PURCHASE AGREEMENT

Execution Version

PURCHASE AGREEMENT

by and among

GB HOLDING I, LLC,

AM APPAREL HOLDINGS, INC.

and

G-III LEATHER FASHIONS, INC.

Dated as of February 11, 2008

TABLE OF CONTENTS

i

ii

SCHEDULES

A1 – Seller and Company Knowledge

A2 – Buyer Knowledge

A3 – Retained Directors and Officers

A4 – Purchase Price Calculation

Disclosure Schedule

iii

PURCHASE AGREEMENT

This Purchase Agreement, dated as of February 11, 2008 (including the schedules and exhibits hereto, this “ Agreement ”), is by and among AM Apparel Holdings, Inc., a Delaware corporation (the “ Company ”), GB Holding I, LLC, a Delaware limited liability company and the sole stockholder of the Company (“ Seller ”), and G-III Leather Fashions, Inc., a New York corporation (“ Buyer ”). The Company, Seller and Buyer are referred to collectively herein as the “ Parties ” and each individually as a “ Party .”

W I T N E S S E T H :

WHEREAS, Seller owns all of the issued and outstanding shares of common stock, par value $0.01 per share, of the Company (the “ Shares ”);

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the Shares on the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, concurrently with the execution of this Agreement, as a material inducement to Buyer’s willingness to enter into this Agreement, Seller is delivering a Guarantee Agreement, dated as of the date hereof (the “ Guarantee ”), among Seller, the Guarantor named therein (the “ Guarantor ”) and Buyer;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises herein made, and in consideration of the representations and warranties, herein contained, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Parties hereto, intending to become legally bound, hereby agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.1. Certain Definitions. As used in this Agreement, the following terms shall have the following meanings:

“ Action ” means any action, suit or proceeding by or before any court or other Governmental Authority or arbitration tribunal.

“ Affiliate ” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act.

“ Agreed Claims ” has the meaning set forth in Section 9.4(d) .

“ Agreement ” has the meaning set forth in the preamble to this Agreement.

“ Allowances ” has the meaning set forth in Section 3.25 .

“ Balance Sheet Date ” has the meaning set forth in Section 3.8 .

“ Business Day ” means any day other than Saturday, Sunday or any other day on which banking institutions in New York or New Jersey are not open for the transaction of normal banking business.

“ Buyer ” has the meaning set forth in the preamble to this Agreement.

“ Buyer Group ” has the meaning set forth in Section 9.1 .

“ Buyer Specified Representations ” has the meaning set forth in Section 9.2 .

“ Claim ” has the meaning set forth in Section 9.4(a) .

“ Claim Notice ” has the meaning set forth in Section 9.4(a) .

“ Closing ” has the meaning set forth in Section 2.3 .

“ Closing Date ” means the date the Closing occurs pursuant to Section 2.3 .

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

“ Company ” has the meaning set forth in the preamble to this Agreement.

“ Company Financial Statements ” has the meaning set forth in Section 3.8 .

“ Company Group ” means the Company and the Company’s Subsidiaries.

“ Company Plan ” has the meaning set forth in Section 3.18(a) .

“ Confidentiality Agreement ” means the Confidentiality Agreement, dated October 3, 2007, between the Company, Seller and G-III Apparel Group, Ltd.

“ Consents ” means consents, approvals, exemptions, waivers, authorizations, filings, registrations and notifications.

“ Contribution Agreement ” means the Contribution Agreement, dated October 8, 2004, among the Company, A. Marc & Co., Inc., Andrew & Suzanne Company Inc., Ash Retail Corp., Ash Retail of Easthampton, Inc. and the Contributors named therein.

“ Control ” means, with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or partnership interests, by contract or otherwise.

“ Damages ” means all losses, claims, damages, payments, Taxes, costs and expenses (including costs and expenses of Actions, amounts paid in connection with any assessments, judgments or settlements relating thereto, interest and penalties recovered by a third party with respect thereto and out-of pocket expenses and reasonable attorneys’ fees and expenses reasonably incurred in defending against any such Actions or in enforcing a Party’s rights hereunder).

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“ Disclosure Schedule ” means the disclosure schedule delivered by Seller to Buyer on the date hereof.

“ Earnout Prepayment Amount ” has the meaning set forth in Section 2.2(a) of the Contribution Agreement.

“ Environmental Laws ” means any Law existing on the date hereof which deals with (i) pollution or protection of the environment; (ii) exposure of persons to toxic or hazardous substances; or (iii) employee or worker safety (solely to the extent related to exposure of Hazardous Materials).

“ Environmental Liabilities ” means any and all liabilities, claims, demands, costs, damages, losses, expenses, penalties, fines, interest, attorneys’ fees, court costs and other costs of suit incurred or imposed (i) pursuant to any order, notice of responsibility, directive, injunction, judgment or similar act (including settlements) by any Governmental Authority to the extent arising out of a violation of Environmental Laws or (ii) pursuant to any claim or cause of action by a Governmental Authority or other third Person for personal injury, property damage, damage to natural resources or remediation or response costs to the extent arising out of or attributable to any discharge, disposal or release of Hazardous Materials.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ ERISA Affiliate ” has the meaning set forth in Section 3.18(a) .

“ Equity Upside Payments ” means the amounts payable to employees of the Company Group pursuant to the agreements listed in Section 1.1(a) of the Disclosure Schedule.

“ Final Balance Sheet ” has the meaning set forth in Section 3.8 .

“ GAAP ” means United States generally accepted accounting principles.

