Document:

ex10-1.htm

     Exhibit
      10.1

    
       

    

    
      
        	 
	 
	
                AMENDED
                  AND RESTATED

              
	 
	
                STOCK
                  PURCHASE AGREEMENT

              
	 
	
                Dated
                  as of August 8, 2007

              
	 
	
                Among

              
	 
	
                JONES
                  APPAREL GROUP, INC.,

              
	 
	
                JONES
                  APPAREL GROUP HOLDINGS, INC.,

              
	 
	
                BARNEYS
                  NEW YORK, INC.,

              
	 
	
                ISTITHMAR
                  BENTLEY HOLDING CO.

              
	 
	
                And

              
	 
	
                ISTITHMAR
                  BENTLEY ACQUISITION CO.

              
	 
	 

      

       

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

                              

      
        	
                 

              
	
                 TABLE
                  OF CONTENTS 

              	 Page
	 	 
	  
                
                ARTICLE
                  I

                PURCHASE
                  AND SALE OF SHARES; CLOSING

                 

              	
                 

              
	
                SECTION
                  1.01.

              	
                Purchase
                  and Sale of the Shares

              	
                1

              
	
                SECTION
                  1.02.

              	
                Closing

              	
                2

              
	
                SECTION
                  1.03.

              	
                Purchase
                  Price Adjustment

              	
                3

              
	
                SECTION
                  1.04.

              	
                Purchase
                  Price Settlement

              	
                6

              
	
                SECTION
                  1.05.

              	
                Withholding
                  Taxes

              	
                7

              
	
                 

                ARTICLE
                  II

                REPRESENTATIONS
                  AND WARRANTIES RELATING TO THE COMPANY

                 

              
	
                SECTION
                  2.01.

              	
                Organization,
                  Standing and Corporate
                  Power

              	
                8

              
	
                SECTION
                  2.02.

              	
                Subsidiaries

              	
                9

              
	
                SECTION
                  2.03.

              	
                Capital
                  Structure; Indebtedness

              	
                9

              
	
                SECTION
                  2.04.

              	
                Authority;
                  Noncontravention

              	
                11

              
	
                SECTION
                  2.05.

              	
                Governmental
                  Approvals

              	
                12

              
	
                SECTION
                  2.06.

              	
                No
                  Undisclosed Liabilities

              	
                12

              
	
                SECTION
                  2.07.

              	
                Financial
                  Statements

              	
                12

              
	
                SECTION
                  2.08.

              	
                Absence
                  of Certain Changes or Events

              	
                13

              
	
                SECTION
                  2.09.

              	
                Litigation

              	
                13

              
	
                SECTION
                  2.10.

              	
                Contracts

              	
                13

              
	
                SECTION
                  2.11.

              	
                Compliance
                  with Laws

              	
                15

              
	
                SECTION
                  2.12.

              	
                Environmental
                  Matters

              	
                15

              
	
                SECTION
                  2.13.

              	
                Employees
                  and Labor

              	
                16

              
	
                SECTION
                  2.14.

              	
                Employee
                  Benefit Plans

              	
                16

              
	
                SECTION
                  2.15.

              	
                Tax
                  Matters

              	
                19

              
	
                SECTION
                  2.16.

              	
                Real
                  Estate

              	
                21

              
	
                SECTION
                  2.17.

              	
                Terminated
                  Leases

              	
                23

              
	
                SECTION
                  2.18.

              	
                Sufficiency
                  of Assets; Shared Assets and
                  Services

              	
                23

              
	
                SECTION
                  2.19.

              	
                Insurance

              	
                23

              
	
                SECTION
                  2.20.

              	
                Intellectual
                  Property

              	
                24

              
	
                SECTION
                  2.21.

              	
                Company
                  Proprietary Credit Card

              	
                25

              
	
                SECTION
                  2.22.

              	
                Transactions
                  with Affiliates

              	
                25

              
	
                SECTION
                  2.23.

              	
                Major
                  Suppliers

              	
                26

              
	
                SECTION
                  2.24.

              	
                Brokers
                  and Other Advisors

              	
                26

              
	 	 	 
	
                ARTICLE
                  III

                REPRESENTATIONS
                  AND WARRANTIES RELATING TO SELLING PARTIES AND THE SHARES

                 

              
	
                SECTION
                  3.01.

              	
                Organization,
                  Standing and Corporate
                  Power

              	
                26

              
	
                SECTION
                  3.02.

              	
                Authority;
                  Noncontravention

              	
                26

              
	
                SECTION
                  3.03.

              	
                Governmental
                  Approvals

              	
                28

              
	
                SECTION
                  3.04.

              	
                Litigation

              	
                28

              
	
                SECTION
                  3.05.

              	
                Brokers
                  and Other Advisors

              	
                28

              
	
                SECTION
                  3.06.

              	
                The
                  Shares

              	
                28

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                
                  Table
                    of Contents

                  (continued)

                

                 

                ARTICLE
                  IV

                REPRESENTATIONS
                  AND WARRANTIES OF THE PURCHASING PARTIES

                 

              
	
                SECTION
                  4.01.

              	
                Organization,
                  Standing and Corporate
                  Power

              	
                29

              
	
                SECTION
                  4.02.

              	
                Authority;
                  Noncontravention

              	
                29

              
	
                SECTION
                  4.03.

              	
                Governmental
                  Approvals

              	
                30

              
	
                SECTION
                  4.04.

              	
                Litigation

              	
                31

              
	
                SECTION
                  4.05.

              	
                Sufficient
                  Funds

              	
                31

              
	
                SECTION
                  4.06.

              	
                Guarantee

              	
                32

              
	
                SECTION
                  4.07.

              	
                Brokers
                  and Other Advisors

              	
                32

              
	
                SECTION
                  4.08.

              	
                No
                  Additional Representations

              	
                32

              
	
                SECTION
                  4.09.

              	
                No
                  Distribution

              	
                33

              
	
                SECTION
                  4.10.

              	
                Withholding

              	
                33

              

      

      

      
        	 	 	 
	
                ARTICLE
                  V

                COVENANTS

                 

              
	
                SECTION
                  5.01.

              	
                Conduct
                  of Business

              	
                33

              
	
                SECTION
                  5.02.

              	
                Resignations

              	
                37

              
	
                SECTION
                  5.03.

              	
                Support
                  Services

              	
                37

              
	
                SECTION
                  5.04.

              	
                Financing

              	
                38

              
	
                SECTION
                  5.05.

              	
                Access
                  to Information; Confidentiality

              	
                40

              
	
                SECTION
                  5.06.

              	
                Reasonable
                  Best Efforts

              	
                41

              
	
                SECTION
                  5.07.

              	
                Public
                  Announcements

              	
                42

              
	
                SECTION
                  5.08.

              	
                Employee
                  Matters

              	
                42

              
	
                SECTION
                  5.09.

              	
                Letters
                  of Credit and Hedging Contracts

              	
                44

              
	
                SECTION
                  5.10.

              	
                Release
                  of Lease Guarantees

              	
                44

              
	
                SECTION
                  5.11.

              	
                Further
                  Assurances

              	
                45

              
	
                SECTION
                  5.12.

              	
                Intercompany
                  Arrangements

              	
                45

              
	
                SECTION
                  5.13.

              	
                No
                  Solicitation

              	
                45

              
	
                SECTION
                  5.14.

              	
                Lease
                  Estoppel

              	
                46

              
	
                 

                ARTICLE
                  VI

                TAX
                  MATTERS

                 

              
	
                SECTION
                  6.01.

              	
                Tax
                  Indemnification

              	
                47

              
	
                SECTION
                  6.02.

              	
                Apportionment
                  of Taxes

              	
                47

              
	
                SECTION
                  6.03.

              	
                Tax
                  Returns

              	
                48

              
	
                SECTION
                  6.04.

              	
                Survival

              	
                49

              
	
                SECTION
                  6.05.

              	
                Contest

              	
                49

              
	
                SECTION
                  6.06.

              	
                Cooperation
                  on Tax Matters

              	
                50

              
	
                SECTION
                  6.07.

              	
                Tax
                  Effect of Indemnification Payments

              	
                50

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        	
                
                  Table
                    of Contents

                  (continued)

                   

                

                ARTICLE
                  VII

                CONDITIONS
                  PRECEDENT

                 

              
	
                SECTION
                  7.01.

              	
                Conditions
                  to Each Party’s Obligation to Effect the
                  Acquisition

              	
                51

              
	
                SECTION
                  7.02.

              	
                Conditions
                  to Obligations of the Purchasing
                  Parties

              	
                51

              
	
                SECTION
                  7.03.

              	
                Conditions
                  to Obligation of the Selling Parties and the
                  Company

              	
                52

              
	
                SECTION
                  7.04.

              	
                Frustration
                  of Closing Conditions

              	
                53

              
	
                SECTION
                  7.05.

              	
                Key-Man
                  Insurance

              	
                53

              
	
                 

                ARTICLE
                  VIII

                TERMINATION
                  AMENDMENT AND WAIVER

                 

              
	 
	
                SECTION
                  8.01.

              	
                Termination

              	53
	
                SECTION
                  8.02.

              	
                Effect
                  of Termination

              	
                55

              
	
                SECTION
                  8.03.

              	
                Amendment

              	
                55

              
	
                SECTION
                  8.04.

              	
                Extension;
                  Waiver

              	
                55

              
	
                SECTION
                  8.05.

              	
                Fees
                  and Expenses

              	
                56

              
	
                SECTION
                  8.06.

              	
                Maximum
                  Recovery

              	
                56

              
	
                 

                ARTICLE
                  IX

                SURVIVAL
                  AND INDEMNIFICATION

                 

              
	
                SECTION
                  9.01.

              	
                Survival
                  of Representations, Warranties and
                  Covenants

              	
                57

              
	
                SECTION
                  9.02.

              	
                Indemnification
                  by Seller Parent and
                  Seller

              	
                57

              
	
                SECTION
                  9.03.

              	
                Indemnification
                  by the Purchasing Parties

              	
                59

              
	
                SECTION
                  9.04.

              	
                Notice
                  of Claim; Defense

              	
                61

              
	
                SECTION
                  9.05.

              	
                Potential
                  Contributors

              	
                63

              
	
                SECTION
                  9.06.

              	
                Mitigation

              	
                63

              
	
                SECTION
                  9.07.

              	
                Survival
                  of Indemnity

              	
                63

              
	
                SECTION
                  9.08.

              	
                No
                  Duplication; Exclusive Remedy

              	
                63

              
	
                 

                ARTICLE
                  X

                GENERAL
                  PROVISIONS

                 

              
	
                SECTION
                  10.01.

              	
                Notices

              	
                63

              
	
                SECTION
                  10.02.

              	
                Definitions

              	
                65

              
	
                SECTION
                  10.03.

              	
                Interpretation

              	
                66

              
	
                SECTION
                  10.04.

              	
                Counterparts

              	
                66

              
	
                SECTION
                  10.05.

              	
                Entire
                  Agreement; No Third-Party
                  Beneficiaries

              	
                67

              
	
                SECTION
                  10.06.

              	
                Governing
                  Law

              	
                67

              
	
                SECTION
                  10.07.

              	
                Assignment

              	
                67

              
	
                SECTION
                  10.08.

              	
                Jurisdiction;
                  Waiver of Jury Trial

              	
                67

              
	
                SECTION
                  10.09.

              	
                Specific
                  Performance

              	
                68

              
	
                SECTION
                  10.10.

              	
                Obligations
                  of Seller Parent

              	
                69

              
	
                SECTION
                  10.11.

              	
                Severability

              	
                69

              

      

      

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    
      	
              Table
                of Defined Terms

            
	 	 
	
              2004
                Audited Financial Statements

            	
              13

            
	
              2005
                Audited Financial Statements

            	
              13

            
	
              2006
                Audited Financial Statements

            	
              13

            
	
              Accounting
                Firm

            	
              6

            
	
              Acquisition

            	
              2

            
	
              Actual
                Capital Expenditures

            	
              4

            
	
              Affected
                Employees

            	
              42

            
	
              Affiliate

            	
              65

            
	
              Affiliated
                Group

            	
              19

            
	
              Agreement

            	
              1

            
	
              Alternative
                Financing

            	
              40

            
	
              Alternative
                Transaction

            	
              46

            
	
              Audited
                Financial Statements

            	
              13

            
	
              Base
                Purchase Price

            	
              2

            
	
              business
                day

            	
              65

            
	
              CapEx
                Plan

            	
              4

            
	
              CBAs

            	
              16

            
	
              Claim
                Notice

            	
              61

            
	
              Closing

            	
              2

            
	
              Closing
                Date

            	
              2

            
	
              Code

            	
              3

            
	
              Company

            	
              1

            
	
              Company
                By-laws

            	
              9

            
	
              Company
                Certificate

            	
              9

            
	
              Company
                Common Stock

            	
              1

            
	
              Company
                Disclosure Letter

            	
              8

            
	
              Company
                Facility

            	
              22

            
	
              Company
                Leased Real Property

            	
              21

            
	
              Company
                Leased Real Property Permits

            	
              23

            
	
              Company
                Leases

            	
              21

            
	
              Company
                Plans

            	
              17

            
	
              Company
                Severance Plans

            	
              18

            
	
              Confidentiality
                Agreement

            	
              41

            
	
              Contest

            	
              49

            
	
              Contract

            	
              11

            
	
              Current
                Assets

            	
              4

            
	
              Current
                Liabilities

            	
              4

            
	
              Debt
                Financing

            	
              31

            
	
              Direct
                Claim

            	
              61

            
	
              Effect

            	
              8

            
	
              Employee

            	
              16

            
	
              Employment
                Agreement

            	
              1

            
	
              Environmental
                Laws

            	
              15

            
	
              Equity
                Financing

            	
              31

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Table
        of
        Defined Terms

      (continued)

    

    
      	
              Equity
                Funding Letter

            	
              31

            
	
              ERISA

            	
              16

            
	
              Estimated
                Actual Capital Expenditures

            	
              3

            
	
              Estimated
                Closing Net Working Capital

            	
              3

            
	
              Estimated
                Closing Statement

            	
              3

            
	
              Excess
                Amount

            	
              5

            
	
              Exchange
                Act

            	
              13

            
	
              Final
                Actual Capital Expenditures

            	
              5

            
	
              Final
                Adjustment

            	
              7

            
	
              Final
                Closing Net Working Capital

            	
              5

            
	
              Final
                Closing Statement

            	
              5

            
	
              Financial
                Statements

            	
              13

            
	
              Financing

            	
              31

            
	
              Financing
                Commitments

            	
              31

            
	
              Financing
                Modification Requirements

            	
              39

            
	
              GAAP

            	
              3

            
	
              Governmental
                Authority

            	
              12

            
	
              Guarantee

            	
              32

            
	
              HSR
                Act

            	
              12

            
	
              Indebtedness

            	
              10

            
	
              Indemnified
                Party

            	
              61

            
	
              Indemnifying
                Party

            	
              61

            
	
              Initial
                Payment

            	
              3

            
	
              Initiation
                Date

            	
              40

            
	
              Intellectual
                Property Rights

            	
              24

            
	
              IRS

            	
              17

            
	
              IT
                Systems

            	
              25

            
	
              Key
                Personnel

            	
              35

            
	
              Key-Man
                Insurance

            	
              53

            
	
              Knowledge
                of the Selling Parties

            	
              65

            
	
              Laws

            	
              15

            
	
              Liabilities

            	
              12

            
	
              Lien

            	
              65

            
	
              Losses

            	
              58

            
	
              Major
                Supplier

            	
              26

            
	
              Marketing
                Period

            	
              40

            
	
              Material
                Adverse Effect

            	
              8

            
	
              Multiemployer
                Plan

            	
              17

            
	
              Net
                Working Capital

            	
              3

            
	
              Notice
                of Disagreement

            	
              5

            
	
              Notice
                of Superior Transaction

            	
              54

            
	
              Offer
                Documents

            	
              55

            
	
              Order

            	
              13

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Table
        of
        Defined Terms

      (continued)

    

    
      	
              Organizational
                Documents

            	
              9

            
	
              Original
                Stock Purchase Agreement

            	
              1

            
	
              Outside
                Date

            	
              53

            
	
              Permits

            	
              15

            
	
              Permitted
                Liens

            	
              65

            
	
              person

            	
              66

            
	
              Policies

            	
              24

            
	
              Potential
                Acquirer

            	
              46

            
	
              Pre-Closing
                Covenants

            	
              57

            
	
              Pre-Closing
                Period Taxes

            	
              48

            
	
              Pre-Closing
                Straddle Taxes

            	
              48

            
	
              Proceeding

            	
              13

            
	
              Purchase
                Price

            	
              2

            
	
              Purchaser

            	
              1

            
	
              Purchaser
                Guarantor

            	
              32

            
	
              Purchaser
                Indemnified Persons

            	
              57

            
	
              Purchaser
                Parent

            	
              1

            
	
              Purchaser
                Termination Fee

            	
              56

            
	
              Purchaser’s
                Proposed Calculations

            	
              5

            
	
              Purchasing
                Parties

            	
              1

            
	
              Related
                Documents

            	
              66

            
	
              Related
                Person

            	
              25

            
	
              Representatives

            	
              5

            
	
              Required
                Information

            	
              38

            
	
              Restraints

            	
              51

            
	
              SEC

            	
              12

            
	
              Section
                2.10 Contracts

            	
              13

            
	
              Seller

            	
              1

            
	
              Seller
                Indemnified Persons

            	
              59

            
	
              Seller
                Parent

            	
              1

            
	
              Seller
                Parent Termination Fee

            	
              56

            
	
              Selling
                Parties

            	
              1

            
	
              Shares

            	
              1

            
	
              Straddle
                Period

            	
              48

            
	
              Subsidiary

            	
              66

            
	
              Superior
                Transaction

            	
              46

            
	
              Target
                Capital Expenditures

            	
              4

            
	
              Target
                Net Working Capital

            	
              4

            
	
              Tax
                Indemnitee

            	
              47

            
	
              Tax
                Returns

            	
              20

            
	
              Taxes

            	
              19

            
	
              Third
                Party Claim

            	
              61

            
	
              Transaction
                Expenses

            	
              2

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Table
        of
        Defined Terms

      (continued)

    

    
      	
              Transition
                Services Agreement

            	
              38

            
	
              Unaudited
                Financial Statements

            	
              13

            
	
              Withholding
                Amount

            	
              8

            

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          Table
            of Contents

        

      

    

    

    AMENDED
      AND RESTATED STOCK PURCHASE AGREEMENT

     

                    
AMENDED
      AND RESTATED
      STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of August 8, 2007,
      among JONES APPAREL GROUP, INC., a Pennsylvania corporation (“Seller
      Parent”), JONES APPAREL GROUP HOLDINGS, INC., a Delaware corporation
      (“Seller”, and collectively with Seller Parent, the “Selling
      Parties”), BARNEYS NEW YORK, INC., a Delaware corporation (the
“Company”), ISTITHMAR BENTLEY HOLDING CO., a Delaware corporation
      (“Purchaser Parent”) and ISTITHMAR BENTLEY ACQUISITION CO., a Delaware
      corporation (“Purchaser” and together with Purchaser Parent, the
“Purchasing Parties”), amending and restating, in its entirety, the
      Original Stock Purchase Agreement (as defined below).

     

    WHEREAS,
      Seller Parent, Seller, the Company, Purchaser Parent and Purchaser have entered
      into a stock purchase agreement dated as of June 22, 2007 (the “Original
      Stock Purchase Agreement”);

     

    WHEREAS,
      the parties hereto desire to amend and restate in its entirety the Original
      Stock Purchase Agreement to make the modifications hereinafter set
      forth;

     

    WHEREAS,
      Seller is a wholly owned Subsidiary of Seller Parent;

     

    WHEREAS,
      Purchaser is a wholly owned Subsidiary of Purchaser Parent;

     

    WHEREAS,
      Seller is the record and beneficial owner of 1,000 shares (the “Shares”)
      of common stock, par value $0.01 per share, of the Company (“Company Common
      Stock”), which constitutes all of the issued and outstanding shares of
      capital stock, voting interests and equity securities (and rights to acquire
      capital stock, voting interests or equity securities) of the
      Company;

     

    WHEREAS,
      Purchaser Parent and Howard Socol have entered into an agreement dated as of
      July 7, 2007 (the “Employment Agreement”) pursuant to which Howard Socol
      has agreed, among other things, to continue his employment with the Company
      after the purchase of the Shares by Purchaser on the terms and conditions set
      forth therein; and

     

    WHEREAS,
      Purchaser desires to purchase from Seller, and Seller desires to sell to
      Purchaser, all of the Shares, on the terms and subject to the conditions
      contained herein;

     

    NOW,
      THEREFORE, in consideration of the foregoing and the representations,
      warranties, covenants and agreements contained in this Agreement, the parties
      hereto agree as follows:

     

    ARTICLE
      I

     

    Purchase
      and Sale of Shares; Closing

     

    SECTION
      1.01.  Purchase
      and Sale of the Shares.  (a)  On the terms and subject
      to the conditions of this Agreement, at the Closing Seller shall sell, transfer
      and deliver to Purchaser, and Purchaser shall purchase from Seller, the Shares,
      free and clear of any lien, encumbrance, mortgage, deed of trust, security
      interest, easement, conditional

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        Table
          of Contents

      

    

     

     sale
      or other title retention agreement, pledge, hypothecation, assessment, lease,
      levy, charge, transfer restriction, right of first offer, right of first
      refusal, option, preemptive right, voting trust or agreement, proxy or set
      off
      or other adverse claim of any kind or nature, whether arising by agreement,
      statute or otherwise for an aggregate purchase price, payable jointly by the
      Purchasing Parties, of $942,300,000 (the “Base Purchase Price”), as
      adjusted in accordance with Sections 1.03, 1.04 and 1.05 and taking into
      account Section 1.01(b) (such adjusted amount, the “Purchase
      Price”).  The purchase and sale of the Shares is referred to in
      this Agreement as the “Acquisition”.

     

    (b)  The
      Purchase Price shall be reduced by any Transaction
      Expenses.  “Transaction Expenses” shall mean all expenses of
      the Company incurred prior to or on the Closing in connection with the
      preparation of this Agreement and the consummation of the transactions
      contemplated hereby, to the extent not paid prior to the Closing or accrued
      or
      recorded as a liability in Net Working Capital, including the cost of any audits
      of the Financial Statements and fees and disbursements of lawyers, financial
      advisors, accountants and other advisors and service providers; provided,
however, that such Transaction Expenses shall not include any expenses
      incurred in connection with the Financing.

     

    SECTION
      1.02.  Closing.  (a)  Subject
      to the terms and conditions of this Agreement, the closing of the Acquisition
      (the “Closing”) shall take place at the offices of Cravath, Swaine &
Moore, 825 Eighth Avenue, New York, New York 10019, at 9:00 a.m. (New
      York City
      time) on the fifth business day after the conditions set forth in
      Article VII have been satisfied or waived (excluding those conditions
      intended to be satisfied at the Closing, but subject to satisfaction or waiver
      of such conditions at the Closing) or at such other time or place upon which
      the
      parties may agree; provided, however, that notwithstanding the
      satisfaction or waiver of the conditions set forth in Article VII as of any
      date, the Purchasing Parties shall not be required to effect the Closing until
      the earlier of (i) a date during the Marketing Period specified by the
      Purchasing Parties on no less than three business days’ notice to Seller Parent
      and (ii) the fifth business day after the final day of the Marketing Period
      (subject, in each case, to the satisfaction or waiver of all the conditions
      set
      forth in Article VII of this Agreement, as of the date determined pursuant
      to this proviso).  The date on which the Closing occurs is referred to
      in this Agreement as the “Closing Date”.  The Closing shall be
      deemed to occur as of the close of business on the Closing Date or at such
      other
      time as the parties may agree.

     

    (b)  At
      the
      Closing, Seller Parent and Seller shall deliver, or cause to be delivered,
      to
      Purchaser:

     

                           (i)  certificates
      representing the Shares, duly endorsed in blank or accompanied by stock powers
      duly endorsed in blank in proper form for transfer, with appropriate transfer
      tax stamps, if any, affixed;

     

                           (ii)  a
      certificate or certificates covering the matters specified in
      Sections 7.02(a)(iv), 7.02(b) and 7.02(c);

     

     

    
      
        
        

      

      
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                           (iii)  a
      copy of
      each Related Document to which Seller Parent and each of its Subsidiaries
      (including the Company and its Subsidiaries) is a party, duly executed by Seller
      Parent or its Subsidiaries, as applicable;

     

                       
(iv)  the
      letters of resignation required by Section 5.02; and

     

                           (v)  a
      certificate from Seller Parent and Seller dated as of the Closing Date to the
      effect that neither Seller Parent nor Seller is a foreign person for purposes
      of
      Section 1445 of the United States Internal Revenue Code, as amended (the
“Code”).

     

        
      (c)  At
      the
      Closing, the Purchasing Parties shall deliver to Seller Parent:

     

                           (i)  by
      wire
      transfer to a bank account designated in writing by Seller Parent (such
      designation to be made at least two business days prior to the Closing Date),
      immediately available funds in an amount equal to the initial payment
      (determined as provided in Section 1.03(b) below, the “Initial
      Payment”);

     

                           (ii)  a
      certificate or certificates covering the matters specified in
      Sections 7.03(a) and 7.03(b); and

     

                       (iii)  a
      copy of
      each Related Document to which the Purchasing Parties and each of their
      Affiliates is a party, duly executed by the Purchasing Parties or their
      Affiliates, as applicable.

     

    (d)  All
      proceedings to be taken and all documents to be executed and delivered by the
      Selling Parties or the Company in connection with the Closing shall be
      reasonably satisfactory in form and substance to the Purchasing Parties, and
      all
      proceedings to be taken and all documents to be executed and delivered by the
      Purchasing Parties in connection with the Closing shall be reasonably
      satisfactory in form and substance to Seller Parent.  All proceedings
      to be taken and all documents to be executed and delivered by any person at
      the
      Closing shall be deemed to have been taken and executed simultaneously, and
      no
      such proceedings shall be deemed taken nor any such documents deemed executed
      or
      delivered until all have been taken, executed and delivered.

     

    SECTION
      1.03.  Purchase
      Price Adjustment.  (a)  In order to calculate the
      Initial Payment, not later than two business days prior to the Closing Date,
      Seller Parent will prepare and deliver to Purchaser (i) an estimated
      unaudited consolidated balance sheet of the Company as of the close of business
      on the business day immediately preceding the Closing Date, prepared in
      accordance with United States generally accepted accounting principles
      (“GAAP”), applied in all respects consistently with the audited balance
      sheet of the Company as at February 3, 2007 (the “Estimated Closing
      Statement”), and (ii) a certificate signed on behalf of Seller Parent
      by an authorized officer of Seller Parent certifying that the balance sheet
      set
      forth in the Estimated Closing Statement was prepared on the basis described
      in
      clause (i) above and setting forth (A) the estimated amount of the Net
      Working Capital derived from the Estimated Closing Statement (the “Estimated
      Closing Net Working Capital”),  (B) an estimate of the Actual
      Capital Expenditures (the “Estimated Actual Capital Expenditures”), and
      (C) the amount of the Initial Payment.  “Net Working
      Capital” shall mean the excess of (a) the consolidated Current Assets
      of the
      Company as of 

    
       

      
        
          
          

        

        
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    the
      close
      of business on the business day immediately preceding the Closing Date,
over (b) the consolidated Current Liabilities of the Company as of
      such date.  “Current Assets” means all categories of current
      assets set forth as line items on the Estimated Closing Statement, as determined
      in accordance with Section 1.03(a) of the Company Disclosure Letter,
      specifically including all cash and cash equivalents and excluding fair market
      value of derivatives and intercompany/affiliate balances and deferred tax assets
      and federal income tax receivables.  “Current Liabilities”
means all categories of current liabilities set forth as line items
      on the
      Estimated Closing Statement, as determined in accordance with Section 1.03(a)
      of
      the Company Disclosure Letter, specifically excluding all debt, fair market
      value of derivatives, accrued interest, intercompany/affiliate payables and
      deferred taxes and accrued federal income Taxes.  Any additions to the “Other
      Long-term Liabilities – Construction Allowance” account on the Estimated Closing
      Statement or the Final Closing Statement from May 5, 2007 through the Closing
      shall be deemed an increase in “Current Liabilities” for purposes of calculating
      the Estimated Closing Net Working Capital, the Initial Payment, the Final
      Closing Net Working Capital and the Final
      Adjustment.  “Actual Capital Expenditures” shall mean the
      gross capital
      expenditures (excluding all tenant allowances or similar lease incentives which
      offset gross capital expenditures) paid in cash from May 6, 2007 through the
      close of business on the last business day immediately prior to the Closing
      Date. “Target Capital Expenditures” shall mean the gross capital
      expenditures
      (excluding all tenant allowances or similar lease incentives which offset gross
      capital expenditures), the payment of which is provided for in the Company’s
      capital expenditure plan set forth in Section 1.03(a) of the Company Disclosure
      Letter (the “CapEx
      Plan”), from May 6,
      2007 through the fiscal month ending immediately prior to the Closing Date
      plus
      an amount equal to (A) the amount of
      the gross capital expenditures (excluding all tenant allowances or similar
      lease
      incentives which offset gross capital expenditures), the payment of which is
      provided for in the CapEx Plan, for the fiscal month in which the Closing Date
      occurs multiplied
      by (B) the number of days elapsed in
      the fiscal month up through and including the last business day immediately
      prior to the Closing Date divided
      by (C) the number of days in such
      fiscal month.  Set forth on Section 1.03(a) of the Company
      Disclosure Letter is an example showing how the Initial Payment would be
      adjusted and Final Adjustment would be calculated based on certain stated
      assumptions relating to the capital expenditure adjustment described
      below.  Such assumptions are provided solely for the purpose of
      illustrating these calculations. 

