EXHIBIT 99.2
NOTE PURCHASE AGREEMENT
by and among
IP HOLDINGS LLC
AND
CANDIE'S, INC.
AND
XXXXXXX XXXXXX & CO., INC.
AND
MICA FUNDING, LLC
Dated August 20, 2002
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (this "Agreement") is dated August 20,
2002 and is by and among IP HOLDINGS LLC, a Delaware limited liability company
(the "Issuer"), Candie's, Inc., a Delaware corporation ("Candie's"), Xxxxxxx
Xxxxxx & Co., Inc., a California corporation ("Xxxxxx") and Mica Funding, LLC, a
Delaware limited liability company (the "Purchaser").
W I T N E S S E T H
WHEREAS, each of Candie's and Xxxxxx (each, a "Transferor" and
together, the "Transferors") pursuant to that certain Contribution Agreement,
dated the date hereof, by and among the Issuer and each of the Transferors (the
"Contribution Agreement"), is contributing Assets to the Issuer;
WHEREAS, concurrently with or immediately after the execution of the
Contribution Agreement, each of Candie's and Xxxxxx is assigning 100% of its
membership interests in the Issuer to IP Holdings and Management Corporation
("IPMH") pursuant to an Assignment and Acceptance Agreement, dated as of August
1, 2002, by and among the Issuer, Candie's and Xxxxxx;
WHEREAS, the Issuer (a) has pledged to Wilmington Trust Company (the
"Trustee") for the benefit of the Noteholders, all of the right, title and
interest (but none of the obligations) in and to the Collateral pursuant to that
certain Indenture, dated as of August 1, 2002, by and between the Issuer and the
Trustee (the "Indenture") and (b) contemporaneously herewith has issued its
$20,000,000 7.93% Asset-Backed Notes (the "Notes") pursuant to terms of the
Indenture;
WHEREAS, the Issuer desires to sell the Notes to the Purchaser, and
the Purchaser desires to purchase the Notes,
WHEREAS, the Notes are being privately placed by Banc of America
Securities LLC, as placement agent (the "Placement Agent"), pursuant to a
Private Placement Agreement, dated as of August 20, 2002, by and among the
Transferors, the Issuer and the Placement Agent (the "Private Placement
Agreement"), the parties hereto agree as follows:
Section 1. Definitions. All capitalized terms used and not otherwise
defined herein shall have the meanings set forth in the Indenture. The
Securities Act of 1933, as amended, is herein referred to as the "Securities
Act". The Candie's License Agreement, the Xxxxxx License Agreement and the
Transaction Documents are collectively referred to herein as the "Operative
Documents."
Section 2. Terms of Issuance of the Notes. The Issuer agrees to sell
the Notes, and subject to the terms and obligations of this Agreement, the
Purchaser agrees to purchase the Notes on the Closing Date at 99.997% of the
principal amount of the Notes (the "Purchase
Price"). The Notes shall be registered in such names (which may be, if so
indicated, a nominee name) as the Purchaser may direct. The Notes shall include
the legend regarding restrictions on transfer set forth under "PRIVATE PLACEMENT
AND TRANSFER RESTRICTIONS" in the Offering Document (as defined below).
The closing of the sale of the Notes (the "Closing") shall be held
at the office of Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, at 10:00 a.m., New York City time, on August 20, 2002, (the
"Closing Date") or at such other date and time as may be acceptable to the
parties hereto.
The Purchase Price shall be paid to the Issuer or its designee on
the Closing Date by wire transfer of federal funds or other immediately
available funds in accordance with written instructions furnished by the Issuer
not later than two Business Days preceding the Closing Date.
In addition to the delivery of the Notes, the Issuer shall execute
and deliver on the Closing Date (a) each of the Operative Agreements and (b) an
appropriate receipt acknowledging receipt of the Purchase Price for its Notes.
