Joe’s Jeans to Buy Hudson Clothing for $97.6 Mln

Joe’s Jeans has agreed to buy Hudson Clothing Holdings, a portfolio company of Fireman Capital Partners, for about $97.6 million in cash and convertible notes. The deal is expected to close on or about Aug. 31. Los Angeles-based Hudson is a designer and marketer of women’s and men`s premium branded denim apparel. Threadstone Advisors advised Joe’s Jeans while Lazard Middle Market provided financial advice to Hudson Clothing.

PRESS RELEASE

LOS ANGELES–(Business Wire)–
Joe`s Jeans Inc. (NASDAQ: JOEZ) (“Joe`s Jeans”) and Hudson Clothing Holdings,
Inc., (“Hudson”), today announced that they have signed a definitive stock
purchase agreement under which Joe`s Jeans will acquire privately-held Hudson.

The total purchase price for Hudson will be approximately $97.6 million, subject
to certain adjustments, and will be payable in cash and convertible notes issued
by Joe`s Jeans.

Marc Crossman, President and Chief Executive Officer of Joe`s Jeans, stated, “We
are extremely excited about joining forces with Hudson Jeans. Once the
acquisition is complete, we expect to nearly double the size of our business,
meaningfully increase our international and e-commerce penetration, and enhance
our overall prospects for growth. Paramount to the combination is preserving the
DNA of each existing company by retaining its employees and separate facilities.
This deal represents a landmark event in the history of our company and we are
committed to capitalizing on the many opportunities this transformative
transaction will create in marketplace.” Crossman continued, “We believe by
leveraging our sourcing capabilities to realize cost savings across all three
components of making a jean, from fabric, trim to labor, will significantly
reduce our input costs while we drive top line sales by building on the
strengths of each company`s distribution.”

Based in Los Angeles, California, and founded by Peter Kim in 2002, Hudson is a
leading, global designer and marketer of women`s and men`s premium branded denim
apparel. Kim, who will remain Chief Executive Officer of Hudson, will become a
member of the Joe`s Jeans Board of Directors. Hudson`s products include a core
denim line as well as non-denim tops and bottoms. As a global fashion brand,
Hudson continuously innovates within its product line, introducing new styles,
washes, cuts, fabrics and colors, all designed under the premise of one superior
fit. Hudson`s products are available at department stores and selective boutique
and specialty stores around the country, as well as premier retailers in over 30
countries around the world.

Peter Kim stated, “We are thrilled at the prospect of joining a highly respected
team of people that has created an incredible business. To be able to
collaborate with Joe’s Jeans to create one of the largest premium denim
companies in the world is a phenomenal opportunity for us all. We look forward
to benefiting from each other`s strengths and to entering a new chapter of
growth.”

Dan Fireman, Managing Partner of Fireman Capital Partners, which acquired a
controlling stake in Hudson in 2009, said, “We are proud of our partnership with
Hudson and all that we have achieved together, and are pleased that Hudson has
found a perfect home with Joe`s Jeans to take the company to the next stage in
its development.”

Mr. Crossman concluded, “Hudson Jeans represents a great fit for our business
model. There are many complementary features between our two organizations that
should allow us to realize future operating benefits and cost savings. At the
same time, each brand has multiple channel expansion opportunities both
domestically and overseas that will drive top-line growth and operating expense
leverage over the long-term.”

Joe`s Jeans expects the transaction will close on or about August 31, 2013
subject to the contingencies described herein and subject to the satisfaction of
customary closing conditions as set forth in the definitive stock purchase
agreement. The stock purchase agreement terminates unless the transaction closes
by August 31, 2013 unless extended by the parties. Among other things, the
transaction is contingent on obtaining the receipt of commitments for and
closing under senior secured and junior debt financing facilities in an amount
of not less than $80 million to provide for acquisition financing and future
working capital needs of Joe`s Jeans. At the closing, Joe`s Jeans estimates that
the outstanding indebtedness will be approximately $85 million including the
convertible notes. In connection with such financing, intercreditor
arrangements, including agreements concerning the nature of the subordination of
the convertible notes, must be reached among the prospective holders of the
convertible notes and the prospective senior lender. Joe`s Jeans has non-binding
funding term sheets from prospective lenders for the funding, subject to certain
customary closing conditions. Based on discussions with possible senior lenders,
Joe`s Jeans is confident that it will be able to obtain satisfactory senior
financing, but there can be no assurance that adequate financing will be
obtained or that the terms of the subordination will be agreed upon.

