UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF NEW YORK

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In re: Chapter 11

ESCADA (USA) INC., Case No. 09-15008 (SMB)

Debtor.

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DECLARATION OF HARAK BANTHIA IN SUPPORT OF THE SALE MOTION

I, Harak Banthia, hereby declare under penalty of perjury that the following is true to the

best of my knowledge, information, and belief:

1. I am an Authorized Officer of Escada US Subco LLC (the "Purchaser"),

the entity formed by its sole shareholder, Lentzy Investments S.il r.I. ("ESCADA Lu)("), to

acquire substantially all of the assets of Escada (USA) Inc. (the "Debtor") pursuant to that certain

Asset Purchase and Sale Agreement dated as of December 21,2009 (the "Agreement"). In this

capacity, I am familiar with the business and financial affairs of the Purchaser.

2. I submit this declaration (the "Declaration") in support of the Debtor's

Motion Pursuant to Sections 363 and 365 of the Bankruptcy Code and Bankruptcy Rules 6004

and 6006 for (i) Approval of the Sale of Substantially All of the Debtor's Assets, (ii)

Authorization to Enter into Agreement in Connection Therewith, (iii) Approval of the

Assumption and Assignment of Executory Contracts and Unexpired Leases, and (iv) Related

Relief (the "Sale Motion") and in response to certain objections filed with the Court concerning

the assumption and assignment of various leases.

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3. Except as otherwise indicated herein, all facts set forth in this Declaration

are based upon my personal knowledge, upon information supplied to me by people who report

to me, or upon my opinion based on my experience and knowledge with respect to the Purchaser

and ESCADA Lux. If called upon to testify, I would testify competently to the facts set forth in

this Declaration. I am authorized to submit this Declaration on behalf of the Purchaser.

4. Prior to the date hereof, I instructed Purchaser's counsel, Cleary Gottlieb

Steen & Hamilton LLP, to distribute confidential materials to various lessors providing

information concerning the organizational structure and assets of the Purchaser and ESCADA

Lux. Included in these materials is a letter describing recent acquisitions of substantially all of

the assets ofESCADA AG by ESCADA Lux or its subsidiaries. A true and correct copy of this

letter, dated December 27,2009, is attached hereto as Exhibit A.

5. Pursuant to these acquisitions, following the consummation of the

transactions contemplated by the Agreement, ESCADA Lux or its subsidiaries will own

substantially all ofthe assets of ESCADA AG, free and clear of the significant liabilities related

to the bonds issued by ESCADA AG and certain other legacy liabilities ofESCADA AG and its

subsidiaries.

6. The package of materials sent to lessors also includes a confidential copy

of the ESCADA Lux balance sheet, as of December 21,2009 (the date that the Agreement was

executed). As set forth in the balance sheet, the shareholder ofESCADA Lux has made a

significant investment to capitalize ESCADA Lux through a shareholder loan. In addition, the

balance sheet stated that ESCADA Lux holds cash deposits in excess of €30 million.

7. As additional adequate assurance, ESCADA Lux has entered into a

Limited Guarantee with the Seller that guarantees the Purchaser's obligations under the

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Agreement, subject to the terms and conditions therein. A true and correct copy of this Limited

Guarantee is attached hereto as Exhibit B.

8. In addition, ESCADA Lux has agreed to enter into replacement guarantee

agreements with certain lessors that were parties to existing guarantee agreements with

ESCADA AG prior to the commencement of the Debtor's chapter 11 proceeding.

Dated: December 30, 2009

Harak BanthiaAuthorized OfficerEscada US Subco LLC

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Exhibit A

Information Materials

Confidential

ESCADA US Sub eo, LLC

TO WHOM IT MAY CONCERN

December 27,2009

I am writing to provide you with additional information concerning theproposed acquirer of substantially all of the assets of ESCADA (USA) Inc ("ESCADAUS").