     

    (b)  The
      Initial Payment shall be an amount equal to the Base Purchase Price adjusted
      as
      follows:

     

                     
      (i)  if
      the
      Estimated Closing Net Working Capital is less than $108,000,000 (the “Target
      Net Working Capital”), an amount equal to the excess of the Target Net
      Working Capital over the Estimated Closing Net Working Capital shall be deducted
      in calculating the Initial Payment;

     

                  (ii)  if
      the
      Target Net Working Capital is less than the Estimated Closing Net Working
      Capital, an amount equal to the excess of the Estimated Closing Net Working
      Capital over the Target Net Working Capital shall be added in calculating the
      Initial Payment;

     

     

    
      
        
        

      

      
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                      (iii)  if
      the
      Estimated Actual Capital Expenditures are less than Target Capital Expenditures,
      an amount equal to the excess of the Target Capital Expenditures over the
      Estimated Actual Capital Expenditures shall be deducted in calculating the
      Initial Payment; and

     

                     (iv)  if
      the
      Target Capital Expenditures are less than the Estimated Actual Capital
      Expenditures, an amount equal to the excess of the Estimated Actual Capital
      Expenditures over the Target Capital Expenditures shall be added in calculating
      the Initial Payment;

     

    provided
      that if after giving effect to the adjustments in clauses (i) through (iv)
      above, the Initial Payment would exceed $957,300,000, then such excess amount
      (the “Excess Amount”) shall be payable
      if and to the
      extent required by Section 1.04 and the Initial Payment shall be equal to
      $957,300,000.

     

                    
(c)  (i)  Within
      45 days after the Closing Date, Purchaser shall prepare and deliver to
      Seller Parent a consolidated balance sheet of the Company as of the close of
      business on the business day immediately preceding the Closing Date prepared
      in
      accordance with GAAP, applied in all respects consistently with the audited
      balance sheet of the Company as at February 3, 2007 (the “Final Closing
      Statement”).

     

                    
(ii)  When
      Purchaser delivers the Final Closing Statement, Purchaser shall also deliver
      to
      Seller Parent a certificate signed on behalf of Purchaser by an authorized
      officer of Purchaser, certifying that the balance sheet set forth in the Final
      Closing Statement was prepared on the basis described in Section 1.03(c)(i)
      above and setting forth Purchaser’s calculations, based on the Final Closing
      Statement (“Purchaser’s Proposed Calculations”), of (A) the amount
      of Net Working Capital (the “Final Closing Net Working Capital”),
      (B) the amount of the Actual Capital Expenditures (the “Final Actual
      Capital Expenditures”) and (C) the amount of the Final
      Adjustment.

     

                    (d)  During
      the 30-day period following receipt by Seller Parent of the Final Closing
      Statement, Seller Parent, any of its directors or officers, Employees or any
      investment banker, financial advisor, attorney, accountant, lender, agent or
      other representative (collectively, “Representatives”) retained by it or
      any of its Subsidiaries shall be permitted to review information of Purchaser
      and its Representatives relating to the Final Closing Statement.  The
      Final Closing Statement shall become final and binding upon the parties on
      the
      30th day following delivery thereof, unless Seller Parent gives written notice
      of its disagreement with the Final Closing Statement or with the accuracy of
      any
      of Purchaser’s Proposed Calculations (the “Notice of Disagreement”) to
      Purchaser prior to such date, which shall specify the nature of any disagreement
      so asserted.  If a Notice of Disagreement is given by Seller Parent in
      a timely manner, then the Final Closing Statement (as revised in accordance
      with
      this sentence) shall become final and binding upon Seller Parent and Purchaser
      on the earlier of (i) the date Seller Parent and Purchaser resolve in
      writing any differences they have with respect to the matters specified in
      the
      Notice of Disagreement and (ii) the date any disputed matters specified in
      the Notice of Disagreement are finally resolved in writing by a nationally
      recognized independent public accounting firm as shall be agreed upon by the
      parties hereto in writing, which shall not be Purchaser’s or Seller Parent’s or
      any of their respective Affiliates’ independent accountants, and

     

    
       

      
        
          
          

        

        
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    which
      the
      parties currently expect will be Deloitte & Touche (the
“Accounting Firm”).  During the 15-day period following the
      delivery of a Notice of Disagreement, Seller Parent and Purchaser shall seek
      in
      good faith to resolve in writing any differences that they may have with respect
      to the matters specified in the Notice of Disagreement.  If, at the
      end of such 15-day period, Seller Parent and Purchaser are unable to so resolve
      any such differences, Seller Parent and Purchaser shall submit to the Accounting
      Firm for resolution any and all matters that remain in dispute and that were
      included in the Notice of Disagreement.  The Accounting Firm, acting
      as experts and not as arbitrators, shall be instructed to render its
      determination of all matters submitted to it within 15 days following
      submission.  Purchaser and Seller Parent agree that they shall be
      bound by the determination of the Accounting Firm.  Judgment may be
      entered upon the determination of the Accounting Firm in any court having
      jurisdiction over the party against which such determination is to be
      enforced.  The Accounting Firm shall not be authorized or permitted to
      make any determination as to the accuracy of Section 2.07 or any other
      representation or warranty in this Agreement or as to compliance by the Company,
      Seller Parent or Seller with any of their covenants in this Agreement (other
      than in Sections 1.03 and 1.04).  Any determinations by the
      Accounting Firm, and any work or analyses performed by the Accounting Firm,
      in
      connection with its resolution of any dispute under Sections 1.03 and 1.04
      shall not be admissible in evidence in any suit, action or proceeding between
      the parties, other than to the extent necessary to enforce payment obligations
      under Section 1.04.  The fees and expenses of the Accounting Firm
      incurred pursuant to this Section 1.03 shall be borne 50% by Seller Parent
      and 50% by Purchaser.  The fees and disbursements of Seller Parent’s
      advisors incurred in connection with the Final Closing Statement and any Notice
      of Disagreement shall be borne by Seller Parent, and the fees and expenses
      of
      Purchaser’s advisors incurred in connection with the Final Closing Statement and
      any Notice of Disagreement shall be borne by Purchaser.

     

                     SECTION
      1.04.  Purchase
      Price Settlement.  (a)  Subject to paragraph (b)
      below, (i) in the event that the Final Closing Net Working Capital is less
      than the Estimated Closing Net Working Capital, Seller Parent shall, within
      five
      business days following the determination of the Final Closing Net Working
      Capital pursuant to Section 1.03, pay to Purchaser an amount in cash equal
      to the Estimated Closing Net Working Capital minus the Final Closing Net Working
      Capital by wire transfer of immediately available U.S. funds to the account
      or
      accounts specified in writing by Purchaser no less than three business days
      prior to such date;

     

                     
      (ii)  in
      the
      event that the Estimated Closing Net Working Capital is less than the Final
      Closing Net Working Capital, the Purchasing Parties shall or shall cause the
      Company to, within five business days following the determination of the Final
      Closing Net Working Capital pursuant to Section 1.03, pay to Seller Parent
      an amount in cash equal to the Final Closing Net Working Capital minus the
      Estimated Closing Net Working Capital by wire transfer of immediately available
      U.S. funds to the account or accounts specified in writing by Seller Parent
      pursuant to Section 1.02(c)(i);

     

                     
      (iii)  in
      the
      event that the Final Actual Capital Expenditures are less than the Estimated
      Actual Capital Expenditures, Seller Parent shall, within five business days
      following the determination of the Final Actual Capital Expenditures pursuant
      to
      Section 1.03, pay to Purchaser an amount in cash equal to the Estimated
      Actual Capital Expenditures minus the Final Actual Capital Expenditures by
      wire
      transfer of immediately available U.S. funds to the account or accounts
      specified in writing by Purchaser no less than three business days prior to
      such
      date; and

     

     

    
      
        
        

      

      
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                     (iv)  in
      the
      event that the Estimated Actual Capital Expenditures are less than
      the  Final Actual Capital Expenditures, the Purchasing Parties shall
      or shall cause the Company to, within five business days following the
      determination of the  Final Actual Capital Expenditures pursuant to
      Section 1.03, pay to Seller Parent an amount in cash equal to the Final
      Actual Capital Expenditures minus the Estimated Actual Capital Expenditures
      by
      wire transfer of immediately available U.S. funds to the account or accounts
      specified in writing by Seller Parent pursuant to
      Section 1.02(c)(i).

     

                  (b)  The
      payments specified above in paragraph (a) above shall be calculated on a net
      basis and made in one net payment (i.e., so that only one payment will be made
      between Seller Parent and the Purchasing Parties that takes account of all
      such
      payments) and, if there was an Excess Amount pursuant to Section 1.03(b), such
      net payment shall be subject to the following adjustments:

     

                     (i)  if
      the
      net amount payable pursuant to clauses (a)(i) through (iv) above is payable
      by
      Seller Parent and is greater than the Excess Amount, then such net amount
      payable by Seller Parent shall be reduced by the Excess Amount;

     

                     (ii)  if
      the
      net amount payable pursuant to clauses (a)(i) through (iv) above is payable
      by
      Seller Parent and is equal to the Excess Amount, then no amount shall be payable
      by Seller Parent;

     

                    
(iii)  if
      the
      net amount payable pursuant to clauses (a)(i) through (iv) above is payable
      by
      Seller Parent and is less than the Excess Amount, then the Purchasing Parties
      shall or shall cause the Company to pay to Seller Parent an amount equal to
      the
      Excess Amount minus the net amount otherwise payable by Seller Parent;
      and

     

                    
(iv)  if
      the
      net amount payable pursuant to clauses (a)(i) through (iv) above is payable
      by
      the Purchasing Parties, then the Purchasing Parties shall or shall cause the
      Company to pay to Seller Parent an amount equal to such net amount plus the
      Excess Amount.

     

    (c)  The
      adjustment to the Purchase Price after Closing pursuant to this
      Section 1.04 is referred to herein as the “Final
      Adjustment”.  Following the Closing through the resolution of any
      adjustment to the Purchase Price contemplated by this Section 1.04,
      Purchaser shall afford, and shall cause the Company and its Subsidiaries to
      afford, to Seller Parent and any accountants, counsel or financial advisors
      retained by Seller Parent in connection with the determination of the Final
      Closing Net Working Capital and the Final Actual Capital Expenditures,
      reasonable access during normal business hours to all the properties, books,
      contracts, personnel and records of the Company, its Subsidiaries and its
      Representatives relevant to the adjustment contemplated by this
      Section 1.04.

     

    SECTION
      1.05.  Withholding
      Taxes.  Purchaser shall be entitled to deduct and withhold from
      the Purchase Price such amounts as Purchaser is required to deduct

     

    
       

      
        
          
          

        

        
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    and
      withhold under the Code, or any provision of state, local or foreign Tax Law,
      with respect to the making of payment of such Purchase Price (the
“Withholding Amount”).  To the extent the amounts are so
      withheld by Purchaser, such withheld amounts shall be treated for all purposes
      of this Agreement as having been paid to Seller Parent and shall be timely
      paid
      by Purchaser to the appropriate Taxing authority.

     

     

    ARTICLE
      II

     

    Representations
      and Warranties Relating to the Company

     

    Except
      as
      set forth in the disclosure letter delivered by Seller Parent to the Purchasing
      Parties dated as of the date of this Agreement (the “Company Disclosure
      Letter”) (each section of which qualifies the correspondingly numbered
      representation, warranty or covenant to the extent specified therein and such
      other representations, warranties or covenants to the extent it is readily
      apparent that a matter in such section is relevant to such other representation,
      warranty or covenant), each Selling Party, jointly and severally, represents
      and
      warrants to the Purchasing Parties as follows:

     

    SECTION
      2.01.  Organization,
      Standing and Corporate Power.  Each of the Company and its
      Subsidiaries (a) is a corporation or limited liability company, as the case
      may be, duly organized, validly existing and in good standing under the Laws
      of
      the jurisdiction in which it is incorporated or formed, as the case may be,
      and
      (b) has all requisite corporate or limited liability company, as the case
      may be, power and authority to carry on its business as now being
      conducted.  Each of the Company and its Subsidiaries is duly qualified
      or licensed to do business and is in good standing in each jurisdiction in
      which
      the nature of its business or the ownership, leasing or operation of its
      properties or other assets makes such qualification or licensing necessary,
      other than in such jurisdictions where the failure to be so qualified or
      licensed individually or in the aggregate has not had and would not reasonably
      be expected to have a Material Adverse Effect.  For purposes of this
      Agreement, “Material Adverse Effect” shall mean any state of facts,
      circumstance, event, change, development, effect or occurrence (any such item,
      an “Effect”) (i) that is materially adverse to the business, consolidated
      results of operations, assets, properties or financial condition of the Company
      and its Subsidiaries taken as a whole or (ii) that impairs in any material
      respect the ability of either Selling Party or the Company to perform its
      obligations under this Agreement or prevents or materially impedes, interferes
      with, hinders or delays the consummation of the Acquisition or any of the other
      transactions contemplated hereby, except, in the case of clause (i) above,
      for any Effect to the extent such Effect results from or is attributable to
      (A) any change in conditions in the United States, foreign or global
      economy or capital or financial markets generally, including any change in
      interest or exchange rates, (B) any change in conditions (including any
      change in general legal, regulatory, political, economic or business conditions
      or any change in GAAP) in, or otherwise generally affecting, the industry in
      which the Company and its Subsidiaries conduct business, (C) the
      negotiation, execution, announcement or pendency of this Agreement and the
      transactions contemplated hereby, including any impact thereof on relationships,
      contractual or otherwise, with any customers, suppliers, distributors, partners
      or employees, (D) any act of terrorism or war (whether threatened, pending
      or declared), (E) any action taken by the Company or any of its
      Subsidiaries with the written consent of either of the Purchasing Parties or
      (F) any failure by the
      Company or any of its Subsidiaries to meet projections (it being understood
      that, without limiting the applicability of the provisions contained in
      clause (A) or (B) above, the cause or causes of any such failure may
      be deemed either alone or in combination with other events to constitute a
      Material Adverse Effect and may be taken into account in determining whether
      a
      Material Adverse Effect has occurred); except in the case of
      clause (A), (B) or (D), to the extent such Effect has a disproportionate
      effect on the Company and its Subsidiaries, taken as a whole, when compared
      to
      other companies operating in the same industry in which the Company and its
      Subsidiaries conduct business; it being understood and agreed that for purposes
      of Section 2.04(b),
      the definition of the term “Material Adverse Effect” shall not include the
      exception set forth in the preceding clause (C).  The Company has
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    available
      to the Purchasing Parties true and complete copies of the certificate of
      incorporation of the Company as in effect on the date of this Agreement (the
      “Company Certificate”) and the By-laws of the Company as in effect on the
      date of this Agreement (the “Company By-laws”), and each equivalent
      organizational document for each of the Company’s Subsidiaries (the Company
      Certificate and the Company By-laws, together with such equivalent
      organizational documents of the Company’s Subsidiaries, the “Organizational
      Documents”).

     

     

    SECTION
      2.02.  Subsidiaries.  Section 2.02
      of the Company Disclosure Letter sets forth a true and complete list of all
      the
      Subsidiaries of the Company and, for each such Subsidiary, the state of
      incorporation or formation.  All the outstanding shares of capital
      stock of, or other equity or voting interests in, each such Subsidiary are
      duly
      authorized, validly issued, fully paid and nonassessable and are owned, directly
      or indirectly, by the Company free and clear of any lien, encumbrance, mortgage,
      deed of trust, security interest, easement, conditional sale or other title
      retention agreement, pledge, hypothecation, assessment, lease, levy, charge,
      transfer restriction, right of first offer, right of first refusal, option,
      preemptive right, voting trust or agreement, proxy or set off or other adverse
      claim of any kind or nature, whether arising by agreement, statute or otherwise,
      and free of any restriction on the right to vote, sell or otherwise dispose
      of
      such capital stock or other equity or voting interests.  Except for
      the capital stock of, or other equity or voting interests in, its Subsidiaries,
      the Company does not beneficially own, directly or indirectly, any capital
      stock
      of, or other equity or voting interests in, any person.

     

    SECTION
      2.03.  Capital
      Structure; Indebtedness.  (a)  The authorized
      capital stock of the Company consists of 1,000 shares of Company Common Stock,
      of which 1,000 shares of Company Common Stock were issued and outstanding,
      none
      of which were held by the Company or any Subsidiary of the Company, and no
      shares of Company Common Stock will be (x) subject to a right of repurchase
      by the Company, (y) subject to forfeiture back to the Company or
      (z) subject to transfer or lock-up restrictions, in each of cases (x),
      (y) and (z), following the consummation of the Acquisition or any of the other
      transactions contemplated by this Agreement.

     

     

    
      
        
        

      

      
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    (b)  There
      are
      no outstanding options or other rights to purchase or receive Company Common
      Stock.  Other than the Shares and the shares of capital stock, or
      other equity voting interests in the Company’s Subsidiaries held by the Company
      or another Subsidiary of the Company, (i) there are not issued, reserved
      for issuance or outstanding any (A) shares of capital stock of, or other
      equity or voting interests in, the Company or its Subsidiaries,
      (B) securities of the Company or any of its Subsidiaries convertible into
      or exchangeable or exercisable for shares of capital stock of, or other equity
      or voting interests in, the Company or any of its Subsidiaries or  (C) options,
      calls, warrants or other rights to acquire from the Company or any of its
      Subsidiaries any capital stock of, or other equity or voting interests in,
      or
      securities convertible into or exchangeable or exercisable for capital stock
      of,
      or other equity or voting interests in, the Company or any of its Subsidiaries,
      (ii) there exists no obligation of the Company or any of its Subsidiaries
      to issue any capital stock of, or other equity or voting interests in, or
      securities convertible into or exchangeable or exercisable for capital stock
      of,
      or other equity or voting interests in, the Company or any of its Subsidiaries
      and (iii) there are no outstanding stock appreciation rights, rights to
      receive shares of Company Common Stock or shares of capital stock of or other
      equity or voting interests in any Subsidiary of the Company, on a deferred
      basis
      or otherwise, or other rights that are linked in any way to the value of Company
      Common Stock or shares of capital stock of, or other equity or voting interests
      in, any Subsidiary of the Company issued or granted by the Company or any
      Subsidiary.

     

    (c)  All
      outstanding shares of capital stock of the Company are duly authorized, validly
      issued, fully paid and nonassessable and not subject to preemptive
      rights.  There are no Contracts of any kind to which the Company or
      any of its Subsidiaries is a party or is bound, other than the Operating
      Agreement of Barneys Asia Co. LLC, a copy of which has been provided to the
      Purchasing Parties, that obligate the Company or any of its Subsidiaries to
      repurchase, redeem or otherwise acquire (i) shares of capital stock of, or
      other equity or voting interests in, the Company or any of its Subsidiaries
      or
      (ii) options, warrants or other rights to acquire shares of capital stock
      of, or other equity or voting interests in, or securities convertible into
      or
      exchangeable for capital stock of, or other equity or voting interests in,
      the
      Company or any of its Subsidiaries.  Neither the Company nor any of
      its Subsidiaries is a party to any voting Contract with respect to the voting
      of
      any such securities, other than the Operating Agreement of Barneys Asia Co.
      LLC,
      a copy of which has been provided to the Purchasing Parties.  There
      are no irrevocable proxies and no voting Contracts (or Contracts to execute
      a
      written consent or a proxy) with respect to any shares of Company Common Stock
      or any other voting securities of the Company.

     

    (d)  The
      Company and its Subsidiaries have no outstanding
      Indebtedness.  “Indebtedness” with respect to any person means,
      without duplication, (i) the principal of, accrued and unpaid interest on,
      and any prepayment or similar penalties and expenses in respect of,
      (A) indebtedness of such person for money borrowed (but excluding trade
      accounts payable and other accrued current liabilities) and
      (B) indebtedness evidenced by notes, debentures, bonds or other similar
      instruments for the payment of which such person is responsible or liable (but
      excluding trade accounts payable and other accrued current liabilities);
      (ii) all obligations of such person issued or assumed as the deferred
      purchase price of property and all conditional sale obligations of such person
      (but excluding trade accounts payable and other accrued current liabilities);
      (iii) all obligations of such person as lessee under leases that are
      capitalized in accordance with GAAP (but excluding capitalized tenant allowances
      and step rents contained in the Company Leases); (iv) all obligations,
      contingent or otherwise, of such person under letters of credit, surety bonds
      and similar instruments, in each case to the extent such obligations would
      be
      required to appear on the balance sheet of such person in accordance with GAAP
      (but excluding obligations relating to letters of credit listed in Section
      5.09
      of the Company Disclosure Letter and similar obligations incurred between the
      date hereof and the Closing Date in the ordinary course of business consistent
      with past practice); (v) all obligations of such  person
      under or pursuant to interest rate cap contracts, swap contracts, foreign
      currency exchange contracts or other hedging or similar contracts (including
      any
      breakage or associated fees), but excluding obligations relating to hedging
      contracts listed in Section 5.09 of the Company Disclosure Letter and similar
      obligations incurred between the date hereof and the Closing Date in the
      ordinary course of business consistent with past practice; (vi) all
      obligations of the type referred to in clauses (i) through (v) of any
      person for which such person is responsible or liable, directly or indirectly,
      as obligor, guarantor, surety or otherwise; and (vii) all obligations of
      the type referred to in clauses (i) through (vi) of other persons secured
      by any Lien on any property or asset of such person (whether or not such
      obligation is assumed by such person).

    
       

      
        
          
          

        

        
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    SECTION
      2.04.  Authority;
      Noncontravention.  (a)  The Company has all requisite
      corporate power and authority to execute and deliver this Agreement and to
      consummate the Acquisition and the other transactions contemplated
      hereby.  The execution and delivery of this Agreement by the Company
      and the consummation of the Acquisition and the other transactions contemplated
      by this Agreement and the compliance by the Company with the provisions of
      this
      Agreement have been duly authorized by all necessary corporate action on the
      part of the Company, and no other corporate proceedings on the part of the
      Company are necessary to authorize or approve this Agreement or to consummate
      the Acquisition or the other transactions contemplated hereby.  This
      Agreement has been duly executed and delivered by the Company and, assuming
      the
      due authorization, execution and delivery by each of the other parties hereto,
      constitutes a legal, valid and binding obligation of the Company, enforceable
      against the Company in accordance with its terms (subject to applicable
      bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
      other Laws affecting creditors’ rights generally from time to time in
      effect).

     

    (b)  The
      execution and delivery of this Agreement does not, and the consummation of
      the
      Acquisition and the other transactions contemplated by this Agreement and
      compliance with the provisions hereof do not and will not, conflict with, or
      result in any violation or breach of, or constitute a default (with or without
      notice or lapse of time or both) under, or give rise to a right of consent,
      termination, cancellation or acceleration of any obligation, or to the loss
      of a
      benefit under, or result in the creation of any Lien upon any of the properties
      or other assets of the Company or any of its Subsidiaries under (i) the
      Organizational Documents of the Company or any of its Subsidiaries,
      (ii) any note, loan or credit agreement, bond, debenture, note, mortgage,
      indenture, lease or other contract, agreement, instrument, obligation or license
      (each, including all amendments thereto, a “Contract”) to which the
      Company or any of its Subsidiaries is a party or is bound or any of their
      respective properties or other assets is bound by or subject to or otherwise
      under which the Company or any of its Subsidiaries has any rights or benefits
      or
      (iii) subject to the governmental filings and other matters referred to in
      Section 2.05, any Law applicable to the Company or any of its Subsidiaries
      or their respective properties or other assets, other than, in the case of
      clauses (ii) and (iii), any such conflicts, violations, breaches, defaults,
      rights, results, losses or Liens that individually or in the aggregate have
      not
      had and are not reasonably likely to have an Effect described in clause (ii)
      of
      the definition of Material Adverse Effect.

     

     

    
      
        
        

      

      
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    SECTION
      2.05.  Governmental
      Approvals.  No consent, approval, order or authorization of,
      action by or in respect of, or registration, declaration or filing with, any
      domestic or foreign (whether supranational, national, federal, state,
      provincial, local or otherwise) government or any court, administrative,
      regulatory or other governmental agency, commission or authority or any
      nongovernmental self-regulatory agency, commission or authority (each, a
“Governmental Authority”) is required by or with respect to the Company
      or any of its Subsidiaries in connection with the execution and delivery of
      this
      Agreement by the Company or the consummation by the Company of the Acquisition
      or any of the other transactions contemplated by this Agreement, except for
      (a) those required to be made pursuant to the Hart-Scott-Rodino Antitrust
      Improvements Act of 1976, as amended (the “HSR Act”) and (b) such
      other consents, approvals, orders, authorizations, registrations, declarations,
      permits, actions, notifications and filings the failure of which to be obtained
      or made individually or in the aggregate have not had and are not reasonably
      likely to have an Effect described in clause (ii) of the definition of Material
      Adverse Effect.

     

    SECTION
      2.06.  No
      Undisclosed Liabilities.  (a)  Neither the Company nor
      any of its Subsidiaries has any liabilities of any nature, whether accrued,
      absolute, contingent, known, unknown or otherwise (the “Liabilities”),
      except for (i) Liabilities disclosed in the balance sheet dated as of
      February 3, 2007 included in the Financial Statements,
      (ii) Liabilities incurred in the ordinary course of business since
      February 3, 2007, (iii) Liabilities under Contracts that relate to
      obligations that have not yet been performed, and are not required to be
      performed, (iv) obligations relating to guarantees by the Company of its
      Subsidiaries’ obligations under the Company Leases listed on Section 2.06
      of the Company Disclosure Letter, and (v) obligations under letters of
      credit and hedging contracts disclosed pursuant to
      Section 5.09.  Neither the Company nor any of its Subsidiaries
      maintains any “off-balance sheet arrangement” within the meaning of
      Item 303(a)(4)(ii) of Regulation S-K of the Securities and Exchange
      Commission (the “SEC”).

     

    (b)  Neither
      the Company nor any of its Subsidiaries has any Liabilities or obligations
      to
      indemnify any of their respective directors, officers or other representatives
      under any of the Organizational Documents with respect to matters arising prior
      to the Closing Date.

     

    SECTION
      2.07.  Financial
      Statements.  (a)  Section 2.07(a)
      of the Company Disclosure Letter includes a correct and complete copy of
      (i)(A) the audited consolidated balance sheet of the Company and its
      Subsidiaries as at January 29, 2005, together with the audited consolidated
      statements of income and cash flows for the periods

     

     

    
      
        
          
          

        

        
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      from
        February 1, 2004 to December 19, 2004 and December 20, 2004 to
        January 29, 2005 (the “2004 Audited Financial Statements”),
        (B) the audited consolidated balance sheet of the Company and its
        Subsidiaries as at January 28, 2006, together with the audited consolidated
        statements of income and cash flows for the fiscal year ended January 28,
        2006 (the “2005 Audited Financial Statements”), and (C) the audited
        consolidated balance sheet of the Company and its Subsidiaries as at
        February 3, 2007, together with the audited consolidated statements of
        income and cash flows for the fiscal year ended February 3, 2007 (the
“2006 Audited Financial Statements”, and together with the 2004 Audited
        Financial Statements and the 2005 Audited Financial Statements, the “Audited
        Financial Statements”), in each case audited by BDO Seidman, LLP and
        (ii) the unaudited consolidated balance sheet of the Company and its
        Subsidiaries as at May 5, 2007, together with the unaudited consolidated
        statement of income and cash flows for the three months ended May 5, 2007,
        reviewed by BDO Seidman, LLP (the “Unaudited Financial Statements”, and
        together with the Audited Financial Statements, the “Financial
        Statements”).  The Financial Statements were prepared in
        accordance with GAAP applied on a consistent basis throughout all periods
        involved, and fairly present the consolidated financial position and the
        consolidated results of operations and cash flows of the Company and its
        Subsidiaries, in each case as of the dates and for the periods referred to
        therein, subject, in the case of the Unaudited Financial Statements, to
        (A) normal year end adjustments in accordance with the Company’s and its
        Subsidiaries’ ordinary course of business and (B) the absence of footnote
        disclosures required by GAAP.  The information set forth on
        Section 2.07(a) of the Company Disclosure Letter was prepared from the
        books and records of Seller Parent and its Subsidiaries.

    

     

    (b)  None
      of
      the Company or any of its Subsidiaries is required to file periodic reports
      with
      the SEC pursuant to the Securities Exchange Act of 1934, as amended, and the
      rules and regulations promulgated thereunder (the “Exchange
      Act”).

     

    SECTION
      2.08.  Absence
      of Certain Changes or Events.  Since February 3, 2007,
      (a) the Company and its Subsidiaries have conducted their respective
      businesses in the ordinary course consistent with past practice and
      (b) through the date of this Agreement, there has not been any Effect that,
      individually or in the aggregate, has had or is reasonably likely to have a
      Material Adverse Effect.  No Selling Party, the Company or any of its
      Subsidiaries has taken any action between February 3, 2007 and the date of
      this Agreement that, if taken after the date of this Agreement, would constitute
      a breach of any of clauses (i), (ii), (iii), (v), (vi), (viii), (ix), (x),
      (xiii), (xiv) or (xix) of Section 5.01(a).

     

    SECTION
      2.09.  Litigation.  Except
      with respect to Employees and Labor and Employee Benefit Plans, which are the
      subject of Sections 2.13 and 2.14, as of the date of this Agreement, there
      is no claim, suit, action, investigation or other legal, administrative or
      arbitral proceeding (a “Proceeding”) (a) pending or, to the
      Knowledge of the Selling Parties, threatened against the Company or any of
      its
      Subsidiaries or any of their respective properties, rights or other assets,
      except for any such Proceeding involving claims (i) for only monetary
      damages not exceeding $200,000 or (ii) that would be covered by insurance
      policies maintained by or for the benefit of the Company and its Subsidiaries,
      or (b) relating to the Acquisition, this Agreement or any of the other
      transactions contemplated hereby.  There is no material judgment,
      decree, injunction, rule or order of any Governmental Authority (an
“Order”) or arbitrator outstanding against, or, to the Knowledge of the
      Selling Parties, material Proceeding, notice of violation, order of forfeiture
      or complaint by any Governmental Authority involving, the Company or any of
      its
      Subsidiaries.