The convertible notes in principal amount of approximately $24.1 million,
subject to adjustment for the purchase price, to be issued to Hudson`s
management stockholders will be structurally and contractually subordinated to
Joe`s Jeans` existing senior debt, have a term of six years, would accrue cash
interest paid quarterly on the outstanding principal amount at an annual rate of
10% per annum, and will be convertible by each of the holders beginning two
years after the closing of the acquisition and ending 6 years after the closing,
into shares of our common stock or cash, in certain circumstances, at Joe`s
Jeans` election. The $10 million, subject to adjustment for the purchase price,
in principal amount of convertible notes to be issued to Hudson`s institutional
investor stockholder will be structurally and contractually subordinated to
Joe`s Jeans` existing senior debt, have a term of six years, would accrue cash
interest paid quarterly on the outstanding principal amount at an annual rate of
6.50% per annum, and will be convertible by the holder beginning one year after
the closing of the acquisition and ending six years after the closing, into
shares of our common stock or cash, in certain circumstances, at Joe`s Jeans`
election. The convertible notes would be convertible, in whole but not in part,
at a conversion price of $1.78, subject to certain adjustments that are typical
for convertible notes of this type, into approximately 19.1 million shares of
common stock, subject to receipt of Joe`s Jeans stockholder approval to increase
the number of authorized shares, if necessary, and to comply with NASD rules.
Joe`s Jeans contemplates seeking shareholder approval promptly after the closing
of the transaction. Prior to receipt of such stockholder approval, the
conversion rights will be limited to approximately 13.5 million shares. If Joe`s
Jeans elects to pay cash with respect to a conversion of the convertible notes,
the amount of cash to be paid per share shall equal the then outstanding
principal amount of the convertible note divided by the average of the closing
prices for the stock over the 20 trading day period immediately preceding the
notice of conversion. Joe`s Jeans will have the right to redeem the convertible
notes at any time by paying an amount equal to the principal amount plus
interest that would have accrued through the maturity date and upon such
redemption the holder would retain the conversion right applicable to the note.
Certain insiders of Joe`s Jeans holding approximately 23% of the votes have
agreed to vote in favor of authorizing Joe`s Jeans to issue, at Joe`s Jeans`
election, the maximum amount of shares of common stock upon conversion of the
convertible notes.

Threadstone Advisors LLC served as financial advisor to Joe`s Jeans on the
transaction and Akin, Gump Strauss Hauer & Feld LLP served as legal advisor to
Joe`s Jeans. Lazard Middle Market LLC served as financial advisor to Hudson
Clothing on the transaction and McDermott Will & Emery LLP served as legal
advisor to Hudson.

About Joe`s Jeans Inc.

Joe’s Jeans Inc. is a casual chic lifestyle brand offering a unique
interpretation on classic, modernized wardrobe staples encompassing a versatile
range of timeless styles from premium denim and handcrafted collection pieces to
contemporary accessories and footwear.

With over a decade in fashion, Joe’s has remained true to their DNA throughout
their expansion, embracing fashion innovation in the creation of a full faceted
line for Men, Women and Kids. Joe`s is available coast to coast in the USA and
internationally throughout Europe, Asia, Canada, Latin America and the Middle
East.

Visit: joesjeans.com or facebook.com/joesjeans

About Fireman Capital Partners (FCP)

Fireman Capital Partners invests in consumer-focused companies through both
growth equity and buyout transactions. The private equity firm focuses on
dynamic consumer businesses with revenues between $20 and $150 million, and who
have a unique vision and strong management. Fireman Capital leverages its
capital, extensive relationships, and deep operating expertise to add
substantial value.

This release contains forward-looking statements within the meaning of the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995, as
amended.The matters discussed in this news release involve estimates,
projections, goals, forecasts, assumptions, risks and uncertainties that could
cause actual results or outcomes to differ materially from those expressed in
the forward-looking statements.All statements in this news release that are not
purely historical facts are forward-looking statements, including statements
containing the words “intend,” “believe,” “estimate,” “project,” “expect” or
similar expressions.Any forward-looking statement inherently involves risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. Factors that would cause or contribute to such
differences include, but are not limited to: the parties` ability to close the
acquisition of Hudson Clothing Holdings, Inc., or Hudson, including obtaining
financing to fully fund the acquisition and satisfying the conditions in the
stock purchase agreement, including the receipt and terms and conditions of any
required governmental of the proposed acquisition that could reduce anticipated
benefits or cause the parties to abandon the acquisition, the diversion of
management’s time and attention from our ongoing business during this time
period, the impact of the acquisition on our stock price, the anticipated
benefits of the acquisition on our financial results, business performance and
product offerings, our ability to successfully integrate Hudson`s businesses and
realize cost savings and any other synergies, the risk that the credit ratings
of the combined company or its subsidiaries may be different from what the
companies expect, continued acceptance of our product, product demand,
competition, capital adequacy, general economic conditions and the potential
inability to raise additional capital if required, the risk that Joe`s Jeans
will be unsuccessful in gauging fashion trends and changing customer
preferences; the risk that changes in general economic conditions, consumer
confidence, or consumer spending patterns will have a negative impact on Joe`s
Jeans financial performance; the highly competitive nature of Joe`s Jeans
business in the United States and internationally and its dependence on consumer
spending patterns, which are influenced by numerous other factors; Joe`s Jeans
ability to respond to the business environment and fashion trends; continued
acceptance of the Joe`s brand in the marketplace; and other risks.Joe`s Jeans
discusses certain of these factors more fully in its additional filings with the
SEC, including its last annual report on Form 10-K and quarterly report on Form
10-Q filed with the SEC, and this release should be read in conjunction with
those reports, together with all of the Joe`s Jeans other filings, including
current reports on Form 8-K, through the date of this release.Joe`s Jeans urges
you to consider all of these risks, uncertainties and other factors carefully in
evaluating the forward-looking statements contained in this release.

Any forward-looking statement is based on information current as of the date of
this document and speaks only as of the date on which such statement is made,
and Joe`s Jeans undertakes no obligation to update these statements to reflect
events or circumstances after the date on which such statement is made.Readers
are cautioned not to place undue reliance on forward-looking statements.