STOCK PURCHASE AGREEMENT

Exhibit 2.1

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

dated as of

January 22, 2007

among

FRUIT OF THE LOOM, INC. ,

FL ACQUISITION CORP. ,

LEE BELL, INC. ,

T.I. VENTURE GROUP, INC.

and

V.F. CORPORATION

relating to the purchase and sale

of

the Companies specified herein

TABLE OF CONTENTS

		Page
ARTICLE 1
Definitions
Section 1.01. Definitions			1
Section 1.02. Other Definitional and Interpretative Provisions			9
ARTICLE 2
Purchase and Sale
Section 2.01. Purchase and Sale; Allocation of Purchase Price			10
Section 2.02. Closing			11
Section 2.03. Initial Purchase Price Adjustment			11
Section 2.04. Closing Balance Sheet			12
Section 2.05. Adjustment of Purchase Price			13
ARTICLE 3
Representations and Warranties of the Sellers
Section 3.01. Corporate Existence and Power			14
Section 3.02. Corporate Authorization			14
Section 3.03. Governmental Authorization			15
Section 3.04. Noncontravention			15
Section 3.05. Capitalization			15
Section 3.06. Ownership of Shares			16
Section 3.07. Subsidiaries			16
Section 3.08. Financial Statements			16
Section 3.09. Absence of Certain Changes			16
Section 3.10. No Undisclosed Material Liabilities			18
Section 3.11. Intercompany Accounts			18
Section 3.12. Material Contracts			19
Section 3.13. Litigation			20
Section 3.14. Compliance with Applicable Laws			20
Section 3.15. Properties			20
Section 3.16. Intellectual Property			21
Section 3.17. Insurance Coverage			22
Section 3.18. Bankers’ Fees			23
Section 3.19. Employees			23
Section 3.20. Employee Benefit Plans and Labor Matters			23
Section 3.21. Environmental Matters			24
Section 3.22. Sufficiency of Assets			25
Section 3.23. Notes and Accounts Receivable			26

		Page
Section 3.24. Inventory			26
ARTICLE 4
Representations and Warranties of Buyer
Section 4.01. Corporate Existence and Power			27
Section 4.02. Corporate Authorization			27
Section 4.03. Governmental Authorization			27
Section 4.04. Noncontravention			27
Section 4.05. Financing			28
Section 4.06. Purchase for Investment			28
Section 4.07. Litigation			28
Section 4.08. Bankers’ Fees			28
Section 4.09. Inspections; No Other Representations			28
ARTICLE 5
Covenants of the Sellers
Section 5.01. Conduct of the Company			29
Section 5.02. Access to Information			30
Section 5.03. Notices of Certain Events			31
Section 5.04. Resignations			31
Section 5.05. Transfer of Certain Excluded Assets			31
Section 5.06. Intercompany Accounts			32
Section 5.07. Noncompete; Nonsolicitation			32
Section 5.08. Exclusive Dealings			33
ARTICLE 6
Covenants of Buyer
Section 6.01. Access			34
Section 6.02. Waiver of Conflicts Regarding Representation; Nonassertion of Attorney-Client Privilege			34
Section 6.03. Litigation; Insurance Claim			35
Section 6.04. Guaranties			35
Section 6.05. Formalities Required Under French Law			35
ARTICLE 7
Covenants of Buyer and the Sellers
Section 7.01. Best Efforts; Further Assurances			36
Section 7.02. Certain Filings			37
Section 7.03. Public Announcements			37
Section 7.04. Trademarks and Tradenames; VF Outlet Relationship			37
Section 7.05. Confidentiality			39

		Page
ARTICLE 8
Tax Matters
Section 8.01. Definitions			39
Section 8.02. Tax Representations			41
Section 8.03. Tax Covenants			44
Section 8.04. Tax Sharing			46
Section 8.05. Cooperation on Tax Matters			46
Section 8.06. Indemnification by the Sellers			47
Section 8.07. Purchase Price Adjustment			49
ARTICLE 9
Employee Benefits
Section 9.01. References			49
Section 9.02. U.S. Employees			49
Section 9.03. International Employees			51
Section 9.04. Service Credit			52
Section 9.05. Welfare Benefit Plans			52
Section 9.06. Accrued Vacation Days			52
Section 9.07. Workers’ Compensation			52
Section 9.08. No Employee Rights			52
ARTICLE 10
Conditions to Closing
Section 10.01. Conditions to Obligations of Buyer and the Sellers			53
Section 10.02. Conditions to Obligation of Buyer			53
Section 10.03. Conditions to Obligation of the Sellers			54
ARTICLE 11
Survival; Indemnification
Section 11.01. Survival			55
Section 11.02. Indemnification			55
Section 11.03. Procedures			57
Section 11.04. Calculation of Damages			61
Section 11.05. Assignment of Claims			61
Section 11.06. Exclusivity			61
ARTICLE 12
Termination
Section 12.01. Grounds for Termination			62
Section 12.02. Effect of Termination			62

		Page
ARTICLE 13
Miscellaneous
Section 13.01. Notices			62
Section 13.02. Amendments and Waivers			63
Section 13.03. Expenses			64
Section 13.04. Successors and Assigns			64
Section 13.05. Governing Law			64
Section 13.06. Jurisdiction; Service of Process			64
Section 13.07. WAIVER OF JURY TRIAL			65
Section 13.08. Counterparts; Effectiveness; Third Party Beneficiaries			65
Section 13.09. Entire Agreement			65
Section 13.10. Severability			66
Section 13.11. Disclosure Schedules			66
Section 13.12. Specific Performance			66
Section 13.13. Parent Guarantee			66

TABLE OF EXHIBITS AND SECTIONS
OF SELLER DISCLOSURE SCHEDULE

Exhibit A		Outline of Terms of Transition Services Agreement
Exhibit B		Outline of Terms for VF Outlet, Inc. Relationship
Exhibit C		Outline of Terms of Employee Secondment Agreement
Section 1.01(a)		Active Business Employees
Section 1.01(b)		Balance Sheet as of 9/30/2006
Section 1.01(c)		Disclosed Litigation Matters
Section 1.01(d)		Knowledge Definition
Section 2.01(b)		Allocation
Section 3.04		Non Contravention
Section 3.05(a)		Capitalization/Ownership of Shares
Section 3.07(a)		Subsidiaries
Section 3.07(b)		Obligations Relating to Subsidiary Securities
Section 3.08		Financial Statements
Section 3.09(b)(iv)		Capital Contribution
Section 3.09(b)(vii)		Employment-related Agreements with Directors, Officers and Employees
Section 3.09(b)(viii)		Capital Expenditures Budget
Section 3.10(b)		Disclosed Material Liabilities
Section 3.12(a)(i)		Lease Agreements
Section 3.12(a)(v)		Partnerships
Section 3.12(a)(vii)		Agreements Relating to Indebtedness
Section 3.12(a)(viii)		Other Material Agreements That Limit Freedom of Business
Section 3.12(a)(ix)		Agreements with Directors and Officers
Section 3.12(a)(x)		Other Material Agreements
Section 3.16(a)		Material Registrations and Applications for Registration Included in the Owned Intellectual Property Rights
Section 3.16(b)		Certain Material Agreements Relating to Intellectual Property

Section 3.17(a)		Insurance Coverage
Section 3.19		Employees
Section 3.20(a)		Employee Plans
Section 3.21		Environmental Matters
Section 5.01		Conduct of Company
Section 5.01(g)		Employee Compensation; Retention Bonuses
Section 5.05		Transfer of Certain Excluded Assets
Section 6.03		Insurance Claims
Section 6.04		Guaranties
Section 7.04(a)(i)		Excluded Marks
Section 8.02		Tax Representations
Section 9.02(c)		Severance for Redundant Employees

STOCK PURCHASE AGREEMENT

     AGREEMENT (as the same may be amended from time to time in accordance with its terms, this “ Agreement ”) dated as of January 22, 2007, among Fruit of the Loom, Inc., a Delaware corporation (“ Parent ”), FL Acquisition Corp., a Delaware corporation (“ Buyer ”), Lee Bell, Inc., a Delaware corporation (“ Lee Bell ”), T.I. Venture Group, Inc., a Delaware corporation (“ T.I. Venture ”) and V.F. Corporation, a Pennsylvania corporation (“ VF Parent ” and together with Lee Bell and T.I. Venture, the “ Sellers ” and each, a “ Seller ”).

