FRANCHISE AGREEMENT

between

"CORTEFIEL, S.A"

and

" TOMASEVIC d.o.o”

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On the one hand,

“CORTEFIEL, S.A.", a legally established company with its registered office in Madrid at Avenida del Llano Castellano number 51 and holder of Tax Identification Number A-08099459

Represented by Mr. Marcos Gómez García and Mr. Antonio González Cortezón, resident for professional purposes in Madrid at Avenida del Llano Castellano number 51 and holder of Spanish National Identification Number, respectively, nº 1.117.227-W and 5.375.787-C.

Hereinafter referred to as the Franchiser.

and

On the other hand,

“TOMASEVIC d.o.o ” legally established commercial company with its registered office in Sarajevo at Vojvode Radomira Putnika number 38 holder of Tax Identification Number 4400509140009……………………………………. Represented by Jovan Šilj………………………. Director, resident for professional purposes in the above address.

Hereinafter referred to as the Franchisee.

The parties to the present contract expressly recognize the other party's sufficient capacity to execute the present contract and oblige themselves thereby in their respective representations, hereby

DECLARE

1. That the Franchiser is a company devoted to the marketing of clothing apparel and is the registered owner, in several countries, of the "SPRINGFIELD" trademark, with the ability to use it in as a distinctive trade mark in garments and outfitting. The Franchiser has developed a good reputation franchised network.

2. The Franchiser is the owner in the Registry of Bosnia-Herzegovina of the following trademarks (hereinafter the Trademarks):

International Trademark SPRINGFIELD Nº 842.865

3. That the Franchisee is a company in the business as distributor and franchisee of goods, wholesale and retail, among others.

4. That the Franchisee has been selected by the Franchiser to join the SPRINGFIELD Franchise network, and the Franchisee, after receiving the required legal information, has expressed his interest in joining the SPRINGFIELD network

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through the signature of a Franchise Agreement.5. The Franchisee expressly recognizes that there is no national rule in Bosnia which

prevails and/or is opposite to any of the terms and conditions of the Franchise Agreement.

STIPULATIONS

FIRST. DEFINITIONS.

When used in this Agreement, each of the terms set forth in this Clause 1 shall have the meaning indicated:

1.1 “Franchisee Group Company" will mean any firm, corporation, partnership, trust or other juridical entity, now or hereafter existing:

a. Which owns or controls, directly or indirectly, at least the fifty percent (50%) of the shares, or of the voting rights with respect to the election of member of the Board of Directors, or such other persons authorized by law to perform functions analogous to those of a corporate member of the Board of Directors, of such party.

b. Of which at least the fifty percent (50%) of the shares, or of the voting rights with respect to the election of member of the Board of Directors, or such other persons authorized by law to perform functions analogous to those of a corporate member of the Board of Directors, is owned or controlled, directly or indirectly, by such party; or

c. Of which at least the fifty percent (50%) of the shares, or of the voting rights with respect to the election of member of the Board of Director, or such other persons authorized by law to perform functions analogous to those of a corporate member of the Board of Directors, is owned or controlled, directly or indirectly, by any Company as defined in this Clause.

1.2 “SPRINGFIELD know-how” means the whole of the technical, organizational, marketing, operations and management and other confidential business information to be provided to Franchisee in anticipation of and pursuant to this Agreement.

1.3 “SPRINGFIELD Intellectual Property” means all of SPRINGFIELD copyrights, trade marks (whether registered or unregistered), trade name, domain names, moral rights, publicity and portrait rights, patent rights, know how, rights in confidential information, and all other related rights in intellectual property rights of any nature.

1.4 “SPRINGFIELD products” will mean such models of men and women elements, such as garments, apparel, footwear and accessories as bear the Trademarks with the authority of the Franchiser and are identifies by the Franchiser each season to be made available to Franchisee for sale.

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1.5 “SPRINGFIELD store” will mean:

- Stand Alone

Independent commercial SPRINGFIELD stores located in shopping streets or malls, with good frontage, prestigious, well communicated and attracting large crowds of people, unless otherwise agreed upon both parties, distributed on a single SPRINGFIELD store, with availability of good stand alone-fronts and windows, and with fulfilment of all legal requirements demanded for the SPRINGFIELD store to operate under the rules of the Franchisee's country.

