVE RELIEF

     Licensee  acknowledges and admits that in the event Licensee should violate
any of the  terms of this  Agreement  concerning  or  related  to the use of the
Licensed  Marks:  (i) Everlast  could not be adequately  compensated  for injury
resulting  therefrom  by  payment  of  money  damages;  (ii)  Everlast  would be
irreparably injured by such violation; (iii) Everlast would not have an adequate
remedy at law; and (iv) it would be extremely  difficult,  if not  impossible to
determine  the resulting  monetary  damages  suffered by Everlast.  Accordingly,
Licensee  agrees that, in the event  Licensee  violates any of the terms of this
Agreement concerning or related to the use of the Licensed Marks, Everlast shall
be entitled,  in addition to any other remedy to which Everlast would  otherwise
be entitled, to equitable relief by way of preliminary and permanent injunction.

21.0 ENFORCEMENT AND ARBITRATION

     21.1 Either party shall have the right at all times to seek  enforcement of
this  Agreement in court,  but the parties  shall be required to waive a jury in
any action brought to enforce, or for breach of this Agreement.  The parties may


                                       38
<PAGE>

mutually  elect,  alternatively,  to arbitrate  any disputes  arising under this
Agreement,  and any such  disputes,  to the extent  permitted  by law,  shall be
settled and  determined by arbitration in New York, New York before the American
Arbitration  Association  in  accordance  with and pursuant to its  then-current
Rules for Commercial Arbitration.  The arbitrators shall have the power to award
specific  performance or injunctive  relief and reasonable  attorneys'  fees and
expenses  to  any  party  in  such  arbitration.  However,  in  any  arbitration
proceeding  arising under this  Agreement,  the  arbitrators  shall not have the
power to change,  modify or alter any express  condition,  term or  provision of
this Agreement, and to that extent, the scope of their authority is limited. The
arbitration award shall be final and binding upon the parties.

     21.2 The  parties  shall  have  such  right to  interim  relief,  including
injunctive relief as provided in Article 20 hereof, in any federal Court sitting
in the City of New York as may be provided by law.

     21.3 Any action to  enforce  an  arbitration  award or for  interim  relief
hereunder  may be  brought  only in a Court  of  general  original  jurisdiction
sitting  in the  City of New  York  and the  parties  do  hereby  submit  to the
jurisdiction of each such Court.

     21.4 The  service  of any  notice,  process,  motion or other  document  in
connection  with any  arbitration  under this Agreement or for interim relief or
the  enforcement of any  arbitration  award  hereunder may be effectuated in the
manner in which  notices  are to be given to a party  pursuant  to  Article  19,
above.

22.0 TRANSITIONAL EXPENSES

     Everlast and Licensee  acknowledge and agree that during the period January
1, 2005 through June 30, 2005,  Everlast and Licensee  will each incur costs and
expenses related to the Licensed Products, payable on a monthly basis commencing
January 31, 2005, which were previously borne and satisfied pursuant to contract
solely by  Everlast.  The  parties  agree that such  expenses  shall,  as of the


                                       39
<PAGE>

Effective  Date,  be borne by  Everlast  and  Licensee  in  accordance  with the
following rules:

     (a)  With respect to discounts,  allowances and other charge-backs incurred
     by Licensee that arise from or otherwise  relate to Licensed  Products sold
     in 2004 by Everlast: (i) Everlast shall reimburse Licensee for all retailer
     charge-backs  relating to specific retailer  agreements  written and signed
     and/or orally agreed to by Everlast  before December 31, 2004; and (ii) For
     all other  retailer  requested  charge-backs,  Licensee,  Everlast  and the
     retailer shall fully negotiate,  and agree upon the amount and terms of the
     charge-back,  and only  upon  such  agreement  Everlast  shall be liable to
     reimburse Licensee for the amount paid to retailer.

     (b)  With respect to Spring,  Summer and Fall, 2005 samples and catalogs of
     Licensed  Products  purchased  by Everlast,  Licensee  will  purchase  such
     samples and catalogs  from  Everlast at a price equal to half of Everlast's
     cost,  but not greater than  $45,000.  Such amount shall be in addition to,
     and not offset against, any royalties due under this Agreement.

