ESCROW AGREEMENT
Exhibit
10.1
THIS
ESCROW AGREEMENT,
dated as
of September 6, 2007 (this “Escrow Agreement”), is by and between Iconix
Brand Group, Inc.,
a
Delaware corporation (“Iconix”); Xxx
Xxxxxx,
an
individual (“Sellers’ Representative”), on behalf of the Sellers and solely in
his capacity as Sellers’ Representative under the Underlying Agreement; and
U.S.
BANK NATIONAL ASSOCIATION, a
national banking association, as Escrow Agent hereunder (“Escrow
Agent”).
BACKGROUND
A. Iconix
and Sellers have entered into a Purchase and Sale Agreement (the “Underlying
Agreement”), dated as of September 6, 2007, by and between Iconix, Official
Pillowtex, LLC (“Pillowtex”) and the sellers of interest in Pillowtex listed as
signatories thereto (“Sellers”), pursuant to which
the
Sellers sold all of the membership interests in Pillowtex to Iconix. The
Underlying Agreement provides that Iconix shall deposit the Escrow Funds
(defined below) in a segregated escrow account to be held by Escrow
Agent.
B. Escrow
Agent has agreed to accept, hold, and disburse the funds deposited with it
and
the earnings thereon in accordance with the terms of this Escrow
Agreement.
C. Pursuant
to the Underlying Agreement, Sellers have appointed the Sellers’ Representative
(as defined below) to represent them for all purposes in connection with the
funds to be deposited with Escrow Agent and this Escrow Agreement.
D. In
order
to establish the escrow of funds and to effect the provisions of the Underlying
Agreement, the parties hereto have entered into this Escrow
Agreement.
STATEMENT
OF AGREEMENT
NOW
THEREFORE,
for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, for themselves, their successors and assigns,
hereby agree as follows:
1. Definitions.
The
following terms shall have the designated meanings when used
herein:
(a) “Business
Day” shall mean any day on which banks are not required, or are authorized, to
close in the City of New York, New York.
(b) “Claim”
shall mean a claim for indemnification by Iconix pursuant to the Underlying
Agreement.
(c) “Claim
Amount” shall mean the amount designated by Iconix to be the amount (to the
extent then known) of any Claim for which a Claim Notice has been delivered.
(d) “Claim
Notice” shall mean a written notification, signed by Iconix and delivered which
shall specify the representation or agreement in the Underlying Agreement with
respect to which a Claim is being made, the facts giving rise to and the alleged
basis for such Claim, the Claim Amount of such Claim, the date of such Claim
Notice, and the aggregate Claim Amounts of all Claims as to which Claim Notices
have been delivered, and will shall attach copies of all material written
evidence of such Claim. Each Claim Notice also shall include a certification
by
the Iconix that the Claim is being made pursuant to the Underlying Agreement
and
this Escrow Agreement.
(e) “Claim
Response” shall mean a written notification, signed by the Sellers’
Representative, which shall set forth whether or not the Sellers dispute any
matter with respect to a Claim Notice or the Claim described
therein.
(f) “Escrow
Funds” shall mean the funds deposited with Escrow Agent pursuant to Section
3
of this
Agreement, together with any interest and other income thereon; initially,
such
amount shall be Twenty-four Million Dollars ($24,000,000).
(g) “Joint
Written Direction” shall mean a written direction executed by Iconix and
Sellers’ Representative and directing Escrow Agent to disburse all or a portion
of the Escrow Funds or to take or refrain from taking an action pursuant to
this
Escrow Agreement.
(h) “Sellers’
Representative” shall mean the person so designated hereto or any other person
designated in a writing signed by Sellers and delivered to Escrow Agent and
Iconix in accordance with the notice provisions of this Escrow Agreement, to
act
as their representative under this Escrow Agreement.
2. Appointment
of and Acceptance by Escrow Agent.
Iconix
and Sellers’ Representative hereby appoint Escrow Agent to serve as escrow agent
hereunder. Escrow Agent hereby accepts such appointment and, upon receipt by
wire transfer of the Escrow Funds in accordance with Section
3
below,
agrees to hold, invest and disburse the Escrow Funds in accordance with this
Escrow Agreement.
3. Commencement
of Duties.
Iconix,
on the date hereof, simultaneously with the execution and delivery of this
Escrow Agreement, shall transfer by wire transfer to the Escrow Agent the
aggregate sum of Twenty-Four Million Dollars ($24,000,000).
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4. Disbursements
of Escrow Funds.
