{"id":43716,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/stock-purchase-agreement-tommy-hilfiger-corp-tommy-hilfiger.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stock-purchase-agreement-tommy-hilfiger-corp-tommy-hilfiger","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/stock-purchase-agreement-tommy-hilfiger-corp-tommy-hilfiger.html","title":{"rendered":"Stock Purchase Agreement &#8211; Tommy Hilfiger Corp., Tommy Hilfiger (Eastern Hemisphere) Ltd. and The Europe Holdings Ltd."},"content":{"rendered":"<pre>\n                            STOCK PURCHASE AGREEMENT\n\n\n                                  by and among\n\n\n                           TOMMY HILFIGER CORPORATION,\n\n\n                   TOMMY HILFIGER (EASTERN HEMISPHERE) LIMITED\n\n\n                                       and\n\n\n                           TH EUROPE HOLDINGS LIMITED\n\n\n                            dated as of June 29, 2001\n\n\n\n\n\n\n                                   ARTICLE I\n\nCertain Definitions...........................................................1\n\n                                   ARTICLE II\n\nPurchase and Sale Stock; Closing..............................................5\n\n          Section 2.1  Purchase and Sale......................................5\n          Section 2.2. Time and Place of Closing..............................6\n\n                               ARTICLE III\n\nRepresentations and Warranties of Seller......................................6\n\n      Section 3.1   Incorporation; Authorization; etc.........................6\n      Section 3.2.  Capitalization; Structure.................................8\n      Section 3.3.  Financial Statements......................................8\n      Section 3.4.  Properties; Leases........................................8\n      Section 3.5.  Absence of Certain Changes................................9\n      Section 3.6.  Litigation; Orders........................................9\n      Section 3.7.  Licenses, Approvals, Other Authorizations,\n                    Consents, Reports, etc....................................9\n      Section 3.8.  Labor Matters............................................10\n      Section 3.9.  Compliance with Laws.....................................10\n      Section 3.10. Insurance................................................10\n      Section 3.11. Material Contracts.......................................10\n      Section 3.12. Brokers, Finders, etc....................................11\n      Section 3.13. Affiliate Transactions...................................11\n      Section 3.14. Environmental Compliance.................................12\n      Section 3.15. Netherlands Antilles and Netherlands\n                    Tax Matters..............................................13\n      Section 3.16. No Undisclosed Liabilities...............................13\n\n                                   ARTICLE IV\n\nRepresentations and Warranties of THEH.......................................14\n\n      Section 4.1.  Incorporation; Authorization; etc........................14\n      Section 4.2.  Other Authorizations, Consents, Reports, etc.............15\n      Section 4.3.  Brokers, Finders, etc.............. .....................15\n      Section 4.4.  Acquisition of Shares for Investment.....................15\n\n                                    ARTICLE V\n\nCovenants of Seller, Parent and THEH.........................................16\n\n      Section 5.1.  Investigation of Business; Access to Properties\n                    and Records..............................................16\n\n\n\n      Section 5.2.  Efforts; Obtaining Consents..............................16\n      Section 5.3   Further Assurances.......................................17\n      Section 5.4.  Conduct of Business by Seller............................17\n      Section 5.5.  Preservation of Business.................................19\n      Section 5.6.  Non-Solicitation.........................................19\n      Section 5.7.  Notice of Developments...................................19\n      Section 5.8.  Guarantees and Other Commitments.........................19\n      Section 5.9.  Financial Statements.....................................20\n      Section 5.10. Financing................................................20\n      Section 5.11. Resignation of Directors.................................20\n      Section 5.12. Intercompany Accounts; Indebtedness......................20\n\n                                   ARTICLE VI\n\nEmployee Benefits............................................................20\n\n      Section 6.1  Employee Benefit Plans....................................20\n      Section 6.2. Company Employee Benefit Plans............................21\n      Section 6.3. Administration............................................22\n\n                                   ARTICLE VII\n\nTax Matters..................................................................22\n\n      Section 7.1.  Tax Returns of the Company and\n                    the Subsidiaries.........................................22\n      Section 7.2.  Allocation of Certain Taxes..............................23\n      Section 7.3.  Filing Responsibility....................................24\n      Section 7.4.  Refunds and Carrybacks...................................25\n      Section 7.5.  Cooperation and Exchange of Information..................25\n      Section 7.6.  Tax Indemnification by Seller............................26\n      Section 7.7.  Transfer Taxes...........................................26\n      Section 7.8.  Definitions..............................................26\n\n                                  ARTICLE VIII\n\nConditions to THEH's Obligation to Close.....................................27\n\n      Section 8.1.  Representations, Warranties and Covenants\n                    of Seller................................................27\n      Section 8.2.  No Orders or Injunctions.................................27\n      Section 8.3.  Opinions of Seller's Counsel.............................27\n      Section 8.4.  Non-Competition Agreement; Consents......................27\n      Section 8.5.  Tax Matters..............................................27\n\n                                   ARTICLE IX\n\nConditions to Seller's Obligation to Close...................................28\n\n      Section 9.1.  Representations, Warranties and \n                    Covenants of Parent......................................28\n\n\n                                      -ii-\n\n\n\n      Section 9.2.  No Orders or Injunctions.................................28\n\n                                    ARTICLE X\n\nSurvival; Indemnification....................................................28\n\n      Section 10.1. Survival.................................................28\n      Section 10.2  Indemnification by Seller................................29\n      Section 10.3. Indemnification Procedures...............................29\n      Section 10.4. Limits on Indemnification................................30\n      Section 10.5. Losses Net of Insurance..................................31\n      Section 10.6. Adjustment to Purchase...................................31\n\n                                   ARTICLE XI\n\nTermination..................................................................31\n\n      Section 11.1  Termination..............................................31\n      Section 11.2. Procedure and Effect of Termination......................31\n\n                                   ARTICLE XII\n\nMiscellaneous................................................................32\n\n      Section 12.1  Counterparts.............................................32\n      Section 12.2  Governing Law............................................32\n      Section 12.3. Jurisdiction; Waiver of Trial by Jury....................32\n      Section 12.4. Entire Agreement.........................................32\n      Section 12.5. Expenses.................................................32\n      Section 12.6. Notices..................................................32\n      Section 12.7. Successors and Assigns...................................33\n      Section 12.8  Headings; Definitions....................................34\n      Section 12.9  Amendments and Waivers...................................34\n      Section 12.10.Severability.............................................34\n      Section 12.11 Interpretation...........................................34\n\n\n                                      -iii-\n\n\n\nSchedule 1                      Individuals With Knowledge\nSchedule 3.1(a)                 Jurisdictions in Which the Company and the\n                                Subsidiaries are Qualified to Do Business\nSchedule 3.1(d)                 Violations and Accelerations\nSchedule 3.2(a)                 Stock Information\nSchedule 3.3                    Applicable Accounting Principles\nSchedule 3.4                    Real Property and Leases\nSchedule 3.5                    Absence of Certain Changes\nSchedule 3.6                    Litigation\nSchedule 3.7(b)                 Required Licenses\nSchedule 3.8                    Labor Agreements, Disputes\nSchedule 3.9                    Compliance With Law\nSchedule 3.10                   Insurance Policies\nSchedule 3.11                   Material Contracts\nSchedule 3.13                   Affiliate Transactions\nSchedule 3.14                   Environmental Compliance\nSchedule 3.16                   Undisclosed Liabilities\nSchedule 4.2                    Authorizations and Consents\nSchedule 5.4                    Conduct of Business by Seller\nSchedule 6.1(a)                 Company Employee Benefit Plans\nSchedule 6.1(c)                 Payments Caused by this Agreement\nSchedule 7.1(a)                 Income Tax Returns\nSchedule 7.1(b)                 Contested Taxes; Reserves\nSchedule 7.1(c)                 Tax Extensions and Powers of Attorneys\nSchedule 7.1(d)                 Company Affiliated Group\nSchedule 7.1(e)                 Audits\n\nExhibit A                       Form of AIHL-TH Guarantee\nExhibit B-1                     Form of Waiver by Thomas J. Hilfiger\nExhibit B-2                     Form of Waiver by Joel J. Horowitz\nExhibit C-1                     Form of Non-Competition Agreement with Silas\n                                K.F. Chou and Lawrence S. Stroll\nExhibit C-2                     Form of Non-Competition Agreement with Fred\n                                Gehring\n\n\n                                      -iv-\n\n\n\n                            STOCK PURCHASE AGREEMENT\n\n          THIS STOCK PURCHASE AGREEMENT (the \"AGREEMENT\"), dated as of June 29,\n2001, is by and among Tommy Hilfiger Corporation, a British Virgin Islands\ncorporation (\"PARENT\"), Tommy Hilfiger (Eastern Hemisphere) Limited, a British\nVirgin Islands corporation and a wholly owned subsidiary of Parent (\"THEH\"), and\nTH Europe Holdings Limited, a British Virgin Islands corporation (\"SELLER\").\n\n          WHEREAS, Seller owns 100% of the issued and outstanding shares of\ncapital stock of T.H. International N.V., a corporation organized under the laws\nof the Netherlands Antilles (the \"COMPANY\"); and\n\n          WHEREAS, THEH desires to purchase from Seller, and Seller desires to\nsell to THEH, 100% of the issued and outstanding shares of capital stock of the\nCompany, upon the terms and subject to the conditions set forth herein (the\n\"STOCK PURCHASE\"); and\n\n          WHEREAS, AIHL-TH Limited, a British Virgin Islands corporation\n(\"AIHL\"), has entered into a Guarantee in the form attached as EXHIBIT A hereto,\ndated of even date herewith, pursuant to which AIHL has guaranteed all of the\nobligations of Seller under this Agreement; and\n\n          WHEREAS, in connection with the execution and delivery of this\nAgreement, TH Europe (as defined below) has at the request of Parent entered\ninto an employment agreement with each of Fred Gehring and Ludo Onnink, such\nagreements to be effective as of the closing of the Stock Purchase hereunder\n(the \"EMPLOYMENT AGREEMENTS\"); and\n\n          WHEREAS, in connection with the execution and delivery of this\nAgreement, Tommy Hilfiger U.S.A., Inc., a wholly owned subsidiary of Parent, has\nreceived a waiver from Thomas J. Hilfiger in the form attached as EXHIBIT B-1\nhereto and a waiver from Joel J. Horowitz in the form attached as EXHIBIT B-2\nhereto with respect to certain compensation matters under their respective\nemployment agreements, such waivers to be effective as of the closing of the\nStock Purchase hereunder; and\n\n          WHEREAS, in connection with the execution and delivery of this\nAgreement, (a) Silas K.F. Chou and Lawrence S. Stroll have entered into a\nNon-Competition Agreement with Parent in the form attached as EXHIBIT C-1 hereto\nand (b) Fred Gehring has entered into a Non-Competition Agreement with Parent in\nthe form attached as EXHIBIT C-2 hereto.\n\n          NOW, THEREFORE, in consideration of the premises and of the mutual\ncovenants herein contained, the parties hereto agree as follows:\n\n                                    ARTICLE I\n\n                               CERTAIN DEFINITIONS\n\n          As used in this Agreement the following terms shall have the following\nrespective meanings:\n\n\n\n\n          \"ACTION\" shall mean any complaint, claim, prosecution, indictment,\naction, suit, arbitration, investigation, inquiry or proceeding by or before any\nGovernmental Authority.\n\n          \"AFFILIATE\" shall mean any Person that directly, or indirectly through\none or more intermediaries, controls or is controlled by or is under common\ncontrol with the party specified.\n\n          \"AGREEMENT\" shall have the meaning set forth in the preamble hereof.\n\n          \"AIHL\" shall have the meaning set forth in the recitals hereof.\n\n          \"APPLICABLE RETURN\" shall have the meaning set forth in Section\n10.1(a) hereof.\n\n          \"CLOSING\" shall mean the consummation of the transactions contemplated\nby Section 2.1 of this Agreement.\n\n          \"CLOSING DATE\" shall have the meaning set forth in Section 2.2 hereof.\n\n          \"CODE\" shall mean the Internal Revenue Code of 1986, as amended, and\nany successor thereto.\n\n          \"COMPANY\" shall have the meaning set forth in the recitals hereof.\n\n          \"COMPANY BALANCE SHEET\" shall mean the audited consolidated balance\nsheet of the Company and its consolidated subsidiaries as of March 31, 2001,\nincluded in the Financial Statements.\n\n          \"COMPANY EMPLOYEE BENEFIT PLANS\" shall have the meaning set forth in\nSection 6.1(a) hereof.\n\n          \"COMPANY MATERIAL ADVERSE EFFECT\" shall have the meaning set forth in\nSection 3.5 hereof.\n\n          \"CONTINUING AFFILIATE\" shall mean Seller, AIHL or any of their\nrespective corporate Affiliates (other than (i) the Company and the Subsidiaries\nand (ii) Parent and its subsidiaries).\n\n          \"COVERED LOSSES\" shall mean any and all debts, losses, liabilities,\nclaims, fines, royalties, deficiencies, damages, obligations, payments\n(including, without limitation, those arising out of any demand, assessment,\nsettlement, judgment or compromise relating to any Action), costs and expenses\n(including, without limitation, interest and penalties due and payable with\nrespect thereto and reasonable attorneys' and accountants' fees and any other\nout-of-pocket expenses incurred in investigating, preparing, defending, avoiding\nor settling any Action or in enforcing another party's obligations hereunder),\nincluding, without limitation, any of the foregoing arising under, out of or in\nconnection with any Action, order or consent decree of any Governmental\nAuthority or award of any arbitrator of any kind, or any law, rule, regulation,\ncontract, commitment or undertaking.