“ Governmental Authority ” means any federal, state, local or foreign government, court of competent jurisdiction, administrative agency or commission or other governmental or regulatory authority or instrumentality.

“ Guarantee ” has the meaning set forth in the recitals to this Agreement.

“ Guarantor ” has the meaning set forth in the recitals to this Agreement.

“ Hazardous Materials ” means (i) asbestos, polychlorinated biphenyls, petroleum, petroleum derived substances, by-products or wastes, (ii) any substance that is defined, listed or identified as a “hazardous waste” or “hazardous substance” thereunder, or (iii) any substance that is toxic, explosive, corrosive, flammable, radioactive, or otherwise hazardous and is defined, regulated or listed as such by any Governmental Authority under any applicable Environmental Law.

“ Indebtedness ” means the sum (without duplication) of (i) the principal amount of any indebtedness of the Company or any other member of the Company Group for borrowed

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money, (ii) the principal amount of indebtedness of the Company or any other member of the Company Group evidenced by promissory notes, bonds or debentures, (iii) capitalized lease obligations of the Company or any other member of the Company Group, (iv) all indebtedness of the type referred to in items (i), (ii) and (iii) above of a Person other than a member of the Company Group which is guaranteed by a member of the Company Group and (v) any unpaid interest owing on any of the foregoing or prepayment penalties on any of the foregoing; provided , that notwithstanding the foregoing, the Letters of Credit will not be considered “Indebtedness” hereunder.

“ Indemnified Claim ” has the meaning set forth in Section 9.4(i) .

“ Indemnified Party ” has the meaning set forth in Section 9.2 .

“ Indemnifying Party ” has the meaning set forth in Section 9.2 .

“ Indemnity Reduction Amounts ” has the meaning set forth in Section 9.3(c) .

“ Injunction ” has the meaning set forth in Section 6.1 .

“ Intellectual Property ” means (a) all patents, patent applications, and patent disclosures, (b) all trademarks, service marks, trade dress, logos, trade names, domain names, and corporate names, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, works of authorship and all copyrights, and all applications, registrations, and renewals in connection therewith, and (d) all trade secrets.

“ Knowledge ” means, with respect to Seller, the Company or the Company Group, the actual knowledge of any individual set forth on Schedule A1 and, with respect to Buyer, the actual knowledge of any individual set forth on Schedule A2 .

“ Laws ” means all applicable laws, statutes, constitutions, rules, regulations, judgments, rulings, orders, decrees and injunctions of Governmental Authorities.

“ Leased Real Property ” has the meaning set forth in Section 3.12(b) .

“ Letters of Credit ” means the letters of credit outstanding on the Closing Date issued pursuant to that certain Master Purchase Agreement, dated as of November 5, 2004, by and among Gordon Brothers Retail Partners, LLC, A. Marc & Co., Inc. and Andrew & Suzanne Company, Inc.

“ Liability ” means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

“ Licenses ” has the meaning set forth in Section 3.22 .

“ Lien ” means any mortgage, pledge, lien, encumbrance, charge or other security interest.

“ Lock-Box Partial Period ” has the meaning set forth in Section 9.7(a) .

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“ Material Adverse Effect ” means (a) with respect to the Company Group, a material adverse effect on the business, operations, assets or financial condition of the Company Group, taken as a whole, excluding, in each case, any such effect resulting from or arising out of or in connection with (i) acts of God, calamities, national or international political or social conditions including the engagement by any country in hostilities, whether commenced before or after the date hereof, and whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack, (ii) economic, industry or market events, occurrences, developments, circumstances or conditions, whether general or regional in nature or limited to any area in which the Company Group operates, in each case that do not have a disproportionate effect on the Company Group relative to other Persons in the specialty retail industry, (iii) changes in applicable Laws or accounting standards, principles or interpretations, (iv) the negotiation (including activities relating to due diligence), execution, delivery or public announcement or the pendency of this Agreement or any of the transactions contemplated herein or any actions taken or not taken in compliance herewith or otherwise at the request or with the consent of Buyer, (v) any event, occurrence, circumstance or fact that is set forth in the Disclosure Schedule or (vi) any change in or effect on the assets or properties of the Company Group which is cured (including the payment of money) by the Seller, (b) with respect to Buyer, a material adverse effect on the ability of Buyer to perform its obligations under, or to consummate the transactions contemplated by, this Agreement and (c) with respect to Seller, a material adverse effect on the ability of Seller to perform its obligations under, or to consummate the transactions contemplated by, this Agreement.

“ Material Contracts ” has the meaning set forth in Section 3.15(a) .

“ New Jersey Lease ” means the Real Property Lease for the Leased Real Property located at 50 Enterprise Avenue, Secaucus, New Jersey.

“ New Jersey Lease Consent ” has the meaning set forth in Section 2.4(a)(xi) .

“ Other Parties ” has the meaning set forth in Section 3.15(b) .

“ Parties ” has the meaning set forth in the preamble to this Agreement.

“ Payoff Letters ” has the meaning set forth in Section 2.4(a)(iii) .