The
Escrow Funds shall be distributed by the Escrow Agent in accordance with the
following:
(a) If,
prior
to the Closing, the Underlying Agreement is terminated by the Sellers pursuant
to Section
7.01(d)
thereof,
Sellers’ Representative may deliver to Escrow Agent a written notice
(“Sellers’
Representative Notice”)
that
(i) states that the Underlying Agreement was terminated pursuant to Section
7.01(d)
thereof,
as applicable, (ii) states that Sellers are entitled to $15,000,000 of the
Escrow Funds, as
well
as any interest and any other income earned
on such
$15,000,000, and that Iconix is entitled to the balance of the Escrow Funds
(such balance, the “Indemnification
Funds”)
and
(iii) requests that Escrow Agent disburse such portion of the Escrow Funds
to
Sellers, and such portion to Iconix in the manner indicated in such notice
(any
Sellers’ Representative Notice pursuant to this Section
4.4(a)
shall be
accompanied by a certification that a copy of such notice has been given to
Iconix). If Iconix does not dispute such Sellers’ Representative Notice in
writing to Sellers’ Representative and Escrow Agent within five (5) Business
Days of Iconix’ receipt (as provided in Section 15 below) of a copy of such
notice, then the Escrow Agent shall release such amount to Sellers’
Representative and Iconix within ten (10) Business Days after the receipt of
such Sellers’ Representative Notice, as instructed. However, if Iconix timely
objects to such Sellers’ Representative Notice in writing as provided in the
immediately preceding sentence, Escrow Agent shall not disburse any amount
except in accordance with Section
4(e)
below.
Iconix and Sellers’ Representative agree that any Claim or objection to or
dispute with Sellers’ Representative Notice shall be made and asserted in good
faith.
(b) On
the
date of the Closing, Sellers’ Representative and Iconix shall deliver to Escrow
Agent a joint written notice which (i) states that the Closing has occurred
pursuant to the Underlying Agreement, (ii) states that Sellers are entitled
to
$15,000,000 of the Escrow Funds, as
well
as any interest and any other income earned
on such
$15,000,000, and (iii) requests that Escrow Agent disburse such portion of
the
Escrow Funds to Sellers Representative and that the remaining Escrow Funds
shall
remain in escrow for a period of twelve (12) months from the Closing Date,
subject to terms and conditions set forth in Section
4(c)
below.
(c) Upon
the
expiration of the first anniversary of the Closing Date, Escrow Agent shall:
(a)
retain in the Escrow Funds sufficient funds to pay in full all Claim Amounts,
if
any, that have not been resolved at such time; and (b) distribute, as promptly
as practicable, the balance of the Escrow Funds to the Sellers in accordance
with their respective Ownership Percentages; provided,
that
the distribution made to each Sellers against whom Iconix
has
asserted any Claim individually on or before such date which (i) has not been
resolved at such time by the delivery to Escrow Agent of a Joint Written
Direction or (ii) has resulted in payments made to Iconix pursuant to Section
5
herein shall be reduced by the amount of any such Claim, as applicable, and
the
distributions made to the other Sellers shall be adjusted
accordingly.
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(f) Except
as
provided in Section
4(c),
all
distributions of Escrow Funds to Sellers under Section
4
shall be
distributed to each Seller in accordance with that Seller’s respective Ownership
Percentage as set out in Schedule
B
hereto.
(g) All
distributions of funds from the Escrow Funds shall be subject to the fees and
claims of Escrow Agent and the Indemnified Parties (as defined below) pursuant
to Section
10
and
Section 11
below.
5. Indemnification
Claims.
1. Iconix
shall deliver each Claim Notice to the Sellers’ Representative and Escrow Agent,
such delivery to be in accordance with the notice provisions of this Escrow
Agreement.
2. Upon
receipt of any Claim Notice, Escrow Agent shall promptly make entries or
notations in the Escrow Account records relating to the Indemnification Funds,
indicating that funds in the amount of the Claim Amount are reserved to satisfy
such Claim, and identifying the date and number of such Claim
Notice.
3. Within
twenty (20) days of receipt by the Sellers’ Representative of any Claim Notice,
the Sellers’ Representative shall deliver a Claim Response to Iconix and Escrow
Agent, such delivery to be in accordance with the notice provisions of this
Escrow Agreement. If, in connection with a Claim Notice, the Seller’s
Representative fails to deliver a Claim Response by the end of the twentieth
(20th) day following receipt by the Seller’s Representative of a Claim Notice,
Escrow Agent shall pay to Iconix out of the Escrow Account an amount equal
to
the Claim Amount. Any such payment shall be made on or before the third (3rd)
Business Day following the expiration of such twenty (20) day period. Escrow
Agent shall continue to hold any amounts remaining in the Escrow Account
following the payment of any Claim Notice in accordance with the terms of this
Escrow Agreement.
