Document:

UNIT SUBSCRIPTION AGREEMENT

This UNIT SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of November 15, 2007, by and between International Brands Management Group Ltd., a Delaware corporation (the “Company”), and DCMGE LLC (the “Purchaser”).

WHEREAS, the Company is proposing to file a registration statement (the “Registration Statement”) on Form S-1 under the Securities Act of 1933, as amended (the “Securities Act”) with the Securities and Exchange Commission in connection with a proposed initial public offering (the “Initial Public Offering”) of 25,000,000 units (“Units”), each consisting of one share of common stock of the Company, par value $0.0001 per share (“Common Stock”),
and one warrant to purchase one additional share of Common Stock for $6.00, subject to the terms and conditions set forth in the Registration Statement; and

WHEREAS, in order to capitalize the Company prior to the Initial Public Offering, the Company desires to issue and sell, and the Purchaser desires to purchase and acquire, certain Initial Units (as defined below) on the terms and conditions hereinafter set forth.

NOW, THEREFORE, for and in consideration of the promises and mutual covenants set forth herein, the parties hereto agree as follows:

1. Purchase and Sale of Units. The Purchaser hereby subscribes for and purchases from the Company, and the Company hereby issues and sells to the Purchaser, 350,000 units (the “Initial Units”) at a purchase price of approximately $.003478 per Initial Unit for an aggregate purchase price of $1,217.42. Each Initial Unit consists of one share of Common Stock and one warrant (an “Initial Warrant”) to purchase one additional share of Common Stock for $6.00 in accordance with the terms of the Warrant Agreement to be entered into by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent, which
shall be substantially in the form attached hereto as Exhibit A (the “Warrant Agreement”). The Initial Units, together with the underlying Common Stock and the Initial Warrants, are referred to herein as the “Securities.”

2. Closing of Purchase and Sale. The closing of the purchase and sale of the Initial Units shall take place at the offices of the Company immediately following the execution of this Agreement. At the closing, the Company shall deliver to the Purchaser a certificate evidencing the Initial Units, registered in the Purchaser’s name, upon the payment of the aggregate purchase price therefor in immediately available funds by delivery of a cashiers check or by wire transfer to an account designated by the Company.

3. Intentionally Omitted. 

 

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4. Restrictive Legends. All certificates representing the Initial Units shall have endorsed thereon the following legends: 

(a) “The securities represented by this Certificate have not been registered under the Securities Act of 1933, as amended. The securities may not be sold, offered for sale, pledged or hypothecated in the absence of an effective registration statement as to the securities under the Securities Act or an opinion of counsel satisfactory to the Company that such registration statement is not required.”

(b) Any legend required pursuant to the terms of the Warrant Agreement or that certain Securities Escrow Agreement among the Company, Continental Stock Transfer & Trust Company and the other signatories thereto.

(c) Any legend required by state securities or blue sky laws or regulations.

5. Investment Representations. In connection with the purchase of the Securities, the Purchaser represents to the Company the following: 

(a) The Purchaser is familiar with the Company’s business plans and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. The Purchaser has been afforded the opportunity to ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment in the Securities involves a high degree of risk. The Purchaser has sought such accounting, legal and tax advice as the Purchaser has considered necessary to make an informed investment decision with respect to the Purchaser’s acquisition of the Securities. The Purchaser has such knowledge and expertise in financial and business matters, knows of the high degree of risk associated with investments generally and particularly investments in the securities of companies in the
development stage such as the Company, is capable of evaluating the merits and risks of an investment in the Securities, and is able to bear the economic risk of an investment in the Securities in the amount contemplated hereunder. The Purchaser understands that there presently is no public market for the securities and none is anticipated to develop in the foreseeable future. The Purchaser can afford a complete loss of its investment in the Securities. The Purchaser is purchasing the Securities for investment for the Purchaser’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act. 

(b) The Purchaser understands that the Securities have not been registered under the Securities Act or any state securities law by reason of a specific exemption 

 

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therefrom, and that the Company is relying on the truth and accuracy of, and the Purchaser’s compliance with, the representations and warranties and agreements of the Purchaser set forth herein to determine the availability of such exemptions and the eligibility of the Purchaser to acquire such Securities, including, but not limited to, the bona fide nature of the Purchaser’s investment intent as expressed herein. 

