UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA
Plaintiff

v.

ZORAN LADICORBIC LTD., a corporation,
Defendant.

98 Civ. ( )

CONSENT DECREE

WHEREAS: Plaintiff, the United States of America, has commenced this action by filing the complaint herein; defendant has waived service of the summons and complaint; the parties have been represented by the attorneys whose names appear hereafter; and the parties have agreed to settlement of this action upon the following terms and conditions, without adjudication of any issue of fact or law and without defendant admitting liability for any of the matters alleged in the complaint;

THEREFORE, on the joint motion of plaintiff and defendant, it is hereby ORDERED, ADJUDGED, and DECREED as follows:

1. This Court has jurisdiction of the subject matter and of the parties.

2. The complaint states a claim upon which relief may be granted against the defendant under Sections 5(a)(1), 5(m)(1)(A), 9, 13(b) and 16(a) of the Federal Trade Commission Act, 15 U.S.C. §§ 45(a)(1), 45(m)(1)(A), 49, 53(b) and 56(a).

CIVIL PENALTY

3. Defendant, Zoran Ladicorbic Ltd., its successors and assigns, shall pay to plaintiff a civil penalty, pursuant to Section 5(m)(1)(A) of the Federal Trade Commission Act, 15 U.S.C. § 45(m)(1)(A), in the amount of $14,000.

4. Defendant shall make the payment required by Paragraph 3 within five (5) days of the date defendant receives notice from plaintiff of entry of this Consent Decree by electronic fund transfer in accordance with the instructions provided by the Civil Division, United States Department of Justice, Washington, D.C. 20530.

5. In the event of any default in payment, which default continues for ten (10) days beyond the due date of payment, the entire unpaid penalty, together with interest, as computed pursuant to 28 U.S.C. § 1961, from the date of default to the date of payment, shall immediately become due and payable.

INJUNCTION

6. Defendant, its successors and assigns, and its officers, agents, servants, employees, and attorneys, and all persons in active concert or participation with any one or more of them who receive actual notice of this Consent Decree by personal service or otherwise, are hereby enjoined from ever violating, directly or through any corporation, subsidiary, division or other device, any provision of the Federal Trade Commission's Trade Regulation Rule Concerning the Care Labeling of Textile Wearing Apparel (the "Care Labeling Rule" or "Rule"), 16 C.F.R. Part 423, or as the Rule may hereafter be amended. A copy of this Rule is attached hereto as "Appendix A" and incorporated herein as if fully set forth verbatim.

7. Defendant, its successors and assigns, and its officers, agents, servants, employees, and attorneys, and all persons in active concert or participation with any one or more of them who receive actual notice of this Consent Decree by personal service or otherwise, are hereby enjoined from ever violating, directly or through any corporation, subsidiary, division or other device, any provision of the Textile Fiber Products Identification Act, as amended ("Textile Act"), 15 U.S.C. § 70, et seq., or any of the rules and regulations implementing the Textile Act (Textile Rules), 16 C.F.R. § 303, or as the Textile Rules may hereafter be amended. A copy of the Textile Rules is attached hereto as Appendix "B" and incorporated herein as if fully set forth verbatim; or any provision of the Wool Products Labeling Act of 1939, as amended ("Wool Act"), 15 U.S.C. § 68, et seq., or any of the rules and regulations implementing the Wool Act (Wool Rules), 16 C.F.R. § 300, or as the Wool Rules may hereafter be amended. A copy of the Wool Rules is attached hereto as Appendix "C" and incorporated herein as if fully set forth verbatim.

PERSONS AFFECTED; CONTINUING JURISDICTION

8. Defendant, its successors and assigns, shall, within thirty (30) days of the entry of this Consent Decree, provide a copy of this Consent Decree, the Care Labeling Rule, the Statement of Basis and Purpose for that Rule, the Textile Act and Wool Act, and the rules and regulations implementing those Acts, to each of the officers and directors of defendant Zoran Ladicorbic Ltd., and to all supervisory personnel responsible for its compliance with the Care Labeling Rule and the Textile Act and Wool Act, secure from each such person a signed statement acknowledging receipt of a copy of this Consent Decree, and shall, within ten (10) days of complying with this paragraph, file an affidavit with the Court and serve the Federal Trade Commission by mailing a copy thereof to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580, setting forth the fact and manner of its compliance, including the name and title of each person to whom a copy of the Consent Decree has been provided.

9. Defendant, its successors and assigns, shall maintain the following: a record of the instructions on the care labels on all items of textile wearing apparel offered for sale by defendant; a record of any and all care instructions appearing on hangtags attached to textile wearing apparel offered for sale by defendant; a record of the reasonable basis for each such care instruction; copies of all test reports relating to the care of any textile wearing apparel offered for sale by the defendant (including tests of any component thereof), and the actual items that were tested; all correspondence to and from customers, suppliers, and consumers relating to the accuracy, adequacy or completeness of the care instructions or any harm to textile wearing apparel, which might have been caused by the inaccuracy, inadequacy or incompleteness of the care instructions; and all documents relating to defendant's compliance with each provision of this Consent Decree. All such documents and things shall be maintained for three (3) years from the date defendant last ships the wearing apparel at issue to customers. Within fifteen (15) days after receipt of a written request, defendant shall make such documents and things available for inspection and copying by Federal Trade Commission staff.

10. Defendant, its successors and assigns, shall notify the Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580, at least thirty (30) days prior to any change in defendant's business, including, but not limited to, merger, incorporation, dissolution, assignment, sale which results in the emergence of a successor corporation, the creation or dissolution of a subsidiary or parent, or any other change which may affect defendant's obligations under this Consent Decree.

11. This Court shall retain jurisdiction of this matter for the purposes of enabling any of the parties to this Consent Decree to apply to the Court at any time for such further orders or directives as may be necessary or appropriate for the interpretation or modification of this Consent Decree, for the enforcement of compliance therewith, or for the punishment of violations thereof.

JUDGMENT IS THEREFORE ENTERED in favor of plaintiff and against defendant, pursuant to all the terms and conditions recited above.

Dated this day of , 1998.
UNITED STATES DISTRICT JUDGE

The parties, by their respective counsel, hereby consent to the terms and conditions of the Consent Decree as set forth above and consent to the entry thereof. Defendant waives any rights that may arise under the Equal Access to Justice Act, 28 U.S.C. § 2412.