Document:

Credit Agreement

    Exhibit
      10.1

    

    IMPORTANT
      NOTE:

    BRINGING
      THIS CREDIT AGREEMENT OR ANY CERTIFIED COPY OF THIS CREDIT AGREEMENT INTO THE
      REPUBLIC OF AUSTRIA AS WELL AS ANY WRITTEN CONFIRMATION OR WRITTEN REFERENCE
      TO
      THIS CREDIT AGREEMENT MAY CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY
      TAX.

     

    

     

    CREDIT
      AGREEMENT

     

    DATED
      AS OF DECEMBER 13, 2005

     

    AMONG

     

    

     

    MODINE
      HOLDING GMBH

     

    AS
      BORROWER,

     

    

     

    MODINE
      MANUFACTURING COMPANY

     

    AND
      CERTAIN OF ITS SUBSIDIARIES

     

    AS
      GUARANTORS,

     

    

     

    THE
      LENDERS,

     

    

     

    J.P.
      MORGAN EUROPE LIMITED

     

    AS
      AGENT,

     

    

     

    J.P.
      MORGAN PLC

     

    AS
      LEAD ARRANGER AND SOLE BOOK RUNNER,

     

    

     

    

    
       

      
        
          

        

      

       

    

    TABLE
      OF CONTENTS

     

    Page

     

     

    CREDIT
      AGREEMENT

     

    Article
      1
      DEFINITIONS

     

    Article
      2
      THE CREDITS

    
      	 	
              Section
                2.1

            	
              Term
                Loan.

            	 

    

    
      	 	
              Section
                2.2

            	
              Required
                Payments.

            	 

    

    
      	 	
              Section
                2.3

            	
              Optional
                Principal Payments.

            	 

    

    
      	 	
              Section
                2.4

            	
              Method
                of Selecting Initial Interest Periods for the Loans.

            	 

    

    
      	 	
              Section
                2.5

            	
              Selection
                of Interest Periods for Outstanding Advances.

            	 

    

    
      	 	
              Section
                2.6

            	
              Method
                of Borrowing.

            	 

    

    
      	 	
              Section
                2.7

            	
              Interest
                Rate, etc.

            	 

    

    
      	 	
              Section
                2.8

            	
              Rates
                Applicable After Default.

            	 

    

    
      	 	
              Section
                2.9

            	
              Method
                of Payment.

            	 

    

    Section
      2.10 Noteless
      Agreement; Evidence of Indebtedness.

    Section
      2.11 Telephonic
      Notices.

    Section
      2.12 Interest
      Payment Dates; Interest Basis.

    Section
      2.13 Notification
      of Advances, Interest Rates and Prepayments.

    Section
      2.14 Lending
      Installations.

    Section
      2.15 Non-Receipt
      of Funds by the Agent.

    Section
      2.16 Judgment
      Currency.

     

    Article
      3
      YIELD PROTECTION; TAXES

    
      	 	
              Section
                3.1

            	
              Yield
                Protection.

            	 

    

    
      	 	
              Section
                3.2

            	
              Changes
                in Capital Adequacy Regulations.

            	 

    

    
      	 	
              Section
                3.3

            	
              Availability
                of Types of Advances.

            	 

    

    
      	 	
              Section
                3.4

            	
              Funding
                Indemnification.

            	 

    

    
      	 	
              Section
                3.5

            	
              Taxes.

            	 

    

    
      	 	
              Section
                3.6

            	
              Lender
                Statements; Survival of Indemnity.

            	 

    

     

    Article
      4
      CONDITIONS PRECEDENT

    
      	 	
              Section
                4.1

            	
              Conditions
                to the Effective Date.

            	 

    

    
      	 	
              Section
                4.2

            	
              Conditions
                Precedent to Borrowing.

            	 

    

     

    Article
      5
      REPRESENTATIONS AND WARRANTIES

    
      	 	
              Section
                5.1

            	
              Corporate
                Existence and Power.

            	 

    

    
      	 	
              Section
                5.2

            	
              Authorization.

            	 

    

    
      	 	
              Section
                5.3

            	
              Binding
                Effect.

            	 

    

    
      	 	
              Section
                5.4

            	
              No
                Conflict; Government Consent.

            	 

    

    
      	 	
              Section
                5.5

            	
              Financial
                Statements; Material Adverse Change.

            	 

    

    
      	 	
              Section
                5.6

            	
              Litigation
                and Contingent Obligations.

            	 

    

    
      	 	
              Section
                5.7

            	
              Compliance
                with ERISA.

            	 

    

    
      	 	
              Section
                5.8

            	
              Taxes.

            	 

    

    
      	 	
              Section
                5.9

            	
              Subsidiaries.

            	 

    

    Section
      5.10 Not
      an
      Investment Company.

    Section
      5.11 Ownership
      of Property; Liens.

    Section
      5.12 Material
      Agreements; Default.

    Section
      5.13 Full
      Disclosure.

    Section
      5.14 Environmental
      Matters.

    Section
      5.15 Insolvency.

    Section
      5.16 Compliance
      with Laws.

    Section
      5.17 Regulation
      U.

    Section
      5.18 Public
      Utility Holding Company Act.

    Section
      5.19 Post-Retirement
      Benefits.

    Section
      5.20 Insurance.

    Section
      5.21 Plan
      Assets; Prohibited Transactions.

     

    Article
      6
      COVENANTS

    
      	 	
              Section
                6.1

            	
              Information.

            	 

    

    
      	 	
              Section
                6.2

            	
              Inspection
                of Property, Books and Records.

            	 

    

    
      	 	
              Section
                6.3

            	
              Restricted
                Payments.

            	 

    

    
      	 	
              Section
                6.4

            	
              Loans
                or Advances.

            	 

    

    
      	 	
              Section
                6.5

            	
              Investments
                and Acquisitions.

            	 

    

    
      	 	
              Section
                6.6

            	
              Negative
                Pledge.

            	 

    

    
      	 	
              Section
                6.7

            	
              Maintenance
                of Existence.

            	 

    

    
      	 	
              Section
                6.8

            	
              Dissolution.

            	 

    

    
      	 	
              Section
                6.9

            	
              Consolidations,
                Mergers and Sales of Assets.

            	 

    

    Section
      6.10 Use
      of
      Proceeds.

    Section
      6.11 Compliance
      with Laws; Payment of Taxes and Other Claims.

    Section
      6.12 Insurance.

    Section
      6.13 Change
      in
      Fiscal Year.

    Section
      6.14 Maintenance
      of Property.

    Section
      6.15 Environmental
      Matters.

    Section
      6.16 Indebtedness.

    Section
      6.17 Sale
      of
      Accounts.

    Section
      6.18 Financial
      Covenants.

    Section
      6.19 Guaranties.

    Section
      6.20 Rate
      Management Transactions.

    Section
      6.21 Affiliates.

    Section
      6.22 Condition
      Subsequent.

     

    Article
      7
      DEFAULTS

     

    Article
      8
      ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

    
      	 	
              Section
                8.1

            	
              Acceleration.

            	 

    

    
      	 	
              Section
                8.2

            	
              Amendments.

            	 

    

    
      	 	
              Section
                8.3

            	
              Preservation
                of Rights.

            	 

    

     

    Article
      9
      GENERAL PROVISIONS

    
      	 	
              Section
                9.1

            	
              Survival
                of Representations.

            	 

    

    
      	 	
              Section
                9.2

            	
              Governmental
                Regulation.

            	 

    

    
      	 	
              Section
                9.3

            	
              Headings.

            	 

    

    
      	 	
              Section
                9.4

            	
              Entire
                Agreement.

            	 

    

    
      	 	
              Section
                9.5

            	
              Several
                Obligations; Benefits of this Agreement.

            	 

    

    
      	 	
              Section
                9.6

            	
              Expenses;
                Indemnification.

            	 

    

    
      	 	
              Section
                9.7

            	
              Numbers
                of Documents.

            	 

    

    
      	 	
              Section
                9.8

            	
              Accounting.

            	 

    

    
      	 	
              Section
                9.9

            	
              Severability
                of Provisions.

            	 

    

    Section
      9.10 Nonliability
      of Lenders.

    Section
      9.11 Confidentiality.

    Section
      9.12 Nonreliance.

    Section
      9.13 Disclosure.

    Section
      9.14 USA
      Patriot Act.

    Section
      9.15 Place
      of
      Performance.

     

    Article
      10 THE AGENT

    Section
      10.1 Appointment;
      Nature of the Relationship.

    Section
      10.2 Powers.

    Section
      10.3 Reliance;
      Counsel.

    Section
      10.4 Delegation
      to Sub-Agent.

    Section
      10.5 Resignation;
      Successor Agent.

    Section
      10.6 Lender
      Credit Decision.

    Section
      10.7 Agent’s
      Reimbursement and Indemnification.

    Section
      10.8 Execution
      of Collateral Documents.

     

    Article
      11 SETOFF; RATABLE PAYMENTS

    Section
      11.1 Setoff. 

    Section
      11.2 Ratable
      Payments.

     

    Article
      12 GUARANTY

    Section
      12.1 Representations,
      Warranties and Covenants.

    Section
      12.2 Guaranty.

    Section
      12.3 Guaranty
      Unconditional.

    Section
      12.4 Discharge
      Only Upon Payment in Full; Reinstatement in Certain Circumstances.

    Section
      12.5 General
      Waivers.

    Section
      12.6 Subordination
      of Subrogation; Subordination of Intercompany Indebtedness.

    Section
      12.7 Contribution
      with Respect to Guaranteed Obligations.

    Section
      12.8 Stay
      of
      Acceleration.

    Section
      12.9 No
      Waivers.

    Section
      12.10 Expenses
      of Enforcement, etc.

    Section
      12.11 Setoff. 

    Section
      12.12 Financial
      Information.

     

    Article
      13 BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

    Section
      13.1 Successors
      and Assigns; Participations.

    Section
      13.2 Dissemination
      of Information.

    Section
      13.3 Tax
      Treatment.

     

    Article
      14 NOTICES

    Section
      14.1 Notices.

    Section
      14.2 Change
      of
      Address.

     

    Article
      15 COUNTERPARTS

     

    Article
      16 CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

    Section
      16.1 CHOICE
      OF LAW.

    Section
      16.2 CONSENT
      TO JURISDICTION.

    Section
      16.3 WAIVER
      OF JURY TRIAL.

    

     

    ANNEX
      I GUARANTY
      JOINDER SUPPLEMENT

    

    EXHIBITS

    EXHIBIT
      A-1 FORM
      OF
      AUSTRIAN OPINION

    EXHIBIT
      A-2 FORM
      OF
      U.S. OPINION

    EXHIBIT
      B COMPLIANCE
      CERTIFICATE

    EXHIBIT
      C ASSIGNMENT
      AND ASSUMPTION AGREEMENT

    

    SCHEDULES

    PRICING
      SCHEDULE

    SCHEDULE
      1  EUROCURRENCY
      PAYMENT OFFICES

    OF
      THE
      AGENT

    SCHEDULE
      2  LENDING
      INSTALLATIONS

    SCHEDULE
      3  MANDATORY
      COST FORMULAE

    SCHEDULE
      5.6 LITIGATION

    SCHEDULE
      5.9 SUBSIDIARIES
      

    SCHEDULE
      5.14(a) ENVIRONMENTAL
      MATTERS

    SCHEDULE
      5.14(b) HAZARDOUS
      MATERIALS

    SCHEDULE
      6.5A EXISTING
      INVESTMENTS

    SCHEDULE
      6.5B INVESTMENTS
      RELATED TO MODINE AUSTRIA TRANSACTION

    SCHEDULE
      6.16 INDEBTEDNESS
      AND LIENS

    

    

     

    

     

    
      
        
          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    IMPORTANT
      NOTE:

    BRINGING
      THIS CREDIT AGREEMENT OR ANY CERTIFIED COPY OF THIS CREDIT AGREEMENT INTO THE
      REPUBLIC OF AUSTRIA AS WELL AS ANY WRITTEN CONFIRMATION OR WRITTEN REFERENCE
      TO
      THIS CREDIT AGREEMENT MAY CAUSE THE IMPOSITION OF AUSTRIAN STAMP DUTY
      TAX.

     

    

     

    CREDIT
      AGREEMENT

     

    This
      Agreement, dated as of December 13, 2005, is among Modine Holding GmbH, a
      company organized under the laws of Austria, Modine Manufacturing Company,
      a
      Wisconsin corporation, those of its Subsidiaries from time to time party hereto
      as Guarantors, the Lenders and J.P. Morgan Europe Limited, a company organized
      under the laws of England and Wales, as Agent. The parties hereto agree as
      follows:

     

    ARTICLE
      1  

     

    

     

    DEFINITIONS

     

    As
      used
      in this Agreement:

     

    “Acquisition”
      means any transaction, or any series of related transactions, consummated on
      or
      after the date of this Agreement, by which the Parent or any of its Subsidiaries
      (i) acquires any going business or all or substantially all of the assets
      of any firm, corporation or limited liability company, or division thereof,
      whether through purchase of assets, merger or otherwise or (ii) directly or
      indirectly acquires (in one transaction or as the most recent transaction in
      a
      series of transactions) at least a majority (in number of votes) of the
      securities of a corporation which have ordinary voting power for the election
      of
      directors (other than securities having such power only by reason of the
      happening of a contingency) or a majority (by percentage or voting power) of
      the
      outstanding ownership interests of a partnership or limited liability
      company.

     

    “Administrative
      Questionnaire” means an Administrative Questionnaire in a form supplied by the
      Agent.

     

    “Advance”
      means at any time and with respect to any Interest Period extant at such time
      that portion of the Loans sharing such Interest Period. 

     

    “Affiliate”
      of any Person means any other Person directly or indirectly controlling,
      controlled by or under common control with such Person. A Person shall be deemed
      to control another Person if the controlling Person owns 10% or more of any
      class of voting securities (or other ownership interests) of the controlled
      Person or possesses, directly or indirectly, the power to direct or cause the
      direction of the management or policies of the controlled Person, whether
      through ownership of stock, by contract or otherwise.

     

    “Agent”
      means JPMEL in its capacity as contractual representative of the Lenders
      pursuant to Article 10, and not in its individual capacity as a Lender, and
      any
      successor Agent appointed pursuant to Article 10.

     

    “Aggregate
      Commitment” means the aggregate of the Commitments of all the Lenders. The
      Aggregate Commitment is EUR 71,000,000.

     

    “Agreement”
      means this credit agreement, as it may be amended or modified and in effect
      from
      time to time.

     

    “Agreement
      Accounting Principles” means generally accepted accounting principles as in
      effect from time to time, applied in a manner consistent with that used in
      preparing the financial statements referred to in Section 5.5.

     

    “Anti-Terrorism
      Order” means Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001) issued by
      the President of the U.S. (Executive Order Blocking Property and Prohibiting
      Transactions with Persons Who Commit, Threaten to Commit, or Support
      Terrorism).

     

    “Applicable
      Margin” means, at any time, the percentage rate per annum which is applicable at
      such time as set forth in the Pricing Schedule.

     

    “Approved
      Fund” is defined in Section 13.1(b).

     

    “Arranger”
      means J.P. Morgan plc, a company organized under the laws of England and Wales,
      and its successors, in its capacity as Lead Arranger and Sole Book
      Runner.

     

    “Article”
      means an article of this Agreement unless another document is specifically
      referenced.

     

    “Assignment
      and Assumption” means an assignment and assumption entered into by a Lender and
      an assignee (with the consent of any party whose consent is required by
      Section 13.1), and accepted by the Agent, in the form of Exhibit C or
      any other form approved by the Agent.

     

    “Authorized
      Officer” means any of the Chief Financial Officer, Treasurer, or Controller of
      the Borrower or Parent, as applicable, acting singly.

     

    “Borrower”
      means Modine Holding GmbH, a company organized under the laws of Austria, and
      its successors and assigns. 

     

    “Borrowing
      Date” means the date the Loans are made hereunder.

     

    “Borrowing
      Notice” is defined in Section 2.4.

     

    “Business
      Day” means (i) with respect to any borrowing, payment or rate selection of
      Advances, a day (other than a Saturday or Sunday) on which (A) banks generally
      are open in London for the conduct of substantially all of their commercial
      lending activities and (B) the Trans-European Automated Real-Time Gross
      Settlement Express Transfer System (TARGET) (or, if such clearing system ceases
      to be operative, such other clearing system (if any) determined by the Agent
      to
      be a suitable replacement) is open for settlement of payment in Euros, and
      (ii)
      for all other purposes, a day (other than a Saturday or Sunday) on which banks
      generally are open in Chicago and London for the conduct of substantially all
      of
      their commercial lending activities.

     

    “CERCLA”
      means the Comprehensive Environmental Response, Compensation and Liability
      Act
      of 1980, as amended by the Superfund Amendments and Reauthorization Act of
      1986,
      and as it may be further amended from time to time, 42 U.S.C.§§9601 et
      seq.

     

    “Capitalized
      Lease” of a Person means any lease of Property by such Person as lessee which
      would be capitalized on a balance sheet of such Person prepared in accordance
      with Agreement Accounting Principles.

     

    “Capitalized
      Lease Obligations” of a Person means the amount of the obligations of such
      Person under Capitalized Leases which would be shown as a liability on a balance
      sheet of such Person prepared in accordance with Agreement Accounting
      Principles.

     

    “Cash
      Equivalent Investments” means (i) short-term obligations of, or fully guaranteed
      by, the United States of America, (ii) with respect to Investments of a Foreign
      Subsidiary only, direct obligations of such Foreign Subsidiary’s Domestic
      National Government maturing within one year, (iii) commercial paper rated
      A-1
      or better by S&P or P-1 or better by Moody's, (iv) demand deposit accounts
      maintained in the ordinary course of business, (v) (1) preferred
      stocks rated A3 or better by Moody’s or A- or better by S&P,
      (2) adjustable rate preferred stock funds rated A3 or better by Moody’s or
      A- or better by S&P, and (3) municipal notes with credit support
      provided by, and putable (within a period not to exceed one year from date
      of
      acquisition) to, financial institutions rated A or better by Moody’s, S&P,
      or the Fitch Investor Service, (vi) tax exempt variable rate demand notes
      rated AA or better by Moody’s or S&P, provided that such notes permit the
      Parent or applicable Subsidiary to require the issuer to repurchase such notes
      after a period of not more than one year from date of acquisition thereof,
      (vii) certificates of deposit issued by and time deposits with commercial
      banks (whether domestic or foreign) having capital and surplus in excess of
      $100,000,000, and (viii) repurchase agreements or like investment vehicles,
      in each case rated A-1 or better by S&P or P-1 or better by Moody’s and
      having a maturity date not greater than 270 days; provided
      in each
      case that the same provides for payment of both principal and interest (and
      not
      principal alone or interest alone) and is not subject to any contingency
      regarding the payment of principal or interest. 

     

    “Change
      in Control” means (a) with respect to any Person or group of Persons acting in
      concert which on the date of this Agreement owns 15% or more of the outstanding
      shares of voting stock of the Parent, the acquisition by any such Person or
      group of Persons acting in concert of beneficial ownership (within the meaning
      of Rule 13d-3 of the Securities and Exchange Commission under the Securities
      Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock
      of the Parent; or (b) with respect to any Person or group of Persons acting
      in
      concert (other than those described in clause (a) immediately above), the
      acquisition by any such Person or group of Persons, of beneficial ownership
      (within the meaning of Rule 13d-3 of the Securities and Exchange Commission
      under the Securities Exchange Act of 1934) of 20% or more of the outstanding
      shares of voting stock of the Parent; or (c) as of any date a majority of the
      Board of Directors of the Parent consists of individuals who were not either
      (i)
      directors of the Parent as of the corresponding date of the previous year,
      (ii)
      selected or nominated to become directors by the Board of Directors of the
      Parent of which a majority consisted of individuals described in clause (i),
      or
      (iii) selected or nominated to become directors by the Board of Directors of
      the
      Parent of which a majority consisted of individuals described in clause (i)
      and
      individuals described in clause (ii); or (d) as of any date the Borrower ceases
      to be a direct or indirect Wholly-Owned Subsidiary of the Parent.

     

    “Code”
      means the Internal Revenue Code of 1986, as amended, reformed or otherwise
      modified from time to time.

     

    “Collateral
      Documents” means, collectively, each agreement, instrument or document that may
      at any time secure all or any part of the Secured Obligations.

     

    “Collateral
      Shortfall Amount” is defined in Section 8.1.

     

    “Commitment”
      means, for each Lender, the obligation of such Lender to make a Loan to the
      Borrower in the amount set forth opposite its signature below.

     

    “Consolidated
      Adjusted EBITDA” means, as to any Person and with reference to any period,
      Consolidated EBIT plus,
      to the
      extent deducted in determining Consolidated Net Income, depreciation and
      amortization, all calculated for such Person and its Subsidiaries on a
      consolidated basis. “Consolidated Adjusted EBITDA” for any period, as to any
      Person, shall be calculated to be the actual amount for such period for such
      Person and its Subsidiaries; provided,
      upon
      the consummation of any Acquisition, for calculations made from and after such
      Acquisition, Consolidated Adjusted EBITDA shall be calculated on a pro forma
      basis
      including the target’s historical Consolidated Adjusted EBITDA for the
      applicable period using historical financial statements obtained from the
      seller, broken down by fiscal quarter in such Person’s reasonable judgment (the
      amounts from which may be adjusted solely as may be necessary to comply with
      Agreement Accounting Principles).

     

    “Consolidated
      EBIT” means, as to any Person and with reference to any period, Consolidated Net
      Income plus,
      to the
      extent deducted from revenues in determining Consolidated Net Income, (i)
      Consolidated Interest Expense, (ii) expense for federal, state, local and
      foreign income and franchise taxes paid or accrued and (iii) extraordinary
      losses incurred other than in the ordinary course of business, minus,
      to the
      extent included in Consolidated Net Income, extraordinary gains realized other
      than in the ordinary course of business, all calculated for such Person and
      its
      Subsidiaries on a consolidated basis.

     

    “Consolidated
      Interest Expense” means, as to any Person and with reference to any period, the
      interest expense of such Person and its Subsidiaries calculated on a
      consolidated basis for such period including, without limitation, such interest
      expense as may be attributable to Capitalized Leases, Receivables Transaction
      Financing Costs, the discount or implied interest component of Off-Balance
      Sheet
      Liabilities, all commissions, discounts and other fees and charges owed with
      respect to Letters of Credit and Net Mark-to-Market Exposure.

     

    “Consolidated
      Net Income” means, as to any Person and with reference to any period, the net
      income (or loss) of such Person and its Subsidiaries calculated on a
      consolidated basis for such period, excluding any non-cash charges or gains
      which are unusual, non-recurring or extraordinary, and including, to the extent
      not otherwise included in the determination of Consolidated Net Income, all
      cash
      dividends and cash distributions received by the Parent or any Subsidiary from
      any Person in which the Parent or such Subsidiary has made an
      investment.

     

    “Consolidated
      Net Worth” means as to any Person and at any time the consolidated stockholders’
equity of such Person and its Subsidiaries calculated on a consolidated basis
      as
      of such time.

     

    “Consolidated
      Total Debt” means as to any Person and at any time Indebtedness of such Person
      and its Subsidiaries calculated on a consolidated basis.

     

    “Contingent
      Obligation” of a Person means any agreement, undertaking or arrangement by which
      such Person assumes, guarantees, endorses, contingently agrees to purchase
      or
      provide funds for the payment of, or otherwise becomes or is contingently liable
      upon, the obligation or liability of any other Person, or agrees to maintain
      the
      net worth or working capital or other financial condition of any other Person,
      or otherwise assures any creditor of such other Person against loss, including,
      without limitation, any comfort letter, operating agreement, take-or-pay
      contract or the obligations of any such Person as general partner of a
      partnership with respect to the liabilities of the partnership.

     

    “Controlled
      Group” means all members of a controlled group of corporations or other business
      entities and all trades or businesses (whether or not incorporated) under common
      control which, together with the Parent or any of its Subsidiaries, are treated
      as a single employer under Section 414 of the Code.

     

    “Credit
      Parties” means the Borrower and the Guarantors.

     

    “Default”
      means an event described in Article 7.

     

    “Designated
      Financial Contract” means any financial contract evidencing any Rate Management
      Obligations to which any Lender or affiliate of any Lender shall be a
      party.

     

    “Dollars”
      and “$” shall mean the lawful currency of the United States of
      America.

     

    “Domestic
      National Government” means, with respect to a Foreign Subsidiary, the national
      government of the country in which the Foreign Subsidiary’s principal place of
      business is located.

     

    “Domestic
      Subsidiary” means each Subsidiary of the Parent which is organized under the
      laws of the United States of America or any state, territory or possession
      thereof.

     

    “Effective
      Date” means the date on which (i) each of the conditions precedent described in
      Section 4.1 has been satisfied, and (ii) this Agreement has been executed by
      all
      of the parties hereto.

     

    “Environmental
      Laws” means any and all federal, state, local and foreign statutes, laws,
      judicial decisions, regulations, ordinances, rules, judgments, orders, decrees,
      plans, injunctions, permits, concessions, grants, franchises, licenses,
      agreements and other governmental restrictions relating to (i) the protection
      of
      the environment, (ii) the effect of the environment on human health, (iii)
      emissions, discharges or releases of pollutants, contaminants, hazardous
      substances or wastes into surface water, ground water or land, or (iv) the
      manufacture, processing, distribution, use, treatment, storage, disposal,
      transport or handling of pollutants, contaminants, hazardous substances or
      wastes or the clean-up or other remediation thereof, including, without
      limitation, CERCLA.

     

    “Environmental
      Liabilities” means all liabilities (including anticipated compliance costs) in
      connection with or relating to the business, assets presently or previously
      owned, leased or operated property, activities (including, without limitation,
      off-site disposal) or operations of the Parent and each of its Subsidiaries,
      whether vested or unvested, contingent or fixed, actual or potential, known
      or
      unknown, which arise under or relate to matters covered by Environmental
      Laws.

     

    “Environmental
      Proceeding” means any judicial or administrative proceeding arising from or in
      any way associated with any Environmental Law.

     

    “Environmental
      Release” means releases as defined in CERCLA or under any other Environmental
      Law.

     

    “Equivalent
      Foreign Rating” means, with respect to a rating issued by Moody’s, an equivalent
      rating issued by a recognized rating agency comparable to S&P or Moody’s and
      reasonably acceptable to the Lender.

     

    “ERISA”
      means the Employee Retirement Income Security Act of 1974, as amended from
      time
      to time, and any rule or regulation issued thereunder.

     

    “Euro”
      and/or “EUR” means the euro referred to in Council Regulation (EC) No. 1103/97
      dated June 17, 1997 passed by the Council of the European Union, or, if
      different, the then lawful currency of the member states of the European Union
      that participate in the third stage of Economic and Monetary Union.

     

    “Eurocurrency
      Payment Office” of the Agent shall mean the office, branch, affiliate or
      correspondent bank of the Agent specified as the “Eurocurrency Payment Office”
for such currency in Schedule
      1
      hereto
      or such other office, branch, affiliate or correspondent bank of the Agent
      as it
      may from time to time specify to the Borrower and each Lender as its
      Eurocurrency Payment Office. 

     

    “EURIBOR”
      means, with respect to an Advance for the relevant Interest Period or unpaid
      sum
      in Euro: (i) the applicable Screen Rate; or (ii) if no Screen Rate is available
      for the relevant Interest Period, the arithmetic mean of the rates (rounded
      upwards to four decimal places) as supplied to the Agent at its request quoted
      by the Reference Banks to leading banks in the European interbank market, in
      each case as of 11:00 a.m. (Brussels time) on the applicable Quotation Date
      for
      the offering of deposits in Euro and for a period comparable to the Interest
      Period of the relevant Advance or unpaid sum.

     

    “Excluded
      Taxes” means, in the case of each Lender or applicable Lending Installation and
      the Agent, taxes imposed on its overall net income, and franchise taxes imposed
      on it, by (i) the jurisdiction under the laws of which such Lender or the Agent
      is incorporated or organized or (ii) the jurisdiction in which the Agent’s or
      such Lender’s principal executive office or such Lender’s applicable Lending
      Installation is located.

     

    “Exhibit”
      refers to an exhibit to this Agreement, unless another document is specifically
      referenced.

     

    “Facility
      Maturity Date” means September 30, 2009.

     

    “Foreign
      Subsidiary” means each Subsidiary which is not a Domestic
      Subsidiary.

     

    “Fund”
      means any Person (other than a natural person) that is (or will be) engaged
      in
      making, purchasing, holding or otherwise investing in commercial loans and
      similar extensions of credit in the ordinary course of its
      business.

     

    “Guarantors”
      means the Initial Guarantors along with each additional Specified Domestic
      Subsidiary that becomes a party to this Agreement by executing a supplement
      hereto in the form attached as Annex
      I.

     

    “Guaranty”
      means the guaranty set forth in Article 12 hereof, as such guaranty may be
      amended or modified and in effect from time to time.

     

    “Hazardous
      Materials” includes, without limitation, (i) solid or hazardous waste, as
      defined in the Resource Conservation and Recovery Act of 1980, or in any
      applicable state or local law or regulation, (ii) hazardous substances, as
      defined in CERCLA, or in any applicable state or local law or regulation, (iii)
      gasoline, or any other petroleum product or by-product, (iv) toxic substances,
      as defined in the Toxic Substances Control Act of 1976, or in any applicable
      state or local law or regulation or (v) insecticides, fungicides, or
      rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide
      Act of 1975, or in any applicable state or local law or regulation, as each
      such
      act, statute or regulation may be amended from time to time.

     

    “Holders
      of Obligations” means the holders of the Obligations from time to time and shall
      include (A) each Lender in respect of its Loan, (B) the Agent and the Lenders
      in
      respect of all other present and future obligations and liabilities of the
      Borrower of every type and description arising under or in connection with
      this
      Agreement or any other Loan Document, (C) each indemnified party under Section
      9.6 of this Agreement in respect of the obligations and liabilities of the
      Borrower to such Person hereunder and under the other Loan Documents, and (D)
      their respective successors, transferees and assigns.

     

    “Indebtedness”
      of a Person means, without duplication, such Person’s (i) obligations for
      borrowed money, (ii) obligations representing the deferred purchase price of
      Property or services (other than accounts payable arising in the ordinary course
      of such Person’s business payable on terms customary in the trade), (iii)
      obligations, whether or not assumed, secured by Liens or payable out of the
      proceeds or production from Property now or hereafter owned or acquired by
      such
      Person, (iv) obligations which are evidenced by notes, acceptances, or other
      instruments, (v) obligations of such Person to purchase securities or other
      Property arising out of or in connection with the sale of the same or
      substantially similar securities or Property, (vi) Capitalized Lease
      Obligations, (vii) obligations in respect of Letters of Credit, (viii)
      Contingent Obligations in respect of Indebtedness of any other Person, (ix)
      Off-Balance Sheet Liabilities, (x) Receivables Transaction Attributed
      Indebtedness, and (xi) any other obligation for borrowed money or other
      financial accommodation which in accordance with Agreement Accounting Principles
      would be shown as a liability on the consolidated balance sheet of such
      Person.

     

    “Initial
      Guarantors” means Parent, Modine Delaware LLC, a Delaware limited liability
      company, Modine, Inc., a Delaware corporation, Modine Climate Systems Inc.,
      a
      Kentucky corporation, Thermacore International, Inc., a Pennsylvania
      corporation, Thermacore, Inc., a Pennsylvania corporation, Thermal Corp., a
      Delaware corporation, Modine Jackson, Inc., a Delaware corporation, Airedale
      Inc., a Delaware corporation and Airedale North America, Inc. a Pennsylvania
      corporation. 

     

    “Interest
      Expense Coverage Ratio” means, as of any date of calculation, the ratio of (i)
      the Parent’s Consolidated EBIT for the then most recently ended four fiscal
      quarters to (ii) the Parent’s Consolidated Interest Expense for the then most
      recently ended four fiscal quarters.

     

    “Interest
      Period” means, with respect to an Advance, a period of one, two, three or six
      months (or,
      with
      respect to the EUR 30,000,000 portion of the Loans that is to be prepaid on
      or
      before December 30, 2005, such shorter period as may be agreed by the
      Lenders and the Borrower) commencing on a Business Day selected by the Borrower
      pursuant to this Agreement. Such Interest Period having a period of one, two,
      three or six months shall end on the day which corresponds numerically to such
      date one, two, three or six months thereafter, provided,
      however,
      that if
      there is no such numerically corresponding day in such next, second, third
      or
      sixth succeeding month, such Interest Period shall end on the last Business
      Day
      of such next, second, third or sixth succeeding month. If an Interest Period
      would otherwise end on a day which is not a Business Day, such Interest Period
      shall end on the next succeeding Business Day, provided,
      however,
      that if
      said next succeeding Business Day falls in a new calendar month, such Interest
      Period shall end on the immediately preceding Business Day. 

     

    “Investment”
      of a Person means any loan, advance (other than commission, travel and similar
      advances to officers and employees made in the ordinary course of business),
      extension of credit (other than accounts receivable arising in the ordinary
      course of business on terms customary in the trade) or contribution of capital
      by such Person; stocks, bonds, mutual funds, partnership interests, notes,
      debentures or other securities owned by such Person; any deposit accounts and
      certificates of deposit owned by such Person; and structured notes, derivative
      financial instruments and other similar instruments or contracts owned by such
      Person.

     

    “JPMEL”
      means J.P. Morgan Europe Limited, a company organized under the laws of England
      and Wales, in its individual capacity, and its successors.

     

    “Lenders”
      means the lending institutions listed on the signature pages of this Agreement
      and their respective successors and assigns. 

     

    “Lending
      Installation” means, with respect to a Lender or the Agent, the office, branch,
      subsidiary or affiliate of such Lender or the Agent with respect to Euro listed
      on Schedule
      2
      or
      otherwise selected by such Lender or the Agent pursuant to Section 2.9,
provided,
      however,
      that no
      such office, branch, subsidiary or affiliate shall be located in the Republic
      of
      Austria.

     

    “Letter
      of Credit” of a Person means a letter of credit or similar instrument which is
      issued upon the application of such Person or upon which such Person is an
      account party or for which such Person is in any way liable.

     

    “Leverage
      Ratio” means, as of any date of calculation, the ratio of (i) the Parent’s
      Consolidated Total Debt outstanding on such date to (ii) the Parent’s
      Consolidated Adjusted EBITDA for the then most recently ended four fiscal
      quarters. 

     

    “Lien”
      means any lien (statutory or other), mortgage, pledge, hypothecation,
      assignment, deposit arrangement, encumbrance or preference, priority or other
      security agreement or preferential arrangement of any kind or nature whatsoever
      (including, without limitation, the interest of a vendor or lessor under any
      conditional sale, Capitalized Lease or other title retention
      agreement).

     

    “Loan”
      means any Lender’s term loan pursuant to Section 2.1. References to “the Loans”
mean all such term loans.

     

    “Loan
      Documents” means this Agreement (including the Guaranty) and the Collateral
      Documents.

     

    “Mandatory
      Costs” means, with respect to an Advance, the percentage rate per annum from
      time to time determined in accordance with the applicable mandatory cost formula
      set forth in Schedule 3. 

     

    “Material
      Adverse Effect” means a material adverse effect on (i) the business, Property,
      condition (financial or otherwise), results of operations, or prospects of
      the
      Parent and its Subsidiaries taken as a whole, (ii) the ability of the Borrower
      or any Guarantor to perform its obligations under the Loan Documents to which
      it
      is a party, or (iii) the validity or enforceability of any of the Loan Documents
      or the rights or remedies of the Agent or the Lenders thereunder.

     

    “Modine
      Austria” means Modine Austria GmbH, a company organized under the laws of
      Austria.

     

    “Modine
      Manufacturing Credit Agreement” means the Amended and Restated Credit Agreement
      dated as of October 27, 2004 by and among the lenders named therein,
      JPMorgan Chase Bank, N.A., as Agent and J.P. Morgan Securities Inc., as Lead
      Arranger and Sole Book Runner, as amended.

     

    “Moody’s”
      means Moody’s Investors Service, Inc.

     

    “Multiemployer
      Plan” means a Plan maintained pursuant to a collective bargaining agreement or
      any other arrangement to which the Parent or any member of the Controlled Group
      is a party to which more than one employer is obligated to make
      contributions.

     

    “Net
      Mark-to-Market Exposure” of a Person means, as of any date of determination, the
      excess (if any) of all unrealized losses over all unrealized profits of such
      Person arising from Rate Management Transactions. “Unrealized losses” means the
      fair market value of the cost to such Person of replacing such Rate Management
      Transaction as of the date of determination (assuming the Rate Management
      Transaction were to be terminated as of that date), and “unrealized profits”
means the fair market value of the gain to such Person of replacing such Rate
      Management Transaction as of the date of determination (assuming such Rate
      Management Transaction were to be terminated as of that date).

     

    “Non-U.S.
      Lender” is defined in Section 3.5(d).

     

    “Obligations”
      means all unpaid principal of and accrued and unpaid interest on the Loans,
      all
      accrued and unpaid fees and all expenses, reimbursements, indemnities and other
      obligations of the Borrower to the Lenders or to any Lender, the Agent or any
      indemnified party arising under the Loan Documents.

     

    “Off-Balance
      Sheet Liability” of a Person means (i) any repurchase obligation or liability of
      such Person with respect to accounts or notes receivable sold by such Person,
      (ii) any liability under any Sale and Leaseback Transaction which is not a
      Capitalized Lease, (iii) any liability under any so-called “synthetic lease”
transaction entered into by such Person, or (iv) any obligation arising with
      respect to any other transaction which is the functional equivalent of or takes
      the place of borrowing but which does not constitute a liability on the balance
      sheets of such Person, but excluding from this clause (iv) Operating
      Leases.

     

    “Operating
      Lease” of a Person means any lease of Property (other than a Capitalized Lease)
      by such Person as lessee which has an original term (including any required
      renewals and any renewals effective at the option of the lessor) of one year
      or
      more.

     

    “Operating
      Lease Obligations” means, as at any date of determination, the amount obtained
      by aggregating the present values, determined in the case of each particular
      Operating Lease by applying a discount rate (which discount rate shall equal
      the
      discount rate which would be applied under Agreement Accounting Principles
      if
      such Operating Lease were a Capitalized Lease) from the date on which each
      fixed
      lease payment is due under such Operating Lease to such date of determination,
      of all fixed lease payments due under all Operating Leases of the Parent and
      its
      Subsidiaries.

     

    “Other
      Taxes” is defined in Section 3.5(b).

     

    “Parent”
      means Modine Manufacturing Company, a Wisconsin corporation. 

     

    “Participants”
      is defined in Section 13.1(c).

     

    “PBGC”
      means the Pension Benefit Guaranty Corporation, or any successor
      thereto.

     

    “Permitted
      Encumbrances” means: 

     

    (a)  Liens
      for
      taxes, assessments or governmental charges or levies on the Parent’s or a
      Subsidiary’s Property if the same shall not at the time be delinquent or
      thereafter can be paid without penalty, or are being contested in good faith
      and
      by appropriate proceedings and for which adequate reserves in accordance with
      Agreement Accounting Principles shall have been set aside on the books of the
      Parent or such Subsidiary.

     

    (b)  Liens
      imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and other
      similar liens arising in the ordinary course of business which secure payment
      of
      obligations not more than 60 days past due.

     

    (c)  Liens
      arising out of pledges or deposits under worker’s compensation laws,
      unemployment insurance, old age pensions, or other social security or retirement
      benefits, or similar legislation.

     

    (d)  Utility
      easements, building restrictions and such other encumbrances or charges against
      real property as are of a nature generally existing with respect to properties
      of a similar character and which do not in any material way affect the
      marketability of the same or interfere with the use thereof in the business
      of
      the Parent or its Subsidiaries.

     

    (e)  Liens
      existing on the date hereof and described in Schedule
      6.16.

     

    (f)  Liens
      incurred in connection with any transfer of an interest in accounts or notes
      receivable or related assets as part of a Qualified Receivables
      Transaction.

     

    (g)  Liens
      created after the date hereof by conditional sale or other title retention
      agreements (including Capitalized Leases) or in connection with purchase money
      Indebtedness with respect to equipment and fixtures acquired by the Parent
      or
      its Subsidiaries in the ordinary course of business, involving the incurrence
      of
      an aggregate amount of Indebtedness of no more than $10,000,000 outstanding
      at
      any time for all such Liens (provided that such Liens attach only to the assets
      financed and such Indebtedness is incurred within 30 days following such
      purchase and does not exceed 100% of the purchase price of the subject
      assets).

     

    (h)  In
      addition to Liens otherwise described in clauses (a) through (h) above, Liens
      securing an aggregate amount of Indebtedness outstanding at any time of no
      more
      than $10,000,000.

     

    “Person”
      means any natural person, corporation, firm, joint venture, partnership, limited
      liability company, association, enterprise, trust or other entity or
      organization, or any government or political subdivision or any agency,
      department or instrumentality thereof.

     

    “Plan”
      means an employee pension benefit plan which is covered by Title IV of ERISA
      or
      subject to the minimum funding standards under Section 412 of the Code as to
      which the Parent or any member of the Controlled Group may have any
      liability.

     

    “Pricing
      Schedule” means the Schedule attached hereto identified as such.

     

    “Property”
      of a Person means any and all property, whether real, personal, tangible,
      intangible, or mixed, of such Person, or other assets owned, leased or operated
      by such Person.

     

    “Pro
      Rata
      Share” means, with respect to a Lender, a portion equal to a fraction the
      numerator of which is such Lender’s Commitment (or, once the Loans have been
      made, the outstanding amount of such Lender’s Loan) and the denominator of which
      is the Aggregate Commitment (or, once the Loans have been made, the aggregate
      outstanding amount of the Loans).

     

    “Qualified
      Receivables Transaction” means any transaction or series of transactions that
      may be entered into by the Parent or any Subsidiary pursuant to which the Parent
      or any Subsidiary may sell, convey or otherwise transfer to a newly-formed
      Subsidiary or other special-purpose entity, or any other Person, any accounts
      or
      notes receivable and rights related thereto on a limited recourse basis,
      provided that (i) such sale, conveyance or transfer qualifies as a sale under
      Agreement Accounting Principles and (ii) the Receivables Transaction Attributed
      Indebtedness incurred in such transaction or series of transactions does not
      exceed fifteen percent (15%) of the total assets of the Parent and its
      Subsidiaries on a consolidated basis at any one time outstanding.

     

    “Quotation
      Date” means, with respect to any Interest Period, the date that is two Business
      Days prior to the first day of such Interest Period.

     

    “Rate”
      means, with respect to an Advance for the relevant Interest Period, a per annum
      rate of interest equal to the sum of (i) EURIBOR, plus (ii) the Applicable
      Margin, plus (iii) Mandatory Costs.

     

    “Rate
      Management Transaction” means any transaction (including an agreement with
      respect thereto) now existing or hereafter entered into by the
      Borrower which
      is
      a rate swap, basis swap, forward rate transaction, commodity swap, commodity
      option, equity or equity index swap, equity or equity index option, bond option,
      interest rate option, foreign exchange transaction, cap transaction, floor
      transaction, collar transaction, forward transaction, currency swap transaction,
      cross-currency rate swap transaction, currency option or any other similar
      transaction (including any option with respect to any of these transactions)
      or
      any combination thereof, whether linked to one or more interest rates, foreign
      currencies, commodity prices, equity prices or other financial measures.

     

    “Rate
      Management Obligations” of a Person means any and all obligations of such
      Person, whether absolute or contingent and howsoever and whensoever created,
      arising, evidenced or acquired (including all renewals, extensions and
      modifications thereof and substitutions therefor), under (i) any and all Rate
      Management Transactions, and (ii) any and all cancellations, buy backs,
      reversals, terminations or assignments of any Rate Management
      Transactions.

     

    “Receivables
      Transaction Attributed Indebtedness” means the amount of obligations outstanding
      under the legal documents entered into as part of any Qualified Receivables
      Transaction on any date of determination that would be characterized as
      principal if such Qualified Receivables Transaction were structured as a secured
      lending transaction rather than as a purchase.

     

    “Receivables
      Transaction Financing Cost” means such portion of the fees, service charges, and
      other costs, as well as all collections or other amounts retained by purchasers
      of accounts or notes receivable and rights related thereto pursuant to a
      Qualified Receivables Transaction, which are in excess of amounts paid to the
      Parent and its Subsidiaries under any Qualified Receivables Transaction for
      the
      purchase of accounts or notes receivable and rights related thereto pursuant
      to
      such Qualified Receivables Transaction and are the equivalent of the interest
      component of the financing if the transaction were characterized as a secured
      lending transaction rather than as a purchase.

     

    “Reference
      Banks” means, in relation to EURIBOR, the Agent and any other bank or financial
      institution appointed as such by the Agent.

     

    “Register”
      is defined in Section 13.1(b).

     

    “Regulation
      D” means Regulation D of the Board of Governors of the Federal Reserve System
      as
      from time to time in effect and any successor thereto or other regulation or
      official interpretation of said Board of Governors relating to reserve
      requirements applicable to member banks of the Federal Reserve
      System.

     

    “Regulation
      U” means Regulation U of the Board of Governors of the Federal Reserve System
      as
      from time to time in effect and any successor or other regulation or official
      interpretation of said Board of Governors relating to the extension of credit
      by
      banks for the purpose of purchasing or carrying margin stocks applicable to
      member banks of the Federal Reserve System.

     

    “Related
      Parties” means, with respect to any specified Person, such Person's Affiliates
      and the respective directors, officers, employees, agents and advisors of such
      Person and such Person's Affiliates.

     

    “Reportable
      Event” means a reportable event as defined in Section 4043 of ERISA and the
      regulations issued under such section, with respect to a Plan, excluding,
      however, such events as to which the PBGC has by regulation waived the
      requirement of Section 4043(a) of ERISA that it be notified within 30 days
      of
      the occurrence of such event, provided,
      however,
      that a
      failure to meet the minimum funding standard of Section 412 of the Code and
      of
      Section 302 of ERISA shall be a Reportable Event regardless of the issuance
      of
      any such waiver of the notice requirement in accordance with either Section
      4043(a) of ERISA or Section 412(d) of the Code.

     

    “Reports”
      is defined in Section 9.6(a).

     

    “Required
      Lenders” means Lenders in the aggregate having at least fifty-one percent (51%)
      of the Aggregate Commitment, or, once the Loans have been made, Lenders in
      the
      aggregate holding at least fifty-one percent (51%) of the aggregate outstanding
      amount of the Loans; provided that, if there shall be two or more Lenders,
      Required Lenders shall constitute at least two Lenders.

     

    “Restricted
      Payment” means, with respect to any Person, (i) any dividend or other
      distribution on any shares of such Person’s capital stock (except dividends
      payable solely in shares of its capital stock) or (ii) any Stock Purchase
      Restricted Payment.

     

    “S&P”
      means Standard and Poor’s Ratings Services, a division of The McGraw Hill
      Companies, Inc.

     

    “Sale
      and
      Leaseback Transaction” means any sale or other transfer of Property by any
      Person with the intent to lease such Property as lessee.

     

    “Schedule”
      refers to a specific schedule to this Agreement, unless another document is
      specifically referenced.

     

    “Screen
      Rate” means, in relation to EURIBOR, the percentage rate per annum determined by
      the Banking Federation of the European Union for the relevant interest period,
      displayed on the appropriate page of the Telerate screen. If the agreed page
      is
      replaced or service ceases to be available, the Agent may specify another page
      or service displaying the appropriate rate after consultation with the Borrower
      and the Lenders.

     

    “Section”
      means a numbered section of this Agreement, unless another document is
      specifically referenced.

     

    “Secured
      Obligations” means, collectively, (i) the Obligations and (ii) all Rate
      Management Obligations owing to one or more Lenders.

     

    “Selection
      Notice” is defined in Section 2.5.

     

    “Single
      Employer Plan” means a Plan maintained by the Parent or any member of the
      Controlled Group for employees of the Parent or any member of the Controlled
      Group.

     

    “Specified
      Domestic Subsidiary” means, at any time, each Domestic Subsidiary other than
      (i) Domestic Subsidiaries that do not conduct a business of any kind and do
      not own or possess any assets and (ii) so long as they remain private
      charitable foundations, Modine Foundation, Inc., a Wisconsin corporation, and
      Modine Manufacturing Company Foundation, Inc., a Wisconsin
      corporation.

     

    “Stock
      Purchase Restricted Payment” means, with respect to any Person, any net payment
      declared or made on account of the purchase, redemption, retirement, acquisition
      or sale of (A) any shares of such Person’s capital stock or (B) any option,
      warrant or other right to acquire shares of such Person’s capital
      stock.

     

    “Subsidiary”
      of a Person means (i) any corporation more than 50% of the outstanding
      securities having ordinary voting power of which shall at the time be owned
      or
      controlled, directly or indirectly, by such Person or by one or more of its
      Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii)
      any
      partnership, limited liability company, association, joint venture or similar
      business organization more than 50% of the ownership interests having ordinary
      voting power of which shall at the time be so owned or controlled. Unless
      otherwise expressly provided, all references herein to a “Subsidiary” shall mean
      a Subsidiary of the Parent and shall include the Borrower as a Subsidiary of
      the
      Parent.

     

    “Substantial
      Portion” means, with respect to the Property of the Parent and its Subsidiaries,
      Property which represents more than 15% of the consolidated assets of the Parent
      and its Subsidiaries or property which is responsible for more than 15% of
      the
      consolidated net sales or of the consolidated net income of the Parent and
      its
      Subsidiaries, in each case, as would be shown in the consolidated financial
      statements of the Parent and its Subsidiaries as at the beginning of the
      twelve-month period ending with the month in which such determination is made
      (or if financial statements have not been delivered hereunder for that month
      which begins the twelve-month period, then the financial statements delivered
      hereunder for the quarter ending immediately prior to that month).

     

    “Taxes”
      means any and all present or future taxes, duties, levies, imposts, deductions,
      charges or withholdings, and any and all liabilities with respect to the
      foregoing, but excluding
      Excluded
      Taxes and Other Taxes.

     

    “Transferee”
      is defined in Section 13.2.

     

    “Unfunded
      Liabilities” means the amount (if any) by which the present value of all vested
      and unvested accrued benefits under all Single Employer Plans exceeds the fair
      market value of all such Plan assets allocable to such benefits, all determined
      as of the then most recent valuation date for such Plans using PBGC actuarial
      assumptions for single employer plan terminations.

     

    “Unmatured
      Default” means an event which but for the lapse of time or the giving of notice,
      or both, would constitute a Default.

     

    “Wholly-Owned
      Subsidiary” of a Person means (i) any Subsidiary all of the outstanding voting
      securities of which shall at the time be owned or controlled, directly or
      indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such
      Person, or by such Person and one or more Wholly-Owned Subsidiaries of such
      Person, or (ii) any partnership, limited liability company, association, joint
      venture or similar business organization 100% of the ownership interests having
      ordinary voting power of which shall at the time be so owned or
      controlled.

     

    The
      foregoing definitions shall be equally applicable to both the singular and
      plural forms of the defined terms.

     

    ARTICLE
      2  

     

    

     

    THE
      CREDITS

     

    Section
      2.1  Term
      Loan. 

     

    Each
      Lender severally agrees, on the terms and conditions set forth in this
      Agreement, to make a single term loan to the Borrower on the Borrowing Date
      in
      an amount equal to such Lender’s Commitment. Amounts repaid on the Loans may not
      be reborrowed. 

     

    Section
      2.2  Required
      Payments. 

     

    (a)  On
      or
      before December 30, 2005, the Borrower will make a principal payment of EUR
      30 million on the Loans.

     

    (b)  The
      unpaid principal balance of the Loans and all other unpaid Obligations shall
      be
      paid in full by the Borrower on the Facility Maturity Date.

     

    Section
      2.3  Optional
      Principal Payments. 

     

    The
      Borrower may from time to time pay, subject to the payment of any funding
      indemnification amounts required by Section 3.4 but without penalty or premium,
      all outstanding Loans, or, in a minimum aggregate amount of EUR 5,000,000 or
      any
      integral multiple of EUR 1,000,000 in excess thereof, any portion of the
      outstanding Loans upon written notice received by the Agent by 11:00 a.m.
      (London time) three Business Days prior to the date of prepayment. 

     

    Section
      2.4  Method
      of Selecting Initial Interest Periods for the Loans. 

     

    The
      Borrower shall select the Interest Period(s) applicable to the Loans by giving
      the Agent irrevocable notice (a “Borrowing Notice”) not later than 11:00 a.m.
      (London time) at least three Business Days before the Borrowing Date,
      specifying:

     

    (a)  the
      Borrowing Date, which shall be a Business Day not later than December 29,
      2005, and

     

    (b)  the
      Interest Period applicable to each Advance comprising the Loans and the amount
      of each such Advance.

     

    Section
      2.5  Selection
      of Interest Periods for Outstanding Advances. 

     

    Each
      Advance shall continue until the end of the then applicable Interest Period
      therefor, at which time: each Advance shall automatically continue with an
      Interest Period of one month unless (x) such Advance is or was repaid in
      accordance with terms hereof or (y) the Borrower shall have given the Agent
      a
      Selection Notice (as defined below) requesting that, at the end of such Interest
      Period, such Advance continue for the same or another Interest
      Period.

     

    The
      Borrower shall give the Agent irrevocable notice (a “Selection Notice”) of each
      continuation of an Advance for a new Interest Period not later than 11:00 a.m.
      (London time) at least three Business Days prior to the date of the requested
      continuation, specifying:

     

    (i)  the
      requested date, which shall be a Business Day, of such continuation,
      and

     

    (ii)  the
      duration of the Interest Period applicable thereto.

     

    Section
      2.6  Method
      of Borrowing. 

     

    On
      the
      Borrowing Date, each Lender shall make available its Loan, not later than noon,
      local time, in the city of the Agent’s Eurocurrency Payment Office, in Euro.
      Unless the Agent determines that any applicable condition specified in
      Article 4 has not been satisfied, the Agent will make the funds so received
      from the Lenders available to the Borrower at the Agent’s aforesaid address.

     

    Section
      2.7  Interest
      Rate, etc. 

     

    Each
      Advance shall bear interest on the outstanding principal amount thereof from
      and
      including the first day of the Interest Period applicable thereto to (but not
      including) the last day of such Interest Period at the Rate determined by the
      Agent as applicable to such Advance based upon the Borrower’s selections under
      Sections 2.4 and 2.5 and otherwise in accordance with the terms hereof. No
      Interest Period may end after the Facility Maturity Date.

     

    Section
      2.8  Rates
      Applicable After Default. 

     

    Notwithstanding
      anything to the contrary contained in Sections 2.4, 2.5 or 2.7, during the
      continuance of a Default or Unmatured Default the Required Lenders may, at
      their
      option, by notice to the Borrower (which notice may be revoked at the option
      of
      the Required Lenders notwithstanding any provision of Section 8.2 requiring
      unanimous consent of the Lenders to changes in interest rates), declare that
      no
      Advance may be continued for an Interest Period in excess of one month. During
      the continuance of a Default the Required Lenders may, at their option, by
      notice to the Borrower (which notice may be revoked at the option of the
      Required Lenders notwithstanding any provision of Section 8.2 requiring
      unanimous consent of the Lenders to changes in interest rates), declare that
      each Advance shall bear interest for the remainder of the applicable Interest
      Period at the rate otherwise applicable to such Interest Period plus 2% per
      annum, provided
      that,
      during the continuance of a Default under Section 7.7 or 7.8, the interest
      rates
      set forth in clauses (i) and (ii) above shall be applicable to all Loans without
      any election or action on the part of the Agent or any Lender.

     

    Section
      2.9  Method
      of Payment. 

     

    Each
      Advance shall be repaid and each payment of interest thereon shall be paid
      in
      Euro. All payments of the Obligations hereunder shall be made, without setoff,
      deduction, or counterclaim, in immediately available funds to the Agent at
      (except as set forth in the next sentence) the Agent’s address specified
      pursuant to Article 14, or at any other Lending Installation of the Agent
      specified in writing by the Agent to the Borrower, shall be initiated by 12:00
      noon (local time for such address or Lending Installation) on the date when
      due
      and shall (except as otherwise specifically required hereunder) be applied
      ratably by the Agent among the Lenders. All payments to be made by the Borrower
      hereunder shall be made in Euro on the date due in such funds as may then be
      customary for the settlement of international transactions in Euro for the
      account of the Agent, at its Eurocurrency Payment Office for such currency
      and
      shall be applied ratably by the Agent among the Lenders. Each payment delivered
      to the Agent for the account of any Lender shall be delivered promptly by the
      Agent to such Lender in the same type of funds that the Agent received at the
      address of the Agent’s Eurocurrency Payment Office. The Agent is hereby
      authorized to charge any account of the Borrower maintained with JPMEL or any
      of
      its Affiliates for each payment of principal, interest and fees as it becomes
      due hereunder. 

     

    Section
      2.10  Noteless
      Agreement; Evidence of Indebtedness. 

     

    (a)  Each
      Lender shall maintain in accordance with its usual practice an account or
      accounts evidencing the indebtedness of the Borrower to such Lender resulting
      from each Loan made by such Lender from time to time, including the amounts
      of
      principal and interest payable and paid to such Lender from time to time
      hereunder.

     

    (b)  The
      Agent
      shall also maintain accounts in which it will record (i) the amount of each
      Loan
      made hereunder and the Interest Period with respect thereto, (ii) the amount
      of
      any principal or interest due and payable or to become due and payable from
      the
      Borrower to each Lender hereunder, and (iii) the amount of any sum received
      by
      the Agent hereunder from the Borrower and each Lender’s share
      thereof.

     

    (c)  The
      entries maintained in the accounts maintained pursuant to paragraphs (a) and
      (b)
      above shall be prima facie
      evidence
      of the existence and amounts of the Obligations therein recorded; provided,
      however,
      that
      the failure of the Agent or any Lender to maintain such accounts or any error
      therein shall not in any manner affect the obligation of the Borrower to repay
      the Obligations in accordance with their terms.

     

    Section
      2.11  Telephonic
      Notices. 

     

    The
      Borrower hereby authorizes the Lenders and the Agent to extend or continue
      Advances and to transfer funds based on telephonic notices made by any person
      or
      persons the Agent or any Lender in good faith believes to be acting on behalf
      of
      the Borrower, it being understood that the foregoing authorization is
      specifically intended to allow the Borrowing Notice and Selection Notices to
      be
      given telephonically. The Borrower agrees to deliver promptly to the Agent
      a
      written confirmation, if such confirmation is requested by the Agent or any
      Lender, of each telephonic notice signed by an Authorized Officer. If the
      written confirmation differs in any material respect from the action taken
      by
      the Agent and the Lenders, the records of the Agent and the Lenders shall govern
      absent manifest error.

     

    Section
      2.12  Interest
      Payment Dates; Interest Basis. 

     

    Interest
      accrued on each Advance shall be payable on the last day of its applicable
      Interest Period, on any date on which the Advance is prepaid, whether by
      acceleration or otherwise, and at maturity. Interest accrued on each Advance
      having an Interest Period longer than three months shall also be payable on
      the
      last day of each three-month interval during such Interest Period. Interest
      on
      Advances shall be calculated for actual days elapsed on the basis of a 360-day
      year. Interest shall be payable for the day an Advance is made but not for
      the
      day of any payment on the amount paid if payment is initiated prior to 12:00
      noon (local time of the applicable Lending Installation) at the place of
      payment. If any payment of principal of or interest on an Advance shall become
      due on a day which is not a Business Day, such payment shall be made on the
      next
      succeeding Business Day and, in the case of a principal payment, such extension
      of time shall be included in computing interest in connection with such
      payment.

     

    Section
      2.13  Notification
      of Advances, Interest Rates and Prepayments. 

     

    Promptly
      after receipt thereof, the Agent will notify each Lender of the contents of
      the
      Borrowing Notice, each Selection Notice, and each repayment notice received
      by
      it hereunder. The Agent will notify each Lender of the interest rate applicable
      to each Advance promptly upon determination of such interest rate.

     

    Section
      2.14  Lending
      Installations. 

     

    Each
      Lender will book its Loans at the appropriate Lending Installation listed on
      Schedule
      2
      or such
      other Lending Installation designated by such Lender in accordance with the
      final sentence of this Section 2.20. All terms of this Agreement shall apply
      to
      any such Lending Installation and the Loans shall be deemed held by each Lender
      for the benefit of any such Lending Installation. Each Lender may, by written
      notice to the Agent and the Borrower in accordance with Article 13, designate
      replacement or additional Lending Installations through which Loans will be
      made
      by it and for whose account Loan payments are to be made.

     

    Section
      2.15  Non-Receipt
      of Funds by the Agent. 

     

    Unless
      the Borrower or a Lender, as the case may be, notifies the Agent prior to the
      date on which it is scheduled to make payment to the Agent of (i) in the case
      of
      a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a payment
      of principal, interest or fees to the Agent for the account of the Lenders,
      that
      it does not intend to make such payment, the Agent may assume that such payment
      has been made. The Agent may, but shall not be obligated to, make the amount
      of
      such payment available to the intended recipient in reliance upon such
      assumption. If such Lender or the Borrower, as the case may be, has not in
      fact
      made such payment to the Agent, the recipient of such payment shall, on demand
      by the Agent, repay to the Agent the amount so made available together with
      interest thereon in respect of each day during the period commencing on the
      date
      such amount was so made available by the Agent until the date the Agent recovers
      such amount at a rate per annum equal to the interest rate applicable to the
      relevant Loan or such higher rate as may be quoted by the Agent to such Lender
      or the Borrower, as the case may be, as reflecting the Agent’s cost of
      funds.

     

    Section
      2.16  Judgment
      Currency. 

     

    If
      for
      the purposes of obtaining judgment in any court it is necessary to convert
      a sum
      due from the Borrower or any Guarantor hereunder in the currency expressed
      to be
      payable herein (the “specified currency”) into another currency, the parties
      hereto agree, to the fullest extent that they may effectively do so, that the
      rate of exchange used shall be that at which in accordance with normal banking
      procedures the Agent could purchase the specified currency with such other
      currency at the Agent’s main London office on the Business Day preceding that on
      which final, non-appealable judgment is given. The obligations of the Borrower
      in respect of any sum due to any Lender or the Agent hereunder shall,
      notwithstanding any judgment in a currency other than the specified currency,
      be
      discharged only to the extent that on the Business Day following receipt by
      such
      Lender or the Agent (as the case may be) of any sum adjudged to be so due in
      such other currency such Lender or the Agent (as the case may be) may in
      accordance with normal, reasonable banking procedures purchase the specified
      currency with such other currency. If the amount of the specified currency
      so
      purchased is less than the sum originally due to such Lender or the Agent,
      as
      the case may be, in the specified currency, the Borrower agrees, to the fullest
      extent that it may effectively do so, as a separate obligation and
      notwithstanding any such judgment, to indemnify such Lender or the Agent, as
      the
      case may be, against such loss, and if the amount of the specified currency
      so
      purchased exceeds (a) the sum originally due to any Lender or the Agent, as
      the
      case may be, in the specified currency and (b) any amounts shared with other
      Lenders as a result of allocations of such excess as a disproportionate payment
      to such Lender under Section 11.2, such Lender or the Agent, as the case may
      be,
      agrees to remit such excess to the Borrower.

     

    ARTICLE
      3  

     

    

     

    YIELD
      PROTECTION; TAXES

     

    Section
      3.1  Yield
      Protection. 

     

    (a) If,
      on or
      after the date of this Agreement, the adoption of any law or any governmental
      or
      quasi-governmental rule, regulation, policy, guideline or directive (whether
      or
      not having the force of law), or any change in the interpretation or
      administration thereof by any governmental or quasi-governmental authority,
      central bank or comparable agency charged with the interpretation or
      administration thereof, or compliance by any Lender or applicable Lending
      Installation with any request or directive (whether or not having the force
      of
      law) of any such authority, central bank or comparable agency:

     

    (i)  subjects
      any Lender or any applicable Lending Installation to any Taxes, or changes
      the
      basis of taxation of payments (other than with respect to Excluded Taxes) to
      any
      Lender in respect of its Advances or participations therein, or

     

    (ii)  imposes
      or increases or deems applicable any reserve, assessment, insurance charge,
      special deposit or similar requirement against assets of, deposits with or
      for
      the account of, or credit extended by, any Lender or any applicable Lending
      Installation (other than reserves and assessments taken into account in
      determining the interest rate applicable to Advances), or

     

    (iii)  imposes
      any other condition the result of which is to increase the cost to any Lender
      or
      any applicable Lending Installation of making, funding or maintaining its
      Advances, or reduces any amount receivable by any Lender or any applicable
      Lending Installation in connection with its Advances, or requires any Lender
      or
      any applicable Lending Installation to make any payment calculated by reference
      to the amount of Advances, by an amount deemed material by such
      Lender,

     

    and
      the
      result of any of the foregoing is to increase the cost to such Lender or
      applicable Lending Installation, as the case may be, of making or maintaining
      its Advances or Commitment, or to reduce the return received by such Lender
      or
      applicable Lending Installation, as the case may be, in connection with such
      Advances or Commitment, then, within 15 days of demand by such Lender, the
      Borrower shall pay such Lender, such additional amount or amounts as will
      compensate such Lender for such increased cost or reduction in amount
      received.

     

    (b) Non-U.S.
      Reserve Costs or Fees.
      If any
      law or any governmental or quasi-governmental rule, regulation, policy,
      guideline or directive of any jurisdiction outside of the United States of
      America or any subdivision thereof (whether or not having the force of law),
      imposes or deems applicable any reserve requirement against or fee with respect
      to assets of, deposits with or for the account of, or credit extended by, any
      Lender or any applicable Lending Installation, and the result of the foregoing
      is to increase the cost to such Lender or applicable Lending Installation of
      making or maintaining its Advances to, or of making or maintaining its
      Commitment to, the Borrower or to reduce the return received by such Lender
      or
      applicable Lending Installation in connection with such Advances or Commitment,
      then, within 15 days of demand by such Lender, the Borrower shall pay such
      Lender, such additional amount or amounts as will compensate it for such
      increased cost or reduction in amount received.

     

    Section
      3.2  Changes
      in Capital Adequacy Regulations. 

     

    If
      a
      Lender determines the amount of capital required or expected to be maintained
      by
      such Lender, any Lending Installation of such Lender or any corporation
      controlling such Lender is increased as a result of a Change, then, within
      15
      days of demand by such Lender, the Borrower shall pay such Lender the amount
      necessary to compensate for any shortfall in the rate of return on the portion
      of such increased capital which such Lender determines is attributable to this
      Agreement, the outstanding amount of its Loan or its Commitment to make a Loan,
      as the case may be, hereunder (after taking into account such Lender’s policies
      as to capital adequacy). “Change” means (i) any change after the date of this
      Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change
      in any other law, governmental or quasi-governmental rule, regulation, policy,
      guideline, interpretation, or directive (whether or not having the force of
      law)
      after the date of this Agreement which affects the amount of capital required
      or
      expected to be maintained by any Lender or any Lending Installation or any
      corporation controlling any Lender. “Risk-Based Capital Guidelines” means (i)
      the risk-based capital guidelines in effect in the United States on the date
      of
      this Agreement, including transition rules, and (ii) the corresponding capital
      regulations promulgated by regulatory authorities outside the United States
      implementing the July 1988 report of the Basle Committee on Banking Regulation
      and Supervisory Practices Entitled “International Convergence of Capital
      Measurements and Capital Standards,” including transition rules, and any
      amendments to such regulations adopted prior to the date of this
      Agreement.

     

    Section
      3.3  Availability
      of Types of Advances. 

     

    If
      any
      Lender determines that maintenance of its Loan at a suitable Lending
      Installation would violate any applicable law, rule, regulation, or directive,
      whether or not having the force of law, or if the Required Lenders determine
      that (i) deposits of a type and maturity appropriate to match fund Advances
      are
      not available or (ii) the interest rate applicable to the Advances does not
      accurately reflect the cost of making or maintaining the Advances, then the
      Agent shall suspend the availability of Advances of the affected type or
      maturity and require any affected Advances to be repaid or to be converted
      to
      Advances of a different type or maturity, subject to the payment of any funding
      indemnification amounts required by Section 3.4.

     

    Section
      3.4  Funding
      Indemnification. 

     

    If
      any
      payment of an Advance occurs on a date which is not the last day of the
      applicable Interest Period, whether because of acceleration, prepayment or
      otherwise, or an Advance is not made on the date specified by the Borrower
      for
      any reason other than default by the Lenders, the Borrower will indemnify each
      Lender for any loss or cost incurred by it resulting therefrom, including,
      without limitation, any loss or cost in liquidating or employing deposits
      acquired to fund or maintain such Advance.

     

    Section
      3.5  Taxes. 

     

    (a)  All
      payments by any Credit Party to or for the account of any Lender or the Agent
      hereunder shall be made free and clear of and without deduction for any and
      all
      Taxes. If the any Credit Party shall be required by law to deduct any Taxes
      from
      or in respect of any sum payable hereunder to any Lender or the Agent, (i)
      the
      sum payable shall be increased as necessary so that after making all required
      deductions (including deductions applicable to additional sums payable under
      this Section 3.5) such Lender or the Agent (as the case may be) receives an
      amount equal to the sum it would have received had no such deductions been
      made,
      (ii) the applicable Credit Party shall make such deductions, (iii) the
      applicable Credit Party shall pay the full amount deducted to the relevant
      authority in accordance with applicable law and (iv) the applicable Credit
      Party
      shall furnish to the Agent the original copy of a receipt evidencing payment
      thereof within 30 days after such payment is made.

     

    (b)  In
      addition, each Credit Party hereby agrees, jointly and severally, to pay any
      present or future stamp or documentary taxes and any other excise or property
      taxes, charges or similar levies which arise from any payment made hereunder
      or
      from the execution or delivery of, or otherwise with respect to, this Agreement
      (“Other Taxes”).

     

    (c)  Each
      Credit Party hereby agrees, jointly and severally, to indemnify the Agent and
      each Lender for the full amount of Taxes or Other Taxes (including, without
      limitation, any Taxes or Other Taxes imposed on amounts payable under this
      Section 3.5) paid by the Agent or such Lender as a result of its Commitment,
      the
      Loan made by it hereunder, or otherwise in connection with its participation
      in
      this Agreement and any liability (including penalties, interest and expenses)
      arising therefrom or with respect thereto. Payments due under this
      indemnification shall be made within 30 days of the date the Agent or such
      Lender makes demand therefor pursuant to Section 3.6.

     

    (d)  Each
      Lender that is not incorporated under the laws of the United States of America
      or a state thereof (each a “Non-U.S. Lender”) agrees that it will, not more than
      ten Business Days after the date of this Agreement, (i) deliver to the Agent
      two
      duly completed copies of United States Internal Revenue Service Form W-8BEN
      or
      W-8ECI, certifying in either case that such Lender is entitled to receive
      payments under this Agreement without deduction or withholding of any United
      States federal income taxes, and (ii) deliver to the Agent a United States
      Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is
      entitled to an exemption from United States backup withholding tax. Each
      Non-U.S. Lender further undertakes to deliver to each of the Borrower and the
      Agent (x) renewals or additional copies of such form (or any successor form)
      on
      or before the date that such form expires or becomes obsolete, and (y) after
      the
      occurrence of any event requiring a change in the most recent forms so delivered
      by it, such additional forms or amendments thereto as may be reasonably
      requested by the Borrower or the Agent. All forms or amendments described in
      the
      preceding sentence shall certify that such Lender is entitled to receive
      payments under this Agreement without deduction or withholding of any United
      States federal income taxes, unless
      an event
      (including without limitation any change in treaty, law or regulation) has
      occurred prior to the date on which any such delivery would otherwise be
      required which renders all such forms inapplicable or which would prevent such
      Lender from duly completing and delivering any such form or amendment with
      respect to it and such Lender advises the Borrower and the Agent that it is
      not
      capable of receiving payments without any deduction or withholding of United
      States federal income tax.

     

    (e)  For
      any
      period during which a Non-U.S. Lender has failed to provide the Borrower with
      an
      appropriate form pursuant to clause (d), above (unless such failure is due
      to a
      change in treaty, law or regulation, or any change in the interpretation or
      administration thereof by any governmental authority, occurring subsequent
      to
      the date on which a form originally was required to be provided), such Non-U.S.
      Lender shall not be entitled to indemnification under this Section 3.5 with
      respect to Taxes imposed by the United States; provided
      that,
      should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced
      rate of withholding tax become subject to Taxes because of its failure to
      deliver a form required under clause (d), above, the Borrower shall take such
      steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S.
      Lender to recover such Taxes.

     

    (f)  Any
      Lender that is entitled to an exemption from or reduction of withholding tax
      with respect to payments under this Agreement pursuant to the law of any
      relevant jurisdiction or any treaty shall deliver to the Borrower (with a copy
      to the Agent), at the time or times prescribed by applicable law, such properly
      completed and executed documentation prescribed by applicable law as will permit
      such payments to be made without withholding or at a reduced rate.

     

    (g)  If
      the
      U.S. Internal Revenue Service or any other governmental authority of the United
      States or any other country or any political subdivision thereof asserts a
      claim
      that the Agent did not properly withhold tax from amounts paid to or for the
      account of any Lender (because the appropriate form was not delivered or
      properly completed, because such Lender failed to notify the Agent of a change
      in circumstances which rendered its exemption from withholding ineffective,
      or
      for any other reason), such Lender shall indemnify the Agent fully for all
      amounts paid, directly or indirectly, by the Agent as tax, withholding therefor,
      or otherwise, including penalties and interest, and including taxes imposed
      by
      any jurisdiction on amounts payable to the Agent under this subsection, together
      with all costs and expenses related thereto (including attorneys fees and time
      charges of attorneys for the Agent, which attorneys may be employees of the
      Agent). The obligations of the Lenders under this Section 3.5(g) shall survive
      the payment of the Obligations and termination of this Agreement.

     

    Section
      3.6  Lender
      Statements; Survival of Indemnity. 

     

    To
      the
      extent reasonably possible, each Lender shall designate an alternate Lending
      Installation with respect to its Advances to reduce any liability of the
      Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
      unavailability of Advances under Section 3.3, so long as such designation is
      not, in the judgment of such Lender, disadvantageous to such Lender. Each Lender
      shall deliver a written statement of such Lender to the Borrower (with a copy
      to
      the Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5.
      Such written statement shall set forth in reasonable detail the calculations
      upon which such Lender determined such amount and shall be final, conclusive
      and
      binding on the Borrower in the absence of manifest error. Determination of
      amounts payable under such Sections in connection with an Advance shall be
      calculated as though each Lender funded its Advance through the purchase of
      a
      deposit of the type, currency and maturity corresponding to the deposit used
      as
      a reference in determining the Advance applicable to such Loan, whether in
      fact
      that is the case or not. Unless otherwise provided herein, the amount specified
      in the written statement of any Lender shall be payable on demand after receipt
      by the Borrower of such written statement. The obligations of the Borrower
      and
      the other Credit Parties under Sections 3.1, 3.2, 3.4 and 3.5 shall survive
      payment of the Obligations and termination of this Agreement.

     

    ARTICLE
      4  

     

    

     

    CONDITIONS
      PRECEDENT

     

    Section
      4.1  Conditions
      to the Effective Date. 

     

    The
      Effective Date shall not occur unless: 

     

    (a)  the
      Borrower has furnished to the Agent the following, each in form and substance
      satisfactory to the Lenders and with sufficient copies for the
      Lenders:

     

    (i)  A
      certified copy of the current articles of association of the
      Borrower.

     

    (ii)  Copies
      of
      resolutions of the shareholders meeting and of the management board of the
      Borrower authorizing the execution of the Loan Documents to which the Borrower
      is a party.

     

    (iii)  An
      officer's certificate executed by all members of the management board of the
      Borrower in certified form (A) confirming the up-to-date character of the
      documents listed under clauses (i) and (ii) above of this Section 4.1(a) and
      (B)
      which shall also identify by name and title and bear the signatures of the
      Authorized Officers and any other officers of the Borrower authorized to sign
      the Loan Documents to which the Borrower is a party, upon which certificate
      the
      Agent and the Lenders shall be entitled to rely until informed of any change
      in
      writing by the Borrower.

     

    (iv)  Copies
      of
      the articles or certificate of incorporation of each Guarantor, together with
      all amendments, and a certificate of status or good standing (as applicable),
      certified by the appropriate governmental officer in its jurisdiction of
      incorporation; provided,
      that
      the certificates of status or good standing for Thermacore International, Inc.,
      a Pennsylvania corporation, Thermacore, Inc., a Pennsylvania corporation, and
      Airedale North America, Inc., a Pennsylvania corporation, may be later delivered
      pursuant to Section 6.22.

     

    (v)  Copies,
      certified by the Secretary or Assistant Secretary of each Guarantor, of its
      by-laws and of its Board of Directors’ resolutions and of resolutions or actions
      of any other body authorizing the execution of the Loan Documents to which
      such
      Guarantor is a party.

     

    (vi)  An
      incumbency certificate, executed by the Secretary or Assistant Secretary of
      each
      Guarantor, which shall identify by name and title and bear the signatures of
      the
      Authorized Officers and any other officers of such Guarantor authorized to
      sign
      the Loan Documents to which such Guarantor is a party, upon which certificate
      the Agent and the Lenders shall be entitled to rely until informed of any change
      in writing by such Guarantor.

     

    (vii)  Written
      opinions of the Borrower’s and the Guarantors’ counsel, addressed to the Agent
      and the Lenders in substantially the form of Exhibits
      A-1
      and
A-2.

     

    (viii)  Copies,
      certified by an Authorized Officer of the Borrower, of the substantially final
      forms of share purchase and contribution agreements and all related
      documentation (including the entire final documentation on the capital increase
      to be implemented at the level of the Borrower and to be filed with the
      appropriate commercial register) to be entered into by and among the Borrower,
      the Parent and Modine, Inc. pursuant to which the purchase by and contribution
      to the Borrower of all the outstanding common equity of Modine Austria will
      be
      consummated and the corporate ownership structure as described in Schedule
      5.9
      hereto
      will be effected (other than “step 3” described in Schedule
      6.5B)
      (the
“Share
      Purchase and Contribution Documentation”).

     

    (ix)  Copies,
      certified by an Authorized Officer of the Parent, of (i) reasonably satisfactory
      audited consolidated financial statements of the Parent for the two most recent
      fiscal years ended prior to the Borrowing Date as to which such financial
      statements are available and (ii) reasonably satisfactory unaudited interim
      consolidated financial statements of the Parent for each quarterly period ended
      subsequent to the date of the latest financial statements delivered pursuant
      to
      clause (i) of this paragraph as to which such financial statements are
      available.

     

    (x)  Such
      other documents as any Lender or its counsel may have reasonably requested;
      and

     

    (b)  the
      Agent
      shall be satisfied:

     

    (i)  That
      the
      structure and terms of the Loans do not present any withholding tax or other
      tax
      issues, regulatory issues or other legal issues relating to the cross-border
      funding and repayment of the Loans.

     

    (ii)  That
      the
      Loan Documents are in compliance with all applicable Austrian laws.

     

    (iii)  As
      to all
      other legal matters incident to the making of the Loans.

     

    Section
      4.2  Conditions
      Precedent to Borrowing. 

     

    The
      Lenders shall not be required to make any Loans unless the Effective Date has
      occurred and each of the following is true on the Borrowing Date:

     

    (a)  There
      exists no Default or Unmatured Default and the Agent has received a certificate
      to that effect, signed by an Authorized Officer of the Borrower.

     

    (b)  The
      representations and warranties contained in Article 5 are true and correct
      as of
      the Borrowing Date and the Agent has received a certificate to that effect,
      signed by an Authorized Officer of the Borrower.

     

    (c)  The
      Lenders, the Agent and the Arranger have been reimbursed for all out-of-pocket
      expenses (including reasonable attorneys’ fees) for which invoices have been
      presented, on or before the Borrowing Date.

     

    (d)  All
      governmental and third party approvals necessary or, in the reasonable
      discretion of the Agent, advisable in connection with the financing contemplated
      hereby or the acquisition of all the common equity of Modine Austria shall
      have
      been obtained and be in full force and effect.

     

    ARTICLE
      5  

     

    

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Each
      of
      the Borrower and the Parent represents and warrants jointly and severally to
      the
      Lenders that:

     

    Section
      5.1  Corporate
      Existence and Power. 

     

    The
      Parent is a corporation and the Borrower is a limited liability company. Each
      of
      the Parent and the Borrower is duly organized and validly existing under the
      laws of the jurisdiction of its incorporation or organization, is duly qualified
      to transact business in every jurisdiction where, by the nature of its business,
      such qualification is necessary, and has all corporate or organizational powers
      and all governmental licenses, authorizations, consents and approvals required
      to carry on its business as now conducted. 

     

    Section
      5.2  Authorization. 

     

    The
      execution, delivery and performance by the Borrower and the Guarantors of the
      Loan Documents to which they are party (a) are within the Borrower’s and the
      Guarantors’ organizational or corporate powers and (b) have been duly authorized
      by all necessary organizational or corporate action.

     

    Section
      5.3  Binding
      Effect. 

     

    This
      Agreement constitutes a valid and binding agreement of the Borrower and the
      Guarantors enforceable in accordance with its terms, and each other Loan
      Document, when executed and delivered in accordance with this Agreement, will
      constitute a valid and binding obligation of each of the Borrower and the
      Guarantors that is a party to such Loan Document, enforceable in accordance
      with
      such Loan Document’s terms, provided
      that the
      enforceability hereof and thereof is subject in each case to general principles
      of equity and to bankruptcy, insolvency and similar laws affecting the
      enforcement of creditors’ rights generally.

     

    Section
      5.4  No
      Conflict; Government Consent. 

     

    Neither
      the execution and delivery by each of the Borrower and the Guarantors of the
      Loan Documents to which it is a party, nor the consummation of the transactions
      therein contemplated, nor compliance with the provisions thereof will violate
      (a) any law, rule, regulation, order, writ, judgment, injunction, decree or
      award binding on the Parent, the Borrower or any Subsidiary or (b) the Parent’s,
      the Borrower’s or any Subsidiary’s articles or certificate of incorporation,
      partnership agreement, certificate of partnership, articles or certificate
      of
      organization, by-laws, or operating or other management agreement, as the case
      may be, or (c) the provisions of any indenture, instrument or agreement to
      which
      the Parent, the Borrower or any Subsidiary is a party or is subject, or by
      which
      it, or its Property, is bound, or conflict with or constitute a default
      thereunder, or result in, or require, the creation or imposition of any Lien
      in,
      of or on the Property of the Parent, the Borrower or a Subsidiary pursuant
      to
      the terms of any such indenture, instrument or agreement. No order, consent,
      adjudication, approval, license, authorization, or validation of, or filing,
      recording or registration with, or exemption by, or other action in respect
      of
      any governmental or public body or authority, or any subdivision thereof, which
      has not been obtained by the Parent, the Borrower or any Subsidiary, is required
      to be obtained by the Parent, the Borrower or any Subsidiary in connection
      with
      the execution and delivery of the Loan Documents, the borrowings under this
      Agreement, the payment and performance by the Borrower and the Guarantors of
      the
      Obligations or the legality, validity, binding effect or enforceability of
      any
      of the Loan Documents.

     

    Section
      5.5  Financial
      Statements; Material Adverse Change. 

     

    (a)  The
      consolidated financial statements of the Parent and its Subsidiaries as of
      March 31, 2005 reported on by PricewaterhouseCoopers LLP and the unaudited
      consolidated financial statements of the Parent and its Subsidiaries as of
      September 26, 2005, each heretofore delivered to the Lenders, were prepared
      in accordance with generally accepted accounting principles in effect on the
      date such statements were prepared and fairly present the consolidated financial
      condition and operations of the Parent and its Subsidiaries at such date and
      the
      consolidated results of their operations for the period then ended.

     

    (b)  Since
      March 31, 2005, there has been no change in the business, Property, prospects
      condition (financial or otherwise) or results of operations of the Parent,
      the
      Borrower and the Subsidiaries that could reasonably be expected to have a
      Material Adverse Effect.

     

    Section
      5.6  Litigation
      and Contingent Obligations. 

     

    Except
      as
      disclosed in Schedule
      5.6,
      there
      is no litigation, arbitration, governmental investigation, proceeding or inquiry
      pending, or to the knowledge of any of their officers, threatened against or
      affecting the Parent, the Borrower or any Subsidiary which could reasonably
      be
      expected to have a Material Adverse Effect or which seeks to prevent, enjoin
      or
      delay the making of the Loans. Other than any liability incident to any
      litigation, arbitration or proceeding which could not reasonably be expected
      to
      have a Material Adverse Effect, neither the Parent nor the Borrower has any
      material Contingent Obligations not provided for or disclosed in the financial
      statements referred to in Section 5.5.

     

    Section
      5.7  Compliance
      with ERISA. 

     

    (a)  The
      Parent and each member of the Controlled Group (excluding Foreign Subsidiaries
      of the Parent) have fulfilled their obligations under the minimum funding
      standards of ERISA and the Code with respect to each Plan and are in compliance
      in all material respects with the presently applicable provisions of ERISA
      and
      the Code, and have not incurred any liability to the PBGC or a Plan under Title
      IV of ERISA.

     

    (b)  Each
      Plan
      complies in all material respects with all applicable requirements of law and
      regulations, no Reportable Event has occurred with respect to any Plan, neither
      the Parent nor any other member of the Controlled Group has withdrawn from
      any
      Plan or initiated steps to do so, and no steps have been taken to reorganize
      or
      terminate any Plan.

     

    (c)  Neither
      the Parent nor any member of the Controlled Group (excluding Foreign
      Subsidiaries of the Parent) is or ever has been obligated to contribute to
      any
      Multiemployer Plan.

     

    (d)  Each
      Foreign Subsidiary of the Parent (including the Borrower): (i) has fulfilled
      its
      funding obligations under any and all applicable laws, regulations and similar
      requirements of governmental authorities with respect to each employee benefit
      or pension plan; (ii) is in compliance in all material respects with the
      presently applicable provisions of such laws, regulations and requirements;
      and
      (iii) except as disclosed in the financial statements referred to in Section
      5.5, has not incurred any liability, indebtedness or obligation under or in
      connection with any employee benefit or pension plan.

     

    Section
      5.8  Taxes. 

     

    There
      have been filed on behalf of the Parent, the Borrower and the Subsidiaries
      all
      federal, state and local income, excise, property and other tax returns which
      are required to be filed by them and all taxes due pursuant to such returns
      or
      pursuant to any assessment received by or on behalf of the Parent, the Borrower
      or any Subsidiary have been paid, except such taxes, if any, as are being
      contested in good faith and as to which adequate reserves have been provided
      in
      accordance with Agreement Accounting Principles and as to which no Lien exists.
      The charges, accruals and reserves on the books of the Parent, the Borrower
      and
      the Subsidiaries in respect of taxes or other governmental charges are adequate.
      United States income tax returns of the Parent, the Borrower and the
      Subsidiaries have been audited by the Internal Revenue Service through the
      fiscal year ended March 31, 1996. No tax liens have been filed and no claims
      are
      being asserted with respect to any such taxes.

     

    Section
      5.9  Subsidiaries. 

     

    Schedule
      5.9
      hereto
      contains an accurate list of all Subsidiaries of the Parent as of the date
      of
      this Agreement and after giving effect to the transactions contemplated hereby,
      setting forth their respective jurisdictions and forms of organization and
      the
      percentage of their respective capital stock or other ownership interests owned
      by the Parent, the Borrower or other Subsidiaries. All of the issued and
      outstanding shares of capital stock or other ownership interests of such
      Subsidiaries have been (to the extent such concepts are relevant with respect
      to
      such ownership interests) duly authorized and issued and are fully paid and
      non-assessable, except, with respect to Subsidiaries organized under Wisconsin
      Law, to the extent that personal liability may be imposed upon the shareholders
      pursuant to Section 180.0622(2)(b) of the Wisconsin Business Corporation Law,
      as
      judicially interpreted. Each of the Parent’s Subsidiaries is a corporation or
      other organization duly organized, validly existing and (to the extent such
      concept applies to such entity) in good standing under the laws of its
      jurisdiction of incorporation or organization, is duly qualified to transact
      business in every jurisdiction where, by the nature of its business, such
      qualification is necessary, and has all corporate or organization powers and
      all
      governmental licenses, authorizations, consents and approvals required to carry
      on its business as now conducted.

     

    Section
      5.10  Not
      an
      Investment Company. 

     

    None
      of
      the Parent, the Borrower nor any Subsidiary is an “investment company” or a
      company “controlled” by an “investment company”, within the meaning of the
      Investment Company Act of 1940, as amended.

     

    Section
      5.11  Ownership
      of Property; Liens. 

     

    Each
      of
      the Parent, the Borrower and the Subsidiaries has good title, free of all Liens
      other than Permitted Encumbrances, to all of the Property and assets reflected
      as owned by the Parent, the Borrower and the Subsidiaries in the Parent’s most
      recent consolidated financial statements provided to the Agent, and such
      Property and assets are sufficient for the conduct of its business.

     

    Section
      5.12  Material
      Agreements; Default. 

     

    None
      of
      the Parent, the Borrower nor any of the Subsidiaries is a party to any agreement
      or instrument or subject to any charter or other corporate restriction which
      could reasonably be expected to have a Material Adverse Effect. None of the
      Parent, the Borrower nor any of the Subsidiaries is in default under or with
      respect to any agreement, instrument or undertaking to which it is a party
      or by
      which it or any of its Property is bound (x) which default could reasonably
      be
      expected to have a Material Adverse Effect or (y) which agreement, instrument
      or
      undertaking evidences or governs Indebtedness. No Default or Unmatured Default
      has occurred and is continuing.

     

    Section
      5.13  Full
      Disclosure. 

     

    No
      information, exhibit or report furnished by the Parent, the Borrower or any
      of
      the Subsidiaries to the Agent or to any Lender in connection with the
      negotiation of, or compliance with, the Loan Documents contained any material
      misstatement of fact or omitted to state a material fact or any fact necessary
      to make the statements contained therein not misleading. The Parent and the
      Borrower have disclosed to the Lenders in writing any and all facts which may
      (to the extent the Parent or the Borrower can now reasonably foresee) have
      a
      Material Adverse Effect.

     

    Section
      5.14  Environmental
      Matters. 

     

    In
      the
      ordinary course of its business, the officers of the Parent and the Borrower
      consider the effect of Environmental Laws on the business of the Parent, the
      Borrower and the Subsidiaries, in the course of which they identify and evaluate
      potential risks and liabilities accruing to the Parent or the Borrower due
      to
      Environmental Laws. On the basis of this consideration, the Parent and the
      Borrower have concluded that Environmental Laws cannot reasonably be expected
      to
      have a Material Adverse Effect. None of the Parent, the Borrower nor any
      Subsidiary has received any notice to the effect that its operations are not
      in
      material compliance with any of the requirements of applicable Environmental
      Laws or are the subject of any federal or state investigation evaluating whether
      any remedial action is needed to respond to a release of any toxic or hazardous
      waste or substance into the environment, which non-compliance or remedial action
      could reasonably be expected to have a Material Adverse Effect. Except as
      disclosed in Schedule
      5.14(a)
      hereto
      and by this reference made a part hereof: none of the Parent, the Borrower
      nor
      any Subsidiary has been designated as a potentially responsible party under
      CERCLA or any other Environmental Law, and none of the Parent’s or the
      Borrower’s Property has been identified on any current or proposed (i) National
      Priorities List under 40 C.F.R. § 300, (ii) CERCLIS list or (iii) any list
      arising from a state statute similar to CERCLA. No Hazardous Materials have
      been
      or are being used, produced, manufactured, processed, generated, stored,
      disposed of, managed at, or shipped or transported to or from any Property
      of
      the Parent, the Borrower or any Subsidiary or are otherwise present at, on,
      in
      or under any such Property, or, to the best of the knowledge of the Parent
      and
      the Borrower, at or from any adjacent site or facility, except for Hazardous
      Materials disclosed on Schedule
      5.14(b)
      hereto
      and by this reference made a part hereof, and such Hazardous Materials are
      produced, manufactured, processed, generated, stored, disposed of, and managed
      in the ordinary course of business in compliance with all applicable
      Environmental Laws.

     

    Section
      5.15  Insolvency. 

     

    After
      giving effect to the execution and delivery of the Loan Documents and the making
      of the Loans under this Agreement, none of the Parent, the Borrower nor any
      Subsidiary will be “insolvent,” within the meaning of such terms as defined in §
101 of Title 11 of the United States Code or Section 2 of the Uniform Fraudulent
      Transfer Act, or any other applicable state law pertaining to fraudulent
      transfers or conveyances, as each may be amended from time to time, or be unable
      to pay its debts generally as such debts become due, or have an unreasonably
      small capital to engage in any business or transaction whether current or
      contemplated.

     

    Section
      5.16  Compliance
      with Laws. 

     

    The
      Parent, the Borrower and each of the Subsidiaries and each member of the
      Controlled Group has complied with all applicable laws (including but not
      limited to ERISA), regulations, rules, orders and restrictions of any domestic
      or foreign government or any instrumentality or agency thereof having
      jurisdiction over the conduct of their respective businesses or the ownership
      of
      their respective Property (including but not limited to PBGC), except where
      any
      failure to comply with any of the foregoing could not, alone or in the
      aggregate, reasonably be expected to have a Material Adverse Effect.

     

    Section
      5.17  Regulation
      U. 

     

    Margin
      stock (as defined in Regulation U) constitutes less than 25% of the value of
      those assets of the Parent, the Borrower and its Subsidiaries which are subject
      to any limitation on sale, pledge, or other restriction hereunder.

     

    Section
      5.18  Public
      Utility Holding Company Act. 

     

    None
      of
      the Parent, the Borrower nor any Subsidiary is a “holding company” or a
“subsidiary company” of a “holding company”, or an “affiliate” of a “holding
      company” or of a “subsidiary company” of a “holding company”, within the meaning
      of the Public Utility Holding Company Act of 1935, as amended.

     

    Section
      5.19  Post-Retirement
      Benefits. 

     

    The
      present value of the expected cost of post-retirement medical and insurance
      benefits payable by the Parent, the Borrower and the Subsidiaries to their
      employees and former employees, as estimated by the Parent in accordance with
      procedures and assumptions deemed reasonable by the Required Lenders, does
      not
      exceed $42,038,000 as of March 31, 2005.

     

    Section
      5.20  Insurance. 

     

    The
      Parent, the Borrower and each of the Subsidiaries maintains (either in the
      name
      of the Parent, the Borrower or in such Subsidiary’s own name), with financially
      sound and reputable insurance companies, insurance on all its property in at
      least such amounts and against at least such risks as are usually insured
      against in the same general area by companies of established repute engaged
      in
      the same or similar business.

     

    Section
      5.21  Plan
      Assets; Prohibited Transactions. 

     

    Neither
      the Parent nor the Borrower is an entity deemed to hold “plan assets” within the
      meaning of 29 C.F.R. § 2510.3-101 of an employee benefit plan (as defined in
      Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within
      the meaning of Section 4975 of the Code), the Parent is an “operating company”
as defined in 29 C.F.R. § 2510-101(c), and neither the execution of this
      Agreement nor the making of Loans hereunder gives rise to a prohibited
      transaction within the meaning of Section 406 of ERISA or Section 4975 of the
      Code.

     

    ARTICLE
      6  

     

    

     

    COVENANTS

     

    During
      the term of this Agreement, unless the Required Lenders shall otherwise consent
      in writing:

     

    Section
      6.1  Information. 

     

    The
      Parent and the Borrower will maintain, for themselves and each Subsidiary,
      a
      system of accounting established and administered in accordance with generally
      accepted accounting principles, and deliver to the Lenders:

     

    (a)  within
      90
      days after the close of each of its fiscal years, an unqualified (except for
      qualifications relating to changes in accounting principles or practices
      reflecting changes in generally accepted accounting principles and required
      or
      approved by the Parent's independent certified public accountants) audit report
      certified by PricewaterhouseCoopers LLP or other independent certified public
      accountants acceptable to the Lenders, prepared in accordance with Agreement
      Accounting Principles on a consolidated and consolidating basis (consolidating
      statements need not be certified by such accountants) for itself and its
      Subsidiaries, including balance sheets as of the end of such period, related
      profit and loss and reconciliation of surplus statements, and a statement of
      cash flows, accompanied by a certificate of said accountants that, in the course
      of their examination necessary for their certification of the foregoing, they
      have obtained no knowledge of any Default or Unmatured Default, or if, in the
      opinion of such accountants, any Default or Unmatured Default shall exist,
      stating the nature and status thereof;

     

    (b)  within
      45
      days after the close of the first three quarterly periods of each of its fiscal
      years, for itself and its Subsidiaries, consolidated and consolidating unaudited
      balance sheets as at the close of each such period and consolidated and
      consolidating profit and loss statements and a statement of cash flows for
      the
      period from the beginning of such fiscal year to the end of such quarter, all
      certified by its Treasurer, Controller or Chief Financial Officer;

     

    (c)  simultaneously
      with the delivery of each set of financial statements referred to in clauses
      (a)
      and (b) above, a certificate in the form of Exhibit
      B
      attached
      hereto of the Treasurer, Controller or Chief Financial Officer of the Parent
      (i)
      setting forth in reasonable detail the calculations required to establish
      whether the Parent was in compliance with the requirements of Sections 6.3,
      6.4,
      6.5, 6.9, 6.16, 6.18, 6.19 and 6.20 on the date of such financial statements
      and
      (ii) stating whether any Default or Unmatured Default exists on the date of
      such
      certificate and, if any Default or Unmatured Default then exists, setting forth
      the details thereof and the action which the Parent is taking or proposes to
      take with respect thereto;

     

    (d)  within
      five Business Days after the Parent or the Borrower becomes aware of the
      occurrence of any Default or Unmatured Default or of the occurrence of any
      other
      development, financial or otherwise, that could reasonably be expected to have
      a
      Material Adverse Effect, a certificate of the Treasurer, Controller or Chief
      Financial Officer of the Parent setting forth the details thereof and the action
      which the Parent is taking or proposes to take with respect
      thereto;

     

    (e)  promptly
      upon the mailing thereof to the shareholders of the Parent generally, copies
      of
      all financial statements, reports and proxy statements so mailed; 

     

    (f)  promptly
      upon the filing thereof, copies of all registration statements (other than
      the
      exhibits thereto and any registration statements on Form S-8 or its equivalent)
      and annual, quarterly or monthly reports which the Parent or any of its
      Subsidiaries shall have filed with the Securities and Exchange
      Commission;

     

    (g)  as
      soon
      as possible, and in any event within 10 days after any member of the Controlled
      Group (i) knows that any Reportable Event has occurred with respect to any
      Plan,
      a statement, signed by the Chief Financial Officer, Treasurer or Controller
      of
      the Parent, describing said Reportable Event and the action which the Parent
      proposes to take with respect thereto, along with a copy of any notice of such
      Reportable Event given or required to be given to the PBGC; (ii) receives notice
      of complete or partial withdrawal liability under Title IV of ERISA, a copy
      of
      such notice; or (iii) receives notice from the PBGC under Title IV of ERISA
      of
      an intent to terminate or appoint a trustee to administer any Plan, a copy
      of
      such notice;

     

    (h)  promptly
      upon the execution and delivery thereof, notice of any waiver, consent,
      modification or amendment of or to the Note Purchase Agreement (as defined
      in
      the Modine Manufacturing Credit Agreement), together with a copy of the
      documentation relating thereto; and

     

    (i)  from
      time
      to time such additional information regarding the financial position or business
      of the Parent, the Borrower and the Subsidiaries as the Lenders may reasonably
      request.

     

    Section
      6.2  Inspection
      of Property, Books and Records. 

     

    Each
      of
      the Parent and the Borrower will, and will cause each Subsidiary to, permit
      the
      Agent and the Lenders, by their respective representatives and agents, to visit
      and inspect their respective properties in order to: (a) examine and make
      abstracts from any of their respective books and records; and (b) to discuss
      their respective affairs, finances and accounts with their respective officers,
      employees and independent public accountants. The Parent and the Borrower agree
      to cooperate and assist in such visits and inspections, in each case at such
      reasonable times and as often as may reasonably be desired; provided, however,
      that so long as no Default or Unmatured Default has occurred and is continuing,
      such visits and inspections shall not take place more often than once each
      fiscal year of the Parent. 

     

    Section
      6.3  Restricted
      Payments. 

     

    Neither
      the Parent nor the Borrower will, nor will they permit any Subsidiary to,
      declare or make any Restricted Payment except: (a) the Parent may declare or
      make a Restricted Payment (other than Stock Purchase Restricted Payments
      permitted by clause (b) below) if, after giving effect to such Restricted
      Payment, the aggregate amount of all such Restricted Payments declared or made
      after the date of this Agreement (excluding Stock Purchase Restricted Payments
      permitted by clause (b) below) does not exceed One Hundred Fifty Million
      and No/100 Dollars ($150,000,000) and no Default or Unmatured Default shall
      have
      occurred and be continuing; (b) the Parent may declare or make a Stock Purchase
      Restricted Payment, if after giving effect to such Stock Purchase Restricted
      Payment, the aggregate of all Stock Purchase Restricted Payments declared or
      made after the date of this Agreement does not exceed One Hundred Fifty Million
      and No/100 Dollars ($150,000,000) and no Default or Unmatured Default shall
      have
      occurred and be continuing; and (c) any Subsidiary (including the Borrower)
      may
      declare and pay dividends or make distributions to the Parent or to a
      Wholly-Owned Subsidiary. 

     

    Section
      6.4  Loans
      or Advances. 

     

    Neither
      the Parent nor any of its Subsidiaries shall make loans or advances to any
      Person except: (a) loans or advances to employees not exceeding Three
      Million and No/100 Dollars ($3,000,000) in the aggregate outstanding made in
      the
      ordinary course of business and consistently with practices existing on March
      31, 2004; (b) deposits required by government agencies or public utilities;
      (c) loans or advances in the ordinary course of business between the Parent
      and its Subsidiaries and between Subsidiaries; and (d) other loans and
      advances made in the ordinary course of business not exceeding Five Million
      and
      No/100 Dollars ($5,000,000) in the aggregate at any time outstanding; provided
      that after giving effect to the making of any loans, advances or deposits
      permitted by clause (a), (b), (c) or (d) of this Section, the Parent will be
      in
      full compliance with all the provisions of this Agreement.

     

    Section
      6.5  Investments
      and Acquisitions. 

     

    (a)  Neither
      the Parent nor the Borrower will, nor will they permit any Subsidiary to, make
      or suffer to exist any Investments (including without limitation, loans and
      advances to, and other Investments in, Subsidiaries), or commitments therefor,
      or to create any Subsidiary or to become or remain a partner in any partnership
      or joint venture, or to make any Acquisition of any Person, except:

     

    (i)  Cash
      Equivalent Investments.

     

    (ii)  Existing
      Investments in Subsidiaries and other Investments in existence the date hereof
      and described in Schedule
      6.5A.

     

    (iii)  Investments
      comprised of capital contributions (whether in the form of cash, a note, or
      other assets) to a Subsidiary or other special-purpose entity created solely
      to
      engage in a Qualified Receivables Transaction.

     

    (iv)  Acquisitions;
      provided, however, that prior to closing any such Acquisition the Parent shall
      deliver to the Agent a certificate of the Treasurer, Controller or Chief
      Financial Officer of the Parent setting forth in reasonable detail financial
      calculations demonstrating that, after giving effect to such Acquisition, no
      Default or Unmatured Default will exist on a pro forma basis (assuming that
      such
      Acquisition (and any related incurrence of Indebtedness) had occurred on the
      first day of the four-fiscal quarter period ending at the last fiscal
      quarter-end).

     

    (v)  Rate
      Management Transactions permitted by Section 6.20.

     

    (vi)  Loans
      and
      advances permitted by Section 6.4.

     

    (vii)  The
      Investments by the Borrower in Modine Austria, by the Parent in the Borrower
      and
      by the Parent in Modine, Inc. described in Schedule
      6.5B.

     

    (b)  The
      Parent and its Subsidiaries may make and have outstanding the following other
      Investments, in addition to the Investments permitted under Section 6.5(a):
      (i)
      loans and advances in the ordinary course of business between the Parent and
      its
      Subsidiaries and between Subsidiaries, and (ii) other Investments, provided
      that
      at no time shall the aggregate outstanding amount of Investments existing and
      permitted under this Section 6.5(b)(ii) exceed $40,000,000. 

     

    Section
      6.6  Negative
      Pledge. 

     

    Neither
      the Parent nor the Borrower will, nor will they permit any Subsidiary to,
      create, incur or suffer to exist any Lien in, of or on any of the Property
      of
      the Parent, the Borrower or any Subsidiary, except for Permitted
      Encumbrances.

     

    Section
      6.7  Maintenance
      of Existence. 

     

    Except
      for corporate reorganizations permitted by Sections 6.9(a) and 6.9(b), each
      of
      the Parent and the Borrower shall, and shall cause each Subsidiary to, remain
      duly incorporated or organized, validly existing and (to the extent such concept
      applies to such entity) in good standing as a corporation or limited liability
      company or (in the case of the Subsidiaries) other form of organization in
      its
      jurisdiction of incorporation or organization, maintain all requisite authority
      to conduct its business in each jurisdiction in which its business is conducted,
      and carry on its business in substantially the same manner and in substantially
      the same fields as such business is now carried on and maintained.

     

    Section
      6.8  Dissolution. 

     

    None
      of
      the Parent, the Borrower nor any of the Subsidiaries shall suffer or permit
      dissolution or liquidation either in whole or in part or redeem or retire any
      shares of its own stock or that of any Subsidiary, except through corporate
      reorganization to the extent permitted by Sections 6.9(a) and
      6.9(b).

     

    Section
      6.9  Consolidations,
      Mergers and Sales of Assets. 

     

    Neither
      the Parent nor the Borrower will, nor will they permit any Subsidiary to,
      consolidate or merge with or into, or sell, lease or otherwise transfer all
      or
      any substantial part of its assets to, any other Person, or discontinue or
      eliminate any business line or segment, provided
      that

     

    (a)  Subsidiaries
      of the Parent (other than the Borrower and its Subsidiaries) may merge into
      the
      Parent or a Wholly-Owned Subsidiary, and

     

    (b)  the
      foregoing limitation on the sale, lease or other transfer of assets and on
      the
      discontinuation or elimination of a business line or segment shall not prohibit:
      

     

    (i) sales
      of
      inventory in the ordinary course of business;

     

    (ii) leases,
      sales or other dispositions of Property that, together with all other Property
      of the Parent and its Subsidiaries previously leased, sold or disposed of (other
      than inventory in the ordinary course of business) as permitted by this Section
      during the twelve-month period ending with the month in which any such lease,
      sale or other disposition occurs, do not constitute a Substantial Portion of
      the
      Property of the Parent and its Subsidiaries;

     

    (iii) any
      transfer of an interest in accounts or notes receivable and related assets
      as
      part of a Qualified Receivables Transaction; and

     

    (iv) the
      liquidation and dissolution of Industrial Airsystems, Inc., Radman, Inc. and
      Modine of Puerto Rico, Inc.

     

    Section
      6.10  Use
      of
      Proceeds. 

     

    The
      Borrower will use approximately EUR 70,780,391 of the proceeds of the Loans
      to
      acquire approximately 45.1% of the outstanding common equity of Modine Austria,
      and will use the remainder of the proceeds of the Loans for the Borrower’s
      ordinary corporate purposes. No portion of the proceeds of the Loans will be
      used by the Borrower, directly or indirectly, for the purpose, whether
      immediate, incidental or ultimate, of purchasing or carrying any “margin stock”
(as defined in Regulation U), or for any purpose in violation of any applicable
      law or regulation.

