EXHIBIT 99.1
NOTE PURCHASE AGREEMENT
by and among
IP HOLDINGS LLC
AND
ICONIX BRAND GROUP, INC. (f/k/a CANDIE'S, INC.)
AND
MICA FUNDING, LLC
Dated July 22, 2005
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (this "Agreement") is dated July 22,
2005 and is by and among IP Holdings LLC, a Delaware limited liability company
(the "Issuer"), Iconix Brand Group, Inc., (f/k/a Candie's, Inc.), a Delaware
corporation ("Iconix"), and Mica Funding, LLC, a Delaware limited liability
company (the "Purchaser").
W I T N E S S E T H
WHEREAS, Iconix, pursuant to that certain ▇▇▇ ▇▇▇▇▇ Contribution
Agreement, dated the date hereof, by and between Iconix and the Issuer (the "▇▇▇
▇▇▇▇▇ Contribution Agreement"), is contributing certain Assets to the Issuer;
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 Second Amended and Restated Indenture, dated as of July 1, 2005, by and
between the Issuer and the Trustee (the "Second Amended and Restated Indenture")
and (b) contemporaneously herewith has issued its $63,000,000 8.45% IP Holdings
LLC Asset-Backed Notes (the "Notes") pursuant to terms of the Second Amended and
Restated Indenture;
WHEREAS, the Issuer desires to sell the Notes to the Purchaser, and
the Purchaser desires to purchase the Notes.
NOW, THEREFORE, 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 Second Amended and
Restated Standard Definitions attached hereto as Appendix A. The Second Amended
and Restated Indenture, the Security Agreements, the ▇▇▇ ▇▇▇▇▇ Contribution
Agreement, that certain Amendment No. 1 to Management Agreement, dated the date
hereof, by and among the Manager, the Issuer, IPHM and the Servicer and that
certain Amendment No. 2 to Servicing Agreement, dated the date hereof, by and
among the Issuer, the Servicer and Trustee 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 for the cash amount
of $45,489,014.35 and the exchange of the Original Notes and the Subordinate
Notes for 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 in Section 2.2 of the Second Amended and Restated Indenture.
The closing of the sale of the Notes (the "Closing") shall be held
at the office of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ New York
City time, on July 22, 2005, (the "Closing Date") or at such other date and time
2
as may be acceptable to the parties hereto.
The cash portion of 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. The
Original Notes and the Subordinate Notes shall be delivered to the Trustee, and
the Trustee shall acknowledge receipt thereof, on 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 Iconix and the Issuer.
Except as provided in paragraph (b) below, Iconix, as for itself, the Manager
and IPHM, 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 only with respect to the portions of the representations and warranties
that specifically refer to Iconix (and the Manager and IPHM), in the case of
Iconix, or the Issuer, in the case of the Issuer and (II) in the case of
information and documents supplied after the Closing Date, only with respect to
such information and documents supplied by Iconix (or the Manager and IPHM), in
the case of Iconix, or the Issuer, in the case of the Issuer):
(a) 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 now being and hereafter proposed to be
conducted; 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, except in such jurisdictions where the
failure to be so qualified could not reasonably be expected to have a
materal adverse effect on its ability to perform its obligations under the
Operative Documents to which it is a party.
(b) (i) Iconix 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 now being and hereafter proposed to be conducted; (ii) Iconix
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, except in such
jurisdictions where the failure to be so qualified could not reasonably be
expected to have a materal adverse effect on the ability of Iconix to
perform its obligations under the ▇▇▇ ▇▇▇▇▇ Contribution Agreement; and
(iii) 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,
except in such jurisdictions where the failure to be so qualified could
not reasonably be expected to have a material adverse effect on the
ability of IPHM to perform its obligations under the Operative Documents
to which it is a party.
3
(c) Each of the Operative Documents, the Notes and this Agreement to
which Iconix, IPHM, 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.
(d) Assuming the due authorization, execution and delivery thereof
by the other parties thereto, each Operative Document to which the Issuer,
IPHM, Iconix 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.
(e) 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.