4. If
Sellers’ Representative delivers a timely Claim Response with respect to all or
any portion of a Claim Notice, Escrow Agent shall not disburse, and shall
continue to hold in the Escrow Account, the Claim Amount or the disputed portion
thereof, as the case may be, pending receipt of either (i) a Joint Written
Direction or (ii) a notice from either Iconix or the Seller’s Representative
stating that such Claim Notice has been submitted to a court of competent
jurisdiction for judgment and that a judgment with respect to such matters
has
been rendered (a “Judgment
Notice”)
which
is accompanied by a copy of a final order of such court, pursuant to which
such
court has determined whether and to what extent Iconix is entitled to the amount
requested in the Claim Notice. Upon receipt of a Joint Written Direction or
a
Judgment Notice, as applicable, Escrow Agent shall thereafter act in accordance
with Section 5.e, or Section 5.f below, as applicable.
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5. Upon
receipt by Escrow Agent of a Joint Written Direction, if such Joint Written
Direction indicates that Iconix is entitled to payment in respect of all or
any
portion of the Claim Notice, then Escrow Agent shall release from the Escrow
Account and pay to Iconix the amount indicated in such Joint Written Direction
(up to a maximum of the amount of the Indemnification Funds). Such payment
shall
be made on or before the third (3rd) Business Day following the date on which
such Joint Written Direction is received by Escrow Agent. If such Joint Written
Direction indicates that Iconix is not entitled to all or any portion of the
amount claimed in such Claim Notice (a “Discharge
Notice”),
then
the Escrow Agent shall (i) pay to Iconix that amount, if any, of the amount
claimed in such Claim Notice that Escrow Agent is instructed to pay to Iconix
pursuant to such Joint Written Direction (as set forth in the foregoing
sentence) and (ii) continue to hold the amount to which Iconix was determined
not to be entitled in accordance with the terms of the Joint Written Direction
until such amounts are to be disbursed in accordance with the terms of this
Escrow Agreement.
6. If
Escrow
Agent has received a Judgment Notice with respect to any Claim Notice, then
Escrow Agent shall release from the Escrow Account and pay to Iconix an amount
equal to the amount due Iconix, as explicitly set forth in such Judgment Notice
(up to a maximum of the amount of the Indemnification Funds). Such payment
will
be made on or before the third (3rd) business day following the date on which
Escrow Agent receives such Judgment Notice. If such Judgment Notice indicates
that Iconix is not entitled to all or any portion of the amount claimed in
the
Claim Notice, then Escrow Agent shall continue to hold the amount to which
Iconix was determined not to be entitled in accordance with the Judgment Notice
until such amounts are to be disbursed in accordance with the terms of this
Escrow Agreement.
6. Suspension
of Performance; Disbursement Into Court.
If, at
any time, (i) there shall exist any dispute between Iconix, Sellers and/or
the
Sellers’ Representative with respect to the holding or disposition of all or any
portion of the Escrow Funds or any other obligations of Escrow Agent hereunder,
(ii) Escrow Agent is unable to determine, to Escrow Agent’s sole but reasonable
satisfaction, the proper disposition of all or any portion of the Escrow Funds
or Escrow Agent’s proper actions with respect to its obligations hereunder, or
(iii) Iconix and Sellers’ Representative have not within 30 days of the
furnishing by Escrow Agent of a notice of resignation pursuant to Section
7
hereof,
appointed a successor Escrow Agent to act hereunder, then Escrow Agent may,
in
its sole discretion, take either or both of the following actions:
(a) suspend
the performance of any of its obligations (including without limitation any
disbursement obligations) under this Escrow Agreement until such dispute or
uncertainty shall be resolved to the sole but reasonable satisfaction of Escrow
Agent or until a successor Escrow Agent shall have been appointed (as the case
may be).
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(b) petition
(by means of an interpleader action or any other appropriate method), at the
joint and several expense of Iconix and Sellers’ Representative (on behalf of
the Sellers) any court of competent jurisdiction in any venue convenient to
Escrow Agent, for instructions with respect to such dispute or uncertainty,
and
to the extent required or permitted by law, pay into such court, for holding
and
disposition in accordance with the instructions of such court, all Escrow Funds,
after deduction and payment to Escrow Agent of all fees and expenses (including
court costs and attorneys’ fees and expenses) payable to, incurred by, or
expected to be incurred by Escrow Agent in connection with the performance
of
its duties and the exercise of its rights hereunder.
Escrow
Agent shall have no liability to Iconix, Sellers, their respective shareholders
or members or any other person with respect to any such suspension of
performance or disbursement into court, specifically including any liability
or
claimed liability that may arise, or be alleged to have arisen, out of or as
a
result of any delay in the disbursement of the Escrow Funds or any delay in
or
with respect to any other action required or requested of Escrow Agent.
7. Investment
of Funds.
The
Escrow Agent is herein directed and instructed to invest initially and reinvest
the Escrow Funds in the
investment indicated on Schedule
A
hereto.
With
the execution of this document, Iconix and Sellers’ Representative acknowledge
receipt of prospectuses and/or disclosure materials associated with the
investment vehicle, either through means of hard copy or via access to the
website associated with the investment selected by Iconix and Sellers’
Representative. Iconix and Sellers’ Representative acknowledge that they have
discussed the investment and are in agreement as to the selected investment.
