AGREEMENT
Exhibit
10.1
EXECUTION
VERISON
AGREEMENT
AGREEMENT,
dated as of the 2nd day of June 2006, by and among Iconix Brand Group, Inc.,
f/k/a/ Candie’s, Inc., a Delaware corporation (the “Company”), UCC Consulting
Corp, a New York corporation (“Consulting”), D’Loren Realty LLC d/b/a Content
Holdings, a New York limited liability company (“Content”), Xxxxxx X’Xxxxx, an
individual (“D’Loren”) and Xxxxx Xxxxx, an individual (“Haran” and along with
Consulting, Content and D’Loren, the “Consulting Parties”).
W
I T N E S S E T H:
WHEREAS,
the Company and Consulting entered into an exclusive investment banking
agreement dated June 7, 2005, along with a mutual confidentiality and
non-disclosure agreement contemplated thereby (collectively the “Advisory
Agreement”); and
WHEREAS,
pursuant to the Advisory Agreement, the Company engaged Consulting as the
exclusive advisor to the Company for any proposed acquisition transactions
in
the apparel or footwear industries (“Acquisitions”) or debt financings related
to any Acquisition (“Financings”) undertaken by the Company for the term of the
Advisory Agreement; and
WHEREAS,
during the term of the Advisory Agreement, the Company has, with the advice
and
assistance of Consulting, completed Acquisitions of or relating to the Xxx
Xxxxx, Rampage and Xxxx brands (the “Completed Acquisitions”); and
WHEREAS,
as a result of the Completed Acquisitions (i) Consulting Parties’ rights to
purchase One Million (1,000,000) shares of the Company’s common stock, par value
$.001 per share (the “Warrant Shares”), pursuant to the Stock Purchase Warrant
dated June 7, 2005 (the “June 0000 Xxxxxxx”) have fully vested in accordance
with the terms of the Advisory Agreement and the June 2005 Warrant and (ii)
the
Company has registered the Warrant Shares for resale pursuant to that Amendment
No. 1 to the Company’s Registration Statement on Form S-3, which Amendment No. 1
was filed with the Securities and Exchange Commission on October 11, 2005;
and
WHEREAS,
the Company, Consulting and the Consulting Parties wish to terminate the
Advisory Agreement and provide for certain consideration related to acquisition
services for the Mossimo Acquisition (as defined in paragraph 2 hereof), in
consideration of and conditioned upon, the terms of this Agreement (this
“Agreement”) and the equity-related instruments contemplated
hereby.
NOW,
THEREFORE, in consideration of the foregoing premises and the respective
representations, warranties, covenants and agreements hereinafter set forth,
the
parties hereto hereby agree as follows:
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1.
Termination of the Advisory Agreement.
Upon
the execution and delivery of this Agreement, the Advisory Agreement shall
be
terminated in its entirety and be of no further force or effect, except for
the
continuing obligations with respect to the Advisory Agreement described in
Sections 2(c) and 5(c) below.
2.
Consideration for Consultant’s Services related to Mossimo Acquisition.
(a)
The
Company shall pay to Consulting an acquisition related services fee (the
“Acquisition Fee”) of Two Million Five Hundred Thousand Dollars ($2,500,000),
which shall be payable upon the completion of the acquisition by the Company
(or
any of its affiliates) of Mossimo, Inc. (or its affiliates) (the “Mossimo
Acquisition”). The payment of the Acquisition Fee shall be made on the closing
date of the Mossimo Acquisition, at the option of the Company, either (i) in
immediately available funds with respect to the entire Acquisition Fee or (ii)
in immediately available funds with respect to an amount of not less than Two
Million Dollars ($2,000,000) with the balance thereof, plus interest accrued
on
such balance from the closing date of the Mossimo Acquisition, at the rate
of
six (6%) percent per annum, payable on October 31, 2006, as evidenced by a
promissory note, in the form of note attached hereto as Exhibit
A
(the
“Note”). The parties agree and acknowledge that Consulting has heretofore fully
discharged its obligations under the Advisory Agreement with respect to Mossimo,
Inc.
(b)
Upon
execution and delivery of this Agreement and in consideration for the above
referenced services, the Company shall also issue and deliver to Consulting’
designees listed on Schedule A hereto warrants to purchase Two Hundred Fifty
Thousand (250,000) shares of the Company’s common stock, $.001 par value per
share (the “New Warrant Shares”) at an exercise price equal to the average
closing price of the Company’s Common Stock on the Nasdaq National Market during
the five (5) trading days ending prior to the date hereof (the “New Warrants”).