Section 3. Representations and Warranties of the Transferors and the
Issuer. Except as provided in paragraph (d) below, the Transferors, as for
themselves and only themselves, and the Issuer, as for itself and only itself,
severally represent and warrant to the Purchaser, as of the Closing Date as
follows (but (I) in each case other than paragraph (a) below, only with respect
to the portions of the representations and warranties that specifically refer to
the Transferors (and the Manager), in the case of the Transferors, or the Issuer
(and IPHM), in the case of the Issuer, (II) in the case of paragraph (a) below,
other than with respect to information and documents supplied after the Closing
Date, the Transferors and the Issuers jointly and severally represent and
warrant and (III) in the case of information and documents supplied after the
Closing Date, only with respect to such information and documents supplied by
the Transferors (or the Manager) in the case of the Transferors, or the Issuer
(or IPHM), in the case of the Issuer):
(a) A confidential private placement memorandum relating to
the Notes have been prepared by the Issuer (the "PPM"). The PPM as
supplemented by any additional information and documents delivered by or
on behalf of the Issuer to prospective purchasers are hereinafter
collectively referred to as the "Offering Document". The Offering Document
does not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The preceding representation shall not be deemed made with respect to
information, if any, contained therein regarding Persons not affiliated
with the Issuer (the "Other Party Information"), except that the Issuer
represents and warrants that no Person affiliated with the Issuer has
actual knowledge that any of the Other Party Information contains an
untrue statement of material fact or omits to state a fact which has or
which would have a material adverse effect on the condition (financial or
other), business, properties or results of operations of the Issuer.
(b) Each of the Issuer and the Manager is a limited liability
company duly formed, validly existing and in good standing under the laws
of the State of Delaware, with power and authority to own its properties
and conduct its business as described in the Offering Document; and each
of the Issuer and the Manager is duly qualified to do business as a
foreign entity in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification.
(c) IPHM is a corporation duly formed, validly existing and in
good standing under the laws of the State of Delaware, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Offering Document; and IPHM is duly qualified
to do business as a foreign entity in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct
of its business requires such qualification.
(d) Candie's represents and warrants that Candie's is a
corporation duly formed, validly existing and in good standing under the
laws of the State of Delaware, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Offering Document; and Candie's is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires
such qualification. Xxxxxx is a corporation duly formed, validly existing
and in good standing under the laws of the State of California, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Offering Document; and Xxxxxx is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification.
(e) Each of the Operative Documents, the Notes and this
Agreement to which any of the Transferors, the Manager or the Issuer are
parties has been duly authorized and on the Closing Date, each of such
documents will have been duly executed and delivered by the parties
thereto, and each will conform to the description thereof contained in the
Offering Document.
(f) Assuming the due authorization, execution and delivery
thereof by the other parties thereto, each Operative Document to which the
Issuer, the Transferors or the Manager is a party will constitute a valid
and legally binding obligation of such party, enforceable in accordance
with its respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
(g) No consent, approval, authorization, or order of, or
filing with any governmental agency or body or any court is required for
the consummation of the transactions contemplated by the Operative
Documents or in connection with the issuance and sale of the Notes by the
Issuer.
(h) The consummation of the transactions contemplated by the
Operative Documents and the fulfillment of the terms thereof will not (i)
conflict with or result in a breach of, or constitute a default under, any
of the provisions of any indenture, mortgage, deed of trust, contract, or
other instrument to which any of the Issuer, the Transferors or the
Manager is a party or by which any of them is bound or (ii) result in a
creation or imposition of any lien (other than the Lien of the Indenture)
upon any of the properties or assets of any of the Issuer, the Transferors
or the Manager pursuant to the terms of any such indenture, mortgage, deed
of trust, contract or other instrument.
(i) The execution, delivery and performance of each of the
Operative Documents to which the Transferors, the Issuer and the Manager
is a party, and the issuance and sale of the Notes by the Issuer and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over
the Issuer, the Transferors, the Manager or any of their properties, or
any agreement or instrument to which the Issuer, the Transferors or the
Manager is a party or by which the Issuer, the Transferors or the Manager
is bound or to which any of the properties of the Issuer, the Transferors
or the Manager is subject, or the organizational documents of the Issuer,
the Transferors or the Manager and the Issuer has full power and authority
to authorize, issue and sell the Notes as contemplated by this Agreement.
(j) Each of the Issuer, the Transferors and the Manager
possesses all necessary certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct the
business now operated by such party and has not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Issuer, the Transferors or the Manager, as the case may be, would
individually or in the aggregate have a material adverse effect on such
party.
