EXECUTION VERSION

 

Securities Purchase Agreement

July 25, 2013

 

Sequential Brands Group, Inc.

1065 Avenue of the Americas

30th Floor

New York, NY 10018

 

Ladies and Gentlemen:

 

The undersigned investors (the “Investors”) understand Sequential Brands Group,
Inc., a corporation organized under the laws of the State of Delaware (the
“Company”), is offering an aggregate of 7,000,000 shares of its common stock,
par value $0.001 per share (the “Securities”) in a private placement pursuant to
Regulation D promulgated under the Securities Act of 1933, as amended (the
“Securities Act”). This offering is made pursuant to the offering materials made
available to the Investors as listed on Schedule 1 hereto (the “Offering
Materials”). The undersigned further understands that the offering is being made
without registration of the Securities under the Securities Act, or any
securities law of any state of the United States or of any other jurisdiction,
and is being made only to “accredited investors” (as defined in Rule 501 of
Regulation D promulgated under the Securities Act).

 

1.          Purchase. Subject to the terms and conditions hereof and as set
forth in the Offering Materials, the Company agrees to sell and each of the
Investors, severally, but not jointly, agrees to purchase the number of
Securities set forth opposite their respective names in Appendix A hereto for
the purchase price set forth in Appendix A, which is payable as described in
Section 3 hereof. The undersigned acknowledges that the Securities will be
subject to restrictions on transfer as set forth in this Securities Purchase
Agreement (the “Purchase Agreement”) and under applicable securities laws.

 

2.          The Closing. The closing of the purchase and sale of the Securities
(the “Closing”) shall take place at the offices of White & Case LLP, at 10:30
a.m. on July 26, 2013, or at such other time and place as the Company may
designate by notice to the undersigned (the “Closing Date”).

 

3.          Payment for Securities. Payment for the Securities shall be received
by the Company from the Investors by wire transfer of immediately available
funds to an account designated by the Company at least twenty four (24) hours
prior to 9:30 a.m., New York time, on the Closing Date, unless otherwise agreed
between the Company and each Investor, as to itself only, per the written
instructions provided to the Investors at least two business days before the
Closing Date or other means approved by the Company at or prior to the Closing,
in the amount as set forth opposite each Investor’s name in Appendix A hereto.
The Company shall deliver certificates representing the Securities to each
respective Investor in accordance with Section 4 hereof, bearing an appropriate
legend (as set forth below) referring to the fact that the Securities were sold
in reliance upon an exemption from registration under the Securities Act.

 

 

 

 

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.

 

4.          Closing Deliverables of the Company. On or prior to the Closing Date
(or as otherwise specified in each clause below), the Company shall deliver or
cause to be delivered to each Investor the following:

 

(a)          This Purchase Agreement, dated as of the date hereof, by and among
the Company and the Investors duly executed by the Company;

 

(b)          Unless otherwise agreed to by the Company and an Investor (as to
itself only), “.pdf” copies of one or more stock certificates, free and clear of
all restrictive or other legends (except as provided in Section 3 hereof) or
statements from the Company’s transfer agent evidencing the Securities purchased
by such Investor hereunder, registered in the name of such Investor as set forth
in Appendix A hereto (the “Stock Certificates”) with the original Stock
Certificates to be delivered by the Company’s transfer agent to the registered
address of each Investor, as set forth in Appendix A hereto, promptly after the
Closing Date but no later than five business days from the Closing Date;

 

(c)          That certain registration rights agreement, dated as of the Closing
Date, by and among the Company and the investors signatory thereto (the
“Registration Rights Agreement”) duly executed by the Company;

 

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(d)          A certificate of the secretary of the Company, dated as of the
Closing Date, (i) certifying resolutions adopted by the Company’s board of
directors, or a duly authorized committee thereof, approving the transactions
contemplated in this Purchase Agreement, the Registration Rights Agreement and
any other documents or agreements executed in connection with the transactions
contemplated hereunder (together, the “Transaction Documents”) and the issuance
of the Securities, (ii) certifying the current versions of the Company’s
certificate of incorporation and by-laws, each as amended, and (iii) certifying
as to the signatures and authority of persons signing the Transaction Documents
and related documents on behalf of the Company;