WITNESSETH:

     WHEREAS, the Sellers own all of the Company Securities; and

     WHEREAS, the Sellers desire to sell the Company Shares (as defined below) to Buyer, and Buyer desires to purchase the Company Shares from the Sellers, upon the terms and subject to the conditions set forth below.

     ACCORDINGLY, the parties hereto agree as follows:

ARTICLE 1
Definitions

     Section 1.01. Definitions . (a) As used in this Agreement, the following terms have the following meanings:

     “ Accounting Policies ” means the accounting policies, principles, practices and methodologies used in the preparation of the Balance Sheet. The Accounting Policies conform with GAAP in all respects.

     “ Active Business Employee ” means any Active U.S. Business Employee or Active International Business Employee.

     “ Active International Business Employee ” means (i) any individual who is, as of the Closing Date, an employee of any Company or any Subsidiary and is employed outside the United States and (ii) any individual identified on Section 1.01(a) of the Seller Disclosure Schedule who is, as of the Closing Date, an employee of the Sellers or any of their Affiliates and is employed outside the United States.

     “ Active U.S. Business Employee ” means (i) any individual who is, as of the Closing Date, an employee of any Company or any Subsidiary and is employed within the United States and (ii) any individual identified on Section 1.01(a) of the Seller Disclosure Schedule who is, as of the Closing Date,

an employee of the Sellers or any of their Affiliates and is employed within the United States.

     “ Advances ” means all receivables outstanding and owed by VF France Investments SNC to Lee Bell under the Advance Agreement dated February 3, 1992 between those parties, as amended on November 8, 1993 and on January 13, 1997.

     “ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person; provided that (i) none of the Companies or Subsidiaries shall be considered an Affiliate of any of the Sellers or their Affiliates (other than the Companies and the Subsidiaries) and (ii) none of the Sellers or their Affiliates (other than the Companies and the Subsidiaries) shall be considered an Affiliate of any Company or Subsidiary. For purposes of this definition, the term “ control ” (including, with correlative meanings, the terms “ controlling ”, “ controlled by ” and “ under common control with ”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

     “ Antitrust Laws ” means the HSR Act, the EC Merger Regulations and other similar Applicable Laws restricting, prohibiting or relating to anti-monopoly, anti-competition and other similar matters.

     “ Applicable Law ” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise.

     “ Balance Sheet ” means the unaudited combined balance sheet of the Companies and the Subsidiaries as of September 30, 2006 and attached as part of Section 1.01(b) of the Seller Disclosure Schedule.

     “ Balance Sheet Date ” means September 30, 2006.

     “ Base Working Capital ” means $190,891,000.

     “ Business ” means the development, manufacturing, marketing, licensing, advertising and sales of women’s undergarments and intimate apparel by the Companies and their Subsidiaries.

     “ Business Day ” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.

     “ Business Employee ” means any current or former employee of any Company or any Subsidiary.

     “ Buyer Material Adverse Effect ” means a material adverse effect on (a) the business, assets, condition (financial or otherwise) or operations of Buyer and its subsidiaries, taken as whole, except any such effect resulting from or arising in connection with (i) changes, circumstances or conditions generally affecting the industry in which Buyer and its subsidiaries participate which do not materially disproportionately affect such parties, (ii) changes generally affecting United States or global economic conditions, financial or credit markets, (iii) changes resulting from a change in Applicable Law or GAAP, (iv) changes resulting from any act of war or terrorism (or any escalation thereof) or (v) changes, facts, circumstances or conditions resulting from the announcement or existence of this Agreement or any transaction contemplated hereby, or (b) the ability of such parties to consummate on a timely basis the transactions contemplated hereby.

     “ Closing Date ” means the date of the Closing.

     “ Closing Working Capital ” means, as of the close of business on the date immediately preceding the Closing Date and all as determined in accordance with the Accounting Policies, the excess of combined current assets over combined current liabilities of the Companies and the Subsidiaries on that date, provided that such calculation (A) shall exclude (i) any intercompany accounts and any balances owed between any Company or any Subsidiary, on the one hand, and any Seller or any of its Affiliates, on the other hand, (ii) any Income Tax assets and liabilities (including deferred assets and liabilities), (iii) any effect of any transfer of the Excluded Leases, the Excluded Marks and the Excluded Shares and (iv) any gain or loss relating to or resulting from any hedging agreement, (B) shall only include, with respect to each of B.L. Intimate Apparel Canada Inc. and VF-Diltex S. de R.L. de C.V., the portion of such combined current assets over combined current liabilities that is proportionate to the Companies’ and the Subsidiaries’ ownership share in such company and (C) shall include an additional $2,250,000 in current assets.

     “ Commercially Reasonable Manner ” means a reasonable and cost-effective method available under the circumstances determined (x) from the perspective of a reasonable business person (acting without regard to the availability of indemnification under this Agreement) to meet the requirements of any applicable Environmental Law or to meet the demands of any applicable Governmental Authority or as required by any judicial or administrative resolution, order or settlement agreement of a Third Party Claim, it being understood that such Commercially Reasonable Manner may include, where

appropriate, the use of engineering or institutional controls and a deed or other restriction, so long as such control or restriction would be acceptable to a reasonable business person (acting without regard to the availability of indemnification under this Agreement), does not materially limit the use of the relevant property for industrial or commercial activities and so long as such control or restriction is acceptable to the Governmental Authority with primary jurisdiction over the matter.

     “ Companies ” means VFG Dessous Vertriebs GmbH, a German company, VF France Investments, SNC, a French company, and Vanity Fair Ventures, Inc., a Delaware corporation (each, a “ Company ”).

     “ Company Shares ” means all of the outstanding shares of capital stock of the Companies set forth next to the names of the Companies on Section 3.05(a) of the Seller Disclosure Schedule.

     “ Disclosed Litigation Matters ” means the items described on Section 1.01(c) of the Seller Disclosure Schedule.

     “ Employee Plan ” means the agreements, plans, arrangements or policies as to which the Companies or the Subsidiaries will have any actual or contingent duty, obligation or liability following the Closing, as specified on Section 3.20(a) of the Seller Disclosure Schedule, consisting (in each case, to the extent the Companies or Subsidiaries will have any such post-Closing duty, obligation, or liability thereunder) of: (1) each “employee benefit plan”, as defined in Section 3(3) of ERISA covering any Business Employee or any dependent of any Business Employee; (2) each employment, severance or similar agreement, plan, arrangement or policy covering any Business Employee; and (3) each other plan or arrangement providing for compensation, bonuses, profit-sharing, or other forms of incentive or deferred compensation, vacation benefits, insurance (including any self-insured arrangements), health or medical benefits, employee assistance program, disability or sick leave benefits, workers’ compensation, supplemental unemployment benefits, severance benefits and post-employment or retirement benefits (including compensation, pension, health, medical or life insurance benefits), in each case covering any Business Employee or any dependent of any Business Employee.

     “ Environmental Investigation ” means any investigation or sampling of the soil, surface water or groundwater or any disclosure, report or communication to any Governmental Authority or third party that relates to any actual or potential contamination of the soil, surface water or groundwater at, on, under or within any real property.

     “ Environmental Laws ” means any Applicable Law that has as its principal purpose the protection of the environment or the regulation of hazardous or toxic substances or wastes.

     “ ERISA ” means the Employee Retirement Income Security Act of 1974.

     “ ERISA Affiliate ” of any entity means any other entity which, together with such entity, would be treated as a single employer under Section 414 of the Code.

     “ EC Merger Regulation ” means the EC Merger Regulation (Regulation 139 of 2004).

     “ Excluded Leases ” means the leases or subleases for those properties listed on Section 5.05 of the Seller Disclosure Schedule.

     “ Excluded Marks ” means the VF Trademarks and Tradenames listed on Section 7.04(a)(i) of the Seller Disclosure Schedule that are owned by any Company or Subsidiary.

     “ Excluded Shares ” means all of the outstanding shares of capital stock of the entities set forth on Section 5.05 of the Seller Disclosure Schedule.

     “ French Company ” means VF France Investments, SNC, a French company.

     “ GAAP ” means generally accepted accounting principles in the United States.

     “ Governmental Authority ” means any transnational, domestic or foreign federal, state or local, governmental authority, department, court, agency or official, including any political subdivision thereof.

     “ Hazardous Substances ” means any pollutant, contaminant or any toxic, radioactive or otherwise hazardous substance, as such terms are defined in, or identified pursuant to, any Environmental Laws.

     “ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

     “ Identified Environmental Matters ” shall mean (i) any contamination of the soil, surface water or groundwater at, on or under the Monroeville, Alabama or Jackson, Alabama real property owned by the Companies and the Subsidiaries, which contamination was caused by activities at, on or within such real property on or prior to the Closing, and (ii) the absence of required permits as described on Section 3.21 of the Seller Disclosure Schedule together with actions required to obtain any such permits (“ Permit Claims ”).

     “ Intellectual Property Right ” means any trademark, service mark, trade name, Internet domain name, mask work, invention, patent, trade secret, copyright, know-how (including any registrations or applications for registration

of any of the foregoing) or any other similar type of proprietary intellectual property right.

     “ knowledge of the Sellers ”, “ Sellers’ knowledge ” or any other similar qualification in this Agreement with respect to knowledge or awareness of, or receipt of notice by, any Seller or any Company or Subsidiary, means the actual knowledge of the individuals listed on Section 1.01(d) of the Seller Disclosure Schedule.

     “ Licensed Intellectual Property Rights ” means all Intellectual Property Rights owned by a third party and licensed or sublicensed to any Company or Subsidiary and used in connection with the Business.

     “ Lien ” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or encumbrance in respect of such property or asset.

     “ Material Adverse Effect ” means a material adverse effect on (a) the business, assets, condition (financial or otherwise) or operations of the Companies and the Subsidiaries, taken as whole, except any such effect resulting from or arising in connection with (i) changes, circumstances or conditions generally affecting the industry in which the Companies and the Subsidiaries participate which do not materially disproportionately affect such parties, (ii) changes generally affecting United States or global economic conditions, financial or credit markets, (iii) changes resulting from a change in Applicable Law or GAAP, (iv) changes resulting from any act of war or terrorism (or any escalation thereof) or (v) changes, facts, circumstances or conditions resulting from the announcement or existence of this Agreement or any transaction contemplated hereby, or (b) the ability of such parties to consummate on a timely basis the transactions contemplated hereby.

     “ Owned Intellectual Property Rights ” means all Intellectual Property Rights owned by any Company or Subsidiary.

     “ Person ” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.

     “ Seller Disclosure Schedule ” means the disclosure schedule delivered to Buyer by the Sellers on the date hereof.

     “ Subsidiary ” means any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time, directly or indirectly, owned by any of the Companies.

     “ Transaction Documents ” means this Agreement, the Transaction Services Agreement, the Employee Secondment Agreement and all other agreements and documents executed pursuant to this Agreement.

     “ Transition Services Agreement ” means the Transition Services Agreement to be entered into at Closing and incorporating the terms set forth on Exhibit A to this Agreement.

     “ Working Capital ” means, as of a specified date and as determined in accordance with the Accounting Policies, the excess of combined current assets over combined current liabilities of the Companies and the Subsidiaries on that date, provided that such calculation (A) shall exclude (i) any intercompany accounts and any balances owed between any Company or any Subsidiary, on the one hand, and any Seller or any of its Affiliates, on the other hand, (ii) any Income Tax assets and liabilities (including deferred assets and liabilities), (iii) any effect of any transfer of the Excluded Leases, the Excluded Marks and the Excluded Shares and (iv) any gain or loss relating to or resulting from any hedging agreement, and (B) shall only include, with respect to each of B.L. Intimate Apparel Canada Inc. and VF-Diltex S. de R.L. de C.V., the portion of such combined current assets over combined current liabilities that is proportionate to the Companies’ and the Subsidiaries’ ownership share in such joint venture.

     (b) Each of the following terms is defined in the Section set forth opposite such term:

Term		Section
Accountants			2.04
Acquisition Proposal			5.08
Agreement		Preamble
Allocation Statement			2.01
Antitrust Order			7.01
Buyer		Preamble
Buyer Excluded Representations			11.01
Buyer Warranty Breach			11.02
Buyer’s 125 Plan			9.02
Buyer 401(k) Plan			9.02
Buyer Indemnified Parties			11.02
Capex Budget			3.09
CERCLA			3.21
Claim			11.03
Closing			2.02
Closing Balance Sheet			2.04
Code			8.01
Company Securities			3.05

Term		Section
Current Representation			6.02
Damages			11.02
Designated Person			6.02
Employee Secondment Agreement			9.02
End Date			12.01
Environmental Matters			3.21
Final Adjustment Amount			2.05
Final Working Capital			2.05
French Statutory Liabilities			11.02
Guaranties			6.04
Identified Environmental Cap			11.02
Income Tax			8.01
Indemnified Party			11.03
Indemnifying Party			11.03
Independent Accountants			2.01
Initial Adjustment Amount			2.03
Lee Bell		Preamble
Loss			8.06
Multiemployer Plan			3.20
NFA Letter			11.03
Noncompete Period			5.07
Parent		Preamble
Permit Claims			1.01
Permitted Liens			3.15
Post-Closing Representation			6.02
Post-Closing Tax Period			8.01
Potential Contributor			11.05
Pre-Closing Tax Period			8.01
Previous Month’s Balance Sheet			2.03
process agent			13.06
Purchase Price			2.01
Remedial Action			11.03
Return			8.01
Section 338(h)(10) Election			8.03
Seller		Preamble
Seller Excluded Representations			11.01
Seller Group			8.01
Seller’s 125 Plan			9.02
Seller 401(k) Plan			9.02
Separate Return			8.03
Stand-Alone Disposition Order			7.01
Subsidiary Securities			3.07
T.I. Venture		Preamble
Tax			8.01

Term		Section
Tax Asset			8.01
Taxing Authority			8.01
Tax Benefit			8.06
Tax Claim			8.06
Third Party Claim			11.03
U.S. Employee Transition Date			9.02
Vanity Fair Trademarks and Tradenames			7.04
VF Parent		Preamble
VF Trademarks and Tradenames			7.04
Warranty Breach			11.02
Warranty Cap			11.02

     Section 1.02 . Other Definitional and Interpretative Provisions . The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule, but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “, but not limited to,”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed on the Seller Disclosure Schedule or any other schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule. References to any Person include the successors and permitted assigns of that Person. References to any Applicable Law are to that law, as amended, and the rules and regulations promulgated under that Applicable Law. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” or to a particular statute or law shall be deemed also to include any and all Applicable Laws.

