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 September 16, 2005
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NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (this "Agreement") is dated
September 16, 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 Rampage Contribution
Agreement, dated the date hereof, by and
between Iconix and the Issuer (the
"Rampage Contribution Agreement"), is
contributing certain Assets to the Issuer;
WHEREAS, Iconix presently intends to acquire certain assets
related to the name "JNCO" and to
contribute such assets to the Issuer pursuant
to the JNCO Contribution Agreement, which
is expected to be substantially
similar to the Rampage Contribution
Agreement;
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 Third Amended and
Restated Indenture, dated as of
September , 2005, by and between the Issuer
and the Trustee (the "Third Amended
and Restated Indenture") and (b)
contemporaneously herewith has issued its
$103,000,000 IP Holdings LLC Asset-Backed
Notes (the "Notes") pursuant to terms
of the Third 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 Third Amended and Restated
Standard Definitions attached hereto as
Appendix A. The Third Amended and
Restated Indenture, the Security
Agreements, the Rampage Contribution Agreement,
that certain Amendment No. 2 to Management
Agreement, dated the date hereof, by
and among the Manager, the Issuer, IPHM and
the Servicer and that certain
Amendment No. 3 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 $40,000,000 and
the exchange of the July 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 Third Amended and
Restated Indenture.
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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, New York
10022, 10:00 AM New York City time, on
September 16, 2005, (the "Closing Date")
or at such other date and time 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 July 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,
for itself, the Manager and IPHM, and
the Issuer, 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 Rampage
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
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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.
(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 Third 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.
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(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,
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 Rampage
Assets
(as defined in
the Rampage
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
September
16, 2005, by and among Iconix, Rampage Licensing, LLC, a
California
limited liability company, Rampage.com, LLC, a Delaware
limited
liability
company, and Rampage
Closing Company, a California corporation,
Larry Hansel,
Bridgette Hansel
Andrews, Michelle
Hansel, Paul Buxbaum and
David
Ellis. If the JNCO Acquisition occurs, Iconix will promptly
contribute
the stock or assets acquired in connection with the JNCO
Acquisition to
the Issuer pursuant to the JNCO Contribution Agreement.
(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 Rampage 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 Rampage
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 Third 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.
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Section 4.
Representations and Warranties of the Issuer.
--------------------------------------------
(a) The Notes
have been duly authorized; and when the Notes are
authenticated, delivered and paid for pursuant to this Agreement on
the
Closing Date, such Notes will have been duly executed,
authenticated,
issued and delivered and will 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.
(c) If the
Issuer enters into the JNCO Contribution Agreement, it will
promptly take all such action requested by the Purchaser to subject
the
assets described therein to Lien of the Third Amended and
Restated
Indenture.
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, packagi