Sizes of the SPRINGFIELD store:Only men: With at least 150 m2Only women: With at least 80m2Men and women: With at least 220m2Storage: 15% of sales surface in every case

1.6 “Trademarks” will mean the SPRINGFIELD and SPF name, and any other trademarks designated by the Franchiser in its sole discretion.

SECOND: PURPOSE OF THE CONTRACT.

The Franchiser, registered owner of the Trademark and also of the initials, logotypes, designs and artwork referring to the said Trademarks, hereby grants the Franchisee the right to distribute the SPRINGFIELD products in the SPRINGFILED store opened in Bijeljina Tom SC, Shopping Center TOM, Sremska bb, 76300 Bijeljina on May 2010, under the aforementioned Trademarks.

THIRD: OBLIGATIONS OF THE PARTIES.

3.1 The Franchisee shall have the following obligations:

a) To apply the commercial methods of SPRINGFIELD, to keep the name and the uniform identity of the SPRINGFIELD network, such as: promotions policy, image and concept of the trademark, systems of labelling, and mainly the price structure and the value of the concept (price/quality relationship when compares with its main national and international competitors).

b) To sell the SPRINGFIELD products solely by retail in commercial SPRINGFIELD stores, which belong to the Franchisee or are, leased by the same.

b1) Alterations and maintenance of the SPRINGFIELD store

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The Franchisee is obliged to proceed, following the Franchiser’s instructions, to change the image of each SPRINGFIELD store after a period of five years, from the date of its opening.

The Franchisee will conduct the necessary maintenance works to keep every SPRINGFIELD store in proper conditions in terms of tidiness, image and functioning, at least, the following elements: furniture, air conditioning and electric installation. Likewise the Franchisee will conduct the polishing of the parquet and the stone of the floor, removing the damaged cotton canvas, as well as carrying out any needed repair.

Any of the Franchiser approvals and/or authorizations mentioned in the present clause must be issued in written. c) To use in the said SPRINGFIELD store the distinctive Trademarks on the labels, leaflets, brochures, logotypes, boxes, packaging and all other elements related there with, in accordance with the designs authorized by the Franchiser.

d) To sell in the SPRINGFIELD store, exclusively and solely clothing and other products bearing the Trademarks.

e) Not to use any trademark, logotype or distinctive symbol other than those of the Trademark, within a SPRINGFIELD store.

f) To keep the said SPRINGFIELD store supplied with the stock levels of SPRINGFIELD products as required by the Franchiser in order to satisfy the demand for the product and to execute the minimum orders according to the sales budget approved by the Franchiser.

g) To hire the following persons:

g1) To hire a Visual Merchandiser to be in charged of the window-dressing and merchandising of the SPRINGFIELD stores.

g2) To hire a Store Manager. Such SPRINGFIELD store Manager will be responsible for, without limitation, keeping SPRINGFIELD informed of the condition of the SPRINGFIELD store, introducing and maintaining SPRINGFIELD franchise standards and SPRINGFIELD sales techniques, and supervising and ensuring overall fulfilment of all obligations of Franchisee under this Agreement.

g3) To have in enough number of sales persons to satisfy the SPRINGFIELD store necessities.

g4)The Franchisee will provide each sales person as per uniform and two

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ensembles per season.

g5) The Franchisee will train the personnel according to the training calendars and systems required by the Franchiser.

The Franchisee undertakes to assure that the hired personnel fulfil the criteria and profile required by the Franchiser.

h) To comply with the general and periodical window-dressing and merchandising indications sent by the Franchiser – Visual Merchandising Guidelines. The Franchisee will conduct the necessary maintenance works to keep every shop-window in proper conditions in terms of tidiness, image and functioning.

In case of any change of the shop window and/ or visual merchandising, the Franchisee will send to the Franchiser photos through email of both each shop-window and inside of the SPRINGFIELD store following the Franchiser indications.

i) To maintain the highest possible level of prestige and image for the trade mark assigned and to maintain adequate consistency with the level of prestige associated with the various SPRINGFIELD stores offering SPRINGFIELD products for sale to the public.

j) To subscribe a multi risk insurance policy for all the SPRINGFIELD store.

