sec document

EX-99.1 2 ex991toform8k03733_12142005.htm sec document

Exhibit 99.1

LICENSE AGREEMENT

BETWEEN

EVERLAST WORLDWIDE INC.

AND

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

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

TABLE OF CONTENTS

1.0 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

4.0 ROYALTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

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

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

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

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

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

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

14.0 GOODWILL . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

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

19.0 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

21.0 ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.0 NO PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . .

23.0 NON-ASSIGNABILITY . . . . . . . . . . . . . . . . . . . . . . . . .

24.0 APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . .

25.0 INTEGRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26.0 MODIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.0 ENFORCEABILITY . . . . . . . . . . . . . . . . . . . . . . . . . .

LICENSE AGREEMENT

This Agreement is made and entered as of the 1st day of January, 2006
("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 men's apparel, including men's
activewear, sportswear, jeans, swimwear, and outerwear, but specifically
excluding boys', infant, and toddler apparel, and shall also specifically

exclude all professional and amateur boxing apparel. During the Term, defined
herein below, Licensee shall have a right of first refusal to add boys' apparel
to the definition of Licensed Products, in the event Everlast's current boys'
apparel license in the Contract Territory (defined herein below) shall expire
during the Term. During the Term, Everlast shall only be permitted to sell men'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.

1.2 On or before the Effective Date, Everlast will assign to
Licensee, and Licensee will assume, Everlast's current non-exclusive license
with Fortune Fashion to use Licensed Marks in connection with sales of t-shirts
to JC Penney retail stores (the "T-Shirt License"), including all of Everlast's
right, title and interest in and to all royalties (earned royalties and any
guarantees) payable by Fortune Fashion under the T-Shirt License, and including
the right to enforce its rights to such royalties via demand, litigation or
otherwise. Apart from administering the collection of royalties, and policing
Fortune Fashion's performance under the terms of the T-Shirt License, which
shall become and be Licensee's duty and responsibility, Licensee shall not be
responsible for any of Licensor's affirmative or implied obligations under the
T-Shirt License. Upon expiration of the T-Shirt License, Everlast shall not
grant any further non-exclusive or other rights in and to the Licensed Marks in
connection with any products in the men's apparel category to any third party
during the Term of this Agreement. Everlast shall, and hereby does indemnify and
hold Licensee harmless from and against any claims brought or actions filed by
Fortune Fashion against Licensee or any of its sub-licensees arising out of, or
in connection with the T-Shirt License, and further shall, and hereby does
indemnify and hold Licensee harmless from and against any claims brought or
actions filed by any of its sub-licensees and retailers arising from any
intentional or reckless acts committed by Fortune Fashion or Everlast found to
be in violation of the rights in and to the T-Shirt License granted to Licensee
hereunder.

1.3 "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 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.

1.4 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.

1.5 "Contract Territory" means the United States, its territories
and possessions, and any and all U.S. military installations and bases
worldwide.

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

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

3.0 TERM AND RENEWAL

3.1 The "Term" of this Agreement shall consist of the "Initial
Term" and two renewal "Option Periods." 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, 2006, and thereafter to each calendar twelve (12) month period commencing on
each January 1st during the Term, whether the same shall occur during the
Initial Term or during the First Option Period or Second 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, 2006, and thereafter to each successive calendar three (3) month
period during each Contract Year, commencing April 1, 2006 and thereafter.

3.2 Provided that this Agreement is otherwise in full force and
effect, that Licensee has fully paid all annual Guaranteed Minimum Royalties
(defined below) hereunder, and that Licensee is not otherwise in default in the
performance of any of its obligations hereunder, Licensee may, subject to and in
accordance with this Paragraph 3.2 and any applicable subparagraph, renew this
Agreement for two (2) additional Option Periods of five (5) years each:

(a) Licensee may renew this Agreement for an initial Option
Period, commencing January 1, 2010 and ending December 31, 2014 ("First 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, Licensee shall be entitled to renew provided Licensee has
paid Everlast a minimum of US$2,250,000 in cumulative Earned Royalties and
Guaranteed Minimum Royalties (defined herein as "cumulative royalties") for the
period January 1, 2005 through December 31, 2009. If at the time Licensee
provides its notice of renewal for the Option Period to Everlast Licensee's
cumulative royalties paid to Everlast are then below US$2,250,000, and upon
payment to Everlast of Licensee's remaining cumulative royalties for the period
January 1, 2006 through December 31, 2009 such cumulative royalties remain below
US$2,250,000, then Licensee's notice of 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.

