STEVEN MADDEN, LTD. (Form: 10-Q, Received: 11/09/2010 15:10:19)

Exhibit A

EXECUTION VERSION

EARN-OUT AGREEMENT

by and among

STEVEN MADDEN, LTD.,

BIG BUDDHA, INC.,

and

JEREMY BASSAN

Dated as of February 10, 2010

EARN-OUT AGREEMENT

This EARN-OUT AGREEMENT (this “Agreement”), dated as of February 10, 2010 and effective as of the Closing Date (as defined below), if one occurs, is entered into by and among Steven Madden, Ltd., a Delaware corporation (“Purchaser”), Jeremy Bassan (“Seller”) and Big Buddha, Inc., a California corporation (the “Company”).

RECITALS

WHEREAS, concurrently herewith, Seller and Purchaser are entering into that certain Stock Purchase Agreement, dated as of the date hereof (as amended from time to time in accordance with its terms, the “Stock Purchase Agreement”), pursuant to which Purchaser shall purchase all of the issued and outstanding shares of capital stock of the Company from Seller; and

WHEREAS, pursuant to Section 2.2(a) of the Stock Purchase Agreement, Seller shall be entitled to receive certain earn-out purchase price payments, subject to the terms and conditions of this Agreement, in respect of each Earn-Out Year (as defined below).

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Definitions . As used in this Agreement, the following terms shall have the meanings indicated:

“2010 Contingent Purchase Price Payment” shall have the meaning set forth in Section 2(a) hereof.

“2011 Contingent Purchase Price Payment” shall have the meaning set forth in Section 2(b) hereof.

“2012 Contingent Purchase Price Payment” shall have the meaning set forth in Section 2(c) hereof.

“2010 Earn-Out Year” shall mean the twelve month period beginning on April 1, 2010 and ending on March 31, 2011.

“2011 Earn-Out Year” shall mean the twelve month period beginning on April 1, 2011 and ending on March 31, 2012.

“2012 Earn-Out Year” shall mean the twelve month period beginning on April 1, 2012 and ending on March 31, 2013.

“AAA” shall mean the American Arbitration Association.

“Advance Payment” shall have the meaning set forth in Section 4(b) hereof.

“Affiliate” with respect to any Person shall mean any other Person which, directly or indirectly, is in control of, is controlled by or is under common control with such specified Person. For the purposes of this definition, “control,” when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. In the case of any Person who is an individual, such Person’s Affiliates shall include such Person’s spouse, siblings, parents, children, grandchildren, and trusts for the benefit of any of the foregoing.

“Agreement” shall have the meaning set forth in the preamble.

“Applicable Contingent Purchase Price Payment Date” shall have the meaning set forth in Section 4 hereof.

“Board of Directors” shall have the meaning set forth in Section 7(a) hereof.

“Business Day” means any day that is not a Saturday or Sunday or a legal holiday on which banks are authorized or required by law to be closed in New York, New York.

“Cause” shall have the meaning set forth in the Employment Agreement.

“Change of Control” shall mean any transaction, event or occurrence or series of transactions, events or occurrences resulting in (a) one or more Persons or group of Persons becoming the beneficial owner (as such term defined in Rule 13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934, as ended) of in excess of 50% of the voting securities of Purchaser, (b) the voluntary or involuntary liquidation, dissolution or other winding up of the affairs of Purchaser, or (c) the sale of all or substantially all of the assets of Purchaser.

“Closing Date” shall have the meaning set forth in the Stock Purchase Agreement.

“Company” shall have the meaning set forth in the preamble.

“Contingent Purchase Price Payment” shall mean each of the 2010 Contingent Purchase Price Payment, the 2011 Contingent Purchase Price Payment and the 2012 Contingent Purchase Price Payment.

“Contingent Purchase Price Statement” shall have the meaning set forth in Section 3(a) hereof.

“Dispute” shall have the meaning set forth in Section 18 hereof.

“Dispute Notice” shall have the meaning set forth in Section 3(b) hereof.

“Disputing Party” shall have the meaning set forth in Section 18 hereof.

“Earn-Out Year” shall mean each of the 2010 Earn-Out Year, the 2011 Earn-Out Year and the 2012 Earn-Out Year.

“EBITDA” shall mean the Company’s (a) Net Sales, less, without duplication, the sum of (i) cost of sales, (ii) selling and distribution expenses (for the avoidance of doubt, including co-op advertising expenses, but excluding the expenses specifically provided for in clause (a)(v) of this definition), (iii) design and production expenses, (iv) general administrative expenses (for the avoidance of doubt, including in each of the foregoing clauses the net amount payable under the Services Agreement), (v) ten percent (10%) of all amounts paid in respect of advertising other than co-op advertising, and (vi) the net change in prepaid expenses and other assets from the balance at the beginning of an Earn-Out Year and the balance at the end of such Earn-Out Year, to the extent such amounts represent costs or expenses incurred in one period for the benefit of the following period, plus (b) to the extent included in expenses in clause (a) of this definition, the sum of (i) interest expense, (ii) fees and expenses (including prepayment penalties) in connection with financings, (iii) income tax expense (including payments in respect of any tax sharing or other similar agreement) other than international VAT or other similar tax, (iv) depreciation and amortization expense, (v) expenses resulting from FAS 142 or FAS 144, (vi) amortized expenses related to the closing of the transactions contemplated by the Stock Purchase Agreement and the 338(h)(10) Election (as defined in the Stock Purchase Agreement), if any, (vii) any allocation of corporate overhead from Affiliates of the Company or allocation of profit, loss or expenses from Affiliates of the Company, other than those allocations specified in the Services Agreement, (viii) any Losses (as defined in the Stock Purchase Agreement) of the Company which give rise to an indemnity obligation pursuant to the indemnification provisions of the Stock Purchase Agreement, to the extent, and only to the extent, that such indemnity obligations have been honored, (ix) any amounts recovered or recoverable by the Company from insurance, to the extent, and only to the extent, the Loss attributable to such insurance arose in the same period, and (x) any relocation and transition expenses of the Company resulting from the consummation of the transactions contemplated by the Stock Purchase Agreement. For purposes of clause (b)(x) of this definition, relocation and transition expenses shall include without limitation (i) all Relocation Payments (as such term is defined in the Stock Purchase Agreement) paid by the Company, Purchaser or any of its subsidiaries pursuant to Section 8.2 of the Stock Purchase Agreement, (ii) all relocation expenses reimbursed by the Company or Purchaser pursuant to Section 2(c) of the Employment Agreement, (iii) severance payments paid by the Company, Purchaser or any of its subsidiaries pursuant to Section 8.2 of the Stock Purchase Agreement, (iv) all incremental costs of accounting and other personnel and systems solely related to the transition of the Company’s accounting, information systems, employees, customers, suppliers and the like, (v) all costs related to the closing of the Company’s offices and warehouse in Santa Cruz, California (including any fees or penalties resulting therefrom), the move of the Company’s offices and warehouse to the New York Metropolitan Area and the move of any of the Company’s merchandise to Purchaser’s Los Angeles warehouse, and (vi) any fees or expenses in connection with the preparation of any Contingent Purchase Price Statement or any dispute hereunder, the determination of Net Working Capital under the Stock Purchase Agreement, and any change in the Company’s accounting methods. Each figure in clauses (a) through (b) of this definition shall be determined on a consolidated basis in accordance with GAAP consistently applied from the Closing Date.

“Employment Agreement” shall mean the employment agreement, dated as of the date hereof, between Purchaser and Seller, executed and delivered simultaneously with the execution and delivery of this Agreement.

“Estimate” shall have the meaning set forth in Section 4(b) hereof.

“Final Contingent Purchase Price Statement” shall have the meaning set forth in Section 3(c) hereof.

“Final Financial Statements” shall have the meaning set forth in Section 3(c) hereof.

“Financial Statements” means for any Earn-Out Year, unaudited financial statements for the Company for such Earn-Out Year, which shall be prepared in accordance with GAAP.

“GAAP” shall mean United States generally accepted accounting principles, as in effect on the date of this Agreement, consistently applied.

“Good Reason” shall have the meaning set forth in the Employment Agreement.

“Gross Sales” shall mean the total invoiced amount of products, including but not limited to seconds and close-outs and including the amount of sales of products on the www.bigbuddha.com website, and excluding any insurance or freight invoiced as a separate line item.

“Independent Accounting Firm” shall have the meaning set forth in Section 3(b) hereof.

“Intercompany Transaction” shall have the meaning set forth in Section 8 hereof.

“Net Sales” shall mean Gross Sales, less (i) returns by customers and (ii) allowances and trade discounts granted, including co-op allowances, markdown allowances and any other chargebacks provided for in the books, records and financial statements of a company.

“Net Sales Target” shall have the meaning set forth in Section 2(e) hereof.

“Net Sales Target Amount” shall have the meaning set forth in Section 2(e) hereof.

“Notice of Set-Off Dispute” shall have the meaning set forth in Section 5(b) hereof.

“Person” shall mean an individual, partnership, venture, unincorporated association, organization, syndicate, corporation, limited liability company, or other entity, trust, trustee, executor, administrator or other legal or personal representative or any government or any agency or political subdivision thereof.

“Prime Rate” shall mean the rate of interest that The JPMorgan Chase Bank (or its successor and assign) announces from time to time as its prime lending rate as then in effect, or if no such rate is announced by The JPMorgan Chase Bank (or its successor or assign), the prime lending rate announced by a New York City money center bank selected by Purchaser and reasonably acceptable to the Seller.

“Purchaser” shall have the meaning set forth in the preamble.

“Revised Contingent Purchase Price Statement” shall have the meaning set forth in Section 3(b) hereof.

“Revised Financial Statements” shall have the meaning set forth in Section 3(b) hereof.

“Rules” shall have the meaning set forth in Section 18 hereof.

“Seller” shall have the meaning set forth in the preamble.

“Services Agreement” shall mean that certain services agreement, dated as of the date hereof, among Purchaser, Seller and the Company.

“Set-Off Notice” shall have the meaning set forth in Section 5(b) hereof.

“Set-Off Review Period” shall have the meaning set forth in Section 5(b) hereof.

“Stock Purchase Agreement” shall have the meaning set forth in the recitals.

2. Contingent Purchase Price Calculation .

(a) 2010 Contingent Purchase Price Payment . The aggregate amount of the contingent purchase price payment payable to Seller with respect to the 2010 Earn-Out Year (the “2010 Contingent Purchase Price Payment”) shall equal the sum of (x) 70% of the EBITDA for the 2010 Earn-Out Year, plus (y) the Additional Contingent Amount (as defined below) for the 2010 Earn-Out Year

(b) 2011 Contingent Purchase Price Payment . The aggregate amount of the contingent purchase price payment payable to Seller with respect to the 2011 Earn-Out Year (the “2011 Contingent Purchase Price Payment”) shall equal the sum of (x) 70% of the EBITDA for the 2011 Earn-Out Year, plus (y) the Additional Contingent Amount for the 2011 Earn-Out Year.

(c) 2012 Contingent Purchase Price Payment . The aggregate amount of the contingent purchase price payment payable to Seller with respect to the 2012 Earn-Out Year (the “2012 Contingent Purchase Price Payment”) shall equal the sum of (x) 70% of the EBITDA for the 2012 Earn-Out Year, plus (y) the Additional Contingent Amount for the 2012 Earn-Out Year.

(d) As used in this Agreement, the term “Additional Contingent Amount” shall mean, with respect to any given Earn-Out Year, the total of (i) 2.0% of the total amount of retail Net Sales in such Earn-Out Year of “Big Buddha” brand handbags sold in Purchaser’s retail stores or on Purchaser’s website, plus (ii) 2.5% of the total amount of wholesale Net Sales in such Earn-Out Year of “Big Buddha” brand handbags sold outside of the United States, plus (iii) 2.5% of the total amount of wholesale Net Sales in such Earn-Out Year of “Big Buddha”

brand merchandise other than handbags, plus (iv) 2.0% of the total amount of wholesale Net Sales in such Earn-Out Year of any private label merchandise sold by Purchaser using the same design as any “Big Buddha” brand handbags. For purposes of clarity, any amounts included in the preceding clauses (i) through (iv) shall not be included in the Net Sales of the Company.

(e) In the event that the Company achieves Net Sales of fifty million dollars ($50,000,000) in any single Earn-Out Year (the “Net Sales Target”), there shall be a one-time addition to the Contingent Purchase Price Payment for the first Earn-Out Year in which the Net Sales Target is achieved in an amount equal to two million five hundred thousand dollars ($2,500,000) (the “Net Sales Target Amount”). For the avoidance of doubt, to the extent that the Net Sales Target Amount is included in a Contingent Purchase Price Payment for any Earn-Out Year in accordance with the preceding sentence, no similar addition shall be made to any subsequent Contingent Purchase Price Payments pursuant to this Agreement.

(f) For the avoidance of doubt, the parties acknowledge that (i) no Contingent Purchase Price Payment shall ever be less than zero, and (ii) each Contingent Purchase Price is payable whether or not Seller is employed by Purchaser or the Company at any time during or after the applicable Earn-Out Year.

(g) Notwithstanding anything to the contrary in this Agreement, in the event that, prior to the end of the 2012 Earn-Out Year, Seller’s employment with Purchaser is terminated (a) by Purchaser without Cause or by Seller for Good Reason or (b) following a Change of Control of Purchaser, the Contingent Purchase Price Payment payable to Seller hereunder in respect of the Earn-Out Year in which such employment is terminated and in respect of each Earn-Out Year thereafter through the 2012 Earn-Out Year shall be equal to the greater of (x) (I) if one of the events described in clause (a) or (b) occurs in the 2010 Earn-Out Year, $1,200,000, or (II) if any one of the events described in clause (a) or (b) occurs in the 2011 Earn-Out Year or the 2012 Earn-Out Year, 50% of the Contingent Purchase Price Payment paid to Seller with respect to the prior Earn-Out Year, and (y) the Contingent Purchase Price Payment calculated in accordance with Section 2(a), 2(b) or 2(c) hereof, as applicable.

(h) Notwithstanding anything to the contrary herein, in the event that the employment of Seller is terminated by Purchaser without Cause or by Seller with Good Reason and the Company employs another executive or executives to replace Seller, than any excess of the compensation and benefits of the executive(s) employed to replace Seller over the amounts that would have been payable to Seller pursuant to the Employment Agreement had Seller remained employed by Purchaser shall be disregarded for purposes of the calculation of EBITDA pursuant to this Agreement, regardless of the actual amount of such compensation and benefits.

3. Contingent Purchase Price Statement; Dispute .

(a) As promptly as practicable, but in any event within seventy-five (75) days after the end of each Earn-Out Year, Purchaser shall prepare and deliver to Seller (and the Company shall provide Purchaser with all assistance as may be reasonably requested by Purchaser in connection with such preparation) (i) Financial Statements for such Earn-Out Year, (ii) a statement of the Contingent Purchase Price Payment for such Earn-Out Year, which shall

explain in reasonable detail the calculations of EBITDA for such Earn-Out Year (a “Contingent Purchase Price Statement”) and (iii) reasonable supporting documentation sufficiently detailed to enable Seller to verify the amounts set forth in such Financial Statements and Contingent Purchase Price Statement.