4.2 The following are the obligations of the Franchiser:

a) To transmit to the Franchisee the Franchiser’s know-how concerning, among others, product, training if needed (customer service and organization), personnel management and merchandising. The Franchiser will appoint, to be in contact with the Franchisee, a Franchisee Coordinator as well as direct contact in each Franchiser headquarters department.

The Franchiser will set up a training program to be executed in Spain, for the Franchisee’s key management. Such training will be held yearly at the time of the Convention. The Franchisee will assume the travel and accommodation costs necessary for executing such training program.

b) To keep in effective force the trademark which is the object of the present assignment of exclusive rights of use. For that purpose, the Franchiser shall exercise close vigilance of the Trademark's registration and shall undertake whatever suits and legal or administrative actions may be necessary to protect the trademark from attacks, imitations (whether intentional or otherwise) which third parties may make or attempt to make. Furthermore, the Franchisee is hereby empowered to effect such claims on its own in accordance with the provisions of Stipulation 8.

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c) The Franchiser will provide the Franchisee with periodical dossiers, which shall include its window-dressing and merchandising recommendations.

d) The Franchiser will conduct Conventions for the presentation of its key styles.

The Convention will be conducted in the English language, and there will be no additional charge if training is conducted during the convention, but the Franchisee will be responsible for the food, travel, and lodging expenses of its representatives at the convention.

e) The Franchisee may require from the Franchiser, in the Territory of the Franchisee, to conduct assistance, training or any other kind of service included in the object of the Franchise Contract. All the charges, except time costs, caused by it will be for the account of the Franchisee (unless this assistance requires for the Franchiser to temporary substitute an employee in the Company).

f) According to what it is stated in Stipulation Fifth, the Franchiser will provide the Franchisee with advertisement advice and will jointly establish with the Franchisee the advertising campaigns.

g) To apply to the Franchisee the bonus policy as per Annex nº 1.

FIFTH: COMMUNICATION: ADVERTISING, PROMOTION AND PUBLIC RELATIONS

5.1 All material and documentation referring to general advertising and the SPRINGFIELD corporate image (catalogues, POS material, etc), shall be supplied by the Franchiser and furnished in the English language, with the expenses being for the account of the Franchisee. The cost must be paid in a period of 30 days from the invoice date.

5.2 All local advertising and/or promotion carried out with the SPRINGFIELD name, regardless of the format and whether oral, printed or written, must be submitted for prior approval by the Franchiser, who shall not withhold such permission without justification. The Franchiser will provide the Franchisee all the graphic material necessary to produce the advertising actions agreed by both parties.

During each season, the Franchisee shall allocate a budget of not less than 3% of the net sales of SPRINGFIELD budgeted for the financial year for advertising and promotion campaigns. This budget shall be destined for local advertising, promotions, and public relations activities approved by the Franchiser and carried out by the Franchisee.

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Twice per year (November and May) the Franchisee will send to the Franchiser a marketing plan proposal which will be approved by the Franchiser within a period of 15 days.

Each three months, the Franchisee will send to the Franchiser a report, including sample material and documentation, which must justify the expenses realized in local advertising, promotions, and public relations activities included in the marketing plan. The report must follow the Franchiser’s requirements as per the SPRINGFIELD Operations Manual (which will be provided to the Franchisee). The excess or defect resulting of these expenses will be regularised in the budget for the next year.

5.3 The Franchisee undertakes to use its best efforts to get that SPRINGFIELD be a known trademark in the Territory, for this purpose the Franchisee undertakes to name the SPRINGFIELD trademark over any other circumstances in all SPRINGFIELD advertising, promotions, and public relations activities.

SIXTH: TERM.