“ Permitted Liens ” means any (a) mechanic’s, materialmen’s, laborer’s, workmen’s, repairmen’s, carrier’s and similar Liens, including all statutory Liens, arising or incurred in the ordinary course of business, (b) Liens for Taxes, assessments and other governmental charges (i) not yet delinquent or (ii) being contested in good faith through appropriate proceedings, (c) purchase money Liens and Liens securing rental payments under capital lease arrangements, (d) pledges or deposits under workers’ compensation legislation, unemployment insurance Laws or similar Laws, (e) good faith deposits in connection with bids, tenders, leases, contracts or other agreements, including rent security deposits, (f) pledges or deposits to secure public or statutory obligations or appeal bonds, (g) Liens referred to in the Company Financial Statements, (h) other Liens not incurred in connection with the borrowing of money which do not interfere with or impair, in any material respect, the present operation of the business of the Company Group, (i) in the case of property held by the Company Group, easements, covenants and other restrictions which do not materially impair the current use,

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occupancy or value of the property subject thereto, (j) any landlord’s lien arising under contract or statute, (k) as to any Leased Real Property, any Lien affecting the interest of the lessor thereof that would not, individually or in the aggregate, adversely affect the ability of the Company Group to conduct its businesses in the ordinary course at the Leased Real Property or (l) any Liens arising to secure Indebtedness of the Company Group identified to be paid off at Closing in the Payoff Letters.

“ Person ” means an individual, partnership, limited liability partnership, corporation, limited liability company, association, joint stock company, trust, estate, joint venture, unincorporated organization, or governmental entity (or any department, agency, or political subdivision thereof).

“ Pre-Closing Period ” has the meaning set forth in Section 9.7(d) .

“ Pre-Lock-Box Period ” has the meaning set forth in Section 9.7(a) .

“ Purchase Price ” means an amount equal to $19,147,835.14

“ Real Property Leases ” has the meaning set forth in Section 3.12(b) .

“ Remedies Exception ” means (i) applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application, heretofore or hereafter enacted or in effect, affecting the rights and remedies of creditors generally, and (ii) the exercise of judicial or administrative discretion in accordance with general equitable principles, particularly as to the availability of the remedy of specific performance or other injunctive relief.

“ Reorganization ” means the reorganization of the Company Group consummated in April 2007.

“ Replacement Letter of Credit ” has the meaning set forth in Section 2.4(b)(vi) .

“ Securities Act ” means the Securities Act of 1933, as amended.

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

“ Seller ” has the meaning set forth in the preamble to this Agreement.

“ Seller Group ” has the meaning set forth in Section 9.2 .

“ Seller Specified Representations ” has the meaning set forth in Section 9.1 .

“ Shares ” has the meaning set forth in the recitals to this Agreement.

“ Solvent ” means when used with respect to any Person, means that, as of any date of determination, (a) the amount of the “fair saleable value” of the assets of such Person will, as of such date, exceed (i) the value of all “liabilities of such Person, including contingent and other liabilities,” as of such date, as such quoted terms are generally determined in accordance with applicable federal laws governing determinations of the insolvency of debtors, and (ii) the

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amount that will be required to pay the probable liabilities of such Person on its existing debts (including contingent liabilities) as such debts become absolute and matured, (b) such Person will not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged following such date, and (c) such Person will be able to pay its liabilities, including contingent and other liabilities, as they mature. For purposes of this definition, “not have an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged” and “able to pay its liabilities, including contingent and other liabilities, as they mature” means that such Person will be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due.

“ Specified Mark Claims ” has the meaning set forth in Section 9.9.

“ Specified Marks ” has the meaning set forth in Section 3.13(c).

“ Specified Parties ” has the meaning set forth in Section 9.1(e) .

“ Specified Party Claims ” has the meaning set forth in Section 9.8 .

“ Specified AR Proceeding ” means the matter described in Section 1.1(b) of the Disclosure Schedule.

“ Specified HS Proceeding ” means the matter described in Section 1.1(c) of the Disclosure Schedule.

“ Stay Bonuses ” has the meaning set forth in Section 3.18(a) .

“ Straddle Period ” has the meaning set forth in Section 9.7(a) .

“ Subsidiary ,” when used with respect to any Person, means any other Person of which (a) in the case of a corporation, at least (i) a majority of the equity and (ii) a majority of the voting interests are owned or Controlled, directly or indirectly, by such first Person, by any one or more of its Subsidiaries, or by such first Person and one or more of its Subsidiaries or (b) in the case of any Person other than a corporation, such first Person, one or more of its Subsidiaries, or such first Person and one or more of its Subsidiaries (i) owns a majority of the equity interests thereof and (ii) has the power to elect or direct the election of a majority of the members of the governing body thereof.

“ Tax ” means any federal, state, local, or foreign tax, charge, duty, fee, levy or other assessment, including income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, escheat or other tax, fee or like assessment or charge imposed by any Governmental Authority or arising under any Law, and including any interest, penalty, or addition thereto.

“ Tax Contest ” has the meaning set forth in Section 9.7(f) .

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“ Tax Return ” means any return, declaration, report, claim for refund, form, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, required to be filed with any Governmental Authority.

“ Third Party Claim ” has the meaning set forth in Section 9.4(e) .

“ Transaction Documents ” means this Agreement, the Guarantee and all other documents delivered or required to be delivered by any Party pursuant to this Agreement.

“ Transfer Taxes ” means all transfer, sales, real property or personal property transfer or gains, use, excise, stock transfer, stamp, documentary, filing, recording, registration, and similar Taxes incurred as a result of the transactions contemplated by this Agreement.

“ US Leased Real Property ” has the meaning set forth in Section 3.12(b) .

“ US Real Property Leases ” has the meaning set forth in Section 3.12(b) .

Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The words “herein”, “hereof” and “hereunder” and words of similar import refer to this Agreement (including the Exhibits to this Agreement and the Disclosure Schedule) in its entirety and not to any part hereof unless the context shall otherwise require. All references herein to Articles, Sections, Exhibits and the Disclosure Schedule shall be deemed references to Articles and Sections of, and Exhibits and the Disclosure Schedule to, this Agreement unless the context shall otherwise require. Unless the context shall otherwise require, any references to any agreement or other instrument or statute or regulation are to it as amended and supplemented from time to time (and, in the case of a statute or regulation, to any successor provisions). Any reference to any federal, state, local, or foreign statute or Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Any reference in this Agreement to a “day” or a number of “days” (without explicit reference to “Business Days”) shall be interpreted as a reference to a calendar day or number of calendar days. If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.

ARTICLE II.

PURCHASE AND SALE OF SHARES

Section 2.1. Purchase and Sale of Shares. Upon the terms and subject to the conditions of this Agreement, Buyer agrees to purchase from Seller, and Seller agrees to sell to Buyer, all of the Shares at the Closing, for aggregate consideration equal to the Purchase Price, as payable pursuant to Section 2.2 .

Section 2.2. Payment of Purchase Price. At Closing, Buyer shall pay an amount in immediately available funds by wire transfer to an account or accounts that have been designated by Seller to Buyer prior to the Closing equal to the Purchase Price.

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Section 2.3. Closing. Subject to the satisfaction or, when permissible, waiver of the conditions set forth in Article VII , the closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022, commencing at 10:00 a.m. local time on the date hereof.

Section 2.4. Closing Deliveries.

(a) At the Closing, Seller is delivering or causing to be delivered to Buyer the following:

(i) original stock certificate representing the Shares, duly endorsed in blank or accompanied by a stock power with all stock transfer stamps necessary to transfer the Shares to Buyer and original stock certificates representing all of the outstanding shares of capital stock of each of the Company’s Subsidiaries;

(ii) resignations or terminations of the executive officers, directors and managers of each member of the Company Group appointed or designated by Seller or its Affiliates to such positions from their positions as executive officers, directors and managers effective as of the Closing (other than those Persons listed on Schedule A3 or identified by Buyer prior to Closing with respect to whom such resignation or termination is not required);

(iii) letters, in customary form and substance, with respect to the satisfaction in full of any Indebtedness of the Company Group outstanding as of the Closing Date, the full and unconditional discharge of all obligations of any member of the Company Group under all agreements or instruments relating to such Indebtedness (including guaranties), and the release of any Liens relating thereto and termination of any UCC, Patent and Trademark Office or other filings evidencing such Liens (collectively, the “ Payoff Letters ”);

(iv) a properly executed statement from Seller that it is not a “foreign person” as defined in Section 1445 of the Code;

(v) estoppel certificate from the landlord under the New Jersey Lease, in form and substance reasonably satisfactory to Buyer;

(vi) good standing certificate of each member of the Company Group, from the Secretaries of State of its state of organization and each jurisdiction in which it is qualified to do business as a foreign corporation;

(vii) a copy of the certificate of incorporation of each member of the Company Group, as in effect on the Closing Date, certified by the Secretary of State of its state of incorporation as of a recent date;

(viii) a copy of the bylaws of each member of the Company Group, certified by the secretary of such member of the Company Group;

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(ix) the stock books and minute books of the Company and its Subsidiaries (including, without limitation, all attachments to all minutes and written consents contained therein);

(x) the written consents to the transactions contemplated by this Agreement by the licensors under the license agreements specified in Section 2.4(a)(x) of the Disclosure Schedule, in form and substance reasonably satisfactory to Buyer;

(xi) the written consent to the transactions contemplated by this Agreement by the landlord under the New Jersey Lease in form and substance reasonably satisfactory to Buyer (the “ New Jersey Lease Consent ”);

(xii) letters executed by each of Financo, Inc. and FTI Consulting certifying as to the termination, as of the Closing, of all engagement of Financo, Inc. and FTI Consulting to render services to or with respect to any member of the Company Group and the payment in full of all fees and expenses owed to Financo, Inc. and FTI Consulting with respect to any such services;

(xiii) evidence of the full and unconditional discharge and release by Seller and Seller’s Affiliates (other than any member of the Company Group) and the Company Group of all intracompany accounts, receivables, payables, contracts, agreements, guarantees, suretyships, deposits, bonds, letters of credit or security between, for the benefit of or provided by, Seller and Seller’s Affiliates (other than any member of the Company Group), on the one hand, and any member or members of the Company Group, on the other hand, which arrangements are identified in Section 3.24(b) of the Disclosure Schedule, in each case, other than the Letters of Credit;

(xiv) assignment to the applicable member of the Company Group of all inventory to which the outstanding Letters of Credit relate;

(xv) the Guarantee executed by the Guarantor; and

(xvi) all other documents required to be delivered by Seller to Buyer at the Closing pursuant to this Agreement.

(b) At the Closing, Buyer is delivering or causing to be delivered the following:

(i) cash in immediately available funds as provided in Section 2.2 ;

(ii) payment in full discharge of any and all Indebtedness of the Company Group outstanding as of the Closing Date, by wire transfer of immediately available funds in the amounts and to the accounts set forth in the Payoff Letters;

(iii) evidence of termination of the Company’s guaranty with respect to the New Jersey Lease;

(iv) guaranty with respect to the New Jersey Lease by G-III Apparel Group, Ltd.;

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(v) the New Jersey Lease Consent;

(vi) blanket letter of credit in favor of Gordon Brothers Retail Partners, LLC with respect to the Letters of Credit (such blanket letter of credit delivered at Closing, the “ Replacement Letter of Credit ”);

(vii) evidence of Buyer’s payment for a prepaid, non-cancelable six (6) year director’s and officers’ liability insurance tail policy for the persons currently covered by the Company’s directors’ and officers’ liability insurance policy; and

(viii) all other documents required to be delivered by Buyer to Seller at the Closing pursuant to this Agreement.