(b) If Licensee's reported and certified Earned Royalties for the
Contract Year ending December 31, 2014 are equal to or greater the annual
Guaranteed Minimum Royalty payable for such Contract Year, Licensee may renew
this Agreement for a second Option Period ("Second Option Period") of five (5)
years, through December 31, 2019. At the option of Everlast, on written notice
to Licensee, Licensee's exercise of its option to renew for the Second Option
Period may be voided, and this Agreement terminated as of the end of the First
Option Period if (i) Licensee is in default in the performance of any of its
obligations hereunder (including the payment in full of all due Guaranteed
Minimum Royalty payments) as of December 31, 2014, and the applicable time to
cure has passed; (ii) Licensee's Earned Royalties for the Contract Year ending
December 31, 2014 are less than the annual Guaranteed Minimum Royalty payable
for such Contract Year as of December 31, 2014; or (iii) this Agreement is not
in full force and effect as of December 31, 2014. In the event that Licensee is
in default as of December 31, 2014 and the applicable time to cure has not
passed, this Agreement shall automatically expire and terminate on the day
immediately following the last day of such applicable cure period unless the
default is cured before such day. During the Second Option Period, annual
Guaranteed Minimum Royalties shall be calculated and paid in accordance with the
provisions of Paragraphs 4.2 and 4.3 hereof.

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, and three and
one-half percent (3.5%) of such Net Sales made by Licensee's sub-licensees
("Earned Royalty"); provided, that each of Licensee's sub-licensees hereunder
shall be required in their sub-license agreement with Licensee to pay to
Licensee a royalty of no less than seven percent (7%) of such sub-licensee's net
(wholesale) sales of Licensed Products. During the Initial Term, Earned Royalty
overages hereunder shall accumulate against minimum royalties paid under, and be
paid as royalties pursuant to and in accordance with Licensee's current women's
apparel license for the territory of the United States (dated as of January 1,
2005; the "Women's Apparel License"); provided, however, that for the Contact
Year ending December 31, 2007, Earned Royalty overages for Net Sales between
$10,000,000 and $13,000,000 only shall be paid to Everlast quarterly at the rate
of five percent (5%), in accordance with the terms of Article 5, herein below,
within 30 days after the end of each Contract Year Quarter falling within such
Contract Year. Earned Royalty overages for the Contact Year ending December 31,
2007 for Net Sales in excess of $13,000,000 shall accumulate on the Women's
Apparel License. Subject to paragraph 4.3, herein below, Earned Royalties for
the Option Period 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 of the Initial Term as follows:

Contract Year Ending Guaranteed Minimum Royalty Installment
-------------------- -------------------------- -----------
December 31, 2006 US$450,000 US$112,500
December 31, 2007 US$500,000 US$125,000
December 30, 2008 US$600,000 US$150,000
December 31, 2009 US$700,000 US$175,000

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. During the
Option Period the annual Guaranteed Minimum Royalty for each Contract Year shall
be the greater of (i) an amount equal to sixty percent (60%) of the total Earned
Royalties for the immediately preceding Contract Year (initial Term or Option
Period) calculated at a 5% royalty rate, or (ii) an amount equal to the annual
Guaranteed Minimum Royalty for the immediately preceding Contract Year (initial
Term or Option Period), plus 10% thereof.

4.3 During each individual Contract Year commencing after December
31, 2009, 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.

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, 2010 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). 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 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 In the event Licensee files for bankruptcy protection under
Chapter 7 or 11 of the United States Bankruptcy Code during the Term of this
Agreement (a "Bankruptcy Filing"), Licensee shall be required thereafter to
cause each of its sub-licensees transacting business in Licensed Products in

connection with this Agreement to pay directly to Everlast any and all
Guaranteed Minimum Royalties and Earned Royalties due Licensee. In the event of
any such Bankruptcy Filing, Licensee shall further be required to execute
amendments to all sublicense agreements then existing between Licensee and its
sub-licensees transacting business in Licensed Products in connection with this
Agreement to require such sub-licensees to make royalty payments directly to
Everlast in accordance with this paragraph.