The New Warrants shall be in form and substance identical to the June 2005
Warrants, except that the New Warrants shall not be transferable and shall
become fully vested and exercisable upon the consummation of the Mossimo
Acquisition.
(c)
Nothing in this Agreement shall be construed to effect in any way (i)
Consulting’s rights to indemnification under Section 7 of the Advisory Agreement
or (ii) subject to Sections 2(d) and 4(a) hereof, the parties’ agreement to
maintain confidentiality under Section 7 of the Advisory Agreement. In addition,
nothing in this Agreement shall be construed to affect any ongoing obligations
of the Company to Consulting Parties or any of its officers, directors,
affiliates, permitted transferees, successors or assigns with respect to the
registration rights contained in the June 2005 Warrants or the New
Warrants.
(d)
Nothing herein shall be construed to require any additional services to be
performed by Consulting or any of its officers, directors or affiliates, or
to
impose any limitations or restrictions on the future business activities of
Consulting or any of its officers, directors, successors, assigns or affiliates,
under the Advisory Agreement or otherwise.
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3.
Representations and Warranties.
(a)
Representations
and Warranties of the Company.
The
Company hereby represents and warrants that (i) this Agreement, the Note and
the
New Warrants have been duly authorized, executed and delivered by the Company
and are the valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, (ii) the Company has
not
assigned any claim of any kind against any of the Consulting Parties to any
third party, (iii) no consent of any third party is required for the
execution, delivery and performance of this Agreement by the Company and (iv)
a
sufficient number of New Warrant Shares have been reserved for issuance upon
the
conversion of the New Warrants.
(b)
Representations
and Warranties of Consulting.
Consulting hereby represents and warrants that: (i) this Agreement has been
duly authorized, executed and delivered by Consulting and is the valid and
binding obligation of Consulting, enforceable against Consulting in accordance
with its terms, (ii) Consulting has not assigned any claim of any kind against
the Company to any third party and (iii) no consent of any third party is
required for the execution, delivery and performance of this Agreement by
Consulting.
4.
Covenants.
(a)
Covenants
of the Company.
The
Company hereby acknowledges and agrees that Consulting has, from time to time
in
the performance of its duties under the Advisory Agreement, introduced the
Company to potential Acquisition targets (the “Targets”) and to potential
sources of capital for proposed Financings. The Company acknowledges that
Consulting is, and during the term of the Advisory Agreement has been, engaged
in the business of financial advising and consulting and that in such business
it has developed relationships with a myriad of potential Targets and potential
sources of Financings. The Company shall in no way interfere with nor take
any
action or omit to take any action which would adversely affect any existing
or
potential business relationships of Consulting or to disparage the business
reputation of Consulting or any of its officers, directors, employees or
affiliates.
Furthermore,
the Company shall use its best efforts to take, or cause to be taken, all
actions requested by Consulting or any of its permitted transferees, successors
or assigns to secure the benefits intended to be conveyed by this Agreement,
the
Warrants and the New Warrants, including without limitation, the rights, if
any,
to assign and transfer any June 2005 Warrants, New Warrant, Warrant Shares
or
New Warrant Shares or registration rights with respect thereto.
(b) Covenants
of Consulting.
Consulting shall in no way take any action that could reasonably be construed
to
disparage the business reputation of the Company or any of its officers,
directors, employees or affiliates, nor will it solicit any current or former
employees of the Company or its affiliates.
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5.
Releases.
(a)
Releases
by Consulting.
Effective as of the date of this Agreement, except to the extent otherwise
set
forth in Section 5(c) below, Consulting for itself and for each of its past
and
present agents, officers, directors, employees, attorneys, shareholders,
parents, subsidiaries, and each of their respective legal or business entities,
insurers, successors and assigns, (the “Consulting Releasing Parties”) hereby
jointly and severally, voluntarily release and forever discharges the Company
and each of its affiliates, parents, subsidiaries, officers, directors,
stockholders, employees, agents, attorneys, accountants and other advisors,
and
the heirs, executors and administrators, if applicable, and the predecessors,
successors or assigns of each of the foregoing (collectively the “Company
Released Parties”) from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims, and demands of any nature whatsoever (“Claims”), in
law or equity, which against any of the Company Released Parties, any or all
of
the Consulting Releasing Parties ever had, now have or hereafter can, shall
or
may have, for, upon, or by reason of any matter, cause or thing whatsoever
from
the beginning of the world to the date hereof arising out of or relating to
the
Advisory Agreement or its termination.
(b)
Release
by the Company.