Section 2.5. Satisfaction of Conditions. All conditions to the obligations of Seller and Buyer to proceed with the Closing under this Agreement will be deemed to have been fully and completely satisfied or waived for all purposes upon the Closing.

Section 2.6. Transfer Taxes. All Transfer Taxes will be borne fifty percent (50%) by Buyer and fifty percent (50%) by Seller.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY GROUP

Seller represents and warrants to Buyer, except as set forth in the Disclosure Schedule, as follows:

Section 3.1. Organization of the Company. The Company is a corporation, validly existing and in good standing under the laws of Delaware, and the Company has all requisite corporate power and authority to carry on its business as it is currently conducted and to own, lease and operate its properties where such properties are now owned, leased or operated. Each other member of the Company Group (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (b) has all requisite organizational power and authority to carry on its respective business as it is currently conducted and to own, lease and operate its properties where such properties are now owned, leased or operated, except in all cases where any failures of the representations in this sentence to be true would not, individually or in the aggregate, have a Material Adverse Effect on the Company Group. Each member of the Company Group is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or license necessary, except in such jurisdictions where the failure to be so duly qualified or licensed or in good standing would not, individually or in the aggregate, have a Material Adverse Effect on the Company Group.

Section 3.2. Authorization. The Company has all requisite corporate power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is or will be party and to perform its obligations hereunder and thereunder. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which the Company is or will be a Party and the consummation of the transactions

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contemplated hereby and thereby have been duly authorized by the Company’s Board of Directors and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement, such Transaction Documents or the consummation of the transactions contemplated hereby or thereby. This Agreement has been duly executed and delivered by the Company and (assuming this Agreement constitutes a valid and binding obligation of Buyer and Seller) constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Remedies Exception. Except as provided in Section 3.2 of the Disclosure Schedule, the Reorganization was duly authorized by the Board of Directors, approved by the requisite vote of the stockholders of the members of the Company Group party thereto and consummated in accordance with applicable Law.

Section 3.3. Organizational Documents; Books and Records . The copies of the organizational documents of each entity comprising the Company Group delivered to Buyer are complete and correct and represent the presently effective organizational documents of each member of the Company Group. No member of the Company Group is in violation of its respective organizational documents. The minute books of each member of the Company Group delivered to the Buyer at the Closing contain, in all material respects, complete and correct records of all meetings held of, and corporate action taken by, the shareholders, boards of directors and committees of the boards of directors of each such member of the Company Group.

Section 3.4. Noncontravention; Earnout Payments. Neither the execution and delivery of the Transaction Documents by the Company, nor the consummation of the transactions contemplated thereby will (a) conflict with any provision of the organizational documents of any member of the Company Group or any resolution adopted by the board of directors or shareholders of any member of the Company Group, (b) materially conflict with, result in the material breach of any provision of, or constitute a material default under any Material Contract, except for Material Contracts to be terminated at Closing as provided in Section 2.4 or the contracts set forth on Section 2.4(a)(x) of the Disclosure Schedule, or (c) violate in any material respect any laws, regulations, orders or judgments applicable to any member of the Company Group. Neither the execution and delivery of this Agreement by the Company or the Seller, nor the consummation of the transactions contemplated hereby, gives rise to any obligation of the Company to pay an Earnout Prepayment Amount. Notwithstanding anything to the contrary contained herein, the Parties agree that the Company makes no representation or warranty under this Section 3.4 with respect to any Real Property Lease.

Section 3.5. Capitalization. The authorized capital stock of the Company consists of 250,000 shares of common stock, par value $0.01 per share, of which 200,000 shares are issued and outstanding as of the date hereof and 50,000 shares of preferred stock, par value $0.01 per share, no shares of which are issued and outstanding as of the date hereof. Seller is the record and beneficial owner of all of the Shares. All of the Shares have been duly authorized and validly issued and are fully paid and nonassessable and were not issued in violation of any preemptive rights. Other than the Shares, no shares of capital stock of the Company are issued and outstanding, or may become required to be issued by reason of any options, warrants, rights to subscribe to, calls or commitments of any character, relating to, or securities or rights convertible into or exchangeable or exercisable for, shares of any capital stock of the Company, and there are no contracts, commitments, understandings or arrangements by which the Company is or may be bound to issue, redeem, purchase or sell additional shares of capital stock

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of the Company or securities convertible into or exchangeable for any capital stock of the Company. All outstanding shares of capital stock of each member of the Company Group are free of any Liens other than Permitted Liens, and are not subject to preemptive rights or rights of first refusal. Since November 5, 2004, the shares of capital stock of each member of the Company Group have been issued in compliance with the Securities Act and applicable state securities Laws and all dividends and distributions by each member of the Company Group have been made in compliance with their respective organizational documents and applicable Laws. No instrument of Indebtedness of any member of the Company Group confers upon the holder thereof the right to vote (or is convertible into securities having the right to vote) on any matters on which shareholders of the applicable member of the Company Group may vote. There are no other contracts, commitments, powers of attorney or agreements relating to voting or the purchase or sale of, the outstanding capital stock of any member of the Company Group.