5.5 All payments by Licensee, or any sublicense of 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 "Dollar" type deep discount store.
Licensee shall further be prohibited from selling Licensed Products to Wal-Mart
and Kmart without Everlast's prior written approval, which approval shall not be
unreasonably withheld. 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 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 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.

6.3 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, 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.

6.4 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.

6.5 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, 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 reasonable 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 promptly upon
Everlast's reasonable request 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, 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.

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. Subject to any applicable cure pursuant to paragraph 7.6, herein below,
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 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.

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
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,
subject to paragraphs 16.1 and 16.2, herein below, 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.

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.

9.2 Licensee shall attend tradeshows in its reasonable commercial
discretion; provided, however, that for the Contract Year ending December 31,
2006, Licensee shall attend the first MAGIC show to be held February 21st -
24th, 2006, and shall use Everlast's existing men's apparel booth/stand, all at
Licensee's expense, including without limitation, travel, shipping, ring,
security, re-design, restructuring, cleaning, entertainment, boxer/endorser, and
booth space expenses. Everlast and Licensee shall negotiate Licensee's
participation in the MAGIC show to be held in August, 2006, in good faith.
Licensee shall have the option, during each subsequent Contract Year, to use
Everlast's existing men's apparel booth/stand for MAGIC shows, at Licensee's
expense. An example of expenses associated with MAGIC show attendance is annexed
hereto as Exhibit C. In consideration for Everlast's storage of its booth at its
Moberly, Missouri facility at a cost of $20,000 per year, Licensee shall host
Everlast's Licensing Department at both of the 2006 MAGIC shows in the Everlast
men's tradeshow booth by providing a table/desk, five chairs, and a display grid
for/at each show.

9.3 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
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.

9.4 Licensee shall pay Everlast a quarterly advertising royalty
("Advertising Royalty") to Everlast equal to one percent (1%) of Net Sales per
Contract Year Quarter based upon Licensed Products actually shipped only.
Licensee shall pay such Advertising Royalty quarterly, in accordance with the
terms of paragraph 5.1 herein above. Advertising Royalties shall neither be
counted against, nor deducted from Earned Royalties, and shall be due and
payable whether or not Earned Royalty overages are due for any Contract Year
Quarter. Licensee shall additionally expend on advertising in each Contract
Year, during the initial Term and any Option Period hereof, an amount equal to
not less than one percent (1%) of Net Sales. Licensee's advertising expenditures
may include, without limitation, point-of-sale materials, cooperative (retail)
advertising, trade show expenses, consumer advertising, trade advertising, and
catalog and brochure 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 Contract Year.

9.5 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.

9.6 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.

9.7 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 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
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.

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, or of the T-Shirt License, 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, INVENTORY AND CHARGE BACKS

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
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 core Licensed Products ("Core Products"; Core Products are those
included and set forth on the inventory list attached hereto as Exhibit E) and
Spring '06 Licensed Products on hand as of December 31, 2005, at a price equal
to LDP (Everlast's FOB cost + freight + duty + brokerage fees + agent's
commission) plus a fee for merchandising and design equal to 1.75% of Everlast's
FOB cost (the "Inventory Purchase Price"). Everlast shall have until no later
than April 30, 2006 to sell and ship all non-Core Product Licensed Products in
inventory as of December 31, 2005 that predate Spring '06 inventory. 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 accordance with
the Inventory Purchase Schedule and Stipulations attached as Exhibit D hereto,
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,
2006; 40% by February 1, 2006; 60% by March 1, 2006; 80% by March 31, 2006; 90%
by April 30, 2006; and 100% by May 30, 2006. 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 With respect to discounts, allowances and other charge-backs
incurred by Licensee that arise from, or otherwise relate to Licensed Products
sold and shipped 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 prior to December 31, 2005; and

(ii) For all other retailer requested charge-backs, Licensee,
Everlast and the retailer shall fully negotiate, and determine in good faith the
amount and terms of the charge-back, and only upon and in accordance such
agreement shall Everlast be liable to reimburse Licensee for the amount paid to
any such retailer.