(k) There are no pending actions, suits or proceedings against
or affecting the Issuer, the Transferors, the Manager or any of their
respective properties that, if determined adversely to the such party,
would individually or in the aggregate have a material adverse effect on
the such party, or would materially and adversely affect the ability of
the Issuer, the Transferors or the Manager, as the case may be, to perform
its respective obligations under any of the Operative Documents to which
it is a party, or which are otherwise material in the context of the sale
of the Notes; and, to each of the Issuer's, Transferor's and the Manager's
knowledge, no such actions, suits or proceedings are threatened or
contemplated.
(l) Assuming that the Notes are offered in the manner
contemplated by the Offering Document and this Agreement, that the
Purchaser's representations and warranties in the investor letter,
substantially in the form attached hereto as Exhibit A, are true and
correct in all material respects and that any subsequent holder of a Note
complies with Section 3.5 of the Indenture, the Issuer is not an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered
under Section 8 of the United States Investment Company Act of 1940 (the
"Investment Company Act"); and the Issuer is not and, after giving effect
to the offering and sale of the Notes and the application of the proceeds
thereof as described in the Offering Document, will not be an "investment
company" as defined in the Investment Company Act.
(m) No form of general solicitation or general advertising was
used by either Transferor or the Issuer or its representatives in
connection with the offer and sale of the Notes. No investors were
solicited or otherwise approached by the Transferors or the Issuer or any
representative of any of them for the purpose of offering the Notes for
sale who were not institutional investors. The Issuer has not issued or
sold any Notes within the six-month period immediately preceding the date
hereof or securities that could be integrated with the Notes. Neither the
Issuer nor any representative on its behalf has offered or sold, nor will
any of them offer or sell, any Notes in any manner that would render the
issuance and sale of the Notes a violation of the Securities Act or any
state securities or "Blue Sky" laws, or require registration pursuant
thereto, nor has any of them authorized, nor will any authorize, any
Person to act in such manner.
(n) Neither this Agreement, the Offering Document nor any
other document, certificate or statement furnished to the Purchaser by or
on behalf of the Issuer in connection herewith contains any untrue
statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein and therein not
misleading. There is no fact or facts peculiar to the Issuer or any of its
Affiliates which materially adversely affects or in the future may (so far
as the Issuer can now reasonably foresee), individually or in the
aggregate, reasonably be expected to materially adversely affect the
business, property or assets, or financial condition of the Issuer or any
of its Affiliates and which has not been set forth in this Agreement, the
Offering Document or in the other documents, certificates and statements
furnished to the Purchaser by or on behalf of the Issuer prior to the date
hereof in connection with the transactions contemplated hereby.
(o) Assuming that the Purchaser's representations and
warranties in the investor letter, substantially in the form attached
hereto as Exhibit A, are true and correct in all material respects, the
offer and sale of the Notes to the Purchaser in the manner contemplated by
the Offering Document and this Agreement will be exempt from the
registration requirements of the Securities Act and it is not necessary to
qualify an indenture in respect of the Notes under the United States Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
(p) Each of the representations and warranties of the Issuer,
the Transferors and the Manager set forth in each of the Operative
Documents to which it is a party is true and correct in all material
respects.
(q) Any taxes, fees and other governmental charges in
connection with the execution and delivery of the Operative Documents or
the execution, delivery and sale of the Notes have been or will be paid
prior to the Closing Date.
Section 4. Representations and Warranties of the Issuer.
(a) The Notes have been duly authorized; and when the Notes
are authenticated, delivered and paid for pursuant to this Agreement on
the Closing Date, such Notes will have been duly executed, authenticated,
issued and delivered and will conform to the description thereof contained
in the Offering Document; and will constitute valid and legally binding
obligations of the Issuer, enforceable against the Issuer in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(b) The Issuer has not entered and will not enter into any
contractual arrangement with respect to the distribution of the Notes
except for this Agreement and the Private Placement Agreement.
Section 5. Covenants of Candie's and the Issuer.
(a) Candie's will pay all present and future recording and
filing fees, and all legal, financial and miscellaneous out-of-pocket
expenses and costs incurred in connection with the negotiation and
consummation of this Agreement and closing the transactions hereby
contemplated, including, but not limited to (i) all expenses incidental to
the performance of the Transferors' or the Manager's obligations under the
Operative Documents including all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the
Notes, the preparation of the Operative Documents and amendments and
supplements thereto, and any other document relating to the issuance,
offer, sale and delivery of the Notes; (ii) any fees charged by investment
rating agencies for the rating of the Notes; (iii) the fees and expenses
of Standard & Poor's Corporation CUSIP Service Bureau in connection with
obtaining a private placement number with respect to the Notes; (iv) the
fees, expenses and disbursements of Xxxxx & XxXxxxxx; (v) the Placement
Agent's fees; and (vi) expenses incurred in printing and delivering the
Offering Document (including any amendments and supplements thereto) to
the Purchaser. Without limiting any provisions of the Operative Documents,
the Issuer further agrees that it will pay or cause to be paid, promptly
upon demand, all reasonable expenses incurred by the Purchaser in
connection with the making of any amendments or modifications to, or the
giving of any release, consent or waiver in respect of, this Agreement and
any Operative Document executed pursuant hereto or thereto, including the
fees and disbursements of counsel for the Purchaser in connection
therewith, in each case that are related to or arising out of a request
of, or an action taken by or that are otherwise required or caused by,
directly or indirectly, the Issuer, the Transferors or the Manager,
whether or not such modifications or amendments are consummated or all
consents are obtained. Without limiting the any provisions of the
Operative Documents, the Issuer further agrees that it will pay, or
reimburse the Purchaser for, promptly upon demand, all costs and expenses
(including reasonable legal fees and disbursements) incident to or in
connection with (i) any action taken by the Purchaser, in good faith, to
enforce its rights and remedies under this Agreement or any other
Operative Document
and (ii) any bankruptcy or insolvency proceedings involving Candie's or
any of its Affiliates.
(b) The Issuer shall use its reasonable efforts to ensure that
it will not be or become, a management company, unit investment trust or
face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act, although it may rely on the
investor letter delivered by the Purchaser and assume compliance with the
provisions of Section 3.5 of the Indenture. The Issuer further agrees to
comply with the undertaking stated to be made by it in the final sentence
of paragraph 5 of the investor letter delivered by the Purchaser.
Section 6. Conditions of the Purchaser's Obligations. The
obligations of the Purchaser to purchase and pay for the Notes on the Closing
Date will be subject to the accuracy of the representations and warranties on
the part of the Issuer and the Transferors herein, the accuracy of the
statements of officers of the Issuer made pursuant to the provisions hereof, to
the performance by the Issuer of its obligations hereunder and to the following
additional conditions precedent:
(a) The Purchaser shall have received a letter, dated June 30,
2001 of Xxxx Xxxxx LLP, in form and substance satisfactory to the
Purchaser, regarding the financial valuation of the Assets.
(b) There shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of the
Issuer, the Transferors, the Manager or any of their respective Affiliates
which, in the judgment of the Purchaser, is material and adverse and makes
it impractical or inadvisable to proceed with completion of the purchase
of the Notes; (ii) any downgrading in the rating of any debt securities of
the Candie's or any of its Affiliates by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Securities Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities of Candie's or any of its Affiliates (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Candie's
or any of its Affiliates on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress,
any financial market disruption or any other substantial national or
international calamity or emergency if, in the judgment of the Purchaser,
the effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with completion
of the purchase of the Notes.
(c) The Notes shall have been duly authorized, executed,
authenticated, delivered and issued and shall be entitled to the benefits
of the Indenture. Each of the
Operative Documents and this Agreement shall have been duly authorized,
executed and delivered by the respective parties thereto and shall be in
full force and effect, and all conditions precedent contained in the
Operative Documents shall have been satisfied.
(d) The Purchaser and the Trustee shall have each received a
counterpart original, together with any required conformed copies of the
Operative Documents and all closing documents delivered at or prior to the
Closing.
(e) The Purchaser and the Trustee shall have each received
signature and incumbency certificates executed by the authorized officers
or manager of each of the Issuer, the Transferors and the Manager, to
enable each of them to enter in to the Operative Documents to which such
entity is a party.