     

    Section
      6.11  Compliance
      with Laws; Payment of Taxes and Other Claims. 

     

    Each
      of
      the Parent and the Borrower will, and will cause each Subsidiary to, comply
      with
      all laws, rules, regulations, orders, writs, judgments, injunctions, decrees
      or
      awards to which it may be subject including, without limitation, all
      Environmental Laws. Without limitation of the foregoing, each of the Parent
      and
      the Borrower will, and will cause each of the Subsidiaries to, not be a Person
      described in Section 1 of the Anti-Terrorism Order, and not engage in any
      dealings or transactions, or otherwise be associated, with any such Person.
      Each
      of the Parent and the Borrower will, and will cause each of the Subsidiaries
      to,
      (x) timely file complete and correct United States federal and applicable
      foreign, state and local tax returns required by law and pay when due all taxes,
      assessments, governmental charges and levies upon it or its income, profits
      or
      Property and (y) pay when due all claims for labor, supplies, rent and other
      obligations which, if unpaid, might become a lien against the property of the
      Parent, the Borrower or any Subsidiary; except those which are being contested
      in good faith by appropriate proceedings and with respect to which adequate
      reserves have been set aside in accordance with Agreement Accounting
      Principles.

     

    Section
      6.12  Insurance. 

     

    Each
      of
      the Parent and the Borrower will maintain, and will cause each of the
      Subsidiaries to maintain (either in the name of the Parent or the Borrower
      or in
      such Subsidiary’s own name), with financially sound and reputable insurance
      companies, insurance on all its Property in at least such amounts and against
      at
      least such risks as is consistent with sound business practice, and the Parent
      and the Borrower will furnish to any Lender upon request full information as
      to
      the insurance carried.

     

    Section
      6.13  Change
      in Fiscal Year. 

     

    Neither
      the Parent nor the Borrower will change its fiscal year without (a) providing
      the Lenders with prior written notice of such change; and (b) executing and
      delivering to the Lenders, prior to such change, such amendments to this
      Agreement and the other Loan Documents as the Lenders may reasonably deem
      necessary and appropriate as a result of such change in fiscal
      year.

     

    Section
      6.14  Maintenance
      of Property. 

     

    Each
      of
      the Parent and the Borrower will, and will cause each Subsidiary to, maintain
      all of its Property and assets in good condition, repair and working order,
      and
      make all necessary and proper repairs, renewals and replacements so that its
      business carried on in connection therewith may be properly conducted at all
      times.

     

    Section
      6.15  Environmental
      Matters. 

     

    Neither
      the Parent nor the Borrower will, nor will either permit any other Person to,
      use, produce, manufacture, process, generate, store, dispose of, manage at,
      or
      ship or transport to or from any of its Property any Hazardous Materials except
      for Hazardous Materials disclosed on Schedule
      5.14(b)
      hereto
      and by this reference made a part hereof and which are used, produced,
      manufactured, processed, generated, stored, disposed of or managed in the
      ordinary course of business in compliance with all applicable Environmental
      Laws. Each of the Parent and the Borrower agrees that upon the occurrence of
      an
      Environmental Release it will act immediately to investigate the extent of,
      and
      to take appropriate remedial action to eliminate, such Environmental Release,
      whether or not ordered or otherwise directed to do so. Promptly, and in any
      event within 15 Business Days after the Parent or the Borrower obtains knowledge
      thereof, the Parent or the Borrower shall furnish to the Lenders written notice
      of all material Environmental Liabilities, pending, threatened or anticipated
      material Environmental Proceedings, and material Environmental Releases at,
      on,
      in, under or in any way affecting it, any Subsidiary or any of its or their
      Property or any adjacent property, and all facts, events, or conditions that
      could lead to any of the foregoing.

     

    Section
      6.16  Indebtedness. 

     

    Neither
      the Parent nor the Borrower will, nor will it permit any Subsidiary to, create,
      incur or suffer to exist any Indebtedness, except:

     

    (a)  The
      Loans.

     

    (b)  Indebtedness
      described in Schedule
      6.16
      not
      exceeding the commitment limits set forth therein, and extensions, renewals
      and
      replacements of any such Indebtedness to the extent such extensions, renewals
      and replacements do not increase the outstanding principal amount
      thereof.

     

    (c)  Receivables
      Transaction Attributed Indebtedness.

     

    (d)  Indebtedness,
      in addition to Indebtedness permitted pursuant to subsections (a)-(c) above,
      in
      an aggregate amount at any time outstanding not to exceed the greater of
      $100,000,000 or fifteen percent (15%) of the Parent’s Consolidated Net
      Worth.

     

    Section
      6.17  Sale
      of Accounts. 

     

    Neither
      the Parent nor the Borrower will, nor will they permit any Subsidiary to, sell
      or otherwise dispose of any notes receivable or accounts receivable, with or
      without recourse, except (a) sale or assignment of accounts for collection
      purposes in the ordinary course of business, and (b) Qualified Receivables
      Transactions.

     

    Section
      6.18  Financial
      Covenants. 

     

    (a)  Leverage
      Ratio.
      The
      Parent will not permit the Leverage Ratio, determined as of the end of each
      fiscal quarter, to be greater than 3.0 to 1.0. 

     

    (b)  Interest
      Expense Coverage Ratio.
      The
      Parent will not permit the Interest Expense Coverage Ratio, determined as of
      the
      end of each fiscal quarter, to be less than 3.0 to 1.0.

     

    Section
      6.19  Guaranties. 

     

    Promptly,
      and in any event within 30 days, after a Person shall become a Specified
      Domestic Subsidiary that is not a Specified Domestic Subsidiary on the date
      hereof, Parent shall cause such new Specified Domestic Subsidiary to become
      a
      party to this Agreement by executing and delivering to the Agent a Guaranty
      Joinder Supplement in the form of Annex I attached hereto, along with such
      other
      documents, opinions and information as the Agent may require regarding such
      Specified Domestic Subsidiary and the enforceability of such Guaranty.

     

    Section
      6.20  Rate
      Management Transactions. 

     

    Neither
      the Parent nor Borrower will, nor will they permit any Subsidiary to, enter
      into
      or remain liable under any Rate Management Transactions, except for Rate
      Management Transactions that are entered into in the ordinary course of business
      of the Parent, the Borrower or such Subsidiary and not for speculative
      purposes.

     

    Section
      6.21  Affiliates. 

     

    Neither
      the Parent nor the Borrower will, nor will they permit any Subsidiary to, enter
      into any transaction (including, without limitation, the purchase or sale of
      any
      Property or service) with, or make any payment or transfer to, any Affiliate
      except (i) in the ordinary course of business and pursuant to the reasonable
      requirements of the Parent’s, the Borrower’s or such Subsidiary’s business and
      upon fair and reasonable terms no less favorable to the Parent, the Borrower
      or
      such Subsidiary than the Parent, the Borrower or such Subsidiary would obtain
      in
      a comparable arms-length transaction and (ii) transactions between the Parent,
      the Borrower or any Subsidiary, on the one hand, and any Subsidiary or other
      special-purpose entity created to engage solely in a Qualified Receivables
      Transaction.

     

    Section
      6.22  Condition
      Subsequent. 

     

    On
      or
      before December 30, 2005, (a) the Borrower shall provide the Agent
      satisfactory evidence (including fully executed copies of the Share Purchase
      and
      Contribution Documentation) that the Borrower’s acquisition of all the common
      equity of Modine Austria, by purchase from and contribution by the Parent,
      has
      been consummated, and the resulting corporate ownership structure as described
      in Schedule
      5.9
      hereto
      has been effected (other than “step 3” described in Schedule
      6.5B),
      all in
      accordance with applicable law and on terms satisfactory to the Agent and the
      Lenders and (b) the Borrower shall provide certificates of status or good
      standing issued by the appropriate Pennsylvania office for Thermacore
      International, Inc., a Pennsylvania corporation, Thermacore, Inc., a
      Pennsylvania corporation, and Airedale North America, Inc., a Pennsylvania
      corporation.

     

    ARTICLE
      7  

     

    

     

    DEFAULTS

     

    The
      occurrence of any one or more of the following events shall constitute a
      Default:

     

    Section
      7.1   

     

    The
      Borrower shall fail to pay when due any principal of any Loan, or shall fail
      to
      pay when due any interest on any Loan or other fee or other amount payable
      hereunder; or

     

    Section
      7.2   

     

    The
      Parent or the Borrower shall fail to observe or perform any covenant contained
      in Section 6.1(d), Sections 6.3 through 6.10, inclusive, or Sections 6.16
      through 6.21, inclusive; or 

     

    Section
      7.3   

     

    The
      Parent or the Borrower shall fail to observe or perform any covenant or
      agreement contained in this Agreement (other than those covered by Section
      7.1
      or 7.2 above), or the Parent, the Borrower or any Subsidiary shall fail to
      observe or perform any covenant or agreement contained in any other Loan
      Document, for thirty (30) days after the earlier of (i) the first day on which
      a
      responsible officer of the Parent, the Borrower or Subsidiary has knowledge
      of
      such failure, or (ii) written notice thereof has been given to the Parent,
      the
      Borrower or Subsidiary by a Lender; or 

     

    Section
      7.4   

     

    Any
      representation, warranty, certification or statement made or deemed made by
      or
      on behalf of the Parent or the Borrower in Article 5, by or on behalf of any
      Guarantor in Article 12, or by or on behalf of the Parent, the Borrower or
      any
      Subsidiary in, under or in connection with any Loan Document, or any
      certificate, financial statement or other document delivered pursuant to any
      Loan Document, shall prove to have been incorrect in any material respect when
      made (or deemed made); or

     

    Section
      7.5   

     

    The
      Parent, the Borrower or any Subsidiary shall fail to make any payment in respect
      of Indebtedness outstanding (other than the Loans) in an aggregate amount in
      excess of $20,000,000 when due or within any applicable grace period;
      or

     

    Section
      7.6   

     

    Any
      event
      or condition shall occur which results in the acceleration of the maturity
      of
      Indebtedness outstanding in an aggregate amount in excess of $20,000,000 of
      the
      Parent, the Borrower or any Subsidiary or the purchase of such Indebtedness
      by
      the Parent (or its designee), the Borrower (or its designee) or such Subsidiary
      (or its designee) prior to the scheduled maturity thereof or enables (or, with
      the giving of notice or lapse of time or both, would enable) the holders of
      such
      Indebtedness or any Person acting on such holders’ behalf to accelerate the
      maturity thereof or require the purchase thereof by the Parent (or its
      designee), the Borrower (or its designee) or such Subsidiary (or its designee)
      prior to the scheduled maturity thereof, without regard to whether such holders
      or other Person shall have exercised or waived their right to do so, or any
      Indebtedness outstanding in an aggregate amount in excess of $20,000,000 of
      the
      Parent, the Borrower or any Subsidiary shall be declared to be due and payable
      or required to be prepaid or repurchased (other than by a regularly scheduled
      payment) prior to the stated maturity thereof; or

     

    Section
      7.7   

     

    The
      Parent, the Borrower or any Subsidiary shall commence a voluntary case or other
      proceeding seeking liquidation, reorganization or other relief with respect
      to
      itself or its debts under any bankruptcy, insolvency or other similar law now
      or
      hereafter in effect or seeking the appointment of a trustee, receiver,
      liquidator, custodian or other similar official of it or any Substantial Portion
      of its property, or shall consent to any such relief or to the appointment
      of or
      taking possession by any such official in an involuntary case or other
      proceeding commenced against it, or shall make a general assignment for the
      benefit of creditors, or shall fail generally to pay, or shall admit in writing
      its inability to pay, its debts as they become due, or shall take any corporate
      action to authorize any of the foregoing, or shall fail to contest in good
      faith
      any appointment or proceeding described in Section 7.8; or

     

    Section
      7.8   

     

    An
      involuntary case or other proceeding shall be commenced against the Parent,
      the
      Borrower or any Subsidiary seeking liquidation, reorganization or other relief
      with respect to it or its debts under any bankruptcy, insolvency or other
      similar law now or hereafter in effect or seeking the appointment of a trustee,
      receiver, liquidator, custodian or other similar official of it or any
      Substantial Portion of its property, and such involuntary case or other
      proceeding shall remain undismissed and unstayed for a period of 45 days; or
      an
      order for relief shall be entered against the Parent, the Borrower or any
      Subsidiary under the federal bankruptcy laws as now or hereafter in effect;
      or

     

    Section
      7.9   

     

    The
      Parent, the Borrower or any member of the Controlled Group shall fail to pay
      when due any material amount which it shall have become liable to pay to the
      PBGC or to a Plan under Title IV of ERISA; or the PBGC shall institute
      proceedings under Title IV of ERISA to terminate or to cause a trustee to be
      appointed to administer any such Plan or Plans or a proceeding shall be
      instituted by a fiduciary of any such Plan or Plans to enforce Section 515
      or
      4219(c)(5) of ERISA and such proceeding shall not have been dismissed within
      30
      days thereafter; or a condition shall exist by reason of which the PBGC would
      be
      entitled to obtain a decree adjudicating that any such Plan or Plans must be
      terminated; or

     

    Section
      7.10   

     

    One
      or
      more judgments or orders for the payment of money in an aggregate amount in
      excess of $20,000,000 (or the equivalent thereof in currencies other than
      Dollars), or one or more nonmonetary judgments or orders which, individually
      or
      in the aggregate, could reasonably be expected to have a Material Adverse
      Effect, shall be rendered against the Parent, the Borrower or any Subsidiary,
      and such judgment(s) or order(s) shall continue unsatisfied and unstayed for
      a
      period of 45 days; or

     

    Section
      7.11   

     

    A
      federal
      tax lien shall be filed against the Parent or the Borrower under Section 6323
      of
      the Code or a lien of the PBGC shall be filed against the Parent or the Borrower
      under Section 4068 of ERISA and in either case such lien shall remain
      undischarged for a period of 25 days after the date of filing, or the Unfunded
      Liabilities of all Single Employer Plans shall exceed in the aggregate
      $20,000,000, or any Reportable Event shall occur in connection with any Plan;
      or

     

    Section
      7.12   

     

    Any
      Change in Control shall occur; or

     

    Section
      7.13   

     

    Nonpayment
      by the Parent, the Borrower or any Subsidiary of any Rate Management Obligation
      when due or the breach by the Parent, the Borrower or any Subsidiary of any
      term, provision or condition contained in any Rate Management Transaction;
      or

    

    Section
      7.14   

     

    Any
      court, government or governmental agency shall condemn, seize or otherwise
      appropriate, or take custody or control of, all or any portion of the Property
      of the Parent and its Subsidiaries which, when taken together with all other
      Property of the Parent and its Subsidiaries so condemned, seized, appropriated,
      or taken custody or control of, during the twelve-month period ending with
      the
      month in which any such action occurs, constitutes a Substantial Portion;
      or

     

    Section
      7.15   

     

    The
      Guaranty shall fail to remain in full force or effect with respect to any or
      all
      of the Guarantors or any action shall be taken to discontinue or to assert
      the
      invalidity or unenforceability of the Guaranty with respect to any or all of
      the
      Guarantors, or any Guarantor shall fail to comply with any of the terms or
      provisions of the Guaranty, or any Guarantor shall deny that it has any further
      liability under the Guaranty, or shall give notice to such effect;
      or

     

    Section
      7.16   

     

    Any
      Collateral Document shall for any reason fail to create a valid and perfected
      first priority security interest in any collateral purported to be covered
      thereby, except as permitted by the terms of any Collateral Document, or any
      Collateral Document shall fail to remain in full force or effect or any action
      shall be taken to discontinue or to assert the invalidity or unenforceability
      of
      any Collateral Document, or the Parent, the Borrower or any Guarantor shall
      fail
      to comply with any of the terms or provisions of any Collateral
      Document.

     

    

     

    ARTICLE
      8  

     

    

     

    ACCELERATION,
      WAIVERS, AMENDMENTS AND REMEDIES

     

    Section
      8.1  Acceleration. 

     

    If
      any
      Default described in Section 7.7 or 7.8 occurs with respect to the Borrower,
      the
      Obligations shall immediately become due and payable without any election or
      action on the part of the Agent or any Lender. If any other Default occurs,
      the
      Required Lenders (or the Agent with the consent of the Required Lenders) may
      declare the Obligations to be due and payable whereupon the Obligations shall
      become immediately due and payable, without presentment, demand, protest or
      notice of any kind, all of which the Borrower hereby expressly waives.

     

    Section
      8.2  Amendments. 

     

    Subject
      to the provisions of this Article 8, the Required Lenders (or the Agent with
      the
      consent in writing of the Required Lenders) and the Credit Parties may enter
      into agreements supplemental hereto for the purpose of adding or modifying
      any
      provisions to the Loan Documents or changing in any manner the rights of the
      Lenders or the Credit Parties hereunder or waiving any Default hereunder;
provided,
      however,
      that no
      such supplemental agreement shall, without the consent of all of the
      Lenders:

     

    (a)  Extend
      the final maturity of any Loan, or forgive all or any portion of the principal
      amount thereof, or reduce the rate or extend the time of payment of interest
      or
      fees thereon.

     

    (b)  Amend
      Section 11.2.

     

    (c)  Reduce
      the percentage specified in the definition of Required Lenders.

     

    (d)  Extend
      the Facility Maturity Date, or reduce the amount or extend the payment date
      for,
      the mandatory payments required under Section 2.3, or, subject to Section 2.26,
      increase the amount of the Aggregate Commitment, of the Commitment of any Lender
      hereunder, or permit the Borrower to assign its rights under this
      Agreement.

     

    (e)  Release
      or terminate the Guaranty as to any Guarantor.

     

    (f)  Amend
      this Section 8.2.

     

    No
      amendment of any provision of this Agreement relating to the Agent shall be
      effective without the written consent of the Agent. The Agent may waive payment
      of the fee required under Section 13.1 without obtaining the consent of any
      other party to this Agreement.

     

    Section
      8.3  Preservation
      of Rights. 

     

    No
      delay
      or omission of the Lenders or the Agent to exercise any right under the Loan
      Documents shall impair such right or be construed to be a waiver of any Default
      or an acquiescence therein. Any single or partial exercise of any such right
      shall not preclude other or further exercise thereof or the exercise of any
      other right, and no waiver, amendment or other variation of the terms,
      conditions or provisions of the Loan Documents whatsoever shall be valid unless
      in writing signed by the Lenders required pursuant to Section 8.2, and then
      only
      to the extent in such writing specifically set forth. All remedies contained
      in
      the Loan Documents or by law afforded shall be cumulative and all shall be
      available to the Agent and the Lenders until the Obligations have been paid
      in
      full.

     

    ARTICLE
      9  

     

    

     

    GENERAL
      PROVISIONS

     

    Section
      9.1  Survival
      of Representations. 

     

    All
      representations and warranties of the Credit Parties contained in this Agreement
      shall survive the making of the Loans herein contemplated.

     

    Section
      9.2  Governmental
      Regulation. 

     

    Anything
      contained in this Agreement to the contrary notwithstanding, no Lender shall
      be
      obligated to extend credit to the Borrower in violation of any limitation or
      prohibition provided by any applicable statute or regulation.

     

    Section
      9.3  Headings. 

     

    Section
      headings in the Loan Documents are for convenience of reference only, and shall
      not govern the interpretation of any of the provisions of the Loan
      Documents.

     

    Section
      9.4  Entire
      Agreement. 

     

    The
      Loan
      Documents embody the entire agreement and understanding among the Borrower,
      the
      Guarantors, the Agent and the Lenders and supersede all prior agreements and
      understandings among the Borrower, the Guarantors, the Agent and the Lenders
      relating to the subject matter thereof.

     

    Section
      9.5  Several
      Obligations; Benefits of this Agreement. 

     

    The
      respective obligations of the Lenders hereunder are several and not joint and
      no
      Lender shall be the partner or agent of any other (except to the extent to
      which
      the Agent is authorized to act as such). The failure of any Lender to perform
      any of its obligations hereunder shall not relieve any other Lender from any
      of
      its obligations hereunder. This Agreement shall not be construed so as to confer
      any right or benefit upon any Person other than the parties to this Agreement
      and their respective successors and assigns, provided,
      however,
      that
      the parties hereto expressly agree that the Arranger shall enjoy the benefits
      of
      the provisions of Sections 9.6, 9.10 and 10.6 to the extent specifically set
      forth therein and shall have the right to enforce such provisions on its own
      behalf and in its own name to the same extent as if it were a party to this
      Agreement.

     

    Section
      9.6  Expenses;
      Indemnification.

     

    (a)  The
      Borrower shall reimburse the Agent and the Arranger for any costs, internal
      charges and out-of-pocket expenses (including reasonable attorneys’ fees and
      time charges of attorneys for the Agent, which attorneys may be employees of
      the
      Agent) paid or incurred by the Agent or the Arranger in connection with the
      preparation, negotiation, execution, delivery, syndication, distribution
      (including, without limitation, via the internet), review, amendment,
      modification, and administration of the Loan Documents. The Borrower also agrees
      to reimburse the Agent, the Arranger and the Lenders for any costs, internal
      charges and out-of-pocket expenses (including reasonable attorneys’ fees and
      time charges of attorneys for the Agent, the Arranger and the Lenders, which
      attorneys may be employees of the Agent, the Arranger or the Lenders) paid
      or
      incurred by the Agent, the Arranger or any Lender in connection with the
      collection and enforcement of the Loan Documents. Expenses being reimbursed
      by
      the Borrower under this Section include, without limitation, costs and expenses
      incurred in connection with the Reports described in the following sentence.
      The
      Borrower acknowledges that from time to time JPMEL may prepare and may
      distribute to the Lenders (but shall have no obligation or duty to prepare
      or to
      distribute to the Lenders) certain audit reports (the “Reports”) pertaining to
      the Borrower’s assets for internal use by JPMEL from information furnished to it
      by or on behalf of the Borrower, after JPMEL has exercised its rights of
      inspection pursuant to this Agreement.

     

    (b)  The
      Borrower hereby further agrees to indemnify the Agent, the Arranger and each
      Lender, their respective affiliates, and each of their directors, officers
      and
      employees against all losses, claims, damages, penalties, judgments, liabilities
      and expenses (including, without limitation, all reasonable expenses of
      litigation or preparation therefor whether or not the Agent, the Arranger or
      any
      Lender or any affiliate is a party thereto) which any of them may pay or incur
      arising out of or relating to this Agreement, the other Loan Documents, the
      transactions contemplated hereby or the direct or indirect application or
      proposed application of the proceeds of the Loans hereunder except to the extent
      that they are determined in a final non-appealable judgment by a court of
      competent jurisdiction to have resulted from the gross negligence or willful
      misconduct of the party seeking indemnification. The obligations of the Borrower
      under this Section 9.6 shall survive the termination of this
      Agreement.

     

    (c)  To
      the
      extent that the Borrower fails to pay any amount required to be paid by it
      to
      the Agent or the Arranger under paragraph (a) or (b) of this Section, each
      Lender severally agrees to pay to the Agent or the Arranger, as the case may
      be,
      such Lender’s Pro Rata Share (determined as of the time that the applicable
      unreimbursed expense or indemnity payment is sought) of such unpaid amount;
      provided that the unreimbursed expense or indemnified loss, claim, damage,
      liability or related expense, as the case may be, was incurred by or asserted
      against the Agent or the Arranger in its capacity as such.

     

    (d)  All
      Loan
      Documents shall be signed and executed outside the Republic of Austria and
      the
      originals and all certified copies thereof shall always be kept outside the
      Republic of Austria. Should any party transfer, or cause the transfer by third
      parties of any original or certified copy of a Loan Document into the Republic
      of Austria, thereby triggering stamp duties, the party transferring (or
      procuring the transfer of) such original or certified copy triggering stamp
      duties shall be liable for such stamp duties, unless the transfer of the
      original or certified copy of the relevant Loan Document into the Republic
      of
      Austria was (i) required by mandatory law, order, request or decree of a
      governmental body, court, authority or agency (whether for the purposes of
      initiating, prosecuting, enforcing or executing any claim or remedy or enforcing
      any judgment or otherwise); or (ii) made for, or in connection with, the
      enforcement of the rights of one or several parties under a Loan Document,
      in
      which cases such stamp duties shall be borne by the Borrower.

     

    Section
      9.7  Numbers
      of Documents. 

     

    All
      statements, notices, closing documents, and requests hereunder shall be
      furnished to the Agent with sufficient counterparts so that the Agent may
      furnish one to each of the Lenders.

     

    Section
      9.8  Accounting. 

     

    Except
      as
      provided to the contrary herein, all accounting terms used herein shall be
      interpreted and all accounting determinations hereunder shall be made in
      accordance with Agreement Accounting Principles.

     

    Section
      9.9  Severability
      of Provisions. 

     

    Any
      provision in any Loan Document that is held to be inoperative, unenforceable,
      or
      invalid in any jurisdiction shall, as to that jurisdiction, be inoperative,
      unenforceable, or invalid without affecting the remaining provisions in that
      jurisdiction or the operation, enforceability, or validity of that provision
      in
      any other jurisdiction, and to this end the provisions of all Loan Documents
      are
      declared to be severable.

     

    Section
      9.10  Nonliability
      of Lenders. 

     

    The
      relationship between the Borrower on the one hand and the Lenders and the Agent
      on the other hand shall be solely that of borrower and lender. Neither the
      Agent, the Arranger nor any Lender shall have any fiduciary responsibilities
      to
      the Borrower. Neither the Agent, the Arranger nor any Lender undertakes any
      responsibility to the Borrower to review or inform the Borrower of any matter
      in
      connection with any phase of the Borrower’s business or operations. The Borrower
      agrees that neither the Agent, the Arranger nor any Lender shall have liability
      to the Borrower (whether sounding in tort, contract or otherwise) for losses
      suffered by the Borrower in connection with, arising out of, or in any way
      related to, the transactions contemplated and the relationship established
      by
      the Loan Documents, or any act, omission or event occurring in connection
      therewith, unless it is determined in a final non-appealable judgment by a
      court
      of competent jurisdiction that such losses resulted from the gross negligence
      or
      willful misconduct of the party from which recovery is sought. Neither the
      Agent, the Arranger nor any Lender shall have any liability with respect to,
      and
      the Borrower hereby waives, releases and agrees not to sue for, any special,
      indirect, consequential or punitive damages suffered by the Borrower in
      connection with, arising out of, or in any way related to the Loan Documents
      or
      the transactions contemplated thereby.

     

    Section
      9.11  Confidentiality. 

     

    Each
      Lender agrees to hold any confidential information which it may receive from
      the
      Borrower or the Guarantors pursuant to this Agreement in confidence, except
      for
      disclosure (i) to its Affiliates and to other Lenders and their respective
      Affiliates, (ii) to legal counsel, accountants, and other professional advisors
      to such Lender or to a Transferee, (iii) to regulatory officials, (iv) to any
      Person as requested pursuant to or as required by law, regulation, or legal
      process, (v) to any Person in connection with any legal proceeding to which
      such
      Lender is a party, (vi) to such Lender’s direct or indirect contractual
      counterparties in swap agreements or to legal counsel, accountants and other
      professional advisors to such counterparties, (vii) permitted by Section 13.2
      and (viii) to rating agencies if requested or required by such agencies in
      connection with a rating relating to the Advances hereunder. Each Lender that
      is
      in receipt of confidential information from the Borrower or the Guarantors
      agrees (a) to hold such information in accordance with such Lender’s customary
      procedures for handling confidential information of such nature and in
      accordance with safe and sound banking practices, (b) not to use such
      confidential information for any purpose other than purposes contemplated by
      this Agreement, (c) to limit disclosure of such confidential information to
      the
      Persons referred to in this Section 9.11 having a need to know such information
      in connection with purposes contemplated by this Agreement, and (d) that, unless
      specifically prohibited by applicable law or government agency or court order,
      such Lender shall notify the Borrower or the Guarantors of any request by any
      governmental authority for disclosure of any such confidential information
      prior
      to making disclosure of such information, so that the Borrower or the Guarantors
      shall have the opportunity to seek an appropriate protective agreement or order
      limiting disclosure of such information.

     

    Section
      9.12  Nonreliance. 

     

    Each
      Lender hereby represents that it is not relying on or looking to any margin
      stock (as defined in Regulation U of the Board of Governors of the Federal
      Reserve System) for the repayment of the Loans provided for herein.

     

    Section
      9.13  Disclosure. 

     

    The
      Borrower and each Lender hereby acknowledge and agree that JPMEL and/or its
      Affiliates from time to time may hold investments in, make other loans to or
      have other relationships with the Borrower and its Affiliates.

     

    Section
      9.14  USA
      Patriot Act. 

     

    Each
      Lender that is subject to the requirements of the USA Patriot Act (Title III
      of
      Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies
      the Borrower that pursuant to the requirements of the Act, it is required to
      obtain, verify and record information that identifies the Borrower, which
      information includes the name and address of the Borrower and other information
      that will allow such Lender to identify the Borrower in accordance with the
      Act.

     

    Section
      9.15  Place
      of Performance. 

     

    The
      exclusive place of performance (Leistungsort)
      in
      respect of all rights and obligations of the parties of this Agreement shall
      be
      London, England, or any other place communicated by the Agent to the Borrower,
      but shall at all times be a place outside the Republic of Austria. 

     

    ARTICLE
      10  

     

    

     

    THE
      AGENT

     

    Section
      10.1  Appointment;
      Nature of the Relationship.

     

    Each
      of
      the Lenders hereby irrevocably appoints J.P. Morgan Europe Limited as its agent
      (the “Agent”) and authorizes the Agent to take such actions on its behalf and to
      exercise such powers as are delegated to the Agent by the terms hereof, together
      with such actions and powers as are reasonably incidental thereto. The bank
      serving as the Agent hereunder shall have the same rights and powers in its
      capacity as a Lender as any other Lender and may exercise the same as though
      it
      were not the Agent, and such bank and its Affiliates may accept deposits from,
      lend money to and generally engage in any kind of business with the Borrower,
      the Parent or any Subsidiary or other Affiliate thereof as if it were not the
      Agent hereunder.

     

    Section
      10.2  Powers. 

     

    The
      Agent
      shall not have any duties or obligations except those expressly set forth
      herein. Without limiting the generality of the foregoing, (a) the Agent
      shall not be subject to any fiduciary or other implied duties, regardless of
      whether a Default has occurred and is continuing, (b) the Agent shall not
      have any duty to take any discretionary action or exercise any discretionary
      powers, except discretionary rights and powers expressly contemplated hereby
      that the Agent is required to exercise in writing as directed by the Required
      Lenders (or such other number or percentage of the Lenders as shall be necessary
      under the circumstances as provided in Section 8.2), and (c) except as
      expressly set forth herein, the Agent shall not have any duty to disclose,
      and
      shall not be liable for the failure to disclose, any information relating to
      the
      Borrower, the Parent or any of its Subsidiaries that is communicated to or
      obtained by the bank serving as Agent or any of its Affiliates in any capacity.
      The Agent shall not be liable for any action taken or not taken by it with
      the
      consent or at the request of the Required Lenders (or such other number or
      percentage of the Lenders as shall be necessary under the circumstances as
      provided in Section 8.2) or in the absence of its own gross negligence or
      willful misconduct. The Agent shall be deemed not to have knowledge of any
      Default unless and until written notice thereof is given to the Agent by the
      Borrower, the Parent or a Lender, and the Agent shall not be responsible for
      or
      have any duty to ascertain or inquire into (i) any statement, warranty or
      representation made in or in connection with this Agreement, (ii) the
      contents of any certificate, report or other document delivered hereunder or
      in
      connection herewith, (iii) the performance or observance of any of the
      covenants, agreements or other terms or conditions set forth herein,
      (iv) the validity, enforceability, effectiveness or genuineness of this
      Agreement or any other agreement, instrument or document, or (v) the
      satisfaction of any condition set forth in Article 4 or elsewhere herein,
      other than to confirm receipt of items expressly required to be delivered to
      the
      Agent. 

     

    Section
      10.3  Reliance;
      Counsel. 

     

    The
      Agent
      shall be entitled to rely upon, and shall not incur any liability for relying
      upon, any notice, request, certificate, consent, statement, instrument, document
      or other writing believed by it to be genuine and to have been signed or sent
      by
      the proper Person. The Agent also may rely upon any statement made to it orally
      or by telephone and believed by it to be made by the proper Person, and shall
      not incur any liability for relying thereon. The Agent may consult with legal
      counsel (who may be counsel for the Borrower or other Credit Parties),
      independent accountants and other experts selected by it, and shall not be
      liable for any action taken or not taken by it in accordance with the advice
      of
      any such counsel, accountants or experts.

     

    Section
      10.4  Delegation
      to Sub-Agent. 

     

    The
      Agent
      may perform any and all its duties and exercise its rights and powers by or
      through any one or more sub-agents appointed by the Agent. The Agent and any
      such sub-agent may perform any and all its duties and exercise its rights and
      powers through their respective Related Parties. The exculpatory provisions
      of
      the preceding paragraphs shall apply to any such sub-agent and to the Related
      Parties of the Agent and any such sub-agent, and shall apply to their respective
      activities in connection with the syndication of the credit facilities provided
      for herein as well as activities as Agent.

     

    Section
      10.5  Resignation;
      Successor Agent. 

     

    Subject
      to the appointment and acceptance of a successor Agent as provided in this
      paragraph, the Agent may resign at any time by notifying the Lenders and the
      Borrower. Upon any such resignation, the Required Lenders shall have the right,
      in consultation with the Borrower, to appoint a successor. If no successor
      shall
      have been so appointed by the Required Lenders and shall have accepted such
      appointment within 30 days after the retiring Agent gives notice of its
      resignation, then the retiring Agent may, on behalf of the Lenders, appoint
      a
      successor Agent which shall be a bank with an office in New York, New York,
      or
      an Affiliate of any such bank. Upon the acceptance of its appointment as Agent
      hereunder by a successor, such successor shall succeed to and become vested
      with
      all the rights, powers, privileges and duties of the retiring Agent, and the
      retiring Agent shall be discharged from its duties and obligations hereunder.
      The fees payable by the Borrower to a successor Agent shall be the same as
      those
      payable to its predecessor unless otherwise agreed between the Borrower and
      such
      successor. After the Agent's resignation hereunder, the provisions of this
      Article and Section 9.6 shall continue in effect for the benefit of such
      retiring Agent, its sub-agents and their respective Related Parties in respect
      of any actions taken or omitted to be taken by any of them while it was acting
      as Agent.

     

    Section
      10.6  Lender
      Credit Decision. 

     

    Each
      Lender acknowledges that it has, independently and without reliance upon the
      Agent, the Arranger or any other Lender and based on such documents and
      information as it has deemed appropriate, made its own credit analysis and
      decision to enter into this Agreement and the other Loan Documents. Each Lender
      also acknowledges that it will, independently and without reliance upon the
      Agent, the Arranger or any other Lender and based on such documents and
      information as it shall from time to time deem appropriate, continue to make
      its
      own decisions in taking or not taking action under or based upon this Agreement,
      any related agreement or any document furnished hereunder or
      thereunder.

     

    Section
      10.7  Agent’s
      Reimbursement and Indemnification. 

     

    The
      Lenders agree to reimburse and indemnify the Agent ratably in proportion to
      their respective Commitments (or, if the Commitments have been terminated,
      in
      proportion to their Commitments immediately prior to such termination) (a)
      for
      any amounts not reimbursed by the Borrower for which the Agent is entitled
      to
      reimbursement by the Borrower under the Loan Documents, (b) for any other
      expenses incurred by the Agent on behalf of the Lenders, in connection with
      the
      preparation, execution, delivery, administration and enforcement of the Loan
      Documents (including, without limitation, for any expenses incurred by the
      Agent
      in connection with any dispute between the Agent and any Lender or between
      two
      or more of the Lenders) and (c) for any liabilities, obligations, losses,
      damages, penalties, actions, judgments, suits, costs, expenses or disbursements
      of any kind and nature whatsoever which may be imposed on, incurred by or
      asserted against the Agent in any way relating to or arising out of the Loan
      Documents or any other document delivered in connection therewith or the
      transactions contemplated thereby (including, without limitation, for any such
      amounts incurred by or asserted against the Agent in connection with any dispute
      between the Agent and any Lender or between two or more of the Lenders), or
      the
      enforcement of any of the terms of the Loan Documents or of any such other
      documents, provided
      that (i)
      no Lender shall be liable for any of the foregoing to the extent any of the
      foregoing is found in a final non-appealable judgment by a court of competent
      jurisdiction to have resulted from the gross negligence or willful misconduct
      of
      the Agent and (ii) any indemnification required pursuant to Section 3.5(g)
      shall, notwithstanding the provisions of this Section 10.7, be paid by the
      relevant Lender in accordance with the provisions thereof. The obligations
      of
      the Lenders under this Section 10.7 shall survive payment of the Obligations
      and
      termination of this Agreement.

     

    Section
      10.8  Execution
      of Collateral Documents. 

     

    The
      Lenders hereby empower and authorize the Agent to execute and deliver to the
      Borrower and the Guarantors on their behalf any agreements, documents or
      instruments as shall be necessary or appropriate to effect the purposes of
      this
      Agreement.

     

    ARTICLE
      11  

     

    

     

    SETOFF;
      RATABLE PAYMENTS

     

    Section
      11.1  Setoff. 

     

    In
      addition to, and without limitation of, any rights of the Lenders under
      applicable law, if the Borrower becomes insolvent, however evidenced, or any
      Default occurs, any and all deposits (including all account balances, whether
      provisional or final and whether or not collected or available) and any other
      Indebtedness at any time held or owing by any Lender or any Affiliate of any
      Lender to or for the credit or account of the Borrower may be offset and applied
      toward the payment of the Obligations owing to such Lender, whether or not
      the
      Obligations, or any part thereof, shall then be due.

     

    Section
      11.2  Ratable
      Payments. 

     

    If
      any
      Lender, whether by setoff or otherwise, has payment made to it upon its Loan
      in
      a greater proportion than that received by any other Lender, such Lender agrees,
      promptly upon demand, to purchase a portion of the aggregate outstanding amount
      of the Loans held by the other Lenders so that after such purchase each Lender
      will hold its Pro Rata Share of the aggregate outstanding amount of the Loans.
      If any Lender, whether in connection with setoff or amounts which might be
      subject to setoff or otherwise, receives collateral or other protection for
      its
      Obligations or such amounts which may be subject to setoff, such Lender agrees,
      promptly upon demand, to take such action necessary such that all Lenders share
      in the benefits of such collateral ratably in proportion to their respective
      Pro
      Rata Shares of the aggregate outstanding amount of the Loans. In case any such
      payment is disturbed by legal process, or otherwise, appropriate further
      adjustments shall be made.

     

    ARTICLE
      12  

     

    

     

    GUARANTY

     

    Section
      12.1  Representations,
      Warranties and Covenants. 

     

    Each
      of
      the Guarantors represents and warrants (which representations and warranties
      shall be deemed to have been renewed as of the Borrowing Date)
      that:

     

    (a)  It
      is a
      corporation, partnership or limited liability company duly and properly
      incorporated or organized, as the case may be, validly existing and (to the
      extent such concept applies to such entity) in good standing under the laws
      of
      its jurisdiction of incorporation or organization and has all requisite
      authority to conduct its business in each jurisdiction in which its business
      is
      conducted, except to the extent that the failure to have such authority could
      not reasonably be expected to have a Material Adverse Effect.

     

    (b)  It
      (to
      the extent applicable) has the power and authority and legal right to execute
      and deliver this Agreement and to perform its obligations hereunder. The
      execution and delivery by each Guarantor of this Agreement and the performance
      by each of its obligations hereunder have been duly authorized by proper
      proceedings, and this Agreement constitutes a legal, valid and binding
      obligation of each Guarantor, respectively, enforceable against such Guarantor,
      respectively, in accordance with its terms, except as enforceability may be
      limited by bankruptcy, insolvency or similar laws affecting the enforcement
      of
      creditors’ rights generally.

     

    (c)  Neither
      the execution and delivery by it of this Agreement, nor the consummation of
      the
      transactions herein contemplated, nor compliance with the provisions hereof
      will
      (i) violate any law, rule, regulation, order, writ, judgment, injunction, decree
      or award binding on it or its articles or certificate of incorporation, limited
      liability company or partnership agreement, certificate of partnership, articles
      or certificate of organization, by-laws, or operating agreement or other
      management agreement, as the case may be, or the provisions of any indenture,
      instrument or agreement to which Parent or any of its Subsidiaries is a party
      or
      is subject, or by which it, or its Property, is bound, or (ii) conflict with,
      or
      constitute a default under, or result in, or require, the creation or imposition
      of any Lien in, of or on its Property pursuant to the terms of, any such
      indenture, instrument or agreement. No order, consent, adjudication, approval,
      license, authorization, or validation of, or filing, recording or registration
      with, or exemption by, or other action in respect of any governmental or public
      body or authority, or any subdivision thereof, which has not been obtained
      by
      it, is required to be obtained by it in connection with the execution, delivery
      and performance by it of, or the legality, validity, binding effect or
      enforceability against it of, this Guaranty.

     

    In
      addition to the foregoing, each of the Guarantors covenants that, so long as
      any
      Lender has any Commitment outstanding under this Agreement or any amount payable
      under this Agreement or any other Guaranteed Obligations (as defined below)
      shall remain unpaid, it will, and, if necessary, will enable the Borrower to,
      fully comply with those covenants and agreements of the Borrower applicable
      to
      such Guarantor set forth in this Agreement.

     

    Section
      12.2  Guaranty. 

     

    Each
      of
      the Guarantors hereby unconditionally guarantees, jointly with the other
      Guarantors and severally, the full and punctual payment when due (whether at
      stated maturity, upon acceleration or otherwise) of the Obligations, including,
      without limitation, (A) the principal of and interest on the Loans made to
      the
      Borrower pursuant to this Agreement, (B) any Rate Management Obligations of
      the
      Borrower, and (C) all other amounts payable by the Borrower or any of its
      Subsidiaries under this Agreement, the other Loan Documents and any Designated
      Financial Contract (all of the foregoing being referred to collectively as
      the
“Guaranteed Obligations”). Upon failure by the Borrower or any of its
      Affiliates, as applicable, to pay punctually any such amount, each of the
      Guarantors agrees that it shall forthwith on demand pay such amount at the
      place
      and in the manner specified in this Agreement, any Designated Financial Contract
      or the relevant Loan Document, as the case may be. Each of the Guarantors hereby
      agrees that this Guaranty is an absolute, irrevocable and unconditional guaranty
      of payment and is not a guaranty of collection.

     

    Section
      12.3  Guaranty
      Unconditional. 

     

    The
      obligations of each of the Guarantors hereunder shall be unconditional and
      absolute and, without limiting the generality of the foregoing, shall not be
      released, discharged or otherwise affected by:

     

    (a)  any
      extension, renewal, settlement, indulgence, compromise, waiver or release of
      or
      with respect to the Guaranteed Obligations or any part thereof or any agreement
      relating thereto, or with respect to any obligation of any other guarantor
      of
      any of the Guaranteed Obligations, whether (in any such case) by operation
      of
      law or otherwise, or any failure or omission to enforce any right, power or
      remedy with respect to the Guaranteed Obligations or any part thereof or any
      agreement relating thereto, or with respect to any obligation of any other
      guarantor of any of the Guaranteed Obligations;

     

    (b)  any
      modification or amendment of or supplement to this Agreement, any other Loan
      Document or any Designated Financial Contract, including, without limitation,
      any such amendment which may increase the amount of, or the interest rates
      applicable to, any of the Obligations guaranteed hereby;

     

    (c)  any
      release, surrender, compromise, settlement, waiver, subordination or
      modification, with or without consideration, of any other guaranties with
      respect to the Guaranteed Obligations or any part thereof, or any other
      obligation of any person or entity with respect to the Guaranteed Obligations
      or
      any part thereof, or any nonperfection or invalidity of any direct or indirect
      security for the Guaranteed Obligations;

     

    (d)  any
      change in the corporate, partnership or other existence, structure or ownership
      of the Borrower or any other guarantor of any of the Guaranteed Obligations,
      or
      any insolvency, bankruptcy, reorganization or other similar proceeding affecting
      the Borrower or any other guarantor of the Guaranteed Obligations, or any of
      their respective assets or any resulting release or discharge of any obligation
      of the Borrower or any other guarantor of any of the Guaranteed
      Obligations;

     

    (e)  the
      existence of any claim, setoff or other rights that the Guarantors may have
      at
      any time against the Borrower, any other guarantor of any of the Guaranteed
      Obligations, the Agent, any Holder of Obligations or any other Person, whether
      in connection herewith or in connection with any unrelated transactions,
      provided that nothing herein shall prevent the assertion of any such claim
      by
      separate suit or compulsory counterclaim;

     

    (f)  the
      enforceability or validity of the Guaranteed Obligations or any part thereof
      or
      the genuineness, enforceability or validity of any agreement relating thereto
      or
      with respect to any collateral securing the Guaranteed Obligations or any part
      thereof, or any other invalidity or unenforceability relating to or against
      the
      Borrower or any other guarantor of any of the Guaranteed Obligations, for any
      reason related to this Agreement, any Designated Financial Contract, any other
      Loan Document, or any provision of applicable law or regulation purporting
      to
      prohibit the payment by the Borrower or any other guarantor of the Guaranteed
      Obligations, of any of the Guaranteed Obligations;

     

    (g)  the
      failure of the Agent to take any steps to perfect and maintain any security
      interest in, or to preserve any rights to, any security or collateral for the
      Guaranteed Obligations, if any;

     

    (h)  the
      election by, or on behalf of, any one or more of the Holders of Obligations,
      in
      any proceeding instituted under Chapter 11 of Title 11 of the United States
      Code
      (11 U.S.C. § 101 et seq.) (the “Bankruptcy Code”), of the application of
      Section 1111(b)(2) of the Bankruptcy Code;

     

    (i)  any
      borrowing or grant of a security interest by the Borrower, as
      debtor-in-possession, under Section 364 of the Bankruptcy Code;

     

    (j)  the
      disallowance, under Section 502 of the Bankruptcy Code, of all or any portion
      of
      the claims of any of the Holders of Obligations or the Agent for repayment
      of
      all or any part of the Guaranteed Obligations;

     

    (k)  the
      failure of any other Guarantor or Specified Domestic Subsidiary to sign or
      become party to this Agreement (as a guarantor or otherwise) or any amendment,
      change, or reaffirmation hereof; or

     

    (l)  any
      other
      act or omission to act or delay of any kind by the Borrower, any other guarantor
      of the Guaranteed Obligations, the Agent, any Holder of Obligations or any
      other
      Person or any other circumstance whatsoever which might, but for the provisions
      of this Section 12.3, constitute a legal or equitable discharge of any
      Guarantor’s obligations hereunder.

     

    Section
      12.4  Discharge
      Only Upon Payment in Full; Reinstatement in Certain
      Circumstances. 

     

    Each
      of
      the Guarantors’ obligations hereunder shall remain in full force and effect
      until all Guaranteed Obligations shall have been paid in full in cash and the
      Commitments shall have terminated or expired. If at any time any payment of
      the
      principal of or interest on any Advance or any other amount payable by the
      Borrower or any other party under this Agreement, any Designated Financial
      Contract or any other Loan Document is rescinded or must be otherwise restored
      or returned upon the insolvency, bankruptcy or reorganization of the Borrower
      or
      otherwise, each of the Guarantors’ obligations hereunder with respect to such
      payment shall be reinstated as though such payment had been due but not made
      at
      such time.

     

    Section
      12.5  General
      Waivers. 

     

    Each
      of
      the Guarantors irrevocably waives acceptance hereof, presentment, demand or
      action on delinquency, protest, the benefit of any statutes of limitations
      and,
      to the fullest extent permitted by law, any notice not provided for herein,
      as
      well as any requirement that at any time any action be taken by any Person
      against the Borrower, any other guarantor of the Guaranteed Obligations, or
      any
      other Person.

     

    Section
      12.6  Subordination
      of Subrogation; Subordination of Intercompany Indebtedness.

     

    (a)  Subordination
      of Subrogation.
      Until
      the Guaranteed Obligations have been indefeasibly paid in full in cash, the
      Guarantors (i) shall have no right of subrogation with respect to such
      Guaranteed Obligations and (ii) waive any right to enforce any remedy which
      the
      Holders of Obligations or the Agent now have or may hereafter have against
      the
      Borrower, any endorser or any guarantor of all or any part of the Guaranteed
      Obligations or any other Person, and the Guarantors waive any benefit of, and
      any right to participate in, any security or collateral given to the Holders
      of
      Obligations and the Agent to secure the payment or performance of all or any
      part of the Guaranteed Obligations or any other liability of the Borrower to
      the
      Holders of Obligations. Should any Guarantor have the right, notwithstanding
      the
      foregoing, to exercise its subrogation rights, each Guarantor hereby expressly
      and irrevocably (a) subordinates any and all rights at law or in equity to
      subrogation, reimbursement, exoneration, contribution, indemnification or setoff
      that the Guarantor may have to the indefeasible payment in full in cash of
      the
      Guaranteed Obligations and (b) waives any and all defenses available to a
      surety, guarantor or accommodation co-obligor until the Guaranteed Obligations
      are indefeasibly paid in full in cash. Each Guarantor acknowledges and agrees
      that this subordination is intended to benefit the Agent and the Holders of
      Obligations and shall not limit or otherwise affect such Guarantor’s liability
      hereunder or the enforceability of this Guaranty, and that the Agent, the
      Holders of Obligations and their respective successors and assigns are intended
      third party beneficiaries of the waivers and agreements set forth in this
      Section 12.6(a).

     

    (b)  Subordination
      of Intercompany Indebtedness.
      Each
      Guarantor agrees that any and all claims of such Guarantor against either the
      Borrower or any other Guarantor hereunder (each an “Obligor”) with respect to
      any Intercompany Indebtedness (as hereinafter defined), any endorser, obligor
      or
      any other guarantor of all or any part of the Guaranteed Obligations, or against
      any of its properties shall be subordinate and subject in right of payment
      to
      the prior payment, in full and in cash, of all Guaranteed Obligations.
      Notwithstanding any right of any Guarantor to ask, demand, sue for, take or
      receive any payment from any Obligor, all rights, liens and security interests
      of such Guarantor, whether now or hereafter arising and howsoever existing,
      in
      any assets of any other Obligor shall be and are subordinated to the rights
      of
      the Holders of Obligations and the Agent in those assets. No Guarantor shall
      have any right to possession of any such asset or to foreclose upon any such
      asset, whether by judicial action or otherwise, unless and until all of the
      Guaranteed Obligations (other than contingent indemnity obligations) shall
      have
      been fully paid and satisfied (in cash) and all financing arrangements pursuant
      to any Loan Document or any Designated Financial Contract have been terminated.
      If all or any part of the assets of any Obligor, or the proceeds thereof, are
      subject to any distribution, division or application to the creditors of such
      Obligor, whether partial or complete, voluntary or involuntary, and whether
      by
      reason of liquidation, bankruptcy, arrangement, receivership, assignment for
      the
      benefit of creditors or any other action or proceeding, or if the business
      of
      any such Obligor is dissolved or if substantially all of the assets of any
      such
      Obligor are sold, then, and in any such event (such events being herein referred
      to as an “Insolvency Event”), any payment or distribution of any kind or
      character, either in cash, securities or other property, which shall be payable
      or deliverable upon or with respect to any indebtedness of any Obligor to any
      Guarantor (“Intercompany Indebtedness”) shall be paid or delivered directly to
      the Agent for application on any of the Guaranteed Obligations, due or to become
      due, until such Guaranteed Obligations (other than contingent indemnity
      obligations) shall have first been fully paid and satisfied (in cash). Should
      any payment, distribution, security or instrument or proceeds thereof be
      received by the applicable Guarantor upon or with respect to the Intercompany
      Indebtedness after any Insolvency Event and prior to the satisfaction of all
      of
      the Guaranteed Obligations (other than contingent indemnity obligations) and
      the
      termination of all financing arrangements pursuant to any Loan Document among
      the Borrower and the Holders of Obligations, such Guarantor shall receive and
      hold the same in trust, as trustee, for the benefit of the Holders of
      Obligations and shall forthwith deliver the same to the Agent, for the benefit
      of the Holders of Obligations, in precisely the form received (except for the
      endorsement or assignment of the Guarantor where necessary), for application
      to
      any of the Guaranteed Obligations, due or not due, and, until so delivered,
      the
      same shall be held in trust by the Guarantor as the property of the Holders
      of
      Obligations. If any such Guarantor fails to make any such endorsement or
      assignment to the Agent, then the Agent or any of its officers or employees
      is
      irrevocably authorized to make the same. Each Guarantor agrees that until the
      Guaranteed Obligations (other than the contingent indemnity obligations) have
      been paid in full (in cash) and satisfied and all financing arrangements
      pursuant to any Loan Document among the Borrower and the Holders of Obligations
      have been terminated, no Guarantor will assign or transfer to any Person (other
      than the Agent) any claim any such Guarantor has or may have against any
      Obligor.

     

    Section
      12.7  Contribution
      with Respect to Guaranteed Obligations.

     

    (a)  To
      the
      extent that any Guarantor shall make a payment under this Guaranty (a “Guarantor
      Payment”) which, taking into account all other Guarantor Payments then
      previously or concurrently made by any other Guarantor, exceeds the amount
      which
      otherwise would have been paid by or attributable to such Guarantor if each
      Guarantor had paid the aggregate Guaranteed Obligations satisfied by such
      Guarantor Payment in the same proportion as such Guarantor’s Allocable Amount
      (as defined below) (as determined immediately prior to such Guarantor Payment)
      bore to the aggregate Allocable Amounts of each of the Guarantors as determined
      immediately prior to the making of such Guarantor Payment, then, following
      indefeasible payment in full in cash of the Guaranteed Obligations and
      termination of this Agreement and the Designated Financial Contracts, such
      Guarantor shall be entitled to receive contribution and indemnification payments
      from, and be reimbursed by, each other Guarantor for the amount of such excess,
      pro rata based upon their respective Allocable Amounts in effect immediately
      prior to such Guarantor Payment.