Iconix and Sellers’ Representative may provide instructions changing the
investment of the Escrow Funds (subject to applicable minimum investment
requirements) by the furnishing of a Joint Written Direction to the Escrow
Agent; provided,
however,
that no
investment or reinvestment may be made except in the following:
(a) direct
obligations of the United States of America or obligations the principal of
and
the interest on which are unconditionally guaranteed by the United States of
America;
(b) certificates
of deposit issued by any bank, bank and trust company, or national banking
association (including Escrow Agent and its affiliates), which certificates
of
deposit are insured by the Federal Deposit Insurance Corporation or a similar
governmental agency;
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(c) any
institutional money market fund offered by Escrow Agent, including any
institutional money market fund managed by Escrow Agent or any of its
affiliates; or
(d) money
market accounts of any bank, trust company, or national banking association
offered by the Escrow Agent and its affiliates.
If
Escrow
Agent has not received a Joint Written Direction at any time that an investment
decision must be made, Escrow Agent shall invest the Escrow Funds, or such
portion thereof as to which no Joint Written Direction has been received, in
the
investment indicated on Schedule
A
hereto.
Each of the foregoing investments shall be made in the name of Escrow Agent.
No
investment shall be made in any instrument or security that has a maturity
of
greater than thirty (30) days. Notwithstanding anything to the contrary
contained herein, Escrow Agent may, without notice to Iconix or Sellers’
Representative, sell or liquidate any of the foregoing investments at any time
if the proceeds thereof are required for any disbursement of Escrow Funds
permitted or required hereunder. All investment earnings shall become part
of
the Escrow Funds and investment losses shall be charged against the Escrow
Funds. Escrow Agent shall not be liable or responsible for loss in the value
of
any investment made pursuant to this Escrow Agreement, or for any loss, cost,
tax, fee, penalty or other charge resulting from any investment, reinvestment,
sale or liquidation of any investment of the Escrow Funds. With respect to
any
Escrow Funds received by Escrow Agent after ten o’clock, a.m., New York, New
York time, Escrow Agent shall not be required to invest such funds or to effect
any investment instruction until the next Business Day.
8. Resignation
of Escrow Agent.
Escrow
Agent may resign and be discharged from the performance of its duties hereunder
at any time by giving sixty (60) days prior written notice to Iconix and
Sellers’ Representative specifying a date when such resignation shall take
effect. Upon any such notice of resignation, Iconix and Sellers’ Representative
jointly shall appoint a successor Escrow Agent hereunder prior to the effective
date of such resignation. The retiring Escrow Agent shall transmit all records
pertaining to the Escrow Funds and shall pay all Escrow Funds to the successor
Escrow Agent, after making copies of such records as the retiring Escrow Agent
deems advisable and after deduction and payment to the retiring Escrow Agent
of
all fees and expenses (including court costs and attorneys’ fees and expenses)
payable to or incurred by the retiring Escrow Agent in connection with the
performance of its duties and the exercise of its rights hereunder. After any
retiring Escrow Agent’s resignation, the provisions of this Escrow Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by
it
while it was Escrow Agent under this Escrow Agreement. Any corporation or
association into which the Escrow Agent may be merged or converted or with
which
it may be consolidated, or any corporation or association to which all or
substantially all of the escrow business of the Escrow Agent’s corporate trust
line of business may be transferred, shall be the Escrow Agent under this Escrow
Agreement without further act.
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9. Liability
of Escrow Agent.
The
Escrow Agent undertakes to perform only such duties as are expressly set forth
herein and no duties or obligations shall be implied. The Escrow Agent shall
have no liability under and no duty to inquire as to the provisions of any
agreement other than this Escrow Agreement. The Escrow Agent shall not be liable
for any action taken or omitted by it in good faith except to the extent that
a
court of competent jurisdiction determines that the Escrow Agent’s gross
negligence or willful misconduct was the cause of any loss to Iconix or Sellers.
Escrow Agent’s sole responsibility shall be for the safekeeping and disbursement
of the Escrow Funds in accordance with the terms of this Escrow Agreement.