(b) Seller may dispute such Financial Statements and/or Contingent Purchase Price Statement for such Earn-Out Year by sending a written notice (a “Dispute Notice”) to Purchaser within thirty (30) days after Purchaser’s delivery of all of the items specified in Section 3(a) to the Seller. The Dispute Notice shall identify each disputed item on the Financial Statements or Contingent Purchase Price Statement, specify the amount of such dispute and set forth in reasonable detail the basis for such dispute. In the event of any such disputes, Purchaser and Seller shall attempt, in good faith, to reconcile the items identified in the Dispute Notice and any related items that may arise during the process described in this Section 3(b) (including providing information that is reasonably requested to the other party), and any resolution by them as to any disputed items shall be final, binding and conclusive on the parties and shall be evidenced by a writing signed by Purchaser and Seller, including, as appropriate, revised Financial Statements (“Revised Financial Statements”) and/or a revised Contingent Purchase Price Statement (a “Revised Contingent Purchase Price Statement”) reflecting such resolution. If Purchaser and Seller are unable to reach such resolution within twenty (20) days after Seller’s delivery of the Dispute Notice to Purchaser, then Purchaser and Seller shall promptly submit any remaining disputed items for final binding resolution to any independent accounting firm mutually acceptable to Purchaser and Seller (which accounting firm has not, within the prior twenty-four (24) months, provided services to Purchaser, Seller or the Company or any Affiliate of any of them). If Purchaser and Seller are unable to agree upon an independent accounting firm within thirty (30) days, an independent accounting firm selected by Purchaser (which accounting firm has not, within the prior twenty-four (24) months, provided services to Purchaser or the Company or any Affiliate of either of them) and an independent accounting firm selected by Seller (which accounting firm has not, within the prior twenty-four (24) months, provided services to Seller or the Company or any Affiliate of either of them) shall select an independent accounting firm that has not, within the prior twenty-four (24) months, provided services to Purchaser, Seller or the Company or any Affiliate of any of them. Such independent accounting firm mutually agreed upon by Purchaser and Seller or selected by the procedure referenced in the immediately preceding sentence, as the case may be, is hereinafter referred to as the “Independent Accounting Firm.” If any remaining disputed items are submitted to an Independent Accounting Firm for resolution, (A) each party will furnish to the Independent Accounting Firm such workpapers and other documents and information relating to the remaining disputed items as the Independent Accounting Firm may request and are available to such party, and each party will be afforded the opportunity to present to the Independent Accounting Firm any material relating to the disputed items and to discuss the resolution of the disputed items with the Independent Accounting Firm; (B) each party will use its good faith commercially reasonable efforts to cooperate with the resolution process so that the disputed items can be resolved within forty-five (45) days after submission of the disputed items to the Independent Accounting Firm; (C) the determination by the Independent Accounting Firm, as set forth in a written notice to Purchaser and Seller (which written notice shall include, as appropriate, Revised Financial Statements and/or a Revised Contingent Purchase Price Statement), shall be final, binding and conclusive on the parties absent manifest error; and (D) the fees and disbursements of the Independent Accounting Firm shall be allocated by the

Independent Accounting Firm between Purchaser and Seller in the same proportion that the aggregate dollar amount of the disputed items submitted to the Independent Accounting Firm that are unsuccessfully disputed by Seller (as finally determined by the Independent Accounting Firm) bears to the total amount of all disputed items submitted to the Independent Accounting Firm. By way of illustration, if Seller disputes $500,000 of items, and the Independent Accounting Firm determines that Seller’s position is correct as to $400,000 of the disputed items, then Purchaser would bear 80 percent and Seller would bear 20 percent of such fees and disbursements.

(c) The Financial Statements for such Earn-Out Year and the Contingent Purchase Price Statement or, if either have been adopted pursuant to Section 3(b), the Revised Financial Statements and/or the Revised Contingent Purchase Price Statement, shall be deemed to be final, binding and conclusive on Purchaser and Seller (“Final Financial Statements” and “Final Contingent Purchase Price Statement”) upon the earliest of (A) the failure of Seller to deliver to Purchaser the Dispute Notice within thirty (30) days after Purchaser’s delivery to Seller of all of the items specified in Section 3(a) for such Earn-Out Year; (B) the resolution by Purchaser and Seller of all disputes, as evidenced by, as appropriate, Revised Financial Statements and/or a Revised Contingent Purchase Price Statement; and (C) the resolution by the Independent Accounting Firm of all disputes, as evidenced by, as appropriate, Revised Financial Statements and/or a Revised Contingent Purchase Price Statement. Any Contingent Purchase Price Payment based on Final Financial Statements and a Final Contingent Purchase Price Statement shall be made in accordance with Section 4 hereof.

4. Contingent Purchase Price Payments .

(a) Each Contingent Purchase Price Payment shall be paid and payable by Purchaser or the Company to Seller with respect to each Earn-Out Year and shall be paid on a date or dates selected by Purchaser that results in the payment of such Contingent Purchase Price Payment to Seller in full on or before the tenth (10 th ) Business Day after the later of (x) the date on which the Final Financial Statements and Final Contingent Purchase Price Statement are deemed final, binding and conclusive for such Earn-Out Year pursuant to Section 3(c) and (y) the conclusion of the negotiation period with respect to any set-off pursuant to Section 5 (such date, the “Applicable Contingent Purchase Price Payment Date”). In the event that any amounts due under this Section 4 shall not be paid to Seller on or before the Applicable Contingent Purchase Price Payment Date, such amounts shall bear interest, calculated from the Applicable Contingent Purchase Price Payment Date until the date such amounts are paid to Seller, at a rate per annum equal to the Prime Rate, calculated and payable monthly, compounded monthly. Each Contingent Purchase Price Payment shall be paid in cash and shall be made by wire transfer of immediately available funds to an account or accounts designated at least two (2) Business Days prior to the applicable payment date by Seller in writing.

(b) Notwithstanding the foregoing, on or before December 1 of each Earn-Out Year, Purchaser or the Company shall deliver to Seller (i) Purchaser’s good faith estimate of the Contingent Purchase Price Payment amount for the nine month period beginning on April 1 and ending on December 31 of such Earn-Out Year (the “Estimate”) and (ii) payment in an amount equal to 75% of the applicable Estimate, which payment shall be an advance on the Contingent

Purchase Price Payment for such Earn-Out Year (the “Advance Payment”). On the Applicable Contingent Purchase Price Payment Date for each Earn-Out Year:

(i) if the Contingent Purchase Price Payment calculated in accordance with Section 2(a) hereof for such Earn-Out Year exceeds the total amount paid to Seller in respect of the Advance Payment for the nine month period beginning on April 1 and ending on December 31 of such Earn-Out Year, Purchaser or the Company shall pay to Seller with respect to such Earn-Out Year the balance of the Contingent Purchase Price Payment for such Earn-Out Year, calculated as an amount equal to (x) the Contingent Purchase Price Payment calculated in accordance with Section 2(a) hereof for such Earn-Out Year, minus (y) the total amount paid to Seller in respect of the Advance Payment for the nine month period beginning on April 1 and ending on December 31 of such Earn-Out Year; or

(ii) if the Contingent Purchase Price Payment calculated in accordance with Section 2(a) hereof for such Earn-Out Year is less than the total amount paid to Seller in respect of the Advance Payment for the nine month period beginning on April 1 and ending on December 31 of such Earn-Out Year, Seller shall refund to Purchaser with respect to such Earn-Out Year an amount equal to (x) the total amount paid to Seller in respect of the Advance Payment for the nine month period beginning on April 1 and ending on December 31 of such Earn-Out Year, minus (y) the Contingent Purchase Price Payment calculated in accordance with Section 2(a) hereof for such Earn-Out Year.

5. Set-Off Rights .

(a) Notwithstanding any provision of this Agreement to the contrary, the parties hereby acknowledge and agree that, in addition to any other right hereunder, Purchaser shall have the right, but not the obligation, from time to time to set off against any Contingent Purchase Price Payment required to be paid by Purchaser to Seller pursuant to this Agreement any amounts owed at such time by Seller to the Company or to Purchaser (or any of its Affiliates) hereunder or pursuant to the Stock Purchase Agreement.

(b) If Purchaser elects to exercise its set-off rights hereunder against any amounts otherwise required to be paid by Purchaser to Seller pursuant to this Agreement, it shall give Seller written notice of such election (the “Set-Off Notice”) no later than the date on which the Final Financial Statements and Final Contingent Purchase Price Statement are deemed final, binding and conclusive pursuant to Section 3(d), which Set-Off Notice shall include the amount to be set off and a reasonable description of the circumstances giving rise to Purchaser’s entitlement to such set-off. Seller shall have thirty (30) days after receipt of such Set-Off Notice to review such Set-Off Notice (the “Set-Off Review Period”), and in the event that Seller has any objections or challenges to the exercise of the set-off right of Purchaser, Seller shall submit a single written notice of set-off dispute (“Notice of Set-Off Dispute”) to Purchaser during such Set-Off Review Period, specifying in reasonable detail the nature of any asserted objections or challenges. In the event that Seller does not submit a Notice of Set-Off Dispute within thirty (30) days of Purchaser’s delivery of the Set-Off Notice, it shall be conclusively presumed that Seller and the Company do not object to such Set-Off Notice and such Set-Off Notice shall be deemed to be final, binding and conclusive on the parties. In the event of any such dispute, Seller and Purchaser shall negotiate in good faith to resolve such dispute for thirty (30) days after

receipt by Purchaser of the Notice of Set-Off Dispute. If Seller and Purchaser are unable to resolve such dispute within such 30-day period, the amount payable by Purchaser to Seller shall automatically be reduced by the amount set forth in the Set-Off Notice. In the event that there is a final determination that Seller did not owe the Company or Purchaser (or any of its Affiliates) the amount that has been set off, Purchaser shall promptly repay to Seller all such amounts that are so determined to have been incorrectly set off, plus interest, calculated from the date of set-off until the date such amount is paid to Seller, at a rate per annum equal to the Prime Rate, calculated and payable monthly, compounded monthly. For purposes of this Section 5, a determination shall be final if any and all appeals therefrom shall have been resolved or if thirty (30) days shall have passed from the rendering of such determination (or of any determination of appeal therefrom) and no party shall have commenced any appeal therefrom.

(c) In the case of any such set-off by Purchaser pursuant to this Section 5, Seller’s obligation to make such payment (or any portion thereof) shall be deemed satisfied and discharged to the extent of such set-off. The exercise of such right of set-off by Purchaser in good faith, whether or not finally determined to be justified, will not constitute a breach under this Agreement or the Stock Purchase Agreement.

6. Covenants of Purchaser . Purchaser hereby covenants and agrees that, from the Closing Date until the earlier of (i) the termination of this Agreement or (ii) the end of the 2012 Earn-Out Year, it will (x) maintain the Company as a division of Purchaser, which will maintain appropriate accounting books and records necessary to calculate amounts payable hereunder, and (y) not change the name of such division to a name that does not include the words “Big Buddha” without Seller’s prior consent, which consent shall not be unreasonably withheld.

7. Corporate Governance During Earn-Out Period . Seller and Purchaser agree that until the earlier of the termination of this Agreement or the end of the 2012 Earn-Out Year, the Company shall be managed in accordance with the following provisions:

(a) The Board of Directors of the Company (the “Board of Directors”) shall consist of the same three (3) persons, and Purchaser will vote the Company’s common stock owned by it in favor of the election of two (2) designees of Purchaser and one (1) designee of Seller, provided that during his term of employment with the Company, the designee of Seller shall be himself. Except as specifically provided for in Sections 7(b) or 7(c) hereof, the Board of Directors or its designee shall have authority to control all of the operations of the Company.

(b) Notwithstanding the provisions of Section 7(a) to the contrary, the following actions shall not be taken without the mutual consent of Seller, on the one hand, and Purchaser or the Board of Directors, on the other hand: (i) entering into any transaction with any Affiliate of Purchaser or the Company or any officer or director of Purchaser or the Company or their respective Affiliates (including family members), other than compensation arrangements in the ordinary course operations of the Company consistent with past practice or as provided in the Services Agreement, (ii) voluntarily liquidating or dissolving the Company, (iii) filing of a petition under bankruptcy or other insolvency laws, or admitting in writing that the Company is bankrupt, insolvent or generally unable to pay its debts as they become due, (iv) issuing any capital stock or other securities of the Company or granting any option or other right to acquire any capital stock or other securities of the Company, (v) selling all or substantially all of the

stock or assets of the Company to a third party that is not a one-hundred percent (100%)-owned subsidiary of Purchaser or Purchaser itself (other than sales of inventory in the ordinary course of business consistent with the Company’s past practices) or engaging in a merger transaction (other than mergers solely for the purpose of reincorporating the Company in the state of Delaware), or (vi) ceasing the design, marketing, sale or distribution of handbags. For the avoidance of doubt, it is acknowledged and agreed among the parties hereto that the restrictions set forth in clause (v) above shall not apply to a sale of all or substantially all of the stock or assets of Purchaser or any Affiliate of Purchaser (other than the Company) or the engagement by Purchaser or any Affiliate of Purchaser (other than the Company) in any merger transaction. Furthermore, neither Purchaser nor the Company may, or may cause any of its Affiliates to, take any action or enter into any transaction that is primarily intended to adversely affect any of the Contingent Purchase Price Payments payable under this Agreement, provided that such prohibition shall not restrict Purchaser or any of its Affiliates from manufacturing, selling and distributing any products, including handbags.

(c) Notwithstanding the provisions of Sections 7(a) or 7(b) to the contrary, if Purchaser proposes to design, market, distribute or sell a brand or line of handbags that is a derivative of the “Big Buddha” brand through the “Big Buddha” division, Purchaser shall provide to Seller a one-time opportunity to elect to have such brand or line taken into account for purposes of calculating EBITDA and/or Net Sales hereunder (an election to have such brand or line so taken into account, “Opting In”, and an election not to have such brand or line so taken into account, “Opting Out”). If Seller “Opts In” with respect to any such brand or line, then such brand or line shall be taken into account for purposes of calculating EBITDA and/or Net Sales hereunder. If Seller “Opts Out” with respect to any such brand or line, then such brand or line shall not be taken into account for purposes of calculating EBITDA and/or Net Sales hereunder. For the avoidance of doubt, such election by Seller with respect to any brand or line shall be deemed final, binding and conclusive and Seller shall not have the right to change such election at any time thereafter. Notwithstanding the foregoing, Purchaser shall have the right to use all Company IP Rights (as defined in the Stock Purchase Agreement) in the design, marketing, distribution or sale of such brand or line.

(d) Seller and the appropriate designees of Purchaser shall consult regularly (but in any event at least quarterly) with each other to mutually agree on EBITDA and revenue goals.

(e) Purchaser shall, subject to Purchaser’s then existing policies, practices and procedures consistently applied to the Company and to all domestic subsidiaries or divisions of Purchaser, consult with Seller with respect to the following: (i) the determination of the compensation and benefits payable to the Company’s employees, (ii) the strategic direction and budget of the Company, (iii) accepting new customers and terminating existing customers, (iv) hiring, promoting or terminating employees of the Company or transferring Company employees from or to Purchaser or one of its Affiliates, (v) designing, selling, marketing or otherwise distributing products to historical and prospective customers of the Company, and (vi) terminating existing suppliers or engaging new suppliers; provided that all decisions with respect to the foregoing shall be in Purchaser’s sole discretion.

(f) In the event that the employment of Seller is terminated by the Company, including, without limitation, due to his death or disability, (i) he may be removed from the Board of Directors and (ii) all decisions regarding the Company shall be at the sole discretion of Purchaser or its designees and the Company shall thereafter be operated by Purchaser in a manner determined in its sole discretion; provided that neither Purchaser nor the Company may take or omit to take any action that is primarily intended to adversely affect any of the Contingent Purchase Price Payments under this Agreement.

(g) Purchaser shall provide to the Company adequate working capital to facilitate its operations, as determined by the Board of Directors.

8. Intercompany Transactions and Other Activities During Earn-Out Period . For purposes of determining any Contingent Purchase Price Payment payable under this Agreement, Seller and Purchaser agree that until the earlier of the termination of this Agreement or the end of the 2012 Earn-Out Year, (a) sales of company products to Purchaser for sale in Purchaser’s retail stores or on Purchaser’s website shall be priced at cost, and (b) all other transactions between the Company, on the one hand, and Purchaser or any of its subsidiaries (excluding the Company), on the other hand (each an “Intercompany Transaction”), shall be at cost or market, whichever is lower, or shall be adjusted to be upon fair and reasonable terms no less favorable to either party than would be obtained in a comparable arm’s-length transaction with an unaffiliated third Person. The parties acknowledge and agree that the Services Agreement is or will be on arm’s-length terms.

