EXECUTION COPY
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is dated as of September 25,
1997, by and among XXXXXX, XXXXXXX, XXXXXXXXX & GREEN, P.C., a
New York professional corporation ("WCA&G"), NEW RIO, L.L.C., a
Delaware limited liability company ("New Rio"), and XXXXXXX X.
XXXXXX, an individual ("Xxxxxx"). Reference is made to that
certain Stock Exchange Agreement dated as of September 25, 1997
between the Warnaco Group, Inc., New Rio, and each of the members
of New Rio signatory thereto (the "Exchange Agreement"). Terms
used and defined or defined by reference in the Exchange
Agreement and not otherwise defined herein shall be used herein
as therein defined.
R E C I T A L S:
WHEREAS, Xxxxxx has requested that New Rio make a
Transfer to him of his Allocated Shares.
WHEREAS, New Rio is willing to make such transfer on
the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing pre-
mises and the mutual covenants hereinafter contained, the parties
hereto agree as follows:
ARTICLE I
1. Appointment of Escrow Agent. New Rio and Xxxxxx
hereby appoint WCA&G, having offices at 00 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, as escrow agent for the purposes herein set forth
("Escrow Agent"), and Escrow Agent hereby accepts such
appointment and agrees to be bound by the terms and conditions of
this Escrow Agreement.
ARTICLE II
2. Delivery of the Escrow Documents. Xxxxxx and New
Rio shall deliver or cause there to be delivered to Escrow Agent,
and Escrow Agent shall accept receipt of, the documents set forth
on Exhibit A hereto (the "Escrow Documents").
ARTICLE III
3.1 Release of Escrow Documents
A. The Escrow Agent is instructed by the parties
to deliver, and it hereby agrees to deliver, all of the Escrow
Documents (except the Company stock certificate representing
225,337 shares of the Company registered in the name of Xxxxx
Denim Partners (the "Stock Certificate")) to the appropriate
parties as set forth in Exhibit A upon receipt of all of the
Escrow Documents.
B. The Escrow Agent is instructed by the parties
to deliver, and it hereby agrees to deliver, the Stock
Certificate, duly endorsed for transfer, to Parent at Closing.
Upon its receipt of the 73,021 shares of Parent Class A Common
Stock to be received in exchange therefor, the Escrow Agent is
instructed by the parties to deliver, and the Escrow Agent hereby
agrees to deliver, the Exchanged Shares to Xxxxxx or his order.
C. Until the Escrow Agent has received all of the
Escrow Documents, it shall continue to hold any such documents
received in escrow and shall not release any of them to any
person.
3.2 Dispute
In the event of a dispute among any of the parties
to this Escrow Agreement, Escrow Agent shall not comply with any
claims or demands from either Xxxxxx or New Rio as long as such
dispute may continue, and in so refusing, the Escrow Agent shall
make no delivery or other disposition of the Escrow Documents
then held by it under this Escrow Agreement until it has received
a final court order from a court of competent jurisdiction
directing disposition of the Escrow Documents, or until it has
received appropriate written instructions signed by both Xxxxxx
and New Rio.
3.3 Release of the Escrow Documents in accordance with
Joint Instructions
Notwithstanding the provisions of Sections 3.1
through 3.2 above, Escrow Agent, upon receipt of written in-
structions signed by both Xxxxxx and New Rio on the release of
the Escrow Documents, shall release the Escrow Documents in
accordance with such instructions.
ARTICLE IV
Rights and Responsibilities of Escrow Agent
4.1 Generally
To induce Escrow Agent to act hereunder, it is
further agreed by Xxxxxx and New Rio that:
(a) Escrow Agent shall not be under any duty to give
any documents held in escrow by it hereunder any greater degree
of care than it gives its own similar property.
(b) This Escrow sets forth all the duties of the
Escrow Agent with respect to any and all matters pertinent
hereto, and no implied duties or obligations shall be read into
this Escrow Agreement against Escrow Agent.
(c) Escrow Agent shall not be liable to New Rio or
Xxxxxx except for its own gross negligence or willful misconduct.
Except with respect to those claims based upon gross negligence
or willful misconduct that are successfully asserted against
Escrow Agent, the other parties hereto shall jointly and
severally indemnify and hold harmless Escrow Agent from and
against any and all losses, liabilities, claims, actions, damages
and expenses, including reasonable attorneys' fees and
disbursements, arising out of and in connection with this Escrow
Agreement.
(d) Escrow Agent may act pursuant to the advice of
counsel with respect to any matter relating to this Escrow Agree-
ment and shall not be liable for any action taken or omitted in
accordance with such advice.
(e) Escrow Agent makes no representation as to the
validity, value, genuineness or collectability of any security or
other document or instrument held by or delivered to it.