The term of duration of the present contract shall be FIVE (5) years counted from the date of its signing, unless otherwise terminated prior thereto pursuant to Clause Eleventh or otherwise under the provisions of this Agreement. Should the Franchisee unilaterally decide to terminate the present contract before the period set out without a previous six months notice to the Franchiser, the Franchisee shall be obliged to pay the Franchiser a sum amounting to 10% of the turnover of SPRINGFIELD products sold in the whole Territory mentioned in Clause 2, in the immediately preceding financial year in the form of compensation for the damages caused to the SPRINGFIELD image by the early closure of the SPRINGFIELD store.

The parties will meet nine (9) months prior to the expiration of the TERM to review Franchisee’s overall business performance and discuss an extension of the initial Term for another FIVE (5) year period. However, such renewal will only be effective if and when the following conditions are met:

a) Franchisee has complied, within any applicable cure periods, in SPRINGFIELD sole but reasonable discretion, with all material terms and conditions of this Agreement; and

b) There is no outstanding breach; andc) Franchisee has met, acting in good faith and through bona fide sales, throughout the

Term the minimum purchase requirements and other performance goals agreed between the parties; and

d) Execution of a new Franchise Agreement in the standard form then used by the Franchiser, which new agreement may differ from the terms of this Agreement; and

e) Neither party has notified the other in writing not less than six 6 prior to the expiration of

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the Term of its decision not to renew the Agreement.

In the event of any extension of the Term the Franchisee undertakes that its employees concerned with the operation of the SPRINGFIELD store complete any re-training or refresher training at such time and at such expense as reasonably requested by SPRINGFIELD.

SEVENTH: CONTROL.

7.1 The Franchisee must keep an exact record of the transactions made under the scope of the present contract and must supply the Franchiser with such information, as the latter may consider appropriate and in such manner as may be requested.

7.2 The Franchisee will install its own computer system (software and hardware) required for the right operative working of each SPRINGFIELD store and to guarantee the following:

a) To satisfy the operational capacity of the store in the activity and management cycle.

b) To offer a client service based on the quality standards of the Franchiser.

c) To register the information according to Annex nº 2.d) To transmit the information to the Franchiser on a daily basis.

7.3 The Franchiser may conduct a physical inspection of the SPRINGFIELD stores and also carry out an examination of the accounting books and records at any time during the hours of opening to the public after giving prior written notice to the Franchisee.

7.4 The Area Manager and the Visual Merchandiser may conduct at any time and without prior notice a physical inspection of the SPRINGFIELD stores

7.5 The Franchiser, at it’s own cost, may appoint an auditor of its choice to examine the volume of sales achieved with the Trademarks.

EIGTH: SPRINGFIELD INTELLECTUAL PROPERTY AND TRADE MARK FALSIFICATION AND INFRINGEMENTS.

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8.1 Notwithstanding any other clause in this Agreement, Franchisee will not: (i) use any of the Trademarks as part of the corporate or business name of Franchisee; (ii) use any of the Trademarks in a manner liable to invalidate the registration of such trademark or authorize any third party to do the same , (iii) use any of the Trademarks in conjunction with any other Trademark; (iv) use or register in the Territory during the Term and thereafter any trademarks that are confusingly similar to any of the Trademarks.

8.2 Should there be any cases of falsification or infringements of the Trademarks within the Territory to which the present franchise concession refers, the Franchisee must immediately inform the Franchiser of the same.

With regard to the possible suits or complaints arising, three possibilities are considered:

a) If the Franchiser wishes to proceed alone with the suit or complaint, the Franchiser shall bear the corresponding expenses and shall be the sole beneficiary of any resulting compensation.

b) If both parties agree to pursue the case or complaint together, the Franchiser shall take charge of the necessary steps. The expenses of the suit or complaint shall be shared 50% each for both parties. Each of the parties shall receive 50% of the compensations arising out of such suit or complaint.

c) Should the Franchiser opt to waive the right to legal action for counterfeiting, the Franchisee may not undertake such suit or complaint on its own account without first obtaining the express consent of the Franchiser. In this case, the Franchisee shall bear the corresponding expenses of the suit or complaint and shall be the sole beneficiary of any resulting compensation.

NINETH: PURCHASE.