\n\n\n                                       -2-\n\n\n\n          \"DETERMINATION\" shall have the meaning set forth in Section 7.8(a)\nhereof.\n\n          \"EMPLOYMENT AGREEMENTS\" shall have the meaning set forth in the\nrecitals hereof.\n\n          \"ENCUMBRANCE\" shall mean any mortgage, pledge, lien, easement,\nrestrictive covenant, right of way, lease, purchase agreement, option, security\ninterest or other encumbrance.\n\n          \"ENVIRONMENTAL LAW\" shall have the meaning set forth in Section\n3.14(a)(ii) hereof.\n\n          \"EUROPEAN LICENSE\" shall have the meaning set forth in Section 5.8\nhereof.\n\n          \"EXCHANGE ACT\" shall mean the Securities Exchange Act of 1934, as\namended.\n\n          \"EXPIRATION DATE\" shall have the meaning set forth in Section 10.1(a)\nhereof.\n\n          \"FINANCIAL STATEMENTS\" shall have the meaning set forth in Section 3.3\nhereof.\n\n          \"FORTIS COMFORT LETTER\" shall have the meaning set forth in Section\n5.8 hereof.\n\n          \"GAAP\" shall mean United States generally accepted accounting\nprinciples.\n\n          \"GOVERNMENTAL AUTHORITY\" shall have the meaning set forth in Section\n3.1(d) hereof.\n\n          \"HAZARDOUS SUBSTANCE\" shall have the meaning set forth in Section\n3.14(a)(i) hereof.\n\n          \"INCOME TAX RETURNS\" shall have the meaning set forth in Section\n7.8(b) hereof.\n\n          \"INCOME TAXES\" shall have the meaning set forth in Section 7.8(c)\nhereof.\n\n          \"INDEMNIFICATION THRESHOLD\" shall have the meaning set forth in\nSection 10.4 hereof.\n\n          \"INDEMNIFIED PARTIES\" shall have the meaning set forth in Section\n10.2(a) hereof.\n\n          \"INDIVIDUAL AFFILIATE\" shall mean any of Silas K.F. Chou, Lawrence S.\nStroll, Thomas J. Hilfiger, Joel J. Horowitz and Fred Gehring.\n\n          \"INTELLECTUAL PROPERTY\" means all United States and foreign (a)\npatents, patent applications, patent disclosures and improvements thereto, (b)\ntrademarks, service marks, logos, trade names and corporate names and\nregistrations and applications for registration thereof, including, but not\nlimited to, all marks registered in the United States Patent and Trademark\nOffice, (c) copyrights and registrations and applications for registration\nthereof, (d) computer software, data and documentation, (e) trade secrets and\nconfidential business information (including ideas, formulas, compositions,\ninventions (whether patentable or unpatentable and \n\n\n                                      -3-\n\n\n\nwhether or not reduced to practice), know-how, manufacturing and production\nprocesses and techniques, research and development information, drawings,\nspecifications, designs, plans, proposals, technical data, copyrightable works,\nfinancial, marketing and business data, pricing and cost information, business\nand marketing plans and customer and supplier lists and information) and (f)\ncopies and tangible embodiments thereof (in whatever form or medium) in which\nthe Company or any Subsidiary has any rights.\n\n          \"IRS\" shall have the meaning set forth in Section 7.8(d) hereof.\n\n          \"LICENSES\" shall have the meaning set forth in Section 3.7(a) hereof.\n\n          \"NET AFTER-TAX BASIS\" shall mean, with respect to the calculation of\nany indemnification payment owed to any party pursuant to this Agreement,\ncalculation thereof in a manner taking into account any Taxes owing by the\nindemnified party or its Affiliates as a result of receipt or accrual of the\nindemnity payment and any Tax benefit received or accrued by the indemnified\nparty or its Affiliates as a result of the indemnified liability.\n\n          \"NOTICE OF CLAIM\" shall have the meaning set forth in Section 10.3(a)\nhereof.\n\n          \"PARENT\" shall have the meaning set forth in the preamble hereof.\n\n          \"PERMITTED EXCEPTIONS\" shall mean (a) mechanics', materialmen's,\ncarriers', workmen's, warehousemen's, repairmen's, landlords' or similar liens\nimposed by law arising and incurred in the ordinary course of business and\nsecuring obligations that are not delinquent, (b) liens for taxes and other\ngovernmental charges, assessments or fees which (i) are not yet due and payable\nor which may be paid without penalty or (ii) are being contested in good faith\nthrough appropriate procedures and in respect of which the Company or a\nSubsidiary has created adequate reserves or (c) Encumbrances which individually\nor in the aggregate do not detract from the value of any of the property or\nassets subject thereto or interfere with the present use thereof.\n\n          \"PERSON\" shall mean any individual, firm, corporation, partnership or\nother entity (including Governmental Authorities), and shall include any\nsuccessor (by merger or otherwise) of such entity.\n\n          \"PRICEWATERHOUSECOOPERS\" shall mean PricewaterhouseCoopers LLP or one\nof its international affiliates.\n\n          \"PURCHASE PRICE\" shall have the meaning set forth in Section 2.1\nhereof.\n\n          \"RCRA HAZARDOUS WASTE\" shall have the meaning set forth in Section\n3.14(a)(iii) hereof.\n\n          \"REAL PROPERTY\" shall have the meaning set forth in Section 3.4\nhereof.\n\n          \"RETAINED LIABILITIES\" shall have the meaning set forth in Section\n10.2(a) hereof.\n\n          \"RETURNS\" shall have the meaning set forth in Section 7.8(e) hereof.\n\n\n                                      -4-\n\n\n\n\n\n          \"SECURITIES ACT\" shall mean the Securities Act of 1933, as amended.\n\n          \"SELLER\" shall have the meaning set forth in the preamble hereof.\n\n          \"SELLER AFFILIATE\" shall mean any of the Company, a Subsidiary or a\nContinuing Affiliate.\n\n          \"SELLER'S KNOWLEDGE\" or \"KNOWLEDGE OF SELLER\" shall mean the knowledge\nof those individuals set forth on SCHEDULE 1, after due inquiry by such\nindividuals of the respective officers and directors of the Company and TH\nEurope.\n\n          \"SHARES\" shall mean the shares of one United States dollar (US$1) each\nof the Company.\n\n          \"STOCK PURCHASE\" shall have the meaning set forth in the recitals\nhereof.\n\n          \"SUBSIDIARIES\" shall mean TH Europe, TH UK Ltd, a corporation\norganized under the laws of the United Kingdom, TH Deutschland GmbH, a German\ncorporation, TH Italia SRL, an Italian corporation, Hilfiger Stores BV, a\nNetherlands corporation, Hilfiger Stores Ltd. (to be renamed Tommy Stores Ltd.),\na corporation organized under the laws of the United Kingdom, Pepe Jeans Retail\nLtd. (to be renamed Hilfiger Stores Ltd.), a corporation organized under the\nlaws of the United Kingdom, Pepe Jeans France SAS (to be renamed Hilfiger Stores\nSAS), a French corporation, TH Belgium NV, a Belgian corporation, TH France SAS,\na French corporation, and any direct or indirect subsidiary of the Company\nformed after the date of this Agreement.\n\n          \"TAX AUDIT\" shall have the meaning set forth in Section 7.5(d) hereof.\n\n          \"TAX LAWS\" shall have the meaning set forth in Section 7.8(f) hereof.\n\n          \"TAXES\" shall have the meaning set forth in Section 7.8(g) hereof.\n\n          \"TAXING AUTHORITY\" shall have the meaning set forth in Section 7.8(h)\nhereof.\n\n          \"TH EUROPE\" shall mean Tommy Hilfiger Europe B.V., a company\nincorporated under the laws of the Netherlands.\n\n          \"THEH\" shall have the meaning set forth in the preamble hereof.\n\n          \"$\" shall mean United States Dollars.\n\n                                   ARTICLE II\n\n                       PURCHASE AND SALE OF STOCK; CLOSING\n\n          Section 2.1. PURCHASE AND SALE. On the basis of the representations,\nwarranties, covenants and agreements and subject to the satisfaction or waiver\n(to the extent permitted) of the conditions set forth in Articles VIII and IX,\nat the Closing Seller will sell and THEH will \n\n\n                                      -5-\n\n\n\npurchase six thousand (6,000) Shares, which constitute, and will constitute as\nof the Closing, 100% of the issued and outstanding shares of capital stock or\nother equity interests of the Company. In payment for such Shares,\nsimultaneously with the delivery by Seller of certificates for such Shares, with\nall appropriate stock powers and requisite tax stamps attached, properly signed,\nin form suitable for the transfer of such Shares to THEH, and subject to the\nsatisfaction or waiver (to the extent permitted) of the applicable conditions\nset forth herein, THEH will deliver to Seller $200,000,000 (the \"PURCHASE\nPRICE\") by wire transfer of immediately available funds to the account or\naccounts specified by Seller.\n\n          Section 2.2. TIME AND PLACE OF CLOSING. Subject to satisfaction or\nwaiver of the conditions to Closing set forth herein, the Closing shall take\nplace at the offices of Wachtell, Lipton, Rosen &amp; Katz, 51 West 52nd Street, New\nYork, New York, at 9:00 a.m., New York City time, on July 6, 2001 or at such\nother time and date as THEH and Seller may agree (the \"CLOSING DATE\").\n\n                                  ARTICLE III\n\n                    REPRESENTATIONS AND WARRANTIES OF SELLER\n\n          Seller hereby represents and warrants to THEH and Parent as follows:\n\n          Section 3.1. INCORPORATION; AUTHORIZATION; ETC. (a) Each of the\nCompany and the Subsidiaries has been duly organized and is validly existing and\nin good standing (to the extent such term is applicable) under the laws of the\njurisdiction of its incorporation. Each of the Company and the Subsidiaries has\nfull corporate power and authority to own its properties and assets and to\nconduct its business as it is now being conducted and is in good standing (to\nthe extent such term is applicable) and is duly qualified to transact business\nin each jurisdiction in which the nature of property owned or leased by it or\nthe conduct of its business requires it to be so qualified, except where the\nfailure to be in good standing or so qualified would not have a material adverse\neffect on the Company and the Subsidiaries, taken as a whole. Each jurisdiction\nin which the Company or any Subsidiary is qualified to do business is set forth\non Schedule 3.1(a).\n\n          (b) Seller has been duly organized, is validly existing and is in good\nstanding under the laws of the British Virgin Islands.\n\n          (c) Seller has full corporate power and authority to execute and\ndeliver this Agreement, to perform its obligations hereunder and to consummate\nthe transactions contemplated hereby. The execution and delivery of this\nAgreement by Seller, the performance of Seller's obligations hereunder and the\nconsummation by Seller of the transactions contemplated hereby have been duly\nand validly authorized by all necessary corporate proceedings on the part of\nSeller, and no other corporate proceeding or action on the part of Seller or its\nBoard of Directors and stockholders is necessary therefor.\n\n          (d) The execution, delivery and performance of this Agreement by\nSeller will not (i) violate or conflict with any provision of the memorandum of\nassociation or articles of association (or similar instruments) of any of\nSeller, the Company or any Subsidiary, (ii) except\n\n\n                                      -6-\n\n\n\nas set forth on Schedule 3.1(d), conflict with, violate or constitute a default\nunder any provision of, or be an event that is (or with the giving of notice or\npassage of time or both will result in) a violation of or default under, or\nresult in the acceleration of or entitle any party to accelerate (whether after\nthe giving of notice or lapse of time or both) any obligation or right under, or\nresult in the imposition of any lien upon or the creation of a security interest\nin any of the Shares or any of the assets or properties of the Company or any of\nthe Subsidiaries pursuant to, or require a consent or create a penalty or\nincrease the Company's or any Subsidiary's payment or performance obligations\nunder, any material mortgage, lien, lease, instrument, order, arbitration award,\njudgment or decree, or any material contract, agreement, license or permit, to\nwhich Seller, the Company or any Subsidiary is a party or by which any of them\nor any of their property is bound, or (iii) assuming that all consents,\napprovals, authorizations and other actions described in Section 3.7(b) have\nbeen obtained and all filings and obligations set forth in Section 3.7(b) have\nbeen made, violate or conflict with in any material respect, or result in the\nimposition of any material lien (other than liens arising from any actions taken\nor arrangements made by Parent or any of its subsidiaries) upon any of the\nShares, or any of the assets or properties of the Company or any Subsidiary\npursuant to, any provision of law, regulation, rule, writ, injunction, decree,\nstatute, order, judgment or ruling of any federal, state, local, foreign,\nsupernational or supranational court or tribunal (including any court or\ntribunal dealing with labor matters), governmental, regulatory or administrative\nagency, department, bureau, authority or commission or arbitral panel\n(\"GOVERNMENTAL AUTHORITY\") or any other material restriction of any kind or\ncharacter to which Seller, the Company or any Subsidiary is or may be subject or\nby which any of them or any of their property is or may be bound. This Agreement\nhas been duly executed and delivered by Seller and, assuming the due execution\nhereof by Parent and THEH, this Agreement constitutes the legal, valid and\nbinding obligations of Seller enforceable against Seller in accordance with its\nterms except as such enforceability may be limited by any applicable bankruptcy,\ninsolvency, reorganization, moratorium or other similar laws affecting\ncreditors' rights generally, and except as the availability of equitable\nremedies may be limited by the application of general principles of equity\n(regardless of whether such equitable principles are applied in a proceeding at\nlaw or in equity).\n\n          (e) Upon consummation of the Stock Purchase at the Closing, as\ncontemplated by this Agreement, Seller will deliver to THEH good and valid title\nto all of the outstanding Shares free and clear of any liens, claims, charges,\nsecurity interests, options or other legal or equitable encumbrances or other\nrights of third parties (except those imposed by the United States federal\nsecurities laws or any action taken or arrangement made by Parent or any of its\nsubsidiaries).\n\n          (f) Seller has made available to THEH complete and correct copies of\nthe memorandum of association and articles of association (or similar\ninstruments), as amended to date, of Seller, the Company and each of the\nSubsidiaries, and has made available to THEH the corporate minute books\ncontaining the records of meetings of the stockholders and boards of directors,\nthe stock certificate books and the stock record books of the Company and the\nSubsidiaries. The stock record books of the Company and the Subsidiaries which\nSeller has made available to THEH are complete and correct in all respects and\naccurately reflect the ownership of all of the outstanding shares of the\nCompany's and the Subsidiaries' respective capital stock and all other\nsecurities issued by the Company or any of the Subsidiaries. All material\ncorporate actions taken by the Company and the Subsidiaries since their\nrespective\n\n\n                                      -7-\n\n\n\norganization and incorporation have been duly authorized and subsequently\nratified as necessary. Neither the Company nor any of the Subsidiaries is in\ndefault under or in violation of any provision of its articles of incorporation,\nbylaws or similar instruments.