(f) Escrow Agent may rely without any liability upon
the contents of any writing of any court, arbitrator or other
third party contemplated herein as a means to resolve disputes.
4.2 Resignation
Escrow Agent may, at any time upon not less than
20 days prior notice, and, upon the joint written request of New
Rio and Xxxxxx, shall, resign as such by delivering the Escrow
Documents then held by it in escrow hereunder to any successor
escrow agent jointly designated by Xxxxxx and New Rio in writing,
or any court of competent jurisdiction, whereupon Escrow Agent
shall be discharged of any and all further obligations arising in
connection with this Escrow Agreement. The resignation of Escrow
Agent shall take effect on the appointment of a successor
(including a court of competent jurisdiction) and Escrow Agent
shall continue to serve as Escrow Agent hereunder until such
appointment has been made.
ARTICLE V
General
5.1 Expenses. The parties hereto shall bear their own
respective expenses incurred in connection with this Escrow
Agreement and in connection with all obligations required to be
performed by each of them under this Escrow Agreement.
5.2 Amendment and Waiver. No amendment of any
provision of this Escrow Agreement shall in any event be
effective, unless the same shall be in writing and signed by the
parties hereto.
5.3 Notices. Any notices or other communications re-
quired to be given pursuant to this Escrow Agreement shall be in
writing and shall be deemed given: (i) upon delivery, if by hand;
(ii) on the date of mailing, if sent by registered or certified
mail, postage prepaid, return receipt requested or by express
mail or air courier; or (iii) upon transmission, if sent by telex
or facsimile. All notices hereunder shall be given as follows:
If to Escrow Agent:
Xxxxxx, Xxxxxxx, Xxxxxxxxx & Green, P.C.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx, III
Telecopy: (000) 000-0000
If to Xxxxxx:
00 Xxxxxxx Xxxxx
Xxxxx 0-X
Xxxxx Xxxxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
If to New Rio:
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att: Xxxx X. Xxxxx, General Counsel
Telecopy: (000) 000-0000
Any party may change its address for receiving notice by
written notice given to the others named above in the manner
provided above.
5.4 Counterparts. This Escrow Agreement may be
executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same agreement.
5.5 Parties in Interest. This Escrow Agreement shall
bind and inure to the benefit of the parties named herein and
their respective heirs, successors and assigns. This Escrow
Agreement shall not be assignable by any party without the prior
written consent of the other party, and any attempted assignment
in violation of this provision shall be null and void and without
legal effect.
5.6 Entire Agreement. This Escrow Agreement, together
with the exhibits attached hereto contains the entire agreement
and understanding of the parties hereto with respect to the
matters herein set forth, and all prior negotiations and under-
standings relating to the subject matter of this Escrow Agreement
are merged herein and are superseded and canceled by this Escrow
Agreement.
5.7 Governing Law. This Escrow Agreement shall be
governed by and construed in accordance with the internal sub-
stantive laws of the State of New York, without giving effect to
the principles of conflicts of law thereof.
IN WITNESS WHEREOF, this Escrow Agreement has been duly
executed by or on behalf of each of the parties hereto as of the
date first above written.
XXXXXX, XXXXXXX, XXXXXXXXX
& GREEN, P.C.
AS ESCROW AGENT
By_______________________ _____________________________
Name: Xxxxxxx X. Xxxxxx
Title:
NEW RIO, L.L.C.
By___________________________
Name:
Title:
Exhibit A
Escrow Documents
- Stock Exchange Agreement dated as of September 25, 1997 *
- Stock Certificate of Designer Holdings Ltd. ("DHL")
representing 225,337 shares (CUSIP 250571.10.6). **
- Indemnification Agreement executed by Xxxxxxx X. Xxxxxx
("Xxxxxx") in favor of Charterhouse Equity
Partners II, L.P. ("CEP") ***
- Continuity of Interest Agreement dated as of September 25,
1997. *
- Release dated September 25, 1997 executed by Xxxxxx Xxxxx in
favor of Xxxxxx. ****
- Release dated September 25, 1997 executed by Xxxxxx Xxxxx in
favor of Xxxxxx. ****
- Undertaking of Xxxxxx dated September 25, 1997 to pay
allocable share of certain transaction bonuses. *****
_________________________________
* Each of Xxxxxx, The Warnaco Group, Inc.
("Warnaco"), and New Rio, LLC ("New Rio") to
receive an original execution copy.
** Escrow Agent to deliver this stock certificate to
Warnaco at Closing under the Stock Exchange
Agreement.
*** Original execution copy to CEP.
**** Original execution copy to Xxxxxx.
***** Original executed copy to New Rio.