 

(e)          A certificate of an executive officer of the Company, dated as of
the Closing Date, certifying to the satisfaction of the conditions in Sections
6(b)(i) and (ii); and

 

(f)          An opinion, dated as of the Closing Date, from White & Case LLP, as
counsel to the Company, stating that (i) the Securities will be validly issued,
fully paid and non-assessable and (ii) it is not necessary in connection with
the issuance, sale and delivery to the Investors of the Securities by the
Company under the circumstances contemplated by this Purchase Agreement and the
Offering Materials to register the Securities under the Securities Act.

 

5.          Closing Deliverables of the Undersigned Investors. On or prior to
the Closing Date (or as otherwise specified in each clause below), each Investor
shall deliver or cause to be delivered to the Company the following:

 

(a)          The purchase price to be paid, in United States dollars and
immediately available funds as set forth in Appendix A hereto, by wire transfer
directly to an account designated by the Company as provided for in Section 3
hereof;

 

(b)          A fully completed and duly executed investor questionnaire dated on
or prior to the commencement of this offering; and

 

(c)          This Purchase Agreement, the Registration Rights Agreement and any
other documents or agreements executed in connection with the transactions
contemplated hereunder duly executed by such Investor.

 

6.          Closing Conditions.

 

(a)          The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met by the Investors or
waived by the Company:

 

(i)          The accuracy in all material respects, when made and as of the
Closing Date, of the representations and warranties of the Investors contained
herein (except with respect to representations and warranties which relate to a
specific date, in which case such representations and warranties shall continue
to be materially accurate as of such date).

 

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(ii)         All obligations, covenants and agreements of the Investors required
to be performed at or prior to the Closing shall have been performed.

 

(iii)        The delivery by the Investors of the items set forth in Section 5
of this Purchase Agreement.

 

(iv)        No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents.

 

(b)          The respective obligations of the Investors hereunder in connection
with the Closing are subject to the following conditions being met by the
Company or waived by each Investor as to itself:

 

(i)          The accuracy in all material respects, when made and as of the
Closing, of the representations and warranties of the Company contained herein
(except with respect to representations and warranties which relate to a
specific date, in which case such representations and warranties shall continue
to be materially accurate as of such date).

 

(ii)         All obligations, covenants and agreements of the Company contained
herein required to be performed at or prior to the Closing shall have been
performed.

 

(iii)        No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents.

 

(iv)        The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Securities, all of which shall be
and remain so long as necessary in full force and effect.

 

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7.          Representations and Warranties of the Company. The Company
represents and warrants that:

 

(a)          The Company is duly formed and validly existing under the laws of
the State of Delaware, with the requisite corporate power and authority to
conduct its business as it is currently being conducted and to own or lease its
assets and has secured any other authorizations, approvals, permits and orders
required by law for the conduct by the Company of its business as it is
currently being conducted.

 

(b)          The Company has the requisite corporate power and authority to
enter into and perform the Transaction Documents and to issue the Securities in
accordance with the terms hereof. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action, and no further consent or authorization of the
Company, its board of directors or stockholders is required. When executed and
delivered by the Company, the Transaction Documents shall constitute a valid and
binding obligation of the Company, enforceable against the Company in accordance
with their terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors’ rights generally.

 

(c)          The Securities are duly authorized and, when issued, delivered and
paid for in the manner set forth in this Purchase Agreement, will be validly
issued, fully paid and non-assessable, and will conform in all material respects
to the description thereof incorporated by reference into the Offering
Materials. In addition, such Securities will be free and clear of all liens,
claims, charges, security interests or agreements, pledges, assignments,
covenants, restrictions or other encumbrances created by, or imposed by, the
Company and rights of refusal of any kind imposed by the Company (other than
restrictions on transfer under applicable securities laws) and the holder of
such Securities shall be entitled to all rights accorded to a holder of the
Company’s common stock.