9.1 OBJECT

9.1.1 The Franchiser hereby undertakes to sell the Franchisee directly and/or through the authorized suppliers of the SPRINGFIELD Trademarks1, the garments and products sufficiently representing the entire SPRINGFIELD range and adapted to the principles of style and quality for which the trademarks are well known. The Franchisee hereby undertakes to purchase the same solely from the Franchiser and/or authorized suppliers2.

1

2 Actually: Cortefiel Commercial, SA (Swiss company) , Eurofiel Confección, SA (Spanish company) and Cortix d.o.o Beograd (Serbian company).

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The SPRINGFIELD products will be given with fulfilment of the legal requirements to allow their entrance in the Territory. The Franchisee undertakes to inform the Franchiser with regards to such legal requirements.

Notwithstanding the preceding provisions, the Franchisee may obtain the SPRINGFIELD products included in the present franchise contract from other Franchisees.

9.1.2 Buying procedure:

a) Men products: The purchase is made through the Convention and email or FTP.

a1. Convention

The Franchiser will prepare a Convention per season where the Franchisee will make the purchase of the following season (ie: on middle Spring-Summer, the purchase of the Spring Summer next year, on middle Fall/Winter, the purchase of Fall Winter next year).

Before the Convention and within the period notified by the Franchiser, the Franchisee must send a budget per store and season according to the document to be provided by the Franchiser. The budget must include:

- Purchase with SPF rate- Net sales- Mix sales- Size breakdown- Qualitative questionnaire

Both parties will confirm the budget within a maximum period which will end one week before the starting of the Convention. The confirmation must be done through an email including the approval to the budget which should be attached to the email.

The Franchisee will select the models, colours and sizes as per the samples and/or design sheet of the SPRINGFIELD products.

Once the order is included in the Franchiser system, such order will be considered as firm order and it will not be subject to changes, additional discounts, cancellations o returns.

a2. Email or FTP

One or several times per season, the Franchiser will send to the Franchisee a call for

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purchase through:

- order sheet- images of design products- design sheet

The Franchisee must complete the order and return it to the Franchiser in the period required through email or FTP (the Franchisee must notify the Franchiser in advance that the file is on FTP). Once the order is completed and sent, such order will be considered as firm order and it will not be subject to changes, additional discounts, cancellation o returns.

The total of the purchase at the end of the season must be the same than it was included in the budget approved at the beginning of the season.

b) Women products: The Franchiser will ask to the Franchisee for a budget per store and per season for the purchase of the following season (ie: on middle Spring-Summer, the budget of the Spring Summer next year, on middle Fall/Winter, the budget of Fall Winter next year), to be sent according to the document to be provided by the Franchiser, through an email. The budget must include:

- Purchase with SPF rate- Net sales- Mix sales- Size breakdown - Qualitative questionnaire

The Franchisee will send the budget in a maximum period of 15 days from the Franchiser requirement. Once the budget is received both parties will confirm it within a maximum period of 15 days. Once is confirmed, the budget will be considered as firm order and it will not be subject to changes, additional discounts, cancellation o returns.

The confirmation must be done through an email including the approval to the budget which should be attached to the email.

The Franchiser could prepare trend presentations to show the women collection of the next seasons. If the Franchisee does not send the budget or does not confirm it, the Franchiser will prepare the orders according to the transmitted sales and/or business plan attached to the Contract.

c) SPRINGFIELD material (any other material different to SPRINGFIELD products such as visual merchandising, fixtures and fittings): The Franchiser and/ or the authorized supplier will deliver such material on an ex-works basis and will be paid by advance payment, according to the Franchiser instructions.

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9.1.3 Orders will be delivered CIP Skopje (for SPRINGFIELD products) with the terms and prices previously agreed between the parties.

The Franchisee undertakes to accept any change in the Incoterm proposed by the Franchiser along the contract (10.1.2 c) and 10.1.3).

9.1.4. Defective products

The Franchisee undertakes to accept a level of minor defects in 1% (yearly invoices) of each option (style/colour).

Anyway the Franchisee should inform the Franchisor of each minor defect by sending samples or photographs within 14 working days from the date of the receipt of each option.

Any claim concerning major defective styles shall be notified by the Franchisee by mail (pictures or samples) according to Annex nº 3, within 14 working days from the date of receipt of the style, unless the defect was not apparent on reasonable inspection, in this case it shall be notified within 30 working days from the date of receipt of each option.

The compensatory actions will be analysed case by case consisting on specific discounts, credit notes, later reductions on new styles, etc according to the quantity and seriousness of the defects.

9.1.5 The Franchisee shall pay in advance SS11 season. From FW11 the Franchisee shall guarantee payment 60 days after date of invoice by means of an irrevocable stand by letter of credit (it is attached as Annex nº 4 a pattern of such letter of credit), for all purchases of SPRINGFIELD products for the Territory. For this purpose, it is expressly noted that:

a) The date of invoicing will coincide with the date of delivery of the goods as per the Incoterm established in the Agreement.3 b) The stand-by LC should be advised through and available with one of the following banks previous the Franchiser requirement: Banco Santander (BSCHESMM or any other entity appointed by the Franchiser.

c) The issuer of the SBLC should be a bank which must be approved by the Franchiser.

d) The Franchiser will advise the name of the beneficiary of the SBLC. The Franchiser

3 The Franchisee recognizes the Franchiser a deviation between 10 and 15 days with regards to the invoicing date.

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reserves its right to modify the company beneficiary of the SBLC along the contract and with previous written notice to the Franchisee. The Franchisee agrees that the sole beneficiary of SBLC may be Eurofiel Confección, SA, Cortefiel Commercial, SA, Cortix d.o.o Beograd or a bank designated by the Franchiser under a factoring agreement as the case may be.

e) The Franchisee undertakes to open the stand by letter of credit in a period of one month from the Franchiser’s notification related to amounts and conditions.

In case of delay in the opening of the SBLC due to reasons attributable to the Franchisee, the Franchisee will be obliged to:

- pay in advance the SPRINGFIELD products and SPRINGFIELD material which are pending to be sent, and

- in case of non payment to pay the cost of the SPRINGFIELD Products and SPRINGFIELD material storage.

9.2 RETAIL SALES PRICES

In order to maintain a homogeneous image for the Trademarks, the Franchiser shall notify to the Franchisee at the beginning of each season of the indicative retail price list and agree with the Franchisee the maximum retail price list that the Franchisee is authorised to apply.

9.3 MINIMUM ORDERS

The Franchisee hereby undertakes to place the minimum order established in Annex nº 5.

Once the term of the present contract has terminated, and should there be any extension of the same, the minimum order values referred to in the present paragraph 10.3 shall be reviewed in the light of the results obtained in preceding periods and shall be agreed in writing between the parties.

TENTH: OBLIGATION OF CONFIDENTIALITY. All confidential information as well as the SPRINGFIELD commercial experience supplied to the Franchisee by the Franchiser on the basis of the fulfilment of the present contract is supplied to assist the Franchisee to know the SPRINGFIELD Products and will only be used by the Franchisee for this purpose.

The Franchiser and The Franchisee shall keep the confidential information secret and shall be obliged not to divulge the other party's know-how to third parties during the validity of the present contract and following its termination unless the confidential information and the commercial

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experience have become public knowledge without such public knowledge having been due to a breach of contract by the other party.

ELEVENTH: CAUSES OF TERMINATION

11.1 Franchiser will be entitled to terminate this Agreement, in the event of breach by Franchisee of its obligation under this Agreement, if the Franchisee has not cured such breach within a period of thirty (30) days after having received from Franchiser a notice to cure such breach, unless the causes for such breach are not attributable to the Franchisee.

Termination of this Agreement pursuant to this paragraph 11.1 will be effective thirty (30) days after receipt by Franchisee of said notice, provided Franchisee’s failure to cure such breach to SPRINGFIELD full satisfaction still prevails as at the date of termination. Any and all indemnification to which Franchisee could be entitled in case of termination pursuant to this clause 11.1 is excluded.