\n\n          Section 3.2. CAPITALIZATION; STRUCTURE. (a) The authorized capital\nstock of the Company consists of 30,000 Shares, of which 6,000 Shares are issued\nand outstanding. All of the outstanding shares of capital stock of the Company\nare validly issued, fully paid and nonassessable and are owned beneficially and\nof record by Seller. All of the outstanding shares of capital stock or other\nequity interests of the Subsidiaries, as listed on Schedule 3.2(a), are validly\nissued, fully paid and nonassessable. Except as set forth on Schedule 3.2(a),\nall of the outstanding shares of capital stock or other equity interests of the\nSubsidiaries are owned by the Company or another Subsidiary in the amounts set\nforth on Schedule 3.2(a). None of the outstanding Shares nor any of the shares\nof outstanding capital stock or other equity interests of any Subsidiary have\nbeen issued in violation of, or are subject to, any preemptive rights. Except as\nprovided in the European License, the shares of capital stock or other equity\ninterests of the Subsidiaries and the outstanding Shares are owned in each case\nfree and clear of any liens, claims, charges, security interests, options or\nother legal or equitable encumbrances or restrictions. Except as provided in the\nEuropean License, there are no outstanding options, warrants, subscriptions or\nother rights of any kind to acquire, or obligations to issue, shares of capital\nstock of any class of, or other equity interests in, the Company or any\nSubsidiary, or any securities convertible into or exchangeable or exercisable\nfor any shares of capital stock of any class of, or other equity interests in,\nthe Company or any Subsidiary.\n\n          (b) Neither the Company nor any of the Subsidiaries directly or\nindirectly owns or has the right to acquire any capital stock of or other equity\ninterests, investment, partnership, joint venture or similar interest in any\ncorporation, partnership or other entity or other Person except for the\nownership of the outstanding shares or other equity interests of the\nSubsidiaries, as set forth on Schedule 3.2(a).\n\n          Section 3.3. FINANCIAL STATEMENTS. Seller has previously furnished to\nTHEH true and complete copies of the consolidated financial statements of the\nCompany and its consolidated subsidiaries for the fiscal years ended March 31\nfor each of 2001, 2000 and 1999 (such financial statements for the Company for\n2001 and for TH Europe for 2001, 2000 and 1999 being audited and accompanied by\nthe unqualified opinion of PricewaterhouseCoopers) (the \"FINANCIAL STATEMENTS\").\nExcept as set forth on Schedule 3.3, the Financial Statements (including the\nnotes thereto) present fairly in all material respects the consolidated\nfinancial position and results of operations and cash flows of the Company and\nits consolidated subsidiaries for the respective periods or as of the respective\ndates set forth therein, in each case in accordance with GAAP applied on a\nconsistent basis throughout the periods involved (except as otherwise indicated\ntherein). The Financial Statements have been prepared from and in accordance\nwith the books and records of the Company and its subsidiaries.\n\n          Section 3.4. PROPERTIES; LEASES. Except for Permitted Exceptions or as\nset forth on Schedule 3.4 hereto, at the Closing the Company or a Subsidiary\nwill have good and marketable title to, or valid leasehold interests in, as the\ncase may be, and hold free and clear of all Encumbrances, all of the properties\nand assets reflected in the Company Balance Sheet or acquired in the ordinary\ncourse of business since the date of the Company Balance Sheet other\n\n\n                                      -8-\n\n\n\nthan assets sold or fixtures transferred in the ordinary course of business\nconsistent with past practice since such date. Schedule 3.4 sets forth a list of\nall real property used in conducting the businesses of the Company and the\nSubsidiaries (collectively, the \"REAL PROPERTY\"). Seller has delivered to THEH\nor otherwise made available, correct and complete copies of all leases,\nsubleases and other material agreements or other material instruments relating\nto the Real Property to which the Company or any of the Subsidiaries is a party,\nall of which are identified on Schedule 3.4 hereto. There are no pending or, to\nSeller's knowledge, threatened condemnation proceedings relating to any of the\nReal Property. Except as set forth on Schedule 3.13.B.1., none of the real\nproperty improvements (including leasehold improvements), equipment and other\nassets owned or used by the Company or the Subsidiaries is subject to any\ncommitment or other arrangement for their sale or use by any Affiliate of the\nCompany or any of the Subsidiaries or by third parties.\n\n          Section 3.5. ABSENCE OF CERTAIN CHANGES. Except as set forth on\nSchedule 3.5 hereto and except as contemplated by this Agreement, since March\n31, 2001, there has been no (a) change or development in, or effect on, the\nCompany and the Subsidiaries that is, or could reasonably be expected to be,\nmaterially adverse to the business, assets, liabilities, condition (financial or\notherwise), results of operations or prospects of the Company and the\nSubsidiaries, taken as a whole (a \"COMPANY MATERIAL ADVERSE EFFECT\"), or (b)\naction taken by the Company or any Subsidiary which, if taken from the date\nhereof through the Closing, would violate Section 5.4(a) through (l) (assuming\nthat references to \"the date of this Agreement\" in clause (ii) of Section 5.4(c)\nwere deemed to be changed to \"March 31, 2001\").\n\n          Section 3.6. LITIGATION; ORDERS. Except as set forth on Schedule 3.6\nhereto, there are no Actions pending or, to the knowledge of Seller, threatened\nor claims asserted against the Company or any Subsidiary other than routine\nActions in the ordinary course of business as to which the claims against the\nCompany and the Subsidiaries are less than $25,000 individually and $75,000 in\nthe aggregate. Except as set forth on Schedule 3.6 hereto, there are no material\njudgments or material outstanding orders, injunctions, decrees, stipulations,\nsettlement agreements, citations, investigations, fines or awards against or\nbinding upon the Company or any Subsidiary or any of their respective properties\nor businesses.\n\n          Section 3.7. LICENSES, APPROVALS, OTHER AUTHORIZATIONS, CONSENTS,\nREPORTS, ETC. (a) The Company and the Subsidiaries possess or have been granted\nall material registrations, filings, applications, certifications, notices,\nconsents, licenses, permits, approvals, certificates, franchises, orders,\nqualifications, authorizations and waivers (\"LICENSES\") of any Governmental\nAuthority necessary to entitle them to conduct their businesses in the manner in\nwhich they are presently being conducted.\n\n          (b) Except (i) as set forth on Schedule 3.7(b) hereto, (ii) required\nnotices to the Committee for Merger Affairs in the Netherlands pursuant to\nArticle 21.1 of the Merger Code and (iii) those the failure to make, file, give\nor obtain which would not have a Company Material Adverse Effect or prevent the\nconsummation of the Stock Purchase and the other transactions contemplated\nhereby, there are no Licenses required to be made, filed, given or obtained by\nSeller, the Company or any of the Subsidiaries with, to or from any Governmental\nAuthority in connection with the consummation of the Stock Purchase and the\nother transactions contemplated under this Agreement.\n\n\n                                      -9-\n\n\n\n          Section 3.8. LABOR MATTERS. Schedule 3.8 hereto sets forth all\ncollective bargaining or other agreements with labor unions, trade unions,\nemployee representatives, work committees, guilds or associations representing\nemployees of the Company or any of the Subsidiaries. As of the date hereof, the\nCompany does not have any \"trade unions\" as such term is defined in the SER\nFUSIEGEDRAGSREGELS. As of the date hereof, neither the Company nor any\nSubsidiary is involved in or, to Seller's knowledge, threatened with any labor\ndispute, arbitration, lawsuit, grievance or administrative proceeding (other\nthan immaterial grievances), relating to labor matters involving any current or\nformer employee of the Company or any Subsidiary. Except as set forth on\nSchedule 3.8, as of the date hereof, no union or association organizing or\nelection activities involving any nonunion employees of the Company or any\nSubsidiary are in progress or, to the knowledge of Seller, have been threatened\nsince April 1, 1998.\n\n          Section 3.9. COMPLIANCE WITH LAWS. Except as may be disclosed in\nSchedule 3.9, the conduct of the businesses of the Company and the Subsidiaries\nis in and has been in compliance in all material respects with all material\nstatutes, laws, regulations, ordinances, rules, judgments, orders or decrees\napplicable thereto. Except as set forth on Schedule 3.9, neither Seller nor the\nCompany or any Subsidiary has received written notice of any alleged violation\nof any statute, law, regulation, ordinance, rule, judgment, order or decree from\nany Governmental Authority applicable to the Company or any of the Subsidiaries\nor to their properties which has not been satisfactorily addressed and which\ngives or may give rise to material fines or other civil penalties or to any\ncriminal liabilities. In furtherance and not in limitation of the foregoing,\nneither Seller nor the Company or any Subsidiary has, directly or indirectly,\npaid or delivered any fee, commission or other sum of money or item of property,\nhowever characterized, to any government official or other governmental party,\nin the United States or any other country, which is in any manner related to the\nbusinesses or operations of the Company or the Subsidiaries and which was\nillegal under any statutes, laws, regulations, ordinances, rules, judgments,\norders or decrees of any Governmental Authority (including, without limitation,\nthe U.S. Foreign Corrupt Practices Act). The lack of a Works Council, within the\nmeaning of the WET OP DE ONDERNEMINGSRADEN, in the Company shall not result in\nany economic penalties to the Company nor shall it preclude or prohibit, nor\nresult in any grounds to preclude, prohibit or challenge in any court of law or\notherwise, the Stock Purchase as contemplated herein.\n\n          Section 3.10. INSURANCE. Each of the Company and the Subsidiaries is\ncovered by valid and currently effective insurance policies issued in its favor\nthat are customary in scope and amount of coverage for privately-owned companies\nof similar size and financial condition in the industry and locale in which it\noperates. Schedule 3.10 lists all insurance policies which are in effect\ncovering the Company, any of the Subsidiaries or their employees, or the Real\nProperty and such Schedule lists each of the parties to such policies. Except as\nset forth on Schedule 3.10, all such policies are in full force and effect, all\npremiums due thereon have been paid and the Company and the Subsidiaries have\ncomplied with the provisions of such policies in all material respects.\n\n          Section 3.11. MATERIAL CONTRACTS. Except as set forth on Schedule 3.11\nhereto, neither the Company nor any Subsidiary is a party to or bound by any\nwritten or oral (a) employment, consulting or non-competition agreement or\ncontract requiring payments of compensation to any one Person in excess of\n$75,000 per year or aggregate payments of \n\n\n                                      -10-\n\n\n\ncompensation to any one Person in excess of $150,000, other than (i) employment\nagreements entered into with employees in the ordinary course of business\ncontaining terms not differing in any material respect from the forms of\ncontract previously provided by Seller to THEH and (ii) the Employment\nAgreements, true and correct copies of which Seller has previously provided to\nTHEH; (b) joint venture or partnership contract or agreement; (c) contract or\nagreement restricting the right of the Company or any of the Subsidiaries to\ncompete in any way with any other Person; (d) other than trade payables in the\nordinary course of business, agreement or contract creating, evidencing or\nsecuring, as of the date hereof, obligations of the Company or any of the\nSubsidiaries for (i) borrowed money, (ii) purchase money indebtedness, (iii) any\nguarantee or assumption of an obligation for borrowed money or purchase money\nindebtedness or other obligations of reimbursement of any maker of a letter of\ncredit or any guaranty of minimum equity or capital or any make-whole or similar\nagreement, (iv) any loan or extension of credit by the Company or any Subsidiary\nor (v) bankers acceptance; (e) agreement or contract relating to any outstanding\ncommitment for capital expenditures in excess of the amount set forth in the\ncapital budget provided to THEH prior to the date hereof; (f) licenses, whether\nas licensor or licensee, of any Intellectual Property (other than the European\nLicense); (g) any material lease as lessee or lessor of real or personal\nproperty; (h) capitalized lease or sale-leaseback or material conditional sale\nagreement; (i) distributorship, agency or franchise agreement; (j) material raw\nmaterial or other supply agreements or any exclusive dealing, requirements or\ntake-or-pay contracts; (k) other than as identified in Section 3.12, any\nbrokerage or finders fee agreements; or (l) other contract or agreement, entered\ninto other than in the ordinary course of business, involving an estimated total\nfuture payment or payments in excess of $100,000. Each contract or agreement set\nforth on Schedule 3.11 hereto is in full force and effect, and, to Seller's\nknowledge, is legal, valid and binding and enforceable against each other Person\nparty thereto. Neither the Company or any of the Subsidiaries, nor, to Seller's\nknowledge, any other party to any such contract or agreement, is in material\nbreach thereof or default thereunder and there does not exist under any\nprovision thereof, any event that, with the giving of notice or the lapse of\ntime or both, would constitute such a breach or default by the Company or any\nSubsidiary or, to Seller's knowledge, by any other party to any such contract or\nagreement, except for such breaches, defaults and events as to which requisite\nwaivers or consents have been or prior to the Closing will have been obtained.\nSeller has made available to THEH true and correct copies of each of such\nwritten agreements and contracts or provided written summaries of any such oral\nagreements and contracts.\n\n          Section 3.12. BROKERS, FINDERS, ETC. No Seller Affiliate has employed,\nor is subject to any valid claim of, any broker, finder, or other similar\nintermediary in connection with the transactions contemplated by this Agreement\nwho might be entitled to a fee or commission in connection with such\ntransactions, other than pursuant to an engagement letter with Schroder Salomon\nSmith Barney, a true and correct copy of which Seller has previously provided to\nTHEH, the fees and expenses of which will be payable by the Company.\n\n          Section 3.13. AFFILIATE TRANSACTIONS. (a) Except as disclosed in the\nnotes to the Financial Statements or as set forth on Schedule 3.13 hereto, (i)\nno Individual Affiliate or Continuing Affiliate or officer, director or employee\nof any Continuing Affiliate directly or indirectly provides or causes to be\nprovided to the Company or any of the Subsidiaries any assets, loans, advances,\nservices or facilities (other than in their capacity as an officer, director or\nemployee of the Company or the Subsidiaries), (ii) neither the Company nor any\nof the \n\n\n                                      -11-\n\n\n\nSubsidiaries provides or causes to be provided to any such officer, director or\nemployee, Continuing Affiliate or Individual Affiliate any assets, loans,\nadvances, services or facilities, and (iii) neither the Company nor any of the\nSubsidiaries has paid any dividends or made any other distributions or payments\nto any Affiliates of either the Company or any of the Subsidiaries (other than\nthe Company and the Subsidiaries) since March 31, 2001, except as contemplated\nby Section 5.12. Except as set forth on Schedule 3.13 hereto, neither the\nCompany nor any of the Subsidiaries, jointly with any Continuing Affiliate,\npurchases or sells goods or services.\n\n          (b) Each of Fred Gehring and Ludo Onnink has tendered his written\nresignation as an officer or director of each Continuing Affiliate for which\nsuch individual served as an officer or director, and no such resignation has\nsubsequently been withdrawn.\n\n          Section 3.14. ENVIRONMENTAL COMPLIANCE. (a) For purposes of this\nSection 3.14, (i) \"HAZARDOUS SUBSTANCE\" means any pollutant, contaminant,\nhazardous or toxic substance or waste, solid waste, petroleum, petroleum\nproduct, by-product or breakdown product, or any other chemical, substance or\nmaterial listed or identified in or regulated by or under any Environmental Law;\n(ii) \"ENVIRONMENTAL LAW\" means any applicable statute, rule, regulation, law,\nby-law, ordinance or directive of any Governmental Authority dealing with the\npollution or protection of natural resources or the indoor or ambient\nenvironment or with the protection of human health or safety; and (iii) \"RCRA\nHAZARDOUS WASTE\" means a solid waste that is listed or classified as a hazardous\nwaste, as that term is defined in or pursuant to the Resource Conservation and\nRecovery Act, as amended, 42 U.S.C. ss. 6901 et seq.\n\n          (b) Except as set forth on Schedule 3.14, there are no claims pending\nor, to the knowledge of Seller, threatened, and none of Seller, the Company or\nthe Subsidiaries has received any written notice, alleging, warning or notifying\nSeller, the Company or any Subsidiary that the Company or any Subsidiary is, has\nbeen or may be in violation of, or non-compliance with, in any material respect,\nany Environmental Law.\n\n          (c) Except as set forth on Schedule 3.14, to the knowledge of Seller,\nno Hazardous Substances have ever been buried, spilled, leaked, discharged,\nemitted, generated, stored, used or released, and no Hazardous Substances are\nnow present in amounts, concentrations or conditions requiring investigation,\nstudy, removal, remediation or any other responsive action or corrective action\nunder, or forms the basis of a claim pursuant to, any Environmental Law, in, on,\nfrom or under the Real Property or any other property with respect to which the\nCompany or any Subsidiary may be identified as a potentially responsible party\nor otherwise bear liability, except for immaterial quantities stored or used by\nthe Company or any Subsidiary in the ordinary course of its business and in\naccordance, in all material respects, with all applicable Environmental Laws.\n\n          (d) Except as set forth on Schedule 3.14, the Real Property is not\nbeing used and, to the knowledge of Seller, never has been used in connection\nwith the business of manufacturing, storing or transporting Hazardous\nSubstances, and, to the knowledge of Seller, no RCRA Hazardous Wastes have been\ntreated, stored or disposed of there.\n\n          (e) Except as set forth on Schedule 3.14, to Seller's knowledge, there\nare not now and never have been any underground or above ground storage tanks or\nother containment \n\n\n                                      -12-\n\n\n\nfacilities of any kind on the Real Property which contain or contained any\nHazardous Substances.\n\n          (f) Except as set forth on Schedule 3.14, none of the Real Property is\nor has been listed on any list, schedule, log, inventory or database maintained\nor issued by any Governmental Authority of sites or facilities with potential,\nthreatened, suspected or actual releases of Hazardous Substances.\n\n          (g) Schedule 3.14 identifies, and Seller has provided to THEH true and\ncorrect copies of, all environmental audits or assessments relating in whole or\nin part to the Company or any of the Subsidiaries undertaken by or on behalf of\nany of the Seller Affiliates, or, to Seller's knowledge, by Governmental\nAuthorities or other third parties, and any written communications by the\nCompany or the Subsidiaries or, to Seller's knowledge, relating in whole or in\npart to the Company or any of the Subsidiaries with environmental agencies,\nwithin the past six years which describe the status of any Real Property or the\ncompliance of the owners or lessees thereof with respect to any Environmental\nLaw.\n\n          (h) Except as set forth on Schedule 3.14, no Seller Affiliate has\nreceived any written notice from any Governmental Authority or other third party\nthat the Company or any of the Subsidiaries or any of their predecessors is or\nmay be a potentially responsible party or may otherwise bear liability for any\nactual or threatened release of Hazardous Substances at or from any site or\nfacility other than the Real Property.\n\n          Section 3.15. NETHERLANDS ANTILLES AND NETHERLANDS TAX MATTERS. (a)\nNetherlands Antilles. The tax ruling granted by the relevant Netherlands\nAntilles Tax Authority, dated December 15, 1999, which provides that, in\naccordance with articles 14 and 14A of the Profit Tax Ordinance 1940, the\nCompany is subject to Netherlands Antilles tax at rates of 2.4-3% is in full\nforce and effect as of the date hereof and the Company is in compliance with all\nprovisions thereof. TH Europe has received oral confirmation from such\nNetherlands Antilles Tax Authority that the ruling will remain in effect\nfollowing the execution and delivery of this Agreement and the consummation of\nthe Stock Purchase and the other transactions contemplated hereunder.\n\n          (b) Netherlands. The special tax ruling granted by the relevant\nNetherlands Tax Authority, dated March 4, 1997, which provides that, subject to\ncertain restrictions, pre-tax profits of TH Europe otherwise subject to taxation\nin the Netherlands in excess of 7% of TH Europe's net sales are tax-exempt, is\nin full force and effect as of the date hereof and TH Europe is in compliance\nwith all provisions thereof. TH Europe has received written confirmation from\nsuch Netherlands Tax Authority on June 26, 2001, a true and complete copy of\nwhich Seller has previously provided to THEH, that the ruling will remain in\neffect following the execution and delivery of this Agreement and the\nconsummation of the Stock Purchase and the other transactions contemplated\nhereunder.\n\n          Section 3.16. NO UNDISCLOSED LIABILITIES. Except (a) as disclosed in\nSchedule 3.16 hereto, (b) as and to the extent disclosed or reserved against on\nthe Company Balance Sheet or identified in the notes thereto, (c) as incurred\nafter the date of the Company Balance Sheet in the ordinary course of business\nconsistent with prior practice and not prohibited by this \n\n\n                                      -13-\n\n\n\nAgreement or (d) liabilities or obligations relating to Actions, contracts,\nagreements or environmental matters disclosed on or not required to be disclosed\non Schedules 3.6, 3.11 or 3.14, respectively, the Company and the Subsidiaries\ndo not have any liabilities or obligations of any nature, whether known or\nunknown, absolute, accrued, contingent or otherwise and whether due or to become\ndue.\n\n                                   ARTICLE IV\n\n                     REPRESENTATIONS AND WARRANTIES OF THEH\n\n          THEH hereby represents and warrants to Seller as follows:\n\n          Section 4.1. INCORPORATION; AUTHORIZATION; ETC. (a) Each of Parent and\nTHEH has been duly incorporated and is validly existing as a company limited by\nshares in good standing under the laws of the British Virgin Islands. THEH has\nfull corporate power and authority to own its property and to conduct its\nbusiness as it is now being conducted and is duly qualified as a foreign\ncorporation to transact business and is in good standing (to the extent such\nterm is applicable) in each jurisdiction in which the conduct of its business or\nownership or leasing of property requires such qualification, except to the\nextent that the failure to be so qualified or in good standing would not have a\nmaterial adverse effect on Parent and its subsidiaries, taken as a whole. Each\nof Parent and THEH has full corporate power and authority to execute and deliver\nthis Agreement, to perform its obligations hereunder and to consummate the\ntransactions contemplated hereby. The execution and delivery of this Agreement\nby Parent and THEH and the performance by Parent and THEH of their respective\nobligations hereunder and the consummation of the transactions contemplated\nhereby by Parent and THEH have been duly authorized by the Board of Directors of\nParent and THEH, as applicable, and no other corporate proceedings on the part\nof Parent or THEH or their respective Boards of Directors or stockholders are\nnecessary therefor.\n\n          (b) The execution, delivery and performance by Parent and THEH of this\nAgreement will not (i) violate or conflict with any provision of the memorandum\nof association or articles of association (or similar instruments) of Parent or\nTHEH, (ii) conflict with, violate or constitute a default under any provision\nof, or be an event that is (or with the giving of notice or passage of time or\nboth will result in) a violation of or default under, or result in the\nacceleration of or entitle any party to accelerate (whether after the giving of\nnotice or lapse of time or both) any obligation or right under, or result in the\nimposition of any lien upon or the creation of a security interest in any of the\nassets or properties of Parent or its subsidiaries pursuant to, or require a\nconsent or create a penalty or increase Parent's or any of its subsidiary's\npayment or performance obligations under, any mortgage, lien, lease, instrument,\norder, arbitration award, judgment or decree, or any contract, agreement,\nlicense or permit, to which Parent or any of its subsidiaries is a party or by\nwhich any of them or any of their property is bound, or (iii) assuming that all\nconsents, approvals, authorizations and other actions described in Section 4.2\nhave been obtained and all filings and obligations set forth in Section 4.2 have\nbeen made, violate or conflict with, or result in the imposition of any lien\n(other than liens arising from any actions taken or arrangements made by any\nSeller Affiliate) upon any of the assets or properties of Parent or any of its\nsubsidiaries pursuant to, any provision of law, regulation, rule, writ,\ninjunction, decree, statute, order, judgment or ruling of any Governmental\nAuthority or any other \n\n\n                                      -14-\n\n\n\nrestriction of any kind or character to which Parent or any of its subsidiaries\nis or may be subject or by which any of them or any of their property is or may\nbe bound except, in the case of clauses (ii) or (iii) for such conflicts,\nviolations, defaults, accelerations or liens which would not, individually or in\nthe aggregate, have a material adverse effect on Parent and its subsidiaries\ntaken as a whole or on the ability of Parent and THEH to consummate the Stock\nPurchase and the other transactions contemplated hereby. This Agreement has been\nduly executed and delivered by Parent and THEH and, assuming the due execution\nhereof by Seller, this Agreement constitutes the legal, valid and binding\nobligations of Parent and THEH enforceable against such parties in accordance\nwith its terms except as such enforceability may be limited by any applicable\nbankruptcy, insolvency, reorganization, moratorium or other similar laws\naffecting creditors' rights generally, and except as the availability of\nequitable remedies may be limited by the application of general principles of\nequity (regardless of whether such equitable principles are applied in a\nproceeding at law or in equity).\n\n          Section 4.2. OTHER AUTHORIZATIONS, CONSENTS, REPORTS, ETC. Except (a)\nas set forth on Schedule 4.2 hereto, (b) for applicable requirements, if any, of\nthe Exchange Act, (c) for notices to the Committee for Merger Affairs in the\nNetherlands pursuant to Article 21.1 of the Merger Code and (d) those the\nfailure to make, file, give or obtain which would not have a material adverse\neffect on Parent and its subsidiaries taken as a whole or prevent the\nconsummation of the Stock Purchase and the other transactions contemplated\nhereby, there are no Licenses required to be made, filed, given or obtained by\nParent or THEH with, to or from any Governmental Authority in connection with\nthe consummation of the Stock Purchase and the transactions contemplated under\nthis Agreement.\n\n          Section 4.3. BROKERS, FINDERS, ETC. Except for the services of Morgan\nStanley &amp; Co. Incorporated and Gleacher &amp; Co. LLC, neither Parent nor THEH has\nemployed, nor is Parent or THEH subject to any valid claim of, any broker,\nfinder, or other similar intermediary in connection with the transactions\ncontemplated by this Agreement who might be entitled to a fee or commission in\nconnection with such transactions. No Continuing Affiliate has or will have any\nobligations to Morgan Stanley &amp; Co. Incorporated or Gleacher &amp; Co. LLC with\nrespect to the transactions contemplated by this Agreement.\n\n          Section 4.4. ACQUISITION OF SHARES FOR INVESTMENT. THEH has such\nknowledge and experience in financial and business matters that it is capable of\nevaluating the merits and risks of its purchase of the Shares and has been\nprovided access to personnel and books of the Company and the Subsidiaries for\npurposes of making its evaluation. THEH is acquiring the Shares for investment\nand not with a view toward or for sale in connection with any distribution\nthereof, or with any present intention of distributing or selling the Shares.\nTHEH agrees that the Shares may not be sold, transferred, offered for sale,\npledged, hypothecated or otherwise disposed of without registration under the\nSecurities Act, except pursuant to an exemption from such registration available\nunder the Securities Act.\n\n\n                                      -15-\n\n\n\n                                   ARTICLE V\n\n                      COVENANTS OF SELLER, PARENT AND THEH\n\n          Section 5.1. INVESTIGATION OF BUSINESS; ACCESS TO PROPERTIES AND\nRECORDS. (a) Prior to the Closing Date, Seller shall and shall cause the Company\nand the Subsidiaries to afford to representatives of THEH full access to the\npersonnel, offices, plants, properties, books and records of the Company and the\nSubsidiaries during normal business hours, in order that THEH may have full\nopportunity to make such investigations as it desires of the affairs and assets\nof the Company and the Subsidiaries; PROVIDED, HOWEVER, that such investigation\nby THEH shall not unreasonably disrupt the personnel and operations of the\nCompany and the Subsidiaries.\n\n          (b) At the Closing or as soon thereafter as practicable, Seller will\ndeliver or cause to be delivered to THEH all corporate records of the Company\nand the Subsidiaries, and all other original (or copies thereof, if originals\nare not immediately available) agreements, documents, books and records relating\nto the businesses of the Company and the Subsidiaries.\n\n          (c) Except as required by law and except to the extent such\ninformation becomes publicly available other than as a result of any action\ntaken by any Continuing Affiliate or its directors, officers, employees or\nagents, from and after the Closing Date, Seller shall, and shall use its best\nefforts to cause the other Continuing Affiliates to, and shall use its\nreasonable best efforts to cause the respective directors, officers, employees\nand agents of the Continuing Affiliates to, maintain the confidentiality of\nnon-public information with respect to the Company and the Subsidiaries. In the\nevent that any of the Continuing Affiliates after the Closing Date is requested,\nor becomes required by law, to disclose any confidential information relating to\nthe Company and the Subsidiaries, Seller will provide THEH with prompt notice\nthereof (before such information is disclosed if practicable) so that THEH may\nseek a protective order or other appropriate remedy and\/or waive compliance with\nthe terms of this Section 5.1(c).