ARTICLE 2
Purchase and Sale

     Section 2.01 . Purchase and Sale; Allocation of Purchase Price . (a) Upon the terms and subject to the conditions of this Agreement, the Sellers agree to sell to Buyer, and Buyer agrees to purchase from the Sellers, the Company Shares and the Advances at the Closing. The aggregate purchase price (the “ Purchase Price ”) for the Company Shares and the Advances is $350,000,000. The Purchase Price shall be paid as provided in Section 2.02 and shall be subject to net adjustment as provided in Sections 2.03 and 2.05.

     (b) The Sellers and Buyer agree that Purchase Price (as adjusted) shall be allocated among the Company Shares and to the Advances as follows: (i) $1,000,000 to the outstanding shares of capital stock of VFG Dessous Vertriebs GmbH, (ii) $1,000,000 to the outstanding shares of capital stock of the French Company, (iii) $19,000,000 to the Advances and (iv) the balance to the outstanding shares of capital stock of Vanity Fair Ventures, Inc. The aggregate deemed sales price of the assets of Vanity Fair Ventures Inc. (as determined in accordance with Treasury Regulations Section 1.338-4) shall be allocated among those assets (and among the assets of its U.S. Subsidiaries) in a manner consistent with the fair market values set forth in an allocation schedule (the “ Allocation Statement ”) to be prepared by Buyer within 120 days of the Closing Date and approved by the Sellers. In the event that the parties are unable to agree on an allocation within 30 days of the preparation of the Allocation Statement, then the parties agree to be bound by an Allocation Statement prepared by independent accountants of nationally recognized standing reasonably satisfactory to Buyer and the Sellers (who shall not have any material relationship with Buyer or the Sellers) (“ Independent Accountants ”). The Sellers and Buyer agree that the Allocation Statement shall reflect the fair market value determinations set forth on Section 2.01(b) of the Seller Disclosure Schedule. If an adjustment is made (or deemed to be made) with respect to the Purchase Price pursuant to Section 2.03, 2.05 or Section 8.07, the Allocation Statement shall be adjusted to reflect the net adjustment as mutually agreed by Buyer and the Sellers. In the event that the parties are unable to agree on an allocation within 30 days of an adjustment, then the parties agree to be bound by an adjustment prepared by Independent Accountants. Fees and other costs of the Independent Accountants shall be borne equally by Buyer, on the one hand, and the Sellers, on the other. The Sellers and Buyer agree to be bound by the Allocation Statement (as adjusted) for all purposes and to not take any position that is in any way inconsistent with the terms of the Allocation Statement (as adjusted) in the preparation, filing and audit of any Tax return or in any administrative or judicial proceeding. In the event any reported position based on the Allocation Statement is audited or disputed by any Governmental Authority, or otherwise, the party hereto receiving notice thereof shall promptly notify the other parties hereto. The Sellers and Buyer agree to

cooperate in the defense of the reported positions of the parties based on the Allocation Statement.

     Section 2.02 . Closing . The closing (the “ Closing ”) of the purchase and sale of the Company Shares hereunder shall take place at (or be directed from) the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York, as soon as practicable on a date to be mutually agreed by the parties, but in no event later than the date of VF Parent’s fiscal month end for the fiscal month during which all the conditions set forth in Article 10 are satisfied or (to the extent permitted hereby) waived (other than those conditions which by their nature cannot be satisfied until the Closing Date), or at such other time or place as Buyer and the Sellers may agree, provided however , (i) if all such conditions are satisfied or (to the extent permitted hereby) waived on a non-Business Day, the Closing shall be effective as of such date but the Purchase Price shall be payable on the immediately following Business Day, and (ii) if all such conditions are satisfied or (to the extent permitted hereby) waived within five or fewer days prior to such fiscal month end, the parties will work together to consummate the Closing on a Business Day that is not later than seven days after all such conditions are satisfied or (to the extent permitted hereby) waived. At the Closing:

     (a) Buyer shall deliver to the Sellers the Purchase Price (subject to any adjustments pursuant to Section 2.03) in immediately available funds by wire transfer to an account of the Sellers with a bank in New York City designated by Sellers, by notice to Buyer, which notice shall be delivered not later than two Business Days prior to the Closing Date (or if not so designated, then by certified or official bank check payable in immediately available funds to the order of the Sellers in such amount).

     (b) The Sellers shall deliver to Buyer certificates for the Company Shares duly endorsed or accompanied by stock powers duly endorsed in blank, with any required transfer stamps affixed thereto.

     Section 2.03 . Initial Purchase Price Adjustment . (a) No later than 10 days prior to the Closing Date, the Sellers shall deliver to Buyer the unaudited combined balance sheet of the Companies and the Subsidiaries as of the end of (i) the month immediately preceding the month in which the Closing is to occur if the Closing is to occur within the second half of the month in which it occurs and (ii) the month prior to the month immediately preceding the month in which the Closing is to occur if the Closing is to occur within the first half of the month in which it occurs (the “ Previous Month’s Balance Sheet” ), together with a statement based on the Previous Month’s Balance Sheet setting forth the Sellers’ calculation of Working Capital as of the date of the Previous Month’s Balance Sheet. Buyer shall promptly review such statement of Working Capital, and the parties agree to discuss in good faith any comments or questions that Buyer may have with respect to such statement. The Sellers shall consider in their good faith

any reasonable suggestions that Buyer may make or propose with respect to that statement in making any revisions to the same. For purposes of this Agreement, the term “ Initial Adjustment Amount ” means an amount equal to the Working Capital as of the date of the Previous Month’s Balance Sheet minus Base Working Capital.

     (b) The Purchase Price payable pursuant to Section 2.01 shall be increased by the Initial Adjustment Amount if that amount is positive. The Purchase Price payable pursuant to Section 2.01 shall be decreased by the Initial Adjustment Amount if that amount is negative.

     Section 2.04 . Closing Balance Sheet . (a) As promptly as practicable, but no later than 45 days after the Closing Date, the Sellers will cause to be prepared and delivered to Buyer the Closing Balance Sheet, and a statement based on such Closing Balance Sheet setting forth the Sellers’ calculation of Closing Working Capital. The Closing Balance Sheet (the “ Closing Balance Sheet ”) shall (x) fairly present the combined financial position of the Companies and the Subsidiaries as at the close of business on the date immediately preceding the Closing Date in a manner that is consistent with the Accounting Policies and (y) include line items substantially consistent with those in the Balance Sheet.

     (b) If Buyer disagrees with the Sellers’ calculation of Closing Working Capital delivered pursuant to Section 2.04(a), Buyer may, within 30 days after delivery of the documents referred to in Section 2.04(a), deliver a notice to the Sellers disagreeing with such calculation and which specifies Buyer’s calculation of such amount and, in reasonable detail, Buyer’s grounds for such disagreement. Any such notice of disagreement shall specify those items or amounts as to which Buyer disagrees, and Buyer shall be deemed to have agreed with all other items and amounts contained in the Closing Balance Sheet.

     (c) If a notice of disagreement shall be duly delivered pursuant to Section 2.04(b), Buyer and the Sellers shall, during the 20 days following such delivery, use their best efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of Closing Working Capital, which amount shall not be more than the amount thereof shown in the Sellers’ calculations delivered pursuant to Section 2.04(a) nor less than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 2.04(b). If Buyer and the Sellers are unable to reach such agreement during such period, they shall promptly thereafter cause independent accountants (the “ Accountants ”) of nationally recognized standing reasonably satisfactory to Buyer and the Sellers (who shall not have any material relationship with Buyer, the Sellers or any of their respective Affiliates), promptly to review this Agreement and the disputed items or amounts for the purpose of calculating Closing Working Capital. In making such calculation, such independent accountants shall consider only those items or amounts in the Closing Balance Sheet or the Sellers’ calculation of Closing Working Capital as to which Buyer

has disagreed. Such independent accountants shall deliver to Buyer and the Sellers, as promptly as practicable, a report setting forth such calculation. Such report shall be final and binding upon Buyer and the Sellers. The cost of such review and report shall be borne equally by Buyer, on the one hand, and the Sellers, on the other hand.