11.2 Franchiser will be entitled to terminate this Agreement with a previous ninety days notice to the Franchisee, if:

a) The continued operation of the SPRINGFIELD store is not economically viable;b) Franchisee provides the Franchiser with false or deceitful information, or omits to

notify the Franchiser of facts rendering representations or information misleading, false or deceptive;

c) Franchisee (including its directors and officers) is convicted of a criminal offence or involved in any behaviour or operation that could adversely affect the good name of the Franchiser;

d) Closing of the SPRINGFIELD stores pursuant to an administrative or judicial decision sanctioning a violation by Franchisee with respect to such SPRINGFIELD stores;

e) Violation of Clauses 4.1 j), 8, 9.3 and 10 of this Agreement, unless violation of clauses 4.1 j) and 9.3 are due to force majeure;

f) Non-payment of any fees and/or costs due by the Franchisee to the Franchiser within sixty (60) days after having received notice thereof;

g) Repeat of contractual breaches (others than those set out in Clause 11.2) which have been the subject of notification by SPRINGFIELD to Franchisee pursuant to clause 11.1, provided any such repeat occurs two (2) times in one year or five (5) times during the Term of this Agreement.

h) The ownership of more than fifty percent (50%) of the voting rights of The Franchisee is acquired by a third Company other than a Group Company;

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Franchiser will be entitled to claim from the Franchisee compensation for the losses and damages suffered from the breaches committed by the Franchisee and termination of this Agreement pursuant to this clause 11.2. Any and all indemnification to which Franchisee could be entitled in case of termination pursuant to this clause 11.2 is excluded.

11.3 Franchisee will be entitled to terminate this Agreement in the event of breach by Franchiser of its obligation under this Agreement, if the Franchiser has not cured such breach within a period of thirty (30) days after having received from Franchisee a notice to cure such breach, unless the causes for such breach are not attributable to the Franchiser.

Termination of this Agreement will be effective thirty (30) days after receipt by Franchiser of a notice of Franchisee’s decision to exercise its right to terminate the Agreement pursuant to this clause 11.3, provided Franchiser’s failure to cure such breach still prevails as at the date of termination. Franchisee will be entitled to claim from the Franchiser compensation for the losses and damages suffered from the breaches committed by the Franchiser and termination of this Agreement.

For the contract to be terminated in virtue of any of the causes listed above, it shall be sufficient to provide due notification by registered mail with acknowledgement of receipt. Within the term of twenty (20) days following such notification of termination, the Franchisee shall supply the Franchiser with a report of the amount and description of all the SPRINGFIELD products in possession of the Franchisee and the Franchisee is entitled to proceed with the sale of such products during the term of ninety (90) days.

Once the said term has expired, the Franchisee must immediately cease to exercise the rights licensed in this Agreement, suspend the marketing and advertising of the products included in the SPRINGFIELD trademark and shall no longer be entitled to use the trademark or its identifying marks, which is the object of the present contract nor any imitation, translation or variation of the same. In particular, Franchisee will immediately remove all notices, signs and other materials that have been provided to Franchisee to create the common identity from the SPRINGFIELD store and return the same to the Franchiser.

Franchisee will return to Franchiser all originals and copies of the SPRINGFIELD know-how, graphic material (i.e: merchandising dossiers, product dossiers, style books, concept dossier, ……) and other written materials supplied by the Franchiser under this Agreement.

Should the Franchisee retain any stock of the SPRINGFIELD trademark following the expiration of the said period of 90 days, the Franchiser will have the right (but not the obligation) to re-purchase any unsold SPRINGFIELD products from the Franchisee. Such SPRINGFIELD products will be sold to the Franchiser at cost price minus a discount of 50% to cover the depreciation of the merchandise, with all expenses arising out of the sale of such products being for the account of the Franchisee. Any SPRINGFIELD products not re-purchased by the Franchiser may be sold by Franchisee through its regular business operation. These SPRINGFIELD products must be sent with the packing list.

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However, Franchisee will use reasonable efforts to sell-off such SPRINGFIELD products on terms and conditions consistent with those applied during the term of this Agreement and will take no action, which could devalue or disparage the SPRINGFIELD products.

The Franchiser will have the right (but not the obligation) to purchase Franchisee's furniture and other goods that are distinctive for the common identity of the franchised network, at book value, once an audit be realised; or to require that the Franchisee does not use the furniture and decorative elements in the SPRINGFIELD store, during one year after the termination of this Agreement.