9. Term . This Agreement shall be effective on the Closing Date, if one occurs, and shall continue until the payment of all Contingent Purchase Price Payments pursuant to Section 4.

10. Assignment; Binding Nature . Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by Seller. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective heirs, personal representatives, legatees, successors and permitted assigns.

11. Amendment . This Agreement may be modified or amended only by an instrument in writing, duly executed by Purchaser, on the one hand, and Seller, on the other hand.

12. Notices . All notices, demands and communications of any kind which any party hereto may be required or desires to serve upon another party under the terms of this Agreement shall be in writing and shall be given by: (a) personal service upon such other party; (b) mailing a copy thereof by certified or registered mail, postage prepaid, with return receipt requested; (c) sending a copy thereof by Federal Express or equivalent courier service; or (d) sending a copy thereof by facsimile, in each case addressed as follows:

If to the Company:

Big Buddha, Inc.

2853 Mission Street

Santa Cruz, California 95060

Attention: Jeremy Bassan

Facsimile: (831) 421-9805

with copies to:

Sonnenschein Nath & Rosenthal LLP

525 Market Street, 26 th Floor

San Francisco, California 94105

Attention: Stafford Matthews, Esq.

Facsimile No.: (415) 882-0300

If to Seller:

Jeremy Bassan

208 Woodrow Avenue

Santa Cruz, California 95060

with copies to:

Sonnenschein Nath & Rosenthal LLP

525 Market Street, 26 th Floor

San Francisco, California 94105

Attention: Stafford Matthews, Esq.

Facsimile No.: (415) 882-0300

If to Purchaser:

Steven Madden, Ltd.

52-16 Barnett Ave.

Long Island City, New York 11104

Attention: Awadhesh Sinha

Facsimile: (718) 446-5599

with copies to:

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

United States of America

Attention: James A. Grayer, Esq.

Facsimile: (212) 715-8000

In the case of service by Federal Express or equivalent courier service or by facsimile or by personal service, such service shall be deemed complete upon delivery or transmission, as

applicable. In the case of service by mail, such service shall be deemed complete on the fifth Business Day after mailing. The addresses and facsimile numbers to which, and persons to whose attention, notices and demands shall be delivered or sent may be changed from time to time by notice served as hereinabove provided by any party upon any other party.

13. Governing Law; Jurisdiction . This Agreement and all the transactions contemplated hereby, and all disputes between the parties under or related to the Agreement or the facts and circumstances leading to its execution, whether in contract, tort or otherwise, shall be governed by, and construed and enforced in accordance with, the laws of the State of New York including, without limitation, Section 5-1401 and 5-1402 of the New York General Obligations Law and New York Civil Practice Laws and Rules 327.

14. Negotiated Agreement . Purchaser and Seller acknowledge that they have been advised and represented by counsel in the negotiation, execution and delivery of this Agreement and accordingly agree that if an ambiguity exists with respect to any provision of this Agreement, such provision shall not be construed against any party because such party or its representatives drafted such provision.

15. Severability . If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any arbitrator to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest extent permitted by law. If the final determination of an arbitrator declares that any item or provision hereof is invalid or unenforceable, the parties hereto agree that the arbitrator making the determination of invalidity or unenforceability shall have the power, and is hereby directed, to reduce the scope, duration or area of the term or provision, to delete specific words or phrases and to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

16. Headings . The headings in this Agreement are inserted for convenience only and shall not constitute a part hereof.

17. Counterparts; Facsimile . For the convenience of the parties, any number of counterparts hereof may be executed, each such executed counterpart shall be deemed an original, and all such counterparts together shall constitute one and the same instrument. Facsimile or electronic transmission of any signed original counterpart and/or retransmission of any signed facsimile or electronic transmission shall be deemed the same as the delivery of an original.

18. Arbitration . Except as otherwise set forth in Section 3(b) hereof, if any dispute or difference of any kind whatsoever shall arise between the parties to this Agreement (each a “Disputing Party”) in connection with or arising out of this Agreement, or the breach, termination or validity thereof (a “Dispute”), then, on the demand of any Disputing Party, the Dispute shall be finally and exclusively resolved by arbitration in accordance with the

Commercial Arbitration Rules of the AAA (the “Rules”) then in effect, except as modified herein. The arbitration shall be held, and the award shall be issued in, the State of New York. There shall be one neutral arbitrator appointed by agreement of the Disputing Parties within thirty (30) days after receipt by respondent of the demand for arbitration. If such arbitrator is not appointed within the time limit provided herein, on the request of any Disputing Party, an arbitrator shall be appointed by the AAA by using a list striking and ranking procedure in accordance with the Rules. Any arbitrator appointed by the AAA shall be a retired federal judge or a practicing attorney with no less than fifteen years of experience and an experienced arbitrator with no less than five completed prior arbitrations relating to the purchase and sale of a wholesale business. By agreeing to arbitration, the Disputing Parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and the enforcement of any award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitrator shall have full authority to grant provisional remedies and to direct the Disputing Parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any Disputing Party to respect the arbitrator’s orders to that effect. Any arbitration proceedings, decisions or awards rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq . In arriving at a decision, the arbitrator shall be bound by the terms and conditions of this Agreement and shall apply the governing law of this Agreement as designated in Section 13. The arbitrator is not empowered to award damages in excess of compensatory damages, and each Disputing Party hereby irrevocably waives any right to recover punitive, exemplary or similar damages with respect to any Dispute. The award shall provide that the fees and expenses of the arbitration (including the fees of the AAA, the fees and expenses of the arbitrator and attorneys’ fees of the prevailing Disputing Party) shall be allocated based on the proportion that the aggregate amount of disputed items submitted to arbitration that are unsuccessfully disputed by each Disputed Party (as finally determined by the arbitrator) bears to the total amount of all disputed items submitted to arbitration. The award, which shall be in writing and shall, on the written request of any Disputing Party, state the findings of fact and conclusions of law upon which it is based, shall be final and binding on the Disputing Parties and shall be the sole and the exclusive remedy between the Disputing Parties regarding any claims, counterclaims, issues or accountings presented to the arbitral tribunal. Judgment upon any award may be entered in any court of competent jurisdiction located in the State of New York, and the parties hereby consent to the exclusive jurisdiction of the courts located in the State of New York. All arbitration proceedings and resulting arbitration awards shall be strictly confidential and shall not be disclosed by the Disputing Parties to anyone, except to the extent necessary to disclose to compel arbitration, enforce any arbitration award or for accounting and financial reporting or to comply with reporting obligations under applicable securities laws and regulations.

19. Entire Agreement . This Agreement, the Stock Purchase Agreement, the Services Agreement and the Employment Agreement, including all schedules and exhibits hereto and thereto, contain the entire understanding of the parties hereto with respect to the subject matter hereof.

[Remainder of page intentionally left blank]

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

COMPANY :

BIG BUDDHA, INC.

By: /s/ Jeremy Bassan

Name: Jeremy Bassan

Title: President

PURCHASER :

STEVEN MADDEN, LTD.

By: /s/ Edward Rosenfeld

Name: Edward Rosenfeld

Title: Chief Executive Officer

SELLER :

/s/ Jeremy Bassan

Jeremy Bassan

Exhibit B

EXECUTION VERSION

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of February 10, 2010, is entered into by and between Steven Madden, Ltd., a Delaware corporation (the “Company”) and Jeremy Bassan (“Executive”).

WITNESSETH :

WHEREAS , the Company desires to acquire all of the issued and outstanding shares of capital stock of Big Buddha, Inc., a California corporation (“Big Buddha”) pursuant to a Stock Purchase Agreement, dated as of the date hereof, by and between the Company and Executive (as amended from time to time in accordance with its terms, the “Stock Purchase Agreement”);

WHEREAS, in connection with the transactions contemplated in the Stock Purchase Agreement, the Company, Big Buddha and Executive have entered into an Earn-Out Agreement, dated as of the date hereof, governing certain terms and conditions under which Executive is entitled to receive earn-out payments (as amended from time to time in accordance with its terms, the “Earn-Out Agreement”);

WHEREAS , immediately prior to the Closing (as defined in the Stock Purchase Agreement), Executive is employed as President of Big Buddha;

WHEREAS, this Agreement is to be effective upon the Closing;

WHEREAS , the Company wishes to ensure that it will have the benefits of Executive’s services after the Closing on the terms and conditions hereinafter set forth;

WHEREAS , the Company and Executive acknowledge and agree that the retention of Executive’s services and Executive’s agreement to enter into and adhere to the noncompetition, nonsolicitation and nondisclosure of proprietary information provisions contained in this Agreement are critical reasons for the Company entering into the Stock Purchase Agreement and consummating the transactions contemplated thereby; and

WHEREAS , Executive desires to work for the Company on the terms and conditions hereinafter set forth.

NOW, THEREFORE , in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Employment; Term . The Company hereby employs Executive, and Executive hereby accepts employment with the Company, in accordance with and subject to the terms and conditions set forth herein. The term of employment shall commence upon the Closing, if one occurs (the “Effective Date”), and shall continue until March 31, 2013 (the “Term”), unless earlier terminated in accordance with Section 5 hereof.

2. Employment .

(a) The Company hereby agrees to employ Executive as President of the Big Buddha division of the Company for the Term. Executive agrees to serve in such capacity and to perform such duties and responsibilities as are reasonably requested by the Company consistent with such position in a company of the size and nature of the Company, including, without limitation, special projects for the Company and its Affiliates (as defined in the Earn-Out Agreement) as reasonably requested by the Company. During the Term, Executive shall report directly to the Brand Director and Executive Vice President – Wholesale and Retail of the Company.

(b) Executive shall devote substantially all of Executive’s business time and attention to Executive’s duties on the Company’s behalf. The foregoing shall not prevent Executive from expending reasonable amounts of time on passive personal investments, for educational or charitable activities, or, with the reasonable approval of the Company, serving as a director on the boards of any non-competing companies, provided that, in each case, such activities do not individually or collectively interfere with or adversely affect the performance of Executive’s duties under this Agreement.

(c) Executive agrees that Executive’s employment shall be based in the New York metropolitan area (“New York”) and that Executive shall relocate to New York as soon as practicable, but no later than sixty (60) days, following the date hereof. The Company agrees to reimburse Executive for the following expenses to the extent incurred by Executive in relocating to New York:

(i) economy class airfare for up to three (3) round trips between New York and San Francisco or San Jose, California;

(ii) reasonable moving expenses for the relocation of household goods, furniture and one (1) car by a moving company selected by the Company from at least three (3) bids or estimates obtained by Executive and provided to the Company; and

(iii) reasonable temporary living expenses for up to three (3) months, which are reasonably acceptable to the Company and with respect to which Executive has submitted to the Company receipts or other documentation reasonably acceptable to the Company, in an aggregate amount not to exceed $20,000.

3. Compensation .

(a) The Company shall pay Executive a base salary of no less than five hundred thousand dollars ($500,000) (the “Base Salary”), payable in accordance with the

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Company’s then existing payroll practices and subject to all legally required or customary withholdings and other applicable taxes.

(b) Upon the approval of this Agreement, the Compensation Committee of the Board of Directors of the Company shall grant to Executive an option to purchase an aggregate of 50,000 shares of common stock, par value $0.0001 per share, of the Company (the “Options”) under the Company’s 2006 Stock Incentive Plan, to be effective upon, and subject to, the occurrence of the Closing. One-third of the Options shall vest on each of the first, second and third anniversaries of the Effective Date (subject to Executive’s continued employment through such dates). The Options shall have an exercise price of the fair market value on the last trading date prior to the grant date, shall remain exercisable for seven (7) years from the Effective Date (subject to earlier termination due to a termination of employment), and shall be granted pursuant to a Stock Option Grant Agreement of even date herewith between the Company and Executive, in substantially the form attached hereto as Exhibit A (the “Option Agreement”).

(c) Executive shall not be entitled to participate in any bonus program or other incentive compensation plan of the Company or Big Buddha, or to receive any additional compensation from the Company or Big Buddha, except as expressly set forth herein.

4. Benefits .

(a) The Company agrees to reimburse Executive for all reasonable travel, business, entertainment and other business expenses incurred by Executive in connection with the performance of Executive’s duties under this Agreement in accordance with the Company’s corporate travel policy applicable to similarly situated employees of the Company as it may be amended from time to time. Such reimbursements shall be made by the Company within a reasonable amount of time after submission by Executive of vouchers in accordance with the Company’s then applicable policies and procedures. Notwithstanding the foregoing, any reimbursement that is taxable to Executive shall be paid no later than the end of the year following the year in which it is incurred.

(b) As soon as administratively practicable and in accordance with the Company’s policies, Executive shall be entitled to participate in any and all medical insurance, group health, dental and vision care programs, disability insurance, pension, and other benefit plans which are made generally available by the Company to other similarly situated senior level executives of the Company performing similar functions as Executive; provided , however , that Executive shall not be entitled to participate in any cash bonus, incentive compensation or equity compensation or similar plan other than those described in Section 3(b) hereof. The Company, in its sole discretion, may at any time amend or terminate its benefit plans or programs.

(d) Executive shall be entitled to such other benefits as are generally available to other similarly situated senior level executives of the Company performing similar

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functions as Executive, including those contained in the Company’s corporate travel policy then in effect, provided that when travelling on Company business:

(i) Executive shall be permitted to fly business/first class for international travel;

(ii) Executive shall be entitled to car service pickup at the airport; and

(iii) Executive shall be permitted to rent a cellular car phone.

(e) Executive shall be entitled to receive benefits based on the date Executive started employment at Big Buddha.

(f) In the event the Company determines to purchase key man life insurance on Executive, Executive agrees to comply with all reasonable requirements of the insurance company associated therewith, including, without limitation, submitting to medical examinations.

5. Termination . Executive’s employment hereunder may be terminated prior to the end of the Term under the following circumstances:

(a) Death . Executive’s employment hereunder shall terminate upon Executive’s death.

(b) Total Disability . The Company may terminate Executive’s employment hereunder at any time after Executive becomes “Totally Disabled.” For purposes of this Agreement, Executive shall be “Totally Disabled” upon the earlier of (i) the date Executive becomes entitled to receive disability benefits under the Company’s long-term disability plan or (ii) Executive’s inability to perform the duties and responsibilities contemplated under this Agreement for a period of more than one hundred eighty (180) consecutive days due to physical or mental incapacity or impairment.

(c) Termination by the Company without Cause . The Company may terminate Executive’s employment hereunder without Cause (as hereinafter defined) at any time after providing written notice to Executive.

(d) Termination by the Company for Cause . The Company may terminate Executive’s employment hereunder for Cause at any time after providing written notice to Executive. For purposes of this Agreement, the term “Cause” shall mean any of the following: (i) Executive’s willful or intentional failure or refusal to perform or observe any of Executive’s material duties, responsibilities or obligations set forth in, or as contemplated under, this Agreement; (ii) acts or omissions by Executive involving Executive’s gross negligence related to the discharge of Executive’s duties; (iii) any act or failure to act by Executive constituting fraud or involving a knowing, willful or intentional misrepresentation, theft, embezzlement, dishonesty or moral turpitude (collectively, “Fraud”); (iv) conviction of (or a plea of nolo contendere to) an offense which is a felony in the jurisdiction involved or which is a misdemeanor in the jurisdiction involved but which involves Fraud; (v) any willful or intentional

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act or omission by Executive which is intended to or which materially injures the reputation, business or business relationships of the Company or Big Buddha, or Executive’s reputation or business relationships; or (vi) Executive’s willful or intentional failure or refusal to comply with any reasonable and lawful request or direction of the Company not contrary to the provisions of this Agreement or the Earn-Out Agreement which, if curable, in the case of subsections (i) and (vi) above, has not been cured within thirty (30) days following written notice to Executive, which written notice shall (A) indicate the specific termination provision of this Agreement relied upon and (B) set forth in reasonable detail the facts and circumstances claimed to provide the basis for termination of Executive’s employment under the provisions so indicated.