     

    (b)  As
      of any
      date of determination, the “Allocable Amount” of any Guarantor shall be equal to
      the maximum amount of the claim which could then be recovered from such
      Guarantor under this Guaranty without rendering such claim voidable or avoidable
      under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable
      state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or
      similar statute or common law.

     

    (c)  This
      Section 12.7 is intended only to define the relative rights of the Guarantors,
      and nothing set forth in this Section 12.7 is intended to or shall impair the
      obligations of the Guarantors, jointly and severally, to pay any amounts as
      and
      when the same shall become due and payable in accordance with the terms of
      this
      Agreement.

     

    (d)  The
      parties hereto acknowledge that the rights of contribution and indemnification
      hereunder shall constitute assets of the Guarantor to which such contribution
      and indemnification is owing.

     

    (e)  The
      rights of the indemnifying Guarantors against other Guarantors under this
      Section 12.7 shall be exercisable upon the full and indefeasible payment of
      the
      Guaranteed Obligations in cash and the termination of this Agreement and the
      Designated Financial Contracts. This Section 12.7 shall survive termination
      of
      this Agreement.

     

    Section
      12.8  Stay
      of Acceleration. 

     

    If
      acceleration of the time for payment of any amount payable by the Borrower
      under
      this Agreement, any Designated Financial Contract or any other Loan Document
      is
      stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all
      such amounts otherwise subject to acceleration under the terms of this
      Agreement, any Designated Financial Contract or any other Loan Document shall
      nonetheless be payable by each of the Guarantors hereunder forthwith on demand
      by the Agent.

     

    Section
      12.9  No
      Waivers. 

     

    No
      failure or delay by the Agent or any Holder of Obligations in exercising any
      right, power or privilege hereunder shall operate as a waiver thereof nor shall
      any single or partial exercise thereof preclude any other or further exercise
      thereof or the exercise of any other right, power or privilege. The rights
      and
      remedies provided in this Guaranty, this Agreement, any Designated Financial
      Contract and the other Loan Documents shall be cumulative and not exclusive
      of
      any rights or remedies provided by law.

     

    Section
      12.10  Expenses
      of Enforcement, etc. 

     

    Subject
      to the terms of this Agreement, after the occurrence of a Default under this
      Agreement, the Lenders shall have the right at any time to direct the Agent
      to
      commence enforcement proceedings with respect to the Guaranteed Obligations.
      The
      Guarantors agree to reimburse the Agent and the Holders of Obligations for
      any
      reasonable costs and out-of-pocket expenses (including reasonable attorneys’
fees and time charges of attorneys for the Agent and the Holders of Obligations,
      which attorneys may be employees of the Agent or the Holders of Obligations)
      paid or incurred by the Agent or any Holders of Obligations in connection with
      the collection and enforcement of amounts due under the Loan Documents,
      including without limitation this Article 12. The Agent agrees to distribute
      payments received from any of the Guarantors hereunder to the Holders of
      Obligations on a pro rata basis for application in accordance with the terms
      of
      this Agreement.

     

    Section
      12.11  Setoff. 

     

    At
      any
      time after all or any part of the Guaranteed Obligations have become due and
      payable (by acceleration or otherwise), each Holder of Obligations and the
      Agent
      may, without notice to any Guarantor and regardless of the acceptance of any
      security or collateral for the payment hereof, appropriate and apply toward
      the
      payment of all or any part of the Guaranteed Obligations (A) any indebtedness
      due or to become due from such Holder of Obligations or the Agent to any
      Guarantor, and (B) any moneys, credits or other property belonging to any
      Guarantor, at any time held by or coming into the possession of such Holder
      of
      Obligations or the Agent or any of their respective affiliates.

     

    Section
      12.12  Financial
      Information. 

     

    Each
      Guarantor hereby assumes responsibility for keeping itself informed of the
      financial condition of the Borrower and any and all endorsers and/or other
      guarantors of all or any part of the Guaranteed Obligations, and of all other
      circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations,
      or any part thereof, that diligent inquiry would reveal, and each Guarantor
      hereby agrees that none of the Holders of Obligations or the Agent shall have
      any duty to advise such Guarantor of information known to any of them regarding
      such condition or any such circumstances. In the event any Holder of Obligations
      or the Agent, in its sole discretion, undertakes at any time or from time to
      time to provide any such information to a Guarantor, such Holder of Obligations
      or the Agent shall be under no obligation (A) to undertake any investigation
      not
      a part of its regular business routine, (B) to disclose any information which
      such Holder of Obligations or the Agent, pursuant to accepted or reasonable
      commercial finance or banking practices, wishes to maintain confidential or
      (C)
      to make any other or future disclosures of such information or any other
      information to such Guarantor.

     

    ARTICLE
      13  

     

    

     

    BENEFIT
      OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

     

    Section
      13.1  Successors
      and Assigns; Participations. 

     

    

     

    (a)
      The
      terms and provisions of the Loan Documents shall be binding upon and inure
      to
      the benefit of the parties hereto and their respective successors and assigns
      permitted hereby, except that (i) no Credit Party may assign or otherwise
      transfer any of its rights or obligations under the Loan Documents without
      the
      prior written consent of each Lender (and any attempted assignment or transfer
      by any Credit Party without such consent shall be null and void) and (ii) no
      Lender may assign or otherwise transfer its rights or obligations under the
      Loan
      Documents except in accordance with this Section 13.1. Nothing in this
      Agreement, expressed or implied, shall be construed to confer upon any Person
      (other than the parties hereto, their respective successors and assigns
      permitted hereby, Participants (to the extent provided in paragraph (c) of
      this
      Section) and, to the extent expressly contemplated hereby, the Related Parties
      of each of the Agent and the Lenders) any legal or equitable right, remedy
      or
      claim under or by reason of this Agreement.

    

    (b) (i)
      Subject to the conditions set forth in paragraph (b)(ii) below, any Lender
      may
      assign to one or more assignees all or a portion of its rights and obligations
      under the Loan Documents (including all or a portion of its Commitment and
      the
      Loans at the time owing to it) with the prior written consent (such consent
      not
      to be unreasonably withheld) of:

    

    (A)
      the
      Borrower, provided
      that no
      consent of the Borrower shall be required for an assignment to a Lender, an
      Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred
      and is continuing, any other assignee;

    

    (B) the
      Agent, provided
      that no
      consent of the Agent shall be required for an assignment of all or any portion
      of Loan to a Lender, an Affiliate of a Lender or an Approved Fund;
      and

    

    (ii)
      Assignments shall be subject to the following additional conditions:

    (A)
      except in the case of an assignment to a Lender or an Affiliate of a Lender
      or
      an assignment of the entire remaining amount of the assigning Lender’s
      Commitment or Loans, the amount of the Commitment or Loans of the assigning
      Lender subject to each such assignment (determined as of the date the Assignment
      and Assumption with respect to such assignment is delivered to the Agent) shall
      not be less than EUR5,000,000 unless each of the Borrower and the Agent
      otherwise consent, provided
      that no
      such consent of the Borrower shall be required if an Event of Default has
      occurred and is continuing;

    

    (B)
      each
      partial assignment shall be made as an assignment of a proportionate part of
      all
      the assigning Lender's rights and obligations under the Loan Documents,
provided
      that
      this clause shall not be
      construed to prohibit the assignment of a proportionate part of all the
      assigning Lender’s rights and obligations in respect of its Commitments or
      Loans; 

    

    (C)
      the
      assignee shall be a legal entity incorporated or otherwise organized outside
      the
      Republic of Austria; 

    

    (D)
      the
      parties to each assignment shall execute and deliver to the Agent an Assignment
      and Assumption, together with a processing and recordation fee of $3,500;
      and

    

    (E) the
      assignee, if it shall not be a Lender, shall deliver to the Agent an
      Administrative Questionnaire.

    

    For
      the
      purposes of this Section 13.1, the term “Approved
      Fund”
has
      the
      following meaning:

     

    “Approved
      Fund”
means
      any Person (other than a natural person) that is engaged in making, purchasing,
      holding or investing in bank loans and similar extensions of credit in the
      ordinary course of its business and that is administered or managed by (a)
      a
      Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
      entity that administers or manages a Lender.

    

    (iii)
      Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
      of this Section 13.1, from and after the effective date specified in each
      Assignment and Assumption the assignee thereunder shall be a party hereto and,
      to the extent of the interest assigned by such Assignment and Assumption, have
      the rights and obligations of a Lender under this Agreement and the other Loan
      Documents, and the assigning Lender thereunder shall, to the extent of the
      interest assigned by such Assignment and Assumption, be released from its
      obligations under this Agreement (and, in the case of an Assignment and
      Assumption covering all of the assigning Lender's rights and obligations under
      this Agreement, such Lender shall cease to be a party hereto but shall continue
      to be entitled to the benefits of Section 3.1, 3.2, 3.4, 3.5 and 9.6 and Article
      10). Any assignment or transfer by a Lender of rights or obligations under
      this
      Agreement that does not comply with this Section 13.1 shall be treated for
      purposes of this Agreement as a sale by such Lender of a participation in such
      rights and obligations in accordance with paragraph (c) of this
      Section.

    

    (iv)
      The
      Agent, acting for this purpose as an agent of the Borrower, shall maintain
      at
      one of its offices a copy of each Assignment and Assumption delivered to it
      and
      a register for the recordation of the names and addresses of the Lenders, and
      the Commitment of, and outstanding amount of the Loans owing to, each Lender
      pursuant to the terms hereof from time to time (the "Register").
      The
      entries in the Register shall be conclusive, and the Borrower, the Agent and
      the
      Lenders may treat each Person whose name is recorded in the Register pursuant
      to
      the terms hereof as a Lender hereunder for all purposes of this Agreement,
      notwithstanding notice to the contrary. The Register shall be available for
      inspection by the Borrower and any Lender, at any reasonable time and from
      time
      to time upon reasonable prior notice.

    

    (v)
      Upon
      its receipt of a duly completed Assignment and Assumption executed by an
      assigning Lender and an assignee, the assignee's completed Administrative
      Questionnaire (unless the assignee shall already be a Lender hereunder), the
      processing and recordation fee referred to in paragraph (b) of this Section
      and any written consent to such assignment required by paragraph (b) of this
      Section, the Agent shall accept such Assignment and Assumption and record the
      information contained therein in the Register; provided
      that if
      either the assigning Lender or the assignee shall have failed to make any
      payment required to be made by it pursuant to Section 2.2(e), 2.21, 2.22(b),
      (e)
      or (j), 3.5(g), 9.6(c), 10.7 or 11.2, the Agent shall have no obligation to
      accept such Assignment and Assumption and record the information therein in
      the
      Register unless and until such payment shall have been made in full, together
      with all accrued interest thereon. No assignment shall be effective for purposes
      of this Agreement unless it has been recorded in the Register as provided in
      this paragraph.

    

    (c) (i)
      Any
      Lender may, without the consent of the Borrower or the Agent, sell
      participations to one or more banks or other entities (a "Participant")
      in all
      or a portion of such Lender's rights and obligations under this Agreement
      (including all or a portion of its Commitment and the Loans owing to it);
provided
      that
      (A) such Lender's obligations under this Agreement shall remain unchanged,
      (B) such Lender shall remain solely responsible to the other parties hereto
      for the performance of such obligations and (C) the Borrower, the Agent and
      the other Lenders shall continue to deal solely and directly with such Lender
      in
      connection with such Lender's rights and obligations under this Agreement.
      Any
      agreement or instrument pursuant to which a Lender sells such a participation
      shall provide that such Lender shall retain the sole right to enforce this
      Agreement and to approve any amendment, modification or waiver of any provision
      of this Agreement; provided
      that
      such agreement or instrument may provide that such Lender will not, without
      the
      consent of the Participant, agree to any amendment, modification or waiver
      described in the proviso to Section 8.2 that affects such Participant. Subject
      to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant
      shall be entitled to the benefits of Section 3.1, 3.2, 3.4 and 3.5 to the same
      extent as if it were a Lender and had acquired its interest by assignment
      pursuant to paragraph (b) of this Section. To the extent permitted by law,
      each
      Participant also shall be entitled to the benefits of Section 11.1 as
      though it were a Lender, provided such Participant agrees to be subject to
      Section 11.2 as though it were a Lender.

    

    (ii)
      A
      Participant shall not be entitled to receive any greater payment under Section
      3.1, 3.2 or 3.5 than the applicable Lender would have been entitled to receive
      with respect to the participation sold to such Participant, unless the sale
      of
      the participation to such Participant is made with the Borrower's prior written
      consent. A Participant not incorporated under the laws of the United States
      of
      America or any State thereof agrees to comply with the provisions of Section
      3.5
      to the same extent as if it were a Lender.

    

    (d)  Any
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement to secure obligations of such Lender,
      including without limitation any pledge or assignment to secure obligations
      to a
      Federal Reserve Bank, and this Section shall not apply to any such pledge or
      assignment of a security interest; provided
      that no
      such pledge or assignment of a security interest shall release a Lender from
      any
      of its obligations hereunder or substitute any such pledgee or assignee for
      such
      Lender as a party hereto.

    

    Section
      13.2  Dissemination
      of Information. 

     

    The
      Borrower authorizes each Lender to disclose to any Participant or assignee
      permitted under Section 13.1 or any other Person acquiring an interest in the
      Loan Documents by operation of law (each a “Transferee”) and any prospective
      Transferee any and all information in such Lender’s possession concerning the
      creditworthiness of the Borrower and its Subsidiaries, including without
      limitation any information contained in any Reports, provided
      that
      each Transferee and prospective Transferee agrees to be bound by Section 9.11
      of
      this Agreement. 

     

    Section
      13.3  Tax
      Treatment. 

     

    If
      any
      interest in any Loan Document is transferred to any Transferee which is not
      incorporated under the laws of the United States or any State thereof, the
      transferor Lender shall cause such Transferee, concurrently with the
      effectiveness of such transfer, to comply with the provisions of Section
      3.5(d).

     

    ARTICLE
      14  

     

    

     

    NOTICES

     

    Section
      14.1  Notices. 

     

    Except
      as
      otherwise permitted by Section 2.11 with respect to the Borrowing Notices and
      Selection Notices, all notices, requests and other communications to any party
      hereunder shall be in writing (including electronic transmission, facsimile
      transmission or similar writing) and shall be given to such party: (w) in the
      case of the Borrower or the Agent, at its address or facsimile number set forth
      on the signature pages hereof, (x) in the case of any Lender, at its address
      or
      facsimile number set forth below its signature hereto, (y) in the case of the
      Parent, at its address or facsimile number set forth below its signature hereto,
      and in the case of any other Guarantor, c/o Modine Manufacturing Company, at
      the
      same address or facsimile number or (z) in the case of any party, at such other
      address or facsimile number as such party may hereafter specify for the purpose
      by notice to the Agent and the Borrower in accordance with the provisions of
      this Section 14.1. Each such notice, request or other communication shall be
      effective (i) if given by facsimile transmission, when transmitted to the
      facsimile number specified in this Section and confirmation of receipt is
      received, (ii) if given by mail, 72 hours after such communication is deposited
      in the mails with first class postage prepaid, addressed as aforesaid, or (iii)
      if given by any other means, when delivered (or, in the case of electronic
      transmission, received) at the address specified in this Section; provided
      that
      notices to the Agent under Article 2 shall not be effective until
      received.

     

    Section
      14.2  Change
      of Address. 

     

    The
      Borrower, the Agent and any Lender may each change the address for service
      of
      notice upon it by a notice in writing to the other parties hereto.

     

    ARTICLE
      15  

     

    

     

    COUNTERPARTS

     

    This
      Agreement may be executed in any number of counterparts, all of which taken
      together shall constitute one agreement, and any of the parties hereto may
      execute this Agreement by signing any such counterpart. This Agreement shall
      be
      effective when it has been executed by the Borrower, the Agent and the Lenders
      and each party has notified the Agent by facsimile transmission or telephone
      that it has taken such action.

     

    ARTICLE
      16  

     

    

     

    CHOICE
      OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

     

    Section
      16.1  CHOICE
      OF LAW. 

     

    THE
      LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW
      PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT
      REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK, BUT GIVING
      EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

     

    Section
      16.2  CONSENT
      TO JURISDICTION. 

     

    THE
      BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE
      JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK
      COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
      NEW
      YORK, AND ANY APPELLATE COURT FROM ANY THEREOF IN ANY ACTION OR PROCEEDING
      ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY
      IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
      MAY
      BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
      IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
      PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
      NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING
      PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
      JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY
      AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
      MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
      DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW
      YORK.

     

    Section
      16.3  WAIVER
      OF JURY TRIAL. 

     

    THE
      BORROWER, THE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
      PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING
      IN
      TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
      WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
      THEREUNDER.

    

    

    

     

    

     

    
      
        
          

          

          MILW_1919821.7

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF, the Borrower, the Guarantors, the Lenders and the Agent have
      executed this Agreement as of the date first above written.

     

    

    MODINE
      HOLDING GMBH,
      as
      Borrower

     

    By:  
      /s/C.
      O’Neill          

    Title: Managing
      Director

    

    c/o
      Modine Europe GmbH

    Arthur-B-Modine-Strasse
      1

    D-70794

    Filderstandt-Bonlanden

    Germany

    Attention:
      Chief Financial Officer - Modine Europe 

    Telephone:
      49-711-7094-0

    Fax:
      49-711-7094-297

    

    

     

    

     

    

     

    

     

    [Signature
      Page 1 of 6 to Credit Agreement]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Borrower, the Guarantors, the Lenders and the Agent have
      executed this Agreement as of the date first above written.

     

    

     

    MODINE
      MANUFACTURING COMPANY,
      as
      Parent and as a Guarantor

     

    By:  
      /s/D.
      R.
      Zakos                                    

    
      	 	
              Title:

            	
              Vice
                President, General Counsel and
                Secretary

            

    

    

    1500
      DeKoven Avenue

    Racine,
      Wisconsin 53403-2552

    Attention:
      Corporate Treasurer

    Telephone: (414)-636-1288

    FAX: (414)-636-1818

     

    

     

    

     

    

     

    

     

    

     

    [Signature
      Page 2 of 6 to Credit Agreement]

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Borrower, the Guarantors, the Lenders and the Agent have
      executed this Agreement as of the date first above written.

     

    

    
      	
              MODINE
                DELAWARE LLC, as a Guarantor 

               

               

              By:
                /s/William K. Langan

              Title:
                President

               

              MODINE
                CLIMATE SYSTEMS INC.,

              as
                a Guarantor

               

               

              By:
                /s/D. R. Zakos

              Title:
                Secretary

               

              THERMACORE
                INTERNATIONAL, INC.,

              as
                a Guarantor

               

               

              By:
                /s/D. R. Zakos

              Title:
                VP and Assistant Secretary

               

              THERMACORE,
                INC., as a Guarantor

               

               

              By:
                /s/D. R. Zakos

              Title:
                VP and Assistant Secretary

               

              THERMAL
                CORP., as a Guarantor

               

               

              By:
                /s/D. R. Zakos

              Title:
                VP and Assistant Secretary

            	
              MODINE,
                INC., as a Guarantor

               

               

              By:
                /s/William K. Langan

              Title:
                President

               

              MODINE
                JACKSON, INC., as a Guarantor

               

               

              By:
                /s/D. R. Zakos

              Title:
                Secretary

               

              AIREDALE
                INC., as a Guarantor

               

               

              By:
                /s/M. C. Kelsey

              Title:
                Secretary

               

              AIREDALE
                NORTH AMERICA, INC.,

              as
                a Guarantor

               

               

              By:
                /s/M. C. Kelsey

              Title:
                Secretary

            

    

    

    

     

    [Signature
      Page 3 of 6 to Credit Agreement]

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Borrower, the Guarantors, the Lenders and the Agent have
      executed this Agreement as of the date first above written.

     

    

     

    

    

     

    J.P.
      MORGAN EUROPE LIMITED,
      as the
      Agent 

     

    

    By: /s/Lesley
      Pluck          /s/Ching
      Loh

    Title: Associate               
      Associate

    

    125
      London Wall

    London
      EC2Y 5AJ

    ENGLAND

    Attention:
      Loans Agency (Lesley Pluck)

    Telephone: +44
      20
      7777 2940

    FAX: +44
      20
      7777 2360 or 2085

     

    

     

    

     

    

     

    

     

    

     

    [Signature
      Page 4 of 6 to Credit Agreement]

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Borrower, the Guarantors, the Lenders and the Agent have
      executed this Agreement as of the date first above written.

     

    Commitments

     

    EUR
      47,333,333.00 J.P.
      MORGAN EUROPE LIMITED,
      as a
      Lender 

     

    

    By: 
      /s/Alastair Stevenson

    Title: Vice
      President

    

    125
      London Wall

    London
      EC2Y 5AJ

    ENGLAND

    Attention:
      Alastair Stevenson

    Telephone: +44
      2077779073

    FAX: 
      +44
      2077774781

     

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    [Signature
      Page 5 of 6 to Credit Agreement]

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Borrower, the Guarantors, the Lenders and the Agent have
      executed this Agreement as of the date first above written.

     

    Commitments

     

    EUR
      23,666,667.00 SUNTRUST
      BANK,
      as a
      Lender 

     

    By: /s/Heidi
      M. Khambatta

    Title: Director

    

    303
      Peachtree Street NE

    10th
      Floor

    MC
      1928

    Atlanta,
      Georgia 30308

    Attention:
      William Humphries

    Telephone: 404-724-3931

    FAX: 
      414-658-4989

     

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    [Signature
      Page 6 of 6 to Credit Agreement]STOCK PURCHASE AGREEMENT

EXHIBIT 10.1

EXECUTION COPY

STOCK PURCHASE AGREEMENT

by and among

WARNACO INC.,

FINGEN APPAREL N.V.,

FINGEN S.P.A.,

EURO CORMAR S.P.A.,

and

CALVIN KLEIN, INC.

DATED AS OF DECEMBER 20, 2005

i

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

Section 1.1

Definitions

1

Section 1.2

Interpretation

20

ARTICLE II

PURCHASE AND SALE OF SHARES

Section 2.1

Purchase and Sale

21

Section 2.2

Consideration

22

Section 2.3

Estimated Closing Date Working Capital

22

Section 2.4

Working Capital Adjustment

23

Section 2.5

Tax Withholdings

28

ARTICLE III

CLOSING

Section 3.1

Closing

28

Section 3.2

Closing Deliveries

28

Section 3.3

Transfer of the Italian Purchased Shares

32

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF FINGEN SELLERS

Section 4.1

Organization and Standing

32

Section 4.2

Capitalization

33

Section 4.3

Authorization

34

Section 4.4

Noncontravention

34

Section 4.5

Financial Statements; Liabilities

35

Section 4.6

Indebtedness

36

Section 4.7

Books and Records

37

Section 4.8

Accounting Practices

37

Section 4.9

Inventory

37

Section 4.10

Accounts Receivable

37

Section 4.11

Absence of Certain Changes

38

Section 4.12

Euro Cormar Separation

38

Section 4.13

Bank Account

40

Section 4.14

Litigation

40

Section 4.15

Compliance with Laws; Permits

40

Section 4.16

Products

41

Section 4.17

Absence of Certain Payments

41

ii

Section 4.18

Taxes

42

Section 4.19

Customs

43

Section 4.20

Real and Personal Properties

43

Section 4.21

Intellectual Property

44

Section 4.22

Employee Benefits

46

Section 4.23

Labor Matters

48

Section 4.24

Environmental Matters

50

Section 4.25

Material Contracts

50

Section 4.26

Insurance Coverage

52

Section 4.27

Affiliate Relationships

52

Section 4.28

Brokers

53

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF CKI

Section 5.1

Organization and Standing

53

Section 5.2

Capitalization

54

Section 5.3

Authorization

55

Section 5.4

Noncontravention

55

Section 5.5

Financial Statements; Liabilities

55

Section 5.6

Third Party Indebtedness

56

Section 5.7

Books and Records

57

Section 5.8

Accounting Practices

57

Section 5.9

Inventory

57

Section 5.10

Accounts Receivable

58

Section 5.11

Absence of Certain Changes

58

Section 5.12

Bank Account

58

Section 5.13

Litigation

59

Section 5.14

Compliance with Laws; Permits

59

Section 5.15

Products

60

Section 5.16

Absence of Certain Payments

60

Section 5.17

Taxes

60

Section 5.18

Customs

62

Section 5.19

Real and Personal Properties

62

Section 5.20

Intellectual Property

63

Section 5.21

Employee Benefits

64

Section 5.22

Labor Matters

67

Section 5.23

Environmental Matters

69

Section 5.24

Material Contracts

69

Section 5.25

Insurance Coverage

71

Section 5.26

Affiliate Relationships

71

Section 5.27

Brokers

72

Section 5.28

CKI's Knowledge

72

iii

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Section 6.1

Organization and Existence

72

Section 6.2

Authorization

73

Section 6.3

Noncontravention

73

Section 6.4

Financing

73

Section 6.5

Brokers

73

ARTICLE VII

COVENANTS

Section 7.1

Conduct of the Business

74

Section 7.2

Access to Information; Confidentiality

77

Section 7.3

Commercially Reasonable Efforts

78

Section 7.4

Transitional Matters; Post-Closing Books and Records

79

Section 7.5

Expenses

80

Section 7.6

Termination of Affiliate Contracts

81

Section 7.7

Italian GAAP Financials

81

Section 7.8

Taxes

82

Section 7.9

Non-Solicitation of Employees; Non-Competition

84

Section 7.10

Bank Accounts

85

Section 7.11

Waiver of Rights

85

Section 7.12

Resignations

85

Section 7.13

Transfer of Nominee Shares

86

Section 7.14

Euro Cormar Separation

86

Section 7.15

CK Jeanswear Licenses

87

Section 7.16

Indebtedness

87

Section 7.17

Director Liability

87

Section 7.18

Delivery of Books and Records and Other Files

87

Section 7.19

CMI Transfer Agreement

88

ARTICLE VIII

CONDITIONS TO CLOSING

Section 8.1

Conditions of the Parties' Obligations to Effect the Closing

88

Section 8.2

Additional Conditions to Obligation of the Sellers to Effect the Closing

88

Section 8.3

Additional Conditions to Obligation of the Purchaser to Effect the Closing

89

ARTICLE IX

INDEMNIFICATION; SELLERS' REPRESENTATIVE

iv

Section 9.1

Survival of Representations and Warranties

89

Section 9.2

Indemnification of the Purchaser

90

Section 9.3

Indemnification of the Sellers

90

Section 9.4

Indemnification Procedure for Third Party Claims

91

Section 9.5

Indemnification Procedure for Other Claims

92

Section 9.6

Certain Tax Matters

93

Section 9.7

Limitations on Indemnification

95

Section 9.8

Exclusive Remedy

97

Section 9.9

Acknowledgment

97

ARTICLE X

TERMINATION, AMENDMENT AND WAIVER

Section 10.1

Termination

98

Section 10.2

Effect of Termination

98

ARTICLE XI

MISCELLANEOUS

Section 11.1

Notices

99

Section 11.2

Severability

100

Section 11.3

Counterparts

100

Section 11.4

Disclosure Schedules

101

Section 11.5

Entire Agreement; No Third Party Beneficiaries

101

Section 11.6

Amendments and Waivers

101

Section 11.7

Governing Law; Jurisdiction; Service of Process

101

Section 11.8

Dispute Resolution

102

Section 11.9

Publicity

103

Section 11.10

Assignment

103

v

TABLE OF SCHEDULES

Schedule I

Working Capital

Schedule II

Business Licensing Contracts

Schedule III

Collection Business Licensing Contracts

Schedule IV

Subsidiaries of Jeanswear N.V. 

Schedule V

Permitted Encumbrances 

Schedule VI

September 30, 2005 Working Capital

Schedule 2.1

Purchased Shares

Schedule 2.2(a)(i)

Allocation Schedule

Schedule 2.2(a)(ii)

Examples of Adjustments 

Schedule 3.2(a)(viii)

Material Consents

Schedule 3.2(a)(ix)

Material Filings

Schedule 7.4(b) 

Transition Services

Schedule 7.6

Termination of Affiliate Contracts

Schedule 7.9(b)

Trademarks

Schedule 8.1(b)

Governmental Consents

Fingen Sellers Disclosure Schedule

CKI Disclosure Schedule

Purchaser Disclosure Schedule

TABLE OF EXHIBITS

Exhibit A

Form of CKI Release Agreement

Exhibit B 

Form of Escrow Agreement

Exhibit C 

Form of Deeds of Transfer

Exhibit D

Forms of Each CK Jeanswear License

Exhibit E

CMI Business Plan

Exhibit F

Form CMI Transfer Agreement

i

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT, dated as of December 20, 2005 (this "Agreement"), by and among Warnaco Inc., a Delaware corporation (the "Purchaser"), Fingen Apparel N.V., a limited liability company organized and existing under the laws of the Netherlands ("Fingen Apparel"), Fingen S.p.A., a joint stock company organized and existing under the laws of Italy ("Fingen S.p.A."), Euro Cormar S.p.A., a joint stock company organized and existing under the laws of Italy ("Euro Cormar"), and Calvin Klein, Inc., a New York corporation ("CKI" and, together with, Fingen Apparel, Fingen S.p.A. and Euro Cormar, the "Sellers").

WHEREAS, the Sellers collectively own, beneficially and of record, all of the Purchased Shares (as hereinafter defined);

WHEREAS, Fingen S.p.A. owns, beneficially and of record, all of the CMI Shares (as hereinafter defined);

WHEREAS, the Sellers desire to sell, convey, assign, transfer and deliver to the Purchaser, and the Purchaser desires to purchase, acquire and accept, all of the Purchased Shares upon the terms and subject to the conditions set forth herein (the "Acquisition"); 

WHEREAS, Fingen S.p.A. desires to transfer and deliver to the Purchaser, and the Purchaser desires to accept, all of the CMI Shares (as hereinafter defined) upon the terms and subject to the conditions set forth in the CMI Transfer Agreement (as hereinafter defined) (the "CMI Transfer"); and

WHEREAS, at the Closing, the Sellers and the Purchaser shall enter into the Escrow Agreement (as hereinafter defined), pursuant to which, among other things, the Purchaser shall deposit the Escrow Amount (as hereinafter defined) into the Escrow Account (as hereinafter defined) in accordance with Section 2.2(c) hereof.

NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1

Definitions

.  For all purposes of this Agreement, except as otherwise expressly provided herein:

"AAA" means American Arbitration Association.

"Accounting Firm" shall have the meaning set forth in Section 2.4(b).

"Acquisition" shall have the meaning set forth in the recitals.

"Action" means any action, notice, claim, complaint, charge, dispute, proceeding, suit, hearing, litigation, arbitration, audit or investigation (whether civil, criminal, administrative, judicial or regulatory), or any appeal therefrom.

"Actual Closing Date Cash" means the amount of the Companies' cash and cash equivalents (including interest earned on cash deposits) as at the close of business on the day immediately prior to the Closing Date and as set forth in the Final Adjustment Statement.

"Actual Closing Date Working Capital" means the Closing Date Working Capital as set forth in the Final Adjustment Statement; provided, that, for purposes of Section 2.4(c), Actual Closing Date Working Capital, to the extent in excess of €67,500,000, shall be disregarded.

"Actual Excess Amount" shall have the meaning set forth in Schedule I.

"Actual Net Indebtedness Amount" shall have the meaning set forth in Schedule I.

"Actual Sellers Third Party Indebtedness" means the amount of Sellers Third Party Indebtedness (together with any accrued interest thereon and the amount of any applicable prepayment penalties or similar costs or fees set forth in the applicable payoff letter agreed upon by the Sellers) as at the close of business on the day immediately prior to the Closing Date and as set forth in the Final Adjustment Statement.

"A.E.S. Advanced Euro Service" means A.E.S. Advanced Euro Service S.r.l., a limited liability company organized and existing under the laws of Italy.

"A.E.S. Advanced Euro Service Shares" means the issued and outstanding shares of capital stock, or other equity interest in, A.E.S. Advanced Euro Service.

"Affiliate" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.  For purposes of this definition, "control" (including the terms "controlled by" and "under common control with") with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, or as a trustee or executor, of the power to direct or cause the direction of the management and policies of a Person whether through the ownership of voting securities, as trustee or executor, by Contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the management and policies of such Person.

"Agreement" shall have the meaning set forth in the preamble. 

2

"Allocation Schedule" shall have the meaning set forth in Section 2.2(a).

"Ancillary Agreements" means, collectively, the CKI Release Agreement, the Escrow Agreement, each of the Deeds of Transfer, each of the CK Jeanswear Licenses and the CMI Transfer Agreement.

"Applicable GAAP" means, with respect to any specified financial information of a Person, accounting principles generally accepted in the jurisdiction applicable to such financial information.

"Applicable Guarantor" shall have the meaning set forth in Section 4.6(a).

"Assets" means any and all properties, assets and rights of any kind, nature and description, whether real, personal or mixed, tangible or intangible.

"Assumed Euro Cormar Business Liabilities" shall have the meaning set forth in Section 4.12(c)(ii).

"Base Purchase Price" shall have the meaning set forth in Section 2.2(a).

"Business" means the Companies' business of manufacturing, marketing, sourcing, advertising (as approved by CKI), promoting, sub-licensing (as approved by CKI) and selling at wholesale and retail, jeanswear apparel and bridge sportswear apparel (and accessories related to each of the foregoing), in each case, under the CK/CALVIN KLEIN, CALVIN KLEIN, CALVIN KLEIN JEANS and CK/CALVIN KLEIN JEANS marks, including through the operation of retail stores (including full price and outlet stores) throughout Europe, Asia, the Middle East and elsewhere, as conducted pursuant to the licensing Contracts set forth in Schedule II; provided, that, for purposes of this Agreement, the Collection Business shall not be deemed to be a portion of the Business.

"Business Day" means any day that is not a Saturday, Sunday or other day on which banks are required or authorized by Law to be closed in the State of New York or in Amsterdam, The Netherlands.

"Cap" shall have the meaning set forth in Section 9.7(a).

"Cash Objection Item" shall have the meaning set forth in Section 2.4(a).

"Certified Closing Date Cash" means the amount of the Companies' cash and cash equivalents (including interest earned on cash deposits) as at the close of business on the day immediately prior to the Closing Date and as set forth in the Sellers Third Party Indebtedness and Cash Letter.

"Certified Excess Amount" shall have the meaning set forth in Schedule I.

"Certified Net Indebtedness Amount" shall have the meaning set forth in Schedule I.

3

"Certified Sellers Third Party Indebtedness Amount" means the amount of Sellers Third Party Indebtedness (together with any accrued interest thereon and the amount of any applicable prepayment penalties or similar costs or fees set forth in the applicable payoff letter agreed upon by the Sellers) as at the close of business on the day immediately prior to the Closing Date and as set forth in the Sellers Third Party Indebtedness and Cash Letter.

"Chair" shall have the meaning set forth in Section 11.8(b).

"CKI" shall have the meaning set forth in the preamble.

"CKI Affiliate Contracts" shall have the meaning set forth in Section 5.26(a).

"CKI Disclosure Schedule" shall have the meaning set forth in the opening paragraph of Article V.

"CKI Pro Rata Share" means 22.25%.

"CKI Release Agreement" means the release agreement substantially in the form of Exhibit A hereto, by and among the Purchaser, each of the Companies and CKI.

"CKI Share Conversion" means the conversion of CKI's share ownership interest as of the date hereof in Jeanswear Asia and Jeanswear Europe into a share ownership interest in Jeanswear N.V.

"CKI Transfer Liability" means any Liability relating to the CKI Share Conversion.

"CK Jeanswear Licenses" shall have the meaning set forth in Section 7.15.

"Closing" shall have the meaning set forth in Section 3.1.

"Closing Date" shall have the meaning set forth in Section 3.1. 

"Closing Date Working Capital" shall have the meaning set forth in Schedule I.

"Closing Purchase Price" shall have the meaning set forth in Section 2.2(a).

"CMI" means Confezioni Moda Italia S.r.l., a limited liability company organized and existing under the laws of Italy.

"CMI Business Plan" shall have the meaning set forth in Section 7.1(d).

"CMI Shares" means the issued and outstanding shares of capital stock of, or other equity interest in, CMI.

4

"CMI Transfer" shall have the meaning set forth in the recitals.

"CMI Transfer Agreement" shall have the meaning set forth in Section 7.19.

"Code" means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

"Collection Business" means CMI's business of manufacturing, marketing, sourcing, advertising (as approved by CKI), promoting, sub-licensing (as approved by CKI) and selling at wholesale, women's premier ready to wear apparel lines, men's premier designer clothing and furnishings, and men's and women's accessories and leather goods worldwide, in each case, under the CALVIN KLEIN COLLECTION trademark as conducted pursuant to the terms of the licensing Contracts set forth in Schedule III; provided, that, for purposes of this Agreement, the Business shall not be deemed a portion of the Collection Business.

"Companies" means, collectively, each Jeanswear N.V. Company and each Retail Company.

"Company Balance Sheet" shall have the meaning set forth in Section 4.5(a).

"Company Benefit Plans" shall have the meaning set forth in Section 4.22(d).

"Company Business Employee Contracts" shall have the meaning set forth in Section 4.22(a).

"Company Business Employees" means all of the employees of each Company.

"Company Consultant Contracts" shall have the meaning set forth in Section 4.22(g)(i).

"Company Consultants" means all agents, consultants and independent contractors who render services in favor or on behalf of any Company.

"Company Financial Statements" shall have the meaning set forth in Section 4.5(a).

"Company IP Agreements" means all Contracts to which any Company is a party or otherwise bound (whether oral or written) that contain provisions:  (a) granting to any Person any rights in the Intellectual Property of any Company; (b) granting to any Company any rights in Intellectual Property (except for commercially available off-the-shelf software); (c) consenting to another Person's use of any Companies' Intellectual Property; (d) transferring ownership of any Intellectual Property rights to or from any 

5

Company; and (e) imposing any restrictions or limitations on the use by any Company of any Intellectual Property (except for commercially available off-the-shelf software).

"Company Lease" shall have the meaning set forth in Section 4.20(b).

"Company Leased Real Property" means all leasehold or subleasehold estates and similar rights to possess or occupy any land, buildings, structures, improvements, fixtures or other interest in any real property held by any Company.

"Company Material Contracts" shall have the meaning set forth in Section 4.25(a).

"Company Permits" shall have the meaning set forth in Section 4.15(e)(i).

"Company Service Provider" means any third party service provider acting on behalf of, or otherwise retained by, any Company, including the manufacturers and contractors engaged in the manufacturing of products for any of the Companies.

"Company Statutory Financial Filing" means, with respect to any Company, any financial information (including any balance sheet, statement of income, statement of cash flows or similar financial statement) required by Law to be supplied to any Governmental Entity by, or on behalf of, such Company, including any amendments to such information.

"Consent" means any consent, approval, license, permit, waiver, Order or authorization of any Person.

"Contract" means any agreement, contract, arrangement, understanding, license, obligation, promise, commitment or undertaking that is legally binding.

"Copyrights" means all copyrights and copyrightable subject matter, including copyrights of Software (if any) and registrations and applications for any of the foregoing, and rights to sue for all Infringements thereof, including past Infringements.

"Customs" shall have the meaning set forth in Section 4.19.

"Deeds of Transfer" shall have the meaning set forth in Section 3.3(a).

"Designated Accounting Firm" shall have the meaning set forth in Section 2.4(b).

"Designated Escrow Amount" shall have the meaning set forth in Section 9.5(d).

"Designated Indigo Blue Shares" means all Indigo Blue Shares, other than the Indigo Blue Shares held by Fingen S.p.A. as of the date hereof.

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"Designated Intercompany Contracts" shall have the meaning set forth in Section 5.26(b).

"Designated Matters" shall have the meaning set forth in Section 9.7(d).

"Designated Representations and Warranties" means each of the representations and warranties of CKI set forth in Article V (other than those set forth in Sections 5.2(d), 5.3, 5.4, 5.26(a) and 5.27, in each case, to the extent such Sections are solely applicable to CKI or its Affiliates).

"Dispute Notice" shall have the meaning set forth in Section 2.4(a).

"Disputes" shall have the meaning set forth in Section 11.8(a).

"Disclosure Schedules" means, collectively, the Fingen Sellers Disclosure Schedule, the CKI Disclosure Schedule and the Purchaser Disclosure Schedule.

"Distribution D" means Distribution D GmbH, a limited liability company organized and existing under the laws of Germany.

"Domain Names" means any alphanumeric designation which is registered with, or assigned by, any domain name registrar, domain name registry, or other domain name registration authority as part of an electronic address on the Internet (as set forth in 15 U.S.C. § 1127).

"Encumbrance" means any security interest, pledge, mortgage, option, lien (including environmental and Tax liens), assessment, lease, charge, encumbrance, adverse claim, conditional sales contract, collateral security arrangement, equitable interest, right of first refusal, preemptive right, veto right (e.g., "diritto di gradimento") or similar restrictions, including any restriction on the use, voting, transfer, disposition, receipt of income or other exercise of any attributes of ownership.

"Environmental Law" means any Law as in effect on the date hereof relating to the regulation or protection of human health, safety or the environment or to emissions, discharges, releases or threatened releases of pollutants (including electromagnetic emissions), contaminants, chemicals or industrial, toxic or hazardous substances or wastes into the environment (including ambient air, soil, surface water, ground water, wetlands, land or subsurface strata). 

"Escrow Account" means the Escrow Account (as such term is defined in the Escrow Agreement).

"Escrow Agent" means the Escrow Agent (as such term is defined in the Escrow Agreement).

"Escrow Agreement" means the escrow agreement substantially in the form of Exhibit B hereto, by and among the Purchaser, each of the Sellers and the Escrow 

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Agent; provided, that such form of the Escrow Agreement is subject to such changes as the Escrow Agent may reasonably request.

"Escrow Amount" shall have the meaning set forth in Section 2.2(c).

"Estimated Closing Date Working Capital" shall have the meaning set forth in Section 2.3.

"Estimated Working Capital Statement" shall have the meaning set forth in Section 2.3.

"Euro Cormar" shall have the meaning set forth in the preamble.

"Euro Cormar Business Assets" shall have the meaning set forth in Section 4.12(c)(i).

"Euro Cormar Business Employees" shall have the meaning set forth in Section 4.12(c)(iii).

"Euro Cormar Separation" shall have the meaning set forth in Section 4.12(b).

"Euro Cormar Separation Documents" shall have the meaning set forth in Section 4.12(i).

"Euro Retail" means Euro Retail S.r.l., a limited liability company organized and existing under the laws of Italy.

"Euro Retail Shares" means the issued and outstanding shares of capital stock, or other equity interest in, Euro Retail.

"Expert Fee" means all fees, costs and expenses owing to such expert appointed by the applicable Seller(s) to appraise the Going Concern in connection with the consummation of the Euro Cormar Separation.

"F.A. France" means F.A. France SARL, a limited liability company organized and existing under the laws of France.

"FCPA" means the Foreign Corrupt Practices Act of 1977, as amended.

"Filing" means any registration, declaration or filing with, or notice to, any Person.

"Final Adjustment Statement" shall have the meaning set forth in Section 2.4(a) or 2.4(b), as the case may be.

"Final Preliminary Adjustment Statement" shall have the meaning set forth in Section 2.4(a).

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"Final Release Date" shall have the meaning set forth in Section 9.5(d).

"Fingen Apparel" shall have the meaning set forth in the preamble.

"Fingen Apparel UK" means Fingen Apparel UK Limited, a limited liability company organized and existing under the laws of the United Kingdom.

Fingen Apparel UK Subsidiary" means Jeanswear Services, Ltd., a limited liability company organized and existing under the laws of the United Kingdom.

"Fingen Apparel UK Companies" means, collectively, Fingen Apparel UK and the Fingen Apparel UK Subsidiary.

"Fingen Sellers" means, collectively, Fingen Apparel, Fingen S.p.A. and Euro Cormar.

"Fingen Sellers Affiliate Contracts" shall have the meaning set forth in Section 4.27(a).

"Fingen Sellers Disclosure Schedule" shall have the meaning set forth in the opening paragraph of Article IV.

"Fingen Sellers Pro Rata Share" means 77.75%.

"Fingen S.p.A." shall have the meaning set forth in the preamble.

"Going Concern" shall have the meaning set forth in Section 4.12(b).

"Gold Lightening" means Gold Lightening Limited, a limited liability company organized and existing under the laws of Hong Kong.

"Gold Lightening Declaration of Trust" shall have the meaning set forth in Section 7.13.

"Gold Lightening Nominee Shares" shall have the meaning set forth in Section 7.13.

"Gold Lightening Shares" means the issued and outstanding shares of capital stock of, or other equity interest in, Gold Lightening.

"Governmental Entity" means any (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdictional or political subdivision of any nature, (b) governmental or quasi-governmental entity of any nature, including any governmental or quasi-governmental division, subdivision, department, board, agency, bureau, branch, office, commission, council, board, instrumentality, organization, taxing authority or unit and any court or other tribunal, including, with respect to any Company organized and existing under the laws of Italy, such Company's Register, (c) Person, or body exercising, or entitled to exercise, any 

9

executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or (d) arbitration tribunal.

"Grant Thornton" means the applicable member firm(s) of Grant Thornton LLP.

"Guaranteed Indebtedness" shall have the meaning set forth in Section 4.6(a).

"Hardware" means any item of computer equipment or components or other tangible property necessary and useful in connection with any Software.

"Hazardous Material" means (a) any petroleum or petroleum products, flammable explosives, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls (PCBs); (b) any chemicals or other materials or substances which, as of the date hereof, are defined as, or included in the definition of, "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants" or words of similar import under any Environmental Law; and (c) any other chemical or other material, substance or emission (including electromagnetic emissions), exposure to which is prohibited, limited or regulated by any Governmental Entity under any Environmental Law.

"Indebtedness" means, with respect to any specified Person, any Liability (contingent or otherwise) relating to:  (a) indebtedness, including interest and any prepayment penalties, expenses, or fees thereon created, issued or incurred by such Person for borrowed money (whether by loan or the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) reimbursement obligations and obligations with respect to letters of credit, bankers' acceptances, bank guarantees, surety bonds and performance bonds, whether or not matured, (c) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable arising, and accrued expenses incurred, in the ordinary course of business and consistent with such Person's customary trade practices; (d) obligations with respect to interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, interest rate insurance agreements, foreign exchange contracts, currency swap or option agreements, forward contracts, commodity swap, purchase or option agreements, other commodity price hedging arrangements and all other similar Contracts designed to alter the risks of any Person arising from fluctuations in interest rates, currency values or commodity prices; (e)indebtedness secured by a lien on the property of such Person, whether or not the respective indebtedness so secured is a primary obligation of, or has been assumed by, such Person; (f) capital lease obligations of such Person; and (g) indebtedness of others guaranteed by such Person (including guarantees in the form of an agreement to repurchase or reimburse, letters of credit and guarantees by a Company of performance obligations of another Person (other than any other Company)).

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"Indemnified Party" means any Person claiming indemnification under any provision of Article IX.

"Indemnifying Party" means any Person against whom a claim for indemnification is being asserted under any provision of Article IX.

"Indigo Blue" means Indigo Blue S.A., a limited liability company organized and existing under the laws of Switzerland.

"Indigo Blue Shares" means the issued and outstanding shares of capital stock of, or other equity interest in, Indigo Blue.

"Infringement" means an assertion that a given item infringes on, misappropriates, dilutes, unfairly competes with, constitutes unauthorized use of, or otherwise violates rights or interests in, the Intellectual Property of any Person.

"Initial Release Date" shall have the meaning set forth in Section 9.5(d).

"Intellectual Property" means all Copyrights (including Software), Patents, Rights of Publicity, Trademarks, Domain Names, Trade Secrets and any similar intellectual property rights (including goodwill associated with any of the foregoing).

"Intercompany Contracts" shall have the meaning set forth in Section 4.27(b).

"Italian GAAP" means the rules of Italian Law applicable to the preparation of financial statements, as integrated by, and interpreted and applied in accordance with, the accounting principles issued by the "Commissione dei Consigli Nazionali dei Dottori Commercialisti e dei Ragionieri," as amended by the "Organismo Italiano di Contabilita" on May 30, 2005 as in effect from time to time and applied consistently throughout the periods involved.

"Italian GAAP Financials" means the combined balance sheet of the Companies (and Jeanswear Service International Trading) as of September 30, 2005, the related combined statements of income and cash flows for the nine month period then ended, the notes thereto (which notes, among other things, set forth in reasonable detail a qualitative description of the significant accounting differences which would result had the information set forth in such financial statements been prepared in conformity with U.S. GAAP), together with an unqualified opinion thereon from the Italian GAAP Financials Auditors stating that the audit was conducted in accordance with U.S. GAAS.  The Italian GAAP Financials will be prepared entirely in English.

"Italian GAAP Financials Auditors" shall have the meaning set forth in Section 7.7(a).

"Italian Purchased Companies" means, collectively, Euro Retail and A.E.S. Advanced Euro Service.

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"Italian Purchased Shares" means, collectively, the Euro Retail Shares and the A.E.S. Advanced Euro Service Shares.

"Italian Tax Clearance Certificates" shall have the meaning set forth in Section 4.12(h).

"Jeanswear Asia" means CK Jeanswear Asia, Ltd., a limited liability company organized and existing under the laws of Hong Kong.

"Jeanswear Asia Declaration of Trust" shall have the meaning set forth in Section 7.13.

"Jeanswear Asia Nominee Shares" shall have the meaning set forth in Section 7.13.

"Jeanswear Asia Shares" means the issued and outstanding shares of capital stock of, or other equity interest in, Jeanswear Asia.

"Jeanswear Europe" means CK Jeanswear Europe S.p.A., a joint stock company organized and existing under the laws of Italy.

"Jeanswear Korea" means CK Jeanswear Korea Co. Ltd., a limited liability company organized and existing under the laws of Korea.

"Jeanswear N.V." means CK Jeanswear N.V., a limited liability company organized and existing under the laws of the Netherlands.

"Jeanswear N.V. Benefit Plans" shall have the meaning set forth in Section 5.21(d).

"Jeanswear N.V. Business Employee Contracts" shall have the meaning set forth in Section 5.21(a).

"Jeanswear N.V. Business Employees" means all of the employees of each Jeanswear N.V. Company.

"Jeanswear N.V. Companies" means, collectively, Jeanswear N.V. and each of its direct and indirect Subsidiaries set forth on Schedule IV.

"Jeanswear N.V. Company Consultant Contracts" shall have the meaning set forth in Section 5.21(g)(i).

"Jeanswear N.V. Company Consultants" means all agents, consultants and independent contractors who render services in favor or on behalf of any Jeanswear N.V. Company.

"Jeanswear N.V. Company Material Contracts" shall have the meaning set forth in Section 5.24(a).

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"Jeanswear N.V. Company Permits" shall have the meaning set forth in Section 5.14(e)(i).

"Jeanswear N.V. Company Statutory Financial Filing" means, with respect to any Jeanswear N.V. Company, any financial information (including any balance sheet, statement of income, statement of cash flows or similar financial statement) required by Law to be supplied to any Governmental Entity by, or on behalf of, such Jeanswear N.V. Company, including any amendments to such information.

"Jeanswear N.V. Declarations of Trust" shall have the meaning set forth in Section 7.13.

"Jeanswear N.V. IP Agreements" means all Contracts to which any Jeanswear N.V. Company is a party or otherwise bound (whether oral or written) that contain provisions:  (a) granting to any Person any rights in the Intellectual Property of any Jeanswear N.V. Company; (b) granting to any Jeanswear N.V. Company any rights in Intellectual Property (except for commercially available off-the-shelf software); (c) consenting to another Person's use of Intellectual Property owned by any Jeanswear N.V. Company; (d) transferring ownership of any Intellectual Property rights to or from Jeanswear N.V. Company; and (e) imposing any restrictions or limitations on the use and/or registration of any Intellectual Property by Jeanswear N.V. Company (except for commercially available off-the-shelf software).

"Jeanswear N.V. Lease" shall have the meaning set forth in Section 5.19(b).

"Jeanswear N.V. Leased Real Property" means all leasehold or subleasehold estates and other rights to use or occupy any land, buildings, structures, improvements, fixtures or other interest in any real property held by any Jeanswear N.V. Company.

"Jeanswear N.V. Company Material Contracts" shall have the meaning set forth in Section 5.24(a).

"Jeanswear N.V. Sellers" means, collectively, Fingen Apparel (in its capacity as the Seller of the Jeanswear N.V. Shares) and CKI.

"Jeanswear N.V. Service Provider" means any third party service provider acting on behalf of, or otherwise retained by, any Jeanswear N.V. Company, including the manufacturers and contractors engaged in the manufacturing of products for any of the Jeanswear N.V. Companies.

"Jeanswear N.V. Shares" means, collectively, the issued and outstanding shares of capital stock of, or other equity interest in, each Jeanswear N.V. Company.

"Jeanswear N.V. Subsidiary Shares" shall have the meaning set forth in Section 5.2(a).

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"Jeanswear N.V. Third Party Indebtedness" means any Third Party Indebtedness owing by any Jeanswear N.V. Company.

"Jeanswear Services International Trading" means Jeanswear Services International Trading Co. Ltd., a limited liability company organized and existing under the laws of the Peoples' Republic of China.

"Jeanswear Services International Trading Liability" means any (x) Liability relating to the pre-Closing transfer to any Company of any Assets (including any inventory) of Jeanswear Services International Trading, other than such Liabilities set forth in the Final Adjustment Statement (including the purchase price paid or to be paid for such Assets) and/or (y) Liability relating to such transferred Assets which are not exclusively related to the Business.

"Joint Notice" means any Joint Notice (as such term is defined in the Escrow Agreement).