Section 3.6. Subsidiaries of the Company. Section 3.6 of the Disclosure Schedule sets forth for each of the Company’s Subsidiaries (a) its name and jurisdiction of organization, (b) its form of organization and (c) the capital stock or membership interests held by the Company, directly or indirectly, in such Subsidiary. The Company is the direct or indirect beneficial and record owner of all of the issued and outstanding shares of capital stock or membership interests in such Subsidiaries, free and clear of all Liens, except (x) as may be created by this Agreement, (y) for any restrictions on sales of securities under the Securities Act or other applicable Laws or (z) for Permitted Liens. Section 3.6 of the Disclosure Schedule sets forth a complete list of the officers and directors of each member of the Company Group as of the date hereof. No member of the Company Group owns, directly or indirectly, any equity securities of any Person, except that the Company owns the equity securities of its Subsidiaries listed in Section 3.6 of the Disclosure Schedule.

Section 3.7. Government Authorizations. Except for Consents that, if not obtained or made, would not, individually or in the aggregate, have a Material Adverse Effect on the Company Group, no Consent of, with or to any Governmental Authority is required to be obtained or made by the Company in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, other than any such requirement that is applicable as a result of any facts that specifically relate to the business or activities in which Buyer or its Affiliates is or proposes to be engaged, other than the business currently conducted by the Company Group.

Section 3.8. Financial Statements. Set forth in Section 3.8 of the Disclosure Schedule are (a) the audited consolidated balance sheets of the Company Group as of December 31, 2006 and December 31, 2005, and the related consolidated statements of operations and cash flows for the fiscal years then ended, (b) the unaudited consolidated balance sheet of the Company as of December 31, 2007 (the “ Balance Sheet Date ”), and the related consolidated statements of operations and cash flows for the twelve (12) months ended on the Balance Sheet Date, and (c) the unaudited consolidated balance sheet of the Company as of January 31, 2008 (the “ Final Balance Sheet ”, and (a), (b) and (c) collectively, the “ Company Financial Statements ”). Except to the extent set forth therein, each of the Company Financial Statements presents fairly, in all material respects, the assets, liabilities, consolidated financial position, results of operations and cash flows of the Company Group, at the respective dates set forth therein and for the respective periods covered thereby, and were prepared in accordance with

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GAAP (except, in the case of the unaudited financial statements, for the absence of footnotes and any year-end adjustments), consistently applied. Except to the extent set forth in the Company Financial Statements, (i) the unaudited Company Financial Statements reflect all adjustments necessary to present fairly, in all material respects, the financial condition of the Company for the applicable periods and (ii) except as would not be required to be disclosed in accordance with GAAP, the statements of operations included in the Company Financial Statements do not contain any material items of special or non-recurring income or other material amounts of income not earned in the ordinary course of business.

Section 3.9. Undisclosed Liabilities. As of January 31, 2008, the Company Group had no Liabilities of a kind that would be required to be reflected on or reserved against on a consolidated balance sheet of the Company Group (including the notes thereto) prepared in accordance with GAAP, except for Liabilities (a) set forth in, reflected in, reserved against or disclosed in the Final Balance Sheet (including the notes thereto), (b) under Material Contracts or other contracts or agreements of the Company or its Subsidiaries not required by the terms hereof to be disclosed in the Disclosure Schedule (in each case, other than Liabilities arising as a result of a breach thereunder by a member of the Company Group), (c) that have been discharged or paid in full in the ordinary course of business, (d) disclosed in the Disclosure Schedule or (e) that do not exceed $250,000 in the aggregate. Notwithstanding anything to the contrary contained herein, the Parties agree that the Company makes no representation or warranty under this Section 3.9 with respect to any subject matter to which another section of this Agreement contains a specific representation or warranty relating thereto.

Section 3.10. Absence of Certain Changes.

(a) Since the Balance Sheet Date through the date hereof, except as contemplated by or disclosed pursuant to this Agreement, the Company Group has conducted its business only in the ordinary course, and there has not been (i) to the Company’s Knowledge, any event or development that would, as of the date hereof, individually or in the aggregate, have a Material Adverse Effect on the Company Group or (ii) any material change in accounting methods, principles or practices affecting the Company Group, except as required by GAAP.

(b) During the period commencing on February 1, 2008 and ending at the Closing, except (i) as otherwise contemplated by this Agreement (including as described on Section 3.10(b) of the Disclosure Schedule and the other matters contemplated by the other Schedules and Exhibits hereto) and the other Transaction Documents or (ii) as required by applicable Law, the Company has not, and each other member of the Company Group has not, taken any of the following actions:

(A) incurred damage or destruction or loss of any asset or property, whether or not covered by insurance, in an amount in excess, individually or in the aggregate, of $150,000 (excluding, for the avoidance of doubt, operating losses incurred in the ordinary course of business);

(B) (1) amended its organizational documents; or (2) authorized for issuance, issued, granted, sold, delivered, disposed of, pledged or otherwise encumbered any shares of its capital stock or issued any options, warrants or other rights to subscribe for or acquire any shares of its capital stock;

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(C) redeemed, purchased or acquired any Shares or declared or paid any dividends with respect to the capital stock of the Company;

(D) except as required by GAAP, adopted or materially changed any accounting methods, principles or practices;

(E) entered into, terminated or materially modified any Material Contract (excluding, for the avoidance of doubt, any purchase order entered into, terminated or modified in the ordinary course of business consistent with past practices);

(F) sold, transferred, licensed or otherwise disposed of or encumbered any of the material assets pertaining to the business of the Company Group, other than sales or inventory in the ordinary course of business consistent with past practices;

(G) acquired by merger or consolidation with, or merged or consolidated with, or purchased substantially all of the equity interests or assets of, or otherwise acquired, any material business of any corporation, partnership, association or other business organization or division thereof;