(e) Termination by Executive for Good Reason . Executive may terminate Executive’s employment hereunder at any time if Executive has “Good Reason.” For purposes of this Agreement, the term “Good Reason” shall mean the existence of one or more of the following conditions arising without the prior written consent of Executive: (i) the failure to maintain Executive in the position of President of Big Buddha, the removal of him from such position or any material diminution in Executive’s duties, authority, title or responsibilities (other than in connection with a termination of Executive’s employment); (ii) a material diminution in Executive’s Base Salary or a material adverse change in benefits not affecting other senior level executives of the Company performing similar functions as Executive; (iii) Executive is assigned duties or the Board of Directors of the Company authorizes the conduct of business which would cause Executive to commit Fraud or would expose Executive to criminal liability; or (iv) any other action or inaction that constitutes a material breach of this Agreement. If one or more of the above conditions for Good Reason exist, the Executive must provide notice to the Company no more than ninety (90) days following the initial existence of the condition. Upon such notice, the Company shall have a period of thirty (30) days during which it may remedy the condition and not be required to pay the amounts required pursuant to Section 6(b) hereof.

(f) Termination by Executive Without Good Reason . Executive may terminate Executive’s employment hereunder without Good Reason at any time after providing thirty (30) days prior written notice to the Company.

6. Compensation Following Termination Prior to the End of the Term . In the event that Executive’s employment hereunder is terminated prior to the end of the Term, Executive shall be entitled only to the following compensation and benefits upon such termination:

(a) Termination by Reason of Death or Total Disability, by the Company for Cause, or by Executive without Good Reason . In the event that Executive’s employment is terminated prior to the expiration of the Term by reason of Executive’s death or Total Disability, or termination by the Company for Cause, or termination by Executive without Good Reason, respectively, the Company shall pay the following amounts to Executive (or to Executive’s spouse, or to Executive’s estate if Executive is unmarried at the time of Executive’s death, as applicable):

(i) any accrued but unpaid Base Salary (as determined pursuant to Section 3(a) hereof) for services rendered to the date of termination;

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(ii) any accrued but unpaid expenses required to be reimbursed pursuant to Section 4(a) hereof; and

(iii) any amounts in respect of accrued but unused vacation days (as determined pursuant to Section 4(c) hereof) up to the date of termination.

Except as otherwise specifically provided herein, in the event Executive’s employment is terminated as described in this Section 6(a), the benefits to which Executive and/or Executive’s family may be entitled upon such termination pursuant to the plans, programs and arrangements referred to in Section 4(b) hereof shall be determined and paid in accordance with the terms of such plans, programs and arrangements.

(b) Termination by the Company Without Cause or by Executive for Good Reason . In the event that Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, the Company shall pay the following amounts to Executive:

(i) any accrued but unpaid Base Salary (as determined pursuant to Section 3(a) hereof) for services rendered to the date of termination;

(ii) any accrued but unpaid expenses required to be reimbursed pursuant to Section 4(a) hereof;

(iii) current Base Salary for the remainder of the Term, payable in accordance with the Company’s then existing payroll practices; and

(iv) any amounts in respect of accrued but unused vacation days (as determined pursuant to Section 4(c) hereof) up to the date of termination.

Notwithstanding the foregoing, the Company shall have no obligation to make any further payments pursuant to Section 6(b)(iii) hereof in the event that Executive breaches any of his obligations set forth in Section 7 hereof.

Except as otherwise specifically provided herein, in the event Executive’s employment is terminated as described in this Section 6(b), the benefits to which Executive and/or Executive’s family may be entitled upon such termination pursuant to the plans, programs and arrangements referred to in Section 4(b) hereof shall be determined and paid in accordance with the terms of such plans, programs and arrangements. For the avoidance of doubt, termination of Executive’s employment by the Company or by Executive shall not have any effect on the Earn-Out Agreement or any amounts due to Executive thereunder except as expressly provided for in the Earn-Out Agreement.

(c) Compliance with Code Section 409A . Notwithstanding the foregoing, and in accordance with Code Section 409A and the Treasury regulations promulgated thereunder, if Executive is a “specified employee” for purposes of Code Section 409A, no deferred compensation (including, without limitation, salary continuation payments in accordance with Section 6(b)(iii) hereof) which is payable at separation from service and is not exempt from the application of Code Section 409A will be paid to Executive during the six-

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month period immediately following the day he is separated from service. Any payments so delayed for six months shall be paid on the first business day following completion of such six-month period. Executive’s termination of employment shall be construed for purposes of this Agreement to mean separation from service within the meaning of Code Section 409A. This Agreement is intended to exempt certain payments and reimbursements from the application of Code Section 409A and the Treasury regulations promulgated thereunder, or to comply with the requirements of Code Section 409A, as the case may be. Should any additional amendments be required in order to ensure that any amounts payable under this Agreement are not subject to the additional 20% excise tax under Code Section 409A, the Company shall so notify Executive, and the parties shall work in good faith to amend this Agreement while maintaining to the maximum extent practicable the original intent of this Agreement.

(d) General .

(i) In the event that Executive’s employment is terminated for any reason, Executive shall cease to be an employee of the Company for all purposes, and, except as may be provided under this Agreement, the Option Agreement or under the terms of any incentive compensation, employee benefit or fringe benefit plan applicable to Executive at the time of the termination of Executive’s employment prior to the end of the Term, shall have no right to receive any other compensation, employee benefits or perquisites, or to participate in any other plan, arrangement or benefit, with respect to any future period after such termination. In the event that Executive’s employment is terminated for any reason, the Company’s payment of salary and other amounts specifically provided for in the applicable previous paragraph of this Section 6 shall constitute complete satisfaction of all payment obligations of the Company to Executive pursuant to this Agreement.

(ii) Executive’s rights set out in this Agreement, the Option Agreement and other applicable benefit plans shall constitute Executive’s sole and exclusive rights and remedies as a result of Executive’s actual or constructive termination of employment.

7. Noncompetition and Nonsolicitation; Nondisclosure of Proprietary Information; Surrender of Records .

(a) General. Executive acknowledges that the Company would not consummate the transactions contemplated by the Stock Purchase Agreement without the assurance that Executive will not engage in any of the activities prohibited by this Section 7 for the periods set forth below. Executive understands that the provisions of this Section 7 may limit Executive’s ability to earn a livelihood in a business similar to the business of the Company but nevertheless agrees and hereby acknowledges that the consideration provided under this Agreement, including any amounts provided under Section 3 hereof, are sufficient to justify the restrictions contained in such provisions. Executive agrees to restrict Executive’s actions as provided for in this Section 7. Executive further acknowledges that the scope and duration of the restrictions set forth in this Section 7 are reasonable in light of the specific nature and duration of the transactions contemplated by the Stock Purchase Agreement and the payments Executive is directly receiving pursuant to the terms of the Stock Purchase Agreement. In consideration thereof, and in light of Executive’s education, skills and abilities, Executive agrees that Executive will not assert in any forum that the provisions of this Section 7 prevent Executive

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from earning a living or otherwise are void or unenforceable or should be held void or unenforceable.

(b) Noncompetition; Nonsolicitation .

(i) Executive acknowledges and recognizes the highly competitive nature of the Company’s business and that Executive’s position with the Company and access to the Company’s and Big Buddha’s confidential records and proprietary information renders Executive special and unique. In consideration of payments made and to be made by the Company directly to Executive (x) pursuant to this Agreement (including, without limitation, pursuant to Section 3 hereof), and (y) in connection with the sale of Executive’s interest in Big Buddha pursuant to the Stock Purchase Agreement, Executive agrees that for the applicable periods as set forth below (the “Applicable Periods”), Executive will not, directly or indirectly, in the United States or any other place in which the Company or Big Buddha then does business, be affiliated in any manner with any individual, partnership, venture, unincorporated association, organization, syndicate, corporation, limited liability company, or other entity, trust and trustee, executor, administrator or other legal or personal representative, or any government or agency or political subdivision thereof (any of the foregoing, a “Person”) engaged in the business of selling, designing, licensing, distributing (at wholesale or retail) and/or marketing (A) handbags and shoes, (B) any other product categories the Company is actively selling, designing, licensing, distributing (at wholesale or retail) and/or marketing under the “Big Buddha” brand (or combination of the “Big Buddha” brand with any other brand or mark) as of the date of the termination or expiration of the Agreement, including conducting any business under any name that contains any trademark, service mark, copyright, slogan, trade name, or internet domain name listed in Section 4.8(h) of the Disclosure Schedule to the Stock Purchase Agreement or any variation thereof or (C) any other product categories sold, designed, licensed, distributed or marketed by Executive for the Company or any of its Affiliates during the Term:

Termination Event	Applicable Period
Executive’s employment is terminated by the Company for Cause or by Executive without Good Reason	Three (3) years from the date of termination
Executive’s employment is terminated by the Company without Cause or by Executive with Good Reason	One (1) year from the date of termination
Executive’s employment is terminated due to the expiration of the Term of this Agreement	Two (2) years from the date of termination

(ii) In further consideration of the payments made and to be made by the Company directly to Executive (x) pursuant to this Agreement (including, without limitation, pursuant to Section 3 hereof), and (y) in connection with the sale of Executive’s interest in Big Buddha pursuant to the Stock Purchase Agreement, Executive agrees that for the

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Applicable Periods, Executive shall not, directly or indirectly, (a) advise or encourage any employee, agent, consultant, representative, customer, licensor, vendor or supplier of the Company or Big Buddha to terminate his, her, or its relationship with the Company or Big Buddha or to reduce the amount of business customarily done with the Company or Big Buddha, or (b) solicit or attempt to solicit or participate in the solicitation of or employ or otherwise engage any employee, agent, consultant or representative of the Company or Big Buddha, or otherwise advise or encourage any such person to become an employee, agent, representative or consultant of or to any other Person; provided that this Section 7(b)(ii) shall not prohibit soliciting or recruiting generally in the public media (without specifically targeting such employees, agents, consultants or representatives).

(iii) For the Applicable Periods, Executive agrees that upon the earlier of Executive’s (x) negotiating with any Competitor (as defined below) concerning the possible employment of Executive by the Competitor, (y) receiving an offer of employment from a Competitor, or (z) becoming employed by a Competitor, Executive will (A) immediately provide notice to the Company of such circumstances and (B) provide copies of Section 7 hereof to the Competitor. Executive further agrees that the Company may provide notice to a Competitor of Executive’s obligations under this Agreement, including without limitation, Executive’s obligations pursuant to Section 7 hereof. The parties further agree, notwithstanding the provisions of Section 7(g) hereto, that any disclosures to a Competitor pursuant to this Section 7(b)(iii) shall not be a breach of Section 7(g). For purposes of this Agreement, “Competitor” shall mean any Person (other than the Company or Big Buddha or any of their respective Affiliates) that then engages, directly or indirectly, in the United States or any other place in which the Company or Big Buddha then does business, in the business of selling, designing, licensing, distributing (at wholesale or retail) and/or marketing (A) handbags and shoes, (B) any other product categories Big Buddha is actively selling, designing, licensing, distributing (at wholesale or retail) and/or marketing as of the date of the termination or expiration of the Agreement, (C) any other product categories the Company is actively selling, designing, licensing, distributing (at wholesale or retail) and/or marketing under the “Big Buddha” brand (or combination of the “Big Buddha” brand with any other brand or mark) as of the date of the termination or expiration of the Agreement or (D) any other product categories sold, designed, licensed, distributed or marketed by Executive for the Company or any of its Affiliates during the Term.

(c) Proprietary Information . Executive acknowledges that during the course of Executive’s employment with the Company, Executive will necessarily have access to and make use of proprietary information and confidential records of the Company and its Affiliates (including, without limitation, Big Buddha). Executive covenants that Executive shall not, during the Term or at any time thereafter (irrespective of the circumstances under which Executive’s employment with the Company terminates), directly or indirectly, use for Executive’s own purpose or for the benefit of any Person other than the Company and its Affiliates, or otherwise disclose, any proprietary information of which Executive has knowledge to any Person, unless such disclosure has been authorized in writing by the Company or such Affiliates or is otherwise required by law. Executive acknowledges and understands that the term “proprietary information” includes, but is not limited to, patents, copyrights, trademarks and trade secrets such as, without limitation: (a) designs, drawings, sketches, fabrics, accessories and ornaments utilized or incorporated in or proposed to be utilized or incorporated in any product of

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the Company or its Affiliates; (b) the software products, programs, applications and processes utilized by or on behalf of the Company and its Affiliates (other than off-the-shelf software programs); (c) the name and/or address of any customer, licensor or vendor of the Company and its Affiliates or any information concerning the transactions or relations of any customer, licensor or vendor of the Company and its Affiliates with the Company and its Affiliates or any of their shareholders, principals, directors, officers, employees or agents; (d) any information concerning any product, technology or procedure employed by or on behalf of the Company and its Affiliates but not generally known to its customers, licensors, vendors or competitors, or under development by or being tested by or on behalf of the Company and its Affiliates but not at the time offered generally to customers, licensors, or vendors; (e) any information relating to the Company’s and its Affiliates’ computer systems, pricing or marketing methods, sales margins, cost or source of raw materials, supplies or goods, capital structure, operating results, or borrowing arrangements; (f) any information which is generally regarded as confidential or proprietary in any line of business engaged in by or on behalf of the Company and its Affiliates; (g) any business plans, budgets, advertising or marketing plans of the Company or its Affiliates; (h) any information contained in any of the written or oral policies and procedures or manuals of the Company and its Affiliates; (i) any information belonging to customers, licensors, vendors or Affiliates of the Company and its Affiliates or any other individual or entity which the Company and its Affiliates has agreed to hold in confidence; and (j) all written, graphic and other material (whether in writing on magnetic tape or in electronic or other form) relating to or containing any of the foregoing. Executive acknowledges and understands that information that is not novel or copyrighted or trademarked or patented may nonetheless be proprietary information. The term “proprietary information” shall not include information generally available to and known by the public or within the industry or information that is or becomes available to Executive on a non-confidential basis from a source other than the Company (or any of its Affiliates) or the Company’s (or its Affiliates’) shareholders, principals, directors, officers, employees or agents (other than as a result of a breach of any obligation of confidentiality).

(d) Confidentiality and Surrender of Records . Executive shall not during the Term or at any time thereafter (irrespective of the circumstances under which Executive’s employment with the Company terminates), except as required by law or as is necessary for the performance of Executive’s duties hereunder, directly or indirectly, publish, make known or in any fashion disclose any confidential records to, or permit any inspection or copying of confidential records by, any Person, and Executive shall not retain, and shall deliver promptly to the Company, any of the same following termination of Executive’s employment hereunder for any reason or upon request by the Company. The term “confidential records” means all correspondence, memoranda, files, manuals, books, designs, sketches, lists, financial, operating, or marketing records, magnetic tape, or electronic or other media or equipment or records of any kind which may be in Executive’s possession or under Executive’s control or accessible to Executive which contain any proprietary information. All confidential records shall be and remain the sole property of the Company or its Affiliates during the Term and thereafter.

(e) Disclosure Required by Law . In the event Executive is required by law or court order to disclose any proprietary information or confidential records of the Company or its Affiliates, Executive shall provide the Company with prompt written notice so that the Company may seek a protective order or other appropriate remedy, and if such protective

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order or other remedy is not obtained, Executive shall furnish only that portion of the proprietary information or confidential records that is legally required.