     

    SECTION
      2.10.  Contracts.  (a)  Section 2.10
      of the Company Disclosure Letter sets forth, as of the date of this Agreement,
      a
      true and complete list of, and the Company has made available to the Purchasing
      Parties true and complete copies of (collectively, “Section 2.10
      Contracts”):

     

                     
      (i)  each
      Contract, other than purchase orders, of the Company or any of its Subsidiaries
      involving, or reasonably expected to involve, aggregate annual payments by
      or to
      the Company or any of its Subsidiaries of more than $1,000,000, other than
      any
      Contract (A) set forth on Section 2.13 or 2.14 of the Company
      Disclosure Letter or (B) of the type described in
      Section 2.10(a)(ix);

     

     

    
      
        
        

      

      
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        (ii)  (A) all
        Contracts pursuant to which any Indebtedness of the Company or any of its
        Subsidiaries is outstanding or may be incurred and (B) all Contracts
        involving any “keep well” arrangements or pursuant to which the Company or any
        of its Subsidiaries has agreed to maintain any financial statement condition
        of
        another person;

       

                       
(iii)  all
        Contracts pursuant to which the Company or any of its Subsidiaries has agreed
        not to, or which, following the consummation of the Acquisition, could restrict
        the ability of the Purchasing Parties, including the Company and its
        Subsidiaries, to compete with any person in any business or in any geographic
        area or to engage in any business or other activity, including any restrictions
        relating to “exclusivity” or any similar requirement in favor of any person
        other than the Company or any of its Subsidiaries or pursuant to which any
        benefit is required to be given or lost as a result of so competing or
        engaging;

       

                     (iv)  all
        Contracts pursuant to which the Company or any of its Subsidiaries is a party
        (A) granting another party “most favored nation” or similar status or
        (B) granting another party, or that grants the Company or any of its
        Subsidiaries, license to, or franchise in respect of, any material right,
        property or asset;

       

                     (v)  all
        joint
        venture, limited liability company, partnership or other similar Contracts
        (including all amendments thereto) in which the Company or any of its
        Subsidiaries holds an interest;

       

                        (vi)  all
        Contracts relating to the acquisition or disposition of any business, operations
        or division (whether by merger, sale of stock, sale of assets or otherwise)
        to
        the extent any unresolved claims or actual or contingent express obligations
        of
        any party thereunder remain;

       

                     (vii)  all
        Contracts containing outstanding material obligations relating to the settlement
        of any Proceeding involving the Company or its Subsidiaries;

       

                     (viii)  all
        employment agreements between a Selling Party, the Company or any of its
        Subsidiaries, on the one hand, and any Employee of the Company or its
        Subsidiaries, on the other hand; or

       

                    
(ix)  all
        Contracts between the Company or any of its Subsidiaries, on the one hand,
        and a
        Major Supplier, on the other hand, other than purchase orders.

       

                     (b)  Each
        of
        the Section 2.10 Contracts is valid and binding on the Company or its
        Subsidiary, and to the Knowledge of the Selling Parties, is in full force
        and
        effect.  Neither the Company nor any of its Subsidiaries is in
        violation of or in default under (nor, to the Knowledge of the Selling Parties,
        does there exist any condition which upon the passage of time or the giving
        of
        notice or both would cause such a violation of or default under) any
        Section 2.10 Contract to which it is a party or by which they or any of
        their respective properties or other assets are bound, other than
        inconsequential defaults or violations.

    

     

     

    
      
        
        

      

      
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    (c)  Section 2.10(c)
      of the Company Disclosure Letter lists, as of the date of this Agreement, each
      claim in excess of $100,000 made by any party in connection with any
      Section 2.10 Contract which has not been settled as of the date of this
      Agreement, and an explanation of the status of such claim, including relevant
      dates, amounts and impact on caps, baskets and deductibles under any indemnity
      thereunder.

     

    SECTION
      2.11.  Compliance
      with Laws.  Except with respect to Environmental Laws, Employees
      and Labor, Employee Benefit Plans and Taxes, which are the subject of
      Sections 2.12,
      2.13, 2.14 and 2.15, respectively, each of the Company and its Subsidiaries
      (including each and all of their operations, practices, properties and assets)
      is, and since January 1, 2005, has been, in material compliance with
      (a) all statutes, laws, ordinances, rules, regulations, judgments, orders
      and decrees of any Governmental Authority (collectively, “Laws”) and
      Orders applicable to it, its personnel, properties or other assets or its
      business or operations, including Laws relating to consumer finance or the
      extension of credit and (b) all permits, licenses, variances, exemptions,
      authorizations, operating certificates, franchises, orders and approvals of
      all
      Governmental Authorities (collectively, “Permits”) issued to the Company
      or any of its Subsidiaries.  None of the Company and its Subsidiaries
      have received, since January 1, 2005, a notice or other written
      communication alleging or relating to a possible material violation of any
      Law
      or Order applicable to it, its personnel, properties or other assets or its
      businesses or operations.  The Company and its Subsidiaries have in
      effect all material Permits necessary for them to own, lease or operate their
      properties and other assets and to carry on their business operations as now
      conducted.  There is no Proceeding pending, nor has the Company or its
      Subsidiaries received any written notice from any Governmental Authority, to
      revoke, cancel, refuse to renew or adversely modify any material
      Permit.

     

    SECTION
      2.12.  Environmental
      Matters.  (a)  Each of the Company and its Subsidiaries
      is in compliance in all material respects with all applicable Environmental
      Laws, and there is no environmental Proceeding existing or pending, or, to
      the
      Knowledge of the Selling Parties, threatened, against or affecting the Company
      or any of its Subsidiaries alleging material noncompliance with, or that has
      resulted in or is reasonably likely to result in Liability under, Environmental
      Laws.  For purposes of this Agreement, “Environmental Laws”
shall mean all applicable Laws in effect as of the Closing and applicable
      Permits and licenses relating to the protection of the environment, natural
      resources or human health and safety.

     

    (b)  The
      Selling Parties have made available to the Purchasing Parties copies of all
      material environmental, health and safety reports, audits, assessments or other
      material communications or documentation relating to environmental, health
      or
      safety matters in their possession relating to the Company and its Subsidiaries,
      or any property owned, operated or leased by the Company and its Subsidiaries,
      including any material Phase I or Phase II Environmental Site Assessments,
      asbestos surveys or abatement reports, indoor air quality studies or remediation
      reports, or site assessment or remediation plans.

     

     

    
      
        
        

      

      
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      SECTION
        2.13.  Employees
        and Labor.  (a)  Section 2.13(a)
        of the Company Disclosure Letter sets forth a complete and accurate list,
        as of
        the date of this Agreement, of all collective bargaining agreements and any
        labor union contracts to which the Company or any of its Subsidiaries is
        a party
        (including any extensions of such agreements or agreements to extend such
        agreement or agreements pending negotiation) and all collective bargaining
        agreements and labor union contracts currently being negotiated as of the
        date
        of this Agreement which are or would be applicable to any employees of the
        Company or its Subsidiaries (each, an “Employee”
and
        such agreements, collectively,
“CBAs”).  As
        of the date of this
        Agreement, no CBA has expired without being either (x) renewed or (y) extended
        pending negotiations.  As of the date of this Agreement, neither the
        Company nor any of its Subsidiaries is engaged in negotiations with any labor
        organization as the collective bargaining representative of any Employees
        for an
        initial collective bargaining agreement.  To the Knowledge of the
        Selling Parties, as of the date of this Agreement, (i) no officer or Employee
        is
        being represented by a works’ council or a labor organization other than those
        that are parties to the CBAs and (ii) there are no labor unions, except UNITE
        HERE or its subordinate Joint Boards or local unions, presently engaging
        in any
        organizing activity with respect to any Employee.  There are, and for
        the three years preceding the date of this Agreement there have been, no
        strikes, organized slowdowns, work stoppages or lockouts or other material
        labor
        disputes pending, or to the Knowledge of the Selling Parties, threatened
        against
        or involving the Company or any of its Subsidiaries.

    

     

    (b)  Each
      of
      the Company and its Subsidiaries is in material compliance with all Laws
      applicable to the Company and its Subsidiaries regarding the terms and
      conditions of employment or other employment-related matters, including without
      limitation Laws relating to discrimination, fair labor standards, wage and
      hour,
      terms and conditions of employment practices and occupational health and safety
      or wrongful discharge, and as of the date of this Agreement there are no
      material complaints, lawsuits or other Proceedings pending or, to the Knowledge
      of the Selling Parties, threatened against the Company or its Subsidiaries
      brought by or on behalf of any applicant for employment, any current or former
      Employee or any class of the foregoing, relating to any such Laws, or alleging
      breach of any express or implied contract of employment or wrongful termination
      of employment, or alleging any other discriminatory, wrongful or tortious
      conduct in connection with the employment relationship.

     

    (c)  As
      of the
      date of this Agreement, no material grievance, arbitration demand or Proceeding,
      whether or not filed pursuant to a CBA, is pending or, to the Knowledge of
      the
      Selling Parties, is threatened, against the Company or any of its Subsidiaries
      that involves an attempt by any labor organization to extend its jurisdiction
      or
      representation rights, or (except in the case of CBAs listed on
      Section 2.13(a) of the Company Disclosure Letter and the labor
      organizations that are parties thereto) apply its collective bargaining
      agreement to the Company or any of its Subsidiaries. 

     

    SECTION
      2.14.  Employee
      Benefit Plans.  (a)  Section 2.14(a)
      of the Company Disclosure Letter sets forth a true and complete list, as of
      the
      date of this Agreement, of all “employee benefit plans” as defined in
      Section 3(3) of the Employee Retirement Income Security Act of 1974, as
      amended (“ERISA”) and all other material compensation, bonus, pension,
      profit sharing, deferred compensation, incentive compensation, stock ownership,
      stock purchase, stock option, phantom stock or other equity-based, retirement,
      post-retirement health
      or
      life insurance, vacation, disability, death benefit, hospitalization, medical,
      employment, retention, consulting, change in control, salary continuation,
      termination, severance or other employee benefit plans, programs, policies,
      practices, arrangements, agreements, funds, commitments or payroll practices
      maintained, sponsored or contributed to or required to be maintained, sponsored
      or contributed to by the Company or any of its Subsidiaries or to which the
      Company or any of its Subsidiaries

    
       

      
        
          
          

        

        
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    contributes
      or is obligated to contribute or under which the Company or any of its
      Subsidiaries has any Liability (including a Liability arising out of an
      indemnification, guarantee, hold harmless or similar agreement), with respect
      to
      any current or former Employee, officer or director of the Company or any of
      its
      Subsidiaries or any beneficiary or dependent thereof, other than Multiemployer
      Plans and CBAs (the “Company Plans”).  None of the Company
      Plans provides for post-employment life or health insurance benefits or coverage
      for any participant or any beneficiary of a participant, except as may be
      required under the Consolidated Omnibus Budget Reconciliation Act of 1985,
      as
      amended, or at the expense of the participant or the participant’s
      beneficiary.  There has been no written communication to Employees of
      the Company or its Subsidiaries that promises or guarantees such Employees
      retiree health or life insurance benefits or other retiree death benefits on
      a
      permanent basis.  As of the date of this Agreement, neither the
      Company nor any of its Subsidiaries has announced any intent or commitment
      to
      create or implement any additional employee benefit plan or to amend, modify
      or
      terminate any Company Plan.  Each Company Plan that is an employee
      welfare benefit plan may by its terms be amended or terminated on and after
      the
      Closing Date without the incurrence of any material cost or Liability by the
      Company or its Subsidiaries (it being understood that the obligations of
      Purchaser pursuant to Section 5.08 hereof apply notwithstanding the foregoing
      representation).

     

    (b)  True,
      correct and complete copies of the following documents with respect to each
      of
      the Company Plans have been made available to the Purchasing Parties by the
      Company, to the extent applicable:  (i) such Company Plan (or,
      with respect to any Company Plan that is not in writing, a written description
      of the terms thereof), all amendments thereto and related trust documents,
      insurance contracts or other documentation of any related funding arrangement,
      and amendments thereto, (ii) the most recent Forms 5500 and all schedules
      thereto and the two most recent annual reports, actuarial reports and/or
      financial reports, (iii) the most recent Internal Revenue Service (the
“IRS”) determination letter, if applicable, and any communication from or
      with the IRS relating to such letter or the subject matter thereof,
      (iv) summary plan descriptions, if applicable, (v) any material
      communication between the Company or any of its Subsidiaries and any
      Governmental Authority and (vi) communications that are not themselves Company
      Plans or CBAs, with one or more participants in any Company Plan, that would
      reasonably be expected to result, individually or in the aggregate, in material
      Liability to the Company in excess of the Company’s obligations under any
      Company Plan or CBA.

     

    (c)  Section 2.14(c)
      of the Company Disclosure Letter sets forth, as of the date of this Agreement,
      a
      true and complete list of each “multiemployer plan” (within the meaning of
      Section 3(37) and Section 4001(a)(3) of ERISA) maintained or
      contributed to by the Company or any of its Subsidiaries, or to which the
      Company or any of its Subsidiaries is obligated to contribute or has any
      Liability (a “Multiemployer Plan”).  For purposes of this
      Agreement, the term “Multiemployer Plan” shall be deemed to include the Barneys
      Retail/Employees Union Health Fund.  Neither the Company nor any of
      its Subsidiaries has (i) incurred, or is reasonably likely to incur, a
“complete withdrawal” or a “partial withdrawal” (as such terms are defined in
      Sections 4203 and 4205, respectively, of ERISA) with respect to any
      Multiemployer Plan or (ii) received any notice, as of the date of this
      Agreement, or otherwise reasonably expects that any Multiemployer Plan is or
      will be “insolvent” or in “reorganization” (within the meaning of
      Sections 4241 and 4245, respectively, of ERISA).  The Company has
      provided the Purchasing Parties with the most recent estimates requested by
      the
      Company (it being understood that no such estimates were requested by the
      Company in connection with this Agreement or the transactions contemplated
      hereby) of the potential withdrawal liability to which the Company or any
      Subsidiary would be subject if the Company or any Subsidiary were to withdraw
      from each Multiemployer Plan.

     

     

    
      
        
        

      

      
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    (d)  Section 2.14(d)
      of the Company Disclosure Letter sets forth a true and complete list, as of
      the
      date of this Agreement, of (i) each Company Plan that provides severance,
      termination, retention, change in control or similar benefits (the “Company
      Severance Plans”) and (ii) the levels of Employees who participate in
      each such Company Severance Plan.

     

    (e)  Neither
      the Company nor its Subsidiaries (i) maintains or contributes to, or has
      maintained or contributed to, (x) any “employee benefit plan” (other than a
      Multiemployer Plan) within the meaning of Section 3(3) of ERISA that is
      subject to Section 302 or Title IV of ERISA or Section 412 of the Code
      or (y) any “multiple employer plan” within the meaning of
      Sections 4063/4064 of ERISA or Section 413(c) of the Code or
      (ii) has incurred or, to the Knowledge of the Selling Parties, is
      reasonably likely to incur, any Liability pursuant to Section 412 of the
      Code or Title I or Title IV of ERISA (other than Liability for premiums to
      the
      Pension Benefit Guaranty Corporation arising in the ordinary course of
      business).  Neither the Company nor any of its Subsidiaries has, in
      the past five years, engaged in any transaction described in Section 4069
      or 4212(c) of ERISA that would reasonably be expected to result in the
      incurrence of a Liability by the Company or its Subsidiaries on or after the
      Closing.

     

    (f)  Each
      Company Plan has been maintained in all material respects in accordance with
      its
      terms and in compliance in all material respects with all provisions of ERISA,
      the Code (including in each case rules and regulations thereunder) and other
      applicable Laws with respect to such Company Plan.  Other than routine
      claims for benefits, there is no pending or, to the Knowledge of the Selling
      Parties, threatened material audit or material Proceeding relating to any
      Company Plan. With respect to each Company Plan for which financial statements
      are required by ERISA, to the Knowledge of the Selling Parties, there has been
      no material adverse change in the financial status of such Company Plan since
      the date of the most recent such statements provided to the Purchasing Parties
      by the Company.  To the Knowledge of the Selling Parties, no
“prohibited transaction,” breach of fiduciary duty or similar action or omission
      has resulted in or is reasonably likely to result in the imposition of any
      material Liability, Tax or penalty on the Company or any of its Subsidiaries,
      or
      in any requirement for the posting of security with respect to a Company Plan
      or
      imposition of any Lien on the assets of the Company or any of its Subsidiaries
      with respect to a Company Plan, under ERISA, the Code or other applicable
      Law.

     

     

    
      
        
        

      

      
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    (g)  Each
      Company Plan that is intended to qualify under Section 401 of the Code has
      been given a favorable determination letter from the IRS with respect to such
      qualification, and, to the Knowledge of the Selling Parties, nothing has
      occurred with respect to the operation of the Company Plans that has caused
      or
      is reasonably likely to cause the loss of such qualification or exemption or
      the
      imposition of any material Liability, penalty or Tax under ERISA or the
      Code.

     

    (h)  Except
      for failures to make contributions that individually or in the aggregate would
      not reasonably be expected to result in material Liability to the Company or
      any
      of its Subsidiaries, all contributions (including all employer contributions
      and
      employee salary reduction contributions) required to have been made by the
      Company or its Subsidiaries under any of the Company Plans (or in the case
      of
      any Multiemployer Plan, the applicable CBA or other governing Contract) or
      by
      Law to any funds or trusts established under a Company Plan or Multiemployer
      Plan or in connection therewith have been made by the due date thereof
      (including any valid extensions) and any payments not yet due have been
      accurately reflected in the consolidated balance sheet included in the Financial
      Statements.

     

    (i)  Neither
      the execution and delivery of this Agreement nor the consummation of the
      Acquisition or any other transaction contemplated by this Agreement will
      (i) entitle any Employee or any director or independent contractor of the
      Company or any of its Subsidiaries to, or increase any, severance, change in
      control, termination or other compensation or benefits; (ii) increase the
      amount or value of any benefit or compensation otherwise payable or required
      to
      be provided to any such Employee, director or independent contractor;
      (iii) accelerate the time of payment or vesting or trigger any payment or
      funding (through a grantor trust or otherwise) of any such compensation or
      benefits under, or trigger any other material obligation pursuant to any Company
      Plan; or (iv) result in any amount failing to be deductible by reason of
      Section 280G of the Code.

     

    (j)  On
      or
      following the consummation of the transactions contemplated by this Agreement,
      none of the Company nor any of its Subsidiaries would reasonably be expected
      to
      incur any Liability under Title IV of ERISA as a result of being treated as
      a
      single employer with Seller Parent or its Affiliates (other than the Company
      and
      its Subsidiaries) for purposes of Section 414(b), (c), (m) or (o) of the Code
      or
      Section 4212(c) or 4069 of ERISA.

     

    (k)  Each
      Company Plan has been operated in good faith compliance with the provisions
      of
      Section 409A of the Code.

     

    (l)  No
      Company Plan exists that, as a result of the execution of this Agreement,
      shareholder approval of this Agreement, or the transactions contemplated by
      this
      Agreement (whether alone or in connection with any subsequent event(s)), could
      result in payments under any of the Company Plans which would not be deductible
      under Section 280G of the Code.

     

    SECTION
      2.15.  Tax
      Matters.  (a)  Each of the Company, its Subsidiaries and
      any consolidated, combined, unitary, affiliated or aggregate group of which
      the
      Company or any of its Subsidiaries is a member (an “Affiliated Group”)
      has timely filed (taking into account any extension of time within which to
      file) all material federal, state, local and foreign income and franchise Tax
      Returns required to be filed by it and has paid all Taxes shown to be due on
      such Tax Returns, and all such Tax Returns are true and complete in all material
      respects.  For purposes of this Agreement, (i) “Taxes”
shall mean all federal, state and local, domestic and foreign, income,
      employment, withholding, escheats, property, unclaimed property, real property
      transfer, transfer gains, transfer, sales, excise and other taxes, tariffs
      or
      governmental charges of any nature whatsoever, including any interest, penalties
      or additions with respect thereto, imposed by any Governmental Authority,
      including any Liability for the payment of any amounts of the type described
      above as a result of being a member of an Affiliated Group or as a result of
      being party to any tax sharing agreement with any of the Selling Parties, any
      of
      their Subsidiaries, or any member of any such Affiliated Group, or as a result
      of any express or implied obligation to indemnify any such other person with
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    above,
      and (ii) “Tax Returns” shall mean any return, declaration, report,
      claim for refund, or information return or statement relating to taxes,
      including any schedule or attachment thereto, and including any amendment
      thereof.

     

    (b)  No
      deficiencies for any Taxes have been proposed, asserted or assessed against
      the
      Company, any of its Subsidiaries or any Affiliated Group that are still pending
      and none of the Selling Parties, the Company or its Subsidiaries is currently
      involved with or has received any notice of any threatened or proposed Tax
      audit, examination, refund litigation, investigation, claim, administrative
      proceeding or adjustment in controversy with respect to the Company or any
      of
      its Subsidiaries.

     

    (c)  The
      federal income Tax Returns of the Affiliated Group of which the Company and
      its
      Subsidiaries are currently a member have been examined by and settled with
      the
      IRS (or the applicable statute of limitations has expired) for all years through
      December 31, 2004.

     

    (d)  Neither
      the Company nor any of its Subsidiaries has constituted either a “distributing
      corporation” or a “controlled corporation” (in each case, within the meaning of
      Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for
      tax-free treatment under Section 355(e) of the Code (A) in the two
      years preceding the date of this Agreement or (B) in a distribution that
      could otherwise constitute part of a “plan” or “series of related transactions”
(within the meaning of Section 355(e) of the Code) in conjunction with the
      Acquisition.

     

    (e)  No
      material claim has been made by any Tax authority in a jurisdiction where the
      Company or any of its Subsidiaries or any Affiliated Group has not filed a
      Tax
      Return that the Company, any of its Subsidiaries or any Affiliated Group is
      or
      may be subject to Tax by such jurisdiction, nor to the Knowledge of the Selling
      Parties is any such assertion threatened.

     

    (f)  As
      of the
      date of this Agreement, there is no outstanding request for any extension of
      time within which to pay any Taxes or file any Tax Returns, and no waiver,
      extension or comparable consent regarding the application of the statute of
      limitations with respect to any Taxes or Tax Return is outstanding, nor is
      any
      request for any such waiver or consent pending.

     

    (g)  As
      of the
      date of this Agreement, the Company and each of its Subsidiaries have withheld
      and paid all Taxes required to be withheld in connection with any amounts paid
      or owing to any employee, creditor, independent contractor or other third party
      except where failure to do so has not had and is not reasonably likely to have,
      individually or in the aggregatewith
      any other such failure or failures, a Material Adverse
      Effect.  The Company and each of its Subsidiaries has complied with
      all information reporting and backup withholding obligations with respect to
      such payments.

    
       

      
        
          
          

        

        
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    (h)  The
      Company has not been a United States real property holding corporation within
      the meaning of Section 897(c)(2) of the Code during the applicable period
      specified in Section 897(c)(1)(A)(ii) of the Code.

     

    (i)  There
      are
      no Liens (other than Permitted Liens) for Taxes upon the Company and its
      Subsidiaries.

     

    (j)  Neither
      the Company nor any of its Subsidiaries, with respect to the income and
      activities of the Company and its Subsidiaries, have been required to file
      any
      foreign Tax Returns.

     

    (k)  None
      of the Selling Parties, with respect to the Company and each of its
      Subsidiaries, or the Company and each of its Subsidiaries, has agreed to make,
      nor is required to make, any adjustments with respect to any taxable period
      ending after the Closing Date pursuant to Section 481(a) of the Code or any
      similar provision of state or local law by reason of a change in accounting
      method initiated by it or any other relevant party.  To the Knowledge
      of the Selling Parties, the IRS has no currently outstanding proposed adjustment
      or change in accounting with respect to the Company and its Subsidiaries, and
      none of the Selling Parties, the Company or its Subsidiaries has any application
      pending with any Governmental Authority requesting permission for any changes
      in
      Tax accounting methods that relate to the business or assets of the Company
      or
      any of its Subsidiaries.

     

    (l)  None
      of the Selling Parties (with respect to the Company and its Subsidiaries),
      the
      Company, or its Subsidiaries has “participated” in a “reportable transaction”
within the meaning of Treasury Regulation section 1.6011-4(b).

     

    SECTION
      2.16.  Real
      Estate.  (a)  None of the Company or any of its
      Subsidiaries owns any real property.

     

    (b)  Section 2.16(b)
      of the Company Disclosure Letter sets forth a true, correct and complete list
      of
      the common address and current use of all real property leased, subleased,
      licensed or otherwise used or occupied (whether as a tenant, subtenant, or
      pursuant to other occupancy arrangements) by the Company and its Subsidiaries
      (collectively, the “Company Leased Real Property”) pursuant to leases,
      subleases, licenses and other occupancy agreements, including all amendments,
      modifications and supplements with respect to any of the foregoing (the
“Company Leases”) under which the Company or any of its Subsidiaries is a
      tenant, subtenant or occupant, and for each Company Lease indicates whether
      or
      not the consent of the landlord will be required in connection with the
      transactions contemplated by this Agreement.  The Company or one of
      its Subsidiaries (either directly or indirectly) holds a valid and existing
      leasehold or subleasehold interest, as applicable, in the Company Leased Real
      Property under each of the Company Leases free and clear of any Liens, except
      for Permitted Liens.  The Selling Parties have delivered or made
      available to the Purchasing Parties true, correct and complete copies of each
      of
      the Company Leases.  With respect to each Company
      Lease:  (i) such Company Lease is, and, assuming the receipt of
      the consents set forth in Section 2.16(b) of the Company Disclosure Letter
      and
      the provision of any notices required under the Company Leases, upon the
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    will
      be, (A) in full force and effect, (B) the legal, valid, and binding
      obligation of the Company or the applicable Subsidiary, and (C) current
      with respect to rent and other sums and charges payable by the Company or such
      Subsidiary pursuant to the Company Lease, (ii) none of the Company or any
      of its Subsidiaries is in material default, taking into account any notice
      and
      cure period, under such Company Lease, to the Knowledge of the Selling Parties,
      no other party to a Company Lease is in material default, taking into account
      any notice and cure period, under such Company Lease and, to the Knowledge
      of
      the Selling Parties, no event has occurred that, with notice or lapse of time,
      or both, would constitute a material breach or default by the Company or any
      of
      its Subsidiaries or permit termination under such Company Lease by any party
      thereto, (iii) the terms of such Company Lease have not been modified in
      any respect, except to the extent that such modifications are set forth in
      the
      documents previously delivered or made available to the Purchasing Parties
      or
      disclosed to the Purchasing Parties in Section 2.16(b) of the Company
      Disclosure Letter, and none of the Selling Parties, the Company or its
      Subsidiaries is currently in negotiations with any landlord to cancel or
      terminate any Company Lease prior to the end of the stated term of such Company
      Lease, (iv) none of the Selling Parties, the Company or any of its
      Subsidiaries has assigned, transferred, conveyed, mortgaged, deeded in trust
      or
      granted any security interest in its leasehold interest in such Company Lease,
      and, other than the Company Leases, none of the Company Leased Real Property
      is
      subject to any lease, sublease, license or other agreement which grants, from
      the Company or one of its Subsidiaries, to any other person, any right to the
      use, occupancy or enjoyment of such Company Leased Real Property or any part
      thereof and (v) each guaranty by the Company or any of its Subsidiaries, if
      any, with respect to a Company Lease is in full force and effect.

     

    (c)  None
      of
      the Selling Parties, the Company or any of its Subsidiaries has received written
      notice of any violation by the Company or any of its Subsidiaries of any
      existing Law, applicable to any store, distribution facility or warehouse
      facility operated by the Company or any of its Subsidiaries pursuant to a
      Company Lease (each, a “Company Facility”), which violation would be
      reasonably likely to materially adversely affect the present use and operation
      of the Company Leased Real Property.

     

    (d)  None
      of
      the Selling Parties, the Company or any of its Subsidiaries has received written
      notice of and, to the Knowledge of the Selling Parties, there are no pending
      condemnation or eminent domain Proceedings that affect any Company Leased Real
      Property.

     

    (e)  None
      of
      the Selling Parties, the Company or its Subsidiaries has received written notice
      of any Proceeding and, to the Knowledge of the Selling Parties, there is no
      Proceeding threatened or pending against the Company or its Subsidiaries with
      respect to any rights or interests of the Company or its Subsidiaries in any
      portion of the Company Leased Real Property.  None of the Selling
      Parties, the Company or any of its Subsidiaries has received written notice
      of
      the existence of any outstanding or pending Order and, to the Knowledge of
      the
      Selling Parties, there are no extant Orders relating to the lease, use,
      occupancy or operation by the Company or its Subsidiaries of the Company Leased
      Real Property, which Orders would be reasonably likely to materially adversely
      affect the present use and operation of the Company Leased Real
      Property.

     

     

    
      
        
        

      

      
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    (f)  To
      the
      Knowledge of the Selling Parties, the current use of the Company Leased Real
      Property by the Company or any of its Subsidiaries does not violate any
      instrument of record affecting such Company Leased Real Property, which
      violations would be reasonably likely to materially adversely affect the present
      use and operation of the Company Leased Real Property.  Since January
      1, 2005, 
      no material damage or destruction has occurred with respect to any of the
      Company Leased Real Property which has not been substantially repaired prior
      to
      the date of this Agreement.

     

    (g)  All
      Permits required to be obtained by the Company or its Subsidiaries, if any
      (collectively, the “Company Leased Real Property Permits”), to continue
      the present use and operation of the Company Leased Real Property, have been
      issued to the Company or such Subsidiary and are, as of the date of this
      Agreement, in full force and effect, except for any lapses, terminations or
      non-issuances of Company Leased Real Property Permits which would not reasonably
      be likely to materially adversely affect the present use and operation of the
      Company Leased Real Property.  None of the Selling Parties, the
      Company or its Subsidiaries has received any written notice from a Governmental
      Entity having jurisdiction over the Company Leased Real Property threatening
      a
      suspension, revocation or cancellation of any Company Leased Real Property
      Permit that would be reasonably likely to materially adversely affect the
      present use and operation of the Company Leased Real Property as a
      whole.