Effective as of the date of this Agreement, except to the extent otherwise
set
forth in Section 5(c) below, the Company for itself and for each of its past
and
present agents, officers, directors, employees, attorneys, shareholders,
parents, subsidiaries, and each of their respective legal or business entities,
insurers, successors and assigns, (the “Company Releasing Parties”) hereby
jointly and severally, voluntarily release and forever discharges the Consulting
Parties and each of its affiliates, parents, subsidiaries, officers, directors,
stockholders, employees, agents, attorneys, accountants and other advisors,
and
the heirs, executors and administrators, if applicable, and the predecessors,
successors and assigns of Consulting and each of the foregoing (collectively
the
“Consulting Released Parties”) from all Claims in law or equity, which against
any of the Consulting Released Parties, any or all of the Company Releasing
Parties ever had, now have or hereafter can, shall or may have, for, upon,
or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the date hereof arising out of or relating to the Advisory Agreement or
its
termination.
(c)
Exceptions,
Indemnification.
Notwithstanding anything contained in this Section 5 to the contrary, this
Section 5 shall not apply to any Claims arising out of breach of the obligations
contained in this Agreement (including without limitation breaches of those
provisions of the Advisory Agreement that survive pursuant to Section 2(c)
above
as well as obligations under the June 2005 Warrants and the New Warrants) or
fraud. Each of the Company and Consulting hereby agree to indemnify and hold
the
other harmless from any and all loses, liabilities, expenses and costs
(including reasonable attorneys’ fees and expenses) arising out of, resulting
from, or relating to (i) any breach of any representation or warranty made
herein by such indemnifying party or (ii) any breach of any covenant or
agreement made by such indemnifying party herein.
(d)
Waiver
and Bar.
In
providing the release included in this Section 5, each of the parties
acknowledges and intends (on behalf of itself and all other persons on whose
behalf the release is being given) that it shall be effective as a bar to each
and every one of the Claims mentioned in or implied by the foregoing releases.
The parties expressly consent that the releases shall be given full force and
effect according to each and all of their express terms and provisions,
including those relating to unknown and unsuspected Claims (notwithstanding
any
state statute that expressly limits the effectiveness of a general release
of
unknown, unsuspected and unanticipated Claims, if any), as well as those
relating to any other Claims mentioned in or implied by the foregoing releases.
The parties acknowledge and agree that this waiver is an essential and material
term of the releases and that without such waiver the parties would not have
agreed to the terms of this Agreement. The parties further agree that in the
event a claim is brought in violation of the foregoing releases, they shall
serve as a complete defense to such Claims.
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6.
Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered or mailed if delivered personally or mailed by registered or certified
mail, postage prepaid, return receipt requested, to the parties at their
respective addresses set forth below:
If
to the
Company:
0000
Xxxxxxxx, 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxx Xxxx, CEO
With
a
copy to:
Blank
Rome LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxxx, Esq.
Fax:
(000) 000-0000
If
to
Consulting to:
XXX
Xxxxxxx Xxxx.
0000
Xxxxxx of the Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx X. X'Xxxxx
Fax:
000-000-0000
with
a
copy to:
Xxxxxxx
Krooks LLP
000
Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxxx X. Xxxxxxx, Esq.
Fax:
000-000-0000
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7.
Press Release.
None of
the parties hereto will make any voluntary public statements or press releases
without showing the other such proposed release prior to it being publicized,
and obtaining the other’s approval.
8.
Entire Agreement.
This
Agreement constitutes the entire agreement of the parties hereto with respect
to
the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
9.
Choice of Law/Governing Law.
This
Agreement shall be construed and enforced in accordance with the internal laws
of the State of New York without reference to its conflicts of laws
provisions.
10.
Further Assurances.
The
Parties hereto agree to, at their own expense, execute and deliver such other
instruments of conveyance, transfer or termination and take such other actions
as any other party may reasonably request, including obtaining the signatures
of
parties not Party to this Agreement, in order to more effective consummate
the
transactions contemplated hereby.
11.
Amendment. This
Agreement may only be modified by a written instrument, which is executed by
each of the parties hereto.
12.
Severability.
This
Agreement shall be deemed severable, and the invalidity or unenforceability
of
this Agreement or any other term or condition hereof shall not affect the
validity or enforceability of this Agreement or of any other term or provision
hereof. Furthermore, in lieu of any such invalid or unenforceable term or
provision, the parties hereto agree that there shall be added as a part of
this
Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
13.
Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any
of
the terms of this Agreement.
14.
Binding Effect; Benefit.
