Document:

Exhibit
      10.3

    

    STOCK
      PURCHASE AGREEMENT

    

    This
      Stock Purchase Agreement (the “Agreement”)
      is
      entered into as of the 9th
      day of
      May, 2008, by and among I.C. Isaacs & Company, Inc., a Delaware company (the
“Company”),
      Textile Investment International S.A. (“Textile”),
      Olivier Bachellerie and Rene Faltz (each individually a “Purchaser”
and
      collectively with Textile, the “Purchasers”).

    

    WITNESSETH:

    

    WHEREAS,
      the Company desires to issue and sell and the Purchasers desire to purchase
      from
      the Company, in the aggregate Two Million Dollars ($2,000,000) of newly issued
      shares of common stock of the Company (the “Common
      Stock”);
      and

    

    WHEREAS,
      the consummation of the transaction contemplated hereby is conditional upon,
      among other things, a concurrent purchase by certain members of the Company’s
      management and executive team of an aggregate of One Hundred Thousand Dollars
      ($100,000) of newly issued shares of Common Stock, consent from Wachovia Bank,
      National Association (“Wachovia”),
      and
      execution and delivery of the Related Documents (as defined herein);

    

    WHEREAS,
      the parties hereto desire to set forth certain agreements and certain terms
      and
      conditions regarding the sale and purchase of the shares of Common
      Stock;

    

    NOW,
      THEREFORE, the parties hereto hereby agree as follows:

    

    

    ARTICLE
      I

    

    Sale
      and
      Purchase of Shares; Closing

    

    Section
      1.1. Sale
      and Purchase of Shares; Purchase Price. 

    

    (a) Upon
      the
      terms and subject to the conditions of this Agreement, the Purchasers agree
      to
      purchase from the Company, and the Company agrees to issue and sell to the
      Purchasers, on the “Closing
      Date”
(as
      defined herein), 10,000,000 shares of Common Stock (the “Company
      Shares”)
      for an
      aggregate purchase price of Two Million Dollars ($2,000,000) (the “Purchase
      Price”).
      Each
      Purchaser shall purchase that number of the Company Shares and pay that portion
      of the Purchase Price as is set forth opposite his or its name on Schedule
      1
      hereto,
      provided that Textile may designate an Affiliate (as defined herein) to purchase
      all or a portion of the shares of Common Stock to be purchased by Textile.
      For
      the purposes of this Agreement the term “Affiliate”
shall
      mean, as to Textile, any other person controlling, controlled by, under the
      control of, or under common control with, such person. As used in this
      definition, “control”
shall
      mean possession, directly or indirectly, of the power to direct or cause the
      direction of management or policies (whether through ownership of securities
      or
      partnership or other ownership interests, by contract or
      otherwise).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Section
      1.2. Closing.

    

    (a) The
      closing of the transactions under this Agreement (the “Closing”)
      shall
      take place at the offices of Kramer Levin Naftalis & Frankel LLP, 1177
      Avenue of the Americas, New York, New York 10036, at 10:00 a.m. (NY time) on
      the
      date hereof. 

    

    Section
      1.3.
       Deliveries
      at Closing.
      At the
      Closing:

    

    (a) The
      Company shall deliver to the Purchasers certificates representing the Company
      Shares.

    

    (b) Each
      Purchaser shall deliver to the Company its portion of the Purchase Price for
      the
      Company Shares by certified check or wire transfer. 

    

    (c) The
      Company shall provide evidence reasonably satisfactory to the Purchasers that
      the following agreements have been or will be concurrently herewith entered
      into
      (and in the case of (ii) and (v) below, the transactions thereunder consummated
      at Closing): (i) that certain notice of election of extension of employment
      agreement, (ii) that certain conversion agreement by and between the Company
      and
      Textile (the “Conversion
      Agreement”);
      (iii)
      that certain debt forgiveness agreement by and between the Company and Textile;
      (iv) that certain investor rights agreement between the Company, the Purchasers
      and Wurzburg Holding S.A. (the “IRA”);
      (v)
      that certain stock purchase agreement by and between the Company and Robert.
      S.
      Stec and (vi) those two certain license amendment agreements to the men’s and
      women’s collections, respectively (copies of all such agreements which are
      attached hereto as Annex
      A,
      collectively, the “Related
      Documents”).

    

    (d) The
      Company shall provide evidence reasonably satisfactory to the Purchasers that
      the Wachovia consent (consenting to the transactions contemplated by and the
      terms of this Agreement and the Related Documents and confirming that the Third
      Amendment to Loan and Security Agreement remains in full force and effect)
      has
      been or will be concurrently with the Closing received. 

    

     

    ARTICLE
      II

    

    Representations
      and Warranties of the Company

    

    The
      Company, represents and warrants to, and covenants and agrees with the
      Purchasers as follows:

    

    Section
      2.1. Organization
      and Good Standing.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware. The Company has no subsidiaries other
      than I.C. Isaacs & Company L.P. and Isaacs Design, Inc. of which both are
      operating subsidiaries. The subsidiaries are duly organized, validly existing
      and in good standing under the laws of the State of Delaware. The Company and
      each of its subsidiaries have all requisite corporate power or limited
      partnership power, as the case may be, and authority to own their properties
      and
      assets and carry on their businesses as now conducted, and are duly qualified
      and in good standing as foreign corporations in each jurisdiction in which
      the
      location or nature of their property or the character of their businesses make
      such qualification necessary, except where the failure to be so qualified would
      not have a material adverse affect, financial or otherwise, on the business,
      condition, assets, properties, liabilities or results of operations of the
      Company or its subsidiaries. 

     

    
      
        
        

      

      
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    Section
      2.2. Corporate
      Power; Authorization; Binding Agreements.
      The
      Company has the corporate power and authority to execute and deliver this
      Agreement and the Related Documents and to perform its obligations hereunder
      and
      thereunder. The execution, delivery and performance of this Agreement and the
      Related Documents, the issuance and sale by the Company of the Company Shares
      hereunder and the consummation by the Company of the transactions contemplated
      hereby and by the Related Documents have been duly authorized by all necessary
      action, corporate or otherwise, on the part of the Company. This Agreement,
      the
      Related Documents and the other agreements of the Company required to consummate
      the transactions contemplated hereunder and thereunder have been duly executed
      and delivered by, and constitute valid and binding obligations of, the Company
      and are enforceable in accordance with their terms subject to the qualifications
      that enforcement of the rights and remedies created hereby is subject to (i)
      bankruptcy, insolvency, reorganization, moratorium and other laws of general
      application affecting rights and remedies of creditors, and (ii) general
      principals of equity (regardless of whether such enforcement is considered
      in a
      proceeding in equity or at law).

    

    Section
      2.3. Capitalization;
      Valid Issuance.
      The
      authorized capital stock of the Company consists of 50,000,000 shares of Common
      Stock, of which 13,740,127 shares are issued and 12,563,418 shares outstanding
      on the date hereof, and 5,000,000 shares of Preferred Stock, of which no shares
      are issued and outstanding on the date hereof. Except as disclosed in the Form
      10-K (as defined herein), there are no outstanding or authorized options,
      warrants, purchase rights, subscription rights, conversion rights, exchange
      rights, or other contracts or commitments that could require the Company or
      any
      subsidiary to issue, sell, or otherwise cause to become outstanding any of
      its
      capital stock. The aggregate number of shares of common stock of the Company
      reserved or required to be reserved by the Company for all such derivative
      securities, contracts and commitments is 3,250,000. There are no outstanding
      or
      authorized stock appreciation, phantom stock, profit participation, or similar
      rights with respect to the Company. There are no preemptive rights with respect
      to the issuance or sale of the Company Shares or registration rights. All of
      the
      presently outstanding shares of Common Stock have been duly and validly
      authorized and issued and are fully paid and non-assessable. The Company Shares
      to be issued hereunder have been duly and validly authorized and, when delivered
      and paid for pursuant to this Agreement, will be validly issued, fully paid
      and
      non-assessable. Assuming the accuracy of the Purchasers’ representations and
      warranties in Article
      III,
      the
      Company Shares are being offered and sold pursuant to an exemption from the
      registration requirements of the Securities Act of 1933, as amended (the
“Act”).
      In
      connection with the offer and sale of the Company Shares, neither the Company,
      any affiliate of the Company nor any person acting on the Company’s or such
      affiliates’ behalf has engaged in any form of general solicitation or general
      advertising, as those terms are used in Rule 502(c) of the Act.

     

    
      
        
        

      

      
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    Section
      2.4. Compliance
      with Other Instruments.
      The
      execution, delivery and performance of this Agreement and the Related Documents
      will not conflict with or, with or without notice or the lapse of time, result
      in any default or in any modification of (i) any provision of the articles
      of incorporation or by-laws or comparable organizational instruments of the
      Company or any subsidiary thereof or (ii) the terms of any contract, agreement,
      obligation, commitment, license, indenture, mortgage, deed of trust, loan or
      credit agreement or any other agreement or instrument to which the Company
      or
      any subsidiary thereof is a party or any of their assets are bound, or the
      creation of any lien, charge or encumbrance of any nature upon any of the
      properties or assets of the Company or any subsidiary thereof. The execution,
      delivery and performance of this Agreement by the Company will not violate
      any
      judgment, decree, statute, rule or regulation of any federal, state or local
      government or agency having jurisdiction over the Company or any subsidiary
      thereof or any of their assets.

    

    Section
      2.5. Brokerage.
      No
      broker, finder, agent or similar intermediary has acted on the Company’s behalf
      in connection with the transactions contemplated by this Agreement and there
      are
      no brokerage commissions, finder’s fees or similar items of compensation payable
      in connection therewith based on any agreement made by or on behalf of the
      Company. The Company will indemnify and hold the Purchasers harmless from and
      against any liability or any expense arising out of any such claim.

    

    Section
      2.6.  Consents,
      etc.
      No
      consent, approval, waiver or authorization of or designation, declaration or
      filing with any governmental or regulatory authority or any other person is
      required in connection with the valid execution and delivery of this Agreement
      or the Related Documents, the offer, sale and issuance of the Company Shares
      or
      the consummation of the transactions contemplated by this Agreement or the
      Related Documents, except for filings that may be required to comply with
      applicable federal and state securities laws.

    

    Section
      2.7. No
      Governmental Proceeding or Litigation.
      No
      suit, action, investigation, inquiry or other proceeding by any governmental
      body or other person or legal or administrative proceeding has been instituted
      or, to the Company’s knowledge, threatened which questions the validity or
      legality of the transactions contemplated hereby or by the Related Documents
      or
      would reasonably be expected to have a material adverse effect on the
      Company.

