Document:

exv10w1

 

Exhibit 10.1

December 19, 2005

Kenneth J. Saunders

30862 Steeplechase Drive

San Juan Capistrano, California 92675

Dear Ken:

I am pleased to extend this offer to join Open Solutions Inc. as EVP & CFO reporting to Louis
Hernandez, Chairman & CEO at an annual salary of $300,000. You will be paid $12,500.00
semi-monthly on the 15th and the 30th of each month. You will be eligible
for an incentive bonus target of 60% of your annual salary subject to attaining corporate goals.

Open Solutions will reimburse up to $90,000.00 towards relocation and/or temporary housing related
costs and expenses including travel during the transition period for you and/or your family and any
other and all related or miscellaneous expenses. If you were to voluntarily terminate within the
first year employment, you will be required to repay them on a pro-rated basis.

You will also be paid a sign-on bonus of $25,000 payable the first month of employment.

The effective date of your employment will be January 3, 2006. However, your employment is
contingent upon satisfactory reference checks, background investigation and pre-employment drug
testing. This offer is effective through the close of business Wednesday, December 21st.

In addition, you will be granted 100,000 Open Solutions Inc. stock options at the fair market value
on the close of business of your employment start date with Open Solutions Inc. These options will
vest over a four-year period. You will also be granted 30,000 shares of restricted stock that will
vest over a five-year period. Both options and restricted stock are subject to the standard terms
of the Open Solutions 2000 Stock Incentive Plan.

If your employment is terminated by the Company without Cause, the Company shall be obligated to
pay you twelve months base salary upon termination. If you are terminated as a result of Change of
Control, you will be eligible for Tier I benefits as defined in Exhibit A attached. For purposes of
Exhibit A, your “duties” are as required to execute the office of the Chief Financial Officer,
reporting to the CEO of Open Solutions Inc. or the Parent entity of any successor company if the
Change of Control involves a merger, acquisition or divestiture.

A summary of additional benefits offered by Open Solutions is enclosed. All insurance benefits
including medical insurance, should you require it, will commence beginning the first day of
employment. In addition, you will be eligible for 15 days annually of accrued vacation time in
addition to the standard number of company holidays, floating holidays, sick time, and personal
days.

Additional information relative to all company benefits along with guidelines concerning employment
are contained in Open Solutions’ employee handbook, a copy of which will be issued to you during
your employee orientation.

You will be required to sign Open Solutions’ Proprietary Information and Inventions,
Non-Solicitation and Non-Competition Agreement as a condition and prior to your employment.
Enclosed is an original of this agreement, which you will need to sign and return it to me prior to
commencing employment.

 

 

Kenneth J. Saunders

Page 2

You also will be required to successfully complete the company’s I-9 U.S. employment verification
process and to pass a drug-screening test prior to commencing employment. You should make
arrangements for the drug screening with an affiliate facility of Foley Lab Services at least two
days prior to commencing employment. Drug screening forms will be provided by the facility.

Open Solutions Inc. is an employment-at-will employer. Therefore, this letter does not constitute
any contract or obligation on the part of the company beyond what is stated and does not guarantee
your employment for any specific duration. You and the company remain free to choose to end your
employment relationship at anytime, for any reason, with or without notice or cause. The company
does not recognize any contract of employment, unless it is reduced to writing and signed by you
and the Chief Executive Officer of Open Solutions Inc.

Open Solutions Inc. recognizes your obligation under your separation agreement with Peregrine
Systems in which you have agreed to provide certain transition services for ninety (90) days
beginning December 19, 2005 and your responsibilities under the Peregrine agreement regarding
transition services will not conflict with your duties as Chief Financial Officer of Open
Solutions. However, you should let us know if you believe that those services do conflict.

Kindly indicate your acceptance of this offer by signing in the space provided below and returning
one fully executed original copy, the signed Non-Solicitation and Non-Competition Agreement, and
the Background Investigation form to my attention, postmarked by December 21, 2005. You may also
fax preliminary copies by the due date to (860) 815-5532.

Welcome to Open Solutions Inc Ken. We are very excited to have you join OSI as a member of the
senior management team and look forward to having you contribute to our future growth and success.
Should you have any questions, please do not hesitate to contact me at (860) 815-5259.

Sincerely,

OPEN SOLUTIONS INC.