     

    SECTION
      2.17.  Terminated
      Leases.  None of the Company or any Subsidiary has, or will have,
      any Liability of any kind related to the closing of any Company Facility with
      respect to which the Company or any of its Subsidiaries has terminated, or
      prior
      to the Closing Date will terminate, its leasehold or subleasehold interest,
      except to the extent reserved against in the balance sheet dated
      February 3, 2007 or disclosed in the notes to the Financial
      Statements.  None of the Selling Parties, the Company or any of its
      Subsidiaries has received any notice of any such Liability (whether actual,
      pending or threatened).

     

    SECTION
      2.18.  Sufficiency of Assets; Shared Assets
      and Services.  The Company or its Subsidiaries have, and, assuming
      the provision of services under the Transition Services Agreement, following
      the
      Closing will have, good title to, or a valid leasehold interest in, or license
      or right to use all of the assets necessary, and such assets are in such
      condition and repair (ordinary wear and tear excepted) as is sufficient, in
      all
      material respects, to operate the business of the Company and its
      Subsidiaries after the Closing Date in substantially the same manner as
      presently conducted.  Section 2.18 of the Company Disclosure
      Letter contains a complete and accurate list as of the date of this Agreement
      of
      (i) all the material assets used or held for use by the Company or its
      Subsidiaries that the Selling Parties or their Affiliate (other than the Company
      and its Subsidiaries) owns, leases, licenses, has a right to use or otherwise
      uses and (ii) the material services provided by the Selling Parties or
      their Affiliates (other than the Company and its Subsidiaries) to the Company
      and its Subsidiaries.

     

    SECTION
      2.19.  Insurance.  (a)  Section 2.19(a)
      of the Company Disclosure Letter sets forth an accurate and complete list of
      the
      policies of insurance maintained as of the date of this Agreement by or for
      the
      benefit of the Company and its Subsidiaries (including any policies of insurance
      maintained for purposes of providing benefits such as workers’ compensation and
      employers’ liability coverage) (collectively, the “Policies”) as well as
      a description of all risks that the Company and its Subsidiaries designate
      as
“self-insured”.  To the Knowledge of the Selling Parties, as of the
      date of this Agreement no insurer on any such Policy has been declared insolvent
      or placed in receivership, conservatorship or liquidation.

     

    
       

      
        
          
          

        

        
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    (b)  Section 2.19(b)
      of the Company Disclosure Letter sets forth a list of all pending claims as
      of
      the date of this Agreement (including with respect to insurance obtained but
      not
      currently maintained) and the claims history (for filed claims) for the Company
      and its Subsidiaries since January 1, 2005 (including with respect to insurance
      obtained but not currently maintained), in each case with respect to each claim
      (or series of related claims) involving amounts in excess of
      $250,000.  None of the Company or any of its Subsidiaries has been
      refused any insurance coverage with respect to any material aspect of its
      operations, nor has its coverage been limited in any material respect by any
      insurance carrier to which it, or either of the Selling Parties on its behalf,
      has applied for insurance.  As of the date of this Agreement, there is
      no claim by the Company or any of its Subsidiaries, or by either of the Selling
      Parties on its behalf, pending under any such Policies as to which coverage
      has
      been questioned, denied or disputed by the underwriters of such
      Policies.

     

    SECTION
      2.20.  Intellectual
      Property.  (a)  Section 2.20 of the Company Disclosure
      Letter set forth the Company’s and its Subsidiaries’ trademark status as of the
      date of this Agreement.  Each of the Company and its Subsidiaries
      owns, or is validly licensed or otherwise has the right to use, all Intellectual
      Property Rights that are used in the conduct of the business of the Company
      and
      its Subsidiaries, in each case free and clear of all Liens other than Permitted
      Liens.  No trademark
      that is material to the Company’s business as currently conducted is subject to
      lapse or abandonment.  All right, title and interest to the
“Barneys” and “Barneys New York” trademarks are owned by the Company and are not
      subject to any Liens (other than Permitted Liens) or licenses.

     

    (b)  To
      the
      Knowledge of the Selling Parties, neither the Company nor any of its
      Subsidiaries has infringed upon or misappropriated in any material respect
      any
      Intellectual Property Rights of any other person.  As of the date of
      this Agreement, no material claims are pending or, to the Knowledge of the
      Selling Parties, threatened that the Company or any of its Subsidiaries is
      infringing or misappropriating the rights of any person with regard to any
      Intellectual Property Right.

     

    (c)  To
      the
      Knowledge of the Selling Parties, no person or persons are infringing in any
      material respect the rights of the Company or any of its Subsidiaries with
      respect to any Intellectual Property Right owned by the Company or any of its
      Subsidiaries.  As of the date of this Agreement, no material claims
      are pending or, to the Knowledge of the Selling Parties, are threatened against
      the Company or any of its Subsidiaries with regard to the ownership by the
      Company or any of its Subsidiaries of any Intellectual Property
      Rights.

     

    (d)  As
      used
      in this Agreement, “Intellectual Property Rights” shall mean all
      intellectual property, including patents, trademarks (registered or
      unregistered), trade secrets, copyrights, trade names, domain names, service
      marks, brand names, trade dress, and other indications of origin, together
      with
      the goodwill associated with the foregoing and registrations of, and
      applications to register, the foregoing, including any extension, modification
      or renewal of any such registration or application.

     

    
       

      
        
          
          

        

        
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    (e)  The
      IT
      Systems owned or licensed by the Company and its Subsidiaries together with
      the
      IT Systems to be used by Seller Parent or any of its Subsidiaries in the
      performance of their obligations under, or which the Purchasing Parties are
      to
      be provided the benefit of pursuant to the terms of, the Transition Services
      Agreement constitute all the IT Systems that are material to the conduct of
      the
      business of the Company and its Subsidiaries, taken as a whole.  As
      used in this Agreement, “IT Systems” shall mean computer software
      programs, including all source code and object code therein and all designs
      and
      documentation related thereto.

     

    (f)  All
      renewal and maintenance fees that are due and payable for the Intellectual
      Property Rights used by the Company have been paid and, to the Knowledge of
      the
      Selling Parties, all Intellectual Property Rights owned by the Company and
      its
      Subsidiaries are valid, subsisting and enforceable.

     

    SECTION
      2.21.  Company
      Proprietary Credit Card.  (a)  Each of the “Barneys”
credit card accounts has been solicited, originated, created, maintained,
      and
      serviced by the Company and its Subsidiaries in compliance, in all material
      respects, with (i) the applicable credit card Contract between the Company
      or its applicable Subsidiary and the person for whom such account has been
      established and to whom such credit card has been issued and (ii) the
      applicable policies, procedures and practices pursuant to which the Company
      or
      any of its Subsidiaries manages its rights, title and interest in and to such
      accounts and receivables related to such account and underwrites, establishes,
      administers, processes, services, collects, terminates or charges-off such
      accounts and such receivables.

     

    (b)  Prior
      to
      the date of this Agreement, the Company has made available to the Purchasing
      Parties true and complete copies of each form of credit card Contract and other
      documentation provided to holders of “Barneys” credit cards, and each such form
      contains all material terms of the Contract between the Company or its
      applicable Subsidiary and such holder.

     

    (c)  The
      Company and its Subsidiaries have
      reasonable procedures and protections in place regarding the collection, use
      and
      dissemination of personal data or other information concerning
      customers.  Since January 1, 2005 there has been no material breach
      with respect to the systems of the Company and its Subsidiaries resulting in
      the
      loss of personal data or other information concerning
      customers.

     

    SECTION
      2.22.  Transactions
      with Affiliates.  None of the Selling Parties or any of their
      Affiliates (other than the Company and its Subsidiaries) or any executive
      officer or director, as applicable, of the Company or its Subsidiaries or any
      member of his or her immediate family or any of his or her Affiliates (each
      a
“Related Person”) (a) owes any amount to the Company or its
      Subsidiaries (other than in respect of extensions of credit in the ordinary
      course of business for goods or services purchased from the Company or any
      of
      its Subsidiaries or advances for travel expenses), nor does the Company or
      its
      Subsidiaries owe any amount to, nor has the Company or its Subsidiaries
      committed to make a loan or extend or guarantee credit to or for the benefit
      of,
      any Related Person (other than in respect of extensions of credit in the
      ordinary course of business for goods or services purchased from the Company
      or
      any of its Subsidiaries or advances for travel expenses), other than payments
      of
      salaries and benefits in the ordinary course and intercompany Indebtedness
      to be
      terminated pursuant to Section 5.12 or (b) is involved in any business
      arrangement (other than employment or acting as a director) or other
      relationship with the Company or its Subsidiaries in which such Related Person
      had, or will have, a direct or indirect material interest, other than
      (i) sales of goods or services by the Company or any of its Subsidiaries to
      any Related Person in the ordinary course of business, (ii) extensions of credit
      related to such sales, (iii) advances for travel expenses, (iv) the shared
      services described in Section 2.18, (v) intercompany Indebtedness to be
      terminated pursuant to Section 5.12 and (vi) purchases by the Company or
      its Subsidiaries of goods for resale from Seller Parent or its
      Subsidiaries.

    
       

      
        
          
          

        

        
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    SECTION
      2.23.  Major
      Suppliers.  None of the Selling Parties, the Company or any of its
      Subsidiaries is engaged, as of the date of this Agreement, in any material
      dispute with any Major Supplier.  During the period from February 3,
      2007 to the date of this Agreement, no Major Supplier has terminated or
      materially reduced or indicated its intention to terminate or materially reduce
      (as compared to the same period in the prior year) its business relations with
      the Company or its Subsidiaries or requested any material and adverse change
      in
      the terms on which it supplies merchandise for the Company or its
      Subsidiaries.  A “Major Supplier” means any merchandise vendor
      to the Company or its Subsidiaries to whom the Company or its Subsidiaries
      paid,
      in the aggregate, more than $3,000,000 during the fiscal year ended February
      3,
      2007.

     

    SECTION
      2.24.  Brokers
      and Other Advisors.  No broker, investment banker, financial
      advisor or other person, other than Goldman, Sachs & Co., the fees and
      expenses of which will be paid by Seller Parent, is entitled to any broker’s,
      finder’s, financial advisor’s or other similar fee or commission in connection
      with the transactions contemplated by this Agreement based upon arrangements
      made by or on behalf of the Company.

     

    ARTICLE
      III

     

    Representations
      and Warranties

    Relating
      to Selling Parties and the Shares

     

    Except
      as
      set forth in the Company Disclosure Letter, each Selling Party, jointly and
      severally, represents and warrants to the Purchasing Parties as
      follows:

     

    SECTION
      3.01.  Organization,
      Standing and Corporate Power.  Seller Parent is a corporation duly
      organized, validly existing and in good standing under the Laws of Pennsylvania
      and has all requisite corporate power and authority to carry on its business
      as
      now being conducted.  Seller is a corporation duly organized, validly
      existing and in good standing under the Laws of Delaware and has all requisite
      corporate power and authority to carry on its business as now being
      conducted.

     

    SECTION
      3.02.  Authority;
      Noncontravention.  (a)  The Selling Parties have all
      requisite corporate power and authority to execute and deliver this Agreement,
      and each Selling Party and each of its Affiliates has, or prior to the execution
      thereof, will have, all requisite power and authority to execute and deliver
      each Related Document to which such Selling Party or such Affiliate is a party
      or will be a party, and to consummate the Acquisition and the other transactions
      contemplated hereby and thereby.  The execution and delivery of this
      Agreement and each Related Document to which it is a party or will be a party
      by
      the Selling Parties and their respective Affiliates (to the extent a party
      thereto), and the consummation of the Acquisition and the other transactions
      contemplated hereby and thereby, and the compliance by the Selling Parties
      and
      their respective Affiliates (to the extent a party thereto) with the provisions
      of this Agreement and each Related Document to which it is a party or will
      be a
      party have been (and in the case of the Related Documents, will be) duly
      authorized by all necessary corporate action on the part of the Selling Parties
      and their respective Affiliates (to the extent a party thereto) and no other
      corporate proceedings on the part of the Selling Parties and their respective
      Affiliates (to the extent a party thereto) are necessary to authorize or approve
      this Agreement or the Related Documents to which such Selling Party or Affiliate
      is a party or will be a party, or to consummate the Acquisition or the other
      transactions contemplated hereby and thereby.  This Agreement has been
      duly executed and delivered by the Selling Parties and, assuming the due
      authorization, execution and delivery by the other parties hereto, constitutes
      a
      legal, valid and binding obligation of the Selling Parties, enforceable against
      the Selling Parties in accordance with its terms (subject to applicable
      bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
      other Laws affecting creditors’ rights generally from time to time in
      effect).  Each Related Document to which a Selling Party or its
      Affiliate is a party or will be a party has been or will be duly executed and
      delivered by such Selling Party or such Affiliate (to the extent a party
      thereto) and, assuming the due authorization, execution and delivery by the
      other parties hereto, constitutes or will constitute a legal, valid and binding
      obligation of the applicable Selling Party or its Affiliate, enforceable against
      such Selling Party or its Affiliate in accordance with its terms (subject to
      applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and other Laws affecting creditors’ rights generally from time to
      time in effect).

     

    
       

      
        
          
          

        

        
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    (b)  The
      execution and delivery of this Agreement and each Related Document to which
      it
      is a party or will be a party does not, and the consummation of the Acquisition
      and the other transactions contemplated hereby and the performance of its
      obligations and compliance with the provisions hereof and thereof do not and
      will not, conflict with, or result in any violation or breach of, or constitute
      a default (with or without notice or lapse of time or both) under, or give
      rise
      to a right of termination, cancellation or acceleration of any obligation,
      or to
      the loss of a benefit under, or result in the creation of any Lien upon any
      of
      the properties or other assets of the Selling Parties or any of their Affiliates
      (to the extent a party thereto) under (i) their Organizational Documents,
      (ii) any Contract to which the Selling Parties or their respective
      Affiliates (as applicable) are party or are bound or any of their respective
      properties or other assets is bound by or subject to or otherwise under which
      the Selling Parties have any rights or benefits, or (iii) subject to the
      governmental filings and other matters referred to in Section 3.03,
      any Law applicable to the Selling Parties or their Affiliates (as applicable)
      or
      properties or other assets, other than, in the case of clauses (i), (ii)
      and (iii) above, any such conflicts, violations, breaches, defaults, rights,
      results, losses or Liens that individually or in the aggregate are not
      reasonably likely to impair in any material respect the ability of the Selling
      Parties to perform their obligations under this Agreement or the Related
      Documents or prevent or materially impede, interfere with, hinder or delay
      the
      consummation of the Acquisition or any of the other transactions contemplated
      by
      this Agreement or the Related Documents to which such Selling Party or Affiliate
      is a party or will be a party.

     

     

    
      
        
        

      

      
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    SECTION
      3.03.  Governmental
      Approvals.  No consent, approval, order or authorization of,
      action by or in respect of, or registration, declaration or filing with, any
      Governmental Authority is required by or with respect to the Selling Parties
      or
      their Affiliates in connection with the execution and delivery of this Agreement
      or any Related Document to which it is a party or will be a party, by the
      Selling Parties or their Affiliates or the consummation by the Selling Parties
      or their Affiliates of the Acquisition or any of the other transactions
      contemplated by this Agreement or the Related Documents to which it is a party
      or will be a party, except for (a) those required to be made pursuant to
      the HSR Act, (b) the filing with the SEC of such reports under the Exchange
      Act as may be required in connection with this Agreement or the Related
      Documents, the Acquisition and the other transactions contemplated hereby and
      thereby and (c) such other consents, approvals, orders, authorizations,
      registrations, declarations, permits, actions, notifications and filings the
      failure of which to be obtained or made individually or in the aggregate have
      not had and are not reasonably likely to have an Effect described in clause
      (ii)
      of the definition of Material Adverse Effect.

     

    SECTION
      3.04.  Litigation.  As
      of the date of this Agreement, there is no Proceeding pending or, to the
      Knowledge of the Selling Parties, threatened against or affecting the Selling
      Parties or any of their Affiliates that individually or in the aggregate is
      reasonably likely to impair in any material respect the ability of the Selling
      Parties or any of their Affiliates to perform their obligations under this
      Agreement or any Related Document to which any of them is a party or will be
      a
      party or prevent or materially impede, interfere with, hinder or delay the
      consummation of the Acquisition or any of the other transactions contemplated
      by
      this Agreement or any Related Document to which any of them is a party or will
      be a party, nor is there any judgment, decree, injunction, rule or order of
      any
      Governmental Authority or arbitrator outstanding, or, to the Knowledge of the
      Selling Parties, investigation, Proceeding, notice of violation, order of
      forfeiture or complaint by any Governmental Authority involving the Selling
      Parties or any of their Affiliates that individually or in the aggregate is
      reasonably likely to impair in any material respect the ability of the Selling
      Parties or any of their Affiliates to perform their obligations under this
      Agreement or any Related Document to which any of them is a party or will be
      a
      party or prevent or materially impede, interfere with, hinder or delay the
      consummation of the Acquisition or any of the other transactions contemplated
      by
      this Agreement or any Related Document to which any of them is a party or will
      be a party.

     

    SECTION
      3.05.  Brokers
      and Other Advisors.  No broker, investment banker, financial
      advisor or other person, other than Goldman, Sachs & Co., the fees and
      expenses of which will be paid by Seller Parent, is entitled to any broker’s,
      finder’s, financial advisor’s or other similar fee or commission in connection
      with the transactions contemplated by this Agreement based upon arrangements
      made by or on behalf of the Selling Parties or the Company.

     

    SECTION
      3.06.  The
      Shares.  Seller has good and valid title to the Shares, free and
      clear of any lien, encumbrance, mortgage, deed of trust, security interest,
      easement, conditional sale or other title retention agreement, pledge,
      hypothecation, assessment, lease, levy, charge, transfer restriction, right
      of
      first offer, right of first refusal, option, preemptive right, voting trust
      or
      agreement, proxy or set off or other adverse claim of any kind or nature,
      whether arising by agreement, statute or otherwise.  Assuming
      Purchaser has the requisite power and authority to be the lawful owner of the
      Shares, upon delivery to Purchaser at the Closing of certificates representing
      the Shares, duly endorsed by Seller for transfer to Purchaser, and upon Seller
      Parent’s receipt of the Closing Date Amount, good and valid title to the Shares
      will pass to Purchaser, free and clear of any lien, encumbrance, mortgage,
      deed
      of trust, security interest, easement, conditional sale or other title retention
      agreement, pledge, hypothecation, assessment, lease, levy, charge, transfer
      restriction, right of first offer, right of first refusal, option, preemptive
      right, voting trust or agreement, proxy or set off or other adverse claim of
      any
      kind or nature, whether arising by agreement, statute or otherwise, other than
      those arising from acts of Purchaser or its Affiliates.  Other than
      this Agreement, the Shares are not subject to any voting trust agreement or
      other Contract, including any Contract restricting or otherwise relating to
      the
      voting, dividend rights or disposition of the Shares.

     

    
       

      
        
          
          

        

        
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    ARTICLE
      IV

     

    Representations
      and Warranties of the Purchasing Parties

     

    Each
      of
      the Purchasing Parties, jointly and severally, represents and warrants to the
      Selling Parties as follows:

     

    SECTION
      4.01.  Organization,
      Standing and Corporate Power.  Each Purchasing Party is an entity
      duly organized, validly existing and in good standing, to the extent applicable,
      under the Laws of the State of Delaware and has all requisite corporate power
      and authority to carry on its business as now being conducted.

     

    SECTION
      4.02.  Authority;
      Noncontravention.  (a)  Each Purchasing Party and each
      of its respective Affiliates (as applicable) has all requisite power and
      authority to execute and deliver this Agreement and has, or prior to the
      execution thereof, will have, all requisite power and authority to execute
      and
      deliver each Related Document to which such Purchasing Party or such Affiliate
      is a party or will be a party, and to consummate the Acquisition and the other
      transactions contemplated hereby and thereby, including the
      Financing.  The execution and delivery of this Agreement and each
      Related Document to which it is a party, or will be a party by the Purchasing
      Parties and their respective Affiliates (to the extent a party thereto) and
      the
      consummation of the Acquisition and any of the other transactions contemplated
      hereby and thereby, including the Financing, and the compliance by the
      Purchasing Parties and their respective Affiliates with the provisions of this
      Agreement and each Related Document to which such Purchasing Party or such
      Affiliate is a party or will be a party have been (and in the case of the
      Related Documents, will be) duly authorized by all necessary corporate or other
      action on the part of the Purchasing Parties and their respective Affiliates,
      and no other corporate or other proceedings on the part of the Purchasing
      Parties or any of their respective Affiliates is necessary to authorize or
      approve this Agreement or any Related Document to which such Purchasing Party
      or
      such Affiliate is a party or will be a party, or to consummate the Acquisition
      or the other transactions contemplated hereby and thereby, including the
      Financing.  This Agreement has been duly executed and delivered by the
      Purchasing Parties and, assuming the due authorization, execution and delivery
      by the other parties hereto, constitutes a legal, valid and binding obligation
      of the Purchasing Parties, enforceable against the Purchasing Parties in
      accordance with its terms (subject to applicable bankruptcy, insolvency,
      fraudulent transfer, reorganization, moratorium and other Laws affecting
      creditors’ rights generally from time to time in effect).  Each
      Related Document to which a Purchasing Party or any of its respective Affiliates
      is a party or will be a party has been or will be duly executed and delivered
      by
      such Purchasing Party and such Affiliates (as applicable), and constitutes
      or
      will constitute a legal, valid and binding obligation of such Purchasing Party
      and such Affiliates (as applicable), enforceable against such Purchasing Party
      and such Affiliates (as applicable) in accordance with its terms (subject to
      applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and other Laws affecting creditors’ rights generally from time to
      time in effect).

     

     

    
      
        
        

      

      
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    (b)  The
      execution and delivery of this Agreement and each Related Document to which
      a
      Purchasing Party or any of its Affiliates is a party or will be a party does
      not, and the consummation of the Acquisition and any of the other transactions
      contemplated hereby, including the Financing, and the performance of their
      obligations and compliance with the provisions hereof and thereof do not and
      will not, conflict with, or result in any violation or breach of, or constitute
      a default (with or without notice or lapse of time or both) under, or give
      rise
      to a right of termination, cancellation or acceleration of any obligation,
      or to
      the loss of a benefit under, or result in the creation of any Lien upon any
      of
      the properties or other assets of such Purchasing Party or any of its Affiliates
      (as applicable) under (i) the Organizational Documents of such Purchasing
      Party or any of its Affiliates (as applicable), (ii) any Contract to which
      such Purchasing Party or any of its Affiliates (as applicable) is a party or
      is
      bound or any of their respective properties or other assets is bound by or
      subject to or otherwise under which such Purchasing Party or any of its
      Affiliates (as applicable) has any rights or benefits or (iii) subject to
      the governmental filings and other matters referred to in Section 4.03,
      any Law applicable to such Purchasing Party or any of its Affiliates (as
      applicable) or properties or other assets, other than, in the case of
      clauses (i), (ii) and (iii) above, any such conflicts, violations,
      breaches, defaults, rights, results, losses or Liens that individually or in
      the
      aggregate are not reasonably likely to impair in any material respect the
      ability of such Purchasing Party or any of its Affiliates (as applicable) to
      perform their obligations under this Agreement or any Related Document to which
      such Purchasing Party or such Affiliate is a party or will be a party, or
      prevent or materially impede, interfere with, hinder or delay the consummation
      of the Acquisition or any of the other transactions contemplated by this
      Agreement, including the Financing, or any Related Document to which such
      Purchasing Party or such Affiliate is a party or will be a party.

     

    SECTION
      4.03.  Governmental
      Approvals.  No consent, approval, order or authorization of,
      action by or in respect of, or registration, declaration or filing with, any
      Governmental Authority is required by or with respect to the Purchasing Parties
      or their respective Affiliates (as applicable) in connection with the execution
      and delivery of this Agreement or any Related Document to which a Purchasing
      Party or any of its Affiliates is a party or will be a party, by such Purchasing
      Party or such Affiliate or the consummation by the Purchasing Parties of the
      Acquisition or any of the other transactions contemplated by this Agreement,
      including the Financing, or any Related Document to which such Purchasing Party
      or such Affiliate is a party or will be a party, except for (i) those
      required to be made pursuant to the HSR Act and (ii) such other consents,
      approvals, orders, authorizations, registrations, declarations, permits,
      actions, notifications and filings the failure of which to be obtained or made
      individually or in the aggregate is not reasonably likely to impair in any
      material respect the ability of such Purchasing Party or its Affiliates (as
      applicable) to perform their obligations under this Agreement or any Related
      Document to which such Purchasing Party or such Affiliate is a party or will
      be
      a party, or prevent or materially impede, interfere with, hinder or delay the
      consummation of the Acquisition or any of the other transactions contemplated
      by
      this Agreement, including the Financing, or any Related Document to which such
      Purchasing Party or such Affiliate is a party or will be a party.

     

     

    
      
        
        

      

      
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    SECTION
      4.04.  Litigation.  As
      of the date of this Agreement, there is no Proceeding pending or, to the
      knowledge of the Purchasing Parties, threatened against or affecting the
      Purchasing Parties or any of their respective Affiliates that individually
      or in
      the aggregate is reasonably likely to impair in any material respect the ability
      of the Purchasing Parties or their respective Affiliates to perform their
      obligations under this Agreement or any Related Documents to which a Purchasing
      Party or any of its Affiliates is a party or will be a party or prevent or
      materially impede, interfere with, hinder or delay the consummation of the
      Acquisition or any of the other transactions contemplated by this Agreement,
      including the Financing, or any Related Document to which a Purchasing Party
      or
      any of its Affiliates is a party or will be a party, nor is there any judgment,
      decree, injunction, rule or order of any Governmental Authority or arbitrator
      outstanding, or, to the knowledge of the Purchasing Parties, investigation,
      Proceeding, notice of violation, order of forfeiture or complaint by any
      Governmental Authority involving the Purchasing Parties or any of their
      respective Affiliates that individually or in the aggregate is reasonably likely
      to impair in any material respect the ability of the Purchasing Parties or
      their
      respective Affiliates to perform their obligations under this Agreement or
      any
      Related Document to which a Purchasing Party or any of its Affiliates is a
      party
      or will be a party, or prevent or materially impede, interfere with, hinder
      or
      delay the consummation of the Acquisition or any of the other transactions
      contemplated by this Agreement, including the Financing, or any Related Document
      to which a Purchasing Party or any of its Affiliates a party or will be a
      party.

     

    SECTION
      4.05.  Sufficient
      Funds.  The Purchasing Parties have delivered to Seller Parent
      true and complete copies of (i) an executed commitment letter from
      Purchaser Guarantor (the “Equity Funding Letter”) to provide equity
      financing in an aggregate amount of at least $462,800,000 (the “Equity
      Financing”) and (ii) executed debt commitment letters from Citigroup
      Global Markets Inc. (the “Financing Commitments”), pursuant to which
      Citigroup Global Markets Inc. has agreed to provide or cause to be provided
      at
      least $505,000,000 at Closing (the “Debt Financing”, and, together with
      the Equity Financing, the “Financing”).  The Purchasing Parties
      have disclosed and made available to the Selling Parties all other agreements,
      arrangements or understandings (whether oral or written) related to the
      Financing, provided that the Purchasing Parties may redact in such
      documents the fee amounts payable to their financing sources under the Financing
      Commitments.  Such fee amounts are customary for debt financings
      similar to the Debt Financing.  Except as otherwise permitted by this
      Agreement, none of the Equity Funding Letter or Financing Commitments has been
      or will be amended or modified, and the respective commitments contained in
      the
      Equity Funding Letter and the Financing Commitments have not been withdrawn
      or
      rescinded in any respect as of the date of this Agreement.  Except to
      the extent amended in accordance with its terms, the Equity Funding Letter
      is in
      full force and effect and is a legal, valid and binding obligation of the
      Purchasing Parties that are party thereto and the other party
      thereto.  Each of the Financing Commitments is in full force and
      effect and is a legal, valid and binding obligation of the Purchasing Parties
      and, to the knowledge of the Purchasing Parties, the other parties
      thereto.  As of the date of this Agreement, no event has occurred
      which, with or without notice, lapse of time or both, would constitute a default
      or breach on the part of the Purchasing Parties or their respective Affiliates
      under any term or condition of the Equity Funding Letter or the Financing
      Commitments.  There are no conditions precedent relating to the
      funding of the full amount of the Financing, other than as set forth in the
      Equity Funding Letter and the Financing Commitments.  As of the date
      of this Agreement, the Purchasing Parties have no reason to believe that any
      of
      the conditions relating to the funding of the full amount of the Financing
      will
      not be satisfied on or prior to the Closing Date.  The Purchasing
      Parties have fully paid any and all commitment fees or other fees required
      by
      the Financing Commitments to be paid on or prior to the date of this Agreement
      and shall in the future pay any such fees as they become due.  The
      Financing, when funded in accordance with the Equity Funding Letter and the
      Financing Commitments, will provide Purchaser with funds sufficient to
      consummate the Acquisition and the other transactions contemplated by this
      Agreement and to pay all related fees and expenses.  The fees and
      expenses of the Purchasing Parties in connection with the Acquisition, the
      Financing and any related transactions will not exceed the amount set forth
      on
      Section 4.05 of the Company Disclosure Letter.

     

     

    
      
        
        

      

      
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    SECTION
      4.06.  Guarantee.  The
      Purchasing Parties have delivered to Seller Parent the limited guarantee of
      Istithmar PJSC (“Purchaser Guarantor”), dated as of the date hereof, with
      respect to certain matters as specified therein (the “Guarantee”), which
      Guarantee is in full force and effect and is a legal, valid and binding
      obligation of Purchaser Guarantor. 

     

    SECTION
      4.07.  Brokers
      and Other Advisors.  No broker, investment banker, financial
      advisor or other person, other than Peter J. Solomon Company, the fees and
      expenses of which will be paid by the Purchasing Parties, is entitled to any
      broker’s, finder’s, financial advisor’s or other similar fee or commission in
      connection with the transactions contemplated by this Agreement based upon
      arrangements made by or on behalf of the Purchasing Parties.