Escrow Agent shall not be charged with knowledge or notice of any fact or
circumstance not specifically set forth herein. Escrow Agent may conclusively
rely upon any notice, instruction, request or other instrument, not only as
to
its due execution, validity and effectiveness, but also as to the truth and
accuracy of any information contained therein, which Escrow Agent shall
reasonably believe to be genuine and to have been signed or presented by the
person or parties purporting to sign the same. In no event shall Escrow Agent
be
liable for incidental, indirect, special, consequential or punitive damages
(including, but not limited to lost profits), even if the Escrow Agent has
been
advised of the likelihood of such loss or damage and regardless of the form
of
action. Escrow Agent shall not be obligated to take any legal action or commence
any proceeding in connection with the Escrow Funds, any account in which Escrow
Funds are deposited, this Escrow Agreement or the Underlying Agreement, or
to
appear in, prosecute or defend any such legal action or proceeding. Escrow
Agent
may consult legal counsel selected by it in the event of any dispute or question
as to the construction of any of the provisions hereof or of any other agreement
or of its duties hereunder, or relating to any dispute involving any party
hereto, and shall incur no liability and shall be fully indemnified from any
liability whatsoever in acting in accordance with the opinion or instruction
of
such counsel. Iconix and Sellers’ Representative (on behalf of the Sellers),
jointly and severally, shall promptly pay, upon demand, the reasonable fees
and
expenses of any such counsel. Escrow Agent shall have no liability or
responsibility to question or determine the accuracy or reasonableness of any
Claim Amount.
The
Escrow Agent is authorized, in its sole but reasonable discretion, to comply
with orders issued or process entered by any court with respect to the Escrow
Funds, without determination by the Escrow Agent of such court’s jurisdiction in
the matter. If any portion of the Escrow Funds is at any time attached,
garnished or levied upon under any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in case any order, judgment or decree
shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, the Escrow Agent is authorized, in its
sole
discretion, to conclusively rely upon and comply with any such order, writ,
judgment or decree which it is advised by legal counsel selected by it is
binding upon it without the need for appeal or other action; and if the Escrow
Agent complies with any such order, writ, judgment or decree, it shall not
be
liable to any of the parties hereto or to any other person or entity by reason
of such compliance even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.
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10. Indemnification
of Escrow Agent.
From
and at all times after the date of this Escrow Agreement, Iconix and Sellers’
Representative (on behalf of the Sellers), jointly and severally, shall, to
the
fullest extent permitted by law, defend, indemnify and hold harmless Escrow
Agent and each director, officer, employee, attorney, agent and affiliate of
Escrow Agent (collectively, the “Indemnified Parties”) against any and all
actions, claims (whether or not valid), losses, damages, liabilities, costs
and
expenses of any kind or nature whatsoever (including without limitation
reasonable attorneys’ fees, costs and expenses) incurred by or asserted against
any of the Indemnified Parties from and after the date hereof, whether direct,
or indirect, as a result of or arising from or in any way relating to any claim,
demand, suit, action or proceeding by any person, including without limitation
Iconix or Sellers, whether threatened or initiated, asserting a claim for any
legal or equitable remedy against any person under any statute or regulation,
including, but not limited to, any federal or state securities laws, or under
any common law or equitable cause or otherwise, arising from or in connection
with the performance or failure of performance of this Escrow Agreement or
any
transactions contemplated herein, whether or not any such Indemnified Party
is a
party to any such action, proceeding, suit or the target of any such inquiry
or
investigation; provided,
however,
that no
Indemnified Party shall have the right to be indemnified hereunder for any
liability finally determined by a court of competent jurisdiction, subject
to no
further appeal, to have resulted from the gross negligence or willful misconduct
of such Indemnified Party. Each Indemnified Party shall have the right to select
and employ a single counsel with respect to any action or claim brought or
asserted against it, and the reasonable fees and expenses of such counsel shall
be paid upon demand by each of Iconix and Sellers’ Representative (on behalf of
the Sellers), jointly and severally. The obligations of Iconix and Sellers’
Representative under this Section
10
shall
survive any termination of this Escrow Agreement and the resignation or removal
of Escrow Agent.
The
parties agree that neither the payment by Iconix or Sellers’ Representative of
any claim by Escrow Agent for indemnification hereunder nor the disbursement
of
any amounts to Escrow Agent from the Escrow Funds in respect of a claim by
Escrow Agent for indemnification shall impair, limit, modify, or affect, as
between Iconix and Sellers, the respective rights and obligations of Iconix,
on
the one hand, and Sellers, on the other hand, under the Underlying Agreement.
11. Fees
and Expenses of Escrow Agent.
Iconix
and Sellers shall compensate Escrow Agent for its services hereunder in
accordance with Schedule
A
attached
hereto and, in addition, shall reimburse Escrow Agent for all of its reasonable
out-of-pocket expenses, including attorneys’ fees and expenses, travel expenses,
telephone and facsimile transmission costs, postage (including express mail
and
overnight delivery charges), copying charges and the like. The additional
provisions and information set forth on Schedule
A
are
hereby incorporated by this reference, and form a part of this Escrow Agreement.
The compensation and reimbursement obligations set forth in this Section
11
shall be
payable by Iconix and Sellers’ Representative (on behalf of the Sellers’),
jointly and severally upon demand by Escrow Agent. The obligations of Iconix
and
Sellers’ Representative under this Section
11
shall
survive any termination of this Escrow Agreement and the resignation or removal
of Escrow Agent. Escrow Agent is authorized to, and may, disburse to itself
from
the Escrow Funds, from time to time, the amount of any compensation and
reimbursement of out-of-pocket expenses due and payable hereunder (including
any
amount to which Escrow Agent or any Indemnified Party is entitled to seek
indemnification pursuant to Section
10
hereof).