    

    Section
      2.8. Special
      Committee.
      The
      transactions contemplated by this Agreement, the IRA and the Conversion
      Agreement have been unanimously approved by the Special Committee of the Board
      of Directors. The Special Committee has determined, after receiving and based
      upon the advice of its financial and legal advisors and after consideration
      of
      the Company’s limited options for raising external capital and the impact on the
      Company’s net operating losses, that the consideration to be paid for the
      Company Shares pursuant to, and the transactions contemplated by, this
      Agreement, the IRA and the Conversion Agreement, are fair to and in the best
      interests of the Company’s stockholders and the transactions contemplated by
      this Agreement, the IRA and the Conversion Agreement are in the best interests
      of the Company’s creditors. The foregoing determination is reflected in all
      material respects in the minutes of the meetings of the Special Committee held
      on April 29, 2008, May 2, 2008 and May 5, 2008, certified copies of which have
      been provided to the Purchasers. 

     

    
      
        
        

      

      
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    Section
      2.9. Form
      10-K.
      The
      Company’s Annual Report on Form 10-K for the year ended December 31, 2007, in
      the form delivered to the Purchasers on May 6, 2008 (the “Form
      10-K”),
      has
      been completed (subject to immaterial non-substantive language changes that
      might be made prior to filing), except for the Part III information which will
      be completed prior to May 15, 2008, is in form ready to be filed with the
      Securities and Exchange Commission (the “SEC”).
      The
      Company’s independent registered public accounting firm has confirmed to the
      Company that such firm’s audit report for the fiscal year ended December 31,
      2007 is released to the Company and that such firm will consent to the filing
      of
      the Form 10-K with the SEC when the Part III information is inserted. The Form
      10-K at the time it is filed will comply as to form in all material respects
      with the applicable requirements of the Act and the Securities Exchange Act
      of
      1934, as amended, as the case may be, the Sarbanes-Oxley Act and the rules
      and
      regulations of the SEC thereunder applicable to such Company SEC reports. The
      Form 10-K does not contain any untrue statement of a material fact or omit
      to
      state a material fact required to be stated therein or necessary in order to
      make the statements in such Form 10-K, in the light of the circumstances under
      which they were made, not misleading. 

    

    Section
      2.10. Financial
      Statements.
      Each of
      the consolidated financial statements (including, in each case, any related
      notes and schedules) contained in the Form 10-K (i) complies as to form in
      all
      material respects with applicable accounting requirements and the published
      rules and regulations of the SEC with respect thereto and (ii) were prepared
      in
      accordance with United States generally accepted accounting principles
(“GAAP”)
      applied
      on a consistent basis throughout the periods involved (except as may be
      indicated in the notes to such financial statements). The consolidated balance
      sheets (including, in each case, any related notes and schedules) contained
      in
      the Form 10-K fairly presents in all material respects the consolidated
      financial position of the Company and its subsidiaries as of the dates indicated
      and each of the consolidated statements of income and of changes in financial
      position contained in the Form 10-K (including, in each case, any related notes
      and schedules) fairly presents in all material respects the consolidated results
      of operations, retained earnings and changes in financial position, as the
      case
      may be, of the Company and its subsidiaries for the periods set forth
      therein.

    

    Section
      2.11. Loan
      Agreement; No Default.
      There
      are
      no outstanding Defaults or Events of Default (as such terms are defined in
      the
      Loan Agreement) under that certain Loan and Security Agreement dated December
      30, 2004 (as amended or otherwise modified from time to time, including but
      not
      limited to the Third Amendment thereto, the “Loan
      Agreement”)
      by and
      among I.C. Isaacs & Company, L.P., as borrower, the Company and Isaacs
      Design, Inc., as guarantors, and Wachovia. 

    

    Section
      2.12. Royalty
      Deferrals.
      There
      are no deferred royalty payments (or interest thereon) owing under the men’s or
      women’s license agreements between the Company or its subsidiaries and Latitude
      Licensing Corp. other than the four months of 2008 royalty payments being
      deferred pursuant to the license amendments which are a part of the Related
      Documents.

    

    
      
        
        

      

      
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    ARTICLE
      III

    

    Representations
      and Warranties of the Purchasers

    

    Each
      Purchaser, severally as to himself, herself or itself only, represents and
      warrants to, and covenants and agrees with the Company (other than in respect
      to
Section
      3.6,
      Section
      3.7
      and
Section
      3.8
      which
      only Textile shall be deemed to so represent and warrant, as to itself) as
      follows:

    

    Section
      3.1. Authorization;
      Power; Binding Agreements.
      The
      execution, delivery and performance of this Agreement have been duly authorized
      by all necessary action of the Purchasers. The Purchasers have the full right,
      power and authority to enter into this Agreement. This Agreement constitutes
      the
      valid and binding obligation of the Purchasers, enforceable in accordance with
      its terms subject to the qualifications that enforcement of the rights and
      remedies hereby is subject to (i) bankruptcy, insolvency, reorganization,
      moratorium and other laws of general application affecting rights and remedies
      of creditors, and (ii) general principles of equity (regardless of whether
      such
      enforcement is considered in a proceeding in equity or at law).

    

    Section
      3.2. Purchase
      for Investment.
      The
      Purchasers are purchasing the Company Shares for their own account, for
      investment purposes and not with a view to, or for resale in connection with,
      any distribution or public offering thereof within the meaning of the
      Act.

    

    Section
      3.3. Unregistered
      Securities; Legend.
      The
      Purchasers understand that the securities to be acquired by them pursuant to
      this Agreement have not been registered under the Act, and will be issued in
      reliance upon an exemption from the registration requirements thereof. The
      Purchasers acknowledge that certificates issued representing the Company Shares
      shall bear a restrictive legend substantially as follows:

    

    “The
      securities represented by this certificate have not been registered under the
      Securities Act of 1933, as amended, or any applicable state securities laws
      and
      may not be offered for sale, sold, transferred or conveyed without registration
      or an opinion of counsel in form and substance satisfactory to the Company
      to
      the effect that such registration is not required.”

    

    Section
      3.4. Access
      to Data; Experience; Accredited Investor.
      The
      Purchasers have had an opportunity to discuss the Company’s business plans with
      the management of the Company, and to ask questions of officers of the Company
      and to make an independent assessment of their investment in the Company Shares.
      The Purchasers have substantial experience in evaluating and investing in a
      nonliquid investment such as the Company Shares and are capable of evaluating
      the merits and risks of their investment in the Company. The Purchasers are
      accredited investors as that term is defined in Rule 501 of Regulation D under
      the Act, and understand that the offer and sale of the Company Shares has been
      and is being made in reliance upon an exemption from registration under the
      Act.
      The Purchasers are able to withstand the loss of their entire
      investment.

     

    
      
        
        

      

      
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    Section
      3.5. Brokerage.
      No
      broker, finder, agent or similar intermediary has acted on the Purchasers behalf
      in connection with the transactions contemplated by this Agreement and there
      are
      no brokerage commissions, finder’s fees or similar items of compensation in
      connection therewith based on any arrangement or agreement made by or on behalf
      of the Purchasers. The Purchasers will indemnify and hold the Company harmless
      against any liability or expense arising out of any such claim.

    

    Section
      3.6. Organization
      and Good Standing. Textile
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of Luxembourg and has all requisite corporate power and authority to carry
      on its business as now conducted.

    

    Section
      3.7. Corporate
      Power; Authorization.
      Textile
      has the corporate power and authority to execute and deliver this Agreement
      and
      to perform fully its obligations hereunder. The execution, delivery and
      performance of this Agreement and the consummation of the transactions
      contemplated hereby have been duly authorized by all necessary action on the
      part of Textile. 

    

    Section
      3.8. No
      Conflicts or Violations.
      The
      execution, delivery and performance of this Agreement will not conflict with
      or,
      with or without notice or the lapse of time, result in any material default
      or
      in any material modification of (i) any provision of the certificate of
      incorporation or by-laws of Textile or (ii) the terms of any contract,
      agreement, obligation, commitment, license, indenture, mortgage, deed of trust,
      loan or credit agreement or any other agreement or instrument to which Textile
      is a party or any of its assets are bound, or the creation of any lien, charge
      or encumbrance of any nature upon any of the properties or assets of Textile.
      The execution, delivery and performance of this Agreement by Textile will not
      violate any judgment, decree, statute, rule or regulation of any federal, state
      or local government or agency having jurisdiction over Textile or its
      assets.

    

    

    ARTICLE
      IV

    

    Additional
      Agreements

    

    Section
      4.1. Disposal
      of Property.
      The
      Company shall use commercially reasonable best efforts to complete by December
      31, 2008, a closing of the sale of its Maryland facility for net cash proceeds
      of not less than Seven Hundred Fifty Thousand Dollars ($750,000).

    

    Section
      4.2.
       Audit;
      Annual Report on Form 10-K.
      The
      Company shall file its Form 10-K for the fiscal year ended December 31, 2007,
      including Part III thereof and the audit report of the Company’s independent
      registered public accounting firm for the fiscal year ended December 31, 2007,
      with the SEC no later than May 15, 2008.

     

    Section
      4.3. Bonuses;
      Incentive Compensation.
      The
      Company shall not make any bonus payments in 2008 to its senior management,
      nor
      issue any bonus payments to such persons with respect to the Company’s financial
      performance for the fiscal year ended 31 December, 2008; provided,
      that,
      the
      Board of Directors of the Company may, with the Purchasers’ prior written
      consent, provide equity incentive compensation to senior management in lieu
      of
      bonuses of any other kind for the fiscal year ended December 31,
      2008.

     

    
      
        
        

      

      
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    Section
      4.4. Indemnity. 
      The
      Company hereby agrees to indemnify and hold harmless the Purchasers from and
      against any damages or loss arising out of or resulting from the transactions
      contemplated by this Agreement or the Related Documents to the extent any such
      claim or lawsuit is instigated or made by any stockholder or creditor of the
      Company (other than the Purchaser or their Affiliates), except in respect of
      (i)
      damages or loss resulting from orders or decrees to which the Purchasers are
      subject and where the consummation of the transactions contemplated by this
      Agreement and the Related Documents cause such damages or loss to arise under
      such orders or decrees (ii) liabilities to stockholders and creditors of the
      Company under agreements entered into by and between such stockholders and
      creditors of the Company and the Purchasers where the consummation of the
      transactions contemplated by this Agreement and the Related Documents cause
      such
      liabilities to arise under such agreements. Notwithstanding the foregoing,
      the
      Company shall be under no obligation to indemnity the Purchasers hereunder
      to
      the extent it is finally determined that any such damages or loss resulted
      directly from the fraud, willfull misconduct or gross negligence of the
      Purchasers. The remedies provided in this Section
      4.4
      will not
      be exclusive or limit any other remedies that may be available to the
      Purchasers.

    

    Section
      4.5. Fees.
      The
      Company shall pay fifty (50%) percent of the Purchasers’ reasonable legal fees
      incurred in connection with the transactions contemplated hereby or by the
      Related Documents.

    

    Section
      4.6. Incorporation
      of IRA Provision.
      Reference is made to Section
      5
      of the
      IRA, which provision is incorporated by reference herein, and if breached shall
      be deemed a breach by the Company of this Agreement. 

     

     

    ARTICLE
      V

    

    Miscellaneous

    

    Section
      5.1. Survival
      of Representations.
      The
      representations, warranties, covenants and agreements made herein or in any
      certificates or documents executed in connection herewith shall survive the
      execution and delivery hereof and thereof and the acquisition by the Purchasers
      of the Company Shares for period of 36 months following the
      Closing.