 

(d)          The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) violate any provision of the
Company’s articles of incorporation or by-laws, each as amended to date, (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
mortgage, deed of trust, indenture, note, bond, license, lease agreement,
instrument or obligation to which the Company is a party or by which the
Company’s properties or assets are bound, or (iii) result in a violation of any
federal, state, local or foreign statute, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations) applicable
to the Company or by which any property or asset of the Company is bound or
affected, except, in the case of (ii) and (iii), for such conflicts, defaults,
terminations, amendments, acceleration, cancellations and violations as would
not, individually or in the aggregate, have a material adverse effect on the
business, properties, management, financial position, stockholders’ equity,
results of operation or prospects of the Company (a “Material Adverse Effect”).
The Company is not required under federal, state, foreign or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Purchase Agreement
or issue and sell the shares in accordance with the terms hereof (other than any
filings, consents and approvals which may be required to be made by the Company
under applicable state and federal securities laws, rules or regulations prior
to or subsequent to the Closing).

 

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(e)          The Company has made available to the Investors through the U.S.
Securities and Exchange Commission’s (the “SEC”) EDGAR system, true and complete
copies of the Company’s most recent Annual Report on Form 10-K for the fiscal
year ended December 31, 2012 (the “10-K”), and all other reports filed by the
Company pursuant to the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) since the filing of the 10-K and prior to the date hereof
(collectively, the “SEC Filings”). The SEC Filings are the only filings required
of the Company pursuant to the Exchange Act for the period from the filing of
the 10-K through the date hereof.

 

(f)          At the time of filing thereof, the SEC Filings complied as to form
in all material respects with the requirements of the Exchange Act and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.

 

(g)          As of their respective dates, the financial statements of the
Company included in the SEC Filings complied in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements), and fairly present in all material respects the
consolidated financial position of the Company as of the dates thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments).

 

(h)          The Company has established and maintains a system of internal
accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles in the United States and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.

 

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(i)          Except as disclosed in the SEC Filings, since March 31, 2013, the
Company has not (i) experienced or suffered any Material Adverse Effect, (ii)
incurred any material liabilities, obligations, claims or losses (whether
liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) other than those incurred in the ordinary course of the Company’s
business, or (iii) declared, made or paid any dividend or distribution of any
kind on its capital stock.

 

(j)          No action, suit, proceeding or investigation is currently pending
or, to the knowledge of the Company, has been threatened in writing against the
Company that: (i) concerns or questions the validity of this Purchase Agreement;
(ii) concerns or questions the right of the Company to enter into this Purchase
Agreement; or (iii) is reasonably likely to have a Material Adverse Effect. The
Company is neither a party to nor subject to the provisions of any material
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or that the Company intends to initiate that would
have a Material Adverse Effect.

 

(k)          Neither the Company nor any person acting on its behalf has
conducted any general solicitation or general advertising (as those terms are
used in Regulation D) in connection with the offer or sale of any of the
Securities.

 

(l)          The Company is presently insured, and during each of the past two
calendar years has been insured, for reasonable amounts with reputable insurance
companies against such risks as companies engaged in a similar business would,
in accordance with good business practice, customarily be insured.

 

(m)          Neither the Company nor any of its subsidiaries nor, to the
Company’s knowledge, any director, officer or employee of the Company or any of
its subsidiaries, acting on behalf of the Company or its subsidiaries, is aware
of or has taken any action, directly or indirectly, that would result in a
violation by such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations promulgated thereunder (the “FCPA”),
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA and the Company and its
subsidiaries have conducted their businesses in compliance with the FCPA and
have instituted and maintain policies and procedures designed to ensure, and
which are reasonably expected to continue to ensure, continued compliance
therewith.

 

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(n)          Neither the Company nor, to the Company’s knowledge, any director,
officer or employee of the Company, acting on behalf of the Company, is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”) and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.