(H) (1) taken any action with respect to the grant of any severance, retention, change of control or termination pay (other than pursuant to any plans, policies or agreements listed in Section 3.10(b)(H) of the Disclosure Schedule) which will become due and payable on or after the Closing Date or entered into, renewed or amended any employment, consulting, severance, change of control or separation contracts with any Company Group Employee; (2) made any change in the key management structure of the Company Group, including, without limitation, the hiring of additional officers or the termination of existing officers; or (3) adopted, entered into or amended any Company Plan, or announced or agreed to the adoption of any new agreement, arrangement or plan which, if adopted, would be a Company Plan;

(I) except for borrowings under existing lines of credit in the ordinary course of business consistent with past practices, (1) created, incurred or assumed any Indebtedness, (2) assumed, guaranteed, endorsed or otherwise became liable or responsible (whether directly, contingently or otherwise) for any material obligations of any Person, (3) made any loans, advances or capital contributions to or investments in any Person other than any member of the Company Group or (4) paid any principal or interest on any Indebtedness;

(J) cancelled any third party Indebtedness owed to any member of the Company Group,

(K) except in the ordinary course of business, made any capital expenditures;

(L) settled any material Tax liability or changed any existing, or made any new, material Tax election;

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(M) amended or modified any term or provision of any of the Real Property Leases; or

(N) agreed to do any of the foregoing.

Section 3.11. Tax Matters.

(a) Each member of the Company Group has timely filed or caused to be filed all Tax Returns required to be filed by it on or before the Closing Date. All such Tax Returns are correct and complete in all material respects. The Company has made available to Buyer copies of all federal, state, foreign and local income Tax Returns filed by any member of the Company Group since January 1, 2004. Each member of the Company Group has either (i) paid or caused to be paid all material Taxes due and payable by it (whether or not shown on any Tax Returns) or (ii) as of January 31, 2008, established an adequate reserve in accordance with GAAP for the payment of all material Taxes accrued by it but not yet due and payable. There are no Liens for Taxes on any assets of any member of the Company Group other than Permitted Liens. No claim has ever been made by a Governmental Authority in a jurisdiction where a member of the Company Group does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

(b) No federal, state, local or foreign Tax audits or administrative or judicial proceedings relating to Taxes are pending with respect to any member of the Company Group. With respect to Taxes for which the statute of limitations remains open, no member of the Company Group has received from any Governmental Authority (including jurisdictions where the member has not filed Tax Returns) any (i) written notice indicating an intent to open a Tax audit or other review, (ii) request for information related to Tax matters, or (iii) notice of deficiency or proposed adjustment for any amount of Tax.

(c) No member of the Company Group has waived any statute of limitations in respect of the assessment and collection of Taxes or agreed to any extension of time which is in effect as of the date hereof with respect to a Tax assessment or deficiency. There are no outstanding powers of attorney enabling any party to represent any member of the Company Group with respect to Tax matters.

(d) No member of the Company Group has, within the past two years, distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that purported or was intended to be governed in whole or in part by Section 355 of the Code.

(e) No member of the Company Group (i) is a party to or bound by any Tax allocation, Tax sharing or Tax indemnity agreement or any other agreement of a similar nature (other than any customary commercial contract not primarily related to Taxes and other than any such agreement the only parties to which are the Company and/or any of the Company’s Subsidiaries) or (ii) has any liability for the Taxes of any Person (other than the Company or any of its Subsidiaries) under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign Law), as a transferee or successor or by contract.

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(f) No member of the Company Group will be required to include any material item of income in, or exclude any item of deduction from, taxable income for any Tax period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a Tax period ending on or prior to the Closing Date, (ii) “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local, or foreign Law) executed on or prior to the Closing Date, (iii) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any similar provision of state, local, or foreign Law), (iv) installment sale or open transaction disposition made on or prior to the Closing Date, or (v) prepaid amount received on or prior to the Closing Date.

(g) No member of the Company Group has entered into any “listed transaction” as defined in Treas. Reg. Section 1.6011-4(b)(2).

(h) The Company and each of its Subsidiaries has withheld and paid all material Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

(i) There is not currently in effect an extension of time within which any member of the Company Group is required to file any Tax Return (including, without limitation, any information return) which has yet to filed with the relevant Governmental Authority.

(j) No member of the Company Group has requested or received any ruling from any Governmental Authority, or signed any binding agreement with any Governmental Authority (including, without limitation, any advance pricing agreement), that would impact the amount of Taxes due from any member of the Company Group or Buyer after the date hereof.

(k) No member of the Company Group is a party to any joint venture or partnership.

(l) Except as expressly provided in paragraphs (f) and (j) of this Section 3.11 , the representations of the Company made in this Section 3.11 refer only to the past activities of the Company Group and are not intended to serve as representations to, or a guarantee of, nor can they be relied upon with respect to, Taxes attributable to any Tax periods (or portions thereof) beginning after, or Tax positions taken after, the Closing Date.

Section 3.12. Real Property; Title to and Condition of Property.

(a) No member of the Company Group owns any real property.