     (d) Buyer and the Sellers agree that they will, and agree to cause their respective independent accountants and the Companies and each Subsidiary to, cooperate and assist in the preparation of the Closing Balance Sheet and the calculation of Closing Working Capital and in the conduct of the audits and reviews referred to in this Section 2.04, including the making available to the extent necessary of books, records, work papers and personnel.

     (e) For the avoidance of doubt, the calculations to be made pursuant to this Section 2.04, and the net purchase price adjustment to be made pursuant to Sections 2.03 and 2.05, are meant only to reflect changes in working capital (as adjusted) of the Companies and the Subsidiaries from the Balance Sheet Date to the date of the Closing Balance Sheet and are not intended to provide an alternate remedy for any breach or alleged breach of the Sellers’ representations and warranties made pursuant to Article 3.

     (f) For the avoidance of doubt, the parties agree that Base Working Capital was computed excluding the cash balances on September 30, 2006 and that the Initial Adjustment Amount and the Final Adjustment Amount will include such cash balances in accordance with the definition of Working Capital and Final Working Capital.

     Section 2.05 . Adjustment of Purchase Price . (a) If (i) the Final Adjustment Amount plus the Purchase Price exceeds (ii) the Initial Adjustment Amount plus the Purchase Price, Buyer shall pay to the Sellers as an adjustment to the Purchase Price, in the manner and with interest as provided in Section 2.05(c), the amount of that excess. If (A) the Initial Adjustment Amount plus the Purchase Price exceeds (B) the Final Adjustment Amount plus the Purchase Price, the Sellers shall pay to Buyer, as an adjustment to the Purchase Price, in the manner and with interest as provided in Section 2.05(c), the amount of that excess.

     (b) For purposes of this Agreement, (i) “ Final Working Capital ” means the Closing Working Capital (y) as shown in the Sellers’ calculation delivered pursuant to Section 2.04(a), if no notice of disagreement with respect thereto is duly delivered pursuant to Section 2.04(b); or (z) if such a notice of disagreement is delivered, (A) as agreed by Buyer and the Sellers pursuant to Section 2.04(c) or (B) in the absence of such agreement, as shown in the Accountants’ calculation delivered pursuant to Section 2.04(c); provided that, in no event shall Final Working Capital be more than the Sellers’ calculation of Closing Working Capital delivered pursuant to Section 2.04(a) or less than

Buyer’s calculation of Closing Working Capital delivered pursuant to Section 2.04(b), and (ii) “ Final Adjustment Amount ” means Final Working Capital minus Base Working Capital.

     (c) Any payment pursuant to Section 2.05(a) shall be made at a mutually convenient time and place within 10 days after Final Working Capital and the Final Adjustment Amount have been determined by delivery by Buyer or the Sellers, as the case may be, of a certified or official bank check(s) payable in immediately available funds to the other party or by causing such payments to be wired and credited to such account(s) of such other party as may be designated by such other party(ies). The amount of any payment(s) to be made pursuant to this Section 2.05 shall bear interest from and including the Closing Date but excluding the date of payment at a rate per annum equal to the 1 month USD LIBOR in effect from time to time during the period such unpaid amount remains outstanding plus one-fifth percent (0.20%), calculated on a daily basis using actual days/360.

ARTICLE 3
Representations and Warranties of the Sellers

     Subject to Section 13.11, except as set forth in the Seller Disclosure Schedule, each Seller represents and warrants, jointly and severally, to Buyer, as of the date hereof and as of the Closing Date, as follows:

     Section 3.01 . Corporate Existence and Power . Each of the Sellers and the Companies is a business entity that is duly organized, validly existing and (to the extent applicable in the relevant jurisdiction of organization) in good standing under the laws of its jurisdiction of organization and has all organizational powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for those licenses, authorizations, permits, consents and approvals the absence of which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 3.02 . Corporate Authorization . The execution, delivery and performance by each Seller of this Agreement and (to the extent a party thereto) the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby are within each Sellers’ corporate powers and have been duly authorized by all necessary corporate action on the part of each Seller. Assuming in each case due execution and delivery by Buyer, each of this

Agreement and (to the extent a party thereto) the other Transaction Documents constitute valid and binding agreements of each Seller.

     Section 3.03 . Governmental Authorization . The execution, delivery and performance by each Seller of this Agreement and (to the extent a party thereto) the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby require no action by or in respect of, or filing with, any Governmental Authority other than (i) compliance with any applicable requirements of the Antitrust Laws; and (ii) any such action or filing as to which the failure to make or obtain would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 3.04 . Noncontravention . The execution, delivery and performance by each Seller of this Agreement and (to the extent a party thereto) the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby do not and will not (i) violate the certificate of incorporation or bylaws, or any equivalent organizational documents, of any Seller, Company or Subsidiary, (ii) assuming compliance with the matters referred to in Section 3.03, violate any Applicable Law, (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of any Seller or any Company or Subsidiary or to a loss of any benefit to which any Seller or any Company or Subsidiary is entitled under any provision of any agreement or other instrument binding upon any Seller or any Company or Subsidiary or (iv) result in the creation or imposition of any Lien on any asset of any Company or Subsidiary, with such exceptions, in the case of each of clauses (ii) through (iv), as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 3.05 . Capitalization . (a) Each Company, its jurisdiction of organization, its Seller parent, its authorized capital stock and the number of shares outstanding as of the date hereof is set forth on Section 3.05(a) of the Seller Disclosure Schedule.

     (b) All outstanding shares of capital stock of each Company have been duly authorized and validly issued and are fully paid and non-assessable. There are no outstanding (i) shares of capital stock or voting securities of any Company, (ii) securities of any Company convertible into or exchangeable for shares of capital stock or voting securities of such Company or (iii) options or other rights to acquire from any Company, or other obligation of any Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of such Company (the items in clauses 3.05(b)(i), 3.05(b)(ii) and 3.05(b)(iii) being referred to collectively as the “ Company Securities ”). There are no outstanding obligations of any Company or Subsidiary to repurchase, redeem or otherwise acquire any Company Securities.

     Section 3.06 . Ownership of Shares . Each Seller is the record and beneficial owner of the specified shares of capital stock of each Company set forth opposite its name on Section 3.05(a) of the Seller Disclosure Schedule, free and clear of any Lien, and will transfer and deliver to Buyer at the Closing valid title to such shares free and clear of any Lien.

     Section 3.07 . Subsidiaries . (a) Each Subsidiary is a business entity that is duly organized, validly existing and (to the extent applicable in the jurisdiction of organization) in good standing under the laws of its jurisdiction of organization and has all organizational powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for those licenses, authorizations, consents and approvals the absence of which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. All Subsidiaries and their respective jurisdictions of organization are identified on Section 3.07(a) of the Seller Disclosure Schedule.

     (b) All of the outstanding capital stock or other voting securities of each Subsidiary is owned by one of the Companies, directly or indirectly, free and clear of any Lien. There are no outstanding (i) securities of any Company or Subsidiary convertible into or exchangeable for shares of capital stock or voting securities of Subsidiary or (ii) options or other rights to acquire from any Company or Subsidiary, or other obligations of any Company or Subsidiary to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of any Subsidiary (the items in clauses 3.07(b)(i) and 3.07(b)(ii) being referred to collectively as the “ Subsidiary Securities ”). There are no outstanding obligations of any Company or Subsidiary to repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities.

     Section 3.08 . Financial Statements . The unaudited combined balance sheet as of December 31, 2005 and the related unaudited combined statements of income for the year ended December 31, 2005 and the unaudited interim combined balance sheet as of September 30, 2006 and the related unaudited interim consolidated statements of income for the nine months ended September 30, 2006 of the Companies and the Subsidiaries fairly present, in conformity with GAAP applied on a consistent basis (except as may be indicated in the notes thereto), the combined financial position of the Companies and the Subsidiaries as of the dates thereof and their combined results of operations for the periods then ended (subject to normal year-end adjustments in the case of any unaudited interim financial statements).

     Section 3.09 . Absence of Certain Changes . (a) Since the Balance Sheet Date, the business of the Companies and its Subsidiaries has been conducted in the ordinary course consistent with past practices, and there has not been any event, occurrence or development which, whether individually or in the

aggregate, has had or would reasonably be expected to have a Material Adverse Effect.

     (b) Since the Balance Sheet Date and through the date of this Agreement, the business of the Companies and their Subsidiaries has been conducted in the ordinary course consistent with past practices, and there has not been:

     (i) any repurchase, redemption or other acquisition by any Company or Subsidiary of any outstanding shares of capital stock or other securities of any Company or Subsidiary;

     (ii) any amendment of any material term of any outstanding security of any Company or Subsidiary;

     (iii) any incurrence, assumption or guarantee by any Company or Subsidiary of any indebtedness for borrowed money, other than under letters of credit listed on Section 3.12(a)(vii) of the Seller Disclosure Schedule or indebtedness incurred in the ordinary course of business consistent with past practices and included as a current liability in the calculation of Closing Working Capital delivered by the Sellers pursuant to Section 2.04;

     (iv) any making of any loan, advance or capital contributions to or investment in any Person, other than loans, advances or capital contributions to or investments made in the ordinary course of business consistent with past practices;

     (v) any transaction or commitment made, or any contract or agreement entered into, by any Company or Subsidiary relating to its assets or business, in either case, material to any Company and its Subsidiaries, taken as a whole, other than transactions and commitments in the ordinary course of business consistent with past practices and those contemplated by this Agreement;

     (vi) any material change in any method of accounting or accounting practice by any Company or Subsidiary except for any such change required by reason of a concurrent change in GAAP;

     (vii) any (A) employment, deferred compensation, severance, retirement or other similar agreement entered into with any director, officer or employee of any Company or Subsidiary (or any amendment to any such existing agreement), (B) grant of any severance or termination pay to any director, officer or employee of any Company or Subsidiary, or (C) change in compensation or other benefits payable to any director, officer or employee of any Company or Subsidiary pursuant to any

severance or retirement plans or policies thereof, in each case other than in the ordinary course of business consistent with past practices;

     (viii) any incurrence of any capital expenditures or any obligations or liabilities in respect thereof, except for (A) those contemplated by the capital expenditure budget for the Business that is attached to Section 3.09(b)(viii) of the Seller Disclosure Schedule (the “ Capex Budget ”) and (B) any unbudgeted capital expenditures not exceeding $500,000 in the aggregate;

     (ix) any labor dispute, other than routine individual grievances, or any activity or proceeding by a labor union or representative thereof to organize any employees of the Business, which employees were not subject to a collective bargaining agreement at the Balance Sheet Date, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to those employees; or

     (x) any change in the methods of accounting or accounting practice by the Sellers with respect to the Business, except as required by concurrent changes in GAAP as agreed to by VF Parent’s independent public accountants.

     Section 3.10 . No Undisclosed Material Liabilities . There are no liabilities of any Company or Subsidiary of any kind, other than:

     (a) liabilities provided for in the Balance Sheet or disclosed in the notes thereto;

     (b) liabilities or obligations disclosed in or arising out of any item, matter, contact, instrument or arrangement disclosed on Section 3.10(b) of the Seller Disclosure Schedule;

     (c) liabilities incurred in the ordinary course of business since the Balance Sheet Date; or

     (d) other undisclosed liabilities which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

     Section 3.11 . Intercompany Accounts . Since the Balance Sheet Date, there has not been any accrual of liability by any Company or Subsidiary to any Seller or any of its Affiliates or other transaction between any Company or Subsidiary and any Seller and any of its Affiliates, except (a) in the ordinary course of business of the Companies and the Subsidiaries consistent with past practice or (b) as contemplated by this Agreement.

     Section 3.12 . Material Contracts . (a) None of the Companies or any Subsidiary is a party to or bound by any of the following on the date of this Agreement:

     (i) any lease (whether of real or personal property) providing for annual rentals of $100,000 or more that cannot be terminated on not more than 60 days’ notice without payment by any Company or Subsidiary of any material penalty;

     (ii) other than purchase orders in the ordinary course of business, any agreement for the purchase of materials, supplies, goods, services, equipment or other assets providing for either (A) annual payments by the Companies and the Subsidiaries of $3,000,000 or more or (B) aggregate payments by the Companies and the Subsidiaries of $5,000,000 or more, in each case that cannot be terminated on not more than 60 days’ notice without payment by any Company or Subsidiary of any material penalty;

     (iii) other than purchase orders from third parties or a Seller or any of its Affiliates in the ordinary course of business, any sales, distribution or other similar agreement providing for the sale by any Company or Subsidiary of materials, supplies, goods, services, equipment or other assets that provides for annual payments to any Company and Subsidiaries of $3,000,000 or more;

     (iv) any agreement for consulting or other professional services providing for annual payments by the Companies and the Subsidiaries of $500,000 or more;

     (v) any material partnership, joint venture or other similar agreement or arrangement;

     (vi) any agreement relating to the acquisition or disposition of any material business (whether by merger, sale of stock, sale of assets or otherwise);

     (vii) any material agreement relating to indebtedness for borrowed money or the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset) or letters of credit outside the ordinary course of business;

     (viii) any agreement that limits the freedom of any Company or Subsidiary to compete in any line of business or with any Person or in any area;

     (ix) any agreement with any Seller or any of its Affiliates or any director or officer of any Seller or any of its Affiliates; or

     (x) any other agreement, commitment, arrangement or plan not made in the ordinary course of business that is material to the Companies and the Subsidiaries, taken as a whole.

     (b) (i) Each agreement, contract, plan, lease, arrangement or commitment required to be disclosed pursuant to this Section is a valid and binding agreement of a Company or Subsidiary, as the case may be, and is in full force and effect, and (ii) none of the Companies or the Subsidiaries or, to the knowledge of any Seller, any other party thereto is in default or breach in any respect under the terms of any such agreement, contract, plan, lease, arrangement or commitment, with such exceptions in the case of each of (i) and (ii) as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 3.13 . Litigation . There is no action, suit, arbitration or proceeding pending against, or to the knowledge of any Seller, threatened against, any Seller, or any Company or Subsidiary or any of their respective properties before any arbitrator or any Governmental Authority which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 3.14 . Compliance with Applicable Laws . None of the Companies or the Subsidiaries is in violation of any Applicable Law, with such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 3.15 . Properties. Except with respect to the Excluded Leases, the Excluded Marks, and the Excluded Shares after the actions contemplated by Section 5.05 shall have occurred, the Companies and the Subsidiaries have good title to, or in the case of leased property and assets have valid leasehold interests in, all property and assets (whether real, personal, tangible or intangible) reflected on the Balance Sheet or acquired after the Balance Sheet Date, except for properties and assets sold or transferred since the Balance Sheet Date in the ordinary course of business consistent with past practices or where the failure to have such good title or valid leasehold interests would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. None of such property or assets is subject to any Lien, except:

     (a) Liens disclosed on the Balance Sheet or notes thereto or securing liabilities reflected on the Balance Sheet or notes thereto;

     (b) Liens for taxes, assessments and similar charges that are not yet due or are being contested in good faith;

     (c) mechanic’s, materialman’s, carrier’s, repairer’s and other similar Liens arising or incurred in the ordinary course of business or that are not yet due and payable or are being contested in good faith;

     (d) Liens incurred in the ordinary course of business since the Balance Sheet Date; or

     (e) other Liens which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (paragraphs (a)-(e) of this Section 3.15 are, collectively, the “ Permitted Liens ”).

     Section 3.16 . Intellectual Property . (a) Section 3.16(a) of the Seller Disclosure Schedule contains a list of all material registrations and applications for registration included in the Owned Intellectual Property Rights, specifying as to each such Intellectual Property Right, as applicable, (i) the owner of such Intellectual Property Right, (ii) the jurisdictions by or in which such Intellectual Property Right has been issued or registered or in which an application for such issuance or registration has been filed and (iii) the registration or application numbers thereof.

     (b)  Section 3.16(b) of the Seller Disclosure Schedule sets forth a list of all material agreements (excluding licenses for commercial off-the-shelf computer software that are generally available on nondiscriminatory pricing terms which have an aggregate acquisition cost of $50,000 or less) to which any Company or any Subsidiary is a party and pursuant to which any Company or any Subsidiary (i) obtains the right to use, or a covenant not to be sued under, any Intellectual Property Right or (ii) grants the right to use, or a covenant not to be sued under, any Intellectual Property Right.

     (c) The Companies and the Subsidiaries are the sole owners of all Owned Intellectual Property Rights (other than the Excluded Marks) and hold all right, title and interest in and to all Owned Intellectual Property Rights (other than the Excluded Marks), free and clear of any Lien. All of the material registrations included in the Owned Intellectual Property Rights (other than the Excluded Marks) are valid and enforceable. The Companies and the Subsidiaries have taken actions reasonably necessary to maintain and protect the effectiveness of all material registrations and applications for registrations included in the Owned Intellectual Property Rights (other than the Excluded Marks), including with regard to payment of applicable maintenance fees and filing of applicable statements of use. The Licensed Intellectual Property Rights and the Owned Intellectual Property Rights together constitute all the Intellectual Property Rights necessary to, or used in, or held for use in, the conduct of the Business as currently conducted. The consummation of the transactions contemplated by this Agreement will not alter, encumber, impair or extinguish any material Owned

Intellectual Property Rights or material Licensed Intellectual Property Rights with the exception of the transfer of the Excluded Marks contemplated by Section 5.05.

     (d) Neither any Company nor any Subsidiary has infringed or misappropriated any Intellectual Property Right of any third party in connection with the operation of the Business as currently conducted, except for such infringements or misappropriations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Owned Intellectual Property Right is subject to any outstanding judgment, injunction, order, decree or agreement restricting the use thereof by any Company or Subsidiary or restricting the licensing thereof by any Company or Subsidiary to any Person, except for any judgment, injunction, order, decree or agreement which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     (e) To the knowledge of the Sellers, within the three-year period prior to the date of this Agreement, no Person has infringed, misappropriated, breached or otherwise violated any Owned Intellectual Property Right or Licensed Intellectual Property Rights (other than nonexclusive Licensed Intellectual Property Rights) except, individually or in the aggregate, as would not be reasonably expected to have a Material Adverse Effect.

     (f) There are no contracts, licenses or agreements between any of the Companies or any of the Subsidiaries and any other Person wherein or whereby any of the Companies or any of the Subsidiaries has agreed to, or assumed, any obligation or duty to warrant, indemnify, reimburse, hold harmless, guaranty or otherwise assume or incur any obligation or liability in connection with any Intellectual Property Right that has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

     Section 3.17 . Insurance Coverage . (a) Attached as Section 3.17(a) of the Seller Disclosure Schedule is a list of all material insurance policies, fidelity bonds and self-insurance arrangements relating to the assets, business, operations, employees, officers or directors of the Companies and its Subsidiaries. Except as set forth on Section 3.17(a) of the Seller Disclosure Schedule, such policies, bonds and arrangements will continue in effect for the benefit of the Companies and their Subsidiaries immediately following the Closing Date. Except as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, (i) all premiums payable under all such policies and bonds have been timely paid in all material respects, and the Companies and the Subsidiaries have otherwise complied in all material respects with the terms and conditions of all of those policies and bonds, and (ii) such policies and bonds provide sufficient coverage for all normal risks incident to the business of the Companies and the Subsidiaries and their respective properties and assets.

     (b) There are no material claims by any Company or Subsidiary pending under any insurance policy or fidelity bond relating to the assets, business, operations, employees, officers or directors of the Companies and the Subsidiaries as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds or in respect of which such underwriters have reserved their rights.

     Section 3.18 . Bankers’ Fees . Except for Merrill Lynch & Co., whose fees will be paid by the Sellers or an Affiliate of the Sellers, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of the Sellers or any Company or any Subsidiary who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement.

     Section 3.19 . Employees . (a) Section 3.19 of the Seller Disclosure Schedule sets forth a true and complete list of the names, titles, annual salaries and other compensation of all officers of the Companies and the Subsidiaries and all other employees of the Companies and Subsidiaries whose base salary for 2006 exceeded $150,000.

     (b) Each individual identified on Section 1.01(a) of the Seller Disclosure Schedule is, as of the date hereof, an employee of the Sellers or any of their Affiliates and renders services primarily in relation to the Business.

     Section 3.20 . Employee Benefit Plans and Labor Matters . (a) Except as set forth in Section 3.20(a) of the Seller Disclosure Schedule, neither the Companies nor any of the Subsidiaries sponsor, maintain or contribute to any Employee Plan and neither the Buyer, the Companies, the Subsidiaries nor any Affiliate of Buyer shall have any obligations or liability with respect to any Employee Plan on or following the Closing Date (other than as provided in the Employee Secondment Agreement).

     (b) Neither the Company nor any Subsidiary nor any ERISA Affiliate nor any predecessor thereof contributes to, or has in the past contributed to, any multiemployer plan, as defined in Section 3(37) of ERISA (a “ Multiemployer Plan ”) with respect to which Buyer, the Companies or the Subsidiaries shall have any liability on or following the Closing Date.

     (c) The consummation of the transactions contemplated by this Agreement will not (either alone or together with any other event) entitle any director, officer, employee or independent contractor of the Companies or the Subsidiaries to severance pay or accelerate the time of payment or vesting or trigger any payment of funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or trigger any other material obligation pursuant to, any agreement, policy or arrangement for the benefit of any such individuals.

     (d) None of the Companies or the Subsidiaries has any liability in respect of post-retirement health, medical or life insurance benefits for retired, former or current employees of the Companies or the Subsidiaries except as required to avoid excise tax under Section 4980B of the Code or as may be required under other Applicable Law.

     (e) None of the Companies or Subsidiaries is a party to or subject to, or is currently negotiating in connection with entering into, any collective bargaining agreement or other contract or understanding with a labor union or organization nor, as of the date hereof, is any of the Companies or Subsidiaries the subject of any material proceeding asserting that any of the Companies or Subsidiaries has committed an unfair labor practice or seeking to compel it to bargain with any labor union or labor organization nor is there pending or, to the knowledge of the Sellers, threatened, nor has there been for the past five years, any labor strike, material dispute, walk-out, work stoppage, slow-down or lockout involving the Companies or the Subsidiaries. There are no campaigns being conducted to solicit cards from employees of the Companies or the Subsidiaries to authorize representation by any labor organization or other proposed bargaining unit representative.

