Item
2.01 Completion of Acquisition or Disposition of Assets.
On
December 17, 2007, Iconix Brand Group, Inc., a Delaware corporation (the
“Registrant”), completed its acquisition of certain of the assets and rights
related to the Seller’s (as defined below) business of designing, marketing,
licensing and/or managing the Starter® brand of marks and intellectual property
and related names (the “Starter Assets”) of Exeter Brands Group LLC, an Oregon
limited liability company (the “Seller”), and NIKE, Inc., an Oregon corporation
(“Parent”) pursuant to an Asset Purchase Agreement (the “Purchase Agreement”)
dated November 15, 2007 by and among the Registrant, Seller and Parent.
In
accordance with the terms of the Purchase Agreement, the Registrant (i) paid
to
the Seller $60,000,000 in cash and (ii) assumed certain liabilities of the
Seller related to the Starter Assets.
In
accordance with the terms of the Purchase Agreement, the Seller delivered
or
caused to be delivered all right, title and interest in the Starter Assets
to
Studio IP Holdings LLC, a Delaware limited liability company and a subsidiary
of
the Registrant (“Studio Holdings”), and Studio Holdings entered into a
transitional license agreement with Seller in which it granted Seller the
non-exclusive right to use the Starter Assets in connection with the
manufacture, marketing, distribution, promotion, advertisement and sale of
men’s
and boy’s apparel. The closing of this transaction occurred following the early
termination of the statutory waiting period required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
The
description of the Purchase Agreement does not purport to be complete and
is
qualified in its entirety by reference to the full text of the Purchase
Agreement, which is filed as an exhibit to this Report. The Purchase Agreement
has been included to provide investors and security holders with information
regarding its terms. It is not intended to provide any other factual information
about the Registrant or the other parties thereto. The Purchase Agreement
contains representations and warranties the parties thereto made to, and
solely
for the benefit of, the other parties thereto. Accordingly, investors and
security holders should not rely on the representations and warranties as
characterizations of the actual state of facts, since they were only made
as of
the date of such agreement. In addition, the Purchase Agreement is modified
by
the underlying disclosure schedules. Moreover, information concerning the
subject matter of the representations and warranties may change after the
date
of such agreement, which subsequent information may or may not be fully
reflected in the Registrant's public disclosures.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
In
order
to finance the cash portion of the purchase price of the Starter Assets,
on
December 17, 2007, the Registrant borrowed $63,157,894.74 pursuant to that
certain Amended and Restated Credit Agreement, dated as of May 2, 2007 (the
“Credit Facility”), among the Registrant, the lenders parties thereto, Lehman
Brothers Inc., as arranger, and Lehman Commercial Paper Inc., as administrative
agent. At the time of such additional borrowing, there was already outstanding
under the Credit Facility a term loan in the principal amount equal to
$211,437,500. The aggregate principal amount of all loans currently outstanding
under the Credit Facility will mature on April 30, 2013 (the “Maturity Date”).
The principal will be repayable in 21 equal quarterly installments in annual
aggregate amounts equal to 1.00% of the aggregate principal amount of the
loans
outstanding, after giving effect to the additional borrowing (with any remaining
unpaid principal balance to be due on the Maturity Date). The Credit Facility
may be prepaid at any time in whole or in part at the option of the Registrant,
without premium or penalty. All amounts outstanding under the Credit Facility
will bear interest, at the Registrant’s option, at the Eurodollar Rate or the
Base Rate (i.e., prime rate), plus an applicable margin of 2.25% and 1.25%,
respectively.