    

    Section
      5.2. Parties
      in Interest.
      All
      agreements, representations and warranties contained in this Agreement by and
      on
      behalf of any of the parties hereto shall bind and inure to the benefit of
      the
      respective successors and assigns of the parties hereto, whether so expressed
      or
      not. 

    

    Section
      5.3. Entire
      Agreement; Amendments and Waivers.
      This
      Agreement (including Schedule
      1)
      and the
      Related Documents contains the entire agreement among the parties with respect
      to the transactions contemplated hereby, and supersede all prior agreements,
      written or oral, with respect thereto. Changes in or additions to this Agreement
      may be made only upon written consent of the Company and the
      Purchasers.

     

    
      
        
        

      

      
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    Section
      5.4. Governing
      Law.
      This
      Agreement and the rights and obligations of the parties hereunder are to be
      governed and construed in accordance with the laws of the State of New York,
      without regard to conflicts of law principles.

    

    Section
      5.5. Notices.
      Any
      notice or other communication required or permitted hereunder shall be in
      writing and shall be delivered personally or sent by electronic mail or
      facsimile transmission, overnight courier, or certified, registered or express
      mail, postage prepaid. Any such notice shall be deemed given when so delivered
      personally or sent by electronic mail or facsimile transmission during normal
      business hours of the recipient, and if not sent during normal business hours,
      then on the recipient’s next business day, one day after deposit with an
      overnight courier, or if mailed, five (5) days after the date of deposit in
      the
      mails, as follows:

    

    if
      to the
      Purchasers, to:

    

    Textile
      Investment International S.A.

    41,
      Avenue de la Gare

    Luxembourg
      L-1611

    Grand
      Duchy of Luxembourg

    Fax:
      001
      352 2648 4747

    Attention:
      Rene Faltz, Managing Director

    

    with
      a
      copy to:

    

    Friedman
      Kaplan Seiler & Adelman LLP

    1633
      Broadway

    New
      York,
      New York 10019

    Fax:
      (212) 833-1250

    Attention:
      Barry A. Adelman, Esq.

    

    if
      to the
      Company, to:

    

    I.C.
      Isaacs & Company, Inc.

    475
      10th
      Avenue,
      9th
      Floor

    New
      York,
      New York 10018

    Fax:
      ____________________

    Attention:
      Robert S. Stec

    

    with
      a
      copy to:

    

    Kramer
      Levin Naftalis & Frankel LLP

    1177
      Avenue of the Americas

    New
      York,
      New York 10036

    Fax:
      (212) 750-8000

    Attention:
      Terrence L. Shen, Esq.

     

    
      
        
        

      

      
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    Any
      party
      may by notice given in accordance with this section to the other parties
      designate another address or person for receipt of notices
      hereunder.

    

    Section
      5.6. Counterparts.
      This
      Agreement may be executed in multiple counterparts and by facsimile, each of
      which when so executed and delivered shall be an original, but all of such
      counterparts shall together constitute one and the same instrument.

    

    Section
      5.7. Effect
      of Headings.
      The
      section and paragraph headings herein are for convenience only and shall not
      affect the construction hereof.

    

    Section
      5.8. Severability.
      This
      Agreement shall be deemed severable, and the invalidity or unenforceability
      of
      any term or provision hereof shall not affect the validity or enforceability
      of
      this Agreement or of any other term or provisions hereof. Furthermore, in lieu
      of any such invalid or unenforceable term or provision, the parties hereto
      intend that there shall be added as a part of this Agreement a provision as
      similar in terms to such invalid or unenforceable provisions as may be possible
      and be valid and enforceable.

     

    
      
        
        

      

      
        -
          10 -

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, this Agreement has been executed by the parties hereto as
      of
      the date first set forth above.

    

      
        	 	
                I.C.
                  Isaacs & Company, Inc.

              
	 	 	 
	 	 	 
	 	
                By:
                  

              	/s/
                Robert S. Stec
	 	
                 

              	
                Name:
                  Robert S. Stec

              
	 	
                 

              	
                Title:  
                  Chief Executive Officer

              
	 	 	 
	 	 	 
	 	
                Textile
                  Investment International S.A.

              
	 	 	 
	 	 	 
	 	
                By:
                  

              	/s/
                René
                Faltz     /s/ Tom Felgen
	 	
                 

              	
                Name:
                  René
                  Faltz & Tom Felgen

              
	 	
                 

              	
                Title:  
                  Managing Directors

              
	 	 	 
	 	 	 
	 	Olivier
                Bachellerie
	 	 	 
	 	 	 
	 	/s/
                Olivier Bachellerie
	 	 	 
	 	 	 
	 	René
                Faltz
	 	 	 
	 	 	 
	 	/s/
                René
                Faltz

      

    

    

    

    [Signature
      Page to Stock Purchase Agreement]

    
      
        
        

      

      
        -
          11 -

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1

    

    
      	
              Name

            	
              Portion
                of Purchase Price

            	
              Number
                of Company Shares

            
	
              Textile
                Investment International S.A.

            	
              $1,000,000

            	
              5,000,000

            
	
              Olivier
                Bachellerie

            	
              $500,000

            	
              2,500,000

            
	
              Rene
                Faltz

            	
              $500,000

            	
              2,500,000

            
	
              Total

            	
              $2,000,000

            	
              10,000,000

            

    

    

      
        
          
          

        

        
          -
            12 -

          
            

          

        

        
          
          

        

      

    

     

    ANNEX
      A

    
       

       

       

      
        
        

      

      
        -
          13 -I.C.
      ISAACS & COMPANY, INC.

     

    

    ____________________________

    

     

    INVESTOR
      RIGHTS AGREEMENT

     

    

    MAY
      9TH,
      2008

     

    

    ____________________________

    

    

    TABLE
      OF
      CONTENTS

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

      
        	 	 	Page 
	 	 	 
	
                SECTION
                  1 Definitions

              	
                1

              
	 	 	 
	
                SECTION
                  2 Preemptive Rights

              	
                3

              
	 	 	 
	
                2.1

              	
                Preemptive
                  Rights

              	
                3

              
	 	 	 
	
                SECTION
                  3 Registration Rights

              	
                6

              
	 	 	 
	
                3.1

              	
                Demand
                  Registration

              	
                6

              
	
                3.2

              	
                Company
                  Registration

              	
                8

              
	
                3.3

              	
                Registration
                  on Form S-3

              	
                9

              
	
                3.4

              	
                Limitations
                  on Subsequent Registration Rights

              	
                9

              
	
                3.5

              	
                Expenses
                  of Registration

              	
                10

              
	
                3.6

              	
                Registration
                  Procedures

              	
                10

              
	
                3.7

              	
                Indemnification

              	
                12

              
	
                3.8

              	
                Information
                  by Holder

              	
                14

              
	
                3.9

              	
                Rule
                  144 Reporting and Form S-3

              	
                14

              
	
                3.10

              	
                Transfer
                  of Registration Rights

              	
                15

              
	 	 	 
	
                SECTION
                  4 Legends

              	
                15

              
	 	 	 
	
                4.1

              	
                Legends

              	
                15

              
	 	 	 
	
                SECTION
                  5 Board Representation; Approval Rights

              	
                15

              
	 	 	 
	
                5.1

              	
                Board
                  Members

              	
                15

              
	
                5.2

              	
                Approval
                  Rights

              	
                17

              
	
                5.3

              	
                Committees

              	
                17

              
	
                5.4

              	
                Indemnification

              	
                17

              
	 	 	 
	
                SECTION
                  6 Miscellaneous

              	
                17

              
	 	 	 
	
                6.1

              	
                Governing
                  Law

              	
                17

              
	
                6.2

              	
                Entire
                  Agreement; Amendment

              	
                18

              
	
                6.3

              	
                Survival

              	
                18

              
	
                6.4

              	
                Successors
                  and Assigns

              	
                18

              
	
                6.5

              	
                Aggregation

              	
                18

              
	
                6.6

              	
                Notices,
                  etc.

              	
                19

              
	
                6.7

              	
                Severability

              	
                19

              
	
                6.8

              	
                Counterparts

              	
                19

              
	
                6.9

              	
                Delays
                  or Omissions

              	
                19

              
	
                6.10

              	
                Attorneys’
                  Fees

              	
                20

              
	
                6.11

              	
                Specific
                  Performance

              	
                20

              
	
                6.12

              	
                Further
                  Instruments and Actions

              	
                20

              
	
                6.13

              	
                Effect
                  of Change in Company’s Capital Structure

              	
                20

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    I.C.
      ISAACS & COMPANY, INC.

    

    

    INVESTOR
      RIGHTS AGREEMENT

    

    This
      Investor Rights Agreement (this “Agreement”)
      is
      made as of May 9, 2008 by and between I.C.
      Isaacs & Company, Inc.,
      a
      Delaware corporation (the “Company”),
      and
      the entities and persons listed on the Schedule of Investors attached hereto
      as
      Exhibit A (collectively the “Investors”
and
      each individually an “Investor”).

     

    RECITALS

    

    WHEREAS,
      the Company and the Investors (or Affiliates thereof) are parties to the Stock
      Purchase Agreement of even date herewith (the “Purchase
      Agreement”),
      pursuant to which the Company has agreed to issue, and the Investors have agreed
      to buy, shares of the Company’s Common Stock, on the terms and subject to the
      conditions set forth in the Purchase Agreement; and

    

    WHEREAS,
      the Purchase Agreement requires, as a condition to closing the issuance and
      sale
      of the shares of Common Stock, that the parties hereto enter into this
      Agreement.

    

    NOW,
      THEREFORE, in consideration of the mutual promises and covenants set forth
      herein, the Investors hereby agree as follows:

    

    SECTION
      1

     

    1.1
       Definitions.
       As
      used
      in this Agreement, the following terms shall have the following respective
      meanings:

    

    “Affiliate”
shall
      mean, with respect to any Investor, any Person which, directly or indirectly,
      controls, is controlled by or is under common control with such Person, and
      shall include, without limitation, any partner, officer, director, or member
      of
      such Person. For the purposes of this definition, “control” (including, with
      correlative meanings, the terms “controlled by” and “under common control
      with”), as used with respect to any Person means the possession, directly or
      indirectly, of the power to direct or cause the direction of the management
      or
      policies of such Person whether through the ownership of voting securities
      or by
      agreement or otherwise.

    

    “Board
      of Directors”
shall
      mean (except where the context clearly indicates otherwise) the board of
      directors of the Company after the reconstitution thereof in accordance with
      Section 5.1 hereof.

    

    “Commission”
shall
      mean the Securities and Exchange Commission or any other U. S. federal agency
      at
      the time administering the Securities Act.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Common
      Stock”
shall
      mean shares of the Company’s Common Stock, $0.0001 par value per
      share.

    

    “Company”
      has
      the
      meaning set forth in the preamble.

    

    “Exchange
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended.

    

    “Holder
      or Holders”
shall
      mean each of the Investors listed on Exhibit A and their transferees as
      permitted by Section 3.10 holding Registrable Securities.