\n\n          Section 5.2. EFFORTS; OBTAINING CONSENTS. (a) Subject to the terms and\nconditions herein provided, each of Seller, Parent and THEH agrees to use all\nreasonable efforts to take, or cause to be taken, all actions and to do, or\ncause to be done, all things necessary, proper or advisable to consummate and\nmake effective as promptly as practicable the transactions contemplated by this\nAgreement and to cooperate with the others in connection with the foregoing,\nincluding using its reasonable efforts (i) to obtain all waivers, consents and\napprovals from other parties to loan agreements, leases, mortgages and other\ncontracts necessary for the consummation of the transactions contemplated\nhereby, (ii) to make all filings with, and to obtain all consents, approvals and\nauthorizations that are required to be obtained from, Governmental Authorities,\n(iii) to lift or rescind any injunction, restraining order, decree or other\norder adversely affecting the ability of the parties hereto to consummate the\ntransactions contemplated hereby, (iv) to effect all necessary registrations and\nfilings and submissions of information requested by Governmental Authorities,\nand (v) to fulfill all conditions to this Agreement. Each of Seller, Parent and\nTHEH shall use all reasonable efforts to prevent the entry, enactment or\npromulgation of any threatened or pending preliminary or permanent injunction or\nother order, decree or ruling or statute, rule, regulation or executive order\nthat would adversely affect the ability of the parties hereto to consummate the\ntransactions contemplated hereby.\n\n\n                                      -16-\n\n\n\n          (b) Each party hereto shall promptly inform the other of any material\ncommunication from any Governmental Authority regarding any of the transactions\ncontemplated hereby. If any of Parent, THEH or Seller or any Affiliate thereof\nreceives a request for additional information or documentary material from any\nsuch Governmental Authority with respect to the transactions contemplated\nhereby, then such party shall endeavor in good faith to make, or cause to be\nmade, as soon as reasonably practicable and after consultation with the other\nparty, an appropriate response in compliance with such request. Each of Parent,\nTHEH and Seller will advise the others promptly in respect of any\nunderstandings, undertakings or agreements (oral or written) which it proposes\nto make or enter into with any Governmental Authority in connection with the\ntransactions contemplated hereby.\n\n          Section 5.3. FURTHER ASSURANCES. Seller, Parent and THEH agree that,\nfrom time to time, whether before, at or after the Closing Date, each of them\nwill take such other action (including, on the part of Seller, using its best\nefforts to cause the other Continuing Affiliates to, and using its reasonable\nbest efforts to cause the respective directors, officers, employees and agents\nof the Continuing Affiliates to, take such action and, on the part of Parent,\nusing its best efforts to cause its subsidiaries to take such action) as may be\nnecessary to carry out the purposes and intents of this Agreement. Seller shall\nuse its best efforts as promptly as practicable following the date hereof to\ncause the resignations described in Section 3.13(b) to be accepted by the\napplicable Continuing Affiliate and, if applicable, such Continuing Affiliate's\nshareholder(s) (to the extent not heretofore accepted), and to make or cause to\nbe made any and all filings with Governmental Authorities required to record\nsuch resignations under applicable laws and regulations.\n\n          Section 5.4. CONDUCT OF BUSINESS BY SELLER. From the date hereof\nthrough the Closing, except as disclosed on Schedule 5.4 hereto or otherwise\ncontemplated by this Agreement, and, except as consented to or approved by THEH\nin writing, Seller covenants and agrees that:\n\n          (a) each of the Company and the Subsidiaries shall operate its\nbusiness in the ordinary and usual course in accordance with past practices;\n\n          (b) neither the Company nor any Subsidiary shall issue or sell (i) any\nshares of its capital stock or (ii) any securities convertible into, or options\nwith respect to, or warrants to purchase or rights to subscribe for, any shares\nof its capital stock or make any change in its issued and outstanding capital\nstock or redeem, purchase or otherwise acquire any of its capital stock;\n\n          (c) neither the Company nor any Subsidiary shall (i) increase in any\nmanner the compensation of, or enter into any new bonus or incentive agreement\nor arrangement with, any of its directors, officers or other employees other\nthan increases in compensation in the ordinary course of business and consistent\nwith past practice and which are not material in the aggregate; (ii) pay or\nagree to pay any pension, retirement allowance or other employee benefit to any\ndirector, officer or employee, whether past or present, other than as required\nby applicable law, contracts or plan documents in effect on the date of this\nAgreement; (iii) enter into any new employment, severance, consulting, or other\ncompensation agreement with any director, officer or employee or other person\nother than in connection with any new hires or promotions in the \n\n\n                                      -17-\n\n\n\nordinary course and consistent with past practice; or (iv) commit itself to any\nadditional pension, profit-sharing, deferred compensation, group insurance,\nseverance pay, retirement or other employee benefit plan, fund or similar\narrangement or adopt or amend or commit itself to adopt or amend any of such\nplans, funds or similar arrangements in existence on the date hereof;\n\n          (d) neither the Company nor any Subsidiary shall (i) amend its\narticles of incorporation, bylaws or similar instruments, (ii) declare any\ndividend or make any distribution with respect to its capital stock, (iii)\nassume, incur or guarantee any obligation for borrowed money other than trade\npayables in the ordinary course of business consistent with past practice, (iv)\ncancel or compromise, except for compromises of current or former short-term\ntrade receivables or other current assets in the ordinary course of business\nconsistent with past practice, any debts owed to it, or (v) waive or release any\nrights of material value;\n\n          (e) neither the Company nor any Subsidiary shall (i) sell, transfer,\nlease or otherwise dispose of any of its assets other than inventory, accounts\nreceivable or fixtures in the ordinary course of business consistent with prior\npractice, (ii) create or permit to exist any new security interest, lien or\nencumbrance on any of its properties or assets, other than Permitted Exceptions,\n(iii) enter into any joint venture, partnership or other similar arrangement,\n(iv) make any investment in or purchase any securities of any Person other than\nin connection with (A) the cash management activities of the Company and the\nSubsidiaries in the ordinary course of business consistent with past practice or\n(B) the formation of a wholly owned subsidiary or (v) purchase any assets of any\nPerson other than in the ordinary course of business consistent with past\npractice;\n\n          (f) neither the Company nor any Subsidiary shall permit a change in\nits methods of maintaining its books, accounts or business records or, except as\nrequired by GAAP (in which event prior notice shall be given to THEH), change\nany of its accounting principles or the methods by which such principles are\napplied for tax or financial reporting purposes;\n\n          (g) the Company and the Subsidiaries together shall incur capital\nexpenditures only in the ordinary course of business consistent with prior\npractice and not in excess of the capital budget provided to THEH prior to the\ndate hereof;\n\n          (h) neither the Company nor any of the Subsidiaries shall (i) enter\ninto or terminate any material lease, contract or agreement, or make any change\nin any of their material leases, contracts and agreements (including but not\nlimited to any contracts listed on Schedule 3.11), (ii) enter into any\ntransaction with any Continuing Affiliate or any director, officer or\nshareholder of any Continuing Affiliate (other than in their capacity as an\nofficer, director or employee of the Company or the Subsidiaries), (iii)\nreclassify any assets or liabilities, or (iv) do any other act that (A) would\ncause any representation or warranty of Seller in this Agreement to be or become\nuntrue in any material respect or (B) could reasonably be expected to have a\nCompany Material Adverse Effect;\n\n          (i)  the Company and Subsidiaries will comply in all material respects\nwith all material laws and regulations applicable to them;\n\n\n                                      -18-\n\n\n\n          (j) neither the Company nor any of the Subsidiaries will make any\npayment of interest on or principal of any intercompany indebtedness to any\nContinuing Affiliate;\n\n          (k) neither the Company nor any of the Subsidiaries shall make any\nelection with respect to Taxes, consent to any waiver or extension of time to\nassess or collect any Taxes without the consent of THEH (which consent shall not\nbe unreasonably withheld) or file any Return other than a Return filed in the\nordinary course of business and prepared in a manner consistent with past\npractice; and\n\n          (l) neither the Company nor any of the Subsidiaries shall agree to\ntake any action prohibited by this Section 5.4.\n\n          Section 5.5. PRESERVATION OF BUSINESS. From the date hereof until the\nClosing, subject to the terms and conditions of this Agreement, Seller shall,\nand shall cause each of the Subsidiaries to, use all reasonable efforts to\npreserve the business of the Company and the Subsidiaries intact, to preserve\nthe good will of customers, suppliers, employees and others having business\nrelations with the Company and the Subsidiaries, to retain its key employees,\nand to maintain insurance in full force and effect.\n\n          Section 5.6. NON-SOLICITATION. Except as otherwise contemplated in\nthis Agreement, the Continuing Affiliates shall not, and shall not permit the\nCompany or the Subsidiaries to, directly or indirectly, (a) solicit any\ninquiries or proposals for, or enter into or continue or resume any discussions\nwith respect to or enter into any negotiations or agreements relating to the\nsale or exchange of any Shares, any shares of capital stock of any Subsidiary or\nall, or a substantial part, of the assets of the Company or any of the\nSubsidiaries or (b) furnish or cause to be furnished any non-public information\nconcerning the business and operations of the Company or the Subsidiaries to any\nPerson (other than to or at the request of THEH and its representatives) other\nthan in the ordinary course of business consistent with past practice.\n\n          Section 5.7. NOTICE OF DEVELOPMENTS. Each party shall promptly notify\nthe other party in writing of any events, facts and occurrences which would\nresult in any breach of any representation or warranty or breach of any covenant\nby such party contained in this Agreement.\n\n          Section 5.8. GUARANTEES AND OTHER COMMITMENTS. Parent shall cause\nTommy Hilfiger Licensing, Inc. to release the existing guarantees and other\nobligations of Seller and any other Continuing Affiliate under the License\nAgreement, dated as of February 1, 1997, by and between Tommy Hilfiger\nLicensing, Inc. and Pepe Jeans London Corporation, as amended and assigned to TH\nEurope (the \"EUROPEAN LICENSE\"), concurrently with the Closing. Parent and THEH\nshall use their commercially reasonable efforts to cause Seller to be absolutely\nand unconditionally released from (on or effective as of the Closing), and shall\n(from and after the Closing) indemnify and hold Seller harmless from and against\nany losses suffered by it arising from, its obligations under the Letter of\nComfort, dated March 21, 2001, from Seller to Fortis Bank (Nederland) N.V. and\nFortis Commercial Finance N.V. and any additional such comfort letter approved\nin advance by Parent (collectively, the \"FORTIS COMFORT LETTER\"). Seller\ncovenants and agrees that it shall timely provide any notices required by it\nunder the Fortis Comfort Letter.\n\n\n                                      -19-\n\n\n\n          Section 5.9. FINANCIAL STATEMENTS. Prior to the Closing, Seller shall\ndeliver to THEH promptly after they are prepared such monthly or other financial\nstatements or financial reports of the Company and the Subsidiaries as are\nprepared by or relating to the Company and the Subsidiaries in the ordinary\ncourse of business and such other financial information as THEH may reasonably\nrequest, promptly after such request. Seller shall use its reasonable efforts to\nhave PricewaterhouseCoopers' consent to Parent's use of and reliance on the\nFinancial Statements and such other financial statements of the Company and the\nSubsidiaries as may be required in connection with filings under the United\nStates federal securities laws.\n\n          Section 5.10. FINANCING. At Closing, Parent shall cause THEH to have\navailable all of the funds necessary to consummate the Stock Purchase.\n\n          Section 5.11. RESIGNATION OF DIRECTORS. At the Closing, Seller shall\ncause to be delivered to THEH duly signed resignations, effective as of the\nClosing, of all directors of the Company and all of the Subsidiaries designated\nin writing by THEH to Seller reasonably prior to the Closing Date, or shall take\nsuch other action as is necessary to ensure that such persons are not directors\nof the Company or the Subsidiaries after the Closing.\n\n          Section 5.12. INTERCOMPANY ACCOUNTS; INDEBTEDNESS. All intercompany\nand intracompany payables and receivables (other than payables and receivables\nfor goods and services, including buying office and\/or sales agency commissions,\nin the ordinary course and payables and receivables pursuant to franchise,\nagency or distribution agreements in the ordinary course) and\/or loans between\nthe Company and the Subsidiaries, on the one hand, and the Continuing\nAffiliates, on the other hand, if any, shall be eliminated, released or\nforgiven, without the transfer of any cash and without the need for any further\ndocumentation, by way of dividends in kind (with respect to receivables of the\nCompany or the Subsidiaries owed by any Continuing Affiliate) or by way of\ncapital contributions (with respect to intercompany payables or loans due to any\nContinuing Affiliate) immediately prior to the Closing.\n\n\n                                   ARTICLE VI\n\n                                EMPLOYEE BENEFITS\n\n          Section 6.1. EMPLOYEE BENEFIT PLANS. Seller hereby represents and\nwarrants to THEH as follows:\n\n          (a) Schedule 6.1(a) includes a complete list of all employee benefit\nplans, programs, policies, retirement schemes, practices, and other arrangements\nfor any employee or former employee (including arrangements for the payment to\nemployees on their retirement or death or on the occurrence of any permanent or\ntemporary disability) or any beneficiary or dependent thereof, whether covering\none person or more than one person, sponsored or maintained by the Company or\nany of the Subsidiaries or to which the Company or any of the Subsidiaries\ncontribute or are obligated to contribute (collectively, \"COMPANY EMPLOYEE\nBENEFIT PLANS\"). No Company Employee Benefit Plan is subject to the Employee\nRetirement Income Security Act of 1974, as amended, nor does any Company\nEmployee Benefit Plan \n\n\n                                      -20-\n\n\n\nprovide benefits to any employee employed in the United States or to any former\nemployee with respect to services rendered in the United States.