As you know, ESCADA US recently executed an Asset PurchaseAgreement (the "Agreement") with ESCADA US Subco LLC ("Purchaser"), whichremains subject to approval of the Bankruptcy Court and certain other customaryconditions. A hearing on ESCADA US's motion to approve the proposed transaction hasbeen set for December 31,2009. Attached to the motion is a list of unexpired leases thatmay be assumed under the Agreement, as well as related cure amounts with respect tosuch leases (the "Assumed Contracts"). The motion has the support of the CreditorsCommittee, which was involved with the negotiation of the Agreement.

Please note that under the Agreement, Purchaser has the option prior to theclosing of the transaction to eliminate from the list of Assumed Contracts any contracts orleases that it so designates. It is our understanding that ESCADA US will reject anyleases that are not assumed by the Purchaser.

The Purchaser is a special purpose entity formed for the purpose of thistransaction. As such, it does not have any meaningful financial statements or corporaterecords. After the transaction closes, however, it will own substantially all of the assetsof ESCADA US, free and clear of ESCADA US's pre-bankruptcy liabilities, except forthose liabilities expressly assumed by the Purchaser under the Agreement.

Given the absence of financial records, we trust that the followinginformation will provide your client with sufficient information concerning thePurchaser.

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Corporate Structure

Purchaser is a Delaware limited liability company formed for the purposeof acquiring substantially all of the assets of ESCADA US. Purchaser's sole shareholderis Lentzy Investments S.a r.l. ("ESCADA Lux"), a limited liability company underLuxembourg law (societe cl responsabilite limiteey, currently registered as "LentzyInvestments S.a r.l." with the commercial register of Luxembourg under registrationnumber B149098. The company will soon be renamed "ESCADA Luxembourg S.a r.l."The registered office of ESCADA Lux is 65, boulevard Grande-Duchesse Charlotte, L-1331 Luxembourg.

The managers (Gerants) of ESCADA Lux are Mrs. Megha Mittal, Mr.Bruno Salzer, Mr. Rony Stefano Bendinelli, Mr. Benoit Nasr, Mr. Cedric Bradfer, Mrs.Tazia Benameur and Mr. Pierre Claudel.

The ultimate parent company of ESCADA Lux is a trust based in Jerseywhose beneficiary is a member of the Mittal family. The trustee of the trust is an affiliateofHSBC Banle

Mrs. Megha Mittal, one of the managers of Escada Lux and the principalarchitect behind the worldwide ESCADA transactions described in this letter, is the wifeof Aditya Mittal, the son of Lakshmi Mittal. Laksmi Mittal is the CEO and majorshareholder of ArcelorMittal S.A., the world's largest steel producer with registered seatin Luxembourg. Aditya Mittal is the CFO of ArcelorMittal S.A. The Mittal familydirectly/indirectly is the largest shareholder of Arcelor Mittal S.A which is the largeststeel company of the world. Further information on ArcelorMittal S.A. is available onthe website www.arcelormittal.com. More information on the Mittal family is publiclyavailable on the internet.

Recent Transactions

On December 1, 2009, ESCADA Lux acquired from the insolvencyreceiver for ESCADA AG all of ESCADA AG's trademarks and other intellectualproperty rights, as well as all subsidiaries and related intra-group receivables ofESCADA AG pertaining to the ESCADA business, with the exception of thosesubsidiaries that are liable for certain obligations under the bonds issued by ESCADAAG (i.e., the distribution subsidiaries in Germany, the UK, the US and Hong Kong).

In addition, certain affiliates of ESCADA Lux have recently closedtransactions relating to the ESCADA business in other jurisdictions.

• On December 1,2009, ESCADA Deutschland GmbH ("ESCADAGmbH"), a wholly owned subsidiary of ESCADA Lux, acquiredfrom the ESCADA AG insolvency receiver all of ESCADA AG'stangible assets and non-intra-group receivables pertaining to the

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business that ESCADA AG had conducted under the trademarksESCADA and ESCADA SPORT. Excluded from this acquisitionwere the departments' logistics/goods terminal, investor relationsand retail academy, which were closed down in connection with arestructuring.