(f) No Other Obligations . Executive represents and warrants to the Company that Executive is not precluded or limited in Executive’s ability to undertake or perform the duties described herein by any contract, agreement or restrictive covenant. Executive covenants that Executive shall not employ the trade secrets or proprietary information of any other Person in connection with Executive’s employment by the Company.

(g) Confidentiality of this Agreement . Executive agrees to keep confidential the terms of this Agreement. This provision does not prohibit Executive from providing this information to Executive’s attorneys or accountants for purposes of obtaining legal or tax advice or as required by law; provided , however , that Executive shall be responsible for breaches of the confidentiality restrictions contained herein by such Persons as if Executive had breached such restrictions. The Company shall not disclose the terms of this Agreement except as necessary in the ordinary course of its business, as required by law or as required by any governmental or quasi-governmental entity or any self regulatory organization.

(h) Developments the Property of the Company . All discoveries, inventions, designs, drawings, sketches, products, processes, methods and improvements conceived, developed or otherwise made by Executive at any time, alone or with others, and in any way relating to the present or future business or products of the Company and its Affiliates, whether or not subject to copyright protection and whether or not reduced to tangible form during the period of Executive’s employment with the Company (collectively referred to as “Developments”), shall be the sole property of the Company. Executive agrees to, and hereby does, assign to the Company all of Executive’s right, title and interest throughout the world in and to all Developments. Executive agrees that all such Developments that are copyrightable shall constitute works made for hire under the copyright laws of the United States and Executive hereby assigns to the Company all copyrights and other proprietary rights Executive may have in any such Developments to the extent that they might not be considered works made for hire. Executive shall make and maintain adequate and current written records of all Developments, and shall disclose all Developments fully and in writing to the Company promptly after development of the same, and at any time upon request.

(i) Construction . For purposes of any provision of Section 7 hereof, “directly or indirectly” means in Executive’s individual capacity for Executive’s own benefit or for the benefit of a third party, or as a shareholder, partner, member, principal, officer, director, trustee, employee, representative, agent or consultant of or to any Person whatsoever; provided , however , that Executive may own, directly or indirectly, solely as an investment, securities of any Person traded on any national securities exchange or listed on the Nasdaq Stock Market if Executive is not a controlling Person of, or a member of a group which controls, such Person and Executive does not, directly or indirectly, own 2% or more of any class of equity securities, or securities convertible into or exercisable or exchangeable for 2% or more of any class of equity securities, of such Person.

(j) Enforcement . Executive acknowledges and agrees that, by virtue of Executive’s position, Executive’s services, and access to and use of confidential records and

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proprietary information, any violation by Executive of any of the undertakings contained in this Section 7 would cause the Company or its Affiliates immediate, substantial and irreparable injury for which it has no adequate remedy at law. Accordingly, Executive agrees that in the event of a breach by Executive of any said undertakings, the Company will be entitled to temporary and permanent injunctive relief in any court of competent jurisdiction (without the need to post any bond and without proving that damages would be inadequate). Rights and remedies provided for in this Section 7 are cumulative and shall be in addition to rights and remedies otherwise available to the parties hereunder or under any other agreement or applicable law.

8. No Third Party Rights . The parties do not intend the benefits of this Agreement to inure to any Person not a party to this Agreement (other than to the spouse or estate of Executive in the case of the death of Executive, in which case such spouse or estate shall be entitled to only those rights set forth in Section 6(a) hereof). Notwithstanding anything contained in this Agreement, or any conduct or course of conduct by any party before or after signing this Agreement, this Agreement shall not be construed as creating any right, claim or cause of action against any party by any Person not a party to this Agreement (other than the spouse or estate of Executive in the case of the death of Executive, in which case such spouse or estate shall be entitled to only those rights set forth in Section 6(a) hereof).

9. Notices . Any notice, consent, request or other communication made or given in accordance with this Agreement shall be in writing and shall be deemed to have been duly given when actually received if delivered in person, sent by Federal Express or equivalent courier service, or sent by facsimile transmission or, if mailed, five (5) business days after mailing by registered or certified mail, return receipt requested, to those parties listed below at their following respective addresses or facsimile numbers, or at such other address or facsimile number or person’s attention as each may specify by notice to the others:

To the Company:

	Steven Madden, Ltd.
	52-16 Barnett Avenue
	Long Island City, NY 11104
	Attention: Awadhesh Sinha
	Facsimile: (718) 446-5599

To Executive:

	Jeremy Bassan
	208 Woodrow Avenue
	Santa Cruz, California 95060

10. Assignability; Binding Effect . This Agreement is a personal contract calling for the provision of unique services by Executive, and Executive’s rights and obligations hereunder may not be sold, transferred, assigned, pledged or hypothecated. In the event of any attempted assignment or transfer of rights or obligations hereunder by Executive contrary to the

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provisions hereof, the Company will have no further liability for payments hereunder. The rights and obligations of the Company hereunder will be binding upon and run in favor of the successors and assigns of the Company.

11. Complete Understanding; Amendment; Waiver . This Agreement, together with the Stock Purchase Agreement, the Earn-Out Agreement and the Option Agreement, constitutes the complete understanding among the parties with respect to the employment of Executive and supersedes all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, and no statement, representation, warranty or covenant has been made by any party with respect thereto except as expressly set forth herein or therein. All prior employment, consulting or other agreements between the Company or its Affiliates and Executive with respect to the performance of any services by Executive to the Company or any of its Affiliates or the payment of any royalties, license fees or other similar fees to Executive, are terminated as of the Effective Date. This Agreement shall not be altered, modified, amended or terminated except by a written instrument signed by each of the parties hereto. Any waiver of any term or provision hereof, or of the application of any such term or provision to any circumstances, shall be in writing signed by the party charged with giving such waiver. Waiver by any party hereto of any breach hereunder by the other parties shall not operate as a waiver of any other breach, whether similar to or different from the breach waived. No delay on the part of the Company or Executive in the exercise of any of their respective rights or remedies shall operate as a waiver thereof, and no single or partial exercise by the Company or Executive of any such right or remedy shall preclude other or further exercise thereof.

12. Negotiated Agreement . The Company and Executive acknowledge that they have been advised and represented by counsel in the negotiation, execution and delivery of this Agreement and accordingly agree that if an ambiguity exists with respect to any provision of this Agreement, such provision shall not be construed against any party because such party or its representatives drafted such provision.

13. Severability . If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any arbitrator to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest extent permitted by law. If the final determination of any arbitrator declares that any item or provision hereof is invalid or unenforceable, the parties hereto agree that the arbitrator making the determination of invalidity or unenforceability shall have the power, and is hereby directed, to reduce the scope, duration or area of the term or provision, to delete specific words or phrases and to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

14. Survivability . The provisions of this Agreement which by their terms call for performance subsequent to termination of Executive’s employment hereunder, or of this Agreement, shall so survive such termination.

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15. Governing Law . This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of New York applicable to contracts made and to be entirely performed therein, without regard to principles of conflicts of laws.

16. Counterparts; Facsimile . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto. Facsimile or electronic transmission of any signed original counterpart and/or retransmission of any signed facsimile or electronic transmission shall be deemed the same as the delivery of an original.

17. Headings . The headings in this Agreement are inserted for convenience only and shall not constitute a part hereof.

18. Arbitration . To the fullest extent allowed by law, any controversy, claim or dispute between Executive and the Company (and/or any of its owners, directors, officers, employees, Affiliates, or agents) relating to or arising out of Executive’s employment or the cessation of that employment will be submitted to final and binding arbitration, to be held in the State of New York for determination in accordance with the American Arbitration Association’s (“AAA”) National Rules for the Resolution of Employment Disputes, as the exclusive remedy for such controversy, claim or dispute. In any such arbitration, the parties may conduct discovery in accordance with the applicable rules of the arbitration forum or as determined by the arbitrator(s), except that the arbitrator(s) shall have the authority to order and permit discovery as the arbitrator(s) may deem necessary and appropriate in accordance with applicable state or federal discovery statutes. The arbitrator(s) shall issue a reasoned, written decision, and shall have full authority to award all remedies which would be available in court. The arbitrators’ award shall provide that the fees and expenses of the arbitration (including the fees of the AAA, the fees and expenses of the arbitrator(s) and attorneys’ fees) shall be allocated based on the proportion that the aggregate dollar amount of disputed items submitted to arbitration that are unsuccessfully disputed by each party (as finally determined by the arbitrator(s)) bears to the total dollar amount of all disputed items submitted to arbitration. The award of the arbitrator(s) shall be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction located in the State of New York, and the parties hereby consent to the exclusive jurisdiction of the courts located in the State of New York. Possible disputes covered by the above include (but are not limited to) unpaid wages, breach of contract, torts, violation of public policy, discrimination, harassment, or any other employment-related claims under laws including but not limited to, Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Age Discrimination in Employment Act, and any other statutes or laws relating to Executive’s relationship with his employer, regardless of whether such dispute is initiated by Executive or the Company. Thus, this bilateral arbitration agreement applies to any and all claims that the Company may have against Executive relating to or arising out of Executive’s employment or the cessation of that employment, including but not limited to, claims for misappropriation of Company property, disclosure of proprietary information or trade secrets, interference with contract, trade libel, gross negligence, or any other claim for alleged wrongful conduct or breach of the duty of loyalty by Executive. However, notwithstanding anything to the contrary contained herein, the Company and Executive shall have their respective rights to seek and obtain injunctive relief from a court with respect to any controversy, claim or

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dispute to the extent permitted by law. Claims where mandatory arbitration is prohibited by law are not covered by this arbitration agreement, and such claims may be presented by either Executive or the Company to the appropriate court or governmental agency. BY AGREEING TO THIS BINDING ARBITRATION PROVISION, BOTH EXECUTIVE AND THE COMPANY GIVE UP ALL RIGHTS TO TRIAL BY JURY. This arbitration agreement is to be construed as broadly as is permissible under applicable law.

[SIGNATURES ON NEXT PAGE]

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IN WITNESS WHEREOF , each of the parties hereto has duly executed this Agreement as of the date first above written.

EXECUTIVE

/s/ Jeremy Bassan
Jeremy Bassan

STEVEN MADDEN, LTD.

By:	/s/ Edward Rosenfeld
	Name:	Edward Rosenfeld
	Title:	Chief Executive Officer

Counterpart Signature Page
Employment Agreement

Exhibit A

NON-QUALIFIED STOCK OPTION AGREEMENT

PURSUANT TO THE

STEVEN MADDEN, LTD.

2006 STOCK INCENTIVE PLAN

THIS AGREEMENT , DATED AS OF FEBRUARY 10, 2010 (THIS “ AGREEMENT ”), BETWEEN STEVEN MADDEN, LTD. (THE “ COMPANY ”) AND JEREMY BASSAN (THE “ PARTICIPANT ” ).

Preliminary Statement

The Compensation Committee of the Board of Directors of the Company (the “ Committee ”) has authorized this grant of a non-qualified stock option (the “ Option ”) on February 10, 2010 (the “ Grant Date ”) to purchase the number of shares of the Company’s common stock, par value $0.0001 per share (the “ Common Stock ”), set forth below in Section 2 to the Participant, as an Eligible Employee of the Company or an Affiliate of the Company. Unless otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Steven Madden, Ltd. 2006 Stock Incentive Plan, as amended (as the same may be further amended from time to time, the “ Plan ”). A copy of the Plan as in effect on the date hereof has been delivered to the Participant. By signing and returning this Agreement, the Participant acknowledges having received and read a copy of the Plan as in effect on the date hereof and agrees to comply with the Plan, this Agreement and all applicable laws and regulations.

Accordingly, the parties hereto agree as follows:

1. Tax Matters . No part of the Option granted hereby is intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “ Code ”).

2. Grant of Option . Subject in all respects to the Plan and the terms and conditions set forth herein and therein, the Participant is hereby granted an Option to purchase from the Company 50,000 shares of Common Stock (the “ Option Shares ”), at a price per share of $39.26 (the “ Option Price ”).

3. Vesting and Exercise.

(a) Except as set forth below, the Option shall vest and become exercisable in installments as provided below, which shall be cumulative. To the extent that the Option has become vested and exercisable as provided below, the Option thereafter may be exercised by the Participant, in whole or in part, at any time or from time to time prior to the expiration or earlier termination of the Option as provided herein and in accordance with Section 6.3(d) of the Plan, including, without limitation, the filing of such written form of exercise notice, if any, as may be required by the Committee or the Company and the payment in full of the Option Price multiplied by the number of Option Shares underlying the portion of the Option exercised. Upon expiration of the Option, the Option shall be canceled and no longer exercisable. The following table indicates each date upon which the Participant shall be vested and entitled to exercise the Option with respect to the percentage of the Option Shares indicated beside such date, provided that the Participant has not had a Termination of

Employment any time prior to such date (each of the dates set forth below being herein called a “ Vesting Pate ”):

Vesting Date	Percentage of Option Shares Vested
First Anniversary of Grant Date	33 1/3 % vest on that date; 33 1/3 % total vested
Second Anniversary of Grant Date	33 1/3 % vest on that date; 66 2/3 % total vested
Third Anniversary of Grant Date	33 1/3 % vest on that date; 100% total vested

(b) There shall be no proportionate or partial vesting in the periods prior to each Vesting Date and all vesting shall occur only on the appropriate Vesting Date, provided that the Participant has not had a Termination of Employment at any time prior to such Vesting Date.

4. Option Term . The term of each Option shall be seven years after the Grant Date and the Option shall expire at 5:00 p.m. (New York City time) on the seventh (7 th ) anniversary of the Grant Date, subject to earlier termination in the event of the Participant’s Termination of Employment as specified in Section 5 .

5. Termination . Subject to Section 4 and the terms of the Plan, the Option, to the extent vested at the time of the Participant’s Termination of Employment, shall remain exercisable as provided in Section 12.1(a) of the Plan, provided , that , notwithstanding the foregoing, in the case of a Termination without Cause or for Good Reason (as defined in the Employment Agreement by and between the Company and the Participant of even date herewith) the Option, to the extent vested at the time of the Participant’s Termination of Employment, shall remain exercisable for one-year from the date of such Termination. Any portion of the Option that is not vested as of the date of the Participant’s Termination of Employment for any reason shall terminate and expire as of the dated of such Termination of Employment.

6. Restriction on Transfer of Option . No part of the Option shall be subject to Transfer other than by will or by the laws of descent and distribution. During the lifetime of the Participant, the Option may be exercised only by the Participant or the Participant’s guardian or legal representative. The Option shall not be subject to levy by reason of any execution, attachment or similar process. Upon any attempt to Transfer me Option or in the event of any levy upon the Option by reason of any execution, attachment or similar process contrary to the provisions hereof, the Option shall immediately and automatically become null and void.

7. Rights as a Stockholder . The Participant shall have no rights as a stockholder with respect to any Option Shares unless and until the Participant has become the holder of record of the Option Shares. No adjustments shall be made to the Option, the Option Shares or the Option Price for dividends in cash or other property, distributions or other rights in respect of any Option Shares, except as otherwise may be specifically provided for in the Plan. No shares of Common Stock shall be issued unless and until payment therefor has been made or provided.

8. Provisions of Plan Control . This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time. The Plan is incorporated herein by reference. If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly, except in the case of Section 5 of this Agreement, which if there is a conflict with the Plan, the terms of Section 5 of this Agreement shall control. This Agreement contains the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any prior agreements and understandings (whether written or oral) between the Company and Participant with respect to the subject matter hereof.

9. Notices . Any notice or communication given hereunder (each a (“ Notice ”) shall be in writing and shall be sent by personal delivery, by courier or by United States mail (registered or certified mail, postage prepaid and return receipt requested), to the appropriate party at the address set form below:

If to the Company, to:

Steven Madden, Ltd.