    

    “Indemnified
      Party”
has
      the
      meaning set forth in Section 3.7(c).

    

    “Indemnifying
      Party”
has
      the
      meaning set forth in Section 3.7(c).

    

    “Initiating
      Holders”
shall
      mean (i) any Investor or Investors who hold Registrable Securities or (ii)
      any
      Holder or Holders who in the aggregate hold at least ten percent (10%) of the
      Registrable Securities.

    

    “Investors”
has
      the
      meaning set forth in the preamble.

    

    “Person”
shall
      mean an individual, corporation, limited liability company, trust, general
      partnership or other entity.

    

    “Preemptive
      Right”
has
      the
      meaning set forth in Section 2.1(a).

    

    “Preemptive
      Notice”
has
      the
      meaning set forth in Section 2.1(a).

    

    “Registrable
      Securities”
shall
      mean (a) the Shares, (b) any Common Stock issued as (or issuable upon
      the conversion or exercise of any warrant, right or other security which is
      issued as) a dividend or other distribution with respect to, or in exchange
      for
      or in replacement of, the Shares, and (c) shares of Common Stock issued or
      issuable pursuant to the conversion of New Securities (as defined in Section
      3.1(a) hereof) acquired by the Investor under Section 3.1 hereof, excluding
      in all cases, however, any Registrable Securities that have been sold to or
      through a broker or dealer or underwriter in a public distribution or a public
      securities transaction or which have been sold in a private transaction in
      which
      the transferor’s rights under this Agreement are not assigned. 

    

    The
      terms
“register,”
      “registered”
and
      “registration”
refer
      to a registration effected by preparing and filing a registration statement
      in
      compliance with the Securities Act, and the declaration or ordering of the
      effectiveness of such registration statement.

    

    “Registration
      Expenses”
shall
      mean all reasonable expenses, except as otherwise stated below, incurred by
      the
      Company in complying with Sections 3.1, 3.2 and 3.3 hereof, including, without
      limitation, all registration, qualification and filing fees, printing expenses,
      escrow fees, fees and disbursements of counsel for the Company (and reasonable
      fees and disbursements of one special counsel for Holders), accounting fees,
      blue sky fees and the expense of any special audits incident to or required
      by
      any such registration (but excluding the compensation of regular employees
      of
      the Company which shall be paid in any event by the Company).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Securities
      Act”
shall
      mean the Securities Act of 1933, as amended, or any similar United States
      federal statute and the rules and regulations of the Commission thereunder,
      all
      as the same shall be in effect at the time.

    

    “Selling
      Expenses”
shall
      mean all underwriting discounts, selling commissions and stock transfer taxes
      applicable to the securities registered by the Holders.

    

    “Shares”
shall
      mean
      the
      shares of the Company’s Common Stock held by the Investors at the date hereof,
      whether pursuant to the Purchase Agreement or otherwise, or which are hereafter
      transferred from one Investor to another, or which are transferred to other
      Holders pursuant to Section 3.10.

    

    “Wurzburg”
shall
      mean Wurzburg Holding S.A., one of the Investors.

    

    1.2 Securities
      Subject to this Agreement.
      The
      securities entitled to the benefits of this Agreement are the Registrable
      Securities but, with respect to any particular Registrable Security, only so
      long as such security continues to be a Restricted Security. A Registrable
      Security that has ceased to be a Registrable Security cannot thereafter become
      a
      Registrable Security. As used herein, a Restricted Security is a Registrable
      Security which has not been distributed in accordance with an effective
      Registration Statement and which has not been distributed by a Holder pursuant
      to Rule 144, Rule 903 or Rule 904, unless, in the case of a Registrable Security
      distributed pursuant to Rule 903 or 904, any applicable restricted period has
      not expired or the SEC or its staff has taken the position in a published
      release, ruling or no-action letter that securities distributed under Rule
      903
      or 904 are ineligible for resale in the United States under Section 4(1) of
      the
      Securities Act notwithstanding expiration of the applicable restricted period.
      Securities shall cease to be Registrable Securities at such time as they are
      tradeable by the then holder without restriction as to volume pursuant to Rule
      144.

    

    SECTION
      2

    

    Preemptive
      Rights

    2.1 Preemptive
      Rights

    

    The
      Company shall not, and it shall not permit any of its subsidiaries to, issue
      or
      sell any New Securities (as defined in Section 2.1(a)), unless prior to the
      issuance or sale of such New Securities, each Investor shall have been given
      the
      opportunity (such opportunity being herein referred to as the “Preemptive
      Right”)
      to
      purchase such Investor’s pro rata portion (as described in this paragraph) of
      New Securities that the Company or any of its subsidiaries may, from time to
      time, propose to sell and issue. An Investor’s pro rata portion, for purposes of
      this Preemptive Right, is equal to the product of the aggregate number of New
      Securities the Company (or its subsidiary) proposes to sell and issue multiplied
      by the quotient of (x) the number of shares of Common Stock owned by such
      Investor, divided by (y) the total number of shares of Common Stock
      outstanding. Each Investor shall have the right to assign, in whole or in part,
      its Preemptive Right to purchase its pro rata share of such New Securities
      to
      any one or more of its Affiliates. The Preemptive Right shall be subject to
      the
      following provisions:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (a) “New
      Securities”
shall
      mean any common stock of the Company (or any subsidiary, as applicable), whether
      now authorized or not, and any rights, options or warrants to purchase said
      common stock of the Company (or its subsidiary, as applicable), and securities
      of any type whatsoever that are, or may become, convertible into common stock
      of
      the Company (or its subsidiary, as applicable); provided, however, that New
      Securities does not include (i) securities issued pursuant to the
      acquisition of another corporation or entity by the Company (or its subsidiary,
      as applicable) by merger, purchase of substantially all of the assets or other
      reorganization, in each case as approved by the Board of Directors; (ii) up
      to 10% of the shares of Common Stock outstanding at closing issued or issuable
      to officers, directors, consultants or employees of the Company pursuant to
      stock option or stock purchase plans or agreements on terms approved by the
      Board of Directors; (iii) securities issued upon the conversion or exercise
      of
      convertible or exercisable securities provided that such convertible or
      exercisable securities were offered to the Investors under this Section 2.1
      (or
      that such Investors waived their Preemptive Right with respect to such
      convertible or exercisable securities) or were outstanding on the date of this
      Agreement; (iv) securities issued to financial institutions or lessors in
      connection with commercial credit arrangements, equipment financings or similar
      transactions approved by the Board of Directors; (v) securities issued in
      connection with any stock split, reverse stock split, stock combination, stock
      dividend, recapitalization or similar event by the Company (or its subsidiary,
      as applicable); (vi) securities issued in connection with any
      reorganization, reclassification, exchange, substitution or other similar
      adjustment approved by the Board of Directors; (vii) securities issued as a
      dividend or distribution on the Common Stock if such dividend or distribution
      is
      distributed to the holders of Common Stock ratably based on the number of shares
      of Common Stock held by all shareholders of the Company on the record date
      for
      such dividend or distribution; or (viii) securities issued by a wholly-owned
      subsidiary to the Company or to another wholly-owned subsidiary of the
      Company.

    

    (b) In
      the
      event that the Company (or any subsidiary, as applicable) proposes to issue
      New
      Securities, it shall give each Investor at least thirty (30) days prior
      written notice (the “Preemptive
      Notice”) of
      its
      intention, describing the type of New Securities, the price, and the general
      terms upon which the Company (or its subsidiary, as applicable) proposes to
      issue the same, the total amount of capital to be raised, the name and address
      of the bona fide purchaser to which the Company (or such subsidiary) proposes
      to
      issue or sell New Securities and the number of such New Securities which such
      Investor is entitled to purchase (determined as provided in the first paragraph
      of this Section 2.1). Each Investor shall have twenty (20) days from the
      date of mailing of any such notice to agree to purchase up to its full pro
      rata
      share of such New Securities for the price and upon the general terms specified
      in the notice by giving written notice to the Company; provided, that if (i)
      the
      consideration specified in the Preemptive Notice to be paid for the New
      Securities is not all cash, or (ii) any property other than New Securities
      is
      proposed to be transferred in connection with the issuance of New Securities
      to
      which the Preemptive Notice relates, then the price payable by an Investor
      shall
      be the consideration specified in the Preemptive Notice or (at the election
      of
      the Investor) (A) a cash amount equal to the fair market value thereof in the
      case of clause (i) and (B) a cash amount equal to the fair market value of
      the
      consideration allocable to the New Securities to be purchased by such Investor
      in the case of clause (ii). Subject to Section 2.1(e), in the event any
      determination of fair market value is required pursuant to this Section 2.1,
      such determination shall be made in good faith by the Board of Directors
      following (if the property is not publicly traded securities) receipt (at the
      Company’s expense) of a valuation from an independent appraiser with appropriate
      industry experience. At
      the
      expiration of such twenty (20) day period, the Company shall promptly notify
      each Investor that elects to purchase or acquire all the shares available to
      it
      (each, a “Fully
      Exercising Investor”)
      of any
      other Investor’s failure to do likewise. During the ten (10) day period
      commencing after the Company has given such notice, each Fully Exercising
      Investor may, by giving notice to the Company, elect to purchase or acquire,
      in
      addition to the number of shares specified above, up to that portion of the
      New
      Securities for which Investors were entitled to subscribe but that were not
      subscribed for by the Investors which is equal to the proportion that the Common
      Stock issued and held (assuming
      conversion, exercise or exchange of all outstanding securities convertible
      into
      or exercisable or exchangeable for Common Stock) by
      such
      Fully Exercising Investor bears to the Common Stock issued and held (assuming
      conversion, exercise or exchange of all outstanding securities convertible
      into
      or exercisable or exchangeable for Common Stock)
      by all
      Fully Exercising Investors who wish to purchase such unsubscribed
      shares.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c) If
      all
      New
      Securities referred to in the Preemptive Notice are not elected to be purchased
      or acquired as provided in Section
      2.1(b),
      the
      Company may, during the sixty (60) day period following the expiration of the
      periods provided in Section
      2.1(b),
      offer
      and sell (or enter into an agreement pursuant to which the sale of New
      Securities covered thereby shall be closed, if at all, within thirty (30) days
      from the execution of such agreement) the remaining unsubscribed portion of
      such
      New Securities to any Person or Persons at a price not less than, and upon
      terms
      no more favorable to the offeree than, those specified in the Preemptive Notice.
      If the Company does not sell such New Securities within such 60-day period
      (or
      such 30-day period after execution of such agreement, as applicable), the right
      provided under this Section
      2.1
      shall be
      deemed to be revived and such New Securities shall not be offered unless first
      reoffered to the Investors in accordance with this Section
      2.1.

     

    (d) Any
      Investor’s failure to exercise this Preemptive Right on any issuance of New
      Securities shall not adversely affect such Investor’s Preemptive Right to
      purchase subsequent issuances of New Securities.