• On December 2,2009, Escada UK Subco Limited, a wholly ownedsubsidiary of ESCADA Lux, acquired substantially all ofthe assetsof insolvent ESCADA (UK) Limited.

• On December 10, 2009, ESCADA GmbH, acquired from theinsolvency receiver for ESCADA Deutschland Vertriebs GmbH allinventories and trade receivables, as well as all plant andmachinery, fixtures and fittings of ESCADA DeutschlandVertriebs GmbH.

• A wholly owned subsidiary of ESCADA Lux may acquire certainassets related to the ESCADA business in Hong Kong.

Each of the above transactions has been structured to provide ESCADALux with ownership of substantially all of ESCADA's global business, free and clear ofthe liabilities related to the bonds issued by ESCADA AG and certain other legacyliabilities of ESCADA AG and its subsidiaries. Thus, we believe that Purchaser and itsaffiliates will have a much stronger balance sheet than ESCADA US and its affiliates.

I hope you find the above information useful. Please do not hesitate tocontact me if you have any questions concerning the foregoing.

Sincerely,

~(Harak C. Banthia)Authorised Signatory

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Exhibit B

Limited Guarantee

EXECUTION COPY

LIMITED GUARANTEE

LIMITED GUARANTEE, dated as of December 21, 2009 (this "Limited Guarantee"),by Lenzty Investments SARL, a Luxembourg socijtj a~ responsabiliti limitie (the "Guarantor")in favor of the Seller under the Purchase Agreement (the "Guaranteed Party").

1. GUARANTEE. To induce the Guaranteed Party to enter into a purchaseagreement, dated as of the date hereof (as amended, amended and restated, supplemented orotherwise modified from time to time, the "Purchase Agreement") by and between Escada USSubco LLC, a Delaware limited liability company ("Purchaser") and the Guaranteed Party, theGuarantor hereby absolutely, irrevocably and unconditionally guarantees to the GuaranteedParty, the due and punctual payment, performance and discharge of all of the obligations of thePurchaser under the Purchase Agreement (the "Guaranteed Obligations"). Under nocircumstances shall the Guarantor be liable for consequential, incremental or punitive damagesand the liability of the Guarantor shall be limited to the payment of cash amounts as set forthherein. All payments hereunder shall be made in lawful money of the United States, inimmediately available funds.

2. NATURE OF GUARANTEE. This Limited Guarantee is an unconditional andcontinuing guarantee of payment and performance and not of collection. The liability of theGuarantor under this Limited Guarantee shall, to the fullest extent permitted under applicableLaw, be absolute, irrevocable and unconditional. This Guarantee is a primary and originalobligation of the Guarantor and is not merely the creation of a surety relationship. TheGuaranteed Party shall not be obligated to file any claim relating to the Guaranteed Obligationsin the event that the Purchaser becomes subject to a bankruptcy, reorganization or similarproceeding, and the failure of the Guaranteed Party to so file shall not affect the Guarantor'sliability with respect to the Guaranteed Obligations hereunder. In the event that any payment tothe Guaranteed Party in respect of the Guaranteed Obligations is rescinded or must otherwise bereturned for any reason whatsoever, Guarantor shall remain liable hereunder with respect to theGuaranteed Obligations as if such payment had not been made (subject to the terms hereof).

3. CHANGES IN OBLIGATIONS. CERTAIN WAIVERS. The Guarantoragrees that the Guaranteed Party may, at any time and from time to time, without notice to orfurther consent of the Guarantor, extend the time of payment or performance of the GuaranteedObligations, and may also make any agreement with the Purchaser for the extension, renewal,payment, compromise, discharge or release thereof, in whole or in part, or for any modificationof the Purchase Agreement or any other agreement between the Guaranteed Party and thePurchaser, without in any way impairing or affecting the Guarantor's obligations under thisLimited Guarantee. The Guarantor agrees that its obligations hereunder shall not be released ordischarged, in whole or in part, or otherwise affected by (a) the failure or delay on the part of theGuaranteed Party to assert any claim or demand or to enforce any right or remedy against thePurchaser or any other Person; (b) any change in the time, place or manner of payment orperformance of the Guaranteed Obligations or any rescission, waiver, compromise, consolidationor other amendment or modification of any of the terms or provisions of the Purchase Agreementor any other agreement evidencing, securing or otherwise executed in connection with theGuaranteed Obligations; (c) the addition, substitution or release of any entity or other Personinterested in the transactions contemplated by the Purchase Agreement; (d) any change in the