Escrow Agent shall notify Iconix and Sellers’ Representative of any disbursement
from the Escrow Funds to itself or any Indemnified Party in respect of any
compensation or reimbursement hereunder and shall furnish to Iconix and Sellers’
Representative copies of all related invoices and other statements. Sellers
and
Iconix hereby grant to Escrow Agent and the Indemnified Parties a security
interest in and lien upon the Escrow Funds to secure all obligations with
respect to the right to offset the amount of any compensation or reimbursement
due any of them hereunder (including any claim for indemnification pursuant
to
Section
10
hereof)
against the Escrow Funds. If for any reason funds in the Escrow Funds are
insufficient to cover such compensation and reimbursement, Iconix and Sellers
shall promptly pay such amounts to Escrow Agent or any Indemnified Party upon
receipt of an itemized invoice.
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12. Representations
and Warranties.
Each of
Iconix and Sellers’ Representative respectively makes the following
representations and warranties to Escrow Agent:
(a) As
applicable, it is duly organized, validly existing, and in good standing under
the laws of the state of its incorporation or organization, and has full power
and authority to execute and deliver this Escrow Agreement and to perform its
obligations hereunder.
(b) This
Escrow Agreement has been duly approved by all necessary action, including
any
necessary shareholder or membership approval, has been executed by its duly
authorized officers, and constitutes its valid and binding agreement enforceable
in accordance with its terms.
(c) As
applicable, the execution, delivery, and performance of this Escrow Agreement
is
in accordance with the Underlying Agreement and will not violate, conflict
with,
or cause a default under its articles of incorporation, certificate of
formation, articles of organization, bylaws, limited liability company
agreement, management agreement or other organizational document, as applicable,
any applicable law or regulation, any court order or administrative ruling
or
decree to which it is a party or any of its property is subject, or any
agreement, contract, indenture, or other binding arrangement, including without
limitation the Underlying Agreement, to which it is a party or any of its
property is subject.
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(d) No
party
other than the parties hereto has, or shall have, any lien, claim or security
interest in the Escrow Funds or any part thereof. No financing statement under
the Uniform Commercial Code is on file in any jurisdiction claiming a security
interest in or describing (whether specifically or generally) the Escrow Funds
or any part thereof.
(e) All
of
its representations and warranties contained herein are true and complete as
of
the date hereof and will be true and complete at the time of any disbursement
of
the Escrow Funds.
13. Identifying
Information.
Iconix
and Sellers’ Representative acknowledge that a portion of the identifying
information set forth on Schedule
A
is being
requested by the Escrow Agent in connection with the USA Patriot Act,
Pub.L.107-56 (the “Act”). To help the government fight the funding of terrorism
and money laundering activities, federal law requires all financial institutions
to obtain, verify, and record information that identifies each person who opens
an account. For a non-individual person such as a business entity, a charity,
a
trust, or other legal entity, the Escrow Agent may ask for documentation to
verify its formation and existence as a legal entity. The Escrow Agent may
also
ask to see financial statements, licenses, identification and authorization
documents from individuals claiming authority to represent the entity or other
relevant documentation. Iconix and Sellers agree to provide any additional
information requested by the Escrow Agent in connection with the Act or any
similar legislation or regulation to which Escrow Agent is subject, in a timely
manner. Iconix and Sellers each represent that all identifying information
set
forth on Schedule
A,
including without limitation its Taxpayer Identification Number assigned by
the
Internal Revenue Service or any other taxing authority, is true and complete
on
the date hereof and will be true and complete at the time of any disbursement
of
the Escrow Funds.
14. Consent
to Jurisdiction and Venue; Waiver of Jury Trial.
In the
event that any party hereto commences a lawsuit or other proceeding relating
to
or arising from this Escrow Agreement, the parties hereto agree that the
Southern District of New York shall have the sole and exclusive jurisdiction
over any such proceeding. If such court lacks federal subject matter
jurisdiction, the parties agree that the any state court within New York County,
City of New York, New York shall have sole and exclusive jurisdiction. Any
of
these courts shall be proper venue for any such lawsuit or judicial proceeding
and the parties hereto waive any objection to such venue. The parties hereto
consent to and agree to submit to the jurisdiction of any of the courts
specified herein and agree to accept service of process to vest personal
jurisdiction over them in any of these courts. THE PARTIES HERETO HEREBY WAIVE
A
TRIAL BY JURY OF ANY AND ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING BETWEEN
THEM OR THEIR SUCCESSORS OR ASSIGNS, UNDER OR IN CONNECTION WITH THIS ESCROW
AGREEMENT OR ANY OF ITS PROVISIONS OR ANY NEGOTIATIONS IN CONNECTION
XXXXXXXX.