"Knowledge" (or similar terms or phrases used herein) means all facts and information which are within the actual knowledge of (a) with respect to the Fingen Sellers, Corrado Fratini, Jacopo Fratini and Cesare Peretti, in each case, following a reasonable investigation and (b) with respect to CKI, (i) Tom Murry, following a reasonable investigation and (ii) John Van Glahn, Pamela Bradford and Deirdre Miles-Graeter; provided, that, in no event, shall Ms. Bradford or Ms. Miles-Graeter be deemed to have actual knowledge of any fact or information other than with respect to licensing Contracts applicable to the Business; provided, further, that, in no event, shall Mr. Van Glahn be deemed to have actual knowledge of any fact or information other than with respect to licensing Contracts and/or financial matters applicable to the Business.

"KPMG" means the applicable member firm(s) of KPMG International.

"Law" means any law, statute, rule, regulation, ordinance, decision, Order or other pronouncement having the effect of law of any nation, state, commonwealth, province, territory, county, municipality, district or other jurisdictional or political subdivision of any nature of any Governmental Entity.

"Liabilities" means any and all liabilities and obligations of any kind or nature, including those arising under common law, statute (or other Law), Contract or otherwise, whether known or unknown, or liquidated or unliquidated.

"Losses" means any cost, loss, Liability, claim, damage, interest award, judgment, penalty or expense (including costs of investigation, defense thereof and reasonable accountants', consultants' and attorneys' fees).

"Mahoney Cohen" means the applicable member firm(s) of Mahoney Cohen & Co.

"Material Adverse Effect" means any circumstance, development, change in, or effect on, the Companies taken as a whole that, individually or in the aggregate 

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with any other related circumstances, developments, changes in, or effects on, the Companies taken as a whole is, or is reasonably expected to be, directly or indirectly, materially adverse to (a) the business or condition (financial or otherwise) or results of operations of the Companies taken as a whole or (b) the ability of any Seller to perform its obligations under, or to consummate the transactions contemplated by, this Agreement; provided, that the following, in each case, will be excluded from the determination of Material Adverse Effect:  circumstances, developments, changes, or effects attributable solely to (t) general economic conditions (including events of war impacting the economy in general and including changes in financial or market conditions) but only to the extent not affecting the Companies (taken as a whole) in a disproportionately and materially adverse manner than it affects other Persons similarly situated, (u) general conditions affecting the apparel industry in Europe and Asia but only to the extent not affecting the Companies (taken as a whole) in a disproportionately and materially adverse manner than it affects other Persons in such industry and in such continents, (v) the identity of the Purchaser or the announcement of this Agreement, (w) any action taken by the Sellers with the Purchaser's written consent pursuant to, and as required by, Section 7.1, (x) any action not taken by the Sellers for which action the Sellers ask the Purchaser for its required written consent pursuant to Section 7.1 and the Purchaser fails to give such consent, (y) the financing of the Acquisition and (z) the CK Jeanswear Licenses.

"New Appointments Request" shall have the meaning set forth in Section 7.12(b).

"New York Courts" shall have the meaning set forth in Section 11.7.

"Objection Item" shall have the meaning set forth in Section 2.4(a).

"Objection Statement" shall have the meaning set forth in Section 2.4(a).

"Option" means, with a respect to any specified Person, any option of another Person to purchase capital stock of, or any other equity interest in, such Person, whether or not vested and exercisable.

"Order" means any writ, judgment, decree, injunction, stipulation, award or similar order of any Governmental Entity (in each case, whether preliminary or final).

"Organizational Documents" means (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) any charter or similar document adopted by, or filed in connection with the creation, formation, or organization of, a Person, including any trust; (e) any shareholders or similar agreement applicable to any Company; and (f) any amendment to any of the foregoing.

"Other Accounting Firm" shall have the meaning set forth in Section 2.4(b).

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"Outside Date" shall have the meaning set forth in Section 10.1(e).

"Patents" means all patents and patentable subject matter, including business methods, processes and industrial designs, including any continuations, divisionals, continuations-in-part, renewals, reissues and applications for any of the foregoing and rights to sue for past Infringement thereof.

"Permits" means any licenses, permits, certificates, authorizations, consents or orders of, or filings with, or any waiver of the foregoing, issued by any Governmental Entity.

"Permitted Encumbrances" means any and all (a) liens for Taxes, assessments and other governmental charges not yet due and payable or, if due, (i) not delinquent or (ii) being contested in good faith by appropriate proceedings and for which adequate reserves are reflected in the Company Financial Statements; (b) mechanics', workmen's, repairmen's, warehousemen's, carriers' or other like liens arising or incurred in the ordinary course of business if the underlying obligations are not more than 30 days past due or are being contested in good faith; (c) liens or title retention arrangements arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business; (d) zoning restrictions, reservations, easements, rights of way, restrictions on use of real property, other similar Encumbrances and other Encumbrances, minor defects and irregularities in title to, real property of the Fingen Sellers, which, individually or in the aggregate, do not materially and adversely affect the title of the Fingen Sellers or any Company to the real property or which, in the aggregate, are not substantial in amount and do not materially interfere with the ordinary conduct of the Business; (e) any Encumbrances set forth in Schedule V; or (f) such other imperfections in title or Encumbrances which do not interfere with the use, operation or enjoyment, or detract from the value of such property or asset.

"Person" means an individual, corporation, partnership, limited liability company, joint stock company, joint venture, association, trust or other entity or organization, including a Governmental Entity.

"Preliminary Working Capital Statement" shall have the meaning set forth in Section 2.4(a).

"Preliminary Adjustment Statement" shall have the meaning set forth in Section 2.4(a).

"Preparation Costs" shall have the meaning set forth in Section 7.7(c).

"Preparation Costs Reimbursement Amount" shall have the meaning set forth in Section 7.7(c).

"Purchased Companies" means, collectively, each of the Retail Companies and the Jeanswear N.V. Companies.

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"Purchased Shares" means, collectively, the issued and outstanding shares of capital stock of, or other equity interest in, each Purchased Company.

"Purchaser" shall have the meaning set forth in the preamble.

"Purchaser Disclosure Schedule" shall have the meaning set forth in the opening paragraph of Article VI.

"Purchaser Indemnified Parties" shall have the meaning set forth in Section 9.2.

"Purchaser Third Party Indebtedness" means any Third Party Indebtedness which the Purchaser shall have secured prior to or at, and caused to be delivered to the Companies as at, the Closing in connection with its financing of the Acquisition.

"Release Dates" shall have the meaning set forth in Section 9.5(d).

"Representatives" means with respect to any specified Person, such Person's officers, managers, directors, supervisory board members or employees.

"Resignation Request" shall have the meaning set forth in Section 7.12(a).

"Resolved Amount" shall have the meaning set forth in Section 9.5(c).

"Retail Companies" means, collectively, Euro Retail, A.E.S. Advanced Euro Service, F.A. France, each of the Fingen Apparel UK Companies, Distribution D and Indigo Blue.

"Retail Sellers" means Fingen S.p.A., Fingen Apparel and Euro Cormar.

"Retained Customs Liability" means any Liability imposed by Customs on any Company for transactions occurring on or prior to the Closing Date.

"Retained Euro Cormar Liability" means any Liability of Euro Cormar and A.E.S. Advanced Euro Services, including the Expert Fee, other than the Assumed Euro Cormar Business Liabilities.

"Retained Euro Retail Liability" means any Liability relating to (x) SAFTI S.r.l., a limited liability company organized and existing under the laws of Italy, or FLAIT S.r.l., a limited liability company organized and existing under the laws of Italy, or (y) any pre-Closing transfer(s) of Euro Retail's ownership interest in any such Subsidiary. 

"Retained Product Liability" means any Liability of any Company relating to the violation by such Company prior to the Closing Date of any applicable Law governing manufacturers' and distributors' Liabilities for safety or defectiveness of products.

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"Right" means, with respect to any specified Person, securities or obligations convertible into, or exercisable or exchangeable for, or giving any Person any right to subscribe for, redeem or acquire (including rights of first refusal or preemptive rights), or any options, warrants, calls, puts or commitments relating to, or any stock appreciation right or other instrument the value of which is determined in whole or in part by reference to the market price or value of, shares of capital stock of, or other equity interest in, such Person.

"Rights of Publicity" means all licensed and owned rights of publicity and privacy, as defined under applicable Law, including the Use of the names, likenesses, voices, signatures, biographical information, persona and other recognizable aspects of natural Persons, and rights to sue for past Infringement thereof, throughout the world.

"Sellers" shall have the meaning set forth in the preamble.

"Sellers Expenses" means the fees and expenses incurred by, or on behalf of, the Sellers in connection with (a) the negotiation, execution and performance of this Agreement, any Ancillary Agreement and any other agreements entered into in connection with, or in anticipation of, the Acquisition or (b) the process and activities undertaken by, or on behalf of, the Sellers in connection with the sale of any Company or any alternatives thereto, including fees and expenses of attorneys (including the fees and expenses of each of Willkie Farr & Gallagher LLP and Avv. Lorenzo Contri).

"Sellers Indemnified Parties" shall have the meaning set forth in Section 9.3.

"Sellers Third Party Indebtedness" means all Third Party Indebtedness other than any Purchaser Third Party Indebtedness.

"Sellers Third Party Indebtedness and Cash Letter" means a letter, dated as of the Closing Date, from the Sellers to the Purchaser (a) setting forth the Sellers' estimate of the amount of (i) Sellers Third Party Indebtedness and (ii) the Companies' cash and cash equivalents (whether unrestricted or otherwise), in the case of subclauses (i) and (ii), as of the close of business on the day immediately prior to the Closing Date and an accounting thereof and (b) computing the Certified Net Indebtedness Amount.

"Sellers Third Party Indebtedness Certificate" means a certificate, dated as of the Closing Date, duly executed by an executive officer of each Seller, satisfactory in form to the Purchaser, certifying that true and complete copies of all Contracts relating to any Sellers Third Party Indebtedness are attached thereto. 

"Sellers Third Party Indebtedness Objection Item" shall have the meaning set forth in Section 2.4(a).

"Separation Fees" shall have the meaning set forth in Section 4.12(g).

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"Software" means all computer programs (whether in source code or object code form) and databases and any documentation related to any of the foregoing (including such computer programs which generate CAD images and specifications).

"Software Cure Cost" means any cost, fee or expense reasonably incurred by the Companies to "cure" any material Contract relating to the Software of any Company but only to the extent necessary to cure any defaults or breaches of such Contracts existing at, or prior to, the Closing.

"Subsidiary" means any Person in which another Person, directly or indirectly through Subsidiaries or otherwise, beneficially owns more than 50% of either the capital stock (or other equity interests in), or the voting control of, such Person.

"Subsidiary Shares" shall have the meaning set forth in Section 4.2(a).

"Target Working Capital Range" shall have the meaning set forth in Schedule I.

"Tax Contest" shall have the meaning set forth in Section 9.6(b).

"Tax Matters" shall have the meaning set forth in Section 9.6(a).

"Taxes" means any and all taxes including fees, levies or other assessments, including income, gross receipts, excise, real or personal property, sales, withholding, social security, occupation, use, service, service use, value added, license, net worth, payroll, franchise, customs or similar taxes, social charges or transfer taxes (whether or not imposed as a result of the transactions contemplated by this Agreement), imposed by any Governmental Entity, foreign or domestic, including any local taxing authority and any political subdivision, instrumentality, agency or similar body together with any interest, penalties, fines or additions to tax and additional amounts imposed with respect thereto.

"Tax Returns" means, with respect to any specified Person, any report, return, document, declaration or other information or filing (including any amendments) with respect to Taxes required by Law to be supplied to any Governmental Entity having taxing authority on such Person, including information returns, where permitted or required, combined or consolidated returns for any group of Persons, any documents with respect to or accompanying payments of estimated Taxes, or with respect to or accompanying requests for the extension of time in which to file any such report, return, document, declaration or other information.

"Termination of Affiliate Contracts" shall have the meaning set forth in Section 7.6.

"Third Party Claim" shall have the meaning set forth in Section 9.4(a).

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"Third Party Indebtedness" means all Indebtedness of the kind described in clause (a) of the definition of "Indebtedness" and owing by any Company to any Person (other than another Company).

"Trademarks" means all trademarks, service marks, trade names, Domain Names and addresses, designs, logos, slogans, other similar designations of source or origin, together with the goodwill of any business symbolized by any of the foregoing, registrations and applications relating to all of the foregoing, and rights to sue for past Infringement thereof, throughout the world.

"Trade Secrets" means all trade secrets (as defined under applicable Law), if any, including customer lists, vendor lists and maketing information, and rights to sue for past Infringement thereof, throughout the world.

"Transfer Taxes" means all excise, sales, use, transfer (including real property transfer or gains), value added, stamp, documentary, filing, recordation and other similar Taxes (including "fissato bollato" on the transfer of the Italian Purchased Shares), together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties, applicable to the transactions contemplated by this Agreement.

"Use" means to copy, adapt, display, perform, transmit, disclose to third Persons, create derivative works from and otherwise modify, make, use, sell (or offer to make, use or sell), import, export and otherwise exploit, and grant to others the right or license to do the same.

"U.S. GAAP" means accounting principles generally accepted in the United States of America.

"U.S. GAAS" means auditing standards generally accepted in the United States of America as promulgated by the American Institute of Certified Public Accountants.

"Warnaco" means The Warnaco Group, Inc., a Delaware corporation.

"Warrant" means, with respect to any specified Person, any warrant to purchase the capital stock of, or other equity interest in, such Person.

Section 1.2

Interpretation

.

(a)

When a reference is made in this Agreement to a Section, Article, Exhibit or Schedule, such reference shall be to a Section, Article, Exhibit or Schedule of this Agreement unless clearly indicated to the contrary.

(b)

Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation" or "but not limited to".

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(c)

The words "hereof", "herein" and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.

(d)

The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term, and words denoting either gender shall include both genders.  Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.

(e)

A reference to any Person or a party to this Agreement (including any reference to the Purchaser or any Company in Section 7.17) or any Ancillary Agreement shall include such party's predecessors, successors and permitted assigns.

(f)

A reference to any "Legislative Decree" is to a "Decreto Legislativo".

(g)

A reference to any legislation or to any provision of any legislation shall include any amendment to, and any modification or re-enactment thereof, any legislative provision substituted therefor and all regulations and statutory instruments issued thereunder or pursuant thereto.

(h)

References to "$" are to United States Dollars.

(i)

References to "€" are to Euros.

(j)

Any reference to members of the supervisory board, supervisory board members or similar expressions shall include members of the board of statutory auditors (i.e., "sindaci") for purposes of Italian Law.

(k)

The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

(l)

The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

ARTICLE II

PURCHASE AND SALE OF SHARES

Section 2.1

Purchase and Sale

.  Upon the terms and subject to the conditions of this Agreement, at the Closing, each of the Sellers shall sell, convey, assign, transfer and deliver to the Purchaser, and the Purchaser shall purchase, acquire and accept 

21

from each of the Sellers, the Purchased Shares held by the Sellers (as set forth in Schedule 2.1 hereto), free and clear of all Encumbrances. 

Section 2.2

Consideration

.

(a)

At the Closing, in consideration for the Purchased Shares and, subject to the terms and conditions of the CMI Transfer Agreement, the CMI Shares, the Purchaser shall, in accordance with Section 3.2(c), (i) pay to the Sellers €240,000,000 (the "Base Purchase Price"), minus (1) the sum of (w) the Escrow Amount, (x) the Certified Sellers Third Party Indebtedness Amount, (y) if the Estimated Closing Date Working Capital is below the Target Working Capital Range, the amount of such deficiency and (z) if the Separation Fees exceed €5,000, the amount of such excess, plus (2) the sum of (x) the Preparation Costs Reimbursement Amount, (y) the Certified Closing Date Cash and (z) if the Estimated Closing Date Working Capital is above the Target Working Capital Range, the amount of such excess (the Base Purchase Price, as adjusted, the "Closing Purchase Price") and (ii) reimburse, or cause the Companies to reimburse, the Certified Sellers Third Party Indebtedness Amount.  The Closing Purchase Price shall be allocated among the Sellers in amounts consistent with Schedule 2.2(a)(i) hereto (the "Allocation Schedule").  The Closing Purchase Price is subject to post-Closing adjustments pursuant to Sections 2.2(b), 2.3, 2.4 and Article IX.  For illustrative purposes, examples of the computation of the adjustments to the Closing Purchase Price described in this Article II are set forth in Schedule 2.2(a)(ii).

(b)

Subject to Section 2.4(d), in the event there is a Certified Excess Amount, the Purchaser shall pay such amount to the Sellers, without interest, out of the proceeds from the collection of the accounts receivable of the Jeanswear N.V. Companies.  Such amounts shall be paid to the Sellers on a monthly first-in, first-out basis, in each case, on the first Business Day of the second calendar month following the month in which such receivables were collected.  Any amount remaining that is owing to the Sellers in respect of the Certified Excess Amount on the sixth-month anniversary of the Closing Date shall then be due and payable on such anniversary date.  Each payment to the Sellers pursuant to this Section 2.2(b) shall be (i) paid in cash by wire transfer of immediately available funds to such account or accounts as the Sellers shall specify and in amounts consistent with the Allocation Schedule and (ii) be deemed an adjustment to the Closing Purchase Price. 

(c)

At the Closing, the Purchaser shall deposit (i) €20,987,240 (the "Escrow Amount") with the Escrow Agent in accordance with the Escrow Agreement, as security for the applicable indemnification obligations of the Sellers described under Article IX  and subject to Section 9.7(e).  The Escrow Agent shall hold the Escrow Amount in accordance with the Escrow Agreement.

Section 2.3

Estimated Closing Date Working Capital

.  Four Business Days prior to the Closing Date, the Sellers shall deliver to the Purchaser a statement setting forth a good faith estimate of the Closing Date Working Capital (such statement, the "Estimated Working Capital Statement").  The Estimated Working Capital Statement shall be prepared in accordance with (i) Italian GAAP applied on a basis consistent with, 

22

and following the accounting principles, procedures, policies, allocations and methods employed in preparing the computation of working capital as of September, 30, 2005 (as such computation is set forth on Schedule VI) and (ii) Schedule I.  The Sellers' estimate of the Closing Date Working Capital set forth in the Estimated Working Capital Statement shall hereinafter be referred to as the "Estimated Closing Date Working Capital;" provided, that for purposes of Sections 2.2(a) and 2.4(c), Estimated Closing Date Working Capital, to the extent in excess of  €67,500,000, shall be disregarded.  For the avoidance of doubt, the computations of Estimated Closing Date Working Capital and Actual Closing Date Working Capital will not include transactions solely between the Jeanswear N.V. Companies (excluding CKJ Fashion (Shanghai) Ltd.), except that margins on inventory sales on transactions solely between the Jeanswear N.V. Companies will not be eliminated. 

Section 2.4

Working Capital Adjustment

.

(a)

As promptly as practicable, but no later than 120 days after the Closing Date, the Purchaser shall prepare and deliver to the Sellers a statement setting forth (i) the Closing Date Working Capital (the "Preliminary Working Capital Statement") and (ii) any dispute(s) of the Purchaser (such statement, if any, the "Objection Statement" and, together with the Preliminary Working Capital Statement, the "Preliminary Adjustment Statement") relating to (1) the Certified Closing Date Cash (any such dispute, a "Cash Objection Item") and/or (2) the Certified Sellers Third Party Indebtedness Amount (any such dispute, a "Sellers Third Party Indebtedness Objection Item" and, together with any Cash Objection Item, an "Objection Item"), in each case, as set forth in the Sellers Third Party Indebtedness and Cash Letter.  The Preliminary Working Capital Statement shall be prepared by the Purchaser in accordance with Schedule I.  The Preliminary Adjustment Statement shall provide reasonable detail (including supporting schedules) supporting the Purchaser's calculation of Closing Date Working Capital and any Objection Item.  Following the Closing, each of the Purchaser and the Sellers shall give the other Person and any independent accountants of such other Person reasonable access to the properties, books, records and personnel of the Companies relating to periods prior to the Closing for purposes of preparing and reviewing the Preliminary Adjustment Statement.  The Sellers shall have 60 days following delivery to the Sellers of the Preliminary Adjustment Statement during which to notify the Purchaser in writing of any dispute of any item contained in the Preliminary Adjustment Statement, which notice shall set forth in reasonable detail the basis for such dispute (including the Sellers' proposal with respect to the Closing Date Working Capital, the amount of the Companies' cash and cash equivalents (including interest earned on cash deposits) as at Closing and/or the amount of Sellers Third Party Indebtedness as at Closing (together with any accrued interest thereon and the amount of any applicable prepayment penalties or similar costs or fees set forth in the applicable payoff letter agreed upon by the Sellers) (as the case may be)) (the "Dispute Notice").  If the Sellers fail to notify the Purchaser in writing of any dispute within such 60-day period, the Preliminary Adjustment Statement shall be deemed to be the "Final Adjustment Statement."  In the event that the Sellers shall so notify the Purchaser of any dispute on or prior to such 60th day, any amounts contained in the Preliminary Adjustment Statement that are not disputed by the Sellers in the Dispute Notice shall be deemed to have been finally determined for purposes of 

23

calculating the Actual Closing Date Working Capital, the Actual Closing Date Cash and/or the Actual Sellers Third Party Indebtedness (as the case may be).  For a period of 15 days following the delivery of the Dispute Notice to the Purchaser, the Chief Financial Officer (or the natural Person(s) performing similar functions) of each of the Purchaser and the Sellers shall attempt to resolve in good faith the amounts disputed in the Dispute Notice.  During such 15-day period, the Purchaser shall be permitted to review the working papers of the Sellers and the Sellers' auditors (subject to the execution of customary access letters) relating to the Estimated Working Capital Statement and the Dispute Notice, and the Sellers shall be permitted to review the working papers of the Purchaser and the Purchaser's auditors (subject to the execution of customary access letters) relating to the Preliminary Adjustment Statement and/or the Objection Statement (if any).  Amounts resolved by such attempts within such 15-day period shall be deemed to have been finally determined for purposes of calculating the Actual Closing Date Working Capital, the Actual Closing Date Cash and/or the Actual Sellers Third Party Indebtedness (as the case may be). 

(b)

If the Purchaser and the Sellers are unable to resolve any such dispute(s) set forth in the Dispute Notice prior to the end of such 15-day resolution period, Grant Thornton, in the first instance, Mahoney Cohen, in the alternative, or, in the event that neither Grant Thornton or Mahoney Cohen is able to serve, an accounting firm mutually acceptable to both the Purchaser and the Sellers (the "Designated Accounting Firm") shall be appointed by the Purchaser and the Sellers to resolve such dispute, and such Accounting Firm's (as hereinafter defined) determination shall be final and binding on the parties to this Agreement.  If the Purchaser and the Sellers cannot mutually agree on the selection of the Designated Accounting Firm (assuming that Grant Thornton and Mahoney Cohen  cannot serve), the Purchaser and the Sellers shall submit to such other Person's independent accountants the name of a reputable and widely recognized accounting firm which does not as of Closing, and has not in the two years prior to Closing, provided audit or other services to any of the Sellers, the Companies or the Purchaser, and the accounting firm shall be selected by lot from these two firms by the independent accountants of the Purchaser and the Sellers (such selected accounting firm, the "Other Accounting Firm").  Grant Thornton, Mahoney Cohen, the Designated Accounting Firm or the Other Accounting Firm finally determined in accordance with this Section 2.1(b) shall hereinafter be referred to as the "Accounting Firm"; provided, that, in no event, may the Accounting Firm be KPMG, PricewaterhouseCoopers, Ernst & Young Global Limited, Deloitte & Touche LLP or BDO Seidman, LLP.  The Accounting Firm may not make any determination with respect to any matter not set forth in the Dispute Notice or otherwise previously resolved, and the Accounting Firm's determination of (i) the Actual Closing Date Working Capital shall not be more than the Closing Date Working Capital set forth in the Dispute Notice or less than the amount of the Closing Date Working Capital set forth in the Preliminary Adjustment Statement, (ii) the Companies' cash and cash equivalents (including interest earned on cash deposits) as at Closing shall not be more than the Certified Closing Date Cash or less than the amount of the Companies' cash and cash equivalents (including interest earned on cash deposits) as at Closing set forth in the Objection Notice (if any) or (iii) the amount of Sellers Third Party Indebtedness (together with any accrued interest thereon and the amount of any applicable prepayment penalties or similar costs or fees set forth in the applicable payoff 

24

letter agreed upon by the Sellers) as at Closing shall not be more than the amount of Sellers Third Party Indebtedness (together with any accrued interest thereon and the amount of any applicable prepayment penalties or similar costs or fees set forth in the applicable payoff letter agreed upon by the Sellers) as at Closing set forth in the Objection Notice (if any) or less than the Certified Sellers Third Party Indebtedness Amount.  Each of the Purchaser and the Sellers and their respective independent accountants shall give the Accounting Firm access at all reasonable times to the properties, books, records and personnel of the Companies relating to periods prior to the Closing for purposes of reviewing the Estimated Working Capital Statement, the Dispute Notice and the Preliminary Adjustment Statement and calculating the Actual Closing Date Working Capital, the Actual Closing Date Cash and/or the Actual Sellers Third Party Indebtedness (as the case may be).  The Accounting Firm shall be instructed to use every reasonable effort to perform its services within 60 days of submission of the Estimated Working Capital Statement, the Dispute Notice and the Preliminary Adjustment Statement to it and, in any case, as promptly as practicable after such submission.  The Preliminary Adjustment Statement, as modified by resolution of any disputes by the Purchaser and the Sellers or by the Accounting Firm, shall be deemed to be the "Final Adjustment Statement."  The Actual Net Indebtedness Amount shall be computed by the Purchaser using the Actual Sellers Third Party Indebtedness and the Actual Closing Date Cash.  The Purchaser, on the one hand, and the Sellers, on the other hand, shall bear equally the fees and expenses relating to the engagement of the Accounting Firm.  

(c)

Within seven calendar days after the determination (in accordance with this Section 2.4) of the Actual Closing Date Working Capital:  

(i)

subject to Section 2.4(c)(iii), in the event that the Actual Closing Date Working Capital is less than the Estimated Closing Date Working Capital, and:

(1)

the Actual Closing Date Working Capital and the Estimated Closing Date Working Capital are each above or each below the Target Working Capital Range, the Sellers shall pay to the Purchaser an amount equal to the difference between the Actual Closing Date Working Capital and the Estimated Closing Date Working Capital;

(2)

the Actual Closing Date Working Capital is below the Target Working Capital Range but the Estimated Closing Date Working Capital is within the Target Working Capital Range, the Sellers shall pay to the Purchaser an amount equal to the difference between the Actual Closing Date Working Capital and €58,000,000;

(3)

the Actual Closing Date Working Capital is within the Target Working Capital Range but the Estimated Closing Date Working Capital is above the Target Working Capital 

25

Range, the Sellers shall pay to the Purchaser an amount equal to the difference between the Estimated Closing Date Working Capital and €62,500,000; and

(4)

the Actual Closing Date Working Capital is below the Target Working Capital Range but the Estimated Closing Date Working Capital is above the Target Working Capital Range, the Sellers shall pay to the Purchaser an amount equal to the sum of the (x) difference between the Actual Closing Date Working Capital and €58,000,000; and (y) difference between the Estimated Closing Date Working Capital and €62,500,000; or

(ii)

subject to Section 2.4(c)(iii), in the event that the Actual Closing Date Working Capital is greater than the Estimated Closing Date Working Capital, and:

(1)

the Actual Closing Date Working Capital and the Estimated Closing Date Working Capital are each above or each below the Target Working Capital Range, the Purchaser shall pay to the Sellers an amount equal to the difference between the Actual Closing Date Working Capital and the Estimated Closing Date Working Capital;

(2)

the Estimated Closing Date Working Capital is below the Target Working Capital Range but the Actual Closing Date Working Capital is within the Target Working Capital Range, the Purchaser shall pay to the Sellers an amount equal to the difference between the Estimated Closing Date Working Capital and €58,000,000; 

(3)

the Estimated Closing Date Working Capital is within the Target Working Capital range but the Actual Closing Date Working Capital is above the Target Working Capital Range, the Purchaser shall pay to the Sellers an amount equal to the difference between the Actual Closing Date Working Capital and €62,500,000; and

(4)

the Actual Closing Date Working Capital is above the Target Working Capital Range but the Estimated Closing Date Working Capital is below the Target Working Capital Range, the Purchaser shall pay to the Sellers an amount equal to the sum of the (x) difference between the Estimated Closing Date Working Capital and €58,000,000; and (y) difference between the Actual Closing Date Working Capital and €62,500,000.

(iii)

Notwithstanding anything in Sections 2.4(c)(i) or 2.4(c)(ii) to the contrary, in the event that the Actual Closing Date Working Capital and the Estimated Closing Date Working Capital are each within the Target Working Capital Range, no payments shall be 

26

owing by either the Purchaser or the Sellers pursuant to this Section 2.4(c)(i).

(d)

Within seven calendar days after the determination (in accordance with this Section 2.4) of the Actual Closing Date Cash, (i) the Sellers, in the event that the Actual Closing Date Cash is less than the Certified Cash Amount, shall pay to the Purchaser an amount equal to such deficiency or (ii) the Purchaser, in the event that the Actual Closing Date Cash is greater than the Certified Cash Amount, shall pay to the Sellers an amount equal to such excess.

(e)

Within seven calendar days after the determination (in accordance with this Section 2.4) of the Actual Sellers Third Party Indebtedness:

(i)

in the event that the Actual Sellers Third Party Indebtedness is greater than the Certified Sellers Third Party Indebtedness Amount:  (1) the Sellers shall pay to the Purchaser an amount equal to such excess and (2) the Purchaser shall pay such excess amount to the applicable lender;

(ii)

in the event that the Actual Sellers Third Party Indebtedness is less than the Certified Sellers Third Party Indebtedness Amount:  (1) the Purchaser shall use its commercially reasonable efforts to cause the applicable lender to repay to the Purchaser an amount equal to such deficiency to the Purchaser and (2) upon receipt thereof, the Purchaser shall pay such amount to the Sellers; provided, that, the Purchaser shall have no payment obligation to the Sellers except to the extent of the amount (if any) paid to it by the applicable lender; provided, further, that, to the extent that the applicable lender does not repay such deficiency to the Purchaser, the Purchaser shall assign to the Sellers any right the Purchaser may have to recover such deficiency from the applicable lender.

(f)

Within seven calendar days after the determination (in accordance with this Section 2.4) of the Actual Excess Amount:

(i)

if the Actual Excess Amount is greater than the Certified Excess Amount, such difference shall be paid by the Purchaser to the Sellers in the manner contemplated by Section 2.2(b); and

(ii)

if the Actual Excess Amount is less than the Certified Excess Amount, the aggregate remaining payments to be made by the Purchaser to the Sellers pursuant to Section 2.2(b) shall be reduced by such deficit, provided, that, if the payments previously made by the Purchaser to the Sellers pursuant to Section 2.2(b) exceed the Actual Excess Amount, the Sellers shall pay the amount of such excess to the Purchaser, and no further payments shall be made by the Purchaser to the Sellers pursuant to such Section.

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(g)

Any payment owing by (i) the Sellers to the Purchaser pursuant to Sections 2.4(c), 2.4(d) and 2.4(e) shall be paid in cash by wire transfer of immediately available funds to such account or accounts as the Purchaser shall specify or (ii) the Purchaser to the Sellers pursuant to Sections 2.4(c), 2.4(d) and 2.4(e) shall be paid in cash by wire transfer of immediately available funds to such account or accounts as the Sellers shall specify and in amounts consistent with the Allocation Schedule, and, in either case, such payment shall be deemed an adjustment to the Closing Purchase Price.

(h)

For the avoidance of doubt, the provisions set forth in (i)  Sections 2.4(c), 2.4(d) and 2.4(e) shall be used in connection with the applicable adjustments made to the Base Purchase Price in the first sentence of Section 2.2(a) and (ii) Section 2.4(f) shall be used in connection with the payment obligations of the Purchaser (if any) pursuant to Section 2.2(b). 

Section 2.5

Tax Withholdings

.  All payments made pursuant to this Article II shall be subject to all applicable Taxes required to be withheld in respect of such payment.

ARTICLE III

CLOSING

Section 3.1

Closing

.  The closing of the transactions contemplated hereby (other than the CMI Transfer) (hereinafter called the "Closing") shall take place at the offices of Skadden, Arps, Slate Meagher & Flom, Four Times Square, New York, New York and at Amsterdam address to come at 9:00 a.m., New York local time, on the second Business Day following the satisfaction or waiver of the conditions set forth in Article VIII (other than those conditions that by their nature are to be satisfied at the Closing), or at such other time, date and place as the Sellers and the Purchaser may agree upon (the date on which the Closing actually occurs being hereinafter referred to as the "Closing Date"); provided, that, unless otherwise agreed to in writing by the Purchaser, in no event, shall the Closing occur within the period commencing on February 16, 2006 and ending on April 2, 2006.  The Closing shall be deemed to be effective at 12:01 a.m., New York local time, on the Closing Date.

Section 3.2

Closing Deliveries

.

(a)

At the Closing, the Sellers shall deliver or cause to be delivered (unless previously delivered) to the Purchaser:

(i)

certificates, if any, representing the Purchased Shares, duly endorsed or accompanied by stock powers duly executed in blank or otherwise in a form reasonably satisfactory to the Purchaser and in compliance with applicable Laws for transfer on the books of each Purchased Company (with any requisite Transfer Tax stamps attached by the Seller);

28

(ii)

an executed receipt for the Closing Purchase Price;

(iii)

a true and complete copy, certified by an officer of each Seller, of (1) the resolutions of each Seller's board of directors authorizing the execution and delivery of this Agreement and each Ancillary Agreement and consummation of the transactions contemplated by hereby and thereby, which resolutions shall be in full force and effect and not revoked; provided, that, with respect to each of Fingen S.p.A. and Euro Cormar, if the adoption of such resolutions is not required (whether by Law, any applicable Organizational Document or otherwise), such Seller shall deliver (x) a true and complete copy, certified by an Italian Notary Public ("copia autentica"), of the current by-laws and the resolutions of the meeting of the board of directors pursuant to which the applicable director was appointed managing director ("amministratore delegato") and was granted due power and authority to execute and deliver this Agreement and each Ancillary Agreement, to consummate the transactions contemplated hereby and thereby and (y) a certificate issued by the relevant Register of Enterprises, dated as of a date within five Business Days prior to the Closing Date, evidencing that such director is in office both as a director and as managing director and (2) the Organizational Documents of each Company;

(iv)

a duly executed certificate of each of the Sellers pursuant to Section 8.3(c);

(v)

a certificate, dated as of the Closing Date, duly executed by an executive officer of CKI, satisfactory in form to the Purchaser, certifying that the Designated Representations and Warranties are true and correct in all respects (disregarding immateriality, materiality, Material Adverse Effect or any derivation of any of the foregoing contained in the Designated Representations and Warranties), in each case, as of the date of this Agreement and as of the Closing Date, with the same force and effect as if made as of the Closing Date (other than such representations and warranties as are made as of another date, which shall be true and correct as of such date), except where any failure of such representations and warranties to be so true and correct in all respects would not reasonably be expected to result in a Material Adverse Effect;

(vi)

a good standing certificate (or its equivalent), if any, for each Company issued by the applicable jurisdictions where such companies are qualified or licensed to do business or own, lease or operate property making such qualification or licensing necessary, dated as of a date within seven days prior to the Closing Date;

(vii)

(1) duly executed resignations (which resignations shall be in a form reasonably acceptable to the Purchaser and, 

29

with respect to resigning directors and supervisory board members, shall include a waiver and release with respect to any claims (other than, with respect to supervisory board members, claims in respect of accrued (but not overdue) fees owing to such supervisory board members) such natural Person may have against any Company on or prior to the Closing), effective as of the Closing Date, from each director and supervisory board member of any Company and such executive officers of any Company as the Purchaser shall have requested in the Resignation Request (it being understood that each such executive officer's resignation shall be limited to the resignation of such Person's title as executive officer of the applicable Company) and (2) a true and complete copy, certified by an officer of each of the Italian Purchased Companies and Jeanswear Europe, of the duly executed minutes of the stockholders/quotaholders meetings of each such Company pursuant to which its new directors, executive officers and supervisory board members are appointed in a manner consistent with the New Appointments Request;

(viii)

duly executed copies of each of the Consents set forth in Schedule 3.2(a)(viii);

(ix)

true and complete copies of each of the Filings to be provided by the Sellers or any Company which are set forth in Schedule 3.2(a)(ix);

(x)

(1) the Sellers Third Party Indebtedness and Cash Letter and (2) the Sellers Third Party Indebtedness Certificate;

(xi)

the Estimated Closing Date Working Capital Statement;

(xii)

duly executed counterparts of each of the Ancillary Agreements;

(xiii)

a true and complete copy of each of the agreements, amendments, endorsements, payoff letters, releases or other documentation reflecting the Termination of Affiliate Contracts (as further described in Section 7.6);

(xiv)

the Italian GAAP Financials;

(xv)

the Deeds of Transfer;

(xvi)

a true and complete copy, certified by an officer of each Jeanswear N.V. Seller, of each of the Jeanswear N.V. Declarations of Trust; and

(xvii)

all other previously undelivered documents, agreements, instruments, writings and certificates, specifications and 

30

physical product samples and such other documents, agreements, instruments, writings, certificates, specifications and physical product samples as the Purchaser may reasonably request to effect the transactions contemplated by this Agreement, in a form reasonably satisfactory to the Purchaser.

(b)

At the Closing, the Purchaser shall deliver or cause to be delivered (unless previously delivered) to the Sellers:

(i)

the Closing Purchase Price in accordance with Section 3.2(c);

(ii)

an executed receipt for delivery of the Purchased Shares;

(iii)

a duly executed officer's certificate of Purchaser pursuant to Section 8.2(c); 

(iv)

a copy, certified by an officer of the Purchaser, of the joint resolutions of the board of directors of each of Warnaco and the Purchaser authorizing the execution and delivery of this Agreement and each Ancillary Agreement and consummation of the transactions contemplated hereby and thereby, which resolutions shall be in full force and effect and not revoked;

(v)

a good standing certificate (or its equivalent) for Purchaser issued by the Secretary of State of the State of Delaware, dated as of a date within three Business Days prior to the Closing Date; 

(vi)

a duly executed counterpart of each of the Ancillary Agreements; 

(vii)

the Deeds of Transfer; and

(viii)

all other previously undelivered documents, agreements, instruments, writings and certificates, and such other documents, agreements, instruments, writings and certificates as the Sellers may reasonably request to effect the transactions contemplated by this Agreement, in form reasonably satisfactory to the Sellers.

(c)

At the Closing, the Purchaser shall pay, or cause to be paid, by wire transfer of immediately available funds to such account or accounts as the Sellers shall specify, (i) the Closing Purchase Price (as determined in accordance with Section 2.2(a)) to the Sellers in amounts consistent with the Allocation Schedule and (ii) the Certified Sellers Third Party Indebtedness Amount.

31

(d)

the Sellers shall provide complete written account information required pursuant to this Section 3.2 to the Purchaser not less than five Business Days before the Closing Date.

Section 3.3

Transfer of the Italian Purchased Shares

.

(a)

At the Closing, Euro Cormar and the Purchaser shall enter into transfer deeds for the Italian Purchased Shares before a duly sworn and commissioned notary public as the Purchaser may select (and which notary is reasonably acceptable to the Sellers) substantially in the form of Exhibit D (collectively, the "Deeds of Transfer").  The amount of any requisite Transfer Taxes related to the Deeds of Transfer shall be shared equally as between the Sellers, on the one hand, and the Purchaser, on the other hand.  The originals of the duly executed Deeds of Transfer shall be filed with such duly sworn and commissioned notary public in Italy as the Purchaser may select for purposes of the registration with the relevant Italian Governmental Entity having Tax authority ("Ufficio del registro") and subsequent filing with the relevant Italian Register(s) of Enterprises ("Registro delle imprese"), in accordance with applicable Law.  The Sellers and Purchaser shall enter into such Deeds of Transfer as may be required under applicable Law.

(b)

The Deeds of Transfer are not intended to, and shall in no way modify, alter or novate the terms and conditions of this Agreement (including any representations, warranties, agreements, covenants or obligations (including any indemnification obligations) herein) or the rights and obligations of the parties as set forth herein, which shall continue to be binding upon the parties, unmodified and in full force and effect, with respect to the transactions contemplated hereby. To the extent that the provisions of this Agreement (including the Exhibits, Schedules and other documents and instruments (other than the Deeds of Transfer) referred to herein) conflict with the terms of the Deeds of Transfer, the terms of this Agreement (including the Exhibits, Schedules and other documents and instruments (other than the Deeds of Transfer) referred to herein) shall supersede the conflicting terms of the Deeds of Transfer.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF FINGEN SELLERS

Except as disclosed in the correspondingly numbered section of the disclosure Schedules delivered herewith by the Fingen Sellers to the Purchaser and which are attached hereto (collectively, the "Fingen Sellers Disclosure Schedule"), the Fingen Sellers hereby jointly and severally represent and warrant to the Purchaser as follows:

Section 4.1

Organization and Standing

.  

(a)

Each Company is a company duly organized, validly existing and in good standing (or its equivalent) under the laws of the jurisdiction of its incorporation or organization and has the requisite corporate power and authority to enable it to own, lease or otherwise hold its Assets and to carry on its business as 

32

presently conducted.  Each Company is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction in which the conduct or nature of its business or the ownership, leasing or holding of its properties makes such qualification or good standing necessary, except such jurisdictions where the failure to be so qualified or in good standing would not reasonably be expected to result in a Material Adverse Effect.  A true and complete list of all such jurisdictions where each Company is qualified to do business as a foreign corporation is set forth in Section 4.1(a) of the Fingen Sellers Disclosure Schedule.

(b)

Section 4.1(b) of the Fingen Sellers Disclosure Schedule sets forth a true and complete list of all Persons in which any Company (i) owns, directly or indirectly, any capital stock or other securities or (ii) has any direct or indirect ownership interest in any business, in each case, other than in any other Company.

Section 4.2

Capitalization

.

(a)

Section 4.2(a) of the Fingen Sellers Disclosure Schedule sets forth a true and complete list of:  (i) the authorized capital stock (and par value per share (if applicable)) or other equity interests and (ii) the number of shares of capital stock or other equity interests issued and outstanding, in each case, for each Purchased Company and each of its direct or indirect Subsidiaries as of the date hereof.  As of the Closing, the (i) authorized capital stock (and par value per share (if applicable)) or other equity interests and (ii) number of shares of capital stock or other equity interests issued and outstanding, in each case, for each Purchased Company and each of its direct or indirect Subsidiaries will be as provided on Section 4.2(a) of the Fingen Sellers Disclosure Schedule.  The issued and outstanding shares of capital stock of, or other equity interest in, each Purchased Company's direct and indirect Subsidiaries (collectively, the "Subsidiary Shares") are held as of the date hereof, and will be held as of immediately prior to the Closing, by the Persons and in the amounts set forth in Section 4.2(a) of the Fingen Sellers Disclosure Schedule, free and clear of any Encumbrances.  All of the Purchased Shares and the Subsidiary Shares are duly authorized, validly issued, fully paid and nonassessable and have been issued in compliance with applicable securities Laws.  None of the Purchased Shares or the Subsidiary Shares has been issued in violation of any Right under any provision of applicable Law, the Organizational Documents of any Company, or any Contract to which any Company is subject or by which it is bound.  

(b)

The Purchased Companies have no, and since January 1, 2003, have not had, any direct or indirect Subsidiaries.

(c)

There are no outstanding Options, Rights or Warrants in respect of any equity interest(s) in any Company. 

(d)

Each Fingen Seller is, and, immediately prior to the Closing, will be the record and beneficial owners of the amount of the Purchased Shares set forth next to such Fingen Seller's name on such Schedule, free and clear of any Encumbrances.  The natural Persons set forth in Section 4.2(a) of the Fingen Sellers 

33

Disclosure Schedule are, and, immediately prior to the Closing, will be, the record and beneficial owners of the amount of the Indigo Blue Shares set forth next to such Person's name on such Schedule, free and clear of any Encumbrances (it being understood that such Indigo Blue Shares are the Designated Indigo Blue Shares).  Upon transfer and delivery of such Purchased Shares by the Fingen Sellers to the Purchaser on the Closing Date in accordance with Article II, the Sellers will deliver to the Purchaser good and valid title to such Purchased Shares, free and clear of any Encumbrances, excepting only (x) restrictions on the subsequent transfer of the Purchased Shares as may be imposed under applicable securities Laws and (y) Encumbrances on the Purchased Shares created by actions taken by the Purchaser.

(e)

The transactions contemplated hereby shall not give rise to any Rights of any Person, nor does any Person otherwise have any Rights with respect to the capital stock of, or other equity interest in, any Company.

Section 4.3

Authorization

.  Each Fingen Seller has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and each Ancillary Agreement to which such Fingen Seller is a party, and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and the Ancillary Agreements by each Fingen Seller and the consummation by such Fingen Seller of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate, stockholder or other action of the Fingen Seller to the extent such Fingen Seller is a party thereto.  This Agreement and the Ancillary Agreements have been duly and validly executed and delivered by each Fingen Seller to the extent such Fingen Seller is a party thereto, and, assuming this Agreement and the Ancillary Agreements have been duly authorized, executed and delivered by the other parties thereto, each of this Agreement and the Ancillary Agreements constitutes a valid and binding agreement of each Fingen Seller to the extent such Fingen Seller is a party thereto, enforceable against each Fingen Seller in accordance with its terms, except to the extent that enforcement may be limited by or subject to (a) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).

Section 4.4

Noncontravention

.  The execution, delivery and performance by each Fingen Seller of this Agreement and each Ancillary Agreement to which it is a party and the consummation by each Fingen Seller of the transactions contemplated hereby and thereby will not, (a) conflict with, or violate any provision of, the Organizational Documents of any Company or any Fingen Seller, (b) require any Consent or Filing, (c) conflict with or violate any applicable Law, (d) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, modification or acceleration) under any note, bond, indenture, deed of trust, mortgage, lease, franchise, license, permit, instrument, Law or Contract to which any Company or any Fingen Seller is a party or by which any Company or any Fingen Seller is bound, except to the extent such violation, breach or default would not result in a Material Adverse Effect or (e) result in the 

34

imposition or creation of any Encumbrances on any Asset of any Company, the Purchased Shares or the Subsidiary Shares.

Section 4.5

Financial Statements; Liabilities

.

(a)

Section 4.5(a) of the Fingen Sellers Disclosure Schedule sets forth true and complete copies of the September 30, 2005 unaudited combined balance sheet and the related unaudited combined statement of income for the Companies (and Jeanswear Services International Trading) for the nine month period then ended (such balance sheet, the "Company Balance Sheet" and, together with such other financial statements, the "Company Financial Statements").  The Company Financial Statements have been prepared (a) from the books and records of the Companies (and Jeanswear Services International Trading) and (b) in conformity with Italian GAAP consistently applied during the periods involved, and fairly present in all material respects the financial condition and the results of operations and sources and uses of cash of the Companies (and Jeanswear Services International Trading) on a combined basis as of the dates and for the periods presented therein, except as otherwise specifically noted therein.  No financial statements of any Person other than the Companies (and Jeanswear Services International Trading) are required by Italian GAAP to be included in the Company Financial Statements.

(b)

None of the Companies (or Jeanswear Services International Trading) has any Liabilities (whether direct, indirect, accrued or contingent) of a nature required by Italian GAAP to be disclosed on a balance sheet except for (i) Liabilities (including Taxes), commitments or obligations incurred in the ordinary course of business subsequent to September 30, 2005, (ii) Liabilities (including Taxes), commitments or obligations incurred in the ordinary course of business subsequent to September 30, 2005 and which are immaterial or (iii) Liabilities, commitments or obligations reflected on, accrued or reserved against in, the Company Balance Sheet.  None of the Companies (or Jeanswear Services International Trading) has or will have as of the Closing any Liability for earnouts or other contingent payments payable to former owners of Assets, stock or other interests acquired by any Company (or Jeanswear Services International Trading) or otherwise arising out of any previous acquisitions by any Company.

(c)

The Italian GAAP Financials will be prepared (i) from the books and records of the Companies (and Jeanswear Services International Trading) and (ii) in accordance with Italian GAAP consistently applied during the periods involved.  

(d)

Section 4.5(d) of the Fingen Sellers Disclosure Schedule sets forth a true and complete list of each jurisdiction in which a Company has supplied or was otherwise required to supply a Company Statutory Financial Filing since January 1, 2003, together with a true and complete copy of each Company Statutory Financial Filing filed since January 1, 2003. 

(e)

Each Company Statutory Financial Filing was prepared (i) in accordance with the books and records of the applicable Company and (ii) in 

35

accordance with Applicable GAAP consistently applied during the periods involved, and fairly presented in all material respects the financial condition and the results of operations and cash flow of the applicable Company as of the dates and for the periods presented therein.  No financial statements of any Person were required by Applicable GAAP to be included in any Company Statutory Financial Filing, except for such Person(s) included in such Company Statutory Financial Filing.

(f)

All Company Statutory Financial Filings have been filed when due in accordance with applicable Law.  As of the date hereof, none of the Companies has requested an extension of time within which to file any Company Statutory Financial Filing, other than such requests for which the applicable Company Statutory Financial Filing has since been filed.  

(g)

There is no Action pending against, or with respect to, any Company relating to any Company Statutory Financial Filing, other than those Actions the outcome of which in the aggregate would not reasonably be expected to have a Material Adverse Effect.  No Governmental Entity has provided to the Fingen Sellers or any Company any notice of an intention to open an Action relating to Company Statutory Financial Filing matters or any request for information relating to Company Statutory Financial Filing matters.  None of the Companies has received any notice from a Governmental Entity in a jurisdiction in which such Company does not supply a Company Statutory Financial Filing that it is or may be required to do so in such jurisdiction.  

Section 4.6

Indebtedness

.  

(a)

Section 4.6(a) of the Sellers Disclosure Schedule sets forth a true and complete list of all Indebtedness owing by any Company which is outstanding as of the date hereof and any Contracts related thereto, including the amount of principal and unpaid interest outstanding under each instrument evidencing such Indebtedness as of November 30, 2005, and indicates any Indebtedness owing by any Company which is guaranteed by any Fingen Seller or its Affiliates (other than any Company) (such guaranteed Indebtedness, the "Guaranteed Indebtedness") together with the identity of the applicable guarantor(s) of such Indebtedness (each such Person(s), the "Applicable Guarantor").

(b)

No Contract relating to any Sellers Third Party Indebtedness contains any restriction upon (i) the prepayment of such Sellers Third Party Indebtedness, (ii) the incurrence of Indebtedness by any Company or (iii) the ability of any Company to grant any Encumbrance on the Assets of any Company.

(c)

At Closing, there will be no Sellers Third Party Indebtedness other than as set forth in the Sellers Third Party Indebtedness and Cash Letter.  

(d)

All Indebtedness owing by any Company is, and, at Closing, will be, unsecured.

36

Section 4.7

Books and Records

.  The books, stock transfer records, stock record books and other records of each Company, all of which have been made available to the Purchaser by the Sellers, are true and complete in all material respects and have been maintained in accordance with applicable Law and with sound business practices.  The minute books of each Company contain materially accurate and materially complete records of all meetings held and corporate action taken by the stockholders, the boards of directors, boards of supervisory board members and committees of any such boards of the Companies.

Section 4.8

Accounting Practices

.

(a)

Each Company maintains accurate books and records reflecting its Assets and Liabilities and maintains internal accounting practices which are lawful, customary and adequate for similarly situated Persons in the jurisdictions in which such Company is organized.  Without limiting the generality of the foregoing, each Company's:  (i) transactions are recorded as necessary to permit preparation of its financial statements in accordance with Applicable GAAP; and (ii) its accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection of the accounts, notes and other receivables on a current, timely and consistent basis.

(b)

To the Knowledge of the Fingen Sellers, since January 1, 2002, none of the Companies has received any written non-frivolous complaint, allegation, assertion or claim regarding the accounting, reserving or auditing practices, procedures, methodologies or methods of any Company, including any non-frivolous complaint, allegation, assertion or claim that any Company has engaged in questionable accounting, reserving or auditing practices.

Section 4.9

Inventory

.  The inventories set forth in the Company Balance Sheet were properly stated therein at the lesser of cost or fair market value determined in accordance with Italian GAAP consistently applied.  Since September 30, 2005, the inventories related to the businesses of each Company have been maintained in the ordinary course of business.  All such inventories are owned free and clear of any Encumbrances, other than Permitted Encumbrances.  All of the inventories recorded on the Company Balance Sheet materially consist of, and all inventories related to the businesses of each Company on the Closing Date and recorded on the Final Adjustment Statement will materially consist of, items of a quality usable or saleable in the normal course of the businesses of each Company, except for samples and second choice goods.

Section 4.10

Accounts Receivable

.  

(a)

All accounts, notes and other receivables of the Companies, whether reflected on the Company Balance Sheet or otherwise, (i) represent actual amounts incurred and owing by the applicable account debtors, (ii) arose from bona fide transactions in the ordinary course of business, (iii) are not subject to any consignment agreement and (iv) the reserves against such receivables set forth in Section 4.10(a)(iv) of the Fingen Sellers Disclosure Schedule have been reasonably determined based on past 

37

practice and in accordance with Italian GAAP.  There have not been any write-offs as uncollectible of any customer accounts receivable of any Company (x) from September 30, 2005 through November 30, 2005 or (y) to the Knowledge of the Fingen Sellers, from December 1, 2005 through the date hereof, except, in any event, for non-material write-offs in the ordinary course of business.  

(b)

To the Knowledge of the Fingen Sellers, the order bookings of the Business set forth in Section 4.10(b) of the Fingen Sellers Disclosure Schedule represent bona fide orders placed by customers of the Business in the amounts set forth therein and as of November 30, 2005.

