REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of January 9,
2013 by and among Sequential Brands Group, Inc., a Delaware corporation (the
“Company”), and the Persons listed on the signature pages hereto as “Investors”
and any Persons identified on the signature page of an joinder agreements
executed and delivered pursuant to Section 9 and Section 10 hereof (each,
including the Investors, a “Holder” and, collectively, the “Holders”).
Capitalized terms used but not otherwise defined herein are defined in Section
13 hereof.

 

R E C I T A L S:

 

WHEREAS, in connection with that certain Securities Purchase Agreement by and
among the Company and the Investors, dated December 21, 2012 (the “Purchase
Agreement”), and the offering contemplated thereby (the “PIPE Transaction”), the
Company has agreed, upon the terms and subject to the conditions set forth in
the Purchase Agreement, to issue and sell to the Investors an aggregate of
4,966,667 shares of the Company’s Common Stock;

 

WHEREAS, in accordance with the terms of the Purchase Agreement, the Company has
agreed to provide the Holders with certain registration rights;

 

NOW, THEREFORE, in accordance with the terms of the Purchase Agreement, and in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and each of the Holders hereby agree as
follows:

 

Section 1. Shelf Registration.

 

(a) Filing. The Company shall, as soon as commercially reasonable, but in any
event not later than 120 days after the Closing Date (as defined below) (such
date, the “Filing Deadline”), file a registration statement on any permitted
form that qualifies, and is available for, the resale of Registrable Securities,
with the Commission in accordance with and pursuant to Rule 415 promulgated
under the Securities Act (or any successor rule then in effect) (the “Shelf”).
The Company shall use its commercially reasonable efforts to cause such Shelf to
become effective as promptly thereafter as practicable, but in any event not
later than 90 days after the Filing Deadline if the Company receives comments to
the Shelf from the Commission (“SEC Comments”) or 30 days after the Filing
Deadline if the Company does not receive SEC Comments (such date, the
“Effectiveness Deadline”). Subject to any SEC Comments, such Shelf shall include
a plan of distribution substantially in the form attached hereto as Exhibit A
(the “Plan of Distribution”), as may be amended in accordance with the terms of
this Agreement. Such Shelf shall not include any shares of Common Stock, other
than the Piggyback Shares, or other securities for the account of any holder
other than the Holders, without the prior written consent of the Holders of a
majority of the Registrable Securities. The Company shall give written notice of
the expected filing of the Shelf (the “Registration Notice”) at least ten
Business Days prior to the filing thereof to each Holder and the Company shall
include in the Shelf all Registrable Securities with respect to which the
Company has received written requests for inclusion therein at least five
Business Days prior to the date of filing indicated in the Registration Notice;
provided, however, that, in order to be named as a selling securityholder in the
Shelf, each Holder must furnish to the Company a duly completed questionnaire in
the form attached to this Agreement as Exhibit B or in a form mutually
acceptable to the parties, and any additional information as may be reasonably
requested by the Company for the purpose of including such Holder’s Registrable
Securities in the Shelf (the “Selling Holder Information”). The Company shall
include, in the Shelf, Selling Holder Information received to the extent
necessary and in a manner so that, upon effectiveness of the Shelf, any such
Holder shall be named, to the extent required by the rules promulgated under the
Securities Act by the Commission, as a selling securityholder and be permitted
to deliver (or be deemed to deliver) a Prospectus relating to the Shelf to
purchasers of the Registrable Securities in accordance with applicable law. If
the Company files an amended version of the Shelf, including any post-effective
amendment to the Shelf (the “Shelf Amendment”), the Company shall give written
notice of such Shelf Amendment (the “Shelf Amendment Notice”) at least ten
Business Days prior to the filing thereof to each Holder and each Holder may be
required, upon the Company’s request, to provide updated Selling Holder
Information, in writing, in the form included with the Company’s Shelf Amendment
Notice. The Company shall include in such Shelf Amendment, such updated Selling
Holder Information, including any Selling Holder Information that was not
included in any previous filed version of the Shelf. Notwithstanding the
foregoing, the Company shall not include any Holder’s Selling Holder Information
on a Shelf Amendment to the extent that such Holder, at the time of the Shelf
Amendment Notice, does not or, at the time of the Shelf Amendment filing, will
not, hold Registrable Securities. The Company shall use its commercially
reasonable efforts to convert any Shelf that is on Form S-1 to a Registration
Statement on Form S-3 (the “Form S-3 Shelf”) as soon as reasonably practicable
after the Company is eligible to use Form S-3. The Company shall use its
commercially reasonable efforts to maintain the effectiveness of the Shelf in
accordance with the terms hereof for a period (such period, the “Shelf Term”)
ending upon the earliest to occur of: (i) the date on which all Registrable
Securities covered by the Shelf have been sold, (ii) the date on which no Holder
hereunder holds Registrable Securities or (iii) one year from the closing date
of the PIPE Transaction (the “Closing Date”).

 

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(b) Liquidated Damages. If a Shelf covering the Registrable Securities is not
filed with the Commission on or prior to the Filing Deadline or the Company
fails to have a Registration Statement declared effective under the Securities
Act prior to the applicable Effectiveness Deadline, in each case for more than
30 consecutive calendar days (the “Grace Period”), the Company will, subject to
the conditions set forth in this Section 1(b), make pro rata payments to each
Holder, as liquidated damages and not as a penalty, in an amount equal to 1.5%
of the aggregate amount invested by such Holder pursuant to the Purchase
Agreement (or the purchase price of the Registrable Securities purchased by any
Holder not an original party to the Purchase Agreement, the “Purchase Amount”)
for each 30-day period (or pro rata for any portion thereof) following the
applicable Grace Period. Such payments shall constitute the Holders’ exclusive
monetary remedy for such events, but shall not affect the right of the Holders
to seek injunctive relief. Such payments shall be made to each Holder by check
mailed to the address of the registered Holder of the Registrable Securities on
the books and records of the Company as maintained by the Company’s transfer
agent, no later than three Business Days after the end of each 30-day period.
Notwithstanding the forgoing, (i) the maximum aggregate liquidated damages
payable to a Holder under this Agreement, including any interest, shall be 10.0%
of the aggregate Purchase Amount paid by such Holder, (ii) no liquidated damages
shall accrue after the Shelf Term, (iii) no liquidated damages shall accrue
during any Acquisition Event Period (as defined below) and (iv) no liquidated
damages shall accrue after the date the shares of Common Stock then held by such
Holder are no longer Registrable Securities. For purposes of this Section 1(b),
an “Acquisition Event Period” shall mean any period prior to the effective date
of the Shelf during which the Company is pursuing and has not yet completed any
announced or unannounced merger or acquisition transaction in respect to which
the Company has entered into a binding or non-binding letter of intent to enter
into definitive documentation, including, but not limited to, the merger with
Heelys, Inc. as contemplated in the agreement and plan of merger by and among
the Company, Heelys, Inc. and Wheels Merger Sub Inc., dated December 7, 2012.

 

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(c) Restrictions on Use of the Registration Statement. Upon written notice to
the Holders of Registrable Securities, the Company shall be entitled to suspend,
for a period of time (each, a “Suspension Period”), the use of any Registration
Statement or Prospectus and shall not be required to amend or supplement the
Registration Statement, any related Prospectus or any document incorporated
therein by reference if the Company determines in its reasonable good faith
judgment that the Registration Statement or any Prospectus may contain an untrue
statement of a material fact or may omit any fact necessary to make the
statements in the Registration Statement or Prospectus not misleading; provided,
that (i) there are no more than four Suspension Periods during the Shelf Term,
(ii) the duration of any one Suspension Period may not exceed 30 days, (iii) the
duration of all Suspension Periods during the Shelf Term may not exceed 90 days
and (iv) the Company shall use its reasonable good faith efforts to amend the
Registration Statement and/or Prospectus to correct such untrue statement or
omission as promptly as reasonably practicable, unless the Company, in its sole
discretion, reasonably expects such amendment would have an adverse effect on
the Company with respect to any proposal or plan of the Company to effect a
merger, acquisition, disposition, financing, reorganization, recapitalization or
similar transaction or any negotiations, discussions or pending proposals with
respect thereto.

 

(d) Rule 415; Cutback. If at any time the Commission takes the position that the
offering of some or all of the Registrable Securities in a Registration
Statement is not eligible to be made on a delayed or continuous basis under the
provisions of Rule 415 under the Securities Act or requires any Holder to be
named as an “underwriter,” the Company shall use its commercially reasonable
efforts to persuade the Commission that the offering contemplated by the
Registration Statement is a valid secondary offering and not an offering “by or
on behalf of the issuer” as defined in Rule 415 and that none of the Investors
is an “underwriter.” The Holders shall have the right to comment or have their
counsel comment on any written submission made to the Commission with respect
thereto. No such written submission shall be made to the Commission to which the
Holders’ counsel reasonably objects. In the event that, despite the Company’s
commercially reasonable efforts and compliance with the terms of this Section
1(d), the Commission refuses to alter its position, the Company shall (i) remove
from the Registration Statement such portion of the Registrable Securities (the
“Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the
registration and resale of the Registrable Securities as the Commission may
require to assure the Company’s compliance with the requirements of Rule 415
(collectively, the “SEC Restrictions”); provided, however, that the Company
shall not agree to name any Holder as an “underwriter” in such Registration
Statement without the prior written consent of such Holder. Any cut-back imposed
on the Investors pursuant to this Section 1(d) shall be allocated among the
Holders on a pro rata basis, unless the SEC Restrictions otherwise require or
provide or the Holders otherwise agree.

 

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Section 2. Holdback Agreements. In connection with any underwritten public
offering of equity securities by the Company (a “Company Underwritten
Offering”), if requested by the managing underwriter for such offering, each
Holder agrees to enter into a lock-up agreement containing customary
restrictions on transfers of equity securities of the Company or any securities
convertible into or exchangeable or exercisable for such securities, without
prior written consent from the Company, during the seven day period prior to and
the 90 day period after (or such shorter period as requested) beginning on the
date of pricing of such underwritten offering (subject to extension in
connection with any earnings release or other release of material information
pursuant to FINRA Rule 2711(f) to the extent applicable) (the “Lock-Up Period”);
provided, that nothing herein will prevent (i)(a) any Holder that is a
partnership, limited liability company or corporation from making a distribution
of Registrable Securities to the partners, members or stockholders thereof, (b)
the transfer by a Holder that is an investment advisor managing a separately
managed account to the owner of the separately managed account, or (c) a
transfer to an Affiliate that is otherwise in compliance with the applicable
securities laws, so long as such distributees or transferees agree to be bound
by the restrictions set forth in this Section 2, (ii) the exercise, exchange or
conversion of any security exercisable or exchangeable for, or convertible into,
Common Stock, provided the Common Stock issued upon such exercise or conversion
shall be subject to the restrictions set forth in this Section 2, or (iii) any
Holder from continuing market-making or other trading activities as a
broker-dealer in the ordinary course of business; provided, further, that there
shall be a period of at least 30 days between the end of any Lock-Up Period and
the pricing date of any subsequent Company Underwritten Offering. If requested
by the managing underwriter, each Holder agrees to execute a lock-up agreement
in favor of the Company’s underwriters to such effect and, in any event, that
the Company’s underwriters in any relevant underwritten offering shall be third
party beneficiaries of this Section 2. The provisions of this Section 2 will no
longer apply to a Holder once such Holder ceases to hold Registrable Securities.

 

Section 3. Company Undertakings.

 

In connection with the Company’s registration obligations hereunder, the Company
shall, as expeditiously as possible:

 

(a) before filing a Registration Statement or Prospectus, any amendments or
supplements thereto or any Issuer Free Writing Prospectus, at the Company’s
expense, furnish to Counsel to the Holders, if any, copies of all such
documents, other than documents that are incorporated by reference, proposed to
be filed and such other documents reasonably requested by the Holders and
provide a reasonable opportunity for review and comment on such documents by
Counsel to the Holders;

 

(b) notify each Holder of Registrable Securities of the effectiveness of the
Registration Statement and prepare and file with the Commission such amendments
and supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective until the date on which all Registrable Securities have been sold
pursuant to the Registration Statement or have otherwise ceased to be
Registrable Securities, and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;
provided, however in no event shall the Company be obligated to maintain the
effectiveness of the Registration Statement beyond the Shelf Term and further
provided, that the Company’s obligations under this Section 3(b) shall not apply
during any Suspension Period;

 

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(c) furnish to each Holder of Registrable Securities, without charge, such
number of copies of the applicable Registration Statement, each amendment and
supplement thereto, the Prospectus included in such Registration Statement
(including any Prospectus (including any Prospectus filed under Rule 424 and any
Issuer Free Writing Prospectus)), all exhibits and other documents filed
therewith and such other documents as such seller may reasonably request
including in order to facilitate the disposition of the Registrable Securities
owned by such seller, and upon request, a copy of any and all transmittal
letters or other correspondence to or received from, the Commission or any other
governmental authority relating to such offer;

 

(d) (i) register or qualify such Registrable Securities under such other
securities or blue sky laws of such jurisdictions as any Holder reasonably
requests, (ii) keep such registration or qualification in effect for so long as
the applicable Registration Statement remains in effect, and (iii) use its
commercially reasonable efforts to do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller in a manner substantially similar to those set forth in the Plan of
Distribution (provided, that nothing contained herein or in the Plan of
Distribution shall require the Company to (w) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this subsection, (x) subject itself to taxation in any such jurisdiction, (y)
consent to general service of process in any such jurisdiction or (z)
participate in or effect any underwritten offering on behalf of or for the
Holders of Registrable Securities;

 

(e) notify each Holder of such Registrable Securities (i) at any time when a
Prospectus relating to the applicable Registration Statement is required to be
delivered under the Securities Act, (A) promptly upon discovery that, or upon
the happening of any event as a result of which, such Registration Statement, or
the Prospectus or Free Writing Prospectus relating to such Registration
Statement, or any document incorporated or deemed to be incorporated therein by
reference contains an untrue statement of a material fact or omits any fact
necessary to make the statements in the Registration Statement or the Prospectus
or Free Writing Prospectus relating thereto not misleading or otherwise requires
the making of any changes in such Registration Statement, Prospectus, Free
Writing Prospectus or document, and, at the request of any such seller and, the
Company shall promptly prepare a supplement or amendment to such Prospectus or
Free Writing Prospectus, furnish a reasonable number of copies of such
supplement or amendment to each seller of such Registrable Securities and file
such supplement or amendment with the Commission so that, as thereafter
delivered to the purchasers of such Registrable Securities, such Prospectus or
Free Writing Prospectus as so amended or supplemented shall not contain an
untrue statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading, (B) promptly if the Company becomes aware
of any request by the Commission or any federal or state governmental authority
for amendments or supplements to a Registration Statement or related Prospectus
or Free Writing Prospectus covering Registrable Securities or for additional
information relating thereto, (C) promptly if the Company becomes aware of the
issuance or threatened issuance by the Commission of any stop order or other
order suspending or threatening to suspend the effectiveness or preventing the
use of a Registration Statement covering the Registrable Securities or
suspending the qualification of any Registrable Securities included in such
Registration Statement (and use its commercially reasonable efforts to prevent
the issuance of or obtain the lifting of any such stop order or obtain the
withdrawal of any order suspending or preventing the use of any related
Prospectus or Free Writing Prospectus or suspending qualification of any
Registrable Securities included in the Registration Statement as soon as
reasonably practicable) or (D) promptly upon the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any Registrable Security for sale in any jurisdiction, or
the initiation or threatening of any proceeding for such purpose; and (ii) when
each such Registration Statement or any amendment thereto has been filed with
the Commission and when each Registration Statement or the related Prospectus or
Free Writing Prospectus or any Prospectus supplement or any post-effective
amendment thereto has become effective;

 

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(f) use its commercially reasonable efforts to cause all Registrable Securities
covered by a Shelf to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities issued by the
Company are then listed;

 

(g) provide and cause to be maintained a transfer agent and registrar for all
such Registrable Securities no later than the effective date of the applicable
Registration Statement;

 

(h) permit any Holder of Registrable Securities, to participate (including, but
not limited to, reviewing, commenting on and attending meetings) in the
preparation of such Registration Statement;

 

(i) with respect to each Free Writing Prospectus or other materials to be
included in the Disclosure Package, ensure that no Registrable Securities be
sold “by means of” (as defined in Rule 159A(b) promulgated under the Securities
Act) such Free Writing Prospectus or other materials without the prior written
consent of the Holders of a majority of the Registrable Securities that are
being sold pursuant to such Free Writing Prospectus, which Free Writing
Prospectuses or other materials shall be subject to the review of Counsel to the
Holders; provided, however, the Company shall not be responsible or liable for
any breach by a Holder that has not obtained the prior written consent of the
Company pursuant to Section 12(o);

 

(j) promptly notify in writing the Holders and the sales or placement agent, if
any, therefor, (i) when such Registration Statement or related Prospectus or
Free Writing Prospectus or any Prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to any such
Registration Statement or any post-effective amendment, when the same has become
effective and (ii) of any written comments by the Commission and by the blue sky
or securities commissioner or regulator of any state with respect thereto;

 

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(k) (i) prepare and file with the Commission such amendments and supplements to
each Registration Statement as may be necessary to comply with the provisions of
the Securities Act, including post-effective amendments to each Registration
Statement as may be necessary to keep such Registration Statement continuously
effective for the applicable time period required hereunder; (ii) cause the
related Prospectus to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) promulgated under the Securities Act; (iii) comply with the
provisions of the Securities Act and the Exchange Act and any applicable
securities exchange or other recognized trading market with respect to the
disposition of all securities covered by such Registration Statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement as so amended or in such
Prospectus as so supplemented; and (iv) provide additional information related
to each Registration Statement as requested by, and obtain any required approval
necessary from, the Commission or any federal or state governmental authority;

 

(l) within the deadlines specified by the Securities Act, make all required
filing fee payments in respect of any Registration Statement or Prospectus used
under this Agreement (and any offering covered thereby);

 

(m) use its commercially reasonable efforts to take all other actions necessary
or customarily taken by issuers to effect the registration of and its
commercially reasonable efforts to take all other actions necessary to effect
the sale of, the Registrable Securities contemplated hereby.

 

Section 4. Registration Expenses. All Registration Expenses shall be borne by
the Company. All Selling Expenses relating to Registrable Securities registered
shall be borne by the Holders of such Registrable Securities pro rata on the
basis of the number of Registrable Securities sold.

 

Section 5. Indemnification; Contribution. The Company agrees to indemnify and
hold harmless each Holder of Registrable Securities, its officers, directors,
members, partners, agents and employees and each Person who controls any such
Holder within the meaning of either the Securities Act or the Exchange Act, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, expenses and actions to which they or any
of them may become subject insofar as such losses, claims, damages, liabilities
and expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement, the Disclosure Package, or any preliminary, final or
summary Prospectus or Free Writing Prospectus included in any such Registration
Statement, or in any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Disclosure Package, or any preliminary, final or summary
Prospectus or Free Writing Prospectus included in any such Registration
Statement (in light of the circumstances under which they were made) not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, expense or
action (whether or not the indemnified party is a party to any proceeding);
provided, however, that the Company will not be liable in any case to the extent
that any such loss, claim, damage, liability or expense arises (i) out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder
specifically for inclusion therein including, without limitation, any notice and
questionnaire (including, for the avoidance of doubt, Exhibit B hereto), or (ii)
out of sales of Registrable Securities made during a Suspension Period after
notice is given pursuant to Section 1(c) hereof. This indemnity clause will be
in addition to any liability which the Company may otherwise have.

 

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(b) Each Holder severally (and not jointly) agrees to indemnify and hold
harmless the Company and each of its officers, directors, members, partners,
agents and employees and each Person who controls the Company within the meaning
of either the Securities Act or the Exchange Act, to the fullest extent
permitted by applicable law, from and against any and all losses, claims,
damages or liabilities to which they or any of them may become subject insofar
as such losses, claims, damages or liabilities arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
a Registration Statement, in the Disclosure Package or any Holder Free Writing
Prospectus, preliminary, final or summary Prospectus included in any such
Registration Statement, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Disclosure Package, or any preliminary,
final or summary Prospectus or Free Writing Prospectus included in any such
Registration Statement, in light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that any such
untrue statement or alleged untrue statement or omission or alleged omission is
contained in any written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion therein;
provided, however, that the total amount to be indemnified by such Holder
pursuant to this Section 5(b) shall be limited to the net proceeds received by
such Holder in the offering to which such Registration Statement, Disclosure
Package, Prospectus or Holder Free Writing Prospectus relates. This indemnity
clause will be in addition to any liability which any such Holder may otherwise
have.

 

(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 5, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent such action
and such failure results in material prejudice to the indemnifying party and
forfeiture by the indemnifying party of substantial rights and defenses; and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, except as
provided in the next sentence, after notice from the indemnifying party to such
indemnified party of its election to so assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
expenses of other counsel or any other expenses subsequently incurred by such
indemnified party in connection with the defense thereof. Notwithstanding the
indemnifying party’s rights in the prior sentence, the indemnified party shall
have the right to employ its own counsel (and one local counsel), but the
indemnified party shall bear the reasonable fees, costs and expenses of such
separate counsel. No indemnifying party shall, in connection with any one action
or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general circumstances or allegations, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties unless the use of
only one firm of attorneys would be inappropriate due to a conflict of interest
in the reasonable judgment of the indemnified party. An indemnifying party shall
not be liable under this Section 5 to any indemnified party regarding any
settlement or compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent is consented to in writing by such
indemnifying party. No indemnifying party, in the defense of any such claim or
litigation, shall, except with the consent of each indemnified party, consent to
entry of any judgment or enter into any settlement or compromise if any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement or compromise includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

 

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(d) In the event that the indemnity provided in Section 5(a) or Section 5(b)
above is held by a court of competent jurisdiction to be unavailable to or
insufficient to hold harmless an indemnified party with respect to any loss,
claim, damage, liability, expense or action referred to herein, then each
applicable indemnifying party agrees to contribute to the aggregate losses,
claims, damages and liabilities (including, without limitation, legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively, “Losses”) to which such indemnifying party may be subject in such
proportion as is appropriate to reflect the relative benefits received from the
offering of the Common Stock, as applicable, and relative fault of the
indemnifying party on the one hand and the indemnified party on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party on the
one hand or the indemnified party on the other and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties agree that it would not be just and equitable
if contribution pursuant to this Section 5(d) were determined by pro rata
allocation (even if the Holders of Registrable Securities or any agents or all
of them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 5(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this Section 5(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5(d), no Person guilty of fraud
or fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraud or fraudulent misrepresentation. For purposes of this
Section 5, each Person who controls any Holder of Registrable Securities, agent
or underwriter within the meaning of either the Securities Act or the Exchange
Act and each director, officer, employee and agent of any such Holder, agent or
underwriter shall have the same rights to contribution as such Holder, agent or
underwriter, and each Person who controls the Company within the meaning of
either the Securities Act or the Exchange Act and each officer and director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this Section 5(d).

 

(e) The provisions of this Section 5 will remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder of
Registrable Securities or the Company or any of the officers, directors,
members, partners, agents and employees or controlling Persons referred to in
this Section 5, and will survive the transfer of Registrable Securities.

 

9

 

 

Section 6. Sale of Registrable Securities. It shall be a condition precedent to
the obligations of the Company to include Registrable Securities of any Holder
in any Registration Statement or Prospectus, as the case may be, that such
Holder shall timely furnish to the Company (as a condition precedent to such
Holder’s participation in such registration) its Selling Holder Information in
accordance with the terms hereof. Each selling Holder shall timely provide the
Company with such information as may be reasonably requested to enable the
Company to prepare a supplement or post-effective amendment to any Shelf
Registration or a supplement to any Prospectus relating to such Shelf
Registration.

 

Section 7. Private Sale and Legends.

 

(a) Except as provided in Section 2, the Company agrees that nothing in this
Agreement shall prohibit the Holders, at any time and from time to time, from
selling or otherwise transferring Registrable Securities pursuant to a private
sale or other transaction which is compliant with and not registered pursuant to
the Securities Act.

 

(b) The Holders acknowledge that the certificate, general statement or other
such instruments representing the Registrable Securities shall bear any legend
as required by the “blue sky” laws of any state and a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates or general statements):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR
THE BENEFIT OF THE ISSUER THAT THESE SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE ISSUER, (B) PURSUANT TO REGISTRATION UNDER
THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER
THE SECURITIES ACT, (D) INSIDE THE UNITED STATES PURSUANT TO THE EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF
AVAILABLE, OR (E) IN A TRANSACTION THAT IS OTHERWISE EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND IN EACH CASE IN COMPLIANCE
WITH APPLICABLE STATE SECURITIES LAWS AND THE APPLICABLE LAWS OF ANY OTHER
JURISDICTION, PROVIDED THAT IN THE CASE OF (C), (D) or (E) ABOVE, THE HOLDER
HAS, PRIOR TO SUCH SALE, FURNISHED TO THE ISSUER A LEGAL OPINION OF COUNSEL OF
RECOGNIZED STANDING, REASONABLY SATISFACTORY TO THE ISSUER. HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.”

 

10

 

 

Section 8. Rule 144 and Rule 144A. With a view to making available to the
Holders of Registrable Securities the benefits of Rule 144 and Rule 144A
promulgated under the Securities Act (“Rule 144” and “Rule 144A”) and other
rules and regulations of the Commission that may at any time permit a Holder of
Registrable Securities to sell securities of the Company to the public without
registration, the Company covenants that it will (i) use its commercially
reasonable efforts to file in a timely manner all reports and other documents
required, if any, to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted thereunder and (ii) make available
information necessary to comply with Rule 144 and Rule 144A, if available with
respect to resales of the Registrable Securities under the Securities Act, at
all times, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (x) Rule 144 and Rule 144A
promulgated under the Securities Act (if available with respect to resales of
the Registrable Securities), as such rules may be amended from time to time or
(y) any other rules or regulations now existing or hereafter adopted by the
Commission.

 

Section 9. Transfer of Registration Rights.The rights of a Holder hereunder may
be transferred, assigned, or otherwise conveyed on a pro rata basis in
connection with any transfer, assignment, or other conveyance of Registrable
Securities to any transferee or assignee; provided that all of the following
additional conditions are satisfied: (a) such transfer or assignment is effected
in accordance with applicable securities laws; (b) such transferee or assignee
agrees in writing to become subject to the terms of this Agreement by delivering
to the Company a duly executed joinder agreement; and (c) the Company is given
written notice by such Holder of such transfer or assignment, stating the name
and address of the transferee or assignee and identifying the Registrable
Securities with respect to which such rights are being transferred or assigned.

 

Section 10. Joinder.

 

Any Person who demonstrates that it is a Holder of Registrable Securities as of
the date of the Registration Notice may acquire the rights of a Holder hereunder
if it agrees in writing to become subject to the terms of this Agreement as a
Holder by delivering to the Company a duly executed joinder agreement in form
attached hereto as Exhibit C.

 

11

 

 

Section 11. Amendment, Modification and Waivers.

 

(a) Amendment. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to or departures from the provisions hereof may not be given, without
the written consent of the Company and the Holders of a majority in principal
amount of the Registrable Securities.

 

(b) Effect of Waiver. No waiver of any terms or conditions of this Agreement
shall operate as a waiver of any other breach of such terms and conditions or
any other term or condition, nor shall any failure of any party to enforce any
provision hereof operate or be construed as a waiver of such provision or of any
other provision hereof and shall not affect the right of such party thereafter
to enforce each provision of this Agreement in accordance with its terms. No
written waiver hereunder, unless it by its own terms explicitly provides to the
contrary, shall be construed to effect a continuing waiver of the provisions
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision.

 

Section 12. Miscellaneous; Remedies; Specific Performance.

 

(a) Specific Performance. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in their favor. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction for, and obtain
from any such court, specific performance and/or injunctive relief (without
posting any bond or other security) in order to enforce or prevent violation of
the provisions of this Agreement and shall not be required to prove irreparable
injury to such party or that such party does not have an adequate remedy at law
with respect to any breach of this Agreement (each of which elements the parties
admit). The parties hereto further agree and acknowledge that each and every
obligation applicable to it contained in this Agreement shall be specifically
enforceable against it and hereby waives and agrees not to assert any defenses
against an action for specific performance of their respective obligations
hereunder. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies available under this Agreement
or otherwise.

 

(b) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, that no party shall assign any of its rights or obligations hereunder
without the prior written consent of the other party, except that the right to
cause the Company to register Registrable Securities hereunder may be assigned
(but only with all related obligations) by a Holder, in compliance with all
applicable securities laws, to a transferee who acquires all or any part of such
Holder’s Registrable Securities from the Holder, as long as such transferee
agrees in writing to be bound by the provisions of this Agreement.

 

12

 

 

(c) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement 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 prohibiting or invalidating the
remainder of this Agreement.

 

(d) Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same Agreement.

 

(e) Descriptive Headings; Interpretation; No Strict Construction. The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular forms of nouns, pronouns,
and verbs shall include the plural and vice versa. Reference to any agreement,
document, or instrument means such agreement, document, or instrument as amended
or otherwise modified from time to time in accordance with the terms thereof,
and, if applicable, hereof. The words “include,” “includes” or “including” in
this Agreement shall be deemed to be followed by “without limitation.” The use
of the words “or,” “either” or “any” shall not be exclusive. The parties hereto
have participated jointly in the negotiation and drafting of this Agreement. If
an ambiguity or question of intent or interpretation arises, this Agreement
shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. All
references to laws, rules, regulations and forms in this Agreement shall be
deemed to be references to such laws, rules, regulations and forms, as amended
from time to time or, to the extent replaced, the comparable successor thereto
in effect at the time. All references to agencies, self-regulatory organizations
or governmental entities in this Agreement shall be deemed to be references to
the comparable successors thereto from time to time.

 

(f) Governing Law. This Agreement and the exhibits and schedules hereto shall be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of New York or any other jurisdiction) to the
extent such rules or provisions would cause the application of the laws of any
jurisdiction other than the State of New York.

 

(g) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when (a) delivered personally to
the recipient, (b) telecopied or sent by facsimile to the recipient, or (c) one
Business Day after being sent to the recipient by reputable overnight courier
service (charges prepaid). Such notices, demands and other communications shall
be sent to the Company at the address set forth below and to any Holder of
Registrable Securities at the address set forth on the signature page hereto, or
at such address or to the attention of such other Person as the recipient party
has specified by prior written notice to the sending party.

 

13

 

 

If to the Company:

 

Sequential Brands Group, Inc.

7383 Sunset Boulevard

Suite A310

Pacific Palisades, CA 90272
Attention: Gary Klein, CFO

 

with copies (which shall not constitute notice) to:

 

White & Case LLP
1155 Avenue of the Americas

New York, New York 10036

Facsimile: (212) 354-8113

Attention:Nazim Zilkha

 David Johansen

 

if to the Transfer Agent:

 

Stalt, Inc.

671 Oak Grove Avenue

Menlo Park, CA

Facsimile:651-321-7113

Attention:Bill Senner

 

If any time period for giving notice or taking action hereunder expires on a day
that is not a Business Day, the time period shall automatically be extended to
the Business Day immediately following such Saturday, Sunday or legal holiday.

 

(h) Delivery by Facsimile. This Agreement, the agreements referred to herein,
and each other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent signed and delivered by means of a facsimile machine or
other electronic means, shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered
in person. At the request of any party hereto or to any such agreement or
instrument, each other party hereto or, thereto shall reexecute original forms
thereof and deliver them to all other parties. No party hereto or to any such
agreement or instrument shall raise the use of a facsimile machine or other
electronic means to deliver a signature or the fact that any signature or
agreement or instrument was transmitted or communicated through the use of a
facsimile machine or other electronic means as a defense to the formation or
enforceability of a contract and each such party forever waives any such
defense.

 

(i) Waiver of Jury Trial. Each of the parties to this Agreement hereby agrees to
waive its respective rights to a jury trial of any claim or cause of action
based upon or arising out of this Agreement. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this Agreement, including
contract claims, tort claims and all other common law and statutory claims. Each
party hereto acknowledges that this waiver is a material inducement to enter
into this Agreement, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in their
related future dealings. Each party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 12(i) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.

 

14

 

 

(j) Arm’s Length Agreement. Each of the parties to this Agreement agrees and
acknowledges that this Agreement has been negotiated in good faith, at arm’s
length, and not by any means prohibited by law.

 

(k) Sophisticated Parties; Advice of Counsel. Each of the parties to this
Agreement specifically acknowledges that (i) it is a knowledgeable, informed,
sophisticated Person capable of understanding and evaluating the provisions set
forth in this Agreement and (ii) it has been fully advised and represented by
legal counsel of its own independent selection and has relied wholly upon its
independent judgment and the advice of such counsel in negotiating and entering
into this Agreement.

 

(l) Entire Agreement. This Agreement, together with the schedules and exhibits
attached hereto, and any certificates, documents, instruments and writings that
are delivered pursuant hereto, constitutes the entire agreement and
understanding of the parties in respect of the subject matter hereof and
supersedes all prior understandings, agreements or representations by or among
the parties, written or oral, to the extent they relate in any way to the
subject matter hereof.

 

(m) Attorneys’ Fees. In the event of litigation or other proceedings in
connection with or related to this Agreement, the prevailing party in such
litigation or proceeding shall be entitled to reimbursement from the opposing
party of all reasonable expenses, including, without limitation, reasonable
attorneys’ fees and expenses of investigation in connection with such litigation
or proceeding.

 

(n) Certification. Within 10 Business Days following receipt of a written
request from the Company by any Holder (which request shall not be made more
than twice in any calendar year), such Holder shall certify to the Company that
such Holder continues to hold Registrable Securities (the “Certification”). If a
Holder fails to provide the Certification within the 10 Business Day period
referred to in the immediately preceding sentence, the Company reserves the
right, in its sole discretion, to remove such Holder’s Registrable Securities
from a Registration Statement.

 

(o) Free Writing Prospectus Consent. No Holder shall use a Holder Free Writing
Prospectus without the prior written consent of the Company, which consent shall
not be unreasonably withheld, conditioned or delayed.

 

15

 

 

(p) No Required Sale. Nothing in this Agreement shall be deemed to create an
independent obligation on the part of any Holder to sell any Registrable
Securities pursuant to any effective registration statement.

 

(q) Termination. The obligations of the Company and of any Holder, other than
those obligations contained in Section 5, shall terminate with respect to the
Company and such Holder as soon as such Holder no longer holds any Registrable
Securities.

 

(r) No Third-Party Beneficiaries or Other Right. Nothing herein shall grant to
or create in any person not a party hereto, or any such person’s dependents or
heirs, any right to any benefits hereunder or any remedies hereunder, and no
such party shall be entitled to sue any party to this Agreement with respect
thereto; provided, however, that the officers, directors, members, partners,
agents and employees of each indemnified party and each Person who controls any
such indemnified party within the meaning of either the Securities Act or the
Exchange Act are intended third-party beneficiaries of Section 5 and shall have
the right, power, and authority to enforce the provisions thereof as though they
were a party hereto.

 

Section 13. Definitions.“Affiliate” of any particular Person means any other
Person directly or indirectly controlling, controlled by or under common control
with such particular Person.

 

“Acquisition Event Period” has the meaning specified in Section 1(b)

 

“Agreement” has the meaning specified in the first paragraph hereof.

 

“Automatic Shelf Registration Statement” means an “automatic shelf registration
statement” as defined in Rule 405 promulgated under the Securities Act.

 

“Beneficial Ownership” and terms of similar import shall be as defined under and
determined pursuant to Rule 13d-3 promulgated under the Exchange Act.

 

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in New York City are generally
authorized or obligated by law or executive order to close.

 

“Certification” has the meaning specified in Section 12(n).

 

“Closing Date” has the meaning specified in Section 1(a).

 

“Commission” means the United States Securities and Exchange Commission or any
successor governmental agency.

 

“Company” has the meaning specified in the first paragraph hereof.

 

“Company Underwritten Offering” has the meaning specified in Section 2.

 

“Common Stock” means the shares of common stock, par value $0.001 per share, of
the Company issued in the PIPE Transaction and any additional shares of such
common stock paid, issued or distributed in respect of any such shares by way of
a stock dividend, stock split or distribution, or in connection with a
combination of shares, and any such security into which such Common Stock shall
have been converted or exchanged in connection with a recapitalization,
reorganization, reclassification, merger, consolidation, exchange, distribution
or otherwise.

 

16

 

 

“control” (including the terms “controlling,” “controlled by” and “under common
control with”) means, unless otherwise noted, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting shares, by
contract, or otherwise.

 

“Counsel to the Holders” means, one counsel (and one local counsel) selected
from time to time by the Holders of a majority of the Registrable Securities.

 

“Cut Back Shares” has the meaning specified in Section 1(d).

 

“Disclosure Package” means, with respect to any offering of securities, (i) the
preliminary prospectus, (ii) each Free Writing Prospectus and (iii) all other
information, in each case, that is deemed, under Rule 159 promulgated under the
Securities Act, to have been conveyed to purchasers of securities at the time of
sale of such securities (including a contract of sale).

 

“Effectiveness Deadline” has the meaning specified in Section 1(a).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.

 

“Filing Deadline” has the meaning specified in Section 1(a).

 

“FINRA” means the Financial Industry Regulatory Authority.

 

“Form S-1” means such form under the Securities Act, as amended from time to
time by the Commission.

 

“Form S-3” means such form under the Securities Act, as amended from time to
time by the Commission.

 

“Form S-3 Shelf” has the meaning specified in Section 1(a).

 

“Free Writing Prospectus” means any “free writing prospectus” as defined in Rule
405 promulgated under the Securities Act.

 

“Grace Period” has the meaning specified in Section 1(b).

 

“Holder” and “Holders” have the meanings specified in the first paragraph
hereof.

 

17

 

 

“Holder Free Writing Prospectus” means each Free Writing Prospectus prepared by
or on behalf of the relevant Holder or used or referred to by such Holder in
connection with the offering of Registrable Securities.

 

“Investors” has the meaning specified in the first paragraph hereof.

 

“Issuer Free Writing Prospectus” means an “issuer free writing prospectus” under
Rule 433 promulgated under the Securities Act.

 

“Lock-Up Period” has the meaning specified in Section 2.

 

“Losses” has the meaning specified in Section 5(d).

 

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, a governmental entity or any department, agency or
political subdivision thereof or any other entity.

 

“Piggyback Shares” means the shares of common stock of the Company held by TCP
WR Acquisition, LLC (“TCP”) and issued pursuant to the purchase agreement by and
between the Company and TCP, dated February 2, 2012.

 

“PIPE Transaction” has the meaning specified in the first paragraph hereof.

 

“Plan of Distribution” has the meaning specified in Section 1(a).

 

“Prospectus” means the prospectus used in connection with a Registration
Statement and any amendments or supplements thereto.

 

“Purchase Agreement” has the meaning specified in the first paragraph hereof.

 

“Purchase Amount” has the meaning specified in Section 1(b).

 

“Registrable Securities” means, at any time, any shares of Common Stock, but
excluding shares of the Company’s common stock acquired in the open market or
otherwise acquired not in connection with the PIPE Transaction; provided,
however, that, as to any Registrable Securities, such securities shall cease to
constitute Registrable Securities upon the earliest to occur of: (u) the date
that is one year from the Closing Date; (v) the date on which such securities
are disposed of pursuant to an effective registration statement under the
Securities Act; (w) the date on which such securities are disposed of pursuant
to Rule 144 (or any successor provision) promulgated under the Securities Act
(or by similar provision under the Securities Act); (x) the date on which such
securities may no longer be deemed “restricted securities” as defined in Rule
144(a)(3) under the Securities Act; (y) with respect to the Registrable
Securities held by any Holder, any time that such Holder is permitted sell such
Registrable Securities under Rule 144(b)(1) (or by similar provision under the
Securities Act); and (z) the date on which such securities cease to be
outstanding. For the purposes of this Agreement, a Person shall be deemed to be
a holder of Registrable Securities whenever such Person has the right to acquire
such Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitation upon the exercise of such right), whether or not such acquisition has
been effected.

 

18

 

 

“Registration Expenses” means all expenses arising from or incident to the
registration of Registrable Securities in compliance with this Agreement,
including, without limitation, (i) Commission, stock exchange, FINRA and other
registration and filing fees, (ii) all fees and expenses incurred in connection
with complying with any securities or blue sky laws (including, without
limitation, fees, charges and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), (iii) all printing, messenger
and delivery expenses, (iv) the fees, charges and disbursements of counsel to
the Company and of its independent public accountants and any other accounting
and legal fees, charges and expenses incurred by the Company, (v) the fees and
expenses incurred in connection with the quotation of Registrable Securities on
any inter-dealer quotation system and (vi) the reasonable fees, charges and
disbursements of Counsel to the Holders, including, for the avoidance of doubt,
any expenses of Counsel to the Holders in connection with the filing or
amendment of any Registration Statement, Prospectus or Free Writing Prospectus
hereunder.

 

“Registration Notice” has the meaning specified in Section 1(a).

 

“Registration Statement” means any registration statement filed hereunder.

 

“Rule 144A” has the meaning specified in Section 8.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time.

 

“SEC Comments” has the meaning specified in Section 1(a).

 

“SEC Restrictions” has the meaning specified in Section 1(d).

 

“Selling Expenses” means the underwriting fees, discounts, selling commissions
and stock transfer taxes applicable to all Registrable Securities registered by
the Holders and legal expenses, expect as otherwise provided in the Purchase
Agreement or other documents regarding the PIPE Transaction.

 

“Selling Holder Information” has the meaning specified in Section 1(a).

 

“Shelf” has the meaning specified in Section 1(a).

 

“Shelf Amendment” has the meaning specified in Section 1(a).

 

“Shelf Amendment Notice” has the meaning specified in Section 1(a).

 

“Shelf Registration” means a registration of securities pursuant to a
registration statement filed with the Commission in accordance with and pursuant
to Rule 415 promulgated under the Securities Act (or any successor rule then in
effect).

 

“Shelf Term” has the meaning specified in Section 1(a).

 

“Suspension Period” has the meaning specified in Section 1(c).

 

* * *

 

19

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

  SEQUENTIAL BRANDS GROUP, INC.           By:         Name:       Title:  

 

 

 

 

 

  Holder Name:    

 

 

  By:         Name:       Title:  

 

 

 

 

  Address for Notices:                     Facsimile:       Attention:    

 

 

 

 

EXHIBIT A

 

PLAN OF DISTRIBUTION

 

The selling stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.

 

The selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein:

 

· ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 

· block trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;

 

· purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 

· an exchange distribution in accordance with the rules of the applicable
exchange;

 

· privately negotiated transactions;

 

· short sales effected after the date the registration statement of which this
Prospectus is a part is declared effective by the Commission;

 

· through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

 

· broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

 

· a combination of any such methods of sale; and

 

· any other method permitted by applicable law.

 

The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus. The selling stockholders also may
transfer the shares of common stock in other circumstances, in which case the
transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.

 

 

 

 

In connection with the sale of our common stock or interests therein, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

 

The aggregate proceeds to the selling stockholders from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this offering.

 

The selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.

 

The selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be
“underwriters” within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act.
Selling stockholders who are “underwriters” within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.

 

To the extent required, the shares of our common stock to be sold, the names of
the selling stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.

 

In order to comply with the securities laws of some states, if applicable, the
common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.

 

 

 

 

We have advised the selling stockholders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling stockholders and their affiliates. In
addition, to the extent applicable we will make copies of this prospectus (as it
may be supplemented or amended from time to time) available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.

 

We have agreed to indemnify the selling stockholders against certain
liabilities, including liabilities under the Securities Act and state securities
laws, relating to the registration of the shares offered by this prospectus.

 

We have agreed with the selling stockholders to keep the registration statement
of which this prospectus constitutes a part effective until the earlier of (1)
such time as all of the shares covered by this prospectus have been disposed of
pursuant to and in accordance with the registration statement or (2) the date on
which all of the shares may be sold without restriction pursuant to Rule 144 of
the Securities Act.

 

 

 

 

EXHIBIT B

 

SEQUENTIAL BRANDS GROUP, INC

 

Notice and Eligible Holder Information Questionnaire

 

The undersigned beneficial owner of capital stock of Sequential Brands Group,
Inc., a Delaware corporation (the “Company”), understands that the Company has
filed or intends to file with the Securities and Exchange Commission (the “SEC”)
one or more registration statements (collectively, the “Registration Statement”)
for the registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”), of the Registrable Securities1, in accordance
with the terms of the Registration Rights Agreement of which this questionnaire
is a part (the “Registration Rights Agreement”), dated as of January 9, 2013
(the “Closing Date”), by and among the Company and the parties identified as the
“Holders” on the signature page thereto. All capitalized terms not otherwise
defined herein shall have the meaning ascribed thereto in the Registration
Rights Agreement.

 

Certain legal consequences arise from being named as a selling securityholder in
the Registration Statement and the related prospectus, as the case may be.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as an Eligible Holder in the Registration Statement and
the related prospectus.

 

NOTICE

 

The undersigned beneficial owner (the “Eligible Holder”) of Registrable
Securities hereby elects to include some or all of the Registrable Securities
owned by it in the Registration Statement. In order to sell or otherwise dispose
of any Registrable Securities pursuant to the Registration Statement, a
beneficial owner of Registrable Securities generally will be required to be
named as a selling securityholder in the related prospectus and deliver a
prospectus to each purchaser of Registrable Securities.

 

If you wish to include the Registrable Securities beneficially owned by you in
the Registration Statement (or a supplement or amendment thereto), you must
complete, sign and deliver this Notice of Registration Statement and Eligible
Holder Information Questionnaire (“Notice and Questionnaire”) to the Company at
the address set forth herein on or prior to the fifth (5th) business day prior
to filing of the Registration Statement (or supplement or amendment, as
applicable). If you fail to do so, you will not be named as an Eligible Holder
in the Registration Statement and may not be able to use the prospectus forming
a part thereof to resell the Registrable Securities that you hold.

 

COMPLETED NOTICE AND QUESTIONNAIRE

 

PLEASE SEND BY PDF A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE
TO: Andrej Micovic at andrej.micovic@whitecase.com.

 

_________________________________

 

[1] “Registrable Securities” means, at any time, any shares of Common Stock, but
excluding shares of the Company’s common stock acquired in the open market or
otherwise acquired not in connection with the PIPE Transaction; provided,
however, that, as to any Registrable Securities, such securities shall cease to
constitute Registrable Securities upon the earliest to occur of: (u) the date
that is one year from the Closing Date; (v) the date on which such securities
are disposed of pursuant to an effective registration statement under the
Securities Act; (w) the date on which such securities are disposed of pursuant
to Rule 144 (or any successor provision) promulgated under the Securities Act
(or by similar provision under the Securities Act); (x) the date on which such
securities may no longer be deemed “restricted securities” as defined in Rule
144(a)(3) under the Securities Act; (y) with respect to the Registrable
Securities held by any Holder, any time that such Holder is permitted sell such
Registrable Securities under Rule 144(b)(1) (or by similar provision under the
Securities Act); and (z) the date on which such securities cease to be
outstanding. For the purposes of this Agreement, a Person shall be deemed to be
a holder of Registrable Securities whenever such Person has the right to acquire
such Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitation upon the exercise of such right), whether or not such acquisition has
been effected.

 

 

 

 

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

1.Name and Security Ownership

 

(a)Full legal name of each registered holder of Registrable Securities and
number of Registrable Securities held:

 

Name   Number of Registrable
Securities                        

 

(b)Full legal name of each registered holder of any other securities of the
Company and number of such securities held

 

Name   Number of Other
Securities                        

 

2.Securities To Be Included In the Registration Statement

 

(a)Do you wish to include in the registration statement all of the Registrable
Securities listed in item 1(a) above?

 

Yes   ¨ No   ¨

 

(b)If your answer to item 2(a) above is “no,” please specify below the number of
shares that you wish to include:

 

Name   Number of Registrable
Securities                        

 

 

 

 

3.Beneficial Ownership of Securities of the Company Owned by the Eligible
Holder(s)

 

“Beneficial ownership” is determined according to rules of the SEC. Securities
are “beneficially owned” by any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or shares
(i) voting power, which includes the power to vote, or to direct the voting of,
such security, and/or, (ii) investment power, which includes the power to
dispose, or to direct the disposition of, such security. The definition of
beneficial ownership often requires disclosure of the individual or groups of
individuals who have or share voting or investment power over the shares in
question.

 

Please describe below or attach as a separate sheet a detailed description of
the beneficial ownership of the Registrable Securities and any other securities
of the Company held by the Eligible Holder. We recommend that you consult with
your own securities law counsel as some or all of the description below will be
included in the Registration Statement. You should also indicate clearly whether
one or more of the beneficial owners disclaims beneficial ownership except to
the extent of his, her or its pecuniary interest in the securities. Exhibit A
hereto provides a typical example of beneficial ownership disclosure.

 

               

 

4. Relationships with the Company:

 

Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three (3) years.

 

State any exceptions here:

 

     

 

5. Broker-Dealer Status:

 

(a)Is any Eligible Holder a broker-dealer?

 

Yes   ¨ No   ¨

 

 

 

 

(b)If the answer is “yes” to Section 5(a) above, did such Eligible Holder
receive the Registrable Securities as compensation for investment banking
services to the Company?

 

Yes   ¨ No   ¨

 

Note: If the answer is “no” to this Section 5(b), the SEC’s staff has indicated
that you should be identified as an underwriter in the Registration Statement.

 

(c)Is any Eligible Holder an affiliate of a broker-dealer?

 

Yes   ¨ No   ¨

 

(d)If any of the Eligible Holders is an affiliate of a broker-dealer, do you
certify that such Eligible Holder purchased the Registrable Securities in the
ordinary course of business, and at the time of the purchase of the Registrable
Securities to be resold, had no agreements or understandings, directly or
indirectly, with any person to distribute the Registrable Securities?

 

Yes   ¨ No   ¨

 

Note: If the answer is “no” to this Section 5(d), the SEC’s staff has indicated
that the Eligible Holder should be identified as an underwriter in the
Registration Statement.

 

Please provide any further information here:

 

           

 

6. Address for Notices to Selling Holder:

 

Contact Person: Contact Person Email Address: Telephone: Fax:

 

The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof at any time while the Registration Statement remains effective.

 

 

 

 

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items one (1) through five (5) and the
inclusion of such information in the Registration Statement and the related
prospectus and any amendments or supplements thereto, as the case may be. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

 

  Beneficial Owner(s):  

 

  By:       Name:       Title:  

 

  Date:  

 

 

 

 

EXHIBIT A

 

Model Beneficial Ownership Disclosure:

 

ABC Fund Management L.P. (“ABC Management LP”) is the investment manager for ABC
Capital Fund (“ABC Capital”) and ABC Capital II Fund (“ABC Capital II” and,
together with ABC Capital, the “ABC Funds”).  ABC Capital Management LLC (“ABC
Management LLC”) is the general partner of ABC Management LP.  The managing
members of ABC Management LLC are Individual A, Individual B and Individual C
(collectively the “ABC Managers”).  ABC Management LP, ABC Management LLC and
each of the ABC Managers may be deemed to beneficially own the securities held
by the ABC Funds.  ABC Management LP, ABC Management LLC and each of the ABC
Managers each disclaim beneficial ownership of such securities except to the
extent of their pecuniary interests therein.

 

 

 

 

EXHIBIT C

 

FORM OF JOINDER AGREEMENT

 

Ladies and Gentlemen:

 

Reference is made to the Registration Rights Agreement, dated as of January 9,
2013 (as such agreement may have been or may be amended from time to time) (the
“Registration Rights Agreement”), by and among Sequential Brands Group, Inc., a
Delaware corporation (the “Company”), each of the other parties signatory
thereto and any other parties identified on the signature pages of any joinder
agreements substantially similar to this joinder agreement executed and
delivered pursuant to Section 10 of the Registration Rights Agreement.
Capitalized terms used but not otherwise defined herein have the meanings set
forth in the Registration Rights Agreement.

 

In consideration of the transfer to the undersigned of Registrable Securities of
the Company, the undersigned represents that it is a transferee of [insert name
of transferor] and agrees that, as of the date written below, the undersigned
shall become a party to the Registration Rights Agreement, and shall be fully
bound by, and subject to, all of the covenants, terms and conditions of the
Registration Rights Agreement as though an original party thereto.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

Executed as of the _______ day of __________________, _____.

 

TRANSFEREE: [insert name of transferee]

 

By:

Name:

Title:

 

Address:            

 

 

Acknowledged and agreed by:

 

SEQUENTIAL BRANDS GROUP, INC.

 

 

By:

Name:

Title: