STOCK PURCHASE AGREEMENT by and between LBD ACQUISITION COMPANY, LLC as the Buyer and FIFTH & PACIFIC COMPANIES, INC., as the Seller Dated as of December 10, 2013

Exhibit 2.1

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

by and between

LBD ACQUISITION COMPANY, LLC

as the Buyer

and

FIFTH & PACIFIC COMPANIES, INC.,

as the Seller

Dated as of December 10, 2013

Table of Contents

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Table of Contents
(continued)

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Table of Contents
(continued)

iii

Table of Contents
(continued)

iv

Table of Contents
(continued)

Exhibits

Disclosure Letters

Seller Disclosure Letter

Buyer Disclosure Letter

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INDEX OF DEFINED TERMS

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INDEX OF DEFINED TERMS
(continued)

vii

INDEX OF DEFINED TERMS
(continued)

viii

INDEX OF DEFINED TERMS
(continued)

ix

INDEX OF DEFINED TERMS
(continued)

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INDEX OF DEFINED TERMS
(continued)

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STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of December 10, 2013, by and between LBD Acquisition Company, LLC, a Delaware limited liability company (“Buyer”), and Fifth & Pacific Companies, Inc., a Delaware corporation (“Seller”) (each, a “Party” and together, the “Parties”).

RECITALS

WHEREAS, the Seller owns all of the issued and outstanding Capital Stock of Lucky Brand Dungarees, Inc., a Delaware corporation (“Lucky,” and together with its Subsidiaries, the “Acquired Companies”); and

WHEREAS, the Seller desires to sell to the Buyer, and the Buyer desires to purchase from the Seller, all of the issued and outstanding Capital Stock of Lucky (the “Acquired Company Shares”), on the terms and subject to the conditions set forth in this Agreement.

Accordingly, in consideration of the mutual representations, warranties, covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1                        Definitions.  For purposes of this Agreement:

(a)                               “ABL Credit Agreement” means the Third Amended and Restated Credit Agreement, dated as of April 18, 2013, among the Seller, ▇▇▇▇ Spade Canada Inc. and ▇▇▇▇ Spade UK Limited, as borrowers, the guarantors party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and US Collateral Agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent and Canadian Collateral Agent and ▇.▇. ▇▇▇▇▇▇ Europe Limited, as European Administrative Agent and European  Collateral Agent, as the same may be amended, amended and restated, supplemented and otherwise modified from time to time.

(b)                              “Accounting Rules” means, collectively, the accounting principles, methods and practices used in preparing the Financial Statements described in Section 4.8(a) applied on a consistent basis as set forth on Exhibit A.

(c)                               “Acquired Company Employee” means any individual who, as of an applicable date of reference, is employed by any Acquired Company or, for purposes of this Agreement any individual as set forth on Section 1.1(c) of the Seller Disclosure Letter.  An individual shall be deemed employed on a date of reference even though such individual is absent from employment on such date due to illness, injury, military service or mobilization or other authorized absence, including due to disability, pregnancy, parental leave or personal leave of absence.

(d)                             “Acquired Company Legal Action” means any current Legal Action relating primarily to the Business and in which any member of the Seller Group or any Acquired Company is a defendant or a party against whom such claim or investigation is directed.

(e)                               “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with, such first Person; provided, that neither any Person that owns Capital Stock of the Seller nor any Affiliate of such Person shall be deemed to be an Affiliate of the Seller solely by virtue of such Person’s ownership of Capital Stock of the Seller.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), when used with respect to any Person, means the power to direct or cause the direction of the management or policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

(f)                                “Ancillary Agreements” means: (i) the Transition Services Agreement and (ii) any other agreements required to be executed and delivered by both the Buyer and/or its Affiliates, on the one hand, and the Seller and/or other members of the Seller Group, on the other hand, pursuant to this Agreement (other than, for the avoidance of doubt, the Seller Debt Financing Documents).

(g)                              “Applicable Exchange” means the New York Stock Exchange.

(h)                              “Assigned Benefit Plans” means the Employee Benefit Plans identified as such in Section 4.13(a) of the Seller Disclosure Letter.

(i)                                  “Business” means the specialty retail, outlet, concession, wholesale apparel, wholesale non-apparel (including accessories, jewelry and handbags), e-commerce, licensing and other operations conducted anywhere in the world under or in connection with the “Lucky Brand” brand, including all derivations thereof.

(j)                                  “Business Day” means any day other than Saturday, Sunday or a day on which commercial banks in New York, New York are authorized or required by Law to close, and shall consist of the time period from 12:01 a.m. through 12:00 midnight, Eastern time.

(k)                              “Buyer Material Adverse Effect” means any event that would prevent, materially impair or materially delay the consummation of the Stock Purchase by the Buyer.

(l)                                  “Capital Stock” means:  (i) any shares, interests, participations or other equivalents (however designated) of capital stock of a corporation; (ii) any ownership interests in a Person other than a corporation, including membership interests, partnership interests, joint venture interests and beneficial interests; and (iii) any warrants, options, convertible or exchangeable securities, subscriptions, rights (including any preemptive or similar rights), calls or other rights to purchase or acquire any of the foregoing.

(m)                          “Cash and Cash Equivalents” means the aggregate amount of cash, cash in transit (including all uncleared checks made out to any Person and all uncleared wires sent to and drafts deposited into the account of any Person) and cash equivalents of the Acquired Companies, in each case, as of immediately prior to the Closing (without giving effect to the

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Stock Purchase, but after giving effect to the Pre-Closing Restructuring and the Shared Asset Transactions), determined in accordance with the Accounting Rules; provided that Cash and Cash Equivalents shall not include (i) Restricted Cash and (ii) cash used after the Determination Time to pay Transaction Expenses prior to the Closing, but only to the extent such Transaction Expenses are not reflected in the Final Closing Statement.

(n)                              “Cause” means, unless otherwise defined, an Acquired Company Employee’s Executive Severance Agreement, if applicable: (i) repeated failure or refusal to perform material duties, responsibilities and obligations (other than caused by incapacity due to physical or mental illness), resulting in demonstrable material injury to the Acquired Companies, the Seller or any of the Seller’s Subsidiaries; (ii) fraud, misrepresentation, theft, embezzlement, dishonesty or moral turpitude resulting in demonstrable injury to the Acquired Companies, the Seller or any of the Seller’s Subsidiaries; (iii) commission of (or a plea of nolo contendere to) a misdemeanor involving fraud, misrepresentation, theft, embezzlement, dishonesty or moral turpitude or any felony; or (iv) material breach of employer policy.

(o)                              “CGCL” means the General Corporation Law of the State of California.

(p)                              “Closing Indebtedness” means the aggregate amount of consolidated Indebtedness of the Acquired Companies (excluding, for the avoidance of doubt, the Indebtedness set forth on Section 6.5(g) of the Seller Disclosure Letter), in each case, outstanding as of immediately prior to the Closing (without giving effect to the Stock Purchase, but after giving effect to the Pre-Closing Restructuring and the Shared Asset Transactions).  Section 1.1(p) of the Seller Disclosure Letter sets forth an illustrative example of the determination of Closing Indebtedness as if the Determination Time had occurred on the Fiscal Month End Date immediately prior to the date hereof.

(q)                              “Code” means the Internal Revenue Code of 1986, as amended.

(r)                                 “Competition Law” means any Law that is designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization, restraint of trade or lessening of competition, including any foreign investment Laws.

(s)                                “Consideration” means $225,000,000.

(t)                                 “Contract” means any contract, agreement, indenture, note, bond, loan, lease, sublease, conditional sales contract, mortgage, license, sublicense, obligation, promise, undertaking, commitment or other binding arrangement (in each case, whether written or oral).

(u)                              “Copyright Act” means the U.S. Copyright Act of 1976, as may be amended from time to time.

(v)                              “Copyrights” means any and all United States and foreign copyrights (whether registered or unregistered) including copyright applications and registrations and all other works of authorship, including patterns and designs.

(w)                          “Current Assets” means, without duplication, the consolidated current assets of the Acquired Companies, in each case, as of the Determination Time (without giving

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effect to the Stock Purchase, but after giving effect to the Pre-Closing Restructuring and the Shared Asset Transactions), which current assets shall include only the current assets in the line items set forth on Exhibit B under the heading “Current Assets,” and no other assets; provided, that in no event shall “Current Assets” include any amount with respect to Cash and Cash Equivalents.

(x)                              “Current Liabilities” means, without duplication, the consolidated current liabilities of the Acquired Companies, in each case, as of the Determination Time (without giving effect to the Stock Purchase, but after giving effect to the Pre-Closing Restructuring and the Shared Asset Transactions), which current liabilities shall include only the line items set forth on Exhibit B under the heading “Current Liabilities” and no other liabilities; provided, that in no event shall “Current Liabilities” include any amount with respect to (i) Closing Indebtedness, (ii) Transaction Expenses, (iii) the retention bonuses described in item 92 of Section 4.13(a) of the Seller Disclosure Letter, (iv) any expense, liability or cost to be borne by the Buyer or by the Acquired Companies following the Closing pursuant to Section 6.5(d), (v) any cost or expense to be borne by the Buyer pursuant to Section 7.12 and (vi) any Retained Compensation Obligations.

(y)                              “Debt Financing Deliverables” means, to the extent required by the Debt Commitment Letter, (i) customary perfection certificates and those corporate organizational documents and (ii) no later than five (5) Business Days prior to the Closing Date (to the extent specifically requested by the Buyer no later than ten (10) Business Days prior to the Closing Date), all documentation and other information that is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulation, including the Patriot Act.

(z)                               “Determination Time” means 11:59 p.m. eastern time on the date immediately prior to the Closing Date.

(aa)                        “DGCL” means the General Corporation Law of the State of Delaware.

(bb)                      “Dollars” or “$” means United States dollars.

(cc)                        “Enforceability Exceptions” means (i) any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws of general applicability affecting creditors’ rights generally and (ii) general principles of equity.

(dd)                    “Environmental Claims” shall mean all written accusations, allegations, notices of violation, liens, claims, demands, suits, or causes of action for any damage, including personal injury or property damage, arising out of or related to Environmental Conditions or pursuant to applicable Environmental Laws.

(ee)                        “Environmental Conditions” shall mean the presence of Hazardous Materials in the environment (including natural resources, soil, surface water, ground water, any present or potential drinking water supply, subsurface strata or ambient air) relating to or arising out of the Business.

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(ff)                          “Environmental Laws” means all laws, regulations, and permits relating to pollution or protection of the environment or, to the extent it concerns exposure to Hazardous Materials, human health and safety.

(gg)                      “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(hh)                      “ERISA Affiliate” means any Person or entity that is treated as under common control with the Seller or, together with the Seller, is treated as a single employer, in each case under Section 414(b), (c), (m) or (o) of the Code.

(ii)                              “Final Closing Statement” means the Closing Statement, adjusted to reflect the Final Adjustment Amount and all components thereof as resolved pursuant to Section 2.4.

(jj)                              “Fiscal Month End Date” means, as applicable, 11:59 p.m. New York City time on any of October 26, 2013, November 30, 2013, December 28, 2013, February 1, 2014 or any subsequent fiscal month end date of the Business as determined by the Seller consistent with past practice.

(kk)                      “Former Acquired Company Employee” means an individual who, as of any date of reference, has previously terminated from employment with the Seller and its Subsidiaries, and who, as of the last day of such employment, was an Acquired Company Employee.

(ll)                              “Fraud” means, with respect to a Party, an actual and intentional fraud with respect to the making of the representations and warranties pursuant to Article IV or Article V (as applicable), provided, that such actual and intentional fraud of such Party shall only be deemed to exist if any of the individuals included on Section 1.1(vv) of the Seller Disclosure Letter (in the case of the Seller) or Buyer Disclosure Letter (in the case of the Buyer) had actual knowledge (as opposed to imputed or constructive knowledge) that the representations and warranties made by such Party pursuant to, in the case of the Seller, Article IV as qualified by the Seller Disclosure Letter, or, in the case of the Buyer, Article V as qualified by the Buyer Disclosure Letter, were actually breached when made, with the express intention that the other Party rely thereon to its detriment.

(mm)              “Fundamental Representations” means the representations and warranties set forth in Section 4.1 (Organization and Power), Section 4.3 (Corporate Authorization), Section 4.4 (Enforceability), Section 4.7(a) through (d) (Capitalization of the Acquired Companies), Section 4.11 (Sufficiency of Assets), Section 4.19 (Brokers), Section 5.1 (Organization and Power), Section 5.2 (Corporate Authorization), Section 5.3 (Enforceability), Section 5.12 (Brokers) and Section 5.13 (Independent Investigation).

(nn)                      “GAAP” means the United States generally accepted accounting principles as in effect on the date hereof or for the period with respect to which such principles are applied.

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(oo)                      “Governmental Authority” means: (i) any federal, state, provincial, local, municipal, foreign or international government or governmental authority, quasi-governmental entity of any kind, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court, tribunal, arbitrator or arbitral body (public or private) or any other body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature (including the Internal Revenue Service and the SEC), (ii) any self-regulatory organization, or (iii) any subdivision of any of the foregoing.

(pp)                      “Group Legal Action” means any current or future Legal Action that both: (i) does not relate primarily to the Seller Business nor primarily to the Business, and (ii) includes each of (A) a member of the Seller Group and (B) an Acquired Company as a defendant or a party against whom any such claim or investigation is directed.  “Group Legal Action” shall exclude any Acquired Company Legal Action or Seller Legal Action.

(qq)                      “Hazardous Materials” means any material, substance or waste that is listed, classified, regulated, characterized or otherwise defined as “hazardous,” “toxic,” “radioactive,” a “pollutant, or “contaminant,” (or words of similar intent or meaning) under applicable Environmental Law.

(rr)                            “Indebtedness” means, with respect to any Person, without duplication, (i) any liability of that Person for borrowed money, whether evidenced by a note, debenture or similar instrument; (ii) all liabilities of such Person under capital leases to the extent required to be capitalized under GAAP, as historically applied; (iii) all reimbursement obligations of such Person under letters of credit, letters of guaranty, bankers’ acceptances and similar obligations to the extent such instruments are then drawn on; (iv) all liabilities of such Person for (A) accrued but unpaid interest and (B) unpaid prepayment penalties, premiums or other expenses or amounts that are payable at any time, but only to the extent such prepayment penalties, premiums or other expenses are incurred in connection with the retirement or prepayment of such liabilities and obligations at the Closing; (v) any earn-out or similar obligations in connection with historical mergers or acquisitions related activity by such Person; (vi) all liabilities of such Person under any interest rate, currency or other hedging or swap agreements; and (vii) all liabilities of such Person for guarantees of another Person in respect of liabilities of the type set forth in clauses (i) through (vi), determined, in the case of each of clauses (i) through (vii), in accordance with GAAP, as historically applied.

(ss)                          “Insurance Policies” means any insurance policies and insurance agreements or arrangements of any kind (other than Employee Benefit Plans), including primary, excess and umbrella policies, comprehensive general liability policies, director and officer liability, fiduciary liability, automobile, aircraft, property and casualty, business interruption, workers’ compensation and employee dishonesty insurance policies, bonds and self-insurance company arrangements, together with the rights, benefits and privileges thereunder.

(tt)                            “Insurance Proceeds” means those monies (i) received by an insured from an unaffiliated third-party insurer within two (2) years of the date on which the corresponding award of Damages was finally determined, or (ii) paid by such third-party insurer on behalf of an insured, in either case net of the present value of any applicable premium adjustment,

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retrospectively rated premium, deductible, self-insured retentions, costs of collection, cost of reserve paid or held by or for the benefit of such insured or other out-of-pocket costs resulting from such payments.

(uu)                      “Intellectual Property” means any and all intellectual property and proprietary rights, including: (i)  United States or foreign patents, patent applications, utility models, and statutory invention registrations, together with all divisions, continuations, continuations-in-part, reissues, extensions, reexaminations and any other post-grant proceedings thereof related to the foregoing, (ii) Trademarks, (iii) Copyrights, and (iv) trade secrets under applicable Law, including confidential and proprietary information and know-how, processes, formulae, methods and data.

(vv)                      “Knowledge” means, when used with respect to the Buyer or the Seller, the actual knowledge, after reasonable inquiry, of the Persons set forth in Section 1.1(vv) of the Buyer Disclosure Letter or the Seller Disclosure Letter, respectively.

(ww)              “Law” means any law (including export control laws), statute, ordinance, code, regulation, rule or other requirement of any Governmental Authority or Order.

(xx)                      “Legal Action” means any claim, action, audit, investigation, arbitration, litigation, suit or other civil, administrative or criminal proceeding in each case by or before a Governmental Authority.

(yy)                      “Liabilities” means any and all Indebtedness, liabilities or obligations of any kind, whether accrued or fixed, contingent, known or unknown, absolute, inchoate or otherwise, determined or determinable.

(zz)                        “Licensed Intellectual Property” means any Intellectual Property related to the Business that is owned by a third party and licensed to an Acquired Company, other than Off-the-Shelf Software Licenses.

(aaa)                 “Liens” means any mortgages, deeds of trust, liens, pledges, security interests, collateral assignments, claims, retention of title, options, rights of first offer or refusal, conditional sales or other security arrangements, or adverse claims of title, ownership or use, or other encumbrances in respect of any property or asset.

(bbb)              “Lucky Liquidity Event” means (a) a sale of all or substantially all of the direct or indirect ownership interests in, or assets of, the Acquired Companies or the Business in a single transaction or series of transactions to one or more third parties, (b) any consolidation or merger of the Acquired Companies or the Business with or into any third party (whether or not the Buyer or such subsidiary is the surviving entity), or any other corporate reorganization or single transaction or series of transactions in which in excess of fifty percent (50%) of the direct or indirect voting power or equity ownership interests in the Acquired Companies or the Business is transferred through a merger, consolidation, tender offer or similar transaction to one or more third parties, (c) any transaction or series of transactions as a result of which twenty percent (20%) or more of the fair market value of the assets of the Acquired Companies or the Business (including Intellectual Property, but excluding the sale or other disposition of inventory or other assets in the ordinary course of business) are no longer directly or indirectly wholly

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owned by the Person then providing any substitute instruments and otherwise acting in furtherance of the Buyer’s obligations with respect to the Seller Guarantees set forth in Section 6.5(e), or (d) any transaction or series of transactions for the purpose of avoiding the satisfaction of any of the foregoing conditions, including any assignment, distribution or other transfer (whether direct or indirect) of assets or stock of Acquired Companies to Affiliates of Buyer that are not subsidiaries of Buyer and that do not assume Buyer’s obligations relating to the Business.

(ccc)                 “Material Adverse Effect” means any change, circumstance, occurrence, event, condition or effect that, individually or in the aggregate, (A) has had or would reasonably be expected to have a material adverse effect on the business, results of operations or financial condition of the Business or (B) would or would reasonably be expected to prevent, materially impair or materially delay the consummation of Pre-Closing Restructuring, the Shared Asset Transactions or Stock Purchase; provided, that the term “Material Adverse Effect” shall not include any such change, circumstance, occurrence, event, condition or effect relating to or arising from or in connection with (i) any national, international or any foreign or domestic regional economic, financial, social or political conditions (including changes therein), including the results of any elections, (ii) changes in any financial, debt, credit, capital or banking markets or conditions (including any disruption thereof, whether resulting from any default or ratings downgrade of the indebtedness of any Governmental Authority or otherwise), (iii) changes in interest, currency or exchange rates or the price of any commodity, security or market index, (iv) changes in legal or regulatory conditions, including changes or proposed changes in Law, GAAP or other accounting principles or requirements, or standards, interpretations or enforcement thereof, (v) changes affecting the fashion or apparel industry in general, (vi) seasonal fluctuations in the Business at times and to degrees reasonably consistent with past performance, (vii) any change in the market price or trading volume of any securities or indebtedness of the Seller or any of its Subsidiaries, any decrease of the ratings or the ratings outlook for the Seller or any of its Subsidiaries by any applicable rating agency and the consequences of such ratings or outlook decrease, or the change in, or failure of the Seller to meet, or the publication of any report regarding, any internal or public projections, forecasts, budgets or estimates of or relating to the Seller or any of its Subsidiaries for any period, including with respect to revenue, earnings, cash flow or cash position (it being understood that nothing in this subclause (vii) shall exclude the facts or circumstances giving rise to such failure from being taken into account in determining whether a “Material Adverse Effect” has occurred), (viii) the actual or threatened occurrence, escalation, outbreak or worsening of any war, police action or military or civil conflicts, whether pursuant to the declaration of an emergency or war or otherwise, (ix) any acts of terrorism, (x) the actual existence, occurrence or continuation of any force majeure events, including any earthquakes, floods, hurricanes, tropical storms, fires or other natural disasters or any other national, international or regional calamity, (xi) the execution or announcement of this Agreement, the Ancillary Agreements, the identity of the parties hereto or thereto, or any of their respective Affiliates, Representatives or financing sources, including any actual or threatened loss, adverse change, impairment or amendment after the date hereof of any Contract or any customer, supplier, investor, landlord, partner, employee or other business relation to the extent due to any of the foregoing in this subclause (xi), (xii) any actions taken, or not taken, with the written consent, waiver or at the request in writing of the Buyer, or (xiii) any actions taken by the Buyer, or any of its Affiliates, Representatives or financing sources after the date hereof (except as required pursuant to this Agreement); except that, in the case of subclauses

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(i), (ii), (iii), (iv), (v), (viii), (ix), and (x), any such change, event, condition or effect which has had a disproportionately adverse effect (but only to the extent of such disproportionate effect) on the Acquired Companies, taken as a whole, compared to other companies which operate in the same industries (and solely with respect to subclauses (ix) and (x), geographies) as the Acquired Companies shall be taken into account in determining whether a “Material Adverse Effect” has occurred.

(ddd)   “Multiemployer Plan” means any multiemployer plan within the meaning of Section 3(37) of ERISA.

(eee)    “Net Indebtedness” means the amount (which may be positive or negative) equal to Cash and Cash Equivalents minus Closing Indebtedness, in each case, calculated as of immediately prior to the Closing (without giving effect to the Stock Purchase, but after giving effect to the Pre-Closing Restructuring and the Shared Asset Transactions).  Notwithstanding anything to the contrary contained herein, in no event shall “Net Indebtedness” include any amount with respect to the Seller Debt Financing, Transaction Expenses, Current Assets or Current Liabilities.

(fff)     “Net Working Capital” means the amount (which may be positive or negative) equal to Current Assets minus Current Liabilities, in each case, calculated as of the Determination Time (without giving effect to the Stock Purchase, but after giving effect to the Pre-Closing Restructuring and the Shared Asset Transactions) and as determined in accordance with the Accounting Rules.  Notwithstanding anything to the contrary contained herein, in no event shall “Net Working Capital” include (i) any amount with respect to Cash and Cash Equivalents, or (ii) any amounts owing from any Acquired Company to any member of the Seller Group or from any member of the Seller Group to any Acquired Company.

(ggg)    “Non-336(e) or 338(h)(10) Affected Tax” means (i) any non-income Tax and (ii) any income Tax imposed by a taxing jurisdiction that does not recognize a Section 336(e) Election or a Section 338(h)(10) Election for purposes of imposing or otherwise determining income Tax on the applicable taxpayer.