This
Agreement shall inure to the benefit of, and be binding upon, the parties hereto
and their respective heirs, legal representatives, successors and assigns.
15.
Counterparts and Facsimile.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same instrument. For purposes of this Agreement signatures received by facsimile
shall have the same force and effect as original signatures.
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IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto as of the date first above written.
By:
/s/
Xxxx
Xxxx
Xxxx
Xxxx
President
and CEO
UCC
CONSULTING CORP.
By:
/s/
Xxxxxx X.
X’Xxxxx
Xxxxxx
X. X’Xxxxx
President
and CEO
CONTENT
HOLDINGS
By:
/s/
Xxxxxx X.
X’Xxxxx
Xxxxxx
X. X’Xxxxx
Operating
Manager
/s/
Xxxxxx
X’Xxxxx
Xxxxxx
X’Xxxxx
/s/
Xxxxx
Xxxxx
Xxxxx
Xxxxx
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EXHIBIT
A
- FORM OF NOTE
NON-NEGOTIABLE
PROMISSORY NOTE
|
$_______________
|
______,
2006
|
FOR
VALUE RECEIVED, the
undersigned, ICONIX
BRAND GROUP., INC., a
Delaware corporation (the “Maker”)
promises to pay UCC Consulting Corp. (the “Payee”),
the
principal sum of [Five Hundred Thousand]1
DOLLARS
($_________) (the “Principal”),
together with interest on the Principal as provided below, in lawful money
of
the United States of America, payable pursuant to the terms and conditions
provided for herein.
This
promissory note (this “Note”)
is
being issued by Maker to secure Maker’s obligations to make certain payments
under the Agreement dated June 2, 2006 among the Maker, the Payee, D’Loren
Realty LLC d/b/a Content Holdings, a New York limited liability company,
Xxxxxx
X’Xxxxx, an individual and Xxxxx Xxxxx, an individual (the “Agreement”).
1. Payment
Terms.
Subject
to Section 4 hereof, the Principal and accrued interest thereon are due and
payable on October 31, 2006 (the “Maturity Date”). The payment of
Principal and interest under this Note shall be made to Payee in immediately
available funds, at such address or location as Payee shall designate.
Maker may at any time, without penalty, premium or charge of any kind, prepay
in
whole or in part the indebtedness evidenced by this Note. Any such prepayments
shall be applied first to interest accrued through the date of prepayment
and
then to Principal.
2. Interest.
Interest shall accrue on the unpaid Principal balance at the rate of six
percent
(6%) per annum until this Note is paid in full and shall be paid on the Maturity
Date or earlier in the event of an optional prepayment or mandatory prepayment
as provided herein; provided, however, that from the date of any Default
(as
defined in Section 3, below) to and including the date the obligations of
Maker
under this Note are paid in full, all Principal, accrued but unpaid interest,
and any other amounts that are or subsequently become due under this Note
shall
bear interest at the rate of fourteen percent (14%) per annum or, if such
rate
be at any time above the legal rate of interest for obligations in the nature
of
those under this Note, at the maximum allowable legal rate of
interest.
3. Events
of Default.
Maker shall be in default under this Note upon the occurrence of any of the
following events of default (each a “Default”):
(a)
Maker
fails to pay the Principal and/or interest under this Note, when due; or
1
Actual
principal amount will be $2.5mm less cash paid at Mossimo
closing
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(b)
Maker
becomes insolvent or bankrupt; or if Maker suffers a receiver or trustee
for it
or substantially all of its assets to be appointed and, if appointed without
its
consent, not discharged within sixty (60) days; or if Maker makes an assignment
for the benefit of its creditors; or
(c)
Maker
breaches any of its obligations under the Agreement; or
(d)
Maker
enters into any agreement for the (i) sale of all or substantially all of
its
assets or the assets of Mossimo, Inc. (or such subsidiary or affiliate of
Maker
utilized to acquire Mossimo, Inc., collectively “Mossimo”), (ii) any merger,
consolidation or similar transaction in which Maker is not the surviving
entity
or following the consummation of which the shareholders of Maker do not hold
a
majority of the equity interests in the surviving or resulting entity or
(iii)
any merger, consolidation or similar transaction in which Mossimo is not
the
surviving entity or following the consummation of which Maker does not hold
a
majority of the equity interests in the surviving or resulting
entity.
4. Remedies
Upon Default.
Upon the occurrence of any Default, the Principal balance hereof together
with
all accrued interest shall become immediately due and payable without notice
or
demand. In addition, upon the occurrence of any Default, Maker shall pay
all of Payee’s reasonable costs of collection, including actual and reasonable
attorneys’ fees and disbursements.