52-16 Barnett Avenue

Long Island City, New York 11104

Attention: Chief Executive Officer

If to the Participant, to the address for the Participant on file with the Company ; or such other address or to the attention of such other person as a party shall have specified by prior Notice to the other party. Each Notice will be deemed given and effective upon actual receipt (or refusal of receipt).

10. No Obligation to Continue Employment . This Agreement is not an agreement of employment. This Agreement does not guarantee that the Company or its Affiliates will employ, retain or continue to, employ or retain the Participant during the entire, or any portion of the term of this Agreement, including but not limited to any period during which any Option is outstanding, nor does it modify in any respect the Company’s or its Affiliates’ right to terminate or modify the Participant’s employment or compensation.

11. Miscellaneous.

(a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns.

(b) This Agreement shall be governed and construed in accordance with the laws of Delaware (regardless of the law that might otherwise govern under applicable Delaware principles of conflict of laws).

(c) There shall be no proportionate or partial vesting in the periods prior to each Vesting Date and all vesting shall occur only on the appropriate Vesting Date, provided that the Participant has not had a Termination of Employment at any time prior to such Vesting Date.

(d) The Option will become fully vested on a Change in Control.

[ Remainder of Page Left Blank ]

IN WITNESS WHEREOF , the parties have executed this Agreement on the date and year first above written.

	STEVEN MADDEN, LTD.

	By:
	Name:	Edward R. Rosenfeld
	Title:	Chief Executive Officer

	PARTICIPANT

	Jeremy Bassan

Exhibit C

EXECUTION VERSION

SERVICES AGREEMENT

by and among

STEVEN MADDEN, LTD.,

BIG BUDDHA, INC.

and

JEREMY BASSAN

Dated as of February 10, 2010

SERVICES AGREEMENT

This SERVICES AGREEMENT (this “Agreement”), dated as of February 10, 2010, is entered into by and among Steven Madden, Ltd., a Delaware corporation (“Madden”), Big Buddha, Inc., a California corporation (the “Company”), and Jeremy Bassan (“Seller”).

RECITALS

WHEREAS, concurrently herewith, Seller and Madden are entering into that certain Stock Purchase Agreement, dated as of the date hereof (as amended from time to time in accordance with its terms, the “Stock Purchase Agreement”), pursuant to which Madden shall purchase all of the issued and outstanding shares of the Company from Seller;

WHEREAS, concurrently herewith, Seller, Madden and the Company are entering into that certain Earn-Out Agreement, dated as of the date hereof (as amended from time to time in accordance with its terms, the “Earn-Out Agreement”), pursuant to which Seller shall be eligible to receive certain earn-out purchase price payments in respect of each Earn-Out Year (as defined in the Earn-Out Agreement);

WHEREAS, the Company desires to obtain from Madden or its subsidiaries, and Madden desires to provide (either itself or through its subsidiaries) to the Company, certain Services (as defined below) following the date hereof; and

WHEREAS, the purpose of this Agreement is to ensure that the Services are delivered by Madden or its subsidiaries to the Company in the manner and on the terms set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

Term

1.1. Term . The term of this Agreement shall be effective on the Closing Date (as defined in the Stock Purchase Agreement), if one occurs, and shall continue until the earlier of the termination of the Earn-Out Agreement or March 31, 2013.

ARTICLE II

Services

2.1. Services by Madden . During the term of this Agreement as set forth in Article I above, Madden shall, either itself or through its subsidiaries (other than the Company), provide the Company, at a minimum, with the services described on Schedule A hereto (the “Services”). Madden agrees to provide, or to cause its subsidiaries to provide, the Services with the same level of care, quality and timeliness which Madden or any of its subsidiaries, as applicable, provides such services to Madden or its subsidiaries (other than the Company), or, with respect

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to services Madden or its subsidiaries do not provide to any other entity other than the Company, in no less than a commercially reasonable manner. The parties hereby acknowledge and agree that all services provided by Madden or its subsidiaries (other than the Company) to the Company shall be deemed to be governed by the terms and conditions of this Agreement and such services shall be deemed Services hereunder.

ARTICLE III

Compensation

3.1. Compensation . As compensation to Madden for the Services, the Company shall pay to Madden or its designee an annual charge (an “Annual Charge”) in an amount comprised of the aggregate costs set forth in respect of each Service or category of Services on Schedule A hereto.

3.2. Billing and Payment .

(a) As promptly as practicable, but in any event within seventy-five (75) days after the end of each Earn-Out Year, Madden shall prepare and deliver to Seller, and the Company shall provide Madden with all assistance as may be reasonably requested by Madden in connection with such preparation, (i) a notice of the Annual Charge for Services provided by Madden under this Agreement during such Earn-Out Year and (ii) reasonable supporting documentation sufficiently detailed to enable Seller to verify the amounts set forth in such notice ((i) and (ii) are collectively referred to as the “Annual Charge Notice”).

(b) Seller may dispute an Annual Charge Notice by sending a written notice (a “Dispute Notice”) to Madden within thirty (30) days of Madden’s delivery of the Annual Charge Notice. The Dispute Notice shall identify each disputed item on such Annual Charge Notice, specify the amount of such dispute and set forth in reasonable detail the basis for such dispute. In the event that Seller does not submit a Dispute Notice within thirty (30) days of Madden’s delivery of the Annual Charge Notice, it shall be conclusively presumed that Seller and the Company do not object to such Annual Charge Notice and such Annual Charge Notice shall be deemed to be final, binding and conclusive on the parties. In the event of a dispute, Madden and Seller shall attempt in good faith to reconcile the items identified in the Dispute Notice and any related items that may arise during the process described in this Section 3(b) (including providing information that is reasonably requested to the other party), and any resolution by them as to any disputed items shall be final, binding and conclusive on the parties and shall be evidenced by a writing signed by Madden and Seller, including a revised Annual Charge Notice (a “Revised Annual Charge Notice”), reflecting such resolution. If Madden and Seller are unable to reach such resolution within twenty (20) days after Seller’s delivery of the Dispute Notice to Madden, then Madden and Seller shall promptly submit any remaining disputed items for final binding resolution to the Independent Accounting Firm (as defined below). If any remaining disputed items are submitted to the Independent Accounting Firm for resolution (A) each party will furnish to the Independent Accounting Firm such workpapers and other documents and information relating to the remaining disputed items as the Independent Accounting Firm may request and are available to such party, and each party will be afforded the opportunity to present

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to the Independent Accounting Firm any material relating to the disputed items and to discuss the resolution of the disputed items with the Independent Accounting Firm; (B) each party will use its good faith commercially reasonable efforts to cooperate with the resolution process so that the disputed items can be resolved within forty-five (45) days after submission of the disputed items to the Independent Accounting Firm; (C) the determination by the Independent Accounting Firm, as set forth in a written notice to Madden and Seller (which written notice shall include a Revised Annual Charge Notice), shall be final, binding and conclusive on the parties absent manifest error; and (D) the fees and disbursements of the Independent Accounting Firm shall be allocated by the Independent Accounting Firm between Madden and Seller in the same proportion that the aggregate amount of the disputed items submitted to the Independent Accounting Firm that are unsuccessfully disputed by each party (as finally determined by the Independent Accounting Firm) bears to the total amount of all disputed items submitted to the Independent Accounting Firm. For purposes of this Agreement, “Independent Accounting Firm” means an independent accounting firm mutually acceptable to Madden and Seller (which accounting firm has not, within the prior 24 months, provided services to Madden, Seller or the Company, or any Affiliate (as defined in the Earn-Out Agreement) of any of them). If Madden and Seller are unable to agree upon an independent accounting firm within thirty (30) days, an independent accounting firm selected by Madden (which accounting firm has not, within the prior 24 months, provided services to Madden or the Company, or any Affiliate of either of them) and an independent accounting firm selected by Seller (which accounting firm has not, within the prior 24 months, provided services to Seller or the Company, or any Affiliate of either of them) shall select an independent accounting firm (which accounting firm has not, within the prior 24 months, provided services to Madden, Seller or the Company, or any Affiliate of any of them) and such independent accounting firm shall be the Independent Accounting Firm. In the event that, in any Earn-Out Year during the term of this Agreement, there is a dispute pursuant to this Section 3.2(b) as well as a contemporaneous dispute pursuant to Section 3(b) of the Earn-Out Agreement, the proceedings relating to both such disputes shall be consolidated and resolved in accordance with the terms of the Earn-Out Agreement.

(c) An Annual Charge Notice or, if one has been adopted pursuant to Section 3.2(b), a Revised Annual Charge Notice, shall be deemed to be final, binding and conclusive on the parties (a “Final Annual Charge Notice”) upon the earliest of (A) the failure of Seller to deliver to Madden a Dispute Notice within thirty (30) days after Madden’s delivery to Seller of the Annual Charge Notice for such Earn-Out Year; (B) the resolution by Madden and Seller of all disputes, as evidenced by a Revised Annual Charge Notice; and (C) the resolution by the Independent Accounting Firm of all disputes, as evidenced by a Revised Annual Charge Notice. Annual Charge payments as set forth in a Final Annual Charge Notice shall be made in accordance with Section 3.2(d) hereof.

(d) Each Annual Charge payment shall be payable by the Company to Madden with respect to the relevant Earn-Out Year and shall be paid in full on or before the tenth (10 th ) Business Day (as defined in the Stock Purchase Agreement) after the relevant Final Annual Charge Notice is deemed final, binding and conclusive for such Earn-Out Year pursuant to Section 3.2(c) hereof.

(e) In furtherance of the foregoing, provisional charges for the Services shall be reflected on a monthly basis on the books and records of the Company, which monthly

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charges shall be adjusted as necessary at the end of each Earn-Out Year hereunder in accordance with the Annual Charge.

ARTICLE IV

Miscellaneous

4.1. Relationship of the Parties . All employees and representatives of Madden or its subsidiaries providing Services to the Company under this Agreement shall be deemed for purposes of all compensation and employee benefits to be employees or representatives solely of Madden or its subsidiaries (other than the Company) and not to be employees of the Company. In performing their respective duties hereunder, all such employees and representatives of Madden or its subsidiaries, as applicable, shall be under the direction, control and supervision of Madden or such subsidiaries (and not of the Company) and Madden or its subsidiaries (other than the Company), as the case may be, shall have the sole right to exercise all authority with respect to the employment (including the termination of employment), assignment and compensation of such employees and representatives. Madden shall have sole responsibility for compliance with all laws relating to the employer/employee relationship between Madden and its employees providing the Services, including, but not limited to, federal, state and/or local laws on hours of labor, wages, worker’s compensation, unemployment compensation, insurance and social security benefits.

4.2. Notices . All notices, demands and communications of any kind which any party hereto may be required or desires to serve upon another party under the terms of this Agreement shall be in writing and shall be given by: (a) personal service upon such other party; (b) mailing a copy thereof by certified or registered mail, postage prepaid, with return receipt requested; (c) sending a copy thereof by Federal Express or equivalent courier service; or (d) sending a copy thereof by facsimile, in each case addressed as follows:

If to the Company:

Big Buddha, Inc.

2853 Mission Street

Santa Cruz, California 95060

Attention: Jeremy Bassan

Facsimile: (831) 421-9805

with copies to:

Sonnenschein Nath & Rosenthal LLP

525 Market Street, 26 th Floor

San Francisco, California 94105

Attention: Stafford Matthews, Esq.

Facsimile No.: (415) 882-0300

If to Seller:

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Jeremy Bassan

208 Woodrow Avenue

Santa Cruz, California 95060

with copies to:

Sonnenschein Nath & Rosenthal LLP

525 Market Street, 26 th Floor

San Francisco, California 94105

Attention: Stafford Matthews, Esq.

Facsimile No.: (415) 882-0300

If to Madden:

Steven Madden, Ltd.

52-16 Barnett Ave.

Long Island City, New York 11104

Attention: Awadhesh Sinha

Facsimile: (718) 446-5599

with copies to:

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

United States of America

Attention: James A. Grayer, Esq.

Facsimile: (212) 715-8000

In the case of service by Federal Express or equivalent courier service or by facsimile or by personal service, such service shall be deemed complete upon delivery or transmission, as applicable. In the case of service by mail, such service shall be deemed complete on the fifth Business Day after mailing. The addresses and facsimile numbers to which, and persons to whose attention, notices and demands shall be delivered or sent may be changed from time to time by notice served as hereinabove provided by any party upon any other party.

4.3. Governing Law . This Agreement and all the transactions contemplated hereby, and all disputes between the parties under or related to the Agreement or the facts and circumstances leading to its execution, whether in contract, tort or otherwise, shall be governed by, and construed and enforced in accordance with, the laws of the State of New York including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law and New York Civil Practice Laws and Rules 327.

4.4. Negotiated Agreement . The parties hereto acknowledge that they have been advised and represented by counsel in the negotiation, execution and delivery of this Agreement and accordingly agree that if an ambiguity exists with respect to any provision of this

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Agreement, such provision shall not be construed against any party because such party or its representatives drafted such provision.

4.5. Severability . If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any arbitrator to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest extent permitted by law. If the final determination of an arbitrator declares that any item or provision hereof is invalid or unenforceable, the parties hereto agree that the arbitrator making the determination of invalidity or unenforceability shall have the power, and is hereby directed, to reduce the scope, duration or area of the term or provision, to delete specific words or phrases and to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

4.6. Headings . The headings in this Agreement are inserted for convenience only and shall not constitute a part hereof.

4.7. Counterparts; Facsimile . For the convenience of the parties, any number of counterparts hereof may be executed, each such executed counterpart shall be deemed an original, and all such counterparts together shall constitute one and the same instrument. Facsimile or electronic transmission of any signed original counterpart and/or retransmission of any signed facsimile or electronic transmission shall be deemed the same as the delivery of an original.

4.8. Arbitration . Except as otherwise set forth in Section 3.2(b) hereof, if any dispute or difference of any kind whatsoever shall arise between the parties to this Agreement (each a “Disputing Party”) in connection with or arising out of this Agreement, or the breach, termination or validity thereof (a “Dispute”), then, on the demand of any Disputing Party, the Dispute shall be finally and exclusively resolved by arbitration in accordance with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (the “AAA”) then in effect, except as modified herein. The arbitration shall be held, and the award shall be issued in, the State of New York. There shall be one neutral arbitrator appointed by agreement of the Disputing Parties within thirty (30) days of receipt by respondent of the demand for arbitration. If such arbitrator is not appointed within the time limit provided herein, on the request of any Disputing Party, an arbitrator shall be appointed by the AAA by using a list striking and ranking procedure in accordance with the Rules. Any arbitrator appointed by the AAA shall be a retired federal judge or a practicing attorney with no less than fifteen years of experience and an experienced arbitrator with no less than five completed prior arbitrations relating to the purchase and sale of a wholesale business. By agreeing to arbitration, the Disputing Parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and the enforcement of any award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitrator shall have full authority to grant provisional remedies and to direct the Disputing Parties to request that any court modify or vacate any

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temporary or preliminary relief issued by such court, and to award damages for the failure of any Disputing Party to respect the arbitrator’s orders to that effect. Any arbitration proceedings, decision or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq . In arriving at a decision, the arbitrator shall be bound by the terms and conditions of this Agreement and shall apply the governing law of this Agreement as designated in Section 4.3. The arbitrator is not empowered to award damages in excess of compensatory damages, and each Disputing Party hereby irrevocably waives any right to recover punitive, exemplary or similar damages with respect to any Dispute. The award shall provide that the fees and expenses of the arbitration (including the fees of the AAA, the fees and expenses of the arbitrator and the attorneys’ fees of the prevailing Disputing Party) shall be allocated based on the proportion that the aggregate amount of disputed items submitted to arbitration that are unsuccessfully disputed by each Disputed Party (as finally determined by the arbitrator) bears to the total amount of all disputed items submitted to arbitration. The award, which shall be in writing and shall, on the written request of any Disputing Party, state the findings of fact and conclusions of law upon which it is based, shall be final and binding on the Disputing Parties and shall be the sole and exclusive remedy between the Disputing Parties regarding any claims, counterclaims, issues or accountings presented to the arbitral tribunal. Judgment upon any award may be entered in any court of competent jurisdiction of the courts located in the State of New York. All arbitration proceedings and resulting arbitration awards shall be strictly confidential and shall not be disclosed by the Disputing Parties to anyone, except to the extent necessary to disclose to compel arbitration, enforce any arbitration award or for accounting and financial reporting or to comply with reporting obligations under applicable securities laws and regulations.

