Iconix Brand Group, Inc. (NASDAQ:ICON) Files An 8-K Entry into a Material Definitive Agreement
On August2, 2017 (the “Closing Date”), as further discussed under Item 1.01 below,
|Item 1.01||Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.|
The information included in Item 1.01 above is incorporated by reference in this Item 1.01.
As disclosed above, on the Closing Date, the Company entered into a credit agreement (the “Credit Agreement”), among
to the terms of the Credit Agreement, the net proceeds of the Senior Secured Term Loan must be used to repay the Companys 1.50% convertible senior subordinated notes due
On the Closing Date the net cash proceeds of the Senior Secured Term Loan were deposited into an escrow account. Effective as of the Closing Date, the funds in the escrow account may be released to IBG Borrower from time to time, subject to the satisfaction of customary conditions precedent upon each withdrawal, to finance repurchases of, or at the maturity date thereof to repay in full, the 2018 Convertible Notes. The Company may determine to make these repurchases in the open market or privately negotiated transactions, depending on prevailing market conditions and other factors.
Borrowings under the Senior Secured Term Loan will amortize quarterly at 0.5% of principal, commencing on September30, 2017. IBG Borrower is obligated to make mandatory prepayments annually from excess cash flow and periodically from net proceeds of certain asset dispositions and from net proceeds of certain indebtedness, if incurred (in each case, subject to certain exceptions and limitations provided for in the Credit Agreement).
IBG Borrowers obligations under the Senior Secured Term Loan are guaranteed jointly and severally by the Company and the other Guarantors to a separate facility guaranty. IBG Borrowers and the Guarantors obligations under the Senior Secured Term Loan are secured by first priority liens on and security interests in substantially all assets of IBG Borrower, the Company and the other Guarantors and a pledge of substantially all equity interests of the Companys subsidiaries (subject to certain limits including with respect to foreign subsidiaries) owned by the Company, IBG Borrower or any other Guarantor. However, the security interests will not cover certain intellectual property and licenses owned, directly or indirectly by the Companys subsidiary Iconix Luxembourg Holdings SÀRL or those subject to the Companys securitization facility. In addition, the pledges exclude certain equity interests of
In connection with the Credit Agreement, IBG Borrower, the Company and the other Guarantors have made customary representations and warranties and have agreed to adhere to certain customary affirmative covenants. Additionally, the Credit Agreement mandates that IBG Borrower, the Company and the other Guarantors enter into account control agreements on certain deposit accounts, maintain and allow appraisals of their intellectual property, perform under the terms of certain licenses and other agreements scheduled in the Credit Agreement and report significant changes to or terminations of licenses generating guaranteed minimum royalties of more than
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In addition, the Credit Agreement contains customary negative covenants and events of default. The Credit Agreement limits the ability of IBG Borrower, the Company and the other Guarantors, with respect to themselves, their subsidiaries and certain joint ventures, from, among other things, incurring and prepaying certain indebtedness, granting liens on certain assets, consummating certain types of acquisitions, making fundamental changes (including mergers and consolidations), engaging in substantially different lines of business than those in which they are currently engaged, making restricted payments and amending or terminating certain licenses scheduled in the Credit Agreement. Such restrictions, failure to comply with which may result in an event of default under the terms of the Credit Agreement, are subject to certain customary and specifically negotiated exceptions, as set forth in the Credit Agreement.
If an event of default occurs, in addition to the Interest Rate increasing by an additional 3%per annum Cortland shall, at the request of Lenders holding more than 50% of the then-outstanding principal of the Senior Secured Term Loan, declare payable all unpaid principal and accrued interest and take action to enforce payment in favor of the Lenders. An event of default includes, among other events: a change of control by which a person or group becomes the beneficial owner of 35% of the voting stock of the Company or IBG Borrower; the failure to extend of the Series 2012-1 ClassA-1 Senior Notes Renewal Date (as defined in the Credit Agreement); the failure of any of
This brief description of the material terms of the Credit Agreement is qualified in its entirety by reference to the provisions of the Credit Agreement attached to this report as Exhibit 10.1, which is incorporated by reference herein.
|Item 1.01||Regulation FD Disclosure.|
On August2, 2017, the Company issued a press release announcing the consummation of the transactions described in Items 1.01 and 2.03, a copy of which is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 1.01, including Exhibit 99.1, is furnished and shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, regardless of any general incorporation language in those filings. In addition, the press release contains statements intended as “forward-looking statements” which are subject to the cautionary statements about forward-looking statements set forth in such press release.
|Item 1.01||Financial Statements and Exhibits.|
|10.1||Credit Agreement, dated as of August2, 2017, among
|10.2||Facility Guaranty, dated as of August2, 2017, among
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|10.3||Security Agreement, dated as of August2, 2017, among
|99.1||Press release titled “Iconix Brand Group Strengthens Balance Sheet,” dated
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