MEMBERSHIP INTEREST PURCHASE AGREEMENT

This MEMBERSHIP INTEREST PURCHASE AGREEMENT dated as of May   4, 2009 (this “ Agreement ”) by and among Iconix Brand Group, Inc., a Delaware corporation (“ Iconix ” or the “ Buyer ”), Donald Edward Hardy and Francesca Passalacqua, trustees of the Hardy/Passalacqua Family Revocable Trust (the “ Seller ” ) and Donald Edward Hardy, individually ( “ Hardy ” ).

WHEREAS , Hardy Life, LLC, a California limited liability company (“ Hardy Life ”) converted into Hardy Way LLC, a Delaware limited liability company (the “ Company ” ) effective as of May 1, 2009 pursuant to that certain plan of conversion (the “ Conversion ”) ;

WHEREAS , the Seller is the owner of in excess of 95% of the membership interests of the Company;

WHEREAS , the Company owns all the right, title and interest in and to the Hardy Brand (as hereinafter defined in Section 3.7 ) and related assets;

WHEREAS , the Buyer has agreed to purchase a fifty percent (50%) membership interest in the Company from the Seller, upon the terms and subject to the conditions set forth herein; and

WHEREAS , all references to the Company in this Agreement relate to the Company and all of its predecessors, including, but not limited to Hardy Life.

NOW, THEREFORE , in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto do hereby agree as follows:

1.             Purchase and Sale of Interest .  Subject to the terms and conditions set forth in this Agreement and in reliance upon the representations, warranties, covenants and conditions herein contained, on the Closing Date (as hereinafter defined in Section 7 ) the Seller  shall sell, convey, assign, transfer and deliver to the Buyer and the Buyer shall purchase, 400,000 membership units comprising immediately following the Closing (as hereinafter defined in Section 7 ) fifty percent (50%) of the aggregate outstanding membership interests in the Company (collectively, the “ Interest ”), free and clear of any and all liens, adverse claims, options, security interests, restrictions, pledges, mortgages, charges and encumbrances of any kind or nature whatsoever, whether arising by Contract (as hereinafter defined in Section 3.2 ), operation of law or otherwise (collectively, “ Liens ”).

2.               Payment of Purchase Price .

2.1.            Purchase Price .  In consideration of the sale, transfer, conveyance and delivery of the Interest, Buyer shall, in full payment thereof, pay to the Seller the aggregate consideration of Seventeen Million Dollars ($17,000,000) (the “ Purchase Price ”).  At the Closing, the Buyer shall pay the Purchase Price to the Seller as follows: (i) Nine Million Dollars ($9,000,000) shall be paid by wire transfer in immediately available funds on the Closing Date (the “ Cash   Consideration ”) and (ii) the issuance to the Seller, in the manner set forth below of such number of shares of Buyer’s Stock (as hereinafter defined) as are equal to the quotient of (A) Eight Million Dollars ($8,000,000) divided by (B) the average per share closing sales price (the “ Per Share Price ”) reported on the Nasdaq Global Select Market for the five (5) consecutive trading days ending on the trading day immediately preceding the Closing Date (the “ Shares ”).   “ Buyer’s Stock ” means shares of common stock, par value $0.001 per share, of Iconix.  The Shares shall be delivered as follows: (i) such number of shares of Buyer’s Stock  as are equal to the quotient of (A) One Million Dollars ($1,000,0000) divided by (B) the Per Share Price (the “ Escrow Shares ”) shall be delivered to the escrow agent (the “ Escrow Agent ”) appointed pursuant to the escrow Agreement attached hereto as Exhibit “A ” (the “ Escrow Agreement ”); and (ii) the balance of the Shares (“ Balance Shares ”) shall be delivered to the Seller.  The Escrow Shares shall be used to secure the Seller’s and Hardy’s indemnification obligations under Section 5 of this Agreement.  In addition to the Escrow Shares, Hardy will pledge, pursuant to the Pledge Agreement, 385,000 membership interests owned by Hardy which shall be used to further secure Hardy’s indemnification obligations under Section 5 of this Agreement.

2.2.            Additional Consideration .   Seller shall be entitled to additional consideration (the “ Earn Out Consideration ”) as determined in accordance with and subject to the terms and conditions set forth in Exhibit “B” attached hereto.