 

(o)          The Company and each of its subsidiaries has (i) timely filed all
United States federal, state and local tax returns, information returns, and
similar reports that are required to be filed (taking into account valid
extensions), and all tax returns are true, correct and complete in all material
respects, (ii) paid in full all taxes shown as due thereon and any other
assessment, fine or penalty levied against it, except for any such assessment,
fine or penalty that is currently being contested in good faith or as would not,
individually or in the aggregate, have a Material Adverse Effect, and (iii)
established on the most recent balance sheet reserves that are adequate for the
payment of all taxes not yet due and payable.

 

(p)          The Company is in compliance in all material respects with all of
the provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it. The
Company has established disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) for the Company
and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Commission’s rules and forms. The Company’s
certifying officers have evaluated the effectiveness of the Company’s disclosure
controls and procedures as of the end of the period covered by the Company’s
most recently filed periodic report under the Exchange Act (such date, the
“Evaluation Date”). The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no changes in the Company’s internal control over financial reporting (as
such term is defined in the Exchange Act) that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.

 

(q)          The Company is not, and immediately after receipt of payment for
the Securities will not be, an “investment company,” an “affiliated person” of,
“promoter” or “principal underwriter” for, an entity “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

 

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8.          Representations and Warranties of the Undersigned. The undersigned
hereby represents and warrants to and covenants with the Company that:

 

(a)          General.

 

(i)          Each undersigned Investor is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
organization with the requisite power and authority to purchase the Securities
to be purchased by it hereunder and to execute and deliver the Transaction
Documents, and such purchase will not contravene any law, rule or regulation
binding on the undersigned or any investment guideline or restriction applicable
to the undersigned.

 

(ii)         Assuming the due authorization, execution and delivery thereof by
the Company, the Transaction Documents constitute such Investor’s valid and
legally binding obligation, enforceable against such Investor in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally.

 

(iii)        The undersigned Investor is a resident of the state set forth on
the signature page hereto and is not acquiring the Securities as a nominee or
agent or otherwise for any other person.

 

(iv)        The undersigned Investor is not a broker-dealer registered with the
SEC under the Exchange Act, or a member of the Financial Industry Regulatory
Authority Inc., or an entity engaged in a business that would require it to be
so registered.

 

(v)         The undersigned will comply with all applicable laws and regulations
in effect in any jurisdiction in which the undersigned purchases or sells
Securities and obtain any consent, approval or permission required for such
purchases or sales under the laws and regulations of any jurisdiction to which
the undersigned is subject or in which the undersigned makes such purchases or
sales, and the Company shall have no responsibility therefor.

 

(vi)        The execution, delivery and performance by such Investor of the
Transaction Documents and the consummation by such Investor of the transactions
contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Investor, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
such Investor is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws) applicable to such Investor, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Investor to perform its obligations
hereunder.

 

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(b)          Information Concerning the Company.

 

(i)          The undersigned has received a copy of the Offering Materials. The
undersigned has not been furnished any offering information from the Company or
any placement agent relating to the offering of the Securities other than the
Offering Materials and has relied only on the information contained therein.

 

(ii)         The undersigned confirms that it is not relying on any
communication (written or oral) of the Company or any of its affiliates, as
investment advice or as a recommendation to purchase the Securities. It is
understood that information and explanations related to the terms and conditions
of the Securities provided in the Offering Materials or otherwise by the Company
or any of its affiliates shall not be considered investment advice or a
recommendation to purchase the Securities, and that neither the Company nor any
of its affiliates is acting or has acted as an advisor to the undersigned in
deciding to invest in the Securities. The undersigned acknowledges that neither
the Company nor any of its affiliates has made any representation regarding the
proper characterization of the Securities for purposes of determining the
undersigned’s authority to invest in the Securities.

 

(iii)        The undersigned is familiar with the business and financial
condition and operations of the Company, all as generally described in the
Offering Materials. The undersigned has had access to such information
concerning the Company and the Securities as it deems necessary to enable it to
make an informed investment decision concerning the purchase of the Securities.