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corporate existence, structure or ownership of the Purchaser or any other Person interested in thetransactions contemplated by the Purchase Agreement; (e) any insolvency, bankruptcy,reorganization or other similar proceeding affecting Purchaser or any other Person interested inthe transactions contemplated by the Purchase Agreement; (f) the adequacy of any other meansany Guaranteed Party may have of obtaining payment related to the Guaranteed Obligations; (g)the value, genuineness, validity, illegality or enforceability of the Purchase Agreement or anyother agreement or instrument (other than as a result of a breach by Seller); or (h) any other actor omission that may in any manner or to any extent vary the risk of or to the Guarantor orotherwise operate as a discharge of the Limited Guarantee as a matter of Law or equity (otherthan as a result of payment and performance of the Guaranteed Obligations in accordance withtheir terms). To the fullest extent permitted by applicable Law, the Guarantor hereby expresslywaives any and all rights or defenses arising by reason of any applicable Law which wouldotherwise require any election of remedies by the Guaranteed Party. The Guarantor waivespromptness, diligence, notice of the acceptance of this Limited Guarantee and of the GuaranteedObligations, presentment, demand for payment, notice of non-performance, default, dishonor andprotest, notice of any Guaranteed Obligations incurred and all other notices of any kind (otherthan notices to the Purchaser pursuant to the Purchase Agreement), all defenses which may beavailable by virtue of any valuation, stay, moratorium law or other similar law now or hereafterin effect, or any right to require the marshalling of assets of the Purchaser or any other Personinterested in the transactions contemplated by the Purchase Agreement, and all suretyshipdefenses generally available (other than, in each case, fraud or willfuil misconduct by theGuaranteed Party or any of its Subsidiaries or defenses to the payment or performance of theGuaranteed Obligations that are available to the Purchaser under the Purchase Agreement orbreach by the Guaranteed Party of this Limited Guarantee). The Guarantor acknowledges that itwill receive substantial direct and indirect benefits from the transactions contemplated by thePurchase Agreement and that the waivers set forth in this Limited Guarantee are knowinglymade in contemplation of such benefits.

Guarantor agrees, to the extent the Guaranteed Party obtains a final, non-appealablejudgment or order on the merits, to pay all reasonable costs, expenses and fees, including,without limitation, all reasonable attorneys' fees which may be incurred by the Guaranteed Partyin enforcing or attempting to enforce this Limited Guarantee.

The Guarantor further covenants and agrees that it shall not institute, and shall cause itsSubsidiaries and Affiliates not to institute, any proceeding asserting that this Guarantee is illegal,invalid or unenforceable in accordance with its terms.

4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of theGuaranteed Party to exercise, and no delay in exercising, any right, remedy or power hereundershall operate as a waiver thereof; nor shall any single or partial exercise by the Guaranteed Partyof any right, remedy or power hereunder preclude any other or future exercise of any right,remedy or power hereunder. Each and every right, remedy and power hereby granted to theGuaranteed Party or allowed it by applicable Law or other agreement shall be cumulative and notexclusive of any other, and may be exercised by the Guaranteed Party at any time or from time totime. The Guaranteed Party shall not have any obligation to proceed at any time or in anymanner against, or exhaust any or all of the Guaranteed Party's rights against, the Purchaser or

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any other Person liable for any portion of the Guaranteed Obligations prior to proceeding againstthe Guarantor.