3.              Representations and Warranties Concerning Hardy, the Seller and the Company .  Hardy hereby represents and warrants to the Buyer as follows:

3.1.            Organization, Standing and Power .  The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.  The Company has the full limited liability company power and authority to own and operate its properties, and execute, deliver and perform its obligations under this Agreement and each of the other Transaction Documents to which the Company is (or is to be) a party.  There is no action or proceeding pending or contemplated to dissolve the Company.  Hardy is an individual and has all requisite right, power and authority and full legal capacity to execute and deliver this Agreement and each of the Transaction Documents (as defined in Section 3.4 ) to which he is a party, to perform his obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby.  The Seller is a trust duly organized, validly existing and in good standing under the laws of the state of its formation.  The Seller has full power and authority to own the Interests and to execute, deliver and perform its obligations under this Agreement and any of the Transaction Documents to which the Seller is (or is to be) a party.  There is no action or proceeding pending or contemplated to dissolve the Seller.

3.2.            Membership Interests .  The Seller is the legal and beneficial owner of in excess of 95% of the issued and outstanding membership interests of the Company, and owns such membership interests of the Company free and clear of all Liens.  Immediately following the Closing, the Interest will constitute a fifty percent (50%) membership interest in the Company.  There are no options, warrants or other rights (including conversion or preemptive rights) or Contracts of any character relating to the issued or unissued membership interests of the Company or obligating the Company to issue or sell any membership interests of or other debt or equity interests in the Company.  Except for the transactions contemplated by this Agreement, there are no outstanding Contracts of the Company to (A) repurchase, redeem or otherwise reacquire any membership interest of or other equity interests in the Company (or any interest therein), (B) provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other entity, (C) issue or distribute to any Person (as defined below) any membership interest of or other equity interests in the Company, or (D) issue or distribute to holders of any of the membership interests of the Company or any other Person any evidences of indebtedness or assets of the Company.  Other than the Operating Agreement (as defined in Section 7.1 ), none of the Company, the Seller or Hardy is a party to or subject to any agreements or understandings of any kind, and there are no agreements or understandings of any kind between any Persons, which affect or relate to the acquisition, disposition or voting or giving of written consents with respect to any membership interest of or other equity interests in the Company.  For purposes of this Agreement, (i) “ Contracts ”, when described as being those of or applicable to any Person, shall mean any and all contracts, agreements, commitments, arrangements or other undertakings, whether formal or informal, written or oral, including any amendment and other modifications thereto, to which such Person is a party or by which such Person or its properties or assets is subject or bound, and (ii) “ Person ” shall mean any individual, sole proprietorship, joint venture, partnership, corporation, limited liability company, association, joint stock company, unincorporated organization, cooperative, trust, estate, government entity or authority (including any branch, subdivision or agency thereof), administrative or regulatory authority, or any other entity of any kind or nature whatsoever.  As of a time immediately prior to the consummation of the transactions contemplated hereby, Schedule 3.2 sets forth the name of each Member of the Company, the number of membership units in the Company owned by each such Member, and the percentage of outstanding membership interests of the Company represented by such interests.  As of the date hereof, there are 800,000 membership interests issued and outstanding.

3.3.            Interests in Other Entities .  The Company does not own or control, directly or indirectly, any interest in any other Person.  The Company has no obligation, agreement, understanding or arrangement to invest in any entity.

3.4.            Authority; Binding Agreement .  This Agreement has been, and upon Hardy’s execution of the Transaction Documents to which he is a party such Transaction Documents will be, duly and validly executed and delivered by Hardy and this Agreement constitutes, and upon their execution such Transaction Documents shall constitute, the legal, valid and binding obligations of Hardy, enforceable against Hardy in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting the rights of creditors generally and subject to the rules of law governing (and all limitations on) specific performance, injunctive relief, and other equitable remedies (collectively, “ Enforceability Exceptions ” ).  For purposes of this Agreement, “ Transaction Documents ” shall mean this Agreement, the Operating Agreement (as hereinafter defined in Section 7.1(c) ), the Escrow Agreement, the Consulting Agreement between the Company and Hardy in the form attached hereto as Exhibit “C” (the “ Consulting Agreement ”), the Pledge Agreement between Iconix and Hardy in the form attached hereto as Exhibit “D” (the “ Pledge Agreement ”) and all other documents, instruments and certificates delivered pursuant hereto or in connection herewith.