 

(iv)        The undersigned understands that, unless the undersigned notifies
the Company in writing to the contrary at or before the Closing Date, each of
the undersigned’s representations and warranties contained in this Purchase
Agreement will be deemed to have been reaffirmed and confirmed as of the Closing
Date, taking into account all information received by the undersigned.

 

(v)         The undersigned understands that no federal or state agency has
passed upon the merits or risks of an investment in the Securities or made any
finding or determination concerning the fairness or advisability of this
investment.

 

(vi)        The undersigned Investor represents and warrants that it has not, as
of the date of this Purchase Agreement and will not (i) use any information
contained in the Offering Materials or any purpose other than an evaluation of
potential investment in the Securities or (ii) disclose any such information
publicly or to any third party (other than those persons, if any, retained to
advise such Investor with respect to its potential investment).

 

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(vii)       The undersigned Investor understands and acknowledges that (A) the
Company previously filed a registration statement on Form S-1 with the SEC (File
333-188497) on May 9, 2013 (such registration statement, including the exhibits
and any amendments thereto, the “Registration Statement”) and subsequently
withdrew such Registration Statement pursuant to Rule 477 of the Securities Act,
effective as of May 15, 2013, (B) no securities were sold under such
Registration Statement, (C) the offer and sale of the Securities being sold
hereunder will not be registered under the Securities Act, (D) the Securities
being sold hereunder will be “restricted securities” as such term is defined
under Rule 144(a)(3) under the Securities Act and may not be resold except in
accordance with the legend affixed to the face of the certificates evidencing
the Securities and the provisions of Section 8(e) hereof, and (E) such Investor
does not have the protection of Section 11 of the Securities Act in connection
with its purchase of the Securities hereunder. As of July 9, 2013, six months
have elapsed since the closing date of the private placement transaction in
connection with which the Registration Statement was filed. Each named selling
stockholder included in the Registration Statement may, subject to the
limitations set forth in Rule 144 promulgated under the Securities Act (“Rule
144”) and the individual determination of the status of each selling
stockholder, avail themselves of the applicable provisions of Rule 144 for sales
of the Company’s common stock.

 

(c)          Non-reliance.

 

(i)          The undersigned represents that it is not relying on (and will not
at any time rely on) any communication (written or oral) of the Company or
Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), as
investment advice or as a recommendation to purchase the Securities, it being
understood that information and explanations related to the terms and conditions
of the Securities and the other Transaction Documents that are described in the
Offering Materials shall not be considered investment advice or a recommendation
to purchase the Securities.

 

(ii)         The undersigned confirms that neither the Company nor Merrill Lynch
have (A) given any guarantee or representation as to the potential success,
return, effect or benefit (either legal, regulatory, tax, financial, accounting
or otherwise) of an investment in the Securities or (B) made any representation
to the undersigned regarding the legality of an investment in the Securities
under applicable legal investment or similar laws or regulations. In deciding to
purchase the Securities, the undersigned is not relying on the advice or
recommendations of the Company or Merrill Lynch and the undersigned has made its
own independent decision that the investment in the Securities is suitable and
appropriate for the undersigned.

 

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(d)          Status of Undersigned.

 

(i)          The undersigned understands and accepts that the purchase of the
Securities involves various risks, including the risks outlined in the Offering
Materials and in this Purchase Agreement. The undersigned has such knowledge,
skill and experience in business, financial and investment matters that the
undersigned is capable of evaluating the merits and risks of an investment in
the Securities. With the assistance of the undersigned’s own professional
advisors, to the extent that the undersigned has deemed appropriate, the
undersigned has made its own legal, tax, accounting and financial evaluation of
the merits and risks of an investment in the Securities and the consequences of
this Purchase Agreement. The undersigned has considered the suitability of the
Securities as an investment in light of its own circumstances and financial
condition and the undersigned is able to bear the risks associated with an
investment in the Securities and its authority to invest in the Securities.