Section 4.11

Absence of Certain Changes

.  

(a)

Since September 30, 2005, (i) except to the extent contemplated by, or in connection with, this Agreement or the Ancillary Agreements, each Company has conducted its business in the ordinary course and (ii) there has been no event, occurrence or development which would reasonably be expected to result in a Material Adverse Effect. 

(b)

Since January 1, 2005, none of the Companies has declared, set aside or paid any dividend (whether a cash dividend or otherwise) or other distribution (whether shares or property or any combination thereof) in respect of any capital stock (or other equity interests) or otherwise.

Section 4.12

Euro Cormar Separation

.

(a)

A.E.S. Advanced Euro Service is an Italian S.r.l., duly organized, validly existing and in good standing under the laws of Italy.

(b)

The Assets, Liabilities and employees set forth in Section 4.12(b) of the Fingen Sellers Disclosure Schedule will, as of the Closing Date, constitute the portion of the going concern of Euro Cormar which primarily pertained to the Business as of the date hereof (the "Going Concern").  Euro Cormar will effect and consummate, or will cause to be effected and consummated, in any event, in accordance with applicable Law and Organizational Documents, all necessary corporate and other actions, including supplying all applicable Filings (including Euro Cormar and A.E.S. Advanced Euro Service's board of directors resolutions, appointment of the expert and receipt of the expert's sworn report and assessment on the Going Concern, successful completion of the unions consultation procedure, A.E.S. Advanced Euro Service's quotaholders resolution on the contribution of the Going Concern and A.E.S. Advanced Euro Service's board of directors resolution relating to the expert's assessment) to separate the Going Concern from Euro Cormar and to contribute the Going Concern into A.E.S. Advanced Euro Service by means of an increase of A.E.S. Advanced Euro Service's capital stock together with the creation of a share premium reserve (collectively, the "Euro Cormar Separation"). 

(c)

In accordance with applicable Law and Organizational Documents, the Euro Cormar Separation will result in:

38

(i)

all of the Assets (including any rights, claims or remedies pursuant to any Contract) primarily relating to the Business which were previously owned, leased or held for use by Euro Cormar (the "Euro Cormar Business Assets"), a true and complete list of which Assets is set forth or described in Section 4.12(b) of the Fingen Sellers Disclosure Schedule, being transferred to A.E.S. Advanced Euro Service;

(ii)

only those Liabilities of Euro Cormar that were directly associated with the Euro Cormar Business Employees or with the operation of the Going Concern as specifically identified in Section 4.12(b) of the Fingen Sellers Disclosure Schedule (collectively, the "Assumed Euro Cormar Business Liabilities") being assumed or borne by A.E.S. Advanced Euro Service; and

(iii)

the employees of Euro Cormar that primarily provided employment services to the Business and that are listed in Section 4.12(b) of the Sellers Disclosure Schedule (collectively, the "Euro Cormar Business Employees") being employed by A.E.S. Advanced Euro Service.

(d)

The Going Concern is a going concern ("azienda" or "ramo d'azienda") for the purposes and meaning of Article 2555 of the Italian civil code and all other applicable provisions of Italian Law (including such provisions relating to labor, Tax and/or social security matters) making reference to the concept of "azienda" or "ramo d'azienda."

(e)

As of the Closing Date, (i) there will be no other actions of any Person (including any transaction, whether required by applicable Law, any Organizational Document or otherwise) necessary to effect the Euro Cormar Separation and (ii) all third party Consents necessary to effect the Euro Cormar Separation (including those necessary to transfer or assign any Contract being part of the Going Concern) shall have been obtained.

(f)

As a result of the Euro Cormar Separation, (i) A.E.S. Advanced Euro Service will have good and marketable title to, (free and clear of all Encumbrances except for those Permitted Encumbrances set forth in Section 4.12(f) of the Fingen Sellers Disclosure Schedule) or a valid and binding leasehold interest in, the Euro Cormar Business Assets; (ii) none of Euro Cormar's current or former employees, agents, consultants and independent contractors or any other Person (other than the Euro Cormar Business Employees) may validly allege to be part of the Going Concern; and (iii) none of Euro Cormar's current or former employees, agents, consultants or independent contractors or any other Person (other than the Euro Cormar Business Employees) claimed or otherwise alleged, nor may any of the foregoing Persons validly allege, that he/she is, or should be treated as, an employee of A.E.S. Advanced Euro Service. 

(g)

On or prior to the Closing Date, Euro Cormar shall have caused A.E.S. Advanced Euro Service to have timely paid all Transfer Taxes relating to 

39

the contribution of the Going Concern and the Taxes relating to the increase of A.E.S. Advanced Euro Service's capital stock, the notarial fees and other costs (other than the Expert Fee) related to the Euro Cormar Separation (such Taxes, fees and other costs (other than the Expert Fee) the "Separation Fees").  A.E.S. Advanced Euro Service is not, and will not be, subject to any Liability associated with such Taxes, fees and costs.

(h)

On or prior to the Closing Date, in accordance with Article 14 of Legislative Decree No. 472 of December 18, 1997, Euro Cormar will have requested (which request shall be subject to the review of the Purchaser) from the appropriate and competent Italian Governmental Entities having Tax authority two tax clearance certificates for VAT and direct Taxes ("certificati carichi pendenti fiscali per IVA e imposte dirette") (the "Italian Tax Clearance Certificates") giving evidence, as of the effective date of the Euro Cormar Separation, of any pending Tax disputes ("contestazioni in corso") and/or Tax burdens ("carichi pendenti") relating to Euro Cormar.  

(i)

True and complete copies of each of the instruments, documents, Consents, reports and corporate resolutions entered into, taken, received or produced by Euro Cormar and/or A.E.S. Advanced Euro Services to effect or otherwise consummate the Euro Cormar Separation (collectively, the "Euro Cormar Separation Documents") will have been made available to the Purchaser prior to the Closing Date. 

Section 4.13

Bank Account

.  Section 4.13 of the Fingen Sellers Disclosure Schedule sets forth the names and locations of all banks and other financial institutions at which each Company maintains a bank, savings, deposit or custodial account or safe deposit box, together with the applicable account numbers and names and identification of all Persons authorized to draw thereon or to have access thereto (including Persons holding powers of attorney or agency authority from the applicable Company or any of its Affiliates).

Section 4.14

Litigation

.  There are (a) no outstanding Orders of any Governmental Entity by which any Company or its Assets is bound and (b) no Actions by or before any Governmental Entity pending or, to the Knowledge of the Fingen Sellers, threatened against any Company or its Assets, directors or officers, other than, in each case, those which would not reasonably be expected to result in a Material Adverse Effect.

Section 4.15

Compliance with Laws; Permits

.  

(a)

None of the Companies is in material violation of any applicable Law or under investigation with respect to, or has been threatened to be charged with, or given notice of, any material violation of, any applicable Law.

(b)

Each of the Italian Purchased Companies and Jeanswear Europe is, and has been, in compliance with the mandatory provisions of Legislative Decree No. 231 of June 8, 2001.  To the Knowledge of the Fingen Sellers, there are, and have been, no circumstances, developments, changes or effects which would result in a 

40

Liability of any Italian Purchased Company (or any of its Affiliates, including, following the Closing, the Purchaser) under Legislative Decree No. 231 of June 8, 2001.

(c)

Since January 1, 2003, each Company has been and is in material compliance with all of its internal policies and/or Contracts with other Persons concerning privacy or security.  Each of the Italian Purchased Companies and Jeanswear Europe is in compliance with the "Documento Programmatico sulla Sicurezza" contemplated by Legislative Decree No. 196 of June 30, 2003 concerning personal data protection.

(d)

None of the Companies is operating under any agreement or understanding with any Governmental Entity which requires it to take, or refrain from taking, any action relating to the conduct of its business or the performance of its obligations under this Agreement which would otherwise be permitted by applicable Law, except to the extent that such agreement or understanding does not materially impair any material business practice of any Company, any acquisition of material property by any Company or the conduct of business by any Company in any material respect.

(e)

To the Knowledge of the Fingen Sellers, (i) all material Permits necessary to conduct the Business used or otherwise held in connection with the business of any Company (collectively, "Company Permits") are valid and in full force and effect; (ii) none of the Companies is in default under, or in violation of, any Company Permit, and no event has occurred or condition exists which constitutes or, that, with notice or lapse of time or both, could constitute, a default under, or violation of, any Company Permit; (iii) none of the Company Permits shall be terminated or impaired or become terminable, in whole or in part, as a result of the transactions contemplated hereby; (iv) all applications required to have been filed for the renewal of any Company Permit have been duly filed on a timely basis with the appropriate Governmental Entities; and (v) there are no material Permits required to be obtained or held by any Company (other than the Company Permits) in connection with its business.    

Section 4.16

Products

.  There is no pending or, to the Knowledge of Fingen Sellers, threatened (a) recall or investigation of, or with respect to, any such product or (b) claim against any Company deriving from the provisions of applicable Law governing (x) manufacturers' and distributors' Liabilities for the safety of such products or (y) manufacturers' Liabilities alleging the defectiveness of such products, other than ordinary course claims of customers of the Business or consumers of the products of the Business which are immaterial.

Section 4.17

Absence of Certain Payments

.  None of the Companies or, to the Knowledge of the Fingen Sellers, any of its Representatives or its Affiliates acting on its behalf has, in connection with, or otherwise relating to, the operation of its business or the business of any of its Affiliates:

(a)

made any bribe, payoff, influence payment, kickback, unlawful material gift or other unlawful payment to (i) obtain favorable treatment in securing business or (ii) to any Person in violation of any applicable Laws; 

41

(b)

used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activity to, or on behalf of, governmental officials or other Persons; 

(c)

to the Knowledge of the Fingen Sellers, accepted or received any unlawful contributions, payments, gifts or expenditures; or

(d)

taken or omitted to take any action which action or omission would violate the FCPA (assuming for purposes of this Section 4.17(d) only that the applicable Company was subject to the FCPA).

Section 4.18

Taxes

.

(a)

All Tax Returns, statements, reports and forms (including estimated tax and information returns and reports) have been filed when due in accordance with applicable Law.  None of the Companies has requested any extension of time within which to file any Tax Return.

(b)

As of the time of filing, the Tax Returns filed by, or on behalf of, any Company were true, correct and complete in all material respects.

(c)

All Taxes shown as due and payable on any Tax Return filed by, or on behalf of, any Company or that were otherwise due and payable have been timely paid or withheld and remitted to the appropriate Governmental Entity.

(d)

The charges, accruals and reserves for Taxes shown on the Company Balance Sheet are adequate to cover such Taxes as of the date thereof.

(e)

All Taxes that any Company is or was required by applicable Law to withhold or collect have been duly withheld or collected and, to the extent required, have been timely paid to the appropriate Governmental Entity.

(f)

None of the Companies has granted any extension or waiver of the statute of limitations period applicable to any Tax Return, which period (after giving effect to such extension or waiver) has not yet expired, and no power of attorney is currently in force with respect to any matter relating to Taxes of any Company.

(g)

There is no Action pending against, or with respect to, any Company in respect of any Tax, and no Governmental Entity has provided to any Fingen Seller or any Company any notice of an intention to open an Action relating to any Tax matters, any request for information relating to Tax matters or notice of assessment, deficiency or adjustment for any amount of Tax.

(h)

There are no Encumbrances for Taxes upon the Assets of any Company, except Encumbrances for current Taxes not yet due.  

(i)

Except for a tax sharing agreement among the Italian Purchased Companies, Jeanswear Europe and Fingen S.p.A., none of the Companies is 

42

currently a party to a Tax sharing agreement or other Contract to pay any Tax with any Person other than another Company.

(j)

None of the Companies has (i) a permanent establishment in any jurisdiction other than its jurisdiction of incorporation or organization, whether directly or by virtue of the activities of any Company Consultant on its behalf or (ii) received any notice from a Governmental Entity in a jurisdiction in which such Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

(k)

None of the Companies will incur any Taxes in any taxing jurisdiction upon leaving any consolidated, combined, unitary or other Tax group of companies as a result of the transactions contemplated hereby.

(l)

Each Company has complied in all material respects with respect to any information, reporting, pricing or other Tax requirement under applicable Laws relating to transfer pricing in any jurisdiction in which it is organized, formed, operates or otherwise conducts business.   

(m)

None of the Companies is a Controlled Foreign Corporation (as such term is defined in the Code).

Section 4.19

Customs

.  All transactions between any Company, on the one hand, and any other Company, Seller or Affiliate of any Seller or third party, on the other hand, including such transactions effected pursuant to, or in connection with, any Intercompany Contract or Fingen Sellers Affiliate Contract, have been conducted and performed in a manner so as to not unlawfully avoid or reduce any Liabilities (including any Taxes or fees) imposed by the "Agenzia delle Dogane" and any other applicable Governmental Entity having customs authority ("Customs").  There are no claims pending or, to the Knowledge of the Fingen Sellers, threatened against or affecting any Company or its Assets by Customs.

Section 4.20

Real and Personal Properties

.

(a)

Each Company has good and marketable title to, or a valid and binding leasehold interest in, its Assets, in any event, free and clear of all Encumbrances, except for Permitted Encumbrances. 

(b)

None of the Companies owns any real property.  Section 4.20(b) of the Fingen Sellers Disclosure Schedule sets forth a true and complete list of all Company Leased Real Property as of November 30, 2005, listing the address of each Company Leased Real Property, the lessor and lessee (or sublessor, sublessee, assign or assignee, as the case may be) under the applicable lease (each, a "Company Lease").

(c)

(i) Each Company Lease is a legal, valid, binding and enforceable obligation of the applicable Company, subject to bankruptcy, moratorium and/or other equitable defenses; (ii) none of the Companies has, or, to the Knowledge of the Fingen Sellers, has any other party thereto (including the lessor, sublessor or assignee thereunder), received written notice that it has violated or waived any material terms or 

43

conditions of any Company Lease which has resulted in a default beyond applicable notice and cure periods; (iii) the current use of the Company Leased Real Property by the applicable Company does not violate in any material respect the certificates of occupancy thereof or the applicable lease agreement; and (iv) the consummation of the transactions contemplated hereby will not constitute a default or give rise to a right of termination or cancellation of any material right or loss of material benefit under any of the Company Leases.  The Sellers have delivered or made available to the Purchaser a true and complete copy of each of the Company Lease documents listed in Section 4.20(b) of the Fingen Sellers Disclosure Schedule, which Company Leases have not been, and will not be (except as permitted hereunder), amended, modified or terminated.  To the Knowledge of the Fingen Sellers, to the extent that any Person, other than any Company, has a right to use or occupy any portion of any of the premises demised under any Company Lease, such right(s) would not reasonably be expected to result in a Material Adverse Effect.  

(d)

The Assets of the Companies include and will include as of the Closing Date all of the Assets (including all Intellectual Property rights and Hardware used by the Companies (including those used pursuant to license agreements)) necessary to conduct the Business as currently conducted.  The tangible Assets of the Companies are free from material defects, have been maintained in all material respects in accordance with normal industry practice, are in good operating condition and repair (subject to normal wear and tear) and are materially suitable for the purpose for which they are presently used.

(e)

None of the Companies conducts any business activities other than those exclusively relating to the Business.

(f)

None of the Companies has received written notice of any condemnation, expropriation or other proceedings in eminent domain pending or threatened (to the Knowledge of the Fingen Sellers) with respect to any of the Company Leased Real Property by any Person.  There is no Order outstanding, or any Action pending or, to the Knowledge of the Fingen Sellers, threatened in writing, relating to the lease, use, occupancy or operation by any Company of any of the Company Leased Real Property.

(g)

Each Company Leased Real Property (i) is adequate and suitable for its present use and (ii) has water supply, storm and sanitary sewer facilities, telephone, gas and electrical connections, fire protections, drainage and other public utilities necessary for the present conduct of the business of the Company occupying such Company Leased Real Property, except where failure to have the same would not reasonably be expected to result in a Material Adverse Effect.

Section 4.21

Intellectual Property

.

(a)

Section 4.21(a) of the Fingen Sellers Disclosure Schedule sets forth a true and complete list of all applications and registrations pertaining to Intellectual Property owned by any Company.

44

(b)

Except for the licenses granted pursuant to the Company IP Agreements, which material written licenses are set forth in Section 4.21(b) of the Fingen Sellers Disclosure Schedule, a Company owns or otherwise has the right to use all Intellectual Property rights necessary to the businesses of the Companies, free and clear of all Encumbrances.

(c)

Since January 1, 2003, there have been no Actions that would reasonably be expected to result in a Material Adverse Effect have been asserted in writing against any Company by any third party (x) alleging that the conduct of the businesses of any Company or the manufacture, sourcing, use, or sale of any product, operation of any retail store, or the use of any process, or of any Intellectual Property, now used by any Company infringes, misappropriates or otherwise violates or dilutes or otherwise makes any claim on or against any Intellectual Property rights of any such third party, or (y) challenging the validity of any Intellectual Property rights of any Company or Intellectual Property used by any Company.

(d)

To the Knowledge of the Fingen Sellers, no third party is misappropriating, infringing, diluting or violating in any material respect any Intellectual Property owned or used by the Company, and, to the Knowledge of the Fingen Sellers, no claims have been brought, asserted or threatened by or against any third party with regard to the foregoing.

(e)

All Intellectual Property set forth in Section 4.21(a) of the Fingen Sellers Disclosure Schedule is subsisting; and the applicable Company has properly and fully recorded all Company IP Agreements which are required to be recorded or registered with any Governmental Agency anywhere in the world.

(f)

To the Knowledge of the Fingen Sellers, no material Intellectual Property owned or used by any Company infringes the Intellectual Property rights of any third party or is the subject of any written notices of breach, default, termination or infringement.

(g)

Section 4.21(g) of the Fingen Sellers Disclosure Schedule sets forth a true and complete list of all Company IP Agreements.  All material Company IP Agreements are in full force and effect, and except as specifically disclosed herein, are not subject to any outstanding notices of termination or breach, default, non-renewal or other violation by any party thereto (or with notice or lapse of time or both, would be in violation or breach of or in default under any such material Company IP Agreement).

(h)

To the Knowledge of the Fingen Sellers, none of the Companies has waived any of its material rights, claims or remedies arising under, or pursuant to, any Company IP Agreement, including such material rights, claims or remedies resulting from a breach or other violation of such Company IP Agreement.

(i)

All Intellectual Property set forth in Section 4.21(a) of the Fingen Seller Disclosure Schedule has proper title ownership in the name of the Company or such other Person(s) set forth on such Schedule.

45

Section 4.22

Employee Benefits

.

(a)

Section 4.22(a)(i) of the Fingen Sellers Disclosure Schedule contains a true and complete list of the Company Business Employees as of November 30, 2005, and whether any written employment Contracts exist relating to any Company Business Employees (such Contracts, the "Company Business Employee Contracts").  Section 4.22(a)(ii) of the Sellers Disclosure Schedule contains a true and complete list, as of the date hereof, of all Company Business Employee Contracts.  To the Knowledge of the Fingen Sellers, each Company Business Employee provides employment services to the Business on an exclusive basis and does not provide any employment services to any Person other than one or more Companies.  

(b)

There are no overdue material Liabilities of any Company relating to salaries, bonuses, commissions, pensions, severance indemnity, severance payments or any other compensation or benefits of any nature.

(c)

There have been no increases with respect to the salaries, bonuses, pensions, commission or other compensation or benefits to any Company Business Employees since September 30, 2005, except for increases which were (i) required by Law or existing Contracts or (ii) made in the ordinary course of business consistent with past practice.

(d)

Section 4.22(d) of the Fingen Sellers Disclosure Schedule sets forth a true and complete list of all employee benefit plans sponsored or maintained by any Company or with respect to which any Company may have any Liability, in any case, for the benefit of the Company Business Employees or former employees of any Company (collectively, the "Company Benefit Plans").  The Sellers have made available to the Purchaser a true and complete copy of each Company Benefit Plan document, including all amendments thereto and written descriptions thereof, which Company Benefit Plan has not been, and will not be, amended, modified or terminated, except to the extent that such amendment, modification or termination would not reasonably be expected to result in a Material Adverse Effect.  The benefits provided under any Company Benefit Plan have not been increased subsequent to the date hereof.

(e)

There is no Contract with any Company Business Employee which requires notice prior to termination of the employment of such Company Business Employee, except as may be required by applicable Law or collective labor contracts.

(f)

Each Company has timely filed or caused to be timely filed true and complete copies of all required social security returns and social security reports (or equivalents of any of the foregoing) with respect to the Company Business Employees.  All Liabilities of any Company with respect to social security (including interest and penalties) (or any equivalent thereof) due and payable on or prior to the date hereof have been paid and such Liabilities which become due and payable prior to the Closing will have been paid prior to Closing.

46

(g)

Section 4.22(g)(i) of the Fingen Sellers Disclosure Schedule sets forth, as of November 30, 2005, a true and complete list of all Company Consultants with compensation in excess of €100,000 per year, indicating the services provided by such Company Consultant and the consideration paid by the applicable Company on account of such services and whether any written Contracts exist relating to any Company Consultant (such Contracts, the "Company Consultant Contracts").  Section 4.22(g)(ii) of the Fingen Sellers Disclosure Schedule contains a true and complete list of all Company Consultant Contracts as of the date hereof.  As of the date hereof, there are no, and, at Closing, there will not be any, overdue Liabilities of any Company with respect to commissions, contributions, indemnification obligations or any other amounts due to any Company Consultant (whether pursuant to the terms of any Company Consultant Contract or otherwise).  None of the Companies has any Liability, including under, or on account of, any Company Benefit Plan, arising out of the hiring of natural Persons to provide services to such Company and treating such Persons as agents, consultants or independent contractors and not as employees of the Company.  None of the Company Consultants or former agents, consultants or independent contractors of any Company or other Person has claimed or otherwise alleged that he/she is, or should be treated as, an employee of any Company.  

(h)

There are no Liabilities of any Company relating to salaries, bonuses, commissions, pensions, severance indemnity, severance payments or any other compensation or benefits of any nature owing or which could become owing to any Company Service Provider, any former Company Service Provider or any natural Person who is or was, and in such Person's capacity as, an employee, agent, consultant or independent contractor of any Company Service Provider, including such Liabilities resulting from the insolvency of any Company Service Provider.

(i)

No Company Benefit Plan provides medical, surgical, hospitalization, death or similar benefits (whether or not insured) for Company Business Employees or former employees of any Company for periods extending beyond their retirement or other termination of service, other than (i) coverage mandated by applicable Law or by collective labor agreement, (ii) death benefits under any "pension plan" or (iii) benefits the full cost of which is borne by the current or former employee (or his beneficiary).  No condition exists that would prevent any Company from amending or terminating any Company Benefit Plan providing health or medical benefits in respect of any Company Business Employee or former employee of any Company other than limitations imposed by applicable Law or by collective labor agreement.

(j)

The execution and delivery by the Fingen Sellers of this Agreement do not, and the consummation of the transactions contemplated hereby will not, (either alone or in combination with any other event) (i) entitle any Company Business Employees to resign, (ii) entitle any Company Business Employee, Company Consultant or other natural Person to any additional compensation, severance, indemnity in lieu of a notice period or other benefits, including pursuant to any Company Business Employee Contract or Company Consultant Contract, (iii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or trigger any other material 

47

obligation pursuant to, any Company Benefit Plan or (iv) result in any breach or violation of, or a default (with or without notice or lapse of time or both) under, any Company Benefit Plan.

(k)

Each Company Business Employee Contract and each Company Consultant Contract is in full force and effect and constitutes a legal, valid and binding agreement, enforceable in accordance with its terms, of the applicable Company, except to the extent that enforcement may be limited by, or subject to, (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and (ii) general equitable principles (where considered in a proceeding in equity or at law), and, to the Knowledge of the Fingen Sellers, of each other party thereto (other than Contracts that have expired or terminated in the ordinary course of business); and none of the Companies or, to the Knowledge of the Fingen Sellers, any other party to such Company Business Employee Contract or Company Consultant Contract is in violation or breach of, or default under, any such Company Business Employee Contract or Company Consultant Contract (or with notice or lapse of time or both, would be in violation or breach of or default under any such Company Business Employee Contract or Company Consultant Contract).  No written notice of default, termination or non-renewal under any such Company Business Employee Contract or Company Consultant Contract has been received by any Company or any Fingen Seller, and no action has been taken or omitted to be taken by any Company, or, to the Knowledge of the Fingen Sellers, by other parties thereto which, with the giving of notice or the lapse of time or both, would result in or become a violation or breach of, or give any Company or any Fingen Seller or any other Person the right to declare a default under, or to accelerate the maturity or performance of, or to cancel terminate or modify, any Company Business Employee Contract or Company Consultant Contract.  To the Knowledge of the Fingen Sellers, none of the Companies has waived any of its material rights, claims or remedies arising under, or pursuant to, any Company Business Employee Contract or Company Consultant Contract, including such material rights, claims or remedies resulting from a breach or other violation of such Company Business Employee Contract or Company Consultant Contract. 

(l)

The Sellers have previously provided or made available to the Purchaser, a true and complete copy of each Company Business Employee Contract and each Company Consultant Contract, which Company Business Employee Contract or Company Consultant Contract has not been, and will not be, amended, modified or terminated (except as otherwise permitted pursuant to Section 7.1).

Section 4.23

Labor Matters

. 

(a)

Section 4.23(a) of the Fingen Sellers Disclosure Schedule sets forth a true and complete list of any (i) labor agreement, collective bargaining agreement, work rules or practices, or any other labor-related Contracts with any labor union, labor organization or works council ("consiglio di fabbrica" and "rappresentanza sindacale aziendale") to which any Company is a party or is otherwise legally bound by; (ii) labor agreements, collective bargaining agreements, work rules or practice or any other labor-related Contracts that pertain to any of the Company Business Employees; (iii) 

48

Company Business Employees represented by any labor organization with respect to their employment and (iv) unfair labor practices committed by the Companies or their Representatives.  To the Knowledge of the Fingen Sellers, (i) no proceeding relating to unfair labor practices has been threatened against any Company or its Representatives since January 1, 2002, (ii) there are no labor union organizing activities with respect to any Company Business Employee, and (iii) there have been no actual or threatened labor disputes, material arbitrations, material grievances, strikes, lockouts, slowdowns or work stoppages against or affecting any Company since January 1, 2002 specific to employees of the Companies (e.g., excluding general and national strikes and work stoppages).  

(b)

Each Company and, to the Knowledge of the Fingen Sellers, each Company Service Provider has been in compliance with all applicable Laws respecting employment and employment practices, including (x) all Laws with respect to terms and conditions of employment, health and safety (including work conditions), wages, hours and overtime compensation, benefits, immigration, freedom of association Laws of the applicable country of manufacture, child (persons under the age of 15 or younger than the age for completing compulsory education, if that age is higher than 15), prison, indentured, exploited, bonded, forced and/or slave labor, employment discrimination, disability rights or benefits, equal opportunity, plant closures and layoffs, affirmative action, workers compensation, labor relations, employee leave issues and unemployment insurance and (y) and Legislative Decree No. 626/1994, Presidential Decree No. 175/1988 and Legislative Decree No. 334/1998.  No notice of violation of any of the foregoing has been received by any Fingen Seller, Company or, to the Knowledge of the Fingen Sellers, any Company Service Provider.  To the Knowledge of the Fingen Sellers, none of the Companies or any Company Service Provider utilizes forced labor, prison labor, convict labor, indentured labor or child labor in connection with the manufacture of the products for the Companies.  

(c)

There are no material Liabilities of any Company relating to labor or social security (or equivalents thereof) matters in respect of the Company Business Employees other than as otherwise provided in the Company Balance Sheet.

(d)

Each Company has materially complied with all redundancy plans.  There are no Liabilities of any Company relating to any lay-offs, redundancies or plant closings by any Company.

(e)

To the Knowledge of the Fingen Sellers, no Company Business Employee is in violation of any material term of any employment agreement, nondisclosure agreement, common law nondisclosure obligation, fiduciary duty, noncompetition agreement, restrictive covenant or other Contract with a former employer of any such employee relating (i) to the right of any such employee to be employed by any Company or (ii) to the Knowledge or Use of any Intellectual Property. 

(f)

Each Company and, to the Knowledge of the Fingen Sellers, each Company Service Provider is properly registered or licensed as a garment manufacturer in each jurisdiction which requires any such registration or licensing and in which such Company or Company Service Provider (as the case may be) conducts 

49

business, except where the failure to be so registered or licensed would not reasonably be expected to result in a Material Adverse Effect.

Section 4.24

Environmental Matters

.  

(a)

Neither the conduct nor operation of the businesses of any Company, nor any condition of any of the Company Leased Real Property, violates any applicable Environmental Law, except where such conduct or violation would not reasonably be expected to result in a Material Adverse Effect.

(b)

None of the Companies or any Fingen Seller has received or been subject to any notice, Action, Order or written information request from any Person stating or alleging, or, in the case of a written information request, raising the possibility, that any Company is in violation of any applicable Environmental Law or is otherwise liable pursuant to any applicable Environmental Law, except where such violation or liability would not reasonably be expected to result in a Material Adverse Effect.

(c)

There have been no spills, disposals or releases of Hazardous Materials on, at, under, or from any Company Leased Real Property, except where such spill, disposal or release would not reasonably be expected to result in a Material Adverse Effect.

(d)

The Purchaser hereby acknowledges and agrees that Section 4.15 and this Section 4.24 are the Fingen Sellers' sole and exclusive representations and warranties as to environmental matters and that none of the other representations and warranties contained in this Agreement shall be deemed to apply, directly or indirectly, to environmental matters.

Section 4.25

Material Contracts

.

(a)

Section 4.25(a) of the Fingen Sellers Disclosure Schedule sets forth a true and complete list of the Company Material Contracts as of November 30, 2005.  For purposes hereof, "Company Material Contracts" shall mean, collectively, each of the following types of executory Contracts, including all amendments, modifications and binding supplements thereto, to which any Company is a party or is otherwise bound:

(i)

leases (whether of real or personal property) providing for annual rentals of €100,000 or more (provided, that the Fingen Sellers hereby jointly and severally represent and warrant to the Purchaser that, other than such lease Contracts constituting Material Contracts, there are approximately 30 leases (whether of real or personal property) to which any Company is a party or is otherwise legally bound);

(ii)

Contracts for the purchase or sale of Assets, products or services providing for either (1) annual payments by or to the Companies of €100,000 or more or (2) aggregate future payments by or to the Companies of €250,000 or more;

50

(iii)

all distribution, franchise or agency Contracts providing for the sale by the Companies of Assets, products or services of €100,000 or more (other than such Contracts which (x) are non-exclusive with respect to Assets, products or services and (y) may be terminated by the applicable Company upon 30 days notice without incurrence by a Company of any payment, premium fee, penalty or similar costs);

(iv)

partnership, joint venture, consortia, co-operation, profit-sharing or shareholders Contracts with any Person (provided, that such Contracts on Section 4.25(a) of the Fingen Sellers Disclosure Schedule shall be marked by one asterisk);

(v)

Contracts with any Governmental Entity relating to the (1) participation of any Company in any amnesty program or (2) the settlement or other disposition of any Tax audit of any Company (provided, that such Contracts on Section 4.25(a) of the Fingen Sellers Disclosure Schedule shall be marked by two asterisks);

(vi)

Contracts with any Person containing any provision or covenant prohibiting or limiting the ability of any Company or its Affiliates to engage in any business activity or compete with any Person or prohibiting or limiting the ability of any Person to compete with any Company or its Affiliates (other than radius restrictions contained in any Material Contract described in Section 4.25(a)(iii)) (provided, that such Contracts on Section 4.25(a) of the Fingen Sellers Disclosure Schedule shall be marked by three asterisks);

(vii)

Contracts under which any Company has, directly or indirectly, made any advance, loan, extension of credit or capital contribution to, or other investment in, any Person, other than any other Company, in an amount in excess of €100,000 (other than extensions of trade credit in the ordinary course of business); and

(viii)

Contracts that commit capital expenditures after the date hereof in excess of €100,000.

(b)

Each Company Material Contract is in full force and effect and constitutes a legal, valid and binding agreement, enforceable in accordance with its terms, of the applicable Company, except to the extent that enforcement may be limited by, or subject to, (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and (ii) general equitable principles (where considered in a proceeding in equity or at law), and, to the Knowledge of the Fingen Sellers, of each other party thereto (other than Contracts that have expired or terminated in the ordinary course of business); and none of the Companies or, to the Knowledge of the Fingen Sellers, any other party to such Company Material Contract is in violation or breach of, or default under, any such Company Material Contract (or with notice or lapse of time or both, would be in violation 

51

or breach of or default under any such Company Material Contract).  No notice of default, termination or non-renewal under any such Company Material Contract has been received by any Company or any Fingen Seller, and no action has been taken or omitted to be taken by any Company, or, to the Knowledge of the Fingen Sellers, by other parties thereto which, with the giving of notice or the lapse of time or both, would result in or become a violation or breach of, or give any Company or any Fingen Seller or any other Person the right to declare a default under, or to accelerate the maturity or performance of, or to cancel terminate or modify, any Company Material Contract.  To the Knowledge of Fingen Sellers, none of the Companies has waived any of its material rights, claims or remedies arising under, or pursuant to, any Company Material Contract, including such material rights, claims or remedies resulting from a breach or other violation of such Company Material Contract.

(c)

The Sellers have previously provided or made available to the Purchaser, (i) a true and complete copy of each Company Material Contract, which Company Material Contract has not been, and will not be, amended, modified or terminated (except as otherwise permitted pursuant to Section 7.1) or (ii) with respect to each Company Material Contract that has not been reduced to writing, a written description thereof (including a summary of the material terms thereof), which description is set forth in Section 4.25(c) of the Fingen Sellers Disclosure Schedule, and which Company Material Contract has not been, and will not be, amended, modified or terminated.

Section 4.26

Insurance Coverage

.  Section 4.26 of the Fingen Sellers Disclosure Schedule sets forth a list of all insurance policies and fidelity bonds relating to any Company or its operations, Assets and officers and employees.  There is no material claim by any Company or any Fingen Seller pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds or in respect of which such underwriters have reserved their rights.  All premiums payable under all such policies and bonds have been timely paid, and the Companies and/or the Fingen Sellers have otherwise complied in all material respects with the terms and conditions of all such policies and bonds.  Such policies and bonds are of the type and in amounts customarily carried by Persons conducting businesses similar to the businesses of the Companies.  The Fingen Sellers do not have Knowledge of any threatened termination of, premium increase with respect to, or material alteration of coverage under, any of such policies or bonds.  

Section 4.27

Affiliate Relationships

.  

(a)

Section 4.27(a) of the Fingen Sellers Disclosure Schedule sets forth all executory Contracts between any Company, on the one hand, and any Fingen Seller and/or its Affiliates (other than any Company), on the other hand (collectively, the "Fingen Sellers Affiliate Contracts").

(b)

Section 4.27(b) of the Fingen Sellers Disclosure Schedule sets forth all material executory Contracts between any Company, on the one hand, and any other Company, on the other hand (collectively, the "Intercompany Contracts").

52

(c)

No director, officer or, to the Knowledge of the Fingen Sellers, other Affiliate (who is a natural Person) of any Company or member of any such director's, officer's, or Affiliate's immediate family:

(i)

is indebted to any Company;

(ii)

has any direct or indirect ownership interest in any supplier, customer or competitor of any Company; or 

(iii)

has a direct or indirect interest in any Company Material Contract or has a claim to have an interest in the Intellectual Property rights of any Company.

Section 4.28

Brokers

.  None of the Companies or any Fingen Seller has employed any investment banker, broker or finder or incurred any Liability for any investment banking fees, brokerage fees, commissions or finders' fees or any other similar fees or commissions in connection with the transactions contemplated by this Agreement for which the Fingen Sellers or any Company have or could have any Liability.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF CKI

Except as disclosed in the correspondingly numbered section of the disclosure Schedules delivered herewith by CKI to the Purchaser and which are attached hereto (collectively, the "CKI Disclosure Schedule"), CKI hereby represents and warrants to the Purchaser as follows:

Section 5.1

Organization and Standing

.  

(a)

Each Jeanswear N.V. Company is a company duly organized, validly existing and in good standing (or its equivalent) under the laws of the jurisdiction of its incorporation or organization and has the requisite corporate power and authority to enable it to own, lease or otherwise hold its Assets and to carry on its business as presently conducted.  Each Jeanswear N.V. Company is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction in which the conduct or nature of its business or the ownership, leasing or holding of its properties makes such qualification or good standing necessary, except such jurisdictions where the failure to be so qualified or in good standing would not reasonably be expected to result in a Material Adverse Effect.  A true and complete list of all such jurisdictions where each Jeanswear N.V. Company is qualified to do business as a foreign corporation is set forth in Section 5.1(a) of the CKI Disclosure Schedule.  

(b)

Section 5.1(b) of the CKI Disclosure Schedule sets forth a true and complete list of all Persons in which any Jeanswear N.V. Company (i) owns, directly or indirectly, any capital stock or other securities or (ii) has any direct or indirect 

53

ownership interest in any business, in each case, other than in any other Jeanswear N.V. Company.

Section 5.2

Capitalization

.

(a)

Section 5.2(a) of the CKI Disclosure Schedule sets forth a true and complete list of:  (i) the authorized capital stock (and par value per share (if applicable)) or other equity interests and (ii) the number of shares of capital stock or other equity interests issued and outstanding, in each case, for Jeanswear N.V. and each of its direct or indirect Subsidiaries as of the date hereof.  As of the Closing, the (i) authorized capital stock (and par value per share (if applicable)) or other equity interests and (ii) number of shares of capital stock or other equity interests issued and outstanding, in each case, for Jeanswear N.V. and each of its direct or indirect Subsidiaries will be as provided on Section 5.2(a) of the CKI Disclosure Schedule.  The issued and outstanding shares of capital stock of, or other equity interest in, each of Jeanswear N.V.'s direct and indirect Subsidiaries (collectively, the "Jeanswear N.V. Subsidiary Shares") are held as of the date hereof, and will be held as of immediately prior to the Closing, by the Persons and in the amounts set forth in Section 5.2(a) of the CKI Disclosure Schedule, free and clear of any Encumbrances.  All of the Jeanswear N.V. Shares and the Jeanswear N.V. Subsidiary Shares are duly authorized, validly issued, fully paid and nonassessable and have been issued in compliance with applicable securities Laws.  None of the Jeanswear N.V. Shares or the Jeanswear N.V. Subsidiary Shares has been issued in violation of any Right under any provision of applicable Law, the Organizational Documents of any Jeanswear N.V. Company, or any Contract to which any Jeanswear N.V. Company is subject or by which it is bound.  

(b)

Jeanswear N.V. has no, and since January 1, 2003, has not had, any direct or indirect Subsidiaries.

(c)

There are no outstanding Options, Rights or Warrants in respect of any equity interest(s) in any Jeanswear N.V. Company. 

(d)

CKI is, and, immediately prior to the Closing, will be, the record and beneficial owner of the amount of the Jeanswear N.V. Shares set forth next to CKI's name in Section 5.2(a) of the CKI Disclosure Schedule, free and clear of any Encumbrances.  Upon transfer and delivery of such Jeanswear N.V. Shares by CKI to the Purchaser on the Closing Date in accordance with Article II, the Sellers will deliver to the Purchaser good and valid title to such Jeanswear N.V. Shares, free and clear of any Encumbrances, excepting only (x) restrictions on the subsequent transfer of the Purchased Shares as may be imposed under applicable securities Laws and (y) Encumbrances on the Purchased Shares created by actions taken by the Purchaser.  

(e)

The transactions contemplated hereby shall not give rise to any Rights of any Person, nor does any Person otherwise have any Rights with respect to the capital stock of, or other equity interest in, any Jeanswear N.V. Company.  

54

Section 5.3

Authorization

.  CKI has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and each Ancillary Agreement to which CKI is a party, and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and the Ancillary Agreements by CKI and the consummation by CKI of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate, stockholder or other action of CKI to the extent CKI is a party thereto.  This Agreement and the Ancillary Agreements have been duly and validly executed and delivered by CKI to the extent CKI is a party thereto, and, assuming this Agreement and the Ancillary Agreements have been duly authorized, executed and delivered by the other parties thereto, each of this Agreement and the Ancillary Agreements constitutes a valid and binding agreement of CKI to the extent CKI is a party thereto, enforceable against CKI in accordance with its terms, except to the extent that enforcement may be limited by or subject to (a) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).

Section 5.4

Noncontravention

.  The execution, delivery and performance by CKI of this Agreement and each Ancillary Agreement to which it is a party and the consummation by CKI of the transactions contemplated hereby and thereby will not, (a) conflict with, or violate any provision of, the Organizational Documents of any Jeanswear N.V. Company or CKI, (b) require any Consent or Filing, (c) conflict with or violate any applicable Law, (d) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, modification or acceleration) under any note, bond, indenture, deed of trust, mortgage, lease, franchise, license, permit, instrument, Law or Contract to which any Jeanswear N.V. Company or CKI is a party or by which any Jeanswear N.V. Company or CKI is bound, except to the extent such violation, breach or default would not result in a Material Adverse Effect or (e) result in the imposition or creation of any Encumbrances on any Asset of any Jeanswear N.V. Company, the Jeanswear N.V. Shares or the Jeanswear N.V. Subsidiary Shares.

Section 5.5

Financial Statements; Liabilities

.

(a)

Insofar as the Company Financial Statements relate to the Jeanswear N.V. Companies, the Company Financial Statements have been prepared (a) from the books and records of the Companies (and Jeanswear International Trading) and (b) in conformity with Italian GAAP consistently applied during the periods involved, and fairly present in all material respects the financial condition and the results of operations and sources and uses of cash of the Companies (and Jeanswear International Trading) on a combined basis as of the dates and for the periods presented therein, except as otherwise specifically noted therein. 

(b)

None of the Jeanswear N.V. Companies has any Liabilities (whether direct, indirect, accrued or contingent) of a nature required by Italian GAAP to be disclosed on a balance sheet except for (i) Liabilities (including Taxes), commitments 

55

or obligations incurred in the ordinary course of business subsequent to September 30, 2005, (ii) Liabilities (including Taxes), commitments or obligations incurred in the ordinary course of business subsequent to September 30, 2005 and which are immaterial or (iii) Liabilities, commitments or obligations reflected on, accrued or reserved against in, the Company Balance Sheet.  None of the Jeanswear N.V. Companies has or will have as of the Closing any Liability for earnouts or other contingent payments payable to former owners of Assets, stock or other interests acquired by any Jeanswear N.V. Company or otherwise arising out of any previous acquisitions by any Jeanswear N.V. Company.

(c)

Section 5.5(c) of the CKI Disclosure Schedule sets forth a true and complete list of each jurisdiction in which a Jeanswear N.V. Company has supplied or was otherwise required to supply a Jeanswear N.V. Company Statutory Financial Filing since January 1, 2003, together with a true and complete copy of each Jeanswear N.V. Company Statutory Financial Filing filed since January 1, 2003. 

(d)

Each Jeanswear N.V. Company Statutory Financial Filing was prepared (i) in accordance with the books and records of the applicable Jeanswear N.V. Company and (ii) in accordance with Applicable GAAP consistently applied during the periods involved, and fairly presented in all material respects the financial condition and the results of operations and cash flow of the applicable Jeanswear N.V. Company as of the dates and for the periods presented therein.  No financial statements of any Person were required by Applicable GAAP to be included in any Jeanswear N.V. Company Statutory Financial Filing, except for such Person(s) included in such Jeanswear N.V. Company Statutory Financial Filing.

(e)

All Jeanswear N.V. Company Statutory Financial Filings have been filed when due in accordance with applicable Law.  As of the date hereof, none of the Jeanswear N.V. Companies has requested an extension of time within which to file any Jeanswear N.V. Company Statutory Financial Filing, other than such requests for which the applicable Company Statutory Financial Filing has since been filed.

(f)

There is no Action pending against, or with respect to, any Company relating to any Jeanswear N.V. Company Statutory Financial Filing, other than those Actions the outcome of which in the aggregate would not reasonably be expected to have a Material Adverse Effect.  No Governmental Entity has provided to CKI or any Company any notice of an intention to open an Action relating to Jeanswear N.V. Company Statutory Financial Filing matters or any request for information relating to Jeanswear N.V. Company Statutory Financial Filing matters.  None of the Jeanswear N.V. Companies has received any notice from a Governmental Entity in a jurisdiction in which such Jeanswear N.V. Company does not supply a Jeanswear N.V. Company Statutory Financial Filing that it is or may be required to do so in such jurisdiction.  

Section 5.6

Third Party Indebtedness

(a)

.  

(a)

Section 5.6(a) of the CKI Disclosure Schedule sets forth a true and complete list of all Indebtedness owing by any Jeanswear N.V. Company which 

56

is outstanding as of the date hereof and any Contracts related thereto, including the amount of principal and unpaid interest outstanding under each instrument evidencing such Indebtedness as of November 30, 2005.

(b)

No Contract relating to any Jeanswear N.V. Third Party Indebtedness contains any restriction upon (i) the prepayment of such Jeanswear Third Party Indebtedness, (ii) the incurrence of Indebtedness by any Company or (iii) the ability of any Jeanswear N.V. Company to grant any Encumbrance on the Assets of any Company.

(c)

At Closing, there will be no Jeanswear N.V. Third Party Indebtedness other than as set forth in the Sellers Third Party Indebtedness and Cash Letter.  

(d)

All Indebtedness owing by any Jeanswear N.V. Company is, and, at Closing, will be, unsecured.

Section 5.7

Books and Records

.  The books, stock transfer records, stock record books and other records of each Jeanswear N.V. Company, all of which have been made available to the Purchaser by the Sellers, are true and complete in all material respects and have been maintained in accordance with applicable Law and with sound business practices.  The minute books of each Jeanswear N.V. Company contain materially accurate and materially complete records of all meetings held and corporate action taken by the stockholders, the boards of directors, boards of supervisory board members and committees of any such boards of the Jeanswear N.V. Companies.

Section 5.8

Accounting Practices

.

(a)

Each Jeanswear N.V. Company maintains accurate books and records reflecting its Assets and Liabilities and maintains internal accounting practices which are lawful, customary and adequate for similarly situated Persons in the jurisdictions in which such Company is organized.  Without limiting the generality of the foregoing, each Jeanswear N.V. Company's: (i) transactions are recorded as necessary to permit preparation of its financial statements in accordance with Applicable GAAP and (ii) its accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection of the accounts, notes and other receivables on a current, timely and consistent basis.

(b)

To the Knowledge of CKI, since January 1, 2002, none of the Jeanswear N.V. Companies has received any written non-frivolous complaint, allegation, assertion or claim regarding the accounting, reserving or auditing practices, procedures, methodologies or methods of any Jeanswear N.V. Company, including any non-frivolous complaint, allegation, assertion or claim that any Jeanswear N.V. Company has engaged in questionable accounting, reserving or auditing practices.

Section 5.9

Inventory

.  The inventories set forth in the Company Balance Sheet (insofar as the Company Balance Sheet relates to the Jeanswear N.V. Companies) were properly stated therein at the lesser of cost or fair market value 

57

determined in accordance with Italian GAAP consistently applied.  Since September 30, 2005, the inventories related to the businesses of each Jeanswear N.V. Company have been maintained in the ordinary course of business.  All such inventories are owned free and clear of any Encumbrances, other than Permitted Encumbrances.  All of the inventories recorded on the Company Balance Sheet materially (insofar as the Company Balance Sheet relates to the Jeanswear N.V. Companies) consist of, and all inventories related to the businesses of each Jeanswear N.V. Company on the Closing Date and recorded on the Final Adjustment Statement will materially consist of, items of a quality usable or saleable in the normal course of the businesses of each Jeanswear N.V. Company, except for samples and second choice goods.

Section 5.10

Accounts Receivable

.  

(a)

All accounts, notes and other receivables of the Jeanswear N.V. Companies, whether reflected on the Company Balance Sheet (insofar as the Company Balance Sheet relates to the Jeanswear N.V. Companies) or otherwise, (i) represent actual amounts incurred and owing by the applicable account debtors, (ii) arose from bona fide transactions in the ordinary course of business, (iii) are not subject to any consignment agreement and (iv) the reserves against such receivables set forth in Section 5.10(a)(iv) of the CKI Disclosure Schedule have been reasonably determined based on past practice and in accordance with Italian GAAP.  There have not been any write-offs as uncollectible of any customer accounts receivable of any Jeanswear N.V. Company (x) from September 30, 2005 through November 30, 2005 or (y) to the Knowledge of CKI, from December 1, 2005 through the date hereof, except, in any event, for non-material write-offs in the ordinary course of business.  

(b)

To the Knowledge of CKI, to the extent applicable to the Jeanswear N.V. Companies, the order bookings of the Business set forth in Section 5.10(b) of the CKI Disclosure Schedule represent bona fide orders placed by customers of the Business in the amounts set forth therein and as of November 30, 2005.

Section 5.11

Absence of Certain Changes

.  

(a)

Since September 30, 2005, (i) except to the extent contemplated by, or in connection with, this Agreement or the Ancillary Agreements, each Jeanswear N.V. Company has conducted its business in the ordinary course and (ii) there has been no event, occurrence or development which would reasonably be expected to result in a Material Adverse Effect.

(b)

Since January 1, 2005, none of the Jeanswear N.V. Companies has declared, set aside or paid any dividend (whether a cash dividend or otherwise) or other distribution (whether shares or property or any combination thereof) in respect of any capital stock (or other equity interests) or otherwise

Section 5.12

Bank Account

.  Section 5.12 of the CKI Disclosure Schedule sets forth the names and locations of all banks and other financial institutions at 

58

which each Jeanswear N.V. Company maintains a bank, savings, deposit or custodial account or safe deposit box, together with the applicable account numbers and names and identification of all Persons authorized to draw thereon or to have access thereto (including Persons holding powers of attorney or agency authority from the applicable Jeanswear N.V. Company or any of its Affiliates).

Section 5.13

Litigation

.  There are (a) no outstanding Orders of any Governmental Entity by which any Jeanswear N.V. Company or its Assets is bound and (b) no Actions by or before any Governmental Entity pending or, to the Knowledge of CKI, threatened against any Jeanswear N.V. Company or its Assets, directors or officers, other than, in each case, those which would not reasonably be expected to result in a Material Adverse Effect.

Section 5.14

Compliance with Laws; Permits

.  

(a)

None of the Jeanswear N.V. Companies is in material violation of any applicable Law or under investigation with respect to, or has been threatened to be charged with, or given notice of, any material violation of, any applicable Law.

(b)

Jeanswear Europe is, and has been, in compliance with the mandatory provisions of Legislative Decree No. 231 of June 8, 2001.  To the Knowledge of CKI, there are, and have been, no circumstances, developments, changes or effects which would result in a Liability of Jeanswear Europe (or any of its Affiliates, including, following the Closing, the Purchaser) under Legislative Decree No. 231 of June 8, 2001.

(c)

Since January 1, 2003, each Jeanswear N.V. Company has been and is in material compliance with all of its internal policies and/or Contracts with other Persons concerning privacy or security.  Each of the Italian Purchased Companies and Jeanswear Europe is in compliance with the "Documento Programmatico sulla Sicurezza" contemplated by Legislative Decree No. 196 of June 30, 2003 concerning personal data protection.

(d)

None of the Jeanswear N.V. Companies is operating under any agreement or understanding with any Governmental Entity which requires it to take, or refrain from taking, any action relating to the conduct of its business or the performance of its obligations under this Agreement which would otherwise be permitted by applicable Law, except to the extent that such agreement or understanding does not materially impair any material business practice of any Jeanswear N.V. Company, any acquisition of material property by any Jeanswear N.V. Company or the conduct of business by any Jeanswear N.V. Company in any material respect.

(e)

To the Knowledge of CKI (i) all material Permits necessary to conduct the Business used or otherwise held in connection with the business of any Jeanswear N.V. Company (collectively, "Jeanswear N.V. Company Permits") are valid and in full force and effect; (ii) none of the Jeanswear N.V. Companies is in default under, or in violation of, any Jeanswear N.V. Company Permit, and no event has occurred or 

59

condition exists which constitutes or, that, with notice or lapse of time or both, could constitute, a default under, or violation of, any Jeanswear N.V. Company Permit; (iii) none of the Jeanswear N.V. Company Permits shall be terminated or impaired or become terminable, in whole or in part, as a result of the transactions contemplated hereby; (iv) all applications required to have been filed for the renewal of any Jeanswear N.V. Company Permit have been duly filed on a timely basis with the appropriate Governmental Entities; and (v) there are no material Permits required to be obtained or held by any Jeanswear N.V. Company (other than the Jeanswear N.V. Company Permits) in connection with its business.  

Section 5.15

Products

.  There is no pending or, to the Knowledge of CKI, threatened (a) recall or investigation of, or with respect to, any such product or (b) claim against any Jeanswear N.V. Company deriving from the provisions of applicable Law governing (x) manufacturers' and distributors' Liabilities for the safety of such products or (y) manufacturers' Liabilities alleging the defectiveness of such products other than ordinary course claims of customers of the Business or consumers of the products of the Business which are immaterial.

Section 5.16

Absence of Certain Payments

.  None of the Jeanswear N.V. Companies or, to the Knowledge of CKI, any of its Representatives or its Affiliates acting on its behalf has, in connection with, or otherwise relating to, the operation of its business or the business of any of its Affiliates: 

(a)

made any bribe, payoff, influence payment, kickback, unlawful material gift or other unlawful payment to (i) obtain favorable treatment in securing business or (ii) to any Person in violation of any applicable Laws; 

(b)

used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activity to, or on behalf of, governmental officials or other Persons; 

(c)

to the Knowledge of CKI, accepted or received any unlawful contributions, payments, gifts or expenditures; or

(d)

taken or omitted to take any action which action or omission would violate the FCPA (assuming for purposes of this Section 5.16(d) only that the applicable Jeanswear N.V. Company was subject to the FCPA).

Section 5.17

Taxes

.

(a)

All Tax Returns, statements, reports and forms (including estimated tax and information returns and reports) have been filed when due in accordance with applicable Law.  None of the Jeanswear N.V. Companies has requested any extension of time within which to file any Tax Return.

(b)

As of the time of filing, the Tax Returns filed by, or on behalf of, any Jeanswear N.V. Company were true, correct and complete in all material respects.

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(c)

All Taxes shown as due and payable on any Tax Return filed by, or on behalf of, any Jeanswear N.V. Company or that were otherwise due and payable have been timely paid or withheld and remitted to the appropriate Governmental Entity.

(d)

The charges, accruals and reserves for Taxes shown on the Company Balance Sheet are adequate to cover such Taxes as of the date thereof.

(e)

All Taxes that any Jeanswear N.V. Company is or was required by applicable Law to withhold or collect have been duly withheld or collected and, to the extent required, have been timely paid to the appropriate Governmental Entity.

(f)

None of the Jeanswear N.V. Companies has granted any extension or waiver of the statute of limitations period applicable to any Tax Return, which period (after giving effect to such extension or waiver) has not yet expired, and no power of attorney is currently in force with respect to any matter relating to Taxes of any Jeanswear N.V. Company.

(g)

There is no Action pending against, or with respect to, any Jeanswear N.V. Company in respect of any Tax, and no Governmental Entity has provided to CKI or any Jeanswear N.V. Company any notice of an intention to open an Action relating to any Tax matters, any request for information relating to Tax matters or notice of assessment, deficiency or adjustment for any amount of Tax.

(h)

There are no Encumbrances for Taxes upon the Assets of any Jeanswear N.V. Company, except Encumbrances for current Taxes not yet due.  

(i)

Except for a tax sharing agreement among the Italian Purchased Companies, Jeanswear Europe and Fingen S.p.A., none of the Jeanswear N.V. Companies is currently a party to a Tax sharing agreement or other Contract to pay any Tax with any Person other than another Company.

(j)

None of the Jeanswear N.V. Companies has (i) a permanent establishment in any jurisdiction other than its jurisdiction of incorporation or organization, whether directly or by virtue of the activities of any Jeanswear N.V. Company Consultant on its behalf or (ii) received any notice from a Governmental Entity in a jurisdiction in which such Jeanswear N.V. Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

(k)

None of the Jeanswear N.V. Companies will incur any Taxes in any taxing jurisdiction upon leaving any consolidated, combined, unitary or other Tax group of companies as a result of the transactions contemplated hereby.

(l)

Each Jeanswear N.V. Company has complied in all material respects with respect to any information, reporting, pricing or other Tax requirement under applicable Laws relating to transfer pricing in any jurisdiction in which it is organized, formed, operates or otherwise conducts business.   

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(m)

None of the Companies is a Controlled Foreign Corporation (as such term is defined in the Code).

Section 5.18

Customs

.  All transactions between any Jeanswear N.V. Company, on the one hand, and any other Company, Seller or Affiliate of any Seller or third party, on the other hand, including such transactions effected pursuant to, or in connection with, any Designated Intercompany Contract or CKI Affiliate Contract, have been conducted and performed in a manner so as to not unlawfully avoid or reduce any Liabilities (including any Taxes or fees) imposed by Customs.  There are no claims pending or, to the Knowledge of CKI, threatened against or affecting any Jeanswear N.V. Company or its Assets by Customs.

Section 5.19

Real and Personal Properties

.

(a)

Each Jeanswear N.V. Company has good and marketable title to, or a valid and binding leasehold interest in its Assets, in any event, free and clear of all Encumbrances, except for Permitted Encumbrances.

(b)

None of the Jeanswear N.V. Companies owns any real property.  Section 5.19(b) of the CKI Disclosure Schedule sets forth a true and complete list of all Jeanswear N.V. Leased Real Property as of November 30, 2005, listing the address of each Jeanswear N.V. Leased Real Property, the lessor and lessee (or sublessor, sublessee, assign or assignee, as the case may be) under the applicable lease (each, a "Jeanswear N.V. Lease").

(c)

(i) Each Jeanswear N.V. Lease is a legal, valid, binding and enforceable obligation of the applicable Jeanswear N.V. Company, subject to bankruptcy, moratorium and/or other equitable defenses; (ii) none of the Jeanswear N.V. Companies has, or, to the Knowledge of CKI, has any other party thereto (including the lessor, sublessor or assignee thereunder), received written notice that it has violated or waived any material terms or conditions of any Jeanswear N.V. Lease which has resulted in a default beyond applicable notice and cure periods; (iii) the current use of the Jeanswear N.V. Leased Real Property by the applicable Jeanswear N.V. Company does not violate in any material respect the certificates of occupancy thereof or the applicable lease agreement; and (iv) the consummation of the transactions contemplated hereby will not constitute a default or give rise to a right of termination or cancellation of any material right or loss of material benefit under any of the Jeanswear N.V. Leases.  The Sellers have delivered or made available to the Purchaser a true and complete copy of each of the Jeanswear N.V. Lease documents listed in Section 5.19(b) of the CKI Disclosure Schedule, which Jeanswear N.V. Leases have not been and will not be (except as permitted hereunder), amended, modified or terminated.  To the Knowledge of CKI, to the extent that any Person, other than any Jeanswear N.V. Company, has a right to use or occupy any portion of any of the premises demised under any Jeanswear N.V. Lease, such right(s) would not reasonably be expected to result in a Material Adverse Effect.  

(d)

The Assets of the Jeanswear N.V. Companies include and will include as of the Closing Date all of the Assets (including all Intellectual Property 

62

rights and Hardware used by the Jeanswear N.V. Companies (including those used pursuant to license agreements)) necessary to conduct the Business as currently conducted.  The tangible Assets of the Jeanswear N.V. Companies are free from material defects, have been maintained in all material respects in accordance with normal industry practice, are in good operating condition and repair (subject to normal wear and tear) and are materially suitable for the purpose for which they are presently used.

(e)

None of the Jeanswear N.V. Companies conducts any business activities other than those exclusively relating to the Business.

(f)

None of the Jeanswear N.V. Companies has received written notice of any condemnation, expropriation or other proceedings in eminent domain pending or threatened (to the Knowledge of CKI) with respect to any of the Jeanswear N.V. Leased Real Property by any Person.  There is no Order outstanding, or any Action pending or, to the Knowledge of CKI, threatened in writing, relating to the lease, use, occupancy or operation by any Jeanswear N.V. Company of any of the Jeanswear N.V. Leased Real Property.

(g)

Each Jeanswear N.V. Leased Real Property (i) is adequate and suitable for its present use and (ii) has water supply, storm and sanitary sewer facilities, telephone, gas and electrical connections, fire protections, drainage and other public utilities necessary for the present conduct of the business of the Company occupying such Jeanswear N.V. Leased Real Property, except where failure to have the same would not reasonably be expected to result in a Material Adverse Effect.

Section 5.20

Intellectual Property

.

(a)

Section 5.20(a) of the CKI Disclosure Schedule sets forth a true and complete list of all applications and registrations pertaining to Intellectual Property owned by any Jeanswear N.V. Company.

(b)

Except for the licenses granted pursuant to the Jeanswear N.V. IP Agreements, which material written licenses are set forth in Section 5.20(b) of the CKI Disclosure Schedule, a Jeanswear N.V. Company owns or otherwise has the right to use all Intellectual Property rights necessary to the businesses of Jeanswear N.V. Companies, free and clear of all Encumbrances.

(c)

Since January 1, 2003, there have been no Actions that would reasonably be expected to result in a Material Adverse Effect have been asserted in writing against any Jeanswear N.V. Company by any third party (x) alleging that the conduct of the businesses of any Jeanswear N.V. Company or the manufacture, sourcing, use, or sale of any product, operation of any retail store, or the use of any process, or of any Intellectual Property, now used by any Jeanswear N.V. Company infringes, misappropriates or otherwise violates or dilutes or otherwise makes any claim on or against any Intellectual Property rights of any such third party, or (y) challenging the validity of any Intellectual Property rights of any Jeanswear N.V. Company or Intellectual Property used by any Jeanswear N.V. Company.

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(d)

To the Knowledge of CKI, no third party is misappropriating, infringing, diluting or violating in any material respect any Intellectual Property owned or used by the Jeanswear N.V. Company, and to the Knowledge of CKI, no claims have been brought, asserted or threatened by or against any third party with regard to the foregoing.

(e)

All Intellectual Property set forth in Section 5.20(a) of the CKI Disclosure Schedule is subsisting; and the applicable Jeanswear N.V. Company has properly and fully recorded all Jeanswear N.V. IP Agreements which are required to be recorded or registered with any Governmental Agency anywhere in the world.

(f)

To the Knowledge of CKI, no material Intellectual Property owned or used by any Jeanswear N.V. Company infringes the Intellectual Property rights of any third party or is the subject of any written notices of breach, default, termination or infringement.

(g)

Section 5.20(g) of the CKI Disclosure Schedule sets forth a true and complete list of all Jeanswear N.V. IP Agreements.  All material Jeanswear N.V. IP Agreements are in full force and effect, and except as specifically disclosed herein, are not subject to any outstanding notices of termination or breach, default non-renewal or other violation by any party thereto or with notice or lapse of time or both, would be in violation or breach of or in default under any such material Jeanswear N.V. IP Agreements.

(h)

To the Knowledge of CKI, none of the Companies has waived any of its material rights, claims or remedies arising under, or pursuant to, any Jeanswear N.V. IP Agreement, including such material rights, claims or remedies resulting from a breach or other violation of such Jeanswear N.V. IP Agreement.

(i)

All Intellectual Property set forth in Section 5.20(a) of the CKI Disclosure Schedule has proper title ownership in the name of the Company or such other Person(s) set forth on such Schedule.

Section 5.21

Employee Benefits

.

(a)

Section 5.21(a)(i) of the CKI Disclosure Schedule contains a true and complete list of the Jeanswear N.V. Company Business Employees as of November 30, 2005, and whether any written employment Contracts exist relating to any Jeanswear N.V. Business Employees (such Contracts, the "Jeanswear N.V. Business Employee Contracts").  Section 5.21(a)(ii) of the CKI Disclosure Schedule contains a true and complete list, as of the date hereof, of all Jeanswear N.V. Business Employee Contracts.  To the Knowledge of CKI, each Jeanswear N.V. Business Employee provides employment services to the Business on an exclusive basis and does not provide any employment services to any Person other than one or more Companies.  

(b)

There are no overdue material Liabilities of any Jeanswear N.V. Company relating to salaries, bonuses, commissions, pensions, severance indemnity, severance payments or any other compensation or benefits of any nature. 

64

(c)

There have been no increases with respect to the salaries, bonuses, pensions, commission or other compensation or benefits to any Jeanswear N.V Business Employees since September 30, 2005, except for increases which were (i) required by Law or existing Contracts or (ii) made in the ordinary course of business consistent with past practice.

(d)

Section 5.21(d) of the CKI Disclosure Schedule sets forth a true and complete list of all employee benefit plans sponsored or maintained by any Jeanswear N.V. Company or with respect to which any Company may have any Liability, in any case, for the benefit of the Jeanswear N.V. Business Employees or former employees of any Jeanswear N.V. Company (collectively, the "Jeanswear N.V. Benefit Plans").  The Sellers have made available to the Purchaser a true and complete copy of each Jeanswear N.V. Benefit Plan document, including all amendments thereto and written descriptions thereof, which Jeanswear N.V. Benefit Plan has not been, and will not be, amended, modified or terminated, except to the extent that such amendment, modification or termination would not reasonably be expected to result in a Material Adverse Effect.  The benefits provided under any Jeanswear N.V Benefit Plan have not been increased subsequent to the date hereof.

(e)

There is no Contract with any Jeanswear N.V Business Employee which requires notice prior to termination of the employment of such Jeanswear N.V Business Employee, except as may be required by applicable Law or collective labor contracts.

(f)

Each Jeanswear N.V. Company has timely filed or caused to be timely filed true and complete copies of all required social security returns and social security reports (or equivalents of any of the foregoing) with respect to the Jeanswear N.V Business Employees.  All Liabilities of any Jeanswear N.V. Company with respect to social security (including interest and penalties) (or any equivalent thereof) due and payable on or prior to the date hereof have been paid and such Liabilities which become due and payable prior to the Closing will have been paid prior to Closing.

(g)

Section 5.21(g)(i) of the CKI Disclosure Schedule sets forth, as of November 30, 2005, a true and complete list of all Jeanswear N.V. Company Consultants with compensation in excess of €100,000 per year, indicating the services provided by such Jeanswear N.V. Company Consultant and the consideration paid by the applicable Jeanswear N.V. Company on account of such services and whether any written Contracts exist relating to any Jeanswear N.V. Company Consultant (such Contracts, the "Jeanswear N.V. Company Consultant Contracts").  Section 5.21(g)(ii) of the CKI Disclosure Schedule contains a true and complete list of all Jeanswear N.V. Company Consultant Contracts as of the date hereof.  As of the date hereof, there are no, and, at Closing, there will not be any, overdue Liabilities of any Jeanswear N.V. Company with respect to commissions, contributions, indemnification obligations or any other amounts due to any Jeanswear N.V. Company Consultant (whether pursuant to the terms of any Jeanswear N.V. Company Consultant Contract or otherwise).  None of the Jeanswear N.V. Companies has any Liability, including under, or on account of, any Jeanswear N.V. Benefit Plan, arising out of the hiring of natural Persons to provide services to such 

65

Jeanswear N.V. Company and treating such Persons as agents, consultants or independent contractors and not as employees of the Jeanswear N.V. Company.  None of the Jeanswear N.V. Company Consultants or former agents, consultants or independent contractors of any Jeanswear N.V. Company or other Person has claimed or otherwise alleged that he/she is, or should be treated as, an employee of any Jeanswear N.V. Company.  

(h)

There are no Liabilities of any Jeanswear N.V. Company relating to salaries, bonuses, commissions, pensions, severance indemnity, severance payments or any other compensation or benefits of any nature owing or which could become owing to any Jeanswear N.V. Service Provider, any former Jeanswear N.V. Service Provider or any natural Person who is or was, and in such Person's capacity as, an employee, agent, consultant or independent contractor of any Jeanswear N.V. Service Provider, including such Liabilities resulting from the insolvency of any Jeanswear N.V. Service Provider.

(i)

No Jeanswear N.V Benefit Plan provides medical, surgical, hospitalization, death or similar benefits (whether or not insured) for Jeanswear N.V. Business Employees or former employees of any Jeanswear N.V. Company for periods extending beyond their retirement or other termination of service, other than (i) coverage mandated by applicable Law or by collective labor agreement, (ii) death benefits under any "pension plan" or (iii) benefits the full cost of which is borne by the current or former employee (or his beneficiary).  No condition exists that would prevent any Jeanswear N.V. Company from amending or terminating any Jeanswear N.V Benefit Plan providing health or medical benefits in respect of any Jeanswear N.V. Business Employee or former employee of any Jeanswear N.V. Company other than limitations imposed by applicable Law or by collective labor agreement.

(j)

The execution and delivery by CKI of this Agreement do not, and the consummation of the transactions contemplated hereby will not, (either alone or in combination with any other event) (i) entitle any Jeanswear N.V. Company Business Employee to resign, (ii) entitle any Jeanswear N.V Company Business Employee, Jeanswear N.V Company Consultant or other natural Person to any additional compensation, severance, indemnity in lieu of a notice period or other benefits, including pursuant to any Jeanswear N.V Business Employee Contract or Company Consultant Contract, (iii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or trigger any other material obligation pursuant to, any Jeanswear N.V Benefit Plan or (iv) result in any breach or violation of, or a default (with or without notice or lapse of time or both) under, any Jeanswear N.V Company Benefit Plan.

(k)

Each Jeanswear N.V. Business Employee Contract and each Jeanswear N.V. Consultant Contract is in full force and effect and constitutes a legal, valid and binding agreement, enforceable in accordance with its terms, of the applicable Jeanswear N.V. Company, except to the extent that enforcement may be limited by, or subject to, (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights 

66

generally and (ii) general equitable principles (where considered in a proceeding in equity or at law), and, to the Knowledge of CKI, of each other party thereto (other than Contracts that have expired or terminated in the ordinary course of business); and none of the Companies or, to the Knowledge of CKI, any other party to such Jeanswear N.V. Business Employee Contract or Jeanswear N.V. Consultant Contract is in violation or breach of, or default under, any such Jeanswear N.V. Business Employee Contract or Jeanswear N.V. Consultant Contract (or with notice or lapse of time or both, would be in violation or breach of or default under any such Jeanswear N.V. Business Employee Contract or Jeanswear N.V. Consultant Contract).  No written notice of default, termination or non-renewal under any such Jeanswear N.V. Business Employee Contract or Jeanswear N.V. Consultant Contract has been received by any Jeanswear N.V. Company or CKI, and no action has been taken or omitted to be taken by any Jeanswear N.V. Company, or, to the Knowledge of CKI, by other parties thereto which, with the giving of notice or the lapse of time or both, would result in or become a violation or breach of, or give any Jeanswear N.V. Company or CKI or any other Person the right to declare a default under, or to accelerate the maturity or performance of, or to cancel terminate or modify, any Jeanswear N.V. Business Employee Contract or Jeanswear N.V. Consultant Contract.  To the Knowledge of CKI, none of the Jeanswear N.V. Companies has waived any of its material rights, claims or remedies arising under, or pursuant to, any Jeanswear N.V. Business Employee Contract or Jeanswear N.V. Consultant Contract, including such material rights, claims or remedies resulting from a breach or other violation of such Jeanswear N.V. Business Employee Contract or Jeanswear N.V. Consultant Contract. 

(l)

The Sellers have previously provided or made available to the Purchaser, a true and complete copy of each Jeanswear N.V. Business Employee Contract or Jeanswear N.V. Consultant Contract, which Jeanswear N.V. Business Employee Contract or Jeanswear N.V. Consultant Contract has not been, and will not be, amended, modified or terminated (except as otherwise permitted pursuant to Section 7.1).

Section 5.22

Labor Matters

. 

(a)

Section 5.22(a) of the CKI Disclosure Schedule sets forth a true and complete list of any (i) labor agreement, collective bargaining agreement, work rules or practices, or any other labor-related Contracts with any labor union, labor organization or works council ("consiglio di fabbrica" and "rappresentanza sindacale aziendale") to which any Jeanswear N.V. Company is a party or is otherwise legally bound by; (ii) labor agreements, collective bargaining agreements, work rules or practice or any other labor-related Contracts that pertain to any of the Jeanswear N.V. Business Employees; (iii) Jeanswear N.V. Business Employees represented by any labor organization with respect to their employment and (iv) unfair labor practices committed by the Jeanswear N.V. Companies or their Representatives.  To the Knowledge of CKI, (i) no proceeding relating to unfair labor practices has been threatened against any Jeanswear N.V. Company or its Representatives since January 1, 2002, (ii) there are no labor union organizing activities with respect to any Jeanswear N.V Business Employee, and (iii) there have been no actual or threatened labor disputes, material arbitrations, material grievances, strikes, lockouts, slowdowns or work stoppages against or affecting 

67

any Jeanswear N.V. Company since January 1, 2002 specific to employees of the Jeanswear N.V. Companies (e.g., excluding general and national strikes and work stoppages).  

(b)

Each Jeanswear N.V. Company and, to the Knowledge of CKI, each Jeanswear N.V. Service Provider has been in compliance with all applicable Laws respecting employment and employment practices, including (x) all Laws with respect to terms and conditions of employment, health and safety (including work conditions), wages, hours and overtime compensation, benefits, immigration, freedom of association Laws of the applicable country of manufacture, child (persons under the age of 15 or younger than the age for completing compulsory education, if that age is higher than 15), prison, indentured, exploited, bonded, forced and/or slave labor, employment discrimination, disability rights or benefits, equal opportunity, plant closures and layoffs, affirmative action, workers compensation, labor relations, employee leave issues and unemployment insurance and (y) and Legislative Decree No. 626/1994, Presidential Decree No. 175/1988 and Legislative Decree No. 334/1998.  No notice of violation of any of the foregoing has been received by CKI, any Jeanswear N.V. Company or, to the Knowledge of CKI, any Jeanswear N.V. Service Provider.  To the Knowledge of CKI, none of the Jeanswear N.V. Companies or any Jeanswear N.V. Service Provider utilizes forced labor, prison labor, convict labor, indentured labor or child labor in connection with the manufacture of the products for the Jeanswear N.V. Companies.

(c)

There are no material Liabilities of any Jeanswear N.V. Company relating to labor or social security (or equivalents thereof) matters in respect of the Jeanswear N.V. Business Employees other than as otherwise provided in the Company Balance Sheet (insofar as the Company Balance Sheet relates to the Jeanswear N.V. Companies).

(d)

Each Jeanswear N.V. Company has materially complied with all redundancy plans.  There are no Liabilities of any Jeanswear N.V. Company relating to any lay-offs, redundancies or plant closings by any Jeanswear N.V. Company.

(e)

To the Knowledge of the CKI, no Jeanswear N.V. Business Employee is in violation of any material term of any employment agreement, nondisclosure agreement, common law nondisclosure obligation, fiduciary duty, noncompetition agreement, restrictive covenant or other Contract with a former employer of any such employee relating (i) to the right of any such employee to be employed by any Jeanswear N.V. Company or (ii) to the Knowledge or Use of any Intellectual Property. 

(f)

Each Jeanswear N.V. Company and, to the Knowledge of CKI, each Jeanswear N.V. Service Provider is properly registered or licensed as a garment manufacturer in each jurisdiction which requires any such registration or licensing and in which such Jeanswear N.V.  Company or Jeanswear N.V. Service Provider (as the case may be) conducts business, except where the failure to be so registered or licensed would not reasonably be expected to result in a Material Adverse Effect.

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Section 5.23

Environmental Matters

.

(a)

Neither the conduct nor operation of the businesses of any Jeanswear N.V. Company, nor any condition of any of the Jeanswear N.V. Leased Real Property, violates any applicable Environmental Law, except where such conduct or violation would not reasonably be expected to result in a Material Adverse Effect.

(b)

None of the Jeanswear N.V. Companies or CKI has received or been subject to any notice, Action, Order or written information request from any Person stating or alleging, or, in the case of a written information request, raising the possibility, that any Jeanswear N.V. Company is in violation of any applicable Environmental Law or is otherwise liable pursuant to any applicable Environmental Law, except where such violation or liability would not reasonably be expected to result in a Material Adverse Effect.

(c)

There have been no spills, disposals or releases of Hazardous Materials on, at, under, or from any Jeanswear N.V. Leased Real Property, except where such spill, disposal or release would not reasonably be expected to result in a Material Adverse Effect. 

(d)

The Purchaser hereby acknowledges and agrees that Section 5.14 and this Section 5.23 are CKI's sole and exclusive representations and warranties as to environmental matters and that none of the other representations and warranties contained in this Agreement shall be deemed to apply directly or indirectly to environmental matters.

Section 5.24

Material Contracts

.

(a)

Section 5.24(a) of the CKI Disclosure Schedule sets forth a true and complete list of the Jeanswear N.V. Company Material Contracts as of November 30, 2005.  For purposes hereof, "Jeanswear N.V. Company Material Contracts" shall mean, collectively, each of the following types of executory Contracts, including all amendments, modifications and binding supplements thereto, to which any Company is a party or is otherwise bound:

(i)

leases (whether of real or personal property) providing for annual rentals of €100,000 or more (provided, that CKI hereby represents and warrants to the Purchaser that, other than such lease Contracts constituting Material Contracts, there are approximately 30 leases (whether of real or personal property) to which any Jeanswear N.V. Company is a party or is otherwise legally bound);

(ii)

Contracts for the purchase or sale of Assets, products or services providing for either (1) annual payments by or to the Jeanswear N.V. Companies of €100,000 or more or (2) aggregate future payments by or to the Jeanswear N.V. Companies of €250,000 or more;

69

(iii)

all distribution, franchise or agency Contracts providing for the sale by the Jeanswear N.V. Companies of Assets, products or services of €100,000 or more (other than such Contracts with (x) are non-exclusive with respect to Assets, products or services and (y) may be terminated by the applicable Jeanswear N.V. Company upon 30 days notice without incurrence by a Jeanswear N.V. Company of any payment premium fee, penalty, or similar costs);

(iv)

partnership, joint venture, consortia, co-operation, profit-sharing or shareholders Contracts with any Person (provided, that such Contracts on Sections 5.24(a) of the CKI Disclosure Schedule shall be marked by one asterisk);

(v)

Contracts with any Governmental Entity relating to the (1) participation of any Jeanswear N.V. Company in any amnesty program or (2) the settlement or other disposition of any Tax audit of any Jeanswear N.V. Company (provided, that such Contracts on Sections 5.24(a) of the CKI Disclosure Schedule shall be marked by two asterisks);

(vi)

Contracts with any Person containing any provision or covenant prohibiting or limiting the ability of any Jeanswear N.V. Company or its Affiliates to engage in any business activity or compete with any Person or prohibiting or limiting the ability of any Person to compete with any Jeanswear N.V. Company or its Affiliates (other than radius restrictions contained in any Material Contract described in Section 5.24 (a)(iii) of the CKI Disclosure Schedule) ( provided, that such Contracts on Section 5.24(a) of CKI Disclosure Schedule shall be marked by three asterisks);

(vii)

Contracts under which any Jeanswear N.V. Company has, directly or indirectly, made any advance, loan, extension of credit or capital contribution to, or other investment in, any Person, other than any other Jeanswear N.V. Company, in an amount in excess of €100,000 (other than extensions of trade credit in the ordinary course of business); and 

(viii)

Contracts that commit capital expenditures after the date hereof in excess of €100,000;

(b)

Each Jeanswear N.V. Company Material Contract and CK Jeanswear License is in full force and effect and constitutes a legal, valid and binding agreement, enforceable in accordance with its terms, of the applicable Jeanswear N.V. Company, except to the extent that enforcement may be limited by, or subject to, (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and (ii) general equitable principles (where considered in a proceeding in equity or at law), and, to the 

70

Knowledge of CKI, of each other party thereto (other than Contracts that have expired or terminated in the ordinary course of business); and none of the Jeanswear N.V. Companies or, to the Knowledge of CKI, any other party to such Jeanswear N.V. Company Material Contract is in violation or breach of, or default under, any such Jeanswear N.V. Company Material Contract (or with notice or lapse of time or both, would be in violation or breach of or default under any such Jeanswear N.V. Company Material Contract).  No notice of default, termination or non-renewal under any such Jeanswear N.V. Company Material Contract has been received by any Jeanswear N.V. Company or CKI, and no action has been taken or omitted to be taken by any Jeanswear N.V. Company, or to the Knowledge of CKI, by other parties thereto which, with the giving of notice or the lapse of time or both, would result in or become a violation or breach of, or give any Jeanswear N.V. Company or CKI or any other Person the right to declare a default under, or to accelerate the maturity or performance of, or to cancel terminate or modify, any Jeanswear N.V. Company Material Contract.  To the Knowledge of CKI, none of the Jeanswear N.V. Companies has waived any of its material rights, claims or remedies arising under, or pursuant to, any Jeanswear N.V. Company Material Contract, including such material rights, claims or remedies resulting from a breach or other violation of such Company Material Contract.

(c)

The Sellers have previously provided or made available to the Purchaser, (i) a true and complete copy of each Jeanswear N.V. Company Material Contract, which Jeanswear N.V. Company Material Contract has not been, and will not be, amended, modified or terminated (except as permitted pursuant to Section 7.1) or (ii) with respect to each Jeanswear N.V. Company Material Contract that has not been reduced to writing, a written description thereof (including a summary of the material terms thereof), which description is set forth in Section 5.24(c) of the CKI Disclosure Schedule, and which Jeanswear N.V. Company Material Contract has not been, and will not be, amended, modified or terminated.

Section 5.25

Insurance Coverage

.  Section 5.25 of the CKI Disclosure Schedule sets forth a list of all insurance policies and fidelity bonds relating to any Jeanswear N.V. Company or its operations, Assets and officers and employees.  There is no material claim by any Jeanswear N.V. Company or CKI pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds or in respect of which such underwriters have reserved their rights.  All premiums payable under all such policies and bonds have been timely paid, and the Jeanswear N.V. Companies and/or CKI have otherwise complied in all material respects with the terms and conditions of all such policies and bonds.  Such policies and bonds are of the type and in amounts customarily carried by Persons conducting businesses similar to the businesses of the Jeanswear N.V. Companies.  CKI does not have Knowledge of any threatened termination of, premium increase with respect to, or material alteration of coverage under, any of such policies or bonds.  

Section 5.26

Affiliate Relationships

.  

(a)

Section 5.26(a) of the CKI Disclosure Schedule sets forth all executory Contracts between any Company, on the one hand, and CKI and/or its 

71

Affiliates (other than any Company), on the other hand (collectively, the "CKI Affiliate Contracts").

(b)

Section 5.26(b) of the CKI Disclosure Schedule sets forth all material executory Contracts between any Jeanswear N.V. Company, on the one hand, and any other Company, on the other hand (collectively, the "Designated Intercompany Contracts").

(c)

No director (to the extent such director was appointed or otherwise designated by CKI) or officer of any Jeanswear N.V. Company or member of any such director's or officer's immediate family:

(i)

is indebted to any Jeanswear N.V. Company;

(ii)

has any direct or indirect ownership interest in any supplier, customer or competitor of any Jeanswear N.V. Company; or 

(iii)

has a direct or indirect interest in any Jeanswear N.V. Company Material Contract or has a claim to have an interest in the Intellectual Property rights of any Jeanswear N.V. Company.

Section 5.27

Brokers

.  None of the Jeanswear N.V. Companies or CKI has employed any investment banker, broker or finder or incurred any Liability for any investment banking fees, brokerage fees, commissions or finders' fees or any other similar fees or commissions in connection with the transactions contemplated by this Agreement for which CKI or any Jeanswear N.V. Company have or could have any Liability.

Section 5.28

CKI's Knowledge

.  Notwithstanding anything herein to the contrary, all of the Designated Representations and Warranties are made to CKI's Knowledge.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF PURCHASER 

Except as disclosed in the correspondingly numbered section of the disclosure Schedules delivered herewith by the Purchaser to the Sellers and which are attached hereto (collectively, the "Purchaser Disclosure Schedule"), the Purchaser hereby represents and warrants to the Sellers as follows:

Section 6.1

Organization and Existence

.  The Purchaser is a company duly organized, validly existing and in good standing (or its equivalent) under the laws of the State of Delaware and has the requisite corporate power and authority to enable it to own, lease or otherwise hold its Assets and to carry on its business as presently conducted.  The Purchaser is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction in which the conduct or nature of its business or 

72

the ownership, leasing or holding of its properties makes such qualification or good standing necessary, except such jurisdictions where the failure to be so qualified or in good standing would not reasonably be expected to result in a material adverse effect on the ability of the Purchaser, to consummate the transactions contemplated hereby.  

Section 6.2

Authorization

.  The Purchaser has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and each Ancillary Agreement to which the Purchaser is a party, and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and the Ancillary Agreements by the Purchaser and the consummation by the Purchaser of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate, stockholder or other action of the Purchaser to the extent the Purchaser is a party thereto.  This Agreement and the Ancillary Agreements have been duly and validly executed and delivered by the Purchaser to the extent the Purchaser is a party thereto, and, assuming this Agreement and the Ancillary Agreements have been duly authorized, executed and delivered by the other parties thereto, each of this Agreement and the Ancillary Agreements constitutes a valid and binding agreement of the Purchaser to the extent the Purchaser is a party thereto, enforceable against the Purchaser in accordance with its terms, except to the extent that enforcement may be limited by or subject to (a) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).

Section 6.3

Noncontravention

.  The execution, delivery and performance by the Purchaser of this Agreement and each Ancillary Agreement to which it is a party and the consummation by the Purchaser of the transactions contemplated hereby and thereby will not, (a) conflict with, or violate any provision of, the Organizational Documents of the Purchaser, (b) require any Consent or Filing, (c) conflict with or violate any applicable Law or (d) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, modification or acceleration) under any note, bond, indenture, deed of trust, mortgage, lease, franchise, license, permit, instrument, Law or Contract to which the Purchaser is a party or by which either the Purchaser is bound, except to the extent such violation, breach or default would not result in a material adverse effect on the ability of the Purchaser to consummate the transactions contemplated hereby.

Section 6.4

Financing

.  The Purchaser will have, at or prior to the Closing Date, sufficient funds available to pay the Closing Purchase Price.  To the knowledge of the Purchaser, upon consummation of the Acquisition, the Purchaser will have reasonably sufficient working capital to operate the Business.

Section 6.5

Brokers

.  Other than JPMorgan Securities Inc., the Purchaser has not employed any investment banker, broker or finder or incurred any Liability for any investment banking fees, brokerage fees, commissions or finders' fees or any other similar fees or commissions in connection with the transactions contemplated 

73

by this Agreement for which the Purchaser or any Company has or could have any Liability.

ARTICLE VII

COVENANTS

Section 7.1

Conduct of the Business

.

(a)

Except as otherwise expressly provided in this Agreement (including in respect of the consummation of the Euro Cormar Separation and the CKI Share Conversion and Section 7.1(d)), from the date of this Agreement until the earlier of the termination of this Agreement or the Closing, the Jeanswear N.V. Sellers shall use their commercially reasonable efforts to cause each Jeanswear N.V. Company and the Retail Sellers shall use their commercially reasonable efforts to cause each Retail Company to conduct its business only in the ordinary course of business.  Without limiting the generality of the foregoing, the Jeanswear N.V. Sellers shall use commercially reasonable efforts to cause each Jeanswear N.V. Company and the Retail Sellers shall use commercially reasonable efforts to cause each Retail Company to preserve intact such Company's present business organization.  In addition, the Jeanswear N.V. Sellers and the Retail Sellers (as the case may be) shall use commercially reasonable efforts to cause each Jeanswear N.V. Company and each Retail Company (as the case may be) not to, without the prior written consent of the Purchaser (unless otherwise expressly provided in this Agreement (including in respect of the consummation of the Euro Cormar Separation and the CKI Share Conversion and Section 7.1(d))):

(i)

amend its Organizational Documents or take any action with respect to any such amendment thereof;

(ii)

authorize, issue, sell or otherwise dispose of, or commit to sell or deliver any shares of, capital stock or other equity interests, including any Options, Rights or Warrants with respect to any Company;

(iii)

split, combine or reclassify any shares of any capital stock or other equity interests; declare, set aside or pay any dividend (whether a cash dividend or otherwise) or other distribution (whether shares or property or any combination thereof) in respect of any capital stock (or other equity interests) or otherwise; or directly or indirectly redeem, purchase or otherwise acquire any capital stock or other equity interests, including any Option, Right or Warrant with respect to any Person;

(iv)

except in the ordinary course of business or as required pursuant to any Company Business Employee Contract or Company Consultant Contract, increase or otherwise change the rate or 

74

nature of compensation (including wages, salaries and bonuses) for services provided by any Company Business Employee or any Company Consultant;

(v)

enter into any employment or similar Contract with any Company Business Employee, Company Consultant or prospective employee, agent, consultant or independent contractor providing for annual payments by the Companies of  €80,000 or more;

(vi)

except as otherwise required by applicable Law, adopt any new employee benefit plan, policy, program or arrangement, or amend any Company Benefit Plan in a way that would serve to materially increase the benefits payable thereunder;

(vii)

enter into, or materially amend the terms of, any collective bargaining agreement or similar labor Contract;

(viii)

adopt a plan of complete or partial liquidation, dissolution, merger, demerger, consolidation, restructuring, recapitalization, equity contribution or other reorganization;

(ix)

except as may be required as a result of a change in Law, change any of the accounting principles or practices (whether for financial accounting or tax purposes) used by any Company;

(x)

revalue any of its Assets, including write-off notes or accounts receivable, other than in the ordinary course of business;

(xi)

make or revoke any material Tax election, change an accounting period, adopt or change an accounting method, file any amended Tax Return, or enter into any agreement to settle or compromise any Tax Liability;

(xii)

except in the ordinary course of business, (i) incur, assume or compromise any Indebtedness or issue any debt securities; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any Person; (iii) make any loans, advances or capital contributions to any Person; (iv) pledge or otherwise encumber shares of capital stock or other equity interests of any Company; or (v) mortgage or pledge any of the Assets of any Company, or create or suffer to exist any Encumbrance thereupon, other than Permitted Encumbrances;

(xiii)

sell, license, lease or otherwise dispose of any Assets, except pursuant to Contracts existing as of the date hereof relating to the sale or disposition of products of any Company or otherwise in the ordinary course;

75

(xiv)

enter into, terminate or materially (A) amend, (B) extend or (C) waive any right, claim or remedy arising under, or pursuant to, any material Contract, including all Company IP Agreements (other than in the ordinary course);

(xv)

acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other Person (or division thereof) or any equity interest therein, or any Assets of any Person (other than Assets acquired in the ordinary course); 

(xvi)

within any 30-day period subsequent to the date hereof, authorize or make capital expenditures in the aggregate in excess of €500,000;

(xvii)

take or fail to take any action whereby any material Intellectual Property rights owned or used by any Company may lapse or become abandoned or unenforceable;

(xviii)

enter into any transaction or Contract which restricts any Company or its Affiliates from engaging in any business or activity anywhere in the world, other than distribution, franchise or agency Contracts (x) providing for the sale by the Companies of Assets, products or services of less than €200,000 and (y) which contain reasonable and customary radius restrictions on any Company (but not on any of its Affiliates (other than any other Company));

(xix)

institute any Action or settle or compromise any pending or threatened Action (1) which relates to the transactions contemplated hereby (other than any Action by any Seller or its Affiliates (including any Company) against the Purchaser) or (2) that is, or is reasonably expected to be, material to the Business;

(xx)

request or require any Person to accelerate the payment of, factor, or write-off or otherwise reduce amounts owing by any Person in respect of, the accounts receivable of any Company, except in the ordinary course of business or as otherwise required by Applicable GAAP;

(xxi)

defer the payment of the accounts payable of any Company beyond such Company's payment practices in the ordinary course of business; 

(xxii)

take any other action not in the ordinary course of business which affects the Closing Date Working Capital, including accelerating the shipment of any inventory of any Company or taking any other action which would accelerate the sales of any products of any Company; or

76

(xxiii)

take or agree in writing or otherwise to take any of the actions described in Sections 7.1(a)(i) through 7.1(a)(xxii) or any action which would make any of the representations or warranties of any of the Sellers contained in this Agreement untrue or incorrect.

(b)

Except as otherwise expressly provided in this Agreement, from the date hereof through the Closing, the Jeanswear N.V. Sellers (with respect to the Jeanswear N.V. Companies) and the Retail Sellers (with respect to the Retail Companies) shall not, and shall cause their Affiliates and/or the applicable Companies not to, sell, transfer, assign, pledge or take any other action that would result in any Encumbrance on the Purchased Shares or the Subsidiary Shares.

(c)

Notwithstanding anything in this Section 7.1 to the contrary, at any time prior to the Closing, CKI shall have the right to enforce the terms of any licensing Contract set forth in Schedule II in accordance with their respective terms (it being understood that nothing in this Section 7.1(c) shall have any effect on the terms and conditions of the CKI Release Agreement).

(d)

Notwithstanding anything herein to the contrary, from the date of this Agreement until the earlier of the termination of this Agreement or the Closing, Fingen S.p.A. shall use its commercially reasonable efforts to cause CMI to conduct its business in accordance with the business plan set forth on Exhibit E hereto (the "CMI Business Plan") and otherwise only in the ordinary course.  Without limiting the generality of the foregoing, Fingen S.p.A. shall use its commercially reasonable efforts to cause CMI to preserve intact its present business organization, and retain the services of the key business employees and consultants and preserve its relationships with customers, suppliers and others having business dealings with CMI, all with the intent of preserving unimpaired its goodwill and ongoing businesses at the CMI Closing Date.

Section 7.2

Access to Information; Confidentiality

.

(a)

Subject to the terms and conditions of this Agreement and applicable Law, from the date of this Agreement until the earlier of the termination of this Agreement or the Closing, the Retail Sellers and the Jeanswear N.V. Sellers (as the case may be) shall, and each of them shall cause their Representatives to, give the Purchaser and its Representatives, investment bankers, attorneys and accountants reasonable access to the business of each Jeanswear N.V. Company or each Retail Company (as the case may be), as well as their respective operations, properties, personal property, books and records, Contracts and commitments during normal business hours and upon prior notice (provided, that, such access shall not unreasonably interfere with normal operations of any Company and, in the Sellers' discretion, such access may be monitored by an Affiliate or Representative of the Sellers) and shall furnish to the Purchaser and its authorized Representatives, investment bankers, attorneys and accountants such financial and operating data, including financial reports prepared for the directors and officers of any Jeanswear N.V. Company or each Retail Company (as the case may be) or the Sellers, and other information as the Purchaser may reasonably request and instruct the Representatives of the Companies to assist the Purchaser in its investigation of any 

77

Company.  Without limiting the generality of the foregoing, the Jeanswear N.V. Sellers or the Retail Sellers (as the case may be) shall (a) provide, or cause to be provided, reasonable access to the properties of any Company and (b) use their commercially reasonable efforts to provide, or cause to be provided, reasonable access to the properties of any Company Service Provider, in each case, as the Purchaser may request for purposes of performing audits in order to determine whether the Jeanswear N.V. Sellers and the Retail Sellers are in compliance with the representations and warranties set forth in Sections 4.23(b) and 5.22(b), respectively.

(b)

For a period of three years following the date hereof, the Jeanswear N.V. Sellers (with respect to the Jeanswear N.V. Companies), the Retail Sellers (with respect to the Retail Companies), and the Purchaser shall, and shall cause their respective Representatives, Affiliates, investment bankers, attorneys, accountants and agents to, keep confidential and not disclose or transfer any information regarding any Company or the Purchaser (in the case of any Seller), or the Sellers (in the case of the Purchaser) obtained in connection with the transactions contemplated hereby or otherwise unless such information (i) is or becomes publicly available (other than as a result of breach of this Section 7.2(b)), (ii) is disclosed after written approval for such disclosure has been given by the Purchaser or the Sellers, as appropriate or (iii) is requested pursuant to, or required by applicable Law, to be disclosed (provided, that, the party receiving such request shall promptly notify the Purchaser, in the case of any of the Sellers, or the Sellers, in the case of the Purchaser, so that the applicable party may seek a protective order or other appropriate remedy).

Section 7.3

Commercially Reasonable Efforts

.

(a)

Subject to the terms and conditions of this Agreement and applicable Law, each of the Sellers and the Purchaser shall use their commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated hereby as soon as practicable.  Without limiting the foregoing, each of the Sellers, on the one hand and on behalf of any Company, and the Purchaser, on the other hand, shall use their commercially reasonable efforts to (to the extent not already obtained or completed) (i) obtain all Consents, Permits or Orders by, and give all necessary notices to, and make all Filings with, and applications and submissions to, any Governmental Entity or other Person, including in respect of, or as required by, applicable antitrust Laws, necessary in connection with the consummation of the transactions contemplated hereby as soon as reasonably practicable; and (ii) provide all such information concerning such party (or, in the case of any Seller, such Company) as may be necessary or reasonably requested in connection with any of the foregoing.  No later than three Business Days after the date hereof, the Purchaser shall file or cause to be filed, the application, documents and other materials required to be filed with the Italian anti-trust authorities ("Autorita Garante della Concurrenza") in connection with the consummation of the transactions contemplated by this Agreement.

(b)

Each of the Sellers and the Purchaser shall keep each other reasonably apprised of the status of matters relating to the completion of the transactions 

78

contemplated hereby and shall reasonably cooperate in connection with obtaining all required Consents of any Governmental Entity.  In that regard, each of the Sellers, on the one hand, and the Purchaser, on the other hand, shall, without limitation, and, in each case, subject to applicable Law:  (i) promptly notify each other of, and if in writing, furnish each other with copies of (or, in the case of oral communications, advise each other orally of) any communications from or with any Governmental Entity with respect to the Acquisition or any of the other transactions contemplated hereby, (ii) permit each other to review and discuss in advance, and consider in good faith the views of the other in connection with, any proposed written (or any material proposed oral) communication with any such Governmental Entity, (iii) not participate in any meeting, teleconference or videoconference with any such Governmental Entity unless it first consults with the Sellers or the Purchaser (as the case may be) and to the extent permitted by such Governmental Entity gives the Sellers or the Purchaser (as the case may be) the opportunity to attend and participate thereat, (iv) furnish each other with copies of all correspondence, filings and communications between it and any such Governmental Entity with respect to this Agreement and the transactions contemplated hereby and (v) furnish each other with such necessary information and reasonable assistance as the Sellers or the Purchaser (as the case may be) may reasonably request in connection with its preparation of necessary filings or submissions of information to any such Governmental Entity.  The Sellers, on the one hand, and the Purchaser, on the other hand, as each deems advisable and necessary, may reasonably designate any competitively sensitive material provided to the other under this Section 7.3(b) as "counsel only."  Such materials and the information contained therein shall be given only to the outside legal counsel of the recipient and will not be disclosed by such outside counsel to employees, officers or directors of the recipient unless express permission is obtained in advance from the source of the materials (the Sellers or the Purchaser, as the case may be) or such applicable Person's legal counsel.

(c)

Except as otherwise expressly provided herein, prior to the Closing, the Purchaser shall not, without the prior consent of the Sellers (which consent shall not be unreasonably withheld, conditioned or delayed) contact or communicate with any Business customer or Company Service Provider in connection with the transactions contemplated hereby.

Section 7.4

Transitional Matters; Post-Closing Books and Records

.

(a)

The Purchaser, on the one hand, and the Jeanswear N.V. Sellers (with respect to the Jeanswear N.V. Companies) and the Retail Sellers (with respect to the Retail Companies), on the other hand, shall use commercially reasonable efforts to cooperate with each other, and shall cause their respective Representatives to cooperate with each other, for a period of not less than 180 days after the Closing Date to ensure the orderly transition of the Companies from the Sellers to the Purchaser and to minimize any disruption that might result from the transition contemplated hereby; provided, that, this Section 7.4(a) shall not apply to the transitional matters described in Section 7.4(b).  During such 180-day period, upon reasonable written notice and during normal business hours, the parties shall provide each other with such information and records and make such of its Representatives, investment bankers, attorneys and 

79

accountants as may reasonably be requested by such other party in connection with financial reporting and accounting matters that relate to the Companies or the preparation of any Tax Return, Tax audit or Action with respect to Taxes that relates to any Company.  The party requesting such assistance shall reimburse the other party for reasonable out-of-pocket costs and expenses incurred in providing such assistance pursuant to this Section 7.4.  The access rights provided pursuant to this Section 7.4 shall be in addition to those rights described in Section 2.4.

(b)

The Purchaser and the applicable Fingen Sellers (as the case may be) hereby agree to, or to cause the applicable Companies or the applicable Sellers to (as the case may be), provide the services described in Schedule 7.4(b) to the Purchaser or the Fingen Sellers (as the case may be) in accordance with the terms and conditions set forth therein.

(c)

For a period of five years following the Closing Date (or such longer period as may be required by any Governmental Entity or legal proceeding or applicable Law):

(i)

unless consented to in writing (which consent shall not be unreasonably withheld, delayed or conditioned) by the Sellers or the Purchaser (as the case may be), the Sellers or the Purchaser (as the case may be) shall not dispose of or destroy any of the books, records or files relating to Business; provided, that requests by the Sellers or the Purchaser (as the case may be) to dispose of or destroy any such books, records or files shall be made in writing and shall specify the contents of, and the matters to which, such books, records or files relate; provided, further, that, this Section 7.4(c)(i) shall apply to CKI solely in its capacity as a Company shareholder and shall not limit the ability of CKI (in its capacity as a licensor) to destroy or dispose of any books, records or files relating to any applicable licensing Contract; and

(ii)

subject to applicable Law and appropriate contractual arrangements regarding confidentiality, the Purchaser or the Sellers (as the case may be) shall allow the Sellers or the Purchaser (as the case may be) and their respective Affiliates and Representatives, attorneys and accountants, reasonable access to the books, records and files which are reasonably required by such parties for purposes related to Tax matters (including preparation of any Tax Returns), regulatory filings, financial statements or the conduct of any litigation or regulatory dispute, in any event, during regular business hours and upon reasonable notice.  The requesting party (whether the Sellers or the Purchaser) shall have the right to make copies of any such books, records and files, at such requesting parties' expense.

Section 7.5

Expenses

.  Except as otherwise expressly provided in this Agreement, whether or not the Closing takes place, all costs and expenses incurred in connection with this Agreement, any Ancillary Agreement and any other agreements 

80

entered into in connection with, or in anticipation of, the Acquisition shall be paid by the party incurring such costs and expenses.  Notwithstanding any provision herein to the contrary, all Sellers Expenses shall be incurred and borne by the Fingen Sellers, CKI and/or their respective Affiliates (other than any Company or CMI).

Section 7.6

Termination of Affiliate Contracts

.  The Fingen Sellers shall, and shall cause their respective Affiliates (other than the Companies), on the one hand, and the Companies, on the other hand, to terminate, effective at any time at or prior to the Closing, the Fingen Sellers Affiliate Contracts, other than the Fingen Sellers Affiliate Contracts set forth on Schedule 7.6 (the "Termination of Affiliate Contracts").  The Termination of Affiliate Contracts shall result in none of the Companies or, at or following the Closing, the Purchaser or its Affiliates being subject to any Liabilities with respect to such Fingen Sellers Affiliate Contracts or otherwise as a result of the Termination of Affiliate Contracts, including in respect of any outstanding amounts payable by any Company to any Person (other than another Company).  At the Closing, each of the Fingen Sellers, on the one hand, and the Purchaser and Warnaco on the other hand (as the case may be) and their respective Affiliates (other than the Companies) shall provide (in a form reasonably acceptable to the other parties) a full written release and exculpation to, and for the benefit of, the parties and any other Affiliates, from any Liability, Loss, restriction or performance in connection with, arising out of, or relating to, such terminated Fingen Sellers Affiliate Contracts and the Termination of Affiliate Contracts.

Section 7.7

Italian GAAP Financials

.   

(a)

The Sellers shall use their commercially reasonable efforts to cause KPMG (or such other independent accounting firm which the parties may agree to in writing) (the "Italian GAAP Financials Auditors") to (i) conduct an audit of the Companies in accordance with U.S. GAAS and to deliver the Italian GAAP Financials as soon as practicable, including preparing, or causing to be prepared, the necessary financial information (including applicable financial statements) required by the Italian GAAP Financials Auditors of the Sellers and the Companies in order to conduct such audit and make such delivery and providing such access to the properties of any Company as the Italian GAAP Financials Auditors may reasonably request in order to conduct a physical count of the inventory of the Companies and (ii) consent to the inclusion of the Italian GAAP Financials Auditors' report to the Italian GAAP Financials in such Filings as are required to be made by the Purchaser or any of its Affiliates pursuant to the applicable rules of the Exchange Act of 1934, as amended, relating to Form 8-K. 

(b)

Notwithstanding anything in Section 7.7(a) to the contrary, until the Italian GAAP Financials are delivered to the Purchaser and to the extent permitted by the Italian GAAP Financials Auditors' internal policies and procedures, the Sellers shall (i) deliver to the Purchaser and its Representatives (from time to time or as otherwise reasonably requested by the Purchaser) status reports with respect to, among other things, the Italian GAAP Financials Auditors' progress in completing the Italian GAAP Financials, (ii) not take or fail to take any action which would prevent the 

81

Purchaser from communicating with, or receiving any documentation or other information (including any work papers) from, the Italian GAAP Financials Auditors relating to its audit of the Companies (including its preparation of the Italian GAAP Financials), and (iii) use their commercially reasonable efforts to deliver to the Purchaser and its Representatives copies of all material documentation or other material information relating to the Italian GAAP Financials which are delivered by the Sellers to, or which are received by the Sellers from, the Italian GAAP Financials Auditors.

(c)

All fees, costs and other amounts owing to the Italian GAAP Financials Auditors solely in respect of its services provided in connection with the Acquisition (collectively, the "Preparation Costs"), including the Italian GAAP Financials Auditors' audit of the Italian GAAP Financials, shall be incurred and borne by one or more of the Sellers or its Affiliates (other than the Companies or CMI); provided, that, at the Closing, the Purchaser shall reimburse the Sellers for 80% of the Preparation Costs (such amount of the Preparation Costs, the "Preparation Costs Reimbursement Amount") (which amount shall serve as an adjustment to the Base Purchase Price as further described in Section 2.2(a)); provided, further, that, in the event that this Agreement is terminated for any reason (whether pursuant to Section 10.1 or otherwise and without regard to the date of such termination), the Purchaser shall reimburse the Sellers for 80% of the Preparation Costs no later than two Business Days after (x) such termination and (y) receipt by the Purchaser of an accounting prepared by the Italian GAAP Financials Auditor of the Preparation Costs owing at the time of such termination.

(d)

Notwithstanding anything herein to the contrary, the Purchaser shall have received the Italian GAAP Financials (together with the Italian GAAP Financials Auditors' work-papers relating to the audit of the Italian GAAP Financials) at least four days prior to the Closing Date; provided, that, the Purchaser may not delay the Closing if all other conditions set forth in Article VIII have been satisfied or waived.

Section 7.8

Taxes

.