(f) All corporate, limited liability company and other
proceedings in connection with the transactions contemplated hereby and
the other Operative Documents and all documents, opinions and certificates
incident thereto shall be satisfactory in form and in substance to the
Purchaser, and the Purchaser shall have received such other documents and
certificates incident to such transaction as the Purchaser shall
reasonably request.
(g) The Purchaser shall have received from counsel to each
party to the Operative Documents (including the Servicer, the Back-Up
Manager and the Trustee), written opinions dated the Closing Date and in
form and substance satisfactory to the Purchaser, covering such matters as
the Purchaser may reasonably request, including but not limited to the
following:
(i) Corporate Opinions. An opinion in respect of each
party to the Operative Documents that such party has been duly
formed and is existing and in good standing under the laws of its
State of formation, with all requisite power and authority to own
its properties and conduct its business; and such party is duly
qualified to do business as a foreign entity in good standing in all
other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except
where the failure to be so qualified, individually or in the
aggregate, would not reasonably be expected to have a material
adverse effect on the financial position of such party.
(ii) Legal, Valid, Binding and Enforceable. An opinion
in respect of each party to the Operative Documents and this
Agreement that each such document to which it is a party has been
duly authorized, executed and delivered and constitutes the valid
and legally binding obligation of each party, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
(iii) Notes. An opinion that the Notes have been duly
authorized, executed, authenticated, issued and delivered and
conform to the description thereof contained in the Offering
Document; and constitute valid and legally binding obligations of
the Issuer, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(iv) No Consents Required. An opinion in respect of each
party to the Operative Documents that in respect of such party, no
consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Operative
Documents, except as set forth or contemplated therein.
(v) Litigation. An opinion (which may be from the
General Counsel of Candie's) in respect of each party to the
Operative Documents that in respect of such party, to such counsel's
knowledge (after due inquiry) there are no pending actions, suits or
proceedings against or affecting such party, any of its subsidiaries
or any of their respective properties that, if determined adversely
to such party or any of its subsidiaries, would individually or in
the aggregate have a material adverse effect, or would materially
and adversely affect the ability of such party to perform its
obligations under the Operative Documents; and to such counsel's
knowledge, no such actions, suits or proceedings are threatened or
contemplated.
(vi) Non-Contravention. An opinion (which in the case of
clause (a)(ii) and (b) may be from the General Counsel of Candie's)
in respect of each party to the Operative Documents that, in respect
of such party, the execution, delivery and performance of the
Operative Documents to which it is a party will not result in a
breach or violation (a)(i) of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or,
(ii) to such counsel's knowledge, order of any governmental agency
or body or any court having jurisdiction over such party or any
subsidiary of such party or any of their properties, or (b) to such
counsel's knowledge, any agreement or instrument to which such party
or any such subsidiary is a party or, to such counsel's knowledge,
by which such party or any such subsidiary is bound or to which any
of the properties of such party or any such subsidiary is subject,
or the organizational documents of such party or any such
subsidiary.
(vii) Securities Laws. An opinion that it is not
necessary in connection with the offer, sale and delivery of Notes
by the Issuer to the Purchaser pursuant to this Agreement to
register the Notes under the Securities Act or to qualify the
Indenture under the Trust Indenture Act.
(viii) Investment Company Act. An opinion that the
Issuer is not and, after giving effect to the offering and sale of
the Notes and the application of
the proceeds as described in the Offering Document, will not be an
"investment company" as defined in the Investment Company Act.
(ix) Federal Income Tax. An opinion that for U.S.
federal income tax purposes, the Notes will be treated as
indebtedness of the Issuer.
(x) New York State Income Tax. A letter from BDO
Xxxxxxx, LLP, addressed to PartnerRe New Solutions Inc.
("PartnerRe") and the Purchaser, stating that the Issuer will not be
subject to New York State or New York City income or franchise taxes
(including the New York City Unincorporated Business Tax).
(xi) Contribution. An opinion to the effect that in the
event that a Transferor were to become a debtor in a case under the
Bankruptcy Code, a court of competent jurisdiction would hold that
the Assets would not constitute property of such Transferor's
bankruptcy estate.