4.9. Entire Agreement . This Agreement (including the schedules hereto), the Stock Purchase Agreement (including the schedules and exhibits thereto) and the Earn-Out Agreement (including the schedules and exhibits thereto) contain the entire understanding of the parties with respect to the subject matter hereof.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first set forth above.

STEVEN MADDEN, LTD.

By:	/s/ Edward Rosenfeld
	Name:	Edward Rosenfeld
	Title:	Chief Executive Officer

BIG BUDDHA, INC.

By:	/s/ Jeremy Bassan
	Name:	Jeremy Bassan
	Title:	President

SELLER :

/s/ Jeremy Bassan
Jeremy Bassan

Counterpart Signature Page

Services Agreement

SCHEDULE A

SERVICES

I.	Corporate Services

“Corporate Services” shall include information technology services (other than services relating to any websites used by the Company or other services described under the heading “Additional Services” below), finance and accounting services, human resources services and logistics services, which solely includes import, traffic, warehouse administration and customs administration services.

The portion of the Annual Charge to be paid by the Company in respect of the Corporate Services shall be equal to the Company Percentage (as defined below) for such Earn-Out Year times the total cost to Madden of providing the Corporate Services to Madden and its applicable subsidiaries, including, without limitation, the Company, for such Earn-Out Year (the “Corporate Services Allocation”); provided that the Company shall not have any obligation to pay the amount of the Corporate Services Allocation that exceeds 3.5% of the Company’s Net Sales. “Company Percentage” with respect to any given Earn-Out Year means the percentage determined by dividing (x) the total Net Sales (as defined in the Earn-Out Agreement) of the Company for such Earn-Out Year by (y) the total Net Sales of Madden and its consolidated subsidiaries (including, without limitation, the Company) for such Earn-Out Year.

For example, if the total cost to Madden of providing the Corporate Services for the 2010 Earn-Out Year (as defined in the Earn-Out Agreement) is $11 million and the Net Sales of the Company in the 2010 Earn-Out Year represents 3.8% of the total Net Sales of Madden and its consolidated subsidiaries, the portion of the Annual Charge to be paid by the Company in respect of the Corporate Services for the 2010 Earn-Out Year shall be $418,000 (3.8% of $11 million).

II.	Accessories Division Services

“Accessories Division Services” shall include (i) occupancy in Madden’s premises and (ii) other services provided by the Accessories Division of Madden (e.g., telephone, office supplies, insurance, reception, housekeeping, divisional financial services, etc.), which division is currently comprised of handbags, belts and small leather goods (the “Accessories Division”) other than the Corporate Services and the Additional Services.

The portion of the Annual Charge to be paid by the Company in respect of the Accessories Division Services shall be calculated as follows:

(i)

For occupancy in Madden’s premises, the Company shall pay its allocation of occupancy expenses based on the percentage determined by dividing (x) the total square footage used by the Company by (y) the total square footage used by Madden and its consolidated subsidiaries (including, without limitation, the Company); provided that, until the Company achieves $20 million in sales, the total square footage deemed to

be used by the Company shall be the lesser of (A) the actual total square footage used by the Company or (B) 3,000 square feet; and be used by the Company shall be the lesser of (A) the actual total square footage used by the Company or (B) 3,000 square feet; and

(ii)

For all other services provided by the Accessories Division, the Company shall pay a fixed amount of $150,000 per Earn-Out Year.

III.	Additional Services

“Additional Services” shall include all other services provided by Madden to the Company other than the Corporate Services and the Accessories Division Services mutually agreed to by the Company and Madden from time to time, including, without limitation, services relating to (i) any websites used by the Company, including, without limitation, services provided in connection with the websites’ creation, design, development, maintenance, hosting, e-commerce, domain management, etc., (ii) order entry and (iii) customer service.

The portion of the Annual Charge to be paid by the Company in respect of the Additional Services shall be equal to Madden’s total cost of providing such services to the Company on a pass-through basis.

Exhibit D

Final Allocation

(Pursuant to Section 8.1(b) of Stock Purchase Agreement)

The parties did not make a Section 338(h) Election with respect to the purchase of the shares of the Company and, therefore, no Final Allocation was prepared.

Exhibit D-1

For the avoidance of doubt, the determination of the amount to be paid by Madden to Seller pursuant to Section 8.1(b)(iii) (the “Payment”) shall be based, inter alia, on the following:

	1.	The Payment shall take into account any interest which may be imposed under Section 453A of the Code in respect of payments made pursuant to the Agreement, including Section 8.1(b)(iii) after the year in which the Closing occurs. Seller shall provide Madden with a schedule setting forth relevant information relating to any other installment obligations held by Seller.

	2.	Madden and Seller acknowledge that, pursuant to Treasury Regulation § 15A.453-1(b)(3)(i), the Company shall not recognize any gain on the date of the Closing with respect to all liabilities of the Company existing immediately prior to the Closing that constitute qualifying indebtedness (within the meaning of Treasury Regulation § 15A.453-1(b)(2)(iv)) to the extent of the Company’s aggregate basis in its assets.

	3.	The Company shall not elect out of the installment method pursuant to Section 453(d) of the Code with respect to the deemed sale of its assets.

	4.	This schedule is subject to change based upon any change in Law.

STEVEN MADDEN, LTD.
(Exact name of registrant as specified in its charter)

Delaware		13-3588231
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

52-16 Barnett Avenue, Long Island City, New York		11104
(Address of principal executive offices)		(Zip Code)

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o (do not check if smaller reporting company)	Smaller reporting company o

PART I- FINANCIAL INFORMATION

ITEM 1.	Condensed Consolidated Financial Statements (Unaudited):

	Condensed Consolidated Balance Sheets	1

	Condensed Consolidated Statements of Income	2

	Condensed Consolidated Statements of Cash Flows	3

	Notes to Unaudited Condensed Consolidated Financial Statements	4

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	29

ITEM 4.	Controls and Procedures	29

PART II - OTHER INFORMATION

ITEM 1.	Legal Proceedings	29

ITEM 6.	Exhibits	31

	Signatures	32

	September 30,			December 31,			September 30,
	2010			2009			2009
	(unaudited)						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	29,045		$	69,266		$	47,622
Accounts receivable, net of allowances of $2,209, $1,195 and $1,806		12,846			11,071			9,909
Due from factors, net of allowances of $10,934, $12,487 and $9,789		81,815			47,534			67,884
Inventories		44,485			30,453			29,678
Marketable securities – available for sale		20,395			17,971			12,815
Prepaid expenses and other current assets		11,590			6,295			6,896
Deferred taxes		8,827			8,779			7,746

Total current assets		209,003			191,369			182,550

Notes receivable		33,195			—			—
Note receivable – related party		3,791			3,568			3,552
Property and equipment, net		21,054			23,793			24,750
Deferred income taxes		6,309			7,543			6,688
Deposits and other		2,775			1,844			1,992
Marketable securities – available for sale		103,179			67,713			65,254
Goodwill – net		36,613			24,313			24,313
Intangibles – net		14,095			6,716			7,191

Total Assets	$	430,014		$	326,859		$	316,290

LIABILITIES
Current liabilities:
Accounts payable	$	37,302		$	24,544		$	26,682
Accrued expenses		21,525			15,338			16,914
Income taxes payable		5,935			166			8,729
Accrued incentive compensation		11,864			12,314			8,819

Total current liabilities		76,626			52,362			61,144

Contingent payment liability		12,000			—			—
Deferred rent		5,494			5,044			4,974
Other liabilities		1,577			1,666			274

Total Liabilities		95,697			59,072			66,392

Commitments, contingencies and other

STOCKHOLDERS’ EQUITY
Preferred stock – $.0001 par value, 5,000 shares authorized; none issued; Series A Junior Participating preferred stock – $.0001 par value, 60 shares authorized; none issued
Common stock – $.0001 par value, 60,000 shares authorized, 36,122 35,687 and 35,438 shares issued, 27,719, 27,425 and 27,176 outstanding		4			3			3
Additional paid-in capital		158,945			147,703			143,437
Retained earnings		305,465			247,365			233,809
Other comprehensive income:
Unrealized gain on marketable securities		2,446			700			633
Treasury stock – 8,403, 8,262 and 8,262 shares at cost		(132,543	)		(127,984	)		(127,984	)

Total Stockholders’ Equity		334,317			267,787			249,898

Total Liabilities and Stockholders’ Equity	$	430,014		$	326,859		$	316,290

		Three Months Ended September 30,						Nine Months Ended September 30,
		2010			2009			2010			2009


Net sales	$	184,118		$	140,138		$	474,390		$	364,039

Cost of sales		106,610			78,462			268,096			209,313

Gross profit		77,508			61,676			206,294			154,726

Commission, royalty and licensing fee income – net		6,587			5,726			18,000			15,993
Operating expenses		(46,707	)		(39,088	)		(129,994	)		(112,729	)

Income from operations		37,388			28,314			94,300			57,990
Interest and other income, net		1,201			488			2,927			1,252

Income before provision for income taxes		38,589			28,802			97,227			59,242
Provision for income taxes		15,673			10,971			39,127			22,690

Net income	$	22,916		$	17,831		$	58,100		$	36,552

Basic income per share	$	0.83		$	0.66		$	2.11		$	1.35

Diluted income per share	$	0.81		$	0.64		$	2.06		$	1.34

Basic weighted average common shares outstanding		27,680			27,152			27,593			27,003
Effect of dilutive securities – options/restricted stock		555			522			643			356

Diluted weighted average common shares outstanding		28,235			27,674			28,236			27,359

	Nine Months Ended
	September 30,
	2010			2009

Cash flows from operating activities:
Net income	$	58,100		$	36,552
Adjustments to reconcile net income to net cash provided by operating activities:
Excess tax benefit from the exercise of options		(2,882	)		(187	)
Depreciation and amortization		7,364			7,113
Loss on disposal of fixed assets		543			718
Non-cash compensation		5,963			4,332
Provision for bad debts		(539	)		294
Accrued interest on note receivable – related party		(223	)		(182	)
Deferred rent expense		463			169
Realized (gain) loss on marketable securities		(32	)		65
Changes in:
Accounts receivable		(2,121	)		(4,618	)
Due from factor		(32,728	)		(33,591	)
Inventories		(13,732	)		1,919
Prepaid expenses, deposits and other assets		(4,216	)		1,086
Accounts payable and other accrued expenses		26,534			23,773
Other liabilities		(102	)		(1,019	)

Net cash provided by operating activities		42,392			36,424

Cash flows from investing activities:
Purchase of property and equipment		(2,280	)		(2,403	)
Purchase of marketable securities		(54,341	)		(54,699	)
Sale/redemption of marketable securities		18,592			12,913
Purchase of notes receivable		(34,186	)		—
Acquisitions, net of cash acquired *		(11,119	)		(5,776	)

Net cash used in investing activities		(83,334	)		(49,965	)

Cash flows from financing activities:
Repayment of advances from factor		—			(30,168	)
Proceeds from options exercised		2,398			1,556
Tax benefit from exercise of options		2,882			187
Purchase of common stock for treasury		(4,559	)		—

Net cash provided by (used in) financing activities		721			(28,425	)

Net decrease in cash and cash equivalents		(40,221	)		(41,966	)
Cash and cash equivalents – beginning of period		69,266			89,588

Cash and cash equivalents – end of period	$	29,045		$	47,622

Due from Bakers Footwear Group, Inc.	$	4,009
Due from Betsey Johnson LLC		29,186
Total	$	33,195

	●	Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.
	●	Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.
	●	Level 3: Significant unobservable inputs.

			Fair Value Measurements Using Fair Value Hierarchy
	Fair value		Level 1		Level 2		Level 3
Assets:

Cash equivalents	$	1,047	$	1,047	$	—	$	—
Current marketable securities – available for sale		20,395		20,395		—		—
Investment in Bakers		996		—		996		—
Note receivable – Bakers		4,009		—		—		4,009
Note receivable – Betsey Johnson		29,186		—		—		29,186
Long-term marketable securities – available for sale		103,179		103,179		—		—
Total assets	$	158,812	$	124,621	$	996	$	33,195

Liabilities:
Contingent consideration	$	12,000		—		—	$	12,000
Total liabilities	$	12,000		—		—	$	12,000

Common Stock authorized			6,096,000

Stock based awards, including restricted stock and stock options granted, net of expired or cancelled			3,460,000

Common Stock available for grant of stock based awards as of September 30, 2010			2,636,000

	Nine Months Ended September 30,
	2010	2009
Expected volatility	47.2% to 52.4%	49.2% to 52.1%
Risk-free interest rate	1.08% to 2.16%	1.39% to 2.09%
Expected life (in years)	2.8 to 4.4	3.4 to 3.9
Expected dividend yield	None	None
Weighted average fair value	$ 12.68	$ 5.78

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2010		1,615,000		$	13.68
Granted		621,000			33.40
Exercised		(231,000	)		10.81
Cancelled/Forfeited		(26,000	)		22.56

Outstanding at September 30, 2010		1,980,000		$	20.09		5.3	$	41,512

Exercisable at September 30, 2010		421,000		$	13.19		4.1	$	11,721

Accounts receivable	$	668
Inventory		1,212
Prepaid expenses and other current assets		102
Trade name		4,100
Customer relationships		4,900
Non-compete agreement		450
Accounts payable		(171	)
Accrued expenses		(442	)
Total fair value excluding goodwill		10,819
Goodwill		12,300
Net assets acquired	$	23,119

	Wholesale						Net Carrying
	Footwear		Accessories		Retail		Amount
Balance at January 1, 2010	$	1,547	$	17,265	$	5,501	$	24,313
Acquisition of Big Buddha		0		12,300		0		12,300
Balance at September 30, 2010	$	1,547	$	29,565	$	5,501	$	36,613

	Estimated Lives	Cost Basis		Accumulated Amortization		Net Carrying Amount
Trade name	6 – 10 years	$	4,300	$	432	$	3,868
Customer relationships	10 years		11,709		2,871		8,838
License agreements	3 – 6 years		5,600		4,833		767
Non-compete agreement	5 years		1,380		758		622
Other	3 years		14		14		—
		$	23,003	$	8,908	$	14,095

	2010				2009
	Number of Shares		Weighted Average Fair Value at Grant Date		Number of Shares		Weighted Average Fair Value at Grant Date
Non-vested at January 1	447,000		$	20.97	358,000		$	29.53
Granted	118,000			30.50	23,000			22.19
Vested	(191,000	)		20.02	(131,000	)		29.58
Forfeited	(10,000	)		28.49	(1,000	)		34.05
Non-vested at September 30	363,000		$	22.01	249,000		$	28.79

2010 (remaining three months)	$	734
2011		2,412
2012		1,673
2013		1,673
2014		1,673
Thereafter		5,930

	$	14,095

		Page

ARTICLE I	Certain Definitions	1

ARTICLE II	Purchase and Sale	8
2.1	Purchase and Sale of Company Shares	8
2.2	Cash Purchase Price.	8
2.3	Post-Closing Adjustment.	9
2.4	Release of Holdback Amount	11