 

(ii)         The undersigned is an “accredited investor” as defined in Rule
501(a) under the Securities Act. The undersigned agrees to furnish any
additional information requested by the Company or any of its affiliates to
assure compliance with applicable U.S. federal and state securities laws in
connection with the purchase and sale of the Securities. The undersigned
acknowledges that the undersigned has completed, duly executed and delivered to
the Company’s placement agent, an investor questionnaire in a form reasonably
satisfactory to the placement agent and that the information contained therein
is complete and accurate as of the date thereof and is hereby affirmed as of the
date hereof.

 

(e)          Restrictions on Transfer or Sale of Securities. As applies to the
undersigned:

 

(i)          The undersigned is acquiring the Securities solely for the
undersigned’s own beneficial account, for investment purposes, and not with a
view to, or for resale in connection with, any distribution of the Securities.
The undersigned understands that the Securities have not been registered under
the Securities Act or any state securities laws by reason of specific exemptions
under the provisions thereof which depend in part upon the investment intent of
the undersigned and of the other representations made by the undersigned in this
Purchase Agreement. The undersigned understands that the Company is relying upon
the representations and agreements contained in this Purchase Agreement (and any
supplemental information) for the purpose of determining whether this
transaction meets the requirements for such exemptions.

 

(ii)         The undersigned understands that the Securities are “restricted
securities” under applicable federal securities laws and that the Securities Act
and the rules of the SEC provide in substance that the undersigned may dispose
of the Securities only pursuant to an effective registration statement under the
Securities Act or an exemption therefrom, and the undersigned understands that,
except as set forth in the Registration Rights Agreement, the Company has no
obligation or intention to register any of the Securities, or to take action so
as to permit sales pursuant to the Securities Act (including Rule 144
thereunder). Accordingly, the undersigned understands that under the SEC’s rules
and other than as set forth in the Registration Rights Agreement, the
undersigned may dispose of the Securities principally only in “private
placements” which are exempt from registration under the Securities Act, in
which event the transferee will acquire “restricted securities” subject to the
same limitations as in the hands of the undersigned. Consequently, the
undersigned understands that the undersigned must bear the economic risks of the
investment in the Securities for an indefinite period of time.

 

12

 

 

(iii)        The undersigned agrees: (A) that the undersigned will not sell,
assign, pledge, give, transfer or otherwise dispose of the Securities or any
interest therein, or make any offer or attempt to do any of the foregoing,
except pursuant to a registration of the Securities under the Securities Act and
all applicable state securities laws, or in a transaction which is exempt from
the registration provisions of the Securities Act and all applicable state
securities laws; (B) that the certificates evidencing the Securities will bear a
legend substantially in the form set out below, making reference to the
foregoing restrictions; and (C) that the Company, its transfer agent and their
affiliates shall not be required to give effect to any purported transfer of
such Securities except upon compliance with the foregoing restrictions. The
legend on the certificates representing the Securities shall state:

 

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.

 

(iv)        The undersigned acknowledges that neither the Company nor any other
person offered to sell the Securities to it by means of any form of general
solicitation or advertising, including but not limited to: (A) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio or
(B) any seminar or meeting whose attendees were invited by any general
solicitation or general advertising.

 

13

 

 

9.          Reliance Upon Representations and Warranties. Each Investor
understands and acknowledges that the Securities are being offered and sold in
reliance on a transactional exemption from the registration requirements of
federal and state securities laws, and that the Company and Merrill Lynch are
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of such Investor set forth in
this Agreement (i) in concluding that the offer and sale of the Securities is a
“private offering” and, as such, is exempt from the registration requirements of
the Securities Act, and (ii) to determine the applicability of such exemptions
in evaluating the suitability of such Investor to purchase the Securities.

 

10.         Furnishing of Information. For a period of one year after the date
of this Purchase Agreement, the Company covenants to file all reports required
to be filed by the Company after the date hereof pursuant to the Exchange Act.
During this one-year period, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Investors and
make publicly available in accordance with Rule 144 such information as is
required for the Investors to sell the Securities under Rule 144.