12.4 Licensee shall assume and take over, as of January 1, 2006,
all of Everlast's open to buy purchase orders that Everlast has placed with its
Licensed Products manufacturers, and shall pay to Everlast a merchandising and
design fee thereon equal to 1.75% of Everlast's FOB cost of all Licensed
Products on-order. Licensee shall assume and take over all of Everlast's open
customer orders for Licensed Products not fulfilled by December 31, 2005.
Additionally, Licensee shall reimburse Everlast for the total LDP cost of any
and all Licensed Products requested by and/or for the television show production
"Contender II" shipped prior to January 1, 2006. This reimbursement shall not
exceed $75,000, and shall be made by Licensee to Everlast in three equal
payments of 33.33% of the reimbursable amount, on each of January 1, 2006,
February 1, 2006, and March 1, 2006.

12.5 Licensee shall reimburse Everlast for all warehousing and
freight costs incurred by Everlast related to or arising out of sales of
Licensed Products made on or after January 1, 2006.

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.

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.

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 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 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 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
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.

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,
and subject to the applicable terms of any other currently valid and enforceable
licenses by and between Everlast and Licensee, 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
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 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 NO PARTNERSHIP

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

23.0 NON-ASSIGNABILITY

23.1 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.

23.2 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.

24.0 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.

25.0 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.

26.0 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.

27.0 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
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.

28.0 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.

29.0 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
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: ______________________ By: ______________________

Name: ____________________ Name: ____________________

Title: ___________________ Title: ___________________

Date: ____________________ Date: ____________________

EXHIBIT A

(Licensed Marks)

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 (3.5% for sub-licensee 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 ___________

EXHIBIT C

SAMPLE M.A.G.I.C. TRADE SHOW EXPENSES

2005 SPRING MAGIC SHOW COSTS - EXAMPLE
MAGIC show fee for space $55,425.00
Ges Services $15,088.32
Airways to Show (samples) $1,064.18
Airways from show (samples) $1,101.08
Booth to show Trailer One $3,843.60
Booth to show Trailer Two $3,843.60
Booth from show Trailer One $3,843.60
Booth from show Trailer Two $3,843.60
Security $1,071.00
Encore TV $1,359.50
Renaissance (booth set up) $15,000.00

Moberly employee for set-up $1,500.00

Totals $106,983.48

Exchange booth storage cost in Moberly, Missouri, which is $20,000 per year, for
Everlast's Licensing Department participation in both 2006 MAGIC shows in the
Everlast men's booth, to include a desk/table, 5 chairs, and a display grid.

EXHIBIT D

INVENTORY PAYMENT SCHEDULE AND STIPULATION

Schedule and stipulations for payments for Inventory:

Payment Schedule

Jan. 1 - 20%

Feb 1 - 40%

March 1 - 80%

April 30 - 90%

May 30 - 100%

Stipulations

Licensee shall pay Everlast LDP plus 1.75% of the FOB price for the
merchandising and design fee on core products (core products are defined on
Exhibit E) and Spring '06 products on hand in inventory as of Dec. 31, 2005. LDP
is defined as: FOB price+Freight+Duty+Brokerage fees+Agent's Commissions.

License shall take over all of the open to buy purchase orders Everlast has
placed with its Licensed Products manufacturers and shall pay Everlast a 1.75%
merchandising and design fee for all goods on-order.

EXHIBIT E

CORE INVENTORY

REPORT RUN - 12/12/05

CORE
---- 12/31/05 12/31/05 future future
style # description WH#1 WH#3 TOTAL INV. WH#1 WH#3 TOTAL inv.
------- ----------- ---- ---- ---------- ---- ---- ----------
1107 cap sleeve jersey 1999 11401 13400 1999 13257 15256
111 sleeveless jersey -3 16234 16231 -3 16761 16758
127 contrast pant 5859 1741 7600 5859 1650 7509
2184 s/l evershield 0 6463 6463 0 6133 6133
2185 s/s evershield 5350 7375 12725 5350 1745 7095
2186 l/s evershield 3834 9269 13103 3834 -245 3589
2187 underwear evershield -348 5873 5525 -348 1310 962
301 pd s/s tee 30 11731 11761 2214 6969 9183
3649 solid short 0 -14 -14 0 3842 3842
3650 pd short 0 0 0 0 1134 1134
423 pd s/l 38 20673 20711 38 20871 20909
601 contrast short 18 10070 10088 132 9146 9278
738 pd cap sleeve jersey 43 23281 23324 43 17872 17915
------------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL 16820 124097 140917 19118 100445 119563
------------------------------------------------------------------------------------------------------------------------------------

final inventory will be +/- 10% 12/31/05 inventory.