    

    (e) If
      the
      consideration received by the Company (or its subsidiary, as applicable) in
      exchange for the New Securities is other securities, its value will be deemed
      its fair market value as determined as follows:

    

    (i) Securities
      not subject to investment letter or other similar restrictions on free
      marketability covered by (ii) below:

    

    (A) If
      traded
      on a securities exchange, the value shall be deemed to be the average of the
      closing prices of the securities on such quotation system over the thirty
      (30) day period ending three (3) days prior to the closing
with
      the
      exercising Investors;

    

    (B) If
      actively traded over-the-counter, the value shall be deemed to be the average
      of
      the closing bid or sale prices (whichever is applicable) over the thirty
      (30) day period ending three (3) days prior to the closing with the
      exercising Investors; and

    

    (C) If
      there
      is no active public market, the value shall be the fair market value thereof,
      as
      determined by the Board of Directors.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (ii) The
      method of valuation of securities subject to investment letter or other
      restrictions on free marketability (other than restrictions arising solely
      by
      virtue of a stockholder’s status as an affiliate or former affiliate) shall be
      to make an appropriate discount from the market value determined as above in
      (i) (A), (B) or (C) to reflect the approximate fair market value
      thereof, as determined by the Board of Directors.

    

    SECTION
      3

    

    Registration
      Rights

     

    3.1 Demand
      Registration

     

    (a) Demand
      for Registration.
      In case
      the Company shall receive from Initiating Holders a written request that the
      Company effect any registration, qualification or compliance with respect to
      an
      offering for an anticipated aggregate offering price of not less than $2,000,000
      (before underwriting discounts and other selling expenses), the Company
      will:

    

    (i) promptly
      (and in no event later than ten (10) days after the date such request is
      received) give written notice of the proposed registration, qualification or
      compliance to all other Holders; and

    

    (ii) as
      soon
      as practicable (and in any event within sixty (60) days after the date that
      the
      Company receives such written request from the Initiating Holders), effect
      such
      registration, qualification or compliance (including, without limitation,
      appropriate qualification under applicable blue sky or other state securities
      laws and appropriate compliance with applicable regulations issued under the
      Securities Act and any other governmental requirements or regulations) as may
      be
      so requested and as would permit or facilitate the sale and distribution of
      all
      or such portion of the Registrable Securities as are specified in such request,
      together with all or such portion of the Registrable Securities of any other
      Holder or Holders joining in such request as are specified in a written request
      received by the Company within twenty (20) days after receipt of such
      written notice from the Company;

    

    Provided,
      however,
      that
      the Company shall not be obligated to take any action to effect any such
      registration, qualification or compliance pursuant to this Section
      3.1(a):

    

    (A) In
      any
      particular jurisdiction in which the Company would be required to execute a
      general consent to service of process in effecting such registration,
      qualification or compliance unless the Company is already subject to service
      in
      such jurisdiction and except as may be required by the Securities
      Act;

    

    (B) During
      the period starting with the date thirty (30) days prior to the Company’s
      estimated date of filing of, and ending on the date three (3) months
      immediately following the effective date of, any registration statement
      pertaining to securities of the Company sold by the Company (other than a
      registration of securities in a Rule 145 transaction or with respect to an
      employee benefit plan), provided that the Company is actively employing in
      good
      faith all reasonable efforts to cause such registration statement to become
      effective;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (C) After
      the
      Company has effected an aggregate of two (2) registrations pursuant to this
      Section 3.1(a) or 3.3(a), provided that (i) such registrations have been
      declared or ordered effective and (ii) the offerings thereunder are not
      interfered with by any stop order, injunction, order or requirement of the
      Commission or other agency or court of competent jurisdiction; or

    

    (D) If
      the
      Company shall furnish to such Holders a certificate signed by the Chief
      Executive Officer of the Company stating that in the good faith judgment of
      the
      Board of Directors it would (i) be materially detrimental to the Company or
      its
      stockholders, (ii) materially interfere with a significant acquisition,
      corporate reorganization, or other similar transaction involving the Company,
      or
      (iii) require premature disclosure of material information that the Company
      has
      a bona fide business purpose for preserving as confidential, if a registration
      statement were to be filed in the near future, then the Company’s obligation to
      register, qualify or comply under this Section 3 shall be deferred for a period
      not to exceed ninety (90) days from the date of receipt of written request
      from the Initiating Holders, provided, however, that in such event, (i) the
      Initiating Holders shall be entitled to withdraw such request and retain its
      rights under this Section 3.1(a) and (ii) the Company shall not utilize this
      right more than once in any twelve (12) month period.

    

    Subject
      to the foregoing clauses (A) through (D), the Company shall file a
      registration statement covering the Registrable Securities so requested to
      be
      registered as soon as practicable after receipt of the request or requests
      of
      the Initiating Holders.

    

    (b) Underwriting.
      In the
      event that a registration pursuant to Section 3.1(a) is for a registered public
      offering involving an underwriting, the Initiating Holders will so advise the
      Company as part of the written request given by such Initiating Holders pursuant
      to Section 4.1(a), and the Company shall in turn advise all other Holders as
      part of the notice given pursuant to Section 4.1(a)(i). In such event, the
      right
      of any Holder to registration pursuant to Section 4.1 shall be conditioned
      upon
      such Holder’s participation in the underwriting arrangements required by this
      Section 4.1, and the inclusion of such Holder’s Registrable Securities in the
      underwriting to the extent requested shall be limited to the extent provided
      herein.

    

    The
      Company shall (together with all Holders proposing to distribute their
      securities through such underwriting) enter into an underwriting agreement
      in
      customary form with the managing underwriter(s) selected for such underwriting
      by the majority in interest of the Initiating Holders, but subject to the
      reasonable approval of the Company. Notwithstanding any other provision of
      this
      Section 3.1, if the managing underwriter advises the Initiating Holders in
      writing that marketing factors require a limitation of the number of shares
      to
      be underwritten, then the Company shall so advise all Holders, and the number
      of
      shares that may be included in the registration and underwriting shall be
      allocated among all Holders in proportion, as nearly as practicable, to the
      respective amounts of Registrable Securities held by such Holders at the time
      of
      filing the registration statement.

    

    If
      any
      Holder disapproves of the terms of the underwriting, such person may elect
      to
      withdraw therefrom by written notice to the Company, the managing underwriter
      and the Initiating Holders. The Registrable Securities and/or other securities
      so withdrawn shall also be withdrawn from registration.

     

    
      
        
        

      

      
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    3.2 Company
      Registration

    

    (a) Notice
      of Registration.
      If at
      any time or from time to time the Company shall determine to register any of
      its
      securities, either for its own account or the account of a security holder
      or
      holders or a combination thereof, other than (i) a registration relating
      solely to employee benefit plans or (ii) a registration relating solely to
      a corporate reorganization or other transaction covered by Commission Rule
      145,
      the Company will:

    

    (i) promptly
      (and in no event later than twenty (20) days prior to the filing of any
      registration statement) give to each Holder written notice thereof;
      and

    

    (ii) include
      in such registration (and any related qualification under blue sky laws or
      other
      compliance), and in any underwriting involved therein, all the Registrable
      Securities specified in a written request or requests made by any Holder within
      twenty (20) days after receipt of such written notice from the
      Company.

    

    (b) Underwriting.
      If the
      registration of which the Company gives notice is for a registered public
      offering involving an underwriting, the Company shall so advise the Holders
      as
      part of the written notice given pursuant to Section 3.2(a)(i). In such event,
      the right of any Holder to registration pursuant to this Section 3.2 shall
      be
      conditioned upon such Holder’s participation in such underwriting and the
      inclusion of Registrable Securities in the underwriting to the extent provided
      herein. All Holders proposing to distribute their securities through such
      underwriting shall, together with the Company, enter into an underwriting
      agreement in customary form with the managing underwriter selected for such
      underwriting by the Company, but subject to the reasonable approval of the
      Holders. Notwithstanding any other provision of this Section 3.2, if the
      managing underwriter determines that marketing factors require a limitation
      of
      the number of shares to be underwritten, the managing underwriter may limit
      the
      number of shares of Registrable Securities to be included in such registration
      without requiring any limitation in the number of shares to be registered on
      behalf of the Company. The Company shall so advise all Holders and the number
      of
      shares that may be included in the registration and underwriting by all Holders
      requesting inclusion of their Registrable Securities or other Company
      securities, as applicable, shall be allocated among them, as nearly as
      practicable, first,
      to the
      Company solely with respect to shares proposed to be sold for the Company’s
      account, and second,
      among
      the Holders in proportion to the respective amounts of Registrable Securities
      held by such Holders at the time of filing of the registration statement. If
      any
      Holder disapproves of the terms of any such underwriting, such holder may elect
      to withdraw therefrom by written notice to the Company and the managing
      underwriter. Any securities excluded or withdrawn from such underwriting shall
      be withdrawn from such registration.
      Notwithstanding anything contained herein to the contrary, in connection with
      any offering involving an underwriting of the Company’s securities the Company
      shall not be required to include any of the Registrable Securities in such
      an
      underwriting unless the Holders accept the terms of the underwriting as agreed
      upon between the Company and its underwriters, and then only in such quantity
      as
      the underwriters in their sole discretion determine will not jeopardize the
      success of the offering by the Company. A registration shall not be counted
      as
“effected” if, as a result of an exercise of the underwriter’s cutback
      provision, fewer than seventy percent (70%) of the total number of Registrable
      Securities that Holders have requested to be included in such registration
      statement are actually included.

     

    
      
        
        

      

      
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    (c) Right
      to Terminate Registration.
      The
      Company shall have the right to terminate or withdraw any registration initiated
      by it under this Section 3.2 prior to the effectiveness of such registration
      whether or not any Holder has elected to include Registrable Securities in
      such
      registration. The Company will give written notice of such determination to
      each
      Holder that has elected to include Registrable Securities in such registration
      and will be relieved of its obligation to register any Registrable Securities
      in
      connection with such registration statement. The expenses of such terminated
      or
      withdrawn Registration will be borne by the Company.

     

    3.3 Registration
      on Form S-3

    

    (a) Request
      for Registration.
      If any
      Holder or Holders request that the Company file a registration statement on
      Form
      S-3 under the Securities Act (or
      any
      successor short-form registration statement similar to Form S-3) for
      a
      public offering of shares of the Registrable Securities held by such Holder
      or
      Holders the reasonably anticipated aggregate price to the public of which would
      exceed $1,000,000 (before underwriting discounts and other selling expenses),
      and the Company is a registrant entitled to use Form S-3 (or any successor
      short-form registration statement similar to Form S-3) to register the
      Registrable Securities for such an offering, the Company shall cause such
      Registrable Securities to be registered for the offering on such form and to
      cause such Registrable Securities to be qualified in such jurisdictions as
      such
      Holder or Holders may reasonably request; provided,
      however,
      that
      the Company shall not be required to effect more than two (2) registrations
      pursuant to this Section 3.3(a) in any twelve (12) month period, provided that
      (i) such registrations have been declared or ordered effective and (ii) the
      offering is not interfered with by any stop order, injunction, order or
      requirement of the Commission or other agency or court of competent
      jurisdiction. The substantive provisions of Section 3.1(b) shall be applicable
      to each registration initiated under this Section 3.3(a). Any request for
      registration under this Section 3.3(a) will not be considered a demand
      registration request pursuant to Section 3.1(a) except if such request for
      registration under this Section 3.3(a) relates to an underwritten
      offering.