(xii) Non-Consolidation. An opinion to the effect that
(1) in the event that either of the Transferors were to become a
debtor in a case under the Bankruptcy Code, a court of competent
jurisdiction would not disregard the separate existence of such
Transferor, on the one hand, and the Issuer or IPHM, on the other
hand, so as to order the substantive consolidation of the assets and
liabilities of (a) the Issuer or IPHM, on the one hand, and (b) such
Transferor, on the other hand, and (2) in the event that the Manager
were to become a debtor in a case under the Bankruptcy Code, a court
of competent jurisdiction would not disregard the separate existence
of the Manager and Issuer so as to order the substantive
consolidation of the assets and liabilities of the Issuer and the
Manager.
(xiii) Security Interests. (A) An opinion to the effect
that (i) in the event that the transfer of the Assets from each of
the Transferors to the Issuer shall be considered a loan secured by
the Assets, upon execution of the Contribution Agreement and upon
the filing of financing statements, assignments and patent and
trademark filings with the Patent and Trademark Office and copyright
filings in the Copyright Office related thereto (collectively, the
"Filing Statements"), the Issuer will have a perfected first
priority security interest in the Assets which may be perfected by
filing in the United States, and (ii) upon execution of the
Indenture, and upon the filing of the Filing Statements related
thereto, the Trustee will have a perfected first priority security
interest in the Collateral which may be perfected by filing in the
United States and (B) a letter from Canadian counsel regarding such
matters in Canada, satisfactory to the Purchaser.
(xiv) Intellectual Property Title Opinion. An opinion to
the effect that (A) each of the Transferors owns the Assets
contributed pursuant to the Contribution Agreement, (B) each
application and registration with respect to an Asset owned by each
of the Transferors is owned by such Transferor and stands in the
name thereof on the records of all relevant office registries, free
and clear of any liens, (C) each Asset relating to a trademark or
copyright contributed by the related Transferor is a valid trademark
or copyright, as the case may be and (D) to the knowledge of such
counsel, there are no claims or proceedings regarding infringement
in connection with the use of, or threaten the validity or value of
the Assets.
(h) The Purchaser shall have received a letter from counsel to
the Issuer that such counsel has no reason to believe that the PPM as of
the date of the PPM and the Closing Date, contained any untrue statement
of a material fact or omitted to state any material fact necessary to make
the statements therein not misleading; it being understood that such
counsel need express no opinion as to the financial statements or other
financial data contained in the PPM.
(i) The Purchaser shall have received from each party to the
Operative Documents such information, certificates and documents as the
Purchaser may reasonably have requested and all proceedings in connection
with the transactions contemplated by this Agreement and all documents
incident hereto shall be in all material respects reasonably satisfactory
in form and substance to the Purchaser.
(j) The (i) Notes shall have received a rating of "Baa3" from
Xxxxx'x and (ii) such rating shall not have been rescinded, and no public
announcement shall have been made by Xxxxx'x that the rating on the Notes
has been placed under review.
(k) The CUSIP Service Bureau of Standard & Poor's shall have
assigned a private placement number for the Notes and the Purchaser shall
have received evidence reasonably satisfactory to the Purchaser of such
number.
(l) The Purchaser shall have received a receipt or other
evidence satisfactory to it from the Trustee, confirming receipt by the
Trustee, of the deposit of funds into the Liquidity Reserve Account
pursuant to Section 12.1 of the Indenture in the amount of $2,900,000.
(m) The Purchaser shall have received evidence reasonably
satisfactory to it and its special counsel that UCC-1 financing statements
and any other similar statements or documentation with respect to
perfection of security interests in the Assets for the benefit of the
Issuer and the Trustee have been, or will be, filed in the appropriate
filing offices in the Covered Jurisdictions, and all other actions have
been taken reflecting the assignment of the interests of the Transferors
in the Assets to the Issuer, as required pursuant to the provisions of the
Contribution Agreement.
(n) The fees and expenses identified in Section 5.1(a) shall
have been paid or provided for to the satisfaction of the Purchaser.
(o) The Purchaser shall have received an officer's certificate
of each of the Issuer and the Transferors certifying that the conditions
to Closing set forth herein have been complied with as of the Closing
Date.
The Purchaser may in their sole discretion waive compliance with any
conditions to the obligations of the Purchaser hereunder.
Section 7. Indemnification.
(a) Each of the Issuer and the Transferors jointly and
severally agrees (i) to indemnify and hold harmless the Purchaser, its
members, employees, managers, directors and officers and each person, if
any, who controls such Purchaser within the meaning of Section 15 of the
Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which such Purchaser may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (A) any breach of any of the representations and
warranties of the Issuer or any Transferor contained herein, provided,
however, that (i) the Issuer shall only indemnify the indemnified parties
with respect to breaches of the Issuer's representations and warranties
and not with respect to a breach by any other party and (ii) the
Transferors shall not indemnify the indemnified parties with respect to
any breach of an Issuer representation and warranty pertaining to the
Assets or any Issuer continuing representations or warranties made herein
that relate to, or require, action to be taken by the Issuer after the
Closing Date, including the payment of the Notes, or (B) any untrue
statement or alleged untrue statement of any material fact contained in
the Offering Document, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
(ii) will reimburse the Purchaser for any legal or other expenses incurred
by the Purchaser in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred.
(b) The obligations of the Issuer and each Transferor under
this Section shall be in addition to any liability which the Issuer or
such Transferor may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Purchaser within
the meaning of Section 15 of the Securities Act or the Exchange Act.
(c) Notwithstanding the foregoing, none of the Issuer,
Candie's, Xxxxxx or the Purchaser has any liability in respect of any
conclusion drawn or statements contained in the report prepared by Consor,
dated July 24, 2002, except for information provided in writing to Consor
by any of them.
Section 8. Failure to Deliver. If, after 3:00 p.m. on the Closing
Date, the Closing has not yet been consummated and the Issuer has requested the
Purchaser to continue to make the Purchase Price available later that day, and
if, by 5:00 p.m. New York City time on such day, the
Issuer fails to tender to the Purchaser the Notes or if the conditions specified
in Section 6 hereof have not been fulfilled or waived by the Purchaser, the
Purchaser may thereupon elect to be relieved of all further obligations under
this Agreement. In addition, Candie's shall pay to the Purchaser interest on the
Purchase Price of its Notes at a variable per annum rate specified by the
Purchaser, from such date until the next succeeding Business Day on which it is
feasible for the Purchaser to invest such moneys in overnight funds. Nothing in
this Section shall relieve the Issuer or any Transferor from any of its
obligations hereunder or otherwise or waive any of the Purchaser's rights
against the Issuer or such Transferor.
Section 9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Issuer, the Transferors and of the Purchaser or its officers
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of the Purchaser, the Transferors, the Issuer or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Notes. If for any
reason the purchase of the Notes by the Purchaser is not consummated, Candie's
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 and the obligation of the Issuer and each of the
Transferors pursuant to Section 7 shall remain in effect. If the purchase of the
Notes is not consummated for any reason other than because of either (i) a
failure of the Purchaser to fund after all conditions to Closing have been met
or (ii) the occurrence of any event specified in clause (iii), (iv) or (v) of
Section 6(b), Candie's will reimburse the Purchaser for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by it
in connection with the offering of the Notes.
Section 10. Severability Clause. Any part, provision,
representation, or warranty of this Agreement which is prohibited or is held to
be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.
Section 11. Notices. All communications hereunder will be in writing
and, (A) if sent to the Purchaser will be mailed, delivered or telegraphed and
confirmed to the Purchaser, at Mica Funding, LLC, c/x Xxxxxxxxx Global
Strategies, 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, with a copy to
PartnerRe New Solutions Inc., Xxx Xxxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000-0000,
Attention: Chief Counsel, (B) if sent to the Issuer, will be mailed, delivered
or telegraphed and confirmed to it at IP Holdings LLC, 000 Xxxxx Xxxx, Xxxxx
000, Xxxxxxxxxx, XX 00000, Attention: General Counsel, (C) if sent to Xxxxxx,
will be mailed, delivered or telegraphed and confirmed to it at Xxxxxxx Xxxxxx &
Co., Inc., 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, Attention: General Counsel
or (C) if sent to Candie's, will be mailed, delivered or telegraphed and
confirmed to it at Candie's, Inc., 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000,
Attention: General Counsel; provided, however, that any notice to the Purchaser
pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to
such Purchaser.