     

    SECTION
      4.08.  No
      Additional Representations.  The Purchasing Parties acknowledge
      that they and their Representatives have been permitted full and complete access
      to the books and records, facilities, equipment, contracts and other properties
      and assets of or with respect to the Company and the Subsidiaries of the Company
      that it and its Representatives have desired or requested to see or review,
      and
      that it and its Representatives have had a full opportunity to meet with the
      officers and employees of the Company and the Subsidiaries of the Company to
      discuss the business of the Company and the Subsidiaries of the
      Company.  The Purchasing Parties acknowledge that none of the Selling
      Parties, the Company, their respective Representatives or any other person has
      made any representation or warranty, expressed or implied, with respect to
      the
      Company and the Subsidiaries of the Company or the accuracy or completeness
      of
      any information regarding the Company and the Subsidiaries of the Company
      furnished or made available to the Purchasing Parties and their Representatives,
      except as expressly set forth in this Agreement, and none of the Selling
      Parties, the Company, their respective Representatives or any other person
      shall
      have or be subject to any Liability to the Purchasing Parties or any other
      person resulting from the distribution to the Purchasing Parties, or the
      Purchasing Parties’ use of, any such information, including any information,
      documents or material made available in any “data rooms” or management
      presentations or in any other form in expectation of the transactions
      contemplated hereby.

     

     

    
      
        
        

      

      
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    SECTION
      4.09.  No
      Distribution.  The Shares being acquired by Purchaser hereunder
      are being acquired for Purchaser’s own account, for investment only and not with
      a view to any public distribution thereof, and Purchaser shall not offer to
      sell
      or otherwise dispose of the Shares so acquired by it in violation of any of
      the
      registration requirements of the Securities Act of 1933, as amended, and the
      rules and regulations promulgated thereunder.  Purchaser acknowledges
      that the Selling Parties have informed it that the Shares have not been
      registered under the Securities Act and may not be sold until they have been
      registered, unless an exemption from such registration is
      available.

     

    SECTION
      4.10.  Withholding.  The
      Purchasing Parties are
      not aware of any basis for, or facts that would give rise to a basis for,
      determination of any Withholding Amount within the meaning of Section 1.05
      of
      this Agreement.

     

    ARTICLE
      V 

     

    Covenants

     

    SECTION
      5.01.  Conduct
      of Business.  

     

    (a)  Conduct
      of Business by the Company.  During the period from the date of
      this Agreement to the Closing Date, except (A) as expressly permitted by
      Section 5.01
      of the Company Disclosure Letter, (B) as consented to in writing by the
      Purchasing Parties (which consent shall not be unreasonably withheld, delayed
      or
      conditioned), (C) as expressly required or permitted by this Agreement or
      (D) as required by applicable Law, the Seller Parent shall cause the
      Company and each of the Company’s Subsidiaries to (i) carry on its
      businesses and operations in all material respects in the ordinary course
      consistent with past practice, (ii) continue all advertising, pricing,
      sales, inventory, receivables, payables, customer credit and proprietary credit
      card operations and currency hedging practices, in all material respects in
      the
      ordinary course consistent with past practice (to the extent consistent with
      this Section 5.01(a)) and (iii) use
      its reasonable best efforts to preserve intact its assets, brands, licenses,
      technology, Intellectual Property Rights and business organizations, keep
      available the services of its current officers and Employees and preserve in
      all
      material respects in accordance with past practice its relationships with
      suppliers, licensors, licensees, distributors and others having business
      dealings with it and maintain its franchises, rights and Permits, with the
      intention that its goodwill and ongoing business shall be unimpaired as of
      the
      Closing Date.  Without limiting the generality of the foregoing,
      during the period from the date of this Agreement to the Closing Date, except
      as
      consented to in writing by the Purchasing Parties or as expressly permitted
      by
      the applicable subsection of Section 5.01 of the Company Disclosure Letter
      or as expressly required or permitted by this Agreement or as required by
      applicable Law, the Seller Parent will not permit the Company or any of the
      Company’s Subsidiaries to:

     

    
       

      
        
          
          

        

        
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                      (i)  (A) declare,
      set aside or pay any dividends on, or make any other distributions (whether
      in
      cash, stock, property or other assets) in respect of, any of its capital stock,
      or other equity or voting interests, other than dividends or distributions
      by
      the Company or a direct or indirect wholly owned Subsidiary of the Company
      to
      its parent in connection with cash management by Seller Parent and its
      Affiliates in the ordinary course of business consistent with past practice,
      (B) split, combine or reclassify any of its capital stock, or other equity
      or voting interests, or issue or authorize the issuance of any other securities
      in respect of, in lieu of or in substitution for shares of its capital stock,
      or
      other equity or voting interests, or (C) purchase, redeem or otherwise
      acquire any shares of capital stock, or other equity or voting interests or
      any
      other securities of the Company or its Subsidiaries or any warrants, options
      or
      other rights to acquire any such shares or other securities;

     

    (ii)  issue,
      deliver, sell, grant, pledge or otherwise encumber or subject to any lien,
      encumbrance, mortgage, deed of trust, security interest, easement, conditional
      sale or other title retention agreement, pledge, hypothecation, assessment,
      lease, levy, charge, transfer restriction, right of first offer, right of first
      refusal, option, preemptive right, voting trust or agreement, proxy or set
      off
      or other adverse claim of any kind or nature, whether arising by agreement,
      statute or otherwise, any shares of its capital stock, any other equity or
      voting interests or any securities convertible into, or exchangeable for, or
      any
      warrants, options or other rights to acquire or receive, any such shares,
      interests or securities or any “phantom” stock, “phantom” stock rights or
      awards, stock appreciation rights, stock-based performance units or any other
      rights that are linked in any way to the price of Company Common Stock or the
      value of the Company or any part thereof;

     

                       (iii)  amend
      or
      modify the Company Certificate or Company By-laws or the comparable charter
      or
      organizational documents of any Subsidiary of the Company;

     

    (iv)  acquire
      any assets (including equity or debt securities), individually, in excess of
      $200,000 or, in the aggregate, in excess of $1,000,000, other than assets
      acquired in the ordinary course of business consistent with past
      practice;

     

    (v)  sell,
      lease, license, mortgage, sell and leaseback or otherwise encumber or subject
      to
      any Lien (other than Permitted Liens) or otherwise dispose of any of its
      properties, rights or other assets or any interest therein to a third party,
      other than (A) the sale of assets having a market value not in excess of
      $300,000 individually or $500,000 in the aggregate  and (B) sales
      of inventory or other assets in the ordinary course of business consistent
      with
      past practice;

     

    
                      (vi)  (A) incur
        or assume any Indebtedness (other than any incurrence of Indebtedness
        (1) associated with the issuance of letters of credit on behalf of the
        Company or any of its Subsidiaries, which letters of credit are issued in
        the
        ordinary course of business consistent with past practice, (2) associated
        with foreign currency transactions entered into in the ordinary course of
        business consistent with past practice or (3) owing to Seller Parent or its
        Subsidiaries that will be terminated in accordance with Section 5.12) or
        issue or sell any debt securities or warrants, options or other rights to
        acquire any debt securities of the Company or any of its Subsidiaries or
        (B) make any loans, advances (other than in the ordinary course of business
        consistent with past practice) or capital contributions to, or investments
        in,
        any other person, other than the Company or any direct or indirect wholly
        owned
        Subsidiary of the Company;

       

      
         

        
          
            
            

          

          
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                    (vii)  incur
        (A) any capital expenditure, or any Liabilities in connection therewith, in
        excess of $750,000 except to the extent such expenditure, obligation or
        Liability is reflected on the Company’s capital expenditure plan set forth in
        Section 5.01(a)(vii)(A) of the Company Disclosure Letter or (B) any capital
        expenditure, or any Liabilities in connection therewith, for the items set
        forth
        in Section 5.01(a)(vii)(B) of the Company Disclosure Letter, whether or not
        reflected on the Company’s capital expenditure plan set forth in Section
        5.01(a)(vii)(A) of the Company Disclosure Letter; provided, that the
        Purchasing Parties shall not unreasonably withhold, delay or condition their
        consent to any request by Seller Parent with respect to the
        foregoing;

       

      (viii)  make
        any amendment, change or other modification to the policies, procedures or
        practices of the Company or any of its Subsidiaries in respect of which it
        (A) manages its rights, title and interest in and to the “Barneys” credit
        card accounts and receivables related to such accounts or (B) underwrites,
        establishes, administers, processes, services, collects, terminates or
        charges-off such accounts and such receivables other than, in the case of
        clause (A) or (B), (1) as required by Law, (2) increases in late
        fees payable by cardholders, (3) in the ordinary course of business
        consistent with past practice or (4) other immaterial amendments, changes
        or modifications; provided, that the Purchasing Parties shall not
        unreasonably withhold, delay or condition their consent to any request by
        Seller
        Parent with respect to the foregoing;

    

     

                     
      (ix)  except
      (A) as required by the terms of
      any Company Plan, Multiemployer Plan or CBA as in effect on the date of this
      Agreement, (B) increases in cash compensation in the ordinary course of business
      consistent with past practice with respect to any Employee, (C) increases to
      retain any Employee that has notified the Company or its Subsidiaries that
      he or
      she intends to terminate his or her employment with the Company or its
      Subsidiaries, (D) the entry into of employment agreements with new hires who
      would be Employees in the ordinary course of business consistent with past
      practice and (E) any amendment to any Company Plan that is made to maintain
      the
      qualified status of such Company Plan or its continued compliance with
      applicable Law, (1) increase the compensation (including bonuses or other
      benefits) payable or to become payable to any of the directors of the Company,
      Employees of the Company at the level of senior vice president and above or
      the
      Creative Director of the Company (collectively, the “Key Personnel”);
      (2) enter into, terminate, adopt,
      materially amend or materially increase the benefits under any Company Plan
      or, other
      than any such entry, termination,
      adoption, amendment or increase that results in an increase to employer
      contributions of not more than 3%, any Multiemployer Plan,
      or enter into any plan or arrangement
      that would be considered a Company Plan if it were in existence on the date
      of
      this Agreement; or (3) accelerate, fund or secure the vesting or payment of
      compensation (including bonuses or other benefits under any Company Plan);
      provided,
      that (I) the exception in clause (D)
      hereof shall not apply with respect to the Key Personnel, provided
      that the Purchasing Parties shall not
      unreasonably withhold, delay or condition their consent to any request by the
      Company to take any of the actions that would otherwise have been permitted
      if
      clause (D) did apply to Key Personnel and shall be deemed to have consented
      to
      the action so requested if the Purchasing Parties have not responded by the
      end
      of the third business day following the date of such request and (II) the
      exceptions in clauses (B) and (C) hereof shall only apply with respect to the
      Key Personnel to the extent that the increases described therein together do
      not
      exceed $35,000 for any individual or $175,000 in the aggregate (for the avoidance of
      doubt, this
      Section 5.01(a)(ix) shall not pertain to any action by any director or employee
      of the Company or any of its Subsidiaries that such director or employee is
      required to take, or to refrain from taking, in accordance with his or her
      fiduciary duties as a trustee or fiduciary of a Multiemployer
      Plan);

     

    
       

      
        
          
          

        

        
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    (x)  terminate
      (other than for cause) any of the Key Personnel;

     

    (xi)  enter
      into any transaction with or for the benefit of any Related Person other than
      (i) sales of goods or services by the Company or any of its Subsidiaries to
      any
      Related Person in the ordinary course of business, (ii) extensions of credit
      related to such sales, (iii) advances for travel expenses, (iv) the shared
      services described in Section 2.18, (v) intercompany Indebtedness to be
      terminated pursuant to Section 5.12 and (vi) purchases by the Company or
      its Subsidiaries of goods for resale from Seller Parent or its
      Subsidiaries;

     

                  (xii)  enter
      into, assume or amend in any material respect, terminate or waive, or assign
      any
      material rights under any Section 2.10 Contract or other Contract or
      commitment that would be a Section 2.10 Contract if entered into, or if
      such amendment, termination or waiver was effected, prior to the date hereof,
      other than in the ordinary course of business consistent with past
      practice;

     

    (xiii)  make,
      change or rescind any material election with respect to Taxes (other than to
      the
      extent consistent with past practice) or enter into any settlement or compromise
      of any material Tax liability or refund;

     

    (xiv)  except
      as
      required by GAAP or applicable Law, make any change in its fiscal year, revalue
      any of its material assets or make material changes in financial or tax
      accounting methods, principles or practices;

     

    (xv)  materially
      modify, amend, terminate or permit the lapse of any material lease relating
      to
      any Company Leased Real Property except in the ordinary course of business
      consistent with past practice;

     

    (xvi)  enter
      into any lease relating to any property that would be Company Leased Real
      Property if such lease were entered into as of the date of this
      Agreement;

     

    (xvii)  fail
      to
      maintain the Policies or any replacement insurance policies upon any of its
      assets or properties in such amounts and of such kinds comparable to those
      in
      effect as of the date of this Agreement, fail to properly report to the
      applicable insurer any Proceeding or other matter that would be covered under
      the Policies as of the date of this Agreement or take any action that would
      prejudice the ability of the Company to obtain insurance policies equivalent
      to
      the Policies after the Closing;

     

     

    
      
        
        

      

      
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                        (xviii)  change
        in
        any material respect the policies or practices regarding the inventory, accounts
        receivable or accounts payable or fail to manage its working capital in
        accordance with past practice;

       

                    
(xix)  adopt
        or
        approve a plan of complete or partial liquidation, dissolution, merger,
        consolidation, restructuring, or other restructuring;

       

                     
(xx)  allow
        to
        lapse, or fail to make any applications for renewal as and when required,
        of any
        Permits necessary for the conduct of its business or the operation of any
        of its
        facilities;

       

                     (xxi)  transfer
        any asset (other than cash) of the Company or its Subsidiaries to any of
        the
        Selling Parties or their respective Affiliates (other than the Company and
        its
        Subsidiaries) or cease providing any service currently provided by the Selling
        Parties or their respective Affiliates (other than the Company and its
        Subsidiaries) to the Company and its Subsidiaries; or

       

                     (xxii)  resolve,
        authorize, agree or commit to take any of the foregoing
        actions.

    

     

    (b)  Certain
      Tax Matters.  (i) The Selling Parties, the Company and its
      Subsidiaries will cause any tax sharing agreement or similar arrangement with
      respect to Taxes involving the Company or its Subsidiaries to be terminated
      effective as of the Closing Date, to the extent any such agreement or
      arrangement relates to the Company or any of its Subsidiaries, and after the
      Closing Date the Company and its Subsidiaries shall have no obligation under
      any
      such agreement or arrangement for any past, present, or future period;
      (ii) Seller shall deliver to the Purchasing Parties a non-foreign affidavit
      dated as of the Closing Date, sworn under penalty of perjury and in form and
      substance required under the Treasury Regulations issued pursuant to
      Section 1445 of the Code stating that Seller is not a “Foreign Person” as
      defined in Section 1445 of the Code; and (iii) all transfer, documentary,
      sales, use, stamp, registration and other such Taxes, and all conveyance fees,
      recording charges and other fees and charges (including any penalties and
      interest) incurred in connection with consummation of the Acquisition or any
      of
      the other transactions contemplated by this Agreement, shall be paid by Seller
      Parent and Seller when
      due, and the Selling Parties will,
      at their own expense, file all necessary Tax Returns and other documentation
      with respect to all such Taxes, fees and charges, and, if required by applicable
      law, the Purchaser will, and will cause its Affiliates to, join in the execution
      of any such Tax Returns and other documentation.

     

    SECTION
      5.02.  Resignations.  At
      the Closing, the Selling Parties shall cause to be delivered to the Purchasing
      Parties duly signed letters of resignation from each member of the Board of
      Directors and each officer of the Company and its Subsidiaries that is specified
      on Schedule 5.02 of the Purchasing Parties Disclosure Schedule or that may
      be designated by the Purchasing Parties in a letter delivered to Seller Parent
      no later than the business day prior to the Closing, each to be effective as
      of
      the Closing.

     

    SECTION
      5.03.  Support
      Services.  Other than the services provided under the Transition
      Services Agreement between Seller Parent and the Purchasing Parties (the
“Transition Services Agreement”) substantially in the form set forth in
      Section 5.03 of the Company Disclosure Letter, the Purchasing Parties
      acknowledge that all the support services disclosed in Section 2.18 of the
      Company Disclosure Letter will be terminated as of the Closing
      Date.

     

    
       

      
        
          
          

        

        
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    SECTION
      5.04.  Financing.  (a)  Prior
      to the Closing, the Company shall provide and shall cause each Subsidiary of
      the
      Company and their respective Representatives to provide, and each Selling Party
      shall cause the Company and each Subsidiary of the Company and their respective
      Representatives to provide, all cooperation in connection with the Debt
      Financing reasonably requested by the Purchasing Parties, provided that
      such requested cooperation does not unreasonably interfere with the ongoing
      operations of the Selling Parties and their Subsidiaries (including the Company
      and its Subsidiaries), including (i) participation in meetings,
      presentations, road shows, due diligence sessions and sessions with rating
      agencies, (ii) assisting with the preparation of materials for rating
      agency presentations and offering documents, private placement memoranda, bank
      information memoranda, prospectuses, business projections and similar documents
      required in connection with the Debt Financing, including execution and delivery
      of customary representation letters in connection with bank information
      memoranda, (iii) executing and delivering, as of the Closing, any pledge
      and security documents, other definitive financing documents, other certificates
      or documents as may be reasonably requested by the Purchasing Parties (including
      a certificate of the Chief Financial Officer of the Company with respect to
      solvency matters) and otherwise reasonably facilitating the pledging of
      collateral, (iv) as promptly as practical, furnishing the Purchasing
      Parties and their financing sources with financial and other pertinent
      information regarding the Company as may be reasonably requested by the
      Purchasing Parties, including all related financial statements, and financial
      data and other information of the type and form customarily included in private
      placements under Rule 144A under the Securities Act to consummate the
      offering(s) of debt securities contemplated by the Financing Commitments (the
      “Required Information”), (v) using reasonable best efforts to
      (y) obtain accountants’ comfort letters, accountants’ consents and legal
      opinions and (z) with respect to any properties for which the Purchasing
      Parties’ lenders request surveys and/or mortgagee title insurance, using
      reasonable best efforts to obtain title insurance in customary form for
      commercial real estate transactions and providing the Purchasing Parties and
      their agents with reasonable access to the applicable properties in connection
      with the Purchasing Parties’ surveys, in either of clause (y) or (z), at
      the Purchasing Parties’ expense, as reasonably requested by the Purchasing
      Parties; (vi) permitting the prospective lenders involved in the Debt
      Financing to identify and evaluate the Company’s and its Subsidiaries’ assets,
      cash management and accounting systems, policies and procedures relating thereto
      for the purposes of establishing collateral arrangements; (vii) without
      limitation of Section 5.06, using reasonable best efforts to obtain
      waivers, consents, estoppels and approvals from other parties to Company Leases
      and Contracts and to arrange discussions among the Purchasing Parties and their
      financing sources with other parties to material leases, encumbrances and
      contracts, and (viii) taking all reasonable actions necessary to permit the
      consummation of the Financing contemplated by the Financing Commitments;
provided, that none of the Selling Parties or any of their Subsidiaries
      (including the Company and its Subsidiaries) shall be required to pay any
      commitment or other similar fee or incur any other liability in connection
      with
      the Debt Financing.  The Purchasing Parties shall, promptly upon
      request by the Seller Parent, reimburse Seller Parent for all reasonable
      out-of-pocket costs incurred by the Selling Parties or any of their Subsidiaries
      (including the Company and its Subsidiaries) in connection with such
      cooperation, including any payments or concessions made in connection with
      clauses (vii) and (viii) above.  The Purchasing Parties shall
      indemnify and hold harmless the Selling Parties, their Subsidiaries (including
      the Company and its Subsidiaries) and their respective Representatives from
      and
      against any and all losses suffered or incurred by them in connection with
      (1)
      any action taken by them at the request of the Purchasing Parties pursuant
      to
      this Section 5.04 or in connection with the arrangement of the Debt Financing
      and (2) any information utilized in connection therewith (other than information
      provided by the Selling Parties and their Subsidiaries (including the Company
      and its Subsidiaries)).  All non-public or otherwise confidential
      information regarding the Company obtained by the Purchasing Parties pursuant
      to
      this Section 5.04 shall be kept confidential in accordance with the
      Confidentiality Agreement; provided, however, that the Purchasing
      Parties and their Representatives shall be permitted to disclose information
      as
      necessary and consistent with customary practices in connection with the Debt
      Financing upon the prior written consent of Seller Parent (such consent not
      to
      be unreasonably withheld, conditioned or delayed).  The Selling
      Parties shall cause the Company and its Subsidiaries and their Representatives
      to update, when requested by the Purchasing Parties, any such Required
      Information to be included in an offering document to be used in connection
      with
      such Financing in order to ensure that such Required Information does not
      contain any untrue statement of a material fact or omit to state any material
      fact necessary in order to make the statements contained therein not
      misleading.  

     

     

    
      
        
        

      

      
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    (b)  The
      Purchasing Parties shall use, and shall cause their Affiliates to use, their
      reasonable best 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 arrange the
      Debt
      Financing on the terms and conditions described in the Financing Commitments
      (provided that the Purchasing Parties may replace or amend the Financing
      Commitments to add lenders, lead arrangers, bookrunners, syndication agents
      or
      similar entities who had not executed the Financing Commitments as of the date
      hereof, or otherwise replace or amend the Financing Commitments so long as
      (a) after such actions, the Financing Commitments do not include any
      additional conditions precedent that are not contained in the Financing
      Commitments provided to Seller Parent as of the date of this Agreement, other
      than inconsequential additional conditions, and (b) such actions are not
      reasonably likely to delay, or diminish the likelihood of, the Purchasing
      Parties obtaining the Debt Financing (clauses (a) and (b) together being
      referred to as the “Financing Modification Requirements”); for purposes
      of this Agreement, the term “Financing Commitments” shall be deemed to
      include any such replacement or amended financing), including using reasonable
      best efforts to (i) maintain in effect the Financing Commitments or any
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    (ii) satisfy
      on a timely basis all conditions applicable to the Purchasing Parties to
      obtaining the Financing set forth therein (including by consummating the equity
      financing contemplated by the Equity Funding Letter), (iii) negotiate and
      enter into definitive agreements with respect thereto on the terms and
      conditions contemplated by the Financing Commitments (including the related
      flex
      provisions) or any Alternative Financing and (iv) consummate the Debt
      Financing on the terms and conditions contemplated by the Financing Commitments
      or any Alternative Financing at or prior to Closing.  In the event any
      portion of the Debt Financing becomes unavailable on the terms and conditions
      contemplated in the Financing Commitments, the Purchasing Parties shall use
      their reasonable best efforts to arrange to obtain alternative financing from
      alternative sources in an amount sufficient to consummate the transactions
      contemplated by this Agreement on terms and conditions that are not materially
      less beneficial to the Purchasing Parties than those contained in the Financing
      Commitments as in effect on the date of this Agreement as determined in the
      reasonable good faith judgment of the Purchasing Parties and consistent with
      the
      Financing Modification Requirements (any such alternative financing actually
      obtained by the Purchasing Parties, “Alternative Financing”) as promptly
      as practicable following the occurrence of such event but no later than the
      last
      day of the Marketing Period.  Nothing in this Agreement shall prohibit
      the Purchasing Parties from entering into agreements relating to the Financing
      or the operation of the Purchasing Parties, including adding other equity
      providers or operating partners, subject in each case to the Financing
      Modification Requirements.  The Purchasing Parties shall have the
      right to amend the Financing Commitments or any Alternative Financing in their
      sole discretion; provided that such amendments are consistent with the
      Financing Modification Requirements.  Notwithstanding the foregoing,
      provided
      that Purchaser Guarantor has complied with its commitment set forth in the
      Equity Funding Letter of even date herewith, the Purchasing Parties shall have
      the option in their sole discretion to determine the amounts, mix and terms
      of
      the Financing Commitments, Alternative Financing, other financing and/or equity
      that they will use to fund the Purchase Price.

     

    (c)  For
      purposes of this Agreement, “Marketing Period” shall mean the first
      period of 35 consecutive calendar days after the Initiation Date
      (i) throughout which (A) the Purchasing Parties and their Debt
      Financing sources shall have the Required Information (provided that any such
      Required Information to be included in an offering document to be used in
      connection with such Debt Financing shall be updated as reasonably requested
      to
      ensure that the Required Information does not contain any untrue statement
      of a
      material fact or omit to state any material fact necessary in order to make
      the
      statements contained therein not misleading) and (B) nothing has occurred
      and no condition exists that would cause any of the conditions set forth in
      Section 7.01 and Section 7.02 to fail to be satisfied, assuming the
      Closing were to be scheduled for any time during such 30 consecutive
      calendar day period, and (ii) at the end of which the conditions set forth
      in Section 7.01 and Section 7.02 shall be satisfied.  For
      purposes of this Agreement, “Initiation Date” shall mean July 28,
      2007.  The Purchasing Parties shall keep Seller Parent informed on a
      reasonably current basis of the status of its efforts to arrange the Debt
      Financing and provide to Seller Parent copies of documents related to the Debt
      Financing as Seller Parent reasonably requests; provided that the
      Purchasing Parties may redact in such documents the fee amounts payable to
      their
      financing sources under the Financing Commitments.  The Purchasing
      Parties shall give Seller Parent prompt notice of any material breach by any
      party of the Financing Commitments of which the Purchasing Parties become aware,
      or any termination of the Financing Commitments.

     

    SECTION
      5.05.  Access
      to Information; Confidentiality.  Subject to applicable Laws
      relating to the exchange of information, the Seller Parent shall, and shall
      cause the Company, each of its Subsidiaries and each of their respective
      Representatives to, afford, upon reasonable advance notice, to the Purchasing
      Parties and the Purchasing Parties’ Representatives, reasonable access during
      normal business hours during the period prior to the Closing Date or the
      termination of this Agreement to all of the Company’s and its Subsidiaries’
properties and other assets, books, contracts, records (including accountants’
work papers and Tax Returns), directors, officers, Employees and attorneys
      and,
      during such period, Seller Parent shall, and shall cause the Company, each
      of
      its Subsidiaries and each of their respective Representatives to, furnish
      promptly to the Purchasing Parties all other information concerning the
      Company’s and its Subsidiaries’ business, properties and personnel as the
      Purchasing Parties may reasonably request.  As soon as
      reasonably

     

    
       

      
        
          
          

        

        
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    practicable
      following the date of this Agreement, the Company shall request an updated
      estimate of the potential withdrawal liability to which the Company or any
      Subsidiary would be subject if the Company or any Subsidiary were to withdraw
      from each Multiemployer Plan and shall promptly furnish to the Purchasing
      Parties any information it receives in response to such
      request.  Except for disclosures expressly permitted by the terms of
      the confidentiality agreement, dated as of October 19, 2006, between an
      Affiliate of the Purchasing Parties and Seller Parent (as it may be amended
      from
      time to time, the “Confidentiality Agreement”), the Purchasing Parties
      shall hold, and shall cause their Representatives and financing sources to
      hold,
      all information received from the Selling Parties and the Company, directly
      or
      indirectly, under this Agreement or otherwise in confidence in accordance with
      the Confidentiality Agreement.  Such obligations shall expire at the
      Closing with respect to Company-related information.

     

    SECTION
      5.06.  Reasonable
      Best Efforts.  (a)  Upon the terms and subject to the
      conditions set forth in this Agreement, each of the parties agrees to use,
      except as otherwise provided below, its reasonable best efforts to take, or
      cause to be taken, all actions, and to do, or cause to be done, and to assist
      and cooperate with the other parties in doing, all things necessary, proper
      or
      advisable to consummate, in the most expeditious manner reasonably practicable,
      the Acquisition and the other transactions contemplated by this Agreement,
      including using reasonable best efforts to accomplish the
      following:  (i) the taking of all acts necessary to cause the
      conditions to Closing to be satisfied as promptly as reasonably practicable,
      (ii) the obtaining of all necessary actions or nonactions, waivers,
      consents, approvals, orders and authorizations from, and the giving of any
      necessary notices to, Governmental Authorities and the making of all necessary
      registrations, declarations and filings (including filings with Governmental
      Authorities, if any), and the taking of all acts as may be necessary to obtain
      any such action, nonaction, waiver, consent, approval, order or authorization,
      (iii) the obtaining of all necessary consents from any third party required
      by any Contract or Company Lease; provided, however, that the
      Purchasing Parties and their Affiliates shall not be required to, and the
      Selling Parties and their Affiliates shall not be required to, make any material
      payment or provide any material value, enter into any Contract (or amend any
      existing Contract) that is materially disadvantageous to the Selling Parties
      and
      their Affiliates or the Purchasing Parties and their Affiliates or otherwise
      take any other action that is adverse to the Selling Parties or their Affiliates
      or the Purchasing Parties or their Affiliates in any material respect, and
      (iv) the execution and delivery of any additional instruments necessary to
      consummate the transactions contemplated by, and to fully carry out the purposes
      of, this Agreement.

     

    (b)  As
      of the
      date of this Agreement, each of Seller Parent and Purchaser has filed all
      necessary filings pursuant to the HSR Act with the United States Federal Trade
      Commission and the Antitrust Division of the United States Department of Justice
      (and shall file as promptly as practicable any form or report required by any
      other Governmental Authority relating to antitrust, competition, trade or other
      regulatory matters).  Each of Purchaser and the Company shall
      (i) respond as promptly as practicable to any inquiries or requests
      received from any Governmental Authority for additional information or
      documentation and (ii) not extend any waiting period under the HSR Act or
      enter into any Contract with any Governmental Authority not to consummate the
      transactions contemplated by this Agreement, except with the written consent
      of
      the other parties hereto.  Each party hereto shall (x) promptly
      notify the other party of any written communication to that party or its
      Affiliates from any Governmental Authority concerning this Agreement or the
      Acquisition and, subject to applicable Law, permit the other party to review
      in
      advance any proposed written communication to any of the foregoing, (y) not
      agree to participate, or to permit its Affiliates to participate, in any
      substantive meeting or discussion with any Governmental Authority with respect
      to any filings, investigation or inquiry concerning this Agreement or the
      Acquisition unless it consults with the other party in advance and, to the
      extent permitted by such Governmental Authority, gives the other party the
      opportunity to attend and participate thereat, and (z) furnish the other
      party with copies of all correspondence, filings and communications (and
      memoranda setting forth the substance thereof) between them and their Affiliates
      and their respective Representatives, on the one hand, and any Governmental
      Authority or members of their respective staffs, on the other hand, with respect
      to this Agreement and the Acquisition (except that the Selling Parties and
      the
      Company shall be under no obligation of any kind to provide the Purchasing
      Parties documents, material or other information relating to the valuation
      of
      the Company or to alternatives to the proposed Acquisition and this Agreement,
      and the Purchasing Parties shall not be obligated to disclose to the Selling
      Parties or the Company any nonpublic information about the Purchasing Parties’
or their Affiliates’ existing business or operations).