    

    (b) Limitations.
      Notwithstanding the foregoing, the Company shall not be obligated to take any
      action pursuant to Section 3.3(a) in any of the circumstances specified in
      clauses (A), (B), (C) or (D) of the proviso to Section 3.1(a).

     

    3.4 Limitations
      on Subsequent Registration Rights

    

    From
      and
      after the date hereof, the Company will not, without the prior written consent
      of holders of a majority of the voting power of the then outstanding Registrable
      Securities, enter into any agreement with any holder or prospective holder
      of
      any securities of the Company which allows such holder or prospective holder
      of
      any securities of the Company to include such securities in any registration
      filed under Sections 3.1, 3.2 or 3.3 hereof, or grants any holder or prospective
      holder rights which are analogous to those granted under Sections 3.1, 3.2
      or
      3.3 unless, under the terms of such agreement, such holder or prospective holder
      may include such securities in any such registration only to the extent that
      the
      inclusion of his securities will not diminish the amount of Registrable
      Securities which are included.

     

    
      
        
        

      

      
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    3.5 Expenses
      of Registration

    

    (a) Registration
      Expenses.
      The
      Company shall bear all Registration Expenses incurred in connection with all
      registrations pursuant to Section 3.1, Section 3.2 and Section
      3.3.

    

    (b) Selling
      Expenses.
      All
      Selling Expenses shall be borne by the Holders pro rata on the basis of the
      number of shares so registered.

    

    3.6  Registration
      Procedures

    

    In
      the
      case of each registration, qualification or compliance effected by the Company
      pursuant to this Agreement, the Company will:

    

    (a) keep
      each
      Holder advised in writing as to the initiation of each registration,
      qualification and compliance and as to the completion thereof;

    

    (b) as
      soon
      as practicable, prepare and file with the Commission a registration statement
      with respect to such securities and use commercially reasonable efforts to
      cause
      such registration statement to become and remain effective until the earlier
      of
      (i) one year or (ii) the distribution described in the Registration
      Statement has been completed; provided, however, that (i) such one-year
      period shall be extended for a period of time equal to the period the Holder
      refrains from selling any securities included in such registration at the
      request of the managing underwriter; and (ii) in the case of any
      registration of Registrable Securities on Form S-3 which are intended to be
      offered on a continuous or delayed basis, such one-year period shall be
      extended, if necessary, to keep the registration statement effective until
      all
      such Registrable Securities are sold;

    

    (c) furnish
      to each of the Holders participating in such registration and to the
      underwriters of the securities being registered such reasonable number of copies
      of the registration statement, preliminary prospectus, final prospectus and
      such
      other documents as such Holders or underwriters may reasonably request in order
      to facilitate the public offering of such securities;

    

    (d) prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection with such
      registration statement as may be necessary to comply with the provisions of
      the
      Securities Act with respect to the disposition of all securities covered by
      such
      registration statement;

    

    (e) use
      reasonable efforts to register and qualify the securities covered by such
      registration statement under such other securities or Blue Sky laws of such
      jurisdictions as shall be reasonably requested by the Holders; provided,
      however, that the Company shall not be required in connection therewith, or
      as a
      condition thereto, to qualify to do business or to file a general consent to
      service of process in any such states or jurisdictions, unless the Company
      is
      already qualified to do business or is subject to service of process in such
      jurisdiction, and except as may be required by the Securities Act;

     

    
      
        
        

      

      
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    (f) in
      the
      event of an underwritten public offering, enter into and perform its obligations
      under an underwriting agreement, in usual and customary form, with the managing
      underwriter of such offering;

     

    (g) notify
      each Holder covered by such registration statement (i) when any prospectus
      or
      any prospectus supplement has been filed with the Commission, and, with respect
      to such registration statement or any post-effective amendment thereto, when
      the
      same has been declared effective by the Commission, (ii) of any request by
      the
      Commission for amendments or supplements to such registration statement or
      related prospectus, or for additional information, (iii) of the issuance by
      the
      Commission of any stop order or the initiation of any proceedings for such
      or a
      similar purpose (and the Company shall use commercially reasonable efforts
      to
      obtain the withdrawal of any such order as soon as practicable), (iv) of the
      receipt by the Company of any notification with respect to the suspension of
      the
      qualification of any of the Registrable Securities for sale in any jurisdiction
      or the initiation or threatening of any proceeding for such purpose (and the
      Company shall use its commercially reasonable efforts to obtain the withdrawal
      of any such suspension as soon as practicable), (v) at any time when a
      prospectus relating thereto is required to be delivered under the Securities
      Act
      of the happening of any event as a result of which the prospectus included
      in
      such registration statement, as then in effect, includes an untrue statement
      of
      material fact or omits to state a material fact required to be stated therein
      or
      necessary to make the statements made therein not misleading in the light of
      the
      circumstances then existing, and, at the request of any such Holder, prepare
      and
      furnish to such Holder a reasonable number of copies of a supplement or an
      amendment to such prospectus as may be necessary so that, as thereafter
      delivered to the purchasers of such Registrable Securities, such prospectus
      shall not include an untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading in light of the circumstances then existing and (vi)
      of
      the Company’s determination that the filing of a post-effective amendment to
      such registration statement shall be necessary or appropriate;

    

    (h) cause
      all
      such Registrable Securities registered pursuant hereunder to be listed on each
      securities exchange or automated quotation system on which similar securities
      issued by the Company are then listed, or, if no Company securities are so
      listed, the Company will cause all such Registrable Securities registered
      pursuant hereunder to be listed on a national securities exchange or national
      automated quotation system or the OTC Bulletin Board, as determined by the
      Board
      of Directors in its sole discretion;

    

    (i) provide
      a
      transfer agent and registrar for all Registrable Securities registered pursuant
      hereunder and a CUSIP number for all such Registrable Securities, in each case
      not later than the effective date of such registration;

    

    (j) permit
      a
      single firm of counsel designated as selling stockholders' counsel by the
      holders of a majority in interest of the Registrable Securities being registered
      to review the registration statement and all amendments and supplements thereto
      a reasonable period of time prior to their filing with the Commission and state
      authorities, and shall not file any document in a form to which such counsel
      reasonably objects; and

    

    (k) cause
      the
      Company's officers, directors and independent certified public accountants
      to
      supply all information reasonably requested by a representative of any Holder
      of
      Registrable Securities, and any attorney or accountant retained by such Holder,
      in connection with such registration; provided, however, that such
      representatives, attorneys or accountants shall, at the request of the Company,
      enter into a confidentiality agreement, in form and substance reasonably
      satisfactory to the Company, prior to the release or disclosure of any such
      information.

     

    
      
        
        

      

      
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    3.7 Indemnification

    

    (a) By
      Company.
      The
      Company will indemnify each Holder, each of its officers, directors, partners,
      legal and financial advisors, and each person controlling such Holder within
      the
      meaning of Section 15 of the Securities Act, with respect to which registration,
      qualification or compliance has been effected pursuant to this Agreement, and
      each underwriter, if any, and each person who controls any underwriter within
      the meaning of Section 15 of the Securities Act and each Investor and its
      officers, directors, partners, legal and financial advisors, and each person
      controlling such Investor within the meaning of Section 15 of the Securities
      Act, against all expenses, claims, losses, damages or liabilities, joint or
      several (or actions in respect thereof), including any of the foregoing incurred
      in settlement of any litigation, commenced or threatened, arising out of or
      based on any untrue statement (or alleged untrue statement) of a material fact
      contained in any registration statement, prospectus, offering circular or other
      document, or any amendment or supplement thereto, incident to any such
      registration, qualification or compliance, or based on any omission (or alleged
      omission) to state therein a material fact required to be stated therein or
      necessary to make the statements therein, in light of the circumstances in
      which
      they were made, not misleading, or any violation by the Company of the
      Securities Act, the Exchange Act or any state or federal securities law, or
      any
      rule or regulation promulgated under such Acts or law applicable to the Company
      in connection with any such registration, qualification or compliance, and
      the
      Company will reimburse each such Holder, each of its officers, directors,
      partners, legal and financial advisors, and each person controlling such Holder,
      each such underwriter and each person who controls any such underwriter, each
      Investor, each of its officers, directors and partners and each person
      controlling such Investor, for any legal and any other expenses reasonably
      incurred in connection with investigating, preparing or defending any such
      claim, loss, damage, liability or action, provided that the Company will not
      be
      liable in any such case to the extent that any such claim, loss, damage,
      liability or expense arises out of or is based on any untrue statement or
      omission or alleged untrue statement or omission, made in reliance upon and
      in
      conformity with written information regarding a Holder furnished to the Company
      by such Holder, controlling person, underwriter or Investor and stated to be
      specifically for use therein. If the Holders and Investors are represented
      by
      counsel other than counsel for the Company, the Company will not be obligated
      under this Section 3.7(a) to reimburse legal fees and expenses of more than
      one
      separate counsel for all Holders and Investors.

    

    (b) By
      Holders.
      Each
      Holder will, if Registrable Securities held by such Holder are included in
      the
      securities as to which such registration, qualification or compliance is being
      effected, indemnify the Company, each of its directors, each of its officers,
      legal and financial advisors, each underwriter, if any, of the Company’s
      securities covered by such a registration statement, each person who controls
      the Company or such underwriter within the meaning of Section 15 of the
      Securities Act, and each other such Holder, each of its officers and directors,
      legal and financial advisors, and each person controlling such Holder within
      the
      meaning of Section 15 of the Securities Act, against all claims, losses,
      damages and liabilities (or actions in respect thereof) arising out of or based
      on any untrue statement (or alleged untrue statement) of a material fact
      contained in any such registration statement, prospectus, offering circular
      or
      other document, or any omission (or alleged omission) to state therein a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading, and will reimburse the Company, such Holders, such
      directors, officers, legal and financial advisors, underwriters or control
      persons for any legal or any other expenses reasonably incurred in connection
      with investigating or defending any such claim, loss, damage, liability or
      action, in each case to the extent, but only to the extent, that such untrue
      statement (or alleged untrue statement) or omission (or alleged omission) is
      made in such registration statement, prospectus, offering circular or other
      document in reliance upon and in conformity with written information regarding
      a
      Holder furnished to the Company by an instrument duly executed by such Holder
      and stated to be specifically for use therein. Notwithstanding the foregoing,
      the liability of each Holder under this Section 3.7(b) shall be several, not
      joint and several, among the Holders, and shall be limited in an amount equal
      to
      the net proceeds received by such Holder of the shares sold by such Holder
      in
      such registration.