5. REPRESENTATIONS AND WARRANTIES. The Guarantor herebyrepresents and warrants that:

(a) the execution, delivery and performance of this Limited Guarantee havebeen duly authorized by all necessary action and do not contravene any provision of theGuarantor's charter, partnership agreement, operating agreement or similar organizationaldocuments or any applicable Law or contractual restriction binding on the Guarantor orits assets;

(b) all consents, approvals, authorizations, permits of, filings with andnotifications to, any Governmental Authority necessary for the due execution, deliveryand performance of this Limited Guarantee by the Guarantor have been obtained or madeand all conditions thereof have been duly complied with, and no other action by, and nonotice to or filing with, any Governmental Authority is required in connection with theexecution, delivery or performance of this Limited Guarantee;

(c) this Limited Guarantee constitutes a legal, valid and binding obligation ofthe Guarantor enforceable against the Guarantor in accordance with its terms, subject to(i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,moratorium or other similar laws affecting creditors' rights generally, and (ii) generalequitable principles (whether considered in a proceeding in equity or at law);

(d) the execution, delivery and performance of this Limited Guarantee by theGuarantor do not and will not contravene or conflict with or result in any violation orbreach of any provision of the organizational documents of Guarantor or any Law orOrders by a Governmental Authority applicable to Guarantor; and

(e) the Guarantor has the financial capacity to pay and perform its obligationsunder this Limited Guarantee, and all funds necessary for the Guarantor to fulfill itsobligations under this Limited Guarantee shall be available to the Guarantor for so longas this Limited Guarantee shall remain in effect in accordance with Section 8 hereof.

6. NO ASSIGNMENT. Neither the Guarantor nor the Guaranteed Party may assignor delegate their rights, interests or obligations hereunder to any other Person (except byoperation of law) without the prior written consent of the other party hereto.

7. NOTICES. All notices, requests, claims, demands and other communicationshereunder shall be given (and shall be deemed to have been duly received if given) by handdelivery in writing or by facsimile transmission with confirmation of receipt, as follows:

if to Guarantor:

Lenzty Investments SARLL-1331 Luxembourg65 boulevard Grande-Duchesse Charlotte

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Attention: Pierre ClaudelFacsimile: +352 26 38 35 09

With a copy to:

Cleary Gottlieb Steen & Hamilton LLP12, rue de Tilsitt75008 Paris FrancePhone: +33-1-40-74-68-00Fax: +33-1-40-74-68-88Attention: Gamal M. Abouali

and to:

Cleary Gottlieb Steen & Hamilton LLPOne Liberty PlazaNew York, New York 10006Phone: 212-225-2000Fax: 212-225-3999Attention: Sean A. O'Neal

If to the Guaranteed Party, as provided in the Purchase Agreement.

8. CONTINUING GUARANTEE. This Limited Guarantee may not be revoked orterminated and shall remain in full force and effect and shall be binding on the Guarantor, itssuccessors and assigns until all amounts payable under this Limited Guarantee have beenindefeasibly paid in full. Notwithstanding the foregoing, this Limited Guarantee shall terminateand the Guarantor shall have no further obligation under this Limited Guarantee as of the earliestof

(a) the Closing; and

(b) the date the Purchase Agreement is validly terminated in accordance withits terms; and

(c) the payment, performance and discharge of all of the GuaranteedObligations.

9. GOVERNING LAW; JURISDICTION.

(a) This Limited Guarantee, the rights of the parties and all actions arising inwhole or part under or in connection herewith will be governed by and construed inaccordance with the laws of the State of New York.