     

     

    
      
        
        

      

      
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    SECTION
      5.07.  Public
      Announcements.  The Purchasing Parties and Seller Parent shall
      consult with each other before issuing, and give each other the opportunity
      to
      review and comment upon, any press release or other public statements with
      respect to this Agreement, the Acquisition and the other transactions
      contemplated hereby and thereby, and shall not issue any such press release
      or
      make any such public statement without the consent of the other party, such
      consent not to be unreasonably withheld or delayed, except as may be required
      by
      applicable Law, court process or by obligations pursuant to any listing
      agreement with any national securities exchange or national securities quotation
      system.

     

    SECTION
      5.08.  Employee
      Matters.  (a)  During the period beginning
      on
      the Closing Date and ending
      on December 31,
      2008, Employees who continue their employment with Purchaser or its
      Affiliates (including the Company after the Closing Date) after the Closing
      Date
      (“Affected Employees”) shall receive compensation and employee benefits
      that are no less favorable in the aggregate than the compensation and benefits
      such Affected Employees received immediately prior to the Closing, other than
      equity-based compensation.  Without limiting the foregoing, during
      the period beginning on the Closing
      Date and ending on December 31, 2008, Purchaser shall, or shall cause the
      Company to, maintain the Company Severance Plans or a severance plan or plans
      of
      Purchaser providing substantially the same benefits to Affected Employees as
      would have been provided to such Affected Employees under the Company Severance
      Plans in which they participated immediately prior to the Closing (or, to the
      extent that Affected Employees participated in the Jones Severance Plan
      immediately prior to the Closing, a severance plan or plans of Purchaser
      providing substantially the same benefits payable under substantially the same
      circumstances to Affected Employees as would have been provided to such Affected
      Employees under the Jones Severance Plan), and shall not amend or permit the
      amendment of any such plans in a manner that is adverse to any Affected
      Employee.

     

    (b)  From
      and
      after the Closing Date, Purchaser shall, or shall cause its Affiliates
      (including the Company after the Closing) to, (i) honor, in accordance with
      their terms, all Company Plans, all existing Contracts with Company or its
      Subsidiaries, on the one hand, and any Affected Employee, on the other hand,
      and
      all obligations, including any rights or benefits arising as a result of the
      Acquisition (either alone or in combination with any other event), other than
      with respect to equity-based compensation, (ii) recognize all the Affected
      Employees’ accrued and unused vacation and other paid time-off benefits
      consistent with the terms of the vacation or similar policies of the Company
      and
      any of its Subsidiaries as in effect immediately prior to the Closing, (iii) pay all annual bonuses that
      are payable to Affected Employees under the annual bonus plans applicable to
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    Affected
      Employees, including the annual
      bonus plans as in effect as of immediately prior to the Closing, with respect
      to
      the fiscal year in which the Closing occurs, including bonuses accrued before
      the Closing Date under such annual bonus plans to the extent that such accruals
      are accurately reflected in the Final Closing Statement and (iv) with
      respect to any Affected Employee whose employment with Purchaser or its
      Affiliates is terminated by the Company without cause prior to the payment
      of
      the annual bonuses in clause (iii), pay such Affected Employees a pro rated
      target bonus under such annual bonus plans, such pro ration to be based on
      the
      number of days that have elapsed prior to such termination in the fiscal year
      in
      which the Closing occurs (provided
      that with respect to each Affected
      Employee such payment shall be offset by any duplicative benefit in the nature
      of bonus pay provided to such Affected Employee by the Company pursuant to
      any
      severance plan, employment agreement or other arrangement then in effect and
      provided,
further
      that the foregoing is intended to apply
      solely with respect to duplicative payments in the nature of bonus pay and
      that
      nothing in this sentence is intended or shall be construed or applied to
      restrict Purchaser’s obligation to provide or cause to be provided, as the case
      may be, both (x) severance benefits that are not in the nature of bonus pay
      and (y) pro rated target bonuses, as required pursuant to
      Section 5.08(a) and this Section 5.08(b),
      respectively).

     

    (c)  For
      purposes of each employee benefit plan of Purchaser or its Affiliates in which
      any Affected Employee is eligible to participate after the Closing, including
      for purposes of eligibility, vesting and benefit levels and accruals, Purchaser
      shall, or shall cause its Affiliates to, treat the service of such Affected
      Employee with the Company and any of its Subsidiaries (or any predecessor
      employer) prior to the Closing as service with Purchaser and its
      Affiliates.  Purchaser shall, or shall cause its Affiliates to, waive
      any pre-existing condition exclusions, evidence of insurability provisions,
      waiting period requirements or any similar provision under any of the welfare
      plans maintained by Purchaser or any of its Affiliates in which Affected
      Employees participate following the Closing Date to the extent such limitations
      and restrictions were waived or satisfied under the applicable Company Plan
      immediately prior to the Closing Date.  In addition, Affected
      Employees shall receive credit for any co-payments, deductibles and annual
      out-of-pocket expenses incurred under the welfare plans of the Company or any
      of
      its Affiliates during the calendar year in which the Closing Date occurs, but
      prior to the Closing Date, for purposes of the corresponding co-payments,
      deductibles and annual out-of-pocket expenses under welfare plans of Purchaser
      or any of its Affiliates for the calendar year in which the Closing Date
      occurs.

     

    (d)  The
      Purchasing Parties agree that any agreement they have entered into or may enter
      into prior to Closing with any director, officer or Employee of the Company
      or
      its Subsidiaries or the Creative Director of the Company will not become
      effective until the Closing.

     

    
       

      
        
          
          

        

        
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    (e)  The
      Company shall promptly notify the Purchasing Parties of any entry into,
      termination of, adoption of, material amendment of or material increase of
      the
      benefits under the Multiemployer Plans referenced in Section 5.01(a)(2) of
      the
      Company Disclosure Letter.

     

    (f)  Prior
      to
      or on the Closing Date, Seller Parent shall vest and/or cash-out for fair market
      value (which, with respect to each
      share of Seller Parent restricted stock held by Affected Employees as of the
      Closing Date, may include the average per share price of Seller Parent’s common
      stock on the New York Stock Exchange as reported by the Wall Street Journal
      for
      the last ten trading days preceding the second full day prior to the date of
      the
      Closing Date) all restricted stock awards of Seller Parent held by the
      Affected Employees.  Seller Parent shall indemnify the Purchasing
      Parties and the Company against all claims, Liabilities, damages, Liens,
      judgments, and expenses arising out of, involving, or in connection with any
      such vesting or cash-out.

     

    SECTION
      5.09.  Letters
      of Credit and Hedging Contracts.  (a)  Section 5.09
      of the Company Disclosure Letter contains a complete and accurate list of all
      letters of credit and hedging contracts to which the Company or any of its
      Subsidiaries is a party as of June 22, 2007, which shall be updated in writing
      by Seller Parent prior to Closing.  On or before the Closing Date,
      Purchaser shall, or shall cause a Subsidiary of Purchaser to, provide the
      Selling Parties with a stand-by letter of credit issued by a bank reasonably
      acceptable to the Selling Parties against any loss, payment or reimbursement
      obligation arising from any outstanding letter of credit issued for the benefit
      of the Company or a Subsidiary of the Company or any foreign exchange hedging
      contract of the Company or its Subsidiaries that is guaranteed by Seller Parent
      or its Subsidiaries (other than the Company and its
      Subsidiaries).  The Purchasing Parties shall indemnify the Selling
      Parties and their Subsidiaries against all claims and Liabilities arising under
      any such letter of credit or hedging contract from and after the Closing
      Date.

     

    (b)  For
      so
      long as Purchaser is in compliance with its obligations under
      Section 5.09(a), each Selling Party shall, and shall cause their respective
      Affiliates to, maintain in full force and effect and perform its obligations
      under each letter of credit that is issued for the benefit of the Company or
      a
      Subsidiary of the Company and each guarantee by Seller Parent or its Affiliate
      of a foreign exchange hedging contract of the Company or its Subsidiary
      following the Closing until such letter of credit or hedging contract expires
      or
      is terminated by (i) such Selling Party at the request of Purchaser or
      (ii) the counterparty thereto.  At the time of Closing, Seller
      Parent and its Subsidiaries (other than the Company and its Subsidiaries) shall
      remove the Company and its Subsidiaries from its letter of credit facility
      (and
      shall terminate the Liability of the Company and its Subsidiaries under any
      existing letters of credit) and may terminate any arrangements to provide credit
      support to the Company and its Subsidiaries under any letters of credit or
      guarantees and the Company and its Subsidiaries will cooperate in terminating
      such credit support.  Following the Closing, Seller Parent and its
      Subsidiaries shall no longer provide any credit support to the Company, other
      than any outstanding letters of credit and hedging arrangements required to
      be
      maintained pursuant to this Section 5.09(b) (so long as the Purchasing Parties
      are in compliance with their obligations under Section 5.09(a)).

     

    SECTION
      5.10.  Release of Lease
      Guarantees.  On or before the Closing Date, (i) Purchaser
      shall use reasonable best efforts to arrange, at its sole cost and expense,
      for replacement arrangements, effective as of the Closing Date, for all lease
      guarantees provided by the Selling Parties or any of their Subsidiaries (other
      than the Company and its Subsidiaries) for the benefit of the Company or any
      of
      its Subsidiaries with respect to any Leased Property, which guarantees are
      listed in Section 5.10 of the Company Disclosure Letter, including such
      reasonable and customary replacement guarantees or letters of credit, as the
      applicable landlord shall require and (ii) Purchaser shall use reasonable
      best efforts to obtain releases from the applicable landlords indicating that
      the Selling Parties and their Subsidiaries shall have no Liability with respect
      to such lease guarantee effective as of the Closing Date, in each case
      reasonably satisfactory to the Selling Parties.  The Purchasing
      Parties shall indemnify the Selling Parties and their Subsidiaries against
      all
      claims, Liabilities, damages, Liens, judgments, and expenses arising out of,
      involving, or in connection with any such lease guarantee from and after the
      Closing Date.

     

    
       

      
        
          
          

        

        
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    SECTION
      5.11.  Further
      Assurances.  From time to time, as and when requested by any
      party, each party shall execute and deliver, or cause to be executed and
      delivered, all such documents and instruments and shall take, or cause to be
      taken, all such further or other actions (subject to Section 5.06), as such
      other party may reasonably deem necessary or desirable to consummate the
      transactions contemplated by this Agreement, including, in the case of the
      Selling Parties, executing and delivering to the Purchasing Parties such
      assignments, deeds, bills of sale, consents and other instruments as the
      Purchasing Parties or their counsel may reasonably request as necessary or
      desirable for such purpose.  If requested by Purchaser Parent, the
      Seller Parent shall cause the Company to take all steps which can reasonably
      be
      taken during the period between the date of this Agreement and the Closing
      Date
      to enter into voluntary compliance programs under applicable escheat or
      abandoned property Laws.

     

    SECTION
      5.12.  Intercompany
      Arrangements.  The Selling Parties and the Purchasing Parties
      acknowledge and agree that, as of the Closing, any contract, lease, license,
      commitment, account or arrangement (other than those entered pursuant to the
      terms of this Agreement) between the Company or its Subsidiaries, on the one
      hand, and the Selling Parties or any of their Subsidiaries (exclusive of the
      Company and its Subsidiaries as of the Closing), on the other hand, shall be
      terminated (without any payment) and be of no further force or effect,
      notwithstanding any terms thereof to the contrary, other than accounts payable
      relating to purchases by the Company or its Subsidiaries of goods for resale
      from Seller Parent or its Subsidiaries pursuant to agreements or arrangements
      disclosed in Section 5.12 of the Company Disclosure Letter, to the extent
      reflected (along with the related inventory) in determining Net Working
      Capital.  The Selling Parties and their Affiliates shall, without any
      payment, retain, satisfy, terminate and/or convert to equity all pre-Closing
      intercompany payables, receivables, obligations, Contracts or other Liabilities,
      other than accounts payable relating to purchases by the Company or its
      Subsidiaries of goods for resale from Seller Parent or its Subsidiaries.

     

    SECTION
      5.13.  No
      Solicitation.  (a)  The parties hereto shall not, and
      shall cause their Subsidiaries (including, in the case of the Selling Parties,
      the Company) and their respective Representatives and Subsidiaries not to
      (i) solicit, initiate or knowingly encourage any inquiries or the making of
      any offer or proposal regarding any Alternative Transaction or (ii) enter
      into, continue or participate in any discussions or negotiations regarding,
      or
      furnish to any person any nonpublic information relating to the Company in
      connection with, or otherwise cooperate with a person or group making any offer
      or proposal regarding any Alternative Transaction or (iii) execute or enter
      into any letter of intent, memorandum of understanding, agreement in principle,
      merger agreement, acquisition agreement, option agreement, joint venture
      agreement, partnership agreement or other similar Contract constituting,
      providing for or related to any Alternative Transaction other than, in the
      case
      of the Selling Parties, in connection with the termination of this Agreement
      as
      provided for in Section 8.01(f). 

     

    
       

      
        
          
          

        

        
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    (b)  Notwithstanding
      the provisions of Section 5.13(a), the Selling Parties may continue to
      participate in discussions or negotiations with, and provide information to,
      Fast Retailing Co., Ltd. (the “Potential Acquirer”) provided that each of
      the following conditions have been met: (i) the Selling Parties and their
      Subsidiaries have theretofore complied with Section 5.13 of the Original
      Stock Purchase Agreement and this Section 5.13 in all respects and (ii) the
      Selling Parties keep the Purchasing Parties advised on a substantially current
      basis of any material developments with respect thereto.

     

    (c)  For
      purposes of this Agreement, “Alternative Transaction” means any
      (i) direct or indirect acquisition (other than any acquisition of the
      shares of Seller Parent) of any of the Shares or any other voting or equity
      interest in the Company by any person (including by means of a spin-off,
      split-off or public offering), (ii) merger, consolidation,
      recapitalization, liquidation, dissolution or similar transaction directly
      or
      indirectly involving the Company, (iii) direct or indirect sale or other
      disposition of all or a substantial portion of the assets of the Company, and
      (iv) other transaction that would reasonably be expected to impede,
      interfere with, prevent, materially delay or limit the economic benefit to
      the
      Purchasing Parties of, the transactions contemplated by this
      Agreement.

     

    (d)  For
      purposes of this Agreement, a “Superior Transaction” means any
      Alternative Transaction that (i) if consummated would result in the
      acquisition, directly or indirectly, by any person (other than the Purchasing
      Parties) of at least 50% of the Shares or of the assets of the Company,
      (ii) is on terms that the Board of Directors of Seller Parent has
      determined in its good faith judgment (after consultation with its outside
      financial advisor and outside counsel) are more favorable to Seller Parent
      from
      a financial point of view than this Agreement and (iii) which the Board of
      Directors of Seller Parent has determined in good faith (after consultation
      with
      its outside financial advisor and outside counsel) is reasonably capable of
      being consummated.

     

    (e)  Notwithstanding
      anything in this
      Agreement to the contrary, in no event shall the Selling Parties be required
      to
      close the transactions contemplated by this Agreement prior to August 11,
      2007.

     

    SECTION
      5.14.  Lease
      Estoppel.  To the extent permissible under the terms of those
      leases set forth on Section 5.14 of the Company Disclosure Letter, Seller
      Parent or the Company shall request and use reasonable best efforts to obtain
      a
      lessor’s estoppel certificate substantially in the form of the lessor’s estoppel
      certificate set forth in Section 5.14 of the Company Disclosure Letter in
      accordance with each of such leases.

     

    
       

      
        
          
          

        

        
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    ARTICLE
      VI 

     

    Tax
      Matters

     

    SECTION
      6.01.  Tax
      Indemnification.  (a)  Seller Parent and Seller shall be
      jointly and severally responsible for and shall pay, and shall jointly and
      severally indemnify and hold the Purchasing Parties, the Company and their
      respective Subsidiaries (each a “Tax Indemnitee”) harmless from, any and
      all Losses incurred by the Company or any of its Subsidiaries in respect of
      its
      income, business, property or operations or for which the Company or any of
      its
      Subsidiaries may otherwise be liable (i) that are allocated to Seller
      Parent and Seller pursuant to Section 6.02; (ii) for which the Company
      or any of its Subsidiaries may otherwise be liable as a result of being included
      in a consolidated group of which the Company or any of its Subsidiaries was
      a
      member prior to the Closing Date pursuant to Treasury Regulations
      Section 1.1502-6 or any analogous provision of state, local or foreign Tax
      Law any payments required to be made after the Closing Date under any Tax
      sharing, Tax indemnity, Tax allocation or similar contracts (whether or not
      written) to which the Company or any of its Subsidiaries was obligated, or
      was a
      party, on or prior to the Closing Date; (iii) that arise from or relate to
      the breach by the Selling Parties of Section 2.15(k) or Section
      5.01(a)(xiii); or (iv) that are attributable to the failure to pay any real
      estate transfer taxes (including the New York City real property transfer tax
      and New York State real estate transfer tax)  in any period prior to the
      Closing Date or to any breach of Section 5.01(b)(iii).

     

    (b)  Amounts
      payable pursuant to this Section 6.01 shall be determined so as to hold the
      Tax Indemnitee harmless on an after-tax basis. For this purpose, any Tax
      benefits shall be computed based on the amount of any benefit actually realized;
      provided, however, that if a Tax benefit attributable to an amount
      paid pursuant to this Section 6.01 is actually realized after the payment
      date of such amount paid, the party realizing such Tax benefit shall promptly
      pay it to the other party.  Where a party has other losses,
      deductions, credits or items available to it, the Tax benefit from any losses,
      deductions, credits or items relating to the amount paid pursuant to this
      Section 6.01 shall be deemed to be realized last after any other losses,
      deductions, credits or items are realized.  In the event that there
      should be a determination disallowing the Tax benefit, the indemnifying party
      shall be liable to refund to the Tax Indemnitee the amount of any related
      reduction previously allowed or payments previously made to the indemnifying
      party pursuant to this Section 6.01(b).

     

    (c)  Any
      indemnity payment required to be made by Seller Parent or Seller pursuant to
      this Article VI shall be paid to the Purchasing Parties no later than five
      business days prior to the date on which Tax with respect to such item would
      be
      due.

     

    SECTION
      6.02.  Apportionment
      of Taxes.  (a)  In order to apportion appropriately any
      Taxes relating to a period that includes the Closing Date, Seller Parent, Seller
      and Purchaser shall, to the extent permitted by applicable Law, elect with
      the
      relevant Taxing authority to treat for all purposes the Closing Date as the
      last
      day of a taxable period of the Company, and such period shall be treated as
      a
      period ending prior to or on the Closing Date for purposes of this
      Agreement.

     

    
       

      
        
          
          

        

        
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    (b)  Seller
      Parent and Seller shall be liable for any Pre-Closing Period
      Taxes.  For purposes of this Agreement, “Pre-Closing Period
      Taxes” means, except to the extent reflected in the determination of Net
      Working Capital:

     

    (i)  with
      respect to Taxes imposed upon the Company or any of its Subsidiaries with
      respect to taxable periods ending prior to or on the Closing Date, all Taxes
      due
      for such taxable period (regardless of whether such Taxes are due and payable
      at
      Closing); and

     

    (ii)  with
      respect to Taxes imposed upon the Company or any of its Subsidiaries with
      respect to taxable periods beginning before and ending after the Closing Date
      (each, a “Straddle Period”), the portion of any such Taxes that is
      allocable to the portion of the Straddle Period ending on the Closing Date
      (such
      Taxes, the “Pre-Closing Straddle Taxes”), determined in accordance with
      the following:

     

    (A)  Other
      than with respect to Taxes allocated pursuant to Section 5.01(b)(iii), in the
      case of Taxes that are either (1) based upon or related to income, receipts
      or shareholders’ equity or (2) imposed in connection with any sale,
      transfer or assignment or any deemed sale, transfer or assignment of property
      (real or personal, tangible or intangible), including any transaction
      contemplated by this Agreement (regardless of whether such transaction occurs
      before or after the Closing Date) or undertaken to implement this Agreement,
      Pre-Closing Period Straddle Taxes shall be deemed equal to the amount that
      would
      be payable if the Tax year ended on the Closing Date.  For purposes of
      this clause (A), any exemption, deduction, credit or other item that is
      calculated on an annual basis shall be allocated to the portion of the Straddle
      Period ending on the Closing Date on a pro rata basis determined by
      multiplying the entire amount of such item allocated to the Straddle Period
      by a
      fraction, the numerator of which is the number of calendar days in the portion
      of the Straddle Period ending on the Closing Date and the denominator of which
      is the number of calendar days in the entire Straddle Period.

     

    (B)  In
      the
      case of Taxes (other than those described in clause (A) above) imposed on a
      periodic basis with respect to the Company or any of its Subsidiaries or
      otherwise measured by the level of any item, Pre-Closing Straddle Taxes shall
      be
      deemed to equal (1) the aggregate amount of such Taxes for the entire
      Straddle Period (or, in the case of Taxes determined on an arrears basis, the
      amount of such Taxes for the immediately preceding Tax period) multiplied
      by (2) a fraction, the numerator of which is the number of calendar
      days in the portion of the Straddle Period ending on the Closing Date and the
      denominator of which is the number of calendar days in the entire Straddle
      Period.

     

    SECTION
      6.03.  Tax
      Returns.  (a)  (i) Seller Parent and Seller shall
      be responsible for the timely filing (taking into account any extensions
      received from the relevant tax authorities) of all Tax Returns required by
      Law
      (A) to be filed by the Company or any of its Subsidiaries on or prior to
      the Closing Date, or (B) to include the Company and its Subsidiaries in a
      consolidated, combined or unitary Tax Return filed by Seller Parent, Seller
      or
      any Affiliate (other than any Tax Indemnitee) with respect to any taxable period
      ending prior to or including the Closing Date; (ii) such Tax Returns shall
      be
      true, correct and complete in all material respects; and (iii) to the extent
      any
      Taxes indicated as due and payable on such Tax Returns constitute Pre-Closing
      Period Taxes or are the responsibility of the Seller Parent and Seller pursuant
      to this Agreement, such Taxes shall be paid or will be paid by the Seller Parent
      and Seller as and when required by Law.  Unless a different treatment
      of any item is required by an intervening change in applicable Law, (x) such
      Tax
      Returns shall be prepared on a basis consistent with those prepared for prior
      taxable periods on the Closing Date and (y) no Tax Returns with respect to
      pre-Closing period Taxes shall be amended if such amendment could adversely
      affect the Purchasing Parties or the Company or any of their respective
      Subsidiaries in any taxable period ending after the Closing Date.
 

     

    
       

      
        
          
          

        

        
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    (b)  The
      Company, or, where applicable, its Subsidiaries, shall be responsible for the
      timely filing (taking into account any extensions received from the relevant
      tax
      authorities) of Tax Returns which are required by Law to be filed by any the
      Company or its Subsidiaries after the Closing Date and to the extent any Taxes
      indicated as due and payable on such Tax Returns constitute Pre-Closing Straddle
      Taxes or are the responsibility of the Seller Parent and Seller pursuant to
      this
      Agreement, such Taxes shall be paid by the Seller Parent and Seller as required
      by Section 6.01.

     

    SECTION
      6.04.  Survival.  All
      obligations and representations under this Article VI and
      Section 2.15(k) shall survive the Closing hereunder and continue until
      30 days following the expiration of the statute of limitations, including
      any applicable extensions or waivers thereof, on assessment of the relevant
      Tax.  

     

    SECTION
      6.05.  Contest.  (a)  For
      purposes of this Agreement, a “Contest” is any audit, Proceeding or other
      dispute with respect to any Tax matter that affects the Company or any of its
      Subsidiaries.  Unless Purchaser has previously received written notice
      from Seller Parent of the existence of such Contest, Purchaser shall promptly
      give written notice to Seller Parent of the existence of any Contest relating
      to
      a Tax matter that is or may be Seller Parent’s, Seller’s or their Affiliate’s
      full or shared responsibility under this Agreement, but no failure to give
      such
      notice shall relieve Seller Parent, Seller or such Affiliate of any Liability
      hereunder except to the extent, if any, that the rights of Seller Parent, Seller
      or such Affiliate with respect to such claim are actually
      prejudiced.  Unless Seller Parent has previously received written
      notice from Purchaser of the existence of such Contest, Seller Parent shall
      promptly give written notice to Purchaser of the existence of any
      Contest.

     

    (b)  Purchaser,
      on the one hand, Seller Parent on the other, agrees, in each case at no cost
      to
      the other party, to cooperate with the other and the other’s representatives in
      a prompt and timely manner in connection with any Contest.  Such
      cooperation shall include, but not be limited to, making available to the other
      party, during normal business hours, all books, records, returns, documents,
      files, other information (including, without limitation, working papers and
      schedules), officers or employees (without substantial interruption of
      employment) or other relevant information necessary or useful in connection
      with
      any Contest requiring any such books, records and files.

     

    (c)  In
      the
      case of any Contest relating to a Tax matter arising in a period ending on
      or
      before the Closing Date, Seller Parent shall have the right to represent the
      Company’s interests in, to employ counsel of its choice at its expense, and to
      control the conduct of such Contest.  Seller Parent shall have the
      right to settle or dispose of any Contest relating to such Tax matter; provided,
however,
      that no settlement or other
      disposition of any Contest that may have an adverse effect on any Taxes payable
      by the Purchasing Parties, the Company or any of their respective Subsidiaries
      during any taxable period ending after the Closing Date in any manner or to
      any
      extent (including, but not limited to, the imposition of income tax
      deficiencies, the reduction of asset basis or cost adjustments and the reduction
      of loss or credit carryovers), except if such effect would be de minimis, shall
      be agreed to without the Purchasing Parties’ prior written consent, which
      consent shall not be unreasonably withheld.

     

    
       

      
        
          
          

        

        
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    (d)  In
      the
      case of any Contest relating to a Tax Return for a Straddle Period, but only
      to
      the extent such Tax matter relates to Taxes for which Seller Parent may be
      required to indemnify Purchaser pursuant to this Agreement, Purchaser and Seller
      Parent shall jointly represent their interests in any Contest, shall employ
      counsel of their mutual choice and shall cooperate with the other and the
      other’s representatives in a prompt and timely manner in connection with any
      Contest.  The parties shall mutually agree on any settlement or other
      disposition of the Contest.  Any such Contest expenses shall be shared
      by the parties to the extent they relate to a Tax matter, shall be borne by
      Purchaser and Seller Parent in the same proportion as such related Taxes are
      borne economically by Purchaser and Seller Parent.

     

    (e)  Purchaser
      shall have the right to control the conduct of any Contest in its sole
      discretion with respect to any other Tax matter.

     

    SECTION
      6.06.  Cooperation
      on Tax Matters.  After the date of the Agreement, Seller Parent,
      Purchaser, and the Company shall, and shall cause their respective Affiliates
      to, cooperate fully as and to the extent reasonably requested by the other
      party, (a) with regard to any qualification or filing requirements or
      similar requirements relating to Taxes for the purpose of minimizing such Taxes,
      and (b) in connection with the filing of Tax Returns of the Company or any
      of its Subsidiaries and any audit, litigation or other Proceeding with respect
      to Taxes. Such cooperation shall include, but not be limited to, the retention
      and (upon the other party’s request) the provision of records and information
      reasonably relevant to any such audit, litigation or other Proceeding and making
      Employees available on a mutually convenient basis to provide additional
      information and explanation of any material provided hereunder.  The
      Company, Seller Parent and Purchaser shall (i) retain all books and records
      with respect to Tax matters pertinent to each of the Company and its
      Subsidiaries relating to any taxable period beginning before the Closing Date
      until expiration of the statute of limitations (and, to the extent notified
      by
      Purchaser or Seller Parent, any extensions thereof) of the respective taxable
      periods, and to abide by all record retention agreements entered into with
      any
      Tax authority and (ii) give the other party reasonable written notice prior
      to transferring, destroying or discarding any such books and records and, if
      the
      other party so requests, shall allow the requesting party to take possession
      of
      such books and records.

     

    SECTION
      6.07.  Tax
      Effect of Indemnification Payments.  All indemnification payments
      made pursuant to Article VI shall be treated for all Tax purposes as
      adjustments to the consideration paid with respect to the Shares. 

     

    
       

      
        
          
          

        

        
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    ARTICLE
      VII

     

    Conditions
      Precedent

     

    SECTION
      7.01.  Conditions
      to Each Party’s Obligation to Effect the Acquisition.  The
      respective obligation of each party hereto to effect the Acquisition is subject
      to the satisfaction or waiver by such party on or prior to the Closing Date
      of
      the following conditions:

     

    (a)  Antitrust.  The
      waiting period (and any extension thereof) applicable to the Acquisition under
      the HSR Act shall have been terminated or shall have expired.

     

    (b)  No
      Injunctions or Restraints.  No (i) Order (whether temporary,
      preliminary or permanent) or other legal restraint issued by any Governmental
      Authority or (ii) Law that, in either case, has the effect of preventing
      the consummation of the Acquisition or the performance of the other material
      transactions contemplated by this Agreement or any Related Document, including
      the Financing (collectively, “Restraints”) shall be in
      effect.

     

    (c)  No
      Proceedings.  No Proceeding initiated by a Governmental Authority
      that seeks the issuance or promulgation of a Restraint shall be
      pending.