     

    
      
        
        

      

      
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    (c) Procedures.
      Each
      party entitled to indemnification under this Section 3.7 (the “Indemnified
      Party”)
      shall
      give notice to the party required to provide indemnification (the “Indemnifying
      Party”)
      promptly after such Indemnified Party has actual knowledge of any claim as
      to
      which indemnity may be sought, and shall permit the Indemnifying Party to assume
      the defense of any such claim or any litigation resulting therefrom, provided
      that counsel for the Indemnifying Party, who shall conduct the defense of such
      claim or litigation, shall be approved by the Indemnified Party (whose approval
      shall not unreasonably be withheld), and the Indemnified Party may participate
      in such defense at such party’s expense. The failure of any Indemnified Party to
      give notice as provided herein shall not relieve the Indemnifying Party of
      its
      obligations under this Agreement unless the failure to give such notice is
      materially prejudicial to an Indemnifying Party’s ability to defend such action.
      Notwithstanding the foregoing, the Indemnifying Party shall not assume the
      defense for matters as to which there is a conflict of interest or separate
      and
      different defenses as determined by the Indemnified Party in its reasonable
      discretion, in which case, the reasonable fees and expenses of counsel retained
      by the Indemnified Party to defend against such matters shall be paid by the
      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 which does not include as
      an
      unconditional term thereof the giving by the claimant or plaintiff to such
      Indemnified Party of a release from all liability in respect to such claim
      or
      litigation. The indemnification provided for under this Agreement will remain
      in
      full force and effect regardless of any investigation made by or on behalf
      of
      the Indemnified Party and will survive the transfer of securities.

    

    (d) Contribution.
      If the
      indemnification provided for in this Section 3.7 is held by a court of competent
      jurisdiction to be unavailable to an Indemnified Party with respect to any
      loss,
      liability, claim, damage, or expense referred to therein, then the indemnifying
      party, in lieu of indemnifying such indemnified party hereunder, shall
      contribute to the amount paid or payable by such indemnified party as a result
      of such loss, liability, claim, damage, or expense in such proportion as is
      appropriate to reflect the relative fault of the indemnifying party on the
      one
      hand and of the indemnified party on the other in connection with the statements
      or omissions that resulted in such loss, liability, claim, damage, or expense
      as
      well as any other relevant equitable considerations. The relative fault of
      the
      indemnifying party and of the indemnified party shall be determined by reference
      to, among other things, whether the untrue or alleged untrue statement of a
      material fact or the omission to state a material fact relates to information
      supplied by the indemnifying party or by the indemnified party and the parties’
relative intent, knowledge, access to information and opportunity to correct
      or
      prevent such statement or omission. Notwithstanding the foregoing, the liability
      of each Holder under this Section 3.7(d) shall be limited in an amount equal
      to
      the net proceeds received by such Holder of the shares sold by such Holder
      in
      such registration. No person guilty of 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 fraudulent
      misrepresentation.

     

    
      
        
        

      

      
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    (e) Controlling
      Agreement.
      Notwithstanding the foregoing, to the extent that the provisions on
      indemnification and contribution contained in the underwriting agreement entered
      into in connection with the underwritten public offering are in conflict with
      the foregoing provisions of this Section 3.7, the provisions in the underwriting
      agreement shall control. 

     

    3.8 Information
      by Holder

    

    The
      Holder or Holders included in any registration shall furnish to the Company
      such
      information regarding such Holder or Holders, the Registrable Securities held
      by
      them and the distribution proposed by them as the Company may request in writing
      and only as shall be necessary to enable the Company to comply with the
      provisions hereof in connection with any registration, qualification or
      compliance referred to in this Agreement.

    

    3.9  Rule
      144 Reporting and Form S-3

    

    With
      a
      view to making available to the Holders the benefits of Rule 144
      promulgated under the Securities Act and certain other rules and regulations
      of
      the Commission which may at any time permit a Holder to sell Registrable
      Securities to the public without registration or pursuant to a registration
      on
      Form S-3, the Company agrees to use commercially reasonable efforts
      to:

    

    (a) make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144 under the Securities Act, at all times after the effective date
      that the Company becomes subject to the reporting requirements of the Securities
      Act or the Exchange Act;

    

    (b) file
      with
      the Commission in a timely manner all reports and other documents required
      of
      the Company under the Securities Act and the Exchange Act (at any time after
      it
      has become subject to such reporting requirements); and

    

    (c) furnish
      to any Holder forthwith upon request a written statement by the Company:
      (i) as to its compliance with the reporting requirements of Rule 144
      (at any time after 90 days after the effective date of the first registration
      statement filed by the Company for an offering of its securities to the general
      public); (ii) as to its compliance with the reporting requirements of the
      Securities Act and the Exchange Act (at any time after it has become subject
      to
      such reporting requirements); (iii) as to its compliance with the
      requirements for qualification as a registrant whose securities may be offered
      and sold pursuant to Form S-3 (at any time after it so qualifies); (iv) a
      copy of the most recent annual or quarterly report of the Company; or
      (v) such other reports and documents of the Company and other information
      in the possession of, or reasonably obtainable by, the Company as such Holder
      may reasonably request in availing itself of any rule or regulation of the
      Commission allowing such Holder to sell any such securities without
      registration.

     

    
      
        
        

      

      
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    3.10 Transfer
      of Registration Rights

    

    The
      rights to cause the Company to register securities granted Holders under
      Sections 3.1, 3.2 and 3.3 may be transferred or assigned by a Holder of
      Registrable Securities provided that: (a) such transfer or assignment may
      otherwise be effected in accordance with applicable securities laws and
      (b) such transferee or assignee (i) will, as a result of such transfer or
      assignment, beneficially own at least 5% (except that for purposes of a transfer
      or registration rights under Section 3.2 only, such number shall be 3%) of
      the
      outstanding shares of Common Stock, (ii) in the case of a transfer or assignment
      by Olivier Bachellerie or Rene Faltz, will hold a number of shares of Common
      Stock equal to at least 30% of the shares purchased by such Investor under
      the
      Purchase Agreement, or (iii) is a current or retired partner, member or holder
      of greater than ten percent (10%) of the voting securities of the transferring
      or assigning Holder or is an Affiliate, or an immediate family member or trust
      for the benefit of immediate family members, of such Holder. No transfer or
      assignment will divest a Holder of such rights and powers unless all Registrable
      Securities owned by such Holder are transferred or assigned.

    

    SECTION
      4

     

    Legends

     

    4.1 Legends

    

    Each
      Investor understands that the share certificates evidencing any Registrable
      Securities purchased pursuant to the Purchase Agreement shall be endorsed with
      the following legend:

     

    “THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION OF SUCH SHARES MAY
      BE
      EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
      OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH
      REGISTRATION IS NOT REQUIRED.”

     

    SECTION
      5

     

    Board
      Representation; Approval Rights

     

    5.1 Board
      Members

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (a) Prior
      to
      the consummation of the transactions contemplated by the Purchase Agreement,
      the
      Company’s Board of Directors consists of 7 members, and Wurzburg or its
      Affiliates has designated three (3) of such members (Francis Girbaud, Olivier
      Bachellerie and Rene Faltz, or the “Existing
      Designees”).
      The
      Company, by action of said 7-member Board of Directors shall, as soon as
      practicable following the consummation of the transactions contemplated by
      the
      Purchase Agreement and having been advised by Wurzburg or its Affiliates of
      the
      three additional individuals that Wurzburg or its Affiliates wish to designate
      as directors, (to the extent permitted under applicable law), (i) increase
      the
      number of directors constituting the Company’s entire Board of Directors to nine
      (9) members, (ii) request and accept the resignation of one current director
      who
      is not an Existing Designee, and (iii) fill the three vacancies so created
      with
      three (3) additional individuals which shall have been designated by Wurzburg
      or
      its Affiliates (together with the Existing Designees, the “Wurzburg
      Designees”).
      Thereafter the number of directors constituting the entire Board of Directors
      shall remain nine (9) and Wurzburg or its affiliates shall be entitled to
      designate 6 individuals to be elected to the Company’s Board of Directors at
      each annual meeting of the stockholders of the Company or at any special meeting
      at which directors are elected; provided that if the Investors hereafter hold,
      in the aggregate, less than 60% of the issued and outstanding Common Stock,
      then
      the number of Wurzburg Designees shall be reduced to that number of directors
      which is equal to the same percentage of nine directors that the shares of
      Common Stock then owned, in the aggregate, by the Investors bears to the total
      outstanding shares of Common Stock If the preceding computation results in
      a
      number which is not a whole number, the number of Wurzburg Designees shall
      be
      rounded down to the nearest whole number but with one-half and above to be
      rounded upward to the nearest whole number.

     

    (b) The
      Company hereby agrees to take all actions which are reasonably necessary or
      desirable, and to otherwise use its best efforts to give effect to Wurzburg’s
      rights under Section 5.1(a) above. 

     

    (c) Without
      limiting anything contained in Section 5.1(b), at each annual meeting of the
      stockholders of the Company (or at any special meeting) at which directors
      are
      to be elected, Wurzburg or its Affiliates shall submit to the Company the names
      of a sufficient number of proposed Wurzburg Designees to fill all of the
      directorships belonging to Wurzburg Designees. The Board of Directors shall
      use
      its best efforts to ensure that all such Wurzburg Designees are elected to
      the
      Board of Directors. If Wurzburg or its Affiliates fail to designate a sufficient
      number of directors to fill all directorships which they are entitled to
      designate, then the Company shall use it best efforts to ensure that any
      directorship not so filled shall remain vacant until such time as Wurzburg
      or
      its Affiliates designate a person to fill such directorship.

     

    (d) The
      Company shall use it best efforts to ensure that no Wurzburg Designee is removed
      without cause without the affirmative vote of the holders of a majority of
      shares of Common Stock held by the Investors, given either at a special meeting
      of stockholders duly called for that purpose or pursuant to a written consent
      of
      such stockholders. In furtherance of the foregoing, in case any stockholder
      of
      the Company proposes to remove any Wurzburg Designee without cause, the Board
      of
      Directors shall recommend to the other stockholders that they vote against
      any
      such removal. Any vacancy to be filled by the Board of Directors (pursuant
      to
      Delaware law) in any directorship intended for a Wurzburg Designee shall be
      filled only by a Wurzburg Designee.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (e) The
      Company agrees to use its best efforts to obtain no later than the date on
      which
      the size of the board is increased to 9 members pursuant to Section 5.1(a)
      the
      resignation of one current director who is not a Wurzburg Designee in order
      to
      create a sufficient number of vacant directorships to allow the 3 new Wurzburg
      Designees to be appointed to the Board of Directors, and to ensure that any
      such
      vacancy created by such resignation shall be filled only by a Wurzburg Designee
      as provided in this Section 5.1; provided, that if the Company is unable to
      obtain such resignation pursuant hereto, then the Company shall take all actions
      reasonably necessary or desirable, and otherwise use its best efforts, to cause
      the removal of such non-Wurzburg Designee by written consent of a majority
      of
      the shares then entitled to vote). 

     

    (f) For
      the
      purposes of this Section 5.1, for any matter that requires the vote of the
      Company’s stockholders, the term “best efforts” shall include, without
      limitation, (x) making a recommendation to the Company’s stockholders that they
      approve or reject (as applicable) the relevant matters referred to in the
      respective paragraphs of this Section 5.1 and (y) (except in the case of the
      proviso to Section 5.1(e)) soliciting proxies from such stockholders in favor
      of
      or against (as applicable) such matters.