\n\n          (b) With respect to each Company Employee Benefit Plan, Seller has\ndelivered or made available to THEH a true, correct and complete copy of (i)\neach writing constituting a part of such Company Employee Benefit Plan,\nincluding without limitation all plan documents, benefit schedules, participant\nagreements, trust agreements, and insurance contracts and other funding\nvehicles; (ii) the most recent annual financial report, if any; and (iii) the\nmost recent letter regarding its tax status from the relevant Taxing Authority,\nif any. Except as specifically provided in the foregoing documents delivered or\nmade available to THEH, there are no amendments to any Company Employee Benefit\nPlan that have been adopted or approved nor has Seller or the Company or any\nSubsidiary taken any formal steps to make any such amendments.\n\n          (c) Except as otherwise set forth in Schedule 6.1(c) hereto, none of\nthe execution and delivery of this Agreement or the consummation of the\ntransactions contemplated hereby will (either alone or in conjunction with any\nrelated event, including without limitation, termination of employment) (i)\nresult in any payment or benefit becoming due from the Company or the\nSubsidiaries under any Company Employee Benefit Plan or any collective\nbargaining agreement, (ii) increase or vest any compensation or benefits under\nany such Company Employee Benefit Plan or collective bargaining agreement or\n(iii) accelerate any liability under any Company Employee Benefit Plan because\nof an acceleration of the time of payment or vesting of any rights or benefits\nto which employees may be entitled thereunder.\n\n          Section 6.2. COMPANY EMPLOYEE BENEFIT PLANS. Seller hereby represents\nand warrants to THEH as follows: (a) All Company Employee Benefit Plans are in\ncompliance with and have been administered and managed in all material respects\nin compliance with their terms and with all applicable requirements of\napplicable law, regulations and requirements, and all contributions required to\nbe made to each such plan under the terms of such plan or under applicable law\nfor all periods of time prior to the Closing Date will by the Closing Date be\ntimely made or paid in full or, to the extent not required to be made or paid to\neach such Plan on or before the Closing Date, have been fully reflected on the\nCompany Balance Sheet to the extent required by GAAP.\n\n          (b) There are no pending or, to Seller's knowledge, threatened claims\n(other than claims for benefits in the ordinary course), lawsuits, audits,\ninvestigations or arbitrations which have been threatened, asserted or\ninstituted against the Company Employee Benefit Plans, any fiduciaries thereof\nwith respect to their duties to the Company Employee Benefit Plans or the assets\nof any of the trusts under any of the Company Employee Benefit Plans which could\nreasonably be expected to result in any material liability of the Company or the\nSubsidiaries to any Company Employee Benefit Plan, any participant or\nbeneficiary thereunder, or any Governmental Authority.\n\n          (c) There is no material dispute about the entitlements or benefits\npayable under any of the Company Employee Benefit Plans, no material claim by or\nagainst the managers or administrators of the Company Employee Benefit Plans or\nthe Company or any of \n\n\n                                      -21-\n\n\n\nthe Subsidiaries has been made or threatened, and there are no circumstances\nwhich would reasonably be expected to give rise to any such claim.\n\n          (d) Where Company Employee Benefit Plans are funded or insured, all\ncontributions and other amounts due to or in respect of them or any state\npension arrangements by the Company and the Subsidiaries have been fully paid at\nClosing. Where such Company Employee Benefit Plans are unfunded or underfunded,\nappropriate reserves are established therefor in the Financial Statements. The\nCompany and the Subsidiaries have not by any act or omission, direct or\nindirect, materially increased their liabilities or obligations to the Company\nEmployee Benefit Plans since the date of the last actuary's report described in\nSection 6.2(e) below.\n\n          (e) Seller has given or made available to THEH the actuary's report on\nthe latest actuarial valuation of each of the Company Employee Benefit Plans or\nsuch other information which accurately describes the financial position of each\nof the Company Employee Benefit Plans. Nothing has happened since the date of\nthat information which would adversely affect the funding position of the\nCompany Employee Benefit Plans in a material way.\n\n          Section 6.3 ADMINISTRATION. Seller, Parent and THEH shall each make\ntheir appropriate employees available to the other at such reasonable times as\nmay be necessary for the proper administration by the other of any and all\nmatters relating to employee benefits affecting employees of the Company and the\nSubsidiaries, including benefits to which such employees may become entitled\nafter the Closing Date under any tax-qualified retirement plan maintained by the\nContinuing Affiliates.\n\n\n                                  ARTICLE VII\n\n                                  TAX MATTERS\n\n          Section 7.1. TAX RETURNS OF THE COMPANY AND THE SUBSIDIARIES. Seller\nrepresents and warrants to THEH that:\n\n          (a) Except as set forth in Schedule 7.1(a) (i) all Income Tax\nReturns required to be filed for taxable periods ending on or prior to the\nClosing Date by the Company or the Subsidiaries have been or will be timely\nfiled and (ii) all other material Returns required to be filed before the\nClosing Date by the Company or the Subsidiaries have been or will be timely\nfiled.\n\n          (b) Except as set forth on Schedule 7.1(b), (i) neither Company nor\nany Subsidiary is doing business or maintains a taxable presence in a\njurisdiction in which (A) it does not file Income Tax Returns or (B) it files\nReturns that are intended to preserve the right to receive the benefit of\ndeductions and credits within the meaning of Treasury Regulation\nSS.1.882-4(a)(3)(iv) or any comparable or similar provision of applicable law;\n(ii) to the knowledge of Seller, no claim has been made in writing by any Taxing\nAuthority in a jurisdiction where the Company or the Subsidiaries (A) do not\nfile Income Tax Returns or (B) file Returns that are intended to preserve the\nright to receive the benefit of deductions and credits within the meaning\n\n\n                                      -22-\n\n\n\nof Treasury Regulation SS.1.882-4(a)(3)(iv) or any comparable or similar\nprovision of applicable law that the Company or any of the Subsidiaries are or\nmay be subject to taxation by that jurisdiction; (iii) except for Taxes being\ncontested in good faith and by appropriate proceedings and for which appropriate\nreserves are established on the Company Balance Sheet, all Taxes owed by the\nCompany and any of the Subsidiaries with respect to any taxable period (or\nportion thereof) ending on or prior to March 31, 2001 (whether or not shown on\nany Return) have (or by the Closing Date will have) been duly and timely paid;\nand (iv) all material Taxes required to be withheld from employee salaries,\nwages and other compensation and from dividend, interest or royalty payments by\nor on behalf of the Company or any of the Subsidiaries with respect to periods\nfor which the statute of limitations has not expired have been withheld, and\nsuch withheld Taxes have been duly and timely paid to the proper Taxing\nAuthorities.\n\n          (c) Except as set forth on Schedule 7.1(c), no agreement or other\ndocument extending, or having the effect of extending, the period of assessment,\npayment or collection of any material Taxes for which the Company or any of the\nSubsidiaries or any of their predecessors may be held liable and no power of\nattorney with respect to any such material Taxes have been executed or filed\nwith the IRS or any other Taxing Authority.\n\n          (d) Except as set forth on Schedule 7.1(d), neither the Company nor\nany of the Subsidiaries has been a member of a group that files Returns on an\naffiliated, combined, consolidated or unitary basis, other than a group of which\none of the Subsidiaries is the common parent or all of whose members are one or\nmore Subsidiaries. Neither the Company nor any of the Subsidiaries has any\nliability for material amounts of Taxes of any other person under Treasury\nRegulation SS.1.1502-6 (or comparable provision under applicable law), as a\ntransferee, successor, indemnitor or otherwise.\n\n          (e) Seller has made available to THEH true and correct copies of all\napplicable Income Tax Returns showing a material amount of tax that have been\nfiled for all taxable periods for which the statute of limitations has not\nexpired, tax rulings, advance pricing agreements, examination reports, and\nstatements of deficiencies assessed against or agreed to by the Company or any\nof the Subsidiaries. Except as set forth on Schedule 7.1(e), (i) no lien exists\nwith respect to any asset of any of the Company or the Subsidiaries that arose\nin connection with any failure to pay Taxes (other than for Taxes not yet due\nand payable); (ii) there are no material Taxes for which the Company or any of\nthe Subsidiaries could be held liable which have been asserted in writing by any\nTaxing Authority to be due; and (iii) there are no pending audits, examinations,\nor investigations with respect to any material Taxes of the Company or any of\nthe Subsidiaries and no Taxing Authority has given notice that it will commence\nany such audit or examination.\n\n          (f) Neither the Company nor any of the Subsidiaries is party to or\nbound by any closing agreement, gain recognition agreement, tax sharing, tax\nindemnity, tax allocation or similar agreement or arrangement.\n\n          Section 7.2. ALLOCATION OF CERTAIN TAXES. Each of Parent and Seller\nagrees that if any of the Companies are permitted but not required under\napplicable Income Tax laws to treat March 31, 2001 as the last day of a taxable\nperiod, Parent and Seller shall treat such day as the last day of a taxable\nperiod. For purposes of this Agreement, in the case of any Tax that is \n\n\n                                      -23-\n\n\n\nimposed on a periodic basis and is payable for a taxable period that begins\nbefore March 31, 2001 and ends after March 31, 2001 (including without\nlimitation any Taxes resulting from a Tax audit or administrative court\nproceeding), the portion of such Taxes which is payable for the portion of such\ntaxable period ending on March 31, 2001, shall be (i) in the case of any Tax\nother than a Tax based upon or measured by income or receipts, the amount of\nsuch Tax for the entire taxable period (or, in the case of such Taxes determined\non an arrears basis, the amount of such Tax for the immediately preceding\nperiod) multiplied by a fraction, the numerator of which is the number of days\nin the portion of such taxable period ending on March 31, 2001 and the\ndenominator of which is the number of days in the entire taxable period, and\n(ii) in the case of a Tax based upon or measured by income or receipts, the\namount which would be payable if the relevant taxable period ended on March 31,\n2001. Any credit or refund resulting from an overpayment of Taxes shall be\nprorated based upon the method employed in the preceding sentence.\n\n          Section 7.3. FILING RESPONSIBILITY. (a) Seller shall prepare and file\nor shall cause the Company and each of the Subsidiaries to prepare and file all\nReturns with respect to the Company and each of the Subsidiaries required to be\nfiled (taking into account any extension of time within which to file) on or\nbefore the Closing Date. With respect to any Return for taxable periods\nbeginning before and ending after March 31, 2001 that is required to be filed on\nor before the Closing Date, Seller shall consult with Parent concerning such\nReturn. Seller shall provide to Parent a copy of its proposed Return to review\nand comment upon at least 30 days prior to the filing of such Return, and Parent\nmay provide comments to Seller, which comments shall be delivered to Seller\nwithin 10 days of receiving such copies from Seller. Seller shall consider in\ngood faith any such revisions to such Tax Returns as are reasonably requested by\nParent.\n\n          (b) Parent, the Company and the Subsidiaries shall file all other\nReturns with respect to the Company and the Subsidiaries. With respect to any\nReturn for taxable periods beginning before and ending after March 31, 2001 that\nis required to be filed after the Closing Date, Parent shall cause the Company\nand each of the Subsidiaries to consult with Seller concerning such Return. The\nCompany and each of the Subsidiaries shall provide Seller a copy of its proposed\nReturn to review and comment upon at least 30 days prior to the filing of such\nReturn, and Seller may provide comments to the Company and each of the\nSubsidiaries, which comments shall be delivered to the Company and each of the\nSubsidiaries within 10 days of receiving such copies from the Company and each\nof the Subsidiaries. The Company and the Subsidiaries shall consider in good\nfaith any such revisions to such Tax Returns as are reasonably requested by\nSeller.\n\n          (c) In the case of any Return for taxable periods beginning before and\nending after March 31, 2001 which is filed after the Closing Date, Seller shall\npay to Parent, at least five days prior to the date on which the Company or any\nof the Subsidiaries is required to make a payment to the relevant Taxing\nAuthority, any amounts for which Seller is liable pursuant to Section 7.6, to\nthe extent such Taxes are not reflected in the reserve for Tax liabilities\n(other than any reserve for deferred Taxes established to reflect timing\ndifferences between book and Tax income) shown on the Company Balance Sheet.\n\n\n                                      -24-\n\n\n\n          Section 7.4. REFUNDS AND CARRYBACKS. (a) Seller shall be entitled to\nany refunds of or amounts credited against Taxes relating to any taxable period\nending on or before March 31, 2001, or with respect to any taxable period\nbeginning before and ending after March 31, 2001, to the portion of such period\nbeginning before and ending on March 31, 2001 (in each case except for refunds\nor credits accrued on the Company Balance Sheet).\n\n          (b) Parent, the Company or the Subsidiaries, as the case may be, shall\nbe entitled to all other refunds or credits of Taxes.\n\n          (c) Parent shall cause the Company and each of the Subsidiaries\npromptly to forward to Seller or to reimburse Seller for any refunds or credits\ndue Seller (pursuant to the terms of this Article VII) after receipt thereof,\nand Seller shall promptly forward to Parent or reimburse Parent for any refunds\nor credits due Parent (pursuant to the terms of this Article VII) after receipt\nthereof.\n\n          (d) Except (i) as required by a Determination, (ii) as otherwise\nrequired by applicable law, or (iii) in connection with a matter described in\nthe second sentence of Section 7.5(d), none of Parent, the Company nor the\nSubsidiaries will, after the Closing Date, amend any tax return relating to a\nperiod ending on or before March 31, 2001 without the prior written consent of\nSeller, which consent will not unreasonably be withheld.\n\n          Section 7.5. COOPERATION AND EXCHANGE OF INFORMATION. (a) Seller shall\nprepare and submit to Parent no later than three months after the Closing Date,\nblank tax return workpaper packages for Tax Returns for which Seller has\nresponsibility to prepare pursuant to Section 7.3. Parent shall and shall cause\nthe Company and each of the Subsidiaries to prepare and to submit to Seller\nwithin three months of receipt all information as Seller shall reasonably\nrequest in such tax return workpaper packages.