(f) The consummation of the transactions contemplated by the
Operative Documents to which Iconix, IPHM the Issuer or the Manager, as
the case may be, is a party, 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, IPHM, Iconix 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 Second
Amended and Restated Indenture) upon any of the properties or assets of
any of the Issuer, IPHM, Iconix or the Manager pursuant to the terms of
any such indenture, mortgage, deed of trust, contract or other instrument.
(g) The execution, delivery and performance of each of the Operative
Documents to which any of Iconix, IPHM, the Issuer or the Manager, as the
case may be, 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, IPHM, Iconix, the Manager or any of their
properties, or any agreement or instrument to which the Issuer, IPHM,
Iconix or the Manager is a party or by which the Issuer, IPHM, Iconix or
the Manager is bound or to which any of the properties of the Issuer,
IPHM, Iconix or the Manager is subject, or the organizational documents of
the Issuer, IPHM, Iconix or the Manager and the Issuer has full power and
authority to authorize, issue and sell the Notes as contemplated by this
Agreement.
(h) Each of the Issuer, IPHM, Iconix 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,
4
authority or permit that, if determined adversely to the Issuer, IPHM,
Iconix or the Manager, as the case may be, would individually or in the
aggregate have a material adverse effect on such party.
(i) Iconix has (i) acquired good and indefeasable title to the ▇▇▇
▇▇▇▇▇ Assets (as defined in the ▇▇▇ ▇▇▇▇▇ Contribution Agreement) (ii)
acquired such assets for fair value, and (iii) consummated such
acquisition substantially in accordance with that certain Asset Purchase
Agreement, dated as of July 22, 2005, by and among Iconix, ▇▇▇ ▇▇▇▇▇
Company, LLC, a Delaware limited liability company, ▇▇▇ ▇▇▇▇▇ Licensing
LLC, a Delaware limited liability company, JBC Canada Holdings, LLC, a
limited liability company formed under the laws of Delaware, ▇▇▇ ▇▇▇▇▇
Canada, LP a limited partnership formed under the laws of Delaware,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
(j) The Licenses include all licenses which relate to any trademark
to which the Issuer shall be a party as licensor.
(k) There are (i) no claims of infringement in connection with use
of the Trademarks, (ii) no proceedings or circumstances which would
materially adversely affect the value of the applications and
registrations listed in Exhibit A-1A to the ▇▇▇ ▇▇▇▇▇ Contribution
Agreement, and (iii) no facts or claims that would prevent Iconix from
having unrestricted use of the applications and registrations listed in
Exhibit A-1A to the ▇▇▇ ▇▇▇▇▇ Contribution Agreement in connection with
the corresponding goods and/or services.
(l) There are no pending actions, suits or proceedings against or
affecting the Issuer, IPHM, Iconix, 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, IPHM, Iconix 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, IPHM's, Iconix's and the Manager's
knowledge, no such actions, suits or proceedings are threatened or
contemplated.
(m) Assuming that the Notes are offered in the manner contemplated
by 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 Second Amended and
Restated 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, as amended, (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, will not be an "investment company"
as defined in the Investment Company Act.
5
(n) No form of general solicitation or general advertising was used
by Iconix, IPHM or the Issuer or its representatives in connection with
the offer and sale of the Notes. No investors were solicited or otherwise
approached by Iconix, IPHM 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.
(o) Neither this Agreement 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, in light of the circumstance in which they
were made, not misleading. There is no fact or facts peculiar to Iconix 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 Iconix or any of
its Affiliates and which has not been set forth in this Agreement 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.
(p) 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 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").
(q) Each of the representations and warranties of the Issuer, IPHM,
Iconix and the Manager set forth in each of the Operative Documents to
which they are a party is true and correct in all material respects.
(r) No Transaction Document has been terminated or amended, except
as pursuant to the consummation of the transactions contemplated by the
Operative Documents or in connection with the issuance and sale of the
Notes by the Issuer.
(s) 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.
6
(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 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.
Section 5. Covenants of Iconix and the Issuer.
(a) Iconix 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 its 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 any other document relating to
the issuance, offer, sale and delivery of the Notes; (ii) 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; and (iii) the fees, expenses and disbursements of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP. 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, supplements 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, IPHM, Iconix 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 Iconix or IPHM
or any of their 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 Second Amended and Restated Indenture.