     (f) Since January 1, 2004, none of the Companies or the Subsidiaries has closed any facility or work site used in the Business or effectuated any material employee layoffs or down-sizing or implemented any early retirement, separation or window program or announced any such action or program in each case where such events have triggered any WARN Act requirements or similar state or foreign labor laws.

     Section 3.21 . Environmental Matters .

     (a) (i) No written notice, order, request for information, complaint or penalty has been received by the Sellers, any Company or Subsidiary, and (ii) there are no judicial, administrative or other actions, suits or proceedings pending or, to the knowledge of any Seller, threatened, in the case of each of (i) and (ii), which allege a material violation of or material liability under any Environmental Law and relate to any Company or Subsidiary;

     (b) (i) each Company and Subsidiary has all material environmental permits necessary for its operations to comply with all applicable Environmental Laws and is in material compliance with the terms of such permits and with all other applicable Environmental Laws, and (ii) all such material environmental permits shall be available for use by the Companies and their Subsidiaries immediately following the Closing Date;

     (c) no Company has disposed of, released or arranged for the disposal or release of any Hazardous Substance at or on any property now or previously owned, leased or operated by any Company or any Subsidiary in a manner that would reasonably be expected to form the basis for any claim, demand or action against such Company or any Subsidiary seeking material damages, investigation or remedial action;

     (d) no property now or previously owned, leased or operated by any Company or any Subsidiary and, to the knowledge of any Seller, no property to which any Company or any Subsidiary has, directly or indirectly, transported or arranged for the transportation of any Hazardous Substances is listed or, to Sellers’ knowledge, proposed for listing, on the National Priorities List promulgated pursuant to the Comprehensive Environmental Response Compensation and Liability Act (“ CERCLA ”), or CERCLIS (as defined in CERCLA) or any similar federal, state, or foreign list of sites requiring investigation or clean-up; and

     (e) neither any Company nor any Subsidiary owns or leases any property in New Jersey or Connecticut.

Except as set forth in this Section 3.21, no representations or warranties are being made with respect to matters arising under or relating to Environmental Laws or Hazardous Substances (all such matters collectively, the “ Environmental Matters ”).

     Section 3.22 . Sufficiency of Assets . The assets (tangible and intangible) and properties of the Companies and the Subsidiaries on the Closing Date constitute all of the property and assets (tangible and intangible) that are used or held for use primarily in the Business (excluding, for the sake of clarity, the Excluded Shares, the Excluded Marks and the Excluded Leases). With the provision of the services to Buyer contemplated to be provided by the Transition Services Agreement, the assets and properties of the Companies and the Subsidiaries on the Closing Date will be adequate to conduct the Business immediately following the Closing Date in the same manner as it is currently conducted. All tangible assets of the Companies and the Subsidiaries, including, without limitation, all books, records, files and other documents of the Companies and their Subsidiaries and all books, records, files and other documents relating primarily to the Business (including originals thereof, to the extent existing), will be made available by the Sellers as of the Closing Date for transfer to Buyer and will be located at or transferred to the Business locations to be transferred to Buyer hereunder as promptly as reasonably practicable after the Closing Date; provided , that the Sellers may retain all such books, records, files and other documents prepared in connection with the sale of the Companies, including bids received from other parties and related analyses applicable to the Companies or their Subsidiaries.

     Section 3.23 . Notes and Accounts Receivable. All notes and accounts receivable of the Companies and the Subsidiaries are fairly presented on the Balance Sheet as of the Balance Sheet Date, in conformity with GAAP. The collection rates that apply with respect to those notes and accounts receivable (and the notes and accounts receivable that have been or will be accrued after the Balance Sheet Date), considered as a whole, will conform in all material respects to the historical levels that have been experienced by the Companies and the Subsidiaries. Such notes and accounts represent valid obligations and are not subject to any set-offs or counterclaims, except (i) to the extent of any reserves that are reflected on the Balance Sheet and (ii) for notes and accounts receivable that have accrued or will accrue after the Balance Sheet Date in an aggregate amount that does not materially deviate from historical levels experienced by the Companies and the Subsidiaries with respect to those matters. The reserves reflected on the Balance Sheet and to be reflected on the Closing Balance Sheet are (or will be, as applicable) fairly stated in all material respects and calculated consistent with past practice.

     Section 3.24 . Inventory. The inventory of the Companies and the Subsidiaries is fairly presented on the Balance Sheet as of the Balance Sheet Date, in conformity with GAAP. Such inventory (and the inventory acquired, developed or manufactured by any of the Companies or the Subsidiaries after the Balance Sheet Date), in the aggregate, consists of, and will as of the Closing Date consist of, items of a quality that are commercially usable and salable in the ordinary course of the Business consistent with past practices, subject only to (i) the reserve for inventory writedowns that is reflected on the Balance Sheet and (ii) with respect to inventory acquired, developed or manufactured after the Balance Sheet Date, such exceptions as would require similar relative levels of reserve for inventory writedowns as reflected on the Balance Sheet had such inventory been acquired, developed or manufactured prior to the Balance Sheet Date.

     Section 3.25. Transactions with Affiliates. None of the Companies or the Subsidiaries leases or is committed to lease any properties or assets from, or owes any material amounts to (except for amounts to be extinguished and released at Closing pursuant to Section 5.06), nor has it loaned any material amount (except for amounts to be extinguished and released at Closing pursuant to Section 5.06) to any Seller or any Affiliate of any Seller, including any officer, director or associate of any Seller.

     Section 3.26. Books and Records; Internal Controls. The books and records of the Companies and their Subsidiaries are complete and correct in all material respects and have been maintained in accordance with sound business practices.

ARTICLE 4
Representations and Warranties of Buyer

     Buyer represents and warrants to the Sellers, as of the date hereof and as of the Closing Date, that:

     Section 4.01 . Corporate Existence and Power . Buyer is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware and has all corporate powers and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for those licenses, authorizations, permits, consents and approvals the absence of which would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

     Section 4.02 . Corporate Authorization . The execution, delivery and performance by Buyer of this Agreement and (to the extent a party thereto) the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby are within the corporate powers of Buyer and have been duly authorized by all necessary corporate action on the part of Buyer. Assuming due execution and delivery by the Sellers of this Agreement, this Agreement and (to the extent a party thereto) the other Transaction Documents constitute valid and binding agreements of Buyer.

     Section 4.03 . Governmental Authorization . The execution, delivery and performance by Buyer of this Agreement and (to the extent a party thereto) the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby require no action by or in respect of, or filing with, any Governmental Authority other than (i) compliance with any applicable requirements of the Antitrust Laws; and (ii) any such action or filing as to which the failure to make or obtain would not, individually or in the aggregate, materially impair or delay Buyer’s ability to consummate the transactions contemplated hereby or thereby.

     Section 4.04 . Noncontravention . The execution, delivery and performance by Buyer of this Agreement and (to the extent a party thereto) the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby do not and will not (i) violate the certificate of incorporation or bylaws of Buyer, (ii) assuming compliance with the matters referred to in Section 4.03, violate any Applicable Law, (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of Buyer or to a loss of any benefit to which Buyer is entitled under any provision of any agreement or other instrument binding upon Buyer or (iv) result in the creation or imposition of any Lien on any asset of Buyer, with such exceptions, in the case of clauses (ii) through (iv), as would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

     Section 4.05 . Financing . Buyer has, or will have prior to the Closing, sufficient cash, available lines of credit or other sources of immediately available funds to enable it to make payment of the Purchase