\n\n          (b) As soon as practicable, but in any event within 30 days after\nSeller's request, from and after the Closing Date, Parent shall provide Seller\nwith such cooperation and shall deliver to Seller such information and data\nconcerning the pre-Closing operations of the Company and each of the\nSubsidiaries and make available such knowledgeable employees of the Company and\nthe Subsidiaries as Seller may reasonably request in order to enable Seller to\ncomplete and file all Returns which it may be required to file with respect to\nthe operations and business of the Company and each of the Subsidiaries through\nthe Closing Date or to respond to audits by any Taxing Authorities with respect\nto such operations.\n\n          (c) Parent and Seller and their respective Affiliates shall cooperate\nin the preparation of all Returns described in Section 7.3 hereof. Such\ncooperation shall include, but not be limited to, furnishing prior years'\nReturns or return preparation packages illustrating previous reporting practices\nor containing historical information relevant to the preparation of such\nReturns, and furnishing such other information within such party's possession\nrequested by the party filing such Returns as is relevant to their preparation.\n\n          (d) Seller shall have the right, at its own expense, to control any\naudit or examination by any Taxing Authority (\"TAX AUDIT\"), initiate any claim\nfor refund, contest, resolve and defend against any assessment, notice of\ndeficiency, or other adjustment or proposed\n\n\n                                      -25-\n\n\n\nadjustment which in any such case relates to Taxes for which Seller is liable\npursuant to Section 7.6, with respect to the Company and each of the\nSubsidiaries; PROVIDED, HOWEVER, that no claim, contest or settlement shall be\nresolved by Seller if such claim, contest, or settlement could reasonably be\nexpected to have a material adverse effect on the Company or any of the\nSubsidiaries after the Closing. Parent shall have the right, at its own expense,\nto control any other Tax Audit, initiate any other claim for refund, and\ncontest, resolve and defend against any other assessment, notice of deficiency,\nor other adjustment or proposed adjustment; PROVIDED, HOWEVER, any such\nresolution shall not have a material adverse effect on the Seller. Seller shall\nfurnish Parent and the Company and each of the Subsidiaries with its cooperation\nin a manner comparable to that described in Section 7.5(b) hereof to effect the\npurposes of this Section 7.5(d).\n\n          Section 7.6. TAX INDEMNIFICATION BY SELLER. Seller shall be liable\nfor, and shall hold Parent and the Company and each of the Subsidiaries and any\nsuccessor corporations thereto or Affiliates thereof harmless from and against,\non a Net After-Tax Basis, any and all Taxes imposed upon, or with respect to the\nincome or operations of, the Company or any of the Subsidiaries (i) with respect\nto any taxable period ending on or before March 31, 2001 and (ii) in the case of\nany taxable period beginning before and ending after March 31, 2001, allocable\nto the portion of such period beginning before and ending on March 31, 2001, in\neach case to the extent such Taxes are not reflected in the reserve for Tax\nliabilities (other than any reserve for deferred Taxes established to reflect\ntiming differences between book and Tax income) shown on the Company Balance\nSheet.\n\n          Section 7.7. TRANSFER TAXES. All stock transfer, real estate transfer,\ndocumentary, stamp, recording and other similar Taxes (including interest,\npenalties, and additions to such Taxes) incurred in connection with the\nacquisition of the Company or any of the Subsidiaries contemplated by this\nAgreement shall be borne fifty percent by the Seller and fifty percent by THEH.\n\n          Section 7.8. DEFINITIONS. For purposes of this Article VII, the\nfollowing terms shall have the meanings ascribed to them below:\n\n          (a) \"DETERMINATION\" means a determination as defined by Section\n     1313(a) of the Code or any comparable or similar provision of applicable\n     law.\n\n          (b) \"INCOME TAX RETURNS\" means U.S. federal, state, local or non-U.S.\n     Returns relating to Income Taxes required to be filed with any Taxing\n     Authority that include the Company or any of the Subsidiaries.\n\n          (c) \"INCOME TAXES\" means U.S. federal, state, local or non-U.S.\n     income, profits, capital gains, franchise taxes or other taxes measured by\n     reference to net income, profits or capital gains, together with any\n     interest, penalties, charges or fees imposed with respect thereto.\n\n          (d) \"IRS\" means the United States Internal Revenue Service.\n\n          (e) \"RETURNS\" means returns, reports and forms required to be filed\n     with any Taxing Authority.\n\n\n                                      -26-\n\n\n\n          (f) \"TAX LAWS\" means the Code, U.S. federal, state, county, local, or\n     non-U.S. laws relating to Taxes and any regulations or official\n     administrative pronouncements released thereunder.\n\n          (g) \"TAXES\" means all taxes (whether U.S. federal, state, local or\n     non-U.S.) based upon or measured by income and any other tax whatsoever,\n     including, without limitation, gross receipts, profits, sales, levies,\n     imposts, deductions, charges, rates, duties, use, occupation, value added,\n     ad valorem, transfer, franchise, withholding, payroll and social security,\n     employment, excise, stamp duty or property taxes, together with any\n     interest, penalties, charges or fees imposed with respect thereto.\n\n          (h) \"TAXING AUTHORITY\" means any Governmental Authority including\n     social security administration, U.S. or non-U.S., having responsibility for\n     or jurisdiction over the assessment, determination, collection, or other\n     imposition of Tax.\n\n                                 ARTICLE VIII\n\n                    CONDITIONS TO THEH'S OBLIGATION TO CLOSE\n\n          The obligation of THEH to consummate the Stock Purchase shall be\nsubject to the satisfaction on or prior to the Closing Date of all of the\nfollowing conditions:\n\n          Section 8.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. The\nrepresentations and warranties of Seller contained in this Agreement shall be\ntrue and correct when made and, except for representations and warranties that\nspeak as of a specific date or time (which need only be true and correct as of\nsuch date or time), on and as of the Closing Date with the same effect as though\nsuch representations and warranties had been made on and as of such date, except\nfor such inaccuracies or breaches as would not, individually or in the\naggregate, have a Company Material Adverse Effect, and the covenants and\nagreements of Seller contained in this Agreement to be performed on or before\nthe Closing Date in accordance with this Agreement shall have been duly\nperformed in all material respects, and THEH shall have received at the Closing\na certificate to the effect of the foregoing dated the Closing Date and validly\nexecuted by a Co-Chairman, the Chief Executive Officer or any Director of\nSeller.\n\n          Section 8.2. NO ORDERS OR INJUNCTIONS. No order or injunction shall\nhave been issued by any Governmental Authority which prevents or prohibits the\nconsummation of the Stock Purchase or any other transaction contemplated by this\nAgreement.\n\n          Section 8.3. OPINIONS OF SELLER'S COUNSEL. Parent shall have received\nat Closing opinions addressed to Parent and dated the Closing Date from counsel\nto Seller in form and substance reasonably satisfactory to Parent with respect\nto certain corporate matters in Sections 3.1 and 3.2.\n\n          Section 8.4. CONSENTS. All consents or waivers of the  parties\nto the agreements or consents listed on Schedule 3.1(d) reasonably requested by\nParent shall have been obtained.\n\n          Section 8.5. Tax Matters. The oral confirmation from the Netherlands\nAntilles Tax Authorities referenced in Section 3.15(a) shall not have been\nrescinded or modified in any\n\n\n                                      -27-\n\n\n\nmaterial respect. The written confirmation from the Netherlands Tax Authorities\nreferenced in Section 3.15(b) shall not have been rescinded or modified in any\nmaterial respect.\n\n                                  ARTICLE IX\n\n                   CONDITIONS TO SELLER'S OBLIGATION TO CLOSE\n\n          Seller's obligation to consummate the Stock Purchase shall be subject\nto the satisfaction on or prior to the Closing Date of all of the following\nconditions:\n\n          Section 9.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PARENT AND\nTHEH. The representations and warranties of THEH contained in this Agreement\nshall be true and correct when made and, except for representations and\nwarranties that speak as of a specific date or time (which need only be true and\ncorrect as of such date or time), on and as of the Closing Date with the same\neffect as though such representations and warranties had been made on and as of\nsuch date, except for such inaccuracies or breaches as would not, individually\nor in the aggregate, have a material adverse effect on the ability of THEH to\nconsummate the Stock Purchase, and the covenants and agreements of THEH and\nParent contained in this Agreement to be performed on or before the Closing Date\nin accordance with this Agreement shall have been duly performed in all material\nrespects, and Seller shall have received at the Closing a certificate to the\neffect of the foregoing dated the Closing Date and validly executed by the\nPresident, a Vice President or other senior officer of Parent and THEH.\n\n          Section 9.2. NO ORDERS OR INJUNCTIONS. No order or injunction shall\nhave been issued by any Governmental Authority which prevents or prohibits the\nconsummation of the Stock Purchase or any other transaction contemplated by this\nAgreement.\n\n                                   ARTICLE X\n\n                            SURVIVAL; INDEMNIFICATION\n\n          Section 10.1. SURVIVAL. (a) The representations and warranties of\nSeller contained in this Agreement shall survive the Closing until December 31,\n2002, except the representations and warranties set forth (i) in Sections 3.1(e)\nand 3.2(a) which shall survive the Closing indefinitely, (ii) in Section 3.14\nwhich shall survive the Closing until the third anniversary of the Closing Date,\nand (iii) in Section 3.15 and Article VII which shall survive the Closing until\n90 days after the expiration of the relevant statutes of limitations (including\nany extensions thereof) for all applicable Taxes or, if later, until resolution\nof any disputes arising during such period applicable to the income tax return\n(the \"APPLICABLE RETURN\") of each of the Company and the Subsidiaries for the\nperiod ending on March 31, 2001 (such later date being the \"EXPIRATION DATE\").\n\n          (b) The covenants and agreements contained in this Agreement which by\ntheir terms do not contemplate performance after the Closing Date shall survive\nthe Closing until December 31, 2002. The covenants and agreements contained in\nthis Agreement which by their terms contemplate performance after the Closing\nDate (including but not limited to the indemnities) shall survive the completion\nof the transactions contemplated herein.\n\n\n                                      -28-\n\n\n\n          Section 10.2. INDEMNIFICATION BY SELLER. (a) Subject to Section\n10.4 hereof, from and after the Closing Date, Seller shall indemnify and hold\nharmless Parent and its subsidiaries and their respective officers and directors\n(collectively, the \"INDEMNIFIED PARTIES\"), on a Net After-Tax Basis, from and\nagainst any and all Covered Losses suffered by such Indemnified Parties\nresulting from or arising out of (i) any inaccuracy in or breach of any of the\nrepresentations or warranties of Seller when made, and, except for\nrepresentations and warranties that speak as of a specific date or time (which\nneed only be true and correct as of such date and time), on and as of the\nClosing Date, (ii) any breach or nonfulfillment of any covenants or agreements\nmade by Seller herein, and (iii) any liability or obligation of the Company or\nany of the Subsidiaries arising from or relating to any business other than (x)\nthe business of the Company and the Subsidiaries conducted under the European\nLicense or (y) the business assumed by the Company or the Subsidiaries pursuant\nto the transactions contemplated by the Agreement, dated November 23, 2000,\nbetween USC Group Plc and TH Europe (collectively, \"RETAINED LIABILITIES\"). The\nindemnity by Seller under this Section 10.2 shall not affect or limit the\nindemnification provided by Seller under Section 7.6; it being understood and\nagreed that the Indemnified Parties shall not be entitled to indemnification\nunder this Article X for any Covered Losses for which indemnification is\nprovided under Section 7.6 if such indemnification would be available under both\nSection 7.6 and this Article X.\n\n          (b) The Indemnified Parties shall not be entitled to assert any\nindemnification pursuant to clause (i) or (ii) (in the case of covenants and\nagreements which by their terms do not contemplate performance after the Closing\nDate) of Section 10.2(a): (i) after the Expiration Date, with respect to\ninaccuracies in or breaches of the representations and warranties by Seller\ncontained in Section 3.15 and Article VII, (ii) after the third anniversary of\nthe Closing Date, with respect to inaccuracies in or breaches of the\nrepresentations and warranties by Seller contained in Section 3.14 or (iii)\nafter December 31, 2002, with respect to all other inaccuracies in or breaches\nof the representations and warranties by Seller contained in any other Section\nhereof (other than Sections 3.1(e) and 3.2(a), which shall have no such\nlimitation) or any breach or nonfulfillment of any covenants or agreements made\nby Seller herein which by their terms were required to be performed prior to the\nClosing Date; provided that if on or prior to such Expiration Date, third\nanniversary of the Closing Date or December 31, 2002, as the case may be, a\nNotice of Claim shall have been given to Seller pursuant to Section 10.3 hereof\nfor such indemnification, the Indemnified Parties shall continue to have the\nright to be indemnified on a Net After-Tax Basis with respect to such\nindemnification claim until such claim for indemnification has been satisfied or\notherwise resolved as provided in this Article X.\n\n          Section 10.3. INDEMNIFICATION PROCEDURES. (a) Upon obtaining knowledge\nof any claim or demand which has given rise to, or is expected to give rise to,\na claim for indemnification hereunder, Parent shall give written notice (\"NOTICE\nOF CLAIM\") of such claim or demand to Seller. Parent shall furnish to Seller in\nreasonable detail such information as the Indemnified Parties may have with\nrespect to such indemnification claim (including copies of any summons,\ncomplaint or other pleading which may have been served on it and any written\nclaim, demand, invoice, billing or other document evidencing or asserting the\nsame). Subject to the limitations set forth in Section 10.2(b) hereof, no\nfailure or delay by Parent in the performance of the foregoing shall reduce or\notherwise affect the obligation of Seller to indemnify and hold the Indemnified\nParties harmless on a Net After-Tax Basis, except to the extent that such\nfailure or delay shall have actually adversely affected Seller's ability to\ndefend \n\n\n                                      -29-\n\n\n\nagainst, settle or satisfy any Covered Losses for which the Indemnified\nParties are entitled to indemnification hereunder.\n\n          (b) If the claim or demand set forth in the Notice of Claim given by\nParent pursuant to Section 10.3(a) hereof is a claim or demand asserted by a\nthird party, Seller shall have 15 days after the date on which Notice of Claim\nis given to notify Parent in writing of its election to defend such third party\nclaim or demand on behalf of the Indemnified Party. If Seller elects to defend\nsuch third party claim or demand, Parent shall make available to Seller and its\nagents and representatives all records and other materials which are reasonably\nrequired in the defense of such third party claim or demand and shall otherwise\ncooperate with, and assist Seller in the defense of, such third party claim or\ndemand, and so long as Seller is defending such third party claim in good faith,\nthe Indemnified Parties shall not pay, settle or compromise such third party\nclaim or demand. If Seller elects to defend such third party claim or demand,\nthe Indemnified Party shall have the right to participate in the defense of such\nthird party claim or demand, at such Indemnified Party's own expense. In the\nevent, however, that such Indemnified Party reasonably determines that\nrepresentation by counsel to Seller of both Seller and such Indemnified Party\ncould reasonably be expected to present such counsel with a conflict of\ninterest, then the Indemnified Party may employ separate counsel to represent or\ndefend it in any such action or proceeding and Seller will pay the fees and\nexpenses of such counsel; PROVIDED, that Seller shall not, in connection with\nany proceeding or related proceedings in the same jurisdiction, be liable for\nthe fees and expenses of more than one separate firm of attorneys (in addition\nto local counsel) at any time for all Indemnified Parties. If Seller does not\nelect to defend such third party claim or demand or does not defend such third\nparty claim or demand in good faith, the Indemnified Party shall have the right,\nin addition to any other right or remedy it may have hereunder, at Seller's\nexpense, to defend such third party claim or demand; PROVIDED, HOWEVER, that (i)\nsuch Indemnified Party shall not have any obligation to participate in the\ndefense of, or defend, any such third party claim or demand; (ii) such\nIndemnified Party's defense of or its participation in the defense of any such\nthird party claim or demand shall not in any way diminish or lessen the\nobligations of Seller under the agreements of indemnification set forth in this\nArticle X; and (iii) such Indemnified Party may not settle any claim without the\nconsent of Seller (which consent shall not be unreasonably withheld or delayed).\n\n          (c) Seller and Parent shall cooperate in the defense of any claim or\nlitigation subject to this Article X and the records of each shall be available\nto the other with respect to such defense.\n\n          (d) Except for third party claims being defended in good faith, Seller\nshall satisfy its obligations under this Article X in respect of a valid claim\nfor indemnification hereunder which is not contested by Seller in good faith in\ncash within 30 days after the date on which Notice of Claim is given.\n\n          Section 10.4. LIMITS ON INDEMNIFICATION. Seller shall have no\nliability for indemnification pursuant to this Article X with respect to Covered\nLosses unless such Covered Losses exceed in the aggregate $100,000 (the\n\"INDEMNIFICATION THRESHOLD\"); PROVIDED, HOWEVER, that in the event that Covered\nLosses shall exceed in the aggregate the Indemnification Threshold, Seller shall\nbe liable hereunder for all such Covered Losses; and PROVIDED, FURTHER, that\nCovered Losses with respect to Retained Liabilities shall not be subject to the\n\n\n                                      -30-\n\n\n\nIndemnification Threshold. Notwithstanding anything herein to the contrary, in\nno event shall Seller be required to indemnify the Indemnified Parties pursuant\nto this Article X for Covered Losses in excess of $200,000,000.\n\n          Section 10.5. LOSSES NET OF INSURANCE. The amount of any Covered Loss\nfor which indemnification is provided under this Article X shall be net of any\namounts recovered by the Indemnified Parties under insurance policies with\nrespect to such Covered Loss. In the event that the Indemnified Parties shall\nlater collect any such amounts recovered under insurance policies with respect\nto any Covered Loss for which any of them has previously received payments under\nthis Article X from Seller, such Indemnified Party shall promptly repay to\nSeller such amount recovered.\n\n          Section 10.6. ADJUSTMENT TO PURCHASE PRICE. All indemnity payments\nmade pursuant to this Article X or pursuant to Article VII shall constitute\nadjustments to the Purchase Price for all tax purposes, and no party shall take\nany position inconsistent with such characterization, unless such position is\nimpermissible as a result of a change of law.\n\n                                   ARTICLE XI\n\n                                   TERMINATION\n\n          Section 11.1. TERMINATION. This Agreement may be terminated at any\ntime prior to the Closing:\n\n          (a) by mutual consent of Seller and THEH;\n\n          (b) by either Seller or THEH, if any Governmental Authority of\n     competent jurisdiction shall have issued an injunction, restraining order\n     or decree that restrains or prohibits the consummation of the Stock\n     Purchase or the performance by the parties hereto of the other obligations\n     hereunder, and such injunction, restraining order or decree shall have\n     become final and nonappealable; or\n\n          (c) by either Seller or THEH, if the Closing has not occurred by the\n     close of business on September 30, 2001, unless the failure of the Closing\n     to occur by such date shall be due to the failure of the party seeking to\n     terminate this Agreement to perform or observe in all material respects the\n     covenants and agreements of such party set forth herein.\n\n          Section 11.2. PROCEDURE AND EFFECT OF TERMINATION. In the event of\ntermination of this Agreement by either or both of Seller and THEH pursuant to\nSection 11.1, written notice thereof shall forthwith be given by the terminating\nparty or parties to the other party or parties hereto, and this Agreement shall\nthereupon terminate and become void and have no effect, and the transactions\ncontemplated hereby shall be abandoned without further action by the parties\nhereto, except that the provisions of Section 12.5 shall survive the termination\nof this Agreement; PROVIDED, HOWEVER, that such termination shall not relieve\nany party hereto of any liability for any willful breach of this Agreement\n(other than a breach of a representation, as to which no party shall be liable\nhereunder). If this Agreement is terminated as provided herein, all filings,\n\n\n                                      -31-\n\n\n\napplications and other submissions contemplated by Sections 3.7 and 4.2 and\nArticle V shall, to the extent practicable, be withdrawn from the agency or\nother Persons to which they were made.\n\n                                  ARTICLE XII\n\n                                 MISCELLANEOUS\n\n          Section 12.1. COUNTERPARTS. This Agreement may be executed in one or\nmore counterparts, all of which shall be considered one and the same agreement,\nand shall become effective when one or more counterparts have been signed by\neach of the parties and delivered to the other party.\n\n          Section 12.2. GOVERNING LAW. This Agreement and all disputes,\ncontroversies or claims arising out of or related to this Agreement or a breach\nhereof shall be governed by and construed in accordance with the laws of the\nState of New York as applied to contracts to be performed in New York.\n\n          Section 12.3. JURISDICTION; WAIVER OF TRIAL BY JURY. The parties\nhereby consent to the jurisdiction of the United States District Court for the\nSouthern District of New York and any of the courts of the state of New York in\nany dispute arising under this Agreement and agree further that service of\nprocess or notice in any such action, suit or proceeding shall be effective if\nin writing and delivered in person or sent as provided in Section 12.6 hereof.\nANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR ACTION ARISING OUT OF\nTHIS AGREEMENT OR IN CONNECTION HEREWITH IS HEREBY WAIVED.\n\n          Section 12.4. ENTIRE AGREEMENT. This Agreement and the Schedules and\nExhibits hereto contain the entire agreement between the parties with respect to\nthe subject matter hereof and there are no agreements, understandings,\nrepresentations or warranties between the parties other than those set forth or\nreferred to herein. Except for the provisions of Article X, which are intended\nto benefit, and to be enforceable by, any of the Indemnified Parties, this\nAgreement is not intended to confer and shall not confer upon any Person not a\nparty hereto any rights or remedies hereunder.\n\n          Section 12.5. EXPENSES. Except as otherwise set forth in this\nAgreement, if the transactions contemplated hereby are not consummated, all\nlegal and other costs and expenses incurred in connection with this Agreement\nand the transactions contemplated hereby shall be paid by the party incurring\nsuch costs and expenses. Except as otherwise set forth in this Agreement, if the\ntransactions contemplated hereby are consummated, the legal and other expenses\nincurred in connection with this Agreement shall be paid by the Company and\nTHEH.\n\n          Section 12.6. NOTICES. All notices hereunder shall be sufficiently\ngiven for all purposes hereunder if in writing and delivered personally, sent by\ndocumented overnight delivery service or, to the extent receipt is confirmed,\ntelecopy, telefax or other electronic transmission service to the appropriate\naddress or number as set forth below. Notices to Seller shall be addressed to:\n\n\n                                      -32-\n\n\n\n           TH Europe Holdings Limited\n           c\/o Novel Enterprises Limited\n           12\/F, Novel Industrial Building\n           850-870 Lai Chi Kok Road\n           Cheung Sha Wan, Kowloon\n           Hong Kong\n           Attn:   Lawrence Lok\n           Telecopier No.:   852-2310-1841\n\n           with a copy to:\n\n           Simpson Thacher &amp; Bartlett\n           Citypoint\n           1 Ropemaker Street\n           London EC2Y 9HU\n           England\n           Attn:   William R. Dougherty, Esq.\n           Telecopier No.:   44-20-7275 6502\n\nor at such other address and to the attention of such other person as Seller may\ndesignate by written notice to Parent. Notices to Parent or THEH shall be made\nto Parent and shall be addressed to:\n\n           Tommy Hilfiger Corporation\n           c\/o Tommy Hilfiger U.S.A., Inc.\n           25 West 39th Street\n           New York, New York  10018\n           Attn:  Joel J. Horowitz\n           Telecopier No.:  (212) 548-1818\n\n           with a copy to:\n\n           Wachtell, Lipton, Rosen &amp; Katz\n           51 West 52nd Street\n           New York, NY  10019\n           Attn:  Eric S. Robinson, Esq.\n           Telecopier No:  (212) 403-2000\n\nor at such other address and to the attention of such other person as Parent may\ndesignate by written notice to Seller.\n\n          Section 12.7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding\nupon and inure to the benefit of the parties hereto and their respective\nsuccessors and assigns; PROVIDED, HOWEVER, that no party hereto will assign its\nrights or delegate its obligations under this Agreement without the express\nprior written consent of each other party hereto. Notwithstanding the foregoing,\nTHEH may assign its rights under this Agreement to Parent or any wholly-owned\nsubsidiary of Parent; PROVIDED that no such assignment by THEH of its rights\nhereunder to Parent \n\n\n                                      -33-\n\n\n\nor any wholly-owned subsidiary of Parent shall in any way affect THEH's\nobligations or liabilities under this Agreement.\n\n          Section 12.8. HEADINGS; DEFINITIONS. The Section and Article headings\ncontained in this Agreement are inserted for convenience of reference only and\nwill not affect the meaning or interpretation of this Agreement. All references\nto Sections or Articles contained herein mean Sections or Articles of this\nAgreement unless otherwise stated. All capitalized terms defined herein are\nequally applicable to both the singular and plural forms of such terms.\n\n          Section 12.9. AMENDMENTS AND WAIVERS. This Agreement may not be\nmodified or amended except by an instrument or instruments in writing signed by\nthe party against whom enforcement of any such modification or amendment is\nsought. Any party hereto may, only by an instrument in writing waive compliance\nby the other parties hereto with any term or provision of this Agreement on the\npart of such other parties hereto to be performed or complied with. The waiver\nby any party hereto of a breach of any term or provision of this Agreement shall\nnot be construed as a waiver of any subsequent breach.\n\n          Section 12.10. SEVERABILITY. In the event that this Agreement, or any\nof its provisions, or the performance of any provision, is found to be illegal\nor unenforceable under applicable law now or hereafter in effect, the parties\nshall be excused from performance of such portions of this Agreement as shall be\nfound to be illegal or unenforceable under the applicable laws or regulations\nwithout affecting the validity of the remaining provisions of the Agreement;\nprovided that (i) the remaining provisions of the Agreement shall in their\ntotality constitute a commercially reasonable agreement, and (ii) should any\nmethod of termination of this Agreement or a portion thereof be found to be\nillegal or unenforceable, such method shall be reformed to comply with the\nrequirements of applicable law so as, to the greatest extent possible, to allow\ntermination by that method. Nothing herein shall be construed as a waiver of any\nparty's right to challenge the validity of such law.\n\n          Section 12.11. INTERPRETATION. For the purposes of this Agreement, (i)\na \"subsidiary\" of an entity means any entity more than 50% of the voting power\nof whose outstanding voting securities or equity interests are directly or\nindirectly owned by such other entity, and (ii) \"including\" shall mean\n\"including without limitation.\"\n\n\n                                      -34-\n\n\n\n           IN WITNESS WHEREOF, this Agreement has been signed by\nor on behalf of each of the parties as of the day first above\nwritten.\n\n                               TOMMY HILFIGER CORPORATION\n\n\n                               By: \/s\/ Silas K.F. Chou\n                                   -------------------------------\n                                   Name:  Silas K.F. Chou\n                                   Title: Co-Chairman of the Board\n\n\n\n                               TOMMY HILFIGER (EASTERN HEMISPHERE)\n                               LIMITED\n\n\n                               By: \/s\/ Lawrence S. Stroll\n                                   -------------------------------\n                                   Name:  Lawrence S. Stroll\n                                   Title: Director\n\n\n\n                               TH EUROPE HOLDINGS LIMITED\n\n\n                               By: \/s\/ Silas K.F. Chou\n                                   -------------------------------\n                                   Name:  Silas K.F. Chou\n                                   Title: Co-Chairman of the Board\n\n\n                                      -35-\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7775],"corporate_contracts_industries":[9396],"corporate_contracts_types":[9622,9627],"class_list":["post-43716","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-hilfiger-tommy-corp","corporate_contracts_industries-consumer__clothing","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43716"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43716"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43716"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}