ARTICLE III	Closing	12
3.1	Closing Date	12
3.2	Certain Actions at Closing	12

ARTICLE IV	Representations and Warranties of Seller	13
4.1	Organization and Good Standing	13
4.2	Capitalization.	13
4.3	Authorization.	14
4.4	No Conflicts; Consents	14
4.5	Financial Statements; Undisclosed Liabilities; Promotions and Allowances; Inventory.	14
4.6	Taxes.	15
4.7	Real and Personal Property.	16
4.8	Intellectual Property.	18
4.9	Contracts and Agreements.	20
4.10	Insurance	22
4.11	Litigation	23
4.12	Condition and Sufficiency of Assets	23
4.13	Compliance with Law; Licenses; Customs.	23
4.14	Employees.	24
4.15	Employee Benefit Plans.	27
4.16	Environmental Matters.	30
4.17	Bank Accounts and Powers of Attorney	31
4.18	Absence of Certain Changes	31
4.19	Books and Records	33
4.20	Transactions with Affiliated Persons	33
4.21	Customer and Supplier Relationships.	34
4.22	Absence of Certain Business Practices	34
4.23	Brokers and Finders	34
4.24	Restrictions on Business Activities	34
4.25	Payables	35


5.2	Authorization	36
5.3	No Conflicts; Consents	36
5.4	Litigation	36
5.5	Brokers and Finders	36
5.6	Investment Intent	36

ARTICLE VI	Covenants of Seller	36
6.1	Ordinary Course	37
6.2	Conduct of Business	37
6.3	Certain Filings	39
6.4	Consents and Approvals	40
6.5	Efforts to Satisfy Conditions	40
6.6	Further Assurances	40
6.7	Notification of Certain Matters	40
6.8	Closing Date Debt	40
6.9	Brokers and Finders	40

ARTICLE VII	Covenants of Madden	40
7.1	Certain Filings	41
7.2	Efforts to Satisfy Conditions	41
7.3	Further Assurances	41
7.4	Notification of Certain Matters	41

ARTICLE VII	Certain Other Agreements	41
8.1	Certain Tax Matters	41
8.2	Employee Matters	45

ARTICLE IX	Conditions Precedent to Obligations of Madden	46
9.1	Representations and Warranties	46
9.2	Compliance with Covenants	46
9.3	Lack of Adverse Change	46
9.4	Update Certificate	46
9.5	Balance Sheet	47
9.6	Regulatory Approvals	47
9.7	Consents of Third Parties	47
9.8	FIRPTA Affidavit	47
9.9	No Violation of Orders	47
9.10	Employment Agreement	47
9.11	Transaction Documents	47

As of and three months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail			First Cost		Licensing		Consolidated
September 30, 2010:
Net sales to external customers	$	123,251	$	29,801	$	153,052	$	31,066						$	184,118
Gross profit		48,362		11,095		59,457		18,051							77,508
Commissions and licensing fees - net		—		—		—		—		$	5,617	$	970		6,587
Income (loss) from operations		27,503		5,043		32,546		(1,745	)		5,617		970		37,388
Segment assets	$	302,842	$	72,078		374,920		42,964			12,130		—		430,014
Capital expenditures					$	337	$	711		$	—	$	—	$	1,048

September 30, 2009:
Net sales to external customers	$	92,205	$	19,752	$	111,957	$	28,181						$	140,138
Gross profit		38,979		7,141		46,120		15,556							61,676
Commissions and licensing fees - net		—		—		—		—		$	4,974	$	752		5,726
Income (loss) from operations		20,100		3,129		23,229		(641	)		4,974		752		28,314
Segment assets	$	219,140	$	42,139		261,279		46,452			8,559		—		316,290
Capital expenditures					$	328	$	410		$	—	$	—	$	738

As of and nine months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail			First Cost		Licensing		Consolidated
September 30, 2010:
Net sales to external customers	$	310,176	$	75,161	$	385,337	$	89,053						$	474,390
Gross profit		123,929		29,308		153,237		53,057							206,294
Commissions and licensing fees - net		—		—		—		—		$	14,976	$	3,024		18,000
Income (loss) from operations		65,045		12,169		77,214		(914	)		14,976		3,024		94,300
Segment assets	$	302,842	$	72,078		374,920		42,964			12,130		—		430,014
Capital expenditures					$	814	$	1,466		$	—	$	—	$	2,280
September 30, 2009:

Net sales to external customers	$	231,610	$	49,829	$	281,439	$	82,600						$	364,039
Gross profit		93,126		16,451		109,577		45,149							154,726
Commissions and licensing fees - net		—		—		—		—		$	13,431	$	2,562		15,993
Income (loss) from operations		41,765		5,929		47,694		(5,697	)		13,431		2,562		57,990
Segment assets	$	219,140	$	42,139		261,279		46,452			8,559		—		316,290
Capital expenditures					$	753	$	1,650		$	—	$	—	$	2,403

	Three months ended September 30,				Nine months ended September 30,
	2010		2009		2010		2009
Domestic	$	172,334	$	134,206	$	448,993	$	347,758
International		11,784		5,932		25,397		16,281
Total	$	184,118	$	140,138	$	474,390	$	364,039

	2010					2009
CONSOLIDATED :

Net sales	$	184,118		100	%	$	140,138		100	%
Cost of sales		106,610		58			78,462		56
Gross profit		77,508		42			61,676		44
Other operating income – net of expenses		6,587		4			5,726		4
Operating expenses		46,707		25			39,088		28
Income from operations		37,388		20			28,314		20
Interest and other income, net		1,201		1			488		1
Income before income taxes		38,589		21			28,802		21
Net income		22,916		12			17,831		13

By Segment:

WHOLESALE FOOTWEAR SEGMENT :

Net sales	$	123,251		100	%	$	92,205		100	%
Cost of sales		74,889		61			53,226		58
Gross profit		48,362		39			38,979		42
Operating expenses		20,859		17			18,879		20
Income from operations		27,503		22			20,100		22

WHOLESALE ACCESSORIES SEGMENT :

Net sales	$	29,801		100	%	$	19,752		100	%
Cost of sales		18,706		63			12,611		64
Gross profit		11,095		37			7,141		36
Operating expenses		6,052		20			4,012		20
Income from operations		5,043		17			3,129		16

RETAIL SEGMENT :

Net sales	$	31,066		100	%	$	28,181		100	%
Cost of sales		13,015		42			12,625		45
Gross profit		18,051		58			15,556		55
Operating expenses		19,796		64			16,197		57
Loss from operations		(1,745	)	(6	)		(641	)	(2	)
Number of stores		82					88

FIRST COST SEGMENT :

Other commission income – net of expenses	$	5,617		100	%	$	4,974		100	%

LICENSING SEGMENT :

Licensing income – net of expenses	$	970		100	%	$	752		100	%

	Payment due by period
Contractual Obligations	Total		Remainder of 2010			2011-2012		2013-2014	2015 and after
Operating lease obligations	$	109,739	$	4,347	$	33,608	$	28,130	$	43,654
Purchase obligations		82,082		82,082		—		—		—
Contingent payment liability		12,000		—		7,500		4,500
Other long-term liabilities (future minimum royalty payments)		2,493		339		1,991		163		—
Total	$	206,314	$	86,768	$	43,099	$	32,793	$	43,654

2.1	Stock Purchase Agreement dated February 10, 2010 between Jeremy Bassan and the Company* 1

2.2	Restructuring Agreement dated October 5, 2010 among Steven Madden, Ltd., BJ Acquisition LLC, BJ Agent LLC, Betsey Johnson LLC, Betsey Johnson (UK) Limited, Betsey Johnson Canada Ltd., BJ Vines, Inc., Betsey Johnson, Chantal Bacon, Castanea Family Investments, LLC, Castanea Family Holdings, LLC and Castanea Partners Fund III, L.P. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 8, 2010)

10.1	Collection Agency Agreement dated July 10, 2009 between Rosenthal & Rosenthal, Inc. and the Company* 2

10.2	Purchase and Sale Agreement for Distressed Trades dated August 26, 2010 between BJ Acquisition LLC and Paradox Lending LLC*

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

1.	Agreement originally filed as Exhibit 10.1 to the Company’s current Report on Form 8-K dated February 10, 2010, and filed with the SEC on February 11, 2010, is refiled herewith to include all exhibits thereto.

2.	Agreement originally filed as Exhibits 10.1 through 10.6 to the Company’s current Report on Form 8-K dated July 10, 2009, and filed with the SEC on July 16, 2009, is refiled herewith to include all exhibits thereto.

	STEVEN MADDEN, LTD.

	By:	/s/ EDWARD R. ROSENFELD
		Edward R. Rosenfeld
		Chairman and Chief Executive Officer

	By:	/s/ ARVIND DHARIA
		Arvind Dharia
		Chief Financial Officer and Chief Accounting Officer

Exhibit No.		Description

2.1		Stock Purchase Agreement dated February 10, 2010 between Jeremy Bassan and the Company* 1

2.2		Restructuring Agreement dated October 5, 2010 among Steven Madden, Ltd., BJ Acquisition LLC, BJ Agent LLC, Betsey Johnson LLC, Betsey Johnson (UK) Limited, Betsey Johnson Canada Ltd., BJ Vines, Inc., Betsey Johnson, Chantal Bacon, Castanea Family Investments, LLC, Castanea Family Holdings, LLC and Castanea Partners Fund III, L.P. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 8, 2010)

10.1		Collection Agency Agreement dated July 10, 2009 between Rosenthal & Rosenthal, Inc. and the Company* 2

10.2		Purchase and Sale Agreement for Distressed Trades dated August 26, 2010 between BJ Acquisition LLC and Paradox Lending LLC*

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*


ARTICLE XI	[Intentionally omitted]	49

ARTICLE XII	Indemnification	49
12.1	Survival of Representations, Warranties and Covenants	49
12.2	Indemnification by Seller.	49
12.3	Indemnification by Madden.	50
12.4	Additional Seller Indemnification.	51
12.5	Assumption of Defense	52
12.6	Non-Assumption of Defense	52
12.7	Indemnified Party’s Cooperation as to Proceedings	53
12.8	Calculation of Losses	53
12.9	Payments Treated as Purchase Price Adjustment	53
12.10	Limitation on Indemnification	53

ARTICLE XIII	Miscellaneous	53
13.1	Expenses	53
13.2	Entirety of Agreement	53
13.3	Notices	54
13.4	Amendment	54
13.5	Waiver	54
13.6	Counterparts; Facsimile	54
13.7	Assignment; Binding Nature; No Beneficiaries	54
13.8	Headings	55
13.9	Governing Law; Jurisdiction	55
13.10	Construction	55
13.11	Negotiated Agreement	55
13.12	Public Announcements	55
13.13	Remedies Cumulative	55
13.14	Severability	55
14.15	WAIVER OF JURY TRIAL	56
13.16	Right of Set-Off.	56
13.17	Arbitration	57

	STEVEN MADDEN, LTD.
Address: 52-16 Barnett Ave. Long Island City, New York 11104 Attention: Awadhesh Sinha Facsimile No.: (718) 446-5599	By: /s/ Edward Rosenfeld Name: Edward Rosenfeld Title: Chief Executive Officer

with copies to:
Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, New York 10036 Attention: James A. Grayer, Esq. Facsimile No.: (212) 715-8000

	SELLER
Address: 208 Woodrow Avenue Santa Cruz, California 95060	/s/ Jeremy Bassan Jeremy Bassan


with copies to: Sonnenschein Nath & Rosenthal LLP 525 Market Street, 26 th Floor San Francisco, California 94105 Attention: Stafford Matthews, Esq. Facsimile No.: (415) 882-0300

Section 2.1	–	Company Shares/Capitalization

Section 4.4	–	Conflicts and Consents

Section 4.5(a)	–	Financial Statement Deficiencies

Section 4.5(b)	–	Undisclosed Liabilities

Section 4.5(c)	–	Promotions and Allowances

Section 4.5(d)	–	Inventory

Section 4.6(a)	–	Late Tax Filings

Section 4.6(b)	–	Unpaid Tax Deficiencies; Audits

Section 4.6(c)	–	Miscellaneous Tax Representations

Section 4.7(a)	–	Real Property

Section 4.7(b)	–	Title and Leasehold Deficiencies; Sublicenses and Subleases

Section 4.8(a)	–	Intellectual Property Exceptions

Section 4.8(b)	–	Impairment of Company IP Rights

Section 4.8(c)	–	Royalties

Section 4.8(d)	–	Third Party Infringement

Section 4.8(e)-1	–	Protection of Proprietary Information

Section 4.8(e)-2	–	Affiliate IP Claims

Section 4.8(f)	–	License Agreements

Section 4.8(g)	–	Infringement of Company IP Rights

Section 4.8(h)	–	Intellectual Property Filings

Section 4.9(a)	–	Contracts


Section 4.10	–	Insurance

Section 4.11	–	Litigation

Section 4.12	–	Condition and Sufficiency of Assets

Section 4.13(a)	–	Compliance with Laws

Section 4.13(b)	–	Licenses

Section 4.13(c)	–	Importer Status

Section 4.13(d)	–	Compliance with Customs Laws

Section 4.13(e)	–	Imported Goods Subject to Undisclosed Duties

Section 4.13(f)	–	Customs Records

Section 4.13(g)	–	Liabilities

Section 4.13(h)	–	Audits

Section 4.14(a)	–	Employees

Section 4.14(f)	–	Employment Violations

Section 4.14(i)	–	Severance Obligations

Section 4.14(j)	–	Vacation Policy

Section 4.14(k)	–	Employment Agreements

Section 4.14(m)	–	Arrangements with Sales Reps, etc.

Section 4.15(a)	–	Employee Benefit Plans

Section 4.15(b)	–	Employment Agreements, Contracts and Employee Benefit Plans Subject to Section 409A

Section 4.15(e)	–	Employee Benefit Plans

Section 4.15(l)	–	Change in Control Payments

Section 4.15(n)	–	Employee Benefit Plan Maintenance Costs

Section 4.16(a)	–	Environmental Matters

Section 4.17	–	Bank Accounts; Powers of Attorney

Section 4.18	–	Certain Changes

Section 4.20	–	Transactions with Affiliated Persons

Section 4.21(a)	–	Customers

Section 4.21(b)	–	Suppliers


Section 4.23	–	Brokers, Finders, etc.

Section 4.24	–	Restrictions on Business Activities

Section 4.25	–	Payables

Section 4.26	–	Receivables

Section 4.27	–	Bonding and Financial Security Arrangements

Section 6.2	–	Conduct of Business

Section 6.2(iv)	–	Dividends

Section 8.2	–	Hired and Terminated Employees

Section 9.7	–	Required Consents


	New York, NY
STEVEN MADDEN, LTD.	Dated: July 10, 2009
52-16 Barnett Avenue
Long Island City, NY 11104


If to us	If to you
Rosenthal & Rosenthal, Inc.
1370 Broadway	Steven Madden, Ltd.
New York NY 10018	52-16 Barnett Avenue
Attn: David Flaxman, Esq., with a copy to J. Michael Stanley	Long Island City, NY 11104
Facsimile: (212) 356-0989	Attn: Arvind Dharia

	Facsimile: (718) 308-8201

	With a copy to:

	CERTILMAN BALIN ADLER & HYMAN, LLP
	90 E. Merrick Ave., 9 ^th Floor
	East Meadow, NY 11554
	Attn: Brian Ziegler, Esq.

	Facsimile: (516) 296-7111


By:	/s/ J. Michael Stanley

	J. Michael Stanley
	Managing Director

AGREED:
STEVEN MADDEN, LTD.

By:	/s/ Arvind Dharia

	Arvind Dharia
	C.F.O./Secretary

i.	US Polo Assoc. brand, subject to license;
ii.	Sesame Street brand, subject to license (terminated effective on or about May 12, 2009);
iii.	Software listed in 3.11(b); and
iv.	Tradenames used in business
	a.	Shakedown Street
	b.	Zone 88
	c.	Sarné
	d.	Dover Kidz
	e.	Girls Luv Bags
	f.	35 th Street Bags
	g.	Petite Sac
	h.	Sweettreats by Dover Kidz