     

    5.2 Approval
      Rights

    

    At
      any
      time between the date of this Agreement and the date on which all six (6)
      Wurzburg Designees have been elected to, and are serving on, the Board of
      Directors, as reconstituted pursuant to Section 5.1(a), no action proposed
      to be
      taken by the Company that requires the approval of the Board of Directors (or
      a
      committee thereof) shall be taken by the Company without the unanimous approval
      of the Existing Designees. 

     

    5.3 Committees

     

    The
      Board
      of Directors will not establish any committee authorized to exercise the power
      of the Board of Directors unless the Wurzburg Designees (or their nominees)
      are
      granted representation on such committee consistent with the proportion of
      the
      total number of Wurzburg Designees to the total number of members of the entire
      Board of Directors; provided, however, that the Investors shall waive such
      right
      to proportional representation if they receive an opinion in form and substance
      reasonably acceptable to the Investors from counsel reasonably acceptable to
      the
      Investors that such proportionate representation violates a law or regulation
      then applicable to the Company or its directors in their capacity as
      such.

     

    5.4 Indemnification

    

    The
      Company will indemnify members of the Board of Directors to the fullest extent
      permitted by applicable law.

    

    SECTION
      6

    

    Miscellaneous

     

    6.1 Governing
      Law

    

    This
      Agreement shall be governed in all respects by the laws of the State of Delaware
      as applied to contracts made and to be fully performed entirely within that
      state between residents of that state. All disputes arising out of this
      Agreement shall be subject to the exclusive jurisdiction and venue of the New
      York state courts (or, if there is exclusive federal jurisdiction, the United
      States District Courts of the Southern District of New York) and the Company
      consents to the personal and exclusive jurisdiction and venue of these
      courts.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    6.2 Entire
      Agreement; Amendment

    

    This
      Agreement (including the exhibits hereto) constitutes the full and entire
      understanding and agreement between the parties with regard to the subjects
      hereof. This Agreement or any term hereof may be amended, waived, discharged
      or
      terminated by a written instrument signed by the Company and the Investors
      (or
      as to Section 3, the Holders) or transferees of such Investors holding more
      than
      a majority of the Registrable Securities then outstanding; provided, however,
      that if such amendment or waiver adversely and disproportionately affects a
      party as compared to another party, increases a benefit of a party without
      providing substantially the same benefit on substantially the same terms to
      another party, or increases the obligations of a party, then the consent of
      such
      affected party shall be required.

     

    6.3 Survival

    

    The
      representations, warranties, covenants and agreements made herein shall survive
      any investigation made by any Holder and the closing of the transactions
      contemplated hereby. All statements as to factual matters contained in any
      certificate or other instrument delivered by or on behalf of the Company
      pursuant hereto in connection with the transactions contemplated hereby shall
      be
      deemed to be representations and warranties by the Company hereunder solely
      as
      of the date of such certificate or instrument.

     

    6.4 Successors
      and Assigns

    

    Except
      as
      otherwise expressly provided herein, the provisions hereof shall inure to the
      benefit of, and be binding upon, the successors, assigns, heirs, executors,
      and
      administrators of the parties hereto and shall inure to the benefit of and
      be
      enforceable by each person who shall be a holder of Registrable Securities
      from
      time to time; provided, however, that prior to the receipt by the Company of
      adequate written notice of the transfer of any Registrable Securities specifying
      the full name and address of the transferee, the Company may deem and treat
      the
      person listed as the holder of such shares in its records as the absolute owner
      and holder of such shares for all purposes, including the payment of dividends
      or any redemption price and the delivery of any notices required to be given
      hereunder.

     

    6.5 Aggregation

    

    For
      the
      purposes of determining the number of shares of Registrable Securities held
      by a
      Holder or a transferee or assignee, the holdings of transferees and assignees
      of
      a partnership, limited liability company or corporation, as applicable, who
      are
      Affiliates, partners or members or retired partners or retired members of such
      partnership, limited liability company (including spouses and ancestors, lineal
      descendants and siblings of such partners or spouses who acquire Registrable
      Securities by gift, will or intestate succession) or corporation, as applicable,
      shall be aggregated together and with the holdings of the partnership, limited
      liability company or corporation, as applicable.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    6.6 Notices,
      etc.

    

    All
      notices and other communications required or permitted hereunder shall be in
      writing and shall be mailed by registered or certified mail, postage prepaid,
      or
      otherwise delivered by hand or by messenger, or overnight courier addressed
      or
      by facsimile or electronic mail: (a) if to an Investor (or its transferee),
      at the address of such Investor (or its transferee) set forth on the books
      of
      the Company or the facsimile number of such Investor set forth on the signature
      page hereto, or at the address or facsimile number, as applicable, designated
      by
      such Investor (or its transferee) in a notice delivered to each party hereto
      in
      accordance with the terms hereof upon not less than ten (10) days notice in
      writing; or (b) if to the Company, at the address of its principal office
      and addressed to the attention of the Chief Executive Officer at the Company’s
      address set forth on the signature page hereto or at such other address or
      facsimile number as the Company shall have furnished to the Investors (or its
      transferee) upon not less than ten (10) days notice in writing. Any notice
      required by the provisions of this Section 6.6 shall be deemed effectively
      given: (i) upon personal delivery to the party to be notified,
      (ii) when sent by confirmed facsimile or electronic mail if sent during
      normal business hours of the recipient; if not, then on the next business day,
      (iii) five (5) days after having been sent by registered or certified
      mail, return receipt requested, postage prepaid or (iv) one (1) day
      after deposit with a nationally recognized overnight courier, specifying next
      day delivery, with written verification of receipt.

     

    6.7 Severability

    

    In
      the
      event that any provision of this Agreement becomes or is declared by a court
      of
      competent jurisdiction to be illegal, unenforceable or void, this Agreement
      shall continue in full force and effect without said provision; provided that
      no
      such severability shall be effective if it materially changes the economic
      benefits or burdens of this Agreement to any party.

     

    6.8 Counterparts

    

    This
      Agreement may be executed in any number of counterparts and by facsimile, each
      of which shall be enforceable against the parties actually executing such
      counterparts, and all of which together shall constitute one
      instrument.

     

    6.9 Delays
      or Omissions

    

    It
      is
      agreed that no delay or omission to exercise any right, power, or remedy
      accruing to any party hereto, upon any breach, default or noncompliance by
      any
      other party under this Agreement shall impair any such right, power, or remedy,
      nor shall it be construed to be a waiver of any such breach, default or
      noncompliance, or any acquiescence therein, or of any similar breach, default
      or
      noncompliance thereafter occurring. It is further agreed that any waiver,
      permit, consent, or approval of any kind or character on any party’s part of any
      breach, default or noncompliance under the Agreement or any waiver on such
      party’s part of any provisions or conditions of this Agreement must be in
      writing and shall be effective only to the extent specifically set forth in
      such
      writing. All remedies, either under this Agreement, by law, or otherwise
      afforded to the parties hereto, shall be cumulative and not
      alternative.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    6.10 Attorneys’
      Fees 

    

    Subject
      to Section 3.7, in the event that any dispute among the parties to this
      Agreement should result in litigation, the prevailing party in such dispute
      shall be entitled to recover from the losing party all fees, costs and expenses
      of enforcing any right of such prevailing party under or with respect to this
      Agreement, including without limitation, such reasonable fees and expenses
      of
      attorneys and accountants, which shall include, without limitation, all fees,
      costs and expenses of appeals.

     

    6.11 Specific
      Performance

    

    Each
      Investor and the Company hereby declares that it is impossible to measure in
      money the damages which will accrue to a party hereto or to its heirs, personal
      representatives, or assigns by reason of a failure to perform any of the
      obligations under this Agreement and agrees that the terms of this Agreement
      shall be specifically enforceable. If Investor or the Company, or his or its
      heirs, personal representatives or assigns, institutes any action or proceeding
      to specifically enforce the provisions hereof, any person against whom such
      action or proceeding is brought hereby waives the claim or defense therein
      that
      such party or such personal representative has an adequate remedy at law, and
      such person shall not offer in any such action or proceeding the claim or
      defense that such remedy at law exists.

     

    6.12 Further
      Instruments and Actions

    

    The
      parties agree to execute such further instruments and to take such further
      action as may reasonably be necessary to carry out the intent of this
      Agreement.

     

    6.13 Effect
      of Change in Company’s Capital Structure

    

    Appropriate
      adjustments shall be made in the number and class of shares set forth herein
      in
      the event of a stock dividend, stock split, reverse stock split, combination,
      reclassification or like change in the capital structure of the
      Company.

    

    [Remainder
      of page intentionally left blank]

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned has executed this Agreement as of the date set forth
      above.

     

    

      
        	 	
                COMPANY

              
	 	 	 
	 	 	 
	 	
                I.C.
                  ISAACS & COMPANY, INC.

              
	 	
                a
                  Delaware corporation

              
	 	 	 
	 	 	 
	 	
                By:

              	/s/
                Robert S. Stec
	 	 	
                Name: Robert
                  S. Stec

              
	 	 	
                Title:  
                  Chief Executive Officer

              
	 	 	 
	 	 	 
	 	
                Address:

              

      

    

    

    

    

    [Signature
      Page to Investor Rights Agreement]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      
        	 	
                INVESTORS

              
	 	 	 
	 	
                TEXTILE
                  INVESTMENT INTERNATIONAL S.A.

              
	 	 	 
	 	 	 
	 	
                By:

              	
                /s/
                  René
                  Faltz     /s/ Tom Felgen

              
	 	 	
                Name: René
                  Faltz & Tom Felgen

              
	 	 	
                Title:   Managing
                  Directors

              
	 	 	 
	 	
                Facsimile
                  No.:

              
	 	 	 
	 	 	 
	 	
                WURZBURG
                  HOLDING S.A.

              
	 	 	 
	 	 	 
	 	
                By:

              	
                /s/
                  René
                  Faltz     /s/ Tom Felgen

              
	 	
              	
                
                  Name: René
                    Faltz & Tom Felgen

                

              
	 	 	
                
                  Title:   Managing
                    Directors

                

              
	 	 	 
	 	
                Facsimile
                  No.:

              
	 	 	 
	 	 	 
	 	
                /s/
                  Olivier Bachellerie

              
	 	
                Olivier
                  Bachellerie

              
	 	 	 
	 	 	 
	 	
                Facsimile
                  No.:

              
	 	 	 
	 	 	 
	 	
                /s/
                  René
                  Faltz

              
	 	
                René
                  Faltz

              
	 	 	 
	 	
                Facsimile
                  No.:

              

      

    

     

    

    [Signature
      Page to Investor Rights Agreement]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

    

    SCHEDULE
      OF INVESTORS

    
       

      Textile
        International Investment S.A.

      

      Wurzburg
        Holding S.A.

      

      Olivier
        Bachellerie

      

      Rene
        Faltz

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