Exhibit 10.3
EXECUTION VERSION
J. CREW GROUP, INC.
Common Stock
($0.01 par value)
Purchase Agreement
New York, New York
August 16, 2005
TPG Partners II, L.P.
TPG Parallel II, L.P.
TPG Investors II, L.P.
c/o TPG Partners II, L.P.
301 Commerce Street, Suite 3300
Fort Worth, TX 76102
Ladies and Gentlemen:
J. Crew Group, Inc., a corporation
organized under the laws of New York (together with its successors,
the “ Company ”), proposes to sell to TPG
Partners II, L.P., TPG Parallel II, L.P. and TPG Investors II, L.P.
(each, a “ Purchaser ” and collectively, the
“ Purchasers ”) the number of shares of Common
Stock (“ Common Stock ”) of the Company
described in Section 4 hereto (the shares of Common Stock to be
issued and sold by the Company to the Purchasers hereunder are
hereinafter referred to as the “ Purchased Securities
”), and each Purchaser, severally and not jointly, proposes
to purchase the Purchased Securities. Certain terms used herein are
defined in Section 15 hereof.
1. Representations and Warranties
of the Company .
The Company represents and warrants
to the Purchasers that, as of the date hereof and as of the Closing
Date:
(a) Organization . The
Company has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, except where the failure to be so duly organized,
validly existing and in good standing would not have a material
adverse effect on the business, financial condition or results of
operations of the Company (a “ Material Adverse Effect
”), with corporate power and authority to own or lease its
properties and conduct its business, except where the failure to
have such power and authority would not have a Material Adverse
Effect, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except
in jurisdictions where the failure to be so qualified or in good
standing has not had, and would not be reasonably expected to have,
a Material Adverse Effect;
(b) Authority . The Company
has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement;
(c) Title to Properties . The
Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except Collateral Permitted Liens,
and any real property and buildings held under lease by the Company
and its subsidiaries are held by them under valid, subsisting and
enforceable leases, in each case with such exceptions as do not
result in a Material Adverse Effect;
(d) Capitalization . All of
the issued equity interests of the Company are duly and validly
authorized and issued and fully paid and non-assessable and not
subject to any preemptive or similar rights; and all of the issued
shares of capital stock or other equity interests of each
subsidiary of the Company are validly authorized and issued, are
fully paid, non-assessable and are owned directly or indirectly by
the Company free and clear of any liens, encumbrances, equities or
claims except Collateral Permitted Liens;
(e) Execution and Validity .
This Agreement has been duly authorized and, if and when duly
executed and delivered by the Company and, assuming due
authorization, execution and delivery by the other parties hereto,
will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
subject as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors’ rights and to general equity
principles;
(f) No Conflict . The
execution, delivery and performance by the Company of this
Agreement will not (i) result in any violation of the provisions of
the certificate of incorporation or by-laws or other organizational
documents of the Company, (ii) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument that is material to the
Company and to which the Company is a party or to which any of the
property or assets of the Company is subject or (iii) result in any
violation of the provisions of any law or statute or any order,
rule or regulation, judgment or decree of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties or assets, except for breaches or violations that in the
case of clauses (ii) and (iii) only, individually or in the
aggregate, would not have a material adverse effect on the
performance of its obligations under this Agreement or the
consummation of the transactions contemplated hereby; no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for
execution, delivery and performance of, or the consummation of the
transactions contemplated by this Agreement, except any consent,
approval, authorization, order, registration or qualification (A)
the failure of which to obtain would not have a material adverse
effect on the performance of its obligations under this Agreement
or the consummation of the transactions contemplated hereby or (B)
that is not required to be obtained prior to the date hereof and
that the Company reasonably believes will be obtained in the
ordinary course of business;
(g) Compliance with Other
Agreements, Organizational Documents and Laws . The Company is
not (i) in default in the performance or observance of any
obligation, covenant or
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condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or
instrument that is material to the Company to which it is a party
or by which it or any of its properties may be bound, (ii) in
violation of its certificate of incorporation or by-laws or other
organizational documents or (iii) in violation of any provisions of
law or statute or any order, rule or regulation, judgment or decree
of any court or governmental agency or body having jurisdiction
over the Company or any of its properties or assets; except
, in the case of clauses (i) and (iii) , for such defaults,
violations and failures as would not reasonably be expected to have
a Material Adverse Effect;
(h) Financial Statements .
The historical consolidated financial statements, a copy of which
has been delivered to the Purchasers, fairly present, in all
material respects, the consolidated financial position, results of
operations and cash flows of the Company and its subsidiaries at
the respective dates or for the respective periods to which they
apply, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end
adjustments; such financial statements have been prepared in
accordance with generally accepted accounting principles and
commonly followed industry accounting practices at the time such
financial statements were prepared consistently applied throughout
the periods specified, except as disclosed therein;
(i) Margin Stock . No part of
the proceeds of the sale made to the Purchasers will be used to
purchase or carry any Margin Stock (as defined in Regulation U of
the Board of Governors of the Federal Reserve System) or to extend
credit to others for the purpose of purchasing or carrying any such
Margin Stock or for any purpose that violates the provisions of
Regulation T, U or X of said Board of Governors;
(j) Litigation . Except as
otherwise disclosed in Schedule 1(j), there are no legal or
governmental proceedings pending to which the Company is a party or
of which any property or assets of the Company is the subject that
would reasonably be expected to have a Material Adverse Effect;
and, to the best of the Company’s knowledge, no such
proceedings are threatened by governmental authorities or
others;
(k) Investment Company Status
. The Company is not, and after giving effect to the transactions
contemplated by this Agreement will not be, an “investment
company,” or an entity “controlled by an investment
company,” as such terms are defined in the Investment Company
Act;
(l) No Material Adverse
Change . Since April 30, 2005, and except as disclosed in any
filing by the Company with the Commission prior to the date hereof,
(i) there has not occurred any material adverse change in the
condition, financial or otherwise, or the earnings, business,
management or operations of the Company, (ii) there has not been
any material adverse change in the capital stock or other equity
interests or in the long-term debt of the Company and (iii) except
as otherwise disclosed in Schedule 1(l), the Company has not
entered into any transaction or agreement not in the ordinary
course of business material to the Company;
(m) Insurance . The Company
carries, or is covered by, insurance in such amounts and covering
such risks as is customary for companies engaged in similar
businesses and owning similar properties in localities where the
Company operates;
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(n) Environmental Matters .
The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to
(x) the protection of the environment or (y) hazardous or toxic
substances or wastes, pollutants or contaminants (“
Environmental Laws ”), (ii) has received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct its businesses and (iii) is in
compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not have a
Material Adverse Effect;
(o) Intellectual Property .
The Company owns or possesses adequate rights to use all patents,
patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights and
licenses necessary for and material to the conduct of its
businesses and, except as otherwise disclosed in Schedule 1(j), the
Company has no knowledge that the conduct of its businesses will
conflict with, and the Company has not received any notice of any
claim of conflict with any such rights of others, except as would
not have a Material Adverse Effect;
(p) Employment Matters .
There are no exist