/s/ Greg O’Brien

Greg O’Brien

Vice President, Human Resources

	 	 	 
	Accepted: /s/ Kenneth J. Saunders

	12/19/05	 
	 
	Kenneth J. Saunders

	Dateexv10wxmy

 

Exhibit 10 (M)

Amendments to Saga Communications, Inc. 1997 Non-Employee Director Stock Option Plan

     (as adopted by the Board of Directors of Saga Communications, Inc. effective as of December
19, 2005.)

     1. New Sections 3.2 and 3.3 are inserted to read as follows, and the remaining subsections of
Section 3 are renumbered accordingly:

	 	3.2	 	“’Change in Effective Control of the Company’ has the meaning as
provided in Prop. Treas. Reg. § 1.409A-3(g)(5)(vi) or applicable final
regulation promulgated under § 409A of the Internal Revenue Code of 1986.”
	 
	 	3.3	 	“’Change in a Substantial Portion of the Assets of the Company’
has the meaning as provided in Prop. Treas. Reg. § 1.409A-3(g)(5)(vii) or
applicable final regulation promulgated under § 409A of the Internal Revenue
Code of 1986.”

     2. Section 5.3 of the Plan is amended to read in it entirety as follows:

     “Vesting. An Option shall vest immediately upon its grant; provided, however, that
any Option granted prior to the date of shareholder approval of this Plan as referred to in Section
2.2 hereof shall not vest and become exercisable until the date of such shareholder approval.

     3. A new Section 5.4 is inserted to read as follows and the remaining subsections of Section 5
are renumbered accordingly:

     “Exercise. An Option shall become exercisable at the election of a Director according
to Election I, Election II or Election III as provided in this Section 5.4. Such elections shall
be in writing and delivered to the Board no later than December 31 of the year before the year in
which the Director earns a retainer to which such Option is related, and such election shall become
irrevocable on such December 31. Directors may elect that an Option shall become exercisable:
Election I, upon the date it is granted, Election II, upon the first to occur of the following
events, (a) the date upon which the Director resigns or is no longer a member of the Board, (b) the
date of a Change in Effective Control of the Company or the date of a Change in a Substantial
Portion of the Assets of the Company, (c) the death of the Director, (d) the expiration of a number
of years, specified by the Director in his or her written election, after the date an Option is
granted, or (e) the date twelve months before the Option would otherwise expire under Section
5.5(1), or Election III, upon the first to occur of the following events, (a) the date upon which
the Director resigns or is no longer a member of the Board, (b) the date of a Change in Effective
Control of the Company or the date of a Change in a Substantial Portion of the Assets of the
Company, (c) the death of the Director, or (d) the date twelve months before the Option would
otherwise expire under Section 5.5(1). If a Director makes no election, he or she shall be deemed
to have opted for Election III.

     4. Section 5.5 of the Plan is amended to read in it entirety as follows:

     “Expiration. Each Option shall expire and no longer be exercisable upon the first to
occur of, (1) the date which is ten years from the date upon which the Option is granted, or (2)
the March 16th following the calendar year in which the Option first becomes exercisable
as provided in Section 5.4 hereof.”

7STOCK
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

TABLE OF
CONTENTS

ARTICLE
I

DEFINITIONS

											
	Section
1.1		Definitions		 	1	 
	Section
1.2		Interpretation		 	13	 
	

ARTICLE
II

PURCHASE AND SALE OF
SHARES

											
	Section
2.1		Purchase and
Sale		 	14	 
	Section
2.2		Consideration		 	14	 
	Section
2.3		Estimated Closing Date Working
Capital		 	15	 
	Section 2.4		Working
Capital Adjustment		 	15	 
	Section
2.5		Tax
Withholdings		 	18	 
	

ARTICLE
III

CLOSING

											
	Section
3.1		Closing		 	19	 
	Section
3.2		Closing Deliveries		 	19	 
	Section
3.3		Transfer of the Italian Purchased
Shares		 	21	 
	

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES OF FINGEN
SELLERS

											
	Section
4.1		Organization and
Standing		 	21	 
	Section
4.2		Capitalization		 	22	 
	Section
4.3		Authorization		 	22	 
	Section
4.4		Noncontravention		 	23	 
	Section
4.5		Financial Statements;
Liabilities		 	23	 
	Section
4.6		Indebtedness		 	24	 
	Section
4.7		Books and Records		 	24	 
	Section
4.8		Accounting Practices		 	24	 
	Section
4.9		Inventory		 	25	 
	Section
4.10		Accounts Receivable		 	25	 
	Section
4.11		Absence of Certain
Changes		 	25	 
	Section 4.12		Euro Cormar
Separation		 	25	 
	Section 4.13		Bank
Account		 	27	 
	Section
4.14		Litigation		 	27	 
	Section
4.15		Compliance with Laws;
Permits		 	27	 
	Section
4.16		Products		 	28	 
	Section
4.17		Absence of Certain
Payments		 	28	 
	Section
4.18		Taxes		 	28	 
	Section
4.19		Customs		 	29	 
	Section
4.20		Real and Personal
Properties		 	29	 
	Section
4.21		Intellectual Property		 	30	 
	

i

											
	Section 4.22		Employee
Benefits		 	31	 
	Section 4.23		Labor
Matters		 	33	 
	Section
4.24		Environmental
Matters		 	34	 
	Section 4.25		Material
Contracts		 	34	 
	Section 4.26		Insurance
Coverage		 	35	 
	Section 4.27		Affiliate
Relationships		 	35	 
	Section
4.28		Brokers		 	36	 
	

ARTICLE
V

REPRESENTATIONS AND WARRANTIES OF
CKI

											
	Section
5.1		Organization and
Standing		 	36	 
	Section
5.2		Capitalization		 	36	 
	Section
5.3		Authorization		 	37	 
	Section
5.4		Noncontravention		 	37	 
	Section
5.5		Financial Statements;
Liabilities		 	37	 
	Section 5.6		Third
Party Indebtedness		 	38	 
	Section
5.7		Books and Records		 	39	 
	Section
5.8		Accounting Practices		 	39	 
	Section
5.9		Inventory		 	39	 
	Section
5.10		Accounts Receivable		 	39	 
	Section
5.11		Absence of Certain
Changes		 	40	 
	Section 5.12		Bank
Account		 	40	 
	Section
5.13		Litigation		 	40	 
	Section
5.14		Compliance with Laws;
Permits		 	40	 
	Section
5.15		Products		 	41	 
	Section
5.16		Absence of Certain
Payments		 	41	 
	Section
5.17		Taxes		 	41	 
	Section
5.18		Customs		 	42	 
	Section
5.19		Real and Personal
Properties		 	42	 
	Section
5.20		Intellectual
Property		 	43	 
	Section 5.21		Employee
Benefits		 	44	 
	Section 5.22		Labor
Matters		 	46	 
	Section
5.23		Environmental
Matters		 	47	 
	Section 5.24		Material
Contracts		 	47	 
	Section 5.25		Insurance
Coverage		 	49	 
	Section 5.26		Affiliate
Relationships		 	49	 
	Section
5.27		Brokers		 	49	 
	Section
5.28		CKI's
Knowledge		 	49	 
	

ARTICLE
VI

REPRESENTATIONS AND WARRANTIES OF
PURCHASER

											
	Section
6.1		Organization and
Existence		 	49	 
	Section
6.2		Authorization		 	50	 
	Section
6.3		Noncontravention		 	50	 
	Section
6.4		Financing		 	50	 
	Section
6.5		Brokers		 	50	 
	

ii

ARTICLE
VII

COVENANTS

											
	Section
7.1		Conduct of the
Business		 	50	 
	Section 7.2		Access to
Information; Confidentiality		 	53	 
	Section
7.3		Commercially Reasonable
Efforts		 	53	 
	Section 7.4		Transitional
Matters; Post-Closing Books and
Records		 	54	 
	Section
7.5		Expenses		 	55	 
	Section
7.6		Termination of Affiliate
Contracts		 	55	 
	Section 7.7		Italian
GAAP Financials		 	56	 
	Section
7.8		Taxes		 	56	 
	Section
7.9		Non-Solicitation of Employees;
Non-Competition		 	58	 
	Section 7.10		Bank
Accounts		 	58	 
	Section 7.11		Waiver of
Rights		 	58	 
	Section
7.12		Resignations		 	59	 
	Section
7.13		Transfer of Nominee
Shares		 	59	 
	Section 7.14		Euro Cormar
Separation		 	59	 
	Section 7.15		CK
Jeanswear Licenses		 	60	 
	Section
7.16		Indebtedness		 	60	 
	Section
7.17		Director Liability		 	60	 
	Section
7.18		Delivery of Books and Records and Other
Files		 	60	 
	Section 7.19		CMI Transfer
Agreement		 	60	 
	

ARTICLE
VIII

CONDITIONS TO
CLOSING

											
	Section
8.1		Conditions of the
Parties' Obligations to Effect the
Closing		 	60	 
	Section 8.2		Additional
Conditions to Obligation of the Sellers to Effect the
Closing		 	61	 
	Section 8.3		Additional
Conditions to Obligation of the Purchaser to Effect the
Closing		 	61	 
	

ARTICLE
IX

INDEMNIFICATION; SELLERS'
REPRESENTATIVE

											
	Section
9.1		Survival of Representations and
Warranties		 	62	 
	Section
9.2		Indemnification of the
Purchaser		 	62	 
	Section
9.3		Indemnification of the
Sellers		 	62	 
	Section
9.4		Indemnification Procedure for Third Party
Claims		 	63	 
	Section
9.5		Indemnification Procedure for Other
Claims		 	64	 
	Section 9.6		Certain Tax
Matters		 	64	 
	Section 9.7		Limitations
on Indemnification		 	66	 
	Section
9.8		Exclusive Remedy		 	67	 
	Section
9.9		Acknowledgment		 	67	 
	

iii

ARTICLE
X

TERMINATION, AMENDMENT AND
WAIVER

											
	Section
10.1		Termination		 	68	 
	Section
10.2		Effect of
Termination		 	68	 
	

ARTICLE
XI

MISCELLANEOUS

											
	Section
11.1		Notices		 	68	 
	Section
11.2		Severability		 	69	 
	Section
11.3		Counterparts		 	70	 
	Section
11.4		Disclosure Schedules		 	70	 
	Section
11.5		Entire Agreement; No Third Party
Beneficiaries		 	70	 
	Section
11.6		Amendments and
Waivers		 	70	 
	Section 11.7		Governing
Law; Jurisdiction; Service of
Process		 	70	 
	Section 11.8		Dispute
Resolution		 	71	 
	Section
11.9		Publicity		 	72	 
	Section
11.10		Assignment		 	72	 
	

iv

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
	

v

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.

‘‘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.

2

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

‘‘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.

‘‘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).

3

‘‘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 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.

‘‘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).

4

‘‘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 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.

5

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

‘‘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 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.

6

‘‘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)).

‘‘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).

7

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

‘‘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).

‘‘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).

8

‘‘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).

‘‘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 with any other related 

9

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).

‘‘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 

10

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.

‘‘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.

‘‘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 

11

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).

‘‘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 

12

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).

‘‘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’’.

(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.

13

(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
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 

14

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, 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 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 

15

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 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

16

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 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.

17

(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 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.

(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.

18

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);

(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 

19

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, 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 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;

20

(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.

(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 

21

its business as 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 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 

22

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
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.

23

(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 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.

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 

24

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 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 

25

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:

(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 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.

26

(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
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; 

27

(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;

(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.

28

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

29

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.

(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).

30

(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.

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.

(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,

31

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 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 

32

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)  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 

33

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.

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;

(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 

34

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 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’’).

35

(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’’).

(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 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 

36

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.

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 

37

(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 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) 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 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.

38

(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 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.

39

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 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 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 

40

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.

(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.

41

(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.

(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 rights and Hardware used by
the Jeanswear N.V. 

42

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.

(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 

43

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.

(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 

44

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 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 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, 

45

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 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 

46

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.

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;

(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 

47

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 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 

48

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 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

49

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 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 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, 

50

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 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 

51

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;

(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

(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 

52

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 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 

53

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 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 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 

54

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 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.

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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 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 

56

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 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 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 

57

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.

(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 

58

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 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)).

59

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).

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

60

(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, 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).

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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 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 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.

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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 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.

63

(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 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.

(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 

64

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 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, 

65

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 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 

66

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 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.

67

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 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

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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:

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

69

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.

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 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.

70

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 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 

71

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
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]

72

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 and 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 and
Director

		EURO CORMAR S.P.A.

		By:
/s/ Corrado Fratini

         Name: Corrado
Fratini
         Title: Chief Executive Officer
and Director

		CALVIN KLEIN,
INC.

		By: /s/ Mark Fischer

        Name: Mark Fischer

        Title: Vice President and
Secretary

73

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