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(b) Without limiting any Party's right to appeal any Order of the BankruptcyCourt, (i) the Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms ofthis Limited Guarantee and to decide any claims or disputes which may arise or resultfrom, or be connected with, this Limited Guarantee, any breach or default hereunder, orthe transactions contemplated hereby, and (ii) any and all Actions related to the foregoingshall be filed and maintained only in the Bankruptcy Court, and each of the parties heretohereby consent to and submit to the jurisdiction and venue of the Bankruptcy Court andshall receive notices at such locations as indicated in Section 7; provided, however, that ifthe Bankruptcy Case has been fully and finally closed or dismissed, the parties heretoagree to and hereby unconditionally and irrevocably submit to the exclusive jurisdictionof the United States District Court for the Southern District of New York sitting in NewYork County or the Commercial Division, Civil Branch of the Supreme Court of theState of New York sitting in New York County and any appellate court from any thereof,for the resolution of any such claim or dispute.

(c) The parties hereto hereby unconditionally and irrevocably waive, to thefullest extent permitted by Applicable Law, any objection which they may now orhereafter have to the laying of venue of any dispute arising out of or relating to thisLimited Guarantee or any of the transactions contemplated hereby brought in any courtspecified in subsection (b) above, or any defense of inconvenient forum for themaintenance of such dispute. Each of the parties hereto agrees that a judgment in anysuch dispute may be enforced in other jurisdictions by suit on the judgment or in anyother manner provided by Law

(d) Each of the parties hereto hereby consents to process being served by anyparty hereto in any suit, Action or proceeding by the mailing of a copy thereof inaccordance with the provisions of Section 7; provided, however, that such service shallnot be effective until the actual receipt thereof by the party being served.

10. COUNTERPARTS. This Limited Guarantee may be executed in one or morecounterparts, and by the different parties hereto in separate counterparts, each of which whenexecuted shall be deemed to be an original but all of which taken together shall constitute oneand the same agreement.

11. MISCELLANEOUS.

(a) Capitalized terms used but not defined herein shall have the meaningsgiven to such terms in the Purchase Agreement. This Limited Guarantee constitutes theentire agreement of the parties hereto with respect to the subject matter hereof andsupersedes any and all prior discussions, negotiations, proposals, undertakings,understandings and agreements, whether written or oral, among Guarantor or any of itsaffiliates, on the one hand, and the Guaranteed Party or any of its affiliates, on the otherhand. No modification or waiver of any provision hereof shall be enforceable unlessapproved by the Guaranteed Party and the Guarantor in writing.

(b) Any term or provision of this Limited Guarantee that is invalid orunenforceable in any situation in any jurisdiction will not affect the validity or

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enforceability of the remaining terms and provisions hereof or the validity orenforceability of the offending term or provision in any other situation or in any otherjurisdiction; provided, however, that this Limited Guarantee may not be enforced withoutgiving effect to the limitations in Section 1 hereof and to the provisions of Sections 8 and9 hereof. No party hereto shall assert, and each party shall cause its respective affiliatesnot to assert, that this Limited Guarantee or any part hereof is invalid, illegal orunenforceable.

(c) The descriptive headings herein are inserted for convenience of referenceonly and are not intended to be part of or to affect the meaning or interpretation of thisLimited Guarantee.

(d) All parties acknowledge that each party and its counsel have reviewed thisLimited Guarantee and that any rule of construction to the effect that any ambiguities areto be resolved against the drafting party shall not be employed in the interpretation of thisLimited Guarantee.

[Remainder ofpage intentionally left blank.]

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IN WITNESS WHEREOF, the Guaranteed Party has caused this Limited Guarantee to beexecuted and delivered as of the date first written above by its officer thereunto duly authorized.

ESCADA (USA) INC.

Name: Av~Nvq r. Lv4

Signature Noec to Limited CGLIMtrantee

IN WITNESS WHEREOF, the Guarantor has caused this Limited Guarantee to be executed anddelivered as of the date first written above by its officer thereunto duly authorized.

LENZTY INVESTMENTS SARL

Signature Page to Limited Guarantee

IN WITNESS WHEREOF, the Guarantor has caused this Limited Guarantee to beexecuted and delivered as of the date first written above by its officer thereunto duly authorized.

LENZTY INVE&TMENTS, SARL

B y: _ _ _ _ _ _ _ _

Name:Title.

manager

Signature Page to Limitcd Guarantee7