00
00. Notice.
All
notices, approvals, consents, requests, and other communications hereunder
shall
be in writing and shall be deemed to have been given if delivered personally
to,
five (5) Business Days after it is sent by registered mail, return receipt
requested, postage prepaid to, or one (1) day after receipt is electronically
confirmed, if sent by facsimile to, the address or facsimile number set forth
on
Schedule A
hereto,
or to such other address as each party may designate for itself by like
notice.
16. Amendment
or Waiver.
This
Escrow Agreement may be changed, waived, discharged or terminated only by a
writing signed by Iconix and Sellers’ Representative and Escrow Agent. No delay
or omission by any party in exercising any right with respect hereto shall
operate as a waiver. A waiver on any one occasion shall not be construed as
a
bar to, or waiver of, any right or remedy on any future occasion.
17. Severability.
To the
extent any provision of this Escrow Agreement is prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Escrow Agreement.
18. Governing
Law.
This
Escrow Agreement shall be construed and interpreted in accordance with the
internal laws of the State of New York without giving effect to the conflict
of
laws principles thereof.
19. Entire
Agreement.
This
Escrow Agreement and the Underlying Agreement constitute the entire agreement
between the parties relating to the holding, investment and disbursement of
the
Escrow Funds and sets forth in their entirety the obligations and duties of
Escrow Agent with respect to the Escrow Funds.
20. Binding
Effect.
All of
the terms of this Escrow Agreement, as amended from time to time, shall be
binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of Iconix, Sellers and Escrow Agent.
21. Execution
in Counterparts.
This
Escrow Agreement and any Joint Written Direction may be executed in two or
more
counterparts, which when so executed shall constitute one and the same agreement
or direction.
12
22. Termination.
Upon the disbursement of all amounts in the Escrow Funds pursuant to Joint
Written Direction or the disbursement of all amounts in the Escrow Funds into
court pursuant to Section 5 or Section 8 hereof, this Escrow
Agreement shall terminate and Escrow Agent shall have no further obligation
or
liability whatsoever with respect to this Escrow Agreement or the Escrow
Funds.
23. Dealings.
The
Escrow Agent and any stockholder, director, member, manager, officer or employee
of the Escrow Agent may buy, sell, and deal in any of the securities of Iconix
or Sellers and become pecuniarily interested in any transaction in which Iconix
or Sellers may be interested, and contract and lend money to Iconix or Sellers
and otherwise act as fully and freely as though it were not Escrow Agent under
this Agreement. Nothing herein shall preclude the Escrow Agent from acting
in
any other capacity for Iconix or Sellers or for any other entity.
24. Certain
Tax Matters.
Each
of
Iconix and the Seller’s Representative agree to provide the Escrow Agent with
such information as the Escrow Agent may reasonably request in order for it
to
comply with any information reporting and withholding obligations imposed by
applicable laws or regulations, if any. Except to the extent otherwise required
pursuant to a “determination” (within the meaning of Section 1313(a) of the
Internal Revenue Code of 1986, as amended), the parties hereto will treat Iconix
as owning the Escrow Fund and any interest, dividends or other income accrued
thereon for U.S. federal income tax purposes.
25. Force
Majeure. The Escrow Agent shall not be responsible for delays or failures in
performance resulting from acts beyond its control, such as (but not limited
to)
acts of God, riots, wars, strikes, epidemics, governmental regulations
superimposed after the fact, fire, communication line failures, computer
viruses, power failures, earthquakes or other disasters.
13
IN
WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be
executed as of the date first above written.
|
By:
|
/s/
Xxxx Xxxx
|
|
Title:
|
President
and CEO
|
|
SELLERS’
REPRESENTATIVE
|
|
|
/s/
Xxxxxx X. Xxxxxx
|
|
|
U.S.
BANK NATIONAL ASSOCIATION,
|
|
|
as
Escrow Agent
|
|
|
/s/
Xxxxxx Xxxxx
|
|
|
Title:
|
Vice
President
|
14
SCHEDULE
A
1.
Escrow
Funds.
Escrow
Funds amount:
$24,000,000
Escrow
Funds wiring instructions:
U.S.
BANK NATIONAL ASSOCIATION
CORPORATE
TRUST
ST.
XXXX, MN
ABA
# 000000000
BNF:
U.S. BANK N.A.