 

11.         No Integration. The Company shall not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that could reasonably be expected to
be integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities
to the Investors.

 

12.         Publicity; Certain Transactions. The Company shall not publicly
disclose the name of any Investor or an affiliate of any Investor, or include
the name of any Investor or an affiliate of any Investor in any press release or
filing with the SEC (other than any registration statement to be filed in
connection with the Registration Rights Agreement) or any regulatory agency or
trading market, without the prior written consent of such Investor, except (i)
as required by federal securities law in connection with (A) any registration
statement contemplated by the Registration Rights Agreement and (B) the filing
of the final Transaction Documents (including signature pages thereto) with the
SEC and (ii) to the extent such disclosure is required by law, requested by the
staff of the SEC or trading market regulations, in which case the Company shall
provide the Investors with notice as soon as reasonably practicable of such
disclosure permitted under this subclause (ii). Except as prohibited by law or
any rule or regulation of any securities exchange or any governmental agency,
the Company shall use its commercially reasonable efforts to provide such notice
in advance of any anticipated public disclosure as contemplated by clauses (i)
and (ii) above and permit the Investors to review and provide comments to such
public disclosure. Each Investor acknowledges that the Offering Materials
contain non-public information regarding acquisitions being contemplated by the
Company that are currently material to the Company’s prospects and that trading
in the Company’s securities while in possession of this information would be a
violation of applicable securities laws until the date on which such information
is either (i) publicly disclosed or (ii) is no longer material (the “Cleansing
Date”). In order to give more certainty to Investors, the Company agrees to
promptly notify (“Cleansing Notice”) each Investor when, in the Company’s good
faith determination, the Cleansing Date has occurred. The Company shall use its
commercially reasonable efforts to effect the Cleansing Date as soon as
reasonably practical following the Closing Date and in no event later than
September 30, 2013. Each Investor acknowledges that a Cleansing Notice
represents only the Company’s good faith determination that the Cleansing Date
has occurred and a legal or regulatory authority or trading counterparty may
come to a different conclusion as to whether and when the Cleansing Date has
occurred.

 

14

 

 

13.         Indemnification of Investors. In addition to the indemnity set forth
in the Registration Rights Agreement, the Company agrees to indemnify and hold
harmless each Investor and its affiliates and their respective directors,
officers, trustees, members, managers, employees and agents, and their
respective successors and assigns, from and against any and all losses, claims,
damages, liabilities and expenses (including without limitation reasonable
attorney fees and disbursements and other expenses incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending
or threatened and the costs of enforcement thereof) to which such person may
become subject as a result of any breach of representation, warranty, covenant
or agreement made by or to be performed on the part of the Company under the
Transaction Documents, and will reimburse any such person for all such amounts
as they are incurred by such person.

 

14.         Rule 13d-5. Each of the Investors hereby agree and acknowledge that,
no Investor or its affiliates has an agreement to act, or is acting, together or
in concert with, any other Investor or its affiliates, for or in furtherance of
the purpose of (i) acquiring, holding, voting or disposing of securities of the
Company, (ii) seeking to control the management, the board of directors or
policies of the Company or (iii) effecting or seeking to effect any action,
transaction, change or matter referred to in any one or more of clauses (a)
through (j) of Item 4 of Schedule 13D under the Exchange Act, or otherwise are
or shall be deemed to be acting in concert with each other, for or in
furtherance of any such purpose (such action or agreement to act for such
enumerated purpose or purposes, a “Group Action”). The Company is not aware of
any Investor or Investors or their respective affiliates having any agreement to
take or currently taking any Group Action.

 

15.         Obligations Irrevocable. The obligations of the undersigned shall be
irrevocable.

 

15

 

 

16.         Waiver; Amendment. Neither this Purchase Agreement nor any
provisions hereof shall be modified, changed, discharged or terminated except by
an instrument in writing, signed by the party against whom any waiver, change,
discharge or termination is sought.

 

17.         Assignability. Neither this Purchase Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Company or the undersigned without the prior written
consent of the other party.

