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
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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 Joe Boxer
Contribution
Agreement, dated the date hereof, by and
between Iconix and the Issuer (the "Joe
Boxer 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 Joe Boxer 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 Baker & McKenzie LLP,
805 Third Avenue, New York 10022 New York
City time, on July 22, 2005, (the "Closing
Date") or at such other date and time
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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 Joe Boxer 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.
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(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,
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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
Joe
Boxer
Assets (as defined in the Joe Boxer 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, Joe Boxer
Company,
LLC, a Delaware limited liability company, Joe Boxer Licensing
LLC, a
Delaware limited liability company, JBC Canada Holdings, LLC, a
limited
liability company formed under the laws of Delaware, Joe Boxer
Canada, LP
a limited partnership formed under the laws of Delaware,
William
Sweedler, David Sweedler, Alan Rummelsburg, Joseph Sweedler and
Arnold
Suresky.
(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 Joe Boxer
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 Joe Boxer 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.
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(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.
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(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 wi