The Franchisee undertakes to respect the fulfilment of the pending obligations such us to receive and pay the SPRINGFIELD Products and SPRINGFIELD material ordered before the Termination Agreement.

Should the Franchisee, after receiving due notification of the termination of the present contract or after its expiration in terms of Stipulation Fifth and after the expiration of the term of 90 days, continue to use the SPRINGFIELD trademark, the Franchisee shall be obliged to pay the Franchiser a compensation in the amount of THREE HUNDRED € (300) for the SPRINGFIELD store and for each day of use to be counted from the notification of the termination or expiration of the validity of the contract until the definitive cessation in the use of the trademark.

Notwithstanding the preceding provision, the Franchiser reserves the right to exercise whatever actions are deemed appropriate with a view to obtaining satisfaction for the damages caused by such behaviour.

TWELTH: SUNDRY

12.1 Waiver

The express or implicit waiving of any of the rights inherent in the present contract by either of the parties or the refusal to exercise any action arising out of a breach by the other party shall not constitute nor be deemed to constitute a waiver of any other right inherent in the present contract or as a refusal to exercise any action arising out of a breach by the other party, whether or not similar in nature to the former case.

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12.2 Notifications

Except where specifically stipulated otherwise in the present contract, all notifications, requests, claims and other communications between the parties as required or permitted by the present contract must be in writing and in the English language and must be sent to the address of the parties as indicated in the heading of the present contract or to such other address as the party concerned has notified to the other party by means of a messenger service or fax, with subsequent confirmation by registered mail with acknowledgement of receipt. Any notification or communication shall be deemed to have been effected at the moment of its reception.

12.3 Language

The language of the present contract shall be exclusively English.

12.4 Invalidity

Should any part of the present contract be or be declared null and void, ineffective or impracticable or if any unintentional legal vacuum arises, the validity of the remaining stipulations of the present contract shall not be affected. Instead of the stipulation declared null and void, ineffective or impracticable and in order to fill any unintentional legal vacuum requiring regulation, such valid legal stipulation which comes as close as possible to what the parties legally and commercially desired or would have desired in accordance with the meaning and aims of the present contract if they had considered the matter shall be applicable.

12.5 Modifications

All modifications or additions to the present contract (including the present stipulation) must be made in writing to become effective unless a more rigorous method is prescribed in law.

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12.6 Taxes

If, in accordance with any applicable law, any withholding tax is imposed an any payment which Franchisee is obliged to make to the Franchiser under this Agreement, Franchisee will deduct the sum of tax from such payment and pay it to the competent tax authorities. Within sixty (60) days from such deduction and payment, Franchisee will provide the Franchiser with a receipt, voucher or other document (as well as an English translation thereof), which evidences receipt by the relevant tax authorities of payment of any tax due. Additionally, Franchisee will do all such other things and take such other steps as may be reasonably required to enable the Franchiser to obtain, according to the Spanish Law, any tax credit which may be available to it.

12.7 Applicable Law / Arbitration System

12.7.1 The present contract shall be governed by Spanish law.

12.7.2 Should any dispute arise between the parties regarding the interpretation or application of the present contract, the parties hereto shall attempt to reach mutual agreement. Should such agreement not be forthcoming, all disputes arising in connection with the fulfilment or termination of the present contract shall be submitted by the parties Any disputes that arise between the contracting parties with regard to the interpretation, performance or breach of this contract shall be submitted to the competence of the Courts and Tribunals of the town of Madrid; the parties expressly waive and relinquish any other forum which they may otherwise be entitled to under law.

12.8 Conduct Code

The Franchisee puts on record that it acknowledges the Code of Conduct, enclosed as Annex nº 6, and share the same principles contained in it.

The Agreement signed on April 1st 2011 supplements this Franchise Agreement.

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In witness of their agreement and acceptance of the foregoing, the parties hereto sign the present document.

THE FRANCHISER THE FRANCHISEEIn Madrid,

Mr. Marcos Gómez García Mr.

Mr. Antonio González Cortezón

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