Section 12. Successors and Third-Party Beneficiaries. This Agreement
will inure to the benefit of and be binding upon the parties hereto and their
respective successors and the controlling persons referred to in Section 7 and
no other person, other than as expressly provided
in this paragraph, will have any right or obligation hereunder. It is agreed by
the parties hereto that PartnerRe shall be a third-party beneficiary of the
obligations of the Issuer, Candie's and Xxxxxx hereunder.
Section 13. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO ITS CONFLICT OF LAW PROVISIONS. Each of the Issuer and the Transferors hereby
submits to the non-exclusive jurisdiction of the Federal and state courts in the
Borough of Manhattan in The City of New York in any suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby.
Section 14. Counterparts, Etc. This Agreement supersedes all prior
or contemporaneous agreements and understandings relating to the subject matter
hereof between the Purchaser, the Transferors and the Issuer. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated
except by a writing signed by the party against whom enforcement of such change,
waiver, discharge or termination is sought. This Agreement may be signed in any
number of counterparts each of which shall be deemed an original, which taken
together shall constitute one and the same instrument.
Section 15. No Petition. (a) During the term of this Agreement and
for one year and one day after the retirement of the Notes, none of the parties
hereto or any affiliate thereof will file any involuntary petition or otherwise
institute any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other proceeding under any federal or state bankruptcy or similar
law against the Issuer.
(b) Each of the parties hereto (other than the Purchaser) agrees
that it will not institute against, or join any other person in instituting
against, the Purchaser any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding, or other similar proceeding under the laws of any
jurisdiction, for one year and one day after the latest maturing commercial
paper note of the Purchaser is paid in full. The obligations of such parties
under this Section 15(b) shall survive any termination of this Agreement.
Section 16. Limited Recourse. The obligations of the Purchaser under
this Agreement are solely the obligations of the Purchaser. No recourse shall be
had for the payment of the Purchase Price or any other obligation or claim of or
against the Purchaser arising out of or based upon this Agreement, against any
employee, officer, director, affiliate, member or manager of the Purchaser or
any affiliate of such person (other than with respect to Section 17 below);
provided, however, that the foregoing shall not relieve any such person of any
liability it might otherwise have as a result of fraudulent actions or omissions
taken by it. Each party to this Agreement (other than the Purchaser) agrees that
the Purchaser shall be liable for any claims that such party may have against
the Purchaser only to the extent the Purchaser has funds in excess of those
needed by it to pay amounts due from it on matured or maturing commercial paper
notes or due from it to hedge counterparties in connection with its commercial
paper program. Any and all claims by any such party against the Purchaser shall
be unsecured and subordinate to the claims of the holders of the Purchaser's
commercial paper notes and of all other secured parties under the Purchaser's
commercial paper program.
Section 17. Confidentiality. Neither Candie's, Caruso, the Purchaser
nor any of their respective Affiliates shall make any announcement or disclosure
regarding the participation of PartnerRe or any of its Affiliates in connection
with the transactions contemplated in the Operative Documents, without the prior
written consent of PartnerRe, except that each of Candie's, Xxxxxx or the
Purchaser may disclose such information to such Person's external accountants
and attorneys and as required by any supervisory regulatory authority to which
the disclosing party is subject or under applicable law or order in connection
with any judicial proceeding. If, for any other reason than a breach of this
Section 17 by Candie's, Xxxxxx and the Purchaser or a breach of any another
confidentiality agreement between PartnerRe and the parties hereto, the
confidential information herein otherwise becomes public, then Candie's, Xxxxxx
and the Purchaser shall be permitted to disclose such public information.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year above first written.
CANDIE'S, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Executive Vice President
XXXXXXX XXXXXX & CO., INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Executive Vice President
IP HOLDINGS LLC
By: IP Holdings and Management
Corporation its Manager
By: /s/ Xxxxxxx Xxxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: President
MICA FUNDING, LLC
by: Mica Member, Inc.
as sole Member
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