(a)

The Jeanswear N.V. Sellers and the Retail Sellers (as the case may be) shall (on behalf of the Jeanswear N.V. Companies or the Retail Companies (as the case may be)), or shall cause the Jeanswear N.V. Companies or the Retail Companies (as the case may be) to, prepare and file, in a manner consistent with prior practice except as required by applicable Law, all Tax Returns that are required to be filed by, or with respect to, the applicable Companies that are due on or prior to the day immediately prior to the Closing Date and shall remit or cause to be remitted any Taxes arising in respect of such Tax Returns.  The Purchaser shall file, or cause to be filed, all other Tax Returns with respect to any Company and shall remit or cause to be remitted any Taxes arising in respect of such Tax Returns.  With respect to any Tax Return (i) to be prepared by the Purchaser in accordance with this Section 7.8 and (ii) relating to any Tax period beginning prior to the day immediately prior to the Closing Date, the Purchaser shall provide the Sellers with a draft of any such Tax Return no later than 10 Business Days prior to the time that such Tax Return is filed and shall allow the Sellers to review, comment upon and reasonably approve, without undue delay, any such Tax 

82

Return.  No later than 10 Business Days following the filing of any such Tax Return, the Jeanswear N.V. Sellers and the Retail Sellers (as the case may be) shall reimburse the Purchaser for the portion of the Taxes shown on the Tax Return attributable to the period ending on the day immediately prior to the Closing Date, as determined in accordance with Section 7.8(b).  Notwithstanding the foregoing, the Purchaser shall file, or shall cause each applicable Company to file, all Tax Returns relating to Transfer Taxes, shall remit any Transfer Taxes in respect of such Tax Returns and shall provide the Sellers with copies of such Tax Returns no later than 10 Business Days following the time that any such Tax Return is filed; provided, that, upon its receipt of any such Tax Return and at the Purchaser's written request, the Jeanswear N.V. Sellers and the Retail Sellers (as the case may be) shall promptly reimburse the Purchaser for one-half of any amounts paid by the Purchaser in respect of Transfer Taxes reflected in the Tax Return.  If Tax Returns relating to Transfer Taxes are required by applicable Law to be filed by the Sellers, the Purchaser shall provide the Jeanswear N.V. Sellers and the Retail Sellers (as the case may be) with a draft of any such Tax Return no later than 10 Business Days prior to the time that such Tax Return is required to be filed and shall allow the Jeanswear N.V. Sellers and the Retail Sellers (as the case may be) to review, comment upon and approve any such Tax Return; provided, further, that, at the  written request of the Jeanswear N.V. Sellers and the Retail Sellers (as the case may be), the Purchaser shall promptly reimburse the Jeanswear N.V. Sellers and the Retail Sellers (as the case may be) for one-half of any amounts paid by the Jeanswear N.V. Sellers and the Retail Sellers (as the case may be) in respect of Transfer Taxes reflected in the Tax Return filed by the Jeanswear N.V. Sellers and the Retail Sellers (as the case may be).   

(b)

If requested by the Purchaser, the Jeanswear N.V. Sellers, and/or the Retail Sellers (as the case may be) will, or will cause their applicable Affiliates to, unless prohibited by applicable Law, close the taxable period of each Company as of the close of business on the Closing Date.  The Jeanswear N.V. Sellers and/or the Retail Sellers (as the case may be), shall not, and such Persons shall cause their Affiliates not to take any position inconsistent with the preceding sentence on any Tax Return.  Any Taxes attributable to a taxable period that ends on or before the Closing Date shall be allocated to the applicable Seller(s).  Any Taxes attributable to a taxable period that begins after the Closing Date shall be allocated to the Purchaser.  If applicable Law does not permit any Company to close its taxable year as of the close of business on the Closing Date, or where Taxes are assessed with respect to a taxable period which includes the Closing Date (but does not end on that day), then Taxes, if any, attributable to the taxable period of such Company beginning before and ending after the Closing Date shall be allocated (i) to the applicable Seller(s) for the period up to and including the Closing Date and (ii) to the Purchaser for the period subsequent to the Closing Date.  In the case of any Taxes that are imposed on a periodic basis and are payable for a taxable period that includes (but does not end on) the Closing Date, the portion of such Tax which relates to the portion of such taxable period ending on the Closing Date shall (x) in the case of any Taxes other than Taxes based upon or related to income or receipts that are imposed on the business or the assets acquired, be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in the entire taxable period, and (y) in the case of any tax 

83

based upon or related to income or receipts, be deemed equal to the amount which would be payable if the relevant taxable period ended on the Closing Date.  

(c)

Each of the Sellers, on the one hand, and the Purchaser, on the other hand, shall, and shall cause its Representatives, attorneys and accountants to, provide the other party with such assistance as may reasonably be requested by any of them in connection with the preparation of any Tax Return, any Action by any Governmental Entity, any judicial or administrative Actions relating to Liability for Taxes, and each shall, or shall cause any Company to, retain and provide the other parties with any records or information that may be relevant to any such Tax Return or Action.  Such assistance shall include making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder and shall include providing copies of any relevant Tax Returns and supporting work schedules.

Section 7.9

Non-Solicitation of Employees; Non-Competition

.  

(a)

Until the two-year anniversary of the Closing, none of the Fingen Sellers nor any of its Affiliates will, directly or indirectly, solicit for purposes of employment, offer to hire, entice away, or enter into any employment Contract or similar contract with any employee of the Purchaser or any of its Affiliates with an annual base salary of €50,000 (or the United States Dollar equivalent applicable at such time), including any Company, or otherwise solicit, induce or otherwise encourage any such person to discontinue, cancel or refrain from entering into any employment or similar relationship (contractual or otherwise) with the Purchaser or any of its respective Affiliates, including any Company (other than through general advertising or other general solicitation not targeted to the Purchaser or any of its respective Affiliates (including any Company's employees or contractors) without the Purchaser's prior written consent; provided, that the foregoing shall not prohibit the solicitation of employment or hiring by any Fingen Seller (or its Affiliates) of any natural Persons (x) who respond to general advertising or general solicitations that are not targeted or directed specifically to such Persons or (y) whose employment with a Company has been terminated by such Company.

(b)

Until the three-year anniversary of the Closing, none of the Fingen Sellers or its Affiliates will, directly or indirectly, own, manage, control or participate in the ownership, management or control of, or be related or otherwise affiliated in any manner with, any business similar to the Business or the Collection Business which competes with the Business or the Collection Business by marketing products under the trademarks listed in Schedule 7.9(b) anywhere that any Company currently conducts business; provided, that the foregoing shall not (x) prohibit any of the Fingen Sellers or its Affiliates from owning, as a passive investment, 5% or less of the outstanding equity of any publicly-traded entity and (y) apply to any business owned by a Fingen Seller or its Affiliates as of the date hereof but only to the extent such business competes with Business or the Collection Business as of the date hereof..

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(c)

Until the three-year anniversary of the Closing Date, none of the Fingen Sellers or its Affiliates will, directly or indirectly, take any action which materially adversely interferes with the business relationship between any agent or distributor of the Companies as of the date hereof or as of the Closing Date, including by soliciting, inducing or otherwise encouraging such agent or distributor to discontinue such business relationship; provided, that, this Section 7.9(c) shall not prohibit any Fingen Seller or its Affiliates from maintaining any existing business relationship with any such agent or distributor.

(d)

For the avoidance of doubt, this Section 7.9 shall not restrict the activities of CKI or its Affiliates.

Section 7.10

Bank Accounts

.  Prior to the Closing Date, the Jeanswear N.V. Sellers and/or the Retail Sellers (as the case may be) shall, and shall cause their respective Affiliates to, change, effective as of the Closing, the individuals authorized to draw on, or having access to, the bank, savings, deposit or custodial accounts and safe deposit boxes maintained by any Company to the individuals designated in writing by the Purchaser not less than three Business Days prior to the Closing Date.

Section 7.11

Waiver of Rights

.  Each Seller hereby irrevocably and unconditionally waives, and each Seller shall cause its Affiliates (including the applicable Companies) to irrevocably and unconditionally waive, any Rights relating to the Purchased Shares or the Subsidiary Shares which any Seller or its Affiliates (including any Company) may have pursuant to, or arising under, any Organizational Document of any Company (including any shareholders agreements or similar agreement applicable to any Company) or otherwise, in any event, which would be exercisable or otherwise available to such Seller or its Affiliates (including any Company) as a result of the Acquisition or any other transaction contemplated hereby, and each Seller shall not, and each Seller shall cause each of its Affiliates (including the applicable Companies) not to, take or fail to take any action which would have the effect of causing any such any Right to be exercised or otherwise effected.

Section 7.12

Resignations

. 

(a)

The Sellers shall cause (i) such executive officers of any Company as the Purchaser may request in writing not less than two Business Days prior to the Closing Date (such written request, the "Resignation Request") to resign in such Person's capacity as an officer, effective as at the Closing and (ii) each director and supervisory board member of any Company to resign, in the case of each of subclauses (i) and (ii), effective as at the Closing.  In connection with such resignations, the Sellers shall cause each director and supervisory board member of any Company to duly execute and deliver to the Purchaser such Person's resignation in a form reasonably acceptable to the Purchaser (which such resignation shall include a waiver and release with respect to any claims (other than, with respect to supervisory board members, claims in respect of accrued (but not overdue) fees owing to such supervisory board members) such Person may have against any Company).  Notwithstanding anything in this Section 7.12(a) to the contrary, the Sellers shall not terminate the employment of any executive officer set forth 

85

in the Resignation Request (it being understood that such officer's resignation shall be limited to the resignation of such Person's title as an executive officer of the applicable Company).

(b)

The Fingen Sellers shall cause each Italian Purchased Company and the Jeanswear N.V. Sellers shall cause Jeanswear Europe, in each case, to duly call and hold a board of directors meeting and/or stockholders/quotaholders meeting immediately prior to the Closing to effectuate the appointment of new directors, executive officers and/or supervisory board members as the Purchaser shall request not less than two Business Days prior to the Closing Date (the "New Appointments Request").  The Fingen Sellers or the Jeanswear N.V. Sellers (as the case may be) shall take all actions necessary to cause each Italian Company and Jeanswear Europe (as the case may be) to duly call, give notice of, and convene such meeting of such Company in accordance with applicable Law and the Organizational Documents of such Company.

Section 7.13

Transfer of Nominee Shares

.  Promptly following the date hereof (and, in any event, prior to the Closing), the Jeanswear N.V. Sellers shall, and shall cause their respective Affiliates (including the applicable Jeanswear N.V. Companies) to, in each case, in accordance with applicable Law and the Organizational Documents of such Sellers and their respective Affiliates, (i) take all actions necessary to transfer the Gold Lightening Shares not held by a Company (such Gold Lightening Shares, the "Gold Lightening Nominee Shares") and the Jeanswear Asia Shares not held by a Company (such Jeanswear Asia Shares, the "Jeanswear Asia Nominee Shares"), in each case, to Jeanswear Korea and (ii) cause Jeanswear Korea (1) to execute a declaration of trust (in a form reasonably acceptable to the Purchaser) in favor of Jeanswear Asia and in respect of the Gold Lightening Nominee Shares (the "Gold Lightening Declaration of Trust"), (2) to execute a declaration of trust (in a form reasonably acceptable to the Purchaser) in favor of Jeanswear N.V. and in respect of the Jeanswear Asia Nominee Shares (the "Jeanswear Asia Declaration of Trust" and, together with the Gold Lightening Declaration of Trust, the "Jeanswear N.V. Declarations of Trust"), (3) to comply with the terms and conditions of each of the Jeanswear N.V. Declarations of Trust and (4) not to take any action which would create or suffer to exist any Encumbrance upon the Gold Lightening Nominee Shares or the Jeanswear Asia Nominee Shares or which would otherwise violate the terms and conditions of this Agreement.

Section 7.14

Euro Cormar Separation

.  The Fingen Sellers shall cause Euro Cormar and A.E.S. Advanced Euro Service to take all necessary corporate and other actions in order to consummate the Euro Cormar Separation prior to Closing in accordance with applicable Law, Euro Cormar's and A.E.S. Advanced Euro Service's Organizational Documents and the provisions of this Agreement, including in such a manner so as not to cause the Fingen Sellers to be in breach or other violation of Section 4.11.  Euro Cormar shall (i) bear the amount of the Expert Fee in its entirety and (ii) deliver to the Purchaser an accounting, in writing not less than two day prior to the Closing Date (in reasonable detail), of the amount of all of the Separation Fees.  If the amount of all of the Separation Fees exceeds €5,000, the Sellers shall reimburse the Purchaser for such excess amount (which excess amount shall serve as an adjustment to the Base Purchase Price as further described in Section 2.2(a)).

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Section 7.15

CK Jeanswear Licenses

.  At Closing, CKI and its applicable Affiliates, on the one hand, and the Purchaser and their respective applicable Affiliates, on the other hand, shall execute, or cause to be executed, each of the Contracts attached hereto as Exhibit D, in each case, in the form attached hereto as Exhibit D or such other form as CKI and the Purchaser or their respective applicable Affiliates may otherwise agree to on or prior to the Closing (collectively, the "CK Jeanswear Licenses").

Section 7.16

Indebtedness

.  At Closing, the Purchaser and/or their respective Affiliates shall (a) repay all Sellers Third Party Indebtedness and (b) otherwise cause to be released (unless the Purchaser and/or its respective Affiliates shall have previously released) all of the guarantee(s) of each Applicable Guarantor.

Section 7.17

Director Liability

.  

(a)

To the fullest extent permitted by applicable Law, the Purchaser hereby unconditionally and irrevocably waives and relinquishes for itself and on behalf of its Affiliates (including its directors) and employees any and all any claims, counterclaims, offsets, causes of action, damages and Liabilities, that he, she or it has had, may have or claims to have had, as of the Closing or at any time thereafter directly against any director or supervisory board member of any Company, arising out of, or resulting from, matters existing or occurring on or prior to the Closing Date, including the transactions contemplated hereby.  The Purchaser hereby agrees that the Sellers may cause any Company to approve, on or prior to the Closing Date, such stockholders/quotaholders resolutions as may be reasonably required to cause the Companies to unconditionally waive for itself and on behalf of its Affiliates and employees any and all any claims, counterclaims, offsets, causes of action, damages and Liabilities, that it may have as of the Closing or at any time thereafter directly against any director or supervisory board member of any Company, arising out of, or resulting from, matters existing or occurring on or prior to the Closing Date, including the transactions contemplated hereby; provided, that the Sellers shall (x) provide the Purchaser with drafts of such resolutions no later than five Business Days prior to their approval and (x) include for adoption such reasonable comments as the Purchaser may provide thereto.

(b)

Section 7.17(a) shall be deemed effective as of the Closing.

Section 7.18

Delivery of Books and Records and Other Files

.  The Sellers shall take all actions necessary to cause (a) the minute books, stock transfer records, stock record books (or equivalent corporate book) and corporate seal (if in existence) of each Company and all other materials related to their corporate administration and (b) all other files (including Tax Returns) maintained by the Sellers relating to any Company, including copies of all Contracts (including Company IP Agreements all historical and archived files maintained by Fingen S.p.A. relating to designs and specifications) and related amendments, correspondence and other documentations, in each case, to be delivered to the applicable Company CMI on or prior the Closing (to the extent such books, records, corporate seals and other files are not kept with the relevant Company as of the date hereof).  

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Section 7.19

CMI Transfer Agreement

.  At Closing, Fingen S.p.A. and the Purchaser shall execute, or cause to be executed, the agreement attached hereto as Exhibit F, in the form attached hereto as Exhibit F or such other form as Fingen S.p.A. and the Purchaser may otherwise agree to on or prior to the Closing (the "CMI Transfer Agreement")

ARTICLE VIII

CONDITIONS TO CLOSING

Section 8.1

Conditions of the Parties' Obligations to Effect the Closing

.  The respective obligations of the parties to this Agreement to effect the Closing shall be subject to the satisfaction or waiver by each of the parties prior to the Closing of the following conditions: 

(a)

no Governmental Entity shall have enacted, issued, promulgated, enforced or entered any Law that is in effect and that has the effect of making the Closing illegal or otherwise prohibiting consummation of the transactions contemplated hereby; and

(b)

all Consents of Governmental Entities listed in Schedule 8.1(b) shall have been obtained, all such approvals shall remain in full force and effect, all statutory waiting periods in respect thereof (including under applicable antitrust Laws) shall have expired and no such approval or expiration shall contain any material conditions, limitations or restrictions.

Section 8.2

Additional Conditions to Obligation of the Sellers to Effect the Closing

.  The obligations of the Sellers to effect the Closing shall be subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:

(a)

the Purchaser shall have performed in all material respects its agreements, covenants or obligations under this Agreement required to be performed by the Purchaser on or prior to the Closing Date;

(b)

the representations and warranties of the Purchaser contained in this Agreement shall be true and correct in all respects (disregarding immateriality, materiality, material adverse effect or any derivation of any of the foregoing contained in such representations and warranties), in each case, as of the date of this Agreement and as of the Closing Date, with the same force and effect as if made as of the Closing Date (other than such representations and warranties as are made as of another date, which shall be true and correct as of such date), except where any failure of such representations and warranties to be so true and correct in all respects would not reasonably be expected to result in a material adverse effect on the ability of the Purchaser to consummate the transactions contemplated hereby; 

(c)

the Sellers shall have received from the Purchaser a certificate, dated the Closing Date, duly executed by an executive officer of the Purchaser, 

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satisfactory in form to the Sellers, to the effect of paragraphs (a) and (b) of this Section 8.2; and

(d)

the Sellers shall have received from the Purchaser (i) each of the documents or other deliveries referred to in Sections 3.2(b)(i) through 3.2(b)(vii) and (ii) each of the documents or other deliveries material for purposes of consummating the transactions contemplated hereby which are referred to in Section 3.2(b)(viii).

Section 8.3

Additional Conditions to Obligation of the Purchaser to Effect the Closing

.  The obligations of the Purchaser to effect the Closing shall be subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:

(a)

the Sellers shall have performed in all material respects their agreements, covenants or obligations under this Agreement required to be performed by the Sellers on or prior to the Closing Date;

(b)

the representations and warranties of the Sellers contained in this Agreement, other than the Designated Representations and Warranties shall be true and correct in all respects (disregarding immateriality, materiality, Material Adverse Effect or any derivation of any of the foregoing contained in such representations and warranties), in each case, as of the date of this Agreement and as of the Closing Date, with the same force and effect as if made as of the Closing Date (other than such representations and warranties as are made as of another date, which shall be true and correct as of such date), except where any failure of such representations and warranties to be so true and correct in all respects would not reasonably be expected to result in a Material Adverse Effect;

(c)

the Purchaser shall have received from each of the Sellers a certificate, dated the Closing Date, duly executed by each Seller, satisfactory in form to the Purchaser, to the effect of paragraphs (a) and (b) above;

(d)

there shall not have been any event, occurrence or development which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect; and

(e)

the Purchaser shall have received from the Sellers (i) each of the documents or other deliveries referred to in Sections 3.2(a)(i) through 3.2(a)(xvi) and (ii) each of the documents or other deliveries material for purposes of consummating the transactions contemplated hereby which are referred to in Section 3.2(a)(xvii).

ARTICLE IX

INDEMNIFICATION; SELLERS' REPRESENTATIVE

Section 9.1

Survival of Representations and Warranties

.  All representations and warranties of the parties contained in this Agreement will survive the Closing until March 13, 2007; provided, that (i) the representations and warranties contained in Sections 4.1, 4.2, 4.3, 4.12, 5.1, 5.2, 5.3, 6.1 and 6.2 shall survive 

89

indefinitely and (ii) the representations and warranties contained in Sections 4.15(b), 4.18, 4.24, 5.14(b), 5.17 and 5.23 shall survive until the expiration of the statute of limitations for the applicable representation and warranty plus thirty days.  Any representation or warranty that would otherwise terminate in accordance with this Section 9.1 shall continue to survive until the related claim for indemnification has been satisfied or otherwise resolved as provided in this Article IX if notice of a claim for indemnification shall have been given under this Article IX on or prior to such termination date; provided, that, the representation or warranty shall continue to survive only on account of, and only with respect to, such related claim for indemnification.  Notwithstanding anything in this Agreement to the contrary, nothing in this Section 9.1 shall limit any agreement, covenant or obligation of the parties which by its terms contemplates performance after the Closing.

Section 9.2

Indemnification of the Purchaser

.  Subject to the limitations contained in this Article IX, the Sellers shall indemnify, defend and hold harmless the Purchaser and its respective Affiliates (including the Companies) and their respective officers, managers, directors, employees and the successors, heirs and assigns of any of the foregoing (the "Purchaser Indemnified Parties") from and against any and all Losses which arise out of, or result from:

(a)

any breach of any representation or warranty made by the Sellers in this Agreement (other than any breach of any representation and warranty made by any Seller in Sections 4.18 or 5.17, such breaches being Tax Matters under Section 9.6); provided, that, (x) to the extent that any such representation or warranty (other than any representation or warranty in Sections 4.5(a), 4.5(e), 5.5(a) or 5.5(d)) is qualified by immateriality, materiality or Material Adverse Effect or any derivation of any of the foregoing and (y) Section 5.28, in each such qualifications and such Section shall be ignored for purposes of indemnification under this Section 9.2(a); 

(b)

any breach by any Seller of any agreement, covenant or obligation of such Seller contained in this Agreement;

(c)

any Software Cure Costs;

(d)

any Retained Euro Cormar Liability;

(e)

any Retained Customs Liability; 

(f)

any Retained Product Liability;

(g)

any Retained Euro Retail Liability;

(h)

any CKI Transfer Liability; and 

(i)

any Jeanswear Services International Trading Liability.

Section 9.3

Indemnification of the Sellers

.  Subject to the limitations contained in this Article IX, the Purchaser shall indemnify, defend and hold harmless 

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each Seller and its Affiliates and their respective officers, managers, directors, employees and the successors, heirs and assigns of any of the foregoing (the "Sellers Indemnified Parties") from and against any and all Losses which arise out of, or result from:

(a)

any breach of any representation or warranty made by the Purchaser in this Agreement; provided, that, to the extent that any such representation or warranty is qualified by immateriality, materiality, material adverse effect or any derivation of any of the foregoing, such qualifications shall be ignored for purposes of indemnification under this Section 9.3(a); and

(b)

any breach by the Purchaser of any of its agreements, covenants or obligations contained in this Agreement.

Section 9.4

Indemnification Procedure for Third Party Claims

.  

(a)

Promptly after receipt by an Indemnified Party of notice from any third party of a claim or demand in respect of which indemnity may be sought under Section 9.2 or 9.3 which is asserted against or sought to be collected from the Indemnified Party, including the commencement of any Action against it ("Third Party Claim"), the Indemnified Party shall, if a claim is to be made against an Indemnifying Party under such Section 9.2 or 9.3, as applicable, give notice to the Indemnifying Party of the Third Party Claim, but the failure to notify the Indemnifying Party will not relieve the Indemnifying Party of any Liability that it may have to any Indemnified Party, except to the extent that the Indemnifying Party demonstrates that the defense of such Third Party Claim is prejudiced by the Indemnifying Party's failure to receive such notice.  Such notice shall be delivered in accordance with Section 11.1.

(b)

If any Third Party Claim referred to in Section 9.4(a) is brought against an Indemnified Party, the Indemnifying Party will be entitled to participate in any Action underlying the claim and, to the extent that it wishes (unless the Indemnifying Party is also a party to such Action and the Indemnified Party determines in good faith that joint representation would be inappropriate, in which event such Indemnified Party shall have the right to retain, at the Indemnifying Party's reasonable expense, one separate counsel, reasonably satisfactory to the Indemnifying Party, to defend such claim on behalf of such Indemnified Party), assume the defense of such claim with counsel reasonably satisfactory to the Indemnified Party, and, after notice from the Indemnifying Party to the Indemnified Party of its election to assume the defense of such Action, except in the circumstances described in the parenthetical above, the Indemnifying Party will not, as long as it diligently conducts such defense, be liable to the Indemnified Party under this Section 9.4 for any fees of other counsel or any other expenses with respect to the defense of such claim, in each case, subsequently incurred by the Indemnified Party in connection with the defense of such claim, other than reasonable costs of investigation.  If the Indemnifying Party assumes the defense of the Third Party Claim:  (i) no compromise or settlement of such claim may be effected by the Indemnifying Party without the Indemnified Party's written consent unless (1) there is no finding or admission of any violation of Law by any Indemnified Party or any violation of the rights of any Person, (2) such settlement or compromise releases the Indemnified 

91

Party in connection with such Third Party Claim, (3) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party and (4) such settlement or compromise does not restrict in any manner the ability of the Indemnified Party to conduct its business; (ii) the Indemnified Party will have no Liability with respect to any compromise or settlement of such claim effected without its written consent; and (iii) the Indemnified Party shall have the right to participate in such defense and to employ counsel, in each case, at its own expense.  Subject to Section 9.4(c), if notice is given to an Indemnifying Party of any Third Party Claim and the Indemnifying Party does not, within 35 days after the Indemnified Party's notice is given, give notice to the Indemnified Party of its election to assume the defense of such Action, the Indemnifying Party will be bound by any determination made in such Action or any compromise or settlement effected by the Indemnified Party and the Indemnifying Party will be responsible for any Losses incurred in connection with the defense, compromise, settlement or final determination of such Action.

(c)

Notwithstanding the foregoing, if an Indemnified Party determines in good faith that there is a reasonable probability that an Action may adversely affect it or its Affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, except where nonmonetary relief is merely incidental to a primary claim or claims for monetary damages, the Indemnified Party may, by notice to the Indemnifying Party, assume the exclusive right to defend, compromise or settle such Action (provided, that any costs or fees incurred by the Indemnified Party in connection with such defense, compromise or settlement shall be borne exclusively by such Indemnified Party), but the Indemnifying Party will not be bound by any determination of an Action so defended or any compromise or settlement effected without its consent (which may not be unreasonably withheld); provided, that the Indemnifying Party shall have the right to participate in such defense and to employ counsel at its own expense.

(d)

The parties shall cooperate in the defense of any Third Party Claim and shall furnish such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with the provisions of this Article IX.

Section 9.5

Indemnification Procedure for Other Claims

.  

(a)

In the event any Indemnified Party should have a claim against any Indemnifying Party under this Article IX that does not involve a Third Party Claim, the Indemnified Party shall notify the Indemnifying Party of a claim promptly following the Indemnified Party becoming aware of the same; such notice shall be delivered in accordance with Section 11.1.  The failure by any Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any Liability that it may have to such Indemnified Party under this Article IX, except to the extent that the Indemnifying Party has been prejudiced by such failure.  

(b)

If the Indemnifying Party does not notify the Indemnified Party within 35 Business Days following its receipt of such notice that the Indemnifying 

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Party disputes such claim, such claim specified by the Indemnified Party in such notice shall be conclusively deemed a Liability of the Indemnifying Party under this Article IX, and (i) where, on or prior to the applicable Release Date, the Indemnifying Party is a Seller, the Purchaser shall execute on behalf of the Purchaser Indemnified Party, and deliver to the Escrow Agent, a Joint Notice to pay the amount of such Liability to such Indemnified Party on demand or due, or in the case of any notice in which the amount of the claim is estimated, on such later date when the amount of such claim is finally determined and (ii) where (x) the Indemnifying Party is the Purchaser or (y) following the applicable Release Date, the Indemnifying Party is the Seller, in each case, the Indemnifying Party shall pay (in cash by wire transfer of immediately available funds) the amount of such Liability to the Indemnified Party on demand or due, or, in the case of any notice in which the amount of the claim is estimated, on such later date when the amount of such claim is finally determined.  

(c)

If the Indemnifying Party disputes its Liability with respect to such claim in a timely manner, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved by litigation in accordance with Section 11.6 (in any event, such resolved amount, the "Resolved Amount").  Where on or prior to the applicable Release Date, the Indemnifying Party is a Seller, within two Business Days of the resolution of such dispute, the Sellers and the Purchaser shall execute on behalf of the Purchaser Indemnified Party, and deliver to the Escrow Agent, a Joint Notice, instructing such Escrow Agent to pay the Resolved Amount to the Purchaser Indemnified Party pursuant to the Escrow Agreement.  Any payments made to the Purchaser shall not be subject to withholding Taxes.  Where (x) the Indemnifying Party is the Purchaser or (y) following the applicable Release Date, the Indemnifying Party is a Seller, in each case, within two Business Days of the resolution of such dispute, the Indemnifying Party shall pay the Resolved Amount (in cash by wire transfer of immediately available funds) to the Indemnified Party.  

(d)

Notwithstanding anything herein to the contrary, promptly following (i) March 13, 2007 (the "Initial Release Date"), the Sellers and the Purchaser shall execute and deliver to the Escrow Agent a Joint Notice to affect the delivery by the Escrow Agent to the Sellers of all property then held by the Escrow Agent (subject to retention of amounts sufficient to satisfy any pending claims for Losses), less €6,715,917 or such lesser amount then held by the Escrow Agent (including amounts retained on account of pending claims for Losses) (the "Designated Escrow Amount"), which Designated Escrow Amount the Escrow Agent shall continue to hold under, and pursuant to, the Escrow Agreement and (ii) March 12, 2008 (the "Final Release Date" and, together with the Initial Release Date, the "Release Dates"), the Sellers and the Purchaser shall execute and deliver to the Escrow Agent a Joint Notice to affect the delivery by such Escrow Agent to the Sellers of all property then held by the Escrow Agent (subject to retention of amounts sufficient to satisfy any pending claims for Losses).

Section 9.6

Certain Tax Matters

.

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(a)

Indemnification of the Purchaser.  Subject to Section 9.7(b), the Sellers shall indemnify, defend and hold harmless the Purchaser Indemnified Parties from and against any and all Losses which arise out of, or result from, the following Tax matters (collectively, the "Tax Matters"):  (i) any Tax in excess of amounts accrued in respect of such Tax on any Company's financial books and records (which accruals shall be made in accordance with Applicable GAAP and shall not reflect any of the transactions contemplated by this Agreement) payable by or on behalf of the Sellers or any Sellers' Affiliates, or any Company, for any taxable period ending on or prior to the Closing Date (or for the portion ending on the Closing Date of any taxable period that includes but does not begin or end on the Closing Date), (ii) any deficiencies in any Tax payable by, or on behalf of, the Sellers or any Sellers' Affiliates, or any Company arising from any audit by any taxing agency or authority with respect to any period ending on or prior to the Closing Date (or for the portion ending on the Closing Date of any taxable period that includes but does not begin or end on the Closing Date), (iii) any claim or demand for reimbursement or indemnification resulting from any transfer by the Sellers prior to the Closing of any Tax benefits or credits to any other Person, (iv) one-half of any Transfer Taxes arising from the Transactions contemplated by this Agreement, (v) any Liability for Taxes as a result of the Euro Cormar Separation and (vi) any breach of any representation or warranty made by any Seller in Sections 4.18 and 5.17 (provided, that, to the extent that any such representation or warranty is qualified by immateriality, materiality, material adverse effect or any derivation of any of the foregoing, such qualifications shall be ignored for purposes of indemnification under this Section 9.6); provided, that the Purchaser shall not be entitled to recover more than the amount of any Loss due as a result of bringing a claim for indemnification under more than one clause of this Section 9.6(a); provided, further, that a "Loss" for purposes of this Section 9.6(a) only shall not include any amount of Tax to the extent attributable to a change by a Company after the Closing Date in a legally permissible method of tax accounting that was used by such Company consistently through the Closing Date (but a change after the Closing Date by any Company relating to the transfer pricing used in respect of any payment between any of the Companies shall not be viewed as a change in a legally permissible method of tax accounting for purposes of the preceding proviso).

(b)

Audit Matters.  If any claim for Losses in respect of Taxes relating to any Company involving taxable periods for which the Sellers have an obligation to indemnify the Purchaser under Section 9.6(a) hereof is asserted by any taxing authority against the Purchaser, the Purchaser shall promptly notify the Sellers in writing of such fact; provided, however, that the failure to notify the Sellers will not relieve the Sellers of any liability that it may have to the Purchaser, except to the extent that the Sellers demonstrate that the Sellers were actually prejudiced by the Sellers' failure to receive such notice.  The Sellers shall have the right, at the Sellers' expense, directly or through the Sellers' designated Representatives, subject to the execution of a confidentiality agreement by the Sellers and each of Sellers' designated Representatives, in form and substance reasonably satisfactory to the Purchaser, for the purpose of protecting the confidentiality and use of information of the Purchaser or its Affiliates, including any Company to control any audit, examination, or proceedings relating to Taxes (a "Tax Contest"), in respect of any Tax Return for periods ending on or prior to the Closing Date if such Tax Contest could give rise to a claim for indemnification 

94

hereunder; provided, however, that the Purchaser shall have the right to participate in any such Tax Contest and to review in advance and comment upon all submissions made in the course of any Tax Contest to any Governmental Entity.  In case the Sellers exercise any of the rights under this Section 9.6(b), the Sellers shall provide to the Purchaser the funds necessary to make any payment due in connection with any settlement (i) of a Tax Contest and (ii) of a Tax Contest ("concordato"/"condono fiscale") within five Business Days of payment by the Purchaser.  The Purchaser shall have the right to control any audit, examination or proceedings related to Taxes in respect of any Tax Return for periods (x) beginning before, but ending after, the Closing Date and (y) beginning on or following the Closing Date; provided, however, that the Sellers shall have the right to participate in any such Tax Contest and to review in advance and comment upon all submissions made in the course of any Tax Contest to any Governmental Entity.

(c)

Cooperation on Tax Matters.  After the Closing Date, the Sellers, on the one hand, and the Purchaser and the Companies, on the other hand, shall (i) provide, or cause to be provided, to each other's respective Representatives, investment bankers, attorneys and accountants, such assistance as may reasonably be requested by any of them in connection with the preparation of any Tax Returns, or any audit of any Company in respect of which the Sellers, on the one hand, or the Purchaser or any Company, on the other hand, as the case may be, are responsible, and (ii) retain, or cause to be retained, for so long as any such taxable years or audits shall remain open for adjustments, any records or information which may be relevant to any such Tax Returns or audits.  The assistance provided for in this Section 9.6(c) shall include the Sellers and the Purchaser (x) making their Representatives, attorneys and accountants and the Representatives of their respective Affiliates available to each other on a mutually convenient basis to provide such assistance as might reasonably be expected to be of use in connection with any such Tax Returns or audits and (y) providing, or causing to be provided, such information as might reasonably be expected to be of use in connection with any such Tax Returns or audits, including records, returns, Schedules, documents, work papers, opinions, letters or memoranda, or other relevant materials relating thereto.

(d)

The Purchaser shall not amend any Tax Return in respect of any taxable period ending on or prior to the Closing without Sellers' consents.

Section 9.7

Limitations on Indemnification

.

(a)

The Sellers shall have no Liability to indemnify the Purchaser for Losses under Section 9.2(a)(i) until the total of all such Losses that are incurred by the Purchaser exceeds $5,000,000, and then only for the amount by which such Losses exceed $5,000,000.  The Sellers' maximum Liability for such Losses with respect to all claims for indemnification under this Article IX shall be limited to and shall not exceed (in the aggregate) the sum of (i) €37,320,000 (which Euro amount shall constitute 77.75% of the Cap) plus (ii) $12,722,016 (which United States Dollar amount shall constitute 22.25% of the Cap) (the "Cap"); provided, that (x) the Fingen Sellers' maximum Liability for such claims shall be limited to and shall not exceed the Fingen Seller's Pro Rata Share of the Cap, in the aggregate and (y) CKI's maximum Liability for such Losses with respect to such claims shall be limited to and shall not exceed CKI's Pro 

95

Rata Share of the Cap.  Notwithstanding any provision in this Section 9.7(a) to the contrary, at the Sellers' option, the Sellers shall have no Liability to indemnify the Purchaser for Losses under Section 9.2(a) in respect of any individual claim for which the Loss relating thereto is less than $50,000; provided, further, that the Sellers' may exercise such option with respect to no more than ten individual claims.

(b)

To the extent that any Losses arise out of, or result from a breach by both the Fingen Sellers and CKI of one or more representations, warranties, agreements, covenants or obligations, the Fingen Sellers, on the one hand, and CKI, on the other hand, shall severally but not jointly indemnify the Purchaser in an amount equal to the Fingen Sellers Pro Rata Share and the CKI Pro Rata Share, respectively, of such Losses (it being understood that any Losses arising out of, or resulting from, a Designated Representation and Warranty shall be allocated as between the Fingen Sellers and CKI in an amount equal to the Fingen Sellers Pro Rata Share and the CKI Pro Rata Share, respectively).  To the extent that any Losses arise out of, or result from, a breach by only (x) one or more Fingen Sellers or (y) CKI, in each case, of one or more representations, warranties, agreements, covenants or obligations, the Fingen Sellers or CKI (as the case may be) shall solely indemnify the Purchaser in an amount equal to such Losses.  The indemnification obligation of any Fingen Seller under this Article IX shall be on a joint and several basis as among the Fingen Sellers.  

(c)

The Purchaser shall have no Liability to indemnify the Sellers for Losses under Section 9.2(b)(i) until the total of all such Losses that are incurred by the Sellers exceeds $5,000,000, and then only for the amount by which such Losses exceed $5,000,000.  The Purchaser's maximum Liability for such Losses with respect to all claims for indemnification under this Article IX shall be limited to and shall not exceed $57,177,600.  Notwithstanding any provision in this Section 9.7(c) to the contrary, at the Purchaser's option, the Purchaser shall have no Liability to indemnify the Sellers for Losses under Section 9.2(c) in respect of any individual claim for which the Loss relating thereto is less than $50,000; provided, further, that the Purchaser may exercise such option with respect to no more than ten individual claims.

(d)

The limitations contained in Section 9.7(a) or 9.7(c) (as the case may be) shall not apply to Losses which arise out of, or result from:  (i) any breach by any Seller of any representations and warranties contained in Sections 4.1, 4.2, 4.3, 4.12, 4.18, 5.1, 5.2, 5.3, and 5.17, (ii) any breach by the Purchaser of any representations and warranties contained in Sections 6.1 and 6.2, (iii) any breach by any Seller or the Purchaser (as the case may be) of any of its agreements, covenants or obligations contained in this Agreement (other than any agreement, covenant or obligation to certify any representations and warranties herein), (iv) any intentional breach of this Agreement or fraudulent or knowing misrepresentations by the parties hereto, (v) the Tax Matters, (vi) any Software Cure Cost, (vii) any Retained Euro Cormar Liability, (viii) any Retained Customs Liability, (ix) any Retained Product Liability, (x) any Retained Euro Retail Liability or (xi) any CKI Transfer Liability and (xii) any Jeanswear Services International Trading Liability (such exceptions to the limitations contained in Section 9.7(a) which are described in this Section 9.7(d), collectively, the "Designated Matters") ;provided, that the Sellers' maximum Liability for Losses pursuant to Article X 

96

shall not exceed the Closing Purchase Price.  For the avoidance of doubt, the Sellers' indemnification obligations in respect of any of the Designated Matters described in clauses (v) through (ix) of the immediately preceding sentence, shall be limited to Losses which arise out of, or result from, a pre-Closing act or pre-Closing omission. 

(e)

All Losses payable to any Purchaser Indemnified Party pursuant to this Article IX shall be paid first from the funds held in the Escrow Account; provided, that, following the Initial Release Date, the Designated Escrow Amount shall not be applied towards Losses other than Losses relating to the Designated Matters; provided, further, that, the right of any Purchaser Indemnified Party to recover for Losses shall not be limited to the funds (if any) remaining in the Escrow Account.  

(f)

Notwithstanding anything in this Article IX to the contrary, the Sellers shall have no Liability to indemnify the Purchasers for Losses pursuant to Article IX to the extent that such Losses do not exceed the amount of any applicable reserves established on the Final Adjustment Statement.

(g)

All indemnification payments paid pursuant to this Agreement shall be made directly to the Purchaser (in the case of indemnification obligations of the Sellers) and shall be treated as adjustments to the Closing Purchase Price for all Tax purposes.

Section 9.8

Exclusive Remedy

.  After the Closing, to the extent permitted by Law, the indemnities set forth in this Article IX shall be the exclusive remedies of any Indemnified Party for any misrepresentation, breach of warranty or nonfulfillment or failure to be performed of any agreement, covenant or obligation contained in this Agreement, and the parties shall not be entitled to a rescission of this Agreement or to any further indemnification rights or claims of any nature whatsoever in respect thereof or otherwise in connection with this Agreement, all of which the parties hereto hereby waive; provided, that the foregoing shall not apply to claims of actual fraud or intentional breach of this Agreement.

Section 9.9

Acknowledgment

.  The parties acknowledge that (i) the indemnification obligations of each Seller hereunder are autonomous and independent obligations, (ii) none of the representations and warranties of any of the Sellers set forth herein or in any certificate or document delivered at Closing by, or on behalf of, the Sellers pursuant to this Agreement shall be construed or otherwise deemed as a representation or warranty for purposes of or under Articles 1490 or 1497 of the Italian civil code, which civil code shall not apply to any breach or other violation of any representation, warranty, agreement, covenant or obligation of any of the Sellers and (iii) any claim, right or remedy of any Purchaser Indemnified Party arising hereunder with respect to any such breach or violation shall not be subject to the statute of limitation ("prescrizione") periods and forfeiture ("decadenza") restrictions set forth in Article 1495 of the Italian civil code.

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ARTICLE X

TERMINATION, AMENDMENT AND WAIVER

Section 10.1

Termination

.  This Agreement may be terminated, and the transactions contemplated hereby may be abandoned:

(a)

at any time before the Closing by mutual written agreement of the Purchaser and the Sellers;

(b)

by the Purchaser, if there shall have been a breach by the Sellers of any of their representations, warranties, agreements, covenants or obligations hereunder, which breach would result in the failure to satisfy the conditions set forth in Section 8.3 and, in any such case, such breach (x) shall be incapable of being cured or (y) shall not have been cured in all material respects, in each case, within 30 days after written notice thereof shall have been received by the Sellers;

(c)

by the Sellers, if there shall have been a breach by the Purchaser of any of its respective representations, warranties, agreements, covenants or obligations hereunder, which breach would result in the failure to satisfy the conditions set forth in Section 8.2 and, in any such case, such breach (x) shall be incapable of being cured or (y) shall not have been cured in all material respects, in each case, within 30 days after written notice thereof shall have been received by the Purchaser;

(d)

by the Sellers or the Purchaser, if a Governmental Entity shall have issued a nonappealable, final Order or taken any other nonappealable final action, in each case, having the effect of permanently restraining, enjoining or otherwise prohibiting the Closing and the transactions contemplated hereby; or

(e)

by either the Purchaser or the Sellers upon written notice given to the other party solely in the event that the Closing shall not have taken place on or before February 15, 2006 (the "Outside Date"); provided, that the failure of the Closing to occur on or before such date is not the result of a breach of any representations, warranties, agreements, covenants or obligations hereunder by the party (the Sellers, on the one hand, and the Purchaser, on the other hand, as the case may be) seeking such termination; provided, further, that, if on the Outside Date the Purchaser has not received the delivery referred to in Section 3.2(a)(xiv), then the Outside Date shall be extended to May 20, 2006.

Section 10.2

Effect of Termination

.  If this Agreement is validly terminated pursuant to Section 10.1, this Agreement will forthwith become null and void, and there will be no Liability or obligation on the part of the parties (or any of their respective Representatives, Affiliates, investment bankers, attorneys, accountants or agents), except that the provisions of Sections 7.2(b) and 7.5 (other than the second sentence thereof), 11.1, 11.7, 11.8 and this Section 10.2, will continue to apply following any such termination.  Notwithstanding the previous sentence, no party to this Agreement 

98

shall be released from any Liability for any intentional or willful breach of this Agreement or fraudulent or knowing misrepresentations or action by the parties hereto.

ARTICLE XI

MISCELLANEOUS

Section 11.1

Notices

.  All notices, requests and other communications hereunder shall be in writing (including wire, telefax or similar writing) and shall be sent, delivered or mailed, addressed, or telefaxed:

if to the Purchaser, to:

c/o The Warnaco Group, Inc.

501 Seventh Avenue

New York, New York  10018

Attention:  Jay A. Galluzzo, Esq.

Fax: (212) 287-8275

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York  10036

Attention:  Alan C. Myers, Esq.

Fax:  (212) 735-2000

and to:

Gianni, Origoni, Grippo & Partners

1270 Avenue of the Americas

23rd Floor

New York, NY 10020

Attention:  Stefano Crosio, Esq.

Fax:  (212) 957-9608

and, as to Intellectual Property, with a copy to:

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, New York 10022-2585

Attention: Karen Artz Ash, Esq.

Fax: (212) 940-8671

if to CKI, to:

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Calvin Klein, Inc.

c/o Phillips - Van Heusen Corporation

200 Madison Ave.

New York, NY  10016

Attn:  Mark D. Fischer, Esq.

Fax:  (212) 381-3970 

if to the Fingen Sellers, to:

Fingen Apparel NV

Strawinskylaan 3051-1077

Amsterdam

Attn: Colin Longhurst

Fax:  0031-2030-12116.

with a copy to:

Willkie Farr & Gallagher LLP 

787 Seventh Avenue

New York, New York  10019

Attention:  Serge Benchetrit, Esq.

Fax:  (212) 728-8111

Each such notice, request or other communication shall be given (i) by hand delivery, (ii) by nationally recognized courier service or (iii) by telefax, receipt confirmed (with a confirmation copy to be sent by one of the other permitted methods of delivery).  Each such notice, request or communication shall be effective (i) if delivered by hand or by nationally recognized courier service, when delivered at the address specified in this Section 11.1 (or in accordance with the latest unrevoked written direction from the receiving party) and (ii) if given by telefax, when such telefax is transmitted to the telefax number specified in this Section 11.1 (or in accordance with the latest unrevoked written direction from the receiving party), and the appropriate confirmation is received.

Section 11.2

Severability

.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the application thereof to any Person or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid or enforceable, such provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

Section 11.3

Counterparts

.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement.

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Section 11.4

Disclosure Schedules

.  Notwithstanding anything to the contrary contained in any Disclosure Schedule or in this Agreement, the information and disclosures contained in any Section of such Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other Section of such Disclosure Schedule as though fully set forth in such other section for which the applicability of such information and disclosure is reasonably apparent on the face of such information or disclosure.  The inclusion of any information in any part of any Disclosure Schedule shall not be deemed to be an admission or acknowledgement by the Purchaser or the applicable Sellers (as the case may be), in and of itself, that such information is material to, or outside the ordinary course of, the business of the Purchased Companies.  There shall be no obligation on behalf of any of the parties to update any Disclosure Schedule pursuant to Sections 8.2(b) and 8.3(b); provided, that, in the event that a party elects to update any Disclosure Schedule following the execution of this Agreement, such update shall not (x) be deemed to cure any breach or other violation of any representation or warranty of such party or (y) affect any claim, right or remedy any other party may have had hereunder (including Article IX) prior to such update.

Section 11.5

Entire Agreement; No Third Party Beneficiaries

.  This Agreement (including the documents and instruments referred to herein) (a) constitutes the entire agreement among the parties and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, including any confidentiality agreement entered into between the parties or their Affiliates prior to the date hereof with respect to the sale of the Business and (b) is not intended to confer upon any Person other than the parties hereto, any rights or remedies hereunder.

Section 11.6

Amendments and Waivers

.  This Agreement may not be amended except by an instrument in writing signed on behalf of the Purchaser and the Sellers.  Any of the Purchaser or the Sellers may, by an instrument in writing signed on behalf of such party, waive compliance by any other party with any term or provision of this Agreement that such other party was or is obligated to comply with or perform.

Section 11.7

Governing Law; Jurisdiction; Service of Process

.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the rules of conflict of laws of the State of New York (other than Section 5-1401 of the New York General Obligations Law) or any other jurisdiction that would require the application of any other jurisdiction's laws.  The Purchaser and each of the Sellers irrevocably and unconditionally consent to submit to the jurisdiction and venue of any federal court within the City of New York or any state court located in the City of New York (the "New York Courts")(and of the appropriate appellate courts of such courts) for any action to compel arbitration, for provisional or preliminary relief in aid of arbitration or to prevent irreparable harm prior to the appointment of the arbitral tribunal (and except for an action to enforce a final arbitral award, irrevocably and unconditionally agree not to commence any litigation relating hereto except in such courts) and waive any objection or claim that such party may now or hereafter have to the jurisdiction or venue of such courts or that such litigation was 

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brought in an inconvenient court or forum.  Process in any such action may be served on any party hereto anywhere in the world or in accordance with Section 11.1 herein.

Section 11.8

Dispute Resolution

  

(a)

Except as otherwise expressly set forth herein, including Section 2.4, all disputes, controversies, and claims directly or indirectly arising out of, or in relation to, this Agreement or the validity, interpretation, construction, performance, breach, termination, or enforceability of this Agreement ("Disputes") shall be finally, exclusively and conclusively settled by binding arbitration, as provided in this Section 11.8, under the International Arbitration Rules of the AAA in effect at the time any such arbitration is commenced, except as modified in this Section 11.8.

(b)

The arbitral tribunal shall be comprised of three arbitrators.  Within 30 days after the receipt by respondent of the demand for arbitration, the Purchaser shall nominate one arbitrator and the Sellers shall collectively nominate one arbitrator.  Within 20 days of the appointment of the second arbitrator, the two arbitrators so selected shall select a third arbitrator, who shall chair the arbitral tribunal (the "Chair").  If the Chair is not timely appointed, or if either party fails to nominate an arbitrator as noted herein, at the request of any party, the Chair or other arbitrator shall be appointed by the AAA using listing, ranking and striking procedures.  Any arbitrator appointed by the AAA shall be an experienced arbitrator of disputes arising out of large, complex commercial transactions, with at least 15 years experience as a judge or practicing attorney, and shall be unaffiliated and without prior or current financial alliances or affiliates with any party. 

(c)

The arbitration proceedings shall be conducted in the English language, and all documents not in English submitted by any party as evidence must be accompanied by a certified English translation if the arbitrators so request.  The arbitration proceedings shall be conducted and any arbitral award shall be rendered in New York (Borough of Manhattan), New York. 

(d)

Each party shall have the right to request the other party or parties to produce certain specified documents or categories of documents relevant to the issues in dispute, and any disputes regarding the scope of production shall be submitted to the arbitral tribunal (or the Chair).  In making any determination regarding the scope of production, the Chair or the arbitral tribunal shall be guided by the International Bar Association Rules on the Taking of Evidence in International Commercial Arbitration.

(e)

In rendering an award, the arbitral tribunal shall be required to follow the law of the jurisdiction designated by the parties herein.  In addition to damages, the arbitral tribunal may award temporary or permanent injunctive relief, including specific performance of any obligation under this Agreement. The arbitral tribunal shall not be empowered to award consequential, punitive, multiple or exemplary damages, and the parties hereby waive any right to such damages.  The award shall be 

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final and binding upon the parties and shall be the sole and exclusive remedy between the parties regarding any claims, counterclaims, issues or accounting presented to the arbitral tribunal.  Judgment upon any award may be entered in any court having jurisdiction over any of the parties or any of their assets.

(f)

By agreeing to arbitration, the parties do not intend to deprive any New York Court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of arbitration proceedings or to maintain the status quo or prevent irreparable harm and the enforcement of any award.  Without prejudice to such provisional remedies as may be available under the jurisdiction of a New York Court, the arbitral tribunal shall have full authority to grant provisional remedies or to order the parties to request that a New York court modify or vacate any temporary or preliminary relief issued by such national court, and to award damages for the failure of any party to respect the arbitral tribunal's orders to that effect.

(g)

In order to facilitate the comprehensive resolution of related Disputes, upon the request of any party to an arbitration proceeding brought under this Agreement, the arbitral tribunal for such proceeding shall consolidate any arbitration proceeding constituted under this Agreement with any other arbitration proceeding constituted under this Agreement, if the arbitral tribunal determines that (i) there are issues of fact or law common to the proceedings so that a consolidated proceeding would be more efficient than separate proceedings, and (ii) no party would be unduly prejudiced as a result of such consolidation through undue delay or otherwise.  In the event of different rulings on this question by the arbitral tribunal constituted hereunder and another arbitral tribunal constituted under this Agreement, the ruling of the arbitral tribunal constituted first in time shall control, and such arbitral tribunal shall serve as the tribunal for any consolidated arbitration.

Section 11.9

Publicity

.  None of the parties hereto or their respective Affiliates or Representatives shall issue or cause the publication of any press release or other public announcement or communication with respect to the transactions contemplated by this Agreement without the consent of the Sellers and the Purchaser, except to the minimum extent necessary to comply with the requirements of applicable Law or the regulations or policies of any securities exchange based on the advice of counsel, in which case the party required to make the release or statement or communication shall allow the Sellers or the Purchaser, as the case may be, reasonable time to comment on such release or statement or communication in advance of such issuance, disclosure or filing.  The parties have agreed to the contents and time of release of the initial press release announcing the execution of this Agreement.  Notwithstanding anything herein to the contrary, the Purchaser and/or its Affiliates may disclose any information concerning the transactions contemplated hereby which it deems appropriate in its reasonable judgment, in light of its status as a United States publicly-owned company, including any such disclosures in investor conference calls accessible to the general public or in press interviews.

Section 11.10

Assignment

.  Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto without the prior 

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written consent of each of the other parties; provided, however, that the Purchaser may assign (in whole or in part) its rights or obligations hereunder, including with respect to the purchase, acquisition and acceptance of the Purchased Shares and/or the CMI Shares, to one or more of its wholly-owned direct or indirect Subsidiaries; provided, further, that no such assignment shall relieve the Purchaser of any of its obligations hereunder.  Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.  Any attempted assignment in violation of the terms of this Section 11.10 shall be null and void ab initio.

[SIGNATURE PAGE TO FOLLOW]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.

WARNACO INC.

By:  /s/ Joseph R. Gromek

Name:  Joseph R. Gromek

Title:    President & Chief Executive Officer

FINGEN APPAREL N.V. 

By:  /s/ Gabriele Martini

 

Name:  Gabriele Martini

Title:    Director

FINGEN S.P.A.

By:  /s/ Cesare Brogi

Name:  Cesare Brogi

Title:    Chief Executive Officer & Director

EURO CORMAR S.P.A.

By: :  /s/ Corrado Fratini

Name:  Corrado Fratini

Title:    Chief Executive Officer & Director

CALVIN KLEIN, INC.

By: :  /s/ Mark D. Fischer

Name:  Mark D. Fischer

Title:    Vice President

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