     

    SECTION
      7.02.  Conditions
      to Obligations of the Purchasing Parties.  The obligations of the
      Purchasing Parties to effect the Acquisition are further subject to the
      satisfaction or waiver on or prior to the Closing Date of the following
      conditions:

     

    (a)  Representations
      and Warranties.  (i)  The representations and warranties
      contained in Article II of this Agreement (other than those referred to in
      clause (ii) or (iii) below), disregarding all qualifications and exceptions
      contained therein relating to materiality or Material Adverse Effect, except
      for
      the qualification set forth in Section 2.08(b), shall be true and correct as
      of
      the date of this Agreement and as of the Closing Date with the same effect
      as if
      made on and as of the Closing Date (except that the accuracy of representations
      and warranties that by their terms speak as of a specified date will be
      determined as of such date), except where the failure to be true and correct
      has
      not had and is not reasonably likely to have, individually or in the aggregate,
      a Material Adverse Effect;

     

                     
(ii)  the
      representations and warranties contained in Section 2.01 (Organization,
      Standing and Corporate Power); Section 2.03(d) (Indebtedness);
      Section 2.04 (Authority; Noncontravention); Section 2.24 (Brokers and
      Other Advisors) and Article III (other than those referred to in
      clause (iii) below) shall be true and correct in all material respects as
      of the date of this Agreement and as of the Closing Date with the same effect
      as
      if made on and as of the Closing Date (except that the accuracy of
      representations and warranties that by their terms speak as of a specified
      date
      will be determined as of such date);

     

     

    
      
        
        

      

      
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                      (iii)  the
      representations and warranties contained in Section 2.02 (Subsidiaries);
      Section 2.03(a), (b) and (c) (Capital Structure); and Section 3.06
      (The Shares) shall be true and correct in all respects as of the date of this
      Agreement and as of the Closing Date with the same effect as if made on and
      as
      of the Closing Date (except that the accuracy of representations and warranties
      that by their terms speak as of a specified date will be determined as of such
      date); and

     

                    (iv)  the
      Purchasing Parties shall have received a certificate signed on behalf of the
      Selling Parties by an authorized officer of the Selling Parties to the effect
      of
      the preceding clauses (i), (ii) and (iii).

     

    (b)  Performance
      of Obligations of the Company.  The Company shall have performed
      in all material respects all obligations required to be performed by it under
      this Agreement at or prior to the Closing Date, and the Purchasing Parties
      shall
      have received a certificate signed on behalf of the Company by an authorized
      officer of the Company to such effect.

     

    (c)  Performance
      of Obligations of the Selling Parties.  The Selling Parties shall
      have performed in all material respects all obligations required to be performed
      by them under this Agreement at or prior to the Closing Date, and the Purchasing
      Parties shall have received a certificate signed on behalf of the Selling
      Parties by an authorized officer of the Selling Parties to such
      effect.

     

    (d)  No
      Material Adverse Effect.  Since the date of this Agreement, there
      shall not have been any Effect that is incapable of cure or has not been cured
      that, individually or in the aggregate, has had or is reasonably likely to
      result in a Material Adverse Effect.

     

    (e)  Chief
      Executive Officer.  Howard Socol shall not have died or suffered
      any injury, sickness or mental illness or other condition which has resulted
      in,
      or is reasonably likely to result in, a disability that prevents him from
      performing his duties as chief executive officer of the Company immediately
      following the Closing.

     

    SECTION
      7.03.  Conditions
      to Obligation of the Selling Parties and the Company.  The
      obligation of the Selling Parties and the Company to effect the Acquisition
      is
      further subject to the satisfaction or waiver on or prior to the Closing Date
      of
      the following conditions:

     

    (a)  Representations
      and Warranties.  The representations and warranties contained in
      Article IV of this Agreement, disregarding all qualifications and
      exceptions contained therein relating to materiality, shall be true and correct
      as of the date of this Agreement and as of the Closing Date with the same effect
      as if made on and as of the Closing Date (except that the accuracy of
      representations and warranties that by their terms speak as of a specified
      date
      will be determined as of such date), except where the failure to be true and
      correct is not reasonably likely to have a material adverse effect on the
      ability of either of the Purchasing Parties to perform its obligations under
      this Agreement or prevent or materially impede, interfere with, hinder or delay
      the consummation of the Acquisition or any of the other transactions
      contemplated by this Agreement.  The Selling Parties shall have
      received a certificate signed on behalf of the Purchasing Parties by an
      authorized officer of the Purchasing Parties to such effect.

     

                     
(b)
  Performance
      of Obligations of
      the Purchasing Parties.  The Purchasing Parties shall have
      performed in all material respects all obligations required to be performed
      by
      them under this Agreement at or prior to the Closing Date, and the Selling
      Parties shall have received a certificate signed on behalf of the Purchasing
      Parties by an authorized officer of the Purchasing Parties to such
      effect.

     

    
       

      
        
          
          

        

        
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    SECTION
      7.04.  Frustration of Closing
      Conditions.  None of the Selling Parties, the Company or the
      Purchasing Parties may rely on the failure of any condition set forth in
      Section 7.01, 7.02
      or 7.03,
      as the case may be, to be satisfied if such failure was caused by such party’s
      failure to use its reasonable best efforts, as the case may be, to consummate
      the Acquisition and the other transactions contemplated by this Agreement,
      as
      required by and subject to Section 5.06, or otherwise by such party’s
      breach of its obligations under this Agreement.

     

    SECTION
      7.05.  Key-Man
      Insurance.  After the date hereof,
      the
      Selling Parties shall purchase insurance covering the death or disability of
      Howard Socol, for an aggregate premium of at least $1.5 million, and on such
      other terms and conditions as the Selling Parties may specify (the “Key-Man Insurance”).  In
      the event that
      (a) the condition specified in Section 7.02(e) is not satisfied as of the
      Closing Date and the Purchasing Parties elect to waive such condition or
      (b) the condition specified in Section 7.02(e) is satisfied, and the
      Acquisition is actually consummated (including the payment of the Initial
      Payment), the Selling Parties shall either assign their rights under the Key-Man
      Insurance to the Purchasing Parties or pay over to the Purchasing Parties any
      proceeds of the Key-Man Insurance actually received by the Selling Parties,
      net
      of any Taxes, deductibles or other costs and expenses incurred in connection
      with the receipt of such proceeds.

     

    ARTICLE
      VIII

     

    Termination,
      Amendment and Waiver

     

    SECTION
      8.01.  Termination.  This
      Agreement may be terminated, and the Acquisition contemplated hereby may be
      abandoned, at any time prior to the Closing Date:

     

    (a)  by
      mutual
      written consent of the Purchasing Parties and Seller Parent;

     

    (b)  by
      either
      the Purchasing Parties or Seller Parent by written notice to the other or
      others, as applicable, (i) if the Acquisition shall not have been
      consummated on or before November 15, 2007 (the “Outside Date”) for any
      reason; provided, however, that the right to terminate this
      Agreement under this clause 8.01(b)(i) shall not be available to any party
      hereto whose action or failure to act (or whose Affiliate’s action or failure to
      act) has been a principal cause of or resulted in the failure of the Acquisition
      to occur on or before such date and such action or failure to act constitutes
      a
      breach of this Agreement or (ii) any Restraint referred to in
      Section 7.01(b) shall be in effect and shall have become final and
      nonappealable;

     

    (c)  by
      the
      Purchasing Parties upon written notice to Seller Parent, if the Company or
      the
      Selling Parties shall have materially breached or failed to perform any of
      their
      representations, warranties, covenants or agreements set forth in this
      Agreement, which breach or failure to perform would give rise to the failure
      of
      a condition set forth in Section 7.02 and is incapable of cure or has not
      been cured by the earlier of (i) the date which is twenty-five days after
      the date of delivery of notice of such breach by the Purchasing Parties or
      (ii) the Outside Date;

     

    
       

      
        
          
          

        

        
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    (d)  by
      Seller
      Parent upon written notice to the Purchasing Parties, if the Purchasing Parties
      shall have materially breached or failed to perform any of their
      representations, warranties, covenants or agreements set forth in this
      Agreement, which breach or failure to perform would give rise to the failure
      of
      a condition set forth in Section 7.03 and is incapable of cure or has not
      been cured by the earlier of (i) the date which is twenty-five days after
      the date of delivery of notice of such breach by Seller Parent or (ii) the
      Outside Date;

     

    (e)  by
      Seller
      Parent upon written notice to the Purchasing Parties, if all the conditions
      to
      Closing set forth in Section 7.01 and Section 7.02 have been satisfied
      (or are capable of being satisfied), the Marketing Period shall have ended
      and
      Purchaser fails to pay the Closing Date Amount at the Closing because of a
      failure to receive the proceeds of one or more of the debt financings
      contemplated by the Financing Commitments or any Alternative
      Financing;

     

    (f)  by
      Seller Parent, upon written notice to
      the Purchasing Parties, in order to accept or enter into a Superior Transaction,
      provided each of the following conditions have been met:  (i) the
      Selling Parties have theretofore complied with their obligations under Section
      5.13 of the Original Stock Purchase Agreement and Section 5.13 of this
      Agreement, (ii)(A) after the execution of this Agreement, Seller Parent has
      given the Purchasing Parties no more than one written notice (a
“Notice of Superior Transaction”), which notice
      shall have been delivered
      no later than August 9, 2007 at 5:00 p.m., Eastern Daylight Time, of its
      intention to accept or enter into a Superior Transaction and of all the material
      terms and conditions of such Superior Transaction and (B) the Purchasing Parties
      do not within two business days of receipt by the Purchasing Parties of the
      Notice of Superior Transaction, make an offer that the Board of Directors of
      Seller Parent determines, in its good faith judgment (after consultation with
      its outside financial advisors) to be at least as favorable to Seller Parent
      as
      such Superior Transaction; (iii) the Board of Directors of Seller Parent, after
      taking into account any modifications to the terms hereof agreed to by the
      Purchasing Parties after receipt of such notice, continues to believe
      such  proposed transaction continues to constitute a Superior
      Transaction, and (iv) Seller Parent shall concurrently with its delivery of
      the
      written notice of termination have paid to Purchaser the Seller Parent
      Termination Fee pursuant to Section 8.05(c) (and any termination pursuant to
      this Section 8.01(f) shall not be effective unless and until such fee has been
      paid); provided, however, that in no event shall the Closing occur during any
      of
      the two business day period referred to in this Section 8.01(f);
      or

     

    (g)  by
      the
      Purchasing Parties if an Effect that individually or in the aggregate has had
      or
      is reasonably likely to result in a Material Adverse Effect shall have occurred
      and is incapable of cure or has not been cured by the earlier of (i) the date
      which is twenty-five days after the date of delivery of notice of such Effect
      by
      the Purchasing Parties or (ii) the Outside Date.

     

    The
      parties agree that, for purposes of
      Section 8.01(f)(ii)(B), the phrase “at least as favorable to Seller Parent as
      such Superior Transaction” means (x) a Base Purchase Price of at least $2.5
      million more than (A) the price set forth in the Notice of Superior Transaction
      delivered by Seller Parent to the Purchasing Parties less (B) the Seller Parent
      Termination Fee

    
       

      
        
          
          

        

        
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    and
      (y) no terms or
      conditions in any Offer Document that are different from the terms or conditions
      of this Agreement and the other Offer Documents attached as Exhibits hereto
      except conforming amendments with respect to the Purchase Price referred to
      in
      (x) above (which conforming amendments shall be made in all the Offer
      Documents), amendments reflecting any other terms and conditions included in
      the
      most recent draft offer documents submitted by the Potential Acquirer and deemed
      by the Board of Directors of Seller Parent to constitute a Superior Transaction,
      and the deletion of Section 5.13 and Section 8.01(f) and conforming
      amendments with respect to such deletions.  The “Offer
      Documents” shall mean this Agreement, the Company Disclosure Letter, the
      Transition Services Agreement, the Equity Funding Letter, the Financing
      Commitments, the letter from Purchaser Guarantor dated the date of this
      Agreement and the Guarantee.  If, following delivery by Seller
      Parent
      to the Purchasing Parties of the Notice of Superior Proposal, the Purchasing
      Parties make an offer at least as favorable to Seller Parent as the Superior
      Transaction described in such notice, the Board of Directors of Seller Parent
      shall not conclude that the proposal contained in such Notice of Superior
      Transaction constitutes a Superior Transaction, shall not be permitted to
      terminate this Agreement pursuant to Section 8.01(f) and shall immediately
      enter
      into an amendment to this Agreement reflecting the Purchasing Parties’ amended
      offer.

     

    SECTION
      8.02.  Effect
      of Termination.  In the event of termination of this Agreement by
      either the Seller Parent or the Purchasing Parties as provided in
      Section 8.01, this Agreement shall forthwith become void and have no
      further force or effect, without any liability or obligation on the part of
      the
      Selling Parties, the Purchasing Parties or the Company, except that (i) the
      provisions of Section 2.24 (Brokers and Other Advisors), Section 3.05
      (Brokers and Other Advisors), Section 4.07
      (Brokers and Other Advisors), the last sentence of Section 5.05
      (Confidentiality), Section 5.07 (Public Announcements), this
      Section 8.02 (Effect of Termination), Section 8.05 (Fees and Expenses)
      and Article X (General Provisions) shall survive such termination, and
      (ii) subject to the limitation on damages described in Section 8.06, any
      termination of this Agreement shall not relieve any party from any Liability
      for
      any willful breach by such party of its representations, warranties, covenants
      or agreements set forth in this Agreement.

     

    SECTION
      8.03.  Amendment.  This
      Agreement may not be amended except by an instrument in writing signed on behalf
      of each of the parties hereto.

     

    SECTION
      8.04.  Extension;
      Waiver.  At any time prior to the Closing Date, the parties may
      (a) extend the time for the performance of any of the obligations or other
      acts of the other parties, (b) waive any inaccuracies in the
      representations and warranties contained herein or in any document delivered
      pursuant hereto or (c) waive compliance with any of the agreements or
      conditions contained herein.  Any agreement on the part of a party to
      any such extension or waiver shall be valid only if set forth in an instrument
      in writing signed on behalf of such party.  Any such waiver shall not
      operate as a waiver of, or estoppel with respect to, any subsequent inaccuracy
      or noncompliance.  The failure or delay of any party to this Agreement
      to assert any of its rights under this Agreement or otherwise shall not
      constitute a waiver of such rights nor shall any single or partial exercise
      by
      any party to this Agreement of any of its rights under this Agreement preclude
      any other or further exercise of such rights or any other rights under this
      Agreement.

     

     

    
      
        
        

      

      
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    SECTION
      8.05.  Fees
      and Expenses.  (a)  Except as set forth in
      Section 1.03(d) and 5.01(b), whether or not the Acquisition is consummated,
      all costs and expenses incurred by the Selling Parties or the Company and its
      Subsidiaries in connection with this Agreement, the Related Documents and the
      transactions contemplated hereby and thereby, including any audits, shall be
      paid by the Selling Parties and all costs and expenses incurred by the
      Purchasing Parties in connection with this Agreement, the Related Documents
      and
      the transactions contemplated hereby and thereby shall be paid by the Purchasing
      Parties, it being understood that the Purchasing Parties shall pay all of the
      filing fees for any filings pursuant to the HSR Act.

     

    (b)  In
      the
      event that this Agreement is terminated by Seller Parent pursuant to Section
      8.01(d) or (e), as a result of a breach by the Purchasing Parties of their
      obligation to effect the Closing (including consummating the Acquisition and
      paying the Closing Date Amount) and (ii) the Purchasing Parties failed to
      effect the Closing (including consummating the Acquisition and paying the
      Closing Date Amount) because of a failure to receive the proceeds of one or
      more
      of the debt financings contemplated by the Financing Commitments or any
      Alternative Financing, then the Purchasing Parties shall pay to Seller Parent,
      within five business days after the first demand by Seller Parent therefor
      an
      amount equal to $32,600,000 (the “Purchaser Termination Fee”), in
      immediately available funds by wire transfer to an account designated in writing
      by Seller Parent.

     

    (c)  In
      the
      event that this Agreement is terminated by Seller Parent pursuant to
      Section 8.01(f), Seller Parent shall pay Purchaser the Seller Parent
      Termination Fee, in immediately available funds on the date of such termination,
      by wire transfer to an account designated by Purchaser.  The
“Seller Parent Termination Fee” shall be $34,700,000.

     

    (d)  The
      parties acknowledge that the agreements contained in this Section 8.05 are
      an integral part of the transactions contemplated by this Agreement and that,
      without these agreements, neither party would have entered into this
      Agreement.  Accordingly, in the event Purchaser shall fail to pay the
      Purchaser Termination Fee when due or Seller Parent shall fail to pay the Seller
      Parent Termination Fee when due, and in order to obtain such payment, Seller
      Parent or Purchaser, as the case may be, commences a Proceeding which results
      in
      a judgment or similar award against the other party for such fee, then Purchaser
      or Seller Parent, as the case may be, shall pay to the other party such other
      party’s reasonable costs and expenses (including reasonable attorneys’ fees and
      expenses of enforcement) in connection with such suit.

     

    SECTION
      8.06.  Maximum
      Recovery.  Notwithstanding anything to the contrary in this
      Agreement, if the Purchasing Parties fail to consummate the Acquisition or
      are
      otherwise in breach of this Agreement, then the Liability of the Purchasing
      Parties and any of their respective former, current and future direct or
      indirect equity holders, controlling persons, stockholders, directors, officers,
      employees, agents, Affiliates, members, managers, general or limited partners
      or
      assignees with respect to any breach or alleged breach of any representation,
      warranty, covenant or agreement set forth in this Agreement and any claim,
      loss,
      cost, expenses, damage, Liability or obligation relating to this Agreement
      and
      the transactions contemplated hereby shall be limited to an amount equal to
      the
      amount of the Purchaser Termination Fee (it being understood that no person
      shall have any rights under the Equity Funding Letter (except as expressly
      provided therein)), whether at law or equity, in contract, in tort or otherwise
      (without prejudice to Seller Parent’s rights under the Limited Guarantee, dated
      as of the date hereof, by Purchaser Guarantor in favor of Seller Parent), except
      as expressly provided herein, including the right to specific performance in
      Section 10.09.  None of the Purchasing Parties or any of their
      respective former, current and future direct or indirect equity holders,
      controlling persons, stockholders, directors, officers, employees, agents,
      Affiliates, members, managers, general or limited partners or assignees shall
      have any further Liability or obligation relating to or arising out of the
      Acquisition, this Agreement, any Related Document or the other transactions
      contemplated hereby or thereby, except as expressly provided herein, including
      the right to specific performance in Section 10.09.  Notwithstanding the foregoing,
      following
      the Closing the indemnification provisions of Article IX shall govern the
      parties’ rights to monetary damages and the foregoing limitations on damages
      shall not apply.  Each party hereto hereby agrees and acknowledges
      that it specifically intends that the other parties hereto will have the right
      to specifically enforce this Agreement under the circumstances expressly
      provided in Section 10.09.

     

     

    
       

      
        
          
          

        

        
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    ARTICLE
      IX

     

    Survival
      and Indemnification

     

    SECTION
      9.01.  Survival
      of Representations, Warranties and Covenants.  The representations
      and warranties and the covenants the performance of which is specified to occur
      on or prior to the Closing (the “Pre-Closing Covenants”) of the parties
      contained in this Agreement, including the Company Disclosure Letter, shall
      survive the Closing and continue in full force and effect until 18 months
      after the Closing Date; provided, however, that the
      representations and warranties contained in Section 2.12 (Environmental
      Matters), Section 2.13 (Employees and Labor) and Section 2.14
      (Employee Benefits Plans) shall survive the Closing and continue in full force
      and effect until the date that is 30 months after the Closing Date and the
      representations and warranties contained in Sections 2.01 (Organization,
      Standing and Corporate Power), Section 2.02 (Subsidiaries),
      Section 2.03 (Capital Structure; Indebtedness), Section 2.04(a)
      (Authority), Section 2.24 (Brokers and Other Advisors), Section 3.05
      (Brokers and Other Advisors), Section 3.06 (The Shares), Section 4.01
      (Organization, Standing and Corporate Power), Section 4.02(a) (Authority),
      Section 4.07 (Brokers and Other Advisors) and Section 4.09 (No
      Distribution), shall survive the Closing indefinitely.  Any covenant
      or other agreement herein, any portion of the performance of which may, or
      is
      specified to, occur after the Closing, shall survive indefinitely or for such
      lesser period of time as may be specified therein or elsewhere in this
      Agreement.  Except as otherwise provided in this Article IX and
      in Article VI, no other representations, warranties or covenants of the
      Parties contained in this Agreement shall survive the Closing. 

     

    SECTION
      9.02.  Indemnification
      by Seller Parent and Seller.  (a)  From and after the
      Closing each of the Selling Parties shall, on a joint and several basis,

    indemnify,
      defend and hold harmless the Purchasing
      Parties, their respective Affiliates and their and their Affiliates’ respective
      Representatives (“Purchaser Indemnified Persons”)  

    
       

      
        
          
          

        

        
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    from
      and
      against any and all losses, Liabilities, damages, claims, judgments, awards,
      settlements, demands, offsets and expenses (including interest, penalties,
      court
      costs, arbitration costs and fees, reasonable witness fees and reasonable fees
      and expenses of attorneys, investigators, expert witnesses, accountants and
      other professionals) (“Losses”) which any of them may suffer, incur or
      sustain, arising out of, attributable to or resulting from:

     

                     
(i)
       any
      breach or inaccuracy of any of the representations and warranties contained
      in
      Article II and Article III of this Agreement or any failure of such
      representation or warranty to be true and correct (other than any representation
      or warranty contained in Section 2.15 (Tax Matters), which is the subject
      of the tax indemnification in Article VI), on the date of this Agreement or
      on and as of the Closing Date with the same effect as though made on such date
      or, in the case of any representation or warranty that speaks as of a specific
      date or time, on and as of such specific date or time;

     

                  (ii)  any
      breach by the Selling Parties or the Company of any of their covenants or other
      agreements contained in this Agreement; or

     

                   (iii)  the
      class-action litigation captioned
      Tina Soualian v. Barneys New York, Inc., Barney’s Inc. (case CV 07-558 JFW
      (FFMx)) pending in the United States District Court for the Central District
      of
      California or any other Proceeding arising under the Fair Credit Reporting
      Act,
      15 U.S.C. § 1681 et
      seq., and 15 U.S.C.
§
1681c(g) of the
      Fair and Accurate Credit Transactions Act as a result of any
acts or omissions or alleged acts or omissions occurring at or prior
      to
      the Closing.

     

                   (b)  Notwithstanding
      anything herein to the contrary, the Selling Parties’ indemnification obligation
      under Section 9.02(a) shall be subject to each of the following
      limitations:

     

                       (i)  there
      shall be no obligation to indemnify under Sections 9.02(a)(i) or (ii) for
      Losses arising out of, attributable to or resulting from any breach or
      inaccuracy of any representation or warranty contained in Article II or
      Article III of this Agreement, the failure of any such representation or
      warranty to be true and correct at and as of the times specified in
      Section 9.02(a)(i) or any breach by the Selling Parties or the Company of
      any of their Pre-Closing Covenants (other
      than any claim for willful
      breach, as to which such limitations shall not apply), unless the
      aggregate amount of all Losses for which the Selling Parties, but for this
      clause (i), would be liable under Sections 9.02(a)(i) and (ii) exceeds on a
      cumulative basis an amount equal to $8,250,000, and then only to the extent
      of
      such excess; provided, that the limitation on indemnification set forth
      in this Section 9.02(b)(i) shall not apply to any Losses arising out of,
      attributable to or resulting from any breach or inaccuracy or failure to be
      true
      and correct of the representations and warranties contained in
      Sections 2.01 (Organization, Standing and Corporate Power),
      Section 2.02 (Subsidiaries), Section 2.03 (Capital Structure;
      Indebtedness), Section 2.04(a) (Authority), Section 2.24 (Brokers and
      Other Advisors), Section 3.05 (Brokers and Other Advisors) and
      Section 3.06 (the Shares);

     

     

    
      
        
        

      

      
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      (ii)  the
      obligation of the Selling Parties to indemnify under Sections 9.02(a)(i) or
      (ii) for Losses arising out of, attributable to or resulting from any breach
      or
      inaccuracy of any representation or warranty contained in Article II or
      Article III of this Agreement, the failure of any such representation or
      warranty to be true and correct at and as of the times specified in
      Section 9.02(a)(i) or any breach by the Selling Parties or the Company of
      any of their Pre-Closing Covenants (other than any claim for willful
      breach, as to which such limitations shall not apply) shall be capped at
      an aggregate amount of $100,000,000; provided, that the limitation on
      indemnification set forth in this Section 9.02(b)(ii) shall not apply to
      any Losses arising out of or relating to breach or inaccuracies of the
      representations and warranties contained in Sections 2.01 (Organization,
      Standing and Corporate Power), Section 2.02 (Subsidiaries),
      Section 2.03 (Capital Structure; Indebtedness), Section 2.04(a)
      (Authority), Section 2.24 (Brokers and Other Advisors), Section 3.05
      (Brokers and Other Advisors) and Section 3.06 (The
      Shares);

                     
(iii)  the
      amount of indemnification in respect of any Loss for which the Selling Parties,
      but for this clause (iii), would be liable under Section 9.02(a) shall be
      reduced by the amount of any insurance proceeds, and any indemnity, contribution
      or other similar payment, paid to any Purchaser Indemnified Person by any third
      party with respect to such Loss, in each case net of any Losses incurred in
      collecting such proceeds or payments (provided, that this
      Section 9.02(b)(iii) shall not limit in any respect the right of any
      Purchaser Indemnified Person from pursuing indemnification from the Selling
      Parties hereunder or from recovering for any Loss not reduced to zero pursuant
      to this Section 9.02(b)(iii) and provided, further, that for
      the avoidance of doubt, any amounts for which a Purchaser Indemnified Person
      would ultimately be responsible, as a result of deductibles, self-insurance,
      indemnification of insurers, caps or similar items or arrangements, shall not
      reduce recovery of indemnification hereunder);

     

                   (iv)  for
      purposes of determining the existence of, and calculating the amount of any
      Losses arising out of, attributable to or resulting from any breach or
      inaccuracy of any representation or warranty contained in Article II or
      Article III of this Agreement, the failure of any such representation or
      warranty to be true and correct at and as of the times specified in
      Section 9.02(a)(i) or any breach by the Selling Parties or the Company of
      any of their Pre-Closing Covenants, the representations and warranties and
      Pre-Closing Covenants made by the Selling Parties or the Company, as applicable,
      shall be read without regard to any Material Adverse Effect or materiality
      qualifiers contained therein, except with respect to the representations and
      warranties made by the Selling Parties in Section 2.08(b); and

     

                   (v)  there
      shall be no obligation to indemnify under Section 9.02(a)(i) or (ii) for Losses
      arising out of, attributable to or resulting from any breach or inaccuracy
      of
      any representation or warranty contained in Article II or Article III of this
      Agreement, the failure of any such representation or warranty to be true and
      correct at and as of the times specified in Section 9.02(a)(i) or any breach
      by
      the Selling Parties or the Company of any of their Pre-Closing Covenants (other
      than any claim for willful breach, as to which such limitations shall not
      apply), for any individual items or series of related items where the Loss
      relating thereto is less than $200,000; provided that the Losses related
      to such items shall be excluded in determining whether the $8,250,000 deductible
      provided for in clause (i) of this Section 9.02(b) has been met.

     

    SECTION
      9.03.  Indemnification
      by the Purchasing Parties.  (a)  From and after the
      Closing, the Purchasing Parties shall indemnify, defend and hold harmless each
      Selling Party, their respective Affiliates and their respective Representatives
      (“Seller Indemnified Persons”) from and against all Losses which any of
      them may suffer, incur or sustain, arising out of, attributable to or resulting
      from: 

     

    
       

      
        
          
          

        

        
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      (i)  any
      breach or inaccuracy of any of the representations and warranties contained
      in
      Article IV of this Agreement or any failure of such representation or
      warranty to be true and correct on the date of this Agreement or on and as
      of
      the Closing Date with the same effect as though made on such date or, in the
      case of any representation or warranty that speaks as of a specified date or
      time, on and as of such specified date or time; or

     

                  
(ii)  any
      breach by the Purchasing Parties of any of their covenants or other agreements
      contained in this Agreement.