 

18.         Waiver of Jury Trial. Each of the parties to this Purchase 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 Purchase 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 Purchase
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 Purchase Agreement, that each has already relied
on this waiver in entering into this Purchase 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 18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS PURCHASE AGREEMENT. In the event
of litigation, this Purchase Agreement may be filed as a written consent to a
trial by the court.

 

19.         Submission to Jurisdiction. With respect to any suit, action or
proceeding relating to any offers, purchases or sales of the Securities by the
undersigned (“Proceedings”), the undersigned irrevocably submits to the
jurisdiction of the federal or state courts located in the Borough of Manhattan
in New York City, which submission shall be exclusive unless none of such courts
has lawful jurisdiction over such Proceedings.

 

20.         Governing Law. This Purchase Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

 

21.         Section and Other Headings. The section and other headings contained
in this Purchase Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Purchase Agreement.

 

22.         Counterparts. This Purchase Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which together shall be deemed to be one and the same
agreement.

 

16

 

 

23.         Notices. All notices and other communications provided for herein
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid to the following addresses (or such other address as either
party shall have specified by notice in writing to the other):

 

If to the Company: Sequential Brands Group, Inc.   1065 Avenue of the Americas  
30th Floor   New York, NY 10018   Facsimile: (212) 354-8113   Attention: Yehuda
Shmidman with a copy (which shall not White & Case LLP constitute notice) to:
1155 Avenue of the Americas   New York, New York 10036   Facsimile:   (212)
354-8113   Attention: Nazim Zilkha     David Johansen

 

Notices to the Investors shall be sent to the addresses indicated on their
respective signature pages hereto.

 

24.         Delivery by Facsimile. This Purchase 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.

 

25.         Binding Effect. The provisions of this Purchase Agreement shall be
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns.

 

17

 

 

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

 

27.         Sophisticated Parties; Advice of Counsel. Each of the parties to
this Purchase Agreement specifically acknowledges that (i) it is a
knowledgeable, informed, sophisticated person capable of understanding and
evaluating the provisions set forth in this Purchase Agreement and (ii) it has
been fully advised and represented by internal or outside 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 Purchase
Agreement.

 

28.         Entire Agreement. This Purchase Agreement, together with the
appendices, 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.

 

29.         Survival. All representations, warranties and covenants contained in
this Purchase Agreement shall survive (i) the acceptance of the subscription by
the Company, (ii) changes in the transactions, documents and instruments
described in the Offering Materials which are not material or which are to the
benefit of the undersigned and (iii) the death or disability of the undersigned.

 

30.         Notification of Changes. The undersigned hereby covenants and agrees
to notify the Company upon the occurrence of any event prior to the Closing
pursuant to this Purchase Agreement which would cause any representation,
warranty, or covenant of the undersigned contained in this Purchase Agreement to
be false or incorrect.

 

31.         Severability. If any term or provision of this Purchase Agreement is
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of
this Purchase Agreement or invalidate or render unenforceable such term or
provision in any other jurisdiction.

 

[SIGNATURE PAGE FOLLOWS]

 

18

 

 

IN WITNESS WHEREOF, the undersigned has executed this Purchase Agreement as of
the date first written above.

 

Investor Name:    

 

By     Name:     Title:    

 

Registered Address:              

 

Tax ID #:    

 

Investor Purchase Amount:

US$    

 

Signature Page to the Purchase Agreement

 

 

 

 

Acknowledged and agreed by:

 

  Sequential Brands Group, Inc.         By     Name:     Title:  

  

Signature Page to the Purchase Agreement

 

 

 

 

SCHEDULE 1

 

Offering Materials

 

1.          Slide Deck entitled “Sequential Brands Group – Investment Overview”

 

 

 

 

APPENDIX A

Consideration To Be Delivered

 

Investor Name and
Registered Address   Securities to Be
Acquired   Purchase Price to be
Paid*     ______ shares of
common stock   US$_____    

Total Shares:

______

 

Total Purchase Price:

$________

 

*Rounded for reference purposes.