     (c)  Licensee  shall pay 25% of the  February  2005 MAGIC  Trade Show booth
     cost paid by Everlast,  if Licensee  chooses to participate and display its
     Licensed  Products  in 25%  of  the  Everlast  booth/stand,  at a  cost  of
     approximately  $14,990. Such amount shall be in addition to, and not offset
     against, any royalties due under this Agreement.

     (d)  Licensee shall reimburse Everlast for certain publication  advertising
     costs already borne by Everlast.  Licensee shall  reimburse  Everlast for 5
     insertions  purchased  by Everlast  in the  publication  WWD at  Everlast's
     per-insertion  cost $5,933,  for Issue dates from January 2005 through June
     2005,  for a total  reimbursement  of  $29,665.  Licensee  shall  reimburse


                                       40
<PAGE>

     Everlast for 3 insertions purchased by Everlast in the publication Shape at
     Everlast's  per-insertion  cost $40,000,  for Issue dates from January 2005
     through March 2005, for a total  reimbursement of $120,000.  Licensee shall
     have the right to utilize new creative  materials,  subject to approvals in
     accordance  with  the  terms  of  this  Agreement,   for  these  ads.  Such
     reimbursements  shall  be in  addition  to,  and not  offset  against,  any
     royalties due under this Agreement.

     (e)  Licensee shall  reimburse  Everlast for those  warehousing and freight
     costs  incurred  by  Everlast  for any and all sales of  Licensed  Products
     commencing January 1, 2005 and thereafter.  Such reimbursements shall be in
     addition  to,  and  not  offset  against,  any  royalties  due  under  this
     Agreement.

23.0 NO PARTNERSHIP

     This   Agreement  does  not  constitute  and  shall  not  be  construed  as
constituting a partnership or joint venture between Everlast and Licensee.

24.0 NON-ASSIGNABILITY

     24.1 This  Agreement is personal to Licensee,  and Licensee  shall  neither
assign nor  franchise  this  Agreement  without  the prior  written  approval of
Everlast.  Neither this  Agreement  nor any of the rights of Licensee  hereunder
shall be sold,  transferred or assigned by Licensee  without  Everlast'?s  prior
written  consent.  No  rights  hereunder  shall  derive by  operation  of law or
otherwise upon any assignee, receiver, liquidator, trustee or other party.

     24.2 This Agreement may be freely assigned,  without consent, to any entity
that assumes substantially all of the business of Everlast, including all of the
obligations pursuant to this Agreement;  provided,  however, that any assignment
by Everlast of this entire Agreement,  in whole,  shall include an assignment of
the Licensed Marks. Any such assignment shall effect a novation.

                                       41
<PAGE>

25.0 APPLICABLE LAW

     It is the  intention  of the parties  that all  questions  relating to this
Agreement,  or to its validity,  shall be decided in accordance with the laws of
the State of New York, United States of America,  as if this Agreement were made
in and to be  performed  entirely in the State of New York.  For the purposes of
enforcing rights  hereunder,  all parties hereby  unconditionally  submit to the
jurisdiction  and venue of the United  States  District  Court for the  Southern
District of New York,  and the New York State Courts,  located in New York,  New
York, waive all defenses  relating to personal  jurisdiction  and/or improper or
inconvenient  venue, and agree that any process in any action related hereto may
be served in the manner therein provided for the giving of notices.

26.0 INTEGRATION

     This  Agreement  constitutes  the  entire  Agreement  between  the  parties
concerning the subject matter hereof, and no other agreements, understandings or
representations are included except as expressly noted herein.

27.0 MODIFICATION

     This Agreement may not be modified except by a written  instrument,  signed
by both  parties,  which makes  specific  reference  to this  Agreement by date,
parties and subject matter.

28.0 CONFIDENTIALITY

     Licensee and Everlast each agrees to keep the terms and  conditions of this
Agreement  confidential,  and  neither  party  shall  disclose  such  terms  and
conditions to any third party without  obtaining the other party's prior written


                                       42
<PAGE>

consent;  provided,   however,  that  this  Agreement  may  be  disclosed  on  a
need-to-know  basis to either party's  attorneys and  accountants  provided they
agree to be bound by this confidentiality provision. Both parties hereby consent
to the other's disclosure of information of a financial nature in this Agreement
to its  auditors  and  to  financial  institutions  in the  ordinary  course  of
business,  or as  required by law.  In  addition,  each party may have access to
information  concerning  the other party's and/or its  affiliates'  business and
operations,  and/or other matters relating to creations or business plans, which
information  may not be  accessible or known to the general  public.  Each party
agrees not to use or disclose such  information  of the other party to any third
party without obtaining such other party's prior written consent.

29.0 ENFORCEABILITY

     Neither  the  invalidity  nor  unenforceability  of any  provision  of this
Agreement  shall  affect  the  validity  or  enforceability  of any of the other
provisions of this Agreement,  nor shall the invalidity nor  unenforceability of
any  provision  of this  Agreement  as applied  to a  particular  occurrence  or
circumstance  affect the validity or enforceability of any other applications of
the  same  provision,   provided,  in  either  case,  that  such  invalidity  or
unenforceability does not unreasonably frustrate the commercial purposes of this
Agreement.

30.0 FORCE MAJEURE

     If  either  party is  prevented  from the  performance  of its  obligations
hereunder  by  reason  of an act of God,  fire,  flood,  war,  public  disaster,
governmental enactment,  regulation, or order, strikes or labor difficulties, or
any other cause beyond its control,  and if such party has given the other party
prompt notice thereof and, on request,  such  confirmatory  documentation as the
other  party may  reasonably  request and has in good faith kept the other party
apprised  of when the  delay,  interruption  or  prevention  is  expected  to be
resolved,  the  time  for  the  performance  of the  party's  obligations  shall


                                       43
<PAGE>

thereupon be extended for a period equal to the duration of the contingency that
occasioned  the delay,  interruption  or  prevention,  but not exceeding 60 days
unless otherwise  mutually agreed. If the force majeure condition  continues for
more than 60 days, either party may terminate this Agreement upon written notice
to the other party, and in the event of such a termination of Licensee's  rights
hereunder,  paragraph  15.3 shall not  obligate  Licensee to pay any  Guaranteed
Minimum  Royalties on termination  other than such Guaranteed  Minimum Royalties
that are due and unpaid as of the date of termination.

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

     EVERLAST WORLDWIDE INC.                    JACQUES MORET, INC.


     By: /s/ George Q Horowitz                  By: /s/ Joseph Harary
        --------------------------                  ------------------------

     Name: /s/ George Q Horowitz                Name: Joseph Harary
           -----------------------                    ----------------------

     Title: President                           Title: President

     Date: December 17, 2004                    Date: December 17, 2004




                                       44
<PAGE>


                                    EXHIBIT A

                                (Licensed Marks)




                                       45
<PAGE>


                                    EXHIBIT B

                         ROYALTY AND NET SALES STATEMENT


        LICENSEE NAME____________________________________________________

      LICENSEE ROYALTY AND NET SALES REPORT FOR THE ________ QUARTER, _____

Gross Unit Sales  _________________________________________________________

Net Unit Sales  ___________________________________________________________

Gross Dollar Sales ________________________________________________________

Net Dollar Sales___________________________________________________________

Royalties (at 5% of Net Sales (4% for MarMaxx sales)) _____________________

Total (Net Sales) Royalty Payable this Quarter ____________________________

Net Royalty Due Everlast __________________________________________________


NET SALES BY PRODUCT CATEGORY

Product Category:

Total Units_______________          Total Gross Sales ________________

Total Net Sales __________


NET SALES BY RETAILER:

Retailer:

Total Units_______________          Total Gross Sales ________________

Total Net Sales __________


                                       46


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