5. Notices.
All notices, requests, demands and other communications required or permitted
under this Note shall be in writing and shall be deemed to have been duly
given,
made and received the same day when personally delivered or sent by telecopy
with receipt confirmation, the next business day when delivered by overnight
courier, or three (3) business days after mailing, if sent in the United
States by registered or certified mail, postage prepaid, return receipt
requested, addressed as set forth below:
If
to Maker:
0000
Xxxxxxxx, 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxx Xxxx, CEO
With
a copy to:
Blank
Rome LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxxx, Esq.
Fax:
(000) 000-0000
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If
to Payee:
UCC
Consulting Corp.
0000
Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx X. X'Xxxxx
Fax:
000-000-0000
with
a copy to:
Xxxxxxx
Krooks LLP
000
Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxxx X. Xxxxxxx, Esq.
Fax:
000-000-0000
or
at
such other address or addresses as either Payee or Maker may from time to
time
designate by notice to the other party, in writing.
6. Waivers
of Presentment, Etc.
MAKER EXPRESSLY WAIVES PRESENTMENT, PROTEST, DEMAND, NOTICE OF DISHONOR,
NOTICE
OF NON-PAYMENT, NOTICE OF MATURITY, NOTICE OF PROTEST, PRESENTMENT FOR THE
PURPOSE OF ACCELERATING MATURITY, AND DILIGENCE IN COLLECTION.
7. Waivers
and Amendments: Non-Contractual Remedies: Preservation of
Remedies.
This
Note may be amended, superseded, canceled, renewed or extended and the terms
hereof may be waived, only by a written instrument signed by Payee and Maker
or,
in the case of a waiver, by Payee. The failure of Payee to insist, in any
one or
more instances, upon performance of the terms or conditions of this Note
shall
not be construed as a waiver or relinquishment of any right granted hereunder
or
of the future performance of any such term, covenant or condition. No waiver
on
the part of Payee of any right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, shall preclude any further
exercise thereof or the exercise of any other such right, power or privilege.
The rights and remedies herein provided are cumulative and are not exclusive
of
any rights or remedies that Payee may otherwise have at law or in
equity.
8. Governing
Law.
This
Note shall be governed by and construed and enforced in accordance with the
laws
of the State of New York. The parties hereby: (i) in any legal proceeding
brought in connection with this Note hereby, irrevocably submit to the
nonexclusive in personam
jurisdiction of (A) any state or Federal court of competent jurisdiction
sitting
in the State of New York, County of New York or (B) in the event that any
party
is a defendant in any legal proceeding in which it seeks to join the other
as a
third party defendant, then, any state or Federal court in which such proceeding
has properly been brought, and consent to suit therein; and (ii) waive any
objection they or it may now or hereafter have to the venue of such proceeding
in any such court or that such proceeding was brought in an inconvenient
court.
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9. Headings.
The headings in this Note are for reference only and shall not affect the
interpretation of this Note.
10. Severability.
Whenever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note is held to be prohibited by or invalid under applicable law,
such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Note.
11. Mutilated,
Lost Stolen or Destroyed Note.
In case this Note shall be mutilated, lost, stolen or destroyed, Maker shall
issue and deliver, in exchange and substitution for and upon cancellation
of the
mutilated Note, or in lieu of and substitution for this Note lost, stolen
or
destroyed, a new Note of like tenor, but only upon receipt of evidence
satisfactory to Maker of such loss, theft, or destruction of such Note.
12. Miscellaneous.
(a)
This Note shall bind the Maker and its respective successors, and the benefits
hereof shall inure to the benefit of Payee and its successors and assigns.
Neither Maker nor Payee may assign or transfer this Note to any third
party.
(b)
All references herein to “Maker” and “Payee” shall be deemed to apply to the
Maker and Payee, and their respective successors and permitted
assigns.
(c)
This
Note and any other documents delivered in connection herewith and the rights
and
obligations of the parties hereto and thereto shall for all purposes be governed
by and construed and enforced in accordance with the substantive law of the
State of New York without giving effect to its conflicts of law
principles.
(d)
Any
individual signing this Note on behalf of an entity represents and warrants
to
the Payee that such individual has the right and authority to so execute
this
Note, and that this Note will be enforceable against such entity in accordance
with its terms.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF,
this
Note has been executed and delivered on the date first written
above.
Schedule
A - Designees of New Warrants
|
Content
Holdings
|
225,000
shares
|
|
Xxxxx
Xxxxx
|
25,000
shares
|