The execution and delivery by the Seller of this Agreement and each of the other Transaction Documents (as hereinafter defined) to which the Seller is (or is to be) a party, the performance by the Seller of its obligations hereunder and thereunder, as applicable, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary action on the part of the Seller, and the Seller has all necessary power and authority with respect thereto.  Each of this Agreement and each of the other Transaction Documents to which the Seller is to be a party, will be, when executed and delivered by the Seller, the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its respective terms, except as the same may be limited by the Enforceability Exceptions.

3.5.            Noncontravention .  Neither the execution and delivery by the Company, the Seller or Hardy of this Agreement, or any of the other Transaction Documents to which the Company, the Seller or Hardy is (or is to be) a party, the consummation by the Company, the Seller and Hardy of any of the transactions contemplated hereby or thereby, nor the performance by the Company, the Seller or Hardy of their respective obligations hereunder or thereunder will (nor with the giving of notice or the lapse of time or both would) (a) conflict with or result in a breach of any provision of (x) any Existing License (as hereinafter defined in Section 3.7 ) or other Contract to which the Company, the Seller or Hardy is a party or bound or any other obligation of the Company, the Seller or Hardy to any Person, or (y) the certificate of formation and limited liability company agreement of the Company, each as amended to date or the organizational documents of the Seller, each as amended to date, (b) obligate the Company, the Seller, Hardy or the Buyer to pay any royalty or other compensation to any Person, (c) result in the creation or imposition of any Lien upon the Interest or any of the Hardy Brand or any other assets of the Company, the Seller or Hardy, or (d) constitute a violation of any Legal Requirement (as defined below) applicable to the Company, the Seller or Hardy.  For purposes of this Agreement, “ Legal Requirements ” shall mean any and all laws (statutory, judicial or otherwise), ordinances, regulations, judgments, orders, directives, injunctions, writs, decrees or awards of, and any Contracts with, any Governmental Authority (as hereinafter defined in Section 3.6 ).

3.6.            Consents .  Except as disclosed in Schedule 3.6 hereto, no consent, approval, waiver, notice, order, or authorization of, or registration, qualification, designation, declaration, recordal or filing with, any federal, state, local, municipal or foreign governmental authority, quasi-governmental authority (including any trademark registry or office or other governmental agency, commission, public authority, branch, department or official, and any court or other tribunal) or body exercising, or entitled to exercise, any governmentally derived administrative, executive, judicial, legislative, police, regulatory or taxing authority, or any self-regulatory organization, administrative or regulatory agency, commission, tribunal or authority (each, a “ Governmental Authority ”) or any other Person (including any party to an Existing License) is required in connection with the execution and delivery by the Company, the Seller or Hardy of this Agreement or any of the other Transaction Documents to which the Company, the Seller or Hardy is (or is to be) a party, the performance by the Company, the Seller or Hardy of their respective obligations hereunder and thereunder or consummation by the Company, the Seller or Hardy of the transactions contemplated hereby (including the sale by the Seller of the Interest) or thereby.

3.7.            Intellectual Property .

(a)           All rights, title and interests with respect to the Hardy Brand (as defined below) have been transferred to the Company pursuant to the Conversion, and are owned by the Company, free and clear of any Liens, other than the Existing Licenses (as defined below), Existing Claims (as defined below) or as otherwise specified on Schedule  3.7 (a) (i) , and the Company is the owner of all registrations and pending registration applications for the Hardy Brand in the Territory (as defined below).  Neither the Company, the Seller, Hardy nor any Affiliate of the Company owns any rights to any Mark in the Territory other than the Hardy Brand (all of which have been transferred to the Company pursuant to the Conversion).

(b)           To Hardy’s knowledge, and except for the Existing Claims, the use, licensing and/or sublicensing of the Hardy Brand in the Territory in connection with the design, manufacture, promotion, advertising and sale of products in the Business (as hereinafter defined), (each a “ Contemplated Use ”) does not and will not infringe upon any intellectual property rights or any other rights of any other Person.