(c) The Purchaser further acknowledges and understands that the Securities must be held indefinitely unless the Securities are subsequently registered under the Securities Act or an exemption from such registration is available. The Purchaser understands that the certificates evidencing the Securities will be imprinted with a legend that prohibits the transfer of the Securities unless the Securities are registered or such registration is not required in the opinion of counsel for the Company. 

(d) The Purchaser represents that the Purchaser is an “accredited investor” as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act. 

(e) The Purchaser has all necessary power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. All action necessary to be taken by the Purchaser to authorize the execution, delivery and performance of this Agreement and all other agreements and instruments delivered by the Purchaser in connection with the transactions contemplated hereby has been duly and validly taken, and this Agreement has been duly executed and delivered by the Purchaser. This Agreement constitutes the valid, binding and enforceable obligation of the Purchaser, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws of general application now or hereafter in effect affecting the rights and remedies of creditors and by
general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). The purchase by the Purchaser of the Securities does not conflict with the organizational documents of the Purchaser (if the Purchaser is an entity) or with any material contract by which the Purchaser or its property is bound, or any laws or regulations or decree, ruling or judgment of any court applicable to the Purchaser or its property.

(f) The Purchaser did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502(c) of the Securities Act. 

(g) The Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities, nor have such authorities passed upon or endorsed the merits of the offering of the Securities. 

6. Company Representations and Warranties. In connection with the issuance and sale of the Securities, the Company represents to the Purchaser the following:

(a) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and the Company has all necessary corporate power and authority to enter into this Agreement and to consummate the 

 

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transactions contemplated hereby. All corporate action necessary to be taken by the Company to authorize the execution, delivery and performance of this Agreement and all other agreements and instruments delivered by the Company in connection with the transactions contemplated hereby has been duly and validly taken and this Agreement has been duly executed and delivered by the Company. This Agreement constitutes the valid, binding and enforceable obligation of the Company, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar laws of general application now or hereafter in effect affecting the rights and remedies of creditors and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). The sale by
the Company of the Securities does not conflict with the certificate of incorporation or by-laws of the Company or any material contract by which the Company or its property is bound, or any federal or state laws or regulations or decree, ruling or judgment of any United States or state court applicable to the Company or its property. 

(b) The Initial Units, and the Common Stock and Initial Warrants underlying the Initial Units, have been duly authorized and, when issued, delivered and paid for in accordance with this Agreement, the Common Stock underlying such Initial Units will be validly issued, fully paid and non-assessable and will be free and clear of all liens and claims. The shares of Common Stock issuable upon exercise of the Warrants have been duly authorized and, when issued, delivered and paid for in accordance with the terms of the Warrant Agreement, will be validly issued, fully paid and non-assessable and will be free and clear of all liens and claims. 

7. Miscellaneous.

(a) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the principles of conflicts of law thereof.

(b) Further Execution. The parties agree to take all such further action as may reasonably be necessary to carry out and consummate this Agreement as soon as practicable, and to take whatever steps may be necessary to obtain any governmental approval in connection with or otherwise qualify the issuance of the Securities that are the subject of this Agreement.

(c) Amendment. This Agreement may not be amended, modified or waived, in whole or in part, except by an agreement in writing signed by each of the parties hereto.

(d) Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart.

 

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

 

	
                         
 	
                         
 	
                        COMPANY:
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        INTERNATIONAL BRANDS MANAGEMENT GROUP LTD.
 
	
                          
 	
                         
 	
                        By: 
 	
                        
 /s/ Christopher H. Heyn
 
	
                         
 	
                         
 	
                         
 	
      Name:
 	
      Christopher H. Heyn
 
	
                         
 	
                         
 	
                         
 	
                        Title:
 	
                        President
 

 

	
                         
 	
                         
 	
                        PURCHASER:
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        DCMGE LLC
 
	
                          
 	
                         
 	
                        By: 
 	
                        
 /s/ David Chu
 
	
                         
 	
                         
 	
                         
 	
      Name:
 	
      David Chu
 
	
                         
 	
                         
 	
                         
 	
                        Title:
 	
                        Managing Member[       
 	
           ], 2008
 

International Brands Management Group Ltd. 

25 East 22nd Street 

New York, NY 10010

Pali Capital, Inc.