7
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 Iconix 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) (reserved)
(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, IPHM,
Iconix, 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
Iconix 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 Iconix
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 Iconix 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 Second Amended and Restated 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.
8
(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, IPHM, Iconix 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 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
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
9
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 Iconix) 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 Iconix) 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 Second Amended and
Restated 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 thereof, 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) (reserved)
10
(xi) Contribution. An opinion to the effect that in the event
that Iconix 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 Iconix's bankruptcy estate.
(xii) Non-Consolidation. An opinion to the effect that in the
event that Iconix was to become a debtor in a case under the
Bankruptcy Code, a court of competent jurisdiction would not
disregard the separate existence of Iconix, on the one hand, and the
Issuer, on the other hand, so as to order the substantive
consolidation of the assets and liabilities of (a) the Issuer, on
the one hand, and (b) Iconix, on the other hand.
(xiii) Security Interests. (A) An opinion to the effect that
(i) in the event that the transfer of the Assets from Iconix 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 Second Amended and
Restated 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) the Issuer owns the Assets contributed pursuant to
the ▇▇▇ ▇▇▇▇▇ Contribution Agreement, (B) each application and
registration with respect to an Asset owned by the Issuer is owned
by the Issuer and will, upon proper filing or recording, stand 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 Iconix 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 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.
(i) 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.
11
(j) 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 Second Amended and Restated Indenture in the amount of
$310,000.00 on the Closing Date.
(k) 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 Iconix in the
Assets to the Issuer, as required pursuant to the provisions of the ▇▇▇
▇▇▇▇▇ Contribution Agreement.
(l) The fees and expenses identified in Section 5(a) shall have been
paid or provided for to the satisfaction of the Purchaser.
(m) The Issuer's acceptance of the proceeds of the Notes shall be
deemed its acknowledgement 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 Iconix 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
Securities Exchange Act of 1934, as amended ("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 any breach of
any of the representations and warranties of, or with respect to, the
Issuer, IPHM or Iconix 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) Iconix 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.
(b) The obligations of the Issuer and Iconix under this Section
shall be in addition to any liability which the Issuer or Iconix 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.
12
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,
Iconix 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 Iconix from any of its obligations hereunder or otherwise or waive any of the
Purchaser's rights against the Issuer or Iconix.
Section 9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Issuer, Iconix 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, Iconix, 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, other than as a result of a
breach by the Purchaser, Iconix shall remain responsible for the expenses to be
paid or reimbursed by it pursuant to Section 5 and the obligation of the Issuer
and Iconix 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), Iconix 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/▇ ▇▇▇▇▇▇▇▇▇ Global
Strategies, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, with a copy to
PartnerRe New Solutions Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Chief Counsel, (B) if sent to the Issuer, will be mailed, delivered
or telegraphed and confirmed to it at IP Holdings LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel, or (C) if sent to Iconix,
will be mailed, delivered or telegraphed and confirmed to it at Iconix Brand
Group, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, 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
13
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,
IPHM and Iconix 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. The Issuer, the Purchaser and Iconix hereby
submit 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, Iconix 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. The obligations of such parties under this Section 15(a)
shall survive any termination of this Agreement.
(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
14
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 Iconix, 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 Iconix 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 Iconix
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 Iconix and the Purchaser shall be permitted to disclose
such public information.
Section 18. Survival of Note Purchase Agreement Representations and
Warranties. Each of the Issuer and Iconix agree that each representation and
warranty made by it in the Note Purchase Agreement shall survive notwithstanding
the exchange of the Original Notes and the Subordinate Notes provided for in
Section 2 hereof. Each of the representations and warranties of the Issuer and
Iconix in the Note Purchase Agreement are true and correct as of the date
thereof and are hereby incorporated by reference.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
15
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.
ICONIX BRAND GROUP, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: President and CEO
IP HOLDINGS LLC
by: IP Holdings and Management Corporation,
its Manager
by: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
MICA FUNDING, LLC
by: ▇▇▇▇▇▇▇▇▇ Global Strategies LLC,
its Investment Advisor
by: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
16