(c)            Schedule 3.7 (c) hereto is a complete and accurate list of all of the registrations and applications for registration of Marks (as defined below) owned by the Company in the Territory. To Hardy’s knowledge,   the status of each Hardy Brand on Schedule 3.7 (c) hereto is complete and accurate, and all of the trademark registrations and applications for registration for the Hardy Brand in the Territory are valid, and subsisting, the registrations are enforceable, and, except as set forth in Schedule 3.7 -II hereto, none of such filings have expired or been abandoned, opposed, canceled or otherwise invalidated, and the Company and Hardy are unaware of any existing facts which would form a reasonable basis for opposition, cancellation or invalidation of any of same; and all fee payments, actions and/or filings required to be taken or made prior to the Closing Date and within the ninety (90) day period thereafter in order to maintain such registrations in full force and effect and maintain such applications pending have been (or will prior to the Closing Date be) taken and made.

(d)           To Hardy’s knowledge, except for the Existing Claims, no Person, other than Third Party Licensees (as defined below) and Third Party Sub Licensees (as defined below) pursuant to Existing Licenses, has rights in the Territory to any Hardy Brand.

(e)            Schedule 3.7 (e) hereto constitutes a complete and accurate list of all of the Existing Licenses, together with a table specifying for each such license, the identity of the Licensor (as defined below), the Third Party Licensee and Third Party Sub Licensee granted rights thereunder, the Mark(s) licensed, the licensed goods, the applicable territory, the term and the status of the agreement.

(f)           The Company, the Seller and Hardy have delivered to the Buyer a correct and complete copy of the all documents related to the Conversion and each of the Existing Licenses (as amended to date).

(g)           To Hardy’s knowledge, except as disclosed in Schedule 3.7 (g) hereto, (i) each Existing License is valid and in full force and effect and is enforceable   against the Licensor and the Third Party Licensee or Third Party Sub Licensee and each other party thereto, except as may be limited by the Enforceability Exceptions, (ii) neither the Company nor any Licensor is in violation or breach of or in default of its obligations under any such Existing License and, except as set forth on Schedule 3.7 (g) hereto, no Third Party Licensee or Third Party Sub Licensee is in violation or breach of or in default of its obligations under any such Existing License, which violation, breach or default would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Company or the Licensor or impair the ability of the Company, the Seller or Hardy to perform their respective obligations hereunder and (iii) and no Person (including any Third Party Licensee or Third Party Sub Licensee under any Existing License) has any rights with respect to the Hardy Brand, other than as expressly provided under an Existing License.  Each of the Existing Licenses relating to the Hardy Brand is assignable by the Licensor thereof to the Company.

(h)           To Hardy’s knowledge, other than Nervous Tattoo, Inc., neither the Company, any Licensor, any Third Party Licensee, nor any Third Party Sub Licensee, has breached any provision of an Existing License, which breach would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Company or impair the ability of the Company, the Seller or Hardy to perform their respective obligations hereunder, nor has any Third Party Licensee or Third Party Sub Licensee provided the Company or any Licensor any written notice of an intent to breach any such Existing License.

(i)           To Hardy’s knowledge, except for the Existing Claims, neither the Company, the Seller, Hardy, any Affiliate of the Company (including any Licensor) or their respective licensees of the Hardy Brand (including the Third Party Licensees and Third Party Sub Licensees) nor any other party to any Existing License has infringed upon, misappropriated or otherwise violated, or is currently infringing upon, misappropriating or otherwise violating, any Marks or any other intellectual property right   of any other Person in the Territory, and no Person has infringed, misappropriated or otherwise violated, or is currently infringing, misappropriating or otherwise violating, or otherwise challenging the validity or enforceability of the Company’s, any Licensor’s or any other Company’s Affiliates’ rights, any Third Party Licensee’s rights or any Third Party Sub Licensee’s rights under any Existing License, with respect to any Hardy Brand in the Territory, or any other intellectual property right of the Company or any Affiliate of the Company (including any Licensor), except as specified in Schedule 3.7 (i) .

(j)           To Hardy’s knowledge, except for the Existing Claims, neither the Company, any Affiliate   of the Company (including any Licensor), nor their respective licensees and Affiliates has received from any Person any notice, demand, threat, letter, claim or request alleging that the use or any Contemplated Use of the Hardy Brand in the Territory has or may have infringed or misappropriated or may be infringing or misappropriating or may infringe or misappropriate any intellectual property right of a third party, or challenging the validity, effectiveness or enforceability of any Existing License, nor is the Company, any Licensor or any of their Affiliates aware of any existing facts which would form a reasonable basis for any such claim.