650 Fifth Avenue

New York, New York 10019

	
                         
 	
                        Re:
 	
                        Initial Public Offering
 

Ladies and Gentlemen:

The undersigned officer, director and holder of common stock, par value $0.0001 per share (“Common Stock”), of International Brands Management Group Ltd. (the “Company”), in consideration of Pali Capital, Inc. (the “Underwriters”) entering into a letter of intent and agreeing to act as lead underwriter in connection with the initial public offering of the securities of the Company (the “IPO”), hereby agrees as follows:

	
                         
 	
                        1.
 	
                        Agreements of Stockholders
 

(a) The undersigned hereby waives any right to receive distributions (other than with respect to Common Stock or any shares of Common Stock underlying units the undersigned may purchase in connection with the IPO or in the aftermarket) upon the liquidation of the Trust Account (as defined in the Certificate of Incorporation of the Company (as amended, the “Certificate”; capitalized terms used herein but not defined herein have the meaning set forth in the Certificate)), or as part of any plan of dissolution and distribution required in the event the Company does not consummate a Business Combination by the Termination Date. Except with respect to any shares acquired by the undersigned in connection with or following the IPO, the undersigned hereby (i) waives any and all right, title,
interest or claim of any kind (the “Claim”) in or to all funds in the Trust Account and any remaining net assets of the Company upon liquidation of the Trust Account and dissolution of the Company, (ii) waives any Claim the undersigned may have in the future as a result of, or arising out of, any contracts or agreements with the Company and (iii) agrees the undersigned will not seek recourse against the Trust Account for any reason whatsoever.

(b) In the event of the liquidation of the Trust Account, the undersigned agrees to indemnify and hold harmless the Company against any and all loss, liability, claims, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened, or any claim whatsoever) which the Company may

 

 

become subject as a result of any claim by any vendor for services rendered or products sold to us, or a prospective target business, if such party did not execute a waiver of claims against the Trust Account, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Account. The foregoing section is not for the benefit of any third party beneficiaries of the Company and does not create any contract right in favor of any person other than the Company. 

(c) The undersigned hereby waives any right set forth in the Certificate to demand conversion of the undersigned’s shares of Common Stock into cash (other than with respect to Common Stock or any shares of Common Stock underlying units the undersigned may purchase in the IPO or in the aftermarket) in the event a Business Combination is approved by the Company’s stockholders.

(d) In connection with the stockholder vote required to approve a Business Combination, the undersigned shall vote any shares of Common Stock then owned by the undersigned in accordance with the majority of the votes cast by the public stockholders of the Company’s Common Stock and will vote all shares of the Company’s Common Stock acquired by them in the IPO or aftermarket in favor of any Business Combination negotiated by the officers of the Company. In connection with the stockholder vote for the Company’s plan of dissolution and distribution, if any, required as a result of the Company’s failure to consummate a Business Combination by the Termination Date, the undersigned shall vote any shares of Common Stock then owned by the undersigned in favor of such dissolution and distribution. 

(e) The undersigned and any affiliate of the undersigned will not be entitled to receive from the Company, and will not accept from the Company, any compensation (including finder’s or consulting fees) for services rendered to the Company prior to or in connection with the consummation of a Business Combination (except as described in the registration statement filed with and declared effective by the Securities and Exchange Commission in connection with the IPO (the “Registration Statement”). 

(f) The undersigned will escrow the initial units owned by the undersigned immediately prior to the IPO pursuant to a securities escrow agreement until the earliest of (i) one year from the completion of a Business Combination, or earlier if, following a Business Combination, the last sales price of the Common Stock equals or exceeds $11.50 per share for any 20 trading days within any 30-trading day period (ii) the Company’s liquidation and (iii) the consummation of a Business Combination which results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property subsequent to the Company’s consummating a Business Combination. 

(g) The undersigned will escrow the Warrants purchased in a private placement concurrent with the IPO until the later of one year following the effective date of the Registration Statement and sixty (60) days following the consummation of a Business Combination. 

 

 

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(h) In the event that the Company does not consummate a Business Combination and must liquidate and its remaining net assets are insufficient to complete such liquidation, the undersigned agrees to advance such funds necessary to complete such liquidation and agrees not to seek repayment for such expenses. 

	
                         
 	
                        2.
 	