(b) Section   3.12(b)(i) of the Disclosure Schedule sets forth a list of all leases and subleases of real property used in the business of the Company Group under which any member of the Company Group or an employee thereof is a lessee or sublessee and all amendments thereto and assignments thereof (the “ Real Property Leases ”). The real property subject to the Real Property Leases is hereinafter referred to as the “ Leased Real Property .” A member of the Company Group or an employee thereof is in possession of the Leased Real Property. True and correct copies of the Real Property Leases have been made available to Buyer prior to the date hereof. To the Company’s Knowledge, no member of the Company

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Group (including the tenant under each of the Real Property Leases set forth in Section 3.12(b)(ii) of the Disclosure Schedule (the “ US Real Property Leases ,” and the Leased Real Property subject thereto, the “ US Leased Real Property ”)) is subject to a claim materially adverse to its rights thereunder, including its rights to continued occupation, possession and use of any US Leased Real Property. No member of the Company Group (including the tenant under each of the US Real Property Leases) and, to the Company’s Knowledge, no landlord is in default under any material provision of any US Real Property Lease. All structures and improvements built by a member of the Company Group (including the tenant under each of the US Real Property Leases) on the real property subject to the Real Property Leases were built, and have been maintained in all material respects, in accordance with applicable Laws. The US Leased Real Property is all of the real property necessary for the conduct of the businesses of the Company Group as conducted on the date hereof. To the Company’s Knowledge, the landlord under the New Jersey Lease does not owe the tenant thereunder any reimbursements or other sums pursuant to the New Jersey Lease.

(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company Group, to the Company’s Knowledge, (i) the members of the Company Group have good and valid title to, or a valid leasehold interest in or other valid contractual right to use, the real and personal tangible property reasonably necessary for the conduct of the business of the Company Group as currently conducted on the date hereof, free and clear of all Liens, except for Permitted Liens and (ii) the personal tangible property of the Company Group reasonably necessary to the operation of the business of the Company Group as conducted on the date hereof is in good operating condition and repair, subject to normal wear and tear.

(d) All base rent, additional rent and other sums due and payable under each of the leases set forth in Section 3.12(d) of the Disclosure Schedule has been paid through the date hereof and the applicable tenant thereunder has not taken any affirmative action with the intent to terminate such lease.

Section 3.13. Intellectual Property.

(a) Section 3.13(a) of the Disclosure Schedule sets forth a list of (i) all patents, trademarks, service marks, trade names and copyrights (including, as applicable for each item listed, the record owner, the jurisdiction, the application and registration numbers, the filing date and the issuance or registration date) registered or applied for in the name of any member of the Company Group with the United States Patent and Trademark Office, the United States Copyright Office or corresponding state or international Governmental Authorities and (ii) all internet domain names registered in the name of any member of the Company Group (including, for each item listed, the registrar and the expiration date). Each such registration or application has been maintained effective by all requisite filings, renewals and payments, and remains in full force and effect. Except as indicated therein, none of the Intellectual Property identified in Section 3.13(a) of the Disclosure Schedule has been abandoned or cancelled. Immediately subsequent to the Closing, the Intellectual Property owned by the Company Group will be owned by such member of the Company Group on identical terms and conditions as existed immediately prior to the Closing.

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(b) Except as disclosed in Section 3.13(b) of the Disclosure Schedule, (i) the applicable member of the Company Group, as identified in Section 3.13(a) of the Disclosure Schedule, is the sole owner of all rights, title and interest in and to the Intellectual Property identified in Section 3.13(a) of the Disclosure Schedule , free and clear of any Lien; (ii) the Company Group has not granted to any Person, and no other Person has, any license, option or other rights in or to such Intellectual Property; (iii) the Company Group has not received notice of any pending or threatened action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand that challenges the legality, validity, enforceability, registrations, use or ownership of such Intellectual Property, other than office actions in connection with the prosecution of applications for the registration or issuance of such Intellectual Property, (iv) the Company Group is not a party to any co-existence, consent, settlement or similar agreements, limiting or modifying the rights of the Company Group in such Intellectual Property in North America, or to the Company’s Knowledge, anywhere else in the world, (v) since November 5, 2004, the Company Group has neither brought any Action against any Person, nor provided notice to any Person (including by cease and desist letters), that such Person is infringing such Intellectual Property, and the Company Group has no Knowledge that any Person is infringing Property or intends to infringe such Intellectual and (vi) to the Company’s Knowledge, there are no Persons that use or claim any right to use any name or mark in the United States or Canada that creates a likelihood of confusion with any of the Intellectual Property identified in Section 3.13(a) of the Disclosure Schedule.

(c) To the Company’s Knowledge, the Specified Parties have not asserted that (i) they retain any right, title or interest in any Intellectual Property identified in Section 3.13(a) of the Disclosure Schedule or (ii) they have any rights to use the ANDREW MARC or MARC NEW YORK trademarks or any trademark confusingly similar thereto (the “ Specified Marks ”), in any jurisdiction throughout the world.

(d) To the Company’s Knowledge, the Company Group is not infringing any Intellectual Property rights of any Person. During the past two (2) years (or earlier if not resolved), the Company Group has received no notice alleging that any member of the Company Group has infringed the Intellectual Property rights of any Person, including from the Specified Parties or their representatives or agents.

(e) The Company Group has in place commercially reasonable measures, consistent with industry standards (including entering into appropriate confidentiality, nondisclosure, and noncompete agreements), to reasonably safeguard and maintain the secrecy and confidentiality of the trade secrets included in its Intellectual Property. The Company Group has no Knowledge of any material breach of such confidentiality, nondisclosure, or noncompete agreements by any party thereto.

(f) The Company Group’s use and dissemination of any and all data and information in connection with use of its web sites by users is in compliance with all applicable privacy policies, terms of use and Laws. The transactions contemplated hereunder will not violate the Company Group’s policies, terms of use, or Laws relating to the use, dissemination or transfer of such data or information.

Section 3.14. Environmental Ma