A/C:
180121167365
FOR:
ICONIX/ XXXXXX ESCROW
ATTN:
XXXXXX XXXXXXXXX
TEL:
000-000-0000
FAX:
000-000-0000
2. Escrow
Agent Fees.
|
Acceptance
Fee:
|
$________________________
|
|
Annual
Escrow Fee:
|
$5,000____________________
|
|
Out-of-Pocket
Expenses:
|
$________________________
|
|
Transactional
Costs:
|
$________________________
|
|
Other
Fees/Attorney, etc.:
|
$________________________
|
|
TOTAL
|
$________________________
|
The
Acceptance Fee and the Annual Escrow Fee are payable upon execution of the
escrow documents. In the event the escrow is not funded, the Acceptance Fee
and
all related expenses, including attorneys’ fees and expenses, remain due and
payable, and if paid, will not be refunded. Annual fees cover a full year
in
advance, or any part thereof, and thus are not pro-rated in the year of
termination.
The
fees
quoted in this schedule apply to services ordinarily rendered in the
administration of an Escrow Account and are subject to reasonable adjustment
based on final review of documents, or when the Escrow Agent is called upon
to
undertake unusual duties or responsibilities, or as changes in law, procedures,
or the cost of doing business demand. Services in addition to and not
contemplated in this Agreement, including, but not limited to, document
amendments and revisions, non-standard cash and/or investment transactions,
calculations, notices and reports, and legal fees and expenses, will be billed
as extraordinary expenses.
SCHEDULE
A, continued
Unless
otherwise indicated, the above fees relate to the establishment of one escrow
account. Additional sub-accounts governed by the same Escrow Agreement may
incur
an additional charge. Transaction costs include charges for wire transfers,
checks, internal transfers and securities transactions.
|
3.
|
Taxpayer
Identification Numbers.
|
Iconix:________________________
Sellers:_______________________
________________________
________________________
________________________
________________________
________________________
________________________
|
4.
|
[Reserved.]
|
|
5.
|
Investment
Instructions
|
|
U.S.
Bank Money Market Deposit-CUSIP #
0XXXX00X0
|
|
[List
here. If selecting a money market fund, include fund name, fund
number and
class, describe any additional transaction fees applicable to the
investment and, if applicable, include the following statement
relating to
sweep fees:
|
The
minimum fee for sweeping funds into or out of the fund selected is an annualized
amount of ________ of _____% (_____ basis points) and is deducted from the
interest posted to the account.]
A-2
SCHEDULE
A, continued
6.
Notice
Addresses.
Principal
Place of Business,
if
different
If
to
Iconix at:
0000
Xxxxxxxx, 0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxx Xxxx, CEO
Facsimile: (000)
000-0000
If
to
Sellers’ Representative at:
Sellers’
Representative
c/o
Jubilee Limited Partnership
0000
Xxxxx Xxxx
Xxxxxxxx,
Xxxx 00000
Attention:
Xxx
Xxxxxx
Xxx Xxxxxxxx
Facsimile:
(000)
000-0000
If
to the
Escrow
Agent
at: U.S.
Bank
National Association, as Escrow Agent
000
Xxxx
Xxxxxx, 00xx
xxxxx
Xxx
Xxxx,
XX 00000
ATTENTION:
Corporate Trust Services
Facsimile:
212-509-3384
A-3
SCHEDULE
B
|
Seller
|
Contact
|
Address
|
Ownership
Percentage
|
|
Jubilee
Limited Partnership
|
Xxx
Xxxxxxxxxxxxx
Xxx
Xxxxxx
|
0000
Xxxxx Xxxx
Xxxxxxxx,
XX 00000
|
16.670%
|
|
Xxxxxx
Xxxxxxxx Retail Partners, LLC
|
Xxxxx
Xxxxx
|
00
Xxxxx Xxxxxx
Xxxxxx,
XX 00000
|
13.665%
|
|
Tiger
PTX IP, LLC
|
Xxxx
Xxxxx
Xxx
Xxxx
|
000
Xxxxx Xxxxxxxx Xxxx.
Xxx.
000
Xxxxxxxx
Xxxxxxx, XX 00000
|
13.665%
|
|
Franco
44 PT, LLC
|
Xxxxx
Xxxxxx
|
000
Xxxx 00xx Xxxxxx
Xxx
Xxxx, XX 00000
|
17.000%
|
|
|
|||
|
High
Street Holdings, LLC
|
Xxxxxx
Xxxxxx
|
000
Xxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
|
14.000%
|
|
BFG
PTX Group, LLC
|
Xxxxx
Xxxxxxxxx
|
0000
Xxxxxxxx Xxxx., Xxx. 000
Xxxxx
Xxxx XX 00000
|
5.000%
|
|
CCA
Towels, LLC
|
Xxxxxxx
Xxxxx
|
0000
Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
|
16.000%
|
|
Solwerd
Enterprises, LLC
|
Xxx
Xxxxxxxx
|
0000
Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
|
1.500%
|
|
Mazel
D&K, LLC
|
Xxxxxx
Xxxxxxx
|
00000
Xxxxxx Xxxx
Xxxxx,
XX 00000
|
2.500%
|
|
100.00%
|
B-1