                        Agreements of Directors and Officers
 

(a) In the event that the Company does not consummate a Business Combination by the Termination Date, in the event the undersigned is a director of the Company, the undersigned, in his capacity as a director of the Company, (i) acknowledges the requirement set forth in the Certificate that the Board of Directors of the Company shall adopt, within 15 days after the Termination Date, a resolution finding the dissolution of the Company advisable and provide notices to the Company’s stockholders as required by § 275(a) of the Delaware General Corporate Law as soon as reasonably practicable thereafter and (ii) will take all reasonable actions within the undersigned’s power to effect such dissolution of the Company under the circumstances contemplated by the Certificate provided that at the time of such liquidation and dissolution the undersigned is a director.

(b) In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or entity, any suitable opportunity to acquire an operating business, until the earlier of the consummation by the Company of a Business Combination, the liquidation of the Company or until such time as the undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary and contractual obligations the undersigned might have.

(c) The undersigned acknowledges and agrees that the Company will not consummate any Business Combination which involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority and is reasonably acceptable to Pali Capital, Inc., that the Business Combination is fair to the Company’s stockholders from a financial perspective.

(d) Prior to a Business Combination, neither the undersigned, any member of the family of the undersigned, nor any affiliate (“Affiliate”) of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company. Notwithstanding the foregoing to the contrary, the undersigned shall be entitled to reimbursement from the Company for his out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination and commencing on the Effective Date, DC  Management Group LLC, an affiliate of the undersigned (“Related Party”), shall be allowed to charge the Company $10,000 per month to compensate it for the Company’s use of the Related Party’s office space and certain administrative support and services.

(e) The undersigned agrees that during his period of service as a director, he will not become associated with any other special purpose acquisition company that

 

 

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is involved or intends to be involved in the activities similar to those activities that the Company intends to pursue with respect to a Business Combination.

(f) The undersigned agrees to be Chairman and Chief Executive Officer of the Company and a member of the Company’s board of directors until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company; provided, however, the undersigned is not obligated to contribute a minimum number of hours per week to the Company’s business or operations. The undersigned acknowledges that the foregoing does not interfere with or limit in any way the right of the Company to terminate the undersigned’s employment at any time (subject to other contractual rights the undersigned may have) nor confer upon the undersigned any right to continue in the employ of Company. 

(g) The undersigned’s biographical information set forth in the Registration Statement is true and accurate in all material respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933. The undersigned’s Director’s and Officer’s Questionnaire furnished to the Company in connection with the Registration Statement is true and accurate in all respects. The undersigned represents and warrants that, except as disclosed in the undersigned’s Director’s and Officer’s Questionnaire:  

i   the undersigned is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;

ii   the undersigned has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities, and is not currently a defendant in any such criminal proceeding; and  

iii   the undersigned has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.

(h) The undersigned authorizes any employer, financial institution, or consumer credit reporting agency to release to the Underwriters and its legal representatives or agents (including any investigative search firm retained by the Underwriters) any information they may have about the undersigned’s background and finances (“Information”). Neither the Underwriters nor its agents shall be violating the undersigned’s right of privacy in any manner in requesting and obtaining the Information and the undersigned hereby releases them from liability for any damage whatsoever in that connection.

(i) The undersigned hereby agrees not to propose, or vote in favor of any amendment to the Company’s Amended and Restated Certificate of Incorporation that may

 

 

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not be amended prior to a Business Combination. This paragraph may not be modified or amended under any circumstances. 

	
                         
 	
                        3.
 	
                        Miscellaneous
 

(a) The undersigned has full right and power, without violating any agreement by which the undersigned is bound, to enter into this letter agreement.

(b) This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The undersigned hereby (i) agrees that any action, proceeding or claim against him arising out of or relating in any way to this letter agreement (a “Proceeding”) shall be brought and enforced in the courts of the State of New York of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive, and (ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. If for any reason
such agent is unable to act as such, the undersigned will promptly notify the Company and the Underwriters and appoint a substitute agent acceptable to the Underwriters within 30 days and nothing in this letter will affect the right of either party to serve process in any other manner permitted by law.

[Remainder of page intentionally left blank.]

 

 

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

 

	
                          
 	
                         
 	
      By: 
 	
                          
 
	
                         
 	
                         
 	
                         
 	
                        David Chu
 

 

[Insider Letter]

 

 

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