Amendment To Earn-out Agreement

AMENDMENT TO EARN-OUT AGREEMENT


This AMENDMENT TO EARN-OUT AGREEMENT (this "Amendment"), dated as of April 10, 2006, is by and between Steven Madden, Ltd., a Delaware corporation ("Madden"), and Daniel M. Friedman ("Friedman").


RECITALS
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WHEREAS, the parties hereto are party to that certain Earn-Out Agreement, dated as of February 7, 2006 (the "Earn-Out Agreement"), by and among Madden, Friedman, Daniel M. Friedman & Associates, Inc. and DMF International, Ltd.; and


WHEREAS, pursuant to Section 10 of the Earn-Out Agreement, the parties hereto wish to amend the Earn-Out Agreement to make certain changes as 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:


1. The definition of "EBITDA" set forth in Section 1 (Definitions) of the Earn-Out Agreement is hereby deleted in its entirely and replaced with the following:


""EBITDA" shall mean the Companies' (a) net sales, less, without duplication, the sum of (i) cost of sales (including, without limitation, any amounts which, absent the transactions contemplated by the Stock Purchase Agreement, would have been payable by Daniel M. Friedman & Associates, Inc. to the Purchaser pursuant to the terms of the License Agreement (as hereinafter defined) as if, with respect to such amounts, such License Agreement is coterminous with this Agreement, but excluding any such amounts which would have been payable in respect of products sold under the `Steven by Steve Madden' brand), (ii) selling and distribution expenses, (iii) design and production expenses and (iv) gen ...