For purposes of this Agreement,

“ Affiliate ” of any Person means any Person which, directly or indirectly controls or is controlled by that Person, or is under common control with that Person, and “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities or by contract or otherwise.

“ Business ” means (i) the licensing, promotion and advertising of the Brand (as defined in the Operating Agreement), (ii) all lines of business reasonably related or ancillary thereto (including the establishment and operation of retail stores) and (iii) any other line of business duly approved pursuant to the Operating Agreement.)

“ Existing Claims ” means, with respect to the Hardy Brand, those pending or threatened actions, oppositions, claims and proceedings and Liens, all as listed on Schedule 3.7 -II hereto.

“ Existing Licenses ” means the licenses or other Contracts by and among the Company and/or Hardy or any of their respective Affiliates (each such Person, in its capacity as licensor under such Contracts, a “ Licensor ”) and certain Persons (each such Person, a “ Third Party Licensee ”) granting such Third Party Licensee’s rights to the Hardy Brand in the Territory, all of which are listed in Schedule 3.7(e) and any sublicenses or other Contracts by and among a Third Party Licensee and certain persons (each such Person, a “ Third Party Sub Licensee ”) granting to such Third Party Sub Licensees rights to the Hardy Brand in the Territory, all of which are listed on Schedule 3.7 (e) .

“ Hardy Brand ” means all Marks used in connection with the Business, including, without limitation, each of the Marks listed on Schedule 3.7 -III hereto, and any and all Marks used in connection with the Business of the Company all registrations and applications for registration thereof owned by the Company, any Affiliate of the Company in the Territory, all of which have been validly contributed to the Company pursuant to the Conversion, all Marks derived therefrom for use in the Territory, and all goodwill associated therewith.

“ Marks ” means names, trade names, trademarks, service marks, logos, domain names, characters, symbols, slogans, designations, emblems, designs, colors, and trade dress, and all identifications, labels, insignia or indicia thereof, and all registrations and applications for registration for the foregoing and all common law trademark rights relating thereto.

“ Territory ” means throughout the world.

3.8.            No Actions .  Except as disclosed on Schedule 3.8 , no claim, action, suit, arbitration, inquiry, litigation or investigation or other proceeding is pending or, to the Company’s knowledge, threatened by or against the Company, any Licensor or any other Affiliate of the Company, or Hardy.  Neither the Company, the Seller nor Hardy is a party to or subject to any writ, order, decree, injunction or judgment of any Governmental Authority, and no Licensor is a party to or subject to any writ, order, decree, injunction or judgment of any Governmental Authority that would materially adversely affect it or him, as the case maybe, or  the performance by the Company, the Seller or Hardy of their respective obligations hereunder or any of the other Transaction Documents to which the Company, the Seller or Hardy is (or is to be) a party.

3.9.            Contracts .  

(a)              Schedule 3.9 (a) sets forth a true and correct list of all Contracts to which the Company is bound or subject including, but not limited to, the following types of Contracts:

(i)         any Contract under which it has created, incurred, assumed, or guaranteed any indebtedness for borrowed money, the deferred payment of the purchase price of any properties or any capitalized lease obligation, or under which it has imposed a Lien on any of its properties;

(ii)        any Contract relating to the purchase or sale of inventory, or the furnishing or receipt of services;

(iii)       any Contract for capital expenditures;

(iv)       any leases or similar agreements with respect to any properties, real or personal, whether as landlord, tenant or otherwise;

(v)        any Contract for the license, sale or other disposition of any of the Hardy Brand;

(vi)       any Contract concerning a partnership or joint venture with another Person;

(vii)      any Contract with any Affiliate of the Company; or

(viii)     any Contract that purports to limit the Company’s freedom to compete freely in any line of business or in any geographic area. Complete, true and correct copies of all Contracts have been made available to the Buyer.

(b)           As of the date hereof, other than as set forth in Schedule 3.9 (b) , (i) the Company has complied with and performed all of its material obligations required to be performed under all of the Contracts and is not in default under any of them, and no event has occurred which, with or without the giving of notice, lapse of time or both, would constitute a default by the Company; (ii) each Contract is a valid and binding obligation of the Company and  each other party thereto, and is in full force and effect; (iii) the Company has not received written notice canceling, terminating or repudiating any Contract; and (iv) the Company has no knowledge that any third party has failed to pay all amounts due pursuant to each such Contract beyond any receipt of notice and cure period.

(c)           The Company does not own any real property.

3.10.       Absence of Undisclosed Liabilities; Indebtedness .  Except as disclosed in the Company Financial Statements and as set forth on Schedule 3.10 , the Company does not have any Liabilities (as defined below) except Liabilities that are accrued in the ordinary course of business since March 31, 2009, all of which shall be the responsibility of Hardy to satisfy in accordance with Section 6.2 of this Agreement.  The Company is not a guarantor or otherwise responsible for any Liabilities of any other Person.  For purposes of this Agreement, “ Liabilities ” shall mean any and all indebtedness, liabilities and obligations of any nature whatsoever, whether accrued, absolute, fixed, contingent, determined, determinable, known, unknown, matured or unmatured or otherwise, and whether or not of a nature required to be reflected or reserved against in a balance sheet in accordance with U.S. GAAP.

3.11.         Financial Information; Licensee Receivables .

(a)           Attached to Schedule 3.11 (a) are (i) true and complete copies of the unaudited balance sheets for each of December 31, 2008, December 31, 2007 and December 31, 2006 and the related unaudited statements of income and cash flows for each such fiscal year, and (ii) true and complete copies of the unaudited balance sheets of the Company as of  March 31, 2009 and the related unaudited statements of income and cash flows for the three-month period ended March 31, 2009 (collectively, and including the notes thereto, if any, the “ Company Financial Statements ”).  Except as indicated in the Company Financial Statements (including any notes thereto, if any), the Company Financial Statements (including the notes thereto, if any) were prepared in accordance with generally accepted accounting principles applied on a consistent basis (“ GAAP ”) during the periods involved and fairly present in all material respects the results of the consolidated operations and changes in shareholders’ equity and financial position of the Company for the respective fiscal periods or as of the respective dates therein set forth (subject, in the case of any unaudited Company Financial Statements, including the notes thereto, to any other adjustments described therein and normal year-end audit adjustments).

(b)           Attached hereto as Schedule 3.11(a) is a true and complete schedule by Mark for the years ended December 31, 2008 and 2007 and the three months ended March 31, 2009 of (i) all sales reported by the Third Party Licensees and Third Party Sub Licensees under the Existing Licenses with respect to the use of the Hardy Brand in the Territory, (ii) all royalties or other amounts paid or payable by the Third Party Licensees and Third Party Sub Licensees  in respect of such sales, and (iii) the unpaid amount of such royalties or other amounts at the end of each such period.  The Company has no reason to believe that the sales information reported by any Third Party Licensee or Third Party Sub Licensee is incomplete or inaccurate in any material respect.

(c)           The unpaid balance of royalties and other amounts shown in Schedule 3.11(a)   as being due as of March 31, 2009 from Third Party Licensees and Third Party Sub Licensees under the Existing Licenses with respect to the use of the Hardy Brand in the Territory, together with any such additional royalties or other amounts accrued after March 31, 2009 and unpaid as of the Closing Date (collectively the “ Licensee Receivables ” ), arose (or will arise) in the ordinary course of business of the Company (or an Affiliate of the Company), have been (or will be) fully earned by performance and represent bona fide claims against the respective debtors for royalties and other charges due under an Existing License.  No Licensee Receivable is subject to any set-off or counterclaim of any kind or nature whatsoever.

3.12.          No Violation of Law; Company Permits .  None of the Company, the Seller or Hardy is in violation of, and has not been given written notice of any violation of, any law, statute, order, rule, regulation, ordinance, code, ruling, decree or judgment of any Governmental Authority.  No investigation, proceeding or review relating to the Company, the Seller or Hardy by any Governmental Authority is pending or threatened.  The Company has all material permits, licenses, franchises, variances, exemptions, orders and other governmental authorizations, consents and approvals necessary to own, lease and operate its assets and properties and conduct its business as presently conducted (collectively, the “ Company Permits ”).  The Company is not in violation of the terms of any Company Permit, and there has been no suspension of, imposition of additional conditio