     

                      (b)  Notwithstanding
      anything herein to the contrary, the Purchasing Parties’ indemnification
      obligation under Section 9.03(a) shall be subject to each of the following
      limitations:

     

                    (i)   there
      shall be no obligation to indemnify under Sections 9.03(a)(i) or (ii) for
      Losses arising out of, attributable to or resulting from any breach or
      inaccuracy of any representation or warranty contained in Article IV of
      this Agreement, the failure of any such representation or warranty to be true
      and correct at and as of the times specified in Section 9.03(a)(i) or any
      breach by the Purchasing Parties of any of their Pre-Closing Covenants (other than any claim for willful
      breach, as to which such limitations shall not apply), unless the
      aggregate amount of all Losses for which the Purchasing Parties, but for this
      clause (i), would be liable under Section 9.03(a)(i) exceeds on a
      cumulative basis an amount equal to $8,250,000, and then only to the extent
      of
      such excess; provided, that the limitation on indemnification set forth
      in this Section 9.03(b)(i) shall not apply to Losses arising out of,
      attributable to or resulting from any  breach or inaccuracy or failure
      to be true and correct of the representations and warranties contained in
      Section 4.01(Organization, Standing and Corporate Power), 4.02(a)
      (Authority), 4.07 (Brokers and Other Advisors) and Section 4.09 (No
      Distribution);

     

                   (ii)
the
      obligation of the Purchasing Parties to indemnify under Sections 9.03(a)(i)
      or (ii) for any Losses arising out of, attributable to or resulting from any
      breach or inaccuracy of any representation or warranty contained in
      Article IV of this Agreement, the failure of any such representation or
      warranty to be true and correct at and as of the times specified in
      Section 9.03(a)(i) or any breach by the Purchasing Parties of any of their
      Pre-Closing Covenants (other than
      any claim for willful breach, as to which such limitations shall not apply)
      shall be capped at an aggregate amount of $100,000,000; provided,
      that the limitation on indemnification set forth in this
      Section 9.03(b)(ii) shall not apply to any Losses arising out of or
      relating to breaches or inaccuracies of the representations and warranties
      contained in Section 4.01(Organization, Standing and Corporate Power),
      4.02(a) (Authority), Section 4.07 (Brokers and Other Advisors) and
      Section 4.09 (No Distribution);

     

     

    
      
        
        

      

      
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      (iii)  the
      amount of indemnification in respect of any Loss for which the Purchasing
      Parties, but for this clause (iii), would be liable under Section 9.03(a)
      shall be reduced by the amount of any insurance proceeds, and any indemnity,
      contribution or other similar payment, paid to any Seller Indemnified Person
      by
      any third party with respect to such Loss, in each case net of any Losses
      incurred in collecting such proceeds or payments
      (provided, that this Section 9.03(b)(iii) shall not
      limit in any respect the right of any Seller Indemnified Person from pursuing
      indemnification from the Purchasing Parties hereunder or from recovering for
      any
      Loss not reduced to zero pursuant to this Section 9.03(b)(iii) and
provided, further, that for the avoidance of doubt, any amounts
      for which a Seller Indemnified Person would ultimately be responsible, as a
      result of deductibles, self-insurance, indemnification of insurers, caps or
      similar items or arrangements, shall not reduce recovery of indemnification
      hereunder);

     

                  
(iv)  for
      purposes of determining the existence of, and calculating the amount of any
      Losses arising out of, attributable to or resulting from any breach or
      inaccuracy of any representation or warranty contained in Article IV of
      this Agreement, the failure of any such representation or warranty to be true
      and correct at and as of the times specified in Section 9.03(a)(i) or any
      breach by the Purchasing Parties of any of their Pre-Closing Covenants, the
      representations and warranties and Pre-Closing Covenants made by the Purchasing
      Parties shall be read without regard to any materiality qualifiers contained
      therein; and

     

                     
      (v)  there
      shall be no obligation to indemnify under Section 9.03(a)(i) or (ii) for Losses
      arising out of, attributable to or resulting from any breach or inaccuracy
      of
      any representation or warranty contained in Article IV of this Agreement, the
      failure of any such representation or warranty to be true and correct at and
      as
      of the times specified in Section 9.03(a)(i) or any breach by the Purchasing
      Parties of any of their Pre-Closing Covenants (other than any claim for willful
      breach, as to which such limitations shall not apply), for any individual items
      or series of related items where the Loss relating thereto is less than
      $200,000; provided that the Losses related to such items shall be
      excluded in determining whether the $8,250,000 deductible provided for in clause
      (i) of this Section 9.03(b) has been met.

     

    SECTION
      9.04.  Notice
      of Claim; Defense.  (a)  If (i) any third party
      institutes or asserts any Proceeding that may give rise to Losses for which
      a
      person (an “Indemnifying Party”) may be liable for indemnification under
      this Article IX (a “Third Party Claim”) or (ii) any person
      entitled to indemnification under this Agreement (an “Indemnified Party”)
      shall have a claim to be indemnified by an Indemnifying Party that does not
      involve a Third Party Claim (a “Direct Claim”), then, in case of clause
      (i) or (ii), the Indemnified Party shall promptly send to the Indemnifying
      Party
      a written notice specifying the nature of such claim and, to the extent then
      known, the amount of all related Liabilities (a “Claim
      Notice”).  In the event an Indemnified Party fails to provide a
      timely and adequate Claim Notice, the Indemnifying Party shall be relieved
      of
      its indemnification obligations under this Article IX as a result of such
      failure, only to the extent that it is materially prejudiced by such
      failure.

     

    (b)  In
      the
      event of a Third Party Claim for which the Indemnifying Party has acknowledged
      in writing its obligation to indemnify the Indemnified Party hereunder against
      any Losses that may result from such Third Party Claim, the Indemnifying Party
      may elect to retain counsel of its choice, reasonably acceptable to the relevant
      Indemnified Parties, to represent such Indemnified Parties in connection with
      such Proceeding and shall pay the fees, charges and disbursements of such
      counsel and other defense costs.  The Indemnified Parties may
      participate, at their own expense and through legal counsel of their choice,
      in
      any such Proceeding; provided that (i) the Indemnifying Party shall
      have the right to defend such Third Party Claim by all appropriate proceedings
      and, so long as it diligently pursues such defense, shall have full control
      of
      such defense and such proceedings, and (ii) the Indemnified Parties and
      their counsel shall cooperate with the Indemnifying Party and its counsel in
      connection with such Proceeding.  The Indemnifying Party shall not,
      without the relevant Indemnified Parties’ prior written consent (which shall not
      be unreasonably withheld or delayed), (A) settle or compromise any such
      Proceeding unless the terms of such settlement contain a complete and
      unconditional release of the Indemnified Party of any Liability related to
      such
      Proceeding or (B) settle or compromise any such Proceeding in any manner that
      may adversely affect the Indemnified Party other than as a result of money
      damages or other money payments.

     

    
       

      
        
          
          

        

        
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    (c)  Notwithstanding
      the foregoing, if (i) the Indemnifying Party elects not to assume control
      of such defense, (ii) both the Indemnifying Party and any Indemnified Party
      are parties to or subjects of such Proceeding and conflicts of interests exist
      between the Indemnifying Party and such Indemnified Party, or (iii) the Proceeding is reasonably
      likely to
      establish a precedential custom or practice that is materially detrimental
      to
      the continuing business interests of the Indemnified Party, then the
      Indemnified Parties may retain counsel reasonably acceptable to the Indemnifying
      Party in connection with such Proceeding and assume control of the defense
      in
      connection with such Proceeding and the fees, charges and disbursements of
      no
      more than one such counsel per jurisdiction selected by the Indemnified Parties
      shall be reimbursed by the Indemnifying Party.  Under no circumstances
      will the Indemnifying Party have any Liability in connection with any settlement
      of any Proceeding that is entered into without its prior written consent (which
      shall not be unreasonably withheld or delayed).

     

    (d)  From
      and
      after the delivery of a Claim Notice, at the reasonable request of the
      Indemnifying Party, each Indemnified Party shall grant the Indemnifying Party
      and its counsel, experts and representatives reasonable access, during normal
      business hours, to the books, records, personnel and properties of the
      Indemnified Party to the extent reasonably related to the Claim Notice at no
      cost to the Indemnifying Party (other than for reasonable out-of-pocket expenses
      of the Indemnified Parties).

     

    (e)  If
      there
      is a Proceeding at any time that concerns the business or operations of the
      Company and its Subsidiaries before the Closing Date and a Claim Notice is
      not
      submitted with respect to such Proceeding, then, at the reasonable request
      of
      any of the Purchasing Parties, on the one hand, or any of the Selling Parties
      or
      the Company, on the other hand, Seller Parent and Seller shall make those
      persons who at the relevant times were employees of the Selling Parties and
      the
      Company and its Subsidiaries, or Purchaser shall make those persons who at
      the
      relevant times were Employees, as the case may be, available to cooperate with
      the requesting party and its Affiliates (including by making such employees
      available to provide information, discovery and testimony), to the extent
      reasonable and without interrupting the business or operations of the party
      receiving such request and of its Affiliates, in each case solely for purposes
      of permitting the preparation for, defense of and participation in such
      litigation or Proceeding by any of the requesting party, its Affiliates or
      their
      respective agents, directors, officers and employees; provided that the
      requesting party shall reimburse all reasonable out-of-pocket expenses incurred
      by the party receiving such request, its Affiliates and their respective agents,
      directors, officers and employees in complying with this undertaking and, since
      such payments, if any, will not be made pursuant to an indemnity claim, such
      payments shall not be taken into account for purposes of the limitations set
      forth in Section 9.02(b) or 9.03(b).

     

     

    
      
        
        

      

      
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    SECTION
      9.05.  Potential
      Contributors.  If an Indemnified Party receives any payment from
      an Indemnifying Party in respect of Losses and the Indemnified Party could
      have
      recovered all or a part of such Losses from a third party (including any
      insurer) based on the underlying claim or demand asserted against such
      Indemnifying Party, then such Indemnified Party shall transfer such of its
      rights to proceed against such third party as are necessary to permit such
      Indemnifying Party to recover from such third party the amount of such
      payment.

     

    SECTION
      9.06.  Mitigation.  Any
      Indemnified Party and Indemnifying Party shall cooperate with respect to
      mitigating and resolving any claims or liability with respect to which an
      Indemnifying Party is obligated to indemnify an Indemnified Party hereunder,
      including by using reasonable best efforts to mitigate or resolve any such
      claim
      or liability.

     

    SECTION
      9.07.  Survival
      of Indemnity.  Any matter as to which a Claim Notice has been
      submitted in the manner provided by Section 9.04 within the applicable
      survival period specified in Section 9.01 that is pending or unresolved at
      the end of such applicable survival period shall continue to be covered by
      this
      Article IX, notwithstanding the expiration of the applicable survival
      period specified in Section 9.01 until such matter is finally terminated or
      otherwise resolved under this Agreement or by an arbitral tribunal or court
      of
      competent jurisdiction and any amounts payable hereunder are finally determined
      and paid.

     

    SECTION
      9.08.  No
      Duplication; Exclusive Remedy.  (a)  From and after the
      Closing, any Liability for indemnification hereunder shall be determined without
      duplication of recovery by reason of the state of facts giving rise to such
      Liability constituting a breach of more than one representation, warranty,
      covenant or agreement.

     

    (b)  Except
      as
      provided in Section 1.03, Article VI or Article IX, from and
      after the Closing, the exclusive remedy of the Parties in connection with this
      Agreement and the transactions contemplated hereby shall be as provided in
      Article VI or this Article IX; provided, that this exclusive
      remedy for damages does not preclude a party from bringing an action
      (i) for fraud, (ii) pursuant to Section 1.03 or (iii) for
      specific performance, injunctive relief or any other equitable remedy to require
      any other party to perform its obligations under this Agreement.

     

    ARTICLE
      X

     

    General
      Provisions

     

    SECTION
      10.01.  Notices.  Except
      for notices that are specifically required by the terms of this Agreement to
      be
      delivered orally, all notices, requests, claims, demands, waivers and other
      communications hereunder shall be in writing and shall be deemed given if
      delivered personally, facsimiled (which is confirmed) or sent by overnight
      courier (providing proof of delivery) to the parties at the following addresses
      (or at such other address for a party as shall be specified by like
      notice):

     

     

    
       

      
        
          
          

        

        
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    if
      to the
      Selling Parties, to:

     

    Jones
      Apparel Group, Inc.

    1411
      Broadway

    New
      York,
      NY 10018

    Facsimile
      No.:  212-790-9988

    Attention:  Ira
      M. Dansky, Esq.

     

    with
      a
      copy to:

     

    Cravath,
      Swaine & Moore LLP

    Worldwide
      Plaza

    825
      Eighth Avenue

    New
      York,
      New York 10019

    Facsimile
      No.:  212-474-3700

    Attention:  Scott
      A. Barshay, Esq. and George F. Schoen, Esq.

     

    if
      to the
      Company, to:

    

    Barneys
      New York, Inc.

    575
      Fifth
      Avenue

    New
      York,
      NY 10017

    Facsimile
      No.:  (212) 450-8480

    Attention:
      Marc Perlowitz

     

    with
      a
      copy to:

     

    Jones
      Apparel Group, Inc.

    1411
      Broadway

    New
      York,
      NY 10018

    Facsimile
      No.:  212-790-9988

    Attention:  Ira
      M. Dansky, Esq.

     

    Cravath,
      Swaine & Moore LLP

    Worldwide
      Plaza

    825
      Eighth Avenue

    New
      York,
      New York 10019

    Facsimile
      No.:  212-474-3700

    Attention:  Scott
      A. Barshay, Esq. and George F. Schoen, Esq.

     

    if
      to the
      Purchasing Parties, to:

     

    Istithmar
      PJSC

    Emirates
      Tower, Level 4

    Sheikh
      Zayed Road

    Dubai,
      United Arab Emirates

    Facsimile
      No.:  +971 4 390 3818

    Attention:  John
      Bruno Randazzo

     

    with
      a
      copy to:

     

    Cleary
      Gottlieb Steen & Hamilton LLP

    One
      Liberty Plaza

    New
      York,
      NY 10006

    Facsimile
      No.:  212-225-3999

    Attention:  Daniel
      S. Sternberg, Esq. and David I. Gottlieb, Esq.

     

     

     

    
       

      
        
          
          

        

        
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    SECTION
      10.02.  Definitions.  For
      purposes of this Agreement:

     

    (a)  an
      “Affiliate” of any person means another person that directly or
      indirectly, through one or more intermediaries, controls, is controlled by,
      or
      is under common control with, such first person.

     

    (b)  “business
      day” means a day except a Saturday, a Sunday or other day on which the SEC
      or banks in the City of New York are authorized or required by Law to be
      closed.

     

    (c)  “Knowledge
      of the Selling Parties” of any person that is not an individual means, with
      respect to any matter in question, the actual knowledge of the persons listed
      on
      Section 10.02(c) of the Disclosure Schedule, after due inquiry of the
      employee of the Company or its Subsidiaries with primary responsibility for
      the
      matter in question.

     

    (d)  “Lien”
      means any lien, encumbrance, mortgage, deed of trust, security interest,
      conditional sale or other title retention agreement, pledge, hypothecation,
      charge or set-off, whether arising by agreement, statute or
      otherwise.

     

    (e)  “Permitted
      Liens” means (i) Liens for Taxes that are not yet due and payable, that
      may thereafter be paid without interest or penalty, that have been adequately
      reserved for in accordance with GAAP, or for amounts being contested in good
      faith, (ii) Liens that secure obligations that are reflected as Liabilities
      in the balance sheet dated February 3, 2007 included in the Audited Financial
      Statements or Liens the existence of which is referred to in the notes to the
      Financial Statements, (iii) mechanics’, carriers’, workmen’s, repairmen’s,
      warehousemen’s or other like Liens arising or incurred in the ordinary course of
      business relating to obligations that are not delinquent or that are being
      contested in good faith by the Company or any of its Subsidiaries, (iv) any
      reciprocal easement or operating agreement identified in any Company Lease
      together with other easements, covenants, rights-of-way and other encumbrances
      or restrictions and other imperfections in title that, individually or in the
      aggregate, would not reasonably be expected to impair the value or continued
      use
      and operation of the assets to which they relate as currently conducted,
      (v) zoning, building and other similar codes and regulations, (vi) Liens that have been placed
      by any developer, landlord or other third party on the fee interest or ground
      leasehold interest in any real property in which the Company or any of its
      Subsidiaries has a leasehold or subleasehold interest and any subordination
      agreements of record as of the date hereof entered into by the Company or any
      of
      its Subsidiaries relating to any Company Lease or entered into prior to the
      Closing Date in the ordinary course of business consistent with past practice
      to
      the extent required by the applicable Company Lease, or (vii) Liens
      that do not and could not be reasonably expected to materially interfere with
      the conduct of the Company’s business as currently conducted and do not and
      could not be reasonably expected to adversely affect or impair in any material
      respect the use or value of the Company’s assets as currently
      operated.

     

     

    
      
        
        

      

      
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    (f)  “person”
      means an individual, corporation, partnership, limited liability company, joint
      venture, joint stock company, Governmental Authority, association, trust,
      unincorporated organization or other entity.

     

    (g)  “Related
      Documents” means each other agreement, certificate or document executed and
      delivered in connection with this Agreement and the transactions contemplated
      hereby, including the Transition Services Agreement; provided that the
      term “Related Document” shall not include any agreement, certificate or document
      related to the Financing.

     

    (h)  A
      “Subsidiary” of any person means another person of which an amount of the
      voting securities, other voting rights or voting partnership interests of which
      is sufficient to elect at least a majority of its board of directors or other
      governing body (or, if there are no such voting interests, more than 50% of
      the
      equity interests of which) is owned directly or indirectly by such first
      person.

     

    SECTION
      10.03.  Interpretation.  When
      a reference is made in this Agreement to an Article, a Section, Subsection,
      Exhibit or Schedule, such reference shall be to an Article of, a Section or
      Subsection of, or an Exhibit or Schedule to, this Agreement unless otherwise
      indicated.  The table of contents and headings contained in this
      Agreement are for reference purposes only and shall not affect in any way the
      meaning or interpretation of this Agreement.  Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be
      deemed to be followed by the words “without limitation”.  The words
“hereof”, “hereto”, “hereby”, “herein” and “hereunder” and words of similar
      import when used in this Agreement shall refer to this Agreement as a whole
      and
      not to any particular provision of this Agreement.  The term “or” is
      not exclusive.  The word “extent” in the phrase “to the extent” shall
      mean the degree to which a subject or other thing extends, and such phrase
      shall
      not mean simply “if”.  All terms defined in this Agreement shall have
      the defined meanings when used in any certificate or other document made or
      delivered pursuant hereto unless otherwise defined therein.  The
      definitions contained in this Agreement are applicable to the singular as well
      as the plural forms of such terms and to the masculine as well as to the
      feminine and neuter genders of such term.  Any statute defined or
      referred to herein means such statute as from time to time amended, modified
      or
      supplemented, including by succession of comparable successor statutes and
      references to all attachments thereto and instruments incorporated
      therein.  References to a person are also to its permitted successors
      and assigns.

     

    SECTION
      10.04.  Counterparts.  This
      Agreement may be executed in one or more counterparts (including by electronic
      transmission), all of which shall be considered one and the same agreement
      and
      shall become effective when one or more counterparts have been signed by each
      of
      the parties and delivered to the other parties.

     

     

    
      
        
        

      

      
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    SECTION
      10.05.  Entire
      Agreement; No Third-Party Beneficiaries.  This Agreement, together
      with the Confidentiality Agreement (a) constitutes the entire agreement,
      and supersedes all prior agreements, understandings and negotiations, both
      written and oral, among the parties with respect to the subject matter of this
      Agreement and the Confidentiality Agreement and (b) is not intended to
      confer upon any person other than the parties hereto (and their respective
      successors and assigns) or thereto (and their respective successors and assigns)
      any rights or remedies.  Nothing in this Agreement shall constitute or
      be construed as an amendment or modification of any Company Plan or of any
      employee benefit plan or arrangement of Purchaser or any of its
      Affiliates.

     

    SECTION
      10.06.  Governing
      Law.  This Agreement and any dispute arising out of, relating to
      or in connection with this Agreement shall be governed by, and construed in
      accordance with, the internal laws of the State of Delaware applicable to
      agreements made and to be performed entirely within such State, without giving
      effect to any choice or conflict of law provision or rule that would cause
      the
      application of the laws of any other jurisdiction.

     

    SECTION
      10.07.  Assignment.  Neither
      this Agreement nor any of the rights, interests or obligations hereunder shall
      be assigned, in whole or in part, by operation of Law or otherwise by any of
      the
      parties without the written consent of the other parties; provided,
however, that (a) the Purchasing Parties may transfer any of their
      respective rights or obligations to any Affiliate of the Purchasing Parties
      and
      (b) the Purchasing Parties may make a collateral assignment of any proceeds
      receivable by them under this Agreement to any of their lenders, but no
      assignment pursuant to clauses (a) or (b) of this proviso shall relieve the
      Purchasing Parties of their obligations hereunder.  For the avoidance
      of doubt, no lender shall be entitled to make a claim under this Agreement
      or
      enforce any provision of this Agreement as a result of an assignment of proceeds
      pursuant to clause (b) of the foregoing sentence.  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
      assigns.  

     

    SECTION
      10.08.  Jurisdiction;
      Waiver of Jury Trial.  (a) The Purchasing Parties irrevocably
      submit, and the Selling Parties and the Company irrevocably submit, to the
      exclusive jurisdiction of the Chancery Court of the State of Delaware, for
      the
      purposes of any suit, action or other Proceeding arising out of this Agreement
      or any transaction contemplated hereby (and each agrees that no such action,
      suit or Proceeding relating to this Agreement shall be brought by it or any
      of
      its Affiliates except in such court).  The Purchasing Parties further
      agree, and the Selling Parties and the Company further agree, that service
      of
      any process, summons, notice or document by U.S. registered mail to such
      person’s respective address set forth above (as modified as set forth above)
      shall be effective service of process for any action, suit or Proceeding in
      Delaware with respect to any matters to which it has submitted to jurisdiction
      as set forth above in the immediately preceding sentence.  The
      Purchasing Parties irrevocably and unconditionally waive (and agree not to
      plead
      or claim), and the Selling Parties and the Company irrevocably and
      unconditionally waive (and agree not to plead or claim), any objection to the
      laying of venue of any action, suit or Proceeding arising out of this Agreement
      or the transactions contemplated hereby in the Chancery Court of the State
      of
      Delaware or that any such action, suit or Proceeding brought in any such court
      has been brought in an inconvenient forum.  This Section 10.08(a)
      shall not apply to any dispute under Section 1.03 that is required to be
      decided by the Accounting Firm.

     

     

    
      
        
        

      

      
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    (b)  EACH
      OF
      THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
      BY
      APPLICABLE LAW, ANY AND ALL RIGHTS IT MAY HAVE TO TRIAL BY JURY IN ANY CLAIM,
      SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
      OR
      RELATED TO THIS AGREEMENT.  EACH PARTY HERETO HEREBY
      (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
      HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE
      EVENT
      OF ANY CLAIM, ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER
      AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
      INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVER
      AND CERTIFICATIONS IN THIS SECTION 10.08.

     

    SECTION
      10.09.  Specific
      Performance.  The
      parties agree that irreparable damage would occur in the event that any of
      the
      provisions of this Agreement were not performed in accordance with their
      specific terms or were otherwise breached and therefore that, prior to the
      termination of this Agreement pursuant to Article VIII, (a) the
      Purchasing Parties shall be entitled to an injunction or injunctions to prevent
      breaches of and to enforce specifically the performance of the terms hereof,
      in
      addition to any other remedy they may have at law or in equity and (b) the
      Selling Parties shall be entitled to an injunction or injunctions to prevent
      breaches of and to enforce specifically the Purchasing Parties’ performance of
      their obligations (x) under Sections 5.04, 5.06 and 5.13 hereof and
      (y) hereunder to consummate the Acquisition if, in the case of this
      clause (y), the conditions set forth in Sections 7.01 and 7.02
      hereof shall be satisfied or waived by the Purchasing Parties
      (other
      than those conditions that by their nature are to be satisfied at the Closing
      Date, which shall be capable of being satisfied on the Closing Date) and the
      Financing Commitments or any Alternative Financing are available to be
      drawn down by the
      Purchasing Parties pursuant to the terms of the applicable agreements but are
      not so drawn down solely as a result of the Purchasing Parties refusing to
      do so
      in breach of this Agreement, in each case in addition to any other remedy they
      may have at law or in equity.  Notwithstanding the first
      sentence of this Section 10.09, the parties acknowledge that the Selling
      Parties shall not have the right to specifically enforce the provisions of
      this
      Agreement except to the extent set forth in clause (b) of the preceding
      sentence.  For the
      avoidance of doubt, whether or not a party is entitled to seek injunctions
      or
      specific performance pursuant to the provisions of the preceding sentence or
      otherwise, in no event will the Purchasing Parties be entitled to monetary
      damages in excess of an amount equal to the Purchaser Termination Fee, nor
      will
      the Selling Parties be entitled to monetary damages in excess of an amount
      equal
      to the Purchaser Termination Fee for losses or damages arising from or in
      connection with breaches of this Agreement by the Selling Parties, the Company,
      the Purchasing Parties or their respective Representatives and Affiliates,
      or
      arising from any other claim or cause of action under this Agreement and in
      no
      event shall the Purchasing Parties seek to recover any money damages in excess
      of such applicable amount from the Selling Parties, the Company or their
      Representatives and Affiliates in connection herewith or therewith, nor shall
      the Selling Parties or the Company seek to recover any money damages in excess
      of such applicable amount from the Purchasing Parties or their respective
      Representatives and Affiliates in connection herewith or
      therewith.  Notwithstanding the foregoing, following the Closing the
      indemnification provisions of Article IX shall govern the parties’ rights
      to monetary damages and Section 8.06 and the foregoing limitations on damages
      shall not apply.

     

     

    
      
        
        

      

      
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    SECTION
      10.10.  Obligations
      of Seller Parent.  (a)  Seller Parent shall take any and
      all actions necessary to cause its Subsidiaries (including the Seller and,
      prior
      to the Closing, the Company and its Subsidiaries) to perform any action or
      refrain from taking any action required of such Subsidiaries under this
      Agreement or any Related Document.

     

    (b)  The
      parties hereto agree that for all purposes under this Agreement and any Related
      Document, any action required to be taken hereunder or thereunder by Seller
      may
      be taken by the Seller Parent and any action (including any waiver or consent
      to
      amendments) or omissions to act hereunder or thereunder by Seller Parent shall
      be binding upon and enforceable against the Seller.  In furtherance of
      this Section 10.10(b), the Purchasing Parties shall be entitled to rely
      exclusively upon any communications or writings given or executed by Seller
      Parent and shall not be liable in any manner whatsoever for any action taken
      or
      not taken in reliance upon the actions taken or not taken or communications
      given or executed by Seller Parent.  Any information, document,
      notice, funds or other item required to be delivered to any Subsidiary of Seller
      Parent (including Seller, the Company or its Subsidiaries) hereunder or under
      any Related Document, may be delivered to Seller Parent and such delivery to
      Seller Parent shall constitute delivery to such Affiliate for all purposes
      hereunder and thereunder.

     

    SECTION
      10.11.  Severability.  If
      any term or other provision of this Agreement is invalid, illegal or incapable
      of being enforced by any rule of law or public policy, all other conditions
      and
      provisions of this Agreement shall nevertheless remain in full force and effect
      so long as the economic or legal substance of the transactions contemplated
      hereby is not affected in any manner materially adverse to any party
      hereto.  Upon such determination that any term or other provision is
      invalid, illegal or incapable of being enforced, the parties hereto shall
      negotiate in good faith to modify this Agreement so as to effect the original
      intent of the parties as closely as possible to the fullest extent permitted
      by
      applicable Law in an acceptable manner to the end that the transactions
      contemplated hereby are fulfilled to the extent possible.\

     

    
       

      
        
          
          

        

        
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    IN
      WITNESS WHEREOF, the Selling Parties, the Company and the Purchasing Parties
      have caused this Agreement to be signed by their respective officers thereunto
      duly authorized, all as of the date first written above.

     

    
      	 	JONES
              APPAREL GROUP, INC.,	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
Wesley
              R. Card 	 
	 	 	Wesley
              R. Card	 
	 	 	President
              and Chief Executive
              Officer	 
	 	 	 	 

    

     

    
      
        	 	JONES
                APPAREL GROUP  HOLDINGS, INC.,	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/
Ira
                M. Dansky 	 
	 	 	Ira
                M. Dansky	 
	 	 	President 	 

      

       

      
        
          
            	 	BARNEYS
                    NEW YORK, INC.,	 
	 	 	 	 
	
                     

                  	
                    By:
                      

                  	/s/
Howard
                    Socol 	 
	 	 	Howard
                    Socol	 
	 	 	President and
                    Chief Executive Officer	 

          

        

      

       

      
        
          
            	 	ISTITHMAR
                    BENTLEY HOLDING CO.,	 
	 	 	 	 
	
                     

                  	
                    By:
                      

                  	/s/
David
                    Jackson 	 
	 	 	David
                    Jackson	 
	 	 	Director	 

          

        

      

    

     

    
       

      
        
          	 	ISTITHMAR
                  BENTLEY ACQUISITION CO.,	 
	 	 	 	 
	
                   

                	
                  By:
                    

                	/s/
David
                  Jackson 	 
	 	 	David
                  Jackson	 
	 	 	Director	 

        

      

    

    

    70ex101.htm

    AMENDMENT

     

     

    This
      Amendment (the "Amendment") to the Agreement dated April 12, 2007 by and between
      VALENTIS, INC. ("Licensor") and ACACIA PATENT ACQUISITION CORPORATION ("APAC")
      is made between APAC and Urigen Pharmaceuticals, Inc., ("Urigen"). Urigen and
      APAC may collectively be referred to herein as the "Parties." This Amendment
      is
      effective as of date on which the last Party executes this Amendment below
      (the
      "Amendment Date"). Capitalized terms used herein shall have the same meaning
      as
      those terms defined in the Agreement.

     

    BACKGROUND

     

    WHEREAS,
      the Licensor and APAC entered into the Agreement effective as of April 12,
      2007
      regarding the granting of an exclusive license of the Patents from Licensor
      to
      APAC;

     

    WHEREAS,
      Urigen was formerly known as (f/k/a) Valentis, Inc.; and

     

        WHEREAS,
      the
      Parties desire to mutually amend the Agreement to set forth revised terms.

     

    NOW,
      THEREFORE, in consideration of one dollar ($1.00) in hand paid, the
      promises and mutual covenants contained herein, and for other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged
      by
      the Parties, Urigen and APAC agree as follows:

     

    
      	
              1.  

            	
              Section
                6.5 to the Agreement is hereby deleted in its
                entirety.

            

    

     

    
      	
              2.  

            	
              Except
                as expressly set forth herein, no other terms and conditions of the
                Agreement are amended or modified and the Agreement remains fully
                binding
                and enforceable.

            

    

     

    
      	
                        
                3. 

            	
              This
                Amendment may be executed in several counterparts, each of which
                shall
                constitute an original, but all of which together shall constitute
                one and
                the same instrument. A faxed copy of a signature page shall be considered
                an original for purposes of this Amendment. This Amendment, together
                with
                the Agreement, constitutes the entire understanding of the parties
                with
                respect to its subject matter and may not be modified or amended,
                except
                in writing by the Parties.

            

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the Parties have executed this Amendment as of
      the Amendment Date.

     

     

     

    
      	
              Urigen
                Pharmaceuticals, Inc.

            	 	 	 ACACIA
              PATENT ACQUISITION	 
	 	 	 	 	 
	 	 	 	 	 
	
              /s/
                Terry
                Nida

            	 	 	
              /s/
                Dooyong Lee
                

            	 
	
              Print
                Name: Terry
                Nida

            	 	 	
              Print
                Name:
                Dooyong Lee 

            	 
	
              Title:
                Chief
                Operating Officer 

            	 	 	
              
                Title:
                  Executive Vice President

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