(hhh)    “Off-the-Shelf Software License” means a license to Software that is commercially available on standard terms for a price not exceeding $50,000 on either an annual basis or as a one-time license fee.

(iii)       “Order” means any order, decision, judgment, writ, injunction, decree, award or other determination of any Governmental Authority.

(jjj)       “Owned Intellectual Property” means any and all Intellectual Property related to the Business that is owned by any Acquired Company, as the case may be.

(kkk)    “Permitted Lien” means (i) any Lien for Taxes which are not yet due or which are being contested in good faith by appropriate proceedings and, in each case, which are adequately reserved or accrued for in the Financial Statements in accordance with the Accounting Rules, (ii) Liens securing indebtedness or Liabilities set forth on Section 1.1(lll) of the Seller Disclosure Letter, (iii) non-monetary Liens (other than any Lien securing Indebtedness) or other imperfections of title, if any, that are not individually or in the aggregate,

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materially adverse to the Business or to the use or occupancy of any material leased, subleased or licensed real property for the purposes for which it is currently used, including (A) easements whether or not shown by the public records, overlaps, encroachments and any matters not of record that would be disclosed by an accurate survey or a personal inspection of the property and (B) title to any portion of the premises lying within the right of way or boundary of any public road or private road, (iv) Liens imposed or promulgated by Laws with respect to real property and improvements, including zoning regulations and statutory exceptions to title which are not violated by the current condition, use and operation of any leased, subleased or licensed real property, (v) Liens disclosed on existing title reports or existing surveys that have (together with all title exception documents) been delivered to the Buyer, (vi) mechanics’, construction builders’, carriers’, workmen’s, repairmen’s and similar Liens incurred in the ordinary course of business for amounts not yet due or that are being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established, in each case, to the extent required by GAAP and that are not, individually or in the aggregate, materially adverse to the Business, (vii) (A) in the case of real property leased, subleased or licensed to any Acquired Company or member of the Seller Group, any Lien, whether registered or unregistered, to which the fee (or any other interest in the leased, subleased or licensed property of which such Acquired Company’s or member’s interest is derivative) is subject which Lien is not caused by or the responsibility of such Acquired Company or member to cure under the applicable lease, sublease or license, (B) any Lien or other right in favor of the applicable landlord, sublandlord, licensor or any other Person set out in any lease, sublease or license, and (C) any subleases, licenses or other occupancy contracts set forth in Section 4.15 of the Seller Disclosure Letter; (viii) licenses of Intellectual Property and (ix) Liens that will be fully released (and with reasonable evidence of such release provided to the Buyer) no later than Closing.

(lll)       “Person” means any natural person, corporation, company, partnership, association, limited liability company, limited partnership, limited liability partnership, trust or other legal entity or organization, including any Governmental Authority, and including any successor by merger or otherwise of any of the foregoing.

(mmm)    “Regulations” means the U.S. Treasury regulations promulgated under the Code, as amended.

(nnn)    “Representatives” means, when used with respect to the Buyer or the Seller, the directors, officers, employees, consultants, accountants, legal counsel, financing sources, investment bankers or other financial advisors, agents and other representatives of the Buyer or the Seller, as applicable, and their respective Subsidiaries. Notwithstanding the foregoing, in no event shall the Seller or any member of the Seller Group be in any way deemed a Representative of the Buyer.

(ooo)    “Required Bank Information” means the (i) information described in clause (v)(B) under the Section entitled “Conditions Precedent to Closing” in Exhibit A to the Debt Commitment Letter and (ii) the data that would be required to complete the borrowing base certificate (as described in the Debt Commitment Letter).

(ppp)    “Restricted Cash” means Cash and Cash Equivalents that is restricted for use, as determined in accordance with the Accounting Rules.

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(qqq)    “Rights” means any rights, title, interest or benefit of whatever kind or nature.

(rrr)      “Secured Notes Indenture” means the Indenture dated as of April 7, 2011 between the Seller and U.S. Bank, National Association, as Trustee and Collateral Agent, relating to the Seller’s 10.50% Senior Secured Notes due 2019, as amended by the First Supplemental Indenture, dated September 21, 2011, the Second Supplemental Indenture, dated October 7, 2011 and the Third Supplemental Indenture, dated December 27, 2012, and as the same may be further amended, amended and restated, supplemented and otherwise modified from time to time.

(sss)     “Securities Act” means the U.S. Securities Act of 1933, as amended.

(ttt)      “Seller Business” means the business of the Seller and its Subsidiaries, including relating to the design, retail and marketing of women’s, men’s and children’s apparel, accessories and fragrance products internationally, but excluding the Business.

(uuu)    “Seller Debt Financing” means the debt financing contemplated by the Seller Debt Financing Documents.

(vvv)    “Seller Employee” means any individual who as of an applicable date of reference is employed by the Seller or any of its Subsidiaries, other than the Acquired Companies, and whose services primarily relate to the Seller Business.  For this purpose, an individual shall be deemed employed on a date of reference even though such individual is absent from employment on such date due to illness, injury, military service or mobilization or other authorized absence, including due to disability, pregnancy, parental leave, personal leave of absence or lay-off.

(www) “Seller Group” means, collectively, (i) the Seller and (ii) the Subsidiaries of the Seller (other than the Acquired Companies).

(xxx)    “Shared Asset Transactions” means the transactions contemplated by Section 7.1.

(yyy)    “Shared Assets” means any assets of the Acquired Companies or, to the extent used in or necessary for the Business, the members of the Seller Group, in each case that neither primarily nor exclusively relates to the Business, in each case as described on Section 1.1(yyy) of the Seller Disclosure Letter.

(zzz)    “Shared Proprietary Software” means all the proprietary software owned and controlled by the Seller or any of its Subsidiaries that is used by the Seller and its Subsidiaries in connection with the operation of the Business and is provided to the Buyer under the Transition Services Agreement.

(aaaa)   “Software” means computer software programs including source code and object code.

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(bbbb)  “Subsidiary” means, when used with respect to any Person, any other Person that such Person directly or indirectly owns or has the power to vote or control more than 50% of the voting stock or other interests the holders of which are generally entitled to vote for the election of the board of directors or other applicable governing body of such other Person (or, in the case of a partnership, limited liability company or other similar entity, control of the general partnership, managing member or similar interests).

(cccc)   “Target Net Working Capital” means thirty-five million dollars ($35,000,000).

(dddd) “Tax Returns” means any and all reports, returns, declarations, claims for refund, elections, disclosures, estimates, information reports or returns or statements supplied or required to be supplied to a taxing authority in connection with Taxes, including any schedule or attachment thereto or amendment thereof.

(eeee)   “Taxes” means any and all federal, state, provincial, local, foreign and other taxes, levies, fees, imposts, duties, and similar governmental charges (including any interest, fines, assessments, penalties or additions to tax imposed in connection therewith or with respect thereto) including (i) taxes imposed on, or measured by, income, franchise, profits or gross receipts, (ii) ad valorem, value added, capital gains, sales, goods and services, use, real or personal property, capital stock, license, branch, payroll, estimated, withholding, employment, social security (or similar), escheat, disability, registration, alternative or add-on minimum, unemployment, compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes, and customs duties or other tax, levy, fee, impost, duty or similar governmental charge of any kind whatsoever, and (iii) any Liability for the payment of any amounts of the type described above as a result of any express or implied obligation to pay any such amounts or to indemnify any other Person for such amounts (in each case, pursuant to a Tax Sharing Agreement), assumption, transferee or successor Liability in respect of such amounts, operation of Law in respect of such amounts, Regulations Section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar provision under Law) in respect of such amounts or otherwise.

(ffff)    “Trademarks” means any and all United States or foreign trademarks, service marks, trade dress, logos, domain names and other source or business identifiers (whether registered or unregistered), together with the goodwill associated with any of the foregoing and all registrations, applications for registration, renewals and extensions of any of the foregoing.

(gggg)  “Transactions” means the transactions contemplated by this Agreement and the Ancillary Agreements (other than, for the avoidance of doubt, the Seller Debt Financing).

(hhhh)  “Transaction Expenses” means, without duplication, and to the extent unpaid as of the Closing, the aggregate amount of the following out-of-pocket costs, fees and expenses payable by the Acquired Companies or for which any Acquired Company becomes liable after the Closing in respect of obligations in effect prior to the Closing Date (and is actually paid by such Acquired Company, or otherwise paid or caused to be paid at Closing by Buyer as directed by Seller pursuant to Section 3.4), in each case as a result of the consummation

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of the Stock Purchase, the Pre-Closing Restructuring or the Shared Asset Transactions: (i) the fees and expenses of outside legal counsel, accountants, advisors, brokers, and other third parties and (ii) all “single-trigger” change-in-control or retention bonuses paid by the Acquired Companies to employees of the Acquired Companies as a result of the Closing, other than as set forth on Section 1.1(hhhh) of the Seller Disclosure Letter and all applicable fees, expenses related thereto and the employer portion of any payroll Taxes relating to the payments set forth in clause (ii).  For the avoidance of doubt, all severance under the Employee Severance Agreements set forth on Section 4.13 of the Seller Disclosure Letter shall not be Transaction Expenses, including if any severance thereunder is triggered by any request by the Buyer for an officer’s resignation from such position with any Acquired Company, as contemplated by this Agreement.

(iiii)      “Transition Services Agreement” means a transition services agreement to be entered into at the Closing between the Seller, on the one hand, and each of the Acquired Companies, on the other hand, in form and substance set forth on Exhibit C hereto.

(jjjj)      “TSA Contracts” means any material Contracts of the members of the Seller Group with any Third Party Service Providers (as defined in the Transition Services Agreement) governing services to be provided pursuant to the Transition Services Agreement.

(kkkk)  “Willful Breach” means (i) an action or failure to act by one of the parties hereto that constitutes a material breach of this Agreement, and such action was taken or such failure occurred with such party’s knowledge or intention that such action or failure to act would reasonably be expected to constitute a material breach of this Agreement or (ii) the failure of Buyer or Seller to consummate the Closing when required under Section 3.1.

ARTICLE II

PURCHASE AND SALE OF THE ACQUIRED COMPANY SHARES

Section 2.1      Purchase and Sale of the Acquired Company Shares.  Upon the terms and subject to the conditions of this Agreement, the Buyer agrees to purchase from the Seller, and the Seller agrees to sell to the Buyer, all of the Acquired Company Shares at the closing of the transactions contemplated hereby (the “Closing”), free and clear of all Liens (other than (a) Liens on transfer imposed under applicable securities Laws and (b) Liens created by Buyer or any of its Affiliates), for the consideration specified in Section 2.2 (the “Stock Purchase”).

Section 2.2      Payment of Estimated Purchase Price.  At the Closing, the Buyer shall pay the Estimated Purchase Price (less the face amount of the Seller Debt Financing consummated at the Closing) in immediately available funds by wire transfer to an account or accounts that have been designated in writing by the Seller to the Buyer not less than two (2) Business Days prior to the Closing.  The term “Estimated Purchase Price” means the amount resulting from: (i) the Consideration, plus (ii) the Initial Adjustment Amount.  The Estimated Purchase Price shall be subject to adjustment following the Closing pursuant to Section 2.4 (as so adjusted, the “Purchase Price”).

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Section 2.3      Pre-Closing Statement.  No later than three (3) Business Days prior to the anticipated Closing Date, the Seller shall deliver to the Buyer a certificate executed by an executive officer of the Seller (the “Pre-Closing Statement”) setting forth its good faith estimates of (i) Net Working Capital (the “Estimated Net Working Capital”), (ii) Net Indebtedness (the “Estimated Net Indebtedness”), (iii) Transaction Expenses (the “Estimated Transaction Expenses”) and (iv) the Initial Adjustment Amount.  Estimated Net Working Capital shall be calculated in accordance with the Accounting Rules, and each of Estimated Net Indebtedness and Estimated Transaction Expenses shall be calculated in accordance with the definitions thereof (including, for the avoidance of doubt, any definitions of terms referred to therein).  For purposes of this Agreement, “Initial Adjustment Amount” means an amount (which may be positive or negative) equal to (A) the Estimated Net Working Capital, plus (B) the Estimated Net Indebtedness, minus (C) the Estimated Transaction Expenses, minus (D) the Target Net Working Capital.  The amount of the Initial Adjustment Amount shall be denominated in Dollars.  The Parties acknowledge and agree that the amounts set forth in the Pre-Closing Statement are solely for purposes of determining the Initial Adjustment Amount and the Estimated Purchase Price pursuant to Section 2.2, and the exclusive recourse of Buyer with respect to inaccuracies or disputes with respect thereto is the resolution procedures in Section 2.4.

Section 2.4      Post-Closing Adjustments.

(a)        Within ninety (90) days following the Closing Date or, if earlier, within thirty (30) days of delivery by the Seller to the Buyer, pursuant to the Transition Services Agreement (to the extent required thereby), of the data required to complete the Closing Statement, the Buyer shall deliver to the Seller a certificate executed by an executive officer of the Buyer (the “Closing Statement”) setting forth the actual amounts of (i) Net Working Capital (the “Post-Closing Net Working Capital”), (ii) Net Indebtedness (the “Post-Closing Net Indebtedness”), (iii) Transaction Expenses (the “Post-Closing Transaction Expenses”) and (iv) the Post-Closing Adjustment Amount, together with reasonable supporting documentation.  For purposes of this Agreement, “Post-Closing Adjustment Amount” means an amount (which may be positive or negative) equal to (A) the Post-Closing Net Working Capital, plus (B) the Post-Closing Net Indebtedness, minus (C) the Post-Closing Transaction Expenses, minus (D) the Target Net Working Capital.  The amount of the Post-Closing Adjustment Amount shall be denominated in Dollars.  The Buyer agrees to prepare the Closing Statement and determine the Post-Closing Net Working Capital in accordance with the Accounting Rules, and determine Post-Closing Net Indebtedness and Post-Closing Transaction Expenses in accordance with the definitions thereof  (including, for the avoidance of doubt, any definitions of terms referred to therein).  Such calculations are not intended to, and shall not, permit the introduction of different components, judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Statement or determining the Post-Closing Net Working Capital, Post-Closing Net Indebtedness and Post-Closing Transaction Expenses other than the Accounting Rules and the applicable definitions (including, for the avoidance of doubt, any definitions of terms referred to therein) of Post-Closing Net Working Capital, Post-Closing Net Indebtedness and Post-Closing Transaction Expenses, as the case may be, or to take into account any events, conditions or developments occurring after Closing with respect to any such calculations, components, judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation

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methodologies.  Without limiting the foregoing, the Buyer agrees that the Closing Statement shall entirely disregard (i) any and all effects on the assets or liabilities of the Acquired Companies of any financing or refinancing arrangements entered into at any time by the Buyer or any other transaction entered into by the Buyer in connection with the consummation of the transactions contemplated hereby, and (ii) any of the plans, transactions, or changes which the Buyer (or the Acquired Companies) intends to initiate or make or causes to be initiated or made after the Closing with respect to the Acquired Companies or their business or assets, or any facts or circumstances that are unique or particular to the Buyer or any of its assets or liabilities.

(b)        Within thirty (30) days after the Seller’s receipt of the Closing Statement, the Seller may deliver to the Buyer a written statement either accepting the Closing Statement or specifying any objections thereto (including therein the Seller’s calculations of any disputed items or amounts and the Seller’s grounds for such disagreement in reasonable detail) (an “Objections Statement”).  If the Seller does not deliver an Objections Statement to the Buyer within thirty (30) days after the Seller’s receipt of the Closing Statement, the Closing Statement will be final and binding upon the Seller and the Buyer.

(c)        If the Seller delivers an Objections Statement, then the Seller and the Buyer shall, during the thirty (30) days following such delivery, negotiate in good faith to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of Net Working Capital, Net Indebtedness and/or Transaction Expenses.  If the Seller and the Buyer are unable to reach such agreement during such period, then they shall promptly thereafter appoint Ernst & Young or, if such firm is unavailable, an independent accountant of nationally recognized standing reasonably satisfactory to the Seller and the Buyer (the “Accounting Firm”) to promptly review this Agreement and the disputed items or amounts for the purpose of calculating the actual amount of Net Working Capital, Net Indebtedness and/or Transaction Expenses.  The Accounting Firm, acting as an expert and not as an arbitrator, shall determine in accordance with this Agreement (including the Accounting Rules attached hereto) the actual amount of Net Working Capital, Net Indebtedness and/or Transaction Expenses and shall deliver to the Seller and the Buyer a written report setting forth such calculations.  In resolving any disputed item, the Accounting Firm (i) shall be bound by the provisions of this Section 2.4 and the definitions of Net Working Capital,  Net Indebtedness and/or Transaction Expenses, (ii) shall limit its review to the disputed items submitted to the Accounting Firm for resolution, and shall be instructed not to otherwise investigate matters independently and (iii) shall further limit its review solely to whether the Closing Statement has been prepared in accordance with this Section 2.4 or contains any mathematical or clerical error.  The determination of any disputed items cannot, however, be in excess of, or less than, the greatest or lowest value, respectively, claimed for any such item in the Closing Statement or Objections Statement. Such report shall be final and binding upon the Seller and the Buyer, absent manifest error. The fees, costs and expenses of the Accounting Firm shall be allocated 50% to the Seller, on the one hand, and 50% to the Buyer, on the other hand.

(d)       During the period of time from and after the Closing Date through the final determination of the Final Adjustment Amount in accordance with this Section 2.4, the Buyer shall afford, and shall cause the Acquired Companies to afford, to the Seller and the Accounting Firm, if any, and any accountants, counsel or other Representatives retained by the Seller and/or the Accounting Firm, if any, during reasonable business hours and upon reasonable

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notice to the Buyer, direct access to, and, to the extent applicable, paper and electronic copies of, the properties, books, contracts, personnel, Representatives (including the Buyer’s accountants) and records of the Acquired Companies, their respective Subsidiaries and such Representatives (including the work papers of the Acquired Companies’ accountants) that are reasonably relevant to the review of the Closing Statement and the calculation of Net Working Capital, Net Indebtedness and Transaction Expenses in accordance with this Section 2.4.  Except to the extent disclosure is required by applicable Law, the Seller agrees that it shall, and shall use reasonable best efforts to cause any accountants, counsel or other Representatives retained by the Seller to, hold all information acquired pursuant to this Section 2.4(d) in confidence in accordance with Section 7.3  Following the Closing, the Buyer shall not destroy or amend the books and records of the Acquired Companies to the extent such actions would materially and adversely affect the preparation of the Closing Statement or the review thereof.  No actions taken by the Buyer on its own behalf or on behalf of the Acquired Companies or their respective Subsidiaries, on or following the Closing Date shall be given effect for purposes of determining the Post-Closing Net Working Capital, Post-Closing Net Indebtedness or Post-Closing Transaction Expenses.

(e)        As used herein, “Final Adjustment Amount” means (i) if the Seller fails to deliver an Objections Statement in accordance with Section 2.4(b), the Post-Closing Adjustment Amount as set forth in the Closing Statement, or (ii) if a dispute between the Seller and the Buyer with respect to the Net Working Capital, Net Indebtedness and/or Transaction Expenses is resolved by resolution of the Buyer and the Seller or by submission of any remaining disputes to the Accounting Firm, as contemplated by this Section 2.4, the Post-Closing Adjustment Amount calculated using the Net Working Capital, Net Indebtedness and Transaction Expenses as so resolved.  The amount of the Final Adjustment Amount shall be denominated in Dollars.

(f)        If the Final Adjustment Amount is greater than the Initial Adjustment Amount, then the Buyer shall promptly (but in any event within five (5) Business Days following the determination of the Final Adjustment Amount) deliver to the Seller the amount of such excess by wire transfer of immediately available funds to an account or accounts designated by the Seller in writing.  If the Final Adjustment Amount is less than the Initial Adjustment Amount, then the Seller shall promptly (but in any event within five (5) Business Days following the determination of the Final Adjustment Amount) deliver to the Buyer the amount of such shortfall by wire transfer of immediately available funds to an account or accounts designated by the Buyer in writing.

Section 2.5      Withholding Rights.  The Buyer and the Acquired Companies shall be entitled to deduct and withhold from any amounts payable in connection with the transactions contemplated by this Agreement such amounts as the Buyer or any Acquired Company is required by U.S. federal, state or local Tax Law to deduct and withhold, with respect to the making of such payment; provided, that the Buyer shall notify and consult with the Seller at least ten (10) Business Days before any such required deduction or withholding made by the Buyer with respect to the purchase of the Acquired Company Shares from the Seller.  All such amounts shall be so withheld and paid over to or deposited with the relevant Governmental Authority by the Buyer or the applicable Acquired Company, and such amounts shall be treated for all purposes of this Agreement or an Ancillary Agreement, as applicable, as having been paid to the Person in respect of which such deduction and withholding was made.

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ARTICLE III

CLOSING

Section 3.1      Closing.  Subject to the terms and conditions of this Agreement, the Closing shall take place (a) at the offices of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, 1285 Avenue of the Americas, New York, New York, at 9:00 a.m., Eastern time, on the first Business Day following the Fiscal Month End Date on which the conditions set forth in Article X (other than any conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at the Closing) are satisfied or waived in accordance with this Agreement or (b) at such other place and time as the Buyer and the Seller may agree in writing.  The date on  which the Closing occurs is referred to as the “Closing Date.”  Notwithstanding the foregoing or any other provision to the contrary in this Agreement, the Closing shall not occur prior to the date that is thirty (30) calendar days after (and including) the date hereof without the prior written consent of the Buyer.

Section 3.2      Deliveries by the Seller.  At the Closing, the Seller shall deliver to the Buyer the following:

(a)        Ancillary Agreements.  The Ancillary Agreements to which any member of the Seller Group or either Acquired Company is a party, duly executed by the applicable Seller Group member or Acquired Company;

(b)        Officer’s Certificate.  The certificate, signed by an executive officer of the Seller, to be delivered pursuant to Section 10.2(c);

(c)        Stock Certificates and Stock Powers.  Stock certificates representing the Acquired Company Shares, together with stock powers endorsed in blank necessary to transfer such stock certificates to the Buyer;

(d)       Consent and Release Documentation.  Executed copies of the Consent and Release Documentation;

(e)        Affiliated Transactions.  Evidence of termination, in form reasonably acceptable to the Buyer, of the Affiliated arrangements contemplated by Section 6.4; and

(f)        FIRPTA Certificate.  The certification contemplated by Section 11.8(l).

(g)        Seller Debt Financing Documents.  The Seller Debt Financing Documents to which any member of the Seller Group or either Acquired Company is a party, duly executed by the applicable Seller Group member or Acquired Company.

Section 3.3      Deliveries by the Buyer.  At the Closing, the Buyer shall deliver, or cause to be delivered, to the Seller the following:

(a)        Estimated Purchase Price.  An amount in cash equal to (x) the Estimated Purchase Price minus (y) the face amount of the Seller Debt Financing consummated at the Closing, by wire transfer of immediately available funds to an account or accounts at a bank or

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banks designated by the Seller in writing no later than two (2) Business Days prior to the Closing;

(b)        Ancillary Agreements.  The Ancillary Agreements to which the Buyer is a party duly executed by the Buyer; and

(c)        Officer’s Certificate.  The certificate, signed by an executive officer of the Buyer, to be delivered pursuant to Section 10.3(c).

Section 3.4      Transaction Expenses.  The Buyer shall pay, or cause to be paid, on behalf of the Acquired Companies, all Transaction Expenses to be paid by the Acquired Companies at the Closing and with respect to which the Seller has delivered to Buyer final invoices prior to the Closing Date by wire transfer of immediately available funds or as otherwise directed by the Seller (the “Closing Transaction Expenses”).

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER

Except as set forth in the corresponding sections or subsections of the disclosure letter delivered by the Seller to the Buyer concurrently with the execution of this Agreement (the “Seller Disclosure Letter”), or such other sections or subsections of the Seller Disclosure Letter in accordance with Section 13.11, the Seller hereby represents and warrants to the Buyer that:

Section 4.1      Organization and Power.  The Seller, each other member of the Seller Group that is or will be a party to an Ancillary Agreement and each Acquired Company is duly organized, validly existing and in good standing, to the extent such good standing is recognized under each relevant jurisdiction, under the Laws of its jurisdiction of organization and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted, except where any failure to be in good standing would not reasonably be expected to be material to the Acquired Companies, taken as a whole.

Section 4.2      Foreign Qualifications; Organizational Documents.  Each Acquired Company is duly qualified to do business as a foreign corporation, limited liability company or other legal entity and is in good standing in each jurisdiction in which it leases real property and each other jurisdiction in which the conduct of its business and the lease and operation of its assets makes such qualification necessary, except where any failure to be so qualified or in good standing would not reasonably be expected to be material to the Acquired Companies, taken as a whole.  The Seller has made available to the Buyer true, correct and complete copies of the certificate of incorporation and bylaws (or the equivalent organizational documents) of the Seller and the Acquired Companies as in effect on the date of this Agreement (collectively, the “Acquired Company Organizational Documents”).

Section 4.3      Corporate Authorization.  Each of the Seller, each other member of the Seller Group that is or will be a party to an Ancillary Agreement and each Acquired Company have all necessary corporate (or equivalent) power and authority to enter into, deliver and perform this Agreement and each of the Ancillary Agreements to which it is or will be a party

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and to consummate the Transactions.  The execution, delivery and performance of this Agreement and the Ancillary Agreements by each of the Seller, each other member of the Seller Group that is or will be a party to an Ancillary Agreement and each Acquired Company, and the consummation by each of the Seller or such Subsidiaries of the Transactions have been duly and validly authorized by all necessary corporate, shareholder or other equivalent or similar action on the part of the Seller and such Subsidiaries, as applicable.  No vote or other approval of the stockholders of the Seller is required to consummate the Transactions.

Section 4.4      Enforceability.  This Agreement has been, and each of the Ancillary Agreements will be at or prior to the Closing, duly and validly executed and delivered by the Seller, the Acquired Companies (as applicable) and any applicable member of the Seller Group which is party to any Ancillary Agreement. This Agreement constitutes, and upon execution and delivery, each Ancillary Agreement to which a member of the Seller Group is a party shall constitute, a legal, valid and binding agreement of such member of the Seller Group, enforceable against such member of the Seller Group in accordance with their respective terms, subject to the Enforceability Exceptions.

Section 4.5      Governmental Authorizations.  Assuming that the representations and warranties of the Buyer contained in Section 5.4 are true and correct, the execution, delivery and performance of this Agreement and Ancillary Agreements by the Seller and the relevant members of the Seller Group and the consummation by the Seller of the Stock Purchase does not and will not require any consent, approval or other authorization of, or filing with or notification to any Governmental Authority (collectively, “Governmental Authorizations”) other than:

(a)        the filing with the Securities and Exchange Commission (the “SEC”) of any filings and reports that may be required in connection with this Agreement and the Stock Purchase under the Securities Exchange Act of 1934 (the “Exchange Act”);

(b)        compliance with United States Competition Law;

(c)        the post-Closing notification required to be made by the Buyer pursuant to the Investment Canada Act; and

(d)       where the failure to obtain such Governmental Authorizations would not, individually or in the aggregate, reasonably be expected to be material to the Acquired Companies or the Business.

Section 4.6     Non-Contravention.  The execution, delivery and performance of this Agreement by the Seller, the Ancillary Agreements to which each of the Seller and its Subsidiaries, as applicable, is a party, and the consummation by the Seller and its Subsidiaries of the Transactions does not and will not (a) contravene or conflict with, or result in any violation, breach or default (with or without notice or lapse of time or both) of, any provision of the organizational documents of the Seller, the other members of the Seller Group that are or will be a party to an Ancillary Agreement or the Acquired Company Organizational Documents, (b) contravene or conflict with, give rise to a right of termination, modification, acceleration or cancellation, or result in any violation, breach or default (with or without notice or lapse of time or both) of any Law applicable to the Seller, the other members of the Seller Group that are or

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will be a party to any Ancillary Agreement or any Acquired Company or by which any assets of the Acquired Companies are bound, assuming that all Governmental Authorizations described in Section 4.5 have been obtained or made, (c) result in any violation or breach of, give rise to a right of termination, modification, acceleration or cancellation of any right or obligation, or constitute a default (with or without notice or lapse of time or both) under, any Material Contracts, (d)  result in the loss, forfeiture, cancellation, suspension, limitation, termination or other impairment of, or give rise to any right of any Person to cancel, suspend, limit, terminate, or otherwise impair the right of the Acquired Companies to own or use or otherwise exercise any other rights that the Acquired Companies currently have with respect to, any Owned Intellectual Property, or (e) require any consent, approval or other authorization of, or filing with or notification to, any Person under any Material Contracts other than (i) as set forth on Section 4.6 of the Seller Disclosure Letter and (ii) in the case of clauses (c) or (d) of this Section 4.6, as would not individually or in the aggregate, reasonably be expected to be material to the Acquired Companies or the Business.

Section 4.7      Capitalization of the Acquired Companies.

(a)        A complete and accurate list of the authorized and outstanding Capital Stock of each Acquired Company as of the date hereof is set forth on Section 4.7(a) of the Seller Disclosure Letter.  All such outstanding Capital Stock is directly or indirectly owned as of the date hereof beneficially and of record by the applicable members of the Seller Group or an Acquired Company as set forth on Section 4.7(a) of the Seller Disclosure Letter.  Except as set forth on Section 4.7(a) of the Seller Disclosure Letter, there are no other equity securities of the Acquired Companies issued, reserved for issuance, or outstanding and there are no outstanding or authorized options, warrants, rights to acquire, agreements to issue, convertible or exchangeable securities, subscriptions, other rights or obligations (including any preemptive rights), calls or commitments of any character whatsoever, relating to the equity securities of the Acquired Companies, to which any Acquired Company is a party or is bound that provide for the issuance, delivery or sale of equity securities in any Acquired Company, in each case excluding this Agreement and each Ancillary Agreement.

(b)        All outstanding Capital Stock of each Acquired Company is duly authorized, validly issued, fully paid and non-assessable and not subject to any pre-emptive, registration, subscription or first refusal rights, and are owned free and clear of any Liens, other than (i) Permitted Liens which shall be released at or prior to Closing and Liens to be released pursuant to the Consent and Release Documentation, (ii) Liens on transfer imposed under applicable securities Laws and (iii) Liens created by Buyer or any of its Affiliates.

(c)        There are no outstanding contractual obligations of any Acquired Company to repurchase, redeem or otherwise acquire any Capital Stock of any member of the Seller Group.

(d)       There are no voting trusts, proxies or similar agreements, arrangements or commitments to which any Acquired Company is a party with respect to the voting of any shares of Capital Stock of the Acquired Companies.  There are no bonds, debentures, notes or other Indebtedness issued by any Acquired Company that entitle the holder thereof to vote (or

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convertible into, exchangeable for, or evidencing the right to subscribe for or acquire securities having the right to vote) together with stockholders of the applicable member on any matters.

(e)        There are no Contracts to which the Acquired Companies are party or by which their respective assets are bound that prevent or restrict the payment of dividends or other distributions by the Acquired Companies.

Section 4.8      Financial Statements.

(a)        Section 4.8(a) of the Seller Disclosure Letter contains a true, correct and complete copy of each of (i) the unaudited consolidated balance sheet of the Business (the “Latest Balance Sheet”) as of September 28, 2013 and the related statement of income for the nine (9) month period then ended (together with the Latest Balance Sheet, the “Interim Financial Statements”) and (ii) the unaudited consolidated balance sheets of the Business (the “Year End Balance Sheet”) and related statement of income for the fiscal years ended December 31, 2011 and December 29, 2012 (together with the Year-End Balance Sheet, the “Year-End Financial Statements”).  The Year-End Financial Statements and the Interim Financial Statements, collectively, are hereinafter referred to as the “Financial Statements.”  The Financial Statements have been prepared from the books and records of the Seller in accordance with the Accounting Rules, consistently applied throughout the periods indicated, and present fairly in all material respects the consolidated financial condition and results of operations of the Business as of the times and for the periods referred to therein.

(b)        Section 4.8(b) of the Seller Disclosure Letter sets forth the Indebtedness of the Acquired Companies as of the date of this Agreement (other than to the extent owed to an Acquired Company).

(c)        No Acquired Company and no member of the Seller Group (with respect to the Business) is a party to, or has any commitment to become a party to, any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K of the SEC) or which would not be required to be reflected or reserved on the Financial Statements in accordance with the Accounting Rules, in each case where the purpose of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Business in the Financial Statements.

Section 4.9      Absence of Changes.

(a)        Since the Latest Balance Sheet there has not occurred any Material Adverse Effect.

(b)        Since the Latest Balance Sheet through the date hereof (i) Seller has conducted the business of the Acquired Companies in the ordinary course consistent with past practice of business in all material respects and (ii) no Acquired Company has taken any action or omitted to take any action which, if taken or omitted to be taken after the date hereof, would require the consent of Buyer in accordance with Section 6.1(a), (b),(c), (d), (e),(f), (g), (h), (i), (j), and, to the extent relating to the foregoing clauses, Section 6.1(p).

Section 4.10    Material Contracts.  Section 4.10 of the Seller Disclosure Letter sets forth a list of all of the following Contracts by which any Acquired Company or any of its respective

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properties or assets are, or the Business is, bound as of the date of this Agreement (in each case, other than any Real Property Lease, Assigned Benefit Plan or TSA Contract) (collectively, together with the Contracts required to be disclosed in Section 4.8(b) of the Seller Disclosure Letter, the “Material Contracts”):

(a)        any Contract (or group of related Contracts) for the purchase or lease of materials, supplies, goods, services or equipment that is not terminable by an Acquired Company or member of the Seller Group on sixty (60) days’ notice without penalty or premium and that provides for or is reasonably likely to require either (1) annual aggregate payments by or to, or other consideration from or to, such Acquired Company of $250,000 or more for such Contract (or group of related Contracts), or (2) aggregate payments from or to such Acquired Company of $500,000 or more over the remaining term of such Contract (or Group of related Contracts);

(b)        (i) any Contract requiring an annual or lump-sum payment of $250,000 or more relating to the employment of any officer, individual employee or other Person on a full-time or consulting basis or (ii) any employment, severance, retention, change in control or similar agreement (including any offer letters), excluding in the case of this subclause (ii) any such agreement or offer letter that may be terminated at the election of the applicable Acquired Company upon notice of sixty (60) days or less without cost or penalty.

(c)        Contracts under which such Acquired Company has directly or indirectly guaranteed outstanding Liabilities of any Person (which guarantee obligations exceed $100,000 individually or in the aggregate) (other than any guarantees of Liabilities of any Acquired Company and any endorsements for the purpose of collection in the ordinary course of business);

(d)       Contracts containing (1) a covenant or covenants which purport to limit such Acquired Company’s ability or right to compete with any Person or to engage in any material business or (2) covenants of any other Person not to compete with the Acquired Companies in any material business;

(e)        Contracts that generate a guaranteed annual minimum royalty of $100,000 pursuant to which an Acquired Company grants a third party the right to use any Intellectual Property;

(f)        Contracts pursuant to which an Acquired Company grants an exclusive right or license to a third party to use any material Owned Intellectual Property;

(g)        Contracts pursuant to which a third party grants to an Acquired Company the right to use any material Intellectual Property, other than Software, that involved annual payments from the Acquired Companies in an amount in excess of $50,000 during the 12-month period ended December 31, 2012 or will involve annual payments from the Acquired Companies in an amount in excess of $50,000 during the 12-month period ending December 31, 2013;

(h)        Contracts under which such Acquired Company, directly or indirectly, agreed to make any advance, loan, extension of credit or capital contribution to, or other investment in, any Person (other than any Acquired Company or extensions of trade credit in the ordinary course of business) in any such case which the outstanding balance still owed by such

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Acquired Company, individually, is in excess of $250,000 and, together with any related Contract,  in excess of $500,000;

(i)         Contracts evidencing any Indebtedness;

(j)         Contracts relating to collective bargaining or Contracts with labor unions (or any similar employee organizations);

(k)        Contracts that relate to the future acquisition from or disposition to another Person (other than an Acquired Company) of material operating assets, business or Capital Stock or other equity interest of another Person (other than an Acquired Company) or have contingent payment or indemnification obligations outstanding which, individually, may reasonably be expected to have a value in excess of $250,000 individually or together with any related Contract;

(l)         Contracts for joint ventures, strategic alliances, partnerships or similar arrangements, in each case that are material to the Business (other than the Acquired Company Organizational Documents); and

(m)       Contracts with any customer of the Acquired Companies pursuant to which such customer receives any material (individually or in the aggregate) discount, rebate or credit based on the volume of such customer’s business with the Acquired Companies, or pursuant to which such customer may be entitled to any refunds in excess of five percent (5%) of the revenue from such customer’s business with the Acquired Companies.

(n)        any other Contract not described above in this Section 4.10 (other than (i) purchase orders entered into in the ordinary course of business with retailers and suppliers and (ii) Employee Benefit Plans)  that, individually or together with any other related Contract, involves consideration in excess of $2,000,000 (or, in the case of expenditures by the Acquired Companies, $500,000) in the current fiscal year of the Business or any future fiscal year.

The Seller has made available to the Buyer true and complete copies of all Material Contracts as in effect on the date hereof.  Each Material Contract is, subject to the Enforceability Exceptions, a valid and binding agreement of the applicable Acquired Company except where failure to be valid and binding would not be, individually or in the aggregate, reasonably expected to be material to the Acquired Companies or the Business.  Except as otherwise set forth on Section 4.10 of the Seller Disclosure Letter or where such breach or default is not, individually or in the aggregate, reasonably expected to be material to the Acquired Companies or the Business, (i) none of the Acquired Companies are in breach of or default under any Material Contract, (ii) to the Knowledge of the Seller, no other party to such Material Contract is in breach of or default under, any such Material Contract, (iii) none of the Acquired Companies have received any written claim or written notice of a breach of or default under any such Material Contract, (iv) to the Knowledge of the Seller, no event has occurred which would be reasonably expected to result in a breach of or a default under any Material Contract, or (v) no party has given written notice of any significant dispute with respect to any Material Contract.

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Section 4.11    Sufficiency of Assets.  After giving effect to any assets or services to be provided to the Acquired Companies under the Transition Services Agreement, the Pre-Closing Restructuring and the Shared Asset Transactions, the assets of the Acquired Companies and any Delayed Assets constitute all of the material assets, both tangible and intangible, necessary to operate the Acquired Companies in all material respects from and after the Closing as they have been operated in the twelve months prior to the date of this Agreement.

Section 4.12    Liabilities.  Except as set forth on Section 4.12 of the Seller Disclosure Letter, no Acquired Company has Liabilities of any kind that would have been required to be reflected in, reserved against or otherwise described on the Latest Balance Sheet or in the notes thereto in accordance with the Accounting Rules and were not so reflected, reserved against or described, other than (i) Liabilities incurred in the ordinary course of business after the date of the Latest Balance Sheet (none of which results from or arises out of any material breach of or material default under any Contract, material breach of warranty, tort, material infringement or material violation of Law and which would not reasonably be expected to be material to the Acquired Companies, taken as a whole, (ii) Liabilities incurred by the Acquired Companies in connection with the transactions contemplated hereby or (iii) Liabilities that would not exceed $250,000 in the aggregate.

Section 4.13    Benefit Plans; Employees.

(a)        Section 4.13(a) of the Seller Disclosure Letter lists all material Employee Benefit Plans.  For purposes of this Agreement, “Employee Benefit Plans” means all “employee benefit plans” (as defined in Section 3(3) of ERISA) and all other employee benefit, fringe benefit, profit-sharing, compensation, termination, pension, retirement, retirement savings, equity or equity-based compensation, stock appreciation, health, welfare, medical, dental, disability, life insurance, stock purchase, stock option, severance, employment, consulting, change-of-control, retention, bonus, incentive and deferred compensation plans, programs, agreements, arrangements and policies, whether or not subject to ERISA, whether formal or informal, oral or written, legally binding or not, that are sponsored, maintained or contributed to by the Seller, any Acquired Company or any of their respective Subsidiaries, or with respect to which the Seller, any Acquired Company or any of their respective Subsidiaries has or could have any obligation or liability, contingent or otherwise, in each case for the benefit of or with respect to any Acquired Company Employee or Former Acquired Company Employee or any dependent or beneficiary thereof.  No Acquired Company currently sponsors or maintains any Employee Benefit Plans that are subject to ERISA.

(b)        All Employee Benefit Plans are in compliance in all material respects with all applicable requirements of ERISA, the Code and other applicable laws and have been administered in accordance with their terms and such laws, except where any such failure to so comply would not, individually or in the aggregate, reasonably be expected to result in liability of any Acquired Company or any Subsidiary respectively thereof.  The Seller has made available to the Buyer copies of the Employee Benefit Plans (and, if applicable, related trust agreements) and all amendments thereto together, if applicable, with the most recent annual report (Form 5500), the most recent actuarial valuation report prepared in connection with any Employee Benefit Plan, and the most recent determination letter received from any taxation authority with respect to any Employee Benefit Plan.  Except as set forth in Section 4.13(b) of

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the Seller Disclosure Letter, no Employee Benefit Plans are maintained outside the jurisdiction of the United States, and each Employee Benefit Plan set forth on such schedule (each, a “Foreign Plan”) (i) is and at all times has been administered in compliance in all material respects with applicable law and maintained in good standing with all applicable Governmental Authorities, (ii) if intended to qualify for special tax treatment, such Foreign Plan meets all requirements for such treatment, (iii) if intended to be funded and/or book reserved, such Foreign Plan is fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions; and (iv) no material liability exists or could reasonably be expected to be imposed on any Acquired Company or any Subsidiary respectively thereof with respect to any Foreign Plan.

(c)        Except as set forth in Section 4.13(c) of the Seller Disclosure Letter, neither the Seller nor any of its Subsidiaries nor any ERISA Affiliate has, in the six-year period preceding the date of this Agreement, sponsored, maintained, contributed to or been required to maintain or contribute to, or incurred or could have incurred any actual liability under, any Employee Benefit Plan that is subject to Title IV of ERISA or is otherwise a defined benefit plan.  No Acquired Company nor any Subsidiary thereof is obligated to contribute to or has or had any liability with respect to any Multiemployer Plan with respect to any Acquired Company Employee or Former Acquired Company Employee.  No Employee Benefit Plan provides health, medical or other welfare benefits after retirement or other termination of employment (other than for continuation coverage required under Section 4980(B)(f) of the Code), and  no circumstances exist that could result in any Acquired Company becoming obligated to provide any such benefits.

(d)       There are no pending or, to the Knowledge of the Seller, threatened Legal Actions with respect to any Employee Benefit Plan, other than ordinary and usual claims for benefits by participants and beneficiaries, that could individually or in the aggregate reasonably be expected to result in any material liability of any Acquired Company or any Subsidiary respectively thereof.

(e)        Except as set forth in Section 4.13(e) of the Seller Disclosure Letter, the execution and delivery by the Seller of this Agreement and the consummation by the Seller of the Stock Purchase is not reasonably expected to result in the acceleration of the time of payment or vesting of any compensation or benefits to any Acquired Company Employee or Former Acquired Company Employee.  No amount or other entitlement that could be received as a result of the transactions contemplated hereby (alone or in conjunction with any other event) by any Acquired Company Employee that is a “disqualified individual” (as defined in Section 280G(c) of the Code) with respect to any Acquired Company will constitute an “excess parachute payment” (as defined in Section 280(G)(b)(1) of the Code.  Each Employee Benefit Plan that is a “nonqualified deferred compensation plan” (as defined in Section 409A of the Code) has at all times been in compliance in all material respects with the requirements of Section 409A of the Code and no Acquired Company Employee or Former Acquired Company Employee is entitled to receive any gross-up or additional payment by reason of the tax required by Section 409A or 4999 of the Code being imposed on such person.

(f)        There is no unfair labor practice, charge, complaint, material grievance or arbitration proceeding in progress or, to the Knowledge of the Seller, threatened against any of

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the Acquired Companies that could individually or in the aggregate reasonably be expected to result in a material liability of any Acquired Company or any Subsidiary respectively thereof.

(g)        Except as disclosed in Section 4.13(g) of the Seller Disclosure Letter, during the past five years (i) neither the Seller nor any Acquired Company is or was party to any collective bargaining agreement governing the rights of and obligations to any Acquired Company Employee, (ii) no Person or other trade union holds or held bargaining rights with respect to any Acquired Company Employee, (iii)  no labor organization or group of Persons has made a pending demand for recognition, and no representation proceedings or petitions seeking a representation proceeding are presently pending or, to the Knowledge of the Seller, are or were threatened to be brought or filed with the National Labor Relations Board or other labor relations tribunal with respect to any Acquired Company Employee, (iv) there is and has been no organizing activity involving any Acquired Company pending, or to the Knowledge of the Seller, threatened by any labor organization or group of Persons with respect to Acquired Company Employees, (v) no individual who has performed services for any Acquired Company or any Subsidiary thereof has been improperly excluded from participation in any Employee Benefit Plan, (vi) except as would not be, individually or in the aggregate, material to the Acquired Companies, no Acquired Company nor any Subsidiary thereof has or had any direct or indirect liability, whether absolute or contingent, with respect to any misclassification of any Person as an independent contractor rather than as an employee, as having exempt status rather than non-exempt status for purposes of overtime, or with respect to such Person’s status as an employee leased from another employer, and (vii) no Acquired Company nor any Subsidiary thereof has received any written claim that any Person providing services to any Acquired Company or Subsidiary thereof has been misclassified as an independent contractor rather than an employee or as having exempt status rather than non-exempt status for purposes of overtime.

(h)        Each of the Acquired Companies is in compliance in all material respects with all Laws relating to the employment of labor, including all such Laws relating to employment, equal employment opportunity, nondiscrimination, employment and reemployment rights of members of the uniformed services, immigration, wages, hours, benefits, the Worker Adjustment and Retraining Notification Act of 1988 (“WARN”) and any similar state or local “mass layoff” or “plant closing” Law, collective bargaining, discrimination, civil rights, safety and health, workers’ compensation, and the collection and payment of withholding and/or social security taxes and any similar tax (collectively, “Employment Laws”), and no Acquired Company nor any Subsidiary thereof is liable for the payment of material taxes, fines, penalties or other amounts, however designated, for failure to comply at any time with any of the foregoing Employment Laws.

Section 4.14    Intellectual Property.

(a)        Section 4.14 of the Seller Disclosure Letter sets forth a complete and accurate list of all Owned Intellectual Property that, as of the date of this Agreement, is registered, issued or the subject of a pending application for registration (the “Registered IP”), identifying for each such registration and pending application (i) its registration (as applicable) and application numbers and the relevant jurisdiction, (ii) its owner of record and, if different, its beneficial owner, (iii) its current status, and (iv) in the case of Trademarks, the international class of goods or services specified in such registration or application.

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(b)        An Acquired Company (i) owns and possesses (or will, as of the Closing, own and possess) all right, title and interest in and to the Owned Intellectual Property, free and clear of all Liens (other than Permitted Liens) and (ii) has (or will, as of the Closing, have) a right to use the Licensed Intellectual Property.  All material Registered IP is subsisting and, to the Knowledge of the Seller, and except as set forth on Section 4.14(b) of the Seller Disclosure Letter, valid and enforceable.  The Acquired Companies have taken commercially reasonable actions to avoid the abandonment of, and to prosecute through registration or issuance, all of the material Registered IP.  No representation or warranty is made that any item of Registered IP that is the subject of a pending application will proceed to registration or issuance in the applicable intellectual property office where such application has been filed.  Section 4.14(b) of the Seller Disclosure Letter sets forth all actions with respect to the Registered IP which are due before the date that is one hundred fifty (150) days following the date hereof.

(c)        To the Knowledge of the Seller, the operations, products and services of the Business do not infringe, constitute an unauthorized use of, misappropriate, dilute or otherwise violate any Intellectual Property right of any Person. As of the date of this Agreement, to the Knowledge of the Seller, no Person is infringing, misappropriating, diluting or otherwise violating any Owned Intellectual Property, or engaging in any activities that constitute unfair competition with respect to the Business, (but excluding any claims or proceedings relating to counterfeit goods that reasonably could not be expected to have, either individually or in the aggregate, a Material Adverse Effect).

(d)       There is no Legal Action pending, or, to the Knowledge of the Seller, threatened against, any Acquired Company and, since January 1, 2011, neither the Acquired Companies nor members of the Seller Group have (i) received any written notice, based upon, or challenging or seeking to deny or restrict, the validity, enforceability, registration, use or ownership by such Acquired Company of any of the Owned Intellectual Property, (ii) received any written notice alleging that the use or exploitation of the Owned Intellectual Property or products manufactured or sold by such Acquired Company or any Affiliates or licensees of such Acquired Company, do or may conflict with, misappropriate, infringe, dilute or otherwise violate any Intellectual Property right of any Person, or (iii) received any written notice alleging that such Acquired Company has infringed, misappropriated, diluted or otherwise violated any Intellectual Property right of any Person, in each of clauses (i), (ii) or (iii), except as such matters have been resolved, and to the Knowledge of the Seller no reasonable basis for any claims in each of clauses (i), (ii) or (iii) exist.  Since January 1, 2011, neither the Acquired Companies nor members of the Seller Group have entered into any settlement or coexistence agreement with respect to any Intellectual Property.  As of the date of this Agreement, there are no opposition or cancellation proceedings against any Acquired Company relating to any Trademark registration or pending application for registration of a Trademark and, to the Knowledge of the Seller, no such proceeding is threatened with respect to any of the Trademarks contained in the Registered IP.  To the Knowledge of the Seller, no Registered IP is subject to any outstanding order, judgment, decree or stipulation by a Governmental Authority restricting the use, licensing or other exploitation thereof by an Acquired Company.

(e)        The Acquired Companies and the Seller Group have taken adequate measures, consistent with commercially reasonable practices in the industry, to protect the

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confidentiality of all trade secrets and confidential and proprietary information related to the Business.

(f)        The Acquired Companies and the Seller Group have implemented commercially reasonable procedures to monitor for and take action to stop infringement of the Trademarks included in the Registered IP and the sale of counterfeit products that infringe any such Trademarks, and have taken commercially reasonably steps to preserve and protect the material Registered IP and other material Owned Intellectual Property.

(g)        The Acquired Companies and the Seller Group maintain and enforce physical, technical and logical security procedures with respect to access to and maintenance of their information technology systems and any confidential information stored thereon, which procedures (a) are at least equal to industry standards, (b) comply with applicable Law, and (c) provide reasonably appropriate physical, technical and organizational safeguards against accidental or unlawful destruction, loss, alteration, unauthorized disclosure, theft or misuse. Without limiting the generality of the foregoing, the Acquired Companies and the Seller Group take reasonable measures to secure and defend their locations and equipment against “hackers” and others who may seek, without authorization, to modify or access their systems or the information found therein.

Section 4.15    Real Property.

(a)        The Seller and its Subsidiaries do not use any real property owned by them in the operation of the Business.  The Acquired Companies do not own, and since June 8, 1999 have not owned, any real property.  The Acquired Companies do not operate, and since June 8, 1999 have not operated, any manufacturing operations.  The Acquired Companies have a valid and enforceable right to use and access, or a valid and enforceable leasehold (or subleasehold) interest in, all leased (or subleased) real property (including all buildings, fixtures and other improvements thereto) used in the Business (the “Leased Real Property”).  An Acquired Company enjoys peaceful and undisturbed possession of each material Leased Real Property.  The leasehold (or subleasehold) interest of any Acquired Company in any Leased Real Property is not subject to any Lien, except for Permitted Liens.

(b)        Each of the material leases, subleases and licenses (and any guarantees that may exist related to such leases, subleases and licenses) relating to the Business as of the date of this Agreement (other than certain leases of off-site storage units) is set forth in Section 4.15 of the Seller Disclosure Letter (the “Real Property Leases”).  Each Real Property Lease that is guaranteed by the Seller or any of its Subsidiaries (other than the Acquired Companies) is identified on Section 4.15 of the Seller Disclosure Letter.  The Seller has delivered to the Buyer a true and complete copy of each Real Property Lease.  Each of the material Real Property Leases is, subject to the Enforceability Exceptions, a legal, valid and binding agreement of the Acquired Company party thereto, and, to the Knowledge of the Seller, of the other parties thereto.  No breach or default exists on the part of such Acquired Company or any other party thereto, under any material Real Property Lease, except where such breach or default would not, individually or in the aggregate, reasonably be expected to be material to the Acquired Companies or the Business.  No event has occurred or circumstance exists which, with the delivery of notice, passage of time or both, would constitute a breach or default by an

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Acquired Company under any material Real Property Lease, and the applicable Acquired Company has paid all rent due and payable under the Real Property Leases, except where such breach or default or failure to pay rent due would not, individually or in the aggregate, reasonably be expected to be material to the Acquired Companies or the Business.  No Acquired Company has subleased, assigned or otherwise granted to any Person the right to use or occupy any property leased pursuant to a material Real Property Lease or any portion thereof, except where such sublease, assignment or grant would not, individually or in the aggregate, reasonably be expected to be material to the Acquired Companies.

(c)        None of the Seller or any of its Subsidiaries has received any written notice of (i) existing material violations of building codes and/or zoning ordinances or other governmental or regulatory Laws affecting the Leased Real Property, (ii) existing, pending or threatened condemnation proceedings affecting the Leased Real Property, or (iii) existing, pending or threatened zoning, building code or other moratorium proceedings, or similar matters which could reasonably be expected to materially and adversely affect the ability to operate the Leased Real Property as currently operated. Neither the whole nor any material portion of any material Leased Real Property has been damaged or destroyed by fire or other casualty which is not adequately insured by the Acquired Company, which damage or destruction has not been restored or repaired.

Section 4.16    Taxes.

(a)        All income Tax Returns and all other material Tax Returns, in each case required to be filed by or with respect to any Acquired Company have been timely filed, and all such Tax Returns are true, complete and correct in all material respects.

(b)        All material amounts of Taxes payable by or on behalf of any Acquired Company have been fully and timely paid, whether or not shown or required to be shown on any Tax Return.

(c)        There are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection, assessment or reassessment of, Taxes of any Acquired Company, for any taxable period, and no request for any such extension or waiver is currently pending.

(d)       No material Tax deficiencies or assessments asserted in writing with respect to any Acquired Company are currently outstanding.

(e)        No audit, examination or other proceeding by any Governmental Authority is pending, in progress or threatened in writing with respect to any Taxes due from or with respect to any Acquired Company.

(f)        No Acquired Company (i) has been a member of a group filing a combined, consolidated, unitary or similar Tax Return (other than a group the common parent of which is the Seller), (ii) has any Liability for the Taxes of any other Person (other than the Seller and its Subsidiaries organized in the United States) under Regulations Section 1.1502-6 (or any similar provision of state, local, or foreign Law), as a transferee or successor, by contract or

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otherwise, (iii) is or has been a party to any Tax allocation, sharing or indemnification agreement, other than any such agreement not primarily concerned with the sharing, allocation or indemnification of Taxes (a “Tax Sharing Agreement”), (iv) has entered into or participated in any “reportable transaction” within the meaning of Regulations Section 1.6011-4(b), (v) has a permanent establishment (within the meaning of an applicable Tax treaty) in any country other than the country of its organization, or is subject to Tax in a jurisdiction outside the country of its organization, (vi) has granted to any Person any power of attorney that is currently in force with respect to any Tax matter, (vii) has agreed to or is required to make any adjustment pursuant to Section 481(a) of the Code or any similar provision of state, local or foreign Law by reason of a change in accounting method, has any Knowledge that any Governmental Authority has proposed any such adjustment, or has any application pending with any Governmental Authority requesting permission for any such changes in accounting methods that relate to its business or operations that will affect a taxable period (or portion thereof) beginning after the Closing Date, (viii) has executed or entered into a closing agreement pursuant to Section 7121 of the Code (or any predecessor provision thereof or any similar provision of state, local or foreign Law) that is relevant to taxable periods ending after the Closing Date, or (ix) has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code in the two years prior to the date of this Agreement.

(g)        The Seller is not a “foreign person” within the meaning of Section 1445 of the Code.  Since January 1, 2009, no written claim has been made by any Governmental Authority in a jurisdiction where any Acquired Company does not file Tax Returns (or have Tax Returns filed on its behalf) that it is or may be subject to Tax by that jurisdiction or required to file Tax Returns in that jurisdiction.  The Acquired Companies have withheld and timely paid to the appropriate taxing authority all material amounts of Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party and have each complied in all material respects with all Tax information reporting provisions of all applicable Laws.

(h)        No Acquired Company will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) beginning after the Closing Date as a result of any of the following that occurred or existed on or prior to the Closing Date: (i) an installment sale or open transaction, (ii) a prepaid amount, (iii) an intercompany item under Treasury Regulation Section 1.1502-13 or an excess loss account under Treasury Regulation Section 1.1502-19, or (iv) an election pursuant to Section 108(i) or the Code.

(i)         With respect to any period for which Tax Returns have not yet been filed or for which Taxes of the Acquired Companies are not yet due or owing, the Acquired Companies have made due and sufficient accruals in accordance with GAAP for such Taxes in the Financial Statements.  There are no Liens as a result of any unpaid Taxes upon any of the assets of any Acquired Company (other than Permitted Liens).  The Seller has made available to the Buyer complete copies of (i) pro forma federal, state and provincial income Tax Returns of the Acquired Companies relating to taxable periods since 2009 and (ii) any audit report issued within the last three years relating to Taxes due from any Acquired Company.

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(j)         No Tax rulings, requests for rulings, private letter rulings, technical advice memoranda or other similar agreements or rulings have been entered into with, issued by, or filed with any Governmental Authority with respect to or relating to an Acquired Company that could affect the Tax Returns or Taxes of the Acquired Company for taxable periods (or portions thereof) beginning after the Closing Date.

(k)        To the Knowledge of the Seller, Lucky is not a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code.

(l)         No Acquired Company that is not organized in the United States (i) has an investment in U.S. property within the meaning of Section 956 of the Code, (ii) is engaged in a United States trade or business for U.S. federal income Tax purposes, (iii) is, or has been, a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B) of the Code or treated as a U.S. corporation under Section 7874(b) of the Code or (iv) has elected under Section 897(i) of the Code to be treated as a domestic corporation.

(m)       Each Acquired Company that is organized in the United States is a member of a consolidated group within the meaning of Regulations Section 1.1502-1(h) and is not the common parent of the group.

(n)        No representation or warranty contained in this Section 4.16 (other than subsections (f)(iii), (f)(vi), (f)(vii), (f)(viii), the second sentence of (g), (h), (j), (l) and (m) thereof) shall be deemed to apply directly or indirectly with respect to any taxable period (or portion thereof) beginning after the Closing Date.

Section 4.17    Permits; Compliance with Law.

(a)        (i) Each member of the Seller Group (as it relates to the Business) and each Acquired Company is in possession of all material franchises, grants, authorizations, licenses, easements, variances, exceptions, consents, certificates, approvals and other permits of any Governmental Authority (“Permits”) necessary for it to own, lease and operate its properties and assets related to the Business as it is now being conducted (collectively, the “Acquired Company Permits”) and (ii) except as would not be, individually or in the aggregate, material to the Business or the Acquired Companies, all such Acquired Company Permits are legal, valid, binding and in full force and effect.  No suspension or cancellation of any of the Acquired Company Permits is pending or, to the Knowledge of Seller, threatened in writing.

(b)        No Acquired Company or member of the Seller Group (as it relates to the Business), nor, to the Knowledge of the Seller, any officer, director, employee, agent or other authorized Person acting on behalf of the Acquired Companies (in each case, in their capacity as such) is in conflict with, or in default or violation (and no event has occurred that, with notice or the lapse of time or both, would constitute a default or violation) of, (i) any Law applicable to such Acquired Company or by which its assets and properties are bound (including the Foreign Corrupt Practice Act of 1977, as amended, and any other anti-corruption, anti-bribery, export control, trade, anti-boycott, economic sanction or similar Laws of any jurisdiction applicable to such Acquired Company or by which its assets and properties are bound) or (ii) any Acquired

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Company Permits, in each case, except with respect to violations, conflicts or defaults that would not, individually or in the aggregate, reasonably be expected to be material.

(c)        None of the Acquired Companies or, to the Knowledge of the Seller, any employee, agent or other authorized Person acting on behalf of the Acquired Companies (in each case, in their capacity as such) has, in connection with the operation of the Business, (i) used any corporate or other funds for unlawful gifts or entertainment, (ii) established or maintained any unlawful or unrecorded funds, (iii) made any indirect unlawful payment to any foreign or domestic government official or employee from corporate funds or (iv) has accepted or received any unlawful contributions, payments, gifts or expenditures.

Section 4.18    Litigation.  There are not (a) any Acquired Company Legal Actions pending or, to the Knowledge of the Seller, threatened by or against the Seller Group or the Acquired Companies that are, individually or in the aggregate, material or would reasonably be expected to be material to the Acquired Companies or the Business, or (b) any Legal Actions pending or, to the Knowledge of the Seller, threatened against any executive officer or director of the Business or any Acquired Company in their capacities as such, in each case that (i) involve any alleged criminal action, (ii) seek (or resulted in) injunctive or other non-monetary relief in a manner that, individually or in the aggregate, are material or would reasonably be expected to be material to the operation of the Business or the Acquired Companies, or (iii) are otherwise material or reasonably be expected to be material to the Business or the Acquired Companies.  There are not any Orders outstanding against any Acquired Company, or any member of the Seller Group with respect to the Business, that are or would reasonably be expected to be material.

Section 4.19    Brokers.  No broker, finder or investment banker is entitled to any brokerage, finder’s or other similar fee or commission in connection with the Stock Purchase from any Acquired Company based upon arrangements made by or on behalf of the Seller or any of their respective Subsidiaries.

Section 4.20    Insurance.  Section 4.20 of the Seller Disclosure Letter sets forth a correct and complete list of all material Insurance Policies held by the Seller or its Subsidiaries as of the date hereof for the benefit of the Business (collectively, the “Acquired Company Insurance Policies”).  There are no material claims related to the Business pending under any Acquired Company Insurance Policy as to which coverage has been questioned, denied or disputed in any material respect or in respect of which there is an outstanding reservation of rights.  Neither Seller nor any of its Subsidiaries has received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such material Acquired Company Insurance Policies. All premiums due on such material Acquired Company Insurance Policies have either been paid or, if not yet due, accrued.  All such material Acquired Company Insurance Policies (x) are in full force and effect and enforceable in accordance with their terms and (y) have not been subject to any lapse in coverage for any material term.  None of Seller or any of its Subsidiaries is in material default under, or has otherwise failed to comply with, in any material respect, any provision contained in any such material Acquired Company Insurance Policy.  True and complete copies of the Acquired Company Insurance Policies have been made available to the Buyer.

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Section 4.21    Affiliated Transactions.  Except for employment agreements with any employee, officer or consultant of any member of the Seller Group otherwise disclosed hereunder to the extent disclosed on the Seller Disclosure Letter and those Contracts disclosed on Section 4.21 of the Seller Disclosure Letter, no Acquired Company is a party to any agreement that is currently in effect with any officer, director or Affiliate of any member of the Seller Group (other than an Acquired Company or any of its Subsidiaries) (each, an “Affiliated Person”).  No Affiliated Person owes any amount to any Acquired Company (other than amounts that will be repaid on or prior to the Closing).  No Acquired Company owes any amount to any Affiliated Person, nor has any Acquired Company committed to make any loan or extend or guarantee credit to or for the benefit of any Affiliated Person (in each case, other than amounts, loans or guarantees that will be repaid or released on or prior to the Closing, and in each case except as contemplated hereunder or under any Ancillary Agreement).

Section 4.22    Retailers and Suppliers.  Section 4.22 of the Seller Disclosure Letter sets forth a list of the fifteen (15) largest third party retailers of the Acquired Companies based on the actual revenue received by the Acquired Companies during the twelve-month period ended September 28, 2013 (the “Retailers”).  Section 4.22 of the Seller Disclosure Letter sets forth a list of the fifteen (15) largest suppliers of the Acquired Companies based on the actual expenditures made by the Acquired Companies during the twelve-month period ended September 28, 2013 (the “Suppliers”).  As of the date hereof, no Retailer or Supplier has advised the Seller or any of the Acquired Companies in writing that it intends to terminate the relationship or decrease their respective business levels with, the Acquired Companies, in each case other than due to seasonal changes in the industries in which such Persons operate that are substantially consistent with historical patterns.

Section 4.23    Accounts Receivable. All accounts receivable shown on the Financial Statements represent, and the accounts receivable of the Acquired Companies outstanding at Closing will represent, amounts due related to sales actually made or services actually performed in bona fide transactions, net of allowances and anticipated discounts, or estimates of such amounts, where appropriate.

Section 4.24    Environmental Matters.  The Acquired Companies, the Business, and the conduct of the Business on the Leased Real Properties are in compliance in all material respects with all Environmental Laws.  There are no material Environmental Claims against any of the Acquired Companies, nor has any of the Acquired Companies received any written notification of any allegation of any material actual or potential responsibility for the disposal, release or threatened release at any location of any Hazardous Materials.  There have been no releases of Hazardous Materials by the Acquired Companies or, to the Knowledge of the Seller, by any other Person, that would reasonably be expected to give rise to an Environmental Claim against any Acquired Company.

Section 4.25    Accounting Rules.  The balances reflected in the Balance Sheets of the Lucky Brand Business (as such terms are used in the Accounting Rules) as prepared in accordance with the Accounting Rules included in Exhibit A (i) include all material balances specific to the Business, which may be contained in JDE company codes that are either Lucky specific or co-mingled and (ii) do not include any material balances that are not specific to the

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Business.

Section 4.26    No Other Representations or Warranties. Except as and to the extent expressly set forth in this Article IV and any Ancillary Agreement, or in any agreement, certificate or instrument delivered pursuant to this Agreement, the Seller and its Representatives and Affiliates do not make any representations or warranties, express or implied, with respect to the Acquired Companies, or any of their businesses, assets or liabilities, to the Buyer or any other Person and hereby disclaims all liability and responsibility for any other representation or warranty made, communicated, or furnished to the Buyer or such other Person.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

Except as set forth in the corresponding sections or subsections of the disclosure letter delivered by the Buyer to the Seller concurrently with the execution of this Agreement (the “Buyer Disclosure Letter”), or such other sections or subsections of the Buyer Disclosure Letter in accordance with Section 13.11, the Buyer hereby represents and warrants to the Seller that:

Section 5.1      Organization and Power.  The Buyer is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted.

Section 5.2      Corporate Authorization.  The Buyer has all necessary corporate power and authority to enter into, deliver and perform this Agreement and the Ancillary Agreements to which the Buyer is a party and to consummate the Transactions.  The execution, delivery and performance of this Agreement and the Ancillary Agreements to which the Buyer is a party by the Buyer and the consummation by the Buyer of the Transactions to which it is a party have been duly and validly authorized by all necessary corporate, shareholder or other equivalent or similar action on the part of the Buyer.

Section 5.3      Enforceability.  This Agreement has been duly and validly executed and delivered by the Buyer. This Agreement constitutes, and upon execution and delivery, each Ancillary Agreement to which the Buyer is a party shall constitute, a legal, valid and binding agreement of the Buyer, enforceable against the Buyer in accordance with their respective terms, subject to the Enforceability Exceptions.

Section 5.4      Governmental Authorizations.  Assuming the representations and warranties of the Seller contained in Section 4.5 are true and correct, the execution, delivery and performance of this Agreement by the Buyer and the consummation by the Buyer of the Stock Purchase do not and will not require any Governmental Authorization, other than:

(a)        the filing with the SEC of any filings or reports that may be required in connection with this Agreement and the Stock Purchase under the Exchange Act;

(b)        compliance with applicable United States Competition Law;

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(c)        the post-Closing notification required to be made by the Buyer pursuant to the Investment Canada Act; and

(d)       where the failure to obtain such Governmental Authorizations would not have a Buyer Material Adverse Effect.

Section 5.5      Non-Contravention.  The execution, delivery and performance of this Agreement by the Buyer, the Ancillary Agreements to which Buyer is a party, and the consummation by the Buyer of the Transactions does not and will not: (a) contravene or conflict with, or result in any violation or breach or default (with or without written notice or lapse of time or both) of, any provision of its organizational documents; (b) contravene or conflict with, give rise to a right of termination, modification, acceleration or cancellation, or result in any violation, breach or default (with or without notice or lapse of time or both) of any Law applicable to the Buyer or any of its Subsidiaries or by which any assets of the Buyer or any of its Subsidiaries (“Buyer Assets”) are bound assuming that all Governmental Authorizations described in Section 5.4 have been obtained or made; (c) result in any violation or breach of, give rise to a right of termination, modification, acceleration or cancellation of any right or obligation or constitute a default (with or without notice or lapse of time or both) under, any material Contracts to which the Buyer or any of its Subsidiaries is a party or by which any Buyer Assets are bound (collectively, the “Buyer Contracts”); or (d) require any consent, approval or other authorization of, or filing with or notification to, any Person under any Buyer Contracts, other than in the cases of clauses (b), (c) and (d) of this Section 5.5, as would not have a Buyer Material Adverse Effect.

